AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 5, 2003
NO. 333-40907
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------
TOWN SPORTS INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
<Table>
NEW YORK 7991 13-2749906
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
888 SEVENTH AVENUE, NEW YORK, NEW YORK 10106
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
---------------------
ROBERT GIARDINA
CHIEF EXECUTIVE OFFICER
888 SEVENTH AVENUE, NEW YORK, NEW YORK 10106
(212) 246-6700
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
---------------------
COPIES OF ALL COMMUNICATIONS, INCLUDING COMMUNICATIONS SENT TO
AGENT FOR SERVICE, SHOULD BE SENT TO:
<Table>
JOSHUA N. KORFF, ESQ.
KIRKLAND & ELLIS
CITIGROUP CENTER
153 EAST 53RD STREET
NEW YORK, NEW YORK 10022-4675
</Table>
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon
as practicable after this Registration Statement becomes effective.
---------------------
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
If this Form is filed to registered additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
CALCULATION OF REGISTRATION FEE
<Table>
<Caption>
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED OFFERING PRICE(1) REGISTRATION FEE
- --------------------------------------------------------------------------------------------------
9 5/8% Senior Notes due 2011.................... $255,000,000 $20,629.50
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
</Table>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(o) under the Securities act of 1933, as amended.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TSI ALEXANDRIA, LLC
(Exact name of registrant as specified in its charter)
<Table>
DELAWARE 7991 54-1899994
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI ALLSTON, INC.
(Exact name of registrant as specified in its charter)
<Table>
DELAWARE 7991 04-3377680
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI ANDOVER, INC.
(Exact name of registrant as specified in its charter)
<Table>
MASSACHUSETTS 7991 04-3455758
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI ARDMORE, LLC
(Exact name of registrant as specified in its charter)
<Table>
DELAWARE 7991 22-3805605
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI ARTHRO-FITNESS SERVICES, INC.
(Exact name of registrant as specified in its charter)
<Table>
NEW YORK 7991 13-3344978
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI ASTORIA, INC.
(Exact name of registrant as specified in its charter)
<Table>
NEW YORK 7991 81-0611120
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI BATTERY PARK, INC.
(Exact name of registrant as specified in its charter)
<Table>
NEW YORK 7991 13-4031103
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI BETHESDA, LLC
(Exact name of registrant as specified in its charter)
<Table>
DELAWARE 7991 52-1832309
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI BROADWAY, INC.
(Exact name of registrant as specified in its charter)
<Table>
NEW YORK 7991 11-3000086
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI 217 BROADWAY, INC.
(Exact name of registrant as specified in its charter)
<Table>
NEW YORK 7991 13-3986291
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI BROOKLYN BELT, INC.
(Exact name of registrant as specified in its charter)
<Table>
NEW YORK 7991 11-3436781
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI BRUNSWICK, INC.
(Exact name of registrant as specified in its charter)
<Table>
DELAWARE 7991 52-1661079
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI BRYN MAWR, LLC
(Exact name of registrant as specified in its charter)
<Table>
DELAWARE 7991 22-3768516
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI BULFINCH, INC.
(Exact name of registrant as specified in its charter)
<Table>
DELAWARE 7991 04-3429623
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI CASH MANAGEMENT, INC.
(Exact name of registrant as specified in its charter)
<Table>
NEW YORK 7991 13-3607389
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI CENTRAL SQUARE, INC.
(Exact name of registrant as specified in its charter)
<Table>
DELAWARE 7991 22-3729288
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI CENTREVILLE, LLC
(Exact name of registrant as specified in its charter)
<Table>
DELAWARE 7991 54-1875450
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI CHERRY HILL, LLC
(Exact name of registrant as specified in its charter)
<Table>
DELAWARE 7991 22-3661081
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
2
TSI CHEVY CHASE, INC.
(Exact name of registrant as specified in its charter)
<Table>
DELAWARE 7991 13-9174321
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of Classification Code Number) Identification No.)
incorporation or organization)
</Table>
TSI CLARENDON, LLC
(Exact name of registrant as specified in its charter)
<Table>
DELAWARE 7991 22-3768520
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of Classification Code Number) Identification No.)
incorporation or organization)
</Table>
TSI COBBLE HILL, INC.
(Exact name of registrant as specified in its charter)
<Table>
NEW YORK 7991 13-3285675
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of Classification Code Number) Identification No.)
incorporation or organization)
</Table>
TSI COLONIA, LLC
(Exact name of registrant as specified in its charter)
<Table>
DELAWARE 7991 22-3598664
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of Classification Code Number) Identification No.)
incorporation or organization)
</Table>
TSI COMMACK, INC.
(Exact name of registrant as specified in its charter)
<Table>
NEW YORK 7991 11-3466826
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of Classification Code Number) Identification No.)
incorporation or organization)
</Table>
TSI CONNECTICUT AVENUE, INC.
(Exact name of registrant as specified in its charter)
<Table>
DELAWARE 7991 52-2185711
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of Classification Code Number) Identification No.)
incorporation or organization)
</Table>
TSI COPLEY, INC.
(Exact name of registrant as specified in its charter)
<Table>
DELAWARE 7991 13-3625687
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of Classification Code Number) Identification No.)
incorporation or organization)
</Table>
TSI COURT STREET, INC.
(Exact name of registrant as specified in its charter)
<Table>
NEW YORK 7991 11-3549905
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of Classification Code Number) Identification No.)
incorporation or organization)
</Table>
TSI CROTON, INC.
(Exact name of registrant as specified in its charter)
<Table>
NEW YORK 7991 13-3982171
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of Classification Code Number) Identification No.)
incorporation or organization)
</Table>
3
TSI DANBURY, INC.
(Exact name of registrant as specified in its charter)
<Table>
DELAWARE 7991 06-1502467
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of Classification Code Number) Identification No.)
incorporation or organization)
</Table>
TSI DANVERS, INC.
(Exact name of registrant as specified in its charter)
<Table>
MASSACHUSETTS 7991 04-3173831
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of Classification Code Number) Identification No.)
incorporation or organization)
</Table>
TSI DOWNTOWN CROSSING, INC.
(Exact name of registrant as specified in its charter)
<Table>
DELAWARE 7991 22-3821061
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of Classification Code Number) Identification No.)
incorporation or organization)
</Table>
TSI DUPONT CIRCLE, INC.
(Exact name of registrant as specified in its charter)
<Table>
DELAWARE 7991 52-1664689
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of Classification Code Number) Identification No.)
incorporation or organization)
</Table>
TSI DUPONT II, INC.
(Exact name of registrant as specified in its charter)
<Table>
DELAWARE 7991 52-1887282
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of Classification Code Number) Identification No.)
incorporation or organization)
</Table>
TSI EAST CAMBRIDGE, INC.
(Exact name of registrant as specified in its charter)
<Table>
DELAWARE 7991 22-3767346
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of Classification Code Number) Identification No.)
incorporation or organization)
</Table>
TSI EAST MEADOW, INC.
(Exact name of registrant as specified in its charter)
<Table>
NEW YORK 7991 11-3466828
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of Classification Code Number) Identification No.)
incorporation or organization)
</Table>
TSI EAST 23, INC.
(Exact name of registrant as specified in its charter)
<Table>
NEW YORK 7991 13-3834638
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of Classification Code Number) Identification No.)
incorporation or organization)
</Table>
TSI EAST 31, INC.
(Exact name of registrant as specified in its charter)
<Table>
NEW YORK 7991 13-3459142
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of Classification Code Number) Identification No.)
incorporation or organization)
</Table>
4
TSI EAST 34, INC.
(Exact name of registrant as specified in its charter)
<Table>
NEW YORK 7991 13-3385025
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI EAST 36, INC.
(Exact name of registrant as specified in its charter)
<Table>
NEW YORK 7991 13-3486149
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI EAST 41, INC.
(Exact name of registrant as specified in its charter)
<Table>
NEW YORK 7991 13-3613114
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI EAST 51, INC.
(Exact name of registrant as specified in its charter)
<Table>
NEW YORK 7991 13-3866959
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI EAST 59, INC.
(Exact name of registrant as specified in its charter)
<Table>
NEW YORK 7991 13-3748028
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI EAST 76, INC.
(Exact name of registrant as specified in its charter)
<Table>
NEW YORK 7991 13-3680542
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI EAST 86, LLC
(Exact name of registrant as specified in its charter)
<Table>
NEW YORK 7991 13-4036613
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI EAST 91, INC.
(Exact name of registrant as specified in its charter)
<Table>
NEW YORK 7991 13-3910665
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI F STREET, INC.
(Exact name of registrant as specified in its charter)
<Table>
DELAWARE 7991 52-2347709
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
5
TSI FAIRFAX, LLC
(Exact name of registrant as specified in its charter)
<Table>
DELAWARE 7991 54-1917571
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI FENWAY, INC.
(Exact name of registrant as specified in its charter)
<Table>
DELAWARE 7991 04-3392033
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI FIFTH AVENUE, INC.
(Exact name of registrant as specified in its charter)
<Table>
NEW YORK 7991 13-3378660
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI FIRST AVENUE, INC.
(Exact name of registrant as specified in its charter)
<Table>
NEW YORK 7991 13-3736708
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI FOREST HILLS, INC.
(Exact name of registrant as specified in its charter)
<Table>
NEW YORK 7991 11-3327332
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI FORT LEE, LLC
(Exact name of registrant as specified in its charter)
<Table>
DELAWARE 7991 06-1516948
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI FRAMINGHAM, INC.
(Exact name of registrant as specified in its charter)
<Table>
MASSACHUSETTS 7991 22-3767335
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI FRANKLIN (MA), INC.
(Exact name of registrant as specified in its charter)
<Table>
MASSACHUSETTS 7991 04-3484250
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI FRANKLIN PARK, LLC
(Exact name of registrant as specified in its charter)
<Table>
DELAWARE 7991 22-3598654
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
6
TSI FREEHOLD, LLC
(Exact name of registrant as specified in its charter)
<Table>
DELAWARE 7991 22-3567664
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI GALLERY PLACE, INC.
(Exact name of registrant as specified in its charter)
<Table>
DELAWARE 7991 90-0016157
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI GARDEN CITY, INC.
(Exact name of registrant as specified in its charter)
<Table>
NEW YORK 7991 11-3496320
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI GERMANTOWN, LLC
(Exact name of registrant as specified in its charter)
<Table>
DELAWARE 7991 52-2107893
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI GLOVER, INC.
(Exact name of registrant as specified in its charter)
<Table>
DELAWARE 7991 52-1842000
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI GRAND CENTRAL, INC.
(Exact name of registrant as specified in its charter)
<Table>
NEW YORK 7991 35-2187324
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI GREAT NECK, INC.
(Exact name of registrant as specified in its charter)
<Table>
NEW YORK 7991 13-3525531
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI GREENWICH, INC.
(Exact name of registrant as specified in its charter)
<Table>
DELAWARE 7991 52-2160217
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI HERALD, INC.
(Exact name of registrant as specified in its charter)
<Table>
NEW YORK 7991 13-3674322
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
7
TSI HIGHPOINT, LLC
(Exact name of registrant as specified in its charter)
<Table>
DELAWARE 7991 22-3767356
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI HOBOKEN, LLC
(Exact name of registrant as specified in its charter)
<Table>
DELAWARE 7991 22-3539811
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI HOLDINGS (CIP), INC.
(Exact name of registrant as specified in its charter)
<Table>
DELAWARE 7991 11-3465800
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI HOLDINGS (DC), INC.
(Exact name of registrant as specified in its charter)
<Table>
DELAWARE 7991 52-1786716
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI HOLDINGS (IP), LLC
(Exact name of registrant as specified in its charter)
<Table>
DELAWARE 7991 52-1868513
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI HOLDINGS (MA), INC.
(Exact name of registrant as specified in its charter)
<Table>
MASSACHUSETTS 7991 04-2789250
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI HOLDINGS (MD), INC.
(Exact name of registrant as specified in its charter)
<Table>
DELAWARE 7991 52-1483416
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI HOLDINGS (NJ), INC.
(Exact name of registrant as specified in its charter)
<Table>
DELAWARE 7991 22-3589221
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI HOLDINGS (PA), INC.
(Exact name of registrant as specified in its charter)
<Table>
DELAWARE 7991 23-2995708
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
8
TSI HOLDINGS (VA), INC.
(Exact name of registrant as specified in its charter)
<Table>
DELAWARE 7991 52-2103430
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI HUNTINGTON, INC.
(Exact name of registrant as specified in its charter)
<Table>
NEW YORK 7991 11-3525776
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI INSURANCE, INC.
(Exact name of registrant as specified in its charter)
<Table>
NEW YORK 6411 75-3091175
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
<Table>
DELAWARE 7991 13-3433612
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI IRVING PLACE, INC.
(Exact name of registrant as specified in its charter)
<Table>
NEW YORK 7991 13-4132834
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI JERSEY CITY, LLC
(Exact name of registrant as specified in its charter)
<Table>
DELAWARE 7991 01-0715570
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI LARCHMONT, INC.
(Exact name of registrant as specified in its charter)
<Table>
NEW YORK 7991 13-4032565
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI LEXINGTON (MA), INC.
(Exact name of registrant as specified in its charter)
<Table>
MASSACHUSETTS 7991 04-2931936
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI LINCOLN, INC.
(Exact name of registrant as specified in its charter)
<Table>
NEW YORK 7991 13-3217462
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
9
TSI LONG BEACH, INC.
(Exact name of registrant as specified in its charter)
<Table>
NEW YORK 7991 11-2787121
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI LYNNFIELD, INC.
(Exact name of registrant as specified in its charter)
<Table>
MASSACHUSETTS 7991 04-3100325
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI M STREET, INC.
(Exact name of registrant as specified in its charter)
<Table>
DELAWARE 7991 52-1786713
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI MADISON, INC.
(Exact name of registrant as specified in its charter)
<Table>
NEW YORK 7991 13-3514077
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI MAHWAH, LLC
(Exact name of registrant as specified in its charter)
<Table>
DELAWARE 7991 22-3589223
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI MAMARONECK, INC.
(Exact name of registrant as specified in its charter)
<Table>
NEW YORK 7991 13-3641775
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI MARKET STREET, LLC
(Exact name of registrant as specified in its charter)
<Table>
DELAWARE 7991 22-3767350
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI MARLBORO, LLC
(Exact name of registrant as specified in its charter)
<Table>
DELAWARE 7991 22-3567661
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI MATAWAN, LLC
(Exact name of registrant as specified in its charter)
<Table>
DELAWARE 7991 22-3567666
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
10
TSI MERRIFIELD, INC.
(Exact name of registrant as specified in its charter)
<Table>
DELAWARE 7991 54-1880836
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI MONTCLAIR, LLC
(Exact name of registrant as specified in its charter)
<Table>
DELAWARE 7991 22-3589221
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI MURRAY HILL, INC.
(Exact name of registrant as specified in its charter)
<Table>
NEW YORK 7991 13-4185032
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI NANUET, INC.
(Exact name of registrant as specified in its charter)
<Table>
NEW YORK 7991 13-4001343
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI NASHUA, LLC
(Exact name of registrant as specified in its charter)
<Table>
DELAWARE 7991 22-3768518
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI NATICK, INC.
(Exact name of registrant as specified in its charter)
<Table>
DELAWARE 7991 04-3428236
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) identification No.)
</Table>
TSI NEWARK, LLC
(Exact name of registrant as specified in its charter)
<Table>
DELAWARE 7991 22-3860893
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI NEWBURY STREET, INC.
(Exact name of registrant as specified in its charter)
<Table>
DELAWARE 7991 22-3751072
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI NORTH BETHESDA, LLC
(Exact name of registrant as specified in its charter)
<Table>
DELAWARE 7991 52-2033988
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
11
TSI NORWALK, INC.
(Exact name of registrant as specified in its charter)
<Table>
DELAWARE 7991 06-1517766
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI OCEANSIDE, INC.
(Exact name of registrant as specified in its charter)
<Table>
NEW YORK 7991 11-3432030
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI OLD BRIDGE, LLC
(Exact name of registrant as specified in its charter)
<Table>
DELAWARE 7991 22-3567662
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI PARSIPPANY, LLC
(Exact name of registrant as specified in its charter)
<Table>
DELAWARE 7991 22-3598657
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI PLAINSBORO, LLC
(Exact name of registrant as specified in its charter)
<Table>
DELAWARE 7991 22-3598659
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI PRINCETON, LLC
(Exact name of registrant as specified in its charter)
<Table>
DELAWARE 7991 22-3511330
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI RAMSEY, LLC
(Exact name of registrant as specified in its charter)
<Table>
DELAWARE 7991 22-2396438
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
12
TSI READE STREET, INC.
(Exact name of registrant as specified in its charter)
<Table>
NEW YORK 7991 13-3499439
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI RIDGEWOOD, LLC
(Exact name of registrant as specified in its charter)
<Table>
DELAWARE 7991 13-4178569
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI RITTENHOUSE, LLC
(Exact name of registrant as specified in its charter)
<Table>
DELAWARE 7991 23-2985640
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI RODIN PLACE, LLC
(Exact name of registrant as specified in its charter)
<Table>
DELAWARE 7991 23-2961393
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI RYE, INC.
(Exact name of registrant as specified in its charter)
<Table>
NEW YORK 7991 13-4117100
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI SCARSDALE, INC.
(Exact name of registrant as specified in its charter)
<Table>
NEW YORK 7991 13-3593359
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI SEAPORT, INC.
(Exact name of registrant as specified in its charter)
<Table>
NEW YORK 7991 13-3550318
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
13
TSI SHERIDAN, INC.
(Exact name of registrant as specified in its charter)
<Table>
NEW YORK 7991 13-3754408
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI SILVER SPRING, LLC
(Exact name of registrant as specified in its charter)
<Table>
DELAWARE 7991 52-1483416
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI SOCIETY HILL, LLC
(Exact name of registrant as specified in its charter)
<Table>
DELAWARE 7991 23-2931237
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI SOHO, INC.
(Exact name of registrant as specified in its charter)
<Table>
NEW YORK 7991 13-4032567
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI SOMERSET, LLC
(Exact name of registrant as specified in its charter)
<Table>
DELAWARE 7991 22-3598661
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI SOUTH PARK SLOPE, INC.
(Exact name of registrant as specified in its charter)
<Table>
NEW YORK 7991 11-3576282
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI SPRINGFIELD, LLC
(Exact name of registrant as specified in its charter)
<Table>
DELAWARE 7991 22-3598663
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI STAMFORD DOWNTOWN, INC.
(Exact name of registrant as specified in its charter)
<Table>
DELAWARE 7991 06-1500644
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
14
TSI STAMFORD POST, INC.
(Exact name of registrant as specified in its charter)
<Table>
DELAWARE 7991 06-1502470
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI STAMFORD RINKS, INC.
(Exact name of registrant as specified in its charter)
<Table>
DELAWARE 7991 06-1503493
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI STATEN ISLAND, INC.
(Exact name of registrant as specified in its charter)
<Table>
NEW YORK 7991 13-4007763
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI STERLING, LLC
(Exact name of registrant as specified in its charter)
<Table>
DELAWARE 7991 54-1922221
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI SUPPLEMENTS, INC.
(Exact name of registrant as specified in its charter)
<Table>
DELAWARE 7991 22-3652902
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI SYOSSET, INC.
(Exact name of registrant as specified in its charter)
<Table>
NEW YORK 7991 11-3465797
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI WALL STREET, INC.
(Exact name of registrant as specified in its charter)
<Table>
NEW YORK 7991 13-3644260
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI WALTHAM, LLC
(Exact name of registrant as specified in its charter)
<Table>
DELAWARE 7991 45-0489363
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI WASHINGTON, INC.
(Exact name of registrant as specified in its charter)
<Table>
DELAWARE 7991 52-1628893
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
15
TSI WATER STREET, INC.
(Exact name of registrant as specified in its charter)
<Table>
NEW YORK 7991 13-4137110
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI WELLESLEY, INC.
(Exact name of registrant as specified in its charter)
<Table>
MASSACHUSETTS 7991 04-3259257
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI WEST CALDWELL, LLC
(Exact name of registrant as specified in its charter)
<Table>
DELAWARE 7991 22-3598665
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI WEST NEWTON, INC.
(Exact name of registrant as specified in its charter)
<Table>
DELAWARE 7991 22-3767340
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI WEST NYACK, INC.
(Exact name of registrant as specified in its charter)
<Table>
NEW YORK 7991 13-4182699
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI WEST SPRINGFIELD, LLC
(Exact name of registrant as specified in its charter)
<Table>
DELAWARE 7991 52-2103430
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI WEST 14, INC.
(Exact name of registrant as specified in its charter)
<Table>
NEW YORK 7991 13-4020062
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI WEST 16, INC.
(Exact name of registrant as specified in its charter)
<Table>
NEW YORK 7991 13-4145988
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
16
TSI WEST 23, INC.
(Exact name of registrant as specified in its charter)
<Table>
NEW YORK 7991 13-3896459
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI WEST 38, INC.
(Exact name of registrant as specified in its charter)
<Table>
NEW YORK 7991 13-4046618
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI WEST 41, INC.
(Exact name of registrant as specified in its charter)
<Table>
NEW YORK 7991 13-4162540
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI WEST 44, INC.
(Exact name of registrant as specified in its charter)
<Table>
NEW YORK 7991 06-1554546
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI WEST 48, INC.
(Exact name of registrant as specified in its charter)
<Table>
NEW YORK 7991 30-0033088
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI WEST 52, INC.
(Exact name of registrant as specified in its charter)
<Table>
NEW YORK 7991 13-3994285
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI WEST 73, INC.
(Exact name of registrant as specified in its charter)
<Table>
NEW YORK 7991 13-4020357
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI WEST 76, INC.
(Exact name of registrant as specified in its charter)
<Table>
NEW YORK 7991 13-3976768
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI WEST 80, INC.
(Exact name of registrant as specified in its charter)
<Table>
NEW YORK 7991 13-3694556
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
17
TSI WEST 94, INC.
(Exact name of registrant as specified in its charter)
<Table>
NEW YORK 7991 13-4159717
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI WEST 125, INC.
(Exact name of registrant as specified in its charter)
<Table>
NEW YORK 7991 13-3978641
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI WESTPORT, INC.
(Exact name of registrant as specified in its charter)
<Table>
DELAWARE 7991 22-3817718
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI WESTWOOD, LLC
(Exact name of registrant as specified in its charter)
<Table>
DELAWARE 7991 01-0715576
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI WEYMOUTH, INC.
(Exact name of registrant as specified in its charter)
<Table>
DELAWARE 7991 04-3419386
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI WHITE PLAINS, INC.
(Exact name of registrant as specified in its charter)
<Table>
NEW YORK 7991 13-3965540
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI WHITESTONE, INC.
(Exact name of registrant as specified in its charter)
<Table>
NEW YORK 7991 11-3438769
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
TSI WOODMERE, INC.
(Exact name of registrant as specified in its charter)
<Table>
NEW YORK 7991 11-3566906
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</Table>
18
SUBJECT TO COMPLETION, DATED JUNE 5, 2003
PROSPECTUS
TOWN SPORTS INTERNATIONAL, INC.
Offer for all outstanding 9 5/8% Senior Notes due 2011 in aggregate
principal amount at maturity of $255,000,000 in exchange for up to $255,000,000
aggregate principal amount at maturity of 9 5/8% Senior Exchange Notes due 2011.
TERMS OF THE EXCHANGE OFFER
- - Expires 5:00 p.m., New York City time, , 2003, unless extended.
- - Not subject to any condition other than that the exchange offer not violate
applicable law or any interpretation of the staff of the Securities and
Exchange Commission.
- - We can amend or terminate the exchange offer.
- - We will exchange all 9 5/8% Senior Notes due 2011 that are validly tendered
and not validly withdrawn.
- - We will not receive any proceeds from the exchange offer.
- - The exchange of notes will not be a taxable exchange for U.S. federal income
tax purposes.
- - You may withdraw tendered outstanding 9 5/8% Senior Notes due 2011 any time
before the expiration of the exchange offer.
TERMS OF THE EXCHANGE NOTES
- - The exchange notes rank junior to all of our and the guarantors' existing and
future senior secured debt and senior to all of our and the guarantors'
existing and future subordinated indebtedness.
- - The exchange notes mature on April 15, 2011. The Exchange Notes will bear
interest, which will be payable semi-annually in arrears, at a rate of 9 5/8%
per annum on each April 15 and October 15, commencing October 15, 2003.
- - We may redeem the exchange notes at any time on or after April 15, 2007.
- - Prior to April 15, 2007, we may redeem up to 35% of the exchange notes with
the proceeds of certain equity offerings.
- - Upon a change of control, we may be required to offer to repurchase the
exchange notes.
- - The terms of the exchange notes are identical to our outstanding 9 5/8% Senior
Notes due 2011 except for transfer restrictions and registration rights.
FOR A DISCUSSION OF SPECIFIC RISKS THAT YOU SHOULD CONSIDER BEFORE
TENDERING YOUR OUTSTANDING 9 5/8% SENIOR NOTES DUE 2011 IN THE EXCHANGE OFFER,
SEE "RISK FACTORS" BEGINNING ON PAGE 14.
There is no public market for our outstanding 9 5/8% Senior Notes due 2011
or the exchange notes. However, you may trade our outstanding 9 5/8% Senior
Notes due 2011 in the Private Offerings Resale and Trading through Automatic
Linkages, or PORTAL(TM), market.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THE EXCHANGE NOTES OR DETERMINED IF
THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
TABLE OF CONTENTS
<Table>
<Caption>
Disclosure Regarding Forward-Looking Statements............. ii
Market and Industry Data.................................... ii
Prospectus Summary.......................................... 1
Risk Factors................................................ 14
The Exchange Offer.......................................... 22
The Refinancing Transactions................................ 30
Use of Proceeds............................................. 31
Capitalization.............................................. 32
Selected Consolidated Financial and Other Data.............. 33
Management's Discussion and Analysis of Financial Condition
and Results of Operations................................. 38
Business.................................................... 50
Management.................................................. 65
Security Ownership and Certain Beneficial Owners............ 69
Certain Relationships and Related Transactions.............. 71
Description of Senior Secured Revolving Credit Facility..... 73
Description of Notes........................................ 75
Certain U.S. Federal Income Tax Considerations.............. 112
Plan of Distribution........................................ 112
Legal Matters............................................... 114
Experts..................................................... 114
Available Information....................................... 114
Index to Financial Statements............................... F-1
</Table>
----------------------
As used in this prospectus and unless the context indicated otherwise,
"Notes" refers, collectively, to (a) our 9 5/8% Senior Notes due 2011, also
referred to as the "old notes," and (b) our 9 5/8% Senior Exchange Notes due
2011, also referred to as the "exchange notes."
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
All statements other than statements of historical facts included in this
prospectus, including, without limitation, statements regarding our future
financial position, business strategy, budgets, projected costs and plans and
objectives of management for future operations, are forward-looking statements.
In addition, forward-looking statements generally can be identified by the use
of forward-looking terminology such as "may", "will", "expect", "intend",
"estimate", "anticipate", "believe" or "continue" or the negative thereof or
variations thereon or similar terminology. Although we believe that the
expectations reflected in these forward-looking statements are reasonable, we
can give no assurance that such expectations will prove to have been correct.
Important factors that could cause actual results to differ materially from our
expectations, or "cautionary statements," are disclosed under "Risk Factors" and
elsewhere in this offering memorandum, including, without limitation, in
conjunction with the forward-looking statements included in this prospectus. All
subsequent written and oral forward-looking statements attributable to us, or
persons acting on our behalf, are expressly qualified in their entirety by the
cautionary statements.
MARKET AND INDUSTRY DATA
Some of the market and industry data contained in this prospectus are based
on independent industry publications or other publicly available information.
Although we believe that these independent sources are reliable, we have not
independently verified and cannot assure you as to the accuracy or completeness
of this information. As a result, you should be aware that the market and
industry data contained in this prospectus, and our beliefs and estimates based
on such data, may not be reliable.
---------------------
Our trademarks, service marks and trade names include "New York Sports
Clubs," "Washington Sports Clubs," "Boston Sports Clubs," "Philadelphia Sports
Clubs," "TSAG," "TSI," "Town Sports International, Inc." and "Sports Club for
Kids." This prospectus also contains trademarks, service marks, copyrights and
trade names of other companies.
ii
PROSPECTUS SUMMARY
The following summary contains basic information about us and highlights
selected information from the prospectus. It likely does not contain all the
information that is important to you. Because it is a summary, it does not
contain all the information that you should consider before investing. We
encourage you to read this entire document and the documents we have referred
you to. As used herein, "Town Sports," the "Company," "we," "us," and "our"
refer to Town Sports International, Inc. and its subsidiaries.
OUR COMPANY
We are one of the two leading owners and operators of fitness clubs in the
Northeast and Mid-Atlantic regions of the United States and the third largest
fitness club operator in the United States, as measured by number of clubs. As
of March 31, 2003, we operated 129 clubs that collectively served approximately
356,000 members. Our goal is to provide the premier health club network in each
of the major metropolitan regions we serve. To optimize convenience to our
members, we cluster clubs near the highest concentrations of our target members'
areas of both employment and residence. Our clusters of clubs serve densely
populated major metropolitan regions in which a high percentage of the
population commutes to work. Our target member is college-educated, typically
between the ages of 21 and 50 and earns an annual income of between $50,000 and
$150,000. Our revenues, cash flows from operations and EBITDA for the year ended
December 31, 2002 were $319.4 million, $50.8 million and $69.8 million,
respectively and for the three months ended March 31, 2003 were $86.9 million,
$23.6 million and $22.4 million, respectively. EBITDA is defined as earnings
before interest, taxes, depreciation and amortization, extraordinary loss and
cumulative effect of change in accounting policy. EBITDA is presented because we
believe it provides useful information regarding our liquidity.
We are the largest fitness club operator in Manhattan with 37 locations
(more than twice as large as our nearest competitor) and a total of 85 clubs
under the New York Sports Clubs ("NYSC") brand name within the New York
metropolitan region. We operate 20 clubs in the Boston region and 15 clubs in
the Washington, D.C. region under our Boston Sports Club ("BSC") and Washington
Sports Club ("WSC") brand names, respectively, and have begun establishing a
similar cluster in the Philadelphia region with six clubs under our Philadelphia
Sports Club ("PSC") brand name. In addition, we operate three clubs in
Switzerland. We employ localized brand names for our clubs to create an image
and atmosphere consistent with the local community and to foster the recognition
as a local network of quality fitness clubs rather than a national chain.
Over our 30-year operating history, we have developed and refined a model
club format that allows us to cost effectively construct and efficiently operate
our fitness clubs. Our model club ranges in size from approximately 15,000 to
25,000 square feet and features a wide variety of state-of-the-art
cardiovascular and strength-training equipment, as well as exercise studios
offering extensive group fitness programs. Some clubs also feature additional
amenities, including swimming pools, squash or tennis courts and physical
therapy centers. Our locker rooms generally include a sauna and steam room. We
offer members a variety of other value-added services for which we receive
additional fees, including personal training, massage and Sports Club for Kids.
INDUSTRY OVERVIEW
Demographic trends have helped fuel the growth experienced by the fitness
industry over the past decade. The industry has benefited from the aging of the
"baby boomer" generation and the coming of age of their offspring.
Government-sponsored reports, such as the Surgeon General's Report on Physical
Activity & Health (1996) and the Call to Action to Prevent and Decrease
Overweight and Obesity (2002) have helped to increase the general awareness of
1
the benefits of physical exercise to these demographic segments over those of
prior generations. Membership penetration (defined as club members as a
percentage of the total U.S. population) has increased significantly from 8.3%
in 1991 to 11.9% in 2001.
U.S. FITNESS CLUB REVENUES(1)
(IN $ BILLIONS)
[BAR GRAPH]
<Table>
<Caption>
1993 1994 1995 1996 1997 1998 1999 2000 2001
- ---- ---- ---- ---- ---- ---- ---- ---- ----
6.5 7.3 7.7 8.2 9.0 9.6 10.6 11.6 12.2
</Table>
- ------------
(1) Industry revenues for 1991 and 1992 are not available.
U.S. FITNESS CLUBS MEMBERSHIP
(IN MILLIONS)
[BAR GRAPH]
<Table>
<Caption>
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
20.9 20.8 22.9 25.2 24.1 26.2 28.3 29.5 30.6 32.8 33.8
</Table>
Total U.S. fitness club industry revenues increased at a compound annual
growth rate of 8.2% from $6.5 billion in 1993 to $12.2 billion in 2001, while
the total number of clubs increased at a compound annual growth rate of 3.9%,
from 12,146 in 1991 to 17,807 in 2001. Growth in club memberships outpaced club
growth during this period, increasing at a compound annual growth rate of 4.9%
from 20.9 million in 1991 to 33.8 million in 2001. As a result, average members
per club has increased from 1,721 in 1991 to 1,898 in 2001, indicating
industry-wide demand for further expansion of the existing club base.
Notwithstanding these longstanding growth trends, the fitness club industry
continues to be highly fragmented. Less than 10.0% of clubs in the United States
are owned and operated by companies that own more than 25 clubs, and the two
largest fitness club operators each generate less than 9.0% of total fitness
club revenues.
As a large operator with recognized brand names, leading regional market
shares and an established operating history, we believe we are well positioned
to benefit from these favorable industry dynamics.
COMPETITIVE STRENGTHS
Strong market position. We are the third largest fitness club operator in
the United States, as measured by number of clubs. We are one of the two leading
owners and operators of fitness clubs in the Northeast and Mid-Atlantic regions
of the United States. We are the largest fitness club owner and operator in the
New York and Boston regions, and we believe we are the second largest owner and
operator in the Washington, D.C. region and the third largest in the
Philadelphia region. We attribute our leadership positions in these markets to
the success of
2
our regional clustering strategy, the consistency of facilities and services
provided by our clubs and the ability to continue to attract new members by
providing one of the most attractive price/value combinations available in our
markets.
Successful regional clustering strategy. We believe our regional
clustering strategy allows us to maximize cash flows by providing high quality,
conveniently located fitness facilities on a cost effective basis. By operating
a group of clubs in a concentrated geographic area, the value of our memberships
is enhanced by our ability to offer members access to any of our clubs through a
passport membership. This membership appeals primarily to customers who seek the
convenience of having fitness clubs near their home and their workplace.
Approximately 47% of our members choose the passport membership plan, and
because these memberships offer broader privileges and greater convenience, they
generate higher monthly dues than single club memberships. In a typical month,
approximately 46% of our active members use a club other than the club they
originally joined. Regional clustering also allows us to provide special
facilities within the market, such as squash, tennis, basketball, special
programs and swimming pools, without offering them at each location. We are also
able to achieve economies of scale with regard to sales, marketing, purchasing,
general operations and corporate administrative expenses.
Stable cash flows. We believe that our emphasis on affordable monthly dues
and our electronic funds transfer ("EFT") system allows us to generate stable
and predictable cash flows. We charge a moderate initiation fee (approximately
$83 on average over the last twelve months ended March 31, 2003) and monthly
dues of $39 to $93, depending on the type of membership plan. We believe that
our monthly dues structure gives us a significant competitive advantage in terms
of ease of sale, collection and revenue collected per year, all of which make us
less dependent on new membership sales and price discounting than certain of our
competitors. We also believe our use of EFT, by which a member's credit card or
bank account is automatically debited for each month's dues, assures a more
stable cash flow, substantially reduces the traditional accounts receivable
function and minimizes bad-debt write-offs. Approximately 91.6% of our members
pay their monthly dues through EFT, accounting for 71.6% of consolidated revenue
for the year ended December 31, 2002 and for the three months ended March 31,
2003.
Proven unit operating performance. We have established a track record of
consistent growth in revenue and cash flow across our club base. Our 32
wholly-owned clubs that have been in operation from January 1, 1998 through
March 31, 2003 generated revenues and operating income (after corporate expenses
allocated on a revenue basis) of $122.1 million and $32.3 million, respectively,
during the year ended December 31, 2002, as compared to $85.1 million and $15.1
million, respectively, during the year ended December 31, 1998. We believe that
the track record of our mature clubs provides a sound basis for expected
improved performance in our recently opened clubs as well as providing impetus
for continued investment in new clubs. In addition, for the year ended December
31, 2002, and the three months ended March 31, 2003, revenues from clubs that
have been open for more than 24 months grew at 4.1% (excluding our club in
Battery Park City that was closed for a year due to the events of September 11,
2001) and 1.8%, respectively.
Experienced management team. We believe that our management team is one of
the most experienced management teams in the industry. Our four senior
executives have over 60 years of combined experience in the fitness club
industry and have been working together at Town Sports since 1990. We believe
that our management has the depth, experience and motivation to manage our
internal and external growth. In the aggregate, our management team owns
approximately 26% of our common stock on a fully-diluted basis.
Proprietary centralized information systems. We utilize a proprietary
system developed internally to track and analyze sales, leads and membership
statistics. This system allows us to
3
track the frequency of member workouts, multi-club utilization, value-added
services and demographic profiles by member. This enables us to develop targeted
direct marketing programs and to modify our broadcast and print advertising to
improve consumer response. These systems also assist us in evaluating staffing
needs and program offerings. In addition, we rely on certain data gathered
through our information systems to assist in the identification of new markets
for clubs and site selection within those markets.
BUSINESS STRATEGY
We intend to continue to increase revenues and cash flow using the
following strategies:
Realize benefits from maturation of recently opened clubs. From January 1,
2001 to March 31, 2003, we opened or acquired 27 clubs. We believe that our
recent financial performance does not yet fully reflect the benefit of these
clubs. Based on our historical experience, a new club tends to achieve
significant increases in revenues during its first three years of operation as
it reaches maturity. Because there is relatively little incremental cost
associated with such increasing revenues, there is a greater proportionate
increase in profitability. We believe that the revenues and operating income
(loss) of these 27 clubs will significantly improve as the clubs reach maturity.
<Table>
<Caption>
CLUBS OPEN PRIOR TO CLUBS OPEN SUBSEQUENT
JANUARY 1, 2001 TO JANUARY 1, 2001
------------------- ---------------------
Number of wholly-owned clubs(1)............. 100 27
</Table>
<Table>
<Caption>
FOR THE YEAR ENDED DECEMBER 31, 2002
-------------------------------------------
(IN THOUSANDS)
Revenues(2)................................. $283,266 $33,123
Revenues per club(2)........................ 2,833 1,227
Operating income (loss)(3).................. 47,591 (9,178)
Operating income (loss) per club............ 476 (340)
</Table>
- ---------------
(1) Excludes two partly-owned and managed clubs. Our Battery Park City club
is included with the 27 clubs open subsequent to January 1, 2001. This
club was temporarily closed in September, 2001 and was reopened in
September, 2002.
(2) Excludes $3.0 million of revenues generated at the corporate level.
(3) Includes club operating expenses of $208.7 million for clubs open prior
to January 1, 2001 and $39.1 million for clubs open subsequent to
January 1, 2001, as well as an allocation (based on revenue) of
corporate expenses of $27.0 million and $3.2 million for the clubs open
prior to January 1, 2001 and the clubs open subsequent to January 1,
2001, respectively, and excludes $320,000 of pre-sale operating losses
incurred by clubs that have not yet been opened.
Expansion of regional clusters. We intend to strengthen our market
position and to increase revenues and cash flow in our existing markets through
the opening of new clubs and the acquisition of existing clubs. Before opening
or acquiring a new club, we undertake a rigorous process involving site
selection, demographic and competitive analysis, negotiation of lease and
acquisition terms and financial modeling to ensure that a location meets our
criteria for a model club. As of March 31, 2003, we had identified over 70 urban
and suburban locations in our existing markets that we believe possess the
criteria for a model club.
Increased value-added services. In addition to our regional clustering
strategy, we have continued to focus on increasing the additional services
available to our members. The increased emphasis on value-added services and
programs, such as personal training, massage, Sports Club for Kids, Group
Exclusives, "for fee" programming, swimming and racquet sports has contributed
to our growth, as non-membership club revenues have increased from $11.8
million, or 10.6% of revenues for the year ended December 31, 1998, to $42.8
million,
4
or 13.3% of revenues in the year ended December 31, 2002. These services
generate incremental revenues with minimal capital investment and assist us in
the process of attracting and retaining members.
THE REFINANCING TRANSACTIONS
In connection with the offering of the old notes we repaid our existing
senior and subordinated credit facilities, redeemed our 9 3/4% senior notes due
2004 and our redeemable senior preferred stock and entered into a new senior
secured revolving credit facility.
We refer in this prospectus to these transactions, collectively, as the
"other refinancing transactions."
Our company is incorporated under the laws of the State of New York. Our
principal executive offices are located at 888 Seventh Avenue, New York, New
York 10106. Our telephone number is (212) 246-6700. We maintain the following
web site: www.mysportsclubs.com that provides information about club locations,
program offerings and on-line promotions. Information contained on this web
site, however, is not incorporated into or otherwise a part of this prospectus.
5
PROSPECTUS SUMMARY
The following summary highlights selected information from this prospectus
and may not contain all of the information that is important to you. This
prospectus contains specific terms of this exchange offer and of the Notes we
are offering, as well as information regarding our business and detailed
financial data. We encourage you to read this entire prospectus and the
documents we have referred you to.
THE OLD NOTE OFFERING
Old Notes..................... We sold our 9 5/8% Senior Notes due 2011 to
Deutsche Bank Securities and BNP Paribas on
April 16, 2003 in accordance with the terms of
a purchase agreement. The initial purchasers
subsequently resold the old notes to qualified
institutional buyers in accordance with Rule
144A under the Securities Act of 1933.
Registration Rights
Agreement..................... We and the initial purchasers entered into a
registration rights agreement on April 16,
2003, which granted the initial purchasers and
any subsequent holders of the old notes certain
exchange and registration rights. This exchange
offer is intended to satisfy those exchange and
registration rights with respect to the old
notes. After the exchange offer is complete,
you will no longer be entitled to any exchange
or registration rights with respect to your old
notes.
THE EXCHANGE OFFER
Securities Offered............ Up to $255,000,000 aggregate principal amount
at maturity of 9 5/8% Senior Exchange Notes due
2011. The terms of the exchange notes and the
old notes are identical in all material
respects, except for certain transfer
restrictions and registration rights relating
to the old notes.
The Exchange Offer............ We are offering to exchange the old notes for a
like principal amount at maturity of exchange
notes. Old notes may be exchanged only in
integral principal at maturity in multiples of
$1000.
Expiration Date; Withdrawal of
Tender........................ Our exchange offer will expire 5:00 p.m. New
York City time, on , 2003, or a
later time if we choose to extend this exchange
offer. You may withdraw your tender of old
notes at any time prior to the expiration date.
All outstanding old notes that are validly
tendered and not validly withdrawn will be
exchanged. Any old notes not accepted by us for
exchange for any reason will be returned to you
at our expense as promptly as possible after
the expiration or termination of the exchange
offer.
