Exhibit 10.9
EXHIBIT E TO THE THIRD
AMENDED AND RESTATED
CREDIT AGREEMENT
AS SEPARATELY EXECUTED
THIRD AMENDED AND RESTATED
HOLDINGS PLEDGE AGREEMENT
Dated December 19, 1997
From
FITNESS HOLDINGS, INC.,
as Pledgor,
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to
BANQUE NATIONALE DE PARIS,
as Administrative Agent
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TABLE OF CONTENTS
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SECTION 1 Grant of Security................................................3
SECTION 2 Security for Obligations.........................................4
SECTION 3 Pledgor Remains Liable...........................................4
SECTION 4 Delivery of Collateral...........................................4
SECTION 5 Representations and Warranties...................................5
SECTION 6 Further Assurances...............................................6
SECTION 7 Place of Perfection; Records.....................................6
SECTION 8 Voting Rights; Dividends; Etc....................................7
SECTION 9 Transfers and Other Liens; Additional Shares.....................8
SECTION 10 Administrative Agent Appointed Attorney-in-Fact..................8
SECTION 11 Administrative Agent May Perform.................................9
SECTION 12 The Administrative Agent's Duties................................9
SECTION 13 Remedies.........................................................9
SECTION 14 Registration Rights.............................................11
SECTION 15 Indemnity and Expenses..........................................12
SECTION 16 Security Interest Absolute......................................12
SECTION 17 Amendments; Waivers; Etc........................................13
SECTION 18 Addresses for Notices...........................................13
(i)
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SECTION 19 Continuing Security Interest; Assignments under the
Credit Agreement ...............................................14
SECTION 20 Release and Termination.........................................14
SECTION 21 Governing Law; Submission to Jurisdiction, Waiver of
Jury Trial; Etc ................................................14
Schedule I Pledged Shares
Schedule II Existing Liens
(ii)
EXHIBIT E TO THE THIRD
AMENDED AND RESTATED
CREDIT AGREEMENT
AS SEPARATELY EXECUTED
THIRD AMENDED AND RESTATED HOLDINGS PLEDGE AGREEMENT
THIRD AMENDED AND RESTATED HOLDINGS PLEDGE AGREEMENT, dated December
19, 1997, made by FITNESS HOLDINGS, INC., a Delaware corporation (the
"Pledgor"), to BANQUE NATIONALE DE PARIS ("BNP"), as administrative agent
(together with any successor agent appointed pursuant to Article VII of the
Credit Agreement (as hereinafter defined), the "Administrative Agent") for the
lender parties (the "Lender Parties") and other Agents party to the Credit
Agreement.
PRELIMINARY STATEMENTS:
(1) 24 Hour Fitness, Inc., a California corporation (the
"Borrower"), is the borrower under a Second Amended and Restated Credit
Agreement dated as of March 14, 1997 (as amended, supplemented or otherwise
modified, the "Existing Credit Agreement") with the lenders named therein (the
"Existing Lenders") and BNP as issuing bank and agent (the "Existing Agent").
Pursuant to a Second Amended and Restated Holdings Pledge Agreement dated March
14, 1997 (the "Existing Pledge Agreement"), the Pledgor assigned and pledged to
the Existing Agent for its benefit and the benefit of the issuing bank party to
the Existing Credit Agreement and the ratable benefit of the Existing Lenders
and certain hedge lenders to secure the payment of all Obligations (as defined
in the Existing Credit Agreement) of the Pledgor under, among other things, the
Existing Credit Agreement, a security interest in certain property.
(2) The Borrower has entered into a Third Amended and Restated
Credit Agreement dated as of December 19, 1997 (said Agreement, as it may
hereafter be amended, supplemented or otherwise modified from time to time,
being the "Credit Agreement"; the terms defined therein and not otherwise
defined herein being used herein as therein defined) with the Lender Parties
party thereto, BNP as Syndication Agent and as Administrative Agent for the
Lender Parties, Bankers Trust Company as Documentation Agent for the Lenders and
LaSalle National Bank and Xxxxx Fargo Bank, N.A., as Co-Agents for the Lenders.
(3) The Borrower may from time to time invest in Hedge Agreements
with one or more Lenders in connection with the Credit Agreement (all such
Lenders being, collectively, the "Hedge Banks") to obtain the protection
permitted by Section 5.02(b)(i)(C) of the Credit Agreement against fluctuations
in certain interest rates. Such Hedge Agreements, copies of which shall be
provided to the Administrative Agent, are hereinafter referred to as the
"Secured Hedge Agreements".
