Exhibit 10.1

EXECUTION COPY

THIRD AMENDED AND RESTATED CREDIT AGREEMENT

among

LIFE TIME FITNESS, INC.

Certain designated subsidiaries Life Time Fitness, Inc.,

Various Financial Institutions

and

U.S. BANK NATIONAL ASSOCIATION,

as Administrative Agent, Left Lead

Bookrunner, and Left Lead Arranger

and

J.P. MORGAN SECURITIES INC.,

and

RBC CAPITAL MARKETS,

as Joint Bookrunners

and Joint Lead Arrangers

and

RBC CAPITAL MARKETS,

and

JPMORGAN CHASE BANK

as Syndication Agents

and

BANK OF AMERICA, N.A.

As Documentation Agent

Dated as of June 30, 2011

 

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TABLE OF CONTENTS

 

            Page   ARTICLE I DEFINITIONS AND ACCOUNTING TERMS      1   

1.1.

     Defined Terms      1   

1.2.

     Accounting Terms and Calculations      30   

1.3.

     Computation of Time Periods      30   

1.4.

     Other Definitional Terms      30   

ARTICLE II TERMS OF THE CREDIT FACILITIES

     30   

2.1.

     Lending Commitments      30   

2.2.

     Determination of U.S. Dollar Amounts; Required Payments; Termination     
31   

2.3.

     Method of Selecting Types and Interest Periods for New Advances      31   

2.4.

     Ratable Loans; Types of Advances      32   

2.5.

     Noteless Agreement; Evidence of Indebtedness      32   

2.6.

     Conversions and Continuations      33   

2.7.

     Interest Rates, Interest Payments, and Default Interest      34   

2.8.

     Repayment and Mandatory Prepayment      35   

2.9.

     Reductions in Aggregate Commitment; Optional Prepayments      35   

2.10.

     Letter of Credit Commitment      36   

2.11.

     Procedures for Facility LCs      36   

2.12.

     Terms of Facility LCs      37   

2.13.

     Agreement to Repay Facility LC Drawings      38   

2.14.

     Obligations Absolute      39   

2.15.

     Actions of LC Issuer      40   

2.16.

     Indemnification by Company      40   

2.17.

     Indemnification by Lenders      40   

2.18.

     Swingline Loan Commitment      41   

2.19.

     Fees      43   

2.20.

     Commitment Fee      43   

2.21.

     LC Fees      43   

2.22.

     Computation      44   

2.23.

     Method of Payment      44   

2.24.

     Use of Loan Proceeds      44   

2.25.

     Lending Installations      45   

2.26.

     Interest Rate Not Ascertainable, Etc      45   

2.27.

     Yield Protection      45   

2.28.

     Illegality      46   

2.29.

     Changes in Capital Adequacy Regulations      46   

2.30.

     Funding Losses; Eurocurrency Advances      47   

2.31.

     Discretion of Lender as to Manner of Funding      47   

2.32.

     Taxes      48   

 

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2.33.

     Defaulting Lenders      51   

2.34.

     Market      53   

2.35.

     Replacement of Lender With Respect to Increased Costs      54   

2.36.

     Increase Option.      54   

2.37.

     Borrowing Subsidiaries      55   

2.38.

     Termination of Borrowing Subsidiaries      56   

2.39.

     Judgment Currency      56   

ARTICLE III CONDITIONS PRECEDENT

     56   

3.1.

     Conditions of Closing      56   

3.2.

     Conditions Precedent to all Credit Extensions      59   

ARTICLE IV REPRESENTATIONS AND WARRANTIES

     59   

4.1.

     Organization, Standing, Etc      59   

4.2.

     Authorization and Validity      60   

4.3.

     No Conflict; No Default      60   

4.4.

     Government Consent      60   

4.5.

     Material Adverse Change      60   

4.6.

     Financial Statements and Condition      60   

4.7.

     Litigation      61   

4.8.

     Environmental, Health and Safety Laws      61   

4.9.

     ERISA      61   

4.10.

     Federal Reserve Regulations      62   

4.11.

     Title to Property; Leases; Liens; Subordination      62   

4.12.

     Taxes      62   

4.13.

     Trademarks, Patents      62   

4.14.

     Force Majeure      63   

4.15.

     Investment Company Act      63   

4.16.

     Public Utility Holding Company Act      63   

4.17.

     Full Disclosure      63   

4.18.

     Subsidiaries; Etc      63   

4.19.

     Labor Matters      63   

4.20.

     Solvency      64   

4.21.

     Insurance      64   

4.22.

     Indebtedness      64   

4.23.

     Guaranty or Suretyship      64   

4.24.

     Related Agreements      64   

ARTICLE V AFFIRMATIVE COVENANTS

     65   

5.1.

     Financial Statements and Reports      65   

5.2.

     Existence      67   

5.3.

     Insurance      67   

5.4.

     Payment of Taxes and Claims      67   

5.5.

     Inspection      68   

 

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5.6.

     Maintenance of Properties      68   

5.7.

     Books and Records      68   

5.8.

     Compliance      68   

5.9.

     ERISA      69   

5.10.

     Environmental Matters; Reporting      69   

5.11.

     Further Assurances      69   

5.12.

     LTF Leases      70   

5.13.

     Ownership of Real Estate      70   

5.14.

     Mandatory Distributions      70   

5.15.

     Depository Accounts      71   

5.16.

     Designated Guarantor Subsidiaries      71   

5.17.

     Designated Unrestricted Subsidiaries      71   

5.18.

     Subsidiaries that Become Guarantor Subsidiaries after the Effective Date   
  71   

5.19.

     Pledge of Equity Interests      72   

5.20.

     Most Favored Lender      72   

ARTICLE VI NEGATIVE COVENANTS

     73   

6.1.

     Merger      73   

6.2.

     Disposition of Assets      73   

6.3.

     Plans      74   

6.4.

     Change in Nature of Business      74   

6.5.

     Acquisitions; Subsidiaries, Partnerships and Joint Ventures and Ownership
     74   

6.6.

     Negative Pledges      74   

6.7.

     Restricted Payments      75   

6.8.

     Transactions with Affiliates      76   

6.9.

     Accounting Changes      76   

6.10.

     Investments      76   

6.11.

     Indebtedness      78   

6.12.

     Liens      79   

6.13.

     Contingent Liabilities      80   

6.14.

     Fixed Charge Coverage Ratio      81   

6.15.

     Consolidated Leverage Ratio      81   

6.16.

     Unencumbered Asset Coverage Ratio      81   

6.17.

     Loan Proceeds      81   

6.18.

     Sale and Leaseback Transactions      82   

6.19.

     Related Agreements      82   

6.20.

     Fiscal Year      82   

6.21.

     Real Estate Leases      82   

6.22.

     Limitation on Net Worth of Unrestricted Subsidiaries      82   

ARTICLE VII EVENTS OF DEFAULT AND REMEDIES

     83   

7.1.

     Events of Default      83   

7.2.

     Remedies      85   

7.3.

     Offset      85   

 

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ARTICLE VIII THE AGENT      86   

8.1.

     Appointment; Nature of Relationship      86   

8.2.

     Powers      86   

8.3.

     General Immunity      86   

8.4.

     No Responsibility for Loans, Recitals, etc      86   

8.5.

     Action on Instructions of Lenders      87   

8.6.

     Employment of Administrative Agents and Counsel      87   

8.7.

     Reliance on Documents; Counsel      87   

8.8.

     Agent’s Reimbursement and Indemnification      87   

8.9.

     Rights as a Lender      88   

8.10.

     Lender Credit Decision, Legal Representation      88   

8.11.

     Successor Agent      88   

8.12.

     Delegation to Affiliates      89   

8.13.

     Signing and Delivery of Collateral Documents      89   

8.14.

     Collateral Releases      89   

8.15.

     No Advisory or Fiduciary Responsibility      89   

8.16.

     Notices of Event of Default.      90   

8.17.

     Payments and Collections      90   

8.18.

     Sharing of Payments      91   

8.19.

     Defaulting Lender      91   

ARTICLE IX GENERAL PROVISIONS

     92   

9.1.

     Modifications      92   

9.2.

     Expenses      93   

9.3.

     Waivers, etc.      93   

9.4.

     Notices      94   

9.5.

     Successors and Assigns; Participations; Purchasing Lenders      94   

9.6.

     Confidentiality of Information      98   

9.7.

     Governing Law and Construction      98   

9.8.

     Consent to Jurisdiction      98   

9.9.

     Waiver of Jury Trial      99   

9.10.

     Survival of Agreement      99   

9.11.

     Indemnification      99   

9.12.

     Captions      100   

9.13.

     Entire Agreement      100   

9.14.

     Counterparts; Effectiveness      100   

9.15.

     Borrower Acknowledgements      100   

9.16.

     Interest Rate Limitation      100   

9.17.

     Effect on Existing Credit Agreement      101   

9.18.

     Recitals      101   

9.19.

     Governmental Regulation      101   

9.20.

     Several Obligations; Benefits of this Agreement      101   

9.21.

     Severability of Provisions      101   

 

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9.22.

     Nonliability of Lenders      101   

9.23.

     Nonreliance      102   

9.24.

     Disclosure      102   

9.25.

     USA PATRIOT Act Notification      102   

9.26.

     Electronic Signatures on Assignments      102   

Exhibits

A – Form of Compliance Certificate

B – Form of Assignment Agreement

C – Form of Increasing Lender Supplement

D – Form of Augmenting Lender Supplement

E – Form of Note

Schedules

 

1.1.a    Collateral Documents 1.1.b    Subsidiaries 1.1.c    LTF CMBS I Related
Agreements 1.1.d    Permitted Permanent Loans 1.1.e    Related Agreements 1.1.f
   Lenders and Commitment Amounts 2.10    Facility LCs 4.7    Litigation 4.8   
Environmental 4.13    Trademarks and Patents 4.18    Equity Interests in Persons
other than Wholly-Owned Subsidiaries 4.21    Insurance 6.10    Investments 6.11
   Indebtedness 6.12    Liens 6.13    Contingent Liabilities 6.18    Sale
Leasebacks

 

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THIRD AMENDED AND RESTATED CREDIT AGREEMENT

This Third Amended And Restated Credit Agreement is dated as of June 30, 2011,
and is between Life Time Fitness, Inc., a Minnesota corporation (“Company”); any
Subsidiaries of Company that become Borrowing Subsidiaries after the Effective
Date; the financial institutions that are the Lenders on the Effective Date or
that become Lenders after the Effective Date; U.S. Bank National Association, a
national banking association, as one of the Lenders, as the Swingline Lender, as
Agent, as Left Lead Bookrunner, and as Left Lead Arranger; J.P. Morgan
Securities Inc., as Joint Bookrunner and Joint Lead Arranger; and RBC Capital
Markets (“RBC”), as Joint Bookrunner and Joint Lead Arranger; RBC and JPMorgan
Chase Bank as Syndication Agents, and Bank of America, N.A. as Documentation
Agent.

RECITALS

A. Company, Agent, the Joint Bookrunners and Joint Lead Arrangers, and certain
of the Lenders are parties to the Second Amended and Restated Credit Agreement
dated May 31, 2007 (the “Existing Credit Agreement”).

B. Company, Agent, the Joint Bookrunners, the Joint Lead Arrangers, the
Syndication Agents, the Documentation Agent, and the Lenders desire to amend and
restate the Existing Credit Agreement pursuant to this Agreement.

NOW, THEREFORE, in consideration of the premises and other good and valuable
consideration the receipt and adequacy of which is hereby acknowledged, the
parties to this Agreement hereby agree to amend and restate the Existing Credit
Agreement in the entirety as follows:

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

1.1. Defined Terms. As used in this Agreement the following terms have the
following respective meanings (and such meanings apply equally to both the
singular and plural form of the terms defined, as the context requires):

“Acquisition”: Any transaction or series of transactions consummated after the
Effective Date by which Company or any of its Subsidiaries acquires, either
directly or through an Affiliate or otherwise, (a) any or all of the stock or
other securities of any class of any Person if, after giving effect to such
transaction, such Person would be an Affiliate of Company; or (b) a substantial
portion of the assets (other than Real Estate that Company and its Subsidiaries
intend to develop and operate, either wholly or in substantial part, as a Club
and related businesses), or a division, or line of business of any Person.

“Adjusted Eurocurrency Rate”: With respect to each Interest Period applicable to
a Eurocurrency Advance, the rate (rounded upward, if necessary, to the next one
hundredth of one percent) determined by dividing the Eurocurrency Rate for such
Interest Period by 1.00 minus the Eurocurrency Reserve Percentage.

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“Adjusted Net Income”: For any period, Net Income for such period but excluding:
(a) non-operating gains and losses (including extraordinary or unusual gains and
losses, gains and losses from discontinuance of operations, gains and losses
arising from the sale of assets other than inventory, and other non-recurring
gains and losses) during such period; and (b) losses and income attributable to
any Unrestricted Subsidiary other than income that is distributed to Company or
a Restricted Subsidiary in cash during such period; and (c) non-cash
equity-based compensation.

“Advance”: A borrowing under this Agreement, (i) made by some or all of the
Lenders on the same Borrowing Date, or (ii) converted or continued by the
Lenders on the same date of conversion or continuation, consisting, in either
case, of the aggregate amount of the several Loans of the same Type and, in the
case of Eurocurrency Loans, for the same Interest Period. An Advance may be a
Eurocurrency Advance or a Base Rate Advance. The term “Advance” includes
Swingline Loans except where this Agreement expressly provides to the contrary.

“Affiliate”: With respect to any Person, (a) each other Person that, directly or
indirectly, controls, is controlled by or is under common control with, the
Person referred to, (b) each Person that beneficially owns or holds, directly or
indirectly, 10% or more of any class of voting Equity Interests of the Person
referred to, (c) each Person, 10% or more of the voting Equity Interests (or if
such Person is not a corporation, 10% or more of the equity interest) of which
is beneficially owned or held, directly or indirectly, by the Person referred
to, and (d) each of such Person’s officers, directors, joint venturers and
partners. The term control (including the terms “controlled by” and “under
common control with”) means the possession, directly, of the power to direct or
cause the direction of the management and policies of the Person in question. On
the Effective Date, the only Affiliate of Company that is not a Subsidiary of
Company is Bloomingdale LIFE TIME Fitness, L.L.C., an Illinois limited liability
company.

“Agent”: U.S. Bank in its capacity as contractual representative of the Lenders
under Article X, and not in its individual capacity as a Lender, and any
successor Agent appointed under Article X; provided that when used with
reference to fundings, disbursements, settlements and payments in Canadian
Dollars or any other matter related to Canadian Dollars, “Agent” means U.S. Bank
or a Canadian Affiliate of U.S. Bank.

“Agreed Currencies”: With respect to any Loan or other Obligation, the currency
in which such Loan or other Obligation is denominated. As of the Effective Date,
the Agreed Currencies are (a) for USD Tranche Revolving Loans and Swingline
Loans, U.S. Dollars; and (b) for Multicurrency Tranche Revolving Loans, U.S.
Dollars and Canadian Dollars.

“Agreement”: This Third Amended and Restated Credit Agreement, as it is amended,
supplemented, and otherwise modified and in effect at any relevant time.

“Aggregate Commitment Amount”: As of any date, the sum of the Aggregate USD
Tranche Commitment Amount and the Aggregate Multicurrency Tranche Commitment
Amount. On the Effective Date, the Aggregate Commitment Amount is
U.S.$660,000,000.

“Aggregate Multicurrency Tranche Commitment Amount”: As of any date, the sum of
the Multicurrency Tranche Commitment Amounts of all Multicurrency Tranche
Lenders. On the Effective Date, the Aggregate Multicurrency Tranche Commitment
Amount is U.S.$50,000,000.

 

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“Aggregate Outstanding Credit Exposure”: As of any time of determination, the
sum of (a) Aggregate Outstanding Multicurrency Tranche Credit Exposure plus
(b) Aggregate Outstanding USD Tranche Credit Exposure.

“Aggregate Outstanding Multicurrency Tranche Credit Exposure”: As of any time of
determination, the sum of (a) the aggregate unpaid principal balance of
Multicurrency Tranche Revolving Loans outstanding at such time, and (b) the
Multicurrency Tranche LC Obligations outstanding at such time.

“Aggregate Outstanding USD Tranche Credit Exposure”: As of any time of
determination, the sum of (a) the aggregate unpaid principal balance of USD
Tranche Revolving Loans outstanding at such time, (b) the USD Tranche LC
Obligations outstanding at such time, and (c) the aggregate unpaid principal
balance of the Swingline Loans outstanding at such time.

“Aggregate USD Tranche Commitment Amount”: As of any date, the sum of the USD
Tranche Commitment Amounts of all the USD Tranche Lenders. On the Effective
Date, the Aggregate USD Tranche Commitment Amount is U.S.$610,000,000.

“Allocated Clubs Cash Flow”: With respect to any Permitted Permanent Loan, the
“cash flow” (however defined in the original Related Agreements evidencing or
securing such Permitted Permanent Loan) of Operations that is allocable to the
Clubs operating in the real property and improvements securing such Permitted
Permanent Loan.

“Applicable Lending Office”: For each Lender and for each type of Advance, the
domestic or foreign office of such Lender or an Affiliate of such Lender that
such Lender specifies at any relevant time by notice given pursuant to
Section 9.4 to Agent and Company as the office by which its Advances of such
type are to be made and maintained.

“Applicable Margin”; “Applicable Commitment Fee Rate”: At any time of
determination, the percentage indicated below in accordance with the
Consolidated Leverage Ratio at such time:

 

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Consolidated Leverage Ratio   

Eurocurrency
Rate

Advances

   

Base Rate

Advances

   

Applicable

Commitment
Fee

Rate

 

Less than or equal to 2.00:1.00

     1.25 %      0.25 %      0.20 % 

Greater than 2.00:1.00 but less than or equal to 2.50:1.00

     1.50 %      0.50 %      0.25 % 

Greater than 2.50:1.00 but less than or equal to 3.00:1.00

     1.75 %      0.75 %      0.30 % 

Greater than 3.00:1.00 but less than or equal to 3.50:1.00

     2.00 %      1.00 %      0.35 % 

Greater than 3.50:1.00

     2.25 %      1.25 %      0.40 % 

The Applicable Margin on the Effective Date is 0.75% with respect to Base Rate
Advances and 1.75% per annum with respect to Eurocurrency Advances, and the
Applicable Commitment Fee Rate on the Effective Date is 0.30%, and the
Applicable Margin and Applicable Commitment Fee Rate shall continue at those
percentages until changed in accordance with the terms of this definition. The
Consolidated Leverage Ratio, the Applicable Margin, and the Applicable
Commitment Fee Rate shall be determined at the end of each fiscal quarter,
commencing with the fiscal quarter ending June 30, 2011, as calculated from the
financial statements and Compliance Certificate delivered by Company pursuant to
Sections 5.1.b and c., respectively. Any increase or decrease in: (i) the
Applicable Margin shall apply to all then existing or thereafter arising
Advances; and (ii) the Applicable Margin and the Applicable Commitment Fee Rate
shall become effective as of the first day of the first month following the date
on which Company delivers its financial statements and Compliance Certificate to
Agent and the Lenders in accordance with Section 5.1.b and c., respectively,
showing that the Consolidated Leverage Ratio for the Measurement Period
coinciding with the end of such fiscal quarter required a change in the
Applicable Margin, and shall continue to be effective until subsequently changed
in accordance with this definition; provided that:

(i) if the financial statements required by Section 5.1.b and the Compliance
Certificate required by Section 5.1.c are not delivered in the time periods
those Sections require, then the Consolidated Leverage Ratio shall be deemed to
be greater than 3.50 to 1.0.; and

(ii) if, for any period, the Consolidated Leverage Ratio has been calculated on
fraudulent financial information delivered to Agent by Company and as a result
of such calculation, Borrowers have paid interest, the Commitment Fee, or LC
Fees based on a lower Applicable Margin than if the Consolidated Leverage Ratio
had been properly calculated, Agent and the Lenders reserve the right to recover
additional interest, the Commitment Fee, and LC Fees from Borrowers based on the
correct Applicable Margin for the relevant period, and the Lenders’ acceptance
of interest, the Commitment Fee, or

 

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LC Fees based on the lower Applicable Margin does not constitute a waiver of the
Lenders’ right to collect such additional interest, the Commitment Fee, and LC
Fees and does not relieve, release or discharge any Borrower’s obligation to pay
such additional interest, the Commitment Fee, and LC Fees.

“Applicable Share”: With respect to each USD Tranche Lender, its USD Tranche
Share, and with respect to each Multicurrency Tranche Lender, its Multicurrency
Tranche Share.

“Approved Fund”: Any Fund that is administered or managed by (a) a Lender,
(b) an affiliate of a Lender, or (c) an entity or an affiliate of an entity that
administers or manages a Lender.

“Approximate Equivalent Amount”: Of any currency with respect to any amount of
U.S. Dollars means the Equivalent Amount of such currency with respect to such
amount of U.S. Dollars on or as of such date, rounded up to the nearest amount
of such currency as determined by Agent from time to time.

“Arrangers”: U.S. Bank in its capacity as the left lead arranger and left lead
bookrunner with respect to the Loans, J.P. Morgan Securities Inc., as a joint
bookrunner and joint lead arranger with respect to the Loans, and RBC Capital
Markets, as a joint bookrunner and a joint lead arranger with respect to the
Loans.

“Article”: An article of this Agreement unless another document is specifically
referred to.

“Augmenting Lender”: As defined in Section 2.36.

“Average Available Aggregate Commitment Amount”: With respect to each calendar
quarter from the Effective Date through the Facility Termination Date, the
average of the amounts determined as of the close of business on each day during
such calendar quarter by subtracting the Aggregate Outstanding Credit Exposure
on that day from the Aggregate Commitment Amount on that day.

“Average Life”: With respect to any Indebtedness, at any time of determination,
the quotient arrived at by dividing: (a) the sum of the products of the numbers
of years from the date of determination to the dates of each successive
scheduled principal payment of such Indebtedness multiplied by the amount of
such payment; by (b) the sum of all such payments.

“Base Rate”: For any day, a rate of interest per annum equal to the highest of:
(i) the Prime Rate; (ii) the sum of the Federal Funds Effective Rate for such
day plus 0.50% per annum; and (iii) the Eurocurrency Rate (without giving effect
to the Applicable Margin) for a one-month Interest Period on such day (or if
such day is not a Business Day, the immediately preceding Business Day) for U.S.
Dollars plus 1.50% per annum, provided that the Eurocurrency Rate for any day
shall be based on the rate reported by the applicable financial information
service at approximately 11:00 am London time on such day. For the purposes of
determining any interest rate under this Agreement or under any other Loan
Document that is based on the Base Rate, such interest rate shall change as and
when the Base Rate changes.

 

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“Base Rate Advance”: An Advance with respect to which the interest rate is
determined by reference to the Base Rate.

“Base Rate Loan”: A Loan that, except as otherwise provided in Section 2.7,
bears interest at the Base Rate.

“Borrower” or “Borrowers”: At any relevant time, Company and the Borrowing
Subsidiaries. On the Effective Date, there are no Borrowing Subsidiaries, so
Company is the only Borrower.

“Borrowing Date”: A date on which an Advance is made or a Facility LC is issued.

“Borrowing Notice”: As defined in Section 2.3.

“Borrowing Subsidiary”: Any Foreign Subsidiary of Company designated as a
Borrowing Subsidiary by Company pursuant to Section 2.37, unless terminated
pursuant to Section 2.39. On the Effective Date, there are no Borrowing
Subsidiaries.

“Borrowing Subsidiary Agreement”: A Borrowing Subsidiary Agreement in the form
provided by Agent.

“Borrowing Subsidiary Availability”: With respect to any Borrowing Subsidiary,
the lesser of (a) the Borrowing Subsidiary Sublimit for such Borrowing
Subsidiary and (b) the aggregate amount of the Borrowing Subsidiary Commitments
in effect for such Borrowing Subsidiary.

“Borrowing Subsidiary Commitment”: With respect to any Lender for any Borrowing
Subsidiary, the maximum aggregate U.S. Dollar Equivalent Amount of Loans that
such Lender has agrees to make available to such Borrowing Subsidiary.

“Borrowing Subsidiary Lender”: As to any Borrowing Subsidiary, any Lender having
a Borrowing Subsidiary Commitment with respect to such Borrowing Subsidiary.

“Borrowing Subsidiary Loan”: A Loan made to a Borrowing Subsidiary.

“Borrowing Subsidiary Sublimit”: At any time for any Borrowing Subsidiary, the
amount established by the Lenders as the Borrowing Subsidiary Sublimit for such
Borrowing Subsidiary, as such amount is amended from time to time in accordance
with Section 2.37.

“Borrowing Subsidiary Termination”: A Borrowing Subsidiary Termination in the
form provided by Agent.

“Business Day”: (i) With respect to any borrowing, payment, or rate selection of
Eurocurrency Advances, any day (other than a Saturday or Sunday) on which banks
are generally open in Minneapolis, Minnesota and New York City, for the conduct
of substantially all of their commercial lending activities, interbank wire
transfers can be made on the Fedwire system and dealings in U.S. Dollars are
carried on in the London interbank market; and (ii) for all other purposes, a
day (other than a Saturday or Sunday) on which banks generally are open in
Minneapolis, Minnesota, for the conduct of substantially all of their commercial
lending activities and interbank wire transfers can be made on the Fedwire
system.

“CAD$” or “Canadian Dollar”: Lawful money of Canada.

 

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“Capitalized Lease”: A lease of (or other agreement conveying the right to use)
real or personal property with respect to which at least a portion of the rent
or other amounts due under it constitute Capitalized Lease Obligations.

“Capitalized Lease Obligations”: As to any Person, the obligations of such
Person to pay rent or other amounts under a lease of (or other agreement
conveying the right to use) real or personal property that are required to be
classified and accounted for as a capital lease on a balance sheet of such
Person under GAAP (including Statement of Financial Accounting Standards No. 13
of the Financial Accounting Standards Board) and, for the purposes of this
Agreement, the amount of such obligations shall be the capitalized amount of
such obligations determined in accordance with GAAP (including such Statement
No. 13).

“Cash Taxes”: For any Measurement Period, the aggregate consolidated amount,
without duplication, of federal, state, provincial, and local income taxes
actually paid in cash by Company and its Restricted Subsidiaries.

“Change of Control”: The occurrence after the Effective Date of any single
transaction or event or any series of transactions or events (whether as the
most recent transaction in a series of transactions) that, individually or in
the aggregate, results in: (a) any Person or two or more Persons acting in
concert acquiring beneficial ownership (within the meaning of Rule 13d-3 of the
Securities and Exchange Commission under the Securities Exchange Act of 1934),
directly or indirectly of, or control over, voting securities or other equity
securities of Company representing 25% or more of the combined voting power of
all equity interests of Company entitled to vote in the election of directors;
or (b) the election of a director of Company as a result of which at least a
majority of Company’s Board of Directors does not consist of either
(i) Continuing Directors or (ii) directors appointed by Continuing Directors, as
long as at least 3 Continuing Directors have made such appointments.

“Charges”: As defined in Section 9.16.

“Club”: A health club facility that is owned by a Subsidiary of Company or is
leased pursuant to a LTF Lease.

“Code”: The Internal Revenue Code of 1986, as amended, reformed, or otherwise
modified at any relevant time.

“Collateral”: Any property in which Agent has been granted a Lien pursuant to
any Loan Document.

“Collateral Documents”: The Security Agreements, the Pledge Agreements, and any
other agreement, document, or instrument signed and delivered by Company or any
Affiliate of Company in favor of Agent and pursuant to which Agent is granted a
Lien to secure the Obligations, including without limitation financing
statements, financing statement continuations, and any other document delivered,
recorded, or filed to create or perfect any Lien in any Collateral, as it is
amended, supplemented, extended, restated or otherwise modified and in effect at
any time. The Collateral Documents that exist on the Effective Date are listed
in Schedule 1.1.a.

 

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“Commitment Amount”: With respect to each Lender, its Multicurrency Tranche
Commitment Amount or its USD Tranche Commitment Amount, or both, as applicable.

“Commitment Fee”: As defined in Section 2.20.

“Commitments”: USD Tranche Commitments and Multicurrency Tranche Commitments.

“Company”: Life Time Fitness, Inc, a Minnesota corporation, and its successors
and assigns.

“Consolidated Adjusted Funded Debt”: On any Quarterly Measurement Date, the sum
of: (a) the aggregate outstanding principal amounts of the Revolving Loans and
the Swingline Loans, plus 6 times the Rent Expense (excluding rent paid to a
Subsidiary that is used to make payments on Permitted Permanent Loans included
in clause (c) below) for the Measurement Period ending on such Quarterly
Measurement Date; plus (b) the LC Obligations; plus (c) to the extent not
included in clauses (a) or (b) above, the aggregate outstanding principal amount
of the consolidated Indebtedness of Company and its Restricted Subsidiaries for
borrowed money including, without limitation, the balance sheet amount of
Capitalized Lease Obligations, other interest-bearing Indebtedness, and any
Seller Financing; plus (d) the consolidated Contingent Obligations of Company
and its Restricted Subsidiaries relating to the same type of Indebtedness as
described in clause (c) above.

“Consolidated Leverage Ratio”: On any Quarterly Measurement Date, the ratio of:

(a) the Consolidated Adjusted Funded Debt on such Quarterly Measurement Date; to

(b) EBITDAR for the Measurement Period ending on such Quarterly Measurement
Date.

“Contingent Obligation”: With respect to any Person at the time of any
determination, without duplication, any obligation, contingent or otherwise, of
such Person guaranteeing or having the economic effect of guaranteeing any
Indebtedness of any other Person (the “primary obligor”) in any manner, whether
directly or otherwise: (a) to purchase or pay (or advance or supply funds for
the purchase or payment of) such Indebtedness or to purchase (or to advance or
supply funds for the purchase of) any direct or indirect security for such
Indebtedness, (b) to purchase property, securities, Equity Interests or services
for the purpose of assuring the owner of such Indebtedness of the payment of
such Indebtedness, (c) to maintain working capital, equity capital or other
financial statement condition of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or otherwise to protect the owner of such of
such Indebtedness against loss with respect to such Indebtedness, or (d) entered
into for the purpose of assuring in any manner the owner of such Indebtedness of
the payment of such Indebtedness or to protect the owner against loss with
respect to such Indebtedness, including, without limitation, any comfort letter,
operating agreement, take-or-pay contract or the obligations of any such Person
as general partner of a partnership with respect to the liabilities of the
partnership; provided that the term “Contingent Obligation” shall not include
endorsements for collection or deposit, in each case in the ordinary course of
business.

 

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“Continuing Directors”: Those directors on Company’s Board of Directors as of
the Effective Date (the “Current Board”) or those directors who are recommended
or endorsed for election to the Board of Directors of Company by a majority of
the Current Board or their successors so recommended or endorsed.

“Conversion/Continuation Notice”: As defined in Section 2.6.

“Credit Extension”: The making of an Advance or the issuance of a Facility LC.

“Deemed Dividend Problem”: With respect to any Foreign Subsidiary, any portion
of such Foreign Subsidiary’s accumulated and undistributed earnings and profits
being deemed to be repatriated to Company or the applicable parent Domestic
Subsidiary for U.S. federal income tax purposes and the effect of such
repatriation causing material adverse tax consequences to Company, in each case
as determined by Company in its commercially reasonable judgment acting in good
faith and in consultation with its legal and tax advisors.

“Default”: Any event that, with the giving of notice (whether such notice is
required under Section 7.1, or under some other provision of this Agreement, or
otherwise) or lapse of time, or both, would constitute an Event of Default.

“Defaulting Lender”: At any time, any Lender that, as determined by Agent, has
(a) failed to fund any portion of its Loans or participations in Facility LCs or
Swingline Loans within two Business Days after this Agreement requires it to
fund such portion, (b) notified Company, Agent, LC Issuer, Swingline Lender, or
any other Lender in writing that it does not intend to comply with any of its
funding obligations under this Agreement or has made a public statement to the
effect that it does not intend to comply with its funding obligations (i) under
this Agreement or (ii) under other agreements in which it is obligated to extend
credit unless, in the case of this clause (ii), such obligation is the subject
of a good faith dispute, (c) failed, within two Business Days after request by
Agent, to confirm that it will comply with the terms of this Agreement relating
to its obligations to fund prospective Loans and participations in then
outstanding Facility LCs and Swingline Loans, (d) otherwise failed to pay to
Agent or any other Lender any other amount this Agreement obligates it to pay
within two Business Days after the date when due, unless the subject of a good
faith dispute, or (e) (i) become or is insolvent or has a parent company that
has become or is insolvent or (ii) become the subject of a bankruptcy or
insolvency proceeding, or has had a receiver, conservator, trustee,
administrator, assignee for the benefit of creditors or similar Person charged
with reorganization or liquidation of its business or custodian, appointed for
it, or has taken any action in furtherance of, or indicating its consent to,
approval of or acquiescence in any such proceeding or appointment or has a
parent company that has become the subject of a bankruptcy or insolvency
proceeding, or has had a receiver, conservator, trustee, administrator, assignee
for the benefit of creditors or similar Person charged with reorganization or
liquidation of its business or custodian appointed for it, or has taken any
action in furtherance of, or indicating its consent to, approval of or
acquiescence in any such proceeding or appointment; provided, that a Lender is
not a Defaulting Lender solely as the result of (A) the acquisition or
maintenance of an ownership interest in such Lender or a Person controlling such
Lender or (B) the exercise of control over a Lender or a Person controlling such
Lender, in each case, by a governmental authority or an instrumentality thereof.
Any determination by Agent that a Lender is a Defaulting Lender shall be
conclusive and binding

 

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absent manifest error, and such Lender shall be deemed to be a Defaulting Lender
upon notification of such determination by Agent to Company, LC Issuer,
Swingline Lender, and the other Lenders.

“Default Rate”: As defined in Section 2.7.c.

“Designated Guarantor Subsidiaries”: At any time, all Subsidiaries that Company
has designated as Designated Guarantor Subsidiaries in accordance with
Section 5.16. There are no Designated Guarantor Subsidiaries on the Effective
Date.

“Designated Unrestricted Subsidiary”: Each Wholly-Owned Subsidiary that is
designated as a Designated Unrestricted Subsidiary in Schedule 1.1.b, and each
additional Subsidiary of Company that is designated as a Designated Unrestricted
Subsidiary in accordance with Section 5.17 after the Effective Date.

“Domestic Subsidiary”: A Subsidiary of Company incorporated or organized under
the laws of any jurisdiction in the United States.

“EBITDAR”: For any period of calculation, the sum of: (a) the Adjusted Net
Income for such period; plus (b) the sum of the following amounts deducted in
arriving at Adjusted Net Income (but without duplication for any item):
(i) Interest Expense; (ii) Rent Expense; (iii) depreciation and amortization
expense; and (iv) federal, state, and local income taxes, all calculated for
Company and its Restricted Subsidiaries on a consolidated basis.

“Effective Date”: June 30, 2011 or, if all conditions precedent in Section 3.1
are not satisfied or waived on that date, the date on or after the satisfaction
or waiver of such conditions precedent that Company and Agent establish as the
Effective Date.

“Eligible Assignee”: (i) a Lender; (ii) an Approved Fund; (iii) a commercial
bank organized under the laws of the United States, or any U.S. state, and
having total assets in excess of $3,000,000,000, calculated in accordance with
the accounting principles prescribed by the regulatory authority applicable to
such bank in its jurisdiction of organization; (iv) a commercial bank organized
under the laws of any other country that is a member of the OECD, or a political
subdivision of any such country, and having total assets in excess of
$3,000,000,000, calculated in accordance with the accounting principles
prescribed by the regulatory authority that applies to such bank in its
jurisdiction of organization, so long as such bank is acting through a branch or
agency located in the country in which it is organized or another country that
is described in this clause (iv); or (v) the central bank of any country that is
a member of the OECD; provided, however, that neither Company nor an Affiliate
of Company shall qualify as an Eligible Assignee.

“Encumbered Real Estate Subsidiary”: Any Subsidiary that is the obligor on a
Permitted Permanent Loan, including any Related Mezzanine Encumbered Real Estate
Subsidiary. The Encumbered Real Estate Subsidiaries on the Effective Date are
listed in Schedule 1.1.b.

“Environmental Laws”: All federal, state, local, and foreign statutes, laws,
judicial decisions, regulations, ordinances, rules, judgments, orders, decrees,
plans, injunctions, permits,

 

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concessions, grants, franchises, licenses, agreements, and other governmental
restrictions relating to (i) the protection of the environment, (ii) the effect
of the environment on human health, (iii) emissions, discharges, or releases of
pollutants, contaminants, hazardous substances, or wastes into surface water,
ground water, or land, or (iv) the manufacture, processing, distribution, use,
treatment, storage, disposal, transport, handling, clean-up, or remediation of
pollutants, contaminants, hazardous substances, or wastes.

“Equity Interests”: All shares, interests, participations, or other equivalents,
however designated, of or in a corporation, partnership, or limited liability
company, whether or not voting, including but not limited to common stock,
member interests, warrants, preferred stock, convertible debentures, and all
agreements, instruments and documents convertible, in whole or in part, into any
one or more or all of the foregoing.

“Equivalent Amount”: With respect to any currency at any time, the equivalent in
U.S. Dollars of such currency, calculated on the basis of the arithmetic mean of
the buy and sell spot rates of exchange of Agent in the London interbank market
(or other market where Agent’s foreign exchange operations with respect to such
currency are then being conducted) for such other currency at or about 11:00
a.m. (local time applicable to the transaction in question) on the date on which
such amount is to be determined, rounded up to the nearest amount of such
currency as determined by Agent from time to time; provided, however, that if at
the time of any such determination, for any reason, no such spot rate is being
quoted, Agent may use any reasonable method it deems appropriate to determine
such amount, and such determination shall be conclusive absent manifest error.

“ERISA”: The Employee Retirement Income Security Act of 1974, as amended, and
any rule or regulation issued under it.

“ERISA Affiliate”: Any trade or business (whether or not incorporated) that,
together with Company, is treated as a single employer under Section 414(b) or
(c) of the Code or, solely for the purposes of Section 302 of ERISA and
Section 412 of the Code, is treated as a single employer under Section 414 of
the Code.

“ERISA Event”: Any of the following: (a) any “reportable event”, as defined in
Section 4043 of ERISA or the regulations issued under it with respect to a Plan
(other than an event for which the 30-day notice period is waived); (b) the
existence with respect to any Plan of an “accumulated funding deficiency” (as
defined in Section 412 of the Code or Section 302 of ERISA), whether or not
waived; (c) the filing pursuant to Section 412(d) of the Code or Section 303(d)
of ERISA of an application for a waiver of the minimum funding standard with
respect to any Plan; (d) the incurrence by Company or any of its ERISA
Affiliates of any liability under Title IV of ERISA with respect to the
termination of any Plan; (e) the receipt by Company or any ERISA Affiliate from
the PBGC or a plan administrator of any notice relating to an intention to
terminate any Plan or Plans or to appoint a trustee to administer any Plan;
(f) the incurrence by Company or any of its ERISA Affiliates of any liability
with respect to the withdrawal or partial withdrawal of Company or any of its
ERISA Affiliates from any Plan or Multiemployer Plan; or (g) the receipt by
Company or any ERISA Affiliate of any notice, or the receipt by any
Multiemployer Plan from Company or any ERISA Affiliate of any notice, concerning
the imposition upon Company or any of its ERISA Affiliates of Withdrawal
Liability or a determination that a Multiemployer Plan is, or is expected to be,
insolvent or in reorganization, within the meaning of Title IV of ERISA.

 

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“Eurocurrency Advance”: An Advance with respect to which the interest rate is
determined by reference to the Adjusted Eurocurrency Rate.

“Eurocurrency Loan”: A Loan that, except as otherwise provided in Section 2.7,
bears interest that is determined by reference to the Adjusted Eurocurrency
Rate.

“Eurocurrency Rate”: With respect to each Interest Period applicable to a
Eurocurrency Advance, the applicable British Bankers’ Association Interest
Settlement Rate for deposits in the applicable Agreed Currency (U.S. Dollar
LIBOR or Canadian Dollar LIBOR, as applicable) appearing on the LIBOR01 Page for
such Agreed Currency as of 11:00 a.m. (London time) two Business Days before the
first day of such Interest Period, and having a maturity equal to such Interest
Period, provided that, (i) if the LIBOR01 Page for such Agreed Currency is not
available to Agent for any reason, the applicable Eurocurrency Rate for the
relevant Interest Period shall instead be the applicable British Bankers’
Association Interest Settlement Rate for deposits in the applicable Agreed
Currency as reported by any other generally recognized financial information
service selected by Agent as of 11:00 a.m. (London time) two business days
before the first day of such Interest Period, and having a maturity equal to
such Interest Period, provided that, if no such British Bankers’ Association
Interest Settlement Rate is available to Agent, the applicable Eurocurrency Rate
for the relevant Interest Period shall instead be the rate determined by Agent
to be the rate at which U.S. Bank or one of its Affiliate banks offers to place
deposits in U.S. Dollars with first-class banks in the interbank market at
approximately 11:00 a.m. (London time) two Business Days before the first day of
such Interest Period, in the approximate amount of U.S. Bank’s relevant
Eurocurrency Loan and having a maturity equal to such Interest Period.

“Eurocurrency Reserve Percentage”: As of any day, that percentage (expressed as
a decimal) that is in effect on such day, as prescribed by the Board of
Governors of the Federal Reserve System for determining the maximum reserve
requirement (including any basic, supplemental or emergency reserves) for a
member bank of the Federal Reserve System, with deposits comparable in amount to
those held by Agent, with respect to “Eurocurrency Liabilities” as that term is
defined in Regulation D. The rate of interest applicable to any outstanding
Eurocurrency Advances shall be adjusted automatically on and as of the effective
date of any change in the Eurocurrency Reserve Percentage.

“Event of Default”: Any event described in Section 7.1.

“Exchange Rate”: On any day, for the purposes of determining the U.S. Dollar
Amount of any other currency, the rate at which such other currency may be
exchanged into U.S. Dollars at the time of determination on such day on the
Reuters WRLD Page for such currency. If such rate does not appear on any Reuters
WRLD Page, the Exchange Rate shall be determined by reference to such other
publicly available service for displaying exchange rates that is agreed upon by
Agent and Company, or, in the absence of such an agreement, such Exchange Rate
shall instead be the arithmetic average of the spot rates of exchange of Agent
in the market where its foreign currency exchange operations with respect to
such currency are then being conducted, at or about such time Agent elects after
determining that such rates shall be the basis for

 

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determining the Exchange Rate, on such date for the purchase of U.S. Dollars for
delivery two Business Days later; provided that if at the time of any such
determination, for any reason, no such spot rate is being quoted, Agent may use
any reasonable method it deems appropriate to determine such rate, and such
determination shall be presumed correct absent manifest error.

“Exchange Rate Date”: With respect to each outstanding or requested Loan that is
or will be denominated in a currency other than U.S. Dollars, each of:

(i) the last Business Day of each calendar quarter,

(ii) if an Event of Default exists, any other Business Day designated as an
Exchange Rate Date by Agent in its sole discretion, and

(iii) each date (with such date to be reasonably determined by Agent) that is on
or about the date of (a) a Borrowing Notice or a Conversion/Continuation Notice
with respect to Loans or (b) each request for the issuance or Modification of
any Facility LC or the extension of any Swingline Loan.

“Excluded Taxes”: In the case of each Lender or applicable Lending Installation
and Agent, taxes imposed on its overall net income, and franchise taxes imposed
on it, by the jurisdiction under the laws of which such Lender or Agent is
incorporated or organized or the jurisdiction in which Agent’s or such Lender’s
principal executive office or such Lender’s applicable Lending Installation is
located.

“Exhibit”: An exhibit to this Agreement, unless another document is specifically
referred to.

“Existing Credit Agreement”: As defined in the Recitals to this Agreement.

“Facility LC”: As defined in Section 2.10.

“Facility LC Application”: As defined in Section 2.11.

“Facility LC Collateral Account”: A deposit account belonging to Agent for the
benefit of the Lenders into which this Agreement requires Borrowers to make
deposits; such account shall be under the sole dominion and control of Agent and
not subject to withdrawal by any Borrower, and Agent shall hold and apply any
amounts in the account to the payment of any outstanding Facility LCs when drawn
upon or applied as specified in Section 2.12 or 8.17.

“Facility Termination Date”: The earliest of (a) June 30, 2016, (b) the date on
which the Commitments are terminated pursuant to this Agreement, or (c) the date
on which the Commitments are reduced to zero pursuant to this Agreement.

“Federal Funds Effective Rate”: For any day, an interest rate per annum equal to
the weighted average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers on such
day, as published for such day (or, if such day is not a Business Day, for the
immediately preceding Business Day) by the Federal Reserve Bank of New York, or,
if such rate is not so published for any day that is a

 

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Business Day, the average of the quotations at approximately 10:00 a.m.
(Minneapolis time) on such day on such transactions received by Agent from three
federal funds brokers of recognized standing selected by Agent in its sole
discretion.

“Fixed Charge Coverage Ratio”: On any Quarterly Measurement Date, the ratio of

(a) the result of: (i) EBITDAR for the Measurement Period ending on such
Quarterly Measurement Date, minus (ii) Cash Taxes; minus (iii) the Maintenance
Capital Expenditures for such Measurement Period; to

(b) the sum of: (i) the Interest Expense for such Measurement Period; plus
(ii) the Rent Expense for such Measurement Period; plus (iii) the Mandatory
Principal Payments for such Measurement Period; plus (iv) Restricted Payments
during such Measurement Period.

“Foreign Subsidiary”: Any Subsidiary of Company that is organized under the laws
of a jurisdiction outside of the United States. On the Effective Date, the
Foreign Subsidiaries are FCA Construction Company Canada Inc., an Ontario
corporation; LTF Club Operations Company Canada Inc., an Ontario corporation;
and LTF Real Estate Company Canada Inc., an Ontario corporation.

“Fund”: Any Person (other than a natural person) that is (or will be) engaged in
making, purchasing, holding, or otherwise investing in commercial loans and
similar extensions of credit in the ordinary course of its business.

“GAAP”: Generally accepted accounting principles set forth in the opinions and
pronouncements of the Accounting Principles Board of the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in other statements by any other entity that is
approved by a significant segment of the accounting profession that apply to the
circumstances as of any date of determination, applied in a manner consistent
with that used in preparing the financial statements of Company to which this
Agreement refers.