Resales....................... We believe that you can offer for resale,
resell and otherwise transfer the exchange
notes without complying
6
with the registration and prospectus delivery
requirements of the Securities Act if:
- you acquire the exchange notes in the
ordinary course of business;
- you are not participating, do not intend to
participate, and have no arrangement or
understanding with any person to participate,
in the distribution of the exchange notes;
and
- you are not an "affiliate" of ours, as
defined in Rule 405 of the Securities Act.
If any of these conditions is not satisfied and
you transfer any exchange notes without
delivering a proper prospectus or without
qualifying for a registration exemption, you
may incur liability under the Securities Act.
We do not assume or indemnify you against this
liability.
Each broker-dealer acquiring exchange notes
issued for its own account in exchange for old
notes, which it acquired through market-making
activities or other trading activities, must
acknowledge that it will deliver a proper
prospectus when any exchange notes issued in
the exchange offer are transferred. A
broker-dealer may use this prospectus for an
offer to resell, a resale or other retransfer
of the exchange notes issued in the exchange
offer.
Conditions to the Exchange
Offer......................... Our obligation to accept for exchange, or to
issue the exchange notes in exchange for, any
old notes is subject to certain customary
conditions relating to compliance with any
applicable law, or any applicable
interpretation by any staff of the Securities
and Exchange Commission, or any order of any
governmental agency or court of law. We
currently expect that each of the conditions
will be satisfied and that no waivers will be
necessary. See "The Exchange
Offer -- Conditions to the Exchange Offer."
Procedures for Tendering Notes
Held in the Form of Book-Entry
Interests..................... Most of the old notes were issued as global
securities and were deposited upon issuance
with The Bank of New York. The Bank of New York
issued certificateless depositary interests in
those outstanding old notes, which represent a
100% interest in those old notes, to The
Depository Trust Company.
Beneficial interests in the outstanding old
notes, which are held by direct or indirect
participants in the Depository Trust Company,
are shown on, and transfers of the old notes
can only be made through, records maintained in
book-entry form by The Depository Trust
Company.
7
You may tender your outstanding old notes:
- through a computer-generated message
transmitted by The Depository Trust Company's
Automated Tender Offer Program system and
received by the exchange agent and forming a
part of a confirmation of book-entry transfer
in which you acknowledge and agree to be
bound by the terms of the letter of
transmittal; or
- by sending a properly completed and signed
letter of transmittal, which accompanies this
prospectus, and other documents required by
the letter of transmittal, or a facsimile of
the letter of transmittal and other required
documents, to the exchange agent at the
address on the cover page of the letter of
transmittal;
And either:
- a timely confirmation of book-entry transfer
of your outstanding old notes into the
exchange agent's account at The Depository
Trust Company, under the procedure for
book-entry transfers described in this
prospectus under the heading "The Exchange
Offer -- Book Entry Transfers" must be
received by the exchange agent on or before
the expiration date; or
- the documents necessary for compliance with
the guaranteed delivery described in "The
Exchange Offer -- Guaranteed Delivery
Procedures" must be received by the exchange
agent.
Procedures for Tendering Notes
held in the Form of Registered
Notes......................... If you hold registered old notes, you must
tender your registered old notes by sending a
properly completed and signed letter of
transmittal, together with other documents
required by it, and your certificates, to the
exchange agent, in accordance with the
procedures described in this prospectus under
the heading "The Exchange Offer -- Procedures
for Tendering Old Notes."
United Series Federal Income
Tax Considerations............ The exchange offer should not result in any
income, gain or loss to the holders of old
notes or to us for United States Federal Income
Tax Purposes. See "Certain U.S. Federal Income
Tax Considerations."
Use of Proceeds............... We will not receive any proceeds from the
issuance of the exchange notes in the exchange
offer.
The proceeds from the offering of the old notes
were used to:
- fund the refinancing of our existing senior
secured, senior unsecured and subordinated
indebtedness (including applicable accrued
interest and call premium);
- redeem senior preferred stock;
8
- pay transaction fees and expenses; and
- for general corporate purposes.
Exchange Agent................ The Bank of New York is serving as the exchange
agent for the exchange offer.
Shelf Registration
Statement..................... In limited circumstances, holders of old notes
may require us to register their old notes
under a shelf registration statement.
THE EXCHANGE NOTES
Issuer........................ Town Sports International, Inc.
Securities offered............ $255,000,000 principal amount of 9 5/8% senior
notes due 2011.
Maturity...................... April 15, 2011.
Interest rate................. 9 5/8% per year (calculated using a 360-day
year).
Interest payment dates........ Each April 15 and October 15, beginning on
October 15, 2003. Interest will accrue from the
issue date of the Notes.
Ranking....................... The Notes and the guarantees will be our
unsecured senior obligations and will rank
senior to all of our and the guarantors'
existing and future subordinated debt. The
Notes will effectively rank junior to any of
our and the guarantors' secured debt to the
extent of the value of the assets securing that
debt, including debt under our new senior
secured revolving credit facility. As of
December 31, 2002, after giving effect to this
offering and the other refinancing transactions
described in this prospectus, we estimate that
we and our subsidiaries would have had $12.4
million of secured debt outstanding, excluding
approximately $50.0 million that, subject to
certain limitations, we expect to have
available to borrow under our new senior
secured revolving credit facility.
Guarantees.................... All of our domestic subsidiaries will
unconditionally guarantee the Notes on an
unsecured senior basis. If we cannot make
payments required by the Notes, our guarantor
subsidiaries must make them. The guarantees may
be released under certain circumstances.
Optional redemption........... On or after April 15, 2007, we may redeem some
or all of the Notes at the redemption prices
listed in the "Description of Notes" section
under the heading "Redemption -- Optional
Redemption" plus accrued and unpaid interest.
Optional redemption after
equity offerings.............. At any time (which may be more than once)
before April 15, 2006, we can choose to redeem
up to 35% of the outstanding Notes with money
that we raise in one or more equity offerings,
as long as:
- we pay 109.625% of the face amount of the
Notes plus accrued and unpaid interest;
9
- we redeem the Notes within 120 days of
completing the equity offering; and
- at least 65% of the aggregate principal
amount of Notes originally issued remains
outstanding afterwards.
Change of control offer....... If a change in control of our company occurs,
we must, subject to certain conditions, give
holders the opportunity to sell their notes to
us at 101% of their face amount plus accrued
and unpaid interest.
We might not be able to pay the required price
for Notes presented to us at the time of a
change of control because:
- we might not have enough funds at the time;
or
- the terms of our new senior secured revolving
credit facility may prevent us from paying.
Asset sale proceeds........... If we or our subsidiaries engage in asset
sales, we generally must either invest the net
cash proceeds from such sales in our business
within a period of time, prepay debt under our
new senior secured revolving credit facility or
make an offer to purchase a principal amount of
the Notes equal to the excess net cash
proceeds. The purchase price of the Notes will
be 100% of their principal amount plus accrued
and unpaid interest.
Certain indenture
provisions.................... The indenture governing the Notes will contain
covenants that, among other things, limit our
and our subsidiaries' ability to:
- incur additional debt;
- pay dividends or distributions on our capital
stock or repurchase our capital stock;
- issue preferred stock of subsidiaries;
- make certain investments;
- create liens on our assets to secure debt;
- enter into transactions with affiliates;
- merge or consolidate with another company;
and
- transfer and sell assets.
These covenants are subject to a number of
important limitations and exceptions. See
"Description of Notes -- Certain Covenants."
Risk factors.................. Investing in the Notes involves substantial
risks. See "Risk Factors" for a description of
some of the risks you should consider before
investing in the Notes.
10
SUMMARY HISTORICAL AND OTHER CONSOLIDATED FINANCIAL DATA
Set forth below are our summary historical and other consolidated financial
data as of December 31, 2002 and March 31, 2003 and for the fiscal years ended
December 31, 2000, 2001 and 2002 and the three months ended March 31, 2002 and
2003. The consolidated statement of operations data, balance sheet data and
other financial data for fiscal years ended December 31, 2000, 2001 and 2002
were derived from our audited consolidated financial statements included
elsewhere in this prospectus. The consolidated statement of operations data,
balance sheet data and other financial data for the three months ended March 31,
2002 and 2003 were derived from our unaudited consolidated financial statements
included elsewhere in this prospectus. The club and membership data, for all
periods presented, was derived from our unaudited books and records. The
information contained in this table should be read in conjunction with "Selected
Consolidated Financial and Other Data," "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and the financial statements and
accompanying notes thereto appearing elsewhere in this prospectus. All amounts
are presented in thousands except club and membership data.
<Table>
<Caption>
THREE MONTHS ENDED
YEARS ENDED DECEMBER 31, MARCH 31,
------------------------------ -------------------
2000 2001 2002 2002 2003
-------- -------- -------- -------- --------
STATEMENT OF OPERATIONS DATA:
Revenues........................ $223,828 $281,633 $319,427 $76,874 $86,902
Operating expenses.............. 200,481 252,677 281,334 67,982 72,752
Operating income................ 23,347 28,956 38,093 8,892 14,150
Interest expense, net of
interest income............... 13,120 14,527 16,421 4,085 4,210
Income tax provision............ 5,031 6,853 9,709 2,387 4,099
Net income...................... 4,831 7,046 10,507 1,665 5,841
</Table>
<Table>
<Caption>
AS OF AS OF
DECEMBER 31, 2002 MARCH 31, 2003
----------------- --------------
BALANCE SHEET DATA:
Cash and cash equivalents................................. $ 5,551 $ 9,052
Total assets.............................................. 314,250 312,517
Long-term debt, including current installments............ 160,943 148,838
Redeemable senior preferred stock......................... 62,125 64,089
Redeemable Series A preferred stock....................... 34,841 36,061
Stockholders' deficit..................................... (31,740) (29,437)
</Table>
11
<Table>
<Caption>
THREE MONTHS ENDED
YEARS ENDED DECEMBER 31, MARCH 31,
---------------------------- -------------------
2000 2001 2002 2002 2003
------- ------- -------- -------- --------
OTHER FINANCIAL DATA:
Net cash provided by operating
activities.............................. $40,573 $44,348 $ 50,805 $ 20,569 $ 23,606
Compensation expense incurred in
connection with stock options........... (1,836) (1,149) (1,207) (281) (187)
Depreciation and amortization............. (28,173) (34,549) (33,953) (8,436) (8,896)
Goodwill impairment and club closure
costs................................... -- -- (2,297) (1,301) --
Noncash rental expense, net of noncash
rental income........................... (2,976) (4,224) (1,670) (713) (522)
Net change in certain working capital
components.............................. (9,392) (3,475) (2,413) (10,573) (5,564)
(Decrease) increase in deferred tax
asset................................... 3,326 4,526 1,162 1,413 (2,903)
Increase (decrease) in deferred membership
costs................................... 2,745 1,162 (340) 856 160
Other..................................... 564 407 420 131 147
------- ------- -------- -------- --------
Net income................................ 4,831 7,046 10,507 1,665 5,841
Depreciation and amortization(1).......... 26,248 32,185 31,748 7,857 8,299
Interest expense, net of interest
income.................................. 13,120 14,527 16,421 4,085 4,210
Provision for corporate income tax........ 5,031 6,853 9,709 2,387 4,099
Loss from discontinued operations of
closed clubs(2)......................... 365 530 767 66 --
Cumulative effect of a change in
accounting policy(3).................... -- -- 689 689 --
------- ------- -------- -------- --------
EBITDA(4)................................. $49,595 $61,141 $ 69,841 $ 16,749 $ 22,449
======= ======= ======== ======== ========
EBITDA Margin(4).......................... 22.2% 21.7% 21.9% 21.8% 25.8%
Capital expenditures and club acquisition
costs................................... $71,507 $59,083 $ 43,715 20,376 7,418
CLUB AND MEMBERSHIP DATA:
Total clubs operated at end of
period(5)............................... 105 119 129 126 129
Members at end of period(6)............... 278,000 317,000 342,000 330,000 356,000
Mature club revenue increase(7)........... 18.6% 12.3% 4.1% 3.8% 1.8%
AS ADJUSTED DATA:(8)
Ratio of earnings to fixed charges(9)..... 1.25x
Cash interest expense(10)................. $ 25,711
Ratio of EBITDA to cash interest
expense................................. 2.72x
Debt...................................... $267,443
Ratio of debt to EBITDA................... 3.83x
</Table>
- ------------
(1) Effective January 1, 2002 we implemented Statement of Financial Accounting
Standards ("SFAS") No. 142 ("SFAS 142"), Goodwill and Other Intangible
Assets. In connection with SFAS 142 we no longer amortize goodwill, but
rather test it for impairment when circumstances indicate it is necessary,
and at a minimum annually. A reconciliation of reported net income to net
income adjusted for the impact of SFAS 142 is as follows for the periods
presented:
<Table>
<Caption>
YEARS ENDED
DECEMBER 31,
----------------
2000 2001
------ -------
Net income as reported...................................... $4,831 $ 7,046
Goodwill amortization, net of taxes......................... 2,481 3,092
------ -------
Net income as adjusted...................................... $7,312 $10,138
====== =======
</Table>
12
(2) In the fourth quarter of 2002, we closed two remote underperforming,
wholly-owned clubs. In connection with the closure of one of the clubs, we
recorded club closure costs of $996 related to the write-off of fixed
assets. We have accounted for these two clubs as discontinued operations
and, accordingly, the results of their operations have been classified as
discontinued in the Consolidated Statement of Operations and prior periods
have been reclassified in accordance with Statement of Financial Accounting
Standards ("SFAS") No. 144, Accounting for the Impairment of Long-Lived
Assets and Long-Lived Assets To Be Disposed Of.
Loss from operations and tax benefit for these discontinued clubs were as
follows for the periods presented:
<Table>
<Caption>
THREE
MONTHS
ENDED
YEARS ENDED DECEMBER 31, MARCH 31,
--------------------------- ---------
2000 2001 2002 2002
----- ----- ------- ---------
Loss from operations of discontinued clubs (including
loss on club closure of $996 in 2002).................. $(597) $(894) $(1,318) $(114)
Benefit for corporate income tax......................... (232) (364) (551) (48)
----- ----- ------- -----
Loss from discontinued operations........................ $(365) $(530) $ (767) $ (66)
===== ===== ======= =====
</Table>
(3) Effective January 1, 2002 we implemented SFAS 142. In connection with the
SFAS 142 transitional impairment test we recorded a $1,301 write-off of
goodwill. A deferred tax benefit of $612 was recorded as a result of this
goodwill write-off, resulting in a net cumulative effect of change in
accounting principle of $689 in 2002. The write-off of goodwill related to
four remote, underperforming clubs. The impairment test was performed with
discounted estimated future cash flows as the criteria for determining fair
market value.
(4) EBITDA is defined as earnings before interest, taxes, depreciation,
amortization, income (loss) from operations of discontinued clubs, and
cumulative effect of changes in accounting policy. For the year ended
December 31, 2002 and the three months ended March 31, 2003, EBITDA
includes non-cash charges of $1,207 and $187, respectively, reflecting the
non-cash component of compensation expense related to stock options and
$1,670 and $522, respectively, reflecting the non-cash component of
deferred lease expense net of the non-cash component of deferred lease
income. Non-cash deferred lease expense reflects the difference between
accrued rent expense in accordance with Generally Accepted Accounting
Principles in the United States of America ("GAAP") and cash rent expense
actually paid in a given period, which difference is typically positive in
the early years of a lease and negative in the later years of a lease.
EBITDA is presented because we believe it provides useful information
regarding our liquidity and financial condition. EBITDA should not be
considered in isolation or as a substitute for net income, cash flows, or
other consolidated income (loss) or cash flow data prepared in accordance
with GAAP or as a measure of our profitability or liquidity. EBITDA Margin
is defined as EBITDA as a percentage of revenues. Additionally, investors
should be aware that EBITDA may not be comparable to similarly titled
measures presented by other companies.
(5) Includes all clubs wholly-owned or partly-owned and managed. (We operate
two partly-owned clubs under the Washington Sports Club brand name as of
March 31, 2003).
(6) Represents members at clubs wholly-owned or partly-owned and managed.
(7) We define mature clubs as those clubs operated by us for more than 24
months.
(8) As adjusted data reflects the issuance of the Notes and the other
refinancing transactions as if they had occurred on the first day of the
relevant period.
(9) For the purpose of determining the ratio of earnings to fixed charges,
"earnings" consist of income from continuing operations before provision
for corporate income taxes and fixed charges. "Fixed charges" consist of
interest expense, which includes the amortization of deferred debt issuance
costs and the interest portion of our rent expense (assumed to be one third
of rent expense, which is an appropriate representative of the interest
factor).
(10) Cash interest expense is defined as interest expense less amortization of
debt issuance costs.
13
RISK FACTORS
You should consider carefully all of the information in this prospectus,
including the following risk factors and warnings, before deciding whether to
exchange your old notes for the exchange notes to be issued in this exchange
offer. Except for the first three risk factors described below, these risk
factors apply to both the old notes and the exchange notes.
RISKS RELATED TO THE OFFERING
You may have difficulty selling the old notes which you do not exchange, since
outstanding old notes will continue to have restrictions on transfer and
cannot be sold without registration under securities laws or exemptions from
registration.
If a large number of outstanding old notes are exchanged for exchange notes
issued in the exchange offer, it may be difficult for holders of outstanding old
notes that are not exchanged in the exchange offer to sell their old notes,
since those old notes may not be offered or sold unless they are registered or
there are exemptions from registration requirements under the Securities Act or
state laws that apply to them. In addition, if there are only a small number of
old notes outstanding, there may not be a very liquid market in those old notes.
There may be few investors that will purchase unregistered securities in which
there is not a liquid market. See "The Exchange Offer -- You May Suffer Adverse
Consequences if You Fail to Exchange Outstanding Notes."
In addition, if you do not tender your outstanding old notes or if we do
not accept some outstanding old notes, those old notes will continue to be
subject to the transfer and exchange provisions of the indenture and the
existing transfer restrictions of the old notes that are described in the legend
on the old notes and in the prospectus relating to the old notes.
Resale Restrictions -- If you exchange your old notes, you may not be able to
resell the exchange notes you receive in the exchange offer without
registering them and delivering a prospectus.
You may not be able to resell exchange notes you receive in the exchange
offer without registering those exchange notes or delivering a prospectus. Based
on interpretations by the Commission in no-action letters, we believe, with
respect to exchange notes issued in the exchange offer, that:
1. holders who are not "affiliates" of Town Sports within the meaning of
Rule 405 of the Securities Act;
2. holders who acquire their exchange notes in the ordinary course of
business; and
3. holders who do not engage in, intend to engage in, or have arrangements
to participate in a distribution (within the meaning of the Securities
Act) of the exchange notes;
do not have to comply with the registration and prospectus delivery requirements
of the Securities Act.
Holders described in the preceding sentence must tell us in writing at our
request that they meet these criteria. Holders that do not meet these criteria
could not rely on interpretations of the Commission in no-action letters, and
would have to register the exchange notes they receive in the exchange offer and
deliver a prospectus for them. In addition, holders that are broker-dealers may
be deemed "underwriters" within the meaning of the Securities Act in connection
with any resale of exchange notes acquired in the exchange offer. Holders that
are broker-dealers must acknowledge that they acquired their outstanding
exchange notes in market-making activities or other trading activities and must
deliver a prospectus when they resell the exchange notes they acquire in the
exchange offer in order not to be deemed an underwriter.
14
You should review the more detailed discussion in "The Exchange
Offer -- Procedures for Tendering Old Notes and Consequences of Exchanging
Outstanding Old Notes".
Our substantial leverage may impair our financial condition and we may incur
significant additional debt.
We currently have, and after the issuance of the Notes will have, a
substantial amount of debt. As of March 31, 2003, our total consolidated debt
was approximately $148.8 million. See "Capitalization" for additional
information.
Our substantial debt could have important consequences to you, including:
- making it more difficult for us to satisfy our obligations with respect
to the Notes;
- increasing our vulnerability to general adverse economic and industry
conditions;
- limiting our ability to obtain additional financing to fund future
working capital, capital expenditures, acquisitions of clubs and other
general corporate requirements;
- requiring a substantial portion of our cash flow from operations for the
payment of interest on our debt and reducing our ability to use our cash
flow to fund working capital, capital expenditures, acquisitions of new
clubs and general corporate requirements; and
- limiting our flexibility in planning for, or reacting to, changes in our
business and the industry in which we operate.
These limitations and consequences may place us at a competitive disadvantage to
other less-leveraged competitors.
Subject to specified limitations, the indenture permits us and our
subsidiaries to incur substantial additional debt. In addition, as of March 31,
2003, after giving effect to the offering of the old notes and the other
refinancing transactions, subject to certain limitations, we would be able to
borrow up to $50.0 million (less any standby letter of credit issuances) under
our new senior secured revolving credit facility. If new debt is added to our
and our subsidiaries' current debt levels, the related risks that we and they
now face could intensify. See "Description of Senior Secured Revolving Credit
Facility" for additional information.
Servicing our debt will require a significant amount of cash, and our ability
to generate sufficient cash depends upon many factors, some of which are beyond
our control.
Our ability to make payments on and refinance our debt and to fund planned
capital expenditures depends on our ability to generate cash flow in the future.
To some extent, this is subject to general economic, financial, competitive,
legislative and regulatory factors and other factors that are beyond our
control. We cannot assure you that our business will continue to generate cash
flow from operations at current levels. If we are unable to generate sufficient
cash flow from operations in the future to service our debt, we may have to
refinance all or a portion of our existing debt or obtain additional financing.
We cannot assure you that any refinancing of this kind would be possible or that
any additional financing could be obtained. The inability to obtain additional
financing could have a material adverse effect on our financial condition and on
our ability to meet our obligations to you under the Notes.
Although the notes are referred to as "senior notes," they will be effectively
subordinated to our secured indebtedness.
The Notes are unsecured obligations of Town Sports and are guaranteed by
all of our domestic subsidiaries. As a result of this structure, the Notes are
effectively subordinated to all of our and the guarantors' secured indebtedness
to the extent of the value of the collateral. The effect of this subordination
is that, in the event of a bankruptcy, liquidation, dissolution, reorganization
or similar
15
proceeding involving us and the guarantors, our and the guarantors' assets could
not be used to pay you until after all secured claims against us have been fully
paid.
On March 31, 2003, as adjusted for the issuance of the Notes and the other
refinancing transactions we and the guarantors would have had outstanding an
aggregate of $10.8 million of secured indebtedness that would be effectively
senior to the Notes and, subject to certain limitations, we would be able to
borrow up to $50.0 million (less any standby letter of credit issuances) under
our new senior secured revolving credit facility. We may incur additional
secured indebtedness in the future.
Covenant restrictions under our indebtedness may limit our ability to operate
our business and, in such an event, we may not have sufficient assets to pay
amounts due to you on the Notes.
Our new senior secured revolving credit facility, the indenture governing
the Notes and certain of our other agreements regarding our indebtedness
contain, among other things, covenants that may restrict our and the restricted
subsidiaries' ability to finance future operations or capital needs or to engage
in other business activities. Our new senior secured revolving credit facility
and the indenture restrict, among other things, our ability and the ability of
our restricted subsidiaries to:
- borrow money;
- pay dividends or make distributions;
- purchase or redeem stock;
- make investments and extend credit;
- engage in transactions with affiliates;
- engage in sale-leaseback transactions;
- consummate certain asset sales;
- effect a consolidation or merger or sell, transfer, lease or otherwise
dispose of all or substantially all of our assets; and
- create liens on our assets.
In addition, our new senior secured revolving credit facility requires us
to maintain specified financial ratios and satisfy certain financial condition
tests that may require that we take action to reduce our debt or to act in a
manner contrary to our business objectives. Events beyond our control, including
changes in general economic and business conditions, may affect our ability to
meet those financial ratios and financial condition tests. We cannot assure you
that we will meet those tests or that the lenders will waive any failure to meet
those tests. A breach of any of these covenants would result in a default under
our new senior secured revolving credit facility and the indenture. If an event
of default under our new senior secured revolving credit facility occurs, the
lenders could elect to declare all amounts outstanding thereunder, together with
accrued interest, to be immediately due and payable. In such an event, we cannot
assure you that we would have sufficient assets to pay amounts due on the Notes.
As a result, you may receive less than the full amount you would be otherwise
entitled to receive on the Notes. See "Description of Senior Secured Revolving
Credit Facility" and "Description of Notes" for additional information.
The guarantees may not be enforceable because of fraudulent conveyance laws.
The incurrence of the guarantees by the guarantors may be subject to review
under U.S. federal bankruptcy law or relevant state fraudulent conveyance laws
if a bankruptcy case or lawsuit is commenced by or on behalf of the guarantors'
unpaid creditors. Under these laws, if
16
in such a case or lawsuit a court were to find that, at the time such guarantor
incurred a guarantee of the Notes, such guarantor:
- incurred the guarantee of the Notes with the intent of hindering,
delaying or defrauding current or future creditors; or
- received less than reasonably equivalent value or fair consideration for
incurring the guarantee of the Notes and such guarantor:
- was insolvent or rendered insolvent;
- was engaged, or about to engage, in a business or transaction for which
its remaining assets constituted unreasonably small capital to carry on
its business; or
- intended to incur, or believed that it would incur, debts beyond its
ability to pay as these debts matured (as all of the foregoing terms are
defined in or interpreted under the relevant fraudulent transfer or
conveyance statutes);
then such court could avoid the guarantee of such guarantor or subordinate
the amounts owing under the guarantee to the guarantor's presently existing or
future debt or take other actions detrimental to you.
It may be asserted that the guarantors incurred their guarantees for our
benefit and they incurred the obligations under the guarantees for less than
reasonably equivalent value or fair consideration.
The measure of insolvency for purposes of the foregoing considerations will
vary depending on the law of the jurisdiction that is being applied in any such
proceeding. Generally, a company would be considered insolvent if, at the time
it incurred the debt or issued the guarantee, either:
- the sum of its debts (including contingent liabilities) is greater than
its assets, at fair valuation; or
- the present fair saleable value of its assets is less than the amount
required to pay the probable liability on its total existing debts and
liabilities (including continent liabilities) as they become absolute and
matured.
If a guarantee is voided as a fraudulent conveyance or found to be
unenforceable for any other reason, you will not have a claim against that
obligor and will only be a creditor of Town Sports and any guarantor whose
obligation was not set aside or found to be unenforceable.
We may not have the ability to raise the funds necessary to finance the change
of control offer required by the indenture.
Upon a change of control, subject to certain conditions, we are required to
offer to repurchase all outstanding Notes at 101% of the principal amount
thereof, plus accrued and unpaid interest to the date of repurchase.
The source of funds for that purchase of Notes will be our available cash
or cash generated from our subsidiaries' operations or other sources, including
borrowing, sales of assets or sales of equity. We cannot assure you that
sufficient funds will be available at the time of any change of control to make
required repurchases of Notes tendered. In addition, the terms of our new senior
secured revolving credit facility limit our ability to purchase your Notes. Our
future debt agreements may contain similar restrictions and provisions. If the
holders of the Notes exercise their right to require us to repurchase all of the
Notes upon a change of control, the financial effect of this repurchase could
cause a default under our other debt, even if the change of control itself would
not cause a default. Accordingly, it is possible that we will not have
sufficient funds at the time of the change of control to make the required
repurchase of Notes or that restrictions in our new senior secured revolving
credit facility and the indenture will not allow such repurchases. See
"Description of Notes--Change of Control" and "Description of Senior Secured
Revolving Credit Facility" for additional information.
17
There is no established trading market for the Notes and the Notes contain
restrictions on transfer that may make it difficult for you to sell or pledge
your Notes.
There is currently no established trading market for the Notes. The initial
purchasers are not obligated to repurchase the Notes or to provide markets that
would allow the Notes to be traded. Although we are obligated, subject to some
exceptions, to attempt to exchange the Notes for notes that will be registered
with the SEC, we may not be able to comply with this obligation. See the
description of the proposed exchange offer under "Exchange Offer; Registration
Rights." Whether or not the Notes are exchanged for registered notes in the
proposed exchange offer, an active market for the Notes or the exchange notes
may not develop. If markets for the Notes do not develop, you will not be able
to resell your Notes for an extended period of time, if at all. Consequently,
your lenders may be reluctant to accept the Notes as collateral for loans.
Moreover, if markets for the Notes do develop in the future, we cannot assure
you that these markets will continue indefinitely or that the Notes can be sold
at a price equal to or greater than their initial offering price. In addition,
in response to prevailing interest rates and market conditions generally, the
Notes could trade at a price lower than their initial offering price. Because
the Notes have not been registered under the Securities Act, the Notes are
subject to additional restrictions on transfer, including that:
- the Notes may only be sold within the United States to qualified
institutional buyers;
- the Notes may be sold outside the United States only to non-U.S. persons
in reliance on Regulation S under the Securities Act;
- the Notes will not be registered under the Securities Act or any state or
foreign securities laws; and
- transfers of the Notes are subject to substantial contractual and legal
restrictions, including that you may not sell or offer to sell the Notes
in any state or jurisdiction of the United States or any foreign
jurisdiction other than those where a sale or offer is permitted.
Given the risks inherent in an investment in the Notes and the restrictions
on transfer, you may have difficulty finding willing buyers for the Notes.
Consequently, you may not be able to liquidate your investment readily, and the
Notes may not be readily accepted as collateral for loans. Therefore, you should
be aware that you may bear the economic risk of an investment in the Notes until
maturity. Historically, the market for non-investment grade debt has been
subject to disruptions that have caused substantial volatility in the prices of
securities similar to the Notes. We cannot assure you that the market for the
Notes, if any, will not be subject to similar disruptions. Any such disruptions
may adversely affect you as a holder of the Notes.
RISK FACTORS RELATED TO THE COMPANY
We may experience losses in our recently opened greenfield clubs.
We have opened a total of 20 new club locations that we have constructed
(or greenfield clubs) in the last 24 months. Upon opening a greenfield club, we
typically experience an initial period of club operating losses. Although we
pre-sell memberships, such enrollment typically generates insufficient revenue
for the club to generate positive cash flow. As a result, a greenfield club
typically generates an operating loss in its first full year of operation and
substantially lower margins in its second full year of operations than a mature
club. These operating losses and lower margins will negatively impact our future
results of operations. This negative impact will be increased by the initial
expensing of pre-opening costs which include legal and other costs associated
with lease negotiations and permitting and zoning requirements, as well as
increased depreciation and amortization expenses, which will further negatively
impact net income. A greenfield club typically reaches mature membership levels
in
18
three to four years. We may, at our discretion, accelerate or expand our plans
to open new greenfield clubs, which may adversely affect results from operations
temporarily.
Our inability to acquire additional capital on acceptable terms to finance
future expansion would adversely impact our competitive position.
The opening of greenfield clubs and the acquisition of existing clubs
requires considerable capital. Any material acceleration or expansion of that
plan through additional greenfields or acquisitions, to the extent such
acquisitions include cash payments, may require us to pursue additional sources
of financing. We cannot assure you that financing will be available or that it
will be available on acceptable terms. The inability to finance accelerated
expansion on acceptable terms may negatively impact our competitive position
and/or materially adversely affect our business, results of operations or
financial condition.
We may be unable to attract and retain members, which could have a negative
effect on our business.
The performance of our clubs is dependent on our ability to attract and
retain members, and we cannot assure you that we will be successful in these
efforts, or that the membership levels at our clubs will not materially decline.
Most of our members can cancel their club membership at any time upon 30 days
notice. In addition, there are numerous factors that could lead to a decline in
membership levels at established clubs or that could prevent us from increasing
our membership at newer clubs, including harm to our reputation, a decline in
our ability to deliver quality service at a competitive cost, the presence of
direct and indirect competition in the areas in which the clubs are located, the
public's interest in sports and fitness clubs and general economic conditions.
As a result of these factors, we cannot assure you that our membership levels
will be adequate to maintain or permit the expansion of our operations. In
addition, a decline in membership levels may have a material adverse effect on
our performance, financial condition and results of operations.
Our geographic concentration heightens our exposure to adverse regional
developments.
As of March 31, 2003, we operated 85 fitness clubs in the New York
metropolitan market, 20 fitness clubs in the Boston market, 15 fitness clubs in
the Washington, D.C. market, six fitness clubs in the Philadelphia market and
three fitness clubs in Switzerland. Our geographic concentration in the
Northeast and Mid-Atlantic regions and, in particular, the New York area,
heightens our exposure to adverse developments related to competition, as well
as, economic and demographic changes in these regions. Over the past twelve
months, we have experienced a decline in the growth rate of our mature club
revenue and a decline in memberships in Manhattan, each of which we attribute to
the general economic conditions in the markets we serve as well as to the
continuing effects of the events of September 11, 2001. We cannot assure you
that our geographic concentration will not result in a material adverse effect
on our business, financial condition or results of operations in the future.
The high level of competition in the fitness club industry could make it
difficult for us to generate sufficient cash flow to service our debt.
The fitness club industry is highly competitive. We compete with other
fitness clubs, physical fitness and recreational facilities established by local
governments, hospitals and businesses for their employees, amenity and
condominium clubs, the YMCA and similar organizations and, to a certain extent,
with racquet and tennis and other athletic clubs, country clubs, weight reducing
salons and the home-use fitness equipment industry. We also compete with other
entertainment and retail businesses for the discretionary income of our target
markets. We cannot assure you that we will be able to compete effectively in the
future in the
19
markets in which we operate. Competitors, which may include companies that are
larger and have greater resources than us, may enter these markets to our
detriment. These competitive conditions may limit our ability to increase dues
without a material loss in membership, attract new members and attract and
retain qualified personnel. Additionally, consolidation in the fitness club
industry could result in increased competition among participants, particularly
large multi-facility operators that are able to compete for attractive
acquisition candidates or greenfield locations, thereby increasing costs
associated with expansion through both acquisitions, and lease negotiation and
real estate availability for greenfields. See "Business--Competition."
We could be subject to claims related to health or safety risks at our clubs.
Use of our clubs poses some potential health or safety risks to members or
guests through exertion and use of our services and facilities including
exercise equipment. We cannot assure you that claims against us for death or
injury suffered by members or their guests while exercising at a club will not
be asserted, or that we would be able to successfully defend any such claim. We
cannot assure you that we will be able to maintain our general liability
insurance on acceptable terms in the future or that such insurance will provide
adequate coverage against potential claims. A claim has been filed against us by
an individual for injuries sustained at one of our club locations for $250.0
million in damages for personal injuries and $250.0 million in punitive damages.
"Business -- Legal Proceedings."
Loss of key personnel and/or failure to attract and retain highly qualified
personnel could make it more difficult for us to generate cash flow from
operations and service our debt.
We are dependent on the continued services of our senior management team,
particularly Mark Smith, Chairman; Robert Giardina, Chief Executive Officer;
Richard Pyle, Chief Financial Officer; and Alexander Alimanestianu, Chief
Development Officer. We believe the loss of such key personnel could have a
material adverse effect on us and our financial performance. Currently, we do
not have any long-term employment agreements with our executive officers, and we
cannot assure you that we can attract and retain sufficient qualified personnel
to meet our business needs. See "Management -- Directors and Executive
Officers."
The interests of our controlling shareholder may be in conflict with your
interests as a holder of Notes.
Bruckmann, Rosser, Sherrill & Co., L.P. and certain of its affiliates
(collectively "BRS") own approximately 40% of our common stock on a fully
diluted basis and has the ability to elect a majority of the board of directors
and generally to control the affairs and policies of our company. Circumstances
may occur in which the interests of BRS, as our shareholder, in pursuing
acquisitions or otherwise, could be in conflict with the interests of the
holders of the Notes. See "Security Ownership and Certain Beneficial Owners" and
"Certain Relationships and Related Transactions."
We are subject to extensive government regulation and changes in these
regulations could have a negative effect on our financial condition.
Our operations and business practices are subject to federal, state and
local government regulation in the various jurisdictions in which our clubs are
located, including: (1) general rules and regulations of the Federal Trade
Commission, state and local consumer protection agencies and state statutes that
prescribe certain forms and provisions of membership contracts and that govern
the advertising, sale, financing and collection of such memberships, (2) state
and local health regulations, (3) federal regulation of health and nutritional
supplements, and (4) regulation of rehabilitation service providers. Although we
are not aware of any proposed changes in
20
any statutes, rules or regulations, any changes in such laws could have a
material adverse effect on our financial condition and results of operations.
See "Business -- Government Regulation."
The occurrence of extraordinary events, such as war in Iraq or elsewhere may
increase the likelihood of a major terrorist attack in the United States, which
may adversely affect our clubs, resulting in a decrease in our revenues.
The United States has recently been engaged in a military action in Iraq.
Such military action may increase the likelihood of another major terrorist
attack in the United States. Our geographic concentration in the major cities in
the Northeast and Mid-Atlantic regions and, in particular, the New York and
Washington, D.C. areas, heightens our exposure to such future terrorist attacks,
which may adversely affect our clubs and result in a decrease in our revenues.
Future terrorist attacks cannot be predicted, and their occurrence can be
expected to further negatively affect the United States economy generally, and
specifically the regional markets in which we operate.
21
THE EXCHANGE OFFER
TERMS OF THE EXCHANGE OFFER; PERIOD FOR TENDERING OUTSTANDING EXCHANGE NOTES
On April 16, 2003, we sold the old notes to Deutsche Bank Securities and
BNP Paribas. When we sold the old notes, we entered into a registration rights
agreement with Deutsche Bank Securities and BNP Paribas. The registration rights
agreement requires that we register the old notes sold on April 16, 2003 with
the Commission and offer to exchange the new registered exchange notes for the
outstanding old notes sold on April 16, 2003.
We will accept any validly tendered old notes that you do not withdraw
before 5:00 p.m., New York City time, on the expiration date. We will issue
$1,000 of principal amount at maturity of exchange notes in exchange for each
$1,000 principal amount at maturity of your outstanding old notes. You may
tender some or all of your old notes in the exchange offer.
The form and terms of the exchange notes are the same as the form and terms
of the outstanding old notes except that:
(1) the exchange notes being issued in the exchange offer will be
registered under the Securities Act and will not have legends
restricting their transfer;
(2) the exchange notes being issued in the exchange offer will not contain
the registration rights and liquidated damages provisions contained in
the outstanding old notes; and
(3) interest on the exchange notes will accrue from the last interest date
on which interest was paid on your old notes.
Outstanding old notes that we accept for exchange will not accrue interest
after we complete the exchange offer.
The exchange offer will expire at 5:00 p.m., New York City time, on
, 2003, unless we extend it. If we extend the exchange offer, we will
issue a notice by press release or other public announcement before 9:00 a.m.,
New York City time, on the next business day after the previously scheduled
expiration date.
We reserve the right, in our sole discretion:
(1) to extend the exchange offer;
(2) to delay accepting your old notes;
(3) to terminate the exchange offer and not accept any old notes for
exchange if any of the conditions have not been satisfied; or
(4) to amend the exchange offer in any manner.
We will promptly give oral or written notice of any extension, delay,
non-acceptance, termination or amendment. We will also file a post-effective
amendment with the Commission if we amend the terms of the exchange offer.
If we extend the exchange offer, old notes that you have previously
tendered will still be subject to the exchange offer and we may accept them. We
will promptly return your old notes if we do not accept them for exchange for
any reason without expense to you after the exchange offer expires or
terminates.
22
PROCEDURES FOR TENDERING OLD NOTES
Only you may tender your old notes in the exchange offer.
To tender your old notes in the exchange offer, you must:
(1) complete, sign and date the letter of transmittal which accompanied
this prospectus, or a copy of it;
(2) have the signature on the letter of transmittal guaranteed if required
by the letter of transmittal; and
(3) mail, fax or otherwise deliver the letter of transmittal or copy to the
exchange agent;
OR
if you tender your notes under The Depository Trust Company's book-entry
transfer procedures, transmit an agent's message to the exchange agent on or
before the expiration date.
In addition, either:
(1) the exchange agent must receive certificates for outstanding old notes
and the letter of transmittal; or
(2) the exchange agent must receive a timely confirmation of a book-entry
transfer of your old notes into the exchange agent's account at The
Depository Trust Company, along with the agent's message; or
(3) you must comply with the guaranteed delivery procedures described
below.
An agent's message is a computer-generated message transmitted by The
Depository Trust Company through its Automated Tender Offer Program to the
exchange agent.
To tender your old notes effectively, you must make sure that the exchange
agent receives a letter of transmittal and other required documents before the
expiration date.
When you tender your outstanding old notes and we accept them, the tender
will be a binding agreement between you and us in accordance with the terms and
conditions in this prospectus and in the letter of transmittal.
The method of delivery of outstanding old notes, letters of transmittal and
all other required documents to the exchange agent is at your election and risk.
We recommend that you use an overnight or hand delivery service instead of mail.
If you do deliver by mail, we recommend that you use registered mail, properly
insured, with return receipt requested. In all cases, you should allow enough
time to make sure your documents reach the exchange agent before the expiration
date. Do not send a letter of transmittal or notes directly to us. You may
request your brokers, dealers, commercial banks, trust companies, or nominees to
make the exchange on your behalf.
Unless you are a registered holder who requests that the exchange notes to
be mailed to you and issued in your name, or unless you are an eligible
institution, you must have your signature guaranteed on a letter of transmittal
or a notice of withdrawal by an eligible institution. An eligible institution is
a firm which is a financial institution that is a member of a registered
national securities exchange or a participant in the Securities Transfer Agents
Medallion Program, the New York Stock Exchange Medallion Signature Program or
the Stock Exchanges Medallion Program.
If the person who signs the letter of transmittal and tenders the old notes
is not the registered holder of the old notes, the registered holders must
endorse the old notes or sign a written instrument of transfer or exchange that
is included with the old notes, with the
23
registered holder's signature guaranteed by an eligible institution. We will
decide whether the endorsement or transfer instrument is satisfactory.
We will decide all questions about the validity, form, eligibility,
acceptance and withdrawal of tendered old notes, and our determination will be
final and binding on you. We reserve the absolute right to:
(1) reject any and all tenders of any particular note not properly
tendered;
(2) refuse to accept any old note if, in our judgment or the judgment of
our counsel, the acceptance would be unlawful; and
(3) waive any defects or irregularities or conditions of the exchange offer
as to any particular old note either before or after the expiration
date. This includes the right to waive the ineligibility of any holder
who seeks to tender old notes in the exchange offer.
Our interpretation of the terms and conditions of the exchange offer,
including the instructions in the letter of transmittal, will be final and
binding on all parties. You must cure any defects or irregularities in
connection with tenders of old notes as we will determine. Neither we, the
exchange agent nor any other person will incur any liability for failure to
notify you of any defect or irregularity with respect to your tender of old
notes.
If the letter of transmittal is signed by a person or persons other than
the registered holder or holders of outstanding old notes, the outstanding old
notes must be endorsed or accompanied by powers of attorney, in either case
signed exactly as the name or names of the registered holder or holders that
appear on the outstanding old notes.
If trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity sign the letter of transmittal or any notes or power of attorney on
your behalf, those persons must indicate their capacity when signing, and submit
satisfactory evidence to us with the letter of transmittal demonstrating their
authority to act on your behalf.
To participate in the exchange offer, we require that you represent to us
that:
(1) you or any other person acquiring exchange notes for your outstanding
old notes in the exchange offer is acquiring them in the ordinary
course of business;
(2) neither you nor any other person acquiring exchange notes in exchange
for your outstanding old notes is engaging in or intends to engage in a
distribution of the exchange notes issued in the exchange offer;
(3) neither you nor any other person acquiring exchange notes in exchange
for your outstanding old notes has an arrangement or understanding with
any person to participate in the distribution of exchange notes issued
in the exchange offer;
(4) neither you nor any other person acquiring exchange notes in exchange
for your outstanding old notes is our "affiliate" as defined under Rule
405 of the Securities Act; and
(5) if you or another person acquiring exchange notes for your outstanding
old notes is a broker-dealer, you will receive exchange notes for your
own account, you acquired exchange notes as a result of market-making
activities or other trading activities, and you acknowledge that you
will deliver a prospectus in connection with any resale of your
exchange notes.
Broker-dealers who cannot make the representations in item (5) of the
paragraph above cannot use this exchange offer prospectus in connection with
resales of the exchange notes issued in the exchange offer.
24
If you are our "affiliate," as defined under Rule 405 of the Securities
Act, you are a broker-dealer who acquired your outstanding old notes in the
initial offering and not as a result of market-making or trading activities, or
if you are engaged in or intend to engage in or have an arrangement or
understanding with any person to participate in a distribution of exchange notes
acquired in the exchange offer, you or that person:
(1) may not rely on the applicable interpretations of the staff of the
Commission; and
(2) must comply with the registration and prospectus delivery requirements
of the Securities Act when reselling the exchange notes.
ACCEPTANCE OF OUTSTANDING OLD NOTES FOR EXCHANGE; DELIVERY OF EXCHANGE NOTES
ISSUED IN THE EXCHANGE OFFER
We will accept validly tendered old notes when the conditions to the
exchange offer have been satisfied or we have waived them. We will have accepted
your validly tendered old notes when we have given oral or written notice to the
exchange agent. The exchange agent will act as agent for the tendering holders
for the purpose of receiving the exchange notes from us. If we do not accept any
tendered old notes for exchange because of an invalid tender or other valid
reason, the exchange agent will return the certificates, without expense, to the
tendering holder. If a holder has tendered old notes by book-entry transfer, we
will credit the notes to an account maintained with The Depository Trust
Company. We will return certificates or credit the account at The Depository
Trust Company as promptly as practicable after the exchange offer terminates or
expires.
BOOK-ENTRY TRANSFERS
The exchange agent will make a request to establish an account at The
Depository Trust Company for purposes of the exchange offer within two business
days after the date of this prospectus. Any financial institution that is a
participant in The Depository Trust Company's systems must make book-entry
delivery of outstanding old notes by causing The Depository Trust Company to
transfer those outstanding old notes into the exchange agent's account at The
Depository Trust Company in accordance with The Depository Trust Company's
Automated Tender Offer Procedures. The participant should transmit its
acceptance to The Depository Trust Company on or before the expiration date or
comply with the guaranteed delivery procedures described below. The Depository
Trust Company will verify acceptance, execute a book-entry transfer of the
tendered outstanding old notes into the exchange agent's account at The
Depository Trust Company and then send to the exchange agent confirmation of the
book-entry transfer. The confirmation of the book-entry transfer will include an
agent's message confirming that The Depository Trust Company has received an
express acknowledgment from the participant that the participant has received
and agrees to be bound by the letter of transmittal and that we may enforce the
letter of transmittal against the participant. Delivery of exchange notes issued
in the exchange offer may be effected through book-entry transfer at The
Depository Trust Company. However, the letter of transmittal or facsimile of it
or an agent's message, with any required signature guarantees and any other
required documents, must:
(1) be transmitted to and received by the exchange agent at the address
listed below under "Exchange Agent" on or before the expiration date;
or
(2) the guaranteed delivery procedures described below must be complied
with.
GUARANTEED DELIVERY PROCEDURES
If you are a registered holder of outstanding old notes who desires to
tender old notes but your old notes are not immediately available, or time will
not permit your old notes or other
25
required documents to reach the exchange agent before the expiration date, or
the procedure for book-entry transfer cannot be completed on a timely basis, you
may effect a tender if:
(1) you tender the old notes through an eligible institution;
(2) before the expiration date, the exchange agent received from the
eligible institution a notice of guaranteed delivery in the form we
have provided. The notice of guaranteed delivery will state the name
and address of the holder of the old notes being tendered and the
amount of old notes being tendered, that the tender is being made and
guarantee that within three New York Stock Exchange trading days after
the notice of guaranteed delivery is signed, the certificates for all
physically tendered old notes, in proper form for transfer, or a
book-entry confirmation, together with a properly completed and signed
letter of transmittal with any required signature guarantees and any
other documents required by the letter of transmittal will be deposited
by the eligible institution with the exchange agent; and
(3) the certificates for all physically tendered outstanding old notes, in
proper form for transfer, or a book-entry confirmation, together with a
properly completed and signed letter of transmittal with any required
signature guarantees and all other documents required by the letter of
transmittal, are received by the exchange agent within five New York
Stock Exchange trading days after the date of execution of the notice
of guaranteed delivery.
WITHDRAWAL RIGHTS
You may withdraw your tender of outstanding notes at any time before 5:00
p.m., New York City time, on the expiration date.
For a withdrawal to be effective, you must make sure that, before 5:00
p.m., New York City time, on the expiration date, the exchange agent
receives a written notice of withdrawal at one of the addresses below or,
if you are a participant of The Depository Trust Company, an electronic
message using The Depository Trust Company's Automated Tender Offer
Program.
A notice of withdrawal must:
(1) specify the name of the person that tendered the old notes to be
withdrawn;
(2) identify the old notes to be withdrawn, including the principal amount
at maturity of the old notes;
(3) be signed by the holder in the same manner as the original signature on
the letter of transmittal by which the old notes were tendered or be
accompanied by documents of transfer; and
(4) if you have transmitted certificates for outstanding old notes, specify
the name in which the old notes are registered, if different from that
of the withdrawing holder, and identify the serial numbers of the
certificates.
If you have tendered old notes under the book-entry transfer procedure,
your notice of withdrawal must also specify the name and number of an account at
The Depository Trust Company to which your withdrawn old notes can be credited.
We will decide all questions as to the validity, form and eligibility of
the notices and our determination will be final and binding on all parties. Any
tendered old notes that you withdraw will be not be considered to have been
validly tendered. We will return any outstanding old notes that have been
tendered but not exchanged, or credit them to The Depository Trust
26
Company account, as soon as practicable after withdrawal, rejection of tender,
or termination of the exchange offer. You may retender properly withdrawn old
notes by following one of the procedures described above before the expiration
date.
CONDITIONS TO THE EXCHANGE OFFER
We are not required to accept for exchange, or to issue exchange notes in
exchange for, any outstanding old notes. We may terminate or amend the exchange
offer, if at any time before the acceptance of outstanding notes:
(1) any federal law, statute, rule or regulation has been adopted or
enacted which, in our judgment, would reasonably be expected to impair
our ability to proceed with the exchange offer;
(2) if any stop order is threatened or in effect with respect to the
registration statement which this prospectus is a part of or the
qualification of the indenture under the Trust Indenture Act of 1939;
or
(3) there is a change in the current interpretation by the staff of the
Commission which permits holders who have made the required
representations to us to resell, offer for resale, or otherwise
transfer exchange notes issued in the exchange offer without
registration of the exchange notes and delivery of a prospectus, as
discussed above.
These conditions are for our sole benefit and we may assert or waive them
at any time and for any reason. However, the exchange offer will remain open for
at least five business days following any waiver of the preceding conditions.
Our failure to exercise any of the foregoing rights will not be a waiver of our
rights.
EXCHANGE AGENT
You should direct all signed letters of transmittal to the exchange agent,
The Bank of New York. You should direct questions, requests for assistance, and
requests for additional copies of this prospectus, the letter of transmittal and
the notice of guaranteed delivery to the exchange agent addressed as follows:
<Table>
By Registered or Certified By Hand Delivery By Overnight Courier and By
Mail: (before 4:30 p.m.): Hand after 4:30 p.m. on the
Expiration Date:
The Bank of New York, The Bank of New York,
101 Barclay Street, 7 East 101 Barclay Street, 7 East The Bank of New York,
New York, New York 10286 New York, New York 10286 101 Barclay Street, 7 East
Attn: Corporate Trust Attn: Corporate Trust New York, New York 10286
Operations Operations Attn: Corporate Trust
Operations
</Table>
By Facsimile:
(212) 298-1915
Attn: Customer Service
Confirm by telephone:
(212) 815-6331
Delivery or fax of the letter of transmittal to an address or number other
than those above is not a valid delivery of the letter of transmittal.
27
FEES AND EXPENSES
We will not make any payment to brokers, dealers, or others soliciting
acceptances of the exchange offer except for reimbursement of mailing expenses.
We will pay the estimated cash expenses connected with the exchange offer.
We estimate that these expenses will be approximately $175,000.
ACCOUNTING TREATMENT
The exchange notes will be recorded at the same carrying value as the
existing old notes, as reflected in our accounting records on the date of
exchange. Accordingly, we will recognize no gain or loss for accounting
purposes. The expenses of the exchange offer will be expensed over the term of
the exchange notes.
TRANSFER TAXES
If you tender outstanding old notes for exchange you will not be obligated
to pay any transfer taxes. However, if you instruct us to register exchange
notes in the name of, or request that your old notes not tendered or not
accepted in the exchange offer be returned to, a person other than you, you will
be responsible for paying any transfer tax owed.
You May Suffer Adverse Consequences if You Fail to Exchange Outstanding
Exchange Notes
If you do not tender your outstanding old notes, you will not have any
further registration rights, except for the rights described in the registration
rights agreements and described above, and your old notes will continue to be
subject to restrictions on transfer when we complete the exchange offer.
Accordingly, if you do not tender your notes in the exchange offer, your ability
to sell your old notes could be adversely affected. Once we have completed the
exchange offer, holders who have not tendered notes will not continue to be
entitled to any increase in interest rate that the indenture provides for if we
do not complete the exchange offer.
Holders of the exchange notes issued in the exchange offer and old notes
that are not tendered in the exchange offer will vote together as a single class
under the indenture governing the Notes.
Consequences of Exchanging Outstanding Old Notes
If you make the representations that we discuss above, we believe that you
may offer, sell or otherwise transfer the exchange notes to another party
without registration of your notes or delivery of a prospectus.
We base our belief on interpretations by the staff of the Commission in
no-action letters issued to third parties. If you cannot make these
representations, you cannot rely on this interpretation by the Commission's
staff and you must comply with the registration and prospectus delivery
requirements of the Securities Act in connection with a resale of the old notes.
A broker-dealer that receives exchange notes for its own account in exchange for
its outstanding old notes must acknowledge that it acquired as a result of
market making activities or other trading activities and that it will deliver a
prospectus in connection with any resale of the exchange notes. Broker-dealers
who can make these representations may use this exchange offer prospectus, as
supplemented or amended, in connection with resales of exchange notes issued in
the exchange offer.
However, because the Commission has not issued a no-action letter in
connection with this exchange offer, we cannot be sure that the staff of the
Commission would make a similar determination regarding the exchange offer as it
has made in similar circumstances.
28
SHELF REGISTRATION
The registration rights agreement also requires that we file a shelf
registration statement if:
(1) we cannot file a registration statement for the exchange offer because
the exchange offer is not permitted by law;
(2) law or Commission policy prohibits a holder from participating in the
exchange offer;
(3) a holder cannot resell the exchange notes it acquires in the exchange
offer without delivering a prospectus and this prospectus is not
appropriate or available for resales by the holder; or
(4) a holder is a broker-dealer and holds notes acquired directly from us
or one of our affiliates.
We will also register the exchange notes under the securities laws of
jurisdictions that holders may request before offering or selling notes in a
public offering. We do not intend to register exchange notes in any jurisdiction
unless a holder requests that we do so.
Old notes will be subject to restrictions on transfer until:
(1) a person other than a broker-dealer has exchanged the old notes in the
exchange offer;
(2) a broker-dealer has exchanged the old notes in the exchange offer and
sells them to a purchaser that receives a prospectus from the broker,
dealer on or before the sale;
(3) the old notes are sold under an effective shelf registration statement
that we have filed; or
(4) the old notes are sold to the public under Rule 144 of the Securities
Act.
29
THE REFINANCING TRANSACTIONS
In connection with the offering of the old notes, we have consummated the
following refinancing transactions, which we refer to as the other refinancing
transactions.
REPAYMENT OF EXISTING INDEBTEDNESS
Concurrently with the closing of the offering of the old notes, we paid in
full our obligations under the existing senior and subordinated credit
facilities. At the closing, we had $4.0 million of outstanding borrowings
(including applicable accrued interest) under the existing senior secured credit
facility and $9.1 million of outstanding borrowings (including applicable
accrued interest) under the existing subordinated credit facility.
REDEMPTION OF SENIOR NOTES
In connection with the offering of the old notes we redeemed the $125.0
million in principal amount of our 9 3/4% senior notes due 2004. We redeemed
these notes pursuant to their terms at a redemption price of 102.438% of the
principal amount plus accrued and unpaid interest.
REDEMPTION OF SENIOR PREFERRED STOCK
Concurrently with the closing of the offering of the old notes, we redeemed
all of our issued and outstanding shares of senior preferred stock, of which
Farallon Capital Partners, L.P. and its affiliates held 50.0%, Canterbury
Mezzanine Capital, L.P. and its affiliates held 37.5% and Rosewood Capital, L.P.
held 12.5%. As of April 16, 2003, the redemption date, the aggregate redemption
value of the senior preferred stock was $67.0 million. See "Security Ownership
and Certain Beneficial Owners."
NEW SENIOR SECURED REVOLVING CREDIT FACILITY
Concurrently with the closing of the offering of the old notes, we entered
into a new senior secured revolving credit facility with a syndicate of
financial institutions for which Deutsche Bank Trust Company Americas acts as
administrative agent and Deutsche Bank Securities Inc. and BNP Paribas
Securities Corp. act as joint lead arrangers. The new senior secured revolving
credit facility is a five-year facility providing for borrowings of up to $50.0
million (with a sub-facility for the issuance of letters of credit), none of
which was drawn at closing. See "Description of Senior Secured Revolving Credit
Facility."
30
USE OF PROCEEDS
The old notes were sold to the initial purchasers on April 16, 2003. The
proceeds from the offering of the old notes were $255.0 million less discounts
and commissions to the initial purchasers. The net proceeds from the offering of
the old notes were used to repay the existing senior and subordinated credit
facilities, redeem the $125.0 million in principal amount of our 9 3/4% senior
notes due 2004 (including applicable accrued interest and call premium), redeem
our senior preferred stock, pay related fees and expenses and for general
corporate purposes.
We will not receive any cash proceeds from the issuance of the exchange
notes in the exchange offer. In consideration for issuing the exchange notes as
contemplated in this prospectus, we will receive existing old notes in equal
principal amount at maturity, the terms of which are the same in all material
respects to the exchange notes. The old notes surrendered in exchange for the
exchange notes will be retired or cancelled and not reissued. Accordingly, the
issuance of the exchange notes will not result in any increase or decrease in
our debt.
31
CAPITALIZATION
The following table sets forth our consolidated cash and cash equivalents
and capitalization as of March 31, 2003 on an actual basis and as adjusted to
give effect to the offering of the old notes and the application of the net
proceeds and the other refinancing transactions in connection with the old note
offering. This table should be read in conjunction with our consolidated
financial statements and the related notes to the consolidated financial
statements included elsewhere in this offering memorandum. All amounts are
presented in thousands.
<Table>
<Caption>
AS OF MARCH 31, 2003
----------------------
ACTUAL AS ADJUSTED
-------- -----------
Cash and cash equivalents................................... $ 9,052 $ 41,663(1)
======== ========
Debt:
New senior secured revolving credit facility.............. $ -- $ --(2)
Existing senior credit facility........................... 4,000 --
Notes payable for acquired businesses..................... 5,659 5,659
Capitalized lease obligations............................. 5,179 5,179
9 3/4% Senior notes due 2004.............................. 125,000 --
9 5/8% Senior notes due 2011.............................. -- 255,000
Existing subordinated credit facility..................... 9,000 --
-------- --------
Total debt.................................................. 148,838 265,838
Redeemable Senior preferred stock........................... 64,089 --
Redeemable Series A preferred stock......................... 36,061 36,061
Total shareholders' deficit................................. (29,437) (35,763)
-------- --------
Total capitalization...................................... $219,551 $266,136
======== ========
</Table>
- ---------------
(1) Does not reflect payments associated with accretion on our senior preferred
stock or accrual of interest on our existing indebtedness for periods
subsequent to March 31, 2003.
(2) Does not reflect $50.0 million in revolving credit loans and letters of
credit available under our new senior secured revolving credit facility.
32
SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA
The following table presents our selected consolidated historical financial
and other data, which you should read in conjunction with "Use of Proceeds,"
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and our consolidated financial statements and related notes included
elsewhere in this offering memorandum. In 1998, we changed our fiscal year end
from May 31 to December 31, which resulted in a transition period of seven
months ended December 31, 1998. The decision to change the fiscal year was made
for more convenience in both internal and external communications. The selected
consolidated financial and other data as of and for each of the years in the
three year period ended December 31, 2002 were derived from our audited
consolidated financial statements included elsewhere in this offering
memorandum. The selected consolidated financial and other data as of and for
each of the three month periods ended March 31, 2002 and 2003 were derived from
our unaudited consolidated financial statements included elsewhere in this
prospectus. The selected consolidated financial and other data as of and for the
year ended December 31, 1999, the seven months ended December 31, 1998 and for
the year ended May 31, 1998 have been derived from our audited consolidated
financial statements which are not included in this prospectus. All amounts are
presented in thousands, except club membership and other data.
<Table>
<Caption>
TWELVE SEVEN
MONTHS MONTHS THREE MONTHS ENDED
ENDED ENDED YEARS ENDED DECEMBER 31, MARCH 31,
MAY 31, DECEMBER 31, ----------------------------------------- -------------------
1998 1998 1999 2000 2001 2002 2002 2003
------- ------------ -------- -------- -------- -------- -------- --------
STATEMENT OF OPERATIONS
DATA:
Revenues................ $81,610 $70,641 $158,184 $223,828 $281,633 $319,427 $76,874 $86,902
Operating expenses:
Payroll and related... 34,535 28,113 63,838 90,801 112,766 129,105 31,034 32,770
Club operating........ 25,634 23,943 52,048 68,806 88,941 99,113 24,150 26,662
General and
administrative...... 5,773 5,765 10,797 14,626 18,785 21,368 4,941 5,021
Depreciation and
amortization(1)..... 7,520 8,578 20,513 26,248 32,185 31,748 7,857 8,299
------- ------- -------- -------- -------- -------- ------- -------
Operating income........ 8,148 4,242 10,988 23,347 28,956 38,093 8,892 14,150
Interest expense, net of
interest income(2).... 7,308 5,279 10,243 13,120 14,527 16,421 4,085 4,210
------- ------- -------- -------- -------- -------- ------- -------
Income (loss) from
continuing operations
before provision
(benefit) for
corporate income
taxes................. 840 (1,037) 745 10,227 14,429 21,672 4,807 9,940
Provision (benefit) for
corporate income
taxes................. 494 (431) 622 5,031 6,853 9,709 2,387 4,099
------- ------- -------- -------- -------- -------- ------- -------
</Table>
33
<Table>
<Caption>
TWELVE SEVEN
MONTHS MONTHS THREE MONTHS ENDED
ENDED ENDED YEARS ENDED DECEMBER 31, MARCH 31,
MAY 31, DECEMBER 31, ----------------------------------------- -------------------
1998 1998 1999 2000 2001 2002 2002 2003
------- ------------ -------- -------- -------- -------- -------- --------
Income (loss) from
continuing
operations............ 346 (606) 123 5,196 7,576 11,963 2,420 5,841
Income (loss) from
discontinued
operations of closed
clubs (including loss
on club closure of
$996 in 2002), net of
income taxes(3)....... 19 46 (74) (365) (530) (767) (66) --
Cumulative effect of
change in accounting
principle, net of
income tax benefit of
$612(4)............... (88) -- -- -- -- (689) (689) --
------- ------- -------- -------- -------- -------- ------- -------
Net income (loss)....... 277 (560) 49 4,831 7,046 10,507 1,665 5,841
Accreted dividends on
preferred stock....... (2,387) (2,146) (7,880) (9,016) (10,201) (11,543) (2,779) (3,226)
------- ------- -------- -------- -------- -------- ------- -------
Net income (loss)
attributable to common
stockholders.......... $(2,110) $(2,706) $ (7,831) $ (4,185) $ (3,155) $ (1,036) $(1,114) $ 2,615
======= ======= ======== ======== ======== ======== ======= =======
</Table>
<Table>
<Caption>
AS OF DECEMBER 31, AS OF MARCH 31,
---------------------------------------------------- ---------------
1998 1999 2000 2001 2002 2003
-------- -------- -------- -------- -------- ---------------
BALANCE SHEET DATA:
Working capital (deficit)(5)....... $ 478 $ (1,015) $(38,414) $(42,565) $(43,192) $(45,284)
Total assets....................... 157,416 215,678 256,085 296,005 314,250 312,517
Long-term debt, including current
installments..................... 89,524 132,202 144,498 163,979 160,943 148,838
Redeemable senior preferred stock.. 36,735 42,066 48,029 54,687 62,125 64,089
Redeemable Series A preferred
stock(6)......................... 20,351 23,216 26,580 30,432 34,841 36,061
Total stockholders' deficit........ $(22,684) $(28,813) $(30,491) $(32,797) $(31,740) $(29,437)
</Table>
34
<Table>
<Caption>
TWELVE SEVEN
MONTHS MONTHS THREE MONTHS ENDED
ENDED ENDED YEARS ENDED DECEMBER 31, MARCH 31,
MAY 31, DECEMBER 31, ----------------------------------------- -------------------
1998 1998 1999 2000 2001 2002 2002 2003
-------- ------------ -------- -------- -------- -------- -------- --------
OTHER FINANCIAL DATA:
Cash provided by (used in):
Operating activities........ $ 15,733 $ 7,393 $ 29,496 $ 40,573 $ 44,348 $ 50,805 $ 20,569 $ 23,606
Investing activities........ (36,040) (47,352) (55,078) (70,048) (58,358) (40,182) (19,093) (7,418)
Financing activities........ 40,836 36,116 33,553 5,715 16,103 (10,530) (1,105) (12,687)
Reconciliation of cash flows
provided by operating
activities and net income
(loss) to EBITDA
Net cash provided by
operating activities........ $ 15,733 $ 7,393 $ 29,496 $ 40,573 $ 44,348 $ 50,805 $ 20,569 $ 23,606
Compensation expense
incurred in connection
with stock options........ (1,442) (434) (2,042) (1,836) (1,149) (1,207) (281) (187)
Depreciation and
amortization(1)........... (7,520) (8,578) (20,513) (26,248) (32,185) (31,748) (7,857) (8,299)
Depreciation and
amortization of
discontinued clubs........ (216) (240) (422) (394) (482) (277) (108) --
Goodwill impairment write-
off....................... -- -- -- -- -- (1,301) (1,301) --
Club closure costs.......... -- -- -- -- -- (996) -- --
Amortization of debt
issuance costs............ (412) (363) (1,147) (1,531) (1,882) (1,928) (471) (597)
Losses from extinguishment
of debt................... (1,406) -- -- -- -- -- -- --
Write-off of organization
costs..................... (158) -- -- -- -- -- -- --
Noncash rental expense, net
of noncash rental
income.................... (2,670) (1,493) (3,061) (2,976) (4,224) (1,670) (713) (522)
Net change in certain
working capital
components................ (4,316) (204) (9,596) (9,392) (3,475) (2,413) (10,573) (5,564)
Increase (decrease) in
deferred tax asset........ 1,187 1,411 3,259 3,326 4,526 1,162 1,413 (2,903)
Increase (decrease) in
deferred membership
costs..................... 1,403 2,072 3,836 2,745 1,162 (340) 856 160
Other....................... 94 (124) 239 564 407 420 131 147
-------- -------- -------- -------- -------- -------- -------- --------
Net income (loss)............ $ 277 $ (560) $ 49 $ 4,831 $ 7,046 $ 10,507 $ 1,665 $ 5,841
Depreciation and
amortization.............. 7,520 8,578 20,513 26,248 32,185 31,748 7,857 8,299
Interest expense, net of
interest income(2)........ 7,308 5,279 10,243 13,120 14,527 16,421 4,085 4,210
Provision (benefit) for
corporate income tax...... 494 (431) 622 5,031 6,853 9,709 2,387 4,099
(Income) loss from
discontinued operations or
closed clubs, net of
income taxes(3)........... (19) (46) 74 365 530 767 66 --
Cumulative effect of a
change in accounting
policy(4)................. 88 -- -- -- -- 689 689 --
-------- -------- -------- -------- -------- -------- -------- --------
EBITDA(7).................... $ 15,668 $ 12,820 $ 31,501 $ 49,595 $ 61,141 $ 69,841 $ 16,749 $ 22,449
======== ======== ======== ======== ======== ======== ======== ========
EBITDA Margin(7)............ 19.2% 18.1% 19.9% 22.2% 21.7% 21.9% 21.8% 25.8%
</Table>
35
<Table>
<Caption>
TWELVE SEVEN
MONTHS MONTHS THREE MONTHS ENDED
ENDED ENDED YEARS ENDED DECEMBER 31, MARCH 31,
MAY 31, DECEMBER 31, ----------------------------------------- -------------------
1998 1998 1999 2000 2001 2002 2002 2003
-------- ------------ -------- -------- -------- -------- -------- --------
CLUB, MEMBERSHIP AND OTHER
DATA:
New clubs opened(8).......... 1 4 14 9 12 8 6 --
Clubs acquired(8)............ 13 16 4 11 2 4 1 --
Closed or sold clubs......... -- -- -- -- -- (2) -- --
Wholly owned clubs operated
at end of period(8)......... 45 65 82 103 117 127 124 127
Total clubs operated at end
of period(9)................ 49 69 86 105 119 129 126 129
Members at end of
period(10).................. 125,100 178,700 203,100 278,000 317,000 342,000 330,000 356,000
Mature club revenue
increase(11)................ 12.6% 16.8% 16.0% 18.6% 12.3% 4.1% 3.8% 1.8%
Revenue per weighted average
club (in thousands)(12)..... $ 2,287 $ 1,184 $ 2,130 $ 2,428 $ 2,619 $ 2,606 $ 653 $ 684
Ratio (deficiency) of
earnings to fixed
charges(13)................. 1.0:1.0 $ (1,329) 1.0:1.0 1.4:1.0 1.5:1.0 1.7:1.0 1.6:1.0 2.2:1.0
</Table>
- ------------
(1) Effective January 1, 2002 we implemented Statement of Financial Accounting
Standards ("SFAS") No. 142 ("SFAS 142"), Goodwill and Other Intangible
Assets. In connection with SFAS 142 we no longer amortize goodwill, but
rather test it for impairment when circumstances indicate it is necessary,
and at a minimum annually. A reconciliation of reported net income to net
income adjusted for the impact of SFAS 142 is as follows for the periods
presented:
<Table>
<Caption>
TWELVE SEVEN
MONTHS MONTHS
ENDED ENDED
MAY 31, DECEMBER 31, YEARS ENDED DECEMBER 31,
------- ------------ ---------------------------
1998 1998 1999 2000 2001
------- ------------ ------- ------- -------
Net income (loss) as reported..................... $ 277 $(560) $ 49 $ 4,831 $ 7,046
Goodwill amortization, net of income taxes........ 489 877 1,650 2,481 3,092
----- ----- ------- ------- -------
Net income as adjusted............................ $ 766 $ 317 $ 1,699 $ 7,312 $10,138
===== ===== ======= ======= =======
</Table>
(2) Interest expense for the year ended May 31, 1998 includes the write-off of
$1,406 of previously capitalized fees and expenses related to the repayment
of certain indebtedness.
(3) In the forth quarter of 2002, we closed two remote underperforming,
wholly-owned clubs. In connection with the closure of one of the clubs, we
recorded club closure costs of $996 related to the write-off fixed assets.
We have accounted for these two clubs as discontinued operations and,
accordingly, the results of their operations have been classified as
discontinued in the Consolidated Statement of Operations and prior periods
have been reclassified in accordance with Statement of Financial Accounting
Standards ("SFAS") No. 144, Accounting for the Impairment of Long-Lived
Assets and Long-Lived Assets To Be Disposed Of.
Income (loss) from operations and tax benefit for these discontinued clubs
were as follows for the periods presented:
<Table>
<Caption>
TWELVE SEVEN THREE
MONTHS MONTHS MONTHS
ENDED ENDED ENDED
MAY 31, DECEMBER 31, YEARS ENDED DECEMBER 31, MARCH 31,
------- ------------ ------------------------------- ---------
1998 1998 1999 2000 2001 2002 2002
------- ------------ ----- ----- ----- ------- ---------
Income (loss) from operations of
discontinued clubs (including loss of
club closure of $996 in 2002)........ $32 $78 $(125) $(597) $(894) $(1,318) $(114)
Provision (benefit) for corporate
income tax........................... 13 32 (51) (232) (364) (551) (48)
--- --- ----- ----- ----- ------- -----
Income (loss) from discontinued
operations........................... $19 $46 $ (74) $(365) $(530) $ (767) $ (66)
=== === ===== ===== ===== ======= =====
</Table>
36
(4) Prior to fiscal 1998, we capitalized direct costs incurred to obtain leases
for new clubs to be constructed by us. During the quarter ended May 31,
1998, we adopted the provisions of Statement of Position 98-5 Reporting on
the Costs of Start-up Activities ("SOP 98-5") which requires that these
costs be expensed as incurred. In connection with the adoption of SOP 98-5,
effective June 1, 1997, we recorded a charge of $88 net of $70 in taxes, as
the cumulative effect of this accounting change.
Effective January 1, 2002 we implemented SFAS 142. In connection with SFAS
142 transitional impairment test we recorded a $1.3 million write-off of
goodwill. A deferred tax benefit of $612 was recorded as a result of this
goodwill write-off, resulting in a net cumulative effect of change in
accounting principle of $689 in 2002. The write-off of goodwill related to
four remote, underperforming clubs. The impairment rest was performed with
discounted estimated future cash flows the criteria for determining fair
market value.
(5) Working capital deficit is calculated as current assets less current
liabilities. We normally operate with a working capital deficit because we
receive dues or fee revenue either (i) during the month services are
rendered, or (ii) when paid-in-full in advance. As a result, we have no
material accounts receivable, and record a deferred revenue liability for
membership or ancillary services billed in advance. We also record deferred
revenue liability, because initiation fees are received at enrollment and
are deferred and recognized over the estimated average term of a
membership.
(6) We have 153,637 shares of Series A Redeemable Preferred Stock ("Series A")
outstanding at March 31, 2003. We have reclassified our 2001 financial
statements to account for a redemption feature included in the Series A
stock, in accordance with the guidance in EITF Topic No. D-98:
Classification and Measurement of Redeemable Securities ("EITF Topic No.
D-98"). EITF Topic No. D-98 provided additional guidance on the appropriate
classification of redeemable preferred stock upon the occurrence of an
event that is not solely within the control of an issuer. EITF Topic No.
D-98 requires retroactive application in the first fiscal quarter ending
after December 15, 2001 by reclassifying the financial statements of prior
periods. The carrying value of the Series A stock, which was previously
presented as a component of stockholders' deficit, has been reclassified as
redeemable preferred stock outside of stockholders' deficit. The
reclassification of the 2001 financial statements for the Series A stock
had no effect on our net income, net loss attributable to common
stockholders or total assets. The following sets forth the overall effect
of the reclassification on our stockholders' deficit at December 31, 2001:
<Table>
Stockholders' deficit prior to reclassification............. $ (2,365)
Reclassification of Series A stock.......................... (30,432)
--------
Stockholders' deficit after the reclassification............ $(32,797)
========
</Table>
All periods presented in the balance sheet data above have been
reclassified.
(7) EBITDA is defined as earnings before interest, taxes, depreciation and
amortization, extraordinary loss and cumulative effect of change in
accounting policy. EBITDA is presented because we believe it provides
useful information regarding our liquidity. Our Senior Note holders and our
principle bank often measure our liquidity with EBITDA. EBITDA should not
be considered in isolation or as a substitute for net income, cash flows,
or other consolidated income (loss) or cash flow data prepared in
accordance with Generally Accepted Accounting Principles in the United
States of America ("GAAP"). EBITDA Margin is defined as EBITDA as a
percentage of revenues. Additionally, investors should be aware that EBITDA
may not be comparable to similarly titled measures presented by other
companies.
(8) During fiscal 1998, we opened or acquired 14 clubs and acquired three
formerly partly-owned clubs. During calendar 1998, we acquired one formerly
partly-owned club. During 1999 we relocated one club. During 2000, we
acquired two formerly partly-owned clubs and relocated one club upon the
expiration of its lease.
(9) Includes wholly-owned or partly-owned and managed clubs.
(10) Represents members at wholly-owned or partly-owned and managed clubs.
(11) We define mature clubs as those clubs operated by us for more than 24
months.
(12) Revenue per weighted average club is calculated as club revenue divided by
the product of the total numbers of clubs and their weighted average months
in operation as a percentage of the total year, seven months ended or three
months ended, as applicable.
(13) For the purpose of determining the ratio of earnings to fixed charges,
"earnings" consist of income from continuing operations before provision
for corporate income taxes and fixed charges. "Fixed charges" consist of
interest expense, which includes the amortization of deferred debt issuance
costs and the interest portion of our rent expense (assumed to be one third
of rent expense, which is an appropriate representative of the interest
factor). The ratio of earnings to fixed charges for the year ended December
31, 2002 and the three months ended March 31, 2003 adjusted for the debt
offering on a pro forma basis are 1.3 : 1.0 and 1.7 : 1.0, respectively.
37
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the "Selected
Consolidated Financial and Other Data" and our consolidated financial statements
and the related notes included elsewhere in this offering memorandum. This
offering memorandum contains, in addition to historical information,
forward-looking statements that include risks and uncertainties. Our actual
results may differ materially from those anticipated in these forward-looking
statements. The following discussion makes reference to EBITDA, which is defined
as earnings before interest, taxes, depreciation and amortization, extraordinary
charges and cumulative effect of changes in accounting policy. Investors should
be aware that the items excluded from the calculation of EBITDA, such as
depreciation and amortization, are significant components in an accurate
assessment of our financial performance. EBITDA is presented because we believe
it provides useful information regarding our ability to incur and/or service
debt. EBITDA should not be considered in isolation or as a substitute for net
income, cash flows, or other consolidated income or cash flow data prepared in
accordance with GAAP or as a measure of our profitability or liquidity.
Additionally, investors should be aware that EBITDA may not be comparable to
similarly titled measures presented by other companies.
HISTORICAL CLUB GROWTH
<Table>
<Caption>
SEVEN THREE
MONTHS MONTHS
ENDED ENDED
YEAR ENDED DECEMBER MARCH
MAY 31, 31, YEAR ENDED DECEMBER 31, 31,
----------- -------- ------------------------- ------
1997 1998 1998 1999 2000 2001 2002 2003
---- ---- -------- ---- ---- ---- ---- ------
Clubs at beginning of period........ 28 35 49 69 86 105 119 129
Greenfield clubs(a)................. 3 1 4 14 9 12 8 --
Acquired clubs...................... 5 13 16 4 11 2 4 --
Sold, relocated or closed clubs..... (1) -- -- (1) (1) -- (2) --
--- -- -- -- --- --- --- ---
Clubs at end of period(b)........... 35 49 69 86 105 119 129 129
=== == == == === === === ===
Number of partly owned clubs
included at the end of the
period(c)......................... 7 4 4 4 2 2 2 2
</Table>
- ------------
(a) A "Greenfield club" is a new location constructed by us.
(b) We include in the club count wholly owned and partly owned clubs. In
addition, as of December 31, 2002 we managed two additional clubs in which
we did not have an equity stake. As described in the September 11, 2001
Events discussion, a single club was closed from September 2001 through
August 2002 due to its proximity to the World Trade Center. This club is
included in the clubs at end of period from the year ended 2000 onward.
(c) In March 2000, two clubs previously managed by us were purchased. Including
these two clubs, the total number of clubs opened or acquired in 2000 totals
22.
OVERVIEW
We are one of the two leading owners and operators of fitness clubs in the
Northeast and Mid-Atlantic regions of the United States and are the third
largest fitness club operator in the United States, as measured by number of
clubs. As of March 31, 2003, we operated 129 clubs that collectively served
approximately 356,000 members. Our goal is to provide the premier health club
network in each of the major metropolitan regions we serve. To optimize
convenience to our members, we cluster clubs near the highest concentrations of
our target members' areas of both employment and residence. Our clusters of
clubs serve densely populated major metropolitan regions in which a high
percentage of the population commutes to
38
work. Our target member is college-educated, typically between the ages of 21
and 50 and earns an annual income of between $50,000 and $150,000.
Our operating and selling expenses are comprised of both fixed and variable
costs. The fixed costs include certain payroll expense, rent, utilities,
janitorial expenses and depreciation. Variable costs are primarily related to
sales commissions, advertising and supplies. As clubs mature and increase their
membership base, fixed costs are typically spread over an increasing revenue
base and operating margins tend to improve.
During the last several years, we have increased revenues, operating
income, net income, cash flow from operations and EBITDA by expanding our club
base in New York, Boston, Washington, D.C. and Philadelphia. As a result of our
expanding club base and the relatively fixed nature of our operating costs, our
operating income has increased from $7.4 million for the year ended December 31,
1998 to $38.1 million for the year ended December 31, 2002. Cash flows provided
by operating activities increased from $15.9 million in 1998 to $50.8 million
for the year ended December 31, 2002. Net income (loss) improved from a loss of
$283,000 in 1998 to net income of $10.5 million for the year ended December 31,
2002. EBITDA has increased from $19.5 million in 1998 to $69.8 million for the
year ended December 31, 2002, and EBITDA as a percentage of revenues has
increased from 17.9% to 21.9% over the same period. Similarly, operating income
as a percentage of revenues increased to 11.9% for the year ended December 31,
2002 compared to 6.7% in 1998, and cash flows from operations as a percentage of
revenues increased to 15.9% from 14.6% over these respective periods. Management
expects growth in revenues and EBITDA to continue as the 46 clubs opened or
acquired since the beginning of 2000 continue to mature. Based on our historical
experience, a new club tends to experience significant increase in revenues
during its first three years of operation as it reaches maturity. Because there
is relatively little incremental cost associated with such increasing revenue,
there is a greater proportionate increase in profitability. We believe that the
revenues, EBITDA and operating income of these 46 clubs will increase as they
mature. As a result of our expansion, however, EBITDA and operating income
margins may be negatively impacted in the near term, as further new clubs are
added.
We define mature clubs as those clubs that were operated by us for the
entire period of the period presented and that same entire period of the
preceding year. Under this definition, mature clubs for periods shown are those
clubs that were operated for more than 24 months. Our mature club revenue
increased 14.2%, 16.0%, 18.6%, 12.3% and 4.1%, for the years ended December 31,
1998, 1999, 2000, 2001 and 2002, respectively and 3.8% and 1.8% for the three
months ended March 31, 2002 and 2003, respectively. We believe that the decline
in mature club revenue growth has been driven primarily by general economic
softness, particularly in the New York metropolitan region, which we believe has
had an industry-wide effect. In addition, we believe that the decline in mature
club revenue growth is also attributable to increasing age of our mature clubs.
39
Results of Operations
The following table sets forth certain operating data as a percentage of
revenues for the periods indicated:
<Table>
<Caption>
THREE MONTHS
ENDED
YEARS ENDED DECEMBER 31, MARCH 31,
------------------------ -------------
2000 2001 2002 2002 2003
------ ------ ------ ----- -----
Revenues................................. 100.0% 100.0% 100.0% 100.0% 100.0%
----- ----- ----- ----- -----
Operating expenses
Payroll and related.................... 40.6 40.0 40.4 40.4 37.7
Club operating......................... 30.7 31.6 31.1 31.4 30.7
General and administrative............. 6.6 6.7 6.7 6.4 5.8
Depreciation and amortization.......... 11.7 11.4 9.9 10.2 9.5
----- ----- ----- ----- -----
Operating income....................... 10.4 10.3 11.9 11.6 16.3
Interest expense......................... 6.4 5.3 5.1 5.4 4.9
Interest income.......................... (0.6) (0.1) -- -- --
----- ----- ----- ----- -----
Income from continuing operations
before provision for corporate
income taxes........................ 4.6 5.1 6.8 6.2 11.4
Provision for corporate income taxes..... 2.2 2.4 3.1 3.1 4.7
----- ----- ----- ----- -----
Income from continuing operations........ 2.4 2.7 3.7 3.1 6.7
Loss from discontinued operations of
closed clubs, net of income tax........ (0.2) (0.2) (0.2) -- --
Cumulative effect of a change in
accounting principle, net of income tax
benefit................................ -- -- (0.2) (0.9) --
----- ----- ----- ----- -----
Net income............................... 2.2 2.5 3.3 2.2 6.7
Accreted dividends on preferred stock.... (4.0) (3.6) (3.6) (3.6) (3.7)
----- ----- ----- ----- -----
Net income (loss) attributable to common
stockholders........................... (1.8)% (1.1)% (0.3)% (1.4)% 3.0%
===== ===== ===== ===== =====
</Table>
THREE MONTHS ENDED MARCH 31, 2003 COMPARED TO THE THREE MONTHS ENDED MARCH 31,
2002
Revenues. Revenues increased approximately $10.0 million, or 13.0%, to
$86.9 million during the quarter ended March 31, 2003 from $76.9 million in the
quarter ended March 31, 2002. This increase resulted from the eleven clubs
opened or acquired during the last three quarters of 2001 (approximately $2.2
million), twelve opened or acquired during 2002 (approximately $5.2 million). In
addition, revenues increased during the quarter by approximately $1.3 million or
1.8% at the Company's mature clubs (clubs owned and operated for at least 24
months). The mature club revenue increase is due to three factors: 3.1% from
price increases, 0.6% from an increase in ancillary revenue, offset by a 1.9%
decrease in membership. Fees and other revenue increased $1.3 million
principally due to an on-account business interruption insurance payment
received in January 2003.
