EXHIBIT 10.7
SECOND AMENDMENT TO
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
This SECOND AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT
(this "Amendment") is made and entered into as of the 29th day of August, 2003
by and among LIFE TIME FITNESS, Inc., a Minnesota corporation ("Borrower"),
Antares Capital Corporation, a Delaware corporation ("Antares"), in its capacity
as Agent for the Lenders party to the Credit Agreement described below and as a
Lender, 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,
Mariner CDO 2002, Ltd. ("Mariner") as a Lender, Xxxxxxx Xxxxx Capital, a
division of Xxxxxxx Xxxxx Business Financial Services Inc. a Delaware
corporation, ("Xxxxxxx"), as a Lender and as Syndication Agent, and M&I Xxxxxxxx
& Xxxxxxx Bank, a Wisconsin state bank ("M&I Bank"), as a Lender.
WITNESSETH:
WHEREAS, Borrower, Antares, Chase, Mariner, Merrill and M&I Bank are
all of the parties to a certain Second Amended and Restated Credit Agreement
dated as of July 19, 2001, as amended (the "Credit Agreement"); and
WHEREAS, Borrower has requested that (i) the credit facilities under
the Credit Agreement be increased to up to $55,000,000, and (ii) the Revolving
Termination Date be extended to June 30, 2005, and, subject to the terms and
conditions of this Amendment, Antares, Chase, Mariner, Merrill and M&I Bank are
agreeable to such request;
NOW THEREFORE, in consideration of the mutual conditions and agreements
set forth in the Credit Agreement and this Amendment, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
1. DEFINITIONS. Capitalized terms used in this Amendment, unless
otherwise defined herein, shall have the meaning ascribed to such terms in the
Credit Agreement.
2. AMENDMENTS. Subject to the conditions set forth below, on the
Second Amendment Effective Date the Credit Agreement shall be amended as
follows:
(A) Section 4.16 shall be amended and restated in its
entirety as follows:
4.16 Rent Reserve. The Borrower shall establish
and maintain fully funded the Rent Reserve with respect to all
of the real Property of the TIAA Subsidiaries subject to the
TIAA Facilities and at each time that any real Property of the
Borrower or any of its Subsidiaries becomes subject to
financing provided by TIAA the Borrower shall cause the Rent
Reserve to be increased by an amount determined in accordance
with the definition of Rent Reserve.
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(B) Clause (B) of Section 5.2(i) shall be amended and
restated in its entirety as follows:
(B) the Rent Reserve shall be concurrently
increased by an amount determined in accordance with
the definition of the term Rent Reserve.
(C) The definitions of Aggregate Revolving Loan
Commitment, Rent Reserve, Required Lenders and Revolving Termination
Date shall be amended and restated in their respective entireties as
follows:
"Aggregate Revolving Loan Commitment" means the
combined Revolving Loan Commitments of the Lenders, which
shall be in the amount of $25,000,000 prior to the Second
Amendment Effective Date and in the amount of $40,000,000 on
and after the Second Amendment Effective Date, as such amount
may be reduced from time to time pursuant to this Agreement.
"Rent Reserve" means a reserve account with the
Agent, held as additional Collateral securing the Obligations
pursuant to the Rent Reserve Account Agreement, and funded
with an amount equal to
(a) at all times when the Total
Leverage Ratio is 3.5 to 1.0 or greater, an amount
equal to five (5) months' of the required payments of
principal and interest and impositions applicable to
all outstanding TIAA Facilities, which amount shall
be subject to increase (or decrease) from time to
time upon increase (or decrease) of the TIAA
Facilities; and
(b) if the Total Leverage Ratio
(determined taking into account the reduced amount of
the Rent Reserve pursuant to this clause (b)) is less
than 3.5 to 1.0, an amount equal to four (4) months'
of the required payments of principal and interest
and impositions applicable to all outstanding TIAA
Facilities, which amount shall be subject to increase
(or decrease) from time to time upon increase (or
decrease) of the TIAA Facilities.
"Required Lenders" means at any time (a) Lenders then
holding at least sixty percent (60%) of the sum of the
Aggregate Revolving Loan Commitment then in effect plus that
aggregate outstanding principal balance of the Term Loans, or
(b) if the Revolving Loan Commitments have been terminated,
Lenders then having at least sixty percent (60%) of the
aggregate unpaid principal amount of Loans then outstanding.
"Revolving Termination Date" means the earlier to
occur of (a) June 30, 2005, and (b) the date on which the
Aggregate Revolving Loan Commitment shall terminate in
accordance with the provisions of this Agreement.
