EXHIBIT 10.2
TOWN SPORTS INTERNATIONAL, INC.
$255,000,000
9 5/8% SENIOR NOTES DUE 2011
PURCHASE AGREEMENT
April 10, 2003
DEUTSCHE BANK SECURITIES INC.
BNP PARIBAS SECURITIES CORP.
c/o Deutsche Bank Securities Inc.
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Town Sports International, Inc., a New York corporation (the
"Company"), and the subsidiaries of the Company listed on the signature pages
hereto (the "Guarantors" and, together with the Company, the "Issuers") hereby
confirm their agreement with you (the "Initial Purchasers"), as set forth below.
1. THE SECURITIES. Subject to the terms and conditions
herein contained, the Company proposes to issue and sell to the Initial
Purchasers $255,000,000 aggregate principal amount of its 9 5/8% Senior Notes
due 2011 (the "Notes"). The Notes will be unconditionally guaranteed (the
"Guarantees" and, together with the Notes, the "Securities") on a senior basis
by each of the Guarantors. The Securities are to be issued under an indenture
(the "Indenture") to be dated as of April 16, 2003 by and among the Company, the
Guarantors and The Bank of New York, as Trustee (the "Trustee").
The Securities will be offered and sold to the Initial
Purchasers without being registered under the Securities Act of 1933, as amended
(the "Act"), in reliance on exemptions therefrom.
In connection with the sale of the Securities, the Company has
prepared a preliminary offering memorandum dated March 27, 2003 (the
"Preliminary Memorandum") and a final offering memorandum dated April 10, 2003
(the "Final Memorandum"; the Preliminary Memorandum and the Final Memorandum
each herein being referred to as a "Memorandum") setting forth or including a
description of the terms of the Securities, the terms of the offering of the
Securities, a description of the Company and any material developments relat-
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ing to the Company occurring after the date of the most recent historical
financial statements included therein.
The Initial Purchasers and their direct and indirect
transferees of the Securities will be entitled to the benefits of the
Registration Rights Agreement, substantially in the form attached hereto as
Exhibit A (the "Registration Rights Agreement"), pursuant to which the Issuers
have agreed, among other things, to file a registration statement (the
"Registration Statement") with the Securities and Exchange Commission (the
"Commission") registering the Securities or the Exchange Securities (as defined
in the Registration Rights Agreement) under the Act.
2. REPRESENTATIONS AND WARRANTIES. Each of the Issuers
represents and warrants to and agrees with each of the Initial Purchasers that:
(a) Neither the Preliminary Memorandum as of the date
thereof nor the Final Memorandum nor any amendment or supplement
thereto as of the date thereof and at all times subsequent thereto up
to the Closing Date (as defined in Section 3 below) contained or
contains any untrue statement of a material fact or omitted or omits to
state a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading,
except that the representations and warranties set forth in this
Section 2(a) do not apply to statements or omissions made in reliance
upon and in conformity with information relating to any of the Initial
Purchasers furnished to the Company in writing by the Initial
Purchasers for use in the Preliminary Memorandum, the Final Memorandum
or any amendment or supplement thereto.
(b) As of the Closing Date, the Company will have the
authorized, issued and outstanding capitalization set forth in the
Final Memorandum; all of the subsidiaries of the Company are listed in
Schedule 2 attached hereto (each, a "Subsidiary" and collectively, the
"Subsidiaries"); all of the outstanding shares of capital stock of the
Company and the Subsidiaries have been, and as of the Closing Date will
be, duly authorized and validly issued, are fully paid and
nonassessable and were not issued in violation of any preemptive or
similar rights; all of the outstanding shares of capital stock of the
Company and of each of the Subsidiaries will be free and clear of all
liens, encumbrances, equities and claims or restrictions on
transferability (other than those imposed by the Act and the securities
or "Blue Sky" laws of certain jurisdictions) or voting; except as set
forth in the Final Memorandum, there are no (i) options, warrants or
other rights to purchase, (ii) agreements or other obligations to issue
or (iii) other rights to convert any obligation into, or exchange any
securities for, shares of capital stock of or ownership interests in
the Company or any of the Subsidiaries outstanding. Except for the
Subsidiaries or as disclosed in the Final Memorandum, the Company does
not own, directly or indirectly, any shares of capital stock or any
other
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equity or long-term debt securities or have any equity interest in any
firm, partnership, joint venture or other entity.
(c) Each of the Company and the Subsidiaries is duly
incorporated or otherwise organized, validly existing and in good
standing under the laws of its respective jurisdiction of organization
and has all requisite corporate or limited liability company power and
authority to own its properties and conduct its business as now
conducted and as described in the Final Memorandum; each of the Company
and the Subsidiaries is duly qualified to do business as a foreign
corporation in good standing in all other jurisdictions where the
ownership or leasing of its properties or the conduct of its business
requires such qualification, except where the failure to be so
qualified would not, individually or in the aggregate, have a material
adverse effect on the general affairs, management, business, condition
(financial or otherwise), prospects or results of operations of the
Company and the Subsidiaries, taken as a whole (any such event, a
"Material Adverse Effect").
(d) The Company has all requisite corporate power and
authority to execute, deliver and perform its obligations under the
Notes, the Exchange Notes (as defined in the Registration Rights
Agreement) and the Private Exchange Notes (as defined in the
Registration Rights Agreement). The Notes, when issued, will be in the
form contemplated by the Indenture. The Notes, the Exchange Notes and
the Private Exchange Notes, have each been duly and validly authorized
by the Company and, when duly executed by the Company and authenticated
by the Trustee in accordance with the provisions of the Indenture and
delivered to and paid for by the Initial Purchasers in accordance with
the terms of this Agreement (or issued in accordance with the
Registration Rights Agreement, in the case of the Exchange Notes and
the Private Exchange Notes), will constitute valid and legally binding
obligations of the Company, entitled to the benefits of the Indenture,
and enforceable against the Company in accordance with their terms,
except that the enforcement thereof may be subject to (i) bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights
generally, and (ii) general principles of equity and the discretion of
the court before which any proceeding therefor may be brought.
(e) Each of the Guarantors has all requisite corporate or
limited liability company power and authority, as the case may be, to
execute, deliver and perform its obligations under the Guarantees and
the guarantees of the Exchange Notes and the Private Exchange Notes.
The Guarantees, when issued, will be in the form contemplated by the
Indenture. The Guarantees and the guarantees of the Exchange Notes and
the Private Exchange Notes have each been duly and validly authorized
and, when the Guarantees have been duly executed and delivered by the
Guarantors and when the Notes or the Exchange Notes or the Private
Exchange Notes, as the case may be, are
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duly authenticated by the Trustee in accordance with the provisions of
the Indenture, the Guarantee and the guarantees of the Exchange Notes
and the Private Exchange Notes will constitute valid and legally
binding obligations of the Guarantors, entitled to the benefits of the
Indenture and enforceable against the Guarantors in accordance with
their terms, except that the enforcement thereof may be subject to (i)
bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally, and (ii) general principles of equity and
the discretion of the court before which any proceeding therefor may be
brought.
(f) Each of the Issuers has all requisite corporate or
limited liability company power and authority, as the case may be, to
execute, deliver and perform its obligations under the Indenture. The
Indenture meets the requirements for qualification under the Trust
Indenture Act of 1939, as amended (the "TIA"). The Indenture has been
duly and validly authorized by each of the Issuers and, when executed
and delivered by the Issuers (assuming the due authorization, execution
and delivery by the Trustee), will constitute a valid and legally
binding agreement of each of the Issuers, enforceable against each of
the Issuers in accordance with its terms, except that the enforcement
thereof may be subject to (i) bankruptcy, insolvency, reorganization,
fraudulent conveyance, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally and (ii)
general principles of equity and the discretion of the court before
which any proceeding therefor may be brought.
(g) Each of the Issuers has all requisite corporate or
limited liability company power and authority, as the case may be, to
execute, deliver and perform its obligations under the Registration
Rights Agreement. The Registration Rights Agreement has been duly and
validly authorized by each of the Issuers and, when executed and
delivered by the Issuers (assuming the due authorization, execution and
delivery by the Initial Purchasers), will constitute a valid and
legally binding agreement of each of the Issuers enforceable against
each of the Issuers in accordance with its terms, except that (A) the
enforcement thereof may be subject to (i) bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or other similar laws
now or hereafter in effect relating to creditors' rights generally and
(ii) general principles of equity and the discretion of the court
before which any proceeding therefor may be brought and (B) any rights
to indemnity or contribution thereunder may be limited by federal and
state securities laws and public policy considerations.