Operating Expenses. Operating expenses increased $4.8 million, or 7.0%, to
$72.8 million in the quarter ended March 31, 2003, from $68.0 million in the
quarter ended March 31, 2002. The increase was primarily due to a 7.8% increase
in total months of club operations (the aggregate number of full months of
operation during a given period for the clubs open at the
40
end of such period) to 387 in the quarter ended March 31, 2003 from 359 in the
quarter ended March 31, 2002, in addition to the following factors:
Payroll and related increased by $1.7 million, or 5.6% to $32.8
million in the quarter ended March 31, 2003, from $31.0 million in the
quarter ended March 31, 2002. This increase was principally attributable to
the acquisition or opening of twelve clubs in 2002.
Club operating increased by $2.5 million or 10.4% to $26.7 million in
the quarter ended March 31, 2003, from $24.2 million in the quarter ended
March 31, 2002. This increase is primarily attributable to the acquisition
or opening of twelve clubs in 2002.
General and administrative increased by $80,000, or 1.6% to $5.0
million in the quarter ended March 31, 2003.
Depreciation and amortization increased by $442,000, or 5.6% to $8.3
million in the quarter ended March 31, 2003, from $7.9 million in the
quarter ended March 31, 2002. This increase is principally due to a full
period of depreciation and amortization for fixed asset additions,
acquisitions or club openings since the quarter ended March 31, 2002.
Interest Expense. Interest expense increased $108,000 to $4.2 million
during the quarter ended March 31, 2003, from $4.1 million in the quarter ended
March 31, 2002. This increase was primarily due to increased subordinated credit
borrowings and borrowings associated with club acquisitions, partially offset by
a decrease in line of credit borrowings.
Interest Income. Interest income decreased $17,000 to $22,000 during the
quarter ended March 31, 2003 from $39,000 in the quarter ended March 31, 2002.
The decrease in interest income is due to lower interest rates in the quarter
ended March 31, 2003 when compared to the same period of 2002.
Provision for Income Tax. The income tax provision for the quarter ended
March 31, 2003 was $4.1 million compared to $2.4 million for the quarter ended
March 31, 2002.
Loss on Discontinued Operations. In the fourth quarter of 2002, we closed
two remote underperforming, wholly-owned clubs. We have accounted for these two
clubs as discontinued operations and, accordingly, the results of their
operations have been classified as discontinued in the consolidated statement of
operations and prior periods have been reclassified in accordance with the
Financial Accounting Standards Board issued Statement No. 144, Accounting for
the Impairment or Disposal of Long-lived Assets. The net loss related to these
two clubs was $66,000 for the quarter ended March 31, 2002. Revenues and pre-tax
losses for these discontinued clubs were $434,000 and $114,000 respectively in
the first quarter ended March 31, 2002.
Cumulative Effect of Change In Accounting Principle. In connection with
the January 2002 implementation of SFAS 142 we recorded a goodwill write-off of
$1.3 million. A deferred tax benefit of $612,000 was recorded in connection with
this goodwill write-off resulting in a net cumulative effect of change in
Accounting Principle of $689,000 during the quarter ended March 31, 2002.
Accreted Dividends on Preferred Stock. Accreted dividends on preferred
stock increased $447,000 to $3.2 million during the quarter ended March 31,
2003, from $2.8 million in the quarter ended March 31, 2002. This increase is a
result of the compounding of accreted dividends and an increase in the number of
Series B preferred stock outstanding.
YEAR ENDED DECEMBER 31, 2002 COMPARED TO THE YEAR ENDED DECEMBER 31, 2001
Revenues. Revenues increased $37.8 million or 13.4%, to $319.4 million
during 2002 from $281.6 million in 2001. This increase resulted from the 14
clubs opened or acquired in 2001 (approximately $17.0 million), and the 12 clubs
opened or acquired in 2002
41
(approximately $9.1 million). In addition, revenues increased during 2002 by
approximately $11.1 million or 4.1% at our mature clubs (clubs owned and
operated for at least 24 months). The mature club revenue increase is
attributable to a 1.6% increase in membership, a 2.2% increase in dues, and a
0.3% increase in ancillary revenues.
Our mature club revenue increased 18.6%, 12.3% and 4.1% for the years ended
December 31, 2000, 2001 and 2002, respectively. We believe the decline in mature
club revenue growth had been driven primarily by the general economic climate,
particularly in the New York metropolitan region, which has had an industry-wide
effect. In addition, we believe that the decline in mature club revenue growth
is also attributable to the increasing age of our mature clubs.
Operating Expenses. Operating expenses increased $28.6 million, or 11.3%
to $281.3 million in 2002, from $252.7 million in 2001. This increase was due to
a 13.9% increase in total months of club operations to 1,479 in 2002 from 1,298
in 2001. This increase was partially offset by a $437,000 decrease in
depreciation and amortization from 2001 to 2002. In accordance with SFAS 142 as
of January 1, 2002 goodwill is no longer being amortized.
Payroll and related expenses increased by $16.3 million, or 14.4% to $129.1
million in 2002, from $112.8 million in 2001. This increase was primarily
attributable to the acquisition or opening of 12 clubs in 2002 and a full year
of operating the 14 clubs opened or acquired in 2001. This increase was also
attributable to an increase in health and workers' compensation insurance, and
payroll associated with fee-for-service programs.
Club operating increased by $10.2 million, or 11.4% to $99.1 million in
2002, from $88.9 million in 2001. This increase is primarily attributable to the
acquisition or opening of 12 clubs in 2002 and the additional expenses
attributable to operating the 14 clubs opened or acquired in 2001.
General and administrative increased by $2.6 million, or 13.8% to $21.4
million in 2002, from $18.8 million in 2001. This increase is principally
attributable to a $1.3 million increase in liability and property insurance, and
increases attributable to expenses associated with our expansion, including the
enhancement of our management communication and information systems.
Depreciation and amortization decreased by $437,000, or 1.4% to $31.7
million in 2002, from $32.2 million in 2001. A $2.3 million and a $1.6 million
increase in depreciation and amortization expenses related to clubs opened or
acquired in 2001 and 2002, respectively, and was offset by a $4.3 million
decrease in goodwill amortization expense.
Interest Expense. Interest expense increased $1.6 million to $16.6 million
in 2002 from $14.9 million in 2001, primarily as a result of an increase in
subordinated credit borrowings associated with our club base expansion.
Interest Income. Interest income decreased $253,000 to $138,000 in 2002
from $391,000 in 2001. This decrease is due to lower interest rates earned on
cash balances in 2002 as compared to 2001.
Provision for Corporate Income Taxes. The provision for corporate income
taxes increased $2.8 million from $6.9 million in 2001 to $9.7 million in 2002.
Our effective tax rate decreased to 44.8% in 2002 from 47.5% in 2001. This
decrease is due to a decrease in goodwill amortization which was not deductible
for taxes. With the exception of deferred tax assets of $384,000 related to
certain state net operating loss carry-forwards, which have been reserved for,
we expect future taxable income to be sufficient to realize the $20.3 million of
net deferred tax assets.
Discontinued Operations. In the fourth quarter of 2002, we sold or closed
two remote, underperforming, wholly-owned clubs. In connection with the closure
of one of the clubs we
42
recorded club closure costs of $996 related to the write-off of fixed assets. We
have accounted for these two clubs as discontinued operations and, accordingly,
the results of their operations have been classified as discontinued in the
Consolidated Statement of Operations, and prior periods have been reclassified
in accordance with Statement of Financial Accounting Standards ("SFAS") No. 144,
Accounting for the Impairment of Long-Lived Assets and Long-Lived Assets to be
Disposed of.
Revenue and pre-tax losses for these discontinued clubs were $1.7 million
and $894,000 in 2001, and $1.6 million and $322,000 in 2002, respectively.
Cumulative Effect of a Change in Accounting Principle. In connection with
the implementation of SFAS 142 we recorded a goodwill write-off of $1.3 million
in the first quarter of 2002. A deferred tax benefit of $612,000 was recorded in
connection with this goodwill write-off, resulting in a net cumulative effect of
a change in accounting principle of $689,000.
Accreted Dividends on Preferred Stock. Accreted dividends on the Preferred
Stock increased $1.3 million to $11.5 million in 2002, from $10.2 million in
2001. This increase is due to the compounding of accreted dividends.
YEAR ENDED DECEMBER 31, 2001 COMPARED TO YEAR ENDED DECEMBER 31, 2000
Revenues. Revenues increased $57.8 million or 25.8%, to $281.6 million
during 2001 from $223.8 million in 2000. This increase resulted from the 20
clubs opened or acquired in 2000 (approximately $27.4 million), and the 14 clubs
opened or acquired in 2001 (approximately $6.0 million). In addition, revenues
increased during 2001 by approximately $24.9 million or 12.3% at our mature
clubs (clubs owned and operated for at least 24 months). The mature club revenue
increase is attributable to an 8.3% increase in membership, a 2.1% increase in
dues, and a 1.9% increase in ancillary revenues.
Operating Expenses. Operating expenses increased $52.2 million, or 26.0%
to $252.6 million in 2001, from $200.4 million in 2000. This increase was due to
a 16.6% increase in total months of club operations to 1,298 in 2001 from 1,113
in 2000. The increase is also attributable to the larger, multi purpose clubs
opened or acquired in 2000.
Payroll and related increased by $22.0 million, or 24.2% to $112.8 million
in 2001, from $90.8 million in 2000. This increase was primarily attributable to
the acquisition or opening of 14 clubs in 2001 and a full year of operating the
20 clubs opened or acquired in 2000. This increase was also attributable to an
increase in personal training payroll and increases in management information
systems personnel.
Club operating increased by $20.1 million, or 29.3% to $88.9 million in
2001, from $68.8 million in 2000. This increase is primarily attributable to the
acquisition or opening of 14 clubs in 2001 and the additional expenses
attributable to operating the 20 clubs opened or acquired in 2000.
General and administrative increased by $4.2 million, or 28.8% to $18.8
million in 2001, from $14.6 million in 2000. This increase is principally
attributable to a $1.4 million increase in liability and property insurance,
increases attributable to expenses associated with our expansion, including the
enhancement of our management communication and information systems, and a
$300,000 increase in donations related to the September 11 events.
Depreciation and amortization increased by $6.0 million, or 22.9% to $32.2
million in 2001, from $26.2 million in 2000. This increase is attributable to
the increased fixed assets placed in service and intangible assets and goodwill
acquired arising out of acquisition or opening of new clubs.
43
Interest Expense. Interest expense increased $618,000 to $14.9 million in
2001 from $14.3 million in 2000, primarily as a result of increased indebtedness
under our line of credit. The increase in line of credit borrowings is
principally due to capital expenditure associated with the expansion of our club
base.
Interest Income. Interest income decreased $789,000 from $1.2 million in
2000 to $391,000 in 2001. This decrease is due to lower levels of cash on hand
and lower interest rates earned in 2001 when compared to 2000.
Provision For Corporate Income Taxes. The provision for corporate income
taxes increased $1.9 million from $5.0 million in 2000 to $6.9 million in 2001.
Our effective tax rate decreased to 47.5% in 2001 from 49.2% in 2000. This
decrease is principally due to decreases in the effective New York State and
City rates. With the exception of deferred tax assets of $284,000 related to
certain state net operating loss carry-forwards which have been reserved for, we
expect future taxable income to be sufficient to realize the $19.1 million of
net deferred tax assets.
Discontinued Operations. In the fourth quarter of 2002, we sold or closed
two remote, underperforming, wholly-owned clubs. We have accounted for these two
clubs as discontinued operations and, accordingly, the results of their
operations have been classified as discontinued in the Consolidated Statement of
Operations, and prior periods have been reclassified in accordance with SFAS No.
144.
Revenues and pre-tax losses for these discontinued clubs were $1.2 million
and $597,000 in 2000, $1.7 million and $894,000 in 2001, respectively.
Accreted Dividends On Preferred Stock. Accreted dividends on the preferred
stock increased $1.2 million to $10.2 million in 2001, from $9.0 million in
2000. This increase is due to the compounding of accreted dividends.
LIQUIDITY AND CAPITAL RESOURCES
Liquidity. Historically, we have satisfied our liquidity needs through
cash from operations and various borrowing arrangements. Principal liquidity
needs have included the acquisition and development of new clubs, debt service
requirements and other capital expenditures necessary to maintain existing
clubs. Our cash requirements consist principally of scheduled payments of
principal and interest on outstanding indebtedness, capital expenditures and
lease expenses. Based upon our current level of operations and the anticipated
maturation of our immature club base, we believe that, following the completion
of this offering and the entering into of our new senior secured revolving
credit facility, our cash flow from operations, available cash and available
revolving borrowings under the new senior secured revolving credit facility will
be adequate to meet our future liquidity needs for the next several years.
Operating Activities. Net cash provided by operating activities for the
quarter ended March 31, 2003 was $23.6 million compared to $20.6 million for the
quarter ended March 31, 2002. Cash flows from operations have improved with our
increase in profitability, and in addition, because of the favorable impact of
management's exercise of stock options in February 2003, which provided us with
a current tax deduction of approximately $8.6 million.
Net cash provided by operating activities for the year ended December 31,
2002 was $50.8 million compared to $44.3 million for the year ended December 31,
2001, an increase of $6.5 million. Cash flows from operations has improved as
the profitability of the mature club base and the clubs opened or acquired in
2001, continues to improve. These increases are offset by recently opened or
acquired clubs which may be immature and not yet operating at normal operating
margins. Excluding cash and cash equivalents, we normally operate with a working
capital deficit because we receive dues or fee revenue either (i) during the
month services are rendered, or (ii) when paid-in-full, in advance. As a result,
we have no material
44
accounts receivable, and record a deferred revenue liability for membership and
ancillary services billed in advance. We also record deferred revenue liability
because initiation fees are received at enrollment and are recognized over the
estimated average term of membership.
Net cash provided by operating activities for the year ended December 31,
2001 was $44.3 million compared to $40.6 million during the year ended December
31, 2000. The increase in cash provided by operating activities was primarily
due to an increase in the number of mature clubs and to improved performance by
most of these mature clubs, offset by clubs opened or acquired in 2001 and 2002
which may be immature and not yet operating at normal operating margins.
Investing Activities. We invested $7.4 million in capital expenditures
during the quarter ended March 31, 2003. We currently estimate total capital
expenditure and asset acquisition requirements for the remaining three quarters
of 2003 to approximate $37.6 million, which includes $11.7 million to renovate
and expand certain existing clubs, $9.9 million to maintain certain existing
clubs, $14.8 million to construct new clubs and $1.2 million to further upgrade
our management information systems.
We invested $40.2 million and $58.4 million in capital expenditures and
asset acquisitions during the years ended December 31, 2002 and 2001,
respectively, primarily as a result of our expansion efforts. Our capital
expenditures are net of landlord contributions of $3.5 million and $725,000,
respectively, for the years ended December 31, 2002 and 2001. We estimate that
for the year ended December 31, 2003, we will invest an additional $40.0 million
in capital expenditures, which includes $10.3 million that management intends to
invest to expand and renovate certain existing clubs, $14.6 million to maintain
existing clubs and $2.0 million to further upgrade our management information
system. These expenditures will be funded by cash flow generated from
operations, available cash and credit facilities.
We invested $59.1 million and $71.5 million in capital expenditures and
asset acquisitions during the years ended December 31, 2001 and 2000,
respectively, primarily as a result of our expansion efforts.
Financing Activities. Net cash used in financing activities was $12.7
million for the three months ended March 31, 2003 compared to $1.1 million for
the same period in 2002. Net cash used in financing activities was $10.5 million
for the year ended December 31, 2002 compared to net cash provided by financing
activities of $16.1 million for the same period in 2001.
Net cash provided by financing activities was $16.1 million for the year
ended December 31, 2001 compared to $5.7 million for the same period in 2000.
On April 16, 2003, we completed a refinancing of our debt, including the
offering of $255.0 million of 9 5/8% senior notes due 2011 (the "New Senior
Notes") and the entering into of a new $50.0 million senior secured revolving
credit facility (the "New Senior Credit Facility"). The proceeds from the
offering, less underwriting fees and expenses were used to repay the $4.0 of
principal borrowings outstanding under our existing senior credit facility, $9.0
million of principal borrowings outstanding under our subordinated credit
facility, redeem the $125.0 million of 9 3/4% senior notes due 2004 ("Existing
Senior Notes") including applicable accrued interest and call premium, and to
redeem our redeemable senior preferred stock. The net cash proceeds available
for general corporate purposes after all the aforementioned April 16, 2003
refinancing transactions was approximately $36.6 million. The New Senior Notes
accrue interest as 9 5/8% per annum and interest is payable semiannually on
April 15 and October 15. The New Senior Credit Facility expires April 15, 2008
and contains various covenants including limits in capital expenditures, the
maintenance of a consolidated interest coverage ratio of not less than 2.25:1.00
during 2003, and a maximum permitted total leverage ratio of 4.00:1.00 during
2003.
45
As of March 31, 2003, $125.0 million of our "Existing Senior Notes" were
outstanding. The Existing Senior Notes bore interest at a rate of 9 3/4%. As of
March 31, 2003, our existing line of credit with our principal bank provided for
direct borrowings and letters of credit of up to $25.0 million. The existing
line of credit carried interest at our option based upon the Eurodollar
borrowing rate plus 2.50% or the bank's prime rate plus 1.50% and we were
required to pay a commitment fee of 0.375% per annum on the daily unutilized
amount. As of March 31, 2003, $4.0 million of prime rate borrowings were
outstanding under this line at an interest rate of 5.75%. As of March 31, 2003,
we had approximately $17.0 million available under the line of credit. We also
had a $20.0 million subordinated credit facility, under which there were $9.0
million of outstanding borrowings as of March 31, 2003. The subordinated credit
agreement was entered into with an affiliate of a director and stockholder of
the Company. Interest on principal borrowings accrued at 12.75% per annum, 9.75%
of which was payable on a monthly basis and the remaining 3.0% was accruable, at
our option, through maturity. The total amount of accrued and unpaid interest
could not exceed $2.5 million. We were charged a fee of 0.083% per month based
on the portion of the facility not utilized. In connection with the subordinated
credit agreement, we paid a commitment fee of $225,000 to the lender,
approximately $73,000 of legal fees, and we committed to issue 16,000 shares of
common stock to the lender. In December 2001, we issued an additional 7,000
shares of restricted common stock to the lender which would have been forfeited
by the lender in the event that the agreement was terminated prior to November
30, 2002. As the agreement was not terminated, these shares became unrestricted
in November 2002.
The existing line of credit contained restrictive covenants including a
leverage ratio and interest coverage ratio and dividend payment restrictions and
was collateralized by all of our assets. The subordinated credit facility
contained similar, but less restrictive covenants than those of the line of
credit. As of December 31, 2002 our net leverage ratio, and net interest
coverage ratio as defined in the line of credit agreement were 2.2:1.0 and
4.9:1.0, respectively. Our ability to incur additional debt was limited by the
terms of the line of credit facility in that the net leverage ratio, could not
exceed 3.0:1.0 and the net interest coverage ratio had to be greater than
3.0:1.0. In addition, the indenture governing the Existing Senior Notes limited
the incurrence of additional indebtedness, (other than permitted indebtedness)
unless the consolidated fixed charge coverage ratio, as defined in the
indenture, was greater than 2.0:1.0 after giving effect to such additional
indebtedness. Our common stock is not publicly traded and therefore our ability
to raise equity financing is not as readily available as it is for companies
that have publicly traded common stock.
Notes payable were incurred upon the acquisition of various clubs and are
subject to the right of offset for possible post-acquisition adjustments arising
out of operations of the acquired clubs. These notes are stated at rates between
5.0% and 9.0%. The notes are due on various dates through 2012.
In June 1999, we issued $40.0 million of the Existing Senior Notes thereby
increasing the total Existing Senior Notes outstanding to $125.0 million. These
notes were issued at a price of 98.75%, providing us with $39.5 million of
proceeds before expenses related to the issuance. After payment of fees and
expenses of $3.9 million, we received net proceeds of $35.6 million. Other cash
flow from financing activities during 1998 and 1999 included borrowings under
the line of credit facility, the repayment of long-term debt, and the issuance
of redeemable senior preferred stock.
In November 1998, we sold $40.0 million of redeemable senior preferred
stock. After payment of fees and expenses of approximately $400,000 we received
net proceeds of $39.6 million. The senior preferred stock is redeemable in
November 2008, and carries a cumulative 12.0% annual dividend which is added to
the liquidation value of such preferred shares, if not paid in cash, at our
option.
46
In October 1997, we issued $85.0 million of the Existing Senior Notes and
entered into the line of credit facility. After payment of fees and expenses of
$3.3 million, we received net proceeds of $81.7 million, of which $41.5 million
was used for the repayment of certain indebtedness. The Existing Senior Notes
contain restrictive covenants and restrict the payment of dividends. The line of
credit facility notes contain restrictive covenants, including a leverage ratio
and interest coverage ratio and dividend payment restrictions and is
collaterlized by all of our the assets.
CONTRACTUAL AND COMMERCIAL COMMITMENTS SUMMARY
The aggregate long-term debt, capital lease, operating lease, and
redeemable preferred stock obligations as of March 31, 2003 were as follows:
<Table>
<Caption>
PAYMENTS DUE BY PERIOD
-------------------------------------------------------
LESS THAN AFTER
CONTRACTUAL OBLIGATIONS TOTAL 1 YEAR 1-3 YEARS 4-5 YEARS 5 YEARS
- ----------------------- -------- --------- --------- --------- --------
Long-Term Debt(1)............... $143,527 $ 1,471 $139,902 $ 1,159 $ 995
Capital Lease Obligations(2).... 5,312 3,520 1,792 -- --
Operating Lease
Obligations(3)................ 578,036 46,276 94,989 92,753 344,018
Redeemable Preferred Stock(4)... 36,061 -- 36,061 -- --
Redeemable Senior Preferred
Stock(5)...................... 128,525 -- -- -- 128,525
-------- ------- -------- ------- --------
Total Contractual Cash
Obligations................... $891,461 $51,267 $272,744 $93,912 $473,538
======== ======= ======== ======= ========
</Table>
- ------------
(1) The long-term debt contractual cash obligations include principal payment
requirements only. Interest on long-term debt with fixed rates amounts to
$13.0 million annually. This represents a 9.75% interest rate charge on the
$125.0 million of Senior Notes outstanding as of March 31, 2003, and a
12.75% interest rate charge on the $9.0 million of Subordinated Debt. London
inter-bank offered rate ("LIBOR") line of credit borrowings are not at fixed
rates of interest. As of March 31, 2003, LIBOR line of credit borrowings
were at 4.0% or approximately $580,000 per annum, but such rates may change
widely with changes in market conditions.
(2) Capital lease obligations represent principal and interest payments.
(3) Operating lease obligations include base rent only. Certain leases provide
for additional rent based on increases in real estate tax indexation,
utilities, and defined amounts based on the operating results of the lessee.
(4) The redeemable preferred stock is not redeemable on a specific date, but
rather at our option or possibly upon sale of the company. For purposes of
this schedule we considered this to be redeemable in one to three years.
(5) The redeemable senior preferred stock was redeemed with the proceeds of the
offering of old notes. The redemption amount as of April 16, 2003 was 67.0
million. The above obligation includes future accrual of dividends totalling
$62.1 million.
LEGAL PROCEEDINGS
On February 13, 2003, an individual filed suit against us in the Supreme
Court, New York County, alleging that on January 14, 2003, he sustained an
injury at one of our club locations resulting in serious bodily injury. His
complaint seeks $250.0 million in damages for personal injuries and $250.0
million in punitive damages. We have in force $51.0 million of insurance
coverage to cover claims of this nature. We intend to vigorously contest this
lawsuit and presently anticipate that this matter will be covered by our
insurance.
Additionally, we are a party to various lawsuits arising in the normal
course of business. We believe that the ultimate outcome of these matters will
not have a material adverse effect on our business, results of operations, cash
flows or financial condition.
EFFECT ON RECENT CHANGES IN ACCOUNTING STANDARDS
On December 31, 2002, the FASB issued Statement No. 148, Accounting for
Stock-Based Compensation -- Transition and Disclosure, an amendment of FASB
Statement No. 123, which provided alternative transition methods to the
expensing of employee stock-based compensation under SFAS No. 123. We are not
required to adopt the fair value method prescribed by
47
SFAS No. 123 and, accordingly, will continue to account for stock-based
compensation under the intrinsic value method in accordance with APB No. 25.
In May 2003, the FASB issued Statement No. 150, Accounting for Certain
Financial instruments with Characteristics of both Liabilities and Equity ("FAS
150"). FAS 150 improves the accounting for certain financial instruments that,
under previous guidance, issuers could account for as equity and requires that
those instruments be classified as liabilities in statements of financial
position. This Statement is effective for financial instruments entered into or
modified after May 31, 2003, and otherwise is effective as of September 1, 2003.
We are is in the process of evaluating the impact that FAS 150 will have on our
financial statements.
SEPTEMBER 11, 2001 EVENTS
The terrorist attacks of September 11, 2001 ("the September 11 events"),
resulted in a tremendous loss of life and property. Secondarily, those events
interrupted the operations at four of our clubs located in downtown Manhattan.
Three of the affected four clubs were back on operation by October 2001, while
the fourth club reopened in September 2002.
We carry business interruption insurance to mitigate certain lost revenue
and profits experienced with the September 11 events. In this regard in the
third quarter of 2001 a $175,000 insurance receivable was recorded representing
an estimate of costs incurred in September 2001. Such costs included rent,
payroll benefits, and other club operating costs incurred during period of
closure. In 2002, we collected this $175,000 receivable and received additional
on account payments of $1.0 million. These on-account payments were classified
with fees and other revenues.
Although we have business interruption insurance to cover certain lost
profits at all four clubs, we cannot predict with any degree of certainty what
future amounts will actually be received from our insurance carriers.
Furthermore we cannot, at this time, determine whether the assets related to the
fourth club location have been permanently impaired. We will continue to gather
information to better assess whether or not the assets of this club have been
permanently impaired. We are communicating with our insurance carriers on an
ongoing basis in order to better assess the relief we could expect to receive
for such coverage. In January 2003, we received and recorded an additional $1.3
million on-account payment.
USE OF ESTIMATES AND CRITICAL ACCOUNTING POLICIES
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of
48
contingent assets and liabilities at the dates of the financial statements and
the reported amounts of revenues and expenses during the reporting periods.
Actual results could differ from those estimates.
The most significant assumptions and estimates relate to the allocation and
fair value ascribed to assets acquired in connection with the acquisition of
clubs under the purchase method of accounting, the useful lives, recoverability
and impairment of fixed and intangible assets, deferred income tax valuation,
valuation of, and expense incurred in connection with stock options and
warrants, legal contingencies and the estimated membership life.
Our one-time member initiation fees and related direct expenses are
deferred, and recognized, on a straight-line basis, in operations over an
estimated membership life of 24 months. This estimated membership life has been
derived from actual membership retention experienced by us. Although the average
membership life approximated 24 months over each of the past several years, this
estimated life could increase or decrease in future periods. Consequently, the
amount of initiation fees and direct expenses deferred by us would increase or
decrease in similar proportion.
Long-lived assets, such as fixed assets, goodwill and intangible assets are
reviewed for impairment when events or circumstances indicate that the carrying
value may not be recoverable. Estimated undiscounted expected future cash flows
are used to determine if an asset is impaired, in which case the asset's
carrying value would be reduced to fair value. Actual cash flows realized could
differ from those estimated and could result in asset impairments in the future.
Effective January 1, 2002, we implemented SFAS 142. There were no changes
to the estimated useful lives of amortizable intangible assets due to the SFAS
142 implementation. In connection with the SFAS 142 transition impairment test
we recorded a $1.3 million write-off of goodwill. A deferred tax benefit of
$612,000 was recorded as a result of this goodwill write-off, resulting in a net
cumulative effect of change in accounting principle of $689,000, in the first
quarter of 2002. The write-off of goodwill related to four, remote
underperforming clubs. The impairment test was performed with discounted
estimated future cash flows as the criteria for determining fair market value.
Goodwill has been allocated to reporting units that closely reflect the regions
served by our four trade names; New York Sports Club, Boston Sports Club,
Washington Sports Club and Philadelphia Sports Club, with certain more remote
clubs that do not benefit from a regional cluster being considered single
reporting units.
As of March 31, 2003 our net deferred tax assets totaled $17.3 million.
These net assets represent cumulative net "temporary differences" that will
result in tax deductions in future years. The realizability of these assets
greatly depends on our ability to generate sufficient future taxable income. Our
pre-tax profit was $10.2 million, $14.4 million, $21.7 million, and current tax
liabilities were $8.6 million, $11.4 million and $10.9 million for the years
ended December 31, 2000, 2001 and 2002, respectively. Our pre-tax profit for the
three months ended March 31, 2003 was $9.9 million. Because there is currently
no evidence we will not continue to be profitable, the weight of available
evidence indicates we will be able to realize these net deferred tax assets. If
at some time in the future the weight of available evidence does not support the
realizability of a portion of, or the entire net deferred tax assets, the write-
down of this asset could have a significant impact on our financial statements.
INFLATION
Although we cannot accurately anticipate the effect of inflation on our
operations, we believe that inflation has not had, and is not likely in the
foreseeable future to have, a material impact on our results of operations.
49
BUSINESS
OUR COMPANY
We are one of the two leading owners and operators of fitness clubs in the
Northeast and Mid-Atlantic regions of the United States and the third largest
fitness club operator in the United States, as measured by number of clubs. As
of March 31, 2003, we operated 129 clubs that collectively served approximately
356,000 members. Our goal is to provide the premier health club network in each
of the major metropolitan regions we serve. To optimize convenience to our
members, we cluster clubs near the highest concentrations of our target members'
areas of both employment and residence. Our clusters of clubs serve densely
populated major metropolitan regions in which a high percentage of the
population commutes to work. Our target member is college-educated, typically
between the ages of 21 and 50 and earns an annual income of between $50,000 and
$150,000. Our revenues, cash flows from operations and EBITDA for the year ended
December 31, 2002 were $319.4 million, $50.8 million and $69.8 million,
respectively and for the three months ended March 31, 2003 were $86.9 million,
$23.6 million and $22.4 million, respectively.
We are the largest fitness club operator in Manhattan with 37 locations
(more than twice as large as our nearest competitor) and a total of 85 clubs
under the New York Sports Clubs ("NYSC") brand name within the New York
metropolitan region. We operate 20 clubs in the Boston region and 15 clubs in
the Washington, D.C. region under our Boston Sports Club ("BSC") and Washington
Sports Club ("WSC") brand names, respectively, and have begun establishing a
similar cluster in the Philadelphia region with six clubs under our Philadelphia
Sports Club ("PSC") brand name. In addition, we operate three clubs in
Switzerland. We employ localized brand names for our clubs to create an image
and atmosphere consistent with the local community and to foster the recognition
as a local network of quality fitness clubs rather than a national chain.
Over our 30-year operating history, we have developed and refined a model
club format that allows us to cost effectively construct and efficiently operate
our fitness clubs. Our model club ranges in size from approximately 15,000 to
25,000 square feet and features a wide variety of state-of-the-art
cardiovascular and strength-training equipment, as well as exercise studios
offering extensive group fitness programs. Some clubs also feature additional
amenities, including swimming pools, squash or tennis courts and physical
therapy centers. Our locker rooms generally include a sauna and steam room. We
offer members a variety of other value-added services for which we receive
additional fees, including personal training, massage and Sports Club for Kids.
INDUSTRY OVERVIEW
Demographic trends have helped fuel the growth experienced by the fitness
industry over the past decade. The industry has benefited from the aging of the
"baby boomer" generation and the coming of age of their offspring.
Government-sponsored reports, such as the Surgeon General's Report on Physical
Activity & Health (1996) and the Call to Action to Prevent and Decrease
Overweight and Obesity (2002) have helped to increase the general awareness of
the benefits of physical exercise to these demographic segments over those of
prior generations. Membership penetration (defined as club members as a
percentage of the total U.S. population) has increased significantly from 8.3%
in 1991 to 11.9% in 2001.
50
U.S. FITNESS CLUB REVENUES(1)
(IN $ BILLIONS)
[BAR CHART]
<Table>
<Caption>
1993 1994 1995 1996 1997 1998 1999 2000 2001
- ---- ---- ---- ---- ---- ---- ---- ---- ----
6.5 7.3 7.7 8.2 9.0 9.6 10.6 11.6 12.2
</Table>
- ------------
(1) Industry revenues for 1991 and 1992 are not available.
U.S. FITNESS CLUBS MEMBERSHIP
(IN MILLIONS)
[BAR CHART]
<Table>
<Caption>
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
20.9 20.8 22.9 25.2 24.1 26.2 28.3 29.5 30.6 32.8 33.8
</Table>
Total U.S. fitness club industry revenues increased at a compound annual
growth rate of 8.2% from $6.5 billion in 1993 to $12.2 billion in 2001, while
the total number of clubs increased at a compound annual growth rate of 3.9%,
from 12,146 in 1991 to 17,807 in 2001. Growth in club memberships outpaced club
growth during this period, increasing at a compound annual growth rate of 4.9%
from 20.9 million in 1991 to 33.8 million in 2001. As a result, average members
per club has increased from 1,721 in 1991 to 1,898 in 2001, indicating
industry-wide demand for further expansion of the existing club base.
Notwithstanding these longstanding growth trends, the fitness club industry
continues to be highly fragmented. Less than 10.0% of clubs in the United States
are owned and operated by companies that own more than 25 clubs, and the two
largest fitness club operators each generate less than 9.0% of total fitness
club revenues.
As a large operator with recognized brand names, leading regional market
shares and an established operating history, we believe we are well positioned
to benefit from these favorable industry dynamics.
COMPETITIVE STRENGTHS
Strong market position. We are the third largest fitness club operator in
the United States, as measured by number of clubs. We are one of the two leading
owners and operators of fitness clubs in the Northeast and Mid-Atlantic regions
of the United States. We are the largest fitness club owner and operator in the
New York and Boston regions, and we believe we are the second largest owner and
operator in the Washington, D.C. region and the third largest in the
Philadelphia region. We attribute our leadership positions in these markets to
the success of our regional clustering strategy, the consistency of facilities
and services provided by our clubs and the ability to continue to attract new
members by providing one of the most attractive price/value combinations
available in our markets.
Successful regional clustering strategy. We believe our regional
clustering strategy allows us to maximize cash flows by providing high quality,
conveniently located fitness facilities on a
51
cost effective basis. By operating a group of clubs in a concentrated geographic
area, the value of our memberships is enhanced by our ability to offer members
access to any of our clubs through a passport membership. This membership
appeals primarily to customers who seek the convenience of having fitness clubs
near their home and their workplace. Approximately 47% of our members choose the
passport membership plan, and because these memberships offer broader privileges
and greater convenience, they generate higher monthly dues than single club
memberships. In a typical month, approximately 46% of our active members use a
club other than the club they originally joined. Regional clustering also allows
us to provide special facilities within the market, such as squash, tennis,
basketball, special programs and swimming pools, without offering them at each
location. We are also able to achieve economies of scale with regard to sales,
marketing, purchasing, general operations and corporate administrative expenses.
Stable cash flows. We believe that our emphasis on affordable monthly dues
and our electronic funds transfer ("EFT") system allows us to generate stable
and predictable cash flows. We charge a moderate initiation fee (approximately
$83 on average over the last twelve months ended March 31, 2003) and monthly
dues of $39 to $93, depending on the type of membership plan. We believe that
our monthly dues structure gives us a significant competitive advantage in terms
of ease of sale, collection and revenue collected per year, all of which make us
less dependent on new membership sales and price discounting than certain of our
competitors. We also believe our use of EFT, by which a member's credit card or
bank account is automatically debited for each month's dues, assures a more
stable cash flow, substantially reduces the traditional accounts receivable
function and minimizes bad-debt write-offs. Approximately 91.6% of our members
pay their monthly dues through EFT, accounting for 71.6% of consolidated revenue
for the year ended December 31, 2002 and for the three months ended March 31,
2003.
Proven unit operating performance. We have established a track record of
consistent growth in revenue and cash flow across our club base. Our 32
wholly-owned clubs that have been in operation from January 1, 1998 through
March 31, 2003 generated revenues and operating income (after corporate expenses
allocated on a revenue basis) of $122.1 million and $32.3 million, respectively,
during the year ended December 31, 2002, as compared to $85.1 million and $15.1
million, respectively, during the year ended December 31, 1998. We believe that
the track record of our mature clubs provides a sound basis for expected
improved performance in our recently opened clubs as well as providing impetus
for continued investment in new clubs. In addition, for the year ended December
31, 2002, and the three months ended March 31, 2003, revenues from clubs that
have been open for more than 24 months grew at 4.1% (excluding our club in
Battery Park City that was closed for a year due to the events of September 11,
2001) and 1.8%, respectively.
Experienced management team. We believe that our management team is one of
the most experienced management teams in the industry. Our four senior
executives have over 60 years of combined experience in the fitness club
industry and have been working together at Town Sports since 1990. We believe
that our management has the depth, experience and motivation to manage our
internal and external growth. In the aggregate, our management team owns
approximately 26% of our common stock on a fully-diluted basis.
Proprietary centralized information systems. We utilize a proprietary
system developed internally to track and analyze sales, leads and membership
statistics. This system allows us to track the frequency of member workouts,
multi-club utilization, value-added services and demographic profiles by member.
This enables us to develop targeted direct marketing programs and to modify our
broadcast and print advertising to improve consumer response. These systems also
assist us in evaluating staffing needs and program offerings. In addition, we
rely on certain data gathered through our information systems to assist in the
identification of new markets for clubs and site selection within those markets.
52
BUSINESS STRATEGY
We intend to continue to increase revenues and cash flow using the
following strategies:
Realize benefits from maturation of recently opened clubs. From January 1,
2001 to March 31, 2003, we opened or acquired 27 clubs. We believe that our
recent financial performance does not yet fully reflect the benefit of these
clubs. Based on our historical experience, a new club tends to achieve
significant increases in revenues during its first three years of operation as
it reaches maturity. Because there is relatively little incremental cost
associated with such increasing revenues, there is a greater proportionate
increase in profitability. We believe that the revenues and operating income
(loss) of these 27 clubs will significantly improve as the clubs reach maturity.
<Table>
<Caption>
CLUBS OPEN PRIOR TO CLUBS OPEN SUBSEQUENT
JANUARY 1, 2001 TO JANUARY 1, 2001
------------------- ---------------------
Number of wholly-owned clubs(1)............. 100 27
</Table>
<Table>
<Caption>
FOR THE YEAR ENDED DECEMBER 31, 2002
-------------------------------------------
(IN THOUSANDS)
Revenues(2)................................. $283,266 $33,123
Revenues per club(2)........................ 2,833 1,227
Operating income (loss)(3).................. 47,591 (9,178)
Operating income (loss) per club............ 476 (340)
</Table>
- ---------------
(1) Excludes two partly-owned and managed clubs. Our Battery Park City club
is included with the 27 clubs open subsequent to January 1, 2001. This
club was temporarily closed in September, 2001 and was reopened in
September, 2002.
(2) Excludes $3.0 million of revenues generated at the corporate level.
(3) Includes club operating expenses of $208.7 million for clubs open prior
to January 1, 2001 and $39.1 million for clubs open subsequent to
January 1, 2001, as well as an allocation (based on revenue) of
corporate expenses of $27.0 million and $3.2 million for the clubs open
prior to January 1, 2001 and the clubs open subsequent to January 1,
2001, respectively, and excludes $320,000 of pre-sale operating losses
incurred by clubs that have not yet been opened.
Expansion of regional clusters. We intend to strengthen our market
position and to increase revenues and cash flow in our existing markets through
the opening of new clubs and the acquisition of existing clubs. Before opening
or acquiring a new club, we undertake a rigorous process involving site
selection, demographic and competitive analysis, negotiation of lease and
acquisition terms and financial modeling to ensure that a location meets our
criteria for a model club. As of March 31, 2003, we had identified over 70 urban
and suburban locations in our existing markets that we believe possess the
criteria for a model club.
Increased value-added services. In addition to our regional clustering
strategy, we have continued to focus on increasing the additional services
available to our members. The increased emphasis on value-added services and
programs, such as personal training, massage, Sports Club for Kids, Group
Exclusives, "for fee" programming, swimming and racquet sports has contributed
to our growth, as non-membership club revenues have increased from $11.8
million, or 10.6% of revenues for the year ended December 31, 1998, to $42.8
million, or 13.3% of revenues in the year ended December 31, 2002. These
services generate incremental revenues with minimal capital investment and
assist us in the process of attracting and retaining members.
MARKETING
Our marketing campaign, which has become a large driver of the brand, is
directed by our in-house media department, which is headed by our chief
executive officer. This team develops advertising strategies to promote each of
our regionally branded networks as the premier
53
network of fitness clubs in that region. The media team's goal is to achieve
broad awareness of our regional brand names primarily through radio, television,
newspaper, billboard, and direct mail advertising. We believe that our
clustering of clubs creates economies in our marketing and advertising strategy
that increase the efficiency and effectiveness of these campaigns.
Advertisements generally feature creative slogans that communicate the
serious approach we take toward fitness in a provocative and/or humorous tone,
rather than pictures of our clubs, pricing specials or members exercising.
Promotional marketing campaigns will typically feature opportunities to
participate in value-added services such as personal training for a limited time
at a discount to the standard rate. On occasion, we will also offer reduced
initiation fees to encourage enrollment. Additionally, we frequently sponsor
member referral incentive programs. Such incentive programs include a free month
of membership, personal training sessions, sports equipment such as a free gym
bag or a gift certificate for other in-club purchases.
We also engage in public relations and special events to promote our image
in the local communities. Management believes that these public relations
efforts enhance our image and the image of our local brand names in the
communities in which we operate. We also seek to build our community image
through co-operative advertising campaigns with local retailers.
We maintain the following web site: www.mysportsclubs.com that provides
information about club locations, program offerings and on-line promotions. Our
website provides our members a venue to give us direct feedback on all of our
services and offerings. We also use our website to promote career opportunities.
SALES
Sales of new memberships are generally handled at the club level. We employ
approximately 450 "in-club" membership consultants who are responsible for new
membership sales. Each club generally has two or three full-time and one
part-time membership consultants. These consultants report both to the general
manager of the club as well as to one of our 20 area sales managers, who in turn
report to our Vice President, Sales. Membership consultants' compensation
consists of a base salary plus commission. Sales commissions range from $45 to
$65 per new member enrolled. We provide additional incentive-based compensation
in the form of bonuses contingent upon individual, club and company-wide
enrollment goals. Membership consultants must successfully complete a
three-month, in-house training program through which they learn our sales
strategy. In making a sales presentation, membership consultants emphasize: (i)
the proximity of our clubs to concentrated commercial and residential areas
convenient to where target members live and work, (ii) the lack of a long-term
obligation on the part of the enrollee, (iii) the price value relationship of a
Town Sports membership and (iv) access to value-added services. We believe that
providing employees with opportunities for career advancement is essential to
our ability to attract and retain qualified sales personnel. We also employ six
full-time corporate sales managers whose responsibility is to solicit group
memberships through senior level corporate contacts.
