EXHIBIT 10.6
FIFTH AMENDMENT AND WAIVER TO
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
THIS FIFTH AMENDMENT AND WAIVER, dated as of December 2, 1996
(this "Amendment"), to the Third Amended and Restated Credit Agreement, dated as
of June 26, 1995, as in effect immediately prior to the date hereof (the "Credit
Agreement"), among BALLY TOTAL FITNESS HOLDING CORPORATION (formerly known as
Bally's Health & Tennis Corporation), a Delaware corporation (the "Borrower"),
the several banks and other financial institutions (the "Banks") parties thereto
and THE CHASE MANHATTAN BANK (formerly known as Chemical Bank), a New York
banking corporation, as agent (in such capacity, the "Agent") for the Banks.
W I T N E S S E T H:
WHEREAS, the Borrower has requested the Agent and the Banks to
agree to amend and waive certain provisions of the Credit Agreement as set forth
in this Amendment; and
WHEREAS, the Agent and the Banks are willing to agree to such
amendments and waivers, but only on the terms and subject to the conditions set
forth in this Amendment;
NOW, THEREFORE, in consideration of the premises and for other
good and valuable consideration, the sufficiency of which is hereby
acknowledged, the parties hereto hereby agree as follows:
1. Definitions. Unless otherwise defined herein,
terms defined in the Credit Agreement are used herein as therein
defined.
2. Amendments to Section 7.09. Section 7.09 of the Credit
Agreement is hereby amended by deleting such subsection in its entirety and
substituting in lieu thereof the following:
7.09 Change in Business. Engage in any business activities or
operations substantially and materially different from or unrelated to
business activities existing on the Closing Date; provided, however,
that this Section 7.09 shall not prohibit the Borrower or its
Subsidiaries from managing non-owned fitness centers or providing
payment, processing and collection services for non-owned fitness
centers, or from commencing and operating a Franchise Program, or from
operating a captive insurance company.
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3. Amendment to Subsection 7.02(i). Subsection 7.02(i) of the
Credit Agreement is hereby amended by deleting such subsection in its entirety
and substituting in lieu thereof the following:
(i) (A) Investments in health and fitness clubs not
owned by Subsidiaries or in a captive insurance company in an
aggregate amount not to exceed $5,000,000, of which no more
than $3,500,000 may represent Investments in a captive
insurance company; provided that prior to and after giving
effect to any such Investment, no Default or Event of Default
shall have occurred and be continuing; and (B) additional
Investments in Foreign Subsidiaries located in Canada up to a
maximum aggregate amount of Two Million Dollars ($2,000,000);
provided that the purchase or other acquisition of any
minority interest in the capital stock or other equity
interest of any Foreign Subsidiary shall not constitute an
Investment prohibited by this Section 7.02 or limited by
clause (B) of this paragraph (i).
4. Waiver of Subsections 3.01 and 3.04. The Banks hereby waive
the requirements of Section 3.01 of the Credit Agreement and Borrower shall not
be required to pledge the stock of Lincoln Indemnity Company ("Lincoln") to the
Agent pursuant to the Borrower Pledge Agreement, as amended. In addition, the
Banks hereby waive the requirements of Section 3.04 of the Credit Agreement and
Lincoln shall not be required to become a Guarantor or to execute any of the
Collateral Documents.
5. Representations and Warranties. The Borrower hereby
confirms that, after giving effect to the amendments and waivers provided for
herein, (i) the representations and warranties contained in Article V of the
Credit Agreement are true and correct in all material respects on and as of the
date hereof and no Default or Event of Default has occurred and is continuing,
and (ii) the Borrower has all necessary power and has taken all corporate action
necessary to approve and authorize this Amendment.
6. No Other Amendments. Except as expressly amended
or waived hereby, the Credit Agreement shall continue to be, and
shall remain, in full force and effect in accordance with its
terms.
7. Counterparts. This Amendment may be executed by the
parties hereto in any number of separate counterparts and all of
such counterparts taken together shall be deemed to constitute
one and the same instrument.
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8. Conditions of Effectiveness. This Amendment shall
be come effective on the date on which all of the following
conditions have been met:
(a) The Borrower and the Majority Banks shall have
executed a counterpart of this Amendment and the Agent shall
have received confirmation of such execution.
(b) There shall have been delivered to the Agent
(with sufficient copies for distribution to all Banks), in
form and substance reasonably satisfactory to the Agent, a
copy of the agreement to acquire Lincoln and any other
agreements relating thereto.
(c) The Guarantor's Consent in the form of Exhibit A
attached hereto shall have been executed on behalf of each
Guarantor, and Agent shall have received confirmation of such
execution.
(d) The Agent shall have received evidence, in form
and substance satisfactory to it, of Borrower's corporate
action authorizing the execution and delivery of this
Amendment.
9. Governing Law. THIS AMENDMENT SHALL BE GOVERNED
BY, AND SHALL BE CONSTRUED AND INTERPRETED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF ILLINOIS.
10. Costs and Expenses. Borrower agrees to pay on
demand:
(a) to Agent all reasonable costs, expenses and
attorneys' fees (including allocated costs for in-house legal
services) incurred in connection with the preparation and
administration of this Amendment and any instrument or
agreement required hereunder;
(b) to Agent and to each Bank all reasonable costs,
expenses and attorney's fees (including allocated costs for
in-house legal services) incurred by Agent and each such Bank
in connection with the enforcement of this Amendment or any
instrument or agreement required hereunder; and
(c) to Agent and to each Bank all stamp, registration
and other duties and imposts to which this Amendment and any
instrument or agreement required hereunder may be subject.
