EXHIBIT 10.11
AMENDMENT NO. 2
TO AMENDED AND RESTATED MASTER CONSTRUCTION
AND TERM LOAN AGREEMENT
THIS AMENDMENT NO. 2 TO AMENDED AND RESTATED MASTER CONSTRUCTION AND
TERM LOAN AGREEMENT, dated as of July 19, 2001 (the "Amendment"), among FCA Real
Estate Holdings, LLC, a Delaware limited liability company (the "Borrower"),
U.S. BANK NATIONAL ASSOCIATION, a national banking association, as agent and
administrative bank (in such capacity, the "Administrative Bank"), the "Lender
parties" to the Loan Agreement hereinafter described (each a "Lender" and
collectively the "Lenders") and U.S. BANK NATIONAL ASSOCIATION, a national
banking association, as collateral agent (in such capacity, the "Collateral
Agent").
RECITALS:
A. The Borrower, the Administrative Bank and the Lenders are
parties to that certain Amended and Restated Master Construction and Term Loan
Agreement dated as of July 17, 2000, as amended by an Amendment No. 1 to Amended
and Restated Master Construction and Term Loan Agreement dated as of June 14,
2001 (as so amended, the "Original Agreement").
B. The Borrower has requested the Administrative Bank and the
Lenders to further .amend certain provisions of the Original Agreement.
C. Subject to the terms and conditions of this Amendment, the
Administrative Bank and the Lenders have agreed to the Borrower's requests.
NOW, THEREFORE, the parties agree as follows:
1. DEFINED TERMS. All capitalized terms used in this Amendment
shall, except where the context otherwise requires, have the meanings set forth
in the Original Agreement as amended hereby.
2. AMENDMENTS. The Original Agreement is hereby amended as
follows:
(a) The definitions of "Affiliate," "Contingency
Reserve," "Indebtedness," "Loan Documents" "Maximum Loan Amount," and
"Rebatable Rent" appearing in the DEFINITIONS Section of the Original
Agreement are respectively amended in their entireties to read as
follows:
"Affiliate: With respect to any party and/or LTF, any
Person which directly or indirectly controls, is controlled
by, or is under common control with such party or LTF, as the
case may be and, in addition, in the case of Borrower, each
officer, director, shareholder, joint venturer and partner of
Borrower. A Person shall be deemed to control another Person
if the controlling Person: (a) owns 10% or more of (i) the
combined voting power of all classes of stock having general
voting power under ordinary circumstances to elect a majority
of the board of directors of such Person, if it is a
corporation, (ii) the capital interest or profit interest of
such Person, if it is a partnership, joint venture or similar
entity, or (iii) the beneficial interest of such Person, if it
is a trust, association or other unincorporated organization;
or (b) possesses, directly or indirectly, the power to direct
or cause the direction of the management and policies of the
controlled Person, whether through ownership of stock, by
contract or otherwise.
Contingency Reserve: A funded reserve equal to the
sum (such sum being the `Required Contingency Reserve Amount')
of a base amount of $500,000.00 plus an additional amount of
$250,000.00 for each Series Loan made available to the
Borrower, commencing with the Series K Loan, up to an
aggregate additional amount of $500,000.00; provided, however,
that the Contingency Reserve may be non-funded so long as
Borrower's obligation to fund the Contingency Reserve is
supported by an irrevocable letter of credit (the "Contingency
Reserve LC") issued by a financial institution in favor of the
Collateral Agent in form satisfactory to the Super Majority
Lenders and the Administrative Bank, in their sole discretion.
Indebtedness: Without duplication, all obligations,
contingent or otherwise, which in accordance with GAAP should
be classified upon the described Person's balance sheet as
liabilities, but in any event including the following (whether
or not they should be classified as liabilities upon such
balance sheet): (a) obligations secured by any mortgage,
pledge, security interest, lien, charge or other encumbrance
existing on property owned or acquired subject thereto,
whether or not the obligation secured thereby shall have been
assumed and whether or not the obligation secured is the
obligation of the owner or another party; (b) any obligation
on account of deposits or advances; (c) any obligation for the
deferred purchase price of any property or services, except
trade accounts payable; (d) any obligation as lessee under any
Capitalized Lease; (e) all guaranties, endorsements and other
contingent obligations in respect to Indebtedness of others;
and (f) undertakings or agreements to reimburse or indemnify
issuers of letters of credit. For all purposes of this
Agreement, the Indebtedness of any Person shall include the
Indebtedness of any partnership or joint venture in which such
Person is a general partner or a joint venturer unless such
Indebtedness is non-recourse to such Person.