We believe that clustering clubs allows us to sell memberships based upon
the opportunity for members to utilize multiple club locations to differing
degrees. We have streamlined our membership structure to simplify the sales
process. In addition, the proprietary centralized computer software utilized by
us ensures consistency of pricing and controls enrollment processing at the club
level. We generally offer three principal types of memberships:
- The passport membership, currently priced from $67 to $93 per month, is
our highest priced membership and entitles members to use any Town Sports
club at any time. This membership is held by approximately 47% of our
members. In addition, we have introduced a passport premium membership
for a select club, that includes core member services, at a price greater
than $100 per month.
54
- The gold membership, currently priced from $39 to $82 per month based on
the market area of enrollment, enables members to use a specific club, or
a group of specific clubs, at any time and any Town Sports club during
off-peak times. This membership is held by over 52% of our members.
- The off-peak membership, currently priced from $39 to $75 per month, is
the least expensive membership, and allows members to use any Town Sports
club only during off-peak times. This membership is held by approximately
1% of our members.
We also offer corporate membership plans that vary in price depending on
the respective corporation's needs. The corporate membership plans are typically
at a discount to that of individual membership plans.
By clustering a group of clubs in a geographic area, the value of our
memberships is enhanced by the ability to offer passport memberships, which
allow the member to use any of our clubs at any time. We believe the popularity
of the passport membership results from the broader privileges and greater
convenience this membership plan provides through the opportunity for members to
access club facilities near to both their homes and offices. Our clustering
strategy also allows us to provide access to special facilities and programs
such as squash, tennis, basketball and racquetball courts, swimming pools and
programs targeted at children and other groups, through flagship locations
strategically located in key target areas without offering such facilities or
programs in every location.
In joining a club, a new member signs a membership agreement which
obligates the member to pay a one-time initiation fee and monthly dues on an
ongoing basis. Monthly Electronic Funds Transfer "EFT" membership dues averaged
approximately $70 per month for the year ended December 31, 2002 and
approximately $71 per month for the three months ended March 31, 2003. During
that same period, initiation fees averaged $83 for EFT members. We collect
approximately 93.3% of all monthly membership dues through EFT and EFT revenue
constitutes over 71.6% of consolidated revenue for the year ended December 31,
2002 and for the three months ended March 31, 2003. Substantially all other
membership dues are paid in advance. EFT members can generally cancel
memberships at any time upon 30 days notice. Based upon detailed statistical
studies of the membership base at our clubs open over 24 months, however, the
average length of our memberships is approximately 24 months. The membership
agreement calls for monthly dues to be collected by EFT based on credit card or
bank account debit authorization contained in the agreement. We believe that our
EFT program of monthly dues collection provides a predictable and stable cash
flow for us, eliminates the traditional accounts receivable function, and
minimizes bad-debt write-offs while providing a significant competitive
advantage in terms of the sales process, dues collection, working capital
management and membership retention. In addition, it enables us to increase our
dues in an efficient and consistent manner, which we do annually by between 1%
and 3%, in line with cost of living increases. During the first week of each
month, we receive the EFT dues for that month initiated by a third party EFT
processor. Discrepancies and insufficient funds incidents are researched and
resolved by an in-house staff. For the year ended December 31, 2002 and the
three months ended March 31, 2003, we experienced an average of uncollected EFT
dues of 1.5% and 1.2%, respectively.
Our total EFT revenue has increased by $15.7 million per month from $5.1
million in December, 1997 to $20.8 million in December, 2002. While we strongly
encourage monthly EFT memberships, approximately 8% of our members (often
corporate group members and existing members of acquired clubs) purchase
paid-in-full memberships for a one year term.
ANCILLARY REVENUE
Over the past five years we have expanded the level of ancillary services
provided to our members. Ancillary revenue has increased by $31.0 million from
$11.8 million in 1998 to
55
$42.8 million in 2002. Increases in personal training revenue in particular have
contributed to $21.0 million of the increase in ancillary revenue from 1998 to
2002. In addition, the Company has added Sports Club for Kids and Group
Exclusives (both additional fee-for-service programs) at selected clubs.
Ancillary revenue as a percentage of total revenue has increased from 10.6% for
the year ended December 31, 1998 to 13.3% for the year ended December 31, 2002.
Personal training revenue as a percentage of sales increased from 6.8% of
revenue in 1998 to 8.9% of revenue in 2002.
CLUB FORMAT AND LOCATIONS
Our clubs are typically located in well-established, higher-income
residential, commercial or mixed urban neighborhoods within major metropolitan
areas which are capable of supporting the development of a cluster of clubs. The
clubs generally have relatively high "retail" visibility, and close proximity to
transportation. In the New York City, Boston and Washington, D.C., we have
created clusters of clubs in urban areas and their commuter suburbs in
accordance with our operating strategy of offering our target members the
convenience of multiple locations close to where they live and work, reciprocal
use privileges and standardized facilities and services. We have begun
establishing a similar cluster in Philadelphia.
Approximately half of the clubs we operate are urban clubs and half are
suburban. Our urban clubs generally range in size from 15,000 to 25,000 square
feet and averages approximately 20,000 square feet. Our suburban clubs vary in
size from 15,000 square feet to 75,000 square feet with one club being 200,000
square feet. Excluding this single large club the average suburban club is
24,000 square feet. Membership for each club generally ranges from 2,000 to
4,500 members at maturity. Although club members represent a cross-section of
the population in a given geographic market, our target member is college
educated, between the ages of 21 and 50 and earns an annual income of between
$50,000 and $150,000.
Our facilities include state-of-the-art cardiovascular equipment, including
upright and recumbent bikes, steppers, treadmills, and elliptical motion
machines; strength equipment and free weights, including Cybex, Icarian,
Nautilus, Free Motion and Hammer Strength equipment; group exercise and cycling
studio(s); the Sportsclub Network entertainment system; locker rooms, including
shower facilities, towel service and other amenities such as saunas and
steamrooms, babysitting and a retail shop. Personal training services are
offered at all locations and massage is offered at most clubs, each at an
additional charge. At certain flagship locations, additional facilities also are
offered, including swimming pools, racquet and basketball courts. Also, we have
significantly expanded the availability of fee-based programming at many of our
clubs, including programs targeted at children, members and non-member adult
customers.
We have recently launched our Xpressline strength workout. Xpressline is a
trainer-supervised, eight-station total-body circuit workout designed to
accommodate all fitness levels. This service is a free service provided to our
members. We have also introduced FitMap, which is a visual tool that provides
our members with guidance on how to use our equipment trough safe progressions
of difficulty.
Our Sportsclub Network personal entertainment units have been instated in
over 95% of our clubs. Over 5,200 of these entertainment units have been
installed. The units are typically mounted on cardiovascular equipment and are
equipped with a color screen for television viewing, a compact disc player and
most models have audio cassette players. The Sportsclub Network also broadcasts
our own personalized music video channel that provides us with a direct means of
advertising products and services to our membership base.
56
CLUB SERVICES AND OPERATIONS
We emphasize consistency and quality in all of our club operations,
including:
Management. We believe that our success is largely dependent on the
selection and training of our staff and management. Our management structure is
designed, therefore, to support the professional development of highly motivated
managers who will execute our directives and support growth.
Corporate departments are responsible for each area of club services, such
as exercise group programs, fitness programming, personal training, facility and
equipment maintenance, housekeeping and laundry. This centralization allows
local general managers at each club to focus on customer service, club staffing
and providing a high quality exercise experience. General managers are
responsible for the day-to-day management of each club, and directly report to
area managers, who liaise with senior operations management and other corporate
staff ensuring consistent service at all locations.
Personal Training. All of our fitness clubs offer one-on-one personal
training, which is sold by the single session or in multi-session packages. We
have implemented a comprehensive staff education curriculum that progresses from
basic knowledge and practical skills to advanced concepts and training
techniques. Our education program provides professional standards to ensure that
our trainers provide superior service and fitness expertise to our members.
There are four levels of professional competency for which different levels of
compensation are paid, with mandatory requirements trainers must meet in order
to achieve and maintain such status. We believe the qualifications of the
personal training staff helps ensure that members receive a consistent level of
quality service throughout our club base. We believe that our personal training
programs provide valuable guidance to our members and a significant source of
incremental revenue from value-added services for us. In addition, management
believes that members who participate in personal training programs have a
longer membership life.
Group Fitness. Our commitment to providing a quality workout experience to
our members extends to the employment of program instructors, who teach
aerobics, cycling, strength conditioning, boxing, yoga and step aerobics
classes, among others. Our clustering strategy enables us to staff program
instructors and professional personal trainers at more than one club. As a
result, we can vary a given club's instructors, while providing instructors
sufficient classes to effectively and economically treat these instructors as
full-time employees. All program instructors report to a centralized management
structure, headed by the Vice President of Programs and Services whose
department is responsible for overseeing auditions and providing in-house
training to keep instructors current in the latest training techniques and
program offerings. We also provide Group Exclusive offerings to our members,
which are for-fee based programs that have smaller groups and provide more
focused, and typically more advanced training classes. Some examples of these
offerings include: Pilates, boxing camps, and cycling.
Sports Clubs for Kids. During 2000, we began offering programs for
children under the Sports Club for Kids ("SCFK") brand in the NYSC and PSC
regions. As of December 2002, SCFK was operating in 18 locations throughout our
four major markets. In addition to extending fitness offerings to a market not
previously served by us, we expect that SCFK programming will help position our
suburban clubs as family clubs, which should provide us with a competitive
advantage. Depending upon the facilities available at a location, Sports Clubs
for Kids programming can include traditional youth offerings such as day camps,
sports camps, swim lessons, hockey and soccer leagues, gymnastics, dance,
martial arts and birthday parties. It also can include innovative and
proprietary programming such as Kidspin Theater, a multi-media cycling
experience, and non-competitive "learn-to-play" sports programs. In selected
locations we also offer laser tag.
57
Employee Compensation and Benefits. We provide performance-based
incentives to our management. Senior management compensation, for example, is
tied to our overall performance. Departmental directors, area managers and
general managers have bonuses tied to financial and member retention targets for
a particular club or group of clubs. We offer our employees various benefits
including; health, dental, disability, insurance, pre-tax healthcare and
dependent care accounts and a 401(k) plan. Management believes the availability
of employee benefits provides us a strategic advantage in attracting and
retaining quality managers, program instructors and professional personal
trainers and that this strategic advantage in turn translates into a more
consistent and higher quality workout experience for those members who utilize
such services.
PROPRIETARY CENTRALIZED INFORMATION SYSTEMS
Currently we are utilizing a proprietary system developed internally to
track and analyze sales, leads, and membership statistics which, in conjunction
with our other systems, allows us to track the frequency of member workouts,
multi-club utilization, value-added services and demographic profiles by member,
which enables us to develop targeted direct marketing programs and to modify our
broadcast and print advertising to improve consumer response. These systems also
assist us in evaluating staffing needs and program offerings. In addition, we
rely on certain data gathered through our information systems to assist in the
identification of new markets for clubs and site selection within those markets.
PLANNED INFORMATION SYSTEMS DEVELOPMENTS
We recognize the value of enhancing and extending the uses of information
technology in virtually every area of our business. After developing an
information technology strategy to support the business strategy, we have
developed a comprehensive multi-year plan to replace or upgrade key systems.
We expect to begin implementation of a new fully integrated club management
system during 2003. We have been actively involved in the design of the software
and are currently in the final phase of acceptance testing. This system
incorporates contemporary browser-based, n-tier technology and open architecture
to allow for scalability and extensibility to support our projected growth and
diversification of services. This system will provide enhanced or new
functionality for member services, contract management, electronic billing,
point of sale, inventory control, scheduling resources, reservations, and cash
management.
During 2001, we implemented a new time capture system that integrates with
our payroll processing system. This system will also integrate with the new club
management system to fully automate the various compensation plans for all
employees. In addition, during 2002, we implemented a new budgeting and
forecasting product that will be expanded later in 2003 for data warehousing
capabilities which will enable enhanced managerial and analytical reporting. We
implemented application and telephone systems to manage our internal customer
service center which supports information technology, facilities, equipment and
Sportsclub Network service call requests for all locations. Numerous
infrastructure changes were implemented to accommodate our growth, to provide
network redundancy, efficiencies in operations, and to improve management of all
components of the technical architecture.
Our website will be expanded after the implementation of the above
mentioned club management system to incorporate e-business functionality such as
sales of products, services, and memberships, member self service and
reservations. We have built an intranet to provide the portal for the newly
implemented browser-based application. Development of intranet features to
support corporate communications, human resources programs, and training is
ongoing.
58
In the first half of 2004, we will assess our current financial systems and
provide recommendations for implementation of new fully integrated software.
Coinciding with the implementation of the new club management system, we
will implement an updated Disaster Recovery plan that will include a designated
"hot site", recovery procedures, data restoration testing, and training of
personnel.
STRATEGIC PLANNING
During 2001, we began a strategic planning process. The process, spearhead
by the Chairman and the Chief Executive Officer, produced a new set of core
values, a revised mission statement and a set of five-year performance targets.
In 2002, more than 40 projects were completed in support of the plan's strategic
initiatives and objectives. Our Chairman and Chief Executive Officer led the
strategy process, which produced significant changes in our approach to our
brand, our core business development process and our intranet strategy.
The strategic plan has been updated for 2003 with new strategic initiatives
in several areas. Senior management continues to support the strategic planning
process and believes that accomplishing our strategic objectives will cause us
to attain the five-year performance targets outlined in the 2003 plan.
INTELLECTUAL PROPERTY
We have registered, and are in the process of registering, various
trademarks and service marks with the U.S. Patent and Trademark Office,
including New York Sports Clubs, Washington Sports Clubs, Boston Sports Clubs,
Philadelphia Sports Clubs, TSI and Town Sports International, Inc.
COMPETITION
The fitness club industry is highly competitive. We compete with other
fitness clubs, physical fitness and recreational facilities established by local
governments and hospitals and by businesses for their employees, amenity and
condominium clubs, the YMCA and similar organizations and, to a certain extent,
with racquet, tennis and other athletic clubs, country clubs, weight reducing
salons and the home-use fitness equipment industry. We also compete with other
entertainment and retail businesses for the discretionary income of our target
markets. There can be no assurance that we will be able to compete effectively
in the future in the markets in which we operate. Competitors, which may include
companies which are larger and have greater resources than we, may enter these
markets to our detriment. These competitive conditions may limit our ability to
increase dues without a material loss in membership, attract new members and
attract and retain qualified personnel. Additionally, consolidation in the
fitness club industry could result in increased competition among participants,
particularly large multi-facility operators that are able to compete for
attractive acquisition candidates, and real estate availability thereby
increasing costs associated with expansion through both acquisitions, and
greenfields.
We believe that our market leadership, experience and operating
efficiencies enable us to provide our members with a superior product in terms
of convenience, quality and affordability. We believe that there are significant
barriers to entry in our urban markets, including restrictive zoning laws,
lengthy permit processes and a shortage of appropriate real estate, which could
discourage any large competitor from attempting to open a chain of clubs in
these markets. However, such a competitor could enter these markets more easily
through one or a series of acquisitions.
59
EMPLOYEES
At March 31, 2003, we had approximately 7,500 employees, of which
approximately 2,800 were employed full-time. Approximately 325 employees were
corporate personnel working in the Manhattan, Boston or Washington, D.C.
offices. We are not a party to any collective bargaining agreement with our
employees. We have never experienced any significant labor shortages nor had any
difficulty in obtaining adequate replacements for departing employees and
consider our relations with our employees to be good. We believe that we offer
our employees benefits (including health, dental, disability insurance, pre-tax
healthcare and dependent care accounts, and a 401(k) plan) which are generally
superior to those offered by our competitors.
GOVERNMENT REGULATION
Our operations and business practices are subject to regulation at the
federal, state and, in some cases, local levels. State and local consumer
protection laws and regulations govern our advertising, sales and other trade
practices.
Statutes and regulations affecting the fitness industry have been enacted
in states in which we conduct business; many other states into which we may
expand have adopted or likely will adopt similar legislation. Typically, these
statutes and regulations prescribe certain forms and provisions of membership
contracts, afford members the right to cancel the contract within a specified
time period after signing, require an escrow of funds received from pre-opening
sales or the posting of a bond or proof of financial responsibility, and may
establish maximum prices for membership contracts and limitations on the term of
contracts. In addition, we are subject to numerous other types of federal and
state regulations governing the sale of memberships. These laws and regulations
are subject to varying interpretations by a number of state and federal
enforcement agencies and the courts. We maintain internal review procedures in
order to comply with these requirements, and believe that our activities are in
substantial compliance with all applicable statutes, rules and decisions.
Under so-called state "cooling-off" statutes, a member has the right to
cancel his or her membership for a period of three to ten days (depending on the
applicable state law) and, in such event, is entitled to a refund of any
initiation fee paid. In addition, our membership contracts provide that a member
may cancel his or her membership at any time for medical reasons or relocation a
certain distance from the nearest club. The specific procedures for cancellation
in these circumstances vary due to differing state laws. In each instance, the
canceling member is entitled to a refund of prepaid amounts only. Furthermore,
where permitted by law, a cancellation fee is due to us upon cancellation and we
may offset such amount against any refunds owed.
PROPERTIES
We own the 151 East 86th Street location, which houses a fitness club and a
retail tenant that generated approximately $560,000 of rental income for us
during the twelve months ended March 31, 2003. Our fitness clubs occupy leased
space pursuant to long-term leases (generally 15 to 25 years, including
options). In the next four years (ending December 31, 2006), only three of our
fitness club leases will expire without any renewal option. In each case, we
have, or will have, on the date of expiration, a new Town Sports club in close
proximity, and intend to transfer members to these clubs when and if the
expiring leases are not extended.
We lease approximately 40,000 square feet of office space in New York City,
and have smaller regional offices in Fairfax, VA, East Brunswick, NJ, Old
Bridge, NJ, Philadelphia, PA, Stamford, CT and Wakefield, MA, for
administrative, and general corporate purposes. We also lease warehouse and
commercial space in Long Island City, NY and Brooklyn, NY, for storage purposes
and for the operation of a centralized laundry facility for certain New York
fitness
60
clubs. As of March 31, 2003, 127 of the existing fitness clubs were wholly owned
by us and two were managed and partly-owned. In addition, we provide management
services at two fitness clubs in which we have no equity interest.
The following table provides information regarding our club locations:
<Table>
<Caption>
DATE OPENED OR MANAGEMENT
LOCATION ADDRESS ASSUMED
- -------------------------------------------------------------------------------------------
NEW YORK SPORTS CLUBS:
1. Manhattan 151 East 86th Street January, 1977
2. Manhattan 61 West 62nd Street July, 1983
3. Manhattan 614 Second Avenue July, 1986
4. Manhattan 380 Madison Avenue January, 1990
5. Manhattan 151 Reade Street January, 1990
6. Manhattan 1601 Broadway September, 1991
7. Manhattan 50 West 34th Street August, 1992
8. Manhattan 349 East 76th Street April, 1994
9. Manhattan 248 West 80th Street May, 1994
10. Manhattan 502 Park Avenue February, 1995
11. Manhattan 117 Seventh Avenue South March, 1995
12. Manhattan 303 Park Avenue South December, 1995
13. Manhattan 30 Wall Street May, 1996
14. Manhattan 1635 Third Avenue October, 1996
15. Manhattan 575 Lexington Avenue November, 1996
16. Manhattan 278 Eighth Avenue December, 1996
17. Manhattan 200 Madison Avenue February, 1997
18. Manhattan 131 East 31st Street February, 1997
19. Manhattan 2162 Broadway November, 1997
20. Manhattan 633 Third Avenue April, 1998
21. Manhattan 1657 Broadway July, 1998
22. Manhattan 217 Broadway March, 1999
23. Manhattan 23 West 73rd Street April, 1999
24. Manhattan 34 West 14th Street July, 1999
25. Manhattan 503-511 Broadway July, 1999
26. Manhattan 1372 Broadway October, 1999
27. Manhattan 300 West 125th Street May, 2000
28. Manhattan 102 North End Avenue May, 2000
29. Manhattan 14 West 44th Street August, 2000
30. Manhattan 128 Eighth Avenue December, 2000
31. Manhattan 2521-23 Broadway August, 2001
32. Manhattan 3 Park Avenue August, 2001
33. Manhattan 19 Irving Place November, 2001
34. Manhattan 160 Water Street November, 2001
35. Manhattan 230 West 41st Street November, 2001
36. Manhattan 1221 Avenue of the Americas January, 2002
37. Manhattan 200 Park Avenue December, 2002
38. Brooklyn, NY 110 Boerum Place October, 1985
39. Brooklyn, NY 1736 Shore Parkway June, 1998
40. Brooklyn, NY 179 Remsen Street May, 2001
41. Brooklyn, NY+ 453 Fifth Avenue Opening 2003
</Table>
61
<Table>
<Caption>
DATE OPENED OR MANAGEMENT
LOCATION ADDRESS ASSUMED
- -------------------------------------------------------------------------------------------
42. Queens, NY 69-33 Austin Street, Forest Hills April, 1997
43. Queens, NY 153-67 A Cross Island Parkway June, 1998
44. Queens, NY 2856 Steinway Street Opening 2004
45. Staten Island, NY 300 West Service Road June, 1998
46. Scarsdale, NY 696 White Plains Road October, 1995
47. Mamaroneck, NY 124 Palmer Avenue January, 1997
48. White Plains, NY 1 North Broadway September, 1997
49. Croton-on-Hudson, NY 420 South Riverside Drive January, 1998
50. Larchmont, NY 15 Madison Avenue December, 1998
51. Nanuet, NY 58 Demarest Mill Road May, 1998
52. Great Neck, NY 15 Barstow Road July, 1989
53. East Meadow, NY 625 Merrick Avenue January, 1999
54. Commack, NY 6136 Jericho Turnpike January, 1999
55. Oceanside, NY 2909 Lincoln Avenue May, 1999
56. Long Beach, NY 265 East Park Avenue July, 1999
57. Garden City, NY 833 Franklin Avenue May, 2000
58. Huntington, NY 350 New York Avenue February, 2001
59. Syosset, NY 49 Ira Road March, 2001
60. West Nyack, NY 3656 Palisades Center Drive February, 2002
61. Woodmere, NY 158 Irving Street March 2002
62. Stamford, CT 6 Landmark Square December, 1997
63. Stamford, CT 16 Commerce Road January, 1998
64. Danbury, CT 38 Mill Plain Road January, 1998
65. Stamford, CT 1063 Hope Street November, 1998
66. Norwalk, CT 250 Westport Avenue March, 1999
67. Greenwich, CT 6 Liberty Way May, 1999
68. Westport, CT 427 Post Road, East January, 2002
69. East Brunswick, NJ 8 Cornwall Court January, 1990
70. Princeton, NJ 301 North Harrison Street May, 1997
71. Freehold, NJ 200 Daniels Way April, 1998
72. Matawan, NJ 163 Route 34 April, 1998
73. Old Bridge, NJ Gaub Road and Route 516 April, 1998
74. Marlboro, NJ 34 Route 9 North April, 1998
75. Fort Lee, NJ 1355 15th Street June, 1998
76. Ramsey, NJ 1100 Route 17 North June, 1998
77. Mahwah, NJ 7 Leighton Place June, 1998
78. Parsippany, NJ 2651 Route 10 August, 1998
79. Springfield, NJ 215 Morris Avenue August, 1998
80. Colonia, NJ 1250 Route 27 August, 1998
81. Franklin Park, NJ 3911 Route 27 August, 1998
82. Plainsboro, NJ 10 Schalks Crossing August, 1998
83. Somerset, NJ 120 Cedar Grove Lane August, 1998
84. Hoboken, NJ 221 Washington Street October, 1998
85. West Caldwell, NJ 913 Bloomfield Avenue April, 1999
86. Jersey City, NJ 147 Two Harborside Financial Center June, 2002
87. Newark, NJ 1 Gateway Center October, 2002
</Table>
62
<Table>
<Caption>
DATE OPENED OR MANAGEMENT
LOCATION ADDRESS ASSUMED
- -------------------------------------------------------------------------------------------
88. Ridgewood, NJ+ 129 S. Broad Street Opening 2003
89. Westwood, NJ+ 35 Jefferson Avenue Opening 2003
BOSTON SPORTS CLUBS:
90. Boston, MA 561 Boylston Street November, 1991
91. Allston, MA 15 Gorham Street July, 1997
92. Boston, MA 1 Bulfinch Place August, 1998
93. Natick, MA Sherwood Plaza, 124 Worcester Rd September, 1998
94. Weymouth, MA 553 Washington Street May, 1999
95. Boston, MA 201 Brookline Avenue June, 2000
96. Wellesley, MA 140 Great Plain Avenue July, 2000
97. Boston, MA One Devonshire Place July, 2000
98. Andover, MA 307 Lowell Street July, 2000
99. Lynnfield, MA 425 Walnut Street July, 2000
100. Lexington, MA 475 Bedford Avenue July, 2000
101. Franklin, MA 750 Union Street July, 2000
102. Framingham, MA 1657 Worcester Street July, 2000
103. Danvers, MA 50 Ferncroft Road July, 2000
104. Cambridge, MA 625 Massachusetts Avenue January, 2001
105. East Cambridge, MA 6 Museum Way January, 2001
106. Boston, MA 361 Newbury Street November, 2001
107. West Newton, MA 1359 Washington Street November, 2001
108. Boston, MA 350 Washington Street February, 2002
109. Waltham, MA 840 Winter Street November, 2002
WASHINGTON SPORTS CLUBS:
110. Washington, D.C. 214 D Street, S.E. January, 1980
111. Washington, D.C. 1835 Connecticut Avenue, N.W. January, 1990
112. Washington, D.C. 1990 M Street, N.W. February, 1993
113. Washington, D.C. 2251 Wisconsin Avenue, N.W. May, 1994
114. Washington, D.C. 1211 Connecticut Avenue, N.W. July, 2000
115. Washington, D.C. 1345 F Street, N.W. August, 2002
116. Bethesda, MD 4903 Elm Street May, 1994
117. North Bethesda, MD 10400 Old Georgetown Road June, 1998
118. Germantown, MD 12623 Wisteria Drive July, 1998
119. Chevy Chase, MD 5346 Wisconsin Ave., N.W. February, 2002
120. Alexandria, VA 3654 King Street June, 1999
121. Sterling, VA 21800 Town Center Plaza October, 1999
122. Fairfax, VA 11001 Lee Highway October, 1999
123. West Springfield, VA 8430 Old Keene Mill September, 2000
124. Clarendon, VA 2700 Clarendon Boulevard November, 2001
PHILADELPHIA SPORTS CLUBS:
125. Philadelphia, PA 220 South 5th Street January, 1999
126. Philadelphia, PA 2000 Hamilton Street July, 1999
127. Chalfont, PA One Highpoint Drive January, 2000
128. Cherry Hill, NJ Route 70 and Kings Highway April, 2000
129. Philadelphia, PA 1735 Market Street October, 2000
130. Ardmore, PA 34 W. Lancaster Avenue March, 2002
</Table>
63
<Table>
<Caption>
DATE OPENED OR MANAGEMENT
LOCATION ADDRESS ASSUMED
- -------------------------------------------------------------------------------------------
SWISS SPORTS CLUBS:
131. Basel, Switzerland St. Johanns-Vorstadt 41 August, 1987
132. Zurich, Switzerland Glarnischstrasse 35 August, 1987
133. Basel, Switzerland Basel FC Soccer Stadium August, 2001
</Table>
- ---------------
+ Under construction.
We have also signed five leases for greenfield club development. These
locations are, however, part of development projects and are subject to
various conditions, including delivery of the space as specified in the lease.
LEGAL PROCEEDINGS
On February 13, 2003, an individual filed suit against us in the Supreme
Court, New York County, alleging that on January 14, 2003, he sustained an
injury at one of our club locations resulting in serious bodily injury. His
complaint seeks $250.0 million in damages for personal injuries, and $250.0
million in punitive damages. We have in force $51.0 million of insurance
coverage to cover claims of this nature. We intend to vigorously contest this
lawsuit and presently anticipate that this matter will be covered by our
insurance.
Additionally, we are a party to various lawsuits arising in the normal
course of business. We believe that the ultimate outcome of these matters will
not have a material adverse effect on our business, results of operations, cash
flows, or financial condition.
64
MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the names, ages and a brief account of the
business experience of each person who is a director or executive officer of
Town Sports.
<Table>
<Caption>
NAME AGE POSITION
---- --- --------
Mark Smith............................. 44 Chairman and Director
Robert Giardina........................ 45 Chief Executive Officer, Office of the President
Alexander Alimanestianu................ 44 Chief Development Officer, Office of the
President
Richard Pyle........................... 44 Chief Financial Officer, Office of the President
Randy Stephen.......................... 46 Chief Operating Officer
Keith E. Alessi........................ 48 Director
Paul Arnold............................ 56 Director
Bruce Bruckmann........................ 49 Director
J. Rice Edmonds........................ 32 Director
Jason Fish............................. 45 Director
</Table>
Mark Smith joined us in 1985 and has served as Chief Executive Officer from
1995 to 2001 and became Chairman in January 2002. Prior to these appointments,
he held the position of Executive Vice President of Development and
International Operations. Mr. Smith has also served as a director since
September 1995. He was appointed to the Board of the International Health,
Racquet and Sportsclub Association (the club industry trade association) in
2001. Before joining us, Mr. Smith was a chartered accountant with Coopers &
Lybrand in New York City, London and New Zealand, and a professional squash
player.
Robert Giardina joined us in 1981 and has served as President and Chief
Operating Officer from 1992 to 2001, and became Chief Executive Officer in
January 2002. With over 20 years of experience in the club industry, Mr.
Giardina has expertise in virtually every aspect of facility management and club
operations. In addition to operations, Mr. Giardina has primary responsibility
for sales and marketing.
Alexander Alimanestianu joined us in 1990 and became Executive Vice
President, Development in 1995 and Chief Development Officer in January 2002.
From 1990 to 1995, Mr. Alimanestianu served as Vice President and Senior Vice
President. Before joining us, he worked as a corporate attorney for six years
with one of our outside law firms. Mr. Alimanestianu has been involved in the
development or acquisition of over 100 of our clubs.
Richard Pyle, a British chartered accountant, joined us in 1987 and has
been chiefly responsible for our financial matters since that time, as a Vice
President in 1988, Senior Vice President and Chief Financial Officer in 1992 and
Executive Vice President and Chief Financial Officer in 1995, successively.
Before joining us, Mr. Pyle worked in public accounting (in the United States,
Bermuda, Spain and England) specializing in the hospitality industry, and as the
corporate controller for a British public company in the leisure industry.
Randy Stephen joined us on September 2002 as Chief Operating Officer. Prior
to joining us and since 1987, Mr. Stephen held various positions with Circuit
City Stores, including Director of Human Resources and General Manager. In 1995,
he was appointed Circuit City Stores' Vice President, Corporate Operations,
focusing on marketing, promotions and business process re-engineering and in
1996 he became the Northeast Division President. Prior to 1987, Mr. Stephen
worked with several premier retailers including Eastern Mountain Sports, Eddie
Bauer, Keeger & Sons and Britches of Georgetown.
65
Keith E. Alessi has served as a director of Town Sports since April 1997.
Mr. Alessi is the owner and Chief Executive Officer of Lifestyle Improvement
Centers, LLC. Mr. Alessi is an adjunct professor of Law at Washington and Lee
University School of Law and an adjunct professor of strategy at the University
of Michigan Graduate School of Business. Mr. Alessi served as President, Chief
Executive Officer and a director of Telespectrum Worldwide, Inc. from March 1998
to April 2000. From May 1996 to March 1998, Mr. Alessi served as Chairman,
President and Chief Executive Officer of Jackson Hewitt, Inc. Mr. Alessi is
currently a Director of H&E Equipment Services L.L.C. and MWI Veterinary Supply
Co.
Paul Arnold has served as a director of Town Sports since April 1997. Mr.
Arnold has served as Chairman and Chief Executive Officer of Cort Business
Services, Inc., a Berkshire Hathaway Company, since 2000. From 1992 to 2000, Mr.
Arnold served as President, Chief Executive Officer and Director of Cort
Business Services. Prior to 1992, Mr. Arnold held various positions over a 24
year period within Cort Furniture Rental, a division of Mohasco Industries. Mr.
Arnold is currently a Director of Relocation Central Corp. and Penhall
International, Inc.
Bruce Bruckmann has served as a director of Town Sports since December
1996. Since 1995, Mr. Bruckmann has served as Managing Director of BRS. From
1983 until 1995, Mr. Bruckmann served as an officer and subsequently a Managing
Director of Citicorp Venture Capital, Ltd. Mr. Bruckmann is currently a director
of Penhall International, Inc., Mohawk Industries, Inc., H&E Equipment Services
L.L.C. and Anvil Knitwear, Inc. and a director of several private companies.
J. Rice Edmonds has served as a director of Town Sports since July 2002.
Mr. Edmonds is a Principal of BRS. Prior to joining BRS in 1996, Mr. Edmonds
worked in the high yield finance group of Bankers Trust. Mr. Edmonds is
currently a director of H&E Equipment Services L.L.C. and several other private
companies.
Jason Fish has been a director of Town Sports since December 1996. Mr. Fish
is the co-founder and President of CapitalSource Holdings, L.L.C., a position he
has held since June 2000. Prior to founding CapitalSource, Mr. Fish had been a
Managing Member of Farallon Capital Management, L.L.C. ("FCM") and Farallon
Partners, L.L.C., Farallon's two management entities, since April 1996. Mr. Fish
was a General Partner of the Farallon investment partnerships and a Managing
Director of FCM's predecessor, Farallon Capital Management, Inc., from 1991 to
1996.
66
EXECUTIVE COMPENSATION
The following summarizes, for the year indicated, the principal components
of compensation for our Chief Executive Officer and the other four highest
compensated executive officers (collectively, the "named executive officers").
The compensation set forth below fully reflects compensation for work performed
on our behalf.
SUMMARY COMPENSATION TABLE
<Table>
<Caption>
LONG-TERM
COMPENSATION
AWARDS
COMMON
STOCK
OTHER ANNUAL UNDERLYING
SALARY BONUS (1) COMPENSATION OPTIONS/SARS
NAME AND PRINCIPAL POSITION PERIOD ($) ($) ($) (#)
- --------------------------- ------ ------- --------- ------------ ------------
Mark Smith.......................... 2002 426,072 429,224 -- --
Chairman 2001 413,662 364,597 -- --
2000 397,752 540,000 -- --
Robert Giardina..................... 2002 404,097 327,312 -- --
Chief Executive Officer, 2001 392,327 276,678 -- --
Office of the President 2000 377,237 413,000 -- --
Richard Pyle........................ 2002 236,539 252,815 -- --
Chief Financial Officer, 2001 215,035 216,258 -- --
Office of the President 2000 206,764 317,000 -- --
Alexander Alimanestianu............. 2002 236,539 252,815
Chief Development Officer, 2001 215,035 216,258 -- --
Office of the President 2000 206,764 317,000 -- --
Deborah Smith....................... 2002 178,098 171,690 -- --
Senior Vice President, 2001 172,911 145,839 -- --
Operations 2000 166,261 216,000 -- --
</Table>
- ---------------
(1) Includes annual bonus payments under our Annual Bonus Plan.
OPTION/SAR GRANTS DURING THE YEAR ENDED DECEMBER 31, 2002
There were no options granted to named executive officers by us during the
year ended December 31, 2002.
AGGREGATED OPTION/SAR EXERCISES DURING THE YEARS ENDED DECEMBER 31, 2002 AND
2002 YEAR-END OPTION/SAR VALUES
The following summarizes exercises of stock options (granted in prior
years) by the named executive officers during the year ended December 31, 2002
as well as the number and value of all unexercised options held by the named
executive officers as of December 31, 2002.
<Table>
<Caption>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
OPTIONS/SARS AT IN-THE-MONEY OPTIONS/SARS
SHARES FY-END(#) AT FY-END ($)(1)
ACQUIRED ON VALUE EXERCISABLE/UNEXERCISABLE EXERCISABLE/ UNEXERCISABLE
EXERCISE(#) REALIZED($) -------------------------- ---------------------------
NAME COMMON COMMON COMMON PREFERRED COMMON PREFERRED
- ---- ------------ ----------- --------- ----------- ------------ ------------
Mark Smith........... -- -- 8,830/0 42,812/0 1,147,900/0 2,428,725/0
Robert Giardina...... -- -- 8,829/0 32,793/0 1,147,770/0 1,860,347/0
Richard Pyle......... -- -- 8,828/0 27,569/0 1,147,640/0 1,563,989/0
Alexander
Alimanestianu...... -- -- 8,828/0 27,199/0 1,147,640/0 1,542,999/0
Deborah Smith........ -- -- 5,750/0 9,530/0 740,900/0 540,637/0
</Table>
67
- ---------------
(1) Value realized is based upon the fair market value of the stock at the
exercise date minus the exercise price. Fair market value was determined in
good faith by the Board of Directors and was based upon our historical and
projected financial performance.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The current members of our compensation committee are Bruce Bruckmann, Paul
Arnold and Mark Smith. Bruce Bruckmann and Paul Arnold are non-employee
directors.
MANAGEMENT EQUITY AGREEMENTS
We have entered into executive stock agreements with our named executive
officers. Pursuant to these executive stock agreements, our named executive
officers each have purchased our shares of common stock and/or shares of series
B preferred stock at a purchase price of $1.00 per share of common stock and
$35.00 per share of series B preferred stock.
OUR BENEFIT PLANS
We maintain a 401(k) defined contribution plan and are subject to the
provisions of the Employee Retirement Income Security Act of 1974 ("ERISA"). The
Plan provides for us to make discretionary contributions; however, we elected
not to make contributions for the year ended December 31, 2000. The Plan was
amended, effective January 1, 2001, to provide for an employer matching
contribution in an amount equal to 25% of the participant's contribution with a
limit of five hundred dollars per annum. In February 2002 and 2003, employer
matching contributions totaling $200,000 were made for the Plan year ended
December 31, 2001 and 2002.
68
SECURITY OWNERSHIP AND CERTAIN BENEFICIAL OWNERS
The following table sets forth (as of March 31, 2003) certain information
with respect to the beneficial ownership of the common stock and preferred stock
by: (i) each person or entity who owns of record or beneficially more than 5% or
more of any class of our voting securities; (ii) each named executive officer
and director of Town Sports; and (iii) all directors and named executive
officers of Town Sports as a group. All of our redeemable senior preferred stock
was redeemed with the proceeds of the offering of old notes and the other
refinancing transactions. See "The Refinancing Transactions."
<Table>
<Caption>
COMMON REDEEMABLE SERIES A
STOCK PERCENTAGE OF SENIOR REDEEMABLE SERIES B
BENEFICIALLY COMMON STOCK PREFERRED PREFERRED PREFERRED
NAME OWNED(1) OUTSTANDING(1) STOCK STOCK STOCK
- ---- ------------ -------------- ---------- ---------- ---------
BRS(2)
126 East 56th Street, 29th Floor
New York, New York 10022........... 504,456 37.6% -- 104,330 --
The Farallon Entities(3)
One Maritime Plaza, Suite 1325
San Francisco, California 94111.... 270,091 20.1% 20,000 41,045 --
The Canterbury Entities(4)
600 Fifth Avenue, 23rd Floor
New York, New York 10020........... 139,437 10.4% 15,000 -- --
Capital Source Holdings L.L.C.
4445 Willard Avenue
Chevy Chase, Maryland 20815........ 23,000 1.7% -- -- --
The Rosewood Capital Entities(5)
One Maritime Plaza, Suite 1330
San Francisco, California 94111.... 17,908 1.3% 5,000 -- 109,541
Executive Officers and Directors:
Mark Smith(6)...................... 74,955 5.6% -- -- --
Robert Giardina(6)................. 59,480 4.4% -- -- --
Richard Pyle(6).................... 51,410 3.8% -- -- --
Alexander Alimanestianu(6)......... 50,839 3.8% -- -- --
Deborah Smith(6)................... 21,658 1.6% -- -- --
Bruce C. Bruckmann(7).............. 517,642 38.6% -- 107,057 --
J. Rice Edmonds(8)................. 504,456 37.6% -- 104,330 --
Jason Fish(9)...................... 293,091 21.9% 20,000 41,045 --
Paul Arnold........................ * * -- 591 --
Keith Alessi....................... * * -- 591 --
Executive Officers and Directors as a
Group:
10 Persons(10)..................... 1,074,789 80.2% 20,000 149,285 --
</Table>
- ---------------
* Represents less than 1%.
(1) Beneficial ownership is determined in accordance with Rule 13d-3 under the
Exchange Act. In computing the number of shares beneficially owned by a
person and the percentage ownership of that person, shares of common stock
subject to options held by that person that are currently exercisable or
exercisable within 60 days of March 31, 2003 are deemed outstanding. Such
shares, however, are not deemed outstanding for the purposes of computing
the percentage ownership of any other person.
(2) Excludes shares held individually by Mr. Bruckmann and other individuals
(and affiliates and family members thereof), each of whom are employed by
BRS.
(3) Includes shares held by each of Farallon Capital Partners, L.P., Farallon
Capital Institutional Partners, L.P., Farallon Capital Institutional
Partners II, L.P. and R.R. Capital Partners, L.P. (the "Farallon
Entities"). Farallon Partners, L.L.C. is the general partner of each of the
Farallon Entities. Farallon Partners, L.L.C. disclaims beneficial
69
ownership of such shares. Also includes warrants to purchase 71,630 shares
of common stock with an exercise price of $.01 per share and an expiration
date of November 30, 2008, which will be reduced by 9,637 upon completion
of this offering and the other refinancing transactions.
(4) Includes shares held by each of Canterbury Mezzanine Capital, LP and
Canterbury Detroit Partners, LP.
(5) Includes shares held by each of Rosewood Capital LP, Rosewood Capital IV,
LP and Rosewood Capital IV Associates, LP.
(6) Includes options to acquire common stock, exercisable within 60 days,
pursuant to the option plan. Messrs. Smith, Giardina, Pyle, Alimanestianu
and Ms. Smith each hold such options on 8,830, 8,829, 8,828, 8,828 and
5,750 shares of common stock, respectively. The address for each of these
named executive officers is the same as the address of our principal
executive offices.
(7) Includes 504,456 shares held by BRS, and approximately 2,276 shares held by
certain other family members of Mr. Bruckmann. Mr. Bruckmann disclaims
beneficial ownership of such shares held by BRS.
(8) Includes shares held by BRS. Mr. Edmonds disclaims beneficial ownership of
such shares.