(h) Each of the Issuers has all requisite corporate or
limited liability company power and authority, as the case may be, to
execute, deliver and perform its obligations under this Agreement and
to consummate the transactions contemplated hereby. This Agreement and
the consummation by the Issuers of the transactions con-
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templated hereby have been duly and validly authorized by each of the
Issuers. This Agreement has been duly executed and delivered by each of
the Issuers.
(i) No consent, approval, authorization or order of any
court or governmental agency or body, or third party is required for
the issuance and sale by the Issuers of the Securities to the Initial
Purchasers or the consummation by the Issuers of the other transactions
contemplated hereby, except such as have been obtained and such as may
be required under state securities or "Blue Sky" laws in connection
with the purchase and resale of the Securities by the Initial
Purchasers and except with respect to the registration of the Exchange
Notes and the Private Exchange Notes (if applicable) and the
qualification of the Indenture under the TIA. None of the Issuers is
(i) in violation of its certificate of incorporation or bylaws (or
similar organizational document), (ii) in breach or violation of any
statute, judgment, decree, order, rule or regulation applicable to any
of them or any of their respective properties or assets, except for any
such breach or violation which would not, individually or in the
aggregate, have a Material Adverse Effect, or (iii) in breach of or
default under (nor has any event occurred that, with notice or passage
of time or both, would constitute a default under) or in violation of
any of the terms or provisions of any indenture (other than any
indenture governing the Company's 9.75% Senior Notes due 2004),
mortgage, deed of trust, loan agreement, note, lease, license,
franchise agreement, permit, certificate, contract or other agreement
or instrument to which any of them is a party or to which any of them
or their respective properties or assets is subject (collectively,
"Contracts"), except for any such breach, default, violation or event
that would not, individually or in the aggregate, have a Material
Adverse Effect.
(j) The execution, delivery and performance by the
Issuers of this Agreement, the Indenture and the Registration Rights
Agreement and the consummation by the Issuers of the transactions
contemplated hereby and thereby (including, without limitation, the
issuance and sale of the Securities to the Initial Purchasers) will not
conflict with or constitute or result in a breach of or a default under
(or an event which with notice or passage of time or both would
constitute a default under) or violation of any of (i) the terms or
provisions of any Contract (other than any indenture governing the
Company's 9.75% Senior Notes due 2004), except for any such conflict,
breach, violation, default or event which would not, individually or in
the aggregate, have a Material Adverse Effect, (ii) the certificate of
incorporation or bylaws (or similar organizational document) of any
Issuer or (iii) (assuming compliance with all applicable state
securities or "Blue Sky" laws and assuming the accuracy of the
representations and warranties of the Initial Purchasers in Section 8
hereof) any statute, judgment, decree, order, rule or regulation
applicable to any Issuer or any of their respective properties or
assets, except for any such conflict, breach or violation which would
not, individually or in the aggregate, have a Material Adverse Effect.
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(k) The audited consolidated financial statements of the
Company included in the Final Memorandum present fairly in all material
respects the financial position, results of operations and cash flows
of the Company and the Subsidiaries at the dates and for the periods to
which they relate and have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis, except as
otherwise stated therein. The summary and selected financial and
statistical data in the Final Memorandum present fairly in all material
respects the information shown therein and have been prepared and
compiled on a basis consistent with the audited financial statements
included therein, except as otherwise stated therein.
PricewaterhouseCoopers, LLP (the "Independent Accountants") is an
independent public accounting firm within the meaning of the Act and
the rules and regulations promulgated thereunder.
(l) The pro forma financial information included in the
Final Memorandum (i) comply as to form in all material respects with
the applicable requirements of Regulation S-X promulgated under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), (ii)
have been prepared in accordance with the Commission's rules and
guidelines with respect to pro forma financial statements and (iii)
have been properly computed on the bases described therein; the
assumptions used in the preparation of the pro forma financial data
included in the Final Memorandum are reasonable and the adjustments
used therein are appropriate to give effect to the transactions or
circumstances referred to therein.
(m) Except as described in the Final Memorandum, there is
not pending or, to the knowledge of the Company, threatened any action,
suit, proceeding, inquiry or investigation to which the Company or any
of the Subsidiaries is a party, or to which the property or assets of
the Company or any of the Subsidiaries are subject, before or brought
by any court, arbitrator or governmental agency or body that, if
determined adversely to the Company or any of the Subsidiaries, would,
individually or in the aggregate, have a Material Adverse Effect or
which seeks to restrain, enjoin, prevent the consummation of or
otherwise challenge the issuance or sale of the Securities to be sold
hereunder or the consummation of the other transactions described in
the Final Memorandum.
(n) Each of the Company and the Subsidiaries possesses
all licenses, permits, certificates, consents, orders, approvals and
other authorizations from, and has made all declarations and filings
with, all federal, state, local and other governmental authorities, all
self-regulatory organizations and all courts and other tribunals,
presently required or necessary to own or lease, as the case may be,
and to operate its respective properties and to carry on its respective
businesses as now or proposed to be conducted as set forth in the Final
Memorandum ("Permits"), except where the failure to obtain such Permits
would not, individually or in the aggregate, have a Material Adverse
Effect; each of the Company and the Subsidiaries has fulfilled and
per-
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formed all of its obligations with respect to such Permits and no event
has occurred that allows, or after notice or lapse of time would allow,
revocation or termination thereof or results in any other material
impairment of the rights of the holder of any such Permit; and none of
the Company or the Subsidiaries has received any notice of any
proceeding relating to revocation or modification of any such Permit,
except as described in the Final Memorandum and except where such
revocation or modification would not, individually or in the aggregate,
have a Material Adverse Effect.
(o) Since the date of the most recent financial
statements appearing in the Final Memorandum, and except as described
therein, (i) none of the Company or the Subsidiaries has incurred any
liabilities or obligations, direct or contingent, or entered into or
agreed to enter into any transactions or contracts (written or oral)
not in the ordinary course of business, which liabilities, obligations,
transactions or contracts would, individually or in the aggregate, be
material to the general affairs, management, business, condition
(financial or otherwise), prospects or results of operations of the
Company and its Subsidiaries, taken as a whole, (ii) none of the
Company or the Subsidiaries has purchased any of its outstanding
capital stock, nor declared, paid or otherwise made any dividend or
distribution of any kind on its capital stock (other than with respect
to any of such Subsidiaries, the purchase of, or dividend or
distribution on, capital stock owned by the Company) and (iii) there
shall not have been any change in the capital stock or long-term
indebtedness of the Company or the Subsidiaries.
(p) Each of the Company and the Subsidiaries has filed
all necessary federal, state and foreign income and franchise tax
returns, except where the failure to so file such returns would not,
individually or in the aggregate, have a Material Adverse Effect, and
has paid all taxes shown as due thereon; and other than tax
deficiencies which the Company or any Subsidiary is contesting in good
faith and for which the Company or such Subsidiary has provided
adequate reserves, there is no tax deficiency that has been asserted
against the Company or any of the Subsidiaries that would have,
individually or in the aggregate, a Material Adverse Effect.
(q) The statistical and market-related data included in
the Final Memorandum are based on or derived from sources which the
Company and the Subsidiaries believe to be reliable and accurate.
(r) None of the Company, the Subsidiaries or any agent
acting on their behalf has taken or will take any action that might
cause this Agreement or the sale of the Notes to violate Regulation T,
U or X of the Board of Governors of the Federal Reserve System, in each
case as in effect, or as the same may hereafter be in effect, on the
Closing Date.
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(s) Each of the Company and the Subsidiaries has good and
marketable title to all real property and good title to all personal
property described in the Final Memorandum as being owned by it and
good and marketable title to a leasehold estate in the real and
personal property described in the Final Memorandum as being leased by
it free and clear of all liens, charges, encumbrances or restrictions,
except as described in the Final Memorandum or to the extent the
failure to have such title or the existence of such liens, charges,
encumbrances or restrictions would not, individually or in the
aggregate, have a Material Adverse Effect. All leases, contracts and
agreements to which the Company or any of the Subsidiaries is a party
or by which any of them is bound are valid and enforceable against the
Company or such Subsidiary, and are valid and enforceable against the
other party or parties thereto and are in full force and effect with
only such exceptions as would not, individually or in the aggregate,
have a Material Adverse Effect. The Company and the Subsidiaries own or
possess adequate licenses or other rights to use all patents,
trademarks, service marks, trade names, copyrights and know-how
necessary to conduct the businesses now or proposed to be operated by
them as described in the Final Memorandum, and none of the Company or
the Subsidiaries has received any notice of infringement of or conflict
with (or knows of any such infringement of or conflict with) asserted
rights of others with respect to any patents, trademarks, service
marks, trade names, copyrights or know-how that, if such assertion of
infringement or conflict were sustained, would have a Material Adverse
Effect.
