Exhibit 10.37
EXECUTION
AMENDMENT NO. 1
TO
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
This Amendment No. 1 to
Second Amended and Restated Credit Agreement , dated as of
January 24, 2008 (the “Amendment”), among LIFE
TIME FITNESS, INC., a Minnesota corporation (the “
Borrower ”), the banks from time to time party hereto
(individually, a “ Bank ” and, collectively, the
“ Banks ”), and U. S. BANK NATIONAL ASSOCIATION,
a national banking association, one of the Banks, as Administrative
Agent for the Banks (in such capacity, the “ Agent
”) and Lead Arranger, and J. P. MORGAN SECURITIES INC. and
ROYAL BANK OF CANADA, as Co-Syndication Agents, and BMO Capital
Markets, as Documentation Agent.
RECITALS :
A. The Borrower, the Banks, the
Agent, the Lead Arranger, the Co-Syndication Agents and the
Documentation Agent are the parties to that certain Second Amended
and Restated Credit Agreement dated as of May 31, 2007 (the
“Original Agreement”).
B. The Borrower has requested
that the Agent and the Banks amend certain provisions of the
Original Agreement.
C. Subject to the terms and
conditions of this Amendment, the Agent and the Banks will agree to
the foregoing request of the Borrower.
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) Subpart (b)(v) of the definition
of “ Permitted Permanent Loan ” appearing in
Section 1.1 of the Original Agreement is amended in its
entirety to read as follows:
“(v)(A) the only security for
such Indebtedness are: (1) the real property and improvements
relating to such Clubs being financed by such Permitted Permanent
Loan, (2) the LTF Lease relating to such Clubs, (3) if
required to be by the original Related Agreements evidencing or
securing such Indebtedness, then: (a) normal and reasonable
repair and replacement reserves; and (b) a debt service
reserve to be established from the basic rent payable under the
original LTF Lease relating to such Clubs that exceeds (such excess
basic rent being the ‘Allocated Clubs Excess Rent’) the
regularly scheduled monthly principal and interest payments on such
Indebtedness if the Allocated Clubs Cash Flow is less
than the amount
required in the original Related Agreements evidencing or securing
such Indebtedness; provided , however , that, the
Real Estate Subsidiary’s failure to maintain the required
Allocated Clubs Cash Flow shall not constitute an event of default
(howsoever defined) under the relevant Related Agreements and the
sole remedy for such failure shall be the establishment of the debt
service reserve; (4) if such Indebtedness is Securitized by
re-structuring into a senior loan to the borrowing Real Estate
Subsidiary and a mezzanine loan to a separate Real Estate
Subsidiary (such mezzanine loan Real Estate Subsidiary being a
“Related Mezzanine Real Estate Subsidiary”) that has
been organized for the sole purpose of incurring such mezzanine
loan, then such mezzanine loan may be secured by a pledge of the
Equity Interests in the borrowing Real Estate Subsidiary for such
Indebtedness; and normal and reasonable repair and replacement
reserves that are required to be established by the original
Related Agreements evidencing or securing such Indebtedness
(5) and (B) none of such security shall secure any other
Indebtedness of such Real Estate Subsidiary, its Related Mezzanine
Real Estate Subsidiary, the Borrower or any other Subsidiary;
provided , that, in the case of a Teachers’
Re-financing, the collateral that secured the Permitted Permanent
Loan then being re-financed may continue to secure such
Teachers’ Re-financing;”.
(b) The definition of “
Senior Secured Operating Company Leverage Ratio ”
appearing in Section 1.1 of the Original Agreement is amended
in its entirety to read as follows:
“‘ Senior Secured
Operating Company Leverage Ratio ’: At any Quarterly
Measurement Date, the ratio of:
(a) the sum of: (i) the
aggregate outstanding principal amounts of the Revolving Loans and
the Swingline Loans; plus (ii) the Letter of Credit
Obligations; plus (iii) the aggregate outstanding
principal amount of the Borrower’s and its
Subsidiaries’ Indebtedness for borrowed money (including,
without limitation, the balance sheet amount of Capitalized Lease
Obligations, but excluding any Permitted Permanent Loan on which
the relevant Real Estate Subsidiary (or, in the case of a Permitted
Headquarters Loan, the Borrower) has Limited Recourse Liability),
other interest bearing Indebtedness and any Seller Financing that
is secured by any Lien on any of the Borrower’s assets or by
any Lien on any of its Subsidiaries’ assets that has been
granted as a third party Lien; plus (iv) the
Borrower’s and its Subsidiaries’ Contingent Obligations
relating to Indebtedness for borrowed money (including, without
limitation, the balance sheet amount of Capitalized Lease
Obligations but excluding any Contingent Obligations relating to a
Permitted Permanent Loan on which the Borrower’s or the
relevant Real Estate Subsidiary’s Contingent Obligation is
Limited Recourse Liability), other interest bearing Indebtedness
and any Seller Financing that are secured by any Lien on any of the
Borrower’s assets or by any Lien on any of its
Subsidiaries’ assets that has been granted as a third party
Lien; to
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(b) the result of: (i) EBITDA
for the Measurement Period ending on such Quarterly Measurement
Date; minus (ii) the Interest Expense for such
Measurement Period other than Interest Expense on any Indebtedness
described in subpart (a) above; minus (iii) the
Mandatory Principal Payments for such Measurement Period other than
Mandatory Principal Payments on any Indebtedness described in
subpart (a) above; minus (iv) the portion of any
Allocated Clubs Excess Rent that has been retained as a debt
service reserve during such Measurement Period pursuant to the
Related Agreements evidencing or securing a Permitted Permanent
Loan.”
(c) Section 1.1 of the Original
Agreement is further amended by adding the following new
definitions in proper alphabetical order:
“ Allocated Clubs Cash
Flow ’: With respect to any Permitted Permanent Loan, the
“cash flow” (howsoever defined in the original Related
Agreements evidencing or securing such Permitted Permanent Loan) of
Operations that is allocable to the Clubs operating in the real
property and improvements securing such Permitted Permanent
Loan.
‘ Allocated Clubs Excess
Ren t’: As defined in subpart (b)(v) of the definition of
‘Permitted Permanent Loan’.
‘ Average Life ’:
With respect to any Indebtedness, at any date of determination, the
quotient arrived at by dividing: (a) the sum of the products
of the numbers of years from the date of determination to the dates
of each successive scheduled principal payment of such Indebtedness
multiplied by the amount of such payment; by (b) the sum of
all such payments.
‘ Parity Secured Debt
’: As defined in Section 6.11(j).”
(c) Section 2.30 of the Original
Agreement is further amended by increasing the maximum Aggregate
Revolving Commitment Amount from “$425,000,000” to
“$600,000,000”.
(d) Section 6.11 of the Original
Agreement is amended by adding the following new subsection
(j):
“(j) Other Indebtedness (the
‘Parity Secured Debt’) incurred by the Borrower that is
secured by Liens permitted under Section 6.12(k) hereof;
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