Purchase Agreement
Town Sports International, Inc.
$40,000,000
9 3/4% Senior Notes due 2004
PURCHASE AGREEMENT
June 10, 1999
DEUTSCHE BANK SECURITIES, INC.
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Town Sports International, Inc., a New York corporation (the
"Company"), hereby confirms its agreement with you (the "Initial Purchaser"), 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 Purchaser
$40,000,000 aggregate principal amount of its 9 3/4% Senior Notes due 2004,
Series C (the "Notes"). The Notes are to be issued under an indenture (the
"Indenture") dated as of October 16, 1997 between the Company and United States
Trust Company of New York, as Trustee (the "Trustee").
The Notes will be offered and sold to the Initial Purchaser 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 Notes, the Company has prepared a
final offering memorandum dated June 10, 1999 (the "Memorandum") setting forth
or including a description of the terms of the Notes, the terms of the offering
of the Notes, a description of the Company and any material developments
relating to the Company occurring after the date of the most recent historical
financial statements included therein.
The Initial Purchaser and its direct and indirect transferees of the
Notes 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 Company has agreed, among other
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things, to file a registration statement (the "Registration Statement") with the
Securities and Exchange Commission (the "Commission") registering the Notes or
the Exchange Notes (as defined in the Registration Rights Agreement) under the
Act.
2. Representations and Warranties. The Company represents and
warrants to and agrees with the Initial Purchaser that:
(a) Neither the Preliminary Memorandum as of the date thereof nor
the 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 the Initial Purchaser furnished to
the Company in writing by the Initial Purchaser expressly for use in the
Preliminary Memorandum, the Memorandum or any amendment or supplement thereto.
(b) The Company has the authorized, issued and outstanding
capitalization set forth in the Memorandum; all of the subsidiaries of the
Company are listed in Schedule 1 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 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.
(c) Each of the Company and the Subsidiaries is duly incorporated,
validly existing and in good standing under the laws of its respective
jurisdiction of incorporation and has
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all requisite corporate power and authority to own its properties and conduct
its business as now conducted and as described in the 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 each of its obligations under the Notes, the
Exchange Notes 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 executed by the
Company and authenticated by the Trustee in accordance with the provisions of
the Indenture and, in the case of the Notes, when delivered to and paid for by
the Initial Purchaser in accordance with the terms of this Agreement, 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, 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) The Company has all requisite corporate power and authority 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
the Company and (assuming the due authorization, execution and delivery by the
Trustee) constitutes a valid and legally binding agreement of the Company,
enforceable against the Company in accordance with its terms, except that the
enforcement thereof may be subject to (i) bankruptcy, insolvency,
reorganization, 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.
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(f) The Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under the Registration Rights
Agreement. The Registration Rights Agreement has been duly and validly
authorized by the Company and, when executed and delivered by the Company, will
constitute a valid and legally binding agreement of the Company enforceable
against the Company in accordance with its terms, except that (A) the
enforcement thereof may be subject to (i) bankruptcy, insolvency,
reorganization, 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.
(g) The Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under this Agreement and to
consummate the transactions contemplated hereby. This Agreement and the
consummation by the Company of the transactions contemplated hereby have been
duly and validly authorized by the Company. This Agreement has been duly
executed and delivered by the Company.
(h) 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 Company of the Notes to the Initial Purchaser or the consummation by
the Company 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 Notes by the Initial
Purchaser. None of the Company or the Subsidiaries 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 which, 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, 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 which would
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not, individually or in the aggregate, have a Material Adverse Effect.
(i) The execution, delivery and performance by the Company of this
Agreement, the Indenture and the Registration Rights Agreement and the
consummation by the Company of the transactions contemplated hereby and thereby
(including, without limitation, the issuance and sale of the Notes to the
Initial Purchaser) 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, 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 the Company or any of the Subsidiaries 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 Purchaser in Section 8 hereof) any statute, judgment, decree, order,
rule or regulation applicable to the Company or any of the Subsidiaries 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.
(j) The audited consolidated financial statements of the Company and
the Subsidiaries included in the 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 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.
(k) The pro forma financial information included in the 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
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Commission's rules and guidelines with respect to pro forma financial
information and (iii) have been properly computed on the bases described
therein; the assumptions used in the preparation of the pro forma financial data
and other pro forma financial information included in the Memorandum are
reasonable and the adjustments used therein are appropriate to give effect to
the transactions or circumstances referred to therein.
