EXHIBIT 10.8
THIRD AMENDMENT TO
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
This THIRD AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT
(this "Amendment") is made and entered into as of the 31st day of December, 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
& Xxxxxx 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, LTF MF Real Estate Holdings, LLC, a Delaware limited liability
company ("New RE Holdings"), is a wholly-owned Subsidiary of the Borrower; and
WHEREAS, LTF MF AZ Real Estate, LLC, a Delaware limited liability
company ("AZRE"), is a wholly-owned Subsidiary of New RE Holdings; and
WHEREAS, the Credit Agreement contains certain limitations in respect
of additional Indebtedness which may be incurred by the Borrower or any of its
Subsidiaries and additional Liens which may be granted by Borrower or any of its
Subsidiaries, and Borrower, New RE Holdings and AZRE each desire that certain
financing arrangements with General Electric Capital Corporation ("GECC")
providing for certain term loans to be made available to AZRE, as more fully
described herein, be permitted by Antares, Chase, Mariner, Merrill and M&I Bank;
and on and subject to the terms hereof Antares, Chase, Mariner, Merrill and M&I
Bank are agreeable to such request; and
WHEREAS, the parties also desire to amend the Credit Agreement in
certain respects in order to permit M&I Bank to be an issuer of Lender Letters
of Credit thereunder;
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.
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2. Amendments. Subject to the conditions set forth below, on the
Third Amendment Effective Date the Credit Agreement shall be amended as follows:
(A) Section 1.2(b) shall be amended and restated in its entirety
as follows:
(b) Lender Letters of Credit and Letter of Credit
Participation Agreements. In addition to obtaining Revolving Loans, the
Borrower may utilize the Revolving Loan Commitment to obtain
(i) letters of credit (each such letter of
credit, a "Lender Letter of Credit") issued by the Agent or,
with Agent's approval, any other Lender (an "Issuing Lender"),
or
(ii) letter of credit participation agreements
issued by Agent (each such letter of credit participation, a
"Letter of Credit Participation Agreement") which confirm
payment to banks (whether or not such banks are Lenders) which
issue letters of credit for the account of Borrower on behalf
of each Lender having a Revolving Loan Commitment (severally
and not jointly) according to such Lender's Revolving Loan
Commitment.
Lender Letters of Credit and Letter of Credit Participation Agreements
are collectively referred to herein as "L/C Facilities".
Notwithstanding the foregoing, neither the Agent nor any Issuing Lender
shall have any obligation to issue any L/C Facility for the benefit of
Borrower if, after giving effect thereto, (x) any of the conditions
described in items (i), (ii), (iii) or (iv) of Section 1.1(a) would
exist, or (y) the aggregate amount of the Letter of Credit
Participation Liability would exceed $3,000,000 plus, during the period
while the TIAA Letter of Credit is outstanding, the aggregate undrawn
amount available for drawing thereunder. Notwithstanding anything else
contained in this Agreement, the Borrower may not request issuance of,
and the Agent and the Lenders shall have no obligation hereunder to
issue or cause the issuance of (or extend the maturity of), the TIAA
Letter of Credit except pursuant to consummation of the TIAA
Transaction, and the face amount of the TIAA Letter of Credit, when
issued, shall not exceed $5,000,000.
