Document:

exv4w20

 

EXHIBIT 4.20

Fifteenth Amendment to Rights Agreement

 

 

FIFTEENTH AMENDMENT TO RIGHTS AGREEMENT

DATED AS OF OCTOBER 6, 1998

     This Fifteenth Amendment (the “Fifteenth Amendment”) to the Rights Agreement is made
and entered into as of April 29, 2005, and amends that certain agreement entered into by and
between The Sports Club Company, Inc., a Delaware corporation (the “Company”), and American
Stock Transfer & Company, a New York corporation (the “Rights Agent”), dated as of October
6, 1998, as amended by the (a) First Amendment to Rights Agreement dated as of February 18, 1999,
(b) Second Amendment to Rights Agreement dated as of July 2, 1999, (c) Third Amendment to Rights
Agreement dated as of April 27, 2000, (d) Fourth Amendment to Rights Agreement dated as of June 27,
2001, (e) Fifth Amendment to Rights Agreement dated as of September 6, 2002, (f) Sixth Amendment to
Rights Agreement dated as of March 5, 2003, (g) Seventh Amendment to the Rights Agreement dated as
of April 14, 2003, (h) Eighth Amendment to the Rights Agreement dated as of May 30, 2003, (i) Ninth
Amendment to the Rights Agreement dated as of July 30, 2003, (j) Tenth Amendment to the Rights
Agreement dated as of September 30, 2003, (k) Eleventh Amendment to the Rights Agreement dated as
of November 25, 2003, (l) Twelfth Amendment to the Rights Agreement dated as of March 3, 2004, (m)
Thirteenth Amendment to the Rights Agreement dated as of March 10, 2004 and (n) Fourteenth
Amendment to the Rights Agreement dated as of February 8, 2005 (as so amended, the “Rights
Agreement”). Capitalized terms used but not defined herein shall have the meanings given to
them in the Rights Agreement.

R E C I T A L S

     WHEREAS, on September 29, 1998, the Board of Directors of the Company (the “Board”)
authorized and declared a dividend of one preferred share purchase right for each Common Share of
the Company outstanding on October 6, 1998, each right representing the right to purchase one
five-hundredth of a Preferred Share upon the terms and subject to the conditions set forth in the
Rights Agreement, and further authorized and directed the issuance of one right with respect to
each Common Share that shall become outstanding between the Record Date and the earliest of the
Distribution Date, the Redemption Date and the Expiration Date;

     WHEREAS, the Company and the Rights Agent entered into the Rights Agreement as of October 6,
1998, and thereafter amended said Agreement on the dates set forth in the first paragraph of this
Fifteenth Amendment;

     WHEREAS, on September 15, 2004, the Board approved the creation of a special committee thereof
(the “Special Committee”) to evaluate strategic alternatives for the Company, including the
possibility of a sale of one or more of the Company’s operating assets in a transaction in which
certain stockholders of the Company, including Millennium, D. Michael Talla, Rex A. Licklider
and/or Kayne Anderson Capital Advisors, L.P., and their respective affiliates (collectively, the
“Principal Stockholders”) would participate;

 

 

     WHEREAS, Millenium has proposed a transaction in which the Principal Stockholders would
contribute all of their outstanding shares of preferred stock and/or common stock of the Company,
and Millenium would also contribute a certain amount of cash, to a newly created Delaware
subsidiary that would merge with the Company, cashing out the public shareholders; simultaneously
with the merger, Millenium would purchase certain assets of the Company (the “Proposed
Transaction”) pursuant to an Asset Purchase Agreement and related agreements;

     WHEREAS, the Principal Stockholders and the Company entered into a term sheet with respect to
the Proposed Transaction on February 8, 2005 (the “Term Sheet”);

     WHEREAS, the Special Committee has determined that it is in the best interests of the Company
and its stockholders to amend the Rights Agreement as set forth herein.

A G R E E M E N T

     NOW, THEREFORE, in consideration of the recitals, and the mutual covenants and agreements
hereinafter set forth, the parties hereto hereby amend the Rights Agreement as follows:

     1. The definitions of “Beneficial Owner” and “Beneficially Owned” set forth in Section 1 of
the Rights Agreement are hereby amended by adding the following as the last sentence in subpart
(iv) thereof:

     “Notwithstanding anything to the contrary in this Agreement, no securities shall be deemed to
be Beneficially Owned by any Person solely pursuant to this clause (iv) in connection with (a) the
Term Sheet, including any amendments or changes thereto, so long as any such amendments or changes
to the Term Sheet are approved, in advance of their adoption, by the Special Committee.”

     2. No Other Changes. Except as expressly set forth in this Fourteenth Amendment, the
terms of the Rights Agreement shall continue in full force and effect in accordance with its terms.