(l) 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 which, 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 Notes to be sold hereunder or the consummation of the other transactions
described in the Memorandum.
(m) 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
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 performed all of its
obligations with respect to such Permits and no event has occurred which 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 Memorandum and except where such revocation or
modification would not, individually or in the aggregate, have a Material
Adverse Effect.
(n) Since the date of the most recent financial statements appearing
in the Memorandum, except as described therein, (i) none of the Company or the
Subsidiaries has incurred any liabilities or obligations, direct or contingent,
or
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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 Companies 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 material change in the capital stock or long-term indebtedness of
the Company or the Subsidiaries.
(o) 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.
(p) The statistical and market-related data included in the
Memorandum are based on or derived from sources which the Company believes to be
reliable and accurate.
(q) Neither the Company nor any agent acting on its 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.
(r) 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 Memorandum as being owned by it and good and marketable title to a leasehold
estate in the real and personal property described in the Memorandum as being
leased by it free and clear of all liens, charges, encumbrances or restrictions,
except as described in the Memorandum or to the extent the failure to have such
title or the existence of such liens, charges, encumbrances or restrictions
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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 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 which, if such assertion of infringement or
conflict were sustained, would have a Material Adverse Effect.
(s) To the best knowledge of the Company, there are no legal or
governmental proceedings involving or affecting the Company or any Subsidiary or
any of their respective properties or assets which would be required to be
described in a prospectus pursuant to the Act that are not described in the
Memorandum, nor are there any material contracts or other documents which would
be required to be described in a prospectus pursuant to the Act that are not
described in the Memorandum.
(t) 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
Subsidiaries, (E) none of the Company or the Subsidiaries has received notice
that it
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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.
(u) There is no strike, labor dispute, slowdown or work stoppage
with the employees of the Company or any of the Subsidiaries which is pending
or, to the knowledge of the Company or any of the Subsidiaries, threatened.
(v) 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.
(w) 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.
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(x) 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 assets 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.
(y) 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.
(z) The Notes, the Indenture and the Registration Rights Agreement
conform or will conform, as the case may be, in all material respects to the
descriptions thereof in the Memorandum.
(aa) 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.
(bb) 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.
(cc) 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
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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 Purchaser in Section 8 hereof, it is not necessary in connection
with the offer, sale and delivery of the Notes to the Initial Purchaser in the
manner contemplated by this Agreement to register any of the Notes under the Act
or to qualify the Indenture under the TIA.
(dd) No securities of the Company or any Subsidiary are of the same
class (within the meaning of Rule 144A under the Act) as the Notes and listed on
a national securities exchange registered under Section 6 of the Exchange Act,
or quoted in a U.S. automated inter-dealer quotation system.
(ee) 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 Notes.
Any certificate signed by any officer of the Company and delivered
to the Initial Purchaser or to counsel for the Initial Purchaser shall be deemed
a joint and several representation and warranty by the Company and each of the
Subsidiaries to the Initial Purchaser as to the matters covered thereby.
3. Purchase, Sale and Delivery of the Notes. On the basis of the
representations, warranties, agreements and covenants herein contained and
subject to the terms and conditions herein set forth, the Company agrees to
issue and sell to the Initial Purchaser, and the Initial Purchaser agrees to
purchase from the Company the Notes at a purchase price of 95.75% of their
principal amount. One or more certificates in definitive form for the Notes that
the Initial Purchaser has agreed to purchase hereunder, and in such denomination
or denominations and registered in such name or names as the Initial Purchaser
requests upon notice to the Company at least 36 hours prior to the Closing Date,
shall be delivered by or on behalf of the Company to the Initial Purchaser,
against payment by or on behalf of the Initial Purchaser of the purchase price
therefor by wire transfer (same day 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 Notes shall be made at the offices of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ at 9:00 A.M., New York time, on June 21, 1999, or at
such other place, time or date as the Initial Purchaser,
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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 Notes
available for checking and packaging by the Initial Purchaser 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.
4. Offering by the Initial Purchaser. The Initial Purchaser proposes
to make an offering of the Notes at the price and upon the terms set forth in
the Memorandum, as soon as practicable after this Agreement is entered into and
as in the judgment of the Initial Purchaser is advisable.