The Borrower shall be irrevocably and unconditionally
obligated without presentment, demand, protest or other formalities of
any kind, to reimburse the Agent and any Issuing Lender for any amounts
paid by the Agent or such Issuing Lender under any L/C Facility within
one (1) Business Day after notice to Borrower thereof. The Borrower
hereby authorizes and directs the Lenders with Revolving Loan
Commitments, at the option of the Issuing Lender (with respect to any
Lender Letter of Credit issued by such Issuing Lender) or the Agent
(with respect to any other L/C Facility), to make a Revolving Loan and
fund the proceeds thereof directly to (1) such Issuing Lender in the
amount of any payment made by such Issuing Lender with respect to a
Lender Letter of Credit issued by such Issuing Lender, or (2) the Agent
in the amount of any payment made by the Agent with respect to any
other L/C Facility. All amounts paid by an Issuing Lender with respect
to any Lender Letter of Credit issued by such Issuing Lender or the
Agent with respect to any other L/C Facility that are not repaid by
Borrower within one
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(1) Business Day after notice to Borrower thereof, with the proceeds of
a Revolving Loan or otherwise, shall bear interest from the date
disbursed at the interest rate then applicable to Revolving Loans,
calculated using the Base Rate and the Applicable Margin in effect,
and, if applicable under Section 1.3(c) hereof, the additional two
percent (2.0%) per annum provided for therein. Each Lender agrees to
fund its Commitment Percentage of any Revolving Loan made pursuant to
this Section 1.1(b) and, if no such Revolving Loans are made, each
Lender with a Revolving Loan Commitment agrees to purchase, and shall
be deemed to have purchased, a participation in each L/C Facility in an
amount equal to its ratable share of such L/C Facility based upon the
Revolving Loan Commitments then in effect and each such Lender agrees
to pay (x) to the Agent such share of any payments made by the Agent
under such L/C Facility, and (y) to any Issuing Lender such share of
any payments made by such Issuing Lender under any Lender Letter of
Credit issued by such Issuing Lender. The obligations of each Lender
under the preceding two (2) sentences shall be absolute and
unconditional and such remittance shall be made notwithstanding the
occurrence or continuation of an Event of Default or Default or the
failure to satisfy any condition set forth in Sections 2.2 or 2.3
hereof.
Borrower may request and use a L/C Facility for the same
purpose as any Revolving Loan, or, with respect to the TIAA Letter of
Credit, to secure the TIAA Facilities, or, with respect to the U.S.
Bank Letter of Credit, to secure the U.S. Bank Facilities, but for no
other purposes. Any L/C Facility and any letter of credit or written
contract for which Borrower requests a Letter of Credit Participation
Agreement shall be in such form, be for such amount, and contain such
terms as are reasonably satisfactory to Agent (or, if applicable, the
Issuing Lender).
The expiration date of each Lender Letter of Credit shall be
on a date which is no later than the Revolving Termination Date. Each
Letter of Credit Participation Agreement shall provide that the Letter
of Credit Participation Agreement terminates and all demands or claims
for payment must be presented by a date certain, which date will be the
earlier of (a) one year from its date of issuance (or as extended
pursuant to options to renew for additional one year periods), or as
otherwise provided in the letter(s) of credit to which such Letter of
Credit Participation Agreement relates, or (b) the Revolving
Termination Date.
Borrower shall give the Agent at least ten (10) Business Days
prior notice specifying the date a L/C Facility is to be issued,
identifying the beneficiary thereof, and describing the nature of the
transactions proposed to be supported thereby. If Borrower is
requesting that a Lender be the Issuing Lender, Borrower shall also
provide such ten (10) Business Days' prior notice to such Lender. Each
such notice shall specify the same information and contain the same
certifications which Section 1.5 requires be included in a Notice of
Borrowing and the Agent's obligation to establish an L/C Facility and
any Lender's agreement to be the Issuing Lender of any Lender Letter of
Credit shall be subject to the same conditions precedent as those for
making a Revolving Loan. In addition, any Lender's agreement to be the
Issuing Lender of any Letter of Credit shall also be subject to the
Agent's consent thereto. The notice shall also be accompanied by the
drawing terms for the Lender Letter of Credit or form of each letter of
credit or other
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written contract which will be supported by the Letter of Credit
Participation Agreement.