(4) The Pledgor is the owner of the shares of stock, and of the
warrants, rights and options to acquire the shares of stock (collectively, the
"Pledged Shares"), described on Part
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CREDIT AGREEMENT
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A of Schedule I hereto and issued by the corporations named therein and of the
indebtedness (the "Pledged Indebtedness") described on Part B of Schedule I
hereto and issued by the obligors named therein.
(5) It is a condition precedent to the making of Advances by the
Lender Parties under the Credit Agreement and the issuance of Letters of Credit
by the Issuing Bank under the Credit Agreement, and the entering into the
Secured Hedge Agreements by the Hedge Banks, that the Pledgor shall have granted
the assignment and security interest and made the pledge contemplated by this
Agreement.
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AMENDED AND RESTATED
CREDIT AGREEMENT
AS SEPARATELY EXECUTED
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NOW, THEREFORE, in consideration of the premises and in order to
induce the Lender Parties to make Advances under the Credit Agreement, the
Issuing Bank to issue Letters of Credit under the Credit Agreement and the Hedge
Banks to enter into arrangements permitted by Section 5.02(b)(i)(C) of the
Credit Agreement, the Pledgor hereby agrees with the Administrative Agent for
its benefit and the benefit of the Issuing Bank and the Swing Line Bank and the
ratable benefit of the other Lender Parties and the Hedge Banks as follows:
SECTION 1. Grant of Security. The Pledgor hereby assigns and pledges
to the Administrative Agent for its benefit and the benefit of the Issuing Bank
and the Swing Line Bank and the ratable benefit of the other Lender Parties and
the Hedge Banks, and hereby grants to the Administrative Agent for its benefit
and the benefit of the Issuing Bank and the Swing Line Bank and the ratable
benefit of the other Lender Parties and the Hedge Banks, a security interest in
the following (collectively, the "Collateral"):
(a) the Pledged Shares and the certificates representing the Pledged
Shares, and all dividends, cash, instruments and other property and assets
from time to time received, receivable or otherwise distributed in respect
of or in exchange for any or all of the Pledged Shares;
(b) the Pledged Indebtedness and the instruments evidencing the
Pledged Indebtedness, and all interest, cash, instruments and other
property and assets from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of the Pledged
Indebtedness;
(c) all additional shares of stock, and all additional warrants,
rights or options to acquire shares of stock, from time to time acquired
by the Pledgor in any manner, and the certificates representing such
additional shares and such additional warrants, rights or options and all
dividends, cash, instruments and other property and assets from time to
time received, receivable or otherwise distributed in respect of or in
exchange for any or all of such additional shares or such additional
warrants, rights or options;
(d) all additional indebtedness from time to time owed to the
Pledgor in any manner and the instruments evidencing such additional
indebtedness, and all interest, cash, instruments and other property and
assets from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all such additional indebtedness; and
(e) all proceeds of any and all of the foregoing Collateral to the
extent assignable without consent (including, without limitation, proceeds
that constitute property of the types described in clauses (a) through (d)
of this Section 1) and, to the
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extent not otherwise included, all (i) payments under insurance (whether
or not the Administrative Agent is the loss payee thereof), or any
indemnity, warranty or guaranty, payable by reason of loss or damage to or
otherwise with respect to any of the foregoing Collateral and (ii) cash.
SECTION 2. Security for Obligations. The pledge, assignment and
security interest granted under this Agreement by the Pledgor secure the payment
of all Obligations of the Pledgor now or hereafter existing under this Agreement
and each other Loan Document and under the Secured Hedge Agreements, whether for
principal, interest, premiums, fees, expenses or otherwise (all such Obligations
being the "Secured Obligations"). Without limiting the generality of the
foregoing, this Agreement secures the payment of all amounts that constitute
part of the Secured Obligations and would be owed by the Pledgor to the
Administrative Agent or any Lender Party under the Loan Documents or the Hedge
Banks under the Secured Hedge Agreements but for the fact that they are
unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving the Pledgor.
SECTION 3. Pledgor Remains Liable. Anything herein to the contrary
notwithstanding, (a) the Pledgor shall remain liable under the contracts and
agreements included in the Collateral to the extent set forth therein to perform
all of its duties and obligations thereunder to the same extent as if this
Agreement had not been executed, (b) the exercise by the Administrative Agent of
any of the rights hereunder shall not release the Pledgor from any of its duties
or obligations under the contracts and agreements included in the Collateral,
and (c) none of the Administrative Agent, the Lender Parties or the Hedge Banks
shall have any obligation or liability under the contracts and agreements
included in the Collateral by reason of this Agreement, nor shall the
Administrative Agent, any Lender Party or any Hedge Bank be obligated to perform
any of the obligations or duties of the Pledgor thereunder or to take any action
to collect or enforce any claim for payment assigned hereunder.