     3. Miscellaneous. This Amendment (together with the Rights Agreement) represents the
entire agreement and understanding between the parties hereto with respect to this Amendment and
supersedes all prior and contemporaneous written and oral negotiations, discussions and agreements;
shall be binding on, and inure to the benefit of, the parties hereto and their respective
successors, assigns and legal representatives; and may be executed in counterparts, each of which
shall be deemed an original but all of which shall constitute one and the same agreement.
Paragraph headings appearing in this Amendment are for the convenience of the parties and shall

 

 

not be considered in interpreting or construing any term or provision hereof.

[Balance of Page Intentionally Left Blank; Signature Page Follows]

 

 

     IN WITNESS WHEREOF, the parties hereto have executed this Amendment on the date first written
above.

	 	 	 	 	 	 	 
	 	 	 	 	Company:
	 
	 	 	 	 	 	 
	 	 	 	 	THE SPORTS CLUB COMPANY, INC.
	 
	 	 	 	 	 	 
	Attest:
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	By:
	/s/ Timothy O’Brien
	 

	 	 	 	 	 	 
	 

	 	/s/ Rex Licklider
	 	Name:
	Timothy O’Brien
	 

	 	 	 	 	 	 
	Name:

	 	Rex Licklider
	 	Title:
	Chief Financial Officer
	Title:

	 	Chief Executive Officer	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Trustee:	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	AMERICAN STOCK TRANSFER & TRUST COMPANY
	 
	 	 	 	 	 	 
	Attest:
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	/s/ Susan Silber
	 	By:
	/s/ Herbert J. Lemmer
	 

	 	 
	 	 	 	 
	Name:

	 	Susan Silber
	 	Name:
	Herbert J. Lemmer
	Title:

	 	Assistant Secretary
	 	Title:
	Vice Presidentexv10w84

 

EXHIBIT

10.84

Fourth Supplemental Indenture

 

 

FOURTH SUPPLEMENTAL INDENTURE

     This Supplemental Indenture (the “Fourth Supplemental Indenture”) is made and entered
into as of this 8th day of February, 2005 by and among The Sports Club Company, Inc., a Delaware
corporation (the “Company”), the Subsidiary Guarantors (as defined in the Indenture
(defined below)), and U.S. Bank Trust National Association, a national banking association, now
known as U.S. Bank National Association, as trustee (the “Trustee”), with reference to the
following:

     A. The Company, the Subsidiary Guarantors and the Trustee are parties to an Indenture dated
as of April 1, 1999 (the “Indenture”), pursuant to which the Company issued $100,000,000
principal amount of its 11 3/8% Senior Secured Notes due 2006 (the “Notes”). The Notes are
held by a number of Holders; the largest group of Holders consists of various funds and accounts
managed by Post Advisory Group, LLC and its affiliates (“Post”); funds and accounts managed
by Post own more than fifty percent (50%) of the aggregate principal amount of outstanding Notes.

     B. The Company’s Board of Directors approved the creation of a special committee (the
“Special Committee”) to investigate various strategic alternatives, including the
possibility of a “going private” transaction in which certain of the Company’s principal
stockholders would participate.

     C. The Company and certain of the Company’s principal stockholders have commenced
negotiations on the terms and conditions under which the Company would sell six of its sports
fitness complexes to an affiliate of Millennium Partners, a principal stockholder of the Company
(“Millennium”) for $65,000,000. As part of that transaction, the Company’s four principal
stockholders, Millennium, Rex A. Licklider, D. Michael Talla and Kayne Anderson Capital Advisors
L.P. (the “Principal Stockholders”), would form a new entity which would be merged with and
into the Company, with the Company being the surviving entity, and in connection with which all
Company stockholders, other than the Principal Stockholders, would receive $2.00 for each share of
Common Stock held by them (the “Proposed Transaction”). Finally, as part of the Proposed
Transaction, the Company would refinance its facility in West Los Angeles and use the proceeds of
the asset sale and refinancing to retire the Notes. The Proposed Transaction would be evaluated by
the Special Committee and its independent financial advisor, Barnett & Partners LLC.

     D. In order to permit the Company, Millennium and the Principal Stockholders to engage in
negotiations with respect to, and execute and deliver a term sheet and definitive documentation
governing, the Proposed Transaction without arguably constituting a Change of Control (as defined
in the Indenture), the Company wishes to amend the Indenture to modify the Change of Control
provisions as they apply to the Proposed Transaction, and the Trustee is willing to amend the
Indenture to allow for such modification and amendment, subject to the terms and conditions set
forth in this Fourth Supplemental Indenture.

     E. Pursuant to Section 9.2 of the Indenture, the Trustee, the Subsidiary Guarantors and the
Company have the right to execute and deliver this Fourth Supplemental Indenture to amend the
Indenture as described in Recital D above if such amendment is approved or consented to by Holders
of at least a majority of the principal amount of the Notes outstanding, and Post (which, through
funds and accounts managed by it, holds more than 50% of the principal amount of outstanding Notes)
is willing to consent to this Fourth Supplemental Indenture.