“Guarantor Subsidiaries”: The Required Guarantor Subsidiaries and the Designated
Guarantor Subsidiaries.

“Guaranty”: The Guaranty dated as of the Effective Date signed and delivered by
the Guarantor Subsidiaries in favor of Agent, for the ratable benefit of the
Lenders, as it is supplemented, amended, restated, replaced, or otherwise
modified at any relevant time, and any additional guaranty signed and delivered
by any Guarantor Subsidiary after the Effective Date that is substantially on
the same terms as such Guaranty or is otherwise acceptable to Agent in its
reasonable discretion.

“Immediately Available Funds”: Funds with good value on the day and in the city
in which payment is received.

“Indebtedness”: With respect to any Person at the time of any determination,
without duplication, all obligations, contingent or otherwise, of such Person
that in accordance with

 

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GAAP should be classified upon the balance sheet of such Person as liabilities,
but in any event including: (i) all obligations of such Person for borrowed
money, including non-recourse obligations, and including the Obligations,
(ii) all obligations of such Person that are evidenced by bonds, debentures,
notes, or other similar instruments, (iii) all obligations of such Person upon
which interest charges are customarily paid or accrued, (iv) all obligations of
such Person under conditional sale or other title retention agreements relating
to property purchased by such Person, (v) all obligations of such Person that
are issued or assumed as the deferred purchase price of property or services,
(vi) all obligations of others secured by any Lien on property owned or acquired
by such Person, whether or not the obligations the Lien secures have been
assumed, (vii) all Capitalized Lease Obligations of such Person, (viii) the net
amount of all obligations of such Person with respect to interest rate swap
agreements, cap or collar agreements, interest rate futures or option contracts,
currency swap agreements, currency futures or option agreements and other
similar contracts, (ix) all obligations of such Person, actual or contingent, as
an account party with respect to standby and commercial letters of credit or
bankers’ acceptances, (x) all obligations of any partnership or joint venture as
to which such Person is personally liable, and (xi) all Contingent Obligations
of such Person for which such Person would reserve in accordance with GAAP.

“Intercreditor Agreement”: An intercreditor agreement between the holder of any
Indebtedness of Company or any Subsidiary (other than the Obligations) and
Agent, in form and substance satisfactory to Agent in its reasonable business
judgment, and pursuant to which Agent and the holder of such Indebtedness agree
that such Indebtedness and any Liens securing such Indebtedness are pari passu
with the Obligations.

“Interest Expense”: For any Measurement Period, the aggregate consolidated
amount, without duplication, of interest expense of Company and its Restricted
Subsidiaries determined in accordance with GAAP.

“Interest Period”: With respect to each Eurocurrency Advance, the period
commencing on the date of such Advance or on the last day of the immediately
preceding Interest Period, if any, applicable to an outstanding Advance and
ending one, two, three, or six months thereafter, as the applicable Borrower
elects in the applicable Borrowing Notice or Conversion/Continuation Notice;
provided that:

(a) Any Interest Period that would otherwise end on a day that is not a Business
Day shall be extended to the next succeeding Business Day unless such Business
Day falls in another calendar month, in which case such Interest Period shall
end on the next preceding Business Day;

(b) Any Interest Period that begins on the last Business Day of a calendar month
(or a day for which there is no numerically corresponding day in the calendar
month at the end of such Interest Period) shall end on the last Business Day of
a calendar month; and

(c) Any Interest Period applicable to an Advance on a Revolving Loan that would
otherwise end after the Facility Termination Date shall end on the Facility
Termination Date.

 

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For the purposes of determining an Interest Period, a month means a period
starting on one day in a calendar month and ending on the numerically
corresponding day in the next calendar month; provided that, if there is no
numerically corresponding day in the month in which such an Interest Period is
to end or if such an Interest Period begins on the last Business Day of a
calendar month, then such Interest Period shall end on the last Business Day of
the calendar month in which such Interest Period is to end.

“Investment”: The acquisition, purchase, making, or holding of any Equity
Interests or other security, any loan, advance, contribution to capital,
extension of credit (except for trade and customer accounts receivable for
inventory sold or services rendered in the ordinary course of business and
payable in accordance with customary trade terms), any acquisitions of real or
personal property (other than real and personal property acquired in the
ordinary course of business) and any purchase or commitment or option to
purchase Equity Interests, securities or other debt of or any interest in
another Person or any integral part of any business or the assets comprising all
or any part of such business and the formation of, or entry into, any
partnership as a limited or general partner or the entry into any joint venture.
The amount of any Investment is the original cost of such Investment plus the
cost of all additions to such Investment, without any adjustments for increases
or decreases in value, or write-ups, write-downs or write-offs with respect to
such Investment.

“LC Fee”: As defined in Section 2.21.

“LC Issuer”: U.S. Bank (or any subsidiary or affiliate of U.S. Bank designated
by U.S. Bank) in its capacity as issuer of Facility LCs under this Agreement, or
any successor to U.S. Bank succeeding to its obligations as issuer of Facility
LCs.

“LC Obligations”: At any time, either or both the USD Tranche LC Obligations and
the Multicurrency Tranche LC Obligations, as applicable.

“LC Participations”: At any time, either or both the USD Tranche LC
Participations or the Multicurrency Tranche LC Participations, as applicable.

“LC Payment Date”: As defined in Section 2.13.

“Lenders”: The lending institutions who sign and deliver this Agreement as the
“Lenders” on the Effective Date and their successors and assigns. Unless this
Agreement specifies otherwise, the term “Lenders” includes U.S. Bank in its
capacity as Swingline Lender and LC Issuer.

“Lending Installation”: With respect to a Lender or Agent, the office, branch,
subsidiary, or affiliate of such Lender or Agent listed on the signature pages
to this Agreement or otherwise selected and identified by such Lender or Agent
pursuant to Section 2.25.

“Lien”: With respect to any Person, any security interest, mortgage, pledge,
lien (statutory or other), charge, encumbrance or preference, hypothecation,
assignment, deposit arrangement, title retention agreement, preferential
arrangement, or analogous instrument or device (including the interest of each
vendor or lessor under any conditional sale, Capitalized Lease, or other title
retention agreement), in, of or on any assets or properties of such Person, now
owned or hereafter acquired, whether arising by agreement or operation of law.

 

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“LIBOR01 Page”: The display designated as “LIBOR01 Page” on the Reuters Service
(or such other page as may replace the LIBOR01 Page on that service or such
other service as may be nominated by the British Bankers’ Association as the
information vendor for the purpose of displaying British Bankers’ Association
Interest Settlement Rates for U.S. Dollar deposits).

“Loan”: A Revolving Loan or a Swingline Loan.

“Loan Documents”: This Agreement, any Notes, the Guaranty, the Collateral
Documents, the Upstream Distribution Agreements, and each other document or
agreement, now or in the future, signed by Company or any of its Affiliates for
the benefit of Agent or any Lender under or in connection with this Agreement.

“Loan Party”: Company and each Guarantor Subsidiary.

“LTF CMBS I”: LTF CMBS I, LLC, a Delaware limited liability company.

“LTF CMBS I Related Agreements”: The Related Agreements for the LTF CMBS I
Permitted Permanent Loan that are described on Schedule 1.1.c.

“LTF Lease”: A long-term lease agreement between a Real Estate Subsidiary, as
lessor, and a Restricted Subsidiary, as lessee, relating to a Club.

“Maintenance Capital Expenditures”: On any Quarterly Measurement Date, the sum
of: (a) $10,000,000; plus (b) the product of: (i) $3.75; times (ii) the gross
square feet for each Club that is open and operating on such Quarterly
Measurement Date as measured from the predominant plane of the exterior walls of
such Club.

“Mandatory Principal Payments”: For any Measurement Period, the principal
payments (including the portion of any payment on any Capitalized Lease
allocable to principal in accordance with GAAP) regularly scheduled to have been
paid by Company or any of its Restricted Subsidiaries during such period on the
Permitted Permanent Loans and Company’s and its Restricted Subsidiaries’
Capitalized Leases and other interest-bearing Indebtedness and/or Seller
Financing.

“Majority Lenders”: Lenders having greater than 50% of the Aggregate Commitment
(excluding the Commitment Amounts of Defaulting Lenders) or, if the Aggregate
Commitment has been terminated, Lenders other than Defaulting Lenders in the
aggregate holding greater than 50% of the Aggregate Outstanding Credit Exposure.

“Material Adverse Occurrence”: Any occurrence of whatsoever nature (including,
without limitation, any adverse determination in any litigation, arbitration, or
governmental investigation or proceeding) that could reasonably be expected to
materially and adversely affect (i) the financial condition or operations of
Company and its Subsidiaries taken as a whole, (ii) the ability of any Borrower
to perform its obligations under the Loan Documents, (iii) the validity or
enforceability of the material obligations of any Borrower under the Loan
Documents,

 

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(iv) the rights and remedies of the Lenders and Agent under the Loan Documents,
or (v) the timely payment of the principal of and interest on the Loans or other
amounts payable by Borrowers under this Agreement.

“Maximum Borrowing Subsidiary Amount: As determined from time to time by the
Lenders at the request of Company. On the Effective Date, the Maximum Borrowing
Subsidiary Amount is $0.00.

“Maximum Rate”: As defined in Section 9.16.

“Measurement Period”: On any Quarterly Measurement Date, the four fiscal
quarters ending on such Quarterly Measurement Date.

“Modify” and “Modification”: As defined in Section 2.10.

“Multiemployer Plan”: A multiemployer plan, as that term is defined in
Section 4001 (a) (3) of ERISA, that is maintained (on the Effective Date, within
the five years before the Effective Date, or at any time after the Effective
Date) for employees of Company or any ERISA Affiliate.

“Multicurrency Tranche Commitment”: With respect to each Multicurrency Tranche
Lender, its obligation to make Multicurrency Tranche Revolving Loans to
Borrowers and to purchase Multicurrency Tranche LC Participations.

“Multicurrency Tranche Commitment Amount”: With respect to each Multicurrency
Tranche Lender, on the Effective Date the amount set forth by its name on the
signature page of this Agreement and on Schedule 1.1.f as its Multicurrency
Tranche Commitment Amount, but as reduced or increased at any time after the
Effective Date under this Agreement.

“Multicurrency Tranche LC”: Each Facility LC in which the Multicurrency Tranche
Lenders are obligated to purchase Multicurrency LC Participations under
Section 2.10.

“Multicurrency Tranche LC Obligations”: At any time, the sum, without
duplication, of: (a) the aggregate amount available to be drawn on all
outstanding Multicurrency Tranche LCs ; plus (b) the Reimbursement Obligations
that relate to all Multicurrency Tranche LCs.

“Multicurrency Tranche LC Participation”: As defined in Section 2.11.

“Multicurrency Tranche Lender”: A Lender that has agreed to make Multicurrency
Tranche Revolving Loans and purchase Multicurrency Tranche LC Participations
under the terms of this Agreement.

“Multicurrency Tranche Revolving Loan”: With respect to a Multicurrency Tranche
Lender, a loan made by such Lender in Canadian Dollars pursuant to its
commitment to lend in Section 2.1, and any conversion or continuation of such
loan.

“Multicurrency Tranche Share”: With respect to each Multicurrency Tranche
Lender, a portion equal to a fraction, the numerator of which is the
Multicurrency Tranche Commitment

 

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Amount of such Lender and the denominator of which is the Aggregate
Multicurrency Tranche Commitment Amount, provided, however, if all of the
Multicurrency Tranche Commitments are terminated, then “Multicurrency Tranche
Share” means the percentage obtained by dividing (i) such Lender’s Outstanding
Multicurrency Tranche Credit Exposure at such time by (ii) the Aggregate
Outstanding Multicurrency Tranche Credit Exposure at such time; and provided,
further, that when a Defaulting Multicurrency Tranche Lender exists,
“Multicurrency Tranche Share” means the percentage of the Aggregate
Multicurrency Tranche Commitment Amount (disregarding any Defaulting Lender’s
Multicurrency Tranche Commitment) represented by such Lender’s Multicurrency
Tranche Commitment Amount. If all of the Multicurrency Tranche Commitments have
terminated or expired, the Multicurrency Tranche Shares shall be determined
based upon the Multicurrency Tranche Commitment Amounts most recently in effect,
giving effect to any assignments.

“Net Income”: For any Measurement Period, consolidated after-tax net income of
Company and its Restricted Subsidiaries for such period determined in accordance
with GAAP.

“Net Proceeds”: With respect to the incurrence of any other Indebtedness for
borrowed money (excluding Purchase Money Indebtedness) or from the consummation
of a sale-leaseback transaction by Company or a Restricted Subsidiary, the cash
proceeds received by Company or such Restricted Subsidiary from such transaction
less the sum of: (a) the reasonable costs associated with such transaction; and
(b) the amount of any Indebtedness (other than the Obligations) that is required
to be paid in connection with such transaction.

“Net Worth”: With respect to any Person or Persons, on any date of
determination, the excess of (a) the net book value of the assets of such Person
or Persons at such time, after all appropriate deductions in accordance with
GAAP (including, without limitation, reserves for doubtful receivables,
obsolescence, depreciation and amortization), minus (b) the sum of the total
Indebtedness of such Person or Persons at such time, all as determined in
accordance with GAAP, on an aggregate or consolidated basis with respect to such
Person or Persons.

“Non-U.S. Lender”: As defined in Section 2.32.f.

“Note”: As defined in Section 2.5.

“Obligations”: Borrowers’ obligations with respect to the due and punctual
payment of principal and interest on the Loans and the LC Obligations when and
as due, whether by acceleration or otherwise, and all fees (including the
Commitment Fee), expenses, indemnities, reimbursements and other obligations of
Borrowers under this Agreement or any other Loan Document, and the Rate
Protection Obligations, to the Lenders or to any Lender, Agent, LC Issuer, or
any indemnified party, in all cases whether now existing or hereafter arising or
incurred.

“Operating Lease”: A lease of (or other agreement conveying the right to use)
real or personal property classified as an operating lease in accordance with
GAAP.

“Operations”: LTF Club Operations Company, Inc., a Minnesota corporation, with
respect to all Clubs in the United States, and LTF Club Operations Company
Canada Inc., an Ontario corporation, with respect to all Clubs in Canada.

 

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“Other Taxes”: As defined in Section 2.32.b.

“Outlot”: A parcel of real property purchased as an incidental part of a larger
acquisition where such parcel is not required for the intended purposes of such
acquisition.

“Outstanding Credit Exposure: As to each USD Tranche Lender, its Outstanding USD
Tranche Credit Exposure, and, as to each Multicurrency Tranche Lender, its
Multicurrency Outstanding Multicurrency Tranche Credit Exposure.

“Outstanding Multicurrency Tranche Credit Exposure: As to any each Multicurrency
Tranche Lender at any time, the sum of (i) the aggregate principal U.S. Dollar
Amount of its Multicurrency Tranche Revolving Loans outstanding at such time,
and (ii) its Multicurrency Tranche LC Participations at that time.

“Outstanding USD Tranche Credit Exposure: As to each USD Tranche Lender at any
time, the sum of (i) the aggregate principal U.S. Dollar Amount of its USD
Tranche Revolving Loans outstanding at such time, plus (ii) its USD Tranche
Share of the aggregate principal amount of Swingline Loans outstanding at that
time, plus (iii) its USD Tranche LC Participations at that time.

“Parity Secured Debt”: Indebtedness other than the Obligations incurred by
Company or a Restricted Subsidiary that is secured by Liens permitted under
Section 6.12.k; provided that: (i) at the time of the incurrence of such Parity
Secured Debt, the Unencumbered Asset Coverage Ratio as of the Quarterly
Measurement Date immediately preceding the date on which the proposed additional
Indebtedness is to be incurred would not be more than the ratio permitted by
Section 6.16 determined on a pro forma basis (including a pro forma application
of net proceeds from such proposed additional Indebtedness), as if such proposed
additional Indebtedness had been incurred at the beginning of the Measurement
Period ending on such Quarterly Measurement Date; (ii) the Related Agreements
evidencing or securing such Parity Secured Debt are in form and substance
satisfactory to Agent, in its reasonable business judgment, provided that the
default provisions of such Related Agreements may provide for cross-acceleration
with respect to the covenant defaults under this Agreement; (iii) the holder of
such Parity Secured Debt signs and delivers to Agent, before Company or any
Restricted Subsidiary incurs such Parity Secured Debt, an Intercreditor
Agreement; and (iv) reasonably before the incurrence of such Indebtedness, Agent
has received drafts that are finalized in all material respects of each material
Related Agreement to be signed and delivered in connection with such
transaction. To the extent any such Parity Secured Debt contains covenants or
default provisions that restrict Company or its Restricted Subsidiaries more
than do the covenants and default provisions of this Agreement, the provisions
of Section 5.20 shall apply.

“Participants”: As defined in Section 9.5.b.

“PBGC”: The Pension Benefit Guaranty Corporation, established pursuant to
Subtitle A of Title IV of ERISA, and any successor.

“Permitted Acquisitions”: With respect to Company and Restricted Subsidiaries,
either: (a) any Acquisition by Company or any of its Restricted Subsidiaries
where (i) the business or division acquired are for use, or the Person acquired
is engaged, in the businesses engaged in by

 

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Company or its Restricted Subsidiaries on the Effective Date or other businesses
that are similar, ancillary, or complementary lines of business, or are
reasonable extensions of such business, (ii) the Acquisition is completed on a
non-hostile basis; (iii) for each Acquisition in which the total consideration
paid by Company and its Subsidiaries exceeds $20,000,000, Company delivers to
Agent, no later than 10 Business Days before the consummation of the
Acquisition, proforma financial statements giving effect to the Acquisition that
demonstrate continued compliance with the financial covenants in this Agreement;
(iv) Company or a Restricted Subsidiary is the surviving entity; (v) immediately
before and after giving effect to such Acquisition, no Event of Default exists,
(vi) the Consolidated Leverage Ratio on a proforma basis reflecting the
consummation of the Acquisition is less than 3.75 to 1.00; (vii) the sum of the
cash held by Company and its Restricted Subsidiaries (including any cash
acquired in the acquisition) but excluding cash in any account subject to a Lien
in favor of any Person other than the Lenders plus the amount by which the
Aggregate Commitment Amount exceeds the Aggregate Outstanding Credit Exposure is
at least $50,000,000 immediately after giving effect to such Acquisition;
(viii) for each Acquisition in which the total consideration paid by Company and
its Subsidiaries exceeds $20,000,000, reasonably prior to such Acquisition,
Agent has received unexecuted copies of each material document, instrument, and
agreement to be signed and delivered in connection with such Acquisition,
(ix) for each Acquisition in which the total consideration paid by Company and
its Restricted Subsidiaries is exceeds $20,000,000, Company has delivered to
Agent consents in favor of Agent and the Lenders to the collateral assignment of
rights and indemnities under the related acquisition documents and opinions of
counsel for Company and (if delivered to Company) the selling party in favor of
Agent and the Lenders have been delivered, and (x) if the acquired Person will
be a Guarantor Subsidiary, Agent has received a Guaranty and Collateral
Documents in accordance with Section 5.17 and 5.19; or (b) any other Acquisition
consented to in writing by the Majority Lenders. For the purposes of this
definition, “total consideration” means, without duplication, cash or other
consideration paid, the fair market value of property or stock exchanged (or the
face amount, if preferred stock) other than common stock of Company, the total
amount of any deferred payments or purchase money debt, all Seller Financing,
and the total amount of any Indebtedness assumed or undertaken in such
transactions. With respect to Unrestricted Subsidiaries, “Permitted Acquisition”
means each Acquisition that is completed by an Unrestricted Subsidiary on a
non-hostile basis.

“Permitted Permanent Loan”: Collectively:

(a) the Indebtedness of the Encumbered Real Estate Subsidiaries outstanding on
the Effective Date and described on Schedule 1.1.d; and

(b) Indebtedness incurred by an Encumbered Real Estate Subsidiary that is a
Wholly-Owned Subsidiary after the Effective Date to finance the real property
and improvements relating to one or more Clubs that are then open and operating,
where:

(i) immediately before and after giving effect to such Indebtedness, no Event of
Default exists;

(ii) the Related Agreements for such Indebtedness do not cross-default to, or
permit acceleration based on, any default under or acceleration of any other

 

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Indebtedness of Company or any other Subsidiary except other Permitted Permanent
Loans that are held by the holder of the Indebtedness then being incurred;
provided that any such Indebtedness that is incurred to an initial holder that,
together with any of its Affiliates, are in the business of Securitizing
commercial mortgage loans shall be deemed to be held by separate holders,
regardless of whether such Indebtedness is actually held by separate holders;

(iii) the only Persons liable for such Indebtedness are:

(A) the Encumbered Real Estate Subsidiary that owns all of the relevant Clubs
securing the Indebtedness then being incurred and such liability is limited to
such Encumbered Real Estate Subsidiary’s right, title and interest in and to the
collateral securing the Permitted Permanent Loan then being incurred; subject,
however, to the imposition of personal liability for fraud, misrepresentation,
misapplication of rents or insurance proceeds, adverse environmental conditions
and other exceptions to limited recourse liability that are commonly set forth
in limited recourse real estate financing transactions including, without
limitation, environmental indemnities (such limited recourse liability being
“Limited Recourse Liability”); provided that the Related Agreements for such
Permitted Permanent Loan shall not impose any materially greater liability on
the relevant Encumbered Real Estate Subsidiary than that incurred by LTF CMBS I
pursuant to the LTF CMBS I Related Agreements; and

(B) Company; provided that the Related Agreements for such Permitted Permanent
Loan: (1) shall not impose any greater liability on Company than the Limited
Recourse Liability that is incurred by the relevant Encumbered Real Estate
Subsidiary in such transaction and to its liability as a guarantor of the LTF
Lease securing such Permitted Permanent Loan that is permitted by subpart (v) of
this definition; and (2) shall otherwise comply with the last paragraph of this
definition;

(iv)(A) the only security for such Indebtedness are: (1) the real property and
improvements relating to such Clubs being financed by such Permitted Permanent
Loan, (2) the LTF Lease relating to such Clubs, (3) if required to be by the
original Related Agreements evidencing or securing such Indebtedness, then:
(a) normal and reasonable repair and replacement reserves; and (b) a debt
service reserve to be established from the basic rent payable under the original
LTF Lease relating to such Clubs that exceeds the regularly scheduled monthly
principal and interest payments on such Indebtedness if the Allocated Clubs Cash
Flow is less than the amount required in the original Related Agreements
evidencing or securing such Indebtedness; provided, however, that, the
Encumbered Real Estate Subsidiary’s failure to maintain the required Allocated
Clubs Cash Flow shall not constitute an event of default (however

 

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defined) under the relevant Related Agreements and the sole remedy for such
failure shall be the establishment of the debt service reserve; (4) if such
Indebtedness is Securitized by re-structuring into a senior loan to the
borrowing Encumbered Real Estate Subsidiary and a mezzanine loan to a separate
Related Mezzanine Encumbered Real Estate Subsidiary, then such mezzanine loan
may be secured by a pledge of the Equity Interests in the borrowing Encumbered
Real Estate Subsidiary for such Indebtedness; and (5) normal and reasonable
repair and replacement reserves that are required to be established by the
original Related Agreements evidencing or securing such Indebtedness. None of
such security shall secure any other Indebtedness of such Encumbered Real Estate
Subsidiary, its Related Mezzanine Encumbered Real Estate Subsidiary, Company or
any other Subsidiary;

(v) the Clubs are leased to Operations pursuant to a LTF Lease; provided that
Company may guaranty Operations’ obligations under the relevant LTF Lease;
provided that Company’s lease guaranty obligations must not be materially
greater than that incurred by Company pursuant to the LTF CMBS I Related
Agreements and the Related Agreements establishing such lease guaranty
obligations shall comply with the last paragraph of this definition; and

(vi) reasonably prior to the incurrence of such Indebtedness, Agent has received
drafts that are finalized in all material respects of each material Related
Agreement to be signed and delivered in connection with such transaction.

For the purposes of this Agreement, a single Permitted Permanent Loan may be
evidenced by separate notes made by one or more of the relevant Encumbered Real
Estate Subsidiaries payable to the holder of such Permitted Permanent Loan and
such separate notes may be secured by the real property and improvements
relating to the Clubs respectively owned by such Encumbered Real Estate
Subsidiaries then being financed by such Permitted Permanent Loan; provided that
the proceeds of such separate notes are disbursed to the relevant Encumbered
Real Estate Subsidiary on the same date as part of an integrated financing for
all of such Clubs.

If Company incurs any Limited Recourse Liability that is described in subpart
(b)(iii)(A) of the first paragraph of this definition or guaranties the payment
and performance of a LTF Lease that is described in subpart (b)(v) of this
definition, then the applicable Related Agreements shall not:

(a)(i) cross-default to any other Indebtedness of Company or any other
Subsidiary; and/or (ii) violate Section 6.6; and/or

(b) in the case of any contingent liability, require Company to waive its rights
of contribution, subrogation or other similar rights to succeed to the relevant
lender’s rights against the borrowing Encumbered Real Estate Subsidiary or its
assets upon Company’s payment and performance in full of its obligations under
such Related Agreements.

 

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Each Permitted Permanent Loan shall cause any automatic amendment of this
Agreement that applies under the “most favored lender” provision in
Section 5.20.

“Person”: Any natural person, corporation, partnership, limited partnership,
limited liability limited partnership, limited liability company, joint venture,
firm, association, enterprise, trust, unincorporated organization, government or
governmental agency or political subdivision or any other entity or
organization, whether acting in an individual, fiduciary, or other capacity.

“Plan”: Each employee benefit plan (whether in existence on the Effective Date
or thereafter instituted), as such term is defined in Section 3 of ERISA,
maintained for the benefit of employees, officers or directors of Company or of
any ERISA Affiliate.

“Pledge Agreement” or “Pledge Agreements”: Individually and collectively,
(i) the Pledge Agreement dated June 30, 2011 made by Company in favor of Agent
and pursuant to which Company grants a first priority Lien to Agent, for the
benefit of the Lenders, to secure the Obligations, in the Equity Interests it
owns in its Restricted Subsidiaries and other “Collateral” it describes,
(ii) each Pledge Agreement dated June 30, 2011 made by a Restricted Subsidiary
that owns Equity Interests in another Restricted Subsidiary in favor Agent and
pursuant to which such Restricted Subsidiary grants a first priority Lien to
Agent, for the benefit of the Lenders, to secure the Obligations, in the Equity
Interests and other “Collateral” it describes, but only to the extent that the
granting of such Lien does not violate any restriction on such Restricted
Subsidiary’s right to grant such Lien set forth in any Related Agreement, as it
is amended, supplemented, extended, restated, or otherwise modified and in
effect at any time, and (iii) each additional agreement made after the Effective
Date by any Subsidiary of Company in favor Agent and pursuant to which such
Subsidiary grants a first priority Lien to Agent, for the benefit of the
Lenders, to secure the Obligations, in the Equity Interests and other
“Collateral” it describes, but only to the extent that the granting of such Lien
does not violate any restriction on such Subsidiary’s right to grant such Lien
set forth in any Related Agreement, as it is amended, supplemented, extended,
restated, or otherwise modified and in effect at any time.

“Prime Rate”: The per annum rate of interest from time to time publicly
announced by U.S. Bank or its parent as its “Prime Rate” (which is not
necessarily the lowest rate charged to any customer) for such day, changing when
and as such Prime Rate changes; except that if there is a successor Agent to
U.S. Bank by merger, or U.S. Bank assigns its duties and obligations as “Agent”
to an Affiliate pursuant to Section 10.11, then “Prime Rate” means the prime
rate, base rate or other analogous rate of the new Agent.

“Purchase Money Indebtedness”: Any Indebtedness that is incurred at the time of
the purchase of the relevant property.

“Purchaser”: As defined in Section 9.5.c.

“Quarterly Measurement Date”: The last day of each quarter of Company’s fiscal
year, commencing on June 30, 2011.

“Rate Protection Agreement”: Any interest rate swap, cap or option agreement, or
any other agreement pursuant to which any Borrower hedges interest rate risk
with respect to a portion of the Obligations, entered into by a Borrower with a
Rate Protection Provider.

 

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“Rate Protection Obligations”: The liabilities, indebtedness, and obligations of
Borrowers, if any, to any Rate Protection Provider under a Rate Protection
Agreement.

“Rate Protection Provider”: Any Lender, or any Affiliate of any Lender, that is
the counterparty of a Borrower under any Rate Protection Agreement.

“Regulation D”: Regulation D of the Board of Governors of the Federal Reserve
System as from time to time in effect and any successor or other regulation or
official interpretation of the Board of Governors with respect to reserve
requirements that apply to member banks of the Federal Reserve System.

“Regulation U”: Regulation U of the Board of Governors of the Federal Reserve
System as from time to time in effect and any successor or other regulation or
official interpretation of the Board of Governors with respect to the extension
of credit by banks for the purpose of purchasing or carrying margin stocks that
apply to member banks of the Federal Reserve System.

“Real Estate”: Any undivided fee simple interest in land other than an Outlot;
the tenant’s interest under a long-term ground lease of land; buildings and
other improvements on such land owned in fee simple or leased under a long-term
ground lease; and the right to receive any rents and income from such land owned
in fee simple or leased under a long-term ground lease that have not yet been
received. Without limiting the definition in the preceding sentence, “Real
Estate” does not include (i) any interest in land that Company has sold and then
leased back, either before or after the Effective Date, or (ii) the tenant’s
interest under any lease or other occupancy agreement that is not a long-term
ground lease, or any fixtures or improvements owned by the tenant under any
lease or other occupancy agreement that is not a long-term ground lease.

“Real Estate Subsidiary”: Either an Encumbered Real Estate Subsidiary or an
Unencumbered Real Estate Subsidiary.

“RE Holdings”: LTF Real Estate Holdings, LLC, a Delaware limited liability
company.

“Reimbursement Obligations”: At any time, the aggregate of all of Borrowers’
obligations then outstanding under Section 2.13 to reimburse LC Issuer for
amounts paid by LC Issuer with respect to any one or more drawings under
Facility LCs.

“Related Agreement”: All material documents establishing, evidencing, and/or
securing any Permitted Permanent Loan or any Indebtedness for borrowed money
permitted by Section 6.11.c , or additional Indebtedness permitted by
Section 6.11.g, or any sale-leaseback transaction permitted by Section 6.18, or
any ground lease or other real estate lease covering any Real Estate underlying,
or on which Company and its Subsidiaries intend to develop and operate, a Club
and related businesses that is permitted by Section 6.21. The Related Agreements
in effect on the Effective Date are respectively described on Schedules 1.1.e,
6.11 and 6.18.

“Related Mezzanine Encumbered Real Estate Subsidiary”: A Subsidiary that has
been organized for the sole purpose of incurring a mezzanine loan made in
conjunction with a Securitized Permitted Permanent Loan and whose only material
assets are the Equity Interests in the Encumbered Real Estate Subsidiary that is
the obligor of the related Permitted Permanent Loan.

 

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“Rent Expense”: For any Measurement Period, the aggregate consolidated rent
expense of Company and its Subsidiaries as determined in accordance with GAAP.

“Required Guarantor Subsidiaries”: At any time, all Wholly-Owned Subsidiaries
except for: (i) Designated Unrestricted Subsidiaries, (ii) Foreign Subsidiaries
as to which a guarantee of the Obligations would cause a Deemed Dividend
Problem; and (iii) each Encumbered Real Estate Subsidiary that is prohibited,
restricted, or otherwise limited by the Related Agreements for a Permitted
Permanent Loan to which it is a party from guaranteeing any Indebtedness other
than such Permitted Permanent Loan, granting a Lien on any or all of its assets
to secure any Indebtedness other than such Permitted Permanent Loan, or
permitting a Lien on the Equity Interests in such Encumbered Real Estate
Subsidiary to secure any Indebtedness other than such Permitted Permanent Loan,
but only so long as such prohibitions, restrictions, or limitations apply. The
Required Guarantor Subsidiaries on the Effective Date are listed in Schedule
1.1.a.

“Restricted Payments”: Collectively, (a) all dividends or other distributions in
cash with respect to any Equity Interests in Company, (b) any payment (whether
in cash, Equity Interests other than common stock of Company, or other
property), including any sinking fund or similar deposit, on account of the
purchase, redemption, retirement, acquisition, cancellation or termination of
any Equity Interests in Company or any of its Restricted Subsidiaries, and
(c) all management fees, consulting fees and other similar amounts payable to
any present or former holder of any Equity Interests in Company or any of its
Restricted Subsidiaries.

“Restricted Subsidiary”: Each Guarantor Subsidiary and each other Subsidiary
that is not an Unrestricted Subsidiary.

“Revolving Loans”: Multicurrency Tranche Revolving Loans and USD Tranche
Revolving Loans.

“Schedule”: A specific schedule to this Agreement, unless another document is
specifically referred to.

“Section”: A numbered section of this Agreement, unless another document is
specifically referred to.

“Securitized”: A transaction in which all or any portion of a Permitted
Permanent Loan and the Related Agreements evidencing or securing such Permitted
Permanent Loan are deposited into a trust (including a REMIC trust) by the
holder of such Permitted Permanent Loan and such trust issues certificates to
investors, or any similar transaction and the term “Securitizing” has a meaning
correlative to the foregoing.

“Security Agreement” or “Security Agreements”: Individually or collectively,
(i) the Security Agreement dated June 30, 2011 made by Company in favor of Agent
and pursuant to which Company grants a first priority Lien to Agent, for the
benefit of the Lenders, to secure the Obligations, in the “Collateral” it
describes, as it is amended, supplemented, extended, restated,

 

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or otherwise modified and in effect at any time, (ii) the Security Agreement
dated June 30, 2011 made by each Guarantor Subsidiary in favor of Agent and
pursuant to which each Guarantor Subsidiary grants a first priority Lien to
Agent, for the benefit of the Lenders, to secure the Obligations, in the
“Collateral” it describes, to secure the Obligations, as it is amended,
supplemented, extended, restated, or otherwise modified and in effect at any
time, and (iii) any additional security agreement that any Subsidiary of Company
signs and delivers after the Effective Date to grant a first priority Lien to
Agent, for the benefit of the Lenders, to secure the Obligations, in the
collateral it describes, as it is amended, supplemented, extended, restated, or
otherwise modified and in effect at any time.

“Seller Financing”: Indebtedness incurred as seller financing.

“Subordinated Indebtedness”: Any Indebtedness of a Company or a Restricted
Subsidiary that is formally subordinated to the Obligations on terms that have
been approved in writing by Agent.

“Subsidiary”: with respect to any Person, (i) any corporation, partnership,
limited partnership, limited liability limited partnership, limited liability
company, joint venture, firm, association, enterprise, trust, unincorporated
organization, or other business entity the accounts of which would be
consolidated with those of such Person in such Person’s consolidated financial
statements if such financial statements were prepared in accordance with GAAP as
of such date, and (ii) any other corporation, partnership, limited partnership,
limited liability limited partnership, limited liability company, joint venture,
firm, association, enterprise, trust, unincorporated organization, or other
business entity of which such Person, directly or indirectly, owns Equity
Interests that represent more than 50% of the ordinary voting power, governance
rights, or financial rights of such business entity. Except where this Agreement
expressly provides to the contrary, all references in this Agreement to a
“Subsidiary” or to “Subsidiaries” refer to a Subsidiary or Subsidiaries of
Company. The Subsidiaries on the Effective Date are listed in Schedule 1.1.b.

“Swingline Lender”: U.S. Bank or any other Lender that succeeds to its rights
and obligations as the Swingline Lender under this Agreement.

“Swingline Loan Commitment”: With respect to Swingline Lender, the obligation of
Swingline Lender to make Swingline Loans to Company, as part of the USD Tranche,
in an aggregate principal amount outstanding at any time not to exceed the
Swingline Commitment Amount upon the terms and subject to the conditions and
limitations of this Agreement.

“Swingline Commitment Amount”: As defined in Section 2.18, but as it is reduced
at any time under this Agreement.

“Swingline Loan”: A Loan made to Company by Swingline Lender under Section 2.18.

“Swingline Loan Date”: The date of the making of any Swingline Loan under this
Agreement.

 

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“Taxes”: All present or future taxes, duties, levies, imposts, deductions,
charges or withholdings, and all liabilities with respect to the foregoing, but
excluding Excluded Taxes and Other Taxes.

“Type”: With respect to any Advance, its nature as a Base Rate Advance or a
Eurocurrency Advance, and, with respect to any Loan, its nature as a Base Rate
Loan or a Eurocurrency Loan.

“Unencumbered Asset Coverage Ratio”: On any Quarterly Measurement Date, the
ratio of:

a. the net book value of all Real Estate owned by Unencumbered Real Estate
Subsidiaries on such Quarterly Measurement Date; to

b. the sum of (i) Aggregate Outstanding Credit Exposure; plus (ii) all Parity
Secured Debt on such Quarterly Measurement Date.

“Unencumbered Real Estate Subsidiary”: A Wholly-Owned Subsidiary that: (i) owns
Real Estate and has no material assets other than Real Estate, Equity Interests
in other Unencumbered Real Estate Subsidiaries, or, as to LTF Real Estate
Company, Inc., the other assets it owns on the Effective Date; (ii) does not
engage in any substantial business activity other than acquiring, owning,
developing, operating, and leasing Real Estate, and, as to LTF Real Estate
Company, Inc., the other businesses it is engaged in on the Effective Date;
(iii) has no Indebtedness other than the Obligations and Indebtedness not
evidenced by a promissory note or secured by any Lien that is incurred in the
ordinary course of owning and operating its Real Estate, and, as to LTF Real
Estate Company, Inc., the other businesses it is engaged in on the Effective
Date; and (iv) is a Guarantor Subsidiary. The Unencumbered Real Estate
Subsidiaries on the Effective Date are described on Schedule 1.1.b.

“United States” and “U.S.”: The United States of America.

“Unrestricted Subsidiary”: Each Designated Unrestricted Subsidiary and each
other Subsidiary that is not a Wholly-Owned Subsidiary.

“Upstream Distribution Agreements”: As defined in Section 5.14.b.

“U.S. Bank”: U.S. Bank National Association, a national banking association, in
its individual capacity, and its successors.

“U.S. Dollars”, “U.S.$” and “$”: The lawful currency of the United States.

“U.S. Dollar Amount”: On any date of determination, (a) with respect to any
amount in U.S. Dollars, such amount, and (b) with respect to any amount in an
Agreed Currency, the Equivalent Amount in U.S. Dollars of such amount,
determined by Agent pursuant to Section 2.2 using the Exchange Rate with respect
to such Agreed Currency at the time in effect.

“USD Tranche Commitment”: With respect to each USD Tranche Lender, its
obligation to make USD Tranche Revolving Loans to Company, to purchase USD
Tranche LC

 

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Participations, and to purchase participations in Swingline Loans from Swingline
Lender, in an aggregate principal amount outstanding at any time not to exceed
such Lender’s USD Tranche Commitment Amount as it is modified as a result of any
assignment that has become effective pursuant to Section 9.5.c or as otherwise
modified from time to time pursuant to this Agreement and subject to the
conditions and limitations of this Agreement, and with respect to Swingline
Lender, its obligation to make Swingline Loans to Company.

“USD Tranche Commitment Amount”: With respect to each USD Tranche Lender, on the
Effective Date, the amount set by its name on the signature page of this
Agreement and in Schedule 1.1.f as its USD Tranche Commitment Amount, but as
reduced or increased at any time after the Effective Date under this Agreement.

“USD Tranche LC”: Each Facility LC in which the USD Tranche Lenders are
obligated to purchase USD Tranche LC Participations under Section 2.10.

“USD Tranche LC Obligations”: At any time, the sum, without duplication, of:
(a) the aggregate amount available to be drawn on all outstanding USD Tranche
LCs; plus (b) the Reimbursement Obligations that relate to USD Tranche LCs.

“USD Tranche LC Participation”: As defined in Section 2.11.

“USD Tranche Lender”: Swingline Lender and each other Lender that has agreed to
make USD Tranche Revolving Loans and purchase USD Tranche LC Participations
under the terms of this Agreement.

USD Tranche Revolving Loan”: With respect to each USD Tranche Lender, a loan
made by such Lender in U.S. Dollars pursuant to its commitment to lend in
Section 2.1, and any conversion or continuation of such loan.

“USD Tranche Share”: With respect to each USD Tranche Lender, a portion equal to
a fraction, the numerator of which is the USD Tranche Commitment Amount of such
Lender and the denominator of which is the Aggregate USD Tranche Commitment
Amount, provided, however, if all of the USD Tranche Commitments are terminated,
then “USD Tranche Share” means the percentage obtained by dividing (i) such
Lender’s Outstanding USD Tranche Credit Exposure at such time by (ii) the
Aggregate Outstanding USD Tranche Credit Exposure at such time; and provided,
further, that when a Defaulting USD Tranche Lender exists, “USD Tranche Share”
means the percentage of the Aggregate USD Tranche Commitment Amount
(disregarding any Defaulting Lender’s USD Tranche Commitment) represented by
such Lender’s USD Tranche Commitment Amount. If all of the USD Tranche
Commitments have terminated or expired, the USD Tranche Shares shall be
determined based upon the USD Tranche Commitment Amounts most recently in
effect, giving effect to any assignments.

“Wholly-Owned Subsidiary”: With respect to any Person, any Subsidiary of which
100% of the Equity Interests are at the time owned or controlled, directly or
indirectly, by such Person or one or more Wholly-Owned Subsidiaries of such
Person, or by such Person and one or more Wholly-Owned Subsidiaries of such
Person. All Wholly-Owned Subsidiaries on the Effective Date are identified as
such in Schedule 1.1.b

 

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1.2. Accounting Terms and Calculations. Except to the extent this Agreement
expressly provides to the contrary, all terms of an accounting or financial
nature shall be construed in accordance with GAAP, as in effect from time to
time; provided that, if Company notifies Agent that Company requests an
amendment to any provision of this Agreement to eliminate the effect of any
change occurring after the Effective Date in GAAP or in its application on the
operation of such provision (or if Agent notifies Company that the Majority
Lenders request an amendment to any provision of this Agreement for such
purpose), regardless of whether any such notice is given before or after such
change in GAAP or in its application, then such provision shall be interpreted
on the basis of GAAP as in effect and applied immediately before such change
becomes effective until such notice is withdrawn or amended in accordance with
this Section 1.2; and further provided that, notwithstanding any other provision
of this Agreement, all terms of an accounting or financial nature used in this
Agreement shall be construed, and all computations of amounts and ratios
referred to in this Agreement shall be made, without giving effect to any
election under Accounting Standards Codification 825-10-25 (previously referred
to as Statement of Financial Accounting Standards 159) (or any other Accounting
Standards Codification or Financial Accounting Standard having a similar result
or effect) to value any Indebtedness or other liabilities of Company or any of
its Subsidiaries at “fair value”, as such standards define that term. If at any
time any change in GAAP would affect the computation of any financial ratio or
requirement in any Loan Document and Company, Agent, or the Majority Lenders so
request, Agent, the Lenders and Company shall negotiate in good faith to amend
such ratio or requirement to preserve its original intent in light of such
change in GAAP (subject to the approval of the Majority Lenders), provided that,
until so amended, such ratio or requirement shall continue to be computed in
accordance with GAAP before such change and Company shall provide to Agent and
the Lenders reconciliation statements showing the difference in such
calculation, together with the monthly, quarterly, and annual financial
statements this Agreement requires.

1.3. Computation of Time Periods. In this Agreement, in the computation of a
period of time from a specified date to a later specified date, unless otherwise
stated the word “from” means “from and including” and the word “to” or “until”
each means “to but excluding”.

1.4. Other Definitional Terms. The words “include”, “includes” and “including”
shall be deemed to be followed by the phrase “without limitation”. Unless the
context in which used in this Agreement otherwise clearly requires, “or” means
both “and” and “or”.

ARTICLE II

TERMS OF THE CREDIT FACILITIES

Part A — Terms of Lending

2.1. Lending Commitments. From the Effective Date until the Facility Termination
Date, subject to the terms and conditions set forth in this Agreement, each USD
Tranche Lender severally agrees with the other USD Tranche Lenders to make USD
Tranche Loans to Borrowers in U.S. Dollars and participate in USD Tranche LCs
issued upon the request of Company, and each Multicurrency Tranche Lender
severally agrees with the other Multicurrency Tranche Lenders to make
Multicurrency Tranche Loans in U.S. Dollars or Canadian Dollars, and to
participate in Multicurrency Tranche LCs, provided that, after giving effect to
the making of

 

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each such Loan and the issuance of each such Facility LC: (i) the U.S. Dollar
Amount of such Lender’s Outstanding Credit Exposure shall not exceed its
Commitment Amount; (ii) the Aggregate Outstanding USD Tranche Credit Exposure
shall not exceed the Aggregate USD Tranche Commitment Amount; (iii) the
Aggregate Outstanding Multicurrency Tranche Credit Exposure shall not exceed the
Aggregate Multicurrency Tranche Commitment Amount; (iv) the Aggregate
Outstanding Credit Exposure owing by Borrowing Subsidiaries shall not exceed the
Maximum Borrowing Subsidiary Amount; and (v) all Base Rate Loans shall be made
in U.S. Dollars. Subject to the terms of this Agreement, Borrowers may borrow,
repay, and reborrow at any time before the Facility Termination Date. LC Issuer
shall issue Facility LCs on the terms and conditions set forth in Part B of this
Article II. Loans may be obtained and maintained, at Company’s election but
subject to the limitations of this Agreement, as Base Rate Advances or
Eurocurrency Advances. On the Effective Date, Company, Agent, and the Lenders
acknowledge and agree that the aggregate outstanding principal balance of the
“Revolving Loans” under the Existing Credit Agreement shall be deemed to be the
initial USD Tranche Revolving Loans under this Agreement. There are no
Multicurrency Tranche Revolving Loans on the Effective Date. The Commitments to
extend credit under this Agreement expire on the Facility Termination Date.
Borrowers shall pay all Obligations in full on the Facility Termination Date.

