EXHIBIT 10.6
FIRST AMENDMENT TO SECOND
AMENDED AND RESTATED CREDIT AGREEMENT
This FIRST AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT
(this "First Amendment") is made and entered into as of the 12th day of July,
2002 by and among LIFE TIME FITNESS, Inc., a Minnesota corporation ("Borrower"),
Antares Capital Corporation, a Delaware corporation ("Antares"), as Agent for
the several financial institutions from time to time party to the Credit
Agreement as such term is hereinafter defined (collectively, the "Lenders" and
individually each a "Lender") and for itself as a Lender, BNP Paribas, a banking
association organized under the laws of France ("BNPP"), as a Lender and as
Documentation Agent, and XX Xxxxxx Xxxxx Bank, as trustee of the Antares Funding
Trust created under the Trust Agreement dated as of November 30, 1999 ("Chase"),
as a Lender.
WITNESSETH:
WHEREAS, Borrower, Antares, BNPP, and Chase are parties to that certain
Second Amended and Restated Credit Agreement dated as of July 19, 2001 (as
amended, restated, modified or supplemented and in effect from time to time, the
"Credit Agreement"; capitalized terms used herein and not otherwise defined
herein are used with the meanings given such terms in the Credit Agreement) and
Antares, BNP and Chase are the sole Lenders under the Credit Agreement as of the
date hereof; and
WHEREAS, Borrower has requested that the credit facilities under the
Credit Agreement be increased to up to $40,000,000, and, subject to the terms
and conditions of this Amendment, Antares, BNPP and Chase are agreeable to such
request; and
WHEREAS, to effect the foregoing, Borrower, Agent and the Lenders
desire to amend the Credit Agreement in certain respects as more fully set forth
herein;
NOW THEREFORE, in consideration of the mutual conditions and agreements
set forth in the Credit Agreement and this First Amendment, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
1. AMENDMENTS. Subject to the conditions set forth below, on the
First Amendment Effective Date:
(A) The Credit Agreement shall be amended as follows:
(i) Section 1.1(c) shall be amended and restated in its
entirety as follows:
(c) Term Loans. As of the date of this First
Amendment, $10,000,000 in aggregate outstanding principal
amount of term loans have been funded by Antares, Chase and
BNPP to Borrower. On the First Amendment Effective Date, BNPP
and Antares shall each make an additional term loan to
Borrower
in the amount of $2,500,000 (such new term loans, collectively
with the outstanding term loans, being herein referred to as
the "Term Loans"). The maturity date of all of the Term Loans
shall be the Revolving Termination Date, when the outstanding
principal balance of the Term Loans shall be due and payable
in full in a single installment. The outstanding principal
balance of the Terms Loans shall bear interest from time to
time in accordance with Sections 1.3 and 1.6 hereof.
(ii) The definitions of Consolidated EBIDAT, Maximum
Revolving Loan Balance and Revolving Termination Date shall each be
amended and restated in its entirety as follows:
"Consolidated EBIDAT" means, for any period, for the
Borrower and its Subsidiaries on a consolidated basis,
determined in accordance with GAAP, the sum of (a)
Consolidated Net Income (Loss) for such period, plus (b) all
amounts deducted in determining such Consolidated Net Income
(Loss) for such period for depreciation or amortization, other
than depreciation and amortization for such period which are
attributable to Clubs which were sold or closed, plus (c)
interest expense deducted in determining such Consolidated Net
Income (Loss) for such period, plus (d) all accrued taxes on
or measured by income to the extent included in the
determination of such Consolidated Net Income (Loss) for such
period, plus (e) to the extent included in determining such
Consolidated Net Income (Loss) for such period, any
extraordinary losses and losses from discontinued operations,
plus (f) all other non-cash charges which reduced Consolidated
Net Income (Loss) for such period, other than any such
non-cash charges attributable to Clubs which were sold or
closed.