AGREEMENT

     In consideration of the recitals, and the mutual covenants and agreements hereinafter set
forth, the Company, the Subsidiary Guarantors and the Trustee mutually covenant and agree for the
benefit of the Holders of the Notes as follows:

     1. Recitals; Definitions. The terms and conditions set forth in the Recitals shall
be deemed a part of this Fourth Supplemental Indenture as if set forth in a numbered paragraph
hereof. Unless

 

 

otherwise defined herein, capitalized words or terms appearing in this Fourth Supplemental
Indenture shall have the meanings given to them in the Indenture.

     2. Term. The term of this Fourth Supplemental Indenture shall commence on the date
hereof and shall terminate and expire as of 5:00 p.m., P.S.T., on June 30, 2005 (the
“Term”). Upon the expiration of the Term, except for its application to events which
occurred during the Term, this Fourth Supplemental Indenture shall be of no further force or
effect, and the terms and provisions of the Indenture shall continue to apply as if this Fourth
Supplemental Indenture were never effective.

     3. Modification of Change of Control Provision.

     (a) Subject to the terms of subsection (b) hereof, the following events which may occur
during the Term shall not be deemed to be a Change of Control under the Indenture: (i) any
discussions, understandings or agreements by and among one or more of the Principal Stockholders
relating to or in contemplation of the Proposed Transaction, whether or not such discussions,
understandings or agreements involve other Persons or whether such Stockholders (including any such
other Persons) file, or are required to file, with the Commission a Schedule 13D or 14D in
connection therewith, (ii) the preparation and submission to the Company of a term sheet, letter of
intent or other written proposal setting forth the terms and conditions under which one or more of
the Principal Stockholders (or any Affiliates thereof) are prepared to consummate the Proposed
Transaction, or (iii) the negotiation, execution and delivery of a definitive asset purchase
agreement, merger agreement and other related agreements and instruments by one or more of the
Principal Stockholders (or any Affiliates thereof) relating to the Proposed Transaction; provided
that this Section 3(a) shall not be effective if any such definitive asset purchase agreement,
merger agreement or related agreement or instrument contains any provision that would result in an
adverse consequence to the Company in the event the Proposed Transaction is not consummated due to
the failure of the Holders of the Notes to waive or modify the Change of Control provisions of the
Indenture with respect to such Transaction.

     (b) Anything in subsection (a) to the contrary notwithstanding, the Change of Control
provisions of the Indenture shall not be deemed to be waived or modified with respect to the
consummation of the Proposed Transaction or any aspect thereof. Without limiting the generality of
the foregoing and for purposes of clarification, in the event the consummation of the Proposed
Transaction or any aspect thereof constitutes a Change of Control under the Indenture, all of the
provisions of the Indenture shall apply as if this Fourth Supplemental Indenture was not effective,
including the obligation to make a Change of Control Offer pursuant to Section 4.14 of the
Indenture.

     4. No Other Changes. Except as expressly set forth in this Fourth Supplemental
Indenture, the terms of the Indenture shall continue in full force and effect in accordance with
its terms.

     5. Miscellaneous. This Fourth Supplemental Indenture (together with the Indenture,
as previously amended and supplemented) represents the entire agreement and understanding between
the parties hereto with respect to this Fourth Supplemental Indenture and supersedes all prior and
contemporaneous written and oral negotiations, discussions and agreements; shall be binding on, and
inure to the benefit of, the parties hereto and their respective successors, assigns and legal
representatives; and may be executed in counterparts, each of which shall be deemed an original but
all of which shall constitute one and the same agreement.

     IN WITNESS WHEREOF, the parties hereto have executed this Fourth Supplemental Indenture on the
date first written above.

	 	 	 	 	 
	 	“COMPANY”

THE SPORTS CLUB COMPANY, INC.

 	 
	 	By:  	/s/ Timothy O’Brien
 	 
	 	Name:  	Timothy O’Brien 	 
	 	Title:  	Chief Financial Officer 	 

 

 

	 	 	 	 	 

	 	 	 	 	 	 	 
	 

	 	 	 	“TRUSTEE”
	 
	 	 	 	 	 	 
	 	 	 	 	U.S. BANK NATIONAL ASSOCIATION
	 
	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ Richard Prokosch
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	Richard Prokosch
	 

	 	 	 	Title:
	 	Vice President
	 
	 	 	 	 	 	 
	 	 	 	 	“SUBSIDIARY GUARANTORS”
	 	 	 	 	(see signature pages attached hereto)
	Subsidiary Guarantors:	 	 
	 