SECTION 4. Delivery of Collateral. All certificates and instruments
representing or evidencing Collateral shall be delivered to and held by or on
behalf of the Administrative Agent pursuant hereto and shall be in suitable form
for transfer by delivery, or shall be accompanied by duly executed instruments
of transfer or assignment in blank, all in form and substance reasonably
satisfactory to the Administrative Agent. After the occurrence and during the
continuance of any Event of Default, the Administrative Agent shall have the
right, at any time in its discretion and without notice to the Pledgor, to
transfer to or register in the name of the Administrative Agent or any of its
nominees any or all of the Collateral, subject only to the revocable rights
specified in Section 8(a). In addition, after the occurrence and during the
continuance of an Event of Default, the Administrative Agent shall have the
right at any time to exchange certificates or instruments representing or
evidencing Collateral for certificates or instruments of smaller or larger
denominations.
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CREDIT AGREEMENT
AS SEPARATELY EXECUTED
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SECTION 5. Representations and Warranties. The Pledgor represents
and warrants as to itself and its Collateral as follows:
(a) The principal place of business of the Pledgor or, if the
Pledgor has more than one principal place of business, the chief executive
office of the Pledgor, and the office where the Pledgor keeps its records
concerning the Collateral are located at the address listed below the name
of the Pledgor on the signature page hereof.
(b) The Pledgor is the legal and beneficial owner of the Collateral
free and clear of any Lien. No effective financing statement or other
instrument similar in effect covering all or any part of the Collateral is
on file in any recording office, except such as may have been filed in
favor of the Administrative Agent relating to this Agreement or the other
Collateral Documents, the Existing Pledge Agreement or the "Collateral
Documents" under the Existing Credit Agreement except as set forth on
Schedule II. The Pledgor has no trade names.
(c) All of the shares of stock that constitute Pledged Shares have
been duly authorized and validly issued and are fully paid and
nonassessable. The Pledged Indebtedness has been duly authorized,
authenticated or issued and delivered and is the legal, valid and binding
obligation of the issuers thereof and is not in default.
(d) The Pledged Shares constitute the percentage of the issued and
outstanding shares of stock, and/or warrants, rights or options to acquire
shares of stock, of the issuers thereof indicated on Part A of Schedule I
hereto. The Pledged Indebtedness is outstanding in the principal amount
indicated on Part B of Schedule I hereto.
(e) This Agreement and the pledge of the Collateral pursuant hereto
create a valid and perfected first priority security interest in the
Collateral, securing the payment of the Secured Obligations, and all
filings and other actions necessary or desirable to perfect and protect
such security interest have been duly made or taken.
(f) No consent of any other Person and no authorization, approval or
other action by, and no notice to or filing with, any governmental
authority or regulatory body or any other third party is required for (i)
the grant by the Pledgor of the assignment and security interest granted
hereby, the pledge by the Pledgor of the Collateral pursuant hereto or the
execution, delivery or performance of this Agreement by the Pledgor, (ii)
the perfection or maintenance of the pledge, assignment and security
interest created hereby or (iii) the exercise by the Administrative Agent
of its voting or other rights provided for in this Agreement or the
remedies in respect of the Collateral pursuant to this Agreement (except
as may be required in connection with the disposition of any
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CREDIT AGREEMENT
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portion of the Collateral by laws affecting the offering and a sale of
securities generally), in each case other than the filing of financing and
continuation statements under the Uniform Commercial Code, which financing
statements have been duly filed, and the filing of the Trademark Security
Agreement in the U.S. Patent and Trademark Office, which agreement shall
be duly filed on or immediately after the date of the Second Restatement
Date.
SECTION 6. Further Assurances. (a) The Pledgor agrees that from time
to time, at its own expense, it shall promptly execute and deliver all further
instruments and documents, and take all further action, that may be necessary,
or that the Administrative Agent may deem desirable and may reasonably request,
in order to perfect and protect any pledge, assignment or security interest
granted or purported to be granted hereby (including, without limitation, the
first priority nature thereof) or to enable the Administrative Agent to exercise
and enforce its rights and remedies hereunder with respect to any Collateral.
