Deutsche Bank AG New York Branch New York, NY 10005 Telephone: 212-250-9425 Facsimile: 212-797-0779 Date: July 8, 2011 To: Town Sports International, LLC Attention: Dan Gallagher Facsimile no.: (212) 246-8422 Our Reference: Global No. NI317383N Re:...
Exhibit 10.1
| Deutsche Bank AG New York Branch | ||
| 00 Xxxx Xxxxxx | ||
| Xxx Xxxx, XX 00000 | ||
| Telephone: 000-000-0000 | ||
| Facsimile: 000-000-0000 |
Date:
|
July 8, 2011 | |
To:
|
Town Sports International, LLC | |
Attention:
|
Xxx Xxxxxxxxx | |
Facsimile no.:
|
(000) 000-0000 | |
Our Reference:
|
Global No. NI317383N | |
Re:
|
Interest Rate Swap Transaction |
Ladies and Gentlemen:
The purpose of this letter agreement is to set forth the terms and conditions of the
Transaction entered into between Deutsche Bank AG (“DBAG”)
and Town Sports International, LLC (“Counterparty”) on the Trade Date specified below (the “Transaction”). This letter agreement
constitutes a “Confirmation” as referred to in the Agreement specified below.
The definitions and provisions contained in the 2006 ISDA Definitions (the “Definitions”) as
published by the
International Swaps and Derivatives Association, Inc. are incorporated by reference hereto.
In the event of any inconsistency between the Definitions and this Confirmation, this
Confirmation will govern.
For the
purpose of this Confirmation, all references in the Definitions or
the Agreement to a
“Swap Transaction” shall be deemed to be references to this Transaction.
1. This Confirmation, together with the Agreement, evidences a complete and binding
agreement between DBAG (“Party A”) and Counterparty (“Party B”) as to the terms of the
Transaction to which this Confirmation relates. This Confirmation, together with all other
documents referring to the ISDA Master Agreement (Multicurrency-Cross Border) as amended from
time to time (the “ISDA Form”) (each a “Confirmation”) confirming Transactions (each a
“Transaction”) entered rote between us (notwithstanding anything to the contrary in a
Confirmation), shall supplement, form a part of, and be subject to an agreement in the form of
the ISDA Form as if Party A and Party B had executed an agreement on the Trade Date of the first
such Transaction between us in such form with any amendments thereto mentioned in this
Confirmation, with the Schedule thereto (i) specifying only that (a) the governing law is the
laws of the State of New York, provided, that such choice of law shall be superseded by any
choice of law provision specified in the Agreement upon its execution, and (b) the
Termination Currency Is U.S Dollars and (ii) incorporating the addition to the definition of
“Indemnifiable Tax” contained in (page 48 of) the ISDA “User’s Guide to the 1992 ISDA Master
Agreements” (the “Agreement”). In the event of any inconsistency between the terms of this
Confirmation, and the terms of the Agreement, this Confirmation will prevail for the purpose
of the Transaction.