(t) There are no legal or governmental proceedings
involving or affecting the Company or any Subsidiary or any of their
respective properties or assets that would be required to be described
in a prospectus pursuant to the Act that are not described in the Final
Memorandum, nor are there any material contracts or other documents
that would be required to be described in a prospectus pursuant to the
Act that are not described in the Final Memorandum.
(u) Except as would not, individually or in the
aggregate, have a Material Adverse Effect, (A) each of the Company and
the Subsidiaries is in compliance with and not subject to liability
under applicable Environmental Laws (as defined below), (B) each of the
Company and the Subsidiaries has made all filings and provided all
notices required under any applicable Environmental Law, and has and is
in compliance with all Permits required under any applicable
Environmental Laws and each of them is in full force and effect, (C)
there is no civil, criminal or administrative action, suit, demand,
claim, hearing, notice of violation, investigation, proceeding, notice
or demand letter or request for information pending or, to the
knowledge of the Company or any of the Subsidiaries, threatened against
the Company or any of the Subsidiaries under any Environmental Law, (D)
no lien, charge, encumbrance or restriction has been recorded under any
Environmental Law with respect to any assets, facility or property
owned, operated, leased or controlled by the Company or any of the
Subsidi-
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aries, (E) none of the Company or the Subsidiaries has received notice
that it has been identified as a potentially responsible party under
the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended ("CERCLA") or any comparable state law, (F) no
property or facility of the Company or any of the Subsidiaries is (i)
listed or proposed for listing on the National Priorities List under
CERCLA or is (ii) listed in the Comprehensive Environmental Response,
Compensation, Liability Information System List promulgated pursuant to
CERCLA, or on any comparable list maintained by any state or local
governmental authority.
For purposes of this Agreement, "Environmental Laws" means the
common law and all applicable federal, state and local laws or
regulations, codes, orders, decrees, judgments or injunctions issued,
promulgated, approved or entered thereunder, relating to pollution or
protection of public or employee health and safety or the environment,
including, without limitation, laws relating to (i) emissions,
discharges, releases or threatened releases of hazardous materials into
the environment (including, without limitation, ambient air, surface
water, ground water, land surface or subsurface strata), (ii) the
manufacture, processing, distribution, use, generation, treatment,
storage, disposal, transport or handling of hazardous materials, and
(iii) underground and above ground storage tanks and related piping,
and emissions, discharges, releases or threatened releases therefrom.
(v) There is no strike, labor dispute, slowdown or work
stoppage with the employees of the Company or any of the Subsidiaries
that is pending or, to the knowledge of the Company or any of the
Subsidiaries, threatened.
(w) Each of the Company and the Subsidiaries carries
insurance in such amounts and covering such risks as is adequate for
the conduct of its business and the value of its properties.
(x) None of the Company or the Subsidiaries has any
liability for any prohibited transaction or funding deficiency or any
complete or partial withdrawal liability with respect to any pension,
profit sharing or other plan which is subject to the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), to which
the Company or any of the Subsidiaries makes or ever has made a
contribution and in which any employee of the Company or of any
Subsidiary is or has ever been a participant. With respect to such
plans, the Company and each Subsidiary is in compliance in all material
respects with all applicable provisions of ERISA.
(y) Each of the Company and the Subsidiaries (i) makes
and keeps accurate books and records and (ii) maintains internal
accounting controls which provide reasonable assurance that (A)
transactions are executed in accordance with management's
authorization, (B) transactions are recorded as necessary to permit
preparation of its financial statements and to maintain accountability
for its assets, (C) access to its as-
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sets is permitted only in accordance with management's authorization
and (D) the reported accountability for its assets is compared with
existing assets at reasonable intervals.
(z) None of the Company or the Subsidiaries will be an
"investment company" or "promoter" or "principal underwriter" for an
"investment company," as such terms are defined in the Investment
Company Act of 1940, as amended, and the rules and regulations
thereunder.
(aa) The Securities, the Indenture and the Registration
Rights Agreement will conform in all material respects to the
descriptions thereof in the Final Memorandum.
(bb) No holder of securities of the Company or any
Subsidiary will be entitled to have such securities registered under
the registration statements required to be filed by the Company
pursuant to the Registration Rights Agreement other than as expressly
permitted thereby.
(cc) None of the Company or the Subsidiaries (each on a
consolidated basis) is, nor will any of the Company or the Subsidiaries
(each on a consolidated basis) be, after giving effect to the
execution, delivery and performance of this Agreement, and the
consummation of the transactions contemplated hereby, (a) left with
unreasonably small capital with which to carry on its business as it is
proposed to be conducted, (b) unable to pay its debts (contingent or
otherwise) as they mature or (c) otherwise insolvent.
(dd) None of the Company, the Subsidiaries or any of their
respective Affiliates (as defined in Rule 501(b) of Regulation D under
the Act) has directly, or through any agent, (i) sold, offered for
sale, solicited offers to buy or otherwise negotiated in respect of,
any "security" (as defined in the Act) which is or could be integrated
with the sale of the Notes in a manner that would require the
registration under the Act of the Notes or (ii) engaged in any form of
general solicitation or general advertising (as those terms are used in
Regulation D under the Act) in connection with the offering of the
Notes or in any manner involving a public offering within the meaning
of Section 4(2) of the Act. Assuming the accuracy of the
representations and warranties of the Initial Purchasers in Section 8
hereof, it is not necessary in connection with the offer, sale and
delivery of the Notes to the Initial Purchasers in the manner
contemplated by this Agreement to register any of the Notes under the
Act or to qualify the Indenture under the TIA.
(ee) No securities of the Company or any Subsidiary are of
the same class (within the meaning of Rule 144A under the Act) as the
Securities and listed on a na-
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tional securities exchange registered under Section 6 of the Exchange
Act, or quoted in a U.S. automated inter-dealer quotation system.
(ff) None of the Company or the Subsidiaries has taken,
nor will any of them take, directly or indirectly, any action designed
to, or that might be reasonably expected to, cause or result in
stabilization or manipulation of the price of the Securities.
(gg) None of the Company, the Subsidiaries, any of their
respective Affiliates or any person acting on its or their behalf
(other than the Initial Purchasers) has engaged in any directed selling
efforts (as that term is defined in Regulation S under the Act
("Regulation S")) with respect to the Securities; the Company, the
Subsidiaries and their respective Affiliates and any person acting on
its or their behalf (other than the Initial Purchasers) have complied
with the offering restrictions requirement of Regulation S.
Any certificate signed by any officer of the Company or any
Subsidiary and delivered to any Initial Purchaser or to counsel for the Initial
Purchasers shall be deemed a joint and several representation and warranty by
the Company and each of the Subsidiaries to each Initial Purchaser as to the
matters covered thereby.
3. PURCHASE, SALE AND DELIVERY OF THE SECURITIES. On the
basis of the representations, warranties, agreements and covenants herein
contained and subject to the terms and conditions herein set forth, the Issuers
agree to issue and sell to the Initial Purchasers, and the Initial Purchasers,
acting severally and not jointly, agree to purchase the Securities in the
respective amounts set forth on Schedule 1 hereto from the Issuers at 97.5% of
their principal amount. One or more certificates in definitive form for the
Securities that the Initial Purchasers have agreed to purchase hereunder, and in
such denomination or denominations and registered in such name or names as the
Initial Purchasers request upon notice to the Company at least 36 hours prior to
the Closing Date, shall be delivered by or on behalf of the Issuers to the
Initial Purchasers, against payment by or on behalf of the Initial Purchasers of
the purchase price therefor by wire transfer (same day funds), net of the
overnight cost of such funds, to such account or accounts as the Company shall
specify prior to the Closing Date, or by such means as the parties hereto shall
agree prior to the Closing Date. Such delivery of and payment for the Securities
shall be made at the offices of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ at 10:00 A.M., New York time, on April 16, 2003, or at such other
place, time or date as the Initial Purchasers, on the one hand, and the Company,
on the other hand, may agree upon, such time and date of delivery against
payment being herein referred to as the "Closing Date." The Company will make
such certificate or certificates for the Securities available for checking and
packaging by the Initial Purchasers at the offices of Deutsche Bank Securities
Inc. in New York, New York, or at such other place as Deutsche Bank Securities
Inc. may designate, at least 24 hours prior to the Closing Date.