2.2. Determination of U.S. Dollar Amounts; Required Payments; Termination. Agent
shall determine the U.S. Dollar Amount of: (a) each Advance as of the date three
Business Days before the Borrowing Date for such Advance or, if applicable, the
date such Advance is converted or continued, and (b) all outstanding Advances on
and as of the last Business Day of each quarter and on any other Business Day
elected by Agent in its discretion. If, at any time, either (a) the U.S. Dollar
Amount of the Aggregate Outstanding Credit Exposure exceeds the Aggregate
Commitment Amount, or (b) the U.S. Dollar Amount of the Aggregate Outstanding
Multicurrency Tranche Credit Exposure exceeds 105% of the Aggregate
Multicurrency Tranche Commitment Amount, Borrowers shall immediately make a
payment on the Obligations sufficient to eliminate such excess. Borrowers shall
pay the Aggregate Outstanding Credit Exposure and all other unpaid Obligations
in full on the Facility Termination Date.

2.3. Method of Selecting Types and Interest Periods for New Advances. Company
shall select the Type of Advance and, in the case of each Eurocurrency Advance,
the Interest Period and Agreed Currency that applies. Each request by Company
for Revolving Loans (a “Borrowing Notice”) shall be in writing or by telephone
and must be given so as to be received by Agent not later than 11:00 A.M.
(Minneapolis time) three Business Days before the requested Borrowing Date if
all or any portion of the Revolving Loans are requested as Eurocurrency Advances
and not later than 11:00 A.M. (Minneapolis time) on the requested Borrowing Date
if the Revolving Loans are requested as Base Rate Advances (other than a
Swingline Loan). Each request for Revolving Loans shall be irrevocable and shall
be deemed a representation by Borrowers that on the requested Borrowing Date and
after giving effect to the requested Revolving Loans the applicable conditions
specified in Article III have been and will be satisfied.

Each request for any Advance shall specify (a) the requested Borrowing Date,
which shall be a Business Day, of such Advance, (b) the Agreed Currency for each
requested Revolving Loan, (c) the aggregate amount of the Advance to be made on
such date, which shall

 

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be in a minimum amount of $1,000,000 for Base Rate Advances or $5,000,000 for
Eurocurrency Advances, (d) whether such Revolving Loans are to be funded as Base
Rate Advances or Eurocurrency Advances (and, if such Revolving Loans are to be
made with more than one applicable interest rate choice, specify the amount to
which each interest rate choice applies), and (e) in the case of Eurocurrency
Advances, the duration of the initial Interest Period that applies to such
Advance; provided that no Revolving Loans shall be funded as Eurocurrency
Advances if a Default or Event of Default exists. Agent may rely on any
telephone request by Company for Revolving Loans that it believes in good faith
to be genuine. Agent shall promptly notify each other Lender of the receipt of
such request, the matters it specifies, and of such Lender’s ratable share of
any requested USD Tranche Revolving Loans and, in the case of a Multicurrency
Tranche Lender, such Multicurrency Tranche Lender’s ratable share of any
requested Multicurrency Tranche Revolving Loans. On the specified Borrowing
Date, each Lender shall provide its share of the requested Revolving Loans to
Agent in Immediately Available Funds not later than 1:00 P.M. (Minneapolis
time).

Unless Agent determines that any applicable condition specified in Article III
has not been satisfied, Agent shall make available to Company at Agent’s
principal office in Minneapolis, Minnesota in Immediately Available Funds not
later than 2:00 P.M. (Minneapolis time) on the requested Borrowing Date the
amount of the requested Revolving Loans. If Agent has made a Revolving Loan to
Company on behalf of a Lender but has not received the amount of such Revolving
Loan from such Lender by the time this Agreement requires, such Lender shall pay
interest to Agent on the amount so advanced at the overnight Federal Funds Rate
from the date of such Revolving Loan to the date funds are received by Agent
from such Lender, such interest to be payable with such remittance from such
Lender of the principal amount of such Revolving Loan (provided that Agent shall
not make any Revolving Loan on behalf of a Lender if Agent has received prior
notice from such Lender that it will not make such Revolving Loan). If Agent
does not receive payment from such Lender by the next Business Day after the
date of any Revolving Loan, Agent shall be entitled to recover such Revolving
Loan, with interest thereon at the rate (or rates) then applicable to such
Revolving Loan, on demand, from Company, without prejudice to Agent’s and
Company’s rights against such Lender. If such Lender pays Agent the amount this
Agreement requires with interest at the overnight Federal Funds Rate before
Agent has recovered from Company, such Lender shall be entitled to the interest
payable by Company with respect to the Revolving Loan in question accruing from
the date Agent made such Revolving Loan.

2.4. Ratable Loans; Types of Advances. Each Advance other than any Swingline
Loan shall consist of (a) USD Tranche Revolving Loans made by the USD Tranche
Lenders ratably according to their USD Tranche Shares of the Aggregate USD
Tranche Commitment Amount and (b) in the case of Multicurrency Tranche Revolving
Loans, Multicurrency Tranche Revolving Loans made by the Multicurrency Tranche
Lenders ratably according to their Multicurrency Tranche Shares of the Aggregate
Multicurrency Tranche Commitment Amount. The Advances may be Base Rate Advances
or Eurocurrency Advances, or a combination of the two Types, selected by Company
in accordance with Sections 2.3 and 2.6, or Swingline Loans selected by Company
in accordance with Part C of this Article II.

2.5. Noteless Agreement; Evidence of Indebtedness. Each Lender shall maintain in
accordance with its usual practice so long as any Obligations remain outstanding
a current

 

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account or accounts evidencing Borrower’s indebtedness to such Lender that
results from each Loan made by such Lender, including the amounts of principal
and interest payable and paid to such Lender. Agent shall also maintain accounts
in which it records (i) the amount of each Loan, the Agreed Currency and Type of
each Loan, and the Interest Period with respect to each Loan, (ii) the amount of
any principal or interest due and payable or to become due and payable from
Borrower to each Lender under this Agreement, (iii) the original stated amount
of each Facility LC and the amount of LC Obligations outstanding at any time,
and (iv) the amount of any sum received by Agent from Borrower under this
Agreement and each Lender’s share of such amount. The entries maintained in the
accounts maintained pursuant to this Section 2.5 shall be prima facie evidence
of the existence and amounts of the Obligations recorded in those accounts;
provided that the failure of Agent or any Lender to maintain such accounts or
any error in such accounts shall not in any manner affect Borrower’s obligation
to repay the Obligations in accordance with the terms of this Agreement. Any
Lender has the right to request that its Loans be evidenced by a promissory note
or, in the case of Swingline Lender, promissory notes, representing its
Revolving Loans and Swingline Loans, as applicable, substantially in the form of
Exhibit E, with appropriate changes for notes evidencing Swingline Loans (each a
“Note”). If any Lender requests that its Loans be evidenced by a Note, Borrower
shall prepare, sign, and deliver to such Lender such Note or Notes payable to
the order of such Lender in a form supplied by Agent. Thereafter, the Loans
evidenced by such Note and interest on such Loans shall at all times (prior to
any assignment pursuant to Section 9.5.c) be represented by one or more Notes
payable to the order of the payee named in such Note, except to the extent that
any such Lender subsequently returns any such Note for cancellation and requests
that such Loans once again be evidenced as described in the preceding sentences
of this Section 2.5.

2.6. Conversions and Continuations. On the terms and subject to the limitations
of this Agreement, Company has the option at any time to convert all or any
portion of the Advances into Base Rate Advances or Eurocurrency Advances, or to
continue a Eurocurrency Advance as such; provided that a Eurocurrency Advance
may be converted or continued only on the last day of the Interest Period that
applies to such Advance and no Advance may be converted to or continued as a
Eurocurrency Advance if a Default or Event of Default exists on the proposed
date of continuation or conversion. Advances may be converted to, or continued
as, Eurocurrency Advances only in the aggregate minimum amount of the Advances
of all Lenders so converted or continued, of $5,000,000. Company shall give
Agent written notice of any continuation or conversion of any Advances and such
notice must be given so as to be received by Agent not later than 11:00 A.M.
(Minneapolis time) three Business Days (four Business Days in the case of Agreed
Currencies that Agent designates as requiring additional notice) before the
requested date of conversion or continuation in the case of the continuation of,
or conversion to, Eurocurrency Advances and on the date of the requested
conversion to Base Rate Advances. Each Eurocurrency Advance denominated in an
Agreed Currency other than U.S. Dollars shall automatically continue as a
Eurocurrency Advance in the same Agreed Currency with an Interest Period of one
month unless (i) such Eurocurrency Advance is or was repaid in accordance with
Section 2.9 or (ii) Company gives Agent a Conversion/Continuation Notice
requesting that, at the end of such Interest Period, such Eurocurrency Advance
continue as a Eurocurrency Advance for the same or another Interest Period or
that such Eurocurrency Advance be converted to an Advance in U.S. Dollars. Each
such notice (a “Conversion/Continuation Notice”) shall specify (a) the amount to
be continued or converted, (b) the date for the continuation or conversion
(which must be (1) the last day of the preceding

 

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Interest Period for any continuation or conversion of Eurocurrency Advances, and
(2) a Business Day in the case of continuations as or conversions to
Eurocurrency Advances and a Business Day in the case of conversions to Base Rate
Advances), and (c) in the case of conversions to or continuations as
Eurocurrency Advances, the Interest Period that applies to such Advance. Any
notice given by Company under this Section shall be irrevocable. If Company
fails to notify Agent of the continuation of any Eurocurrency Advance within the
time required by this Section, at the option of Agent, such Advances shall, on
the last day of the Interest Period that applies to such Advance,
(A) automatically be continued as Eurocurrency Advances with the same principal
amount and the same Interest Period or (B) automatically be converted into Base
Rate Advances with the same principal amount. All conversions and continuation
of Advances must be made uniformly and ratably among the Lenders. (For example,
when continuing a two-month Eurocurrency Advance of one Lender to a three-month
Eurocurrency Advance, Company must simultaneously continue all two-month
Eurocurrency Advances of all Lenders having Interest Periods ending on the date
of continuation as three-month Eurocurrency Advances.)

2.7. Interest Rates, Interest Payments, and Default Interest. Interest shall
accrue and be payable on the Revolving Loans as follows:

a. Subject to paragraph (c) below, each Eurocurrency Advance shall bear interest
on the unpaid principal amount of such Revolving Loan during the Interest Period
that applies to such Revolving Loan at a rate per annum equal to the sum of
(A) the Adjusted Eurocurrency Rate for such Interest Period plus (B) the
Applicable Margin.

b. Subject to paragraph (c) below, each Base Rate Advance shall bear interest on
the unpaid principal amount of such Revolving Loan at a varying rate per annum
equal to the sum of (A) the Base Rate plus (B) the Applicable Margin.

c. Notwithstanding anything to the contrary in Section 2.3, 2.6, or this
Section 2.7, during the existence of any Default or Event of Default, Agent or
the Majority Lenders have the right, at their option, by notice to Company
(which notice may be revoked at the option of the party who gave it,
notwithstanding the provisions in Section 9.1 that require unanimous consent of
the Lenders to reduce interest rates), declare that no Advance may be made as,
converted into, or continued as a Eurocurrency Advance. During the existence of
any Event of Default, each Advance shall, at the option of Agent or at the
direction of the Majority Lenders, by notice to Company (which notice may be
revoked at the option of the party who gave it, notwithstanding any provision of
this Agreement requiring unanimous consent of the Lenders to reduce interest
rates), declare that (i) each Advance in an Agreed Currency other than U.S.
Dollars shall be converted to an Advance in the Approximate Equivalent Amount in
U.S. Dollars, notwithstanding any Multicurrency Tranche Lender’s Multicurrency
Tranche Commitment, (ii) each Eurocurrency Advance shall bear interest for the
remainder of the applicable Interest Period at the rate otherwise applicable to
such Interest Period plus 2% per annum, (iii) each Base Rate Advance shall bear
interest at a rate per annum equal to the Base Rate in effect from time to time
plus 2.00% per annum, and (iv) the LC Fee shall be increased by 2.00% per annum,
provided that, during the existence of an Event of Default under Section 7.1.e
or 7.1.f, the interest rates set forth in clauses (ii) and (iii) above and the
increase in the LC Fee set forth in clause (iv) above shall apply to all

 

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Credit Extensions without any election or action on the part of Agent or any
Lender. After an Event of Default has been cured or waived, the interest rate
applicable to Advances and the LC Fee shall revert to the rates that then apply
in the absence of an Event of Default. The interest rate that applies under this
Section 2.7.c to each Advance during the existence of an Event of Default is the
“Default Rate” with respect to that Advance.

d. Interest is payable (i) with respect to each Eurocurrency Advance having an
Interest Period of three months or less, on the last day of the Interest Period
that applies to such Advance; (ii) with respect to any Eurocurrency Advance
having an Interest Period greater than three months, on the last day of the
Interest Period that applies to such Advance and on the last day of each
three-month interval during such Interest Period; (iii) with respect to any Base
Rate Advance, on the last day of each month; (iv) with respect to all Advances,
upon any prepayment, whether by acceleration or otherwise (on the amount
prepaid); and (v) on the Facility Termination Date; provided that interest under
paragraph (c) of this Section is payable on demand.

2.8. Repayment and Mandatory Prepayment. The unpaid principal balance of all
Loans, together with all accrued and unpaid interest on such Loans, shall be due
and payable on the Facility Termination Date. If at any time, (i) the Aggregate
Outstanding USD Tranche Credit Exposure exceeds the Aggregate USD Tranche
Commitment Amount, or (ii) (A) other than as a result of fluctuations in
Exchange Rates, the Aggregate Outstanding Multicurrency Tranche Credit Exposure
exceeds the Aggregate Multicurrency Tranche Commitment Amount, or (B) solely as
a result of fluctuations in Exchange Rates, the Aggregate Outstanding
Multicurrency Tranche Credit Exposure exceeds the Aggregate Multicurrency
Tranche Commitment Amount by more than 5%, Borrowers shall immediately repay to
Agent for the accounts of the Lenders the amount of such excess. With respect to
USD Tranche Revolving Loans, any such payments shall be applied first against
Base Rate Advances and then to Eurocurrency Advances in order starting with the
Eurocurrency Advances having the shortest time to the end of the applicable
Interest Period. If, after payment of all outstanding Advances, the Aggregate
Outstanding Credit Exposure still exceeds the Aggregate Commitment Amount, the
remaining amount paid by Borrowers shall be placed in the Facility LC Collateral
Account.

2.9. Reductions in Aggregate Commitment; Optional Prepayments. Company may
permanently reduce (a) the Aggregate USD Tranche Commitment Amount in whole, or
in part ratably among the USD Tranche Lenders in integral multiples of
U.S.$1,000,000 and (b) the Aggregate Multicurrency Tranche Commitment Amount in
part ratably among the Multicurrency Tranche Lenders in integral multiples of
the Approximate Equivalent Amount of U.S.$1,000,000 in Canadian Dollars, upon at
least 5 Business Days’ written notice to Agent, which notice must specify the
amount of any such reduction, provided, however, that Company cannot reduce
(x) the Aggregate Commitment Amount below the Aggregate Outstanding Credit
Exposure, (y) the Aggregate USD Tranche Commitment Amount below the Aggregate
Outstanding USD Tranche Credit Exposure, or (z) the Aggregate Multicurrency
Tranche Commitment Amount below the Aggregate Outstanding Multicurrency Tranche
Credit Exposure. All accrued Commitment Fees shall be payable on the effective
date of any termination of the obligations of the Lenders to make Credit
Extensions. Borrowers may prepay all outstanding Base Rate Advances (other than
Swingline Loans), in whole, or in a minimum amount of $1,000,000, at any time,
without

 

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premium or penalty. Company may at any time pay, without penalty or premium, all
outstanding Swingline Loans, or any portion of the outstanding Swingline Loans
in a minimum amount of $1,000,000, with notice to Agent and Swingline Lender by
11:00 a.m. (Minneapolis time) on the date of repayment. Company may from time to
time pay, subject to the payment of any funding indemnification amounts required
by Section 2.30, but without penalty or premium, all outstanding Eurocurrency
Advances, or, in a minimum aggregate amount of $1,000,000, any portion of the
outstanding Eurocurrency Advances, upon 3 Business Days’ prior written notice to
Agent. All partial prepayments of Revolving Loans shall be applied pro rata
based on the unpaid principal balance of the Revolving Loans. Amounts paid
(unless following an acceleration or upon termination of the Commitments in
whole) or prepaid on the Revolving Loans under this Section 2.9 may be
reborrowed upon the terms and subject to the conditions and limitations of this
Agreement.

Part B-Terms of the Letter of Credit Facility

2.10. Letter of Credit Commitment. Subject to the terms and conditions of this
Agreement, LC Issuer agrees to issue standby and commercial letters of credit
(each, a “Facility LC”) either (i) as a Multicurrency Tranche LC, denominated in
either U.S. Dollars or Canadian Dollars, or (ii) as a USD Tranche LC,
denominated in U.S. Dollars, and to renew, extend, increase, decrease or
otherwise modify each Facility LC (“Modify,” and each such action a
“Modification”), from time to time on terms reasonably acceptable to LC Issuer
on any Business Day during the period from the Effective Date and ending on the
Facility Termination Date; provided that LC Issuer has no obligation to issue or
Modify any Facility LC if, immediately after giving effect to such issuance or
Modification: (a) the USD Tranche LC Obligations would exceed U.S.$35,000,000;
(b) the Multicurrency Tranche LC Obligations would exceed the Approximate
Equivalent Amount of U.S.$5,000,000; or (c) the Aggregate Outstanding Credit
Exposure would exceed the Aggregate Commitment Amount; and provided further that
LC Issuer has no obligation to issue or Modify any Facility LC if a Default or
Event of Default exists. LC Issuer’s obligation to issue any Facility LC
terminates on the Facility Termination Date. On the Effective Date, Company,
Agent, LC Issuer, and the Lenders acknowledge and agree that the outstanding
Facility LCs issued by LC Issuer under the Existing Credit Agreement are set
forth on Schedule 2.10 and that such Facility LCs and related applications and
agreements are the initial Facility LCs and related applications and agreements
under this Agreement.

2.11. Procedures for Facility LCs. Company shall make each request for a
Facility LC or a Modification of a Facility LC in writing, by facsimile
transmission or electronic mail received by LC Issuer by 2:00 P.M. (Minneapolis
time) on a Business Day that is not less than one Business Day before the
requested date of issuance (which shall also be a Business Day). Each request
for a Facility LC shall specify (i) whether such Facility LC is a USD Tranche LC
or a Multicurrency Tranche LC, (ii) the date of issuance, amendment, renewal or
extension (which shall be a Business Day), (iii) the date on which such Facility
LC is to expire, (iv) the amount of such Facility LC, (v) with respect to
Multicurrency Tranche LCs, whether such Facility LC is to be denominated in U.S.
Dollars or Canadian Dollars, (vi) the name and address of the beneficiary, and
(vii) any other information that is necessary to prepare, amend, renew, or
extend such Facility LC. Each request for a Facility LC shall be deemed a
representation by Company that on the date such Facility LC is issued and after
giving effect to such request the applicable

 

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conditions in Article III have been and will be satisfied. LC Issuer has no
independent duty to determine whether the conditions in Article III have been
satisfied, but LC Issuer shall not issue a Facility LC if, on or before the
proposed date of issuance, LC Issuer receives notice from Agent or the Majority
Lenders that any such condition has not been satisfied or waived. LC Issuer has
the right to require that such request be made on any letter of credit
application form that LC Issuer specifies at the applicable time (each, a
“Facility LC Application”), along with satisfactory evidence of the authority
and incumbency of the officials of Company making such request. LC Issuer shall
promptly notify the other Lenders of the receipt of the request and the matters
it specifies. On the date of each issuance of a Facility LC, LC Issuer shall
send notice to the other Lenders of such issuance, and if requested by a Lender,
a copy of the Facility LCs so issued. In the event of any conflict between the
terms of this Agreement and the terms of any Facility LC Application, the terms
of this Agreement shall control. Concurrently with the issuance or Modification
of each Facility LC in accordance with this Agreement, LC Issuer shall be
deemed, without further action or notice by any party to this Agreement:
(a) with respect to each USD Tranche LC, to have unconditionally and irrevocably
sold and transferred to each USD Tranche Lender, and each USD Tranche Lender
shall be deemed irrevocably and unconditionally to have purchased and received
from LC Issuer, without recourse or warranty, an undivided participation (a “USD
Tranche LC Participation”) in such Facility LC or Modification and the USD
Tranche LC Obligations that relate to that Facility LC or Modification and any
security for it in the amount of such Lender’s USD Tranche Share of such USD
Tranche LC Obligations; and (b) with respect to each Multicurrency Tranche LC,
to have unconditionally and irrevocably sold and transferred to each
Multicurrency Tranche Lender, and each Multicurrency Tranche Lender shall be
deemed irrevocably and unconditionally to have purchased and received from LC
Issuer, without recourse or warranty, an undivided participation (a
“Multicurrency Tranche LC Participation”) in such Facility LC or Modification
and the Multicurrency Tranche LC Obligations that relate to that Facility LC or
Modification and any security for it in the amount of such Lender’s
Multicurrency Tranche Share of such Multicurrency Tranche LC Obligations. LC
Issuer shall retain its individual LC Participation in the amount of its
Applicable Share in each Facility LC and the LC Obligations that relate to such
Facility LC and any security for it.

2.12. Terms of Facility LCs. Facility LCs shall be issued in support of
obligations of any Borrower. All Facility LCs must be issued no less than 10
days before the Facility Termination Date and all Facility LCs must expire no
later than 12 months after the Facility Termination Date. As to each Facility LC
that is outstanding as of the Facility Termination Date, Company shall provide
either (A) cash collateral in an amount reasonably satisfactory to Agent (but in
no event less than 105% of the stated undrawn amount of each Facility LC) for
deposit into the Facility LC Collateral Account, or (B) one or more irrevocable
letters of credit in form and substance, and issued by a bank, reasonably
satisfactory to Agent pursuant to which LC Issuer is entitled to recover the
maximum amount at any time payable under each outstanding Facility LC, plus all
costs and fees then or thereafter payable with respect to such Facility LC under
the terms of this Agreement, provided further that, if Company fails to provide
such cash collateral or one or more letters of credit satisfactory to Agent, the
Lenders shall make Revolving Loans ratably in accordance with their respective
Applicable Shares of the aggregate amount of USD Tranche LCs and Multicurrency
Tranche LCs, as applicable, outstanding on the Facility Termination Date, and
deposit the proceeds of such Revolving Loans into the Facility LC Collateral
Account. Upon Company’s compliance with its obligations under the preceding

 

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sentence upon or following the Facility Termination Date, each Lender’s
obligations to fund its LC Participations under Section 2.13 and to indemnify LC
Issuer under Section 2.17 shall terminate. So long as no Event of Default
exists, any such cash collateral on deposit in the Facility LC Collateral
Account shall be returned to Company upon the cancellation or expiration of all
outstanding Facility LCs and the payment of all amounts due under this Article
II with respect to the issuance, signing, delivery, or transfer of any Facility
LC, any drawing on a Facility LC, or the payment or failure to pay any drawing
under any Facility LC.

2.13. Agreement to Repay Facility LC Drawings. Company is irrevocably and
unconditionally obligated to reimburse LC Issuer on or before the applicable LC
Payment Date for (i) the amount of each draft or other request for payment drawn
under any Facility LC (whether drawn before, on or after its stated expiry
date), without presentment, demand, protest, or other formalities of any kind,
and (ii) interest on all amounts referred to in clause (i) above from the date
of such draw until payment in full at a fluctuating rate per annum at all times
equal to the sum of the Base Rate plus the Applicable Margin plus 2.00%;
provided that so long as the conditions precedent set forth in Section 2.1 and
Article III are satisfied as of the date of any draw under the Facility LC, the
Lenders shall make (and Company hereby authorizes each Lender to make) Revolving
Loans in accordance with Section 2.2 to pay any draw under a Facility LC. LC
Issuer shall promptly notify Company and each Lender of each demand for payment
under a Facility LC and of the date on which such payment is to be made (the “LC
Payment Date”) and the amount of such Lender’s Revolving Loan to be made under
Sections 2.1 and 2.12, if any.

If Company fails to reimburse LC Issuer for any drawing on any Facility LC on
the date of such drawing through the making of Revolving Loans or otherwise,
then, by not later than 1:00 P.M. (Minneapolis time), on such date, each Lender
shall fund its LC Participation in such Facility LC drawing by paying to LC
Issuer, in Immediately Available Funds, such Lender’s Applicable Share of such
demand for payment that Company has not paid to LC Issuer. Each Lender’s
obligation to make such amounts available to LC Issuer shall be irrevocable and
is not subject to any qualification or exception whatsoever and shall be made in
accordance with the terms and conditions of this Agreement under all
circumstances except where Company is not liable to LC Issuer for payment of a
draw on a Facility LC under Section 2.13. If and to the extent any Lender has
not made such amount available to LC Issuer on any such date, such Lender shall,
upon demand, pay interest on such amount to LC Issuer for the account of LC
Issuer for each day from and including the date on which such payment was to be
made to but excluding the date such payment is made at a rate per annum equal to
the Federal Funds Effective Rate from time to time in effect, based upon a year
of 360 days. Any Lender’s failure to make available to LC Issuer its Applicable
Share of any demand for payment under a Facility LC does not relieve any other
Lender of its obligation to make available to LC Issuer its Applicable Share of
such demand for payment on the date such payment is to be made, but no Lender is
responsible for the failure of any other Lender to make available to LC Issuer
such other Lender’s Applicable Share of any such payment.

Whenever, at any time after LC Issuer has made a payment under any Facility LC
and has received from another Lender such other Lender’s Applicable Share of the
unreimbursed portion of such payment, LC Issuer receives any reimbursement on
account of such unreimbursed portion or any payment of interest on account of
such unreimbursed portion, LC

 

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Issuer shall promptly distribute to such other Lender its pro rata share of such
reimbursement in like funds as received in accordance with Section 8.17;
provided that if LC Issuer is required to return such reimbursement or such
payment of interest (as the case may be), such other Lender shall return to LC
Issuer any portion of such reimbursement previously distributed to it by LC
Issuer in like funds as such reimbursement or payment is required to be returned
by LC Issuer.

2.14. Obligations Absolute. Company’s obligation under Section 2.13 to repay LC
Issuer for any amount drawn on any Facility LC and to repay the Lenders for any
Revolving Loans made under Sections 2.12 or 2.13 is absolute, unconditional, and
irrevocable and shall continue for so long as any Facility LC is outstanding
notwithstanding any termination of this Agreement, and shall be paid strictly in
accordance with the terms of this Agreement, under all circumstances whatsoever,
including without limitation the following circumstances:

(a) Any lack of validity or enforceability of any Facility LC;

(b) The existence of any claim, setoff, defense or other right that Company may
have or claim at any time against any beneficiary, transferee or holder of any
Facility LC (or any Person for whom any such beneficiary, transferee or holder
is acting), LC Issuer or any Lender or any other Person, whether in connection
with a Facility LC, this Agreement, the transactions this Agreement
contemplates, or any unrelated transaction; or

(c) Any statement or any other document presented under any Facility LC is
forged, fraudulent, invalid, or insufficient in any respect or any statement in
such document is untrue or inaccurate in any respect whatsoever.

None of Agent, LC Issuer, any other Lender, or their officers, directors or
employees is liable or responsible for, and the obligations of Company to LC
Issuer and the Lenders are not impaired by:

(i) The use that is made of any Facility LC or for any acts or omissions of any
beneficiary, transferee or holder of a Facility LC in connection with the
Facility LC;

(ii) The validity, sufficiency, or genuineness of documents, or of any
endorsements on or to them, even if such documents or endorsements are, in any
or all respects, invalid, insufficient, fraudulent, or forged;

(iii) LC Issuer’s acceptance of documents that appear on their face to be in
order, without responsibility for further investigation, regardless of any
notice or information to the contrary; or

(iv) Any other action of LC Issuer in making or failing to make payment under
any Facility LC if in good faith and in conformity with U.S. or foreign laws,
regulations or customs that apply to such Facility LC.

Notwithstanding the foregoing, Company shall have a claim against LC Issuer, and
LC Issuer shall be liable to Company, to the extent, but only to the extent, of
any direct, as opposed to consequential, damages suffered by Company that
Company proves were caused by LC Issuer’s willful misconduct or gross negligence
in determining whether documents presented under any Facility LC comply with the
terms of such Facility LC.

 

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2.15. Actions of LC Issuer. LC Issuer is entitled to rely, and shall be fully
protected in relying, upon any Facility LC, draft, writing, resolution, notice,
consent, certificate, affidavit, letter, facsimile, or electronic mail message,
statement, order or other document it believes to be genuine and correct and to
have been signed, sent or made by the proper Person or Persons, and upon advice
and statements of legal counsel, independent accountants and other experts
selected by LC Issuer. LC Issuer is fully justified in failing or refusing to
take any action under this Agreement unless it first receives any advice or
concurrence of the Majority Lenders it reasonably deems appropriate or it is
first indemnified to its reasonable satisfaction by the Lenders against any and
all liability and expense that it may incur by reason of taking or continuing to
take any such action. Notwithstanding any other provision of this Article II,
Part B, LC Issuer is in all cases fully protected in acting, or in refraining
from acting, under this Agreement in accordance with a request of the Majority
Lenders, and such request and any action taken or failure to act pursuant to
such request is binding upon the Lenders and any future holders of a
participation in any Facility LC.

2.16. Indemnification by Company. Company shall indemnify and hold harmless each
Lender, LC Issuer and Agent, and their respective directors, officers, agents
and employees from and against any and all claims and damages, losses,
liabilities, costs or expenses (including reasonable counsel fees and
disbursements) that such Lender, LC Issuer or Agent incurs (or that is claimed
against such Lender, LC Issuer, or Agent by any Person whatsoever) by reason of
or in connection with the issuance, signing, and delivery or transfer of or
payment or failure to pay under any Facility LC or any actual or proposed use of
any Facility LC, including, without limitation, any claims, damages, losses,
liabilities, costs or expenses (including reasonable counsel fees and
disbursements) that LC Issuer incurs by reason of or in connection with (i) the
failure of any other Lender to fulfill or comply with its obligations to LC
Issuer under this Agreement (but nothing in this Section 2.16 affects any rights
Company has against any Defaulting Lender) or (ii) by reason of or on account of
LC Issuer issuing any Facility LC that specifies that the term “Beneficiary”
included in such Facility LC includes any successor by operation of law of the
named beneficiary, but that Facility LC does not require that any drawing by any
such successor beneficiary be accompanied by a copy of a legal document,
satisfactory to LC Issuer, evidencing the appointment of such successor
beneficiary; provided that Company is not required to indemnify any Lender, LC
Issuer, or Agent for any claims, damages, losses, liabilities, costs or expenses
to the extent, but only to the extent, caused by (a) the willful misconduct or
gross negligence of LC Issuer in determining whether a request presented under
any Facility LC complied with the terms of such Facility LC or (b) LC Issuer’s
failure to pay under any Facility LC after the presentation to it of a request
strictly complying with the terms and conditions of such Facility LC. Nothing in
this Section 2.16 limits Company’s obligations under any other provision of this
Agreement.

2.17. Indemnification by Lenders. The Lenders severally shall indemnify LC
Issuer acting in its capacity as issuer of the Facility LCs, and each officer,
director, employee, agent and affiliate of LC Issuer, ratably according to their
Applicable Shares with respect to the USD LC Obligations or the Multicurrency
Tranche LC Obligations, as applicable, to the extent not reimbursed by Company,
from and against any and all claims, liabilities, obligations, losses,

 

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damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever that may at any time (including, without
limitation, at any time following the payment of any of the LC Obligations) be
imposed on, incurred by or asserted against LC Issuer in any way relating to or
arising out of the issuance of or payment or failure to pay under the Facility
LC or the use of proceeds of any payment made under the Facility LC; provided
that no Lender shall be liable for the payment to LC Issuer of any portion of
such claims, liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever resulting from LC Issuer’s gross negligence or willful misconduct.
All obligations provided for in this Section 2.17 shall survive the termination
of this Agreement.

Part C-Terms of the Swingline Loan Facility

2.18. Swingline Loan Commitment.

a. Swingline Loan Commitment On the terms and subject to the conditions of this
Agreement, Swingline Lender, in its individual capacity, agrees to make a
revolving credit facility available as loans under the USD Tranche (each, a
“Swingline Loan” and, collectively, the “Swingline Loans”) to Company on a
revolving basis at any time and from time to time from the Effective Date to the
Facility Termination Date, during which period Company may borrow, repay, and
reborrow in accordance with the provisions of this Agreement; provided that no
Swingline Loan will be made in any amount that, after giving effect to such
Swingline Loan, would cause the: (i) the aggregate outstanding principal amount
of the Swingline Loans to exceed $60,000,000 (the “Swingline Commitment
Amount”); or (ii) the Aggregate Outstanding USD Tranche Credit Exposure to
exceed the Aggregate USD Tranche Commitment Amount. Swingline Loans may be
obtained and maintained as Base Rate Advances unless Swingline Lender agrees to
different interest rate; provided that: (A) Swingline Lender may not agree to a
different rate if a Default or Event of Default exists; and (B) upon the
occurrence and during the existence of any Event of Default, the Swingline Loans
shall, at the option of Swingline Lender, bear interest until paid in full at a
rate per annum equal to the Default Rate in effect for Base Rate Advances with
respect to any Swingline Loan that has been made as a Base Rate Advance or, if
any Swingline Loan accrues interest at a different rate, at a rate per annum
equal to the sum of such rate plus 2.00%. Accrued interest on Swingline Loans is
payable on the last day of each calendar month or, if any Event of Default has
exists, on demand. On the Effective Date, Company, Agent and Swingline Lender
acknowledge and agree that the aggregate outstanding principal balance of the
“Swingline Loans” under the Existing Credit Agreement shall be deemed to be the
initial Swingline Loans under this Agreement.

b. Procedure for Swingline Loans. Any request by Company for Swingline Loans
must be in writing or by telephone and must be given so as to be received by
Swingline Lender not later than 1:00 P.M. (Minneapolis time) on the requested
Swingline Loan Date or, if the requested Swingline Loan will accrue interest at
a rate other than the rate applicable to Base Rate Advances, as Swingline Lender
requires. Each request for Swingline Loans is irrevocable and is deemed a
representation by Company that on the requested Swingline Loan Date and after
giving effect to the requested Swingline Loans

 

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the applicable conditions specified in Article III have been and will be
satisfied. Each request for Swingline Loans shall specify (i) the requested
Swingline Loan Date, and (ii) the aggregate amount of the Swingline Loans to be
made on such date, which must be in a minimum amount of $100,000. Swingline
Lender may rely on any telephone request by Company for Swingline Loans that it
believes in good faith to be genuine. On the date of the requested Swingline
Loans, Swingline Lender, unless Swingline Lender determines, or has been
notified by Agent that Agent has determined, that any applicable condition
specified in Article III has not been satisfied, Swingline Lender shall make
available to Company at Swingline Lender’s principal office in Minneapolis,
Minnesota in Immediately Available Funds not later than 2:00 P.M. (Minneapolis
time) on the requested Swingline Loan Date the amount of the requested Swingline
Loans.

c. Repayment of Swingline Loans. Each Swingline Loan is due and payable in full
on the earlier of the date selected by Swingline Lender or the Facility
Termination Date. Company has the right to prepay all or a portion of any
Swingline Loan at any time without premium or penalty. Swingline Lender has the
right, at any time, in its sole discretion, by written notice to Company, Agent,
and the Lenders, to demand repayment of its Swingline Loans by way of a USD
Tranche Revolving Loan borrowing, in which case Company shall be deemed to have
requested a USD Tranche Revolving Loan borrowing comprised entirely of Base Rate
Advances in the amount of such Swingline Loans; provided that, in the following
circumstances, any such demand shall also be deemed to have been given one
Business Day prior to each of (i) the Facility Termination Date, (ii) the
occurrence of any Event of Default described in Section 7.1.f; (iii) upon
acceleration of the Obligations, whether on account of an Event of Default or
otherwise, and (iv) the exercise of remedies in accordance with Section 7.2
(each such USD Tranche Revolving Loan borrowing made on account of any such
deemed request by Company under this Section 2.18.c is a “Mandatory Swingline
Borrowing”).

Each USD Tranche Lender hereby irrevocably agrees to make such USD Tranche
Revolving Loans ratably in accordance with its USD Tranche Share promptly upon
any such request or deemed request on account of each Mandatory Swingline
Borrowing in the amount and in the manner specified in the preceding sentence
and on the same such date notwithstanding (x) the amount of Mandatory Swingline
Borrowing may not comply with the minimum amount for borrowings of USD Tranche
Revolving Loans otherwise required under this Agreement, (xi) whether any
conditions specified in Section 2.2 are then satisfied, (xii) whether a Default
or an Event of Default then exists, (xiii) failure of any such request or deemed
request for Revolving Loans to be made by the time otherwise required in
Section 2.2, (xiv) the date of such Mandatory Swingline Borrowing, or (xv) any
reduction in the USD Tranche Commitment Amounts or termination of the USD
Tranche Commitments immediately before or at the same time as such Mandatory
Swingline Borrowing.

If any Mandatory Swingline Borrowing cannot for any reason be made on the date
otherwise required above (including, without limitation, as a result of the
commencement of a proceeding under the Bankruptcy Code), then each USD Tranche
Lender hereby agrees that it shall forthwith purchase (as of the date the
Mandatory Swingline Borrowing would otherwise have occurred, but adjusted for
any payments

 

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received from Company on or after such date and prior to such purchase) from
Swingline Lender such participations in the outstanding Swingline Loans as is
necessary to cause each such USD Tranche Lender to share in such Swingline Loans
ratably based upon its USD Tranche Share (determined before giving effect to any
termination of the Commitments pursuant to Section 7.2); provided that (A) all
interest payable on the Swingline Loans is for the account of Swingline Lender
until the date as of which the respective participation is purchased, and (B) at
the time any purchase of participations pursuant to this sentence is actually
made, the purchasing USD Tranche Lender shall pay to Swingline Lender interest
on the principal amount of such participation purchased for each day from and
including the day upon which the Mandatory Swingline Borrowing purchase occurs
under this Agreement to but excluding the date of payment for such
participation, at the rate equal to the Federal Funds Effective Rate.

Part D — General

2.19. Fees. On or before the Effective Date, Company shall (i) pay to Agent the
fees set forth in the separate letter agreement dated May 25, 2011 between Agent
and Company, (ii) pay to RBC the fees set forth in the separate letter agreement
dated May 25, 2011 between Company and RBC, and (iii) pay to J.P. Morgan
Securities Inc. and JP Morgan Chase Bank the fees set for the separate letter
agreement dated May 25, 2011 between Company and those two entities. Company
shall pay such fees on the Effective Date and at such other times the fee
letters require. Agent may separately agree with any Lender to pay a portion of
such fees to such Lender, but is not obligated to pay such portion to such
Lender unless and until it is received from Company.

2.20. Commitment Fee. Borrowers shall, from the Effective Date through the
Facility Termination Date, pay to Agent, for the account of each USD Tranche
Lender according to its USD Tranche Share, and for the account of each
Multicurrency Tranche Lender according to its Multicurrency Tranche Share, in
arrears on the last day of each calendar quarter commencing on September 30,
2011, and on the Facility Termination Date, a commitment fee (the “Commitment
Fee”) equal to the per annum Applicable Commitment Fee Rate on the Average
Available Aggregate Commitment Amount for such calendar quarter. Swingline Loans
shall not count as usage of the Aggregate Commitment for the purpose of
calculating the amount of the Commitment Fee Borrower owes, but shall count for
the purposes of calculating Agent’s share of the Commitment Fee.

2.21. LC Fees. For each Facility LC issued, Company shall pay to Agent for the
account of the Lenders ratably in accordance with their Applicable Shares, in
arrears, payable on the last day of each calendar quarter, a letter of credit
fee (an “LC Fee”) in an amount determined by applying a per annum rate equal to
the Applicable Margin for Eurocurrency Advances in effect on such date to the
average daily face amount of such Facility LC during such calendar quarter. In
addition to the LC Fee, Company shall pay to Agent, on demand, all issuance,
amendment, drawing and other fees regularly charged by Agent to its letter of
credit customers and a fronting fee at the per annum rate separately agreed to
by Company and Agent of the face amount of each Facility LC for the period from
the date of issuance to the scheduled expiration date of such Facility LC, and
all out-of-pocket expenses incurred by Agent in connection with the issuance,
Modification, amendment, administration, or payment of any Facility LC. During
the existence of an Event of Default, the rate used for calculating the LC Fee
shall equal the rate that otherwise applies plus 2.00%.

 

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2.22. Computation. The Commitment Fee, LC Fee, and interest on the Eurocurrency
Advances shall be calculated for actual days elapsed on the basis of a 360-day
year, except that Interest at the Base Rate, or any interest rate that is based
on the Prime Rate, shall be calculated for actual days elapsed on the basis of a
365 or 366-day year, as applicable.

2.23. Method of Payment. Each Advance shall be repaid and each payment of
interest on such Advance shall be paid in the currency in which such Advance was
made. All payments of the Obligations shall be made without setoff, deduction,
or counterclaim in Immediately Available Funds not later than 1:00 P.M.
(Minneapolis time) on the date when due to Agent at its main office in
Minneapolis, Minnesota. Funds received after such time shall be deemed to have
been received on the next Business Day. Except (i) with respect to repayments of
Swingline Loans, (ii) in the case of Reimbursement Obligations for which LC
Issuer has not been fully indemnified by the Lenders, or (iii) as this Agreement
otherwise specifically requires, Agent shall promptly distribute in like funds
to each Lender its ratable share of each such payment of principal, interest and
fees received by Agent for the account of the Lenders. Whenever any payment on
the Obligations is stated to be due on a day that is not a Business Day, such
payment is due on the next succeeding Business Day and such extension of time,
in the case of a payment of principal, shall be included in the computation of
any interest on such principal payment; provided that if such extension would
cause payment of interest on or principal of a Eurocurrency Advance to be made
in the next following calendar month, such payment is due on the immediately
preceding Business Day. Each payment delivered to Agent for the account of any
Lender shall be delivered promptly by Agent to such Lender in the same type of
funds that Agent received at its address specified pursuant to this Agreement or
at any Lending Installation specified in a notice received by Agent from such
Lender. Company and the Lenders hereby authorize Agent to charge the account of
Company maintained with U.S. Bank for each payment of principal, interest,
Reimbursement Obligations, and fees as it becomes due. Each reference to Agent
in this Section 2.23 also refers and applies equally to LC Issuer in the case of
payments Company owes LC Issuer under Section 2.13.

Notwithstanding the foregoing provisions of this Section, if, after the making
of any Advance in any currency other than U.S. Dollars, currency control or
exchange regulations are imposed in the country that issues such currency with
the result that the type of currency in which the Advance was made (the
“Original Currency”) no longer exists or Borrowers are not able to make payment
to Agent for the account of the Lenders in such Original Currency, then all
payments to be made by Borrowers in such currency shall instead be made when due
in U.S. Dollars in an amount equal to the U.S. Dollar Amount (as of the date of
repayment) of such payment due, it being the intention of Borrowers and the
Lenders that Borrowers take all risks of the imposition of any such currency
control or exchange regulations.

2.24. Use of Loan Proceeds. Borrowers shall use the proceeds of each Credit
Extension and each Facility LC to refinance, but not to pay, the “Loans” under
the Existing Credit Agreement, and for other general corporate purposes subject
to the Borrowers’ covenants in this Agreement.

 

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2.25. Lending Installations. Each Lender has the right to book its Advances and
its LC Participations and LC Issuer has the right to book the Facility LCs at
any Lending Installation it selects and has the right to change its Lending
Installation at any time. All terms of this Agreement apply to each Lending
Installation and the Loans, Facility LCs, LC Participations, and any Notes
issued under this Agreement shall be deemed held by each Lender or LC Issuer for
the benefit of any such Lending Installation. Each Lender and LC Issuer have the
right, by written notice to Agent and Company, to designate replacement or
additional Lending Installations through which it will make Loans or issue
Facility LCs and for whose account Loan payments or payments with respect to
Facility LCs are to be made.

2.26. Interest Rate Not Ascertainable, Etc. If Agent or the Majority Lenders
determine that deposits of a type and maturity appropriate to match fund
Eurocurrency Advances are not available to such Lenders in the relevant market
or Agent, in consultation with the Lenders, determines that the interest rate
applicable to Eurocurrency Advances is not ascertainable or does not adequately
and fairly reflect the cost of making or maintaining Eurocurrency Advances, then
Agent shall suspend the availability of Eurocurrency Advances and require any
affected Eurocurrency Advances to be repaid or converted to Base Rate Advances,
subject to the payment of any funding indemnification amounts required by
Section 2.30.

2.27. Yield Protection. If, on or after the Effective Date, any law or any
governmental or quasi-governmental rule, regulation, policy, guideline or
directive (whether or not having the force of law) is adopted, or any change is
made in its interpretation, promulgation, implementation, or administration by
any governmental or quasi-governmental authority, central bank, or comparable
agency charged with interpreting or administering it, including, notwithstanding
the foregoing, all requests, rules, guidelines, or directives in connection with
the Dodd-Frank Wall Street Reform and Consumer Protection Act, regardless of the
date enacted, adopted or issued, or compliance by any Lender or applicable
Lending Installation or LC Issuer with any request or directive (whether or not
having the force of law) of any such authority, central bank, or comparable
agency:

a. subjects any Lender or any applicable Lending Installation or LC Issuer to
any Taxes, or changes the basis of taxation of payments (other than with respect
to Excluded Taxes) to any Lender or LC Issuer with respect to its Eurocurrency
Loans, Facility LCs or participations in its Eurocurrency Loans or Facility LCs,
or

b. imposes or increases or deems applicable any reserve, assessment, insurance
charge, special deposit, or similar requirement against assets of, deposits with
or for the account of, or credit extended by, any Lender or any applicable
Lending Installation or LC Issuer (other than reserves and assessments taken
into account in determining the interest rate that applies to Eurocurrency
Advances), or

c. imposes any other condition the result of which is to increase the cost to
any Lender or any applicable Lending Installation or LC Issuer of making,
funding, or maintaining its Eurocurrency Loans, or of issuing or participating
in Facility LCs, or reduces any amount receivable by any Lender or any
applicable Lending Installation or LC Issuer in connection with its Eurocurrency
Loans, Facility LCs or participations

 

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therein, or requires any Lender or any applicable Lending Installation or LC
Issuer to make any payment calculated by reference to the amount of Eurocurrency
Loans, Facility LCs or participations therein held or interest or LC Fees
received by it, by an amount deemed material by such Lender or LC Issuer as the
case may be;

and the result of any of the foregoing is to increase the cost to such Lender or
applicable Lending Installation or LC Issuer, as the case may be, of making or
maintaining its Eurocurrency Loans or Commitment or of issuing or participating
in Facility LCs or to reduce the return received by such Lender or applicable
Lending Installation or LC Issuer, as the case may be, in connection with such
Eurocurrency Loans or Commitment, Facility LCs, or participations in any of
them, then, within 15 days after demand by such Lender or LC Issuer, as the case
may be, Company shall pay such Lender or LC Issuer, as the case may be, such
additional amount or amounts as will compensate such Lender or LC Issuer, as the
case may be, for such increased cost or reduction in amount received.