Chairman of the Supervisory Board
Clemens Börsig
Management Board’ Xxxxx Xxxxxxxxx
(Chairman), Xxxx Xxxxxxxx,
Xxxxxx Xxxxxx, Xxxxxxx-Xxxxx Xxxxxxxx,
Xxxxxx Fitschon,
Xxxxxxxx Xxxx, Xxxxxx Xxxxx
|
Deutsche Bank AG is authorised under German Banking Law (competent authority: BaFin — Federal Financial Supervising Authority) and regulated by the Financial Services Authority for the conduct of UK business, a member of the London Stock Exchange Deutsche Bank AG Is a Joint stock corporation with limited liability incorporated in the Federal Republic of Germany HRB No 30 000 Xxxxxxxx Xxxxx of Frankfurt am Main, Branch Registration In England and Wales BR000005, Registered address, Xxxxxxxxxx Xxxxx, 0 Xxxxx Xxxxxxxxxx Xxxxxx, Xxxxxx XX0X 0XX Deutsche Bank Group online xxxx://xxx.xxxxxxxx xxxx.xxx |
2. The
terms of the particular Transaction to which this Confirmation relates are as follows:
| Notional Amount; | USD 150,000,000 | |||
| Trade Date: | July l, 2011 | |||
| Effective Date: | July 13, 2011 | |||
| Termination Date: | July 13, 2014, subject to adjustment in accordance with the Modified Following Business Day Convention |
Fixed A mounts:
| Fixed Rate Payer: | Counterparty | |||
| Fixed Rate Payer Period End Dates: | The 13th Business Day of each month of each year, commencing | |||
| August 13, 2011, through and including the Termination Date, | ||||
| subject to adjustment in accordance with the Modified | ||||
| Following Business Day Convention | ||||
| Fixed Rate Payer Payment Dates: | The 13th Business Day of each month of each year, commencing | |||
| August 13, 2011, through and including the Termination Date, | ||||
| subject to adjustment in accordance with the Modified | ||||
| Following Business Day Convention | ||||
| Fixed Rate: | 1.983% | |||
| Fixed Rate Day Count Fraction: | Actual/360 | |||
| Fixed Rate Payer Business Days: | New York, London | |||
| Fixed Rate Payer Business | ||||
| Day Convention: | Modified Following |
Floating Amounts:
| Floating Rate Payer: | DBAG | |||
| Floating Rate Payer Period End Dates’ | The 13th Business Day of each month of each year, commencing August 13, 2011, through and including the Termination Date, subject to adjustment in accordance with the Modified Following Business Day Convention | |||
| Floating Rate Payer Payment Dates: | The 13th Business Day of each month of each year, commencing August 13, 2011, through and including the Termination Date, subject to adjustment in accordance with the Modified Following Business Day Convention | |||
| Floating Rate Option: | The greater of 1.5% or USD-LIBOR-BBA | |||
| Designated Maturity: | 1 month | |||
| Spread: | None | |||
| Floating Rate Day | ||||
| Count Fraction: | Actual/360 | |||
| Reset Dates | The first Business Day in each Calculation Period. | |||
| Compounding: | Inapplicable | |||
| Business Days: | New York and London | |||
2
The
“Cross Default” provisions of Section 5(a)(vi) of the ISDA Form will apply to DBAG
and Counterparty; provided however, that,
Section 5(a)(vi)(1) is amended by deleting in the
seventh line thereof the words “, or becoming capable at such
time of being declared,”; provided
further, that, with respect to Section 5(a)(vi)(2), “Cross Default” shall not include any default
that. (A) is the result of mistake, administrative or back
office error, wire transfer
difficulties or an error, omission or problem of an administrative or operational nature, and
such default is cured within three (3) Local Business Days of such party’s receipt of written
notice of its default; or (B) was caused solely because such party was precluded from performing
its obligations under the relevant Specified Indebtedness, or was
unable to so per form, using
reasonable means, directly or through the office of the party through which it was acting for
purposes of the relevant Specified Indebtedness, by reason of force majeure, act of state,
illegality or impossibility and such default was cured within three (3) Local Business Days of
the termination of such force majeure, act of state, illegality or impossibility; provided,
however, in either case the party availing itself of such provision to excuse a default for the
grace period so provided had, in the case era payment default, the necessary funds on hand to
effect any such payment that is excused for the grace period specified above.
“Threshold
Amount” means in relation to Counterpart),, USD 10,000,000 and in relation to
DBAG, 3 percent of the ordinary shareholders’ funds of DBAG appearing as such on its most
recently published audited accounts,
2) ADDITIONAL TERMINATION EVENTS
Each of the following shall constitute on Additional Termination Event:
A. Counterparty’s obligations to DBAG under this Agreement:
(i) cease to be secured pursuant to the Security Documents (as such term is defined
in the Credit Agreement) at any time for any reason; or
(ii) cease to be equally and ratably secured with Counterparty’s obligations to the Lender
(as such term is defined in the Credit Agreement) under the Credit Agreement pursuant
to the relevant Security Documents at any time for any reason, or
(iii) cease to be guaranteed by the Subsidiary Guarantors (as such term is defined in
the Credit Agreement) at any time for any reason.
