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SECOND AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT
THIS SECOND AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT
(this "Amendment"), dated as of March 16, 1998, is entered into by and among THE
SPORTS CLUB COMPANY, INC., a Delaware corporation, and certain of its
subsidiaries identified in the signature pages to this Amendment (collectively,
"Borrowers"), SUMITOMO BANK OF CALIFORNIA, a California banking corporation
("Sumitomo"), COMERICA BANK - CALIFORNIA, a California banking corporation
("Comerica", and collectively with Sumitomo, "Banks"), and Sumitomo in its
capacity as agent for Banks (in such capacity, "Agent"), in light of the
following facts:
RECITALS
A. Pursuant to that certain Amended and Restated Loan Agreement,
dated as of February 2, 1998 and as amended by a First Amendment to Amended and
Restated Loan Agreement dated as of February 23, 1998 (collectively, the "Loan
Agreement"), Banks are providing Borrowers with certain credit facilities.
B. Borrowers, Banks and Agent wish to amend the Loan Agreement
to, among other things, provide for the deferment of the termination of the
Commitment and prepayment of the Obligations.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Borrowers, the Banks and the Agent hereby agree as follows:
1. Defined Terms. All initially capitalized terms set forth
without definition in this Amendment (including, without limitation, in the
recitals hereto) shall have the respective meanings assigned thereto in the Loan
Agreement.
2. Amendments to Definitions. Section 1.1 of the Loan Agreement
is hereby amended such that the definition set forth below shall read in full as
follows:
"Line B Availability" means, as of each date of determination,
the Line B Commitment minus the aggregate amount of all Line B
Loans made by the Banks (including any Outstanding Standby
Letters of Credit, not to exceed the Maximum Standby Letter of
Credit Amount), less any amount by which Borrowers have failed to
comply with the Liquidity Requirement and less any permanent
reductions pursuant to Section 2.2(a).
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3. Standby Letters of Credit.
(a) Section 2.6(a) of the Loan Agreement is amended and
restated to read as follows:
"(a) Subject to the terms and conditions hereof, at any time and
from time to time from the Closing Date to the earlier of 60 days
from the Effective Date or June 29, 1998, the Issuing Bank shall
issue such Standby Letters of Credit as a Responsible Official of
a Borrower on behalf of the Borrowers may request by a Request
for Standby Letter of Credit; provided that, upon giving effect
to such Standby Letter of Credit, (i) the Total Outstanding shall
not exceed $15,000,000, (ii) the issuance of the Standby Letter
of Credit shall not result in an amount which exceeds the Line B
Availability and (iii) the Outstanding Standby Letters of Credit
shall not exceed the Maximum Standby Letter of Credit Amount. If
any Standby Letter of Credit is canceled or otherwise expires or
terminates without it being drawn upon, such cancellation,
expiration or termination shall not effect a permanent reduction
of the Line B Availability pursuant to Section 2.2(a) by the
amount of such Standby Letter of Credit, but instead such amount
may be reborrowed. Unless the Requisite Banks otherwise consent
in writing, the term of any Standby Letter of Credit shall not
exceed the earlier of 60 days from the Effective Date or June 30,
1998. If, as of the immediately preceding date, or upon any
earlier termination or acceleration of the Commitment and any
Loans thereunder, there exist any Outstanding Standby Letters of
Credit, Borrowers shall provide to Agent a standby letter of
credit issued by a bank satisfactory to the Requisite Banks, in
form and substance satisfactory to the Requisite Banks, in favor
of the Banks in a face amount equal to Outstanding Standby
Letters of Credit on that date, or shall make other provisions
satisfactory to the Requisite Banks for the collateralization or
settlement of such Outstanding Standby Letters of Credit. No
Standby Letter of Credit shall be issued except in the ordinary
course of business of Borrowers or their Subsidiaries. Unless
otherwise agreed to by the Requisite Banks, the face amount of
any Standby Letter of Credit shall not be less than $250,000."
4. Equity or Debt Offering. Section 3.1(f) of the Loan Agreement
is amended and restated to read as follows:
"(f) In addition to all other payments hereunder, all
Obligations, including payment of all indebtedness owing under
the Notes, shall be fully due and payable upon the consummation
of SCC, Inc.'s $50,000,000 proposed securities offering or other
equity or debt offering in any amount by or for the
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benefit of any of the Borrowers, and the Commitment shall
terminate; provided, however that if (i) the proposed $50,000,000
equity offering is consummated on or before April 30, 1998 and
(ii) within 5 days thereafter, Borrower shall have complied with
the conditions precedent to this Second Amendment, Banks will
defer the acceleration of all Obligations pursuant to this
Section 3.1(f) for a period of 60 days following the consummation
of such offering but in any event not later than June 30, 1998.
Consummation of the $50,000,000 equity offering shall mean SCC,
Inc.'s successfully concluding the sale of a sufficient number of
shares of common stock to raise, after deduction for normal
expenses, not less than $40 million with such proceeds
irrevocably delivered to SCC, Inc.