Without limiting the generality of the foregoing, the Pledgor shall promptly
after an Event of Default: (i) if any Collateral shall be represented or
evidenced by a promissory note or other instrument or chattel paper, deliver and
pledge to the Administrative Agent hereunder such note, instrument or chattel
paper duly indorsed and accompanied by duly executed instruments of transfer or
assignment, all in form and substance satisfactory to the Administrative Agent;
and (ii) execute and file such financing or continuation statements, or
amendments thereto, and such other instruments or notices, as may be necessary
or as the Administrative Agent may deem desirable and may reasonably request, in
order to perfect and preserve the pledge, assignment and security interest
granted or purported to be granted hereby.
(b) The Pledgor hereby authorizes the Administrative Agent to file
one or more financing or continuation statements, and amendments thereto,
relating to all or any part of the Collateral without the signature of the
Pledgor where permitted by law. A photocopy or other reproduction of this
Agreement or any financing statement covering the Collateral or any part thereof
shall be sufficient as a financing statement where permitted by law.
(c) The Pledgor shall furnish to the Administrative Agent, upon the
Administrative Agent's request either at any time after the occurrence and
during the continuance of an Event of Default or in any event, not less than
once annually, statements and schedules further identifying and describing the
Collateral and such other reports in connection with the Collateral as the
Administrative Agent may reasonably request, all in reasonable detail.
SECTION 7. Place of Perfection; Records. The Pledgor shall keep its
principal place of business, its chief executive office and the office where it
keeps its records concerning the Collateral at the location therefor specified
in Section 5(a) or, upon 30 days' prior written notice to the Administrative
Agent, at such other locations in a jurisdiction where all actions
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CREDIT AGREEMENT
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required by Section 6 shall have been taken with respect to the Collateral. The
Pledgor shall hold and preserve such records and shall permit representatives of
the Administrative Agent at any time during normal business hours to inspect and
make abstracts from such records.
SECTION 8. Voting Rights; Dividends; Etc. (a) So long as no Event of
Default shall have occurred and be continuing and no foreclosure proceedings
shall have been instituted:
(i) The Pledgor shall be entitled to exercise or refrain from
exercising any and all voting and other consensual rights pertaining to
the Collateral or any part thereof for any purpose not prohibited by the
terms of this Agreement, the other Loan Documents or the Secured Hedge
Agreements; provided, however,
(ii) The Pledgor shall be entitled to receive and retain any and all
dividends, distributions and interest paid in respect of the Collateral;
provided, however, that any and all
(A) dividends and interest paid or payable other than in cash in
respect of, and instruments and other property and assets received or
receivable or otherwise distributed in respect of, or in exchange for, any
Collateral,
(B) dividends and other distributions paid or payable in cash in
respect of any Collateral in connection with a partial or total
liquidation or dissolution or in connection with a reduction of capital,
capital surplus or paid-in-surplus and
(C) cash paid or payable or otherwise distributed in respect of
principal of, or in redemption of, or in exchange for, any Collateral
shall be, and shall be forthwith delivered to the Administrative Agent to
hold as, Collateral and, if received by the Pledgor, shall be received in
trust for the benefit of the Administrative Agent, shall be segregated
from other property and assets or funds of the Pledgor and shall be
forthwith delivered to the Administrative Agent as Collateral in the same
form as so received (with any necessary endorsement or assignment). The
Pledgor, promptly upon the request of the Administrative Agent, shall
execute such documents and do such acts as may be necessary or desirable
in the judgment of the Administrative Agent to give effect to this clause
(ii).
(iii) The Administrative Agent shall execute and deliver (or cause
to be executed and delivered) to the Pledgor all such proxies and other
instruments as the Pledgor may request for the purpose of enabling the
Pledgor to exercise the voting and other consensual rights that it is
entitled to exercise pursuant to subparagraph (i) of this
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Section 8(a) and to receive the dividends, distributions or interest
payments that it is authorized to receive and retain pursuant to clause
(ii) of this Section 8(a).
(b) Upon the occurrence and during the continuance of an Event of
Default and upon exercise of foreclosure remedies by the Administrative Agent
under Section 13 hereof:
(i) All rights of the Pledgor to (A) exercise or refrain from
exercising the voting and other consensual rights that it would otherwise
be entitled to exercise pursuant to subparagraph (i) of Section 8(a)
shall, upon notice to the Pledgor by the Administrative Agent, cease and
(B) receive the dividends, interest payments and other distributions that
it would otherwise be authorized to receive and retain pursuant to
subparagraph (ii) of Section 8(a) shall automatically cease, and all such
rights shall thereupon become vested in the Administrative Agent, which
shall thereupon have the sole right to exercise or refrain from exercising
such voting and other consensual rights and to receive and retain as
Collateral such dividends, interest payments and other distributions.