Loan Documents The documents described in Section
II.2. of this Agreement which evidence and secure a Series
Loan and/or are related to a Series Loan, including but not
limited to the Notes, the Mortgage, this Agreement, the
Assignment, the Indemnity, the Lease Subordination Agreement,
the Additional Project Collateral Documents and the Disbursing
Agreement for such Series Loan, and any loan document
described in Section II.9 of the Supplement for such Series
Loan, the Maintenance Agreement, the Rebatable Rent Reserve
Account Agreement, and the Replacement Reserve Account
Agreement and including any amendments thereof and supplements
thereto executed by the respective parties thereto and
approved by the parties required by this Agreement.
Maximum Loan Amount: For any Project and its
Applicable Series Loan, the amount specified in the Supplement
for such Applicable Series Loan but in no
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event more than the lesser of: (a) 75% of the fair market
value of such Project as a vacant health club upon its
Completion; or (b) 60% of the costs for each Project being
financed by its Applicable Series Loan, other than the Series
A Loan and the Series F Loan; provided, however, the Maximum
Loan Amount for the Series J Loan shall be $12,941,196.94.
Rebatable Rent: For any of Borrower's calendar years
with respect to any Project, the `Rebatable Rent' described in
the Project Lease for such Project."
(b) The DEFINITIONS Section of the Original Agreement is
further amended by adding the following new definitions of "Maintenance
Agreement," "Rebatable Rent Reserve Account," "Rebatable Rent Reserve
Account Agreement," "Replacement Reserve Account," "Replacement Reserve
Account Agreement," and "Required Contingency Reserve Amount" in proper
alphabetical order:
"Maintenance Agreement: The Maintenance Agreement
dated as of July 19, 2001 made by LTF in favor of the
Administrative Bank for the benefit of itself and for the
ratable benefit of the Lenders, including any amendments
thereof and supplements thereto, executed by LTF and the
Administrative Bank and approved by the Super Majority
Lenders.
Rebatable Rent Reserve Account: The `Rebatable Rent
Reserve Account' described in the Rebatable Rent Reserve
Account Agreement.
Rebatable Rent Reserve Account Agreement: The
Rebatable Rent Reserve Account Agreement dated as of July 19,
2001 made by the Borrower in favor of the Collateral Agent for
the benefit of itself, the Administrative Bank and for the
ratable benefit of the Lenders, including any amendments
thereof and supplements thereto, executed by the Borrower and
the Collateral Agent and approved by the Administrative Bank
and the Super Majority Lenders.
Replacement Reserve Account: The `Replacement Reserve
Account' described in the Replacement Reserve Account
Agreement.
Replacement Reserve Account Agreement: The
Replacement Reserve Account Agreement dated as of July 19,
2001 made by the Borrower in favor of the Collateral Agent for
the benefit of itself, the Administrative Bank and for the
ratable benefit of the Lenders, including any amendments
thereof and supplements thereto, executed by the Borrower and
the Collateral Agent and approved by the Administrative Bank
and the Super Majority Lenders
Required Contingency Reserve Amount: As defined in
the definition of `Contingency Reserve."'
(c) Section I.1. of the Original Agreement is amended by
adding the following sentence as the last paragraph thereof:
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"Notwithstanding anything to the contrary in this
Agreement or any other Loan Document, the Borrower shall not
be able to obtain any Series Loan if, after giving effect to
the such Series Loan, the number of Applicable Series Loans
for Projects for which Completion has not occurred would
exceed four (4)."
(d) Section II.2. of the Original Agreement is amended by
re-lettering subsection "L" as "N" and by adding the following new
subsections "K," "L" and "M:"
"K. The Maintenance Agreement.
L. The Rebatable Rent Reserve Account
Agreement.
M. The Replacement Reserve Account
Agreement."