2.28. Illegality. If any change after the Effective Date in federal, state, or
foreign laws or regulations or the adoption or making after such date of any
interpretations, directives or requests applying to a class of banks including
any Lender under any federal, state, or foreign laws or regulations (whether or
not having the force of law) by any court or governmental or monetary authority
charged with its interpretation or administration makes it unlawful or
impossible for any Lender to make, maintain or fund any Eurocurrency Advances,
such Lender shall notify Company and Agent, whereupon the obligation of such
Lender to make or continue, or to convert any Advances to, Eurocurrency
Advances, shall be suspended until such Lender notifies Company and Agent that
the circumstances giving rise to such suspension no longer exist. Before giving
any such notice, such Lender shall designate a different Applicable Lending
Office if such designation will avoid the need for giving such notice and will
not, in the judgment of such Lender, be otherwise disadvantageous to such
Lender. If any Lender determines that it may not lawfully continue to maintain
any Eurocurrency Advances to the end of the applicable Interest Periods, all of
the affected Advances shall be automatically converted to Base Rate Advances as
of the date of such Lender’s notice, and upon such conversion Company shall
indemnify such Lender in accordance with Section 2.30.

2.29. Changes in Capital Adequacy Regulations. If a Lender or LC Issuer
determines the amount of capital required or expected to be maintained by such
Lender or LC Issuer, any Lending Installation of such Lender or LC Issuer, or
any corporation or holding company controlling such Lender or LC Issuer is
increased as a result of a Change, then, within 30 days after demand by such
Lender or LC Issuer, Company shall pay such Lender or LC Issuer the amount
necessary to compensate for any shortfall in the rate of return on the portion
of such increased capital that such Lender or LC Issuer determines is
attributable to this Agreement, its Outstanding Credit Exposure or its
Commitment to make Loans and issue or participate in Facility LCs, as the case
may be, hereunder (after taking into account such Lender’s or LC Issuer’s
policies as to capital adequacy). If any such Lender or LC Issuer fails to make
demand for any such amounts within 90 days after it obtains knowledge of an
event giving rise to such demand, such Lender shall only be entitled to payment
under this Section for costs incurred from and after the date 90 days prior to
the date on which demand for payment under this Section is provided. “Change”
means (i) any change after the Effective Date in the Risk-Based Capital
Guidelines or (ii) any adoption of or change in any other law, governmental or

 

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quasi-governmental rule, regulation, policy, guideline, interpretation, or
directive (whether or not having the force of law) or in the interpretation,
promulgation, implementation or administration thereof after the date of this
Agreement which affects the amount of capital required or expected to be
maintained by any Lender or LC Issuer or any Lending Installation or any
corporation controlling any Lender or LC Issuer. Notwithstanding the foregoing,
for the purposes of this Agreement, all requests, rules, guidelines, or
directives in connection with the Dodd-Frank Wall Street Reform and Consumer
Protection Act shall be deemed to be a Change regardless of the date enacted,
adopted, or issued. All requests, rules, guidelines, or directives promulgated
by the Bank for International Settlements, the Basel Committee on Banking
Regulations and Supervisory Practices (or any successor or similar authority) or
the United States financial regulatory authorities shall be deemed to be a
Change regardless of the date adopted, issued, promulgated or implemented.
“Risk-Based Capital Guidelines” means (i) the risk-based capital guidelines in
effect in the United States on the Effective Date, including transition rules,
and (ii) the corresponding capital regulations promulgated by regulatory
authorities outside the United States including transition rules, and any
amendments to such regulations adopted before the Effective Date.

2.30. Funding Losses; Eurocurrency Advances. If (a) any payment of a
Eurocurrency Advance occurs on a date that is not the last day of the applicable
Interest Period, whether because of acceleration, prepayment or otherwise, (b) a
Eurocurrency Advance is not made on the date specified by Company for any reason
other than default by the Lenders, (c) a Eurocurrency Loan is converted other
than on the last day of the Interest Period that applies to it, (d) Company
fails to borrow, convert, continue, or prepay any Eurocurrency Loan on the date
specified in any notice delivered pursuant to this Agreement, or (e) any
Eurocurrency Loan is assigned other than on the last day of the Interest Period
that applies to it as a result of a request by Company pursuant to Section 2.35,
Company shall indemnify each Lender for such Lender’s costs, expenses and
Interest Differential (as determined by such Lender) incurred as a result of
such prepayment. The term “Interest Differential” means the sum equal to the
greater of zero or the financial loss incurred by the Lender resulting from
prepayment, calculated as the difference between the amount of interest such
Lender would have earned (from the investments in money markets as of the
Borrowing Date of such Advance) had prepayment not occurred and the interest
such Lender will actually earn (from like investments in money markets as of the
date of prepayment) as a result of the redeployment of funds from the
prepayment. Because of the short-term nature of this facility, Borrowers agree
that any Interest Differential shall not be discounted to its present value.

2.31. Discretion of Lender as to Manner of Funding. Each Lender is entitled to
fund and maintain its funding of Eurocurrency Advances in any manner it elects,
except that, for the purposes of this Agreement, all determinations under this
Agreement (including, but not limited to, determinations under Section 2.25)
shall be made as if such Lender had actually funded and maintained each
Eurocurrency Advances during the Interest Period for such Advance through the
purchase of deposits having a maturity corresponding to the last day of the
Interest Period and bearing an interest rate equal to the Eurocurrency Rate for
such Interest Period.

 

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2.32. Taxes.

a. All payments by Borrowers to or for the account of any Lender, LC Issuer, or
Agent under this Agreement or under any Note or Facility LC Application shall be
made free and clear of and without deduction for any and all Taxes. If Borrowers
are required by law to deduct any Taxes with respect to any sum payable under
this Agreement to any Lender, LC Issuer or Agent, (i) the sum payable shall be
increased as necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section 2.32), such
Lender, LC Issuer, or Agent (as the case may be) receives an amount equal to the
sum it would have received had no such deductions been made, (b) Borrowers shall
make such deductions, (c) Borrowers shall pay the full amount deducted to the
relevant authority in accordance with applicable law and (d) Borrowers shall
deliver to Agent the original copy of a receipt evidencing payment of such Taxes
within 30 days after making the payment.

b. In addition, Borrowers shall pay any present or future stamp or documentary
taxes and any other excise or property taxes, charges, or similar levies that
arise from any payment made under this Agreement or under any Note or Facility
LC Application or from the signing or delivery of, or otherwise with respect to,
this Agreement or any Note or Facility LC Application (“Other Taxes”).

c. Borrowers shall indemnify Agent, LC Issuer and each Lender for the full
amount of Taxes or Other Taxes (including, without limitation, any Taxes or
Other Taxes imposed on amounts payable under this Section 2.32) paid by Agent,
LC Issuer, or such Lender as a result of its Commitment, any Loans by it under
this Agreement, or otherwise in connection with its participation in this
Agreement and any liability (including penalties, interest and expenses) arising
from or with respect to this Agreement. Borrowers shall make each payment due
under this indemnification within 30 days after Agent, LC Issuer or such Lender
requests it.

d. In the case of any payment under this Agreement or under any Notes by or on
behalf of Borrowers through an account or branch outside the United States or by
or on behalf of Borrowers by a payor that is not a United States person, if
Company determines that no Taxes are payable in respect of such payment, Company
shall furnish or shall cause such payor to furnish, to Agent, at such address,
an opinion of counsel acceptable to Agent stating that such payment is exempt
from Taxes. For the purposes of this Section 2.32.d, the terms “United States”
and “United States person” have the meanings specified in Section 7701 of the
Internal Revenue Code.

e. If any Borrower is required by law or regulation to make any deduction,
withholding, or backup withholding of any taxes, levies, imposts, duties, fees,
liabilities or similar charges of the United States, any U.S. possession or
territory (including the Commonwealth of Puerto Rico) or any area subject to the
jurisdiction of the United States) from any payments to a Lender pursuant to any
Loan Document with respect to the Obligations that are then, or thereafter
become, payable to such Lender, Borrowers shall make such withholdings or
deductions and pay the full amount withheld or deducted to the relevant taxation
authority or other authority in accordance with applicable law.

 

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f. Each Lender that is not a citizen or resident of the United States, a
corporation, partnership or other entity created or organized in or under the
laws of the United States (or any jurisdiction of the United States), or any
estate or trust that is subject to federal income taxation regardless of the
source of its income (a “Non-U.S. Lender”) shall, on or before the Effective
Date, deliver to Company and Agent two duly completed copies of each U.S.
Internal Revenue Service Form W-8BEN or Form W-8ECI, or any subsequent versions
or successors, or, in the case of a Non-U.S. Lender claiming exemption from U.S.
federal withholding tax under Section 871(h) or 881(c) of the Code with respect
to payments of “portfolio interest”, a Form W-8, or any subsequent versions or
successors (and, if such Non-U.S. Lender delivers a Form W-8, a certificate
representing that such Non-U.S. Lender is not a “bank” for the purposes of
Section 881(c) of the Code, is not a 10% percent shareholder (within the meaning
of Section 871(h)(3)(B) of the Code) of Company and is not a controlled foreign
corporation related to Company (within the meaning of Section 864(d)(4) of the
Code)), properly completed and duly signed and delivered by such Non-U.S. Lender
claiming complete exemption from, or a reduced rate of, U.S. federal withholding
tax on all payments by Borrowers under this Agreement and the other Loan
Documents. Such forms shall be delivered by each Non-U.S. Lender on or before
the date it becomes a party to this Agreement. In addition, each Non-U.S. Lender
shall deliver such forms promptly upon the obsolescence or invalidity of any
form previously delivered by such Non-U.S. Lender. Each Non-U.S. Lender shall
promptly notify Company and Agent at any time it determines that it is no longer
in a position to provide any previously delivered certificate to Company (or any
other form of certification adopted by the U.S. taxing authorities for such
purpose). All forms or amendments described in the preceding sentence shall
provide evidence that such Lender is entitled to receive payments under this
Agreement without deduction or withholding of any United States federal income
taxes, unless an event (including without limitation any change in treaty, law
or regulation) has occurred before any such delivery would otherwise be required
that makes all such forms inapplicable or that would prevent such Lender from
duly completing and delivering any such form or amendment with respect to it and
such Lender advises Company and Agent that it is not capable of receiving
payments without any deduction or withholding of United States federal income
tax. Notwithstanding any other provision of this Section 2.32.f, a Non-U.S.
Lender is not required to deliver any form pursuant to this Section 2.32.f that
such Non-U.S. Lender is not legally able to deliver.

g. Borrowers are not required to pay any additional amounts with respect to
United States federal income tax pursuant to Section 2.32 to any Lender for the
account of any Applicable Lending Office of such Lender:

(i) if the obligation to pay such additional amounts would not have arisen but
for a failure by such Lender to comply with its obligations under Section 2.32.f
with respect to such Applicable Lending Office;

(ii) if such Lender has delivered to Company a Form W-8BEN and/or Form W-8ECI
(or any subsequent versions or successors) with respect to such Applicable
Lending Office pursuant to Section 2.32.f and such Lender is at any time
entitled to exemption from deduction or withholding of United States federal

 

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income tax with respect to payments by Borrowers under this Agreement for the
account of such Applicable Lending Office for any reason other than a change in
United States law, treaty or regulations or in the official interpretation of
such law or regulations by any governmental authority charged with its
interpretation or administration (whether or not having the force of law) after
the date of delivery of such Form W-8BEN and/or Form W-8ECI (or any subsequent
versions or successors); or

(iii) if such Lender has delivered to Company a Form W-8 (or any subsequent
versions or successors) with respect to such Applicable Lending Office pursuant
to Section 2.32.f and such Lender is not at any time entitled to exemption from
deduction or withholding of United States federal income tax with respect to
payments by Borrowers under this Agreement for the account of such Applicable
Lending Office for any reason other than a change in United States law or
regulations or any applicable tax treaty or regulations or in the official
interpretation of any such law, treaty or regulations by any governmental
authority charged with its interpretation or administration (whether or not
having the force of law) after the date of delivery of such Form W-8 (or
subsequent versions or successors).

h. Agent and the Lenders agree to use commercially reasonable efforts, upon
request by Company and at Borrowers’ sole cost and expense, to assist Borrowers
in obtaining a refund that is available to Borrowers of any Taxes paid by
Borrowers under this Agreement; provided that (i) Agent or Lender of which such
request is made determines in its reasonable discretion, that such assistance
would not be prejudicial and (ii) if any such refund is subsequently disallowed,
Borrowers shall indemnify Agent and the Lenders for any liability (including
penalties, interest, additions to tax and expenses) arising from or related to
such disallowance. If Agent or any Lender receives a refund or tax credit when
computing its tax payable in the jurisdiction in which Agent or such Lender, as
the case may be, is organized or maintains an Applicable Lending Office, with
respect to Taxes paid by Borrowers, Agent or such Lender shall, to the extent it
can do so without jeopardizing its right to such refund or credit, pay to
Borrowers an amount that would leave Agent or such Lender in the same position
as if no such Taxes had been imposed; provided that (i) nothing in this
Section 2.32.h shall interfere with the right of Agent or such Lender to arrange
its tax affairs in whatever manner it thinks fit, nor require it to disclose any
information relating to its tax affairs or any computations with respect to
taxes or to do anything that would prejudice its ability to benefit from any
other credits, relief, remissions or repayments to which it may be entitled and
(ii) if any such refund or tax credit is subsequently disallowed, then Borrowers
shall within 30 days after receiving notice of any such disallowance from Agent
or any Lender, return the amount paid to Borrowers under this Section 2.32.h to
Agent or Lenders and indemnify Agent and Lenders for any liability (including
penalties, interest, additions to tax and expenses) arising from or related to
such disallowance.

i. For any period during which a Non-U.S. Lender has failed to provide Borrowers
with an appropriate form pursuant to Section 2.32.f (unless such failure is due
to a change in treaty, law or regulation, or any change in the interpretation or

 

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administration thereof by any governmental authority, occurring after a form
originally was required to be provided), such Non-U.S. Lender is not entitled to
indemnification under this Section 2.32 with respect to Taxes imposed by the
United States; provided that, if a Non-U.S. Lender that is otherwise exempt from
or subject to a reduced rate of withholding tax becomes subject to Taxes because
of its failure to deliver a form required under Section 2.32.f, Borrowers shall
take all steps such Non-U.S. Lender reasonably requests to assist such Non-U.S.
Lender to recover such Taxes.

j. Any Lender that is entitled to an exemption from or reduction of withholding
tax with respect to payments under this Agreement or any Note pursuant to the
law of any relevant jurisdiction or any treaty shall deliver to Company (with a
copy to Agent), at the time or times prescribed by applicable law, such properly
completed and signed documentation prescribed by applicable law as will permit
such payments to be made without withholding or at a reduced rate.

k. If the U.S. Internal Revenue Service or any other governmental authority of
the United States or any other country or any political subdivision of the
United States claims that Agent did not properly withhold tax from amounts paid
to or for the account of any Lender (because the appropriate form was not
delivered or properly completed, because such Lender failed to notify Agent of a
change in circumstances that made its exemption from withholding ineffective, or
for any other reason), such Lender shall indemnify Agent fully for all amounts
paid, directly or indirectly, by Agent as tax, withholding for taxes, or
otherwise, including penalties and interest, and including taxes imposed by any
jurisdiction on amounts payable to Agent under this Section 2.32.k, together
with all related costs and expenses (including attorney fees and time charges of
attorneys for Agent, which attorneys may be employees of Agent). The Lenders’
obligations under this Section 2.32.k shall survive the payment of the
Obligations and termination of this Agreement.

2.33. Defaulting Lenders. Notwithstanding any provision of this Agreement to the
contrary, if any Lender becomes a Defaulting Lender, then the following
provisions apply for so long as such Lender is a Defaulting Lender:

a. Commitment Fees shall cease to accrue on the unfunded portion of the
Commitment of such Defaulting Lender;

b. the Commitment and Outstanding Credit Exposure of such Defaulting Lender
shall not be included in determining whether all Lenders or the Required Lenders
have taken or may take any action under this Agreement;

c. if any Swingline Loans are outstanding or any LC Obligations exist at the
time a Lender becomes a Defaulting Lender then:

(i) all or any part of the unfunded participations in and commitments with
respect to such Swingline Loans or Facility LCs shall be reallocated among the
non-Defaulting Lenders in accordance with their respective Applicable Shares but
only to the extent (x) the sum of all non-Defaulting Lenders’ Outstanding

 

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Credit Exposure plus such Defaulting Lenders’ Loans and participations in and
commitments with respect to Loans and Facility LCs does not exceed the total of
all non-Defaulting Lender’s Commitment Amounts and (y) the conditions set forth
in Article III are satisfied at such time; provided, that the LC Fees payable to
the Lenders shall be determined taking into account such reallocation;

(ii) if the reallocation described in clause (i) above cannot, or can only
partially, be effected, Borrowers shall within one Business Day following notice
by Agent (A) first, prepay the outstanding Swingline Loans that were not
reallocated and (B) second, cash collateralize such Defaulting Lender’s
Applicable Share of the LC Obligations in accordance with the procedures in
Section 7.2 for so long as such Facility LC Exposure is outstanding;

(iii) if Borrowers cash collateralize any portion of such Defaulting Lender’s
Facility LC Exposure pursuant to clause (ii) above, Borrowers are not required
to pay any LC Fees to such Defaulting Lender with respect to such Defaulting
Lender’s Facility LC Exposure during the period such Defaulting Lender’s
Facility LC Exposure is cash collateralized; and

(iv) if any Defaulting Lender’s Facility LC Exposure is not cash collateralized
pursuant to clause (ii) above, then, without prejudice to any rights or remedies
of LC Issuer or any Lender under this Agreement, all LC Fees with respect to
such Defaulting Lender’s Facility LC Exposure are payable to LC Issuer until
such Facility LC Exposure is cash collateralized;

d. so long as any Lender is a Defaulting Lender, LC Issuer has no obligation to
issue or Modify any Facility LC unless it is satisfied that the related exposure
will be 100% covered by cash collateral provided by Borrowers in accordance with
Section 2.33.c; and

e. any amount payable to such Defaulting Lender under this Agreement (whether on
account of principal, interest, fees or otherwise and including any amount that
would otherwise be payable to such Defaulting Lender pursuant to Section 2.4 but
excluding Section 2.35) shall, instead of being distributed to such Defaulting
Lender, be retained by Agent in a segregated account and, subject to any
applicable requirements of law, be applied at such time or times Agent
determines (i) first, to the payment of any amounts owing by such Defaulting
Lender to Agent under this Agreement, (ii) second, to the payment of any amounts
owing by such Defaulting Lender to LC Issuer or Swingline Lender under this
Agreement, (iii) third, to the funding of any Revolving Loan or the funding or
cash collateralization of any participating interest in any Swingline Loan or
Facility LC with respect to which such Defaulting Lender has failed to fund its
portion as this Agreement requires, as determined by Agent, (iv) fourth, if so
determined by Agent and Company, held in such account as cash collateral for
future funding obligations of the Defaulting Lender under this Agreement,
(v) fifth, to the payment of any amounts owing to Borrowers or the Lenders as a
result of any judgment of a court of competent jurisdiction obtained by
Borrowers or any Lender against such Defaulting Lender as a result of such
Defaulting Lender’s breach of its obligations under this Agreement, and

 

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(vi) sixth, if so determined by Agent, distributed to the Lenders other than the
Defaulting Lender until the ratio of the Outstanding Credit Exposure of such
Lenders to the Aggregate Outstanding Exposure equals such ratio immediately
before the Defaulting Lender’s failure to fund any portion of any Loans or
participations in Facility LCs or Swingline Loans and (vii) seventh, to such
Defaulting Lender or as otherwise directed by a court of competent jurisdiction;
provided, that if such payment is a prepayment of the principal amount of any
Loans or Reimbursement Obligations with respect to draws under Facility LCs for
which LC Issuer has funded its participation obligations, such payment shall be
applied solely to prepay the Loans of, and Reimbursement Obligations owed to,
all Lenders that are not Defaulting Lenders pro rata prior to being applied to
the prepayment of any Loans, or Reimbursement Obligations owed to, any
Defaulting Lender.

If each of Agent, Company, LC Issuer and Swingline Lender agrees that a
Defaulting Lender has adequately remedied all matters that caused such Lender to
be a Defaulting Lender, then the “Swingline Exposure” and “Facility LC
Exposure”, as the next sentence defines those terms, of the Lenders shall be
readjusted to reflect the inclusion of such Lender’s Commitment and on such date
such Lender shall purchase at par such of the Loans of the other Lenders that
Agent determines are necessary in order for such Lender to hold the Revolving
Loans in accordance with its Applicable Share. For the purposes of this
Section 2.33, (i) “Swingline Exposure” means, with respect to any Defaulting
Lender at any time, such Defaulting Lender’s Applicable Share of the aggregate
principal amount of all Swing Line Loans outstanding at such time and
(ii) “Facility LC Exposure” means, with respect to any Defaulting Lender at any
time, such Defaulting Lender’s Applicable Share of the LC Obligations at such
time. Nothing in this Section 2.33 waives any of Borrowers’ rights or remedies
(whether in equity or law) against any Lender that fails to fund any of its
Loans at the time or in the amount this Agreement requires.

2.34. Market. Notwithstanding the satisfaction of all conditions referred to in
Article II and Article III with respect to any Advance or Facility LC in any
Agreed Currency other than U.S. Dollars, if there occurs on or before the date
of such Advance or the date such LC Facility is issued any change in national or
international financial, political, or economic conditions or currency exchange
rates or exchange controls that would in the reasonable opinion of Agent or the
Majority Lenders make it impracticable for the Eurocurrency Advances comprising
such Advance or Facility LC to be denominated in the Agreed Currency specified
by Company, then Agent shall promptly give Company and the Lenders notice of
such determination, and such Loans or LC Facility shall not be denominated in
such Agreed Currency but shall be made on such Borrowing Date in U.S. Dollars,
in an aggregate principal amount equal to the U.S. Dollar Amount of the
aggregate principal amount specified by Company in the related Borrowing Notice
or Conversion/Continuation Notice, as Base Rate Loans, unless Company notifies
Agent at least one Business Day before that date that (i) it elects not to
borrow on that date or (ii) it elects to borrow on that date in a different
Agreed Currency, as the case may be, in which the denomination of such Loans
would in the opinion of Agent and the Majority Lenders be practicable and in an
aggregate principal amount equal to the U.S. Dollar Amount of the aggregate
principal amount Company specified in the related Borrowing Notice or
Conversion/Continuation Notice.

 

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2.35. Replacement of Lender With Respect to Increased Costs. If Borrowers are
required under Section 2.27, 2.29, 2.30, or 2.32 to make any additional payment
to any Lender or if any Lender’s obligation to make or continue, or to convert
Base Rate Advances into Eurocurrency Advances is suspended under Section 2.26 or
2.28 or if any Lender defaults in its obligation to make a Loan, to reimburse LC
Issuer under Section 2.22, to reimburse Swing Line Lender under Section 2.17.d,
or if any Lender declines to approve an amendment or waiver that is approved by
the Majority Lenders or otherwise becomes a Defaulting Lender (any Lender so
affected is an “Affected Lender”), Company has the right, within 45 days after
written demand for such payment or written notice of such suspension, so long as
such amounts continue to be charged or such suspension is still effective, to
give Agent written notice that it desires to replace such Affected Lender with a
replacement lender (a “Replacement Lender”) as a Lender under this Agreement,
provided that no Default or Event of Default exists either at the time of such
notice or at the time of replacement. If Company obtains a Replacement Lender
that is satisfactory to Agent within 90 days after notice of its intention to
replace an Affected Lender, the Affected Lender shall sell and assign its
Advances and Obligations to the Replacement Lender, provided that (i) the
Replacement Lender must purchase for cash the Advances and other Obligations due
to the Affected Lender under an assignment acceptable to Agent and the Affected
Lender, and the Replacement Lender must become a Lender for all purposes under
this Agreement, assume all obligations of the Affected Lender to be terminated
as of such date, and agree to comply with the requirements of this Agreement
that apply to assignments, and (ii) Borrowers must pay to such Affected Lender
in same day funds on the day of such replacement (A) all interest, fees, and
other amounts then accrued but unpaid to such Affected Lender under this
Agreement through the date of termination, including without limitation payments
due to such Affected Lender under Sections 2.27, 2.29, or 2.32, and (B) an
amount, if any, equal to the payment that would have been due to such Lender on
the day of such replacement under Section 2.30 had the Loans of such Affected
Lender been prepaid on such date rather than sold to the replacement Lender.

2.36. Increase Option. Company may from time to time request an increase in the
Aggregate Commitment Amount, which may be in the form of Commitments for
additional Revolving Loans or term loans (“Term Loans”), in each case in minimum
increments of $10,000,000 or any lower amount that Company and Agent agree on,
so long as, after giving effect to such increase, the aggregate amount of such
increases does not exceed $240,000,000 and the Aggregate Commitment Amount does
not exceed $900,000,000 in accordance with the following terms. Each Term Loan
shall have a maturity date no earlier than the Facility Termination Date, each
Term Loan may include amortization, and each Term Loan may be priced differently
than Revolving Loans. Company may arrange for any such increase to be provided
by one or more Lenders (each Lender so agreeing to an increase in its
Commitment, is an “Increasing Lender”), or by one or more new banks, financial
institutions or other entities (each such new bank, financial institution, or
other entity, is an “Augmenting Lender”), to increase their existing
Commitments, or extend new Commitments, as the case may be; provided that
(i) each Augmenting Lender and each Increasing Lender is subject to the
reasonable approval of Company and Agent and (ii) (A) in the case of an
Increasing Lender, Company and such Increasing Lender enter into an agreement
substantially in the form of Exhibit C, (B) in the case of an Augmenting Lender,
Company and such Augmenting Lender enter into an agreement substantially in the
form of Exhibit D, and (C) if any portion of such increase is a Term Loan,
Agent, the Augmenting Lender, and Borrowers enter into an amendment to this
Agreement with

 

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respect to such Term Loan on terms satisfactory to Agent and Borrowers. No
consent of any Lender (other than the Lenders participating in the increase) is
required for any increase in the Commitment Amounts or the Aggregate Commitment
Amount under this Section 2.36, or any amendment to this Agreement with respect
to a Term Loan pursuant the preceding sentence. Increases and new Commitments
created under this Section 2.36 become effective on the date agreed by Company,
Agent and the relevant Increasing Lenders or Augmenting Lenders, and Agent shall
notify each Lender of such dates. Notwithstanding the foregoing, no increase in
the Aggregate Commitment Amount (or in the Commitment Amount of any Lender)
shall become effective under this Section 2.36 unless, (i) on the proposed date
of the effectiveness of such increase, (A) the conditions set forth in
Section 3.2 are satisfied or waived by the Majority Lenders and Agent receives a
certificate to that effect dated such date and signed by an authorized officer
of Company and (B) Company is in compliance (on a pro forma basis reasonably
acceptable to Agent) with its financial covenants in this Agreement, and
(ii) Agent has received documents consistent with those delivered on the
Effective Date as to the corporate power and authority of Company to borrow
under this Agreement after giving effect to such increase. On the effective date
of any increase in the Commitment Amounts, to the extent such increase is in the
form of Revolving Loans, (i) each relevant Increasing Lender and Augmenting
Lender shall make available to Agent amounts in immediately available funds that
Agent determines, for the benefit of the other Lenders, are required to cause,
after giving effect to such increase and the use of such amounts to make
payments to such other Lenders, each Lender’s portion of the outstanding
Revolving Loans of all the Lenders to equal its Applicable Share of the
Revolving Loans and LC Participations outstanding on such date, and (ii) Company
shall be deemed to have repaid and reborrowed all outstanding Revolving Loans as
of the date of any increase in the Commitments (with such reborrowing to consist
of the Types of Revolving Loans, with related Interest Periods if applicable,
specified in a notice delivered by Company, in accordance Section 2.3). The
deemed payments made under clause (ii) of the immediately preceding sentence
must be accompanied by payment of all accrued interest on the amount prepaid
and, with respect to each Eurocurrency Advance, are subject to indemnification
by Company under Section 2.30 if the deemed payment occurs other than on the
last day of the related Interest Periods. No Lender has any obligation to become
an Increasing Lender, and no refusal to become an Increasing Lender shall make
such Lender a Defaulting Lender.

2.37. Borrowing Subsidiaries. Subject to the terms and conditions of this
Section 2.37, Company may from time to time designate any Foreign Subsidiary
organized under the laws of Canada as a Borrowing Subsidiary (each being, a
“Borrowing Subsidiary”) with the ability to borrow under this Agreement within
the limits of a specified Borrowing Subsidiary Sublimit to be established by the
Lenders; provided, that all of the Multicurrency Tranche Lenders shall first
consent to any such designation (which consent shall not be unreasonably
withheld or delayed). Upon Agent’s signing and delivery of a Borrowing
Subsidiary Agreement that has been signed and delivered by such Subsidiary and
Company (and, in the case of the designation of the initial Borrowing
Subsidiary, Agent’s signing and delivery of a separate amendment to this
Agreement that has been signed and delivered by the Lenders, such Subsidiary and
Company, a legal opinion of special Canadian counsel to Company and such
Borrowing Subsidiary in form and substance acceptable to Agent and such other
documents, certificates, and other items Agent requires and establishment of the
related Borrowing Subsidiary Sublimit and Borrowing Subsidiary Commitment(s),
such Subsidiary shall be a Borrowing Subsidiary and a party to this Agreement.

 

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2.38. Termination of Borrowing Subsidiaries. Any Subsidiary shall cease to be a
Borrowing Subsidiary when (a) no Credit Extension is outstanding to such
Subsidiary and (b) such Subsidiary and Company sign and deliver to Agent a
Borrowing Subsidiary Termination. If a Borrowing Subsidiary liquidates,
dissolves, or ceases to be a Subsidiary, all Credit Extensions outstanding to
such Borrowing Subsidiary shall be due and payable and such Subsidiary shall no
longer be entitled to obtain any Credit Extensions.

2.39. Judgment Currency. If for the purposes of obtaining judgment in any court
it is necessary to convert a sum due from any Borrower in the currency in which
it is payable under this Agreement (the “specified currency”) into another
currency, the parties agree, to the fullest extent that they may effectively do
so, that the rate of exchange used shall be that at which in accordance with
normal banking procedures Agent could purchase the specified currency with such
other currency at Agent’s Minneapolis, Minnesota office on the Business Day
preceding that on which final, non-appealable judgment is given. Each Borrower’s
obligations with respect to any sum due to any Lender or Agent under this
Agreement shall, notwithstanding any judgment in a currency other than the
specified currency, be discharged only to the extent that on the Business Day
following receipt by such Lender or Agent of any sum adjudged to be so due in
such other currency such Lender or Agent is able, in accordance with normal,
reasonable banking procedures, to purchase the specified currency with such
other currency. If the amount of the specified currency so purchased is less
than the sum originally due to such Lender or Agent in the specified currency,
each Borrower agrees, to the fullest extent that it can effectively do so, as a
separate obligation and notwithstanding any such judgment, to indemnify such
Lender or Agent, as applicable, against such loss, and if the amount of the
specified currency so purchased exceeds (a) the sum originally due to any Lender
or Agent in the specified currency and (b) any amounts shared with other Lenders
as a result of allocations of such excess as a disproportionate payment to such
Lender under Section 8.17, such Lender or Agent shall remit such excess to such
Borrower.

ARTICLE III

CONDITIONS PRECEDENT

3.1. Conditions of Closing. The effectiveness of this Agreement is conditioned
on the satisfaction of the following conditions precedent on the Effective Date:

a. Documents. Agent has received the following in form and substance
satisfactory to Agent:

(i) A Note dated as of the Effective Date drawn to the order of each Lender who
requests a Note, drawn to the order of such Lender, signed by a duly authorized
officer (or officers) of Company and delivered to each such Lender.

(ii) The Guaranty signed and delivered by each Guarantor Subsidiary to Agent.

(iii) The Upstream Distribution Agreement signed and delivered by Company, LTF
Club Operations Company, Inc., LTF Real Estate Holdings, LLC, LTF Real Estate
Company, Inc, LTF CMBS Managing Member, Inc., and LTF CMBS I, LLC, a Delaware
limited liability company.

 

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(iv) The Security Agreement signed and delivered by Company.

(v) The Security Agreement signed and delivered by each Guarantor Subsidiary.

(vi) A Pledge Agreement signed and delivered by Company and each Restricted
Subsidiary that owns Equity Interests in another Restricted Subsidiary.

(vii) A certificate of the secretary or assistant secretary (or other
appropriate officer) of Company dated as of the Effective Date and certifying to
the following:

(A) A true and accurate copy of the corporate (or other) resolutions of Company
authorizing the signing, delivery, and performance of the Loan Documents to
which Company is a party;

(B) The incumbency, names, titles and signatures of the officers of Company
authorized to sign the Loan Documents to which Company is a party and to request
Advances;

(C) The Articles of Incorporation (or the equivalent) of Company, including all
amendments, previously delivered by Company to Agent have not been amended,
modified or supplement and remain in full force and effect; and

(D) The bylaws (or other constituent documents) for Company previously delivered
by Company to Agent have not been amended, modified, or supplement and remain in
full force and effect.

(viii) A certificate of good standing for Company in the jurisdiction of its
incorporation or organization and in the jurisdictions where the character of
the properties owned or leased by Company or the business conducted by Company
makes such qualification necessary, certified by the appropriate governmental
officials as of a date acceptable to Agent.

(ix) A certificate of good standing for each Loan Party in the jurisdiction of
such Loan Party’s incorporation or organization and in the jurisdictions where
the character of the properties owned or leased by such Loan Party or the
business conducted by such Loan Party makes such qualification necessary,
certified by the appropriate governmental officials as of a date acceptable to
Agent.

(x) ACORD 27 certificates of insurance with respect to each of the businesses
and real properties of Company in amounts and with carriers that are reasonably
acceptable to Agent.

 

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(xi) A certificate dated the Effective Date of the chief executive officer or
chief financial officer of Company certifying as to the matters set forth in
Sections 3.2.a and 3.2.b.

b. Opinions. Agent has received written legal opinions of counsel to Company
addressed to the Lenders in form and substance satisfactory to Agent, except
that Company shall deliver local opinions of counsel as to Leadville Trail 100,
Inc. and Creative & Production Resources, Inc. within 10 Business Days after the
Effective Date.

c. Compliance. Company has performed and complied with all agreements, terms and
conditions contained in this Agreement required to be performed or complied with
by Company before or on the Effective Date.

d. Collateral Documents. All financing statements and similar documents required
to perfect a first priority Lien in the Collateral have been appropriately filed
or recorded to the satisfaction of Agent; all Collateral Documents required to
be delivered to Agent have been duly delivered to Agent; and the priority and
perfection of the Liens created by the Collateral Documents have been
established to the satisfaction of Agent and its counsel.

e. Other Matters. All corporate and legal proceedings relating to Company and
all instruments and agreements in connection with the transactions contemplated
by this Agreement are satisfactory in scope, form and substance to Agent, the
Lenders and Agent’s counsel, and Agent has received all information and copies
of all documents, including records of corporate proceedings, any Lender or such
counsel reasonably requests. Where appropriate such documents must be certified
by proper corporate or governmental authorities.

f. Fees and Expenses. Agent has received for itself and for the account of the
Lenders all fees and other amounts due and payable by Company on or before the
Effective Date, including the reasonable fees and expenses of counsel to Agent
Company owes under Section 9.2.

g. Compliance Certificate. Agent has received a Compliance Certificate
appropriately completed and duly signed and delivered by Company showing
compliance with Sections 6.14, 6.15, 6.16 and 6.22 as of March 31, 2011.

h. No Material Adverse Change. There has not occurred a material adverse change
(i) in the business, property, liabilities (actual and contingent), operations
or condition (financial or otherwise), results of operations, or prospects of
Company and its Subsidiaries taken as a whole, since December 31, 2010 or
(ii) in the facts and information regarding Company and its Subsidiaries as
represented by Company and its Subsidiaries as of the Effective Date.

i. Financial Projections. Agent has received: (i) Company-prepared financial
projections over a 5-year period giving effect to the Credit Extensions that
demonstrate, in Agent’s reasonable judgment, together with all other information
then available to Agent, that Company can repay its debts and satisfy its other
obligations as

 

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and when they become due, and can comply with the financial covenants in this
Agreement, (ii) information Agent reasonably requests to confirm the tax, legal,
and business assumptions made in such pro forma financial statements, and
(iii) unaudited consolidated financial statements of Company and its
Subsidiaries for the fiscal quarter ended March 31, 2011.

j. Consents. Agent has received all governmental, equity holder, and third party
consents and approvals necessary in connection with the contemplated financing
and all applicable waiting periods have expired without any action being taken
by any authority that would be reasonably likely to restrain, prevent, or impose
any material adverse conditions on Company and its Subsidiaries, taken as a
whole, and no law or regulation applies that in Agent’s reasonable judgment
could have such effect.

3.2. Conditions Precedent to all Credit Extensions. The effectiveness of this
Agreement and the obligations of the Lenders to make any Credit Extension are
subject to the satisfaction of the following conditions precedent on the
Effective Date and on the applicable Borrowing Date:

a. Representations and Warranties. The representations and warranties in Article
IV are true and correct with the same force and effect as if made at such time,
except: (i) to the extent such representations and warranties expressly refer to
an earlier date, in which case they are true and correct in all material
respects as of such earlier date; and (ii) the representations and warranties in
Section 4.6 as to Company’s financial statements shall be deemed to refer to the
financial statements then most recently delivered to the Lenders pursuant to
Section 5.1.a or 5.1.b, as the case may be; provided that the unaudited interim
financial statements do not comply with GAAP because of the absence of footnotes
and are subject to immaterial year-end audit adjustments.

b. No Default. There exists no Default or Event of Default, and no Default or
Event of Default would result from such Credit Extension.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

To induce the Lenders to enter into this Agreement and to make Loans under this
Agreement and to induce LC Issuer to issue Facility LCs, Company and, to the
extent applicable, the other Borrowers, represent and warrant to the Lenders and
Agent:

4.1. Organization, Standing, Etc. Each of Company and its Restricted
Subsidiaries is a corporation or limited liability company duly organized and
validly existing and in good standing under the laws of the jurisdiction of its
organization. Each of Company and its Restricted Subsidiaries has all requisite
power and authority to carry on its businesses as now conducted, to enter into
and perform its obligations under each of the Loan Documents to which it is a
party and, in the case of each Borrower, to enter into this Agreement and to
issue the Notes and to perform its obligations under the Loan Documents. Each of
Company and its Restricted Subsidiaries: (a) holds all certificates of
authority, licenses and permits necessary to carry on its businesses as
presently conducted in each jurisdiction in which such Person is carrying on
such

 

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business, except where the failure to hold such certificates, licenses or
permits would not constitute a Material Adverse Occurrence, and (b) is duly
qualified and in good standing as a foreign corporation or limited liability
company in each jurisdiction in which the character of the properties it owns,
leases, or operates, or the business it conducts, makes such qualification
necessary and the failure so to qualify would permanently preclude such Person
from enforcing its rights with respect to any material assets or could
reasonably be expected to constitute a Material Adverse Occurrence.

4.2. Authorization and Validity. The signing, delivery, and performance by each
Loan Party of the Loan Documents to which it is a party have been duly
authorized by all necessary corporate or company action by such Loan Party. Each
of the Loan Documents constitutes the legal, valid, and binding obligations of
each Loan Party that is a party to such Loan Document, enforceable against such
Loan Party in accordance with its terms, subject to limitations as to
enforceability that might result from bankruptcy, insolvency, moratorium, and
other similar laws affecting creditors’ rights generally and subject to
limitations on the availability of equitable remedies.

4.3. No Conflict; No Default. The signing, delivery, and performance by each
Loan Party of the Loan Documents to which such Loan Party is a party will not
(a) violate in any material respect any provision of any law, statute, rule or
regulation or any order, writ, judgment, injunction, decree, determination or
award of any court, governmental agency or arbitrator presently in effect having
applicability to such Loan Party, (b) violate or contravene any provision of the
organizational documents of such Loan Party, or (c) result in a breach of or
constitute a default under any indenture, loan, credit agreement or any Related
Agreement or any other material agreement, lease or instrument to which such
Loan Party is a party or by which it or any of its properties is bound or result
in the creation of any Lien under any such instrument. Neither Company nor any
of its Restricted Subsidiaries is in default under or in violation of any such
law, statute, rule or regulation, order, writ, judgment, injunction, decree,
determination or award or any such indenture, loan or credit agreement or other
agreement, lease or instrument in any case in which the consequences of such
default or violation could reasonably be expected to constitute a Material
Adverse Occurrence.

4.4. Government Consent. No order, consent, approval, license, authorization or
validation of, or filing, recording or registration with, or exemption by, any
governmental or public body or authority is required on the part of any Loan
Party to authorize, or is required in connection with the signing, delivery and
performance of, or the legality, validity, binding effect or enforceability of,
the Loan Documents, except for any necessary filing or recordation of or with
respect to any of the Collateral Documents.

4.5. Material Adverse Change. Since the date of the most recent audited
financial statements delivered to Agent there has been no change in the
business, property, financial condition, or results of operations of Company and
its Subsidiaries that could reasonably be expected to be a Material Adverse
Occurrence.

4.6. Financial Statements and Condition. The audited consolidated financial
statements for Company and its Subsidiaries as of December 31, 2010, as
delivered to the Lenders before the Effective Date, were prepared in accordance
with GAAP on a consistent basis

 

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and fairly present the consolidated financial condition of Company and its
Subsidiaries as of such date and the results of its consolidated operations and
changes in financial position for the period then ended. As of the date of such
financial statements, Company did not have any material obligation, contingent
liability, liability for taxes, or long-term lease obligation that is not
reflected in such financial statements or in the notes to them. Since
December 31, 2010, there has been no Material Adverse Occurrence.

4.7. Litigation. Except as set forth on Schedule 4.7, there are no actions,
suits or proceedings pending or, to the knowledge of Borrowers, threatened
against or affecting Company or any of its Subsidiaries or any of its properties
before any court or arbitrator, or any governmental department, board, agency or
other instrumentality that could reasonably be expected to constitute a Material
Adverse Occurrence, or that seeks to prevent, enjoin, or delay the making of any
Credit Extension, and there are no unsatisfied judgments against Company or any
of its Subsidiaries, the satisfaction or payment of which could reasonably be
expected to constitute a Material Adverse Occurrence.

4.8. Environmental, Health and Safety Laws. There does not exist any violation
by Company or any of its Restricted Subsidiaries of any applicable U.S. or
foreign federal, state, provincial, or local law, rule or regulation or order of
any government, governmental department, board, agency or other instrumentality
relating to environmental pollution, health, or safety matters that has, will or
threatens to impose a material liability on Company or any of its Restricted
Subsidiaries or that has required or would require a material expenditure by
Company or any of its Restricted Subsidiaries to cure in either case, the effect
of which could reasonably be expected to constitute a Material Adverse
Occurrence. Except as set forth in Schedule 4.8, neither Company nor any of its
Restricted Subsidiaries has received any notice to the effect that any part of
such Person’s operations or properties is not in material compliance with any
such law, rule, regulation or order or notice that it or its property is the
subject of any governmental investigation evaluating whether any remedial action
is needed to respond to any release of any toxic or hazardous waste or substance
into the environment that could reasonably be expected to constitute a Material
Adverse Occurrence. Except as set forth in Schedule 4.8, Company does not have
knowledge that it, any of its Subsidiaries, or any of their respective property
will become subject to Environmental Laws during the term of this Agreement,
compliance with which could reasonably be expected to require significant
capital expenditures by Company or its Restricted Subsidiaries or to constitute
a Material Adverse Occurrence.

4.9. ERISA. Each Plan is in substantial compliance with all applicable
requirements of ERISA and the Code and with all material applicable rulings and
regulations issued under ERISA and the Code setting forth those requirements. No
ERISA Event exists with respect to any Plan. All of the minimum funding
standards applicable to such Plans have been satisfied and there exists no event
or condition that would reasonably be expected to result in the institution of
proceedings to terminate any Plan under Section 4042 of ERISA. With respect to
each Plan subject to Title IV of ERISA, as of the most recent valuation date for
such Plan, the present value (determined on the basis of reasonable assumptions
employed by the independent actuary for such Plan and previously furnished in
writing to the Lenders) of such Plan’s projected benefit obligations did not
exceed the fair market value of such Plan’s assets. Neither the signing and
delivery of this Agreement nor the making of Credit Extensions gives rise to a
“prohibited transaction” as Section 406 of ERISA or Section 4975 of the Code
defines that term.

 

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4.10. Federal Reserve Regulations. None of Company or its Subsidiaries is
engaged principally or as one of its important activities in the business of
extending credit for the purpose of purchasing or carrying “margin stock”, as
that term is defined in Regulation U. The value of all margin stock owned by
Company or any of its Subsidiaries does not constitute more than 25% of the
value of the consolidated assets of Company and its Subsidiaries.

4.11. Title to Property; Leases; Liens; Subordination. Company and each of its
Restricted Subsidiaries has (a) good and marketable title in fee simple to, or
valid leasehold interests in, their respective real properties and (b) good and
sufficient title to, or valid, subsisting and enforceable leasehold interest in,
their respective other properties, including all other properties and assets,
referred to as owned by Company and its Restricted Subsidiaries in the most
recent financial statement referred to in Section 5.1 (other than property
disposed of since the date of such financial statements in the ordinary course
of business or as otherwise permitted under this Agreement). None of such
properties is subject to a Lien, except as allowed under 6.12 or Liens to be
discharged on the Effective Date. Neither Company nor any of its Restricted
Subsidiaries has subordinated any of its material rights under any obligation
owing to it to the rights of any other person.