(B) Section 1.9(c) shall be amended and restated in its entirety
as follows:
(c) Letter of Credit Fees. The Borrower shall pay to the
Agent, for the ratable benefit of the Lenders, a fee equal to four
percent (4.0%) per annum on the outstanding Letter of Credit
Participation Liability, payable quarterly in arrears on the first day
of the month following the end of each quarter. The Borrower shall pay
any Lender acting as Issuing Bank such "facing" or issuance fees, wire
transfer fees, document fees and other fees in respect of any Lender
Letters of Credit issued by such Issuing Bank as may be agreed upon by
Borrower and such Issuing Bank.
(C) Section 5.1 shall be amended by (i) deleting the word "and" at
the end of clause (m) thereof, (ii) replacing the "." at the end of clause (n)
thereof with "; and", and (iii) adding new clauses (o), (p) and (q) thereto as
follows:
(o) Liens granted by the GECC Subsidiaries in favor of
GECC securing the GECC Facilities;
(p) Liens granted by New RE Holdings in favor of GECC
with respect to the ownership interests of New RE Holdings in the GECC
Subsidiaries to secure the GECC Facilities;
(q) the Lien created by the GECC Deposit Agreement in
respect of the amounts of funds of Borrower deposited with GECC
thereunder; and
(r) a Lien in favor of GECC with respect to the ownership
interest of Borrower in New RE Holdings to secure the GECC Facilities.
(D) Section 5.5 shall be amended by (i) deleting the word "and" at
the end of clause (h) thereof, (ii) replacing the "." at the end of clause (i)
thereof with "; and", and (iii) adding a new clause (j) thereto as follows:
(j) the GECC Facilities, provided that (i) the GECC
Subsidiaries are the only obligors thereunder (except, with respect to
Borrower, to the extent of the funds held under the GECC Deposit
Agreement, and except, with respect to New RE Holdings, to the extent
of the pledge of New RE Holdings' interests in the GECC Subsidiaries);
(ii) the sole security for the GECC Facilities is Property owned by the
GECC Subsidiaries (except, with respect to Borrower, for the funds held
under the GECC Deposit Agreement, and except, with respect to New RE
Holdings for the pledge of New RE Holdings' interests in the GECC
Subsidiaries and except, with respect to Borrower, for the pledge of
Borrower's interests in New RE Holdings); (iii) net proceeds of such
Indebtedness (after payment of any related costs and expenses) are used
either (x) to repay Indebtedness under the U.S. Bank Facility which is
secured by the Clubs which are being subjected to Liens in favor of
GECC, or (y) distributed by the GECC Subsidiaries incurring such
Indebtedness to New RE Holdings and then by New RE Holdings to Borrower
promptly upon incurring such Indebtedness; and (iv) with respect to
each incurrence of any such Indebtedness after the Effective Date, no
Default or
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Event of Default shall then exist or would be caused thereby and
Borrower shall have delivered to Agent at least one (1) Business Day in
advance thereof a calculation of the financing covenants in Sections
6.3 and 6.6 prepared on a pro forma basis taking into account the
proposed additional Indebtedness and demonstrating that the incurrence
of such Indebtedness will be in compliance with such Sections.
(E) The following new definitions shall be added in their proper
alphabetical places:
"AZRE" means LTF MF AZ Real Estate, LLC, a Delaware limited
liability company.
"GECC" means General Electric Capital Corporation, a New York
corporation.
"GECC Deposit Agreement" means an agreement between Borrower
and GECC [in substantially the form of Exhibit A to the Eighth
Amendment for the purposes stated therein].
"GECC Facilities" means one or more mortgage loan facilities
between the GECC Subsidiaries and GECC which will be used to refinance
the real Property and improvements relating to those Clubs which are
from time to time held by GECC Subsidiaries.
"GECC Financing Agreements" means the promissory notes,
mortgages, deeds of trust, security agreements, leasehold assignments
and other instruments, documents and agreements executed and delivered
by the GECC Subsidiaries and/or New RE Holdings and/or the Borrower to
evidence the GECC Facilities.