For the purpose of the foregoing Termination Events, the Affected Party shall be Counterpart),.
B. Any collateral under Credit Support Documents is released at any time when DBAG,
or an Affiliate of DBAG is not a party to the Credit Agreement, unless such release will
not have a material adverse effect on DBAG in respect of this Agreement or the release of
such collateral was provided for pursuant to the terms of the Credit Agreement in
effect when DBAG or an Affiliate of DBAG was a party to such Credit Agreement or DBAG
shall have consented in writing prior to such release (such consent not to be unreasonably
withheld).
As used herein and throughout this Agreement. “Credit Agreement” means that USD
300,000,000 Credit and Guarantee Agreement dated as of May 11, 2011 among Town Sports
International Holdings, Inc, Town Sports International, LLC, as the Borrower, Various Lenders and
Deutsche Bank Trust Company Americas, as Administrative Agent, Deutsche Bank Securities Inc. and
Keybank National Association, as Joint Lead Arrangers and Joint Book Running Managers, and
Keybank National Association as Syndication Agent as may be amended, modified, restated or
replaced from time to time
Credit Support Document: The Security Documents referenced in the Credit Agreement and herein
shall be deemed to be Credit Support Documents, with respect to the Counterparty for the purposes
of this Agreement.
Credit Support Provider: The Subsidiary Guarantors as defined in the Credit Agreement and herein
shall be deemed to be Credit Support Providers, with respect to the Counterparty for the purposes
of this Agreement.
3
For the purpose of Section 4(a)(ii) of this Agreement, Party B agrees to deliver true
and complete copies of all documents delivered to the Lenders under the Credit Agreement if
DBAG or an Affiliate of DBAG is not a party to such Credit Agreement. This delivery obligation
will be covered by the representation of Party B as described in Section 3(d).
Section 6(f) of the Agreement is deleted in its entirety and replaced with the following:
“(f)
Upon the designation of any Early Termination Date, the party that is not the Defaulting Party
or Affected Party (“X”) may, without prior notice to the Defaulting or Affected Party (“Y”),
set off any sum or obligation (whether or not arising under thin Agreement, whether matured or
unmatured, whether or not contingent and irrespective of the currency, place of payment or booking
office of the sum or obligation) owed by Y to X (the “X Set Off Amount”) against any sum or
obligation (whether or not arising under this Agreement, whether matured or unmatured, whether or
not contingent and irrespective of the currency, place of payment or booking office of the sum
or obligation) owed by X to Y (the “Y Set Off Amount”). X will give notice to the other party of
any set off effected under this Section 6(1).
For this purpose, either the X Set Off Amount or the Y Set Off Amount (or the relevant
portion of such set off amounts) may be converted by X into the currency in which the other
set off amount is denominated at the rate of exchange at which X would be able, acting in a
reasonable manner and in good faith, to purchase the relevant amount of such currency.
If a sum or obligation is unascertained, X may in good faith estimate that obligation
and set-off in respect of the estimate, subject to the relevant party accounting to the
other when the obligation is ascertained.
Nothing in this Section 6(1) will be effective to create a charge or other security
interest. This Section 6(f) will be without prejudice and in addition to any right of
set-off, combination of accounts, lien or other rights to which any party is at any time
otherwise entitled (whether by operation of law, contract or otherwise).”
Without limiting the rights of a Non-defaulting Party under Section 6, if an Event of
Default with respect to a party has occurred and is continuing and consequently the
Non-defaulting Party does not make a scheduled payment or delivery by reason of the
condition specified in Section 2(a)(iii)(l), the Non-defaulting Party shall have the tight
to suspend performance (including payments and deliveries) under any Transaction; provided
that the Non-defaulting Party shall provide written notice to the Defaulting Party within
five (5) Local Business Day of its exercising its right to suspend performance under
Section 2(a)(iii); and provided that in no event shall any such suspension continue for longer
than ninety (90) Local Business Days with respect to such Transaction unless an Early
Termination Date shall have been declared and notice provided to the Defaulting Party thereof.