(ii) All dividends, interest payments and other distributions that
are received by the Pledgor contrary to the provisions of clause (i) of
this Section 8(b) shall be received in trust for the benefit of the
Administrative Agent, shall be segregated from other property and assets
or funds of the Pledgor and shall be forthwith paid over to the
Administrative Agent as Collateral in the same form as so received (with
any necessary endorsement or assignment).
SECTION 9. Transfers and Other Liens; Additional Shares. (a) The
Pledgor agrees not (i) to sell, assign (by operation of law or otherwise) or
otherwise dispose of, or grant any option with respect to, any of the Collateral
or (ii) to create or suffer to exist any Lien upon or with respect to any of the
Collateral, except for the pledge, assignment and security interest created by
this Agreement.
(b) The Pledgor shall (i) cause each issuer of the Pledged Shares
not to issue any stock or other securities in addition to or in
substitution for the Pledged Shares issued by such issuer, except to the
Pledgor, and (ii) pledge to the Administrative Agent hereunder,
immediately upon its acquisition (directly or indirectly) thereof, any and
all additional shares of stock or other securities of each issuer of the
Pledged Shares.
SECTION 10. Administrative Agent Appointed Attorney-in-Fact. The
Pledgor hereby irrevocably appoints the Administrative Agent the Pledgor's
attorney-in-fact, with full authority in the place and stead of the Pledgor and
in the name of the Pledgor or otherwise, upon the occurrence and continuance of
an Event of Default, to take any action and to execute any
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CREDIT AGREEMENT
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instrument that the Administrative Agent may deem necessary or advisable to
accomplish the purposes of this Agreement, including, without limitation:
(a) to ask for, demand, collect, xxx for, recover, compromise,
receive and give acquittance and receipts for moneys due and to become due
under or in respect of any of the Collateral;
(b) to receive, indorse and collect any drafts, instruments, and
other documents in connection with Section 10(a) above (including, without
limitation, all instruments representing any dividend, interest payment or
other distribution in respect of the Collateral or any part thereof) and
give full discharge for the same; and
(c) to file any claims, to take any action or to institute any
proceedings that the Administrative Agent may deem necessary or desirable
for the collection of any of the Collateral or otherwise to enforce the
rights of the Administrative Agent with respect to any of the Collateral
or to enforce the rights of the Administrative Agent with respect to any
Collateral.
SECTION 11. Administrative Agent May Perform. If the Pledgor fails
to perform any agreement contained herein, the Administrative Agent may upon
notice to Pledgor, itself perform, or cause the performance of, such agreement,
and the expenses of the Administrative Agent incurred in connection therewith
shall be payable by the Pledgor under Section 15(b).
SECTION 12. The Administrative Agent's Duties. The powers conferred
on the Administrative Agent hereunder are solely to protect its interest in the
Collateral and shall not impose any duty upon it to exercise any such powers.
Except for the exercise of reasonable care in the safe custody and preservation
of any Collateral in its possession and the accounting for moneys actually
received by it hereunder, the Administrative Agent shall have no duty as to any
Collateral, as to ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relative to any
Collateral, whether or not the Administrative Agent, any Lender Party or any
Hedge Bank has or is deemed to have knowledge of such matters, or as to the
taking of any necessary steps to preserve rights against any parties or any
other rights pertaining to any Collateral. The Administrative Agent shall be
deemed to have exercised reasonable care in the custody and preservation of any
Collateral in its possession if such Collateral is accorded treatment
substantially equal to that which BNP accords its own property of like tenor.
SECTION 13. Remedies. If any Event of Default shall have occurred
and be continuing:
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(a) The Administrative Agent may exercise in respect of the
Collateral, in addition to other rights and remedies provided for herein
or otherwise available to it, all the rights and remedies of a secured
party upon default under the Uniform Commercial Code in effect in the
State of New York at such time (the "Code") (whether or not the Code
applies to the affected Collateral), and also may (i) require the Pledgor
to, and the Pledgor hereby agrees that it shall at its own expense and
upon request of the Administrative Agent forthwith, assemble all or part
of the Collateral as directed by the Administrative Agent and make it
available to the Administrative Agent at a place to be designated by the
Administrative Agent that is reasonably convenient to both parties and
(ii) without notice except as specified below, sell the Collateral or any
part thereof in one or more parcels at public or private sale, at any
exchange or broker's board or at any of the Administrative Agent's offices
or elsewhere, for cash, on credit or for future delivery, and upon such
other terms as the Administrative Agent may deem commercially reasonable.