4.12. Taxes. Company and its Restricted Subsidiaries have filed all U.S. and
foreign federal, state, provincial, and local tax returns required to be filed
and has paid or made provision for the payment of all taxes due and payable
pursuant to such returns and pursuant to any assessments made against any such
Person or any of its property and all other taxes, fees and other charges
imposed on it or any of its property by any governmental authority (other than
taxes, fees or charges the amount or validity of which is currently being
contested in good faith by appropriate proceedings and with respect to which
reserves in accordance with GAAP have been provided on the books of Company). No
material tax Liens have been filed and no material claims are being asserted
with respect to any such taxes, fees or charges. The charges, accruals, and
reserves on the books of Company with respect to taxes and other governmental
charges are adequate and Company does not know of any proposed material tax
assessment against it or any of its Restricted Subsidiaries or any basis for
such an assessment.

4.13. Trademarks, Patents. Each of Company and its Restricted Subsidiaries has
licenses to use or otherwise has the right to use, all intellectual property
necessary for the conduct of its business as currently conducted, except to the
extent that the absence of such property could not individually, or in the
aggregate, reasonably be expected to constitute a Material Adverse Occurrence.
As of the Effective Date, no claim has been asserted or is pending or, to the
knowledge of Company, has been threatened against Company or any of its
Restricted Subsidiaries by any Person challenging or questioning the use by
Company or any of its Restricted Subsidiaries of any intellectual property in a
manner that could, individually or in the aggregate, reasonably be expected to
constitute a Material Adverse Occurrence, nor does Company know of any reason to
believe that any such claim would be successful if brought. As of the Effective
Date, no claim has been asserted or is pending or, to the knowledge of Company,
threatened against Company or any of its Restricted Subsidiaries by any Person
challenging or questioning the validity or effectiveness of any intellectual
property of Company or any of its Restricted Subsidiaries in a manner that
could, individually or in the aggregate, reasonably be expected to constitute a
Material Adverse Occurrence. The use of intellectual property by Company and its
Restricted Subsidiaries does not infringe on the rights of any Person in a

 

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manner that could, individually or in the aggregate, reasonably be expected to
constitute a Material Adverse Occurrence. Schedule 4.13 is a complete list of
all such intellectual property that is owned by Company or any of its Restricted
Subsidiaries and constitutes a patent issued by, or a trademark or service mark
registered with, the United States Patent and Trademark Office (or, in either
case, applications therefor) or a copyright issued by the United States
Copyright Office (or an application therefor).

4.14. Force Majeure. Since the date of the most recent financial statement
referred to in Section 5.1, the business, properties and other assets of Company
or any of its Restricted Subsidiaries have not been affected as the result of
any fire or other casualty, strike, lockout, or other labor trouble, embargo,
sabotage, confiscation, condemnation, riot, civil disturbance, activity of armed
forces or act of God that could reasonably be expected to constitute a Material
Adverse Occurrence.

4.15. Investment Company Act. Neither Company nor any of its Subsidiaries is an
“investment company” or a company “controlled” by an investment company within
the meaning of the Investment Company Act of 1940, as amended.

4.16. Public Utility Holding Company Act. Neither Company nor any of its
Subsidiaries is a “holding company” or a “subsidiary company” of a holding
company or an “affiliate” of a holding company or of a subsidiary company of a
holding company within the meaning of the Public Utility Holding Company Act of
1935, as amended.

4.17. Full Disclosure. Subject to the following sentence, neither the financial
statements referred to in Section 5.1 nor any other certificate, written
statement, exhibit or report furnished by or on behalf of Company in connection
with or pursuant to this Agreement contains any untrue statement of a material
fact or omits to state any material fact necessary in order to make the
statements contained in such financial statements not misleading in light of the
circumstances in which made. Certificates or statements furnished by or on
behalf of Company to the Lenders consisting of projections or forecasts of
future results or events have been prepared in good faith and based on good
faith estimates and assumptions of the management of Company and its Restricted
Subsidiaries, and, as of the date of delivery, Company has no reason to believe
that such projections or forecasts are not reasonable; provided that Company can
give no assurances that such projections will be attained.

4.18. Subsidiaries; Etc. As of the Effective Date, neither Company nor any of
its Subsidiaries owns, beneficially or of record, any Equity Interests in any
other Person other than (i) the Subsidiaries listed in Schedule 1.1.b, and
(ii) Bloomingdale LIFE TIME Fitness, L.L.C., an Illinois limited liability
company. With respect to all Persons in which Company or any of its Subsidiaries
owns any Equity Interests, beneficially or of record, Schedule 4.18 sets forth
the number and percentage of the shares of each class of Equity Interests owned
beneficially or of record by Company or its Subsidiaries, and the jurisdiction
of organization of each Subsidiary or other issuer of Equity Interests.

4.19. Labor Matters. Neither Company nor any Restricted Subsidiary is a party to
any collective bargaining agreement, and, to the knowledge of Company, there are
no pending or threatened strikes, lockouts, or slowdowns against Company or any
of its Restricted Subsidiaries.

 

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Neither Company nor any of its Restricted Subsidiaries has been or is in
violation in any material respect of the Fair Labor Standards Act or any other
applicable federal, state, local, or foreign law dealing with such matters that
could reasonably be expected to cause a Material Adverse Occurrence. All
payments due from Company or any of its Restricted Subsidiaries on account of
wages and employee health and welfare insurance and other benefits (in each
case, except for de minimus amounts), have been paid or accrued as a liability
on the books of Company.

4.20. Solvency. Immediately after this Agreement becomes effective on the
Effective Date, and immediately following each Credit Extension: (i) the fair
value of the assets of Company and its Subsidiaries on a consolidated basis, at
a fair valuation, will exceed the debts and liabilities, subordinated,
contingent, or otherwise of Company and its Subsidiaries on a consolidated
basis; (ii) the present fair saleable value of the property of Company and its
Subsidiaries on a consolidated basis, will be greater than the amount that will
be required to pay the probable liability of the debts and other liabilities,
subordinated, contingent or otherwise, as such debts and other liabilities
become absolute and matured, of Company and its Subsidiaries on a consolidated
basis; (iii) Company and its Subsidiaries on a consolidated basis, will be able
to pay their debts and liabilities, subordinated, contingent or otherwise, as
such debts and liabilities become absolute and matured; and (iv) Company and its
Subsidiaries on a consolidated basis will not have unreasonably small capital
with which to conduct the business in which they are engaged as such business is
proposed to be conducted following the Effective Date.

4.21. Insurance. Schedule 4.21 sets forth a summary of the property and casualty
insurance program carried by Company and its Subsidiaries on the Effective Date,
including any self-insurance or risk assumption agreed to by any such Person or
imposed upon any such Person by any such insurer.

4.22. Indebtedness. Except for Indebtedness permitted by Section 6.11, neither
Company nor any of its Restricted Subsidiaries has any Indebtedness.

4.23. Guaranty or Suretyship. Except for Contingent Obligations described on
Schedule 6.13 or permitted by Section 6.13, neither Company nor any of its
Restricted Subsidiaries is a party to any contract of guaranty or suretyship and
none of its assets is subject to such a contract.

4.24. Related Agreements.

a. Company has furnished to Agent a true and correct copy of all Related
Agreements in effect on the Effective Date.

b. Company, and to Company’s knowledge, each other party to a Related Agreement,
has taken all necessary corporate, company, partnership or other organizational
action to authorize the signing, delivery and performance of the Related
Agreements and the consummation of the transactions contemplated thereby.

 

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ARTICLE V

AFFIRMATIVE COVENANTS

The Borrowers agree that until any obligation of the Lenders to make any Credit
Extension has expired or been terminated and the Obligations have been paid in
full and all outstanding Facility LCs have expired or the liability of LC Issuer
on the outstanding Facility LC has otherwise been discharged (including by
providing cash collateral or backup letters of credit in accordance with
Section 2.12), unless Agent and the Majority Lenders otherwise consent in
writing:

5.1. Financial Statements and Reports. Company shall maintain, for itself and
each Restricted Subsidiary, a system of accounting established and administered
in accordance with GAAP, and shall deliver to Agent, for the benefit of the
Lenders:

a. As soon as they become available and in any event within 90 days after the
end of each fiscal year of Company, an unqualified (except for qualifications
relating to changes in accounting principles or practices reflecting changes in
GAAP) audit report, with no going concern modifier, certified by Company’s
existing certified public accountants or other independent certified public
accountants of recognized national standing selected by Company and acceptable
to Agent, prepared in accordance with GAAP on a consolidated and consolidating
basis (consolidating statements need not be certified by such accountants) for
Company and its Subsidiaries, including balance sheets as of the end of such
period, related profit and loss and reconciliation of surplus statements, and
statements of income, cash flow, and changes in stockholders’ equity,
accompanied by any management letter prepared by the accountants.

b. As soon as they become available and in any event within 45 days after the
end of each quarter, unaudited consolidated statements of income and cash flow
for Company for such quarter and for the period from the beginning of such
fiscal year to the end of such quarter, setting forth in comparative form to the
corresponding period for the preceding fiscal year, a consolidated balance sheet
of Company as at the end of such quarter, together with corresponding figures
for the prior fiscal year. Company shall also deliver to Agent the related
consolidating financial statements and a certificate signed by the chief
financial officer of Company, on behalf of Company, stating that such financial
statements present fairly the financial condition of Company and that they were
prepared in accordance with GAAP (except for the absence of footnotes and
subject to year-end audit adjustments).

c. Within 10 Business Days after filing or delivering financial statements
pursuant to Section 5.1.a and 5.1.b, a Compliance Certificate in the form
attached to this Agreement as Exhibit A signed by the chief financial officer of
Company demonstrating in reasonable detail compliance (or noncompliance, as the
case may be) with Sections 6.14, 6.15, and 6.16, as of the end of such quarter
and stating that as of the end of such quarter there did not exist any Default
or Event of Default or, if such Default or Event of Default existed, specifying
the nature and period of existence of the Default or Event of Default and what
action Company proposes to take.

 

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d. Upon Agent’s request, by not later than December 31 of each year, projections
by Company for Company’s immediately following fiscal year consisting of a
balance sheet as of the end of such following fiscal year and monthly and year
to date income statements together with the assumptions underlying such
projections certified by Company’s chief financial officer or treasurer as being
based on reasonable estimates, information and assumptions and that such officer
has no reason to believe that such projections are not reasonable (provided that
no assurance can be given that such projections will be attained), all in
reasonable detail and reasonably satisfactory in scope to Agent.

e. Promptly upon any Executive Officer of Company becoming aware of any Default
or Event of Default, a notice describing the nature of the Default or Event of
Default and what action Company proposes to take to remedy or cure such Default
or Event of Default.

f. Promptly upon any Executive Officer of Company becoming aware of the
occurrence, with respect to any Plan, of any ERISA Event, a notice specifying
the nature of the event or transaction and what action Company proposes to take,
and, when received, copies of any notice from PBGC of intention to terminate or
have a trustee appointed for any Plan.

g. Promptly upon any Executive Officer of Company becoming aware of any matter
that has resulted or could reasonably be expected to result in a Material
Adverse Occurrence, a notice from Company describing the nature of the
occurrence and what action Company proposes to take.

h. Promptly upon any Executive Officer of Company becoming aware of (i) the
commencement of any action, suit, investigation, proceeding or arbitration
before any court or arbitrator or any governmental department, board, agency or
other instrumentality affecting Company, any of its Subsidiaries or any property
of such Person, or to which Company or any of its Subsidiaries is a party (other
than litigation where the insurance insures against the damages claimed and the
insurer has assumed defense of the litigation without reservation) that could
reasonably be expected to result in a Material Adverse Occurrence; or (ii) any
adverse development that occurs in any litigation, arbitration or governmental
investigation or proceeding previously disclosed by Company that could
reasonably be expected to result in a Material Adverse Occurrence, a notice from
Company describing the nature and status of the development.

i. Without duplication of items otherwise delivered pursuant to this
Section 5.1, promptly upon mailing or filing, copies of all financial
statements, reports and proxy statements mailed to Company’s shareholders.

j. Promptly upon receipt by Company or any of its Restricted Subsidiaries, a
copy of any notice of default on, or acceleration of, any Indebtedness of
Company or any Restricted Subsidiary in excess of $10,000,000 or waiver of such
Person’s non-compliance with the terms of such Indebtedness; or immediately upon
Company or any of its Restricted Subsidiaries becoming aware of the occurrence
of any event of default

 

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(however defined) on Indebtedness of Company or any Restricted Subsidiary in
excess of $10,000,000 or of any event that could, with the giving of notice
and/or lapse of time, constitute any such event of default, a notice describing
the nature of the event and what action such Person proposes to take.

k. Promptly upon any material change in accounting policies of, or financial
reporting practices by, Company or any Restricted Subsidiary, a notice
describing such material change.

l. Promptly upon any Executive Officer of Company becoming aware of it, a notice
describing the occurrence of any ERISA Event that, alone or together with any
other ERISA Events that have occurred, would reasonably be expected to be a
Material Adverse Occurrence.

m. From time to time, promptly upon request, such other information regarding
the business, operation, and financial condition of Company or any of its
Subsidiaries that any Lender reasonably requests.

Any financial statement Section 5.1.a or 5.1.b requires shall be deemed to have
been furnished on the date on which Company has filed such financial statement
with the Securities and Exchange Commission and is available on the EDGAR
website on the Internet at www.sec.gov or any successor government website that
is freely and readily available to Agent and the Lenders without charge.
Notwithstanding the foregoing, Company shall deliver paper copies of any such
financial statement to Agent upon request.

5.2. Existence. Company shall maintain, and shall cause each of its Restricted
Subsidiaries to maintain, its existence as a corporation or other entity, as
applicable, in good standing under the laws of its jurisdiction of incorporation
or formation and its qualification to transact business in each jurisdiction
where failure so to qualify would permanently preclude such Person from
enforcing its rights with respect to any material asset or could reasonably be
expected to constitute a Material Adverse Occurrence; provided that nothing in
this Section 5.2 prohibits the merger or liquidation of any Subsidiary allowed
under Section 6.1.

5.3. Insurance. Company shall maintain, and shall cause each of its Restricted
Subsidiaries to maintain, with financially sound and reputable insurance
companies such insurance that is required by law, any Loan Document or any
Related Agreement and such other insurance in such amounts and against such
hazards as is customary in the case of reputable firms engaged in the same or
similar business and similarly situated.

5.4. Payment of Taxes and Claims. Company shall file, and shall cause each of
its Restricted Subsidiaries to file, all tax returns and reports that are
required by law to be filed by such Person, and shall pay, and shall cause each
of its Restricted Subsidiaries to pay, before they become delinquent all taxes,
assessments and governmental charges and levies imposed upon it or its property
and all claims or demands of any kind (including but not limited to those of
suppliers, mechanics, carriers, warehouses, landlords and other like Persons)
which, if unpaid, might result in the creation of a Lien upon Company’s or any
of its Restricted Subsidiaries’ property; provided that: (a) the foregoing items
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good faith by appropriate proceedings, and as long as Company’s or any of its
Restricted Subsidiaries’ title to its property is not materially adversely
affected, its use of such property in the ordinary course of its business is not
materially interfered with and adequate reserves with respect thereto have been
set aside on Company’s books in accordance with GAAP; and (b) in all events,
Company and its Restricted Subsidiaries shall pay or cause to be paid all such
taxes, assessments, charges or levies forthwith upon the commencement of
foreclosure of any Lien on any asset of Company or any Restricted Subsidiary
that may have attached as security for such Lien.

5.5. Inspection. Company shall permit, and shall cause each of its Restricted
Subsidiaries to permit, any Person designated by any Lender or Agent to visit
and inspect its books and financial records, to examine and to make copies of
its books of accounts and other financial records, and to discuss with and be
advised by its officers of the affairs, finances and accounts of Company or
Restricted Subsidiaries at any reasonable times and intervals that any Lender,
or Agent designates; provided that so long as no Default or Event of Default
exists, each Lender, Agent and their respective representatives shall use their
best efforts to coordinate their inspections so that such inspections occur at
the same time. So long as no Event of Default exists at the time of any such
visit, inspection or examination or any such inspection or examination does not
reveal significant errors or discrepancies in the most recent financial and
operating statements furnished to any Lender or Agent, the expenses of the
relevant inspecting Person for such visits, inspections and examinations shall
be at the expense of such inspecting Person; provided that: (a) any such visit,
inspection, or examination made while any Event of Default exists or that
reveals any such significant error or discrepancy shall be at the expense of
Company; and/or (b) Borrowers agree to pay to Agent, solely for Agent’s account,
the costs and expenses incurred by Agent, or its representative, in connection
with such Person’s review of Company’s and/or its Restricted Subsidiaries’ real
estate construction procedures; provided further that, so long as no Default or
Event of Default exists, Borrowers are not obligated to pay for more than one
such review during any 12 month period.

5.6. Maintenance of Properties. Company shall maintain, and shall cause each of
its Restricted Subsidiaries to maintain, such Person’s properties used or
desirable in the conduct of its business in good condition, repair and working
order, normal wear and tear excepted, and supplied with all necessary equipment,
and make all necessary repairs, renewals, replacements, betterments and
improvements thereto so that the business carried on in connection therewith is
properly and advantageously conducted at all times.

5.7. Books and Records. Company shall keep, and shall cause each of its
Subsidiaries to keep, adequate and proper records and books of account in which
full and correct entries shall be made of such Person’s dealings, business, and
affairs.

5.8. Compliance. Company shall comply, and shall cause each of its Restricted
Subsidiaries to comply, in all material respects with all laws, rules,
regulations, orders, writs, judgments, injunctions, decrees or awards to which
it is subject, including, without limitation, all Environmental Laws; provided
that the failure so to comply shall not be a breach of this covenant if such
failure could not reasonably be expected to result in a Material Adverse
Occurrence and, with respect to any such failure by Company or a Restricted
Subsidiary, Company or its Restricted Subsidiary is acting in good faith to cure
such non-compliance.

 

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Without limiting the foregoing sentence, Company shall ensure that no person who
owns a controlling interest in or otherwise controls Company is (a) listed on
the Specially Designated Nationals and Blocked Person List maintained by the
Office of Foreign Assets Control (“OFAC”), Department of the Treasury, and/or
any other similar lists maintained by OFAC pursuant to any authorizing statute,
Executive Order or regulation or (b) a person designated under Section 1(b),
(c) or (d) of Executive Order No. 13224 (September 23, 2001), any related
enabling legislation or any other similar Executive Orders, and (c) without
limiting clause (a) above, Company shall comply, and shall cause each of its
Restricted Subsidiaries to comply, with all applicable Bank Secrecy Act and
anti-money laundering laws and regulations.

5.9. ERISA. Company shall maintain, and shall cause each of its ERISA Affiliates
to maintain, each Plan in compliance with all material applicable requirements
of ERISA and of the Code and with all applicable rulings and regulations issued
under ERISA and of the Code and shall not, and shall not permit any of the ERISA
Affiliates to (a) engage in any transaction in connection with which Company or
any of the ERISA Affiliates would be subject to either a civil penalty assessed
pursuant to Section 502(i) of ERISA or a tax imposed by Section 4975 of the
Code, in either case in an amount exceeding $100,000, (b) fail to make full
payment when due of all amounts that, under the provisions of any Plan, Company
or any ERISA Affiliate is required to pay as contributions thereto, or permit to
exist any accumulated funding deficiency (as such term is defined in Section 302
of ERISA and Section 412 of the Code), whether or not waived, with respect to
any Plan in an aggregate amount exceeding $100,000 or (c) fail to make any
payments in an aggregate amount exceeding $100,000 to any Multiemployer Plan
that Company or any of the ERISA Affiliates is required to make under any
agreement relating to such Multiemployer Plan or any law pertaining thereto.

5.10. Environmental Matters; Reporting. Company shall observe and comply with,
and shall cause each of its Restricted Subsidiaries to observe and comply with,
all Environmental Laws to the extent non-compliance could result in a material
liability or otherwise could reasonably be expected to result in a Material
Adverse Occurrence. Company shall give Agent prompt written notice of any
violation as to any environmental matter by Company and of the commencement of
any judicial or administrative proceeding relating to health, safety, or
environmental matters in which an adverse determination or result could
reasonably be expected to result in a Material Adverse Occurrence.

5.11. Further Assurances. Company shall promptly correct any defect or error
that is discovered in any Loan Document or in the signing, acknowledgment, or
recordation of any Loan Document. Promptly upon request by Agent or the Majority
Lenders, Company also shall execute, acknowledge, deliver, record, re-record,
file, re-file, register and re-register, any and all deeds, conveyances,
mortgages, deeds of trust, trust deeds, assignments, estoppel certificates,
financing statements and continuations, notices of assignment, transfers,
certificates, assurances and other instruments that Agent or the Majority
Lenders reasonably require from time to time in order: (a) to carry out more
effectively the purposes of the Loan Documents; (b) to perfect and maintain the
validity, effectiveness and priority of any security interests intended to be
created by the Loan Documents; and (c) to better assure, convey, grant, assign,
transfer, preserve, protect and confirm unto the Lenders the rights granted now
or hereafter intended to be granted to the Lenders under any Loan Document or
under any other instrument signed and delivered in connection with any Loan
Document or that Company may be or become bound to convey, mortgage or assign to
Agent for the benefit of the Lenders in order to carry out the intention or
facilitate the performance of the provisions of any Loan Document.

 

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5.12. LTF Leases. Company shall comply with, and shall cause each applicable
Restricted Subsidiary to comply with, its obligations under each LTF Lease in
all material respects such that neither the Encumbered Real Estate Subsidiary
that is the lessor under such LTF Lease nor any third party lender whose
Permitted Permanent Loan is secured by such LTF Lease has at any time the right
to terminate such LTF Lease by reason of default by Company or Operations under
such LTF Lease.

5.13. Ownership of Real Estate. All Real Estate owned by Company or any of its
Restricted Subsidiaries must be owned by either: (i) an Unencumbered Real Estate
Subsidiary, if such Real Estate is not subject to a Lien encumbering a Permitted
Permanent Loan; or (ii) an Encumbered Real Estate Subsidiary if such Real Estate
is encumbered by a Lien securing a Permitted Permanent Loan. Company shall not
permit any Unencumbered Real Estate Subsidiary that owns fee simple title to any
Real Estate to own any Real Estate that consists of or includes the tenant’s
interest under a long-term ground lease, except that LTF Real Estate Company,
Inc., is permitted to continue to own the ground leasehold interests it owns on
the Effective Date. Company shall not permit any Unencumbered Real Estate
Subsidiary to: (a) own any material assets other than Real Estate or Equity
Interests in another Real Estate Subsidiary; (b) engage in any substantial
business activity other than acquiring, owning, developing, and operating Real
Estate, except that LTF Real Estate Company, Inc. is permitted to be the tenant
under the existing sale-leaseback leases of Clubs listed in Schedule 6.18;
(c) incur any Indebtedness other than (1) the Obligations, (2) Indebtedness that
is not evidenced by a promissory note and is not secured by a Lien on any
property that such Unencumbered Real Estate Subsidiary incurs in the ordinary
course of owning and operating its Real Estate, and (3) LTF Real Estate Company,
Inc.’s obligations and liabilities under the leases listed in Schedule 6.18; or
(d) grant or permit any Lien on any of its Real Estate or other assets, other
than Liens that secure the Obligations.

5.14. Mandatory Distributions. Company shall cause:

a. Each Restricted Subsidiary other than Operations, Real Estate Subsidiaries,
and Foreign Subsidiaries that are not Guarantor Subsidiaries, to distribute, not
less often than monthly, to its owners all cash and cash equivalents that come
into the possession of such Restricted Subsidiary that are not required by such
Restricted Subsidiary to satisfy its immediate working capital requirements.

b. Operations and each Real Estate Subsidiary other than Foreign Subsidiaries
that are not Guarantor Subsidiaries, to enter into an agreement (each an
“Upstream Distribution Agreement”) with Company in form and substance
satisfactory to Agent: (i) requiring Operations and such Real Estate Subsidiary
to promptly distribute, and not less often than monthly, to Company all cash and
cash equivalents that come into the possession of such Subsidiary and that are
not required by such Subsidiary to satisfy: (A) its immediate obligations to
contractors and vendors entered into in the ordinary course of business; and
(B) its obligations under any Permitted Permanent Loan it has borrowed; and
(ii) assigning to Agent a Lien in all of Company’s right, title and

 

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interest in, to and under such agreement and to all payments required to be made
under such Upstream Distribution Agreement, and Company shall cause each such
Subsidiary to comply with such agreement.

5.15. Depository Accounts. Company shall maintain, and cause each of its
Restricted Subsidiaries to maintain, their depository accounts at: (a) a Lender;
or (b) any other financial institution; provided that, unless Agent has
determined that the amount on deposit in the relevant depository accounts is
immaterial, such financial institution has entered into a depository account
control agreement with Agent that is reasonably acceptable to Agent.

5.16. Designated Guarantor Subsidiaries. Company has the right, at any time, to
make any Subsidiary that is not a Wholly-Owned Subsidiary, a “Designated
Guarantor Subsidiary”, by delivering to Agent, both (i) written notice that such
Subsidiary is a Designated Guarantor Subsidiary for the purposes of this
Agreement, and (ii) delivering to Agent the Guaranty and Collateral Documents
Section 5.18 requires with respect to such Designated Guarantor Subsidiary.
Company also has the right to terminate the Designated Guarantor Subsidiary
status of any Subsidiary by delivering a written notice to Agent that it is
terminating the Designated Guarantor Subsidiary status of such Subsidiary, so
long as no Default or Event of Default exists or would exist as a result of such
termination, and Agent shall promptly sign and deliver any termination documents
Company reasonably requests to terminate the Guaranty and Collateral Documents
signed by such Subsidiary.

5.17. Designated Unrestricted Subsidiaries. Company has the right, by delivering
written notice to Agent, to designate any Wholly-Owned Subsidiary to be an
Unrestricted Subsidiary, provided that Company may not make any such designation
(i) when an Event of Default exists or (ii) if after giving effect to any such
designation, the aggregate Net Worth of all Subsidiaries that Company has
designated as Unrestricted Subsidiaries under this Section 5.17 (“Designated
Unrestricted Subsidiaries”) would exceed 5% of the consolidated Net Worth of
Company and its Subsidiaries as of the last day of the immediately preceding
fiscal quarter of Company. If, at any time, the aggregate Net Worth of all
Designated Unrestricted Subsidiaries exceeds 5% of the consolidated Net Worth of
Company and its Subsidiaries, Company shall (a) within 30 days identify in
writing to Agent a sufficient number of Designated Unrestricted Subsidiaries
that shall no longer be so-designated in order to cause the Net Worth of all
Designated Unrestricted Subsidiaries (after giving effect to such redesignation)
to be not greater than 5% of the consolidated Net Worth of Company and its
Subsidiaries, and (b) shall deliver to Agent the Guaranty and Collateral
Documents Section 5.18 requires with respect to each Restricted Subsidiary in
order to become a Restricted Subsidiary, at which time such Subsidiaries’ status
as Designated Unrestricted Subsidiaries shall terminate.

5.18. Subsidiaries that Become Guarantor Subsidiaries after the Effective Date.
Company shall, with respect to each Subsidiary that becomes a Guarantor
Subsidiary after the Effective Date, on or before the date such Subsidiary
becomes a Designated Guarantor Subsidiary, or within 10 Business Days after such
Subsidiary becomes a Required Guarantor Subsidiary, as applicable: (i) cause
such Guarantor Subsidiary to sign and deliver to Agent, for the benefit of the
Lenders, either a joinder to the existing Guaranty, or a new Guaranty,
guaranteeing the Obligations; (ii) cause such Guarantor Subsidiary to sign and
deliver to Agent all Collateral Documents Agent requests in order to grant to
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Lenders, a perfected first priority security interest in all of the assets,
other than Real Estate, of such Guarantor Subsidiary subject to no other Liens,
except for Liens permitted pursuant to Section 6.12; (iii) grant, and cause its
Subsidiaries to grant, a perfected Lien to Agent, for the benefit of the
Lenders, in the Equity Interests Company or any of its Subsidiaries owns in each
Guarantor Subsidiary, on terms substantially equivalent to the terms of the
Pledge Agreements or otherwise on terms acceptable to Agent, in its reasonable
discretion, subject to no other Liens except for Liens permitted pursuant to
Section 6.12 and, as to any Guarantor Subsidiary that is not a Wholly-Owned
Subsidiary, obtain the consent of all other owners of Equity Interests in such
Guarantor Subsidiary to such Lien and to the exercise of Agent’s rights and
remedies pursuant to the relevant Collateral Document.

5.19. Pledge of Equity Interests. Notwithstanding any other term of this
Agreement to the contrary, Company shall grant, and cause its Restricted
Subsidiaries to grant, a continuing perfected Lien to Agent, for the benefit of
the Lenders, in the Equity Interests Company or any of its Restricted
Subsidiaries owns in each Restricted Subsidiary; except that, in the case of a
Foreign Subsidiary that is a Restricted Subsidiary where the granting of such
pledge would result in a Deemed Dividend Problem, the Lien of such pledge shall
be limited to 65% of the Equity Interest of such Subsidiary.

5.20. Most Favored Lender.

a. If Company or any Restricted Subsidiary (a) amends, restates, or otherwise
modifies any Indebtedness other than the Obligations that exceeds $10,000,000 (a
“Material Financing”) or (b) otherwise enters into, assumes, or otherwise
becomes bound or obligated under any Material Financing, that contains covenants
or default provisions that restrict Company more than do the covenants and
default provisions of this Agreement, the terms of this Agreement shall, without
any further action on the part of Company, any Restricted Subsidiary, the Agent,
or any Lender, be immediately and automatically amended to include in this
Agreement each such more restrictive covenant or default provision (subject to
Section 5.20.b). Company shall give Agent written notice of each such event to
Agent together with a copy of the fully-signed and delivered Related Agreements
for such Material Financing within 10 Business Days after such Material
Financing becomes binding on Company or any Restricted Subsidiary. Upon the
written request of Company, Agent, or the Majority Lenders, Company and Agent
shall promptly sign and deliver at Company’s expense (including Agent’s attorney
fees) an amendment to this Agreement in form and substance reasonably
satisfactory to Agent evidencing the amendment of this Agreement to include such
more restrictive covenants or default provisions, provided that the signing and
delivery of such an amendment is merely for the convenience of the parties to
this Agreement and is not a precondition to the effectiveness of the automatic
amendment of this Agreement under this Section 5.20.a.

b. If, after this Agreement is amended under Section 5.20.a to include any more
restrictive covenant or default provision from any Material Financing, any such
more-restrictive covenant or default provision ceases to bind Company or any
Restricted Subsidiary or is amended to be less restrictive with respect to
Company or any Restricted Subsidiary, then, upon the written request of any of
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Lenders, provided that no Default or Event of Default then exists, Agent shall
release or similarly amend, as applicable, such more-restrictive covenant or
default provision, provided further that, if Company or any Restricted
Subsidiary pays a waiver fee or other material consideration to induce such a
termination or amendment, then Company shall pay or give to Agent, for the
benefit of the Lenders, the same fee or other consideration on a pro rata basis
in proportion to the relative outstanding principal amounts of the Obligations
and the principal amount of the Indebtedness outstanding under such Material
Financing (plus, in the case of a revolving credit facility, the aggregate
principal amount of additional loans that the lenders are legally committed to
fund). But no release or amendment under this Section 5.20.b shall make the
covenants and Events of Default in this Agreement less restrictive than they
would have been absent the original amendments under Section 5.20.a that are
being terminated or amended to be less restrictive.

ARTICLE VI

NEGATIVE COVENANTS

The Borrowers agree that until any obligation of the Lenders to make any Credit
Extension has expired or been terminated, the Obligations have been paid in
full, and all outstanding Facility LCs have expired or LC Issuer’s liability on
the outstanding Facility LCs has otherwise been discharged (including by
providing cash collateral or backup letters of credit in accordance with
Section 2.12), unless the Majority Lenders otherwise consent in writing:

6.1. Merger. Company shall not merge or consolidate or enter into any analogous
reorganization or transaction with any Person or liquidate, wind up or dissolve
itself (or suffer any liquidation or dissolution) and shall not permit any of
its Restricted Subsidiaries to do any of the foregoing; provided that, upon not
less than 5 Business Days prior written notice to Agent, any Wholly-Owned
Subsidiary of Company may be merged with or liquidated into Company or any other
Wholly-Owned Subsidiary so long as Company or such Wholly-Owned Subsidiary is
the surviving corporation or entity and such merger or liquidation does not
violate or result in a violation of any other term of this Agreement.

6.2. Disposition of Assets. Company shall not directly or indirectly, sell,
assign, lease, convey, transfer or otherwise dispose of (whether in one
transaction or a series of transactions) any property (including accounts and
notes receivable, with or without recourse) or enter into any agreement to do
any of the foregoing and shall not permit any of its Restricted Subsidiaries to
do any of the foregoing, except, subject to the limitations in Section 6.22:

a. dispositions of inventory, equipment, or fixtures in the ordinary course of
business;

b. the sale of equipment to the extent that such equipment is exchanged for
credit against the purchase price of similar replacement equipment, or the
proceeds of such sale are applied with reasonable promptness to the purchase
price of such replacement equipment;

 

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c. the sale or transfer of any open and operating Clubs to an Encumbered Real
Estate Subsidiary made in connection with such Encumbered Real Estate
Subsidiary’s incurrence of a Permitted Permanent Loan to be secured by such
Clubs;

d. the LTF Leases;

e. the sale or transfer of open and operating Clubs in connection with a
sale-leaseback transaction permitted by Section 6.18.b;

f. the sale or transfer of any Unrestricted Subsidiary or the property of any
Unrestricted Subsidiary;

g. the sale or transfer of Outlots in the ordinary course of Company’s and its
Restricted Subsidiaries’ business; and

h. other dispositions of property not described in Section 6.2.a through
Section 6.2.g that are not material to the operation of Company or any
Restricted Subsidiary, so long as the aggregate net book value of all property
disposed of under this Section 6.2.h in any fiscal year is less than 10% of the
net book value of the consolidated assets of Company and its Subsidiaries as of
the then most fiscal year end.

6.3. Plans. Company shall not permit any event to occur or condition to exist
that would permit any Plan to terminate under any circumstances that would cause
the Lien provided for in Section 4068 of ERISA to attach to any assets of
Company or any of its ERISA Affiliates and shall not permit any of its ERISA
Affiliates to do so; and Company shall not permit, as of the most recent
valuation date for any Plan subject to Title IV of ERISA, the present value
(determined on the basis of reasonable assumptions employed by the independent
actuary for such Plan and previously furnished in writing to the Lenders) of
such Plan’s projected benefit obligations to exceed the fair market value of
such Plan’s assets by more than $100,000 and shall not permit any of its ERISA
Affiliates to do so.

6.4. Change in Nature of Business. Company shall not make, and shall not permit
any of its Restricted Subsidiaries to make, any material change in the nature of
the business of such Person, as carried on at the Effective Date.

6.5. Acquisitions; Subsidiaries, Partnerships and Joint Ventures and Ownership.
Subject to the limitations in Section 6.22, Company shall not, and shall not
permit any of its Restricted Subsidiaries to, purchase or lease or otherwise
acquire all or substantially all of the assets of any Person or make any
Acquisition except Permitted Acquisitions for Restricted Subsidiaries, LTF
Leases, and the transactions permitted by Section 6.2, 6.10, or 6.18. Company
shall not permit any of its Unrestricted Subsidiaries to make any Acquisitions
other than Permitted Acquisitions for Unrestricted Subsidiaries.

6.6. Negative Pledges. Company shall not enter into, and shall not permit any of
its Restricted Subsidiaries to enter into, any agreement, bond, note or other
instrument (including, without limitation, any ground lease or other real estate
lease described in Section 6.21) with or for the benefit of any Person other
than the Lenders that would (a) prohibit such Person from granting, or otherwise
limit the ability of such Person to grant, to the Lenders any Lien on any

 

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assets or properties of such Person, and/or, in the case of any of Company’s
Restricted Subsidiaries, would prohibit such Restricted Subsidiary from paying
distributions or dividends to its equity holders except for the Related
Agreements evidencing or securing: (i) a Permitted Permanent Loan so long as
such restriction applies only to the Encumbered Real Estate Subsidiaries that
are bound by the relevant Related Agreements and terminates upon the payment of
such Permitted Permanent Loan; and (ii) Purchase Money Indebtedness (including
Capitalized Leases) that prohibit the granting of additional Liens on the
property securing such Purchase Money Indebtedness, or (b) require Company or
any of its Restricted Subsidiaries to grant a Lien to any other Person if such
Person grants any Lien to the Lenders.

6.7. Restricted Payments. Company shall not make, and shall not permit any
Restricted Subsidiary to make any Restricted Payments or prepay any Indebtedness
of Company or any of its Restricted Subsidiaries other than the Obligations,
except for the following:

a. So long as no Default or Event of Default exists either before or immediately
following the making of any such payment, Company may make Restricted Payments;

b. any Wholly-Owned Subsidiary of Company may pay dividends or make
distributions to its parent; provided that, if such Wholly-Owned Subsidiary is
indirectly owned by Company through one or more intermediate Subsidiaries, then
such Subsidiary may not pay dividends or make distributions to its parent unless
all of such intermediate Subsidiaries can pay dividends or make distributions to
their respective parents without any restriction or limitation set forth in any
Related Agreement;

c. FCA Restaurant Company, LLC may make distributions to its members in an
amount equal to their federal and state income tax liability arising from their
respective allocable share of that Subsidiary’s taxable income so long as that
Subsidiary is a pass-through tax entity under the Code (such distributions being
the “Tax Distributions”); provided that: (i) such members’ federal and state
income tax liability shall be computed on the basis of the highest marginal
combined tax rate for individuals under the Code and Minnesota law; (ii) Tax
Distributions shall be paid in estimated quarterly installments
contemporaneously with an individual’s obligations to pay estimated income taxes
based upon FCA Restaurant Company, LLC’s annualized income through the end of
its fiscal month immediately preceding such tax installment’s due date and also
contemporaneously with any such members’ filing of its, his or her federal and
state income tax returns if the estimated Tax Distributions paid for any of that
Subsidiary’s fiscal years are not sufficient to pay such members’ actual income
tax liability arising from its, his or her share of that Subsidiary’s actual
taxable income for such fiscal year as disclosed by copies of that Subsidiary’s
tax returns and related Schedules K-1 for such fiscal year delivered to Agent
and the Lenders pursuant to this Agreement; and (iii) if the Tax Distributions
actually paid with respect to any of such Subsidiary’s fiscal years exceed the
Tax Distributions permitted by this Section based upon such Subsidiary’s actual
taxable net income as disclosed by copies of such tax returns and schedules
described above, then such Subsidiary shall immediately recover the excess
amount from the recipient and shall not pay any further Tax Distribution to any
person until such excess amount is recovered;

 

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d. prepayments of: (i) Capitalized Lease Obligations; and/or (ii) other
Indebtedness for borrowed money, provided that prepayments of Subordinated
Indebtedness and unsecured Indebtedness shall not exceed $100,000,000 in the
aggregate between the Effective Date and the Facility Termination Date,
determined on a consolidated basis for Company and its Subsidiaries so long as,
in either case, no Default or Event of Default exists either before or
immediately following the making of such prepayment and such prepayment does not
require Company or any of its Subsidiaries to pay any prepayment premium or
penalty; and

e. Company may purchase shares of its stock in the open market for the purpose
of selling such shares to its employees pursuant to a qualified employee stock
bonus plan described in Section 401 of the Code or an employee stock purchase
plan described in Section 422 of the Code that has been adopted by Company.

6.8. Transactions with Affiliates. Company shall not, and shall not permit any
of its Restricted Subsidiaries to: (a) permit the direct or indirect transfer,
distribution or payment of any of its funds, assets or property to any Affiliate
other than a Restricted Subsidiary, except that Company or any of its Restricted
Subsidiaries may pay: (i) bona fide employee or director compensation (including
benefits) to any Affiliate for services actually rendered to such Affiliate;
(ii) expenses incurred by an employee in the ordinary course of business; and
(iii) expenses or rents for services or property or the use of property
allocated to such Affiliate; provided that: (A) all such payments pursuant to
clauses (a)(i), (ii) and (iii) shall not exceed the amount that would be payable
in a comparable arm’s length transaction with a third party who is not an
Affiliate; (b) lend or advance money, credit or property to any Affiliate except
as permitted by Sections 6.10 and 6.11; (c) invest in (by capital contribution
or otherwise) or purchase or repurchase any stock or indebtedness, or any assets
or properties, of any Affiliate except as permitted by Sections 6.7 and 6.10 or
otherwise permitted by other provisions of this Section 6.8; or (d) guarantee,
assume, endorse or otherwise become responsible for, or enter into any agreement
or instrument for the purpose of discharging or assuming (directly or
indirectly, through the purchase of goods, supplies or services or otherwise)
the indebtedness, performance, capability, obligations, dividends or agreement
for the furnishing of funds of any Affiliate or any of its officers, directors
or employees except for the Contingent Obligations permitted by Section 6.13.

6.9. Accounting Changes. Company shall not make, and shall not permit any of its
Restricted Subsidiaries to make, any significant change in accounting treatment
or reporting practices, except as permitted by GAAP; provided that, for the
purposes of this Agreement, any such change is subject to Section 1.2.

6.10. Investments. Company shall not, and shall not permit any of its Restricted
Subsidiaries to, acquire for value, make, have or hold any Investments, except
the following, provided that Company’s right to make any of the following
Investments is subject to the limitation in Section 6.22:

a. Investments described in Schedule 6.10.

 

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b. Travel-related advances to management personnel and employees in the ordinary
course of business.

c. Investments in readily marketable United States Government Treasury notes or
bills, or in United States Government Agency Securities, including discount
notes that are supported by the full faith and credit of the United States.

d. Certificates of deposit or bankers’ acceptances issued by any Lender or
overnight Eurocurrency deposits issued by any Lender or any of its Affiliates.

e. Commercial paper with an investment grade rating of A1/P1 or A2/P2;

f. Asset backed securities with a credit rating of AAA.

g. Repurchase agreements backed by securities listed in Section 6.10.c or
Section 6.10.d above; provided that all such agreements shall require physical
delivery of the securities securing such repurchase agreement, except those
delivered through the Federal Reserve Book Entry System.

h. Money market mutual funds having a top short-term rating.

i. Extensions of credit in the nature of (i) purchase money financing extended
to a purchaser of any assets of Company or its Restricted Subsidiaries, not to
exceed $50,000,000 in the aggregate during the term of this Agreement, and
(ii) accounts receivable or notes receivable arising from the sale of goods and
services in the ordinary course of business.

j. Shares of stock, obligations or other securities received in settlement of
claims arising in the ordinary course of business.

k. Investments by Company in a Encumbered Real Estate Subsidiary that are made
in connection with such Encumbered Real Estate Subsidiary’s incurrence of a
Permitted Permanent Loan that are required to be made by the applicable Related
Agreements; provided that such Investments are made solely by transferring to
such Encumbered Real Estate Subsidiary the real property and improvements of the
relevant open and operating Clubs or of Company’s relevant corporate
headquarters office buildings that secure such Permitted Permanent Loan.

l. Investments by Company in its Restricted Subsidiaries.

m. Permitted Acquisitions.

n. Investments made after the Effective Date in Unrestricted Subsidiaries for
Club joint ventures; provided that the cumulative net amount of all such
Investments, taken in the aggregate, shall not exceed $50,000,000 at any time.

o. Additional Investments by Company or Restricted Subsidiaries of types not
described in Section 6.10.a through 6.10.n above; provided that the aggregate
amount of all such additional Investments described in this Section 6.10.o shall
not exceed 10% of the consolidated Net Worth of Company and its Subsidiaries at
any time.

 

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Any Investment under Section 6.10.a, .d, .e, .f., or .g above must mature within
one year of the acquisition of such Investment by Company and such Investment
must be maintained in securities accounts maintained with a Lender or, if not
with a Lender, then with any securities intermediary that has signed a
securities account control agreement with Agent that is reasonably acceptable to
Agent.

6.11. Indebtedness. Company shall not incur, create, issue, assume, or suffer to
exist any Indebtedness, and Company shall not permit any of its Restricted
Subsidiaries to do any of the foregoing, except:

a. The Obligations.

b. At any time, current liabilities determined in accordance with GAAP, other
than for borrowed money, incurred in the ordinary course of business, and
intercompany Indebtedness between any of Company and its Restricted
Subsidiaries.

c. Indebtedness existing on the Effective Date and disclosed on Schedule 6.11,
and any extension or refinancing of such Indebtedness; provided that the
Indebtedness incurred in connection with such extension or refinancing, and the
Related Agreements pertaining thereto, do not cross-default to any other
Indebtedness of Company or any of its Subsidiaries except, in the case of:
(A) an extension, any cross-default that is contained in the Related Agreements
pertaining to such extended Indebtedness at the time of its extension; or (B) a
refinancing, any cross-default to other Indebtedness that is held by the holder
of the refinancing Indebtedness.

d. Indebtedness consisting of endorsements for collection, deposit or
negotiation and warranties of products or services, in each case incurred in the
ordinary course of business.

e. Permitted Permanent Loans, provided that such Permitted Permanent Loans shall
cause any automatic amendment of this Agreement that applies under the “most
favored lender” provision in Section 5.20.

f. Contingent liabilities permitted by Section 6.13.

g. Other unsecured Indebtedness incurred by Company or any of its Restricted
Subsidiaries; provided that: (i) the Related Agreements do not cross-default to
any other Indebtedness of Company or any of its Subsidiaries except for
Indebtedness that is held by the holder of such additional Indebtedness;
(ii) reasonably before the incurrence of such Indebtedness, Agent has received
an unexecuted form that is finalized in all material respects of each material
Related Agreement to be signed and delivered in connection with such
transaction; and (iii) such other unsecured Indebtedness shall cause any
automatic amendment of this Agreement that applies under the “most favored
lender” provision in Section 5.20.