7) Illegality. The parties agree that for the avoidance of doubt, for purposes of Section
5(b)(i) of the Agreement, “any applicable law” shall include the Xxxx-Xxxxx Xxxx Street Reform
and Consumer Protection Act of 2010, any rules and regulations promulgated thereunder and any
similar law or regulation, without regard to Section 739 of the Xxxx-Xxxxx Xxxx Street Reform
and Consumer Protection Act of 2010 or any similar legal certainty provision in any legislation
enacted, or rule or regulation promulgated, on or after the date hereof, and the consequences
specified in the Agreement, including without limitation, the consequences specified in Section 6
of the Agreement, shall apply to any Illegality arising from any such act, rule or regulation.
8) Xxxx-Xxxxx Xxxx Street Reform and Consumer Protection Act of 2010: In connection with
Section 739 of the Xxxx-Xxxxx Xxxx Street Reform and Consumer Protection Act of 2010 or any
similar legal certainty provision in any legislation enacted, or rule or regulation
promulgated, on or after the Trade Date, the parties hereby specifically reserve the right to
terminate, renegotiate, modify, amend or supplement the Transaction to the extent that the
enactment of the Xxxx-Xxxxx Xxxx Street Transparency and Accountability Act of 2010 or any
similar legislation, rule or regulation (the “Applicable Act”), or any requirement under the
Applicable Act or an amendment made by the Applicable Act, constitutes a Termination Event or
other similar event under the Transaction that would give rise to such a right to terminate,
renegotiate, modify, amend or supplement the Transaction in accordance with its terms.
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| (i) | Without limiting Section 9(d) or (f) of the Agreement, the parties hereby agree that no payment or delivery by a party made pursuant this Confirmation shall be presumed to preclude such party’s right to challenge the determination of the amount of such payment or delivery obligation at a later date or be deemed to be a waiver of any Event of Default or Termination Event that exists as of the date of any such payment or delivery and no failure of a party to invoke any dispute resolution procedures that may otherwise be available to such party in connection with any such payment or delivery shall be deemed to constitute a waiver of such party’s right to assert that the demand for such payment or delivery constitutes a breach of this Agreement or to constitute a waiver of such party’s right to bring a suit or proceeding in respect thereof.” |
(ii) Section 9(f) of this Agreement shall be amended by the addition of the following at
the end of the provision:
“(1) Failure by a party to expressly reserve any right, power or privilege it has under
this Agreement, and/or (2) continued performance by a party of its obligations or enjoyment of
any rights under this Agreement shall not in any way undermine or prejudice the effectiveness
of this Section.”
10. Account Details:
Account Details for DBAG:
USD DBAG Payment Instructions: |
||
Account With:
|
DB Trust Co. Americas, New York | |
SWIFT Code:
|
XXXXXX00 | |
Favor Of:
|
Deutsche Bank AG, New York | |
Account Number:
|
01 473 969 |
Account Details for Counterparty:
Payment instructions:
|
Please provide |
The Office for DBAG for this Transaction is New York, New York
The Office of Counterparty for this Transaction New York, New York
| DBAG, provided that if an Event of Default or a Potential Event of Default has occurred and is continuing with respect to DBAG, the Calculation Agent shall be a recognized dealer in the relevant derivatives market designated by Counterparty. The Calculation Agent shall act in good faith and in a commercially reasonable manner. The Calculation Agent shall, upon request by Counterparty, provide a written explanation of any calculation, determination or adjustment made by it including, where applicable, a description of the methodology and the basis for such calculation, determination or adjustment in reasonable detail. |
5
Each party will be deemed to represent to the other party on the date on which it enters
into this Transaction that (absent a written agreement between the parties that expressly imposes
affirmative obligations to the contrary for this Transaction):
(A) Non-Reliance. It is acting for its own account, and it has made its own independent
decisions to enter into this Transaction and as to whether this Transaction is appropriate or
proper for it based upon its own judgment and upon advice from such advisers as it has deemed
necessary. It is not relying on any communication (written or oral) of the other party as
investment advice or as a recommendation to enter into this Transaction; it being understood that
information and explanations related to the terms and conditions of this Transaction shall not
be considered investment advice or a recommendation to enter into this Transaction. No
communication (written or oral) received from the other party shall be deemed to be an assurance
or guarantee as to the expected results of this Transaction
(B) Assessment and Understanding. It is capable of assessing the merits of and understanding
(on its own behalf or through independent professional advice), and understands and accepts, the
terms, conditions and risks of this Transaction. It is also capable of assuming, and assumes,
tile risks of this Transaction,
(C) Status
of Parties. The other party is not acting as a fiduciary for, or an adviser to it in
respect of this Transaction.