"Maximum Revolving Loan Balance" means the lesser of
(i) an amount equal to (B) Operating EBIDAT for the
twelve-month period ending on the last day of the preceding
calendar month multiplied by two and three quarters (2.75)
minus (B) the aggregate principal balance of all Senior Debt
(other than Revolving Loans and Letter of Credit Participation
Liability) then outstanding, or (ii) the Aggregate Revolving
Loan Commitment then in effect.
"Revolving Termination Date" means the earlier to
occur of (a) January 2, 2004, and (b) the date on which the
Aggregate Revolving Loan Commitment shall terminate in
accordance with the provisions of this Agreement.
(iii) The following new definitions shall be added in their
proper alphabetical places:
"First Amendment" means that certain First Amendment
to Second Amended and Restated Credit Agreement dated as of
July 12, 2002 by and among Borrower, Agent and the Lenders.
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"First Amendment Effective Date" means the date upon
which (a) the First Amendment is executed by each of Borrower,
Antares, BNPP and Chase, and (b) each of the conditions set
forth in Section 3 of the First Amendment has been satisfied.
2. REAFFIRMATION AND CONFIRMATION OF SECURITY INTEREST. The
Borrower hereby confirms to Antares and the Lenders that the Borrower has
granted to the Agent, for the benefit of the Agent and the Lenders, a security
interest in the Collateral to secure the Obligations of the Borrower to the
Agent and the Lenders. The Borrower hereby reaffirms its grant of such security
interest and lien to the Agent for such purpose in all respects and confirms
that the additional Term Loan contemplated by this First Amendment shall be
Obligations secured thereby.
3. CONDITIONS TO EFFECTIVENESS. This First Amendment Effective
Date shall occur upon completion of each of the following conditions to the
reasonable satisfaction of each of Antares, BNPP and Chase:
(a) Execution and Delivery of First Amendment and
Additional Term Notes. This First Amendment shall have been duly
executed and delivered by Antares, BNPP, and Chase and the Borrower and
the Borrower shall have executed and delivered to each of BNPP and
Antares a Term Note evidencing the term loans to be made by such
Lenders pursuant to this First Amendment;
(b) Secretary's Certificates; Resolutions; Incumbency.
The Borrower shall have delivered to Antares, BNPP and Chase a
certificate of the Secretary or Assistant Secretary of the Borrower
certifying:
(i) the names, offices and true signatures of
the officers of the Borrower authorized to execute, deliver
and perform, as applicable, this First Amendment and the Term
Notes to be delivered to BNPP and Antares pursuant hereto and
any other instrument, document or agreement to be executed or
delivered by the Borrower hereunder; and
(ii) copies of resolutions of the board of
directors of the Borrower approving and authorizing the
execution, delivery and performance by the Borrower of this
First Amendment and the Term Notes to be delivered to BNPP and
Antares pursuant hereto, and of each other instrument,
document or agreement to be executed or delivered by the
Borrower hereunder;
(c) Payment of Fees. The Borrower shall have paid to
Agent, for distribution to the Lenders in accordance with their
agreement with respect thereto, a closing fee of $175,000.
(d) Legal Opinions and Other Documents. Such opinions of
counsel, amendments to the Collateral Documents and other instruments,
documents and
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agreements of the Borrower, as Antares or BNPP may reasonably request
in connection with the transactions contemplated by this First
Amendment; and
(e) No Defaults. No Default or Event of Default shall
have occurred and be continuing under the Credit Agreement or could be
reasonably expected to arise by reason of the transactions contemplated
hereby.
4. REPRESENTATIONS AND WARRANTIES. To induce Agent and Lenders to
enter into this First Amendment, Borrower represents and warrants to Agent and
Lenders that:
(a) the execution, delivery and performance of this First
Amendment and the Term Notes to be delivered to BNPP and Antares
pursuant hereto have been duly authorized by all requisite corporate
action on the part of Borrower and that this First Amendment has been,
and such Term Notes will, when delivered, be duly executed and
delivered by Borrower; and
(b) each of the representations and warranties set forth
in Article 3 of the Credit Agreement (other than those which, by their
terms, specifically are made as of certain date prior to the date
hereof) are true and correct in all material respects as of the date
hereof and will be true and correct in all material respects on the
First Amendment Effective Date after giving effect to the transactions
contemplated hereby;
(c) no approval, consent, exemption, authorization or
other action by, or notice to, or filing with, any Governmental
Authority or other Person is necessary or required in connection with
the consummation by the Borrower of the transactions on its part
contemplated by this First Amendment which has not been obtained or
made prior to the date hereof; and
(d) no Default or Event of Default exists as of the date
of this First Amendment or will arise by reason of consummation of the
transactions contemplated hereby.