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(D) The following new definitions shall be added in their
proper alphabetical places:
"Second Amendment" means that certain Second
Amendment to Second Amended and Restated Credit Agreement
dated as of August 29, 2003 by and among Borrower, Agent and
the Lenders.
"Second Amendment Effective Date" means the date upon
which (a) the Second Amendment is executed by each of
Borrower, Antares, Chase, Mariner, Merrill and M&I Bank, and
(b) each of the conditions set forth in Section 4 of the
Second Amendment has been satisfied.
(C) Schedule 1.1 shall be amended and restated in its
entirety in the form attached to this Amendment and Exhibit A.
3. 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 or lien upon substantially all of the property of the Borrower,
including, without limitation, 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 Loans contemplated by this Amendment shall be
Obligations secured thereby.
4. CONDITIONS TO EFFECTIVENESS. This Amendment shall become
effective and the Second Amendment Effective Date and the other matters
contemplated hereby shall each occur upon completion of each of the following
conditions to the reasonable satisfaction of Antares, Xxxxxxx and M&I Bank:
(a) Execution and Delivery of This Amendment and M&I
Revolving Note. This Amendment shall each have been duly executed by
the Borrower, the Agent and each of the Lenders, and the Borrower shall
have executed and delivered to M&I Bank a Revolving Note in form
satisfactory to M&I Bank, reflecting the Revolving Loan Commitment of
such Lender as increased by this Amendment.
(b) Secretary's Certificates; Resolutions; Incumbency.
The Borrower shall have delivered to Agent and the Lenders 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 Amendment and the Revolving
Note referred to in clause (a) preceding (the "M&I Revolving
Notes") and any other instrument, document or agreement to be
executed or delivered by the Borrower hereunder; and
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(ii) copies of resolutions of the board of
directors of the Borrower approving and authorizing the
Borrower's incurring of additional indebtedness under the
Credit Agreement as amended by this Amendment and the
execution, delivery and performance by the Borrower of this
Amendment and the M&I Revolving Note and 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, any closing fee required by such
agreement.
(d) Legal Opinions and Other Documents. The Borrower
shall have delivered such opinions of counsel, and other instruments,
documents and agreements of the Borrower, as Antares, Xxxxxxx or M&I
Bank may reasonably request in connection with the transactions
contemplated by this Amendment.
(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.
5. REPRESENTATIONS AND WARRANTIES; COVENANT. To induce Agent and
Lenders to enter into this Amendment, Borrower represents and warrants to Agent
and Lenders that (a) the execution, delivery and performance of this Amendment
and each of the M&I Revolving Note have been duly authorized by all requisite
corporate action on the part of Borrower and that this Amendment, and the M&I
Revolving Note have each been 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.
6. SEVERABILITY. Any provision of this Amendment held by a court
of competent jurisdiction to be invalid or unenforceable shall not impair or
invalidate the remainder of this Amendment and the effect thereof shall be
confined to the provision so held to be invalid or unenforceable.
7. REFERENCES. From and after the Second Amendment Effective
Date, 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
Amendment.
8. COUNTERPARTS. This 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. It shall not be necessary in
making proof of this Amendment to produce or account for more than one such
counterpart for each of the parties hereto. Delivery by facsimile by any of the
parties hereto of an executed counterpart of this
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Amendment shall be effective as an original executed counterpart hereof and
shall be deemed a representation that an original executed counterpart hereof
will be delivered.
9. RATIFICATION. The terms and provisions set forth in this
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 Amendment, the terms and provisions of
the Credit Agreement are ratified and confirmed and shall continue in full force
and effect.
11. CAPTIONS. Section captions and headings used in this Amendment
are for convenience only and are not part of and shall not affect the
construction of this Amendment.
12. GOVERNING LAW. This 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 Amendment shall be
interpreted in such a manner as to be effective and valid under applicable law,
but if any provision of this 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 Amendment.
13. SUCCESSORS AND ASSIGNS. This 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 Second
Amendment to Second Amended and Restated Credit Agreement 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: _________________________________
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
By: ____________________________________
Name: __________________________________
Title: _________________________________
MARINER CDO 2002, LTD.
By: ____________________________________
Name: __________________________________
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XXXXXXX XXXXX CAPITAL, a Division of Xxxxxxx
Xxxxx Business Financial Services Inc.
By: ____________________________________
Name: __________________________________
Title: _________________________________
M&I XXXXXXXX & ILLSLEY BANK
By: ____________________________________
Name: __________________________________
Title: _________________________________
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EXHIBIT A
SCHEDULE 1.1(a)
Revolving Loan Commitments
Antares Capital Corporation $12,500,000
Xxxxxxx Xxxxx Capital $12,500,000
M&I Xxxxxxxx & Illsley Bank $15,000,000