5. Indebtedness, Guaranties and Liens. Section 6.9(c) of the Loan
Agreement is amended and restated to read as follows:
"(c) Indebtedness and Liens securing obligations incurred in
connection with the financing or re-financing of any real
property assets of Borrowers or Non-Borrower Affiliates, to the
extent such financing has been approved by the Requisite Banks,
or (ii) incurred in connection with SCC, Inc.'s $50,000,000
proposed securities offering or other equity or debt offering in
any amount by or for the benefit of any of the Borrowers, to the
extent approved by the Requisite Banks."
6. Conditions Precedent. The effectiveness of Section 4 of this
Amendment ("Effective Date") is subject to the prior satisfaction of each of the
following conditions:
(a) all obligations owing by any Borrower to AT&T
Commercial shall have been fully paid, all collateral for such AT&T
obligations shall have been released, all security interests, Liens or
Guaranties in favor of AT&T shall have been terminated and the Special
Deposit Account Agreement and Subordination Agreement shall have been
terminated.
7. Representations and Warranties. Each representation and
warranty made by the Borrowers in Article 4 of the Loan Agreement is true and
correct on and as of the date hereof as though made as of the date hereof,
except to the extent such representations and warranties relate solely to an
earlier date.
8. Full Force and Effect. Each of the Loan Documents is hereby
amended such that all references to the Loan Agreement contained in any of such
documents shall be deemed to be made with respect to the Loan Agreement as
amended by this Amendment.
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Except as amended hereby, the Loan Agreement and the other Loan Documents shall
remain unaltered and in full force and effect.
9. Counterparts. This Amendment may be executed in multiple
counterparts, each of which shall constitute an original and all of which, taken
together, shall constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this
Amendment by their respective duly authorized officers as of the date first
above written.
The "Borrowers"
THE SPORTS CLUB COMPANY, INC.,
a Delaware corporation
By /s/ XXXXXXX X'XXXXX
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Xxxxxxx X'Xxxxx
Chief Financial Officer
THE SPECTRUM CLUB COMPANY, INC.,
a California corporation
By /s/ XXXXXXX X'XXXXX
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Xxxxxxx X'Xxxxx
Chief Financial Officer
XXXXXXX REALTY, INC.,
a New York corporation
By /s/ XXXXXXX X'XXXXX
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Xxxxxxx X'Xxxxx
Chief Financial Officer
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SPORTS CLUB, INC. OF CALIFORNIA,
a California corporation
By /s/ XXXXXXX X'XXXXX
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Xxxxxxx X'Xxxxx
Chief Financial Officer
IRVINE SPORTS CLUB, INC.,
a California corporation
By /s/ XXXXXXX X'XXXXX
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Xxxxxxx X'Xxxxx
Chief Financial Officer
THE SPORTSMED COMPANY, INC.,
a California corporation
By /s/ XXXXXXX X'XXXXX
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Xxxxxxx X'Xxxxx
Chief Financial Officer
L.A./IRVINE SPORTS CLUB, LTD.,
a California limited partnership
By:Sports Club, Inc. of California,
General Partner
By /s/ XXXXXXX X'XXXXX
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Xxxxxxx X'Xxxxx
Its: Chief Financial Officer
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TALLA NEW YORK, INC.,
a New York corporation
By /s/ XXXXXXX X'XXXXX
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Xxxxxxx X'Xxxxx
Chief Financial Officer
SCC SPORTS CLUB, INC.,
a Texas corporation
By /s/ XXXXXXX X'XXXXX
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Xxxxxxx X'Xxxxx
Chief Financial Officer
GREEN VALLEY SPECTRUM CLUB, INC.,
a Nevada corporation
By /s/ XXXXXXX X'XXXXX
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Xxxxxxx X'Xxxxx
Chief Financial Officer
SPECTRUM CLUB/ANAHEIM HILLS, INC.,
a California corporation
By /s/ XXXXXXX X'XXXXX
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Xxxxxxx X'Xxxxx
Chief Financial Officer
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The "Agent"
SUMITOMO BANK OF CALIFORNIA,
a California banking corporation
By /s/ XXXX X. XXXX, XX.
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Xxxx X. Xxxx, Xx.
Senior Vice President
The "Banks"
SUMITOMO BANK OF CALIFORNIA,
a California banking corporation
By /s/ XXXX X. XXXX, XX.
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Xxxx X. Xxxx, Xx.
Senior Vice President
COMERICA BANK - CALIFORNIA,
a California banking corporation
By /s/ XXXXXX XXXXXXX
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Xxxxxx Xxxxxxx
Vice President
Address:
Comerica Bank - California
000 X. Xxxxx Xxxxxxxxx, Xxxxx 0000
Xxxx Xxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxx Xxxxxxx, Vice President
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
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