5. CONSENT. The Borrower hereby requests that the Agent and the
Lenders confirm their consent (which has been verbally given) to the increase to
a principal amount of $4,000,000 and to the extension for an additional five (5)
years (to February 28, 2007) of the Indebtedness owed by the Borrower to U.S.
Bank in connection with the Borrower's Club located in Plymouth, Minnesota.
Borrower hereby confirms that such transaction has closed and the $627,578 of
proceeds therefrom was used to repay Revolving Loans (subject to Borrower's
rights to reborrow such amounts under the Credit Agreement on the terms and
conditions thereof). Borrower also confirms that such consent is effective only
in the specific instance set forth herein, and without prejudice to the rights
of Agent and the Lenders under the Credit Agreement and the other Loan
Documents. Agent and the Lenders hereby confirm that they have consented to such
actions by Borrower notwithstanding the provisions of Sections 5.1 and 5.5 of
the Credit Agreement.
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6. SEVERABILITY. Any provision of this First Amendment held by a
court of competent jurisdiction to be invalid or unenforceable shall not impair
or invalidate the remainder of this First Amendment and the effect thereof shall
be confined to the provision so held to be invalid or unenforceable.
7. REFERENCES. From and after the date of execution hereof by all
parties hereto, any reference to the Credit Agreement contained in any document,
instrument or agreement executed in connection with the Credit Agreement shall
be deemed to be a reference to the Credit Agreement as modified by this First
Amendment.
8. COUNTERPARTS. This First Amendment may be executed in one or
more counterparts, each of which shall constitute an original, but all of which
taken together shall be one and the same instrument.
9. RATIFICATION. The terms and provisions set forth in this First
Amendment shall modify and supersede all inconsistent terms and provisions of
the Credit Agreement and shall not be deemed to be a consent to the modification
or waiver of any other term or condition of the Credit Agreement. Except as
expressly modified and superseded by this First Amendment, the terms and
provisions of the Credit Agreement are ratified and confirmed and shall continue
in full force and effect.
10. CAPTIONS. Section captions and headings used in this First
Amendment are for convenience only and are not part of and shall not affect the
construction of this First Amendment.
11. GOVERNING LAW. This First Amendment shall be a contract made
under and governed by the laws of the State of Illinois, without regard to
conflict of laws principles. Whenever possible, each provision of this First
Amendment shall be interpreted in such a manner as to be effective and valid
under applicable law, but if any provision of this First Amendment shall be
prohibited by or invalid under such law, such provision shall be ineffective to
the extent of such prohibition or invalidity, without invalidating the remainder
of such provision or the remaining provisions of this First Amendment.
12. SUCCESSORS AND ASSIGNS. This First Amendment shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns.
[Balance of page intentionally left blank; signature page follows.]
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IN WITNESS WHEREOF, the parties hereto have caused this First Amendment
to Second Amended and Restated Credit Agreement to be duly executed under seal
and delivered by their respective duly authorized officers on the date first
written above.
LIFE TIME FITNESS, INC.
By:_____________________________________
Name:___________________________________
Title:__________________________________
ANTARES CAPITAL CORPORATION as Agent and
Lender
By:_____________________________________
Name:___________________________________
Title:__________________________________
BNP PARIBAS, as a Lender and as
Documentation Agent
By:_____________________________________
Name:___________________________________
Title:__________________________________
XX XXXXXX XXXXX BANK, not individually but
solely as trustee of the Antares Funding
Trust created under the Trust Agreement
dated as of November 30, 1999, as a Lender
By:_____________________________________
Name:___________________________________
Title:__________________________________
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