	 	 	 	 	 	 
	SCC DEVELOPMENT COMPANY	 	
		 	LA/IRVINE SPORTS CLUBS, LTD.
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	By:
	 	Sports Club, Inc. of California, its
General partner
	By:

	 	/s/ Timothy O’Brien	 	 	 	 
	 

	 	 	 	 	 	 
	Name:

	 	Timothy O’Brien	 	 	 	 
	Title:

	 	Chief Financial Officer
	 	By:
	 	/s/ Timothy O’Brien
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	Timothy O’Brien
	 

	 	 	 	Title:
	 	Chief Financial Officer
	 
	 	 	 	 	 	 
	SCC NEVADA, INC.	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	PONTIUS REALTY, INC.
	By:

	 	/s/ Timothy O’Brien	 	 	 	 
	 

	 	 	 	 	 	 
	Name:

	 	Timothy O’Brien	 	 	 	 
	Title:

	 	Chief Financial Officer
	 	By:
	 	/s/ Timothy O’Brien
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	Timothy O’Brien
	 

	 	 	 	Title:
	 	Chief Financial Officer
	 
	 	 	 	 	 	 
	HFA SERVICES, INC.	 	 	 	 
	 
	 	 	 	 	 	 
	By:	 	/s/ Timothy O’Brien	 	SCC SPORTS CLUB, INC.
	 

	 	 	 	 	 	 
	Name:

	 	Timothy O’Brien	 	 	 	 
	Title:

	 	Chief Financial Officer	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ Timothy O’Brien
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	Timothy O’Brien
	IRVINE SPORTS CLUB, INC.	 	Title:	 	Chief Financial Officer
	 
	 	 	 	 	 	 
	By:

	 	/s/ Timothy O’Brien	 	 	 	 
	 

	 	 	 	 	 	 
	Name:

	 	Timothy O’Brien	 	 	 	 
	Title:

	 	Chief Financial Officer	 	 	 	 

 

 

	 	 	 	 	 	 	 
	SEPULVEDA REALTY AND	 	TVE, INC.
	DEVELOPMENT COMPANY, INC.	 	 	 	 
	 
	 	 	 	 	 	 
	By:

	 	/s/ Timothy O’Brien
	 	By:
	 	/s/ Timothy O’Brien
	 

	 	 
	 	 	 	 
	Name:

	 	Timothy O’Brien
	 	Name:
	 	Timothy O’Brien
	Title:

	 	Chief Financial Officer
	 	 Title:
	 	Chief Financial Officer
	 
	 	 	 	 	 	 
	SF SPORTS CLUB, INC.	 	SCC CALIFORNIA, INC.
	 
	 	 	 	 	 	 
	By:

	 	/s/ Timothy O’Brien
	 	By:
	 	/s/ Timothy O’Brien
	 

	 	 
	 	 	 	 
	Name:

	 	Timothy O’Brien
	 	Name:
	 	Timothy O’Brien
	Title:

	 	Chief Financial Officer
	 	 Title:
	 	Chief Financial Officer
	 
	 	 	 	 	 	 
	SCC REALTY COMPANY	 	THE SPORTS CONNECTION HOLDING COMPANY
	 
	 	 	 	 	 	 
	By:

	 	/s/ Timothy O’Brien
	 	By:
	 	/s/ Timothy O’Brien
	 

	 	 
	 	 	 	 
	Name:

	 	Timothy O’Brien
	 	Name:
	 	Timothy O’Brien
	Title:

	 	Chief Financial Officer
	 	 Title:
	 	Chief Financial Officer
	 
	 	 	 	 	 	 
	SPORTS CLUB, INC. OF CALIFORNIA	 	THE SPORTSMED COMPANY, INC.
	 
	 	 	 	 	 	 
	By:

	 	/s/ Timothy O’Brien
	 	By:
	 	/s/ Timothy O’Brien
	 

	 	 
	 	 	 	 
	Name:

	 	Timothy O’Brien
	 	Name:
	 	Timothy O’Brien
	Title:

	 	Chief Financial Officer
	 	 Title:
	 	Chief Financial Officer
	 
	 	 	 	 	 	 
	TALLA NEW YORK, INC.	 	WASHINGTON D.C. SPORTS CLUB, INC.
	 
	 	 	 	 	 	 
	By:

	 	/s/ Timothy O’Brien
	 	By:
	 	/s/ Timothy O’Brien
	 

	 	 
	 	 	 	 
	Name:

	 	Timothy O’Brien
	 	Name:
	 	Timothy O’Brien
	Title:

	 	Chief Financial Officer
	 	 Title:
	 	Chief Financial Officer
	 
	 	 	 	 	 	 
	 	 	 	 	NY SPORTS CLUB, INC.
	 
	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ Timothy O’Brien
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	Timothy O’Brien
	 

	 	 	 	Title:
	 	Chief Financial Officer

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