(e) ARTICLE II of the Original Agreement is further
amended by adding the following new Section II.10:
"II.10. LTF Indebtedness. The obligation of
any Lender to make any Advance on any Series Loan
shall be expressly conditioned upon the absence of
the acceleration of the maturity of any Indebtedness
of LTF or any of its Subsidiaries (other than the
Borrower) in the aggregate amount of more than
$500,000.00 for any such Person or the absence of any
failure by LTF or any such Subsidiary to have paid
any such Indebtedness when due or, in the case of
such Indebtedness payable on demand, when demanded."
(f) Section III.1. of the Original Agreement is amended
by adding the following sentence as the last paragraph thereof:
"Notwithstanding anything to the contrary in
this Agreement or any other Loan Document, the
Borrower shall not be able to obtain any Series Loan
if, after giving effect to the such Series Loan, the
number of Applicable Series Loans for Projects for
which Completion has not occurred would exceed four
(4)."
(g) The second sentence of the second paragraph of
Section III.2. of the Original Agreement is amended by changing the
amount "$500,000.00" to the words "the Required Contingency Reserve
Amount."
(h) Section IV.4. of the Original Agreement is amended in
its entirety to read as follows:
"IV.4 No Litigation or Defaults.
There are no actions, suits or proceedings
pending or, to the knowledge of the Borrower,
threatened against or affecting Borrower or any
Project, or involving the validity or enforceability
of the Loan Documents or the priority of the Lien
thereof, at law or in equity; and
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Borrower is not in default under any order, writ,
injunction, decree or demand of any court or any
administrative body having jurisdiction over
Borrower."
(i) Section V.7.F. of the Original Agreement is amended
in its entirety to read as follows:
"F. With each of LTF's financial statements
required to be delivered pursuant to Sections V.7.B.
and/or G., a copy of each compliance certificate
delivered by LTF or any of its Subsidiaries (other
than the Borrower) to the holders of any of such
Person's Indebtedness demonstrating compliance or
non-compliance, as the case may be, with the terms of
such Indebtedness."
(j) Section V.7.H. of the Original Agreement is amended
in its entirety to read as follows:
"H. Together with the financial statements
required under Section V.7.E. coinciding with the end
of a quarter of the Borrower's fiscal year, a
compliance certificate in the form of Exhibit A
attached hereto covering all Projects that have been
completed, signed by a Designated Officer."
(k) Section V.7. of the Original Agreement is further
amended by adding the following new Section V.7.O.:
"O. (1) Immediately upon receipt by LTF
or any of its Subsidiaries (other than the Borrower),
a copy of any notice of default on, or acceleration
of, any of such Person's Indebtedness or waiver of
such Person's non-compliance with the terms of such
Indebtedness; or (2) immediately upon Borrower, LTF
or any of LTF's other Subsidiaries becoming aware of
the occurrence of any event of default (howsoever
defined) on any of LTF's or any of such other
Subsidiaries' Indebtedness or of any event which
could, with the giving of notice and/or lapse of
time, constitute any such event of default, a notice
describing the nature thereof and what action such
Person proposes to take with respect thereto.
(1) Section V.28. of the Original Agreement is amended in
its entirety to read as follows:
"V.28. Debt Service Coverage.
Borrower shall receive in cash each month, commencing
on the "Rent Commencement Date" (as defined in the Project
Lease for the Applicable Series Loan), the required payments
of Base Rent for that month under such Project Lease;
provided, however, that the minimum required monthly cash
payments of Base Rent under such Project Lease shall not be
less than 125% of the scheduled monthly installment payments
of principal and interest on such Applicable Series
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Loan that are established for the period following such Series
Loan's Conversion Date."
(m) Section V.30 of the Original Agreement is amended in
its entirety to read as follows:
"V.30. Depositing Collections.
Borrower shall deposit all collections with respect
to the Project Leases in a collateral account maintained at US
Bank and, if required by the Administrative Bank or the Super
Majority Lenders, in separate collateral accounts for each
Project Lease except that Rebatable Rent shall be immediately
transferred by US Bank into the Rebatable Rent Reserve Account
and thereafter shall be disbursed in accordance with the terms
of the Rebatable Rent Reserve Account Agreement. The Borrower
shall not have any right to withdraw any amount deposited in
any collateral account except to pay Obligations arising under
this Agreement and the other Loan Documents or to fund the
Rebatable Reserve Account and/or the Replacement Reserve
Account."
(n) Section VI. 1. K. of the Original Agreement is
amended in its entirety to read as follows:
"K. The maturity of any Indebtedness of Borrower
(other than Indebtedness under this
Agreement or the other Loan Documents) shall
be accelerated, or Borrower shall fail to
pay any such Indebtedness when due or, in
the case of such Indebtedness payable on
demand, when demanded, or any event shall
occur or condition shall exist and shall
continue for more than the period of grace,
if any, applicable thereto and shall have
the effect of causing, or permitting (any
required notice having been given and grace
period having expired) the holder of any
such Indebtedness or any trustee or other
Person acting on behalf of such holder to
cause such Indebtedness to become due prior
to its stated maturity or to realize upon
any collateral given as security therefor."
(o) Sections VI.1.O. and VI.1.P of the Original Agreement
are respectively amended in their entireties to read as follows:
"O. LTF shall default in the performance or
observance of any agreement, covenant or
condition required to be performed or
observed by LTF under the terms of the
Maintenance Agreement.
P. Borrower shall default in the performance or
observance of any agreement, covenant or
condition required to be performed or
observed by Borrower under the terms of the
Rebatable Rent Reserve Account Agreement or
the Replacement Reserve Account Agreement."
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(p) Section VI.2. of the Original Agreement is amended to
add the following new Section VI.2.F.:
"F. Disburse the un-disbursed portion of any
Series Loan to pay the unpaid accrued
interest on such Series Loan or to pay other
Obligations in such order of application as
may be directed by the Super Majority
Lenders."
3. CONDITIONS TO EFFECTIVENESS. This Amendment shall become
effective on the date (the "Effective Date") when, and only when, the
Administrative Bank shall have received:
(a) Counterparts of this Amendment executed by Borrower
and all Lenders;
(b) The Rebatable Rent Reserve Account Agreement and the
Replacement Reserve Account Agreement in form and substance
satisfactory to the Administrative Bank and the Lenders appropriately
completed and duly executed by the Borrower;
(c) The Maintenance Agreement in form and substance
satisfactory to the Administrative Bank and the Lenders appropriately
completed and duly executed by LTF;
(d) Evidence satisfactory to the Administrative Bank and
the Lenders that the occurrence of the Effective Date of this Amendment
is the only remaining condition precedent to the amendment of the
Lessee's credit facility agented by Antares providing for a minimum
credit facility of $35,000,000.00 terminating no earlier than January
2, 2003 and that, upon the occurrence of such Effective Date, such
amendment will be binding upon all parties thereto without further
action on any such parties' part;
(e) An amendment fee, in immediately available funds, in
the amount separately agreed upon in writing by Borrower, US Bank and
Bank One, Michigan; and
(f) Such other documents as the Administrative Bank or
any Lender may reasonably request.