 

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h. The Rate Protection Obligations.

i. The Parity Secured Debt, provided that such other secured Indebtedness shall
cause any automatic amendment of this Agreement that applies under the “most
favored lender” provision in Section 5.20.

j. Other recourse Indebtedness secured by Real Estate that is not described in
Sections 6.11.a through 6.11.i, in an aggregate amount not to exceed at any time
more than 10% of the Net Worth of Company and its Subsidiaries on a consolidated
basis as shown on the consolidated balance sheet of Company then most recently
provided to Agent under Section 5.1, provided that (i) the Related Agreements
evidencing or securing such Indebtedness are in form and substance satisfactory
to Agent, in its reasonable business judgment, provided that the default
provisions in such Related Agreements may provide for cross-acceleration with
respect to the covenant defaults under this Agreement, (ii) reasonably before
the incurrence of such Indebtedness, Agent has received drafts that are
finalized in all material respects of each material Related Agreement to be
signed and delivered in connection with such transaction, and (iii) that such
other recourse Indebtedness shall cause any automatic amendment of this
Agreement that applies under the “most favored lender” provision in
Section 5.20.

k. Other secured Indebtedness that is not described in Sections 6.11.a through
6.11.j, in an aggregate amount not to exceed at any time more than 10% of the
assets of Company and its Subsidiaries on a consolidated basis as shown on the
consolidated balance sheet of Company then most recently provided to Agent under
Section 5.1, provided that such other secured Indebtedness shall cause any
automatic amendment of this Agreement that applies under the “most favored
lender” provision in Section 5.20.

Notwithstanding the foregoing, the Indebtedness, other than Permitted Permanent
Loans, of Foreign Subsidiaries that are Restricted Subsidiaries but not
Guarantor Subsidiaries shall not exceed the Approximate Equivalent Amount of
U.S.$15,000,000.

6.12. Liens. Company shall not create, incur, assume or suffer to exist any
Lien, or enter into, or make any commitment to enter into, any arrangement for
the acquisition of any property through conditional sale, lease-purchase or
other title retention agreements, with respect to any property now owned or
hereafter acquired by Company and shall not permit any of its Restricted
Subsidiaries to do any of the foregoing with respect to any property now owned
or hereafter acquired by such Restricted Subsidiary, except:

a. Liens granted to Agent and the Lenders under the Collateral Documents to
secure the Obligations.

b. Liens existing on the Effective Date and disclosed on Schedule 6.12.

c. Deposits or pledges to secure payment of workers’ compensation, unemployment
insurance, old age pensions or other social security obligations, in the
ordinary course of business of Company or its Subsidiaries.

 

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d. Liens for taxes, fees, assessments, and governmental charges not delinquent
or to the extent that Section 5.4 does not require such Liens to be paid.

e. Liens of carriers, warehousemen, mechanics and materialmen, and other like
Liens arising in the ordinary course of business, for sums not due or to the
extent Section 5.4 does not require such sums to be paid; provided that the
Liens of mechanics and materialmen shall: (i) not exceed the aggregate
outstanding amount of $15,000,000 determined on a consolidated basis for Company
and its Subsidiaries; and (ii) in all events, Company and its Restricted
Subsidiaries shall pay or cause to be paid each such Lien forthwith upon the
commencement of foreclosure of such Lien.

f. Liens incurred or deposits or pledges made or given in connection with, or to
secure payment of, indemnity, performance or other similar bonds.

g. Liens arising solely by virtue of any statutory or common law provision
relating to banker’s liens, rights of set-off or similar rights and remedies as
to deposit accounts or other funds maintained with a creditor depository
institution; provided that (i) such deposit account is not a dedicated cash
collateral account and is not subject to restriction against access by the
account holder in excess of those set forth by regulations promulgated by the
Board, and (ii) such deposit account is not intended by Company or any of its
Restricted Subsidiaries to provide collateral to the depository institution.

h. Encumbrances in the nature of zoning restrictions, easements and rights or
restrictions of record on the use of real property and landlord’s Liens under
leases on the premises rented that do not materially detract from the value of
such property or impair its use in the business of Company or its Restricted
Subsidiaries.

i. The interest of any lessor under any Capitalized Lease entered into after the
Effective Date or purchase money Liens on property acquired after the Effective
Date; provided that (i) the Indebtedness it secures is permitted by
Section 6.11.d and (ii) such Liens are limited to the property acquired and do
not secure Indebtedness other than the related Capitalized Lease Obligations or
the purchase price of such property.

j. Liens against the real property and improvements and rights as lessor under
leases of an Encumbered Real Estate Subsidiary securing a Permitted Permanent
Loan.

k. Liens against the Collateral securing the Parity Secured Debt, provided that:
(i) Agent, or another Person acceptable to Agent, in its reasonable business
judgment, is the collateral agent for the holders of such Parity Secured Debt;
and (ii) such Liens are subject to an Intercreditor Agreement.

l. Liens on Collateral securing the Indebtedness described in Section 6.11.j and
6.11.k.

6.13. Contingent Liabilities. Company shall not, and shall not permit any of its
Restricted Subsidiaries to: (a) endorse, guarantee, contingently agree to
purchase or to provide funds for the payment of, or otherwise become
contingently liable upon, any obligation of any

 

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other Person, except: (i) by the endorsement of negotiable instruments for
deposit or collection (or similar transactions) in the ordinary course of
business; (ii) for guarantees of the obligations of Company to the Lenders or
any Rate Protection Provider and for other Contingent Obligations for the
benefit of the Lenders or any Rate Protection Provider; (iii) Contingent
Obligations existing on the Effective Date and described on Schedule 6.13;
(iv) contingent liabilities incurred after the Effective Date in connection with
Permitted Permanent Loans so long as such contingent liabilities comply with the
conditions set forth in the definition of Permitted Permanent Loan;
(v) guaranties of obligations that would otherwise constitute permitted
Indebtedness under Section 6.11; and (vi) Company’s guaranty of the obligations
of any Real Estate Subsidiary as the lessee under ground leases or other real
estate leases covering any Real Estate on which Company intends to develop and
operate a Club and related businesses (including, without limitation, the lease
guaranties existing on the Effective Date and described in Schedule 6.13) so
long as: (A) the applicable Related Agreements evidencing any lease guaranty
issued after the Effective Date shall not: (1) impose any materially greater
liability on Company than that incurred by Company pursuant to the LTF CMBS I
Related Agreements; (2)(a) cross-default to any other Indebtedness of Company or
any other Subsidiary; and/or (b) violate Section 6.6; and/or (c) require Company
to waive its rights of contribution, subrogation or other similar rights to
succeed to the relevant lender’s rights against the borrowing Encumbered Real
Estate Subsidiary or its assets upon Company’s payment and performance in full
of its obligations under such Related Agreements; and (B) in the case of a
ground lease, such ground lease contains the material provisions that are
routinely required by rating agencies in connection with rating a Securitized
commercial loan that is secured by a leasehold mortgage (any guaranty described
in this clause (a)(vi) shall cause any automatic amendment of this Agreement
that applies under the “most favored lender” provision in Section 5.20); or
(b) agree to maintain the net worth or working capital of, or provide funds to
satisfy any other financial test applicable to, any other Person; or (c) enter
into or be a party to any contract for the purchase or lease of materials,
supplies or other property or services if such contract requires that payment be
made by it regardless of whether or not delivery is ever made of such materials,
supplies or other property or services.

6.14. Fixed Charge Coverage Ratio. Commencing with the Quarterly Measurement
Date occurring on June 30, 2011, Company shall not permit the Fixed Charge
Coverage Ratio, as of the Quarterly Measurement Date for the Measurement Period
ending on that date, to be less than 1.50 to 1.00.

6.15. Consolidated Leverage Ratio. Commencing with the Quarterly Measurement
Date occurring on June 30, 2011, Company shall not permit the Consolidated
Leverage Ratio, as of the Quarterly Measurement Date for the Measurement Period
ending on that date, to be more than 4.00 to 1.00.

6.16. Unencumbered Asset Coverage Ratio. Commencing with the Quarterly
Measurement Date occurring on June 30, 2011, Company shall not permit the
Unencumbered Asset Coverage Ratio, as of the Quarterly Measurement Date for the
Measurement Period ending on that date, to be less than 1.30 to 1.00.

6.17. Loan Proceeds. Company shall not use any part of the proceeds of any Loan
or Advances directly or indirectly, and whether immediately, incidentally or
ultimately, (a) to

 

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purchase or carry “margin stock”, as that term is defined in Regulation U, or to
extend credit to others for the purpose of purchasing or carrying margin stock
or to refund Indebtedness originally incurred for such purpose or (b) for any
purpose that entails a violation of, or that is inconsistent with, Regulations U
or X.

6.18. Sale and Leaseback Transactions. Company shall not enter into, and shall
not permit any of its Restricted Subsidiaries to enter into, any arrangement,
directly or indirectly, whereby it sells or transfer any property, real or
personal, and thereafter leases the same property for the same or a
substantially similar purpose or purposes as the property sold or transferred,
except for:

(a) Sale-leaseback transactions existing on the Effective Date and disclosed on
Schedule 6.18.

(b) Sale-leaseback transactions relating to an open and operating Club that are
entered into by Company after the Effective Date; provided that: (i) the Related
Agreements do not cross-default to any other Indebtedness of Company or any of
its Subsidiaries except for Indebtedness that is held by the lessor party to
such lease; and (ii) reasonably before the consummation of such transaction,
Agent has received drafts that are finalized in all material respects of each
material Related Agreement to be signed and delivered in connection with such
transaction.

6.19. Related Agreements. Company shall not, and shall not permit any of its
Subsidiaries to amend, modify, or supplement any provision of, or waive any
other party’s compliance with any of the terms of, any Related Agreement in any
manner that:

(a) provides for any cross-default to any Indebtedness of Company or any of its
Subsidiaries under this Agreement or any Loan Document, except that such Related
Agreement may cross default among the Indebtedness of Unrestricted Subsidiaries;

(b) could reasonably be expected to result in a Material Adverse Occurrence; or

(c) is materially adverse to the rights and benefits of Agent or the Lenders.

6.20. Fiscal Year. Company shall not change its fiscal year.

6.21. Real Estate Leases. Company shall not permit any Real Estate Subsidiary to
become the tenant under any ground lease or other lease covering any Real Estate
with any lessor or landlord in which the Related Agreements relating to such
ground lease or other Real Estate lease: (a)(i) cross-default to any
Indebtedness of Company or any of its Subsidiaries under this Agreement or any
Loan Document; (ii) contains any financial covenants, or (iii) violates
Section 6.6; and (b) in the case of a long-term ground lease, such long-term
ground lease does not contain the material provisions that are routinely
required by rating agencies in connection with rating a Securitized commercial
loan that is secured by a ground leasehold mortgage.

6.22. Limitation on Net Worth of Unrestricted Subsidiaries. Notwithstanding
anything in this Agreement to the contrary, Company shall not: (i) permit the
aggregate Net

 

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Worth of all Unrestricted Subsidiaries to exceed 10% of the consolidated Net
Worth of Company and its Subsidiaries as of any Quarterly Measurement Date; or
(ii) make, or permit any Subsidiary to make, any Acquisition, Investment, or
Disposition, that would cause the aggregate Net Worth of all Unrestricted
Subsidiaries to exceed 10% of the consolidated Net Worth of Company and its
Subsidiaries immediately after such Acquisition, Investment, or Disposition.

ARTICLE VII

EVENTS OF DEFAULT AND REMEDIES

7.1. Events of Default. The occurrence of any one or more of the following
events constitutes an Event of Default:

a. Any of the Borrowers fails to pay when due, whether by acceleration or
otherwise, any interest on any Loan, any fee or other amount required to be made
to Agent pursuant to the Loan Documents, or any payment on any Rate Protection
Obligation, or any of the Borrowers fails to pay when due, whether by
acceleration or otherwise, any principal of any Loan or any Reimbursement
Obligation that is not paid with the proceeds of Revolving Loans pursuant to
Section 2.13.

b. Any representation or warranty made by or on behalf of any of the Company or
any of its Restricted Subsidiaries in any Loan Document or by or on behalf of
any of Company or any of its Restricted Subsidiaries in any certificate,
statement, report, or document delivered to any Lender or Agent pursuant to or
in connection with any Loan Document or any Credit Extension is false or
misleading in any material respect on the date as of which the facts set forth
are stated or certified.

c. any of the Borrowers fails to comply with Sections 5.2 or 5.3 or any Section
of Article VI.

d. Company or any Restricted Subsidiary fails to comply with any other
agreement, covenant, condition, provision, or term in this Agreement (other than
those set forth in this Section 7.1) or any other Loan Document on its part to
be performed and such failure to comply continues for 30 calendar days after
whichever of the following dates is the earliest: (i) the date Company gives
notice of such failure to the Lenders, (ii) the date Company should have given
notice of such failure to Agent pursuant to Section 5.1, or (iii) the date Agent
or any Lender gives notice of such failure to Company.

e. Borrowers or any of its Restricted Subsidiaries becomes insolvent or
generally does not pay its debts as they mature or applies for, consents to, or
acquiesces in the appointment of a custodian, trustee or receiver of Company or
any of its Restricted Subsidiaries or for a substantial part of the property of
such Restricted Subsidiary or, in the absence of such application, consent or
acquiescence, a custodian, trustee or receiver is appointed for Company or any
of its Restricted Subsidiaries or for a substantial part of its property and is
not discharged within 30 days, or Company or any of its Restricted Subsidiaries
makes an assignment for the benefit of creditors.

f. Any bankruptcy, reorganization, debt arrangement, or other proceedings under
any bankruptcy or insolvency law is instituted by or against Company, or any of
its

 

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Restricted Subsidiaries, and, if instituted against such Person, is consented to
or acquiesced in by such Person, or remains undismissed for 30 days, or an order
for relief is entered against such Person.

g. Any dissolution or liquidation proceeding not permitted by Section 6.1 is
instituted by or against Company or any of its Restricted Subsidiaries and, if
instituted against such Person, is consented to or acquiesced in by such Person
or remains undismissed for 30 days.

h. A judgment or judgments for the payment of money in excess of $3,000,000 in
the aggregate is entered against Company and/or any of its Restricted
Subsidiaries and either (i) the judgment creditor executes on such judgment or
(ii) such judgment remains unpaid or undischarged for more than 30 days from the
date it is entered or such longer period during which execution of such judgment
is stayed during an appeal from such judgment.

i. The maturity of any Indebtedness of Company or any of its Restricted
Subsidiaries (other than Indebtedness under this Agreement or the other Loan
Documents) in excess of the aggregate amount of $10,000,000 for any or all of
such Persons is accelerated, or Company or any of its Restricted Subsidiaries
fails to pay any such Indebtedness when due or, in the case of such Indebtedness
payable on demand, when demanded, or any event occurs or condition exists and
continues for more than the period of grace, if any, that applies and has the
effect of causing, or permitting (any required notice having been given and
grace period having expired) the holder of any such Indebtedness or any trustee
or other Person acting on behalf of such holder to cause such Indebtedness to
become due prior to its stated maturity or to realize upon any collateral given
as security for such Indebtedness.

j. Any execution or attachment is issued whereby any substantial part of the
property of Company or any of its Restricted Subsidiaries is taken or attempted
to be taken and it is not vacated or stayed within 30 days after its issuance.

k. Any Loan Document, at any time, ceases to be in full force and effect (except
in accordance with its terms or in a transaction permitted by this Agreement) or
is judicially declared null and void, or its validity or enforceability is
contested by Company or any other Loan Party, or Agent or the Lenders cease to
have a valid and perfected first priority security interest in any of the
collateral it describes (other than by reason of the action or inaction of Agent
or any Lender).

l. Any Change of Control occurs.

m. The lessor party to any material Operating Lease on which Company or any of
its Restricted Subsidiaries is the lessee party declares an event of default
(howsoever defined) under such Operating Lease and terminates such Operating
Lease or accelerates Company’s or any of its Restricted Subsidiaries’ payment
obligations under such Operating Lease. For the purposes of this Event of
Default, an Operating Lease is material if the aggregate rent payable under such
Operating Lease and all other Operating

 

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Leases between the original lessor party (without giving effect to any
assignment of such original lessor party’s assignment of its rights under such
leases), on the one hand, and Company or any of its Restricted Subsidiaries, on
the other hand, are more than $5,000,000 during any fiscal year.

n. An ERISA Event occurs that, in Agent’s opinion, when taken together with all
other ERISA Events that have occurred, could reasonably be expected to be a
Material Adverse Occurrence.

7.2. Remedies. If (a) any Event of Default described in Sections 7.1.e, .f or .g
occurs with respect to any of the Borrowers, the Commitments shall automatically
terminate and the Obligations shall automatically become immediately due and
payable, and Borrowers shall without demand pay into the Facility LC Collateral
Account an amount equal to the aggregate face amount of all outstanding Facility
LCs; or (b) any other Event of Default exists, then, upon receipt by Agent of a
request in writing from the Majority Lenders, Agent shall take any of the
following actions so requested: (i) declare the Commitments terminated,
whereupon the Commitments shall terminate; (ii) declare the outstanding unpaid
principal balance of the Loans, the accrued and unpaid interest on each Loan,
and all other Obligations to be forthwith due and payable, whereupon the Loan,
all accrued and unpaid interest on the Loans, and all such Obligations shall
immediately become due and payable, in each case without presentment, demand,
protest or other notice of any kind, all of which are hereby expressly waived,
anything in this Agreement or in any other Loan Document to the contrary
notwithstanding; and (iii) demand that Borrowers pay into the Facility LC
Collateral Account an amount equal to the aggregate face amount of all
outstanding Facility LCs. Upon the occurrence of any of the events described in
clause (a) of the preceding sentence, or upon the occurrence of any of the
events described in clause (b) of the preceding sentence when so requested by
the Majority Lenders, Agent has the right to exercise all rights and remedies
under any of the Loan Documents and to enforce all rights and remedies under any
applicable law.

7.3. Offset. In addition to the remedies set forth in Section 7.2, upon the
occurrence of any Event of Default and thereafter while it continues, each
Borrower hereby irrevocably authorizes each Lender or any other holder of any
Note to offset any and all balances, credits, deposits (general or special, time
or demand, provisional or final), accounts (including, without limitation, any
demand deposit, savings or investment account) or monies of such Borrower then
or thereafter with such Lender or such other holder, or any obligations of such
Lender or such other holder of the Note against the Obligations. Each Borrower
hereby grants to Agent for itself and the pro rata use and benefit of each
Lender, each other Note holder and each Rate Protection Provider a Lien in all
such balances, credits, deposits, accounts or monies. Each Borrower and each
Lender agree that Agent has perfected its Lien by “control” over each such
demand deposit, savings or investment account or monies of each Borrower then or
thereafter with such Lender or other holder of any Notes within the meaning of
Article 8 and Article 9 of the Uniform Commercial Code enacted in the relevant
jurisdiction. Each Lender agrees that, as promptly as is reasonably possible
after the exercise of any such setoff right, it shall notify such Borrower of
its exercise of such setoff right; provided that the failure of any Lender to
provide such notice shall not affect the validity of the exercise of such setoff
rights. Nothing in this Agreement shall be deemed a waiver or prohibition of or
restriction on any Lender to all rights of banker’s lien, setoff, and
counterclaim available pursuant to law.

 

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ARTICLE VIII

THE AGENT

The following provisions govern the relationship of Agent with the Lenders.

8.1. Appointment; Nature of Relationship. Each Lender hereby appoints U.S. Bank
as its contractual representative and irrevocably authorizes U.S. Bank as the
“Agent” to act as its contractual representative with the rights and duties the
Loan Documents expressly set forth. Agent agrees to act as such contractual
representative upon the express conditions contained in this Article VIII. Each
reference in the Loan Documents to U.S. Bank as the “Agent” refers only to U.S.
Bank in its capacity as the contractual representative of the Lenders, and
notwithstanding the use of the defined term “Agent,” the Lenders understand and
agree that Agent has no fiduciary responsibilities to any Lender by reason of
any Loan Document and that Agent is merely acting as the contractual
representative of the Lenders with only those duties the Loan Documents
expressly set forth. In its capacity as the Lenders’ contractual representative,
Agent (i) does not hereby assume any fiduciary duties to any of the Lenders,
(ii) is a “representative” of the Lenders within the meaning of the term
“secured party” as defined in the Minnesota Uniform Commercial Code and (iii) is
acting as an independent contractor, the rights and duties of which are limited
to those expressly set forth in the Loan Documents. Each of the Lenders hereby
agrees to assert no claim against Agent on any agency theory or any other theory
of liability for breach of fiduciary duty, all of which claims each Lender
hereby waives.

8.2. Powers. Agent has and has the right to exercise all powers the Loan
Documents specifically delegate to Agent, together with all powers that are
reasonably incidental to those express powers. Agent has no implied duty to any
Lender or any obligation to any Lender to take any action under any Loan
Document except actions the Loan Documents expressly require Agent to take.

8.3. General Immunity. Neither Agent nor any of its directors, officers, agents,
or employees shall be liable to any of the Borrowers or any of the Lenders for
any action taken or omitted to be taken by it or them under any Loan Document or
in connection with any Loan Document except to the extent such action or
inaction is determined in a final non-appealable judgment by a court of
competent jurisdiction to have arisen from the gross negligence or willful
misconduct of such Person.

8.4. No Responsibility for Loans, Recitals, etc. Neither Agent nor any of its
directors, officers, agents or employees is responsible for or has any duty to
ascertain, inquire into, or verify (a) any statement, warranty or representation
made in connection with any Loan Document or any Advance or Facility LC ;
(b) the performance or observance of any of the covenants or agreements of any
obligor under any Loan Document, including, without limitation, any agreement by
an obligor to furnish information directly to each Lender; (c) the satisfaction
of any condition specified in Article IV, except receipt of items required to be
delivered solely to Agent; (d) the existence or possible existence of any
Default or Event of Default; (e) the validity, enforceability, effectiveness,
sufficiency, or genuineness of any Loan Document or any other instrument or
writing furnished in connection with any Loan Document; (f) the value,
sufficiency, creation, perfection, or priority of any Lien in any Collateral; or
(g) the financial condition of any of the Borrowers or any guarantor of any of
the Obligations or of any of Company’s or any such guarantor’s Subsidiaries.

 

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8.5. Action on Instructions of Lenders. Agent shall in all cases be fully
protected in acting, or in refraining from acting, under any Loan Document in
accordance with written instructions signed by the Majority Lenders (or by all
Lenders, to the extent Section 9.1 requires the consent of all Lenders), and
such instructions and any action taken or failure to act pursuant to such
instructions shall be binding on all of the Lenders. Each Lender hereby
acknowledges that Agent has no duty to take any discretionary action any Loan
Document permits it to take unless the Majority Lenders (or all Lenders, to the
extent Section 9.1 requires the consent of all Lenders) request it to take such
an action. Agent is fully justified in failing or refusing to take any action
under any Loan Document unless it is indemnified to its satisfaction by the
Lenders pro rata against any and all liability, cost, and expense it incurs by
reason of taking or continuing to take any such action.

8.6. Employment of Administrative Agents and Counsel. Agent has the right to
execute any of its duties as the Agent under any Loan Document by or through
employees, agents, and attorneys-in-fact and is not answerable to the Lenders,
except as to money or securities it or its authorized agents receive, for the
default or misconduct of any such agents or attorneys-in-fact it selects with
reasonable care. Agent is entitled to advice of counsel concerning the
contractual arrangement between Agent and the Lenders and all matters pertaining
to Agent’s duties under this any Loan Document.

8.7. Reliance on Documents; Counsel. Agent is entitled to rely upon any Note,
notice, consent, certificate, affidavit, letter, facsimile, electronic mail
message, statement, paper, or document it believes to be genuine and correct and
to have been signed or sent by the proper person or persons, and, in respect to
legal matters, upon the opinion of counsel selected by Agent, which counsel may
be employees of Agent. For the purposes of determining compliance with the
conditions specified in Sections 3.1 and 3.2, each Lender that has signed this
Agreement shall be deemed to have consented to, approved, or accepted or to be
satisfied with, each document or other matter those Sections require to be
consented to or approved by or acceptable or satisfactory to a Lender unless
Agent has received notice from such Lender before the applicable date specifying
its objection to such matter.

8.8. Agent’s Reimbursement and Indemnification. The Lenders agree to reimburse
and indemnify Agent ratably in proportion to their respective Commitments (or,
if the Commitments have been terminated, in proportion to their Commitments
immediately prior to such termination) (i) for any amounts not reimbursed by
Borrowers for which Agent is entitled to reimbursement by Borrowers under the
Loan Documents, (ii) for any other expenses incurred by Agent on behalf of the
Lenders, in connection with the preparation, signing, delivery, administration
and enforcement of the Loan Documents (including, without limitation, for any
expenses incurred by Agent in connection with any dispute between Agent and any
Lender or between two or more of the Lenders) and (iii) for any liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind and nature whatsoever that are imposed on,
incurred by or asserted against Agent in any way relating to or arising out of
the Loan Documents or any other document delivered in connection with the Loan
Documents or the transactions they contemplate (including, without limitation,
for any such

 

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amounts incurred by or asserted against Agent in connection with any dispute
between Agent and any Lender or between two or more of the Lenders), or the
enforcement of any of the terms of the Loan Documents or of any such other
documents, provided that (i) no Lender shall be liable for any of the foregoing
to the extent any of the foregoing is found in a final non-appealable judgment
by a court of competent jurisdiction to have resulted from the gross negligence
or willful misconduct of Agent and (ii) any indemnification required pursuant to
Section 2.32.k shall, notwithstanding the provisions of this Section 8.8, be
paid by the relevant Lender in accordance with Section 2.32.k. The obligations
of the Lenders under this Section 8.8 shall survive payment of the Obligations
and termination of this Agreement.

8.9. Rights as a Lender. At all times when Agent is a Lender, Agent has the same
rights and powers under the Loan Documents with respect to its Commitment and
its Loans as any Lender and has the right to exercise those rights and powers as
though it were not Agent, and the term “Lender” or “Lenders” shall, at any time
when Agent is a Lender, unless the context otherwise indicates, include Agent in
its individual capacity. Agent and its Affiliates have the right to accept
deposits from, lend money to, and generally engage in any kind of trust, debt,
equity or other transaction, in addition to those the Loan Documents
contemplate, with Company or any of its Subsidiaries in which Company or such
Subsidiary is not restricted by this Agreement from engaging with any other
Person.

8.10. Lender Credit Decision, Legal Representation.

(a) Each Lender acknowledges that it has, independently and without reliance
upon Agent, the Arranger or any other Lender and based on the financial
statements prepared by Company and such other documents and information as it
has deemed appropriate, made its own credit analysis and decision to enter into
this Agreement and the other Loan Documents. Each Lender also acknowledges that
it will, independently and without reliance upon Agent, the Arranger, or any
other Lender and based on such documents and information as it deems appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under the Loan Documents. Except for any notice, report, document, or
other information this Agreement expressly requires Agent or the Arranger to
deliver to the Lenders, neither Agent nor the Arranger has any duty or
responsibility (either initially or on a continuing basis) to provide any Lender
with any notice, report, document, credit information or other information
concerning the affairs, financial condition, or business of Company or any of
its Affiliates that comes into Agent’s or any Arranger’s possession (whether or
not in their capacities as the Agent or an Arranger) or any of their Affiliates.

(b) Each Lender further acknowledges that it has had the opportunity to be
represented by legal counsel in connection with its signing and delivery of this
Agreement and any other Loan Document, that it has made its own evaluation of
all applicable laws and regulations relating to the transactions this Agreement
contemplates, and that the counsel to the Agent represents only Agent and not
the Lenders in connection with this Agreement and the transactions it
contemplates.

8.11. Successor Agent. Agent has the right to resign at any time by giving
written notice of resignation to the Lenders and Company, and such resignation
shall be effective upon

 

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the appointment of a successor Agent or, if no successor Agent has been
appointed, 45 days after the resigning Agent gives notice of its intention to
resign. Upon any such resignation or removal, the Majority Lenders have the
right to appoint, on behalf of Company and the Lenders, a successor Agent. If no
successor Agent is appointed by the Majority Lenders within 30 days after the
resigning Agent gave notice of its intention to resign, then the resigning Agent
has the right to appoint, on behalf of Company and the Lenders, a successor
Agent. Notwithstanding the previous sentence, Agent has the right at any time
without the consent of any of the Borrowers or any Lender to appoint any of its
Affiliates that is a commercial bank as the successor Agent. If Agent resigns
and no successor Agent is appointed, the Lenders have the right to perform all
the duties of Agent and Borrowers shall make all payments with respect to the
Obligations to the applicable Lender and for all other purposes shall deal
directly with the Lenders. No successor Agent shall be deemed to be appointed
under this Agreement until such successor Agent accepts the appointment. Any
such successor Agent, including any Affiliate that Agent appoints as the
successor Agent, must be a commercial bank having capital and retained earnings
of at least $100,000,000. Upon the acceptance of any appointment as the Agent by
a successor Agent, such successor Agent shall succeed to and become vested with
all of the rights, powers, privileges, and duties of the resigning Agent. Upon
the effectiveness of the resignation of Agent, the resigning Agent shall be
discharged from its duties and obligations under the Loan Documents. After the
effectiveness of the resignation of an Agent, this Article VIII shall continue
in effect for the benefit of such Agent with respect to any actions it took or
omitted to take while it was acting as the Agent.

8.12. Delegation to Affiliates. Borrowers and the Lenders agree that Agent has
the right to delegate any of its duties under this Agreement to any of its
Affiliates. Any such Affiliate (and such Affiliate’s directors, officers,
agents, and employees) that performs duties in connection with this Agreement is
entitled to the same benefits of the indemnification, waiver. and other
protective provisions to which Agent is entitled under this Article VIII and
under Article IX.

8.13. Signing and Delivery of Collateral Documents. The Lenders hereby empower
and authorize Agent to sign and deliver to Company on their behalf the Upstream
Distribution Agreements, the Collateral Documents, and all related financing
statements and any financing statements, agreements, documents or instruments
that are necessary or appropriate to effect the purposes of the Upstream
Distribution Agreements and Collateral Documents.

8.14. Collateral Releases. The Lenders hereby empower and authorize Agent to
sign and deliver to Company or any of the other Borrowers on their behalf any
agreements, documents, or instruments that are necessary or appropriate to
effect any releases of Collateral that any Loan Document or that is otherwise
approved by the Majority Lenders (or, if required by Section 8.14, all of the
Lenders) in writing.

8.15. No Advisory or Fiduciary Responsibility. In connection with all aspects of
each transaction any Loan Document contemplates (including in connection with
any amendment, waiver, or other modification of any Loan Document), Borrowers
acknowledge and agree that: (i) (A) the arranging and other services regarding
this Agreement provided by the Lenders are arm’s-length commercial transactions
between Company and its Affiliates, on the one hand, and the Lenders, on the
other hand, (B) each Borrower has consulted its own legal,

 

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accounting, regulatory, and tax advisors to the extent it has deemed
appropriate, and (C) each Borrower is capable of evaluating, and understands and
accepts, the terms, risks and conditions of the transactions the Loan Documents
contemplate; (ii) (A) each of the Lenders is and has been acting solely as a
principal and, except as expressly agreed in writing by the relevant parties,
has not been, is not, and will not be acting as an advisor, agent, or fiduciary
for Company or any of its Affiliates, or any other Person and (B) no Lender has
any obligation to Company or any of its Affiliates with respect to the
transactions the Loan Documents contemplate except those obligations the Loan
Documents expressly set forth; and (iii) each of the Lenders and their
respective Affiliates may be engaged in a broad range of transactions that
involve interests that differ from those of Company and its Affiliates, and no
Lender has any obligation to disclose any of such interests to Company or its
Affiliates. To the fullest extent permitted by law, Borrowers hereby waive and
release any claims that it may have against each of the Lenders with respect to
any breach or alleged breach of agency or fiduciary duty in connection with any
aspect of any transaction this Agreement contemplates.

8.16. Notices of Event of Default. If Agent acquires actual knowledge of any
Event of Default or Default, Agent shall promptly give notice of such Event of
Default or Default to the Lenders, provided that, except as expressly set forth
in the Loan Documents, Agent has no duty to disclose, and shall not be liable
for the failure to disclose, any information relating to Company or any of its
Subsidiaries that is communicated to or obtained Agent or any of its Affiliates
in any capacity. Agent shall not be deemed to have knowledge or notice of any
Default or Event of Default, except with respect to actual defaults in the
payment of principal, interest and fees required to be paid to Agent for the
account of the Lenders, unless Agent has received written notice from a Lender
or Company referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a “Notice of Default”.

8.17. Payments and Collections. All funds received by Agent with respect to any
payments made by any Borrower on the Loans, the Commitment Fee, or LC Fees shall
be promptly distributed by Agent among the Lenders, in like currency and funds
as received, ratably according to each Lender’s Applicable Share. All funds
received by Agent with respect to any payments made by Company on the Swingline
Loan shall be promptly distributed by Agent to Swingline Lender, in like
currency and funds as received. After any Event of Default has occurred, all
funds received by Agent, whether as payments by Borrowers or as realization on
collateral or on any guaranties, shall (except as may otherwise be required by
law) be distributed by Agent in the following order: (a) first to Agent or any
Lender that has incurred unreimbursed costs of collection with respect to any
Obligations under this Agreement, ratably to Agent and each Lender in the
proportion that the costs incurred by Agent or such Lender bear to the total of
all such costs incurred by Agent and all Lenders; (b) next to Agent for the
account of the Lenders for application on the Loan (first to unpaid accrued
interest and then to principal) and to pay any Rate Protection Obligations then
due and payable, ratably to the Lenders and the holders of such Rate Protection
Obligations; provided that: (i) if no Rate Protection Obligations are then due
and payable, each Lender’s ratable share shall be based on its Applicable Share;
or (ii) if any Rate Protection Obligations are then due and payable, then:
(A) the denominator used in calculating each Lender’s Applicable Share shall be
increased by the amount of such then due and payable Rate Protection
Obligations; and (B) each Rate Protection Provider’s ratable share shall be
calculated as the percentage equivalent of a fraction, the numerator of which
are the Rate Protection Obligations then due and payable to such Rate Protection
Provider and the

 

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denominator of which is the sum of the Commitment Amounts (or, if the Revolving
Credit Commitments have terminated, the Aggregate Outstanding Credit Exposure)
of all Lenders and all Rate Protection Obligations then due and payable;
(c) next to Agent for the account of the Lenders (in accordance with their
Applicable Shares) for any unpaid Commitment Fee or LC Fees owing by the
Borrowers under this Agreement; (d) next to Agent to be held in the Facility LC
Collateral Account to cover any outstanding Facility LCs and upon the
termination or expiration to the Facility LCs without a drawing thereon, in the
order of application set forth in subparts (a), (b) and (c) above and (e) below;
and (e) last to Agent to pay or satisfy all other Obligations then due and
payable.

8.18. Sharing of Payments. If any Lender receives and retains any payment,
voluntary or involuntary, whether by setoff, application of deposit balance or
security, or otherwise, with respect to Indebtedness under this Agreement or any
Notes in excess of such Lender’s share of such payment as determined under this
Agreement, then such Lender shall purchase from the other Lenders, promptly upon
demand, for cash and at face value and without recourse, a portion of the
Aggregate Outstanding Credit Exposure held by the other Lenders so that after
such purchase each Lender will hold its Applicable Share of the Aggregate
Outstanding Credit Exposure; provided that if all or any part of such excess
payment is thereafter recovered from such purchasing Lender, the related
purchases from the other Lenders shall be rescinded ratably and the purchase
price restored as to the portion of such excess payment so recovered, but
without interest. Subject to the participation purchase obligation above in this
Section 8.18, each Lender agrees to exercise any and all rights of setoff,
counterclaim or banker’s lien first fully against any Notes and participations
in such Notes held by such Lender, next to any other Indebtedness of any of the
Borrowers to such Lender arising under or pursuant to this Agreement and to any
participations held by such Lender in Indebtedness of any of the Borrowers
arising under or pursuant to this Agreement, and only then to any other
Indebtedness of any of the Borrowers to such Lender. If any Lender, whether in
connection with setoff or amounts that might be subject to setoff or otherwise,
receives collateral or other protection for its Obligations or such amounts that
may be subject to setoff, such Lender shall, promptly upon demand, take any
action required to ensure that all Lenders share in the benefits of such
collateral ratably in proportion to their respective Applicable Shares of the
Aggregate Outstanding Credit Exposure. If any such payment is disturbed by legal
process or otherwise the Lenders shall make any further adjustments that are
appropriate.

8.19. Defaulting Lender.

a. Remedies Against a Defaulting Lender. In addition to the rights and remedies
that are available to Agent or any of the Borrowers under this Agreement or
applicable law, if at any time a Lender is a Defaulting Lender such Defaulting
Lender’s right to participate in the administration of the Loans and the Loan
Documents, including without limitation, any right to vote with respect to, to
consent to, or to direct any action or inaction of Agent or to be taken into
account in the calculation of the Majority Lenders, shall be suspended while
such Lender remains a Defaulting Lender. If a Lender is a Defaulting Lender
because it has failed to make timely payment to Agent of any amount required to
be paid to Agent under this Agreement (without giving effect to any notice or
cure periods), in addition to other rights and remedies that Agent or any of the
Borrowers may have under the immediately preceding provisions or otherwise,
Agent

 

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shall be entitled (i) to collect interest from such Defaulting Lender on such
delinquent payment for the period from the date on which the payment was due
until the date on which the payment is made at the overnight Federal Funds Rate,
(ii) to withhold or setoff and to apply in satisfaction of the defaulted payment
and any related interest, any amounts otherwise payable to such Defaulting
Lender under this Agreement or any other Loan Document until such defaulted
payment and related interest has been paid in full and such default no longer
exists and (iii) to bring an action or suit against such Defaulting Lender in a
court of competent jurisdiction to recover the defaulted amount and any related
interest. Any amounts received by Agent with respect to a Defaulting Lender’s
Loans shall not be paid to such Defaulting Lender and shall be held uninvested
by Agent and either applied against the purchase price of such Loans under
Section 8.19.b or paid to such Defaulting Lender upon the default of such
Defaulting Lender being cured.

b. Purchase from Defaulting Lender. Any Lender that is not a Defaulting Lender
has the right, but not the obligation, in its sole discretion, to acquire all of
a Defaulting Lender’s Commitments. If more than one Lender exercises such right,
each such Lender has the right to acquire such proportion of such Defaulting
Lender’s Commitments on a pro rata basis. Upon any such purchase, the Defaulting
Lender’s interest in its Loans and its rights under this Agreement (but not its
liability with respect to its Loans or under the Loan Documents to the extent
such liability relates to the period prior to the effective date of the
purchase) shall terminate on the date of purchase, and the Defaulting Lender
shall promptly sign and deliver all documents reasonably requested to surrender
and transfer such interest to the purchaser subject to and in accordance with
the requirements set forth in Section 9.5, including an assignment in form
acceptable to Agent. The purchase price for the Commitments of a Defaulting
Lender shall be equal to the amount of the principal balance of the Loans
outstanding and owed by any of the Borrowers to the Defaulting Lender. The
purchaser shall pay to the Defaulting Lender in Immediately Available Funds on
the date of such purchase the principal of and accrued and unpaid interest and
fees on the Loans made by such Defaulting Lender under this Agreement (it being
understood that such accrued and unpaid interest and fees may be paid pro rata
to the purchasing Lender and the Defaulting Lender by Agent at a subsequent date
upon receipt of payment of such amounts from any of the Borrowers). Prior to
payment of such purchase price to a Defaulting Lender, Agent shall apply against
such purchase price any amounts retained by Agent pursuant to the last sentence
of the immediately preceding Section 8.19.a. The Defaulting Lender is entitled
to receive amounts owed to it by any of the Borrowers under the Loan Documents
that accrued before the default by the Defaulting Lender, to the extent they are
received by Agent from or on behalf of any of the Borrowers. There shall be no
recourse against any Lender or Agent for the payment of such sums except to the
extent of the receipt of payments from any other party or with respect to the
Loans.

ARTICLE IX

GENERAL PROVISIONS

9.1. Modifications. Notwithstanding any provision to the contrary in this
Agreement, any term of this Agreement may be amended with the written consent of
Company; provided that

 

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no amendment, modification, or waiver of any provision of this Agreement or
consent to any departure by Company from any provision of this Agreement shall
be effective unless it is in writing and is signed the Majority Lenders or by
Agent with the written approval of the Majority Lenders, and then such
amendment, modification, waiver, or consent shall be effective only in the
specific instance and for the purpose for which given, except that the consent
of all Lenders is required to: (a) increase Commitment Amounts except as
permitted by Section 2.36; (b) forgive or extend the maturity of any principal
or any installment of principal payable under any Loan or any LC Obligation or
extend the expiration date of any Facility LC beyond the latest expiration date
for such Facility LC that this Agreement permits; (c) reduce the rate of
interest payable with respect to any Loan or LC Obligation or extend the date
any payment is due under such Loan or LC Obligation; (d) reduce the fees or any
other payment obligations of any of the Borrowers under this Agreement or under
any other Loan Document or extend the date of any such payment is due;
(e) release any material Collateral or any material guarantor of any of the
Obligations except as otherwise expressly permitted by the terms of the Loan
Documents; (f) change the definition of Majority Lenders; or (g) amend, modify,
or supplement Section 8.17 or this Section 9.1, or grant any waiver or consent
with respect to the provisions of Section 8.17 or this Section 9.1.
Notwithstanding any other provisions of this Agreement, no amendment,
modification, or waiver shall be made with respect to the provisions of any Loan
Document that affects the rights and obligations of Agent without the consent of
Agent or that affects the rights and obligations of Swingline Lender without the
consent of Swingline Lender. Agent may enter into amendments or modifications
of, and grant consents and waivers to departure from the provisions of, those
Loan Documents to which the Lenders are not parties without the Lenders joining
in such amendments, modifications, consents, and waivers, provided that Agent
has first obtained the separate prior written consent to such amendment,
modification, consent or waiver from the Majority Lenders.

9.2. Expenses. Whether or not the transactions this Agreement contemplates are
consummated, Borrowers agree to reimburse Agent upon demand for all reasonable
out-of-pocket expenses paid or incurred by Agent (including filing and recording
costs and fees and expenses of Fabyanske, Westra, Hart & Thomson, PA, counsel to
Agent) in connection with the due diligence, negotiation, preparation, approval,
review, signing, delivery, syndication, distribution (including, without
limitation, by DebtX or any other internet service Agent selects),
administration, amendment, modification, and interpretation of the Loan
Documents and any related commitment letters. Borrowers shall also pay or
reimburse Agent, the LC Issuer, and the Lenders upon demand for all costs,
internal charges, and out-of-pocket expenses, including, without limitation,
filing and recording costs and fees, costs of any environmental review, and
consultants’ fees, travel expenses, and reasonable fees, charges and
disbursements of outside counsel to Agent, LC Issuer, and the Lenders and the
allocated costs of in-house counsel incurred from time to time, paid or incurred
by Agent, LC Issuer, or any Lender in connection with the collection and
enforcement of the Loan Documents. Expenses that this Section obligates the
Borrowers to pay or reimburse include, without limitation, audit reports
prepared by Agent and distributed to the Lenders (but Agent has no obligation or
duty to prepare or to distribute any such reports to the Lenders concerning the
assets of Company and its Subsidiaries. The obligations of Borrowers under this
Section shall survive any termination of this Agreement.

9.3. Waivers, etc. No failure by Agent or the holder of any Note to exercise and
no delay in exercising any power or right under any Loan Document waives such
power or right;

 

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nor does any single or partial exercise of any power or right preclude any other
or further exercise of such power or right or the exercise of any other power or
right. The remedies provided in this Agreement and in the other Loan Documents
are cumulative and not exclusive of any remedies provided by law; provided that,
except for the exercise of rights pursuant to Section 7.3, no Lender has the
right to independently exercise any right or remedy available to it by contract,
at law or in equity.

9.4. Notices. Except in the case of notices and other communications this
Agreement expressly permits to be given by telephone, and except as this
Section 9.4 provides with respect to electronic communications, any notice or
other communication to any party in connection with this Agreement must be in
writing and must be sent by manual delivery, facsimile transmission, overnight
courier or United States mail (postage prepaid) addressed to such party at the
address specified on the signature page of this Agreement, or at such other
address such party specifies to the other parties to this Agreement in writing
in accordance with this Section 9.4. All periods of notice shall be measured
from the date the notice is delivered if manually delivered, from the date the
notice is sent if sent by facsimile transmission, from the first Business Day
after the date of sending if sent by overnight courier, or from four days after
the date of mailing if mailed; provided that any notice to Agent or any Lender
under Article II shall be deemed to have been given only when received by Agent
or such Lender. Notices and other communications to the Lenders and LC Issuer
may be delivered by electronic communication (including e-mail and internet or
intranet websites) pursuant to procedures approved by Agent or as otherwise
determined by Agent, provided that the foregoing shall not apply to notices to
any Lender or LC Issuer pursuant to Article II if such Lender or LC Issuer, as
applicable, has notified Agent that it is incapable of receiving notices under
such Article by electronic communication. Agent or Company (for itself and on
behalf of the other Borrowers) may, in its discretion, agree to accept notices
and other communications to it under this Agreement by electronic communications
pursuant to procedures approved by it or as it otherwise determines, provided
that it may limit such determination or approval to particular notices or
communications. Unless Agent otherwise prescribes, (i) notices and other
communications sent to an e-mail address shall be deemed received upon the
sender’s receipt of an acknowledgement from the intended recipient (such as by
the “return receipt requested” function, as available, return e-mail or other
written acknowledgement), provided that if such notice or other communication is
not given during the normal business hours of the recipient, such notice or
communication shall be deemed to have been given at the opening of business on
the next Business Day for the recipient, and (ii) notices or communications
posted to an Internet or intranet website shall be deemed received upon the
deemed receipt by the intended recipient at its e-mail address as described in
the foregoing clause (i) of notification that such notice or communication is
available and identifying the website address to be used.