(9) Includes shares held by each of the Farallon Entities and CapitalSource,
L.L.C. Mr. Fish is the founder of CapitalSource L.L.C. an affiliate of the
Farallon Entities. Mr. Fish disclaims beneficial ownership of such shares.
(10) Includes (i) shares held by BRS, which may be deemed to be owned
beneficially by Messrs. Bruckmann and Edmonds, and (ii) shares held by the
Farallon Entities, which may be deemed to be owned beneficially by Mr.
Fish.
Excluding the shares beneficially owned by BRS and the Farallon Entities,
the directors and named executive officers as a group beneficially own (i)
264,056 shares of common stock (which represents approximately 19.7% of the
common stock on a fully diluted basis), (ii) no shares of redeemable senior
preferred stock, (iii) 1,182 shares of series A redeemable preferred stock, and
(iv) and no shares of series B preferred stock.
70
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
REDEEMABLE SENIOR PREFERRED STOCK
In November 1998, we issued 40,000 shares of redeemable senior preferred
stock. After the payment of fees and expenses of approximately $400,000 we
received net proceeds of approximately $39.6 million. The redeemable senior
preferred stock was redeemable in November 2008. The redeemable senior preferred
stock could, at the option of the holder, be converted into common stock upon
all initial public offering of Town Sports. In connection with the offering of
the old notes, we redeemed all of our issued and outstanding shares of senior
preferred stock.
REGISTRATION RIGHTS AGREEMENT
In connection with our recapitalization in 1996, we, BRS, the Farallon
Entities, Canterbury Mezzanine Capital, L.P. ("CMC"), certain members of
management and other shareholders of Town Sports entered into a registration
rights agreement, dated December 10, 1996 (as amended on November 13, 1998, in
connection with the issuance of senior preferred stock, the "Registration Rights
Agreement"). Pursuant to the terms of the Registration Rights Agreement, BRS,
the Farallon Entities and CMC have the right to require us, at our expense and
subject to certain limitations, to register under the Securities Act all or part
of the shares of common stock (the "Registrable Securities") held by them. BRS
is entitled to demand up to three long-form registrations at any time and
unlimited short-form registrations. Farallon is entitled to demand one long-form
registration (but only one year after we have consummated an initial registered
public offering of our common stock) and up to three short-form registrations.
CMC is entitled to demand up to two short-form registrations.
All holders of Registrable Securities are entitled to an unlimited number
of "piggyback" registrations, with us paying all expenses of the offering,
whenever we propose to register our common stock under the Securities Act. Each
such holder is subject to certain pro rata limitations on its ability to
participate in such a "piggyback" registration. In addition, pursuant to the
Registration Rights Agreement, we have agreed to indemnify all holders of
registrable securities against certain liabilities, including certain
liabilities under the Securities Act.
PROFESSIONAL SERVICES AGREEMENT
In connection with our recapitalization, Bruckmann, Rosser, Sherrill & Co.,
Inc. ("BRS Co."), an affiliate of BRS, and Town Sports entered into a
Professional Services Agreement, whereby BRS Co. agreed to provide us certain
advisory and consulting services. In exchange for such services, BRS Co.
receives an annual fee of $250,000 per calendar year while they own at least
20.0% of our outstanding common stock.
SUBORDINATED CREDIT AGREEMENT
In November 2000, we entered into a subordinated credit agreement with
CapitalSource Holdings L.L.C., an affiliate of a director and stockholder of
Town Sports. This subordinated agreement provided for up to $20.0 million of
principal borrowings and expired December 31, 2004. Interest on principal
borrowings accrues at 12.75% per annum; 9.75% of which was payable on a monthly
basis and the remaining 3% was accruable, at our option, through maturity. The
total amount of accrued and unpaid interest could not exceed $2.5 million. We
were charged a fee of 0.083% per month based on the portion of the facility not
utilized. In connection with this agreement we paid a commitment fee of $225,000
to the lender, approximately $73,000 of legal fees, and committed to issue
16,000 shares of common stock to the lender. Such shares were issued during
December 2001 and had an estimated fair value
71
of $1.4 million as of the date the lender committed to provide the financing. In
December 2001 we issued an additional 7,000 shares of restricted common stock to
the lender, which would have been forfeited by the lender in the event that the
agreement had been terminated prior to November 30, 2002. As the agreement was
not terminated, these shares became unrestricted in November 2002. In 2002, an
additional commitment fee of $125,000 was paid to the lender, pending an
increase in the facility of $5.5 million. In connection with the offering of the
old notes, we paid the entire outstanding borrowings under the subordinated
credit facility and terminated the subordinated credit agreement.
72
DESCRIPTION OF SENIOR SECURED REVOLVING CREDIT FACILITY
Our new senior secured revolving credit facility, with Deutsche Bank Trust
Company Americas, as administrative agent, Deutsche Bank Securities Inc., as
joint lead arranger and BNP Paribas Securities Corp., as joint lead arranger and
syndication agent, is a five-year facility, providing for borrowings of up to
$50.0 million (containing a sublimit to be determined available for the issuance
of letters of credit).
Permanent reductions to the commitments under the new senior secured
revolving credit facility are required in an amount equal to (a) 100.0% of the
net cash proceeds of all asset sales and dispositions by us and our
subsidiaries, subject to certain exceptions and reinvestment rights, (b) 100.0%
of the net cash proceeds of issuances of certain debt obligations by us and our
subsidiaries, subject to certain exceptions, and (c) 100.0% of certain insurance
proceeds received by us and our subsidiaries, subject to certain exceptions and
reinvestment rights.
Voluntary prepayments and commitment reductions are permitted in whole or
in part, subject to minimum prepayment or reduction requirements, provided that
voluntary prepayments of eurodollar loans on a date other than the last day of
the relevant interest period are subject to the payment of customary breakage
costs, if any. Such voluntary prepayments and commitment reductions may be made
without premium or penalty.
All of our obligations under the new senior secured revolving credit
facility are unconditionally guaranteed by each of our existing and each
subsequently acquired or organized domestic subsidiaries. The new senior secured
revolving credit facility and the related guarantees are secured by
substantially all of our present and future assets and all present and future
assets of each guarantor, including but not limited to (i) a first-priority
pledge of all of the outstanding capital stock owned by us and each guarantor
(limited to 65% of the voting stock of our first tier foreign subsidiaries) and
(ii) perfected first-priority security interests in all of our present and
future tangible and intangible assets and the present and future tangible and
intangible assets of each guarantor (in each case, other than certain equipment
assets subject to capitalized lease obligations). Guarantees from foreign
subsidiaries and security in respect thereof may be required in certain
circumstances.
Loans under the new senior secured revolving credit facility, at our
option, bear interest at either the base rate or a floating rate equal to the
reserve adjusted London inter-bank offered rate ("LIBOR"), in each case plus a
margin. Overdue principal and, to the extent permitted by law, overdue interest
shall, in each case bear interest at the greater of (x) the rate which is 2% in
excess of the rate otherwise applicable to base rate loans and (y) the rate
which is 2% in excess of the rate then borne by such loans. Interest on all
loans under the new senior secured revolving credit facility are payable (x) in
the case of base rate loans, quarterly and (y) in the case of LIBOR loans, on
the last day of the interest period applicable thereto and every three months in
the case of interest periods in excess of three months and, in each case, at the
time of repayment of any such loans and at maturity. In addition to paying
interest on any outstanding principal amount under the new senior secured
revolving credit facility, we are required to pay an unused revolving credit
facility fee to the senior lenders equal to 0.75% per annum on the unused daily
balance of the revolving credit commitment, commencing on the execution and
delivery of the new senior secured revolving credit facility and payable
quarterly in arrears, based upon the actual number of days elapsed in a 360 day
year. For each letter of credit we issue, we are required to pay (i) a per annum
fee equal to the margin over the LIBOR rate from time to time in effect, (ii) a
fronting fee equal to 1/4 of 1% on the aggregate outstanding stated amounts of
such letters of credit, plus (iii) customary administrative charges.
The credit agreement documentation contains certain customary
representations and warranties and contains customary covenants restricting our
ability to, among others
73
(i) declare dividends or redeem or repurchase capital stock, (ii) prepay, redeem
or purchase other debt, (iii) incur liens, (iv) make loans and investments, (v)
incur additional indebtedness, (vi) amend or otherwise alter debt and other
material agreements, (vii) make capital expenditures, (viii) engage in mergers,
acquisitions and asset sales, (ix) transact with affiliates, and (x) alter the
business we conduct. We also are required to comply with specified financial
covenants and affirmative covenants.
Events of default under the credit agreement include, but are not limited
to, (i) our failure to pay principal or interest when due, (ii) our material
breach of any representations or warranty, (iii) covenant defaults, (iv) events
of bankruptcy, (v) cross default to certain other debt, (vi) unsatisfied final
judgments over a threshold to be determined, and (vii) a change of control. We
pay the senior lenders certain syndication and administration fees, reimburse
certain expenses and provide certain indemnities to the senior lenders, the
administrative agent and the arranger, in each case which are customary for
credit facilities of this type.
74
DESCRIPTION OF NOTES
GENERAL
The Notes were issued under an indenture (the "Indenture"), dated as of
April 16, 2003, among us, the guarantors and The Bank of New York, as trustee.
The following summary of the Indenture does not purport to be complete and is
subject to, and is qualified in its entirety by reference to, the Trust
Indenture Act of 1939, as amended (the "TIA"), and to all of the provisions of
the Indenture (a copy of the form of which may be obtained from us), including
the definitions of certain terms therein and those terms made a part of the
Indenture by reference to the TIA as in effect on the date of the Indenture. The
definitions of most of the capitalized terms used in the following summary are
set forth below under "-- Certain Definitions."
The Notes are our unsecured obligations, ranking equal in right of payment
to all of our unsubordinated debt. The Notes are effectively subordinated to all
existing and future secured debt of the Company to the extent of the assets
securing such debt. As of March 31, 2003, the aggregate principal amount of
secured Debt of the Company and its subsidiaries outstanding was $10.8 million
and the Company had $50.0 million of secured borrowings available under the
Credit Agreement.
We issued the Notes in fully registered form only, without coupons, in
denominations of $1,000 and integral multiples thereof. Initially, the Trustee
acts as Paying Agent and Registrar for the Notes. The Notes may be presented for
registration or transfer and exchange at the offices of the Registrar, which
initially is the Trustee's corporate trust office. We may change any Paying
Agent and Registrar without notice to holders of the Notes. We will pay
principal (and premium, if any) on the Notes at the Trustee's corporate office
in New York, New York. At our option, interest may be paid at the Trustee's
corporate trust office or by check mailed to the registered address of Holders.
Any Notes that remain outstanding after the completion of the Exchange Offer,
together with the Exchange Notes issued in connection with the Exchange Offer,
will be treated as a single class of securities under the Indenture.
PRINCIPAL, MATURITY AND INTEREST
The Notes are unlimited in aggregate principal amount, with $255.0 million
aggregate principal amount to be issued in this offering and will mature on
April 15, 2011. Additional Notes may be issued from time to time subject to the
limitations set forth under "-- Certain Covenants -- Limitation on Incurrence of
Additional Indebtedness."
Interest on the Notes accrue at the rate of 9 5/8% per annum and is payable
semiannually in cash on each April 15 and October 15 to the persons who are
registered Holders at the close of business on the April 1 and October 1
immediately preceding the applicable interest payment date. Interest on the
Notes being issued in this offering will first be payable on October 15, 2003.
Interest on the Notes accrue from the most recent date to which interest has
been paid or, if no interest has been paid, from and including the date of
issuance.
The Notes are not entitled to the benefit of any mandatory sinking fund.
REDEMPTION
Optional Redemption. The Notes are redeemable, at the Company's option, in
whole at any time or in part from time to time, on and after April 15, 2007,
upon not less than 30 nor more than 60 days' notice, at the following redemption
prices (expressed as percentages of the principal amount thereof) if redeemed
during the twelve-month period commencing on April 15
75
of the year set forth below, plus, in each case, accrued and unpaid interest
thereon, if any, to the date of redemption:
<Table>
<Caption>
YEAR PERCENTAGE
- ---- ----------
2007........................................................ 104.813%
2008........................................................ 102.406%
2009 and thereafter......................................... 100.000%
</Table>
Optional Redemption upon Equity Offerings. At any time, or from time to
time, on or prior to April 15, 2006, the Company may, at its option, use the net
cash proceeds of one or more Equity Offerings (as defined below) to redeem up to
35% of the Notes issued under the Indenture at a redemption price equal to
109.625% of the principal amount thereof plus accrued and unpaid interest
thereon, if any, to the date of redemption; provided that:
(1) at least 65% of the principal amount of Notes issued under the
Indenture remains outstanding immediately after any such redemption; and
(2) the Company shall make such redemption not more than 120 days
after the consummation of any such Equity Offering.
As used in the preceding paragraph, "Equity Offering" means a public or
private offering of Qualified Capital Stock of the Company that generates gross
proceeds to the Company of at least $15.0 million.
SELECTION AND NOTICE OF REDEMPTION
In the event that less than all of the Notes are to be redeemed at any
time, selection of such Notes for redemption will be made by the Trustee in
compliance with the requirements of the principal national securities exchange,
if any, on which such Notes are listed or, if such Notes are not then listed on
a national securities exchange, on a pro rata basis, by lot or by such method as
the Trustee shall deem fair and appropriate; provided, however:
(1) that no Notes of a principal amount of $1,000 or less shall be
redeemed in part; and
(2) that if a partial redemption is made with the proceeds of an
Equity Offering, selection of the Notes or portions thereof for redemption
shall be made by the Trustee only on a pro rata basis or on as nearly a pro
rata basis as is practicable (subject to DTC procedures), unless such
method is otherwise prohibited.
Notice of redemption shall be mailed by first-class mail at least 30 but not
more than 60 days before the redemption date to each Holder of Notes to be
redeemed at its registered address. If any Note is to be redeemed in part only,
the notice of redemption that relates to such Note shall state the portion of
the principal amount thereof to be redeemed. A new Note in a principal amount
equal to the unredeemed portion thereof will be issued in the name of the Holder
thereof upon cancellation of the original Note. On and after the redemption
date, interest will cease to accrue on Notes or portions thereof called for
redemption as long as the Company has deposited with the Paying Agent funds in
satisfaction of the applicable redemption price pursuant to the Indenture.
GUARANTEES
The Guarantors jointly and severally guarantee the Company's obligations
under the Indenture and the Notes on a senior unsecured basis. The obligations
of each Guarantor under its Guarantee are limited as necessary to prevent the
Guarantee from constituting a fraudulent conveyance or fraudulent transfer under
applicable law.
76
Each Guarantor may consolidate with or merge into or sell its assets to the
Company or another Guarantor that is a Restricted Subsidiary of the Company
without limitation, or with other Persons upon the terms and conditions set
forth in the Indenture. See "-- Certain Covenants -- Merger, Consolidation and
Sale of Assets." In the event a Guarantor ceases to be a Subsidiary of the
Company in a transaction that complies with the provisions set forth in
"-- Certain Covenants -- Limitation on Asset Sales" and the other covenants
contained in the Indenture, then the Guarantor's Guarantee will be released.
CHANGE OF CONTROL
Upon the occurrence of a Change of Control, each Holder will have the right
to require that the Company purchase all or a portion of such Holder's Notes
pursuant to the offer described below (the "Change of Control Offer"), at a
purchase price equal to 101% of the principal amount thereof plus accrued and
unpaid interest to the date of purchase.
Within 30 days following the date upon which the Change of Control
occurred, the Company must send, by first class mail, a notice to each Holder,
with a copy to the Trustee, which notice shall govern the terms of the Change of
Control Offer. Such notice will state, among other things, the purchase date,
which must be no earlier than 30 days nor later than 45 days from the date such
notice is mailed, other than as may be required by law (the "Change of Control
Payment Date"). Holders electing to have a Note purchased pursuant to a Change
of Control Offer will be required to surrender the Note, with the form entitled
"Option of Holder to Elect Purchase" on the reverse of the Note completed, to
the Paying Agent at the address specified in the notice prior to the close of
business on the third business day prior to the Change of Control Payment Date.
The Company will not be required to make a Change of Control Offer upon a
Change of Control if a third party makes the Change of Control Offer in the
manner, at the times and otherwise in compliance with the requirements set forth
in the Indenture applicable to a Change of Control Offer made by the Company and
purchases all Notes validly tendered and not withdrawn under such Change of
Control Offer.
If a Change of Control Offer is made, there can be no assurance that the
Company will have available funds sufficient to pay the Change of Control
purchase price for all the Notes that might be delivered by Holders seeking to
accept the Change of Control Offer. The Credit Agreement contains, and any
future other agreements relating to other indebtedness to which we become a
party may contain, restrictions or prohibitions on the Company's ability to
repurchase Notes or may provide that an occurrence of a Change of Control
constitutes an event of default under, or otherwise requires payments of amounts
borrowed under, those agreements. If a Change of Control occurs at a time when
the Company is prohibited from repurchasing the Notes, we could seek the consent
of our then existing lenders to the repurchase of the Notes or could attempt to
refinance the Credit Agreement. If the Company does not obtain such consent or
repay the indebtedness, it would remain prohibited from repurchasing the Notes.
In that case, failure to repurchase tendered Notes would constitute an Event of
Default under the Indenture and may constitute a default under the terms of
other indebtedness that we may enter into from time to time. In the event the
Company is required to purchase outstanding Notes pursuant to a Change of
Control Offer, the Company expects that it would seek third party financing to
the extent it does not have available funds to meet our purchase obligations.
However, there can be no assurance that the Company would be able to obtain such
financing.
Neither the Board of Directors of the Company nor the Trustee may waive the
covenant relating to a Holder's right to redemption upon a Change of Control.
Restrictions in the Indenture described herein on the ability of the Company and
its Restricted Subsidiaries to incur additional Indebtedness, to grant liens on
its property, to make Restricted Payments and to make Asset
77
Sales may also make more difficult or discourage a takeover of the Company,
whether favored or opposed by the management of the Company. Consummation of any
such transaction in certain circumstances may require redemption or repurchase
of the Notes, and there can be no assurance that the Company or the acquiring
party will have sufficient financial resources to effect such redemption or
repurchase. Such restrictions and the restrictions on transactions with
Affiliates may, in certain circumstances, make more difficult or discourage any
leveraged buyout of the Company or any of its Subsidiaries by the management of
the Company. While such restrictions cover a wide variety of arrangements that
have traditionally been used to effect highly leveraged transactions, the
Indenture may not afford the Holders of Notes protection in all circumstances
from the adverse aspects of a highly leveraged transaction, reorganization,
restructuring, merger or similar transaction.
The Company will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of Notes pursuant to a Change of Control Offer. To the extent that
the provisions of any securities laws or regulations conflict with the "Change
of Control" provisions of the Indenture, the Company shall comply with the
applicable securities laws and regulations and shall not be deemed to have
breached its obligations under the "Change of Control" provisions of the
Indenture by virtue thereof.
CERTAIN COVENANTS
The Indenture contains, among others, the following covenants:
Limitation on Incurrence of Additional Indebtedness. (a) The Company will
not, and will not permit any of its Restricted Subsidiaries to, directly or
indirectly, create, incur, assume, guarantee, acquire, become liable,
contingently or otherwise, with respect to, or otherwise become responsible for
payment of (collectively "incur") any Indebtedness (other than Permitted
Indebtedness); provided, however, that if no Default or Event of Default shall
have occurred and be continuing at the time of or as a consequence of the
incurrence of any such Indebtedness, the Company or any of its Restricted
Subsidiaries that is or, upon such incurrence becomes, a Guarantor may incur
Indebtedness (including, without limitation, Acquired Indebtedness) and any
Restricted Subsidiary that is not or will not, upon such incurrence, become a
Guarantor may incur Acquired Indebtedness, in each case if on the date of the
incurrence of such Indebtedness, after giving effect to the incurrence thereof,
the Consolidated Fixed Charge Coverage Ratio of the Company is greater than 2.00
to 1.00.
(b) Notwithstanding the preceding paragraph above, the Company will not
incur any Indebtedness if such Indebtedness is by its terms subordinate or
junior in right of payment to any other Indebtedness of the Company, unless such
Indebtedness is also by its terms made subordinate or junior in right of payment
to the Notes to the same extent and in the same manner as such Indebtedness is
subordinated to other Indebtedness of the Company; provided, that Indebtedness
shall not be considered subordinate or junior in right of payment by reason of
being unsecured or being secured to a greater or lesser extent.
Limitation on Restricted Payments. The Company will not, and will not
cause or permit any of its Restricted Subsidiaries to, directly or indirectly:
(1) declare or pay any dividend or make any distribution (other than
dividends or distributions payable in the Qualified Capital Stock of the
Company) on or in respect of shares of the Company's Capital Stock to
holders of such Capital Stock,
(2) purchase, redeem or otherwise acquire or retire for value any
Capital Stock of the Company or any warrants, rights or options to purchase
or acquire shares of any class of such Capital Stock,
78
(3) make any principal payment on, purchase, defease, redeem, prepay,
decrease or otherwise acquire or retire for value, prior to:
(a) any scheduled maturity,
(b) any scheduled or mandatory repayment or
(c) any scheduled sinking fund payment, any Indebtedness of the
Company that is subordinate or junior in right of payment to the Notes;
or
(4) make any Investment (other than Permitted Investments) (each of
the foregoing actions set forth in clauses (1), (2), (3) and (4) being
referred to as a "Restricted Payment");
if at the time of such Restricted Payment or immediately after giving effect
thereto:
(1) a Default or an Event of Default shall have occurred and be
continuing; or
(2) the Company is not able to incur at least $1.00 of additional
Indebtedness (other than Permitted Indebtedness) in compliance with the
covenant described under "--Limitation on Incurrence of Additional
Indebtedness"; or
(3) the aggregate amount of Restricted Payments (including such
proposed Restricted Payment) made subsequent to the Issue Date (the amount
expended for such purposes, if other than in cash, being the fair market
value of such property as determined reasonably and in good faith by the
Board of Directors of the Company) shall exceed the sum of, without
duplication:
(a) 50% of the cumulative Consolidated Net Income (or if
cumulative Consolidated Net Income shall be a loss, minus 100% of such
loss) of the Company earned subsequent to the end of the fiscal quarter
immediately prior to the Issue Date and on or prior to the end of the
most recently ended fiscal quarter for which internal financial
statements are available as of the date the Restricted Payment occurs
(treating such period as a single accounting period), plus
(b) 100% of the aggregate net cash proceeds received by the
Company from any Person (other than a Subsidiary of the Company) from
the issuance and sale subsequent to the Issue Date and on or prior to
the date the Restricted Payment occurs of Qualified Capital Stock of the
Company, plus
(c) without duplication of any amounts included in clause (3)(b)
above, 100% of the aggregate net cash proceeds of any equity
contribution received by the Company from a holder of the Company's
Capital Stock subsequent to the Issue Date and on or prior to the date
the Restricted Payment occurs, plus
(d) without duplication, an amount equal to the sum of
(x) the net reduction in Investments in Unrestricted
Subsidiaries resulting from dividends, repayments of loans or
advances or other transfers of assets by any Unrestricted Subsidiary
to the Company or any Restricted Subsidiary or the receipt of
proceeds by the Company or any Restricted Subsidiary from the sale or
other disposition of any portion of the Capital Stock of any
Unrestricted Subsidiary, in each case occurring subsequent to the
Issue Date and
(y) the consolidated net Investments on the date of Revocation
made by the Company or any of its Restricted Subsidiaries in any
Subsidiary of the Company that has been designated an Unrestricted
Subsidiary after the Issue Date upon its redesignation as a
Restricted Subsidiary in accordance with the covenant described under
"-- Limitation on Designations of Unrestricted Subsidiaries."
79
Notwithstanding the foregoing, the provisions set forth in the immediately
preceding paragraph do not prohibit:
(1) the payment of any dividend or redemption payment within 60 days
after the date of declaration of such dividend or the mailing of such
irrevocable redemption notice if the dividend or redemption payment, as the
case may be, would have been permitted on the date of declaration or the
date of mailing of such notice;
(2) if no Default or Event of Default shall have occurred and be
continuing, the acquisition of any shares of Capital Stock of the Company,
either
(a) solely in exchange for shares of Qualified Capital Stock of
the Company or
(b) through the application of net proceeds of a substantially
concurrent sale for cash (other than to a Restricted Subsidiary of the
Company) of shares of Qualified Capital Stock of the Company;
(3) if no Default or Event of Default shall have occurred and be
continuing, the acquisition of any Indebtedness of the Company that is
subordinate or junior in right of payment to the Notes either
(a) solely in exchange for shares of Qualified Capital Stock of
the Company, or
(b) through the application of net proceeds of a substantially
concurrent sale for cash (other than to a Restricted Subsidiary of the
Company) of
(x) shares of Qualified Capital Stock of the Company or
(y) Refinancing Indebtedness;
(4) if no Default or Event of Default shall have occurred and be
continuing, repurchases by the Company of Capital Stock of the Company or
options or warrants to purchase Capital Stock of the Company, stock
appreciation rights or any similar equity interest in the Company from
consultants, directors, officers and employees of the Company or any of its
Subsidiaries or their authorized representatives upon the death,
disability, retirement or termination of employment of such consultants,
directors, officers or employees in an aggregate amount not to exceed
$750,000 in any calendar year plus the amount of any proceeds received
under key-man life insurance policies that are used to make such payments;
(5) if no Default shall have occurred and be continuing, the
purchase, redemption, defeasance or other acquisition or retirement of
Indebtedness of the Company that is subordinate or junior in right of
payment to the Notes in connection with an asset sale net proceeds amount
offer or change of control offer after complying with the covenants set
forth under "-- Limitation on Asset Sales" and "-- Change of Control"; and
(6) if no Default or Event of Default shall have occurred and be
continuing, Restricted Payments in an aggregate amount not to exceed $10.0
million.
In determining the aggregate amount of Restricted Payments made subsequent to
the Issue Date in accordance with clause (3) of the second preceding paragraph,
amounts expended pursuant to clauses (1), (2)(b), (3)(b)(x), (4) and (6) of the
immediately preceding paragraph shall be included in such calculation.
Limitation on Asset Sales. The Company will not, and will not permit any
of its Restricted Subsidiaries to, consummate an Asset Sale unless:
(1) the Company or the applicable Restricted Subsidiary, as the case
may be, receives consideration at the time of such Asset Sale at least
equal to the fair market value of the
80
assets sold or otherwise disposed of (as determined in good faith by the
Board of Directors of the Company);
(2) at least 75% of the consideration received by the Company or its
Restricted Subsidiary, as the case may be, from such Asset Sale shall be in
the form of cash or Cash Equivalents and shall be received at the time of
such disposition; provided, however, that the amount of:
(a) any liabilities (as shown on the Company's or such Restricted
Subsidiary's most recent balance sheet or the notes thereto) of the
Company or any Restricted Subsidiary (other than liabilities that are by
their terms subordinated to the Notes) that are assumed by the
transferee in such Asset Sale and from which the Company or such
Restricted Subsidiary is released and
(b) any notes, securities or other obligations received by the
Company or by any such Restricted Subsidiary from such transferee that
are immediately converted by the Company or by such Restricted
Subsidiary into cash or Cash Equivalents (to the extent of the cash or
Cash Equivalents received),
shall be deemed to be cash for the purposes of this provision;
(3) upon the consummation of an Asset Sale, the Company shall apply,
or cause such Restricted Subsidiary to apply, the Net Cash Proceeds
relating to such Asset Sale within 360 days of receipt thereof either:
(a) to pay (i) Indebtedness under the Credit Agreement (and, in the
case of any such Indebtedness under any revolving credit facility,
effect a corresponding permanent reduction in the availability under
such revolving credit facility) or other Indebtedness ranking pari passu
with the Notes or Guarantees and (ii) in the case of an Asset Sale by a
Restricted Subsidiary that is not a Guarantor, Indebtedness of such
Restricted Subsidiary; provided, however, that if the Company repays
such other pari passu Indebtedness it must make an equal and ratable
Offer to all holders of Notes as provided in the following paragraph,
(b) to make an investment in properties and assets that replace the
properties and assets that were the subject of such Asset Sale or in
properties and assets that will be used in the business of the Company
and its Restricted Subsidiaries as existing on the Issue Date or in
businesses reasonably related thereto ("Replacement Assets") or
(c) a combination of prepayment and investment permitted by the
foregoing clauses (3)(a) and (3)(b).
On the 361st day after an Asset Sale or such earlier date, if any, as the
Board of Directors of the Company or of such Restricted Subsidiary determines
not to apply the Net Cash Proceeds relating to such Asset Sale as set forth in
clauses (3)(a), (3)(b) and (3)(c) of the next preceding paragraph (each, a "Net
Proceeds Offer Trigger Date"), such aggregate amount of Net Cash Proceeds that
have not been applied on or before such Net Proceeds Offer Trigger Date as
permitted in clauses (3)(a), (3)(b) and (3)(c) of the next preceding paragraph
(each a "Net Proceeds Offer Amount") shall be applied by the Company or such
Restricted Subsidiary to make an offer to purchase (the "Net Proceeds Offer") on
a date not less than 45 nor more than 60 days following the applicable Net
Proceeds Offer Trigger Date, the maximum principal amount of Notes and other
Indebtedness of the Company and the Guarantors that ranks pari passu in right of
payment with the Notes or the Guarantees, as the case may be (to the extent
required by the instrument governing such other Indebtedness), that may be
purchased out of the Net Proceeds Offer Amount (an "Offer"). Any Notes and other
Indebtedness to be purchased pursuant to an Offer shall be purchased pro rata
based on
81
the aggregate principal amount of Notes and such other Indebtedness outstanding
and all Notes shall be purchased at an offer price in cash in an amount equal to
100% of the principal amount thereof, plus accrued and unpaid interest to the
date of purchase.
The Company may defer the Net Proceeds Offer until there is an aggregate
unutilized Net Proceeds Offer Amount equal to or in excess of $10.0 million
resulting from one or more Asset Sales (at which time, the entire unutilized Net
Proceeds Offer Amount, not just the amount in excess of $10.0 million, shall be
applied as required pursuant to the preceding paragraph).
In the event of the transfer of substantially all (but not all) of the
property and assets of the Company and its Restricted Subsidiaries as an
entirety to a Person in a transaction permitted under "-- Merger, Consolidation
and Sale of Assets," the successor corporation shall be deemed to have sold the
properties and assets of the Company and its Restricted Subsidiaries not so
transferred for purposes of this covenant, and shall comply with the provisions
of this covenant with respect to such deemed sale as if it were an Asset Sale.
In addition, the fair market value of such properties and assets of the Company
or its Restricted Subsidiaries deemed to be sold shall be deemed to be Net Cash
Proceeds for purposes of this covenant.
Notwithstanding the four immediately preceding paragraphs, the Company and
its Restricted Subsidiaries will be permitted to consummate an Asset Sale
without complying with such paragraphs to the extent:
(1) at least 75% of the consideration for such Asset Sale constitutes
Replacement Assets; and
(2) such Asset Sale is for fair market value;
provided that any consideration not constituting Replacement Assets received by
the Company or any of its Restricted Subsidiaries in connection with any Asset
Sale permitted to be consummated under this paragraph shall constitute Net Cash
Proceeds subject to the provisions of the four preceding paragraphs.
Each Net Proceeds Offer will be mailed to the record Holders as shown on
the register of Holders within 30 days following the Net Proceeds Offer Trigger
Date, with a copy to the Trustee, and shall comply with the procedures set forth
in the Indenture. Upon receiving notice of the Net Proceeds Offer, Holders may
elect to tender their Notes in whole or in part in integral multiples of $1,000
in exchange for cash. To the extent Holders properly tender Notes in an amount
exceeding the Net Proceeds Offer Amount, Notes of tendering Holders will be
purchased on a pro rata basis (based on amounts tendered). A Net Proceeds Offer
shall remain open for a period of 20 business days or such longer period as may
be required by law.
The Company shall comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of Notes pursuant to a Net Proceeds Offer. To the extent that the
provisions of any securities laws or regulations conflict with the "Asset Sale"
provisions of the Indenture, the Company shall comply with the applicable
securities laws and regulations and shall not be deemed to have breached its
obligations under the "Asset Sale" provisions of the Indenture by virtue
thereof.
Limitation on Dividend and Other Payment Restrictions Affecting
Subsidiaries. The Company will not, and will not cause or permit any of its
Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or
permit to exist or become effective any encumbrance or restriction on the
ability of any Restricted Subsidiary to:
(1) pay dividends or make any other distributions on or in respect of
its Capital Stock;
82
(2) make loans or advances or to pay any Indebtedness or other
obligation owed to the Company or any other Restricted Subsidiary; or
(3) transfer any of its property or assets to the Company or any other
Restricted Subsidiary,
in each case except for such encumbrances or restrictions existing
under or by reason of:
(a) applicable law;
(b) the Indenture, the Notes and the Guarantees;
(c) customary non-assignment provisions of any contract or any
lease governing a leasehold interest of any Restricted Subsidiary;
(d) any instrument governing Acquired Indebtedness, which
encumbrance or restriction is not applicable to any Person, or the
properties or assets of any Person, other than the Person or the
properties or assets of the Person so acquired (including, but not
limited to, such Person's direct and indirect Subsidiaries);
(e) agreements existing on the Issue Date (other than the Credit
Agreement) to the extent and in the manner such agreements are in effect
on the Issue Date;
(f) the Credit Agreement or an agreement governing any other
Indebtedness of the Company or any Restricted Subsidiary permitted to be
incurred under the Indenture; provided that, with respect to any
agreement governing such other Indebtedness, the provisions relating to
such encumbrance or restriction are no less favorable to the Company in
any material respect than the provisions contained in the Credit
Agreement as in effect on the Issue Date;
(g) restrictions on the transfer of assets subject to any Lien
permitted under the Indenture imposed by the holder of such Lien;
(h) restrictions imposed by any agreement to sell assets or Capital
Stock permitted under the Indenture to any Person pending the closing of
such sale;
(i) customary provisions in joint venture agreements and other
similar agreements in each case relating solely to the respective joint
venture or similar entity or to the equity interest therein;
(j) customary provisions imposed by agreements governing
Indebtedness of a Foreign Restricted Subsidiary permitted to be incurred
under the Indenture to the extent that such encumbrance or restriction
relates solely to the respective Foreign Restricted Subsidiary; and
(k) an agreement governing Indebtedness incurred to Refinance the
Indebtedness issued, assumed or incurred pursuant to an agreement
referred to in clause (b) and (d) through (g) above; provided, however,
that the provisions relating to such encumbrance or restriction
contained in any such Indebtedness are no less favorable to the Company
in any material respect as determined by the Board of Directors of the
Company in its reasonable and good faith judgment than the provisions
relating to such encumbrance or restriction contained in agreements
referred to in such clause (b) and (d) through (g) above.
Limitation on Preferred Stock of Restricted Subsidiaries. The Company will
not permit any of its Restricted Subsidiaries that are not Guarantors to issue
any Preferred Stock (other than to the Company or to a Wholly Owned Restricted
Subsidiary) or permit any Person (other than the Company or a Wholly Owned
Restricted Subsidiary) to own any Preferred Stock of any Restricted Subsidiary
that is not a Guarantor.
83
Limitation on Liens. The Company will not, and will not cause or permit
any of its Restricted Subsidiaries to, directly or indirectly, create, incur,
assume or permit or suffer to exist any Liens upon any property or assets of the
Company or any of its Restricted Subsidiaries whether owned on the Issue Date or
acquired after the Issue Date, or any proceeds therefrom, or assign or otherwise
convey any right to receive income or profits therefrom unless:
(1) in the case of Liens securing Subordinated Indebtedness, the Notes
or the Guarantee of such Guarantor, as the case may be, are secured by a
Lien on such property, assets or proceeds that is senior in priority to
such Liens; and
(2) in all other cases, the Notes or the Guarantees, as the case may
be, are secured on an equal and ratable basis, except for
(a) Liens existing as of the Issue Date to the extent and in the
manner such Liens are in effect on the Issue Date;
(b) (x) Liens securing Indebtedness permitted by clauses (2) and
(15) of the definition of Permitted Indebtedness and (y) Liens securing
Indebtedness permitted by the covenant described under "-- Limitation on
Additional Indebtedness" (other than Indebtedness permitted by clauses
(2) and (15) of the definition of Permitted Indebtedness); provided that
such Indebtedness and all other Indebtedness secured by Liens permitted
by this clause (y) shall, at the time such Indebtedness is incurred and
after giving effect to such incurrence, not exceed an aggregate
principal amount equal to the difference between (i) 1.25 times
Consolidated EBITDA for the most recently ended four fiscal quarters for
which internal financial statements are available and (ii) the amount of
Indebtedness then outstanding under clauses (2) and (15) of the
definition of Permitted Indebtedness;
(c) Liens securing the Notes and Guarantees;
(d) Liens of the Company or a Restricted Subsidiary on assets of
any Restricted Subsidiary of the Company and Liens on the assets of the
Company in favor of a Restricted Subsidiary that is a Guarantor;
(e) Liens securing Refinancing Indebtedness that is incurred to
Refinance any Indebtedness that has been secured by a Lien permitted
under the Indenture and that has been incurred in accordance with the
provisions of the Indenture; provided, however, that such Liens
(x) are no less favorable to the Holders and are not more
favorable to the lienholders with respect to such Liens, in each case
in any material respect, than the Liens in respect of the
Indebtedness being Refinanced; and
(y) do not extend to or cover any property or assets of the
Company or any of its Restricted Subsidiaries not securing the
Indebtedness so Refinanced,
(f) Liens in favor of the Company; and
(g) Permitted Liens.
Merger, Consolidation and Sale of Assets. The Company will not, in a
single transaction or series of related transactions, consolidate or merge with
or into any Person, or sell, assign, transfer, lease, convey or otherwise
dispose of (or cause or permit any Restricted Subsidiary to sell, assign,
transfer, lease, convey or otherwise dispose of) all or substantially all of the
84
Company's assets (determined on a consolidated basis for the Company and its
Restricted Subsidiaries) whether as an entirety or substantially as an entirety
to any Person unless:
(1) either:
(a) the Company will be the surviving or continuing corporation or
(b) the Person (if other than the Company) formed by such
consolidation or into which the Company is merged or the Person which
acquires by sale, assignment, transfer, lease, conveyance or other
disposition of properties and assets of the Company and of its
Restricted Subsidiaries substantially as an entirety (the "Surviving
Entity")
(x) will be a corporation organized and validly existing under
the laws of the United States or any State thereof or the District of
Columbia and
(y) will expressly assume, by supplemental indenture (in form
and substance satisfactory to the Trustee), executed and delivered to
the Trustee, the due and punctual payment of the principal of, and
premium, if any, and interest on all of the Notes and the performance
of every covenant of the Notes, the Indenture and the Registration
Rights Agreement on the part of the Company to be performed or
observed;
(2) immediately after giving effect to such transaction and the
assumption contemplated by clause (1) (b) (y) above (including giving
effect to any Indebtedness and Acquired Indebtedness incurred or
anticipated to be incurred in connection with or in respect of such
transaction), the Company or such Surviving Entity, as the case may be,
shall be able to incur at least $1.00 of additional Indebtedness (other
than Permitted Indebtedness) pursuant to the covenant described under
"-- Limitation on Incurrence of Additional Indebtedness";
(3) immediately before and immediately after giving effect to such
transaction and the assumption contemplated by clause (1) (b) (y) above
(including, without limitation, giving effect to any Indebtedness and
Acquired Indebtedness incurred or anticipated to be incurred and any Lien
granted in connection with or in respect of the transaction), no Default or
Event of Default shall have occurred or be continuing; and
(4) the Company or the Surviving Entity shall have delivered to the
Trustee an officers' certificate and an opinion of counsel, each stating
that such consolidation, merger, sale, assignment, transfer, lease,
conveyance or other disposition and, if a supplemental indenture is
required in connection with such transaction, such supplemental indenture
complies with the applicable provisions of the Indenture and that all
conditions precedent in the Indenture relating to such transaction have
been satisfied.
For purposes of the foregoing, the transfer (by lease, assignment, sale or
otherwise, in a single transaction or series of transactions) of all or
substantially all of the properties or assets of one or more Restricted
Subsidiaries the Capital Stock of which constitutes all or substantially all of
the properties and assets of the Company, will be deemed to be the transfer of
all or substantially all of the properties and assets of the Company.
The Indenture provides that upon any consolidation, combination or merger
or any transfer of all or substantially all of the assets of the Company in
accordance with the foregoing, in which the Company is not the continuing
corporation, the Surviving Entity shall succeed to, and be substituted for, and
may exercise every right and power of, the Company under the Indenture and the
Notes with the same effect as if such Surviving Entity had been named as such.
85
Each Guarantor (other than any Guarantor whose Guarantee is to be released
in accordance with the terms of the Guarantee and the Indenture in connection
with any transaction complying with the provisions of "-- Limitation on Asset
Sales") will not, and the Company will not cause or permit any Guarantor to,
consolidate with or merge with or into any Person other than the Company or any
other Guarantor unless:
(1) the entity formed by or surviving any such consolidation or merger
(if other than the Guarantor) or to which such sale, lease, conveyance or
other disposition shall have been made is a corporation, limited liability
company or partnership organized and existing under the laws of the United
States or any State thereof or the District of Columbia;
(2) such entity assumes by supplemental indenture all of the
obligations of the Guarantor on the Guarantee; and
(3) immediately after giving effect to such transaction, no Default or
Event of Default shall have occurred and be continuing.
Any merger or consolidation of a Guarantor with and into the Company (with
the Company being the surviving entity) or another Guarantor that is a
Restricted Subsidiary of the Company need only comply with clause (4) of the
first paragraph of this covenant.
Limitations on Transactions with Affiliates.
(1) The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, enter into or permit to exist any
transaction or series of related transactions (including, without
limitation, the purchase, sale, lease or exchange of any property or the
rendering of any service) with, or for the benefit of, any of its
Affiliates (each an "Affiliate Transaction"), other than:
(a) Affiliate Transactions permitted under paragraph (2) below and
(b) Affiliate Transactions on terms that are no less favorable than
those that might reasonably have been obtained in a comparable
transaction at such time on an arm's-length basis from a Person that is
not an Affiliate of the Company or such Restricted Subsidiary.
All Affiliate Transactions (and each series of related Affiliate
Transactions which are similar or part of a common plan) involving aggregate
payments or other property with a fair market value in excess of $2.5 million
will be approved by the Board of Directors of the Company or such Restricted
Subsidiary, as the case may be, such approval to be evidenced by a Board
Resolution stating that such Board of Directors has determined that such
transaction complies with the foregoing provisions. If the Company or any
Restricted Subsidiary enters into an Affiliate Transaction (or a series of
related Affiliate Transactions related to a common plan) that involves an
aggregate fair market value of more than $10.0 million, the Company or such
Restricted Subsidiary, as the case may be, will, prior to the consummation
thereof, obtain an opinion from an Independent Financial Advisor stating that
such transaction or series of related transactions are fair to the Company or to
the relevant Restricted Subsidiary, as the case may be, from a financial point
of view.