The Pledgor agrees that, to the extent notice of sale shall be required by
law, at least ten days' notice to the Pledgor of the time and place of any
public sale or the time after which any private sale is to be made shall
constitute reasonable notification. The Administrative Agent shall not be
obligated to make any sale of Collateral regardless of notice of sale
having been given. The Administrative Agent may adjourn any public or
private sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the time
and place to which it was so adjourned.
(b) Any cash held by the Affirmative Agent as Collateral and all
cash proceeds received by the Administrative Agent in respect of any sale
of, collection from, or other realization upon all or any part of the
Collateral may, in the discretion of the Administrative Agent, be held by
the Administrative Agent as collateral for, and/or then or at any time
thereafter applied (after payment of any amounts payable to the
Administrative Agent pursuant to Section 15) in whole or in part by the
Administrative Agent for its benefit, the benefit of the Issuing Bank and
the Swing Line Bank and the ratable benefit of the other Lender Parties
and the Hedge Banks against, all or any part of the Secured Obligations in
such order as the Administrative Agent shall elect. In determining the
amounts owing to the Hedge Banks under the Secured Hedge Agreements, the
Administrative Agent shall be entitled to rely, and be fully protected in
relying, upon the Agreement Values of the Secured Hedge Agreements. The
term "Agreement Value" means, with respect to any Secured Hedge Agreement
at any date of determination, the amount, if any, that would be payable to
the Hedge Bank in respect of any "agreement value" under such Secured
Hedge Agreement as though such Secured Hedge Agreement were terminated on
such date, calculated as provided in the International Swap Dealers
Association, Inc. Standard Form of Interest Rate and
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Currency Exchange Agreement, 1987 Edition. Each determination of Agreement
Value shall be made by the Administrative Agent in good faith and in
reliance on any information (including information provided by such Hedge
Bank) that it believes accurate, but without any obligation to verify such
information. Any surplus of such cash or cash proceeds held by the
Administrative Agent and remaining after payment in full of all of the
Secured Obligations shall be paid over to the Pledgor or to whomsoever may
be lawfully entitled to receive such surplus.
(c) The Administrative Agent may exercise any and all rights and
remedies of the Pledgor in respect of the Collateral.
(d) All payments received by the Pledgor in respect of the
Collateral shall be received in trust for the benefit of the
Administrative Agent, shall be segregated from other funds of the Pledgor
and shall be forthwith paid over to the Administrative Agent in the same
form as so received (with any necessary endorsement or assignment).
SECTION 14. Registration Rights. If the Administrative Agent shall
determine to exercise its right to sell all or any of the Collateral pursuant to
Section 13, the Pledgor agrees that, upon request of the Administrative Agent,
the Pledgor will, at its own expense:
(a) execute and deliver, and cause each issuer of the Collateral
contemplated to be sold and the directors and officers thereof to execute
and deliver, all such instruments and documents, and do or cause to be
done all such other acts and things, as may be necessary or, in the
opinion of the Administrative Agent, advisable to register such Collateral
under the provisions of the Securities Act of 1933, as from time to time
amended (the "Securities Act"), to cause the registration statement
relating thereto to become effective and to remain effective for such
period as prospectuses are required by law to be furnished, and to make
all amendments and supplements thereto and to the related prospectus that,
in the opinion of the Administrative Agent, are necessary or advisable,
all in conformity with the requirements of the Securities Act and the
rules and regulations of the Securities and Exchange Commission applicable
thereto;
(b) use its best efforts to qualify the Collateral under the state
securities or "blue sky" laws and to obtain all necessary governmental
approvals for the sale of the Collateral, as reasonably requested by the
Administrative Agent;
(c) cause each such issuer to make available to its security
holders, as soon as practicable, an earnings statement that will satisfy
the provisions of Section 11(a) of the Securities Act and the rules and
regulations thereunder;
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(d) provide the Administrative Agent with such other information and
projections as may be necessary or, in the opinion of the Administrative
Agent, advisable to enable the Administrative Agent to effect the sale of
such Collateral; and
(e) do or cause to be done all such other acts and things as may be
necessary to make such sale of the Collateral or any part thereof valid
and binding and in compliance with applicable law.
The Administrative Agent is authorized, in connection with any sale of the
Collateral pursuant to Section 13, to deliver or otherwise disclose to any
prospective purchaser of the Collateral (i) any registration statement or
prospectus, and all supplements and amendments thereto, prepared pursuant to
subsection (a) above, (ii) any information and projections provided to it
pursuant to subsection (d) above and (iii) any other information in its
possession relating to the Collateral.
