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EXHIBIT 10.79
FIRST AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT
THIS FIRST AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT (this
"Amendment"), dated as of February 23, 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,
the "Borrowers"), SUMITOMO BANK OF CALIFORNIA, a California banking corporation
("Sumitomo"), COMERICA BANK - CALIFORNIA, a California banking corporation
("Comerica", and collectively with Sumitomo, the "Banks"), and Sumitomo in its
capacity as agent for the Banks (in such capacity, the "Agent"), in light of the
following facts:
RECITALS
A. The Borrowers, Sumitomo and the Agent are parties to that certain
Amended and Restated Loan Agreement, dated as of February 2, 1998 (the "Loan
Agreement"), pursuant to which Sumitomo as the sole "Bank" thereunder has
provided the Borrowers with certain credit facilities.
B. The Borrowers, the Banks hereunder and the Agent wish to amend
the Loan Agreement (i) to add Comerica as a Bank thereunder, (ii) to increase
the amount of the Line B Commitment from $8,000,000 to $13,000,000, and (iii) to
make certain conforming changes to the Loan Agreement and the related Loan
Documents to give effect to the foregoing modifications.
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. Addition of Comerica as a Bank. The Borrowers and Sumitomo hereby
consent to Comerica being added as a Bank for all purposes under the Loan
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Agreement pursuant to the terms of that certain Assignment and Assumption
Agreement, its related Request for Registration and the Consent of Agent and
Borrowers, each dated on or about the date hereof.
3. Amendments to Definitions. Section 1.1 of the Loan Agreement is hereby
amended such that each of the definitions set forth below shall read in full as
follows:
"Bank" or "Banks" means individually or collectively Sumitomo Bank,
Comerica Bank - California and any one or more banks or other
financial institutions which become lending parties to this
Agreement in accordance with the terms hereof.
"Commitment" means, collectively, the Line A Commitment and the Line
B Commitment as may be reduced under this Agreement. The respective
percentage obligations of each Bank with respect to the Commitment
are as follows:
Bank Amount Percentage
---- ------ ----------
Sumitomo Bank $10,000,000 66__%
Comerica Bank - California $ 5,000,000 33__%
"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)
and less any amount by which Borrowers have failed to comply with
the Liquidity Requirement.
"Line B Commitment" means the commitment by Banks to make
non-revolving loans in an aggregate principal amount not to exceed
$13,000,000 (including any Outstanding Standby Letters of Credit,
not to exceed the Maximum Standby Letter of Credit Amount).
4. The Line B Loan. Section 2.2(a) of the Loan Agreement is amended and
restated to read as follows:
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"(a) During the Line B Availability Period, and subject to the
applicable conditions set forth in Article 8 hereof, each Bank
shall, on a non-revolving basis and pro rata according to that
Bank's percentage of the then Commitment, make advances to
Borrowers, which may not at any time exceed the Line B Availability.
This is a non-revolving line of credit. Any amount borrowed, even if
repaid before the end of the Line B Availability Period, permanently
reduces the Line B Availability and such amounts may not be
reborrowed. Banks shall not be obligated to make a Line B Loan if,
after giving effect to all Line B Loans to be made by Banks, and the
Outstanding Standby Letters of Credit, the Line B Commitment would
exceed $13,000,000."
5. Standby Letters of Credit. Sections 2.6(a) and 2.6(e) of the Loan
Agreement are 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 through the Banking Day
immediately preceding July 1, 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) Total Outstanding shall not exceed
$15,000,000, (ii) Line B Availability shall not exceed $13,000,000
and (iii) 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, Line B Availability shall not be permanently
reduced 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 Line B Maturity Date. If on the Line B Maturity 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,
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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."
"(e) At all times prior to the Line A Maturity Date, if Borrowers
fail to make any payment required by Section 2.6(d), Agent may, but
is not required to, without notice to or the consent of Borrowers,
make Line B Loans under the Commitment in an aggregate amount equal
to the amount paid by Issuing Bank on the relevant Standby Letter of
Credit, whether or not the same would cause the Line B Commitment to
exceed $13,000,000, and, for this purpose, the conditions precedent
set forth in Article 8 and the amount limitations set forth in
Section 2.1(d) shall not apply. The proceeds of such Line B Loans
shall be retained by Issuing Bank to reimburse it for the payment
made by it under the Standby Letter of Credit."
1. 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 benefit of any of the
Borrowers, and the Commitment shall terminate."
2. Indebtedness, Guaranties and Liens. Section 6.9(c) of the Loan
Agreement is amended and restated to read as follows:
"(c) Indebtedness and Liens (i) 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 the proceeds of
such Indebtedness and/or Liens
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are used to pay in full all Obligations, including payment of all
indebtedness owing under the Notes."