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4. OFFERING BY THE INITIAL PURCHASERS. The Initial
Purchasers propose to make an offering of the Securities at the price and upon
the terms set forth in the Final Memorandum, as soon as practicable after this
Agreement is entered into and as in the judgment of the Initial Purchasers is
advisable.
5. COVENANTS OF THE ISSUERS. Each of the Issuers
covenants and agrees with each of the Initial Purchasers that:
(a) The Issuers will not amend or supplement the Final
Memorandum or any amendment or supplement thereto of which the Initial
Purchasers shall not previously have been advised and furnished a copy
for a reasonable period of time prior to the proposed amendment or
supplement and as to which the Initial Purchasers shall not have given
their consent. The Issuers will promptly, upon the reasonable request
of the Initial Purchasers or counsel for the Initial Purchasers, make
any amendments or supplements to the Preliminary Memorandum or the
Final Memorandum that may be necessary or advisable in connection with
the resale of the Securities by the Initial Purchasers.
(b) The Issuers will cooperate with the Initial
Purchasers in arranging for the qualification of the Securities for
offering and sale under the securities or "Blue Sky" laws of which
jurisdictions as the Initial Purchasers may designate and will continue
such qualifications in effect for as long as may be necessary to
complete the resale of the Securities; provided, however, that in
connection therewith, none of the Issuers shall be required to qualify
as a foreign corporation or to execute a general consent to service of
process in any jurisdiction or subject itself to taxation in excess of
a nominal dollar amount in any such jurisdiction where it is not then
so subject.
(c) If, at any time prior to the completion of the
distribution by the Initial Purchasers of the Securities or the Private
Exchange Securities (if applicable), any event occurs or information
becomes known as a result of which the Final Memorandum as then amended
or supplemented would include any untrue statement of a material fact,
or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading, or if for any other reason it is necessary at any time
to amend or supplement the Final Memorandum to comply with applicable
law, the Issuers will promptly notify the Initial Purchasers thereof
and will prepare, at the expense of the Issuers, an amendment or
supplement to the Final Memorandum that corrects such statement or
omission or effects such compliance.
(d) The Issuers will, without charge, provide to the
Initial Purchasers and to counsel for the Initial Purchasers as many
copies of the Preliminary Memorandum and the Final Memorandum or any
amendment or supplement thereto as the Initial Purchasers may
reasonably request.
-13-
(e) The Company will apply the net proceeds from the sale
of the Securities as set forth under "Use of Proceeds" in the Final
Memorandum.
(f) For so long as any of the Securities remain
outstanding, the Issuers will furnish to the Initial Purchasers copies
of all reports and other communications (financial or otherwise)
furnished by any of the Issuers to the Trustee or to the holders of the
Securities and, as soon as available, copies of any reports or
financial statements furnished to or filed by the Issuers with the
Commission or any national securities exchange on which any class of
securities of the Issuers may be listed.
(g) Prior to the Closing Date, the Issuers will furnish
to the Initial Purchasers, as soon as they have been prepared, a copy
of any unaudited interim financial statements of the Company for any
period subsequent to the period covered by the most recent financial
statements appearing in the Final Memorandum.
(h) None of the Issuers or any of their Affiliates will
sell, offer for sale or solicit offers to buy or otherwise negotiate in
respect of any "security" (as defined in the Act) which could be
integrated with the sale of the Securities in a manner that would
require the registration under the Act of the Securities.
(i) None of the Issuers will, and will not permit its
Subsidiaries to, engage in any form of general solicitation or general
advertising (as those terms are used in Regulation D under the Act) in
connection with the offering of the Securities or in any manner
involving a public offering within the meaning of Section 4(2) of the
Act.
(j) For so long as any of the Securities remain
outstanding, the Issuers will make available at its expense, upon
request, to any holder of such Securities and any prospective
purchasers thereof the information specified in Rule 144A(d)(4) under
the Act, unless the Company is then subject to Section 13 or 15(d) of
the Exchange Act.
(k) The Issuers will use their best efforts to (i) permit
the Securities to be designated PORTAL securities in accordance with
the rules and regulations adopted by the NASD relating to trading in
the Private Offerings, Resales and Trading through Automated Linkages
market (the "Portal Market") and (ii) permit the Securities to be
eligible for clearance and settlement through The Depository Trust
Company.
(l) In connection with Securities offered and sold in an
off shore transaction (as defined in Regulation S) the Issuers will not
register any transfer of such Securities not made in accordance with
the provisions of Regulation S and will not, except in accordance with
the provisions of Regulation S, if applicable, issue any such Notes in
the form of definitive securities.
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6. EXPENSES. The Issuers, jointly and severally, agree
to pay all costs and expenses incident to the performance of its obligations
under this Agreement, whether or not the transactions contemplated herein are
consummated or this Agreement is terminated pursuant to Section 11 hereof,
including all costs and expenses incident to (i) the printing, word processing
or other production of documents with respect to the transactions contemplated
hereby, including any costs of printing the Preliminary Memorandum and the Final
Memorandum and any amendment or supplement thereto, and any "Blue Sky"
memoranda, (ii) all arrangements relating to the delivery to the Initial
Purchasers of copies of the foregoing documents, (iii) the fees and
disbursements of the counsel, the accountants and any other experts or advisors
retained by the Company, (iv) preparation (including printing), issuance and
delivery to the Initial Purchasers of the Securities, (v) the qualification of
the Securities under state securities and "Blue Sky" laws, including filing fees
and fees and disbursements of counsel for the Initial Purchasers relating
thereto, (vi) expenses in connection with any meetings with prospective
investors in the Securities, (vii) fees and expenses of the Trustee including
fees and expenses of counsel, (viii) all expenses and listing fees incurred in
connection with the application for quotation of the Securities on the PORTAL
Market and (ix) any fees charged by investment rating agencies for the rating of
the Securities. If the sale of the Securities provided for herein is not
consummated because any condition to the obligations of the Initial Purchasers
set forth in Section 7 hereof is not satisfied, because this Agreement is
terminated or because of any failure, refusal or inability on the part of the
Issuers to perform all obligations and satisfy all conditions on their part to
be performed or satisfied hereunder (other than solely by reason of a default by
the Initial Purchasers of their obligations hereunder after all conditions
hereunder have been satisfied in accordance herewith), the Issuers, jointly and
severally, agree to promptly reimburse the Initial Purchasers upon demand for
all out-of-pocket expenses (including fees, disbursements and charges of ▇▇▇▇▇▇
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel for the Initial Purchasers) that shall have been
incurred by the Initial Purchasers in connection with the proposed purchase and
sale of the Securities.
7. CONDITIONS OF THE INITIAL PURCHASERS' OBLIGATIONS.
The obligation of the Initial Purchasers to purchase and pay for the Securities
shall, in their sole discretion, be subject to the satisfaction or waiver of the
following conditions on or prior to the Closing Date:
(a) On the Closing Date, the Initial Purchasers shall
have received the opinion, in form and substance satisfactory to
counsel for the Initial Purchasers, dated as of the Closing Date and
addressed to the Initial Purchasers, of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, counsel for
the Company, substantially in the form of Exhibit A hereto. In
rendering such opinion, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ shall have received and may
rely upon such certificates and other documents and information as it
may reasonably request to pass on such matters.
-15-
(b) On the Closing Date, the Initial Purchasers shall
have received the opinion, in form and substance satisfactory to the
Initial Purchasers, dated as of the Closing Date and addressed to the
Initial Purchasers, of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel for the Initial
Purchasers, with respect to certain legal matters relating to this
Agreement and such other related matters as the Initial Purchasers may
reasonably require. In rendering such opinion, ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
shall have received and may rely upon such certificates and other
documents and information as it may reasonably request to pass upon
such matters.
(c) The Initial Purchasers shall have received from the
Independent Accountants a comfort letter or letters dated the date
hereof and the Closing Date, in form and substance satisfactory to
counsel for the Initial Purchasers.