(D) Eligible Contract Participant. It is an “eligible contract participant” within the meaning of
the Commodity Exchange Act, Section 1a(12),
| (A) | Payer Tax Representations. For the purpose of Section 3(e) of the Agreement, each of Party A and Party B makes the following representation: | |
| It is not required by any applicable law, as modified by the practice of any relevant governmental revenue authority, of any Relevant Jurisdiction to make any deduction or withholding for or on account of any Tax from any payment (other than interest under Section 2(e), 6(d)(ii) or 6(e) of the Agreement) to be made by it to the other party under the Agreement. In making this representation, it may rely on (i) the accuracy of any representation made by the other party pursuant to Section 3(f) of the Agreement; (ii) the satisfaction of the agreement of the other party contained in Section 4(a)(i) or 4(a)(iii) of the Agreement and the accuracy and effectiveness of any document provided by the other party pursuant to Section 4(a)(i) or 4(a)(iii) of the Agreement; and (iii) the satisfaction of the agreement of the other party contained in Section 4(d) of the Agreement, provided that it shall not be a breach of this representation where reliance is placed on clause (ii) and the other party does not deliver a form or document under Section 4(a)(iii) of the Agreement by reason of material prejudice to its legal or commercial position. | ||
| (B) | Payee Tax Representations. For the purpose of Section 3(f) of the Agreement, Party A and Party B will make the following representation specified below. | |
| (i) | Party A. It is a “foreign person” (as that term is used in Section 1.6041-4(a)(4) of the United States Treasury Regulations) for U.S. federal income tax purposes, and each payment received or to be received by it will be effectively connected with its conduct of a trade or business in the United States. |
6
(C) Tax
Forms. For the purposes of Section 4(a)(i) and (ii) of the Agreement, each party
agrees to deliver the following documents, as applicable:
Party required to
deliver document
|
Form/Document/Certificate | Date by which to be delivered | ||
Party A
|
Internal Revenue Service Form W-8ECI. | Upon execution and delivery of this Confirmation, promptly upon reasonable demand by Party B; and promptly upon learning that any such form previously provided by Party A has become obsolete or incorrect. | ||
Party B
|
Internal Revenue Service Form W-9. | Upon execution and delivery of this Confirmation, promptly upon reasonable demand by Party A; and promptly upon learning that any such form previously provided by Party B has become obsolete or incorrect. |
7
15. Please confirm that the foregoing correctly sets forth the terms of our agreement
by having an authorized officer sign this Confirmation and return it via facsimile or e-mail
to:
Attention. Derivative Documentation
Telephone: 00 00 0000 0000
Facsimile: 44 20 7545 9761
E-mail:
Xxxxxxxxxx.Xxxxxxxxxxxxx@xx.xxx
This message will be the only form of Confirmation dispatched by us. If you wish to exchange
hard copy forms of this Confirmation, please contact us.
Yours sincerely,
Deutsche Bank AG New York
| By: | DB Services New Jersey, Inc., as Agent | |||
| BY: | /s/ Xxxx Xxxxxxxx | |||
| Name: Xxxx Xxxxxxxx | ||||
| Title: Manager Rates Drafting | ||||
| BY: | /s/ Xxxxxx Besrayeva | |||
| Name: Xxxxxx Besrayeva | ||||
| Title: Manager Equity Drafting | ||||
| Confirmed as of the date first written above: Town Sports International LLC |
||||
| By: | /s/ Xxxxxx Xxxxxxxxx | |||
| Name: | Xxxxxx Xxxxxxxxx | |||
| Title: | CFO | |||
8