3. Ratio of Debt to EBITDA. Section 6.19 of the Loan Agreement is
amended and restated to read as follows:
"6.19 Ratio of Debt to EBITDA. Permit the ratio of notes payable and
capitalized lease obligations (as that line item is disclosed on
Borrower's consolidated balance sheet in their 10K and 10Q) to
EBITDA, as of the last day of the fiscal quarter of Borrowers and
their Subsidiaries, calculated at the end of each such quarter on a
rolling four (4) quarter basis, to be greater than 4.5:1. For the
purposes of the calculation of this ratio, The Spectrum Club's
Fullerton and Santa Xxx lease obligation in the amount of
$10,000,000 by and between SCC I LLC, as Landlord, and The Sports
Club Company, Inc. as Tenant, dated as of December 31, 1997, shall
not be included as debt."
4. Conditions Precedent. The effectiveness of this Amendment is
subject to the prior satisfaction of each of the following conditions:
(a) Execution and Delivery of this Amendment. The Agent shall have
received this Amendment, duly executed by an authorized officer of
(i) each of the Borrowers, (ii) the Agent and (iii) each of the
Banks;
(b) Execution and Delivery of Notes. The Borrowers shall have executed
to the order of the applicable Banks and delivered to the Agent each
of the Notes, evidencing such Banks shares of the Commitment.
(c) Execution and Delivery of Assignment and Assumption Agreement. The
Agent shall have received the Assignment and Assumption Agreement
and its related Request for Registration and Consent of Agent and
Borrowers, which are referred to in paragraph 2 of this Amendment,
in each case duly executed by an authorized officer of each
signatory thereto.
(d) Agent Fee. The Borrowers shall have paid to the Agent a fee as
agreed between Borrowers and Agent in a separate agreement, which
fee shall be fully earned by Agent on the effective date of this
Amendment.
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(e) Commitment Fee. The Borrowers shall have paid to Banks a
commitment fee equal to .5% of the Commitment (i.e., .5%
multiplied by $15,000,000 or $75,000), of which commitment fee
$50,000 has already been paid to Sumitomo, and the remaining
$25,000 shall be paid to Comerica. Such commitment fee paid
to Sumitomo has been fully earned, and such commitment fee
paid to Comerica shall be fully earned on the effective date
of this Amendment. In the event any Bank ceases to be a party
to this Agreement at a time when no Event of Default has
occurred and is continuing, such Bank shall rebate to Agent
the pro rata portion of such commitment fee attributable to
the months remaining until the Maturity Date. Agent shall
distribute the rebated fee to the Banks according to any
increase in their pro rata share of the Commitment, to any
replacement Bank according to its pro rata share of the
Commitment, or if no Banks assume the departing Bank's pro
rata share of the Commitment, to the Borrowers.
(f) Delivery of Corporate Resolutions. Agent shall have received a
corporate resolution from each Borrower, duly executed by an
authorized officer of such Borrower, which shall approve (i) the
addition of Comerica as a Bank under the Loan Agreement; and (ii)
the increase in the amount of the Line B Commitment as set forth in
this Amendment, in a form acceptable to Agent.
(g) Delivery of Opinion Letter. Agent shall have received a favorable
written legal opinion of Kinsella, Boesch, Fujikawa & Xxxxx, as
counsel to Borrowers and their subsidiaries, in a form acceptable to
Agent.
5. 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.
Borrowers have furnished to Agent and the Banks (b) the unaudited consolidated
balance sheets of Borrowers and their Subsidiaries as at December 31, 1997, and
unaudited consolidated income statements, cash flow statements of Borrowers and
their Subsidiaries and unaudited individual Club operating statements for such
month and for their fiscal year ended with such month. Such financial statements
fairly present the financial condition, results of operations and cash flow of
Borrowers and their Subsidiaries as at
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such dates and for such periods, in conformity with generally accepted
accounting principles, consistently applied, provided that the balance sheets
and statements referred to above are subject to normal year-end audit
adjustments.
6. 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. Except as amended hereby, the Loan Agreement and the
other Loan Documents shall remain unaltered and in full force and effect. 1.
7. 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
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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
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
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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
Chief Financial Officer
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
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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/ Xxxxxxxxx X. Xxxx
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Xxxxxxxxx X. Xxxx
Vice President
The "Banks"
SUMITOMO BANK OF CALIFORNIA,
a California banking corporation
By /s/ Xxxxxxxxx X. Xxxx
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Xxxxxxxxx X. Xxxx
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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