(d) The representations and warranties of the Company
contained in this Agreement shall be true and correct on and as of the
date hereof and on and as of the Closing Date as if made on and as of
the Closing Date; the statements of the Company's officers made
pursuant to any certificate delivered in accordance with the provisions
hereof shall be true and correct on and as of the date made and on and
as of the Closing Date; the Company shall have performed all covenants
and agreements and satisfied all conditions on their part to be
performed or satisfied hereunder at or prior to the Closing Date; and,
except as described in the Final Memorandum (exclusive of any amendment
or supplement thereto after the date hereof), subsequent to the date of
the most recent financial statements in such Final Memorandum, there
shall have been no event or development, and no information shall have
become known, that, individually or in the aggregate, has or would be
reasonably likely to have a Material Adverse Effect.
(e) The sale of the Notes hereunder shall not be enjoined
(temporarily or permanently) on the Closing Date.
(f) Other than as disclosed in the Final Memorandum,
subsequent to the date of the most recent financial statements in the
Final Memorandum (exclusive of any amendment or supplement thereto
after the date hereof), none of the Company or any of the Subsidiaries
shall have sustained any loss or interference with respect to its
business or properties from fire, flood, hurricane, accident or other
calamity, whether or not covered by insurance, or from any strike,
labor dispute, slow down or work stoppage or from any legal or
governmental proceeding, order or decree, which loss or interference,
individually or in the aggregate, has or would be reasonably likely to
have a Material Adverse Effect.
(g) The Initial Purchasers shall have received a
certificate of each of the Company and the Guarantors, dated the
Closing Date, signed on behalf of each of the
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Company and the Guarantors by its Chairman of the Board, President or
any Senior Vice President and the Chief Financial Officer, to the
effect that:
(i) The representations and warranties of the
Issuers contained in this Agreement are true and correct on
and as of the date hereof and on and as of the Closing Date,
and the Company has performed all covenants and agreements and
satisfied all conditions on its part to be performed or
satisfied hereunder at or prior to the Closing Date;
(ii) At the Closing Date, since the date hereof
or since the date of the most recent financial statements in
the Final Memorandum, except as disclosed in the Final
Memorandum (exclusive of any amendment or supplement thereto
after the date hereof), no event or development has occurred,
and no information has become known, that, individually or in
the aggregate, has had or would be reasonably likely to have a
Material Adverse Effect; and
(iii) The sale of the Notes hereunder has not been
enjoined (temporarily or permanently).
(h) On the Closing Date, the Initial Purchasers shall
have received the Registration Rights Agreement executed by the Company
and such agreement shall be in full force and effect at all times from
and after the Closing Date.
(i) The Company shall have entered into the new senior
secured revolving credit facility, dated as of the Closing Date, on the
terms described in the Final Memorandum, by and among the Company,
Deutsche Bank Trust Company Americas and the other lenders listed
therein (the "Credit Facility"), which Credit Facility shall be in full
force and effect as of the Closing Date, and shall have taken all other
actions necessary to consummate the "other refinancing transactions"
(as defined in the Final Memorandum).
On or before the Closing Date, the Initial Purchasers and
counsel for the Initial Purchasers shall have received such further documents,
opinions, certificates, letters and schedules or instruments relating to the
business, corporate, legal and financial affairs of the Company and the
Subsidiaries as they shall have heretofore reasonably requested from the
Company.
All such documents, opinions, certificates, letters, schedules
or instruments delivered pursuant to this Agreement will comply with the
provisions hereof only if they are reasonably satisfactory in all material
respects to the Initial Purchasers and counsel for the Initial Purchasers. The
Company shall furnish to the Initial Purchasers such conformed copies of such
documents, opinions, certificates, letters, schedules and instruments in such
quantities as the Initial Purchasers shall reasonably request.
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8. OFFERING OF NOTES; RESTRICTIONS ON TRANSFER. (a) Each
of the Initial Purchasers represents and warrants (as to itself only) that it is
a qualified institutional buyer as defined in Rule 144A promulgated under the
Act (a "QIB"). Each of the Initial Purchasers agrees with the Company (as to
itself only) that (i) it has not and will not solicit offers for, or offer or
sell, the Notes by any form of general solicitation or general advertising (as
those terms are used in Regulation D under the Act) or in any manner involving a
public offering within the meaning of Section 4(2) of the Act; and (ii) it has
and will solicit offers for the Notes only from, and will offer the Notes only
to (A) in the case of offers inside the United States, (x) persons whom the
Initial Purchasers reasonably believe to be QIBs or, if any such person is
buying for one or more institutional accounts for which such person is acting as
fiduciary or agent, only when such person has represented to the Initial
Purchasers that each such account is a QIB, to whom notice has been given that
such sale or delivery is being made in reliance on Rule 144A, and, in each case,
in transactions under Rule 144A or (y) a limited number of other institutional
investors reasonably believed by the Initial Purchasers to be Accredited
Investors that, prior to their purchase of the Notes, deliver to the Initial
Purchasers a letter containing the representations and agreements set forth in
Annex A to the Final Memorandum and (B) in the case of offers outside the United
States, to persons other than U.S. persons ("foreign purchasers," which term
shall include dealers or other professional fiduciaries in the United States
acting on a discretionary basis for foreign beneficial owners (other than an
estate or trust)); provided, however, that, in the case of this clause (B), in
purchasing such Notes such persons are deemed to have represented and agreed as
provided under the caption "Transfer Restrictions" contained in the Final
Memorandum (or, if the Final Memorandum is not in existence, in the most recent
Memorandum).
(b) Each of the Initial Purchasers represents and
warrants (as to itself only) with respect to offers and sales outside the United
States that (i) it has and will comply with all applicable laws and regulations
in each jurisdiction in which it acquires, offers, sells or delivers Notes or
has in its possession or distributes any Memorandum or any such other material,
in all cases at its own expense; (ii) the Notes have not been and will not be
offered or sold within the United States or to, or for the account or benefit
of, U.S. persons except in accordance with Regulation S under the Act or
pursuant to an exemption from the registration requirements of the Act; (iii) it
has offered the Notes and will offer and sell the Notes (A) as part of its
distribution at any time and (B) otherwise until 40 days after the later of the
commencement of the offering and the Closing Date, only in accordance with Rule
903 of Regulation S and, accordingly, neither it nor any persons acting on its
behalf have engaged or will engage in any directed selling efforts (within the
meaning of Regulation S) with respect to the Notes, and any such persons have
complied and will comply with the offering restrictions requirement of
Regulation S; and (iv) it agrees that, at or prior to confirmation of sales of
the Notes, it will have sent to each distributor, dealer or person receiving a
selling concession, fee or other remuneration that purchases Notes from it
during the restricted period a confirmation or notice to substantially the
following effect:
-18-
"The Securities covered hereby have not been registered under the
United States Securities Act of 1933 (the "Securities Act") and may not
be offered and sold within the United States or to, or for the account
or benefit of, U.S. persons (i) as part of the distribution of the
Securities at any time or (ii) otherwise until 40 days after the later
of the commencement of the offering and the closing date of the
offering, except in either case in accordance with Regulation S (or
Rule 144A if available) under the Securities Act. Terms used above have
the meaning given to them in Regulation S."
Terms used in this Section 8 and not defined in this Agreement
have the meanings given to them in Regulation S.
9. INDEMNIFICATION AND CONTRIBUTION. (a) The Issuers,
jointly and severally, agree to indemnify and hold harmless the Initial
Purchasers, and each person, if any, who controls any Initial Purchaser within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act, against
any losses, claims, damages or liabilities to which any Initial Purchaser or
such controlling person may become subject under the Act, the Exchange Act or
otherwise, insofar as any such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon:
(i) any untrue statement or alleged untrue statement of
any material fact contained in any Memorandum or any amendment or
supplement thereto or any application or other document, or any
amendment or supplement thereto, executed by the Company or based upon
the written information furnished by or on behalf of the Company filed
in any jurisdiction in order to qualify the Notes under the securities
or "Blue Sky" laws thereof or filed with any securities association or
securities exchange (each an "Application"); or
(ii) the omission or alleged omission to state, in any
Memorandum or any amendment or supplement thereto or any Application, a
material fact required to be stated therein or necessary to make the
statements therein not misleading,
and will reimburse, as incurred, the Initial Purchasers and each such
controlling person for any legal or other expenses incurred by the Initial
Purchasers or such controlling person in connection with investigating,
defending against or appearing as a third-party witness in connection with any
such loss, claim, damage, liability or action; provided, however, the Issuers
will not be liable in any such case to the extent that any such loss, claim,
damage, or liability arises out of or is based upon any untrue statement or
alleged untrue statement or omission or alleged omission made in any Memorandum
or any amendment or supplement thereto or any Application in reliance upon and
in conformity with written information concerning the Initial Purchasers
furnished to the Issuers by the Initial Purchasers for use therein. This
indemnity agreement will be in addition to any liability that the Issuers may
otherwise have to the indemnified parties. None of the Issuers shall be liable
under this Section 9 for any settlement
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of any claim or action effected without its prior written consent, which shall
not be unreasonably withheld.