5. Covenants of the Company. The Company covenants and agrees with
the Initial Purchaser that:
(a) The Company will not amend or supplement the Memorandum or any
amendment or supplement thereto of which the Initial Purchaser 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
Purchaser shall not have given its consent. The Company will promptly, upon the
reasonable request of the Initial Purchaser or counsel for the Initial
Purchaser, make any amendments or supplements to the Memorandum that may be
necessary or advisable in connection with the resale of the Notes by the Initial
Purchaser.
(b) The Company will cooperate with the Initial Purchaser in
arranging for the qualification of the Notes for offering and sale under the
securities or "Blue Sky" laws of which jurisdictions as the Initial Purchaser
may designate and will continue such qualifications in effect for as long as may
be necessary to complete the resale of the Notes; provided, however, that in
connection therewith, the Company shall not 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 Purchaser of the Notes or the Private Exchange Notes, any event
occurs or information becomes known as a result of which the 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
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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 Memorandum to comply with applicable law, the Company
will promptly notify the Initial Purchaser thereof and will prepare, at the
expense of the Company, an amendment or supplement to the Memorandum that
corrects such statement or omission or effects such compliance.
(d) The Company will, without charge, provide to the Initial
Purchaser and to counsel for the Initial Purchaser as many copies of the
Preliminary Memorandum and the Memorandum or any amendment or supplement thereto
as the Initial Purchaser may reasonably request.
(e) The Company will apply the net proceeds from the sale of the
Notes as set forth under "Use of Proceeds" in the Memorandum.
(f) For so long as any of the Notes remain outstanding, the Company
will furnish to the Initial Purchaser copies of all reports and other
communications (financial or otherwise) furnished by the Company to the Trustee
or to the holders of the Notes and, as soon as available, copies of any reports
or financial statements furnished to or filed by the Company with the Commission
or any national securities exchange on which any class of securities of the
Company may be listed.
(g) Prior to the Closing Date, the Company will furnish to the
Initial Purchaser, 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
Memorandum.
(h) None of the Company or any of its 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 Notes in a manner which would require the registration under the Act of the
Notes.
(i) The Company will not, nor will the Company permit any of the
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 Notes or in any manner involving a public
offering within the meaning of Section 4(2) of the Act.
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(j) For so long as any of the Notes remain outstanding, the Company
will make available at its expense, upon request, to any holder of such Notes
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 Company will use its best efforts to (i) permit the Notes 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 Notes to be eligible for clearance and settlement through The Depository
Trust Company.
6. Expenses. The Company agrees 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 Memorandum and any amendment or supplement thereto, and any "Blue
Sky" memoranda, (ii) all arrangements relating to the delivery to the Initial
Purchaser 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 Purchaser of the Notes, (v) the qualification of the Notes under state
securities and "Blue Sky" laws, including filing fees and fees and disbursements
of counsel for the Initial Purchaser relating thereto, (vi) expenses in
connection with any meetings with prospective investors in the Notes, (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 Notes on the PORTAL Market and (ix) any fees charged by
investment rating agencies for the rating of the Notes. If the sale of the Notes
provided for herein is not consummated because any condition to the obligations
of the Initial Purchaser 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 Company 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 Purchaser of its obligations hereunder after all
conditions hereunder have been satisfied in accordance herewith), the Com-
-15-
pany agrees to promptly reimburse the Initial Purchaser upon demand for all
out-of-pocket expenses (including fees, disbursements and charges of ▇▇▇▇▇▇
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel for the Initial Purchaser) that shall have been
incurred by the Initial Purchaser in connection with the proposed purchase and
sale of the Notes.
7. Conditions of the Initial Purchaser's Obligations. The obligation
of the Initial Purchaser to purchase and pay for the Notes shall, in its sole
discretion, be subject to the satisfaction or waiver of the following conditions
on or prior to the Closing Date:
(a) The Initial Purchaser shall have received an opinion in form and
substance satisfactory to the Initial Purchaser, dated the Closing Date, of
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, counsel for the Company, substantially in the form of Exhibit
B hereto. In rendering such opinion, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ shall have received and
may rely upon such certificates and other documents and information as they may
reasonably request to pass on such matters. In addition, in rendering their
opinion, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ may state that their opinion is limited to matters of
Illinois, New York, Delaware corporate and federal law. Such opinion of ▇▇▇▇▇▇▇▇
& ▇▇▇▇▇ shall be rendered to the Initial Purchaser at the request of the Company
and shall so state therein.