9.5. Successors and Assigns; Participations; Purchasing Lenders.

a. Successors and Assigns. This Agreement binds and inures to the benefit of
Borrowers, Agent, the Lenders, all future holders of any Notes, and their
respective successors and assigns, except that (i) no Borrower may assign or
transfer any of its rights or obligations under this Agreement without the prior
written consent of all Lenders, (ii) any assignment by any Lender must be made
in compliance with Section 9.5.c, and (iii) any transfer by participation must
be made in compliance with Section

 

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9.5.b. Any attempted assignment or transfer by any party not made in compliance
with this Section 9.5.a shall be null and void unless it is treated as
participation in accordance with the terms of this Agreement. The parties to
this Agreement acknowledge that clause (ii) of this Section 9.5.a relates only
to absolute assignments and this Section 9.5.a does not prohibit assignments
creating security interests, including, without limitation, (x) any pledge or
assignment by any Lender of all or any portion of its rights under this
Agreement and any Note to a Federal Reserve Bank or (y) in the case of a Lender
that is a Fund, any pledge or assignment of all or any portion of its rights
under this Agreement and any Note to its trustee in support of its obligations
to its trustee; provided, however, that no such pledge or assignment creating a
security interest shall release the transferor Lender from its obligations under
this Agreement unless and until the parties to the pledge or assignment comply
with Section 9.5.c. Agent has the right to treat the Person that made any Loan
or that holds any Note as the owner of such Loan and Note for all purposes
related to this Agreement unless and until such Person complies with
Section 9.5.c; provided, however, that Agent has the right in its discretion
(but has no obligation to) follow instructions from the Person that made any
Loan or that holds any Note to direct payments relating to such Loan or Note to
another Person. Any assignee of the rights to any Loan or any Note agrees by
acceptance of such assignment to be bound by all the terms and provisions of the
Loan Documents. Any request, authority, or consent of any Person, who at the
time of making such request or giving such authority or consent is the owner of
the rights to any Loan (whether or not a Note has been issued in evidence
thereof), shall be conclusive and binding on any subsequent holder or assignee
of the rights to such Loan.

b. Participations. Any Lender has the right, in the ordinary course of its
commercial banking business and in accordance with applicable law, at any time
to sell to one or more banks or other financial institutions (“Participants”)
participating interests in a minimum amount of $5,000,000 in any Outstanding
Credit Exposure owing to such Lender, any Commitment of such Lender, or any
other interest of such Lender under the Loan Documents. In the case of any such
sale by any Lender of participating interests to a Participant, (i) such
Lender’s obligations under this Agreement to the other parties to this Agreement
shall remain unchanged, (ii) such Lender shall remain solely responsible for
performing its obligations under this Agreement, (iii) such Lender shall remain
the owner of its Outstanding Credit Exposure and the holder of any Note issued
to it in evidence of its Outstanding Credit Exposure for all purposes under the
Loan Documents, (iv) all amounts payable by Borrowers under this Agreement shall
be determined as if such Lender had not sold such participating interests,
(v) Borrowers and Agent shall continue to deal solely and directly with such
Lender in connection with such Lender’s rights and obligations under this
Agreement, and (vi) the agreement pursuant to which such Participant acquires
its participating interest under this Agreement shall provide that such Lender
shall retain the sole right and responsibility to enforce the Obligations,
including, without limitation the right to consent or agree to any amendment,
modification, consent or waiver with respect to any Loan Document, provided that
such agreement may provide that such Lender will not consent or agree to any
such amendment, modification, consent or waiver with respect to the matters set
forth in Sections 9.1.a through .e without the prior consent of such
Participant; and further provided that each Participant shall be bound by
Section 9.6 as if it was a Lender.

 

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Borrowers agree that if amounts outstanding under this Agreement, any Notes, and
the Loan Documents are due and unpaid, or are declared or become due and payable
upon the occurrence of an Event of Default, each Participant shall be deemed to
have, to the extent permitted by applicable law, the right of setoff with
respect to its participating interest in amounts owing under this Agreement and
any Note or other Loan Document to the same extent as if the amount of its
participating interest were owing directly to it as a Lender under this
Agreement or any Note or other Loan Document; provided that such right of setoff
shall be subject to the obligation of such Participant to share with the
Lenders, and the Lenders agree to share with such Participant, as provided in
Section 8.18. Borrowers also agree that each Participant is entitled to the
benefits of Sections 2.27, 2.29, 2.30, 2.32, 9.2, and 9.22 with respect to its
participation in the Commitments, Swingline Loan Commitment, Revolving Loans and
Swingline Loans; provided that no Participant is entitled to receive any greater
amount pursuant to such Sections than the transferor Lender would have been
entitled to receive with respect to the amount of the participation transferred
by such transferor Lender to such Participant had no such transfer occurred; and
(ii) any Participant not incorporated under the laws of any U.S. jurisdiction
agrees to comply with Section 2.32 to the same extent as if it were a Lender.

c. Assignments. Any Lender may at any time assign to one or more Eligible
Assignees (each, a “Purchaser”) all or any part of its rights and obligations
under the Loan Documents. Such assignment must be substantially in the form of
Exhibit B or in any other form that is reasonably acceptable to Agent and
approved by the parties to this Agreement. Each such assignment with respect to
a Purchaser that is not a Lender or an Affiliate of a Lender or an Approved Fund
shall either be in an amount equal to the entire Commitment and Outstanding
Credit Exposure of the assigning Lender or (unless each of Company and Agent
otherwise consents) be in an aggregate amount not less than $5,000,000. The
amount of the assignment must be based on the Commitment or Aggregate
Outstanding Credit Exposure (if the Commitment has been terminated) subject to
the assignment, determined as of the date of such assignment or as of the “Trade
Date”, if the “Trade Date” is specified in the assignment. The consent of
Company is required for an assignment to be effective unless the Purchaser is a
Lender, an Affiliate of a Lender, or an Approved Fund, provided that the consent
of Company is not required if an Event of Default exists; provided further that
Company shall be deemed to have consented to any such assignment unless it
objects by written notice to Agent within 5 Business Days after receiving notice
of the assignment. Agent’s consent is required for an assignment to be effective
unless the Purchaser is a Lender, an Affiliate of a Lender, or an Approved Fund.
LC Issuer’s consent is required for an assignment of a Commitment to be
effective unless the Purchaser is a Lender with a Commitment. Any consent this
Section 9.5.c requires shall not be unreasonably withheld, conditioned, or
delayed. Upon (i) delivery to Agent of an assignment, together with any consents
required by Sections 9.5.a and 9.5.b, and (ii) payment of a $3,500 fee to Agent
for processing such assignment (unless Agent waives such fee), such assignment
shall become effective on the effective date specified in such assignment. The
assignment shall contain a representation by the Purchaser that none of the
consideration used to make the purchase of the Commitment and Outstanding Credit
Exposure under the applicable assignment agreement constitutes “plan assets” as
defined under ERISA and that the rights and interests of the Purchaser in and
under the Loan Documents will not be

 

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“plan assets” under ERISA. On and after the effective date of such assignment,
such Purchaser shall for all purposes be a Lender party to this Agreement and
any other Loan Document signed by or on behalf of the Lenders and have all the
rights and obligations of a Lender under the Loan Documents, to the same extent
as if it were an original party to the Loan Documents, and the transferor Lender
shall be released with respect to the Commitment and Outstanding Credit Exposure
assigned to such Purchaser without any further consent or action by Borrowers,
the Lenders, or Agent. In the case of an assignment of all of the assigning
Lender’s rights and obligations under this Agreement, such Lender shall cease to
be a Lender but shall continue to be entitled to the benefits of, and subject
to, those provisions of the Loan Documents that survive payment of the
Obligations and termination of the applicable agreement. Any assignment or
transfer by a Lender of rights or obligations under this Agreement that does not
comply with this Section 9.5.c shall be treated for the purposes of this
Agreement as a sale by such Lender of a participation in such rights and
obligations in accordance with Section 9.5.b. Upon the consummation of any
assignment to a Purchaser pursuant to this Section 9.5.c, the transferor Lender,
Agent and Borrowers shall, if the transferor Lender or the Purchaser desires
that its Loans be evidenced by Notes, make appropriate arrangements so that new
Notes or, as appropriate, replacement Notes are issued to such transferor Lender
and new Notes or, as appropriate, replacement Notes, are issued to such
Purchaser, in each case in principal amounts reflecting their respective
Commitments, as adjusted pursuant to such assignment. Agent, acting solely for
this purpose as an agent of Borrowers, shall maintain at one of its offices in
the United States, a copy of each Assignment and Assumption delivered to it and
a register for the recordation of the names and addresses of the Lenders, and
the Commitments of, and principal amounts of the Loans owing to, each Lender,
and participations of each Lender in Facility LCs, pursuant to the terms of this
Agreement from time to time (the “Register”). The entries in the Register shall
be conclusive, and Borrowers, Agent, and the Lenders have the right to treat
each Person whose name is recorded in the Register pursuant to this
Section 9.5.c as a Lender for all purposes of this Agreement, notwithstanding
notice to the contrary. The Register shall be available for inspection by
Company at any reasonable time and from time to time upon reasonable prior
notice.

d. No Cost to Borrowers. Borrowers are not liable for any costs incurred by any
Lender in effecting any participation or assignment under Section 9.5.b or
9.5.c.

e. Dissemination of Information. Borrowers authorize each Lender to disclose to
any Participant or Purchaser or any other Person acquiring an interest in the
Loan Documents by operation of law (each a “Transferee”) and any prospective
Transferee any and all information in such Lender’s possession concerning the
creditworthiness of Company and its Subsidiaries, including without limitation
any information contained in any audit reports; provided that each Transferee
and prospective Transferee agrees to be bound by Section 9.6.

f. Tax Treatment. If any interest in any Loan Document is transferred to any
Transferee that is not incorporated under the laws of any United States
jurisdiction, the transferor Lender shall cause such Transferee, concurrently
with the effectiveness of such transfer, to comply with Section 2.32.f.

 

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9.6. Confidentiality of Information. Agent and each Lender shall use reasonable
efforts to assure that information about Company and its operations, affairs and
financial condition, not generally disclosed to the public or to trade and other
creditors, that is furnished to or obtained by Agent or such Lender pursuant to
the provisions of this Agreement is used only for the purposes of this Agreement
and shall not be divulged to any Person other than the Lenders, their Affiliates
and their respective officers, directors, employees and agents, except: (a) to
their attorneys, accountants, and other professional advisors, (b) in connection
with the enforcement of the rights of Agent and the Lenders under the Loan
Documents or otherwise in connection with applicable litigation, (c) in
connection with assignments and participations and the solicitation of
prospective Purchasers and Participants referred to in the immediately preceding
Section, (d) if such information is generally available to the public other than
as a result of disclosure by Agent or any Lender, (e) to any direct or indirect
contractual counterparty in any hedging arrangement or such contractual
counterparty’s professional advisor, (f) to any nationally recognized rating
agency that requires information about any Lender’s investment portfolio in
connection with ratings issued with respect to such Lender, and (g) as may
otherwise be required or requested by any regulatory authority having
jurisdiction over Agent or any Lender or by any applicable law, rule, regulation
or judicial process, the opinion of any Lender’s counsel concerning the making
of such disclosure to be binding on the parties to this Agreement. No Lender
shall incur any liability to any of the Borrowers by reason of any disclosure
permitted by this Section.

9.7. Governing Law and Construction. THE VALIDITY, CONSTRUCTION, AND
ENFORCEABILITY OF THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY THE INTERNAL
LAWS OF THE STATE OF MINNESOTA, WITHOUT GIVING EFFECT TO ANY CONFLICT OF LAWS
PRINCIPLES, BUT GIVING EFFECT TO FEDERAL LAWS OF THE UNITED STATES APPLICABLE TO
NATIONAL BANKS. Whenever possible, each provision of the Loan Documents and any
other statement, instrument or transaction that relates to or is contemplated by
any Loan Document shall be interpreted in such manner as to be effective and
valid under such applicable law, but, if any provision of any Loan Documents or
any other statement, instrument, or transaction that relates to or is
contemplated by any Loan Document shall be held to be prohibited or invalid
under such applicable law, such provision shall be ineffective only to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of such Loan Document or other
statement, instrument or transaction.

9.8. Consent to Jurisdiction. AT THE OPTION OF AGENT, THIS AGREEMENT AND THE
OTHER LOAN DOCUMENTS MAY BE ENFORCED IN ANY FEDERAL COURT OR MINNESOTA STATE
COURT SITTING IN HENNEPIN COUNTY; AND EACH BORROWER CONSENTS TO THE JURISDICTION
AND VENUE OF ANY SUCH COURT AND WAIVES ANY ARGUMENT THAT VENUE IN SUCH FORUMS IS
NOT CONVENIENT. IF ANY OF THE BORROWERS COMMENCES ANY ACTION IN ANOTHER
JURISDICTION OR VENUE UNDER ANY TORT OR CONTRACT THEORY ARISING DIRECTLY OR
INDIRECTLY FROM THE RELATIONSHIP CREATED BY THIS AGREEMENT, AGENT, AT ITS
OPTION, IS ENTITLED TO HAVE THE CASE TRANSFERRED TO ONE OF THE JURISDICTIONS AND
VENUES DESCRIBED ABOVE, OR IF SUCH TRANSFER CANNOT BE ACCOMPLISHED UNDER
APPLICABLE LAW, TO HAVE SUCH CASE DISMISSED WITHOUT PREJUDICE.

 

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9.9. Waiver of Jury Trial. EACH BORROWER, AGENT, AND EACH LENDER IRREVOCABLY
WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING INVOLVING,
DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR
OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN
DOCUMENT OR ANY RELATIONSHIP ESTABLISHED UNDER ANY LOAN DOCUMENT.

9.10. Survival of Agreement. All representations, warranties, covenants, and
agreements made by Borrowers in the Loan Documents and in the certificates or
other instruments prepared or delivered in connection with or pursuant to any
Loan Document shall be deemed to have been relied upon by the Lenders and shall
survive the making of the Credit Extensions and the signing and delivery to the
Lenders by Borrowers of any Notes, regardless of any investigation made by or on
behalf of the Lenders, and shall continue in full force and effect as long as
any Obligation is outstanding and unpaid; provided that the obligations of
Borrowers under Sections 9.2 and 9.11 shall survive payment in full of the
Obligations.

9.11. Indemnification. Borrowers hereby agree to defend, protect, indemnify and
hold harmless Agent, the Arrangers, each Lender, their respective Affiliates,
and each of their directors, officers, employees, attorneys, agents, and
advisors (each of the foregoing being an “Indemnitee” and all of the foregoing
being collectively the “Indemnitees”) from and against any and all losses,
claims, actions, damages, liabilities, judgments, costs and expenses (including
all reasonable fees and disbursements of counsel incurred in the investigation
or defense of any matter) imposed upon, incurred by or asserted against any
Indemnitee, whether direct, indirect or consequential and whether based on any
federal, state, local, or foreign laws or regulations (including securities
laws, Environmental Laws, commercial laws, and regulations of any United States
or Canadian jurisdiction), under common law or on equitable cause, or on
contract or otherwise:

a. by reason of, relating to or in connection with the signing, delivery,
performance, or enforcement of any Loan Document, any commitments relating to
any Loan Document, or any transaction contemplated by any Loan Document; or

b. by reason of, relating to or in connection with any credit extended or used
under the Loan Documents or any act done or omitted by any Person, or the
exercise of any rights or remedies under the Loan Documents, including the
acquisition of any collateral by the Lenders by way of foreclosure of the Lien
on such Collateral, whether by deed or bill of sale in lieu of such foreclosure
or otherwise;

provided that Borrowers shall not be liable to any Indemnitee for any portion of
such claims, damages, liabilities and expenses resulting from such Indemnitee’s
gross negligence or willful misconduct. If this indemnity is unenforceable as a
matter of law as to a particular matter or consequence referred to in this
Agreement, it shall be enforceable to the full extent permitted by law.

This indemnification applies, without limitation, to any act, omission, event or
circumstance existing or occurring on or prior to the date of payment in full of
the Obligations, including specifically Obligations arising under clause (b) of
this Section. The indemnification

 

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provisions set forth above are in addition to any liability that Borrowers
otherwise have. Without prejudice to the survival of any other obligation of
Borrowers under this Agreement, the indemnities and obligations of Borrowers in
this Section shall survive the payment in full of the Obligations.

9.12. Captions. The captions and headings to this Agreement and the table of
contents to this Agreement are for convenience only and in no way define, limit
or describe the scope or intent of any provision of this Agreement.

9.13. Entire Agreement. This Agreement and the other Loan Documents embody the
entire agreement and understanding between Borrowers, Agent, and the Lenders
with respect to the subject matter of this Agreement and the other Loan
Documents. This Agreement supersedes all prior agreements and understandings
relating to the subject matter of this Agreement. Nothing in this Agreement or
in any other Loan Document, expressed or implied, is intended to confer upon any
Persons other than the parties to this Agreement any rights, remedies,
obligations, or liabilities under this Agreement or such other Loan Document.

9.14. Counterparts; Effectiveness. This Agreement may be signed and delivered in
any number of counterparts, all of which taken together shall constitute one and
the same instrument, and any of the parties to this Agreement may execute this
Agreement by signing any such counterpart. Except as provided in Article III,
this Agreement shall become effective when Agent signs it and receives
counterparts which, when taken together, bear the signatures of each of the
parties to this Agreement. Delivery of a signed counterpart of a signature page
of this Agreement by fax, email, or other electronic transmission has the same
binding effect as the delivery of an original manually signed counterpart of
this Agreement.

9.15. Borrower Acknowledgements. Each Borrower hereby acknowledges that (a) it
has been advised by counsel in the negotiation, signing and delivery of the Loan
Documents, (b) neither Agent nor any Lender has any fiduciary relationship to
any of the Borrowers, the relationship being solely that of debtor and creditor,
(c) no joint venture exists between any of the Borrowers and Agent or any
Lender, and (d) neither Agent nor any Lender undertakes any responsibility to
any of the Borrowers to review or inform any of the Borrowers of any matter in
connection with any phase of the business or operations of any of the Borrowers
and each of the Borrowers shall rely entirely upon its own judgment with respect
to its business, and any review, inspection or supervision of, or information
supplied to, any of the Borrowers by Agent or any Lender is for the protection
of the Lenders and none of the Borrowers nor any third party is entitled to rely
thereon.

9.16. Interest Rate Limitation. Notwithstanding anything in this Agreement to
the contrary, if at any time the interest rate applicable to any Loan, together
with all fees, charges and other amounts that are treated as interest on such
Loan under applicable law (collectively, the “Charges”), shall exceed the
maximum lawful rate (the “Maximum Rate”) that may be contracted for, charged,
taken, received or reserved by the Lender holding such Loan in accordance with
applicable law, the rate of interest payable with respect to such Loan, together
with all Charges payable with respect to such Loan, shall be limited to the
Maximum Rate and, to the extent lawful, the interest and Charges that would have
been payable with respect to such Loan but were not payable as a result of the
operation of this Section shall be cumulated and the

 

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interest and Charges payable to such Lender with respect to other Loans or
periods shall be increased (but not above the Maximum Rate therefor) until such
cumulated amount, together with interest thereon at the Federal Funds Effective
Rate to the date of repayment, has been received by such Lender.

9.17. Effect on Existing Credit Agreement. On the Effective Date, the Existing
Credit Agreement shall be deemed to be amended, restated, and replaced in its
entirety by this Agreement. Each reference to the “Credit Agreement”, the “Loan
Agreement” or words of like import in each Loan Document to which Company is
party is hereby amended to refer to this Agreement.

9.18. Recitals. The Recitals to this Agreement are incorporated into and
constitute an integral part of this Agreement.

9.19. Governmental Regulation. Notwithstanding anything in this Agreement to the
contrary, no Lender is obligated to extend credit to any of the Borrowers in
violation of any limitation or prohibition provided or imposed by any applicable
statute or regulation.

9.20. Several Obligations; Benefits of this Agreement. The obligations of the
Lenders under this Agreement are several and not joint and no Lender is the
partner or agent of any other (except to the extent to which Agent is authorized
to act as such). The failure of any Lender to perform any of its obligations
under this Agreement does not relieve any other Lender from any of its
obligations under this Agreement. This Agreement shall not be construed so as to
confer any right or benefit upon any Person other than the parties to this
Agreement and their respective successors and assigns, provided, however, that
the parties to this Agreement expressly agree that each of J.P. Morgan
Securities Inc. and RBC Capital Markets, in its capacity as an Arranger, enjoys
the benefits of Sections 9.2, 9.11, 9.22 and 10.10 and has the right to enforce
those Sections on its own behalf and in its own name to the same extent as if it
were a party to this Agreement.

9.21. Severability of Provisions. Any provision in any Loan Document that is
held to be inoperative, unenforceable, or invalid in any jurisdiction shall, as
to that jurisdiction, be inoperative, unenforceable, or invalid without
affecting the remaining provisions in that jurisdiction or the operation,
enforceability, or validity of that provision in any other jurisdiction, and to
this end the provisions of all Loan Documents are declared to be severable.

9.22. Nonliability of Lenders. The relationship between Borrowers on the one
hand and the Lenders and Agent on the other hand is solely that of borrower and
lender. Neither Agent, the Arranger, nor any Lender has any fiduciary
responsibilities to any of the Borrowers. Neither Agent, the Arranger, nor any
Lender undertakes any responsibility to any of the Borrowers to review or inform
any of the Borrowers of any matter in connection with any phase of Company’s
business or operations. Borrowers agree that neither Agent, the Arranger, nor
any Lender has liability to any of the Borrowers (whether sounding in tort,
contract or otherwise) for losses any of the Borrowers suffers in connection
with, arising out of, or in any way related to, the transactions contemplated
and the relationship established by the Loan Documents, or any act, omission or
event occurring in connection with the Loan Documents, unless it is determined
in a final non-appealable judgment by a court of competent jurisdiction that
such losses resulted

 

101

--------------------------------------------------------------------------------

from the gross negligence or willful misconduct of the party from which recovery
is sought. Neither Agent, the Arranger, nor any Lender has any liability with
respect to, and each Borrower hereby waives, releases, and agrees not to sue
for, any special, indirect, consequential, or punitive damages suffered by such
Borrower in connection with, arising out of, or in any way related to the Loan
Documents or the transactions they contemplate. No Arranger, in its capacity as
such, has any duties or responsibilities under any Loan Document. Each Lender
acknowledges that it has not relied and will not rely on any Arranger in
deciding to enter into this Agreement or any other Loan Document or in taking or
not taking any action.

9.23. Nonreliance. Each Lender hereby represents that it is not relying on or
looking to any “margin stock”, as that term is defined in Regulation U for the
repayment of any of the Obligations.

9.24. Disclosure. Each Borrower and each Lender hereby acknowledge and agree
that U.S. Bank and its Affiliates and each Lender and its Affiliates from time
to time have the right to hold investments in, make other loans to, or have
other relationships, with Company and its Affiliates.

9.25. USA PATRIOT Act Notification. The following notification is provided to
each of the Borrowers pursuant to Section 326 of the USA Patriot Act of 2001, 31
U.S.C. Section 5318:

Each Lender that is subject to the requirements of the USA PATRIOT Act (Title
III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”) hereby
notifies each Loan Party that pursuant to the requirements of the Act, it is
required to obtain, verify and record information that identifies such Loan
Party, which information includes the name and address of such Loan Party and
other information that will allow such Lender to identify such Loan Party in
accordance with the Act.

9.26. Electronic Signatures on Assignments. The words “execution,” “signed,”
“signature,” and words of like import in any assignment and assumption agreement
include electronic signatures or the keeping of records in electronic form, each
of which shall be of the same legal effect, validity, or enforceability as a
manually-signed signature or the use of a paper-based recordkeeping system, as
the case may be, to the extent and as provided for in any applicable law,
including the Federal Electronic Signatures in Global and National Commerce Act,
or any other state laws based on the Uniform Electronic Transactions Act.

Signature Pages Follow

 

102

--------------------------------------------------------------------------------

The parties hereby sign this Third Amended and Restated Credit Agreement.

 

Life Time Fitness, Inc. By:  

 

Name:  

 

Title:  

 

Address:

Life Time Fitness, Inc.

2902 Corporate Place

Chanhassen, MN 55317

Attention: Michael R. Robinson

 

SIGNATURE PAGE: THIRD

AMENDED AND RESTATED CREDIT AGREEMENT

--------------------------------------------------------------------------------

U.S. Bank National Association,

as Agent and as a Lender

By:  

 

Name:  

 

Title:  

 

 

USD Tranche Commitment $82,500,000

Multicurrency Tranche Commitment $7,500,000

Address:

U.S. Bank National Association

U.S. Bancorp Center, (BC-MN-HO3P)

800 Nicollet Mall

Minneapolis, Minnesota 55402

Fax: (612) 303-2264

Attention: Karen E. Weathers

 

SIGNATURE PAGE: THIRD

AMENDED AND RESTATED CREDIT AGREEMENT

--------------------------------------------------------------------------------

JPMorgan Chase Bank, N. A. By:  

 

Name:  

 

Title:  

 

 

USD Tranche Commitment $82,500,000

Multicurrency Tranche Commitment $7,500,000

Address:

Mail Code MI1-8938

28660 Northwestern Highway

Southfield, MI 48034

Fax: 248-799-5826

Attention: Joseph Bomberski

 

SIGNATURE PAGE: THIRD

AMENDED AND RESTATED CREDIT AGREEMENT

--------------------------------------------------------------------------------

Royal Bank of Canada By:  

 

Name:  

 

Title:  

 

 

USD Tranche Commitment $82,500,000

Multicurrency Tranche Commitment $7,500,000

Address:

Royal Bank of Canada

Three World Financial Center

200 Vesey Street

New York, NY 10281-8098

Fax: 212- 428-2372

Attention: Manager – Loans Administration

 

SIGNATURE PAGE: THIRD

AMENDED AND RESTATED CREDIT AGREEMENT

--------------------------------------------------------------------------------

Bank of America National Association By:  

 

Name:  

 

Title:  

 

 

USD Tranche Commitment $57,291,66.68

Multicurrency Tranche Commitment $5,208,333.32

Address:

Bank of America National Association

135 South LaSalle St.

Chicago, IL 60603

Fax: 404-260-9796

Attention: Timothy Cassidy

 

SIGNATURE PAGE: THIRD

AMENDED AND RESTATED CREDIT AGREEMENT

--------------------------------------------------------------------------------

Compass Bank By:  

 

Name:  

 

Title:  

 

 

USD Tranche Commitment $35,750,000

Multicurrency Tranche Commitment $3,250,000

Address:

Compass Bank

8080 N. Central Expressway

Suite 250

Dallas, TX 75206

Fax: 214-346-2746

Attention: Brandon Kelley

 

SIGNATURE PAGE: THIRD

AMENDED AND RESTATED CREDIT AGREEMENT

--------------------------------------------------------------------------------

RBS Citizens, N.A. By:  

 

Name:  

 

Title:  

 

 

USD Tranche Commitment $35,750,000

Multicurrency Tranche Commitment $3,250,000

Address:

RBS Citizens, N.A.

71 South Wacker Drive

Chicago, IL 60606

 

SIGNATURE PAGE: THIRD

AMENDED AND RESTATED CREDIT AGREEMENT

--------------------------------------------------------------------------------

M&I Marshall & Ilsley Bank By:  

 

Name:  

 

Title:  

 

and  

By:  

 

Name:  

 

Title:  

 

 

USD Tranche Commitment $35,750,000

Multicurrency Tranche Commitment $3,250,000

Address:

M&I Marshall & Ilsley Bank

50 South Sixth Street, Suite 1000

Minneapolis, MN 55402-1611

Fax: 612-904-8012

Attention: Kristing Leuer

 

SIGNATURE PAGE: THIRD

AMENDED AND RESTATED CREDIT AGREEMENT

--------------------------------------------------------------------------------

Bank of the West, a California banking corporation By:  

 

Name:  

 

Title:  

 

 

USD Tranche Commitment $35,750,000

Multicurrency Tranche Commitment $3,250,000

Address:

Bank of the West

250 Marquette Avenue, Suite 575

Minneapolis, Minnesota 55402

Fax: 612-339-6362

Attention: Philip P. Krump

 

SIGNATURE PAGE: THIRD

AMENDED AND RESTATED CREDIT AGREEMENT

--------------------------------------------------------------------------------

Fifth Third Bank By:  

 

Name:  

 

Title:  

 

 

USD Tranche Commitment $25,208,333.33

Multicurrency Tranche Commitment $2,291,666.67

Address:

Fifth Third Bank

38 Fountain Square Plaza

Cincinnati, OH 45202

Email: gary.losey@53.com

Attention: Gary S. Losey

Fax: 513-534-5947

 

SIGNATURE PAGE: THIRD

AMENDED AND RESTATED CREDIT AGREEMENT

--------------------------------------------------------------------------------

Union Bank, N.A. By:  

 

Name:  

 

Title:  

 

 

USD Tranche Commitment $25,208,333.33

Multicurrency Tranche Commitment $2,291,666.67

Address:

Union Bank, N.A.

445 S. Figueroa Street

Los Angeles, CA 90071

Fax: 1-800-446-9951

Email: #clo_synd@unionbank.com

Attention: Gena Robles

 

SIGNATURE PAGE: THIRD

AMENDED AND RESTATED CREDIT AGREEMENT

--------------------------------------------------------------------------------

Associated Bank, National Association By:  

 

Name:  

 

Title:  

 

 

USD Tranche Commitment $18,333,333.33

Multicurrency Tranche Commitment $1,666,666.67

Address:

Associated Bank, National Association

740 Marquette Ave

Minneapolis MN55402

Fax: 612-338-3950

Attention: Paul Way

 

SIGNATURE PAGE: THIRD

AMENDED AND RESTATED CREDIT AGREEMENT

--------------------------------------------------------------------------------

BOKF, N.A., dba Bank of Texas By:  

 

Name:  

 

Title:  

 

 

USD Tranche Commitment $18,333,333.33

Multicurrency Tranche Commitment $1,666,666.67

Address:

Bank of Texas

5956 Sherry Lane

Suite 1100

Dallas, TX 75225

Fax: 212-987-8892

Attention: Alan Morris

 

SIGNATURE PAGE: THIRD

AMENDED AND RESTATED CREDIT AGREEMENT

--------------------------------------------------------------------------------

Branch Banking and Trust Company By:  

 

Name:  

 

Title:  

 

 

USD Tranche Commitment $15,125,000

Multicurrency Tranche Commitment $1,375,000

Address:

Branch Banking and Trust Company

200 West 2nd Street, 16th Floor

Winston-Salem, North Carolina 27101

Fax: 336-733-2740

Attention: Kenneth M. Blackwell

 

SIGNATURE PAGE: THIRD

AMENDED AND RESTATED CREDIT AGREEMENT

--------------------------------------------------------------------------------

First Tennessee Bank National Association By:  

 

Name:  

 

Title:  

 

 

USD Tranche Commitment $16,500,000

Multicurrency Tranche Commitment NONE

Address:

First Tennessee Bank National Association

165 Madison Avenue

10th Floor

Memphis, TN 38103

Fax: 901-523-4235

Attention: Bob Nieman

 

SIGNATURE PAGE: THIRD

AMENDED AND RESTATED CREDIT AGREEMENT

--------------------------------------------------------------------------------

Bank of Taiwan, New York Agency By:  

 

Name:  

 

Title:  

 

 

USD Tranche Commitment $13,000,000

Multicurrency Tranche Commitment NONE

Address:

Bank of Taiwan, New York Agency

100 Wall Street, 11th FL

New York, NY 10005

Fax: 212-968-8370

Attention: Thomas K.C. Wu

 

SIGNATURE PAGE: THIRD

AMENDED AND RESTATED CREDIT AGREEMENT

--------------------------------------------------------------------------------

Mega International Commercial Bank Co., Ltd.

Silicon Valley Branch

By:  

 

Name:  

 

Title:  

 

 

USD Tranche Commitment $8,500,000

Multicurrency Tranche Commitment NONE

Address:

Mega International Commercial Bank Co., Ltd. Silicon Valley Branch

333 W. San Carlos St., Ste. 100

San Jose, CA 95110

Fax: 408-283-1678

 

SIGNATURE PAGE: THIRD

AMENDED AND RESTATED CREDIT AGREEMENT

--------------------------------------------------------------------------------

Chang Hwa Commercial Bank, Ltd. By:  

 

Name:  

 

Title:  

 

 

USD Tranche Commitment $8,500,000

Multicurrency Tranche Commitment NONE

Address:

Chang Hwa Commercial Bank, Ltd.

333 South Grand Avenue, Suite 600

Fax: 213-620-7227

Attention: Note Department

 

SIGNATURE PAGE: THIRD

AMENDED AND RESTATED CREDIT AGREEMENT

--------------------------------------------------------------------------------

Taiwan Cooperative Bank By:  

 

Name:  

 

Title:  

 

 

USD Tranche Commitment $8,500,000

Multicurrency Tranche Commitment NONE

Address:

Taiwan Cooperative Bank

601 South Figueroa Street, Suite 3500

Los Angeles, CA 90017

Fax: 213-489-5195

Attention: Life Time Fitness, Inc. Loan

 

SIGNATURE PAGE: THIRD

AMENDED AND RESTATED CREDIT AGREEMENT

--------------------------------------------------------------------------------

Hua Nan Commercial Bank, Ltd. New York Agency By:  

 

Name:  

 

Title:  

 

 

USD Tranche Commitment $5,000,000

Multicurrency Tranche Commitment NONE

Address:

Hua Nan Commercial Bank, LTD., New York Agency

330 Madison Avenue, 38th Floor

New York, NY 10017

Fax:

Email:

Attention:

 

SIGNATURE PAGE: THIRD

AMENDED AND RESTATED CREDIT AGREEMENT

--------------------------------------------------------------------------------

EXHIBIT A

Form of Compliance Certificate

COMPLIANCE CERTIFICATE

Pursuant to Section 5.1.c of the Third Amended and Restated Credit Agreement
dated June 30, 2011 (the “Credit Agreement”) between Life Time Fitness, Inc.
(“Company”) and the Lenders, Company certifies to the Agent and the Lenders as
follows:

1. The financial statements of Company attached to this Certificate for the
period ending             , 201     (the “Financial Statements”) have been
prepared in accordance with GAAP applied on a consistent basis subject only to
year-end adjustments that in the aggregate are not expected to be materially
adverse, and to the omission of footnotes.

2. The representations and warranties in Article IV of the Credit Agreement are
true and correct as of the date of this Certificate as though made on that date
except: (i) to the extent such representations and warranties expressly refer to
an earlier date, in which case they are true and correct in all material
respects as of such earlier date; and (ii) that the representations and
warranties in Section 4.6 regarding Company’s financial statements shall be
deemed to refer to the financial statements of Company, as applicable, that
Company has then most recently delivered to the Lenders under Section 5.1 of the
Credit Agreement.

3. As of             , 201    , (the “Measurement Date”) no Default or Event of
Default exists [except (describe here any Default or Event of Default and the
action Company proposes to take to cure it.)].

4. Section 1.1; EBITDAR. EBITDAR for the Measurement Period was calculated as
follows in accordance with the Credit Agreement:

 

(i)

   Net Income    $                          

(ii)

   Non-operating Gains/Losses    $              

(iii)

   Income attributable to any Unrestricted Subsidiary that is not distributed in
cash    $              

(iv)

   Non-cash equity based compensation    $              

(v)

   Adjusted Net Income (Sum of (i) minus (ii) minus (iii) plus (iv))    $      
       

(vi)

   Interest Expense    $              

(vii)

   Depreciation and Amortization Expense    $              

(viii)

   Federal, State and Local Income Taxes    $              

(ix)

   Rent Expense    $              

(x)

   EBITDAR (Sum of (v), (vi), (vii), (viii), and (ix))       $                  
    

 

 

--------------------------------------------------------------------------------

5. Section 6.14; Fixed Charge Coverage Ratio. If the Measurement Date is a
Quarterly Measurement Date, Company’s required Fixed Charge Coverage Ratio for
the Measurement Period ending at the Measurement Date was not less than 1.50 to
1.00 and Company’s actual ratio on such Measurement Date was              to
1.00 and was computed in accordance with the Credit Agreement as follows:

 

(i)

   EBITDAR for such Measurement Period    $                       

(ii)

   Cash income taxes paid during such Measurement Period    $                  
    

(iii)

   Maintenance Capital Expenditures during such Measurement Period          -
General    $ 10,000,000          - $3.75 times gross square feet in open Clubs
   $                       

(iv)

   Difference of (i) minus (ii) minus (iii)       $                    

(v)

   Interest Expense during such Measurement Period    $                       

(vi)

   Rent Expense during such Measurement Period    $                       

(vii)

   Mandatory Principal Payments during such Measurement Period       $        
           

(viii)

   Restricted Payments during such Measurement Period      

(ixi)

   Sum of (v) plus (vi) plus (vii) plus (viii)    $                       

(ix)

   Fixed Charge Coverage Ratio(Ratio of (iv) to (ix))                  to 1.00
  

6. Section 6.15; Consolidated Leverage Ratio. If the Measurement Date is a
Quarterly Measurement Date, Company’s maximum permitted Consolidated Leverage
Ratio for the Measurement Period ending at the Measurement Date was not more
than 4.00 to 1.00 and Company’s actual ratio on such Measurement Date was
             to 1.00 and was computed in accordance with the Credit Agreement as
follows:

 

(i)

   Revolving Loans    $              

(ii)

   Swingline Loans    $              

(iii)

   6 times Rent Expense (excluding certain rent paid to Subsidiaries as provided
in the definition of Consolidated Adjusted Funded Debt)    $                  
       

(iv)

   LC Obligations    $              

(v)

   Capitalized Lease Obligations    $              

(vi)

   Other interest-bearing Indebtedness    $              

(vii)

   Contingent Obligations    $                       

(viii)

   Consolidated Adjusted Funded Debt (Sum of (i) through (vii))      
$                       

(ix)

   EBITDAR for Measurement Period       $           

(x)

   Consolidated Leverage Ratio (Ratio of (viii) to (ix))                to 1.00

7. Section 6.16; Unencumbered Asset Coverage Ratio. If the Measurement Date is a
Quarterly Measurement Date, Company’s maximum permitted Unencumbered Asset
Coverage Ratio for the Measurement Period ending at the Measurement Date was not
less than 1.30 to 1.00 and Company’s actual ratio on such Measurement Date was
             to 1.00 and was computed in accordance with the Credit Agreement as
follows:

 

(i)

   Net book value of all Real Estate owned by Unencumbered Real Estate
Subsidiaries    $                                  

(ii)

   Aggregate Outstanding Credit Exposure    $                       

(iii)

   Parity Secured Debt    $                       

(iv)

   Unencumbered Asset Coverage Ratio (Ratio of (i) to sum of (ii) plus (iii))   
              to 1.00   

 

--------------------------------------------------------------------------------

8. Applicable Margin. If the Measurement Date is a Quarterly Measurement Date
occurring on or after June 30, 2011, the Applicable Margin for the period from
the first day of the month following delivery of this Compliance Certificate
until changed in accordance with definition of “Applicable Margin”[Check One]:

 

 

            

  

A.

   Consolidated Leverage Ratio is greater than 3.50:1.00         Base Rate
Advances    1.25% per annum           Eurocurrency Rate Advances    2.25% per
annum    

            

  

B.

   Consolidated Leverage Ratio is greater than 3.00:1.00 but less than or equal
to 3.50: 1.00.         Base Rate Advances    1.00% per annum          
Eurocurrency Rate Advances    2.00% per annum    

            

  

C.

   Consolidated Leverage Ratio is greater than 2.50:1.00 but less than or equal
to 3.00:1.00.         Base Rate Advances    0.75% per annum          
Eurocurrency Rate Advances    1.75% per annum    

            

  

D.

   Consolidated Leverage Ratio is greater than 2.00:1.00 but less than or equal
to 2.50:1.00.         Base Rate Advances    0.50% per annum          
Eurocurrency Rate Advances    1.50% per annum    

            

  

E.

   Consolidated Leverage Ratio is less than or equal to 2.00:1.00.         Base
Rate Advances    0.25% per annum           Eurocurrency Rate Advances   
1.25% per annum.  

Signature Page Follows

 

 

--------------------------------------------------------------------------------

Signature Page to

Compliance Certificate

Dated             , 201    .

 

Life Time Fitness, Inc.

By:

 

 

Name:

 

 

Title:

 

 

 

--------------------------------------------------------------------------------

EXHIBIT B

Form of Assignment and Assumption Agreement

ASSIGNMENT AND ASSUMPTION AGREEMENT

This Assignment and Assumption (the “Assignment and Assumption”) is dated as of
the Effective Date set forth below and is between [Insert name of Assignor]
(“Assignor”) and [Insert name of Assignee] (“Assignee”). Capitalized terms used
but not defined in this Assignment and Assumption have the meanings given to
them in the Credit Agreement identified below (as amended, the “Credit
Agreement”), receipt of a copy of which is hereby acknowledged by Assignee. The
Terms and Conditions set forth in Annex 1 attached to this Assignment and
Assumption are hereby agreed to and incorporated herein by reference and made a
part of this Assignment and Assumption as if set forth herein in full.

For an agreed consideration, Assignor hereby irrevocably sells and assigns to
Assignee, and Assignee hereby irrevocably purchases and assumes from Assignor,
subject to and in accordance with the Terms and Conditions and the Credit
Agreement, as of the Effective Date inserted by Agent as contemplated below, the
interest in and to all of Assignor’s rights and obligations in its capacity as a
Lender under the Credit Agreement and any other documents or instruments
delivered pursuant to the Credit Agreement that represents the amount and
percentage interest identified below of all of Assignor’s outstanding rights and
obligations under the facilities identified below (including without limitation
any letters of credit, guaranties and swing line loans included in such
facilities and, to the extent permitted to be assigned under applicable law, all
claims (including without limitation contract claims, tort claims, malpractice
claims, statutory claims and all other claims at law or in equity), suits,
causes of action and any other right of Assignor against any Person whether
known or unknown arising under or in connection with the Credit Agreement, any
other documents or instruments delivered pursuant to the Credit Agreement or the
loan transactions it governs) (the “Assigned Interest”). Such sale and
assignment is without recourse to Assignor and, except as expressly provided in
this Assignment and Assumption, without representation or warranty by Assignor.

 

1.

   Assignor:                               
                                         

2.

   Assignee:                               
                                          [and is an Affiliate/ Approved Fund of
[identify Lender]1

3.

   Borrower(s):                               
                                         

 

1 

Select as applicable.

 

--------------------------------------------------------------------------------

4.    Agent:    [                             
                                        ], as the agent under the Credit
Agreement. 5.    Credit
Agreement:    The [amount] Credit Agreement dated as of [            ], 20[    ]
among [name of Borrower(s)], the Lenders party thereto, U.S. Bank National
Association, as Agent, and the other agents party thereto. 6.    Assigned
Interest:   

 

Facility Assigned            

Aggregate Amount of

Commitment/Loans

for all Lenders*

    

Amount of

Commitment/Loans

Assigned*

    

Percentage Assigned

of

Commitment/Loans2

 

[                    ]3

   $         $           [         ]% 

[                    ]3

   $         $           [         ]% 

[                    ]3

   $         $           [         ]% 

 

7.    Trade Date:    [                    ]4

Effective Date: [            , 20[    ] [TO BE INSERTED BY AGENT AND WHICH SHALL
BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER BY AGENT.]

The terms set forth in this Assignment and Assumption are hereby agreed to:

 

ASSIGNOR [NAME OF ASSIGNOR]   By:  

 

          Title: ASSIGNEE [NAME OF ASSIGNEE] By:  

 

          Title:

 

--------------------------------------------------------------------------------

[Consented to and]5 Accepted: U.S. BANK NATIONAL ASSOCIATION, as Agent

By:

 

 

Title:

[Consented to:]6

 

* 

Amount to be adjusted by the counterparties to take into account any payments or
prepayments made between the Trade Date and the Effective Date.

2 

Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans of
all Lenders.

3 

Fill in the appropriate terminology for the types of facilities under the Credit
Agreement that are being assigned under this Assignment )

4 

Insert if satisfaction of minimum amounts is to be determined as of the Trade
Date.

5 

To be added only if the consent of Agent is required by the terms of the Credit
Agreement.

6 

To be added only if the consent of the Borrower and/or other parties (e.g. Swing
Line Lender, LC Issuer) is required by the Credit Agreement.

 

[NAME OF RELEVANT PARTY]

By:

 

 

Title:

 

 

--------------------------------------------------------------------------------

ANNEX 1

TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION

1. Representations and Warranties.

1.1 Assignor. Assignor represents and warrants that (i) it is the legal and
beneficial owner of the Assigned Interest, (ii) the Assigned Interest is free
and clear of any lien, encumbrance or other adverse claim and (iii) it has full
power and authority, and has taken all action necessary, to execute and deliver
this Assignment and Assumption and to consummate the transactions contemplated
hereby. Neither Assignor nor any of its officers, directors, employees, agents
or attorneys shall be responsible for (i) any statements, warranties or
representations made in or in connection with the Credit Agreement or any other
Loan Document, (ii) the execution, legality, validity, enforceability,
genuineness, sufficiency, perfection, priority, collectibility, or value of the
Loan Documents or any collateral thereunder, (iii) the financial condition of
the Borrower, any of its Subsidiaries or Affiliates or any other Person
obligated in respect of any Loan Document, (iv) the performance or observance by
the Borrower, any of its Subsidiaries or Affiliates or any other Person of any
of their respective obligations under any Loan Documents, (v) inspecting any of
the property, books or records of the Borrower, or any guarantor, or (vi) any
mistake, error of judgment, or action taken or omitted to be taken in connection
with the Loans or the Loan Documents.

1.2. Assignee. Assignee (a) represents and warrants that (i) it has full power
and authority, and has taken all action necessary, to execute and deliver this
Assignment and Assumption and to consummate the transactions contemplated hereby
and to become a Lender under the Credit Agreement, (ii) from and after the
Effective Date, it shall be bound by the provisions of the Credit Agreement as a
Lender thereunder and, to the extent of the Assigned Interest, shall have the
obligations of a Lender thereunder, (iii) agrees that its payment instructions
and notice instructions are as set forth in Schedule 1 to this Assignment and
Assumption, (iv) confirms that none of the funds, monies, assets or other
consideration being used to make the purchase and assumption hereunder are “plan
assets” as defined under ERISA and that its rights, benefits and interests in
and under the Loan Documents will not be “plan assets” under ERISA, (v) agrees
to indemnify and hold Assignor harmless against all losses, costs and expenses
(including, without limitation, reasonable attorneys’ fees) and liabilities
incurred by Assignor in connection with or arising in any manner from Assignee’s
non-performance of the obligations assumed under this Assignment and Assumption,
(vi) it has received a copy of the Credit Agreement, together with copies of
financial statements and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Assumption and to purchase the Assigned Interest on the basis of
which it has made such analysis and decision independently and without reliance
on Agent or any other Lender, and (vii) attached as Schedule 1 to this
Assignment and Assumption is any documentation required to be delivered by
Assignee with respect to its tax status pursuant to the terms of the Credit
Agreement, duly completed and executed by Assignee and (b) agrees that (i) it
will, independently and without reliance on Agent, Assignor or any other Lender,
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under the Loan Documents, and (ii) it will perform in accordance with their
terms all of the obligations which by the terms of the Loan Documents are
required to be performed by it as a Lender.