(b) The Initial Purchasers agree to indemnify and hold
harmless the Issuers, their directors, their officers and each person, if any,
who controls the Issuers within the meaning of Section 15 of the Act or Section
20 of the Exchange Act against any losses, claims, damages or liabilities to
which the Company or any such director, officer or controlling person may become
subject under the Act, the Exchange Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon (i) any untrue statement or alleged untrue statement of any
material fact contained in any Memorandum or any amendment or supplement thereto
or any Application, or (ii) the omission or the alleged omission to state
therein a material fact required to be stated in any Memorandum or any amendment
or supplement thereto or any Application, or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written information
concerning such Initial Purchaser, furnished to the Issuers by the Initial
Purchasers for use therein; and subject to the limitation set forth immediately
preceding this clause, will reimburse, as incurred, any legal or other expenses
incurred by the Issuers or any such director, officer or controlling person in
connection with investigating or defending against or appearing as a third party
witness in connection with any such loss, claim, damage, liability or action in
respect thereof. This indemnity agreement will be in addition to any liability
that the Initial Purchasers may otherwise have to the indemnified parties. The
Initial Purchasers shall not be liable under this Section 9 for any settlement
of any claim or action effected without their consent, which shall not be
unreasonably withheld. None of the Issuers shall, without the prior written
consent of the Initial Purchasers, effect any settlement or compromise of any
pending or threatened proceeding in respect of which any Initial Purchaser is or
could have been a party, or indemnity could have been sought hereunder by any
Initial Purchaser, unless such settlement (A) includes an unconditional written
release of the Initial Purchasers, in form and substance reasonably satisfactory
to the Initial Purchasers, from all liability on claims that are the subject
matter of such proceeding and (B) does not include any statement as to an
admission of fault, culpability or failure to act by or on behalf of any Initial
Purchaser.
(c) Promptly after receipt by an indemnified party under
this Section 9 of notice of the commencement of any action for which such
indemnified party is entitled to indemnification under this Section 9, such
indemnified party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 9, notify the indemnifying party of the
commencement thereof in writing; but the omission to so notify the indemnifying
party (i) will not relieve it from any liability under paragraph (a) or (b)
above unless and to the extent such failure results in the forfeiture by the
indemnifying party of substantial rights and defenses and (ii) will not, in any
event, relieve the indemnifying party from any obligations to any indemnified
party other than the indemnification obligation provided in paragraphs (a)
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and (b) above. In case any such action is brought against any indemnified party,
and it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the extent
that it may wish, jointly with any other indemnifying party similarly notified,
to assume the defense thereof, with counsel reasonably satisfactory to such
indemnified party; provided, however, that if (i) the use of counsel chosen by
the indemnifying party to represent the indemnified party would present such
counsel with a conflict of interest, (ii) the defendants in any such action
include both the indemnified party and the indemnifying party and the
indemnified party shall have been advised by counsel that there may be one or
more legal defenses available to it and/or other indemnified parties that are
different from or additional to those available to the indemnifying party, or
(iii) the indemnifying party shall not have employed counsel reasonably
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after receipt by the indemnifying party of notice of the
institution of such action, then, in each such case, the indemnifying party
shall not have the right to direct the defense of such action on behalf of such
indemnified party or parties and such indemnified party or parties shall have
the right to select separate counsel to defend such action on behalf of such
indemnified party or parties. After notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof and approval
by such indemnified party of counsel appointed to defend such action, the
indemnifying party will not be liable to such indemnified party under this
Section 9 for any legal or other expenses, other than reasonable costs of
investigation, subsequently incurred by such indemnified party in connection
with the defense thereof, unless (i) the indemnified party shall have employed
separate counsel in accordance with the proviso to the immediately preceding
sentence (it being understood, however, that in connection with such action the
indemnifying party shall not be liable for the expenses of more than one
separate counsel (in addition to local counsel) in any one action or separate
but substantially similar actions in the same jurisdiction arising out of the
same general allegations or circumstances, designated by the Initial Purchasers
in the case of paragraph (a) of this Section 9 or the Issuers in the case of
paragraph (b) of this Section 9, representing the indemnified parties under such
paragraph (a) or paragraph (b), as the case may be, who are parties to such
action or actions) or (ii) the indemnifying party has authorized in writing the
employment of counsel for the indemnified party at the expense of the
indemnifying party. After such notice from the indemnifying party to such
indemnified party, the indemnifying party will not be liable for the costs and
expenses of any settlement of such action effected by such indemnified party
without the prior written consent of the indemnifying party (which consent shall
not be unreasonably withheld), unless such indemnified party waived in writing
its rights under this Section 9, in which case the indemnified party may effect
such a settlement without such consent.
(d) In circumstances in which the indemnity agreement
provided for in the preceding paragraphs of this Section 9 is unavailable to, or
insufficient to hold harmless, an indemnified party in respect of any losses,
claims, damages or liabilities (or actions in respect thereof), each
indemnifying party, in order to provide for just and equitable contribution,
shall contribute to the amount paid or payable by such indemnified party as a
result of such
-21-
losses, claims, damages or liabilities (or actions in respect thereof) in such
proportion as is appropriate to reflect (i) the relative benefits received by
the indemnifying party or parties on the one hand and the indemnified party on
the other from the offering of the Notes or (ii) if the allocation provided by
the foregoing clause (i) is not permitted by applicable law, not only such
relative benefits but also the relative fault of the indemnifying party or
parties on the one hand and the indemnified party on the other in connection
with the statements or omissions or alleged statements or omissions that
resulted in such losses, claims, damages or liabilities (or actions in respect
thereof). The relative benefits received by the Issuers on the one hand and any
Initial Purchaser on the other shall be deemed to be in the same proportion as
the total proceeds from the offering (before deducting expenses) received by the
Issuers bear to the total discounts and commissions received by such Initial
Purchaser. The relative fault of the parties shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Issuers on the one hand, or such Initial
Purchaser on the other, the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission or
alleged statement or omission, and any other equitable considerations
appropriate in the circumstances. The Issuers and the Initial Purchasers agree
that it would not be equitable if the amount of such contribution were
determined by pro rata or per capita allocation or by any other method of
allocation that does not take into account the equitable considerations referred
to in the first sentence of this paragraph (d). Notwithstanding any other
provision of this paragraph (d), no Initial Purchaser shall be obligated to make
contributions hereunder that in the aggregate exceed the total discounts,
commissions and other compensation received by such Initial Purchaser under this
Agreement, less the aggregate amount of any damages that such Initial Purchaser
has otherwise been required to pay by reason of the untrue or alleged untrue
statements or the omissions or alleged omissions to state a material fact, and
no person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this paragraph (d),
each person, if any, who controls an Initial Purchaser within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act shall have the same
rights to contribution as the Initial Purchasers, and each director of the
Issuers, each officer of the Issuers and each person, if any, who controls the
Issuers within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, shall have the same rights to contribution as the Issuers.
10. SURVIVAL CLAUSE. The respective representations,
warranties, agreements, covenants, indemnities and other statements of the
Issuers, their officers and the Initial Purchasers set forth in this Agreement
or made by or on behalf of them pursuant to this Agreement shall remain in full
force and effect, regardless of (i) any investigation made by or on behalf of
the Issuers, any of its officers or directors, the Initial Purchasers or any
controlling person referred to in Section 9 hereof and (ii) delivery of and
payment for the Notes. The respective agreements, covenants, indemnities and
other statements set forth in Sections 6, 9
-22-
and 15 hereof shall remain in full force and effect, regardless of any
termination or cancellation of this Agreement.