(b) On the Closing Date, the Initial Purchaser shall have received
the opinion, in form and substance satisfactory to the Initial Purchaser, dated
as of the Closing Date and addressed to the Initial Purchaser, of ▇▇▇▇▇▇ ▇▇▇▇▇▇
& ▇▇▇▇▇▇▇, counsel for the Initial Purchaser, with respect to certain legal
matters relating to this Agreement and such other related matters as the Initial
Purchaser 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 Purchaser 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 Purchaser.
(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
-16-
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 Memorandum (exclusive of any amendment or supplement thereto after the date
hereof), subsequent to the date of the most recent financial statements in such
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 Memorandum, subsequent to the
date of the most recent financial statements in the 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 Purchaser shall have received a certificate of the
Company, dated the Closing Date, signed on behalf of the Company by its Chairman
of the Board, President or any Executive Vice President and the Chief Financial
Officer, to the effect that:
(i) The representations and warranties of the Company 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 Memorandum (exclusive of any
amendment or supplement thereto after the date hereof), no event or
development
-17-
has occurred, and no information has become known, that, individually or
in the aggregate, has 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) The Company shall have received all necessary consents or
waivers from the requisite lenders under the Credit Facility (as defined in the
Offering Memorandum).
(i) The Company shall have received from each initial purchaser of
the Notes from the Initial Purchaser an agreement to treat the receipt of the
delayed draw special payment relating to such purchaser's agreement to schedule
the closing date seven business days from the date of the Memorandum as ordinary
income for tax purposes.
(j) On the Closing Date, the Initial Purchaser 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.
On or before the Closing Date, the Initial Purchaser and counsel for
the Initial Purchaser 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 Purchaser and counsel for the Initial Purchaser. The Company shall
furnish to the Initial Purchaser such conformed copies of such documents,
opinions, certificates, letters, schedules and instruments in such quantities as
the Initial Purchaser shall reasonably request.
8. Offering of Notes; Restrictions on Transfer. The Initial
Purchaser represents and warrants that it is a QIB. The Initial Purchaser agrees
with the Company 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
-18-
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, persons whom the Initial Purchaser reasonably believes 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 Purchaser 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 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 Memorandum.
9. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless the Initial Purchaser, and each person, if any, who
controls the 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 the 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 the 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 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 the 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,
-19-
and will reimburse, as incurred, the Initial Purchaser and each such controlling
person for any legal or other expenses incurred by the Initial Purchaser 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 Company 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 the Memorandum or any amendment or
supplement thereto or any Application in reliance upon and in conformity with
written information concerning the Initial Purchaser furnished to the Company by
the Initial Purchaser specifically for use therein. This indemnity agreement
will be in addition to any liability that the Company may otherwise have to the
indemnified parties. The Company shall not be liable under this Section 9 for
any settlement of any claim or action effected without its prior written
consent, which shall not be unreasonably withheld.
(b) The Initial Purchaser agrees to indemnify and hold harmless the
Company, their directors, their officers and each person, if any, who controls
the Company 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 the 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 Company by the Initial
Purchaser specifically 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 Company 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
-20-
the Initial Purchaser may otherwise have to the indemnified parties. The Initial
Purchaser shall not be liable under this Section 9 for any settlement of any
claim or action effected without its consent, which shall not be unreasonably
withheld. The Company shall not, without the prior written consent of the
Initial Purchaser, effect any settlement or compromise of any pending or
threatened proceeding in respect of which the Initial Purchaser is or could have
been a party, or indemnity could have been sought hereunder by the Initial
Purchaser, unless such settlement (A) includes an unconditional written release
of the Initial Purchaser, in form and substance reasonably satisfactory to the
Initial Purchaser, 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 the 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) 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
-21-
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 Purchaser
in the case of paragraph (a) of this Section 9 or the Company 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 losses,
claims, damages or liabilities (or actions in respect thereof) in such
proportion as is appropriate to reflect (i) the relative benefits re-
-22-
ceived 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 Company on the one hand
and the 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 Company 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 Company 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 Company and the Initial Purchaser 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), the Initial Purchaser shall not 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 the 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 Purchaser, and each director of the
Company, each officer of the Company and each person, if any, who controls the
Company 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 Company.