(2) The restrictions set forth in clause (1) shall not apply to:
(a) reasonable fees and compensation paid to and indemnity provided
on behalf of, our officers, directors, employees or consultants or those
of any Restricted Subsidiary as determined in good faith by the
Company's Board of Directors or senior management,
(b) transactions exclusively between or among the Company and any
of its Restricted Subsidiaries or exclusively between or among such
Restricted Subsidiaries; provided such transactions are not otherwise
prohibited by the Indenture,
86
(c) Restricted Payments and Permitted Investments permitted by the
Indenture and
(d) management or advisory fees to BRS Group or its affiliates in
accordance with the terms of the Management Agreement as in effect on
the Issue Date or as the same may be modified or amended; provided,
however, that such modification or amendment cannot provide for the
payment of such fees in an amount in excess of 1.5% of Consolidated
EBITDA.
Additional Subsidiary Guarantees. If the Company or any of its Restricted
Subsidiaries transfers or causes to be transferred, in one transaction or a
series of related transactions, any property to any Domestic Restricted
Subsidiary that is not a Guarantor having total assets (after giving effect to
such transfer) with a book value in excess of $500,000, or if the Company or any
of its Restricted Subsidiaries shall organize, acquire or otherwise invest in
another Domestic Restricted Subsidiary having total assets with a book value in
excess of $500,000, then such transferee or acquired or other Restricted
Subsidiary shall:
(1) execute and deliver to the Trustee a supplemental indenture in
form reasonably satisfactory to the Trustee pursuant to which such
Restricted Subsidiary shall unconditionally guarantee all of the Company's
obligations under the Notes and the Indenture on the terms set forth in the
Indenture; and
(2) deliver to the Trustee an opinion of counsel that such
supplemental indenture has been duly authorized, executed and delivered by
such Restricted Subsidiary and constitutes a legal, valid, binding and
enforceable obligation of such Restricted Subsidiary.
Thereafter, such Restricted Subsidiary shall be a Guarantor for all purposes of
the Indenture; provided, however, that to the extent that a Restricted
Subsidiary is subject to any instrument governing Acquired Indebtedness, as in
effect at the time of acquisition thereof, that prohibits such Restricted
Subsidiary from issuing a Guarantee, such Restricted Subsidiary shall not be
required to execute such a supplemental indenture until it is permitted to issue
such Guarantee pursuant to the terms of such Acquired Indebtedness; provided,
further, however, that notwithstanding the above proviso, if any such Restricted
Subsidiary incurs Indebtedness under or guarantees the Credit Agreement, then
such Restricted Subsidiary will guarantee the Notes as well.
Reports to Holders. Whether or not required by the rules and regulations
of the Commission, so long as any Notes are outstanding, the Company will
furnish the holders of Notes, with a copy to the Trustee:
(1) all quarterly and annual financial information that would be
required to be contained in a filing with the Commission on Forms 10-Q and
10-K if the Company were required to file such Forms, including a
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" that describes the financial condition and results of
operations of the Company and its consolidated Subsidiaries (showing in
reasonable detail, either on the face of the financial statements or in the
footnotes thereto and in Management's Discussion and Analysis of Financial
Condition and Results of Operations, the financial condition and results of
operations of the Company and its Restricted Subsidiaries separate from the
financial condition and results of operations of the Unrestricted
Subsidiaries of the Company, if any) and, with respect to the annual
information only, a report thereon by the Company's certified independent
accountants; and
(2) the information that would be required to be included in all
current reports that would be required to be filed with the Commission on
Form 8-K if the Company were required to file such reports, in each case
within the time periods specified in the Commission's rules and
regulations.
87
In addition, following the consummation of the exchange offer contemplated
by the Registration Rights Agreement, whether or not required by the rules and
regulations of the Commission, the Company will file a copy of all such
information and reports with the Commission for public availability within the
time periods specified in the Commission's rules and regulations (unless the
Commission will not accept such a filing) and make such information available to
securities analysts and prospective investors upon request. In addition, the
Company has agreed that, for so long as any Notes remain outstanding, it will
furnish to the Holders and to securities analysts and prospective investors,
upon their request, the information required to be delivered pursuant to Rule
144A(d)(4) under the Securities Act.
Limitation on Designations of Unrestricted Subsidiaries. The Company may
designate any Subsidiary of the Company (other than a Subsidiary of the Company
that owns Capital Stock of a Restricted Subsidiary) as an "Unrestricted
Subsidiary" under the Indenture (a "Designation") only if:
(1) no Default shall have occurred and be continuing at the time of or
after giving effect to such Designation; and
(2) the Company would be permitted under the Indenture to make an
Investment at the time of Designation (assuming the effectiveness of such
Designation) in an amount (the "Designation Amount") equal to the sum of:
(a) the fair market value of the Capital Stock of such Subsidiary
owned by the Company and its Restricted Subsidiaries on such date and
(b) the aggregate amount of other Investments of the Company and
its Restricted Subsidiaries in such Subsidiary on such date; and
(3) the Company would be permitted to incur $1.00 of additional
Indebtedness (other than Permitted Indebtedness) pursuant to the covenant
described under "-- Limitation on Incurrence of Additional Indebtedness" at
the time of Designation (assuming the effectiveness of such Designation).
In the event of any such Designation, the Company shall be deemed to have
made an Investment constituting a Restricted Payment pursuant to the covenant
described under "-- Limitation on Restricted Payments" for all purposes of the
Indenture in the Designation Amount. The Indenture will further provide that the
Company shall not, and shall not permit any Restricted Subsidiary to, at any
time:
(1) provide direct or indirect credit support for or a guarantee of
any Indebtedness of any Unrestricted Subsidiary (including of any
undertaking, agreement or instrument evidencing such Indebtedness); or
(2) be directly or indirectly liable for any Indebtedness of any
Unrestricted Subsidiary.
The Indenture further provides that the Company may revoke any Designation
of a Subsidiary as an Unrestricted Subsidiary (a "Revocation"), whereupon such
Subsidiary shall then constitute a Restricted Subsidiary, if:
(1) no Default shall have occurred and be continuing at the time of
and after giving effect to such Revocation; and
(2) all Liens and Indebtedness of such Unrestricted Subsidiary
outstanding immediately following such Revocation would, if incurred at
such time, have been permitted to be incurred for all purposes of the
Indenture.
All Designations and Revocations must be evidenced by Board Resolutions of
the Company certifying compliance with the foregoing provisions.
88
Payments for Consent. The Company will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly, pay or cause to be paid any
consideration to or for the benefit of any Holder of Notes for or as an
inducement to any consent, waiver or amendment of any of the terms or provisions
of the Indenture or the Notes unless such consideration is offered to be paid
and is paid to all Holders of the Notes that consent, waive or agree to amend in
the time frame set forth in the solicitation documents relating to such consent,
waiver or agreement.
EVENTS OF DEFAULT
The following events are defined in the Indenture as "Events of Default":
(1) the failure to pay interest on any Note when the same becomes due
and payable and the default continues for a period of 30 days;
(2) the failure to pay the principal of any Note, when such principal
becomes due and payable, at maturity, upon redemption or otherwise
(including the failure to make a payment to purchase Notes tendered
pursuant to a Change of Control Offer or a Net Proceeds Offer) on the date
specified for such payment in the applicable offer to purchase;
(3) a default in the observance or performance of any other covenant
or agreement contained in the Indenture which default continues for a
period of 30 days after the Company receives written notice specifying the
default (and demanding that such default be remedied) from the Trustee or
the Holders of at least 25% of the outstanding principal amount of the
Notes (except in the case of a default with respect to the covenant
described under "-- Certain Covenants -- Merger, Consolidation and Sale of
Assets," which will constitute an Event of Default with such notice
requirement but without such passage of time requirement);
(4) the failure to pay at final stated maturity (giving effect to any
applicable grace periods and any extensions thereof) the principal amount
of any Indebtedness of the Company or any Restricted Subsidiary, or the
acceleration of the final stated maturity of any such Indebtedness (which
acceleration is not rescinded, annulled or otherwise cured within 20 days
of receipt by the Company or such Restricted Subsidiary of notice of any
such acceleration) if the aggregate principal amount of such Indebtedness,
together with the principal amount of any other such Indebtedness in
default for failure to pay principal at final maturity or which has been
accelerated (in each case with respect to which the 20-day period described
above has passed), aggregates $5.0 million or more at any time;
(5) one or more judgments in an aggregate amount in excess of $5.0
million (to the extent not covered by insurance) shall have been rendered
against the Company or any of its Significant Subsidiaries and such
judgments remain undischarged, unpaid or unstayed for a period of 60 days
after such judgment or judgments become final and nonappealable;
(6) certain events of bankruptcy affecting the Company or any of its
Significant Subsidiaries; or
(7) any Guarantee of a Significant Subsidiary ceases to be in full
force and effect or any Guarantee of a Significant Subsidiary is declared
to be null and void and unenforceable or any Guarantee of a Significant
Subsidiary is found to be invalid or any Guarantor that is a Significant
Subsidiary denies its liability under its Guarantee (other than by reason
of release of a Guarantor in accordance with the terms of the Indenture).
If an Event of Default (other than an Event of Default specified in clause
(6) above relating to the Company) shall occur and be continuing, the Trustee or
the Holders of at least 25% in principal amount of outstanding Notes may declare
the principal of and accrued interest on all the Notes to be due and payable by
notice in writing to the Company and the Trustee
89
specifying the respective Event of Default and that it is a "notice of
acceleration" (its "Acceleration Notice"), and the same shall become immediately
due and payable. If an Event of Default specified in clause (6) above relating
to the Company occurs and is continuing, then all unpaid principal of, and
premium, if any, and accrued and unpaid interest on all of the outstanding Notes
shall ipso facto become and be immediately due and payable without any
declaration or other act on the part of the Trustee or any Holder.
The Indenture provides that, at any time after a declaration of
acceleration with respect to the Notes as described in the preceding paragraph,
the Holders of a majority in principal amount of the Notes may rescind and
cancel such declaration and its consequences:
(1) if the rescission would not conflict with any judgment or decree;
(2) if all existing Events of Default have been cured or waived except
nonpayment of principal or interest that has become due solely because of
the acceleration;
(3) to the extent the payment of such interest is lawful, interest on
overdue installments of interest and overdue principal, which has become
due otherwise than by such declaration of acceleration, has been paid;
(4) if the Company has paid the Trustee its reasonable compensation
and reimbursed the Trustee for its expenses, disbursements and advances;
and
(5) in the event of the cure or waiver of an Event of Default of the
type described in clause (6) of the description above of Events of Default,
the Trustee shall have received an officers' certificate and an opinion of
counsel stating that such Event of Default has been cured or waived.
No such rescission shall affect any subsequent Default or impair any right
consequent thereto.
The Holders of a majority in principal amount of the Notes may waive any
existing Default or Event of Default under the Indenture, and its consequences,
except a default in the payment of the principal of or interest on any Notes.
Holders of the Notes may not enforce the Indenture or the Notes except as
provided in the Indenture and under the TIA. Subject to the provisions of the
Indenture relating to the duties of the Trustee, the Trustee is under no
obligation to exercise any of its rights or powers under the Indenture at the
request, order or direction of any of the Holders, unless such Holders have
offered to the Trustee reasonable indemnity. Subject to all provisions of the
Indenture and applicable law, the Holders of a majority in aggregate principal
amount of the then outstanding Notes have the right to direct the time, method
and place of conducting any proceeding for any remedy available to the Trustee
or exercising any trust or power conferred on the Trustee.
Under the Indenture, the Company is required to provide an officers'
certificate to the Trustee promptly upon any such officer obtaining knowledge of
any Default or Event of Default (provided that such officers shall provide such
certification at least annually whether or not they know of any Default or Event
of Default) that has occurred and, if applicable, describe such Default or Event
of Default and the status thereof.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
The Company may, at its option and at any time, elect to have its
obligations and the obligations of the Guarantors discharged with respect to the
outstanding Notes ("Legal Defeasance"). Such Legal Defeasance means that the
Company shall be deemed to have paid and discharged the entire indebtedness
represented by the outstanding Notes, except for:
(1) the rights of Holders to receive payments in respect of the
principal of, premium, if any, and interest on the Notes when such payments
are due;
90
(2) the Company's obligations with respect to the Notes concerning
- issuing temporary Notes,
- registration of Notes,
- mutilated, destroyed, lost or stolen Notes and
- the maintenance of an office or agency for payments;
(3) the rights, powers, trust, duties and immunities of the Trustee
and our obligations in connection therewith; and
(4) the Legal Defeasance provisions of the Indenture.
In addition, the Company may, at its option and at any time, elect to have
the obligations of the Company released with respect to certain covenants that
are described in the Indenture ("Covenant Defeasance") and thereafter any
omission to comply with such obligations shall not constitute a Default or an
Event of Default with respect to the Notes. In the event Covenant Defeasance
occurs, certain events (not including non-payment, bankruptcy, receivership,
reorganization and insolvency events) described under "Events of Default" will
no longer constitute an Event of Default with respect to the Notes.
In order to exercise either Legal Defeasance or Covenant Defeasance,
(1) the Company must irrevocably deposit with the Trustee, in trust, for the
benefit of the Holders cash in U.S. dollars, non-callable U.S. government
obligations, or a combination thereof, in such amounts as will be sufficient, in
the opinion of a nationally recognized firm of independent public accountants,
to pay the principal of, premium, if any, and interest on the Notes on the
stated date for payment thereof or on the applicable redemption date, as the
case may be;
(2) in the case of Legal Defeasance, the Company shall have delivered
to the Trustee an opinion of counsel in the United States reasonably
acceptable to the Trustee confirming that
(a) the Company has received from, or there has been published by,
the Internal Revenue Service a ruling or
(b) since the date of the Indenture, there has been a change in the
applicable federal income tax law,
in either case to the effect that, and based thereon such opinion of counsel
shall confirm that, the Holders will not recognize income, gain or loss for
federal income tax purposes as a result of such Legal Defeasance and will be
subject to federal income tax on the same amounts, in the same manner and at the
same times as would have been the case if such Legal Defeasance had not
occurred;
(3) in the case of Covenant Defeasance, the Company shall have
delivered to the Trustee an opinion of counsel in the United States
reasonably acceptable to the Trustee confirming that the Holders will not
recognize income, gain or loss for federal income tax purposes as a result
of such Covenant Defeasance and will be subject to federal income tax on
the same amounts, in the same manner and at the same times as would have
been the case if such Covenant Defeasance had not occurred;
(4) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or an Event of
Default resulting from the borrowing of funds to be applied to such deposit
and the grant of any Lien securing such borrowings);
(5) such Legal Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a default under, the Indenture (other
than a Default or an Event of Default resulting from the borrowing of funds
to be applied to such deposit and the grant of
91
any Lien securing such borrowings) or any other material agreement or
instrument to which the Company or any of its Subsidiaries is a party or by
which the Company or any of its Subsidiaries is bound;
(6) the Company shall have delivered to the Trustee an officers'
certificate stating that the deposit was not made by the Company with the
intent of preferring the Holders over any other creditors of the Company or
with the intent of defeating, hindering, delaying or defrauding any other
creditors of the Company or others;
(7) the Company shall have delivered to the Trustee an officers'
certificate and an opinion of counsel, each stating that all conditions
precedent provided for or relating to the Legal Defeasance or the Covenant
Defeasance have been complied with;
(8) the Company shall have delivered to the Trustee an opinion of
counsel to the effect that, assuming no intervening bankruptcy of the
Company between the date of deposit and the 91st day following the date of
deposit and that no Holder is an insider of the Company, after the 91st day
following the date of deposit, the trust funds will not be subject to the
effect of any applicable bankruptcy, insolvency, reorganization or similar
laws affecting creditors' rights generally; and
(9) certain other customary conditions precedent are satisfied.
Notwithstanding the foregoing, the opinion of counsel required by clauses
(2)(a) and (3) above need not be delivered if all the Notes not theretofore
delivered to the Trustee for cancellation:
(1) have become due and payable;
(2) will become due and payable on the maturity date within one year;
or
(3) are to be called for redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of redemption by such
Trustee in the name, and at the expense, of the Company.
SATISFACTION AND DISCHARGE
The Indenture will be discharged and will cease to be of further effect
(except as to surviving rights or registration of transfer or exchange of the
Notes, as expressly provided for in the Indenture) as to all Notes then
outstanding when:
(1) either
(a) all the Notes theretofore authenticated and delivered (except
lost, stolen or destroyed Notes which have been replaced or paid and
Notes for whose payment money has theretofore been deposited in trust or
segregated and held in trust by the Company and thereafter repaid to the
Company or discharged from such trust) have been delivered to the
Trustee for cancellation, or
(b) all Notes not theretofore delivered to the Trustee for
cancellation have become due and payable or will be due and payable
within one year and the Company has irrevocably deposited or caused to
be deposited with the Trustee funds in an amount sufficient to pay and
discharge the entire Indebtedness on the Notes not theretofore delivered
to the Trustee for cancellation, for principal of, premium, if any, and
interest on the Notes to the date of deposit together with irrevocable
instructions from the Company directing the Trustee to apply such funds
to the payment thereof at maturity or redemption, as the case may be;
(2) the Company has paid all other sums payable by the Company under
the Indenture; and
92
(3) the Company has delivered to the Trustee an officers' certificate
and an opinion of counsel stating that all conditions precedent under the
Indenture relating to the satisfaction and discharge of the Indenture have
been complied with.
MODIFICATION OF THE INDENTURE
From time to time, the Company, the Guarantors and the Trustee, without the
consent of the Holders, may amend the Indenture for certain specified purposes,
including curing ambiguities, defects or inconsistencies, so long as such change
does not, in the opinion of the Trustee, adversely affect the rights of any of
the Holders in any material respect. In formulating its opinion on such matters,
the Trustee will be entitled to rely on such evidence as it deems appropriate,
including, without limitation, solely on an opinion of counsel. Other
modifications and amendments of the Indenture may be made with the consent of
the Holders of a majority in principal amount of the then outstanding Notes
issued under the Indenture, except that, without the consent of each Holder
affected thereby, no amendment may:
(1) reduce the amount of Notes whose Holders must consent to an
amendment;
(2) reduce the rate of or change or have the effect of changing the
time for payment of interest, including defaulted interest, on any Notes;
(3) reduce the principal of or change or have the effect of changing
the fixed maturity of any Notes, or change the date on which any Notes may
be subject to redemption or repurchase, or reduce the redemption or
repurchase price therefor;
(4) make any Notes payable in money other than that stated in the
Notes;
(5) make any change in provisions of the Indenture protecting the
right of each Holder to receive payment of principal of and interest on
such Note on or after the due date thereof or to bring suit to enforce such
payment, or permitting Holders of a majority in principal amount of Notes
to waive Defaults or Events of Default;
(6) after the Company's obligation to purchase Notes arises under the
Indenture, amend, change or modify in any material respect the obligation
of the Company to make and consummate a Change of Control Offer in the
event of a Change of Control or make and consummate a Net Proceeds Offer
with respect to any Asset Sale that has been consummated or modify any of
the provisions or definitions with respect thereto;
(7) modify or change any provision of the Indenture or the related
definitions affecting the ranking of the Notes or any Guarantee in a manner
that adversely affects the Holders; provided, that ranking shall not be
affected by the existence or lack thereof of a security interest or by
priority with respect to a security interest; or
(8) release any Guarantor that is a Significant Subsidiary from any of
its obligations under its Guarantee or the Indenture otherwise than in
accordance with the terms of the Indenture.
GOVERNING LAW
The Indenture provides that it, and the Notes, will be governed by, and
construed in accordance with, the laws of the State of New York but without
giving effect to applicable principles of conflicts of law to the extent that
the application of the law of another jurisdiction would be required thereby.
THE TRUSTEE
The Indenture provides that, except during the continuance of an Event of
Default, the Trustee will perform only such duties as are specifically set forth
in the Indenture. During the
93
existence of an Event of Default, the Trustee will exercise such rights and
powers vested in it by the Indenture, and use the same degree of care and skill
in its exercise as a prudent person would exercise or use under the
circumstances in the conduct of his own affairs.
The Indenture and the provisions of the TIA contain certain limitations on
the rights of the Trustee, should it become a creditor of the Company or of a
Subsidiary of the Company, to obtain payments of claims in certain cases or to
realize on certain property received in respect of any such claim as security or
otherwise. Subject to the TIA, the Trustee will be permitted to engage in other
transactions; provided that if the Trustee acquires any conflicting interest as
described in the TIA, it must eliminate such conflict or resign.
CERTAIN DEFINITIONS
Set forth below is a summary of certain of the defined terms used in the
Indenture. Reference is made to the Indenture for the full definition of all
such terms, as well as any other terms used herein for which no definition is
provided.
"Acquired Indebtedness" means Indebtedness of a Person or any of its
Subsidiaries existing at the time such Person becomes a Restricted Subsidiary or
at the time it merges or consolidates with the Company or any of its Restricted
Subsidiaries or assumed in connection with the acquisition of assets from such
Person and in each case not incurred by such Person in connection with, or in
anticipation or contemplation of, such Person becoming a Restricted Subsidiary
or such acquisition, merger or consolidation.
"Affiliate" means, with respect to any specified Person, any other Person
who directly or indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with, such specified Person. The term
"control" means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract or otherwise; and the
terms "controlling" and "controlled" have meanings correlative of the foregoing.
"Affiliate Transaction" has the meaning set forth under "-- Certain
Covenants -- Limitation on Transactions with Affiliates."
"Asset Acquisition" means
(1) an Investment by the Company or any Restricted Subsidiary in any
other Person pursuant to which such Person shall become a Restricted
Subsidiary or shall be merged with or into the Company or any Restricted
Subsidiary; or
(2) the acquisition by the Company or any Restricted Subsidiary of the
assets of any Person (other than a Restricted Subsidiary) which constitute
all or substantially all of the assets of such Person or comprise any
division or line of business of such Person or any other properties or
assets of such Person other than in the ordinary course of business.
"Asset Sale" means any direct or indirect sale, issuance, conveyance,
transfer, lease (other than operating leases entered into in the ordinary course
of business), assignment or other transfer for value by the Company or any of
its Restricted Subsidiaries (including any Sale and Leaseback Transaction) to
any Person other than the Company or a Restricted Subsidiary of:
(1) any Capital Stock of any Restricted Subsidiary; or
(2) any other property or assets of the Company or any Restricted
Subsidiary other than in the ordinary course of business;
94
provided, however, that Asset Sales shall not include
(a) a transaction or series of related transactions for which the
Company or its Restricted Subsidiaries receive aggregate consideration of
less than $2.5 million,
(b) the sale, lease, conveyance, disposition or other transfer of all
or substantially all of the assets of the Company as permitted under
"-- Certain Covenants -- Merger, Consolidation and Sale of Assets,"
(c) disposals or replacements of obsolete equipment in the ordinary
course of business,
(d) the sale, lease, conveyance, disposition or other transfer by the
Company or any Restricted Subsidiary of assets or property to the Company
or one or more Restricted Subsidiaries and
(e) any Restricted Payment permitted by the "Limitation on Restricted
Payments" covenant or any Permitted Investment.
"Board of Directors" means, as to any Person, the board of directors of
such Person or any duly authorized committee thereof.
"Board Resolution" means, with respect to any Person, a copy of a
resolution certified by the Secretary or an Assistant Secretary of such Person
to have been duly adopted by the Board of Directors of such Person and to be in
full force and effect on the date of such certification, and delivered to the
Trustee.
"BRS Group" means Bruckmann, Rosser, Sherrill & Co., Inc. and its
Affiliates.
"Business Day" means a day other than a Saturday, Sunday or other day on
which commercial banking institutions (including, without limitation, the
Federal Reserve System) are authorized or required by law to close in New York
City.
"Capitalized Lease Obligation" means, as to any Person, the obligations of
such Person under a lease that are required to be classified and accounted for
as capital lease obligations under GAAP and, for purposes of this definition,
the amount of such obligations at any date shall be the capitalized amount of
such obligations at such date, determined in accordance with GAAP.
"Capital Stock" means:
(1) with respect to any Person that is a corporation, any and all
shares, interests, participations or other equivalents (however designated
and whether or not voting) of corporate stock, including each class of
Common Stock and Preferred Stock of such Person; and
(2) with respect to any Person that is not a corporation, any and all
partnership, membership or other equity interests of such Person.
"Cash Equivalents" means:
(1) marketable direct obligations issued by, or unconditionally
guaranteed by, the United States Government or issued by any agency thereof
and backed by the full faith and credit of the United States, in each case
maturing within one year from the date of acquisition thereof;
(2) marketable direct obligations issued by any state of the United
States of America or any political subdivision of any such state or any
public instrumentality thereof maturing within one year from the date of
acquisition thereof and, at the time of acquisition, having one of the two
highest ratings obtainable from either S&P or Moody's;
95
(3) commercial paper maturing no more than one year from the date of
creation thereof and, at the time of acquisition, having a rating of at
least A-1 from S&P or at least P-1 from Moody's;
(4) certificates of deposit or bankers' acceptances maturing within
one year from the date of acquisition thereof issued by any bank organized
under the laws of the United States of America or any state thereof or the
District of Columbia or any U.S. branch of a foreign bank having at the
date of acquisition thereof combined capital and surplus of not less than
$250.0 million;
(5) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clause (1) above entered
into with any bank meeting the qualifications specified in clause (4)
above; and
(6) investments in money market funds that invest substantially all
their assets in securities of the types described in clauses (1) through
(5) above.
"Change of Control" means the occurrence of one or more of the
following events:
(1) any sale, lease, exchange or other transfer (in one transaction or
a series of related transactions) of all or substantially all of the assets
of the Company to any Person or group of related Persons for purposes of
Section 13(d) of the Exchange Act (a "Group"), together with any Affiliates
thereof (whether or not otherwise in compliance with the provisions of the
Indenture), other than to a Permitted Holder;
(2) the approval by the holders of Capital Stock of the Company of any
plan or proposal for the liquidation or dissolution of the Company (whether
or not otherwise in compliance with the provisions of the Indenture);
(3) any Person or Group, other than a Permitted Holder, shall become
the owner, directly or indirectly, beneficially or of record, of shares
representing more than 50% of the aggregate ordinary voting power
represented by the issued and outstanding Capital Stock of the Company; or
(4) the replacement of a majority of the Board of Directors of the
Company over a two-year period from the directors who constituted the Board
of Directors of the Company at the beginning of such period, and such
replacement shall not have been approved by a vote of at least a majority
of the Board of Directors of the Company then still in office who either
were members of any such Board of Directors at the beginning of such period
or whose election as a member of any such Board of Directors was previously
so approved.
"Change of Control Offer" has the meaning set forth under "-- Change of
Control."
"Change of Control Payment Date" has the meaning set forth under "-- Change
of Control."
"Common Stock" of any Person means any and all shares, interests or other
participations in, and other equivalents (however designated and whether voting
or non-voting) of, such Person's common stock, whether outstanding on the Issue
Date or issued after the Issue Date, and includes, without limitation, all
series and classes of such common stock.
"Consolidated EBITDA" means, for any period, the sum (without duplication)
of:
(1) Consolidated Net Income; and
(2) to the extent Consolidated Net Income has been reduced thereby,
(a) all income taxes of the Company and its Restricted Subsidiaries
paid or accrued in accordance with GAAP for such period (other than
income taxes
96
attributable to extraordinary, unusual or nonrecurring gains or losses
or taxes attributable to sales or dispositions outside the ordinary
course of business),
(b) Consolidated Interest Expense and
(c) Consolidated Non-cash Charges less any non-cash items
increasing Consolidated Net Income for such period,
all as determined on a consolidated basis for the Company and its Restricted
Subsidiaries in accordance with GAAP.
"Consolidated Fixed Charge Coverage Ratio" means the ratio of Consolidated
EBITDA during the four full fiscal quarters (the "Four Quarter Period") ending
on or prior to the date of the transaction giving rise to the need to calculate
the Consolidated Fixed Charge Coverage Ratio (the "Transaction Date") to
Consolidated Fixed Charges for the Four Quarter Period. In addition to and
without limitation of the foregoing, for purposes of this definition,
"Consolidated EBITDA" and "Consolidated Fixed Charges" shall be calculated after
giving effect on a pro forma (including any pro forma expense and cost
reductions calculated on a basis consistent with Regulation S-X under the
Securities Act) basis for the period of such calculation to:
(1) the incurrence or repayment of any Indebtedness of the Company or
any of its Restricted Subsidiaries (and the application of the proceeds
thereof) giving rise to the need to make such calculation and any
incurrence or repayment of other Indebtedness (and the application of the
proceeds thereof), other than the incurrence or repayment of Indebtedness
in the ordinary course of business for working capital purposes pursuant to
working capital facilities, occurring during the Four Quarter Period or at
any time subsequent to the last day of the Four Quarter Period and on or
prior to the Transaction Date, as if such incurrence or repayment, as the
case may be (and the application of the proceeds thereof), occurred on the
first day of the Four Quarter Period; and
(2) any asset sales or Asset Acquisitions (including, without
limitation, any Asset Acquisition giving rise to the need to make such
calculation as a result of the Company or one of its Restricted
Subsidiaries (including any Person who becomes a Restricted Subsidiary as a
result of the Asset Acquisition) incurring, assuming or otherwise being
liable for Acquired Indebtedness and also including any Consolidated EBITDA
attributable to the assets that are the subject of the Asset Acquisition or
asset sale during the Four Quarter Period) occurring during the Four
Quarter Period or at any time subsequent to the last day of the Four
Quarter Period and on or prior to the Transaction Date, as if such asset
sale or Asset Acquisition (including the incurrence, assumption or
liability for any such Acquired Indebtedness) occurred on the first day of
the Four Quarter Period. If the Company or any of its Restricted
Subsidiaries directly or indirectly guarantees Indebtedness of a third
Person, the preceding sentence shall give effect to the incurrence of such
guaranteed Indebtedness as if the Company or any such Restricted Subsidiary
had directly incurred or otherwise assumed such guaranteed Indebtedness.
Furthermore, in calculating "Consolidated Fixed Charges" for purposes of
determining the denominator (but not the numerator) of this "Consolidated Fixed
Charge Coverage Ratio":
(1) interest on outstanding Indebtedness determined on a fluctuating
basis as of the Transaction Date and that will continue to be so determined
thereafter shall be deemed to have accrued at a fixed rate per annum equal
to the rate of interest on such Indebtedness in effect on the Transaction
Date;
(2) if interest on any Indebtedness actually incurred on the
Transaction Date may optionally be determined at an interest rate based
upon a factor of a prime or similar rate, a eurocurrency interbank offered
rate, or other rates, then the interest rate in effect on the Transaction
Date will be deemed to have been in effect during the Four Quarter Period;
and
97
(3) notwithstanding clause (1) above, interest on Indebtedness
determined on a fluctuating basis, to the extent such interest is covered
by agreements relating to Interest Swap Obligations, shall be deemed to
accrue at the rate per annum resulting after giving effect to the operation
of such agreements.
"Consolidated Fixed Charges" means, with respect to the Company for any
period, the sum, without duplication, of:
(1) Consolidated Interest Expense; plus
(2) the product of
(a) the amount of all dividend payments on any series of Preferred
Stock of the Company (other than dividends paid or to be paid in such
period in Qualified Capital Stock) paid or required to be paid during
such period, and
(b) a fraction, the numerator of which is one and the denominator
of which is one minus the then current effective consolidated federal,
state and local income tax rate of such Person, expressed as a decimal.
"Consolidated Interest Expense" means, for any period, the sum of, without
duplication:
(1) the aggregate of the interest expense of the Company and its
Restricted Subsidiaries for such period determined on a consolidated basis
in accordance with GAAP, including without limitation,
(a) any amortization of debt discount,
(b) the net costs under Interest Swap Obligations,
(c) all capitalized interest and
(d) the interest portion of any deferred payment obligation; and
(2) the interest component of Capitalized Lease Obligations paid,
accrued and/or scheduled to be paid or accrued by the Company and its
Restricted Subsidiaries during such period as determined on a consolidated
basis in accordance with GAAP.
"Consolidated Net Income" means, with respect to the Company, for any
period, the aggregate net income (or loss) of the Company and its Restricted
Subsidiaries for such period on a consolidated basis, determined in accordance
with GAAP; provided that there shall be excluded therefrom:
(1) after-tax gains or losses from Asset Sales (without regard to the
$2.5 million limitation set forth in the definition thereof) or abandonment
or reserves relating thereto;
(2) after-tax items classified as extraordinary or nonrecurring gains
or losses;
(3) the net income (or loss) of any Person acquired in a "pooling of
interests" transaction accrued prior to the date it becomes a Restricted
Subsidiary or is merged or consolidated with the Company or with any
Restricted Subsidiary;
(4) the net income (but not loss) of any Restricted Subsidiary to the
extent that the declaration of dividends or similar distributions by that
Restricted Subsidiary of that income is restricted by a contract, operation
of law or otherwise;
(5) the net income of any Person, other than the Company or a
Restricted Subsidiary, except to the extent of cash dividends or
distributions paid to the Company or to a Restricted Subsidiary by such
Person;
98
(6) income or loss attributable to discontinued operations (including,
without limitation, operations disposed of during such period whether or
not such operations were classified as discontinued); and
(7) in the case of a successor to the Company by consolidation or
merger or as a transferee of the Company's assets, any net income of the
successor corporation prior to such consolidation, merger or transfer of
assets.
"Consolidated Non-cash Charges" means, for any period, the aggregate
depreciation, amortization and other non-cash expenses of the Company
(including, without limitation, charges related to the impairment of
intangibles) and its Restricted Subsidiaries reducing Consolidated Net Income of
the Company for such period, determined on a consolidated basis in accordance
with GAAP (including deferred rent but excluding any such charge which requires
an accrual of or a reserve for cash charges for any future period).
"Covenant Defeasance" has the meaning set forth under "-- Legal Defeasance
and Covenant Defeasance."
"Credit Agreement" means the Credit Agreement dated as of April 16, 2003 by
and among the Company, the lenders from time to time party thereto in their
capacities as lenders thereunder and Deutsche Bank Trust Company Americas, as
agent, together with the related documents thereto (including, without
limitation, any guarantee agreements and security documents), in each case as
such agreements may be amended (including any amendment and restatement
thereof), supplemented or otherwise modified from time to time, including any
agreement extending the maturity of, refinancing, replacing or otherwise
restructuring (including increasing the amount of available borrowings
thereunder or adding Subsidiaries of the Company as additional borrowers or
guarantors thereunder) all or any portion of the Indebtedness under such
agreement or any successor or replacement agreement and whether by the same or
any other agent, lender or group of lenders.
"Currency Agreement" means any foreign exchange contract, currency swap
agreement or other similar agreement or arrangement designed to protect the
Company or any Restricted Subsidiary against fluctuations in currency values.
"Default" means an event or condition the occurrence of which is, or with
the lapse of time or the giving of notice or both would be, an Event of Default.
"Designation" has the meaning set forth under "-- Certain
Covenants -- Limitation on Designations of Unrestricted Subsidiaries."
"Designation Amount" has the meaning set forth under "-- Certain
Covenants -- Limitation on Designations of Unrestricted Subsidiaries."
"Disqualified Capital Stock" means that portion of any Capital Stock which,
by its terms (or by the terms of any security into which it is convertible or
for which it is exchangeable), or upon the happening of any event, matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
is redeemable at the sole option of the holder thereof on or prior to the final
maturity date of the Notes.
"Domestic Restricted Subsidiary" means a Restricted Subsidiary incorporated
or otherwise organized or existing under the laws of the United States or any
state thereof.
"Equity Offering" has the meaning set forth under
"-- Redemption -- Optional Redemption Upon Equity Offerings."
"Exchange Act" means the Securities Exchange Act of 1934, as amended, or
any successor statute or statutes thereto.
99
"fair market value" means, with respect to any asset or property, the price
which could be negotiated in an arm's-length, free market transaction, for cash,
between a willing seller and a willing and able buyer, neither of whom is under
undue pressure or compulsion to complete the transaction. Fair market value
shall be determined by the Board of Directors of the Company acting reasonably
and in good faith and shall be evidenced by a Board Resolution of the Board of
Directors of the Company.
"Farallon" means Farallon Partners, L.L.C. and its Affiliates.
"Foreign Restricted Subsidiary" means a Restricted Subsidiary that is not a
Domestic Restricted Subsidiary.
"GAAP" means 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 such other statements by such
other entity as may be approved by a significant segment of the accounting
profession of the United States, which are in effect as of the Issue Date. All
ratios and computations based on GAAP contained in the Indenture shall be
computed in conformity with GAAP applied on a consistent basis, except that
calculations made for purposes of determining compliance with the terms of the
covenants and with other provisions of the Indenture shall be made without
giving effect to (i) the deduction or amortization of any premiums, fees and
expenses incurred in connection with any financings or any other permitted
incurrence of Indebtedness and (ii) depreciation, amortization or other expenses
recorded as a result of the application of purchase accounting in accordance
with Accounting Principles Board Opinion Nos. 16 and 17 and FASB Nos. 141 and
142.
"Guarantee" means each guarantee of the Company's obligations under the
Indenture and the Notes by the Guarantors.
"Guarantor" means: (1) each of the Guarantors listed on Schedule A to the
Indenture; and (2) each of the Company's Restricted Subsidiaries that in the
future executes a supplemental indenture in which such Restricted Subsidiary
agrees to be bound by the terms of the Indenture as a Guarantor; provided that
any Person constituting a Guarantor as described above shall cease to constitute
a Guarantor when its respective Guarantee is released in accordance with the
terms of the Indenture.
"incur" has the meaning set forth under "-- Certain Covenants -- Limitation
on Incurrence of Additional Indebtedness."
"Indebtedness" means with respect to any Person, without duplication:
(1) all Obligations of such Person for borrowed money;
(2) all Obligations of such Person evidenced by bonds, debentures,
notes or other similar instruments;
(3) all Capitalized Lease Obligations of such Person;
(4) all Obligations of such Person issued or assumed as the deferred
purchase price of property, all conditional sale obligations and all
Obligations under any title retention agreement (but excluding trade
accounts payable and other accrued liabilities arising in the ordinary
course of business);
(5) all Obligations for the reimbursement of any obligor on any letter
of credit, banker's acceptance or similar credit transaction;
(6) guarantees and other contingent obligations in respect of
Indebtedness referred to in clauses (1) through (5) above and clause (8)
below;
100
(7) all Obligations of any other Person of the type referred to in
clauses (1) through (6) which are secured by any Lien on any property or
asset of such Person, the amount of such Obligation being deemed to be the
lesser of the fair market value of such property or asset or the amount of
the Obligation so secured;
(8) all Obligations under currency agreements and interest swap
agreements of such Person; and
(9) all Disqualified Capital Stock issued by such Person with the
amount of Indebtedness represented by such Disqualified Capital Stock being
equal to the greater of its voluntary or involuntary liquidation preference
and its maximum fixed repurchase price.
For purposes hereof, the "maximum fixed repurchase price" of any
Disqualified Capital Stock that does not have a fixed repurchase price shall be
calculated in accordance with the terms of such Disqualified Capital Stock as if
such Disqualified Capital Stock were purchased on any date on which Indebtedness
shall be required to be determined pursuant to the Indenture, and if such price
is based upon, or measured by, the fair market value of such Disqualified
Capital Stock, such fair market value shall be determined reasonably and in good
faith by the Board of Directors of the Company. The amount of Indebtedness of
any Person at any date shall be the outstanding balance on such date of all
unconditional Obligations as described above, and the maximum liability upon the
occurrence of the contingency giving rise to the Obligation, on any contingent
Obligations at such date; provided, however, that the amount outstanding at any
time of any Indebtedness incurred with original issue discount is the face
amount of such Indebtedness less the remaining unamortized portion of the
original issue discount of such Indebtedness at such time as determined in
conformity with GAAP.
"Independent Financial Advisor" means a firm:
(1) that does not, and whose directors, officers and employees or
Affiliates do not, have a direct or indirect financial interest in the
Company; and
(2) that, in the judgment of the Board of Directors of the Company, is
otherwise independent and qualified to perform the task for which it is to
be engaged.
"Initial Purchasers" means Deutsche Bank Securities Inc. and BNP Paribas
Securities Corp.
"Interest Swap Obligations" means the obligations of any Person pursuant to
any arrangement with any other Person, whereby, directly or indirectly, such
Person is entitled to receive from time to time periodic payments calculated by
applying either a floating or a fixed rate of interest on a stated notional
amount in exchange for periodic payments made by such other Person calculated by
applying a fixed or a floating rate of interest on the same notional amount and
shall include, without limitation, interest rate swaps, caps, floors, collars
and similar agreements.
"Investment" means, with respect to any Person, any direct or indirect loan
or other extension of credit (including, without limitation, a guarantee) or
capital contribution to (by means of any transfer of cash or other property to
others or any payment for property or services for the account or use of
others), or any purchase or acquisition by such Person of any Capital Stock,
bonds, notes, debentures or other securities or evidences of Indebtedness issued
by, any other Person. "Investment" shall exclude extensions of trade credit by
the Company and its Restricted Subsidiaries on commercially reasonable terms in
accordance with normal trade practices of the Company or such Restricted
Subsidiary, as the case may be. If the Company or any Restricted Subsidiary
sells or otherwise disposes of any Common Stock of any direct or indirect
Restricted Subsidiary such that, after giving effect to any such sale or
disposition, it ceases to be a Subsidiary of the Company, the Company shall be
deemed to have made an Investment on the date of any such sale or disposition
equal to the fair market value of the Common Stock of such Restricted Subsidiary
not sold or disposed of.
101
"Issue Date" means April 16, 2003.
"Legal Defeasance" has the meaning set forth under "-- Legal Defeasance and
Covenant Defeasance."
"Lien" means any lien, mortgage, deed of trust, pledge, security interest,
charge or encumbrance of any kind (including any conditional sale or other title
retention agreement, any lease in the nature thereof and any agreement to give
any security interest).
"Moody's" means Moody's Investors Service, Inc.
"Net Cash Proceeds" means, with respect to any Asset Sale, the proceeds in
the form of cash or Cash Equivalents including payments in respect of deferred
payment obligations when received in the form of cash or Cash Equivalents (other
than the portion of any such deferred payment constituting interest) received by
the Company or any of its Restricted Subsidiaries from such Asset Sale net of:
(1) reasonable out-of-pocket expenses and fees relating to such Asset
Sale (including, without limitation, legal, accounting and investment
banking fees and sales commissions);
(2) taxes paid or payable after taking into account any reduction in
consolidated tax liability due to available tax credits or deductions and
any tax sharing arrangements;
(3) repayment of Indebtedness that is secured by the assets sold in
the relevant Asset Sale or other Indebtedness that is required to be repaid
in connection with such Asset Sale; and
(4) appropriate amounts to be provided by the Company or any
Restricted Subsidiary, as the case may be, as a reserve, in accordance with
GAAP, against any liabilities associated with such Asset Sale and retained
by the Company or any Restricted Subsidiary, as the case may be, after such
Asset Sale, including, without limitation, pension and other
post-employment benefit liabilities, liabilities related to environmental
matters and liabilities under any indemnification obligations associated
with such Asset Sale.