11. TERMINATION. (a) This Agreement may be terminated in
the sole discretion of the Initial Purchasers by notice to the Issuers given
prior to the Closing Date in the event that the Issuers shall have failed,
refused or been unable to perform all obligations and satisfy all conditions on
its part to be performed or satisfied hereunder at or prior thereto or, if at or
prior to the Closing Date:
(i) any of the Company or the Subsidiaries shall have
sustained any loss or interference with respect to its businesses or
properties from fire, flood, hurricane, accident or other calamity,
whether or not covered by insurance, or from any strike, labor dispute,
slow down or work stoppage or any legal or governmental proceeding,
which loss or interference, in the sole judgment of the Initial
Purchasers, has had or has a Material Adverse Effect, or there shall
have been, in the sole judgment of the Initial Purchasers, any event or
development that, individually or in the aggregate, has or could be
reasonably likely to have a Material Adverse Effect (including without
limitation a change in control of the Company or the Subsidiaries),
except in each case as described in the Final Memorandum (exclusive of
any amendment or supplement thereto);
(ii) trading in securities of the Company or in securities
generally on the New York Stock Exchange, American Stock Exchange or
the NASDAQ National Market shall have been suspended or minimum or
maximum prices shall have been established on any such exchange or
market;
(iii) a banking moratorium shall have been declared by New
York or United States authorities;
(iv) there shall have been (A) an outbreak or escalation
of hostilities between the United States and any foreign power, or (B)
an outbreak or escalation of any other insurrection or armed conflict
involving the United States or any other national or international
calamity or emergency, or (C) any material change in the financial
markets of the United States which, in the case of (A), (B) or (C)
above and in the sole judgment of the Initial Purchasers, makes it
impracticable or inadvisable to proceed with the offering or the
delivery of the Notes as contemplated by the Final Memorandum; or
(v) any securities of the Issuers shall have been
downgraded or placed on any "watch list" for possible downgrading by
any nationally recognized statistical rating organization.
-23-
(b) Termination of this Agreement pursuant to this
Section 11 shall be without liability of any party to any other party except as
provided in Section 10 hereof.
12. INFORMATION SUPPLIED BY THE INITIAL PURCHASERS. The
statements set forth in the last paragraph on the front cover page and in the
second and third sentences of the third paragraph under the heading "Private
Placement" in the Final Memorandum (to the extent such statements relate to the
Initial Purchasers) constitute the only information furnished by the Initial
Purchasers to the Issuers for the purposes of Sections 2(a) and 9 hereof.
13. NOTICES. All communications hereunder shall be in
writing and, if sent to the Initial Purchasers, shall be mailed or delivered to
Deutsche Bank Securities Inc., ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: Corporate Finance Department, with a copy to ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.;
if sent to the Company, shall be mailed or delivered to the Company at ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇▇▇▇; with a copy
to ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Citigroup Center, ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
All such notices and communications shall be deemed to have
been duly given: when delivered by hand, if personally delivered; five business
days after being deposited in the mail, postage prepaid, if mailed; and one
business day after being timely delivered to a next-day air courier.
14. SUCCESSORS. This Agreement shall inure to the benefit
of and be binding upon the Initial Purchasers, the Company and their respective
successors and legal representatives, and nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any other person any legal
or equitable right, remedy or claim under or in respect of this Agreement, or
any provisions herein contained; this Agreement and all conditions and
provisions hereof being intended to be and being for the sole and exclusive
benefit of such persons and for the benefit of no other person except that (i)
the indemnities of the Issuers contained in Section 9 of this Agreement shall
also be for the benefit of any person or persons who control the Initial
Purchasers within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act and (ii) the indemnities of the Initial Purchasers contained in
Section 9 of this Agreement shall also be for the benefit of the directors of
the Issuers, their officers and any person or persons who control the Issuers
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act.
No purchaser of Securities from the Initial Purchasers will be deemed a
successor because of such purchase.
15. APPLICABLE LAW. THE VALIDITY AND INTERPRETATION OF
THIS AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE
TO CONTRACTS MADE AND TO BE
-24-
PERFORMED WHOLLY THEREIN, WITHOUT GIVING EFFECT TO ANY PROVISIONS THEREOF
RELATING TO CONFLICTS OF LAW.
16. COUNTERPARTS. This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
-25-
If the foregoing correctly sets forth our understanding,
please indicate your acceptance thereof in the space provided below for that
purpose, whereupon this letter shall constitute a binding agreement among the
Issuers and the Initial Purchasers.
Very truly yours,
TOWN SPORTS INTERNATIONAL, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
______________________________
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: V.P. Finance/Officer
EACH OF THE GUARANTORS LISTED ON
SCHEDULE 2 HERETO
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
______________________________
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: V.P. Finance/Officer
The foregoing Agreement is hereby con-
firmed and accepted as of the date first
above written.
DEUTSCHE BANK SECURITIES INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
__________________________
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Managing Director
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
__________________________
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Director
BNP PARIBAS SECURITIES CORP.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
__________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Managing Director
SCHEDULE 1
Principal
Amount of
Initial Purchaser Notes
----------------- -----
Deutsche Bank Securities Inc. ........................................... $205,000,000
BNP Paribas Securities Corp.............................................. 50,000,000
------------
Total.......................................................... $255,000,000
SCHEDULE 2
Subsidiaries of the Company
Jurisdiction of
Name Ownership Organization
---- --------- ------------
TSI Alexandria, LLC TSI Holdings (VA), Inc. Delaware
TSI Allston, Inc. Town Sports International, Inc. Delaware
TSI Andover, Inc. TSI Holdings (MA), Inc. Massachusetts
TSI Ardmore, LLC TSI Holdings (PA), Inc. Delaware
TSI Arthro-Fitness Services, Inc. Town Sports International, Inc. New York
TSI Battery Park, Inc. Town Sports International, Inc. New York
TSI Bethesda, LLC TSI Holdings (MD), Inc. Delaware
TSI Broadway, Inc. Town Sports International, Inc. New York
TSI 217 Broadway, Inc. Town Sports International, Inc. New York
TSI Brooklyn Belt, Inc. Town Sports International, Inc. New York
TSI Brunswick, Inc. Town Sports International, Inc. Delaware
TSI Bryn Mawr, LLC TSI Holdings (PA), Inc. Delaware
TSI Bulfinch, Inc. Town Sports International, Inc. Delaware
TSI Cash Management, Inc. Town Sports International, Inc. New York
TSI Central Square, Inc. Town Sports International, Inc. Delaware
TSI Centreville, LLC TSI Holdings (VA), Inc. Delaware
TSI Cherry Hill, LLC TSI Holdings (NJ), Inc. Delaware
TSI Chevy Chase, Inc. TSI Holdings (DC), Inc. Delaware
TSI Clarendon, LLC TSI Holdings (VA), Inc. Delaware