SECTION 15. Indemnity and Expenses. (a) The Pledgor agrees to
indemnify the Administrative Agent, each Lender Party and each Hedge Bank and
each of their respective officers, directors, employees, agents and advisors
(each an "Indemnified Party") from, and hold each of them harmless against, any
and all claims, damages, losses, liabilities and expenses (including, without
limitation, reasonable fees and reasonable expenses of counsel) arising out of
or in connection with or resulting from this Agreement (including, without
limitation, enforcement of this Agreement), except to the extent that such
claims, damages, losses, liabilities and expenses are found in a final,
nonappealable judgment by a court of competent jurisdiction to have resulted
from such Indemnified Party's gross negligence or willful misconduct.
(b) The Pledgor agrees to pay to the Administrative Agent, upon
demand, the amount of any and all expenses, (including, without limitation, the
reasonable fees and reasonable expenses of its counsel and of any experts and
agents) that the Administrative Agent may incur in connection with (i) the
administration of this Agreement, (ii) the custody, preservation, use or
operation of, or the sale of, collection from, or other realization upon, any of
the Collateral, (iii) the exercise or enforcement of any of the rights of the
Administrative Agent or any Lender Party or any Hedge Bank hereunder or (iv) the
failure by the Pledgor to perform or observe any of the provisions hereof.
SECTION 16. Security Interest Absolute. The obligations of the
Pledgor under this Agreement are independent of the Secured Obligations, and a
separate action or actions may be brought and prosecuted against the Pledgor to
enforce this Agreement, irrespective of whether any action is brought against
the Borrower or any other Person or whether the Borrower or such other Person is
joined in any such action or actions. All rights of the Administrative Agent and
the pledge, assignment and security interest hereunder, and all obligations of
the Pledgor hereunder, shall be absolute and unconditional, irrespective of:
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(i) any lack of validity or enforceability of any Loan Document, and
Secured Hedge Agreement or any other agreement or instrument relating
thereto;
(ii) any change in the time, manner or place of payment of, or in
any other term of, all or any of the Secured Obligations, or any other
amendment or waiver of or any consent to any departure from any Loan
Document or any Secured Hedge Agreement, including, without limitation,
any increase in the Secured Obligations resulting from the extension of
additional credit to the Borrower or any of its Subsidiaries or otherwise;
(iii) any taking, exchange, release or non-perfection of any other
collateral, or any taking, release or amendment or waiver of or consent to
departure from any guaranty, for all or any of the Secured Obligations;
(iv) any manner of application of collateral, or proceeds thereof,
to all or any of the Secured Obligations, or any manner of sale or other
disposition of any collateral for all or any of the Secured Obligations or
any other assets of the Borrower or any of its Subsidiaries;
(v) any change, restructuring or termination of the corporate
structure or existence of the Pledgor or any of its Subsidiaries; or
(vi) any other circumstance that might otherwise constitute a
defense available to, or a discharge of, the Pledgor or a third party
grantor of a security interest.
SECTION 17. Amendments; Waivers; Etc. (a) No amendment or waiver of
any provision of this Agreement, and no consent to any departure by the Pledgor
herefrom, shall in any event be effective unless the same shall be in writing
and signed by the Administrative Agent, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.
(b) No failure on the part of the Administrative Agent or any Lender
Party or any Hedge Bank to exercise, and no delay in exercising, any right,
power or privilege hereunder shall operate as a waiver thereof or consent
thereto; nor shall any single or partial exercise of any such right, power or
privilege preclude any other or further exercise thereof or the exercise of any
other right, power or privilege.
SECTION 18. Addresses for Notices. All notices and other
communications provided for hereunder shall be in writing (including telecopier,
telegraphic or telex communication) and mailed, telecopied, telegraphed,
telexed, cabled or delivered, if to the
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Pledgor, addressed to it at the address set forth below the name of the Pledgor
on the signature pages hereof, and if to the Administrative Agent or any Lender
Party, addressed to it at its address set forth in Section 8.02 of the Credit
Agreement, or, as to any Hedge Bank or any other party, at such other address as
shall be designated by such party in a written notice to the each other party
complying as to delivery with the terms of this Section 18. All such notices and
other communications shall, when mailed, telecopied, telegraphed or telexed, be
effective when deposited in the mails, delivered to the telegraph company,
transmitted by telecopier or confirmed by telex answerback, respectively,
addressed as aforesaid.