4. REPRESENTATIONS AND WARRANTIES. To induce the Administrative
Bank, the Lenders and the Collateral Agent to enter into this Amendment,
Borrower represents and warrants to the Administrative Bank, the Lenders and the
Collateral Agent as follows:
(a) The execution, delivery and performance by Borrower
of the Original Agreement as amended by this Amendment and any other
documents to be executed and/or delivered by Borrower in connection
herewith have been duly authorized by all necessary company action, do
not require any approval or consent of, or any registration,
qualification or filing with, any government agency or authority or any
approval or consent of any other person (including, without limitation,
any member), do not and will not conflict with, result in any violation
of or constitute any default under, any provision of Borrower's
Articles of Organization, Member Control Agreement or Operating
Agreement, any agreement binding on or applicable to Borrower or any of
its property, or any law or governmental regulation or court decree or
order, binding upon or applicable
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to Borrower or of any of its property and will not result in the
creation or imposition of any security interest or other lien or
encumbrance in or on any of its property pursuant to the provisions of
any agreement applicable to Borrower or any of its property;
(b) The representations and warranties contained in the
Original Agreement are true and correct as of the date hereof as though
made on that date except to the extent that such representations and
warranties relate solely to an earlier date and except that the
representations and warranties set forth in Section IV.5. of the
Original Agreement with respect to the audited or unauditied financial
statements of the Borrower or the Lessee, as the case may be, shall be
deemed to be a reference to the most recent audited or unaudited
financial statements of the relevant Person delivered to the Lenders
pursuant to Section V.7 of the Original Agreement
(c) (i) No events have taken place and no circumstances
exist at the date hereof which would give Borrower the right to assert
a defense, offset or counterclaim to any claim by the Administrative
Bank or any Lender for payment of any Note; and (ii) Borrower hereby
releases and forever discharges the Administrative Bank, each Lender
and their respective successors, assigns, directors, officers, agents,
employees and participants from any and all actions, causes of action,
suits, proceedings, debts, sums of money, covenants, contracts,
controversies, claims and demands, at law or in equity, which Borrower
ever had or now has against such Person by virtue of such Person's
relationship to Borrower in connection with the Loan Documents and the
transactions related thereto;
(d) The Original Agreement, as amended by this Amendment,
is the legal, valid and binding obligation of Borrower, remains in full
force and effect and is enforceable in accordance with its terms,
subject only to bankruptcy, insolvency, reorganization, moratorium or
similar laws, rulings or decisions at the time in effect affecting the
enforceability of rights of creditors generally and to general
equitable principles which may limit the right to obtain equitable
remedies;
(e) No Default or Event of Default exists prior to or
after giving effect to this Amendment.
5. REFERENCE TO AND EFFECT ON THE LOAN DOCUMENTS.
(a) From and after the date of this Amendment, each
reference in the Original Agreement to "this Agreement", "hereunder",
"hereof', "herein" or words of like import referring to the Original
Agreement, and each reference to the "Agreement", "thereunder",
"thereof", "therein" or words of like import referring to the Original
Agreement in any other Loan Document shall mean and be a reference to
the Original Agreement as amended hereby; and
(b) The execution, delivery and effectiveness of this
Amendment shall not, except as expressly provided herein, operate as a
waiver of any right, power or remedy of Lender under the Original
Agreement or any other Loan Document, nor constitute a waiver of any
provision of the Original Agreement or any such other Loan Document.
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6. COSTS, EXPENSES AND TAXES. Borrower agrees to pay on demand
all costs and expenses of the Administrative Bank and each Lender in connection
with the preparation, reproduction, execution and delivery of this Amendment and
the other documents to be delivered hereunder or thereunder, including their
reasonable attorneys' fees and legal expenses. In addition, Borrower shall pay
any and all stamp and other taxes and fees payable or determined to be payable
in connection with the execution and delivery, filing or recording of this
Amendment and the other instruments and documents to be delivered hereunder, and
agrees to save the Administrative Bank and each Lender harmless from and against
any and all liabilities with respect to, or resulting from, any delay in
Borrower's paying or omission to pay, such taxes or fees.
7. GOVERNING LAW. THE VALIDITY, CONSTRUCTION AND ENFORCEABILITY
OF THIS AMENDMENT SHALL BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF
MINNESOTA, WITHOUT GIVING EFFECT TO CONFLICT OF LAWS PRINCIPLES THEREOF, BUT
GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
8. HEADINGS. Section headings in this Amendment are included
herein for convenience of reference only and shall not constitute a part of this
Amendment for any other purpose.
9. COUNTERPARTS. This Amendment may be executed in one or more
counterparts, each of which shall be deemed to be an original.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized as of the date
first written above.
BORROWER:
FCA REAL ESTATE HOLDINGS, LLC
By: LIFE TIME FITNESS, Inc.
Its: Manager
By:_________________________________________
Its: Secretary and Chief Financial Officer
ADMINISTRATIVE BANK:
U.S. BANK NATIONAL ASSOCIATION, as the
Administrative Bank, the Collateral Agent
and the sole Primary Lender for the Series A
and the Series F Loan and a Lender for all
other Series Loans
By:_________________________________________
Its: Vice President
BANK ONE, MICHIGAN, as a Lender for all
Series Loans, other than the Series A Loan
and the Series F Loan
By:_________________________________________
Its: First Vice President
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