-23-
10. Survival Clause. The respective representations, warranties,
agreements, covenants, indemnities and other statements of the Company, its
officers and the Initial Purchaser 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 Company, any of
its officers or directors, the Initial Purchaser 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 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 Purchaser by notice to the Company given prior to the
Closing Date in the event that the Company 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 Purchaser, has had or
has a Material Adverse Effect, or there shall have been, in the sole
judgment of the Initial Purchaser, 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 Memorandum (exclusive of any amendment or supplement
thereto);
(ii) trading 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;
-24-
(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 Purchaser, makes it impracticable or
inadvisable to proceed with the offering or the delivery of the Notes as
contemplated by the Memorandum; or
(v) any securities of the Company shall have been downgraded or
placed on any "watch list" for possible downgrading by any nationally
recognized statistical rating organization.
(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 Purchaser. The statements
set forth in the last paragraph on the front cover page and in the third and
fourth sentences of the third paragraph under the heading "Private Placement" in
the Memorandum (to the extent such statements relate to the Initial Purchaser)
constitute the only information furnished by the Initial Purchaser to the
Company 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 Purchaser, shall be mailed or delivered to Deutsche Bank
Securities, Inc., ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
Corporate Finance Department; if sent to the Company, shall be mailed or
delivered to the Company at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, Attention:
President; with a copy to ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇
▇▇▇▇▇, Attention:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇.
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 Purchaser, the Com-
-25-
pany 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 Company contained in Section 9 of
this Agreement shall also be for the benefit of any person or persons who
control the Initial Purchaser within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act and (ii) the indemnities of the Initial Purchaser
contained in Section 9 of this Agreement shall also be for the benefit of the
directors of the Company, its officers and any person or persons who control the
Company within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act. No purchaser of Notes from the Initial Purchaser 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 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.
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 between the Company
and the Initial Purchaser.
Very truly yours,
TOWN SPORTS INTERNATIONAL, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇
Title: Chief Financial Officer
The foregoing Agreement is
hereby confirmed and accepted
as of the date first above
written.
DEUTSCHE BANK SECURITIES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Title: MD
SCHEDULE 1
Subsidiaries of the Company
Jurisdiction of
Name Incorporation
---- -------------
SCHEDULE 1
List of Subsidiaries
--------------------------------------------------------------------------------
Company Name Formation Qualification
------------ --------- -------------
--------------------------------------------------------------------------------
I. Parent
--------------------------------------------------------------------------------
Town Sports International, Inc. ("TSI") NY ---
--------------------------------------------------------------------------------
II. Subsidiaries
--------------------------------------------------------------------------------
1. TSI Alexandria, LLC DE VA
--------------------------------------------------------------------------------
2. TSI Allston, Inc. DE MA
--------------------------------------------------------------------------------
3. TSI Arthro-Fitness Services, Inc. NY N/A
--------------------------------------------------------------------------------
4. TSI Battery Park, Inc. NY N/A
--------------------------------------------------------------------------------
5. TSI Bethesda, LLC DE MD
--------------------------------------------------------------------------------
6. TSI Broadway, Inc. NY N/A
--------------------------------------------------------------------------------
7. TSI 217 Broadway, Inc. NY N/A
--------------------------------------------------------------------------------
8. TSI Brooklyn Belt, Inc. NY N/A
--------------------------------------------------------------------------------
9. TSI Brunswick, Inc. DE NJ
--------------------------------------------------------------------------------
10. TSI Bullfinch, Inc. DE MA
--------------------------------------------------------------------------------
11. TSI Cash Management, Inc. NY CT
--------------------------------------------------------------------------------
12. TSI Centreville, LLC DE VA
--------------------------------------------------------------------------------
13. TSI Cherry Hill, LLC DE NJ