TSI Cobble Hill, Inc. Town Sports International, Inc. New York
TSI Colonia, LLC TSI Holdings (NJ), Inc. Delaware
TSI Commack, Inc. Town Sports International, Inc. New York
TSI Connecticut Avenue, Inc. TSI Holdings (DC), Inc. Delaware
TSI ▇▇▇▇▇▇, Inc. Town Sports International, Inc. Delaware
TSI Court Street, Inc. Town Sports International, Inc. New York
TSI Croton, Inc. Town Sports International, Inc. New York
TSI Danbury, Inc. Town Sports International, Inc. Delaware
TSI Danvers, Inc. TSI Holdings (MA), Inc. Massachusetts
TSI Downtown Crossing, Inc. Town Sports International, Inc. Delaware
Jurisdiction of
Name Ownership Organization
---- --------- ------------
TSI Dupont Circle, Inc. TSI Holdings (DC), Inc. Delaware
TSI Dupont II, Inc. TSI Holdings (DC), Inc. Delaware
TSI East Cambridge, Inc. Town Sports International, Inc. Delaware
TSI East Meadow, Inc. Town Sports International, Inc. New York
TSI East 23, Inc. Town Sports International, Inc. New York
TSI East 31, Inc. Town Sports International, Inc. New York
TSI East 34, Inc. Town Sports International, Inc. New York
TSI East 36, Inc. Town Sports International, Inc. New York
TSI East 41, Inc. Town Sports International, Inc. New York
TSI East 51, Inc. Town Sports International, Inc. New York
TSI East 59, Inc. Town Sports International, Inc. New York
TSI East 76, Inc. Town Sports International, Inc. New York
TSI East 86, LLC Town Sports International, Inc. New York
TSI East 91, Inc. Town Sports International, Inc. New York
TSI F Street, Inc. TSI Holdings (DC), Inc. Delaware
TSI Fairfax, LLC TSI Holdings (VA), Inc. Delaware
TSI Fenway, Inc. Town Sports International, Inc. Delaware
TSI Fifth Avenue, Inc. Town Sports International, Inc. New York
TSI First Avenue, Inc. Town Sports International, Inc. New York
TSI Forest Hills, Inc. Town Sports International, Inc. New York
TSI Fort ▇▇▇, LLC TSI Holdings (NJ), Inc. Delaware
TSI Framingham, Inc. TSI Holdings (MA), Inc. Massachusetts
TSI Franklin (MA), Inc. TSI Holdings (MA), Inc. Massachusetts
TSI Franklin Park, LLC TSI Holdings (NJ), Inc. Delaware
TSI Freehold, LLC TSI Holdings (NJ), Inc. Delaware
TSI Gallery Place, Inc. TSI Holdings (DC), Inc. Delaware
TSI Garden City, Inc. Town Sports International, Inc. New York
TSI Germantown, LLC TSI Holdings (MD), Inc. Delaware
TSI ▇▇▇▇▇▇, Inc. TSI Holdings (DC), Inc. Delaware
TSI Grand Central, Inc. Town Sports International, Inc. New York
TSI Great Neck, Inc. Town Sports International, Inc. New York
TSI Greenwich, Inc. Town Sports International, Inc. Delaware
TSI Herald, Inc. Town Sports International, Inc. New York
TSI Highpoint, LLC TSI Holdings (PA), Inc. Delaware
Jurisdiction of
Name Ownership Organization
---- --------- ------------
TSI Hoboken, LLC TSI Holdings (NJ), Inc. Delaware
TSI Holdings (CIP), Inc. Town Sports International, Inc. Delaware
TSI Holdings (DC), Inc. Town Sports International, Inc. Delaware
TSI Holdings (IP), LLC TSI Insurance, Inc. Delaware
TSI Holdings (MA), Inc. Town Sports International, Inc. Massachusetts
TSI Holdings (MD), Inc. Town Sports International, Inc. Delaware
TSI Holdings (NJ), Inc. Town Sports International, Inc. Delaware
TSI Holdings (PA), Inc. Town Sports International, Inc. Delaware
TSI Holdings (VA), Inc. Town Sports International, Inc. Delaware
TSI Huntington, Inc. Town Sports International, Inc. New York
TSI Insurance, Inc. Town Sports International, Inc. New York
TSI International, Inc. Town Sports International, Inc. Delaware
TSI Irving Place, Inc. Town Sports International, Inc. New York
TSI Jersey City, LLC TSI Holdings (NJ), Inc. Delaware
TSI Larchmont, Inc. Town Sports International, Inc. New York
TSI Lexington (MA), Inc. TSI Holdings (MA), Inc. Massachusetts
TSI Lincoln, Inc. Town Sports International, Inc. New York
TSI Long Beach, Inc. Town Sports International, Inc. New York
TSI Lynnfield, Inc. TSI Holdings (MA), Inc. Massachusetts
TSI M Street, Inc. TSI Holdings (DC), Inc. Delaware
TSI Madison, Inc. Town Sports International, Inc. New York
TSI Mahwah, LLC TSI Holdings (NJ), Inc. Delaware
TSI Mamaroneck, Inc. Town Sports International, Inc. New York
TSI Market Street, LLC TSI Holdings (PA), Inc. Delaware
TSI Marlboro, LLC TSI Holdings (NJ), Inc. Delaware
TSI Matawan, LLC TSI Holdings (NJ), Inc. Delaware
TSI ▇▇▇▇▇▇▇▇▇▇, Inc. Town Sports International, Inc. Delaware
TSI Montclair, LLC TSI Holdings (NJ), Inc. Delaware
TSI ▇▇▇▇▇▇ Hill, Inc. Town Sports International, Inc. New York
TSI Nanuet, Inc. Town Sports International, Inc. New York
TSI Nashua, LLC TSI Holdings (MA), Inc. Delaware
TSI Natick, Inc. Town Sports International, Inc. Delaware
TSI Newark, LLC TSI Holdings (NJ), Inc. Delaware
TSI Newbury Street, Inc. Town Sports International, Inc. Delaware
Jurisdiction of
Name Ownership Organization
---- --------- ------------
TSI North Bethesda, LLC TSI Holdings (MD), Inc. Delaware
TSI Norwalk, Inc. Town Sports International, Inc. Delaware
TSI Oceanside, Inc. Town Sports International, Inc. New York
TSI Old Bridge, LLC TSI Holdings (NJ), Inc. Delaware
TSI Parsippany, LLC TSI Holdings (NJ), Inc. Delaware
TSI Plainsboro, LLC TSI Holdings (NJ), Inc. Delaware
TSI Princeton, LLC TSI Brunswick, Inc. Delaware
TSI ▇▇▇▇▇▇, LLC TSI Holdings (NJ), Inc. Delaware
TSI Reade Street, Inc. Town Sports International, Inc. New York
TSI Ridgewood, LLC TSI Holdings (NJ), Inc. Delaware
TSI ▇▇▇▇▇▇▇▇▇▇▇, LLC TSI Holdings (PA), Inc. Delaware
TSI Rodin Place, LLC TSI Holdings (PA), Inc. Delaware
TSI Rye, Inc. Town Sports International, Inc. New York
TSI Scarsdale, Inc. Town Sports International, Inc. New York
TSI Seaport, Inc. Town Sports International, Inc. New York
TSI Sheridan, Inc. Town Sports International, Inc. New York
TSI Silver Spring, LLC TSI Holdings (MD), Inc. Delaware
TSI Society Hill, LLC TSI Holdings (PA), Inc. Delaware
TSI Soho, Inc. Town Sports International, Inc. New York
TSI Somerset, LLC TSI Holdings (NJ), Inc. Delaware
TSI South Park Slope, Inc. Town Sports International, Inc. New York
TSI Springfield, LLC TSI Holdings (NJ), Inc. Delaware
TSI Stamford Downtown, Inc. Town Sports International, Inc. Delaware
TSI Stamford Post, Inc. Town Sports International, Inc. Delaware
TSI Stamford Rinks, Inc. Town Sports International, Inc. Delaware
TSI Staten Island, Inc. Town Sports International, Inc. New York
TSI Sterling, LLC TSI Holdings (VA), Inc. Delaware
TSI Supplements, Inc. Town Sports International, Inc. Delaware
TSI Syosset, Inc. Town Sports International, Inc. New York
TSI Wall Street, Inc. Town Sports International, Inc. New York
TSI Waltham, LLC TSI Holdings (MA), Inc. Delaware
TSI Washington, Inc. TSI Holdings (DC), Inc. Delaware
TSI Water Street, Inc. Town Sports International, Inc. New York
TSI Wellesley, Inc. TSI Holdings (MA), Inc. Massachusetts
Jurisdiction of
Name Ownership Organization
---- --------- ------------
TSI West ▇▇▇▇▇▇▇▇, LLC TSI Holdings (NJ), Inc. Delaware
TSI West ▇▇▇▇▇▇, Inc. Town Sports International, Inc. Delaware
TSI West Nyack, Inc. Town Sports International, Inc. New York
TSI West Springfield, LLC TSI Holdings (VA), Inc. Delaware
TSI West 14, Inc. Town Sports International, Inc. New York
TSI West 16, Inc. Town Sports International, Inc. New York
TSI West 23, Inc. Town Sports International, Inc. New York
TSI West 38, Inc. Town Sports International, Inc. New York
TSI West 41, Inc. Town Sports International, Inc. New York
TSI West 44, Inc. Town Sports International, Inc. New York
TSI West 48, Inc. Town Sports International, Inc. New York
TSI West 52, Inc. Town Sports International, Inc. New York
TSI West 73, Inc. Town Sports International, Inc. New York
TSI West 76, Inc. Town Sports International, Inc. New York
TSI West 80, Inc. Town Sports International, Inc. New York
TSI West 94, Inc. Town Sports International, Inc. New York
TSI West 125, Inc. Town Sports International, Inc. New York
TSI Westport, Inc. Town Sports International, Inc. Delaware
TSI Westwood, LLC TSI Holdings (NJ), Inc. Delaware
TSI Weymouth, Inc. Town Sports International, Inc. Delaware
TSI White Plains, Inc. Town Sports International, Inc. New York
TSI Whitestone, Inc. Town Sports International, Inc. New York
TSI Woodmere, Inc. Town Sports International, Inc. New York