Borrower shall indemnify Agent and each Bank against any and
all liabilities and penalties resulting from any delay in
paying, or failure to pay, any such duties and imposts.
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IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered by their proper and duly authorized
officers as of the date set forth above.
BALLY TOTAL FITNESS HOLDING
CORPORATION
By:
Title:
THE CHASE MANHATTAN BANK, as Agent
By:
Title:
THE CHASE MANHATTAN BANK,
Individually
By:
Title:
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
By:
Title:
BANK OF AMERICA ILLINOIS
By:
Title:
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FIRST UNION NATIONAL BANK
(formerly known as First
Fidelity Bank, N.A.)
By:
Title:
FIRST BANK NATIONAL ASSOCIATION
By:
Title:
MIDLANTIC BANK, N.A.
By:
Title:
LASALLE NATIONAL BANK
By:
Title:
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Exhibit A
Form of Guarantors' Consent
as of December 2, 1996
The Chase Manhattan Bank Individually and as Agent
Bank of America National Trust
and Savings Association
Bank of America Illinois
First Union National Bank
First Bank National Association
Midlantic Bank N.A.
LaSalle National Bank
Gentlemen:
Reference is made to the Third Amended and Restated Credit
Agreement dated as of June 26, 1995 (the "Credit Agreement"), as previously
amended, among you and Bally Total Fitness Holding Corporation (formerly known
as Bally's Health & Tennis Corporation) and to the Amended and Restated Guaranty
Agreement and the New Guarantors Guaranty Agreement executed May 15, 1991, as
amended (collectively, the "Guaranty Agreements"), and the other Collateral
Documents executed by the undersigned in connection with the Credit Agreement.
Each of the undersigned hereby consents to the execution of
the attached Fifth Amendment and Waiver to Third Amended and Restated Credit
Agreement dated as of December 2, 1996, and acknowledges receipt of a copy
thereof. Each of the undersigned hereby jointly and severally, unconditionally
and irrevocably agrees that the Guaranty Agreements and other Collateral
Documents to which it is a party shall apply to the Credit Agreement as amended,
affected, or modified by said Fifth Amendment and Waiver to Third Amended and
Restated Credit Agreement.
It is hereby agreed that all of the terms and conditions of
the Guaranty Agreements and such other Collateral Documents shall continue in
full force and effect and that references in the Guaranty Agreements and such
other Collateral Documents to the Credit Agreement shall be deemed to mean the
Credit Agreement, as amended, affected or modified by the said Fifth Amendment
to Third Amended and Restated Credit Agreement.
BALLY'S FITNESS AND RACQUET CLUBS, INC.
BALLY FITNESS FRANCHISING, INC.
BALLY FRANCHISE RSC, INC.
BALLY FRANCHISING HOLDINGS, INC.
BALLY'S PACWEST, INC.
A-1
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BALLY'S S.C. MANAGEMENT, INC.
BALLY TOTAL FITNESS CORPORATION
CONNECTICUT COST FITNESS CENTERS, INC.
CONNECTICUT VALLEY FITNESS CENTERS, INC.
GREATER PHILLY XX. 0 XXXXXXX XXXXXXX
XXXXXXX XXXXXX XX. 0 HOLDING COMPANY
HEALTH & TENNIS CORPORATION OF NEW YORK
HOLIDAY HEALTH & FITNESS CENTERS OF
NEW YORK INC.
HOLIDAY HEALTH CLUBS AND FITNESS
CENTERS, INC.
HOLIDAY HEALTH CLUBS OF THE EAST COAST, INC.
HOLIDAY HEALTH CLUBS OF THE SOUTHEAST, INC.
HOLIDAY/SOUTHEAST HOLDING CORP.
HOLIDAY SPA HEALTH CLUBS OF CALIFORNIA
HOLIDAY UNIVERSAL, INC.
HOUSTON HEALTH CLUBS, INC.
XXXX XXXXXXX FITNESS CENTERS, INC.
XXXX XXXXXXX HOLDING CORP.
MANHATTAN SPORTS CLUB, INC.
NEW FITNESS HOLDING CO., INC.
NYCON HOLDING CO., INC.
PHYSICAL FITNESS CENTERS OF PHILADELPHIA, INC.
PROVIDENCE FITNESS CENTERS, INC.
RHODE ISLAND HOLDING COMPANY
SCANDINAVIAN DEVELOPMENT COMPANY
SCANDINAVIAN HEALTH SPA, INC.
SCANDINAVIAN US SWIM & FITNESS, INC.
SO. CAL. NAUTILUS FITNESS CENTERS, INC.
TIDELANDS HOLIDAY HEALTH CLUBS, INC.
U.S. HEALTH, INC.
VERTICAL FITNESS AND RACQUET CLUB, LTD.
XXX XXXXX INTERNATIONAL, INC.
XXX XXXXX INTERNATIONAL OF CLEVELAND, INC.
XXX XXXXX INTERNATIONAL OF MISSOURI, INC.
XXX XXXXX INTERNATIONAL OF TOLEDO, INC.
XXX XXXXX OF GREATER MICHIGAN, INC.
By:
Title:
X-0
000000\0000\00000\00XXXXX0.XXX
XXXX XXXXX SPA LIMITED PARTNERSHIP
SPA ASSOCIATES LIMITED PARTNERSHIP
By: BALLY TOTAL FITNESS HOLDING
CORPORATION as General Partner
By:
Title:
A-3
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