--------------------------------------------------------------------------------
14. TSI Cobble Hill, Inc. NY N/A
--------------------------------------------------------------------------------
15. TSI Colonia, LLC DE NJ
--------------------------------------------------------------------------------
16. TSI Commack, Inc. NY N/A
--------------------------------------------------------------------------------
17. TSI ▇▇▇▇▇▇, Inc. DE MA
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
18. TSI Croton, Inc. NY N/A
--------------------------------------------------------------------------------
19. TSI Danbury, Inc. DE CT
--------------------------------------------------------------------------------
20. TSI Dupont Circle, Inc. DE DC
--------------------------------------------------------------------------------
21. TSI Dupont II, Inc. DE DC
--------------------------------------------------------------------------------
22. TSI East Meadow, Inc. NY N/A
--------------------------------------------------------------------------------
23. TSI East 23, Inc. NY N/A
--------------------------------------------------------------------------------
24. TSI East 34, Inc. NY N/A
--------------------------------------------------------------------------------
25. TSI East 36, Inc. NY N/A
--------------------------------------------------------------------------------
26. TSI East 41, Inc. NY N/A
--------------------------------------------------------------------------------
27. TSI East 51, Inc. NY N/A
--------------------------------------------------------------------------------
28. TSI East 59, Inc. NY N/A
--------------------------------------------------------------------------------
29. TSI East 76, Inc. NY N/A
--------------------------------------------------------------------------------
30. TSI East 86, Inc. NY N/A
--------------------------------------------------------------------------------
31. TSI East 9l, Inc. NY N/A
--------------------------------------------------------------------------------
32. TSI East 94. Inc. NY N/A
--------------------------------------------------------------------------------
33. TSI Fairfax, LLC DE VA
--------------------------------------------------------------------------------
34. TSI Fenway, Inc. DE MA
--------------------------------------------------------------------------------
35. TSI Fifth Avenue, Inc. DE N/A
--------------------------------------------------------------------------------
36. TSI First Avenue, Inc. NY N/A
--------------------------------------------------------------------------------
37. TSI Forest Hills, Inc. NY N/A
--------------------------------------------------------------------------------
38. TSI Fort ▇▇▇, LLC DE NJ
--------------------------------------------------------------------------------
39. TSI Framingham, Inc. DE MA
--------------------------------------------------------------------------------
40. TSI Franklin Park, LLC DE NJ
--------------------------------------------------------------------------------
2
18. TSI Croton, Inc. NY N/A
--------------------------------------------------------------------------------
41. TSI Freehold, Inc. DE NJ
--------------------------------------------------------------------------------
42. TSI Germantown, LLC DE MD
--------------------------------------------------------------------------------
43. TSI ▇▇▇▇▇▇, Inc. DE DC
--------------------------------------------------------------------------------
44. TSI Great Neck, Inc. NY N/A
--------------------------------------------------------------------------------
45. TSI Greenwich, Inc. DE CT
--------------------------------------------------------------------------------
46. TSI Greenwich Street, Inc. NY N/A
--------------------------------------------------------------------------------
47. TSI Herald, Inc. NY N/A
--------------------------------------------------------------------------------
48. TSI Hoboken, Inc. DE NJ
--------------------------------------------------------------------------------
49. TSI Holdings (CIP), Inc. DE NY
--------------------------------------------------------------------------------
50. TSI Holdings (DC), Inc. DE DC
--------------------------------------------------------------------------------
51. TSI Holdings (IP), Inc. DE N/A
--------------------------------------------------------------------------------
52. TSI Holdings (MD), Inc. DE MD
--------------------------------------------------------------------------------
53. TSI Holdings (NJ), Inc. DE N/A
--------------------------------------------------------------------------------
54. TSI Holdings (PA), Inc. DE N/A
--------------------------------------------------------------------------------
55. TSI Holdings (VA), Inc. DE N/A
--------------------------------------------------------------------------------
56. TSI International, Inc. DE N/A
--------------------------------------------------------------------------------
57. TSI Larchmont, Inc. NY N/A
--------------------------------------------------------------------------------
58. TSI Lexington, Inc. NY N/A
--------------------------------------------------------------------------------
59. TSI Lincoln, Inc. NY N/A
--------------------------------------------------------------------------------
60. TSI M Street, Inc. DE DC
--------------------------------------------------------------------------------
61. TSI Madison, Inc. NY N/A