SECTION 19. Continuing Security Interest; Assignments under the
Credit Agreement. This Agreement shall create a continuing security interest in
the Collateral and shall (a) remain in full force and effect until the latest of
(i) the payment in full in cash of the Secured Obligations and all other amounts
payable under this Agreement, (ii) the Termination Date and (iii) the
termination or expiration of all Secured Hedge Agreements, (b) be binding upon
the Pledgor, its successors and assigns, and (c) inure to the benefit of, and be
enforceable by, the Administrative Agent, the Lender Parties, the Hedge Banks
and their respective successors, transferees and assigns. Without limiting the
generality of the foregoing clause (c), any Lender Party may assign or otherwise
transfer all or any portion of its rights and obligations under the Credit
Agreement (including, without limitation, all or any portion of its Commitment,
the Advances owing to it and any Note held by it) to any other Person, and such
other Person shall thereupon become vested with all the benefits in respect
thereof granted to such Lender Party herein or otherwise, in each case as
provided in Section 8.07 of the Credit Agreement. Upon the later of (i) the cash
payment in full of the Secured Obligations and all other amounts payable under
this Agreement, (ii) the Termination Date, and (iii) the termination or
expiration of all Secured Hedge Agreements, the security interest granted hereby
shall terminate and all rights to the Collateral shall revert to the Pledgor.
Upon any such termination, the Administrative Agent will, at the Pledgor's
expense, execute and deliver to the Pledgor such documents as the Pledgor shall
reasonably request to evidence such termination.
SECTION 20. Release and Termination. Upon the later of (i) the cash
payment in full of the Secured Obligations, (ii) the Termination Date and (iii)
the termination or expiration of all Secured Hedge Agreements, the pledge,
assignment and security interest granted hereby shall terminate and all rights
to the Collateral shall revert to the Pledgor. Upon any such termination and
reversion, the Administrative Agent shall, at the Pledgor's expense, return to
the Pledgor such of the Collateral of the Pledgor in its possession as shall not
have been sold or otherwise applied pursuant to the terms of the Loan Documents
or the Secured Hedge Agreements and execute and deliver to the Pledgor such
documents as the Pledgor shall reasonably request to evidence such termination
and reversion.
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SECTION 21. Governing Law; Submission to Jurisdiction, Waiver of
Jury Trial; Etc. a) (a) This Agreement shall be governed by and construed in
accordance with the laws of the State of New York. Under otherwise defined
herein or in the Credit Agreement, terms used in Article 9 of the Code are used
herein as therein defined.
(b) The Pledgor hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of any New York State
court or federal court of the United States of America sitting in New York City,
and any appellate court from any thereof, in any action or proceeding arising
out of or relating to this Agreement or any other Loan Document or Secured Hedge
Agreement to which it is or is to be a party, or for recognition and enforcement
of any judgment, and the Pledgor hereby irrevocably and unconditionally agrees
that all claims in respect of any such action or proceeding may be heard and
determined in any such New York State or, to the extent permitted by law, in
such federal court. The Pledgor irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection or defense
that it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or any of the other Loan
Documents to which it is or is to be a party in any New York State or federal
court. The Pledgor hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court. The Pledgor agrees that a final judgment in any
such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing herein shall affect the right that any party may otherwise have to
commence or participate in any action, suit or proceeding relating to this
Agreement, any of the other Loan Documents or any Secured Hedge Agreement to
which it is or is to be a party, or otherwise to proceed against the Pledgor, in
any other jurisdiction.
(c) The Pledgor irrevocably consents to the service of any and all
process in any such action, suit or proceeding by the mailing of copies of such
process to the Pledgor at the address set forth below its name on the signature
page hereof, or by any other method permitted by law. The Pledgor agrees that a
final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law.
(d) To the extent that the Pledgor has or hereafter may acquire
immunity from jurisdiction of any court or from any legal process (whether
through service or notice, attachment prior to judgment, attachment in aid of
execution, execution or otherwise) with respect to itself or its property, the
Pledgor hereby irrevocably waives such immunity in respect of its Obligations
under this Agreement, any other Loan Document and any Secured Hedge Agreement to
which it is or is to be a party.
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(e) The Pledgor irrevocably waives all right to trial by jury in any
action, proceeding or counterclaim (whether based on contract, tort or
otherwise) arising out of or relating to this Agreement, any other Loan Document
or any Secured Hedge Agreement, the transactions contemplated hereby or thereby
or the actions of the Administrative Agent, any Lender Party or the Issuing Bank
in the negotiation, administration, performance or enforcement thereof.
IN WITNESS WHEREOF, the Pledgor has caused this Agreement to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.
FITNESS HOLDINGS, INC.
By:
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Title: Xxxxxxx X. Xxxxxxx
Title: Chief Financial Officer/Executive Vice
President
Address:
