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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 200549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) DECEMBER 31, 1997
THE SPORTS CLUB COMPANY, INC.
Delaware 1-13290 95-4479735
(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Indentification No.)
11100 Santa Monica Boulevard, Suite 300
Los Angeles, California 90025
(address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (310) 479-5200
(Former name or former address, if changed since last report.) Not applicable
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Index of Exhibits on Page 3.
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ITEM 2. ACQUISITION OF ASSETS.
On December 31, 1997, the Company acquired the assets of four
Racquetball World Health and Fitness Clubs located in Santa Ana, Canoga Park,
Fountain Valley and Fullerton, California. The aggregate purchase price for the
clubs was $17 million. The real property interests underlying two of the clubs
were acquired by an affiliate of Millennium Entertainment Partners, L.P. (MEP),
a stockholder of the Company, for $10 million. Concurrently, the Company entered
into a lease, accounted for as a financing lease, whereby the Company will lease
these facilities for $1 million per year. The lease has a twenty year initial
term with two ten-year renewal options and provides for a scheduled rent
increase to $1.2 million per year for years 11-20. The lease also contains a PUT
option, which allows MEP to sell, assign or otherwise transfer it's interests in
the real property to the Company upon the occurrence of certain events. The
remaining assets were purchased by the Company for $5 million cash, and up to
additional $1.5 million of the Company's common stock due to the sellers upon
the completion of certain transactions as defined in the purchase agreement. The
related costs of the acquisition are estimated at $500,000.
Concurrent with the transaction the Company issued 625,000 shares of its
common stock to MEP for $5 million.
The acquisition has been accounted for as a purchase, accordingly the
Company will include the operations of the acquired clubs in the consolidated
financial statements from the date of acquisition. The Company will operate
these four clubs as Spectrum Clubs.
The Clubs were acquired from the following parties:
CLUB SELLER
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Santa Ana RBW/Santa Ana, a California Limited
Partnership and RBWSA, LLC.
Canoga Park Norcan, a California Limited Partnership.
Fullerton RBW/Fullerton, a California Limited
Partnership.
Fountain Valley Racquetball World, a California Limited
Partnership.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) & (b) Financial Statements and Pro forma financial information.
Any financial statements and pro forma financial information required
will be filed within 60 days hereof in accordance with Rule 3-05 of Regulation
S-X.
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(c) Exhibits
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1. Letter agreement dated December 29, 1997 between
Millennium Entertainment Partners, L.P. and the Company
regarding Millennium's purchase of 625,000 shares of the
Company's common stock.
2. Agreement of Purchase and Sale by and among The Spectrum
Club Company, Inc., SCC I LLC and RBW/Fullerton, a
California Limited Partnership, dated as of December 31,
1997.
3. Agreement of Purchase and Sale by and among The Spectrum
Club Company, Inc., SCC I LLC and Norcan, a California
Limited Partnership, dated as of December 31, 1997.
4. Agreement of Purchase and Sale by and among The Spectrum
Club Company, Inc., SCC I LLC, RBW/Santa Ana, a California
Limited Partnership, and RBWSA, LLC dated as of December
31, 1997.
5. Agreement of Purchase and Sale by and among The Spectrum
Club Company, Inc. and Racquetball World, a California
Limited Partnership, dated as of December 31, 1997.
6. Agreement of Lease dated as of December 31, 1997, by and
between SCC I LLC and the Company.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed by the undersigned hereunto
duly authorized.
THE SPORTS CLUB COMPANY, INC.
By: /s/ Timothy O'Brien
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Timothy O'Brien
Chief Financial Officer
January 14, 1998
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