 

--------------------------------------------------------------------------------

2. Payments. Assignee shall pay Assignor, on the Effective Date, the amount
agreed to by Assignor and Assignee. From and after the Effective Date, Agent
shall make all payments in respect of the Assigned Interest (including payments
of principal, interest, Reimbursement Obligations, fees and other amounts) to
Assignor for amounts that have accrued to but excluding the Effective Date and
to Assignee for amounts that have accrued from and after the Effective Date.

3. General Provisions. This Assignment and Assumption binds and inures to the
benefit of Assignor, Assignee, and their successors and assigns. This Assignment
and Assumption may be signed in any number of counterparts, which together
constitute one instrument. Delivery of a signed counterpart of a signature page
of this Assignment and Assumption electronically shall be effective as delivery
of a manually signed original counterpart of this Assignment and Assumption.
This Assignment and Assumption is governed by, and shall be construed in
accordance with, the law of the State of Minnesota.

 

--------------------------------------------------------------------------------

EXHIBIT C

Form of Increasing Lender Supplement

This Increasing Lender Supplement is dated [            ], 20[    ] (this
“Supplement”), and is between              (“Increasing Lender”), U.S. Bank
National Association, as administrative agent (in such capacity, “Agent”), and
LifeTime Fitness, Inc., a Minnesota corporation (“Company”).

This Supplement supplements the Third Amended and Restated Credit Agreement
dated June 30, 2011 (as amended, restated, supplemented or otherwise modified
from time to time, the “Credit Agreement”), between Company, Agent, and the
“Lenders”, as the Credit Agreement defines that term.

Under Section 2.36 of the Credit Agreement Company has the right, subject to the
terms and conditions of the Credit Agreement, to increase the Aggregate
Commitment under the Credit Agreement with the consent of one or more Lenders to
increase the amount of its Commitment. Company has given notice to Agent of its
intention to increase the Aggregate Commitment pursuant to Section 2.36 of the
Credit Agreement. Pursuant to Section 2.36 of the Credit Agreement, the
Increasing Lender now desires to increase the amount of its Commitment under the
Credit Agreement by signing and delivering to Company and Agent this Supplement.

Therefore, each of the parties hereby agrees as follows:

1. Increasing Lender agrees, subject to the terms and conditions of the Credit
Agreement, that on the date of this Supplement its Commitment is increased by
$[        ], thereby making the aggregate amount of its total Commitments
$[        ].

2. Company hereby represents and warrants that no Default or Event of Default
has occurred and is continuing on and as of the date of this Supplement.

3 Each capitalized term in this Supplement that this Supplement does not define
has the meaning the Credit Agreement gives it.

4. This Supplement shall be governed by, and construed in accordance with, the
laws of the State of Minnesota.

5. This Supplement may be executed in any number of counterparts and by
different parties in separate counterparts, each of which when so executed shall
be deemed to be an original and all of which taken together shall constitute one
and the same document.

 

--------------------------------------------------------------------------------

Increasing Lender, Agent, and Company hereby sign this Increasing Lender
Supplement.

 

[INSERT NAME OF INCREASING LENDER] By:  

 

Name: Title:

Accepted and agreed to as of the date first written above:

[                                 ]

 

By:  

 

Name: Title:

Acknowledged as of the date first written above:

 

U.S. BANK NATIONAL ASSOCIATION

as Administrative Agent

By:  

 

Name: Title:

 

--------------------------------------------------------------------------------

EXHIBIT D

Form of Augmenting Lender Supplement

This Augmenting Lender Supplement (this “Supplement” ) is dated [            ],
20[    ] and supplements the Third Amended and Restated Credit Agreement dated
June 30, 2011 (as amended, restated, supplemented or otherwise modified from
time to time, the “Credit Agreement”), between [            ] ( “Borrower”), the
Lenders that are parties to the Credit Agreement, and U.S. Bank National
Association, as administrative agent (in such capacity, “Agent”).

The Credit Agreement provides in Section      that any bank, financial
institution or other entity may extend Commitments under the Credit Agreement
subject to the approval of Borrower and Agent, by signing and delivering to
Borrower and Agent a supplement to the Credit Agreement in substantially the
form of this Supplement.

The undersigned Augmenting Lender was not an original party to the Credit
Agreement but now desires to become a party to it.

Therefore, the parties agree as follows:

1. The undersigned Augmenting Lender agrees to be bound by the Credit Agreement
and agrees that it shall, on the date of this Supplement, become a Lender for
all purposes under and related to the Credit Agreement, with a Commitment with
respect to Revolving Loans of $[        ].

2. The undersigned Augmenting Lender (a) represents and warrants that it is
legally authorized to enter into this Supplement; (b) confirms that it has
received a copy of the Credit Agreement, together with copies of the most recent
financial statements delivered pursuant to Section 5.1 of the Credit Agreement,
and has reviewed such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Supplement; (c) agrees that it will, independently and without reliance upon
Agent or any other Lender and based on such documents and information as it
deems appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Credit Agreement or any other instrument
or document delivered under this Supplement or the Credit Agreement;
(d) appoints and authorizes Agent to take such action as agent on its behalf and
to exercise such powers and discretion under the Credit Agreement or any other
instrument or document furnished pursuant hereto or thereto as are delegated to
Agent by the terms thereof, together with such powers as are incidental thereto;
and (e) agrees that it will be bound by the provisions of the Credit Agreement
and will perform in accordance with its terms all the obligations which by the
terms of the Credit Agreement are required to be performed by it as a Lender.

3. The undersigned’s address for notices for the purposes of the Credit
Agreement is as follows:

[            ]

 

--------------------------------------------------------------------------------

4. The Borrower hereby represents and warrants that no Default or Event of
Default has occurred and is continuing on and as of the date hereof.

5. Each capitalized term in this Supplement that this Supplement does not define
has the meaning the Credit Agreement gives it.

6. This Supplement is governed by, and shall be construed in accordance with,
the laws of the State of Minnesota.

7. This Supplement may be executed in any number of counterparts and by
different parties in separate counterparts, each of which when so executed is an
original and all of which taken together are one and the same document.

[remainder of this page intentionally left blank]

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, each of the undersigned has caused this Supplement to be
executed and delivered by a duly authorized officer on the date first above
written.

 

[INSERT NAME OF AUGMENTING LENDER] By:  

 

Name:   Title:  

Accepted and agreed to as of the date first written above:

[                                 ]

 

By:  

 

Name:   Title:  

Acknowledged as of the date first written above:

 

U.S. BANK NATIONAL ASSOCIATION

as Administrative Agent

By:  

 

Name:   Title:  

--------------------------------------------------------------------------------

EXHIBIT E

Form of Note

NOTE

Minneapolis, Minnesota

June 30, 2011

Life Time Fitness, Inc., a Minnesota corporation (“Borrower”), promises to pay
to the order of              (“Lender”), the aggregate unpaid principal amount
of all Loans by Lender to Borrower under the Credit Agreement in accordance with
Article II of the Credit Agreement, in immediately available funds at the
applicable office of U.S. Bank National Association, as Agent, together with
interest on the unpaid principal amount of this Note (this “Note”) at the rates
and on the dates the Credit Agreement requires. Borrower shall pay the principal
of and accrued and unpaid interest on the Loans in full on the Facility
Termination Date.

Lender shall, and is hereby authorized to, record in accordance with its usual
practice, the date and amount of each Loan and the date and amount of each
principal payment under this Note.

This Note is one of the Notes referred to in, evidences indebtedness incurred
under, and is entitled to the benefits of, the Third Amended and Restated Credit
Agreement dated June 30, 2011 (as amended or modified and in effect at any
relevant time, the “Credit Agreement”) between Borrower, the Lenders that are
parties to the Credit Agreement, LC Issuer, and U.S. Bank National Association,
as the Agent. The terms and provisions of the Credit Agreement govern this Note,
including the terms and conditions under which this Note and the indebtedness it
evidences may be prepaid or its maturity date accelerated. As the Credit
Agreement provides, this Note is secured by the Collateral Documents and
guaranteed under the Guaranty. Each capitalized term in this Note that this Note
does not define has the meaning the Credit Agreement gives it.

Borrower and any other parties to this Note, whether as makers, endorsers, or
otherwise, severally waive presentment, demand, protest, and notice of dishonor
in connection with this Note. In the event of a default under this Note,
Borrower shall pay all costs and expenses of collection, including reasonable
attorney fees.

This Note is made under, and its validity, construction, and enforcement are
governed by, the internal laws of the State of Minnesota without giving effect
to any conflict of laws principles, but giving effect to the federal laws of the
United States that apply to national banks.

 

Life Time Fitness, Inc. By:  

 

Name:  

 

Title:  

 

--------------------------------------------------------------------------------

SCHEDULES

 

1.1.a    Collateral Documents 1.1.b    Subsidiaries 1.1.c    LTF CMBS I Related
Agreements 1.1.d    Permitted Permanent Loans 1.1.e    Related Agreements 1.1.f
   Lenders and Commitment Amounts 2.10    Facility LCs 4.7    Litigation 4.8   
Environmental 4.13    Trademarks and Patents 4.18    Equity Interests in Persons
other than Wholly-Owned Subsidiaries 4.21    Insurance 6.10    Investments 6.11
   Indebtedness 6.12    Liens 6.13    Contingent Liabilities 6.18    Sale
Leasebacks

--------------------------------------------------------------------------------

Schedule 1.1.a

Collateral Documents

Each Security Agreement made by the following entities in favor of Agent:

 

  1.    Life Time Fitness, Inc.   2.    LTF Club Operations Company, Inc.   3.
   LTF Management Services, LLC   4.    LTF Operations Holdings, Inc.   5.   
LTF Real Estate Holdings, LLC   6.    LTF Real Estate Company, Inc.   7.    LTF
Real Estate Voyager I, LLC   8.    LTF Real Estate Voyager II (WBL), LLC   9.   
LTF Real Estate Voyager III (Bloomington), LLC   10.    LTF Real Estate CBC I
(Chan Club), LLC   11.    FCA Construction Company, LLC   12.    LTF Triathlon
Series, LLC   13.    Creative & Production Resources, Inc.   14.    Leadville
Trail 100, Inc.   15.    LTF Yoga Company, LLC   16.    LTF Club Management
Company, LLC   17.    FCA Restaurant Company, LLC   18.    LTF Minnetonka
Restaurant Company, LLC

Each Pledge Agreement made by the following entities in favor of Agent:

 

   a.    Life Time Fitness, Inc.    b.    LTF Club Operations Company, Inc.   
c.    LTF Operations Holdings, Inc.    d.    LTF Real Estate Holdings, LLC    e.
   LTF Real Estate Company, Inc.    f.    LTF CMBS Managing Member, Inc.    g.
   LTF Triathlon Series, LLC    h.    FCA Restaurant Company, LLC

--------------------------------------------------------------------------------

Schedule 1.1.b

Subsidiaries

Guarantor Subsidiaries:

 

  1. LTF Club Operations Company, Inc., a Minnesota corporation FEIN 20-3369824

  2. LTF Management Services, LLC, a Delaware limited liability company FEIN
27-0603333

  3. LTF Operations Holdings, Inc., a Minnesota corporation FEIN 20-3369967

  4. LTF Real Estate Holdings, LLC, a Delaware limited liability company FEIN
20-3370029

  5. LTF Real Estate Company, Inc., a Minnesota corporation FEIN 20-3369902

  6. LTF Real Estate Voyager I, LLC, a Delaware limited liability company FEIN
26-3725827

  7. LTF Real Estate Voyager II (WBL), LLC, a Delaware limited liability company
FEIN 26-4479170

  8. LTF Real Estate Voyager III (Bloomington), LLC, a Delaware limited
liability company FEIN 27-0150822

  9. LTF Real Estate CBC I (Chan Club), LLC, a Delaware limited liability
company FEIN 27-1127470

  10. FCA Construction Company, LLC, a Delaware limited liability company FEIN
41-1905748

  11. LTF Triathlon Series, LLC, a Delaware limited liability company FEIN
20-8185939

  12. Creative & Production Resources, Inc., an Illinois corporation FEIN
36-3817013

  13. Leadville Trail 100, Inc., a Colorado corporation FEIN 84-1133718

  14. LTF Yoga Company, LLC, a Delaware limited liability company FEIN None

  15. LTF Club Management Company, LLC, a Delaware limited liability company
FEIN 20-2874566

  16. FCA Restaurant Company, LLC, a Delaware limited liability company FEIN
41-1947047

  17. LTF Minnetonka Restaurant Company, LLC, a Delaware limited liability
company FEIN 26-2455594

Restricted Subsidiaries: all Guarantor Subsidiaries, plus the following:

 

  1. LTF Club Operations Company Canada Inc., an Ontario, Canada corporation; no
FEIN

  2. LTF CMBS I, LLC, a Delaware limited liability company FEIN 20-2413914

  3. LTF Real Estate Company Canada Inc., an Ontario, Canada corporation no FEIN

  4. LTF CMBS Managing Member, Inc., a Delaware limited liability company FEIN
20-8103047

  5. LTF Real Estate VRDN I, LLC, a Delaware limited liability company FEIN
71-1050443

  6. FCA Construction Company Canada Inc., an Ontario, Canada corporation no
FEIN

--------------------------------------------------------------------------------

Unencumbered Real Estate Subsidiaries:

 

  1. LTF Real Estate Company, Inc., a Minnesota corporation

  2. LTF Real Estate Company Canada, Inc., an Ontario corporation

  3. LTF Real Estate Holdings, LLC

Encumbered Real Estate Subsidiaries:

 

  1. LTF CMBS I, LLC, a Delaware limited liability company

  2. LTF CMBS Managing Member, Inc., a Delaware limited liability company

  3. LTF Real Estate VRDN I, LLC, a Delaware limited liability company

  4. LTF Real Estate Voyager I, LLC, a Delaware limited liability company

  5. LTF Real Estate Voyager II (WBL), LLC, a Delaware limited liability company

  6. LTF Real Estate Voyager III (Bloomington), LLC, a Delaware limited
liability company

  7. LTF Real Estate CBC I (Chan Club), LLC, a Delaware limited liability
company

Unrestricted Subsidiaries:

 

  1. LTF TIAA Real Estate Holdings, LLC, a Delaware limited liability company

  2. LTF Michigan Real Estate Company, LLC, a Delaware limited liability company

  3. LTF Minnesota Real Estate Company, LLC, a Delaware limited liability
company

  4. LTF USA Real Estate Company, LLC, a Delaware limited liability company

  5. FCA Real Estate Holdings, LLC, a Delaware corporation

  6. Two non-wholly owned Subsidiaries with a combined net worth of not more
than U.S.$2.8 million.

Designated Unrestricted Subsidiaries:

 

  1. LTF TIAA Real Estate Holdings, LLC, a Delaware limited liability company

  2. LTF Michigan Real Estate Company, LLC, a Delaware limited liability company

  3. LTF Minnesota Real Estate Company, LLC, a Delaware limited liability
company

  4. LTF USA Real Estate Company, LLC, a Delaware limited liability company

  5. FCA Real Estate Holdings, LLC, a Delaware corporation

Foreign Subsidiaries:

 

  1. LTF Club Operations Company Canada Inc., an Ontario, Canada corporation

  2. LTF Real Estate Company Canada Inc., an Ontario, Canada corporation

  3. FCA Construction Company Canada Inc., an Ontario, Canada corporation

Wholly-Owned Subsidiaries: All Subsidiaries listed above except the following:

 

  1. Two non-wholly owned Subsidiaries with a combined net worth of not more
than U.S.$2.8 million.

--------------------------------------------------------------------------------

Schedule 1.1.c

LTF CMBS I Related Agreements

LTF CMBS I Related Agreements

 

  A.    LTF CMBS I      1.      Loan Agreement (1/24/07)      2.      LTF CMBS I
Note      3.      Mortgages (1/24/07)           -Tempe Club           -Commerce
Township Club           -Garland Club           -Flower Mound Club          
-Willowbrook Club           -Sugar Land Club      4.      Deposit Account
Agreement (1/24/07)      5.      Blocked Account Control Agreement with Lockbox
Services (1/24/07)      6.      Environmental Indemnity Agreement (1/24/07)     
7.      Collateral Assignment of Security Interest (1/24/07)      8.     
Mortgage Loan Cooperation Agreement (1/24/07)      9.      LTF Leases (1/24/07)
          -Tempe Club           -Commerce Township Club           -Garland Club
          -Flower Mound Club           -Willowbrook Club           -Sugar Land
Club   B.    Borrower      1.      Guaranty (1/24/07)      2.      Lease
Guaranty (1/24/07)      3.      Environmental Indemnity Agreement (1/24/07)     
4.      Mortgage Loan Cooperation Agreement (1/24/07)   C.    Operations      1.
     Subordination, Non-Disturbance and Attornment Agreements (1/24/07)     
     -Tempe Club           -Commerce Township Club           -Garland Club     
     -Flower Mound Club           -Willowbrook Club           -Sugar Land Club  
D.    LTF CMBS Managing Member, Inc.      1.      Mortgage Loan Cooperation
Agreement (1/24/07)

--------------------------------------------------------------------------------

Schedule 1.1.d

Permitted Permanent Loans

LTF Real Estate VRDN I

 

  A.    LTF Real Estate VRDN I      $34,235,000 million in variable rate demand
notes issued LTF Real Estate VRDN I, LLC with the proceeds financing the
corporate headquarters and the Overland Park, KS center which is secured by
mortgages held by General Electric Capital Corporation and evidenced by the
following Related Agreements dated June 13, 2008:      1.      Indenture of
Trust      2.      Specimen Note      3.      Reimbursement Agreement      4.
     Irrevocable Direct Pay Letter of Credit      5.      Remarketing Agreement
     6.      Purchase Agreement      7.      UCC-1 Financing Statement      8.
     Mortgage, Security Agreement Assignment of Leases and Rents and Fixture
Filing (Chanhassen Property)      9.      Mortgage, Security Agreement
Assignment of Leases and Rents and Fixture Filing (Overland Park Property)     
10.      Environmental Indemnity Agreement (Chanhassen Corporate Headquarters)  
   11.      Environmental Indemnity Agreement (Overland Park, Kansas)      12.
     Lease between LTF Real Estate VRDN I, LLC and LTF Club Operations Company,
Inc.      13.      Lease Guaranty by Life Time Fitness, Inc. LTF Real Estate
Voyager I   A.    LTF Real Estate Voyager I      A note in the principal amount
of $5,750,000 from LTF Real Estate Voyager I, LLC to Voyager Bank pursuant to
the Loan Agreement and Term Promissory Note related to the Minnetonka Club,
which is evidenced and secured by the following Related Agreements dated
November 21, 2008:      1.      Loan Agreement      2.      Term Promissory Note
     3.      Mortgages and Security Agreement and Fixture Financing Statement  
   4.      Assignment of Leases and Rents      5.      Lease between LTF Real
Estate Voyager I, LLC and LTF Club Operations Company, Inc.      6.      Lease
Guaranty by Life Time Fitness, Inc.

--------------------------------------------------------------------------------

LTF Real Estate Voyager II

 

   A.    LTF Real Estate Voyager II (WBL)       A note in the principal amount
of $4,812,500 from LTF Real Estate Voyager II (WBL), LLC to Voyager Bank
pursuant to the Loan Agreement and Term Promissory Note related to the White
Bear Lake Club, which is evidenced and secured by the following Related
Agreements dated November March, 2009:       1.      Loan Agreement       2.
     Term Promissory Note       3.      Mortgages and Security Agreement and
Fixture Financing Statement       4.      Assignment of Leases and Rents      
5.      Lease between LTF Real Estate Voyager II (WBL), LLC and LTF Club
Operations Company, Inc.       6.      Lease Guaranty by Life Time Fitness, Inc.

LTF Real Estate Voyager III

  A.    LTF Real Estate Voyager III (Bloomington)      A note in the principal
amount of $3,000,000 from LTF Real Estate Voyager II (WBL), LLC to Voyager Bank
pursuant to the Loan Agreement and Term Promissory Note related to the
Bloomington Club, which is evidenced and secured by the following Related
Agreements dated November May 12, 2009:      1.      Loan Agreement      2.     
Term Promissory Note      3.      Mortgages and Security Agreement and Fixture
Financing Statement      4.      Assignment of Leases and Rents      5.     
Lease between LTF Real Estate Voyager III (Bloomington), LLC and LTF Club
Operations Company, Inc.      6.      Lease Guaranty by Life Time Fitness, Inc.
LTF Real Estate CBC I (Chan Club)   A.    LTF Real Estate CBC I (Chan Club)     
A note in the principal amount of $10,300,000 from LTF Real Estate CBC I (Chan
Club), LLC to Community Bank Chanhassen pursuant to the Credit Agreement and
Promissory Note related to the Chanhassen Club, which is evidenced and secured
by the following Related Agreements dated November 20, 2009:      1.      Credit
Agreement      2.      Promissory Note      3.      Mortgage, Security
Agreement, Assignment of Leases and Rents and Fixture Financing Statement     
4.      Environmental and ADA Indemnification Agreement      5.      Lease
Agreement between LTF Real Estate CBC I (Chan Club), LLC and LTF Club Operations
Company, Inc.      6.      Lease Guaranty by Life Time Fitness, Inc.

--------------------------------------------------------------------------------

Schedule 1.1.e

Related Agreements

See the documents described on Schedules 1.1.c., 1.1.d., 6.11 and 6.18.

Leases and related documents for the Clubs at the following locations:

Champlin, MN

Savage, MN

Plymouth, MN

Columbus, OH

Loudon County, VA

Berkeley Heights, NJ

Syosset, NY

Mississauga, Ontario

Sandy Springs, GA

--------------------------------------------------------------------------------

Schedule 1.1.f

Lenders and Commitment Amounts

 

Lender

   USD Tranche
Commitment
Amount      Multicurrency
Tranche
Commitment
Amount      Combined
Commitment
Amount  

U.S. Bank National Association

   $ 82,500,000.00       $ 7,500,000.00       $ 90,000,000.00   

JPMorgan Chase Bank, N. A.

   $ 82,500,000.00       $ 7,500,000.00       $ 90,000,000.00   

Royal Bank of Canada

   $ 82,500,000.00       $ 7,500,000.00       $ 90,000,000.00   

Bank of America National Association

   $ 57,291,666.68       $ 5,208,333.32       $ 62,500,000.00   

Compass Bank

   $ 35,750,000.00       $ 3,250,000.00       $ 39,000,000.00   

RBS Citizens, N.A.

   $ 35,750,000.00       $ 3,250,000.00       $ 39,000,000.00   

M&I Marshall & Ilsley Bank

   $ 35,750,000.00       $ 3,250,000.00       $ 39,000,000.00   

Bank of the West

   $ 35,750,000.00       $ 3,250,000.00       $ 39,000,000.00   

Fifth Third Bank

   $ 25,208,333.33       $ 2,291,666.67       $ 27,500,000.00   

Union Bank, N.A.

   $ 25,208,333.33       $ 2,291,666.67       $ 27,500,000.00   

Associated Bank, National Association

   $ 18,333,333.33       $ 1,666,666.67       $ 20,000,000.00   

BOKF, N.A., dba Bank of Texas

   $ 18,333,333.33       $ 1,666,666.67       $ 20,000,000.00   

Branch Banking and Trust Company

   $ 15,125,000.00       $ 1,375,000.00       $ 16,500,000.00   

First Tennesse Bank National Association

   $ 16,500,000.00          $ 16,500,000.00   

Bank of Taiwan, New York Agency

   $ 13,000,000.00          $ 13,000,000.00   

Mega International Commercial Bank Co., Ltd. Silicon Valley Branch

   $ 8,500,000.00          $ 8,500,000.00   

Chang Hwa Commercial Bank, Ltd.

   $ 5,000,000.00          $ 5,000,000.00   

Taiwan Cooperative Bank

   $ 8,500,000.00          $ 8,500,000.00   

Hua Nan Commercial Bank, Ltd. New York Agency

   $ 8,500,000.00          $ 8,500,000.00   

Totals:

   $ 610,000,000.00       $ 50,000,000.00       $ 660,000,000.00   

--------------------------------------------------------------------------------

Schedule 2.10

Facility LCs

 

1. USBNA Letter of Credit No. SLCMMSP03619, expiring April 15, 2012, issued for
the benefit of The Travelers Indemnity Company and on which there is an undrawn
amount of $575,000.

 

2. USBNA Letter of Credit No. SLCMMSP04876, expiring December 4, 2011, issued
for the benefit of Sentry Insurance A Mutual Company and on which there is an
undrawn amount of $3,650,000.

 

3. USBNA Letter of Credit No. SLCMMSP05169, expiring June 12, 2012, issued for
the benefit of Southeast Metro Stormwater Authority and on which there is an
undrawn amount of $112,830.80.

 

4. USBNA Letter of Credit No. SLCMMSP04196, expiring July 20, 2011, issued for
the benefit of Well-Prop (Multi) LLC and on which there is an undrawn amount of
$750,000.

 

5. Royal Bank of Canada Letter of Credit No. P401798T09591, expiring April 5,
2012, issued for the benefit of The Corporation of the City of Mississauga and
on which there is an undrawn amount of CAD $724,386.30.

 

6. Royal Bank of Canada Letter of Credit No. P401799T09591, expiring April 5,
2012, issued for the benefit of The Corporation of the City of Mississauga and
on which there is an undrawn amount of CAD $33,143.

--------------------------------------------------------------------------------

Schedule 4.7

Litigation

None

--------------------------------------------------------------------------------

Schedule 4.8

Environmental

None

--------------------------------------------------------------------------------

Schedule 4.13

Trademarks and Patents

Trademarks

 

  A. Trademarks. Borrower has registered or applied for registration on the
following trademarks. The following are in addition to the common law rights
that Borrower holds in and to certain other trademarks used in the normal course
of business.

 

  a. United States.

 

  i. LIFE TIME FITNESS.

Services: Physical fitness instruction and health club services.

Registered as number 2,140,172 on March 3, 1998.

 

  ii. MINNEAPOLIS LIFE TIME ATHLETIC CLUB.

Services: Health club services.

Registered as number 2,413,208 on December 12, 2000.

 

  iii. EXPERIENCE LIFE.

Services: Magazines in the field of health, fitness and exercise.

Registered as number 2,544,873 on March 5, 2002.

 

  iv. KICKING, RUNNING, SIT-UP, WEIGHTLIFTING, SWIMMING AND BICYCLING ACTION
FIGURES.

Services: Physical fitness instruction and health club services; and
entertainment and educational services, namely, classes in the fields of
physical fitness, creative dance, tumbling, movement, and self-esteem building,
and providing recreation facilities with computers and play areas for children.

Registered as number 2,621,306 on September 17, 2002.

 

  v. SIT-UP ACTION FIGURE.

Services: Physical fitness instruction and health club services; and
entertainment and educational services, namely, classes in the fields of
physical fitness, creative dance, tumbling, movement, and self-esteem building,
and providing recreation facilities with computers and play areas for children.

Registered as number 2,621,307 on September 17, 2002.

 

  vi. RUNNING ACTION FIGURE.

Services: Physical fitness instruction and health club services; and
entertainment and educational services, namely, classes in the fields of
physical fitness, creative dance, tumbling, movement, and self-esteem building,
and providing recreation facilities with computers and play areas for children.

Registered as number 2,628,257 on October 1, 2002.

--------------------------------------------------------------------------------

  vii. SWIMMING ACTION FIGURE.

Services: Physical fitness instruction and health club services; and
entertainment and educational services, namely, classes in the fields of
physical fitness, creative dance, tumbling, movement, and self-esteem building,
and providing recreation facilities with computers and play areas for children.

Registered as number 2,628,259 on October 1, 2002.

 

  viii. BICYCLING ACTION FIGURE.

Services: Physical fitness instruction and health club services; and
entertainment and educational services, namely, classes in the fields of
physical fitness, creative dance, tumbling, movement, and self-esteem building,
and providing recreation facilities with computers and play areas for children.

Registered as number 2,628,260 on October 1, 2002.

 

  ix. LIFE TIME FITNESS.

Services: Arranging and conducting athletic competitions.

Registered as number 2,689,399 on February 18, 2003.

 

  x. CHICAGO TRIATHLON*

Services: Promoting and organizing athletic competitions in the nature of
swimming, bicycling and foot races

Registered as number 2,715,173 on May 13, 2003

*Owner of Registration: Creative & Production Resources, Inc. (a wholly-owned
indirect Restricted Subsidiary of Borrower)

 

  xi. LIFE TIME FITNESS TRIATHLON AND DESIGN.

Services: Arranging and conducting athletic competitions.

Registered as number 2,722,501 on June 3, 2003.

 

  xii. LEANSOURCE.

Services: Dietary supplements.

Registered as number 2,802,101 on January 6, 2004.

 

  xiii. TRIANGLE DESIGN.

Services: Dietary and nutritional supplements in liquid, capsule, powder, tablet
and bar form; vitamin and mineral supplements; meal replacement nutritional
drinks; and dietary food supplements.

Registered as number 2,808,049 on January 27, 2004.

--------------------------------------------------------------------------------

  xiv. TRIANGLE DESIGN.

Services: Prerecorded videotapes featuring health, fitness, nutrition, and
weight management information.

Registered as number 2,811,553 on February 3, 2004.

 

  xv. KICKING, RUNNING, WEIGHTLIFTING, TENNIS, SWIMMING AND BICYCLING ACTION
FIGURES.

Services: Physical fitness instruction and health club services; and
entertainment and educational services, namely, classes in the fields of
physical fitness, creative dance, tumbling, movement, and self-esteem building,
and providing recreation facilities with computers and play areas for children.

Pending; issued serial number 78/465481 on August 11, 2004.

 

  xvi. TRIANGLE DESIGN.

Services: Physical fitness instruction, yoga instruction, dance instruction;
educational services, namely, offering classes in the field of physical fitness,
yoga, dance and weight management.

Registered as number 2,882,536 on September 7, 2004.

 

  xvii. GENERAL FITNESS AND DESIGN.

Services: Personal trainer services; physical fitness consultation and
instruction; personal training services, namely, strength and conditioning
training.

Registered as number 2,907,824 on December 7, 2004.

 

  xviii. LIFE TIME FITNESS AND DESIGN.

Services: Physical fitness instruction and health club services; and
entertainment and educational services, namely, classes in the fields of
physical fitness creative dance, tumbling, movement, and self-esteem building,
and providing recreation facilities with computers and play areas for children.

Registered as number 2,991,412 on September 6, 2005.

 

  xix. CARDIO2

Services: Physical fitness instruction and health club services; entertainment
and educational services, namely, classes in the field of physical fitness

Pending; issued serial number 77/137551 on March 22, 2007

 

  xx. LIFE TIME FITNESS TRIATHLON SERIES AND DESIGN.

Services: Arranging and conducting athletic competitions

Registered as number 3,321,669 on October 23, 2007.

--------------------------------------------------------------------------------

  xxi. LEADVILLE TRAIL 100*

Services: Entertainment services, namely, organizing, conducting and staging
athletic contests, namely, athletic biking and running races

Registered as number 3,474,602 on July 29, 2008

*Owner of Registration: Leadville Trail 100, Inc. (a wholly-owned indirect
Restricted Subsidiary of Borrower)

 

  xxii. LIFE LAB

Services: Personal trainer services; Physical fitness consultation; Physical
fitness instruction

Registered as number 3,554,618 on December 30, 2008.

 

  xxiii. T.E.A.M. TRAINING EDUCATION ACCOUNTABILITY MOTIVATION.

Services: Physical fitness instruction, weight management, nutritional planning
and educational services in the fields of physical fitness, weight management
and nutrition.

Registered as number 3,735,347 on January 5, 2010.

 

  xxiv. MYHEALTHCHECK

Services: (multiple) Providing assistance, fitness evaluation and consultation
to corporate clients to help their employees make health, wellness and
nutritional changes in their daily living to increase productivity, lower health
care costs and achieve overall wellness. Online electronic newsletters delivered
by email in the fields of health, fitness and wellness; Physical fitness
instruction and health club services, namely, providing instruction and access
to equipment in the field of physical exercise, et. al.

Published as 85/055,978 on June 7, 2010

 

  xxv. MYHEALTHCHECK BY LIFE TIME FITNESS

Services: (multiple) Providing assistance, fitness evaluation and consultation
to corporate clients to help their employees make health, wellness and
nutritional changes in their daily living to increase productivity, lower health
care costs and achieve overall wellness. Online electronic newsletters delivered
by email in the fields of health, fitness and wellness; Physical fitness
instruction and health club services, namely, providing instruction and access
to equipment in the field of physical exercise, et. al.

Published as 85/055,986 on June 7, 2010

 

  b. State of Minnesota.

 

  i. MARTINI BLU.

Services: Restaurant services.

Registered as number 33137 on October 21, 2002.

--------------------------------------------------------------------------------

  c. Australia.

 

  i. LIFE TIME FITNESS.

Services: Health club services.

Registered as number 935300 on July 25, 2003.

 

  d. Mexico.

 

  i. LIFE TIME FITNESS.

Services: Health club services.

Registered as number 787820 on April 23, 2003.

 

  e. Switzerland.

 

  i. LIFE TIME FITNESS.

Services: Health club services.

Registered as number 509.272 on November 25, 2002.

 

  f. Taiwan.

 

  i. LIFE TIME FITNESS.

Services: Health club services.

Registered as number 189070 on November 1, 2003.

 

  g. Canada

 

  i. LIFE TIME FITNESS.

Services: Physical fitness instruction and health club services.

Registered as number TMA788760 on January 26, 2011.

 

  B. Patents.

 

  a. United States.

 

  i. myHealthCheck

Pending; issued serial number 61/435,141 on January 21, 2011.

 

  C. Copyrights. Borrower claims common law rights in and to various copyrighted
materials prepared in the normal course of business.

--------------------------------------------------------------------------------

Schedule 4.18

Equity Interests in Persons other than Wholly-Owned Subsidiaries

Company has Equity Interests in the Subsidiaries as shown in the chart below.
Each Subsidiary of a Subsidiary is indented and follows the respective
Subsidiary in which it is owned. LTF CMBS Managing Member, Inc. owns a 1.0%
interest in LTF CMBS I, LLC with LTF Real Estate Company, Inc. owning the
remaining 99.0% interest.

 

Subsidiary

   Percentage
owned by
parent     Shares/Member
Units owned by
parent       

1. LTF Club Operations Company, Inc.

     100 %      100       Minnesota

a. LTF Club Operations Company Canada Inc.

     100 %      100       Ontario, Canada

b. LTF Management Services, LLC

     100 %      NA       Delaware

2. Bloomingdale LIFE TIME Fitness, L.L.C.*

     33.3 %      400,000 Units       Illinois

3. FCA Real Estate Holdings, LLC

     100 %      NA       Delaware

4. LTF Operations Holdings, Inc.

     100 %      100       Minnesota

a. FCA Construction Company, LLC

     100 %      NA       Delaware

b. FCA Restaurant Company, LLC

     100 %      NA       Delaware

i. LTF Minnetonka Restaurant Company, LLC

     100 %      NA       Delaware

c. FCA Construction Company Canada Inc.

     100 %      100       Ontario, Canada

d. LTF Triathlon Series, LLC

     100 %      NA       Delaware

i. Creative & Production Resources, Inc.

     100 %      1,000       Illinois

ii. Leadville Trail 100, Inc.

     100 %      1,000       Colorado

e. LTF Club Management Company, LLC

     100 %      NA       Delaware

f. LTF Real Estate Holdings, LLC

     100 %      NA       Delaware

i. LTF TIAA Real Estate Holdings, LLC

     100 %      NA       Delaware

1) LTF Michigan Real Estate Company, LLC

     100 %      NA       Delaware

2) LTF Minnesota Real Estate Company, LLC

     100 %      NA       Delaware

3) LTF USA Real Estate Company, LLC

     100 %      NA       Delaware

ii. LTF Real Estate Company, Inc.

     100 %      100       Minnesota

1) LTF CMBS I, LLC

     99 %      NA       Delaware

2) LTF Real Estate Company Canada Inc.

     100 %      100       Ontario, Canada

iii. LTF CMBS Managing Member, Inc.

     100 %      NA       Delaware

1) LTF CMBS I, LLC

     1 %      NA       Delaware

iv. LTF Real Estate VRDN I, LLC

     100 %      NA       Delaware

v. LTF Real Estate Voyager I, LLC

     100 %      NA       Delaware

vi. LTF Real Estate Voyager II (WBL), LLC

     100 %      NA       Delaware

vii. LTF Real Estate Voyager III (Bloomington), LLC

     100 %      NA       Delaware

viii. LTF Real Estate CBC I (Chan Club), LLC

     100 %      NA       Delaware

g. LTF Yoga Company, LLC

     100 %      NA       Delaware

 

* Company owns 33.3% of Bloomingdale LIFE TIME Fitness, L.L.C., an Illinois
limited liability company, and two Subsidiaries that are not Wholly-Owned
Subsidiaries with an aggregate Net Worth of approximately $2.8 million.

--------------------------------------------------------------------------------

Schedule 4.21

Insurance

Company maintains the following insurance coverage for Company, its Restricted
Subsidiaries (all of whom are named insureds) and for Bloomingdale LIFE TIME
Fitness, L.L.C.: Property, Workers Compensation/Employers Liability, General
Liability, Employee Benefits Liability, Professional Liability, Commercial
Automobile, Employed Lawyers Liability, Technology Professional with Network and
Privacy Liability, and Excess Coverage.

--------------------------------------------------------------------------------

Schedule 6.10

Investments

 

1. All Subsidiaries listed in Schedule 1.1b.

 

2. All Investments described in Schedule 4.18.

--------------------------------------------------------------------------------

Schedule 6.11

Indebtedness

 

1. SAVAGE LOAN

$2,711,536 (the “Savage Loan”) owed by LTF Real Estate Company, Inc. to
Associated Bank, National Association pursuant to a Term Loan Agreement (the
“Savage Loan Agreement”) dated August 15, 2002, relating to the Club located in
Savage, Minnesota, which Indebtedness is evidenced and secured by the Savage
Loan Related Agreements described below.

 

a. Pre-Restructure

 

  •  

Savage Loan Agreement

 

  •  

Addendum Term Loan Agreement (8/15/02)

 

  •  

Promissory Note (8/15/02)

 

  •  

Mortgage and Security Agreement and Fixture Financing Statement (8/15/02)

 

  •  

Environmental and ADA Indemnification Agreement (8/15/02)

 

  •  

Assignment of Rents and Leases (8/15/02)

 

  •  

UCC Financing Statements (8/15/02)

 

  •  

Stevens County, Minnesota

 

  •  

Minnesota Secretary of State

 

b. Post-Restructure

 

  •  

Consent, Amendment and Assumption Agreement (9/30/05)

 

2. CHAMPLIN LOAN

$1,910,980 (the “Champlin Loan”) owed by Life Time Fitness, Inc. to Associated
Bank Minnesota pursuant to a Construction Term Loan Agreement dated as of
January 18, 2002, as amended by First Amendment to Construction Term Loan
Agreement dated as of February 28, 2007 (the “Champlin Loan Agreement”),
relating to the Club located in Champlin, Minnesota, which Indebtedness is
evidenced and secured by the Champlin Loan Related Agreements described below.

 

  •  

Champlin Loan Agreement (1/18/02)

 

  •  

Promissory Note (1/18/02)

 

  •  

Mortgage and Security Agreement and Fixture Financing Statement (1/18/02)

 

  •  

Environmental and ADA Indemnification Agreement (1/18/02)

 

  •  

Assignment of Rents and Leases (1/18/02)

 

  •  

UCC Financing Statements (1/18/02)

 

  •  

Hennepin County, Minnesota

 

  •  

Minnesota Secretary of State

--------------------------------------------------------------------------------

  •  

First Amendment to Construction Term Loan Agreement (2/28/07)

 

  •  

Amended and Restated Promissory Note (2/28/07)

 

  •  

Amendment to Mortgage and Security Agreement and Fixture Financing Statement
(2/28/07)

 

  •  

Amendment to Assignment of Rents and Leases (2/28/07)

 

3. LAKEVILLE LOAN

$1,138,605 (the “Lakeville Loan”) owed by LTF Real Estate Company, Inc. to the
City of Lakeville pursuant to a Promissory Note (the “Lakeville Note”) dated as
June 12, 2006, relating to the Club to be located in Lakeville, Minnesota, which
Indebtedness is evidenced and secured by the Lakeville Loan Related Agreements
described below.

 

  •  

Lakeville Note

 

  •  

Purchase Money Mortgage, Security Agreement and Fixture Financing Statement
(6/12/06)

 

4. VFS AIRCRAFT LOAN

$8,455,000 owed by Life Time Fitness, Inc. to VFS Financing, Inc. pursuant to a
promissory note, dated December 31, 2007 related to the Hawker 1000 Aircraft
(Serial No. 259051, Registration No. N880LT), which is evidenced and secured by
the Related Agreements below.

 

  •  

Promissory Note

 

  •  

Aircraft Security Agreement

 

  •  

Addendum to Aircraft Security Agreement

 

  •  

Subordination Agreement

 

  •  

Irrevocable De-Registration and Export Request Authorization

 

5. KACE

$18,835 capital lease to KACE (CORP)

 

6. WELLS FARGO

$4,000,000 owned by Life Time Fitness, Inc. to Wells Fargo Equipment Finance,
Inc. pursuant to a Master Lease, dated as of November 16, 2007, related to the
leasing of Equipment in the amount of, which is evidenced and secured by the
Related Agreements below:

 

  •  

Master Lease Agreement

 

  •  

Supplement to Master Lease/Agreement of Sale

 

  •  

Amendment to Master Lease

--------------------------------------------------------------------------------

Schedule 6.12

Liens

 

1. Liens created by the Related Agreements.

 

2. Liens securing Capitalized Leases.

 

3. A Lien on Borrower’s Equity Interest in Bloomingdale LIFE TIME Fitness,
L.L.C.

 

4. A Lien on Borrower’s and its Subsidiaries’ respective personal property in
favor of Paymentech L.P.

--------------------------------------------------------------------------------

Schedule 6.13

Contingent Liabilities

 

1.

Guaranty by Company, dated September 19, 1999, in favor of 679 Third Street
Investors Company, now in favor of 615 2nd Avenue South-Minneapolis, LLC, in
connection with FCA Restaurant Company, LLC’s lease of restaurant space.

 

2. Guaranty by Company, dated May 27, 2011, to JP Morgan Chase Bank, N.A. in
connection with the Bloomingdale LIFE TIME Fitness, L.L.C. Term Loan Promissory
Note.

 

3. Operating Agreement of LIFE TIME, BSC Land, DuPage Health Services Fitness
Center—Bloomingdale, L.L.C., dated December 1, 1999, by and among Company,
Bloomingdale Sports Center Land Company, and Central DuPage Health.

 

5. Guaranties by, and other contingent liabilities of, Company and CMBS I
arising from the CMBS I Related Agreements described on Schedule 1.1(c).

 

6. Guaranty by Company, dated November 22, 2006, to Lincoln Building Associates,
L.L.C. in connection with LTF Club Operations Company, Inc.’s lease of office
space and the ratification thereof dated February 1, 2010.

 

7. Guaranty by Company, dated November 22, 2006, to NEA Galtier, LLC in
connection with FCA Restaurant Company, LLC’s lease of cafe space.

 

8. Guaranty and Suretyship Agreement by Company, dated July 26, 2006, to
Well-Prop (Multi) LLC in connection with LTF Real Estate Company, Inc.’s lease
of the Clubs located in Bloomington, Minnesota, Eden Prairie, Minnesota (2
locations), Fridley, Minnesota, St. Louis Park, Minnesota and Boca Raton,
Florida.

 

9. Lease Guaranty by Company, dated July 26, 2006, to Minneapolis Community
Development Agency in connection with LTF Real Estate Company, Inc.’s lease of
the Club located in Minneapolis, Minnesota.

 

10. Guaranty by Company, dated June 20, 2011, to Chase Paymentech Solutions and
Paymentech, LLC in connection with the obligations of Company under the credit
card processing agreements between Company and Chase Paymentech Solutions and
Paymentech, LLC.

 

11. Guaranty by Company and LTF Yoga Company, LLC, dated on or around June 30,
2011, to 555 Commercial LLC in connection with the obligations of LTF Real
Estate Company, Inc. under the lease of the Birmingham, Michigan yoga center.

--------------------------------------------------------------------------------

Schedule 6.18

Sale Leasebacks

 

1. Lease Agreement dated May 16, 2001 (the “Woodbury Lease”) between ATR
Investments, LLC, as landlord, and Company, as tenant, which was later
contributed to LTF Real Estate Company, Inc. relating to the Club located in
Woodbury, Minnesota.

Lease Agreement

Sublease Agreement

 

1. Lease Agreement dated September 30, 2003 (the “Rochester Hills/Canton Lease”)
between LT FITNESS (DE) QRS 15-53, Inc., as landlord, and Company, as original
tenant, which was later contributed to LTF Real Estate Company, Inc. relating to
the Clubs located in Rochester Hills, Michigan and Canton, Michigan.

Lease Agreement

Sublease Agreement between LTF Real Estate Company, Inc. and LTF Club

Operations Company

Lease Guaranty Agreement

UCC Financing Statement Amendment

 

2. Lease Agreement dated September 26, 2008 (the “Columbia/Scottsdale Lease”)
between LTF FIT (AZ-MD), LLC, as landlord, and LTF Real Estate Company, as
tenant, relating to the Clubs located in Columbia, Maryland and Scottsdale,
Arizona.

Lease Agreement

Sublease Agreement between LTF Real Estate Company, Inc. and LTF Club

Operations Company

Lease Guaranty Agreement

UCC Financing Statement Amendment

 

3. Lease Agreement dated August 21, 2008 (the “Senior Housing Lease”), between
SNH LTF Properties, LLC, as landlord, and LTF Real Estate Company, Inc. as
tenant, relating to the Clubs located in Alpharetta, Georgia, Romeoville,
Illinois, Allen, Texas, and Omaha, Nebraska.

Lease Agreement

Sublease Agreement between LTF Real Estate Company, Inc. and LTF Club

Operations Company, Inc.

Lease Guaranty by Life Time Fitness