--------------------------------------------------------------------------------
62. TSI Mahwah, LLC DE NJ
--------------------------------------------------------------------------------
63. TSI Mamaroneck, Inc. NY N/A
--------------------------------------------------------------------------------
3
--------------------------------------------------------------------------------
18. TSI Croton, Inc. NY N/A
--------------------------------------------------------------------------------
64. TSI Marlboro, Inc. DE NJ
--------------------------------------------------------------------------------
65. TSI Matawan, Inc. DE NJ
--------------------------------------------------------------------------------
66. TSI ▇▇▇▇▇▇▇▇▇▇, Inc. DE VA
--------------------------------------------------------------------------------
67. TSI Nanuet, Inc. NY N/A
--------------------------------------------------------------------------------
68. TSI Norwalk, Inc. DE CT
--------------------------------------------------------------------------------
69. TSI Oceanside, Inc. NY N/A
--------------------------------------------------------------------------------
70. TSI Old Bridge, Inc. DE NJ
--------------------------------------------------------------------------------
71. TSI Parsippany, LLC DE NJ
--------------------------------------------------------------------------------
72. TSI Plainsboro, LLC DE NJ
--------------------------------------------------------------------------------
73. TSI Princeton, LLC DE NJ
--------------------------------------------------------------------------------
74. TSI ▇▇▇▇▇▇, Inc. NJ N/A
--------------------------------------------------------------------------------
75. TSI ▇▇▇▇▇▇▇▇▇▇▇, LLC DE PA
--------------------------------------------------------------------------------
76. TSI Rockville, LLC DE MD
--------------------------------------------------------------------------------
77. TSI Rodin Place, LLC DE PA
--------------------------------------------------------------------------------
78. TSI Scarsdale, Inc. NY N/A
--------------------------------------------------------------------------------
79. TSI Seaport, Inc. NY N/A
--------------------------------------------------------------------------------
80. TSI Sheridan, Inc. NY N/A
--------------------------------------------------------------------------------
81. TSI Society Hill, LLC DE PA
--------------------------------------------------------------------------------
82. TSI Soho, Inc. NY N/A
--------------------------------------------------------------------------------
83. TSI Somerset, LLC DE NJ
--------------------------------------------------------------------------------
84. TSI Springfield, LLC DE NJ
--------------------------------------------------------------------------------
85. TSI Stamford Downtown, Inc. DE CT
--------------------------------------------------------------------------------
4
--------------------------------------------------------------------------------
18. TSI Croton, Inc. NY N/A
--------------------------------------------------------------------------------
86. TSI Stamford Post, Inc. DE CT
--------------------------------------------------------------------------------
87. TSI Stamford Rinks, Inc. DE CT
--------------------------------------------------------------------------------
88. TSI Stamford - Summer, Inc. DE CT
--------------------------------------------------------------------------------
89. TSI Staten Island, Inc. NY N/A
--------------------------------------------------------------------------------
90. TSI Sterling, LLC DE VA
--------------------------------------------------------------------------------
91. TSI Syosset, Inc. NY N/A
--------------------------------------------------------------------------------
92. TSI Wall Street, Inc. NY N/A
--------------------------------------------------------------------------------
93. TSI Washington, Inc. DE DC
--------------------------------------------------------------------------------
94. TSI West ▇▇▇▇▇▇▇▇, LLC DE NJ
--------------------------------------------------------------------------------
95. TSI West 14, Inc. NY N/A
--------------------------------------------------------------------------------
96. TSI West 23, Inc. NY N/A
--------------------------------------------------------------------------------
97. TSI West 38, Inc. NY N/A
--------------------------------------------------------------------------------
98. TSI West 52, Inc. NY N/A
--------------------------------------------------------------------------------
99. TSI West 73, Inc. NY N/A
--------------------------------------------------------------------------------
100. TSI West 76, Inc. NY N/A
--------------------------------------------------------------------------------
101. TSI West 80, Inc. NY N/A
--------------------------------------------------------------------------------
102. TSI West 125, Inc. NY N/A
--------------------------------------------------------------------------------
103. TSI Weymouth, Inc. DE MA
--------------------------------------------------------------------------------
104. TSI White Plains, Inc. NY N/A
--------------------------------------------------------------------------------
105. TSI Whitestone, Inc. NY N/A
--------------------------------------------------------------------------------
5
EXHIBIT A
[FORM OF REGISTRATION RIGHTS AGREEMENT]