"Obligations" means all obligations for principal, premium, interest,
penalties, fees, indemnifications, reimbursements, damages and other liabilities
payable under the documentation governing any Indebtedness.
"Permitted Holder" means any of BRS Group, Farallon and their respective
Affiliates.
"Permitted Indebtedness" means, without duplication, each of the following:
(1) Indebtedness under the Notes issued under the Indenture in an
aggregate principal amount not to exceed $255.0 million and the Guarantees;
(2) Indebtedness incurred pursuant to the Credit Agreement in an
aggregate principal amount at any time outstanding not to exceed $50.0
million incurred under this clause (2), less the amount of all required
principal payments actually made by the Company in respect of the loans
thereunder that were incurred under this clause (2) in accordance with the
provisions set forth under "-- Certain Covenants -- Limitation on Asset
Sales" (which, in the case of revolving loans, are accompanied by a
corresponding permanent commitment reduction);
(3) other Indebtedness (including Capitalized Lease Obligations) of
the Company and its Restricted Subsidiaries outstanding on the Issue Date;
(4) Purchase Money Indebtedness and Capitalized Lease Obligations of
the Company and its Restricted Subsidiaries in an aggregate amount for all
Indebtedness incurred pursuant to this clause (4) not to exceed $20.0
million outstanding at any one time;
102
(5) Interest Swap Obligations covering Indebtedness of the Company or
any of its Restricted Subsidiaries; provided, however, that such Interest
Swap Obligations are entered into to protect the Company and its Restricted
Subsidiaries from fluctuations in interest rates on Indebtedness incurred
in accordance with the Indenture to the extent the notional principal
amount of such Interest Swap Obligation does not exceed, at the time of
incurrence thereof, the principal amount of the Indebtedness to which such
Interest Swap Obligation relates;
(6) Indebtedness under Currency Agreements; provided, that in the case
of Currency Agreements which relate to Indebtedness, such Currency
Agreements do not increase the Indebtedness of the Company and its
Restricted Subsidiaries outstanding other than as a result of fluctuations
in foreign currency exchange rates or by reason of fees, indemnities and
compensation payable thereunder;
(7) Indebtedness of a Restricted Subsidiary to the Company or to
another Restricted Subsidiary for so long as such Indebtedness is held by
the Company, a Restricted Subsidiary or the holders of a Lien permitted
under the Indenture, in each case subject to no Lien held by a Person other
than the Company, a Restricted Subsidiary or the holders of a Lien
permitted under the Indenture; provided, that if as of any date any Person
other than the Company, a Restricted Subsidiary or the holders of a Lien
permitted under the Indenture owns or holds any such Indebtedness or holds
a Lien in respect of such Indebtedness, such date shall be deemed the
incurrence of Indebtedness not constituting Permitted Indebtedness by the
issuer of such Indebtedness pursuant to this subclause (7);
(8) Indebtedness of the Company to a Restricted Subsidiary for so long
as such Indebtedness is held by a Restricted Subsidiary or the holders of a
Lien permitted under the Indenture, in each case subject to no Lien other
than a Lien permitted under the Indenture; provided that:
(a) any Indebtedness of the Company to any Restricted Subsidiary
that is not a Guarantor is unsecured and subordinated, pursuant to a
written agreement, to the Company's obligations under the Indenture and
the Notes and
(b) if as of any date any Person other than a Restricted Subsidiary
or the holders of a Lien permitted under the Indenture owns or holds any
such Indebtedness or any Person holds a Lien in respect of such
Indebtedness, such date shall be deemed the incurrence of Indebtedness
not constituting Permitted Indebtedness by the Company under this clause
(8);
(9) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument inadvertently
(except in the case of daylight overdrafts) drawn against insufficient
funds in the ordinary course of business; provided, however, that such
Indebtedness is extinguished within four Business Days of incurrence;
(10) Indebtedness of the Company or any of its Restricted Subsidiaries
represented by letters of credit for the account of the Company or such
Restricted Subsidiary, as the case may be, in order to provide security for
workers' compensation claims, payment obligations in connection with
self-insurance or similar requirements in the ordinary course of business;
(11) Refinancing Indebtedness;
(12) Indebtedness represented by guarantees by the Company or its
Restricted Subsidiaries of Indebtedness otherwise permitted to be incurred
under the Indenture; provided that, in the case of a guarantee by a
Restricted Subsidiary, such Restricted Subsidiary complies with the
covenant described under "-- Certain Covenants -- Additional Subsidiary
Guarantees" to the extent applicable;
103
(13) Indebtedness of the Company or any of its Restricted Subsidiaries
in respect of bid, payment and performance bonds, bankers' acceptances,
workers' compensation claims, surety or appeal bonds, payment obligations
in connection with self-insurance or similar obligations, and bank
overdrafts (and letters of credit in respect thereof) in the ordinary
course of business;
(14) Indebtedness of the Company or any Restricted Subsidiary
consisting of guarantees, indemnities or obligations in respect of purchase
price adjustments in connection with the acquisition or disposition of
assets; and
(15) additional Indebtedness of the Company and its Restricted
Subsidiaries in an aggregate principal amount not to exceed $10.0 million
at any one time outstanding (which amount may, but need not, be incurred in
whole or in part under the Credit Agreement).
For purposes of determining any particular amount of Indebtedness under
"Limitation on Incurrence of Additional Indebtedness" covenant, guarantees,
Liens or letter of credit obligations supporting Indebtedness otherwise included
in the determination of such particular amount shall not be included. For
purposes of determining compliance with the "Limitation on Incurrence of
Additional Indebtedness" covenant, in the event that an item of Indebtedness
meets the criteria of more than one of the categories of Permitted Indebtedness
described in clauses (1) through (15) above or is permitted to be incurred
pursuant to the Consolidated Fixed Charge Coverage Ratio provisions of such
covenant, the Company shall, in its sole discretion, classify (or later
reclassify) such item of Indebtedness in any manner that complies with such
covenant. Accrual of interest, accretion or amortization of original issue
discount, the payment of interest on any Indebtedness in the form of additional
Indebtedness with the same terms, the payment of dividends on Disqualified
Capital Stock in the form of additional shares of the same class of Disqualified
Capital Stock and change in the amount outstanding due solely to the result of
fluctuations in the exchange rates of currencies will not be deemed to be an
incurrence of Indebtedness or an issuance of Disqualified Capital Stock for
purposes of the "Limitations on Incurrence of Additional Indebtedness" covenant.
"Permitted Investments" means:
(1) Investments by the Company or any Restricted Subsidiary in any
Person that is or will become immediately after such Investment a
Restricted Subsidiary or that will merge or consolidate into the Company or
a Restricted Subsidiary;
(2) Investments in the Company by any Restricted Subsidiary; provided,
that any Indebtedness incurred by the Company evidencing such Investment by
a Restricted Subsidiary that is not a Guarantor is unsecured and
subordinated, pursuant to a written agreement, to the Company's obligations
under the Notes and the Indenture;
(3) Investments in cash and Cash Equivalents;
(4) loans and advances to directors, employees and officers of the
Company and its Restricted Subsidiaries in the ordinary course of business
for bona fide business purposes not in excess of $5.0 million at any one
time outstanding;
(5) Currency Agreements and Interest Swap Obligations entered into in
the ordinary course of the Company's or a Restricted Subsidiary's
businesses and otherwise in compliance with the Indenture;
(6) other Investments, including Investments in Unrestricted
Subsidiaries, not to exceed $10.0 million at any one time outstanding;
(7) Investments in securities of trade creditors or members received
pursuant to any plan of reorganization or similar arrangement upon the
bankruptcy or insolvency of such
104
trade creditors or members or in good faith settlement of delinquent
obligations of such trade creditors or members;
(8) Investments represented by guarantees that are otherwise permitted
under the Indenture;
(9) Investments the payment for which is Qualified Capital Stock of
the Company;
(10) Investments made by the Company or its Restricted Subsidiaries as
a result of consideration received in connection with an Asset Sale made in
compliance with the covenant described under "-- Certain
Covenants -- Limitation on Asset Sales," and
(11) the acquisition by the Company of obligations of one or more
officers, directors or employees of the Company or any of its Subsidiaries
in connection with such officers', directors' or employees' acquisition of
shares of capital stock of the Company so long as no cash is paid by the
Company or any of its Subsidiaries to such officers, directors or employees
in connection with the acquisition of any such obligations.
"Permitted Liens" means the following types of Liens:
(1) Liens for taxes, assessments or governmental charges or claims
either
(a) not delinquent or
(b) contested in good faith by appropriate proceedings and as to
which the Company or its Restricted Subsidiaries shall have set aside on
its books such reserves as may be required pursuant to GAAP;
(2) statutory and contractual Liens of landlords and Liens of
carriers, warehousemen, mechanics, suppliers, materialmen, repairmen and
other Liens imposed by law incurred in the ordinary course of business for
sums not yet delinquent or being contested in good faith, if such reserve
or other appropriate provision, if any, as shall be required by GAAP shall
have been made in respect thereof;
(3) Liens incurred or deposits made in the ordinary course of business
in connection with workers' compensation, unemployment insurance and other
types of social security, including any Lien securing letters of credit
issued in the ordinary course of business consistent with past practice in
connection therewith, or to secure the performance of tenders, statutory
obligations, surety and appeal bonds, bids, leases, government contracts,
performance and return-of-money bonds and other similar obligations
(exclusive of obligations for the payment of borrowed money);
(4) judgment Liens not giving rise to an Event of Default;
(5) easements, rights-of-way, zoning restrictions and other similar
charges or encumbrances in respect of real property not interfering in any
material respect with the ordinary conduct of the business of the Company
or of any of its Restricted Subsidiaries;
(6) any interest or title of a lessor under any Capitalized Lease
Obligation; provided that such Liens do not extend to any property or asset
which is not leased property subject to such Capitalized Lease Obligation;
(7) purchase money Liens to finance property or assets of the Company
or any Restricted Subsidiary acquired after the Issue Date; provided,
however, that
(a) the related purchase money Indebtedness shall not exceed the
cost of such property or assets and shall not be secured by property or
assets of the Company or any Restricted Subsidiary other than the
property and assets so acquired and
(b) the Lien securing such Indebtedness shall be created within 90
days of such acquisition;
105
(8) Liens upon specific items of inventory or other goods and proceeds
of any Person securing such Person's obligations in respect of bankers'
acceptances issued or created for the account of such Person to facilitate
the purchase, shipment or storage of such inventory or other goods;
(9) Liens securing reimbursement obligations with respect to
commercial letters of credit which encumber documents and other property
relating to such letters of credit and products and proceeds thereof;
(10) Liens encumbering deposits made to secure obligations arising
from statutory, regulatory, contractual or warranty requirements of the
Company or any of its Restricted Subsidiaries, including rights of offset
and setoff;
(11) Liens securing Interest Swap Obligations which Interest Swap
Obligations relate to Indebtedness that is otherwise permitted under the
Indenture;
(12) Liens securing Indebtedness under Currency Agreements;
(13) Liens securing Acquired Indebtedness incurred in accordance with
the covenant described under "-- Certain Covenants -- Limitation on
Incurrence of Additional Indebtedness"; provided that
(a) such Liens secured such Acquired Indebtedness at the time of
and prior to the incurrence of such Acquired Indebtedness by the Company
or a Restricted Subsidiary and were not granted in connection with, or
in anticipation of, the incurrence of such Acquired Indebtedness by the
Company or a Restricted Subsidiary and
(b) such Liens do not extend to or cover any property or assets of
the Company or of any of its Restricted Subsidiaries other than the
property or assets that secured the Acquired Indebtedness prior to the
time such Indebtedness became Acquired Indebtedness of the Company or a
Restricted Subsidiary and are no more favorable to the lienholders than
those securing the Acquired Indebtedness prior to the incurrence of such
Acquired Indebtedness by us or a Restricted Subsidiary;
(14) Liens on assets of a Restricted Subsidiary that is not a
Guarantor to secure Indebtedness and other obligations of such Restricted
Subsidiary that are otherwise permitted under the Indenture;
(15) leases, subleases, licenses and sublicenses granted to others
that do not materially interfere with the ordinary course of business of
the Company and its Restricted Subsidiaries;
(16) banker's Liens, rights of setoff and similar Liens with respect
to cash and Cash Equivalents on deposit in one or more bank accounts in the
ordinary course of business;
(17) Liens arising from filing Uniform Commercial Code financing
statements regarding leases;
(18) Liens in favor of customs and revenue authorities arising as a
matter of law to secure payment of customs duties in connection with the
importation of goods; and
(19) additional Liens not to exceed $10.0 million at any one time.
"Person" means an individual, partnership, corporation, limited liability
company, unincorporated organization, trust or joint venture, or a governmental
agency or political subdivision thereof.
"Preferred Stock" of any Person means any Capital Stock of such Person that
has preferential rights to any other Capital Stock of such Person with respect
to dividends or redemptions or upon liquidation.
106
"Purchase Money Indebtedness" means Indebtedness of the Company or its
Restricted Subsidiaries incurred for the purpose of financing all or any part of
the purchase price or the cost of installation, construction or improvement of
any property.
"Qualified Capital Stock" means any Capital Stock that is not Disqualified
Capital Stock.
"Refinance" means, in respect of any security or Indebtedness, to
refinance, extend, renew, refund, repay, prepay, redeem, defease or retire, or
to issue a security or Indebtedness in exchange or replacement for, such
security or Indebtedness in whole or in part. "Refinanced" and "Refinancing"
shall have correlative meanings.
"Refinancing Indebtedness" means any Refinancing by the Company or any
Restricted Subsidiary of Indebtedness incurred in accordance with the covenant
described under "-- Certain Covenants -- Limitation on Incurrence of Additional
Indebtedness" (other than pursuant to clause (2), (4), (5), (6), (7), (8), (9),
(10), (12), (13), (14) or (15) of the definition of Permitted Indebtedness), in
each case that does not:
(1) result in an increase in the aggregate principal amount of
Indebtedness of such Person as of the date of such proposed Refinancing
(plus the amount of any premium required to be paid under the terms of the
instrument governing such Indebtedness and plus the amount of reasonable
expenses incurred by the Company or any Restricted Subsidiary in connection
with such Refinancing); or
(2) create Indebtedness with
(a) a Weighted Average Life to Maturity that is less than the
Weighted Average Life to Maturity of the Indebtedness being Refinanced
or
(b) a final maturity earlier than the final maturity of the
Indebtedness being Refinanced; provided that
(x) if such Indebtedness being Refinanced is Indebtedness solely
of the Company or a Guarantor, then such Refinancing Indebtedness
shall be Indebtedness solely of the Company or a Guarantor, and
(y) if such Indebtedness being Refinanced is subordinate or
junior to the Notes, then such Refinancing Indebtedness shall be
subordinate to the Notes at least to the same extent and in the same
manner as the Indebtedness being Refinanced.
"Registration Rights Agreement" means the Registration Rights Agreement
dated as of the issue date of the Notes being offered by this offering
memorandum among the Company, the Guarantors and the Initial Purchasers.
"Replacement Assets" means assets of a kind used or usable in the business
of the Company and its Restricted Subsidiaries as conducted on the date of the
relevant Asset Sale.
"Restricted Subsidiary" means any Subsidiary of the Company that has not
been designated by the Board of Directors of the Company, by a Board Resolution
of the Company delivered to the Trustee, as an Unrestricted Subsidiary pursuant
to and in compliance with the covenant described under "-- Certain
Covenants -- Limitation on Designations of Unrestricted Subsidiaries." Any such
Designation may be revoked by a Board Resolution of the Company delivered to the
Trustee, subject to the provisions of such covenant.
"Revocation" has the meaning set forth under "-- Certain
Covenants -- Limitation on Designations of Unrestricted Subsidiaries."
"S&P" means Standard and Poor's Ratings Service
107
"Sale and Leaseback Transaction" means any direct or indirect arrangement
with any Person or to which any such Person is a party, providing for the
leasing to the Company or a Restricted Subsidiary of any property, whether owned
by the Company or any Restricted Subsidiary at the Issue Date or later acquired,
which has been or is to be sold or transferred by the Company or by such
Restricted Subsidiary to such Person or to any other Person from whom funds have
been or are to be advanced by such Person on the security of such Property.
"Significant Subsidiary" will have the meaning set forth in Rule 1.02(w) of
Regulation S-X under the Securities Act.
"Subordinated Indebtedness" means Indebtedness of the Company or any
Guarantor that is by its express terms subordinated or junior in right of
payment to the Notes or the Guarantee of such Guarantor, as the case may be.
"Subsidiary", with respect to any Person, means:
(1) any corporation of which the outstanding Capital Stock having at
least a majority of the votes entitled to be cast in the election of
directors under ordinary circumstances shall at the time be owned, directly
or indirectly, by such Person; or
(2) any other Person of which at least a majority of the voting
interest under ordinary circumstances is at the time, directly or
indirectly, owned by such Person.
"Surviving Entity" has the meaning set forth under "-- Certain
Covenants -- Merger, Consolidation and Sale of Assets."
"Unrestricted Subsidiary" means any Subsidiary of the Company designated as
such pursuant to and in compliance with the covenant described under "-- Certain
Covenants -- Limitation on Designations of Unrestricted Subsidiaries." Any such
designation may be revoked by a Board Resolution of the Company delivered to the
Trustee, subject to the provisions of such covenant.
"Weighted Average Life to Maturity" means, when applied to any Indebtedness
at any date, the number of years obtained by dividing:
(1) the then outstanding aggregate principal amount of such
Indebtedness into
(2) the sum of the total of the products obtained by multiplying
(a) the amount of each then remaining installment, sinking fund,
serial maturity or other required payment of principal, including
payment at final maturity, in respect thereof, by
(b) the number of years (calculated to the nearest one-twelfth)
which will elapse between such date and the making of such payment.
"Wholly Owned Restricted Subsidiary" means any Restricted Subsidiary of
which all the outstanding voting securities (other than in the case of a foreign
Restricted Subsidiary, directors' qualifying shares or an immaterial amount of
shares required to be owned by other Persons pursuant to applicable law) are
owned by the Company or another Wholly Owned Restricted Subsidiary.
108
BOOK-ENTRY; DELIVERY AND FORM
The certificates representing the Notes will be issued in fully registered
form without interest coupons.
Notes sold in reliance on Rule 144A will initially be represented by
permanent global Notes in fully registered form without interest coupons (each a
"Restricted Global Note") and will be deposited with the Trustee as a custodian
for The Depositary Trust Company ("DTC") and registered in the name of a nominee
of such depositary.
Notes sold in offshore transactions in reliance on Regulation S under the
Securities Act will initially be represented by temporary global Notes in fully
registered form without interest coupons (each a "Temporary Regulation S Global
Note") and will be deposited with the Trustee as custodian for DTC, as
depositary, and registered in the name of a nominee of such depositary for the
account of the operator of the Euroclear System or Cedel S.A. Each Temporary
Regulation S Global Note will be exchangeable for a single permanent global Note
(each a "Permanent Regulation S Global Note") after the expiration of the
"distribution compliance period" (as defined in Regulation S) and the
certification required by Regulation S. Prior to such time, a beneficial
interest in the Temporary Regulation S Global Note may be transferred to a
person who takes delivery in the form of an interest in the Restricted Global
Note only upon receipt by the Trustee of a written certification from the
transferor to the effect that such transfer is being made to a person whom the
transferor reasonably believes is a QIB in a transaction meeting the
requirements of Rule 144A. Beneficial interests in a Restricted Global Note may
be transferred to a person who takes delivery in the form of an interest in a
Regulation S Global Note whether before, on or after such time, only upon
receipt by the Trustee of a written certification to the effect that such
transfer is being made in accordance with Regulation S.
Any beneficial interest in a Regulation S Global Note or a Restricted
Global Note (each a "Global Note") that is transferred to a person who takes
delivery in the form of an interest in a Restricted Global Note or a Regulation
S Global Note, respectively, will, upon transfer, cease to be an interest in the
type of Global Note previously held and become an interest in the other type of
Global Note and, accordingly, will thereafter be subject to all transfer
restrictions, if any, and other procedures applicable to beneficial interests in
such other type of Global Note for as long as it remains such an interest.
The Global Notes (and any Notes issued in exchange therefor) will be
subject to certain restrictions on transfer set forth therein and in the
Indenture and will bear the legend regarding such restrictions set forth under
the heading "Notice to Investors" herein. Subject to such restrictions, QIBs or
non-U.S. purchasers may elect to take physical delivery of their certificates
(each a "Certificated Security") instead of holding their interests through the
Global Notes (and which are then ineligible to trade through DTC) (collectively
referred to herein as the "Non-Global Purchasers"). Upon the transfer to a QIB
of any Certificated Security initially issued to a Non-Global Purchaser, such
Certificated Security will, unless the transferee requests otherwise or the
Global Notes have previously been exchanged in whole for Certificated
Securities, be exchanged for an interest in the Global Notes. For a description
of the restrictions on transfer of Certificated Securities and any interest in
the Global Notes, see "Notice to Investors."
THE GLOBAL NOTES
The Company expects that pursuant to procedures established by DTC (i) upon
the issuance of the Global Notes, DTC or its custodian will credit, on its
internal system, the principal amount at maturity of the individual beneficial
interests represented by such Global Notes to the respective accounts of persons
who have accounts with such depositary and (ii) ownership of beneficial
interests in the Global Notes will be shown on, and the transfer of
109
such ownership will be effected only through, records maintained by DTC or its
nominee (with respect to interests of participants) and the records of
participants (with respect to interests of persons other than participants).
Such accounts initially will be designated by or on behalf of the Initial
Purchasers and ownership of beneficial interests in the Global Notes will be
limited to persons who have accounts with DTC ("participants") or persons who
hold interests through participants. Holders may hold their interests in the
Global Notes directly through DTC if they are participants in such system, or
indirectly through organizations which are participants in such system.
So long as DTC, or its nominee, is the registered owner or holder of the
Notes, DTC or such nominee, as the case may be, will be considered the sole
owner or holder of the Notes represented by such Global Notes for all purposes
under the Indenture. No beneficial owner of an interest in the Global Notes will
be able to transfer that interest except in accordance with DTC's procedures, in
addition to those provided for under the Indenture with respect to the Notes.
Payments of the principal of, premium (if any), interest (including
Additional Interest) on, the Global Notes will be made to DTC or its nominee, as
the case may be, as the registered owner thereof. None of the Company, the
Trustee or any Paying Agent will have any responsibility or liability for any
aspect of the records relating to or payments made on account of beneficial
ownership interests in the Global Notes or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interest.
The Company expects that DTC or its nominee, upon receipt of any payment of
principal, premium, if any, interest (including Additional Interest) on the
Global Notes, will credit participants' accounts with payments in amounts
proportionate to their respective beneficial interests in the principal amount
of the Global Notes as shown on the records of DTC or its nominee. The Company
also expects that payments by participants to owners of beneficial interests in
the Global Notes held through such participants will be governed by standing
instructions and customary practice, as is now the case with securities held for
the accounts of customers registered in the names of nominees for such
customers. Such payments will be the responsibility of such participants.
Transfers between participants in DTC will be effected in the ordinary way
through DTC's same-day funds system in accordance with DTC rules and will be
settled in same day funds. If a holder requires physical delivery of a
Certificated Security for any reason, including to sell Notes to persons in
states which require physical delivery of the Notes, or to pledge such
securities, such holder must transfer its interest in a Global Note, in
accordance with the normal procedures of DTC and with the procedures set forth
in the Indenture.
DTC has advised the Company that it will take any action permitted to be
taken by a holder of Notes (including the presentation of Notes for exchange as
described below) only at the direction of one or more participants to whose
account the DTC interests in the Global Notes are credited and only in respect
of such portion of the aggregate principal amount of Notes as to which such
participant or participants has or have given such direction. However, if there
is an Event of Default under the Indenture, DTC will exchange the Global Notes
for Certificated Securities, which it will distribute to its participants and
which will be legended as set forth under the heading "Transfer Restrictions."
DTC has advised the Company as follows: DTC is a limited purpose trust
company organized under the laws of the State of New York, a member of the
Federal Reserve System, a "clearing corporation" within the meaning of the
Uniform Commercial Code and a "Clearing Agency" registered pursuant to the
provisions of Section 17A of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"). DTC was created to hold securities for its participants
and facilitate the clearance and settlement of securities transactions between
participants through electronic book-entry changes in accounts of its
participants, thereby
110
eliminating the need for physical movement of certificates. Participants include
securities brokers and dealers, banks, trust companies and clearing corporations
and certain other organizations. Indirect access to the DTC system is available
to others such as banks, brokers, dealers and trust companies that clear through
or maintain a custodial relationship with a participant, either directly or
indirectly ("indirect participants").
Although DTC has agreed to the foregoing procedures in order to facilitate
transfers of interests in the Global Note among participants of DTC, it is under
no obligation to perform such procedures, and such procedures may be
discontinued at any time. Neither the Company nor the Trustee will have any
responsibility for the performance by DTC or its participants or indirect
participants of their respective obligations under the rules and procedures
governing their operations.
CERTIFICATED SECURITIES
Certificated Securities shall be issued in exchange for beneficial
interests in the Global Notes (i) if requested by a holder of such interests or
(ii) if DTC is at any time unwilling or unable to continue as a depositary for
the Global Notes and a successor depositary is not appointed by the Company
within 90 days.
111
CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS
The following discussion is based upon current provisions of the Internal
Revenue Code of 1986, as amended, applicable Treasury regulations, judicial
authority and administrative rulings and practice as of the date hereof. The
Internal Revenue Service may take a contrary view, and no ruling from the
Service has been or will be sought. Legislative, judicial or administrative
changes or interpretations may be forthcoming that could alter or modify the
following statements and conditions. Any such changes or interpretations may or
may not be retroactive and could affect the tax consequences to holders, whose
tax consequences could be different from the following statements and
conditions. Some holders, including insurance companies, tax-exempt
organizations, financial institutions, broker-dealers, foreign corporations and
persons who are not citizens or residents of the United States, may be subject
to special rules not discussed below. We recommend that each holder consult his
own tax advisor as to the particular tax consequences of exchanging such
holder's old notes for exchange notes, including the applicability and effect of
any state, local or non-U.S. tax law.
Kirkland & Ellis has advised us that the exchange of the old notes for
exchange notes pursuant to the exchange offer should not be treated as an
"exchange" for federal income tax purposes because the exchange notes should not
be considered to differ materially in kind or extent from the old notes. Rather,
the exchange notes received by a holder should be treated as a continuation of
the old notes in the hands of such holder. As a result, there should be no
federal income tax consequences to holders exchanging old notes for exchange
notes pursuant to the exchange offer.
PLAN OF DISTRIBUTION
Each broker-dealer that receives exchange notes for its own account under
the exchange offer must acknowledge that it will deliver a prospectus in
connection with any resale of exchange notes.
This prospectus, as it may be amended or supplemented from time to time,
may be used by a broker-dealer in connection with resales of exchange notes
received in exchange for old notes if the old senior subordinated notes were
acquired as a result of market-making activities or other trading activities.
We and our guarantor subsidiaries have agreed to make this prospectus, as
amended or supplemented, available to any broker-dealer to use in connection
with any such resale for a period of at least 90 days after the expiration date.
In addition, until , 2003, all dealers effecting transactions in the
exchange notes may be required to deliver a prospectus.
Neither we nor our guarantor subsidiaries will receive any proceeds from
any sale of exchange notes by broker-dealers. Exchange notes received by
broker-dealers for their own accounts under the exchange offer may be sold from
time to time in one or more transactions;
- in the over-the-counter market;
- in negotiated transactions;
- through the writing of options on the exchange notes or a combination of
such methods of resale;
- at market prices prevailing at the time of resale;
- at prices related to such prevailing market prices; or
- at negotiated prices.
112
Any resale may be made directly to purchasers or to or through brokers or
dealers. Brokers or dealers may receive compensation in the form of commissions
or concessions from any broker-dealer or the purchasers of any such exchange
notes. An "underwriter" within the meaning of the Securities Act of 1933
includes:
(1) any broker-dealer that resells exchange notes that were received
by it for its own account pursuant to the exchange offer; or
(2) any broker or dealer that participates in a distribution of such
exchange notes.
Any profit on any resale of exchange notes and any commissions or
concessions received by any persons may be deemed to be underwriting
compensation under the Securities Act of 1933. The letter of transmittal states
that, by acknowledging that it will deliver and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act of 1933.
Based on interpretations by the staff of the Securities and Exchange
Commission in no-action letters issued to third parties, we believe that a
holder or other person who receives exchange notes will be allowed to resell the
exchange notes to the public without further registration under the Securities
Act of 1933 and without delivering to the purchasers of the exchange notes a
prospectus that satisfies the requirements of Section 10 of the Securities Act
of 1933. The holder (other than a person that is an "affiliate" of Town Sports
within the meaning of Rule 405 under the Securities Act of 1933) who receives
exchange notes in exchange for old notes in the ordinary course of business and
who is not participating, need not intend to participate or have an arrangement
or understanding with person to participate in the distribution of the exchange
notes.
However, if any holder acquires exchange notes in the exchange offer for
the purpose of distributing or participating in a distribution of the exchange
notes, the holder cannot rely on the position of the staff of the Securities and
Exchange Commission enunciated in such no-action letters or any similar
interpretive letters. The holder must comply with the registration and
prospectus delivery requirements of the Securities Act of 1933 in connection
with any resale transaction. A secondary resale transaction should be covered by
an effective registration statement containing the selling security holder
information required by Item 507 or 508, as applicable, of Regulation S-K under
the Securities Act of 1933, unless an exemption from registration is otherwise
available.
Further, each broker-dealer that receives exchange notes for its own
account in exchange for old notes, where the old notes were acquired by such
participating broker-dealer as a result of market-making activities or other
trading activities, must acknowledge that it will deliver a prospectus in
connection with any resale of any exchange notes. We and each of our guarantor
subsidiaries have agreed, for a period of not less than 90 days from the
consummation of the exchange offer, to make this prospectus available to any
broker-dealer for use in connection with any such resale.
For a period of not less than 90 days after the expiration date we will
promptly send additional copies of this prospectus and any amendment or
supplement to this prospectus to any broker-dealer that requests those documents
in the letter of transmittal. We have agreed to pay all expenses incident to the
exchange offer, including the expenses of one counsel for the holders of the old
notes, other than commissions or concessions of any brokers or dealers. We will
indemnify the holders of the old notes against liabilities under the Securities
Act of 1933, including any broker-dealers.
113
LEGAL MATTERS
The validity of the exchange notes and the guarantees and other legal
matters, including the tax-free nature of the exchange, have been passed upon on
our behalf by Kirkland & Ellis, New York, New York. Certain matters under
Massachusetts law will be passed upon by Epstein Becker & Green, P.C.
EXPERTS
The financial statements as of December 31, 2002 and 2001 and for each of
the three years in the period ended December 31, 2002 included in this
prospectus, have been so included in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.
AVAILABLE INFORMATION
We are subject to the periodic reporting and other informational
requirements of the Exchange Act, as amended. Under the terms of the indenture,
we agree that, whether or not required by the rules and regulations of the SEC,
so long as any Notes are outstanding, we will furnish to the trustee and the
holders of Notes (i) all quarterly and annual financial information that would
be required to be contained in a filing with the SEC on Forms 10-Q and 10-K, if
we were required to file such Forms, including a "Management's Discussion and
Analysis of Financial Condition and Results of Operations" that describes our
financial condition and results of operations and our consolidated subsidiaries
and, with respect to the annual information only, a report thereon by our
certified independent accountants and (ii) all current reports that would be
required to be filed with the SEC on Form 8-K if we were required to file such
reports. In addition, whether or not required by the rules and regulations of
the SEC, we will file a copy of all such information and reports with the SEC
for public availability (unless the SEC will not accept such a filing) and make
such information available to securities analysts and prospective investors upon
request. Information filed with the SEC may be read and copied by the public at
the Public Reference Room of the SEC at 450 Fifth Street, N.W., Washington, D.C.
20549. The public may obtain information on the operation of the Public
Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an
Internet site at http://www.sec.gov that contains reports, proxy and information
statements and other information regarding issuers that file electronically with
the SEC. In addition, we have agreed that, for so long as any Notes remain
outstanding, we will furnish to the holders and to securities analysts and
prospective investors, upon their request, the information required to be
delivered pursuant to Rule 144A(d)(4) under the Securities Act.
Under the indenture governing the Notes we are required to file with the
trustee annual, quarterly and other reports after we file these reports with the
Securities and Exchange Commission. Annual reports delivered to the trustee and
the holders of exchange notes will contain financial information that has been
examined and reported upon, with an opinion expressed by an independent public
accountant. We will also furnish such other reports as may be required by law.
Information contained in this prospectus contains "forward-looking
statements" which can be identified by the use of forward-looking terminology
such as "believes," "expects," "may," "will," "should," or "anticipates" or the
negative thereof or other similar terminology, or by discussions of strategy.
Our actual results could differ materially from those anticipated by such
forward-looking statements as a result of factors described in the "Risk
Factors" beginning on page 14 and elsewhere in this prospectus.
The market and industry data presented in this prospectus are based upon
third-party data. While we believe that such estimates are reasonable and
reliable, estimates cannot always be verified by information available from
independent sources. Accordingly, readers are cautioned not to place undue
reliance on such market share data.
114
INDEX TO FINANCIAL STATEMENTS
<Table>
<Caption>
PAGE
----
Consolidated Financial Statements:
Report of Independent Auditors............................ F-2
Consolidated balance sheets at December 31, 2001 and
2002................................................... F-3
Consolidated statements of operations for the years ended
December 31, 2000, 2001 and 2002....................... F-4
Consolidated statements of stockholders' deficit for the
years ended December 31, 2000, 2001 and 2002........... F-5
Consolidated statements of cash flows for the years ended
December 31, 2000, 2001 and 2002....................... F-6
Notes to consolidated financial statements................ F-7
Condensed consolidated balance sheet as of March 31, 2003
(unaudited)............................................ F-37
Condensed consolidated statements of operations for the
three months ended March 31, 2002 and 2003
(unaudited)............................................ F-38
Condensed consolidated statements of cash flows for the
three months ended March 31, 2002 and 2003
(unaudited)............................................ F-39
Notes to condensed consolidated financial statements
(unaudited)............................................ F-40
</Table>
F-1
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholders of
Town Sports International, Inc.:
In our opinion, the accompanying consolidated balance sheets and the
related consolidated statements of operations, stockholders' deficit and cash
flows present fairly, in all material respects, the financial position of TOWN
SPORTS INTERNATIONAL, INC. and SUBSIDIARIES (the "Company") at December 31, 2001
and 2002, and the results of their operations and their cash flows for each of
the three years in the period ended December 31, 2002, in conformity with
accounting principles generally accepted in the United States of America. These
financial statements are the responsibility of the Company's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these statements in accordance with
auditing standards generally accepted in the United States of America which
require that we plan and perform the audits to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
As discussed in Notes 2m and 4 to the financial statements, the Company
changed its method of accounting for goodwill and other intangibles effective
January 1, 2002. Additionally, as discussed in Note 2r, the Company implemented
the guidance in EITF Topic No. D-98, "Classification and Measurement of
Redeemable Securities."
/s/ PricewaterhouseCoopers LLP
February 14, 2003, except as to Notes 18 and 19
which are dated February 24, 2003 and
June 2, 2003 respectively.
F-2
TOWN SPORTS INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ALL FIGURES $'000, EXCEPT SHARE DATA
DECEMBER 31, 2001 AND 2002
<Table>
<Caption>
DECEMBER 31,
-------------------
2001 2002
-------- --------
ASSETS
Current assets:
Cash and cash equivalents................................. $ 5,458 $ 5,551
Accounts receivable (less allowance for doubtful accounts
of $120 in 2002)........................................ 1,355 1,333
Inventory................................................. 1,326 1,132
Prepaid corporate income taxes............................ -- 3,012
Prepaid expenses and other current assets................. 3,113 4,430
-------- --------
TOTAL CURRENT ASSETS.................................. 11,252 15,458
Fixed assets, net........................................... 200,120 210,823
Goodwill, net............................................... 42,145 45,531
Intangible assets, net...................................... 1,294 1,675
Deferred tax assets, net.................................... 19,092 20,254
Deferred membership costs................................... 14,748 14,408
Other assets................................................ 7,354 6,101
-------- --------
TOTAL ASSETS.......................................... $296,005 $314,250
======== ========
LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' DEFICIT
Current liabilities:
Current portion of long-term debt and capital lease
obligations............................................. $ 4,015 $ 5,178
Accounts payable.......................................... 7,615 5,328
Accrued expenses.......................................... 18,918 21,634
Deferred revenue.......................................... 23,269 26,510
-------- --------
TOTAL CURRENT LIABILITIES............................. 53,817 58,650
Long-term debt and capital lease obligations................ 159,964 155,765
Deferred lease liabilities.................................. 21,510 23,644
Deferred revenue............................................ 3,609 3,435
Other liabilities........................................... 4,783 7,530
-------- --------
TOTAL LIABILITIES..................................... 243,683 249,024
-------- --------
Commitments and contingencies
Redeemable preferred stock:
Redeemable senior preferred stock, $1.00 par value;
liquidation value $57,416 and $64,512 at December 31,
2001 and 2002, respectively; authorized 100,000 shares;
40,000 shares issued and outstanding at December 31,
2001 and 2002........................................... 54,687 62,125
Series A redeemable preferred stock, $1.00 par value; at
liquidation value; authorized 200,000 shares; 153,637
shares issued and outstanding at December 31, 2001 and
2002.................................................... 30,432 34,841
-------- --------
85,119 96,966
-------- --------
Stockholders' deficit:
Series B preferred stock, at liquidation value............ 265 303
Class A voting common stock, $.001 par value; issued and
outstanding 1,028,698 and 1,176,043 shares at December
31, 2001 and 2002, respectively......................... 1 1
Paid-in capital........................................... (22,245) (32,149)
Unearned compensation..................................... (422) (278)
Accumulated other comprehensive income (currency
translation adjustment)................................. 21 293
Retained earnings (accumulated deficit)................... (10,417) 90
-------- --------
TOTAL STOCKHOLDERS' DEFICIT........................... (32,797) (31,740)
-------- --------
TOTAL LIABILITIES, REDEEMABLE PREFERRED STOCK AND
STOCKHOLDERS' DEFICIT................................ $296,005 $314,250
======== ========
</Table>
See notes to consolidated financial statements.
F-3
TOWN SPORTS INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
ALL FIGURES $'000
FOR THE YEARS ENDED DECEMBER 31, 2000, 2001 AND 2002
<Table>
<Caption>
YEARS ENDED DECEMBER 31,
------------------------------
2000 2001 2002
-------- -------- --------
Revenues:
Club operations...................................... $221,210 $278,200 $314,995
Fees and other....................................... 2,618 3,433 4,432
-------- -------- --------
223,828 281,633 319,427
-------- -------- --------
Operating expenses:
Payroll and related.................................. 90,801 112,766 129,105
Club operating....................................... 68,806 88,941 99,113
General and administrative........................... 14,626 18,785 21,368
Depreciation and amortization........................ 26,248 32,185 31,748
-------- -------- --------
200,481 252,677 281,334
-------- -------- --------
OPERATING INCOME.................................. 23,347 28,956 38,093
Interest expense....................................... 14,300 14,918 16,559
Interest income........................................ (1,180) (391) (138)
-------- -------- --------
INCOME FROM CONTINUING OPERATIONS BEFORE PROVISION
FOR CORPORATE INCOME TAXES...................... 10,227 14,429 21,672
Provision for corporate income taxes................... 5,031 6,853 9,709
-------- -------- --------
INCOME FROM CONTINUING OPERATIONS................. 5,196 7,576 11,963
Loss on discontinued operations (including loss on club
closure of $996 in 2002), net of income tax benefits
of $232, $364 and $551 for 2000, 2001 and 2002,
respectively......................................... (365) (530) (767)
Cumulative effect of a change in accounting principle,
net of income tax benefit of $612.................... -- -- (689)
-------- -------- --------
NET INCOME........................................ 4,831 7,046 10,507
Accreted dividends on preferred stock.................. (9,016) (10,201) (11,543)
-------- -------- --------
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS...... $ (4,185) $ (3,155) $ (1,036)
======== ======== ========
</Table>
See notes to consolidated financial statements.
F-4
TOWN SPORTS INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT
ALL FIGURES $'000, EXCEPT SHARE DATA
FOR THE YEARS ENDED DECEMBER 31, 2000, 2001 AND 2002
<Table>
<Caption>
PREFERRED STOCK
---------------- FOREIGN
COMMON STOCK
SERIES B ($1.00 --------------------
PAR) CLASS A ($.001 PAR) CURRENCY
---------------- -------------------- PAID-IN UNEARNED TRANSLATION
SHARES AMOUNT SHARES AMOUNT CAPITAL COMPENSATION ADJUSTMENT
------ ------ ---------- ------- -------- ------------ -----------
Balance at January 1, 2000......... 3,855 $204 1,014,086 $1 $ (5,484) $ (1,240)
Stock commitment in connection with
subordinated credit facility...... 1,360
Compensation expense incurred in
connection with Series B Preferred
stock options..................... 867
Amortization of unearned
compensation...................... 969
Accretion of Series B preferred
stock dividend ($7.85 per
share)............................ 30 (30)
Accretion of Series A redeemable
preferred stock dividend ($21.90
per share)........................ (3,364)
Accretion of redeemable senior
preferred stock dividend ($140.55
per share plus accretion to
liquidation value)................ (5,963)
Forfeiture of unvested options..... (115) 115
Exercise of stock options.......... 5,384 3,757 61
Repurchase of shares............... (5,417) (2) (12,145) (449)
Other comprehensive income, net of
taxes:
Net income........................
Foreign currency translation
adjustment...................... $ 12
Total comprehensive income......
------ ---- --------- -- -------- -------- ----
Balance at December 31, 2000.... 3,822 232 1,005,698 1 (13,117) (156) 12
Common stock issued in connection
with subordinated credit
facility.......................... 23,000
Compensation expense incurred in
connection with Series B Preferred
stock options..................... 993
Amortization of unearned
compensation...................... 156
Accretion of Series B preferred
stock dividend ($8.63 per
share)............................ 33 (33)
Accretion of Series A redeemable
preferred stock dividend ($25.07
per share)........................ (