"GECC Subsidiaries" means any of AZRE, and any other
Subsidiaries which hereafter becomes the owner of real Property which
is subject to the GECC Financing Agreements and to a GECC Subsidiary
Lease with Borrower as tenant.
"GECC Subsidiary Lease" means a a long-term lease agreement
between a GECC Subsidiary as lessor and Borrower as lessee relating to
a Club.
"New RE Holdings" means LTF MF Real Estate Holdings, LLC, a
Delaware limited liability company.
"Third Amendment" means that certain Third Amendment to Second
Amended and Restated Credit Agreement dated as of December __, 2003 by
and among Borrower, Agent and the Lenders.
"Third Amendment Effective Date" means the date upon which (a)
the Third 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 5 of the Third Amendment has been satisfied.
3. Consent. The Borrower hereby requests that the Agent and the
Lenders each consent to AZRE's entering into the GECC Facilities and Borrower's,
AZRE's and New RE Holdings' entering into the GECC Financing Agreements, on
substantially the terms described
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on Exhibit B to this Amendment, and to the incurrence by AZRE of additional
Indebtedness under the GECC Facilities and the GECC Financing Agreement s up to
an outstanding principal amount not at any time to exceed $75,000,000. On and
subject to the foregoing, and provided that the GECC Facilities and the GECC
Financing Agreements do not conflict with the requirements set forth on Exhibit
C to this Amendment, Antares, Chase, Mariner, Merrill and M&I Bank each hereby
consent to (a) AZRE's entering into the GECC Facilities and Borrower's, AZRE's
and New RE Holdings' entering into the GECC Financing Agreements on
substantially the terms described on Exhibit B to this Amendment, and (b) the
incurrence by AZRE of additional Indebtedness under the GECC Facilities and the
GECC Financing Agreements up to an outstanding principal amount not at any time
to exceed $75,000,000. In furtherance of the foregoing, the Lenders severally
agree that the Agent is authorized to release the security interest of the Agent
in Borrower's ownership interests in New RE Holdings and to deliver to GECC a
UCC financing statement amendment evidencing such release of such security
interest, provided that such release shall not be recorded or effective unless
the GECC Facilities close. The consent set forth herein shall be effective only
in the specific instance set forth herein, and is and shall be without prejudice
to the rights of the Agent, any Issuing Bank and the Lenders under the Credit
Agreement and the other Loan Documents in all other respects.
4. 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.
5. Conditions to Effectiveness. This Amendment shall become
effective and the Third 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, Chase, Mariner, Merrill
and M&I Bank:
(a) Execution and Delivery of This Amendment. This
Amendment shall each have been duly executed by the Borrower, the Agent
and each of the Lenders.
(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 this Amendment 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
Borrower's execution, delivery and performance of this
Amendment and each other instrument, document or agreement to
be executed or delivered by the Borrower hereunder.
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(c) 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, Chase, Mariner,
Merrill or M&I Bank may reasonably request in connection with the
transactions contemplated by this Amendment.
(d) 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.
6. 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
have been duly authorized by all requisite corporate action on the part of
Borrower and that this Amendment has 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.
Borrower hereby covenants to deliver to Agent a complete and correct
set of the GECC Financing Agreements executed in connection with the first
incurrence of Indebtedness under the GECC Facilities, certified by Borrower as
complete and correct. Borrower further covenants to promptly deliver to Agent
complete and correct copies of any and all GECC Financing Agreements which are
from time to time executed and delivered thereafter, certified by Borrower as
complete and correct.
7. 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.
8. References. From and after the Third 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.
9. 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 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.
10. 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.
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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 Third 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:____________________________
Title:_____________________________
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XXXXXXX XXXXX CAPITAL, a Division of Xxxxxxx
Xxxxx Business Financial Services Inc.
By:_______________________________
Name:____________________________
Title:_____________________________
M&I XXXXXXXX & ILSLEY BANK
By:_______________________________
Name:____________________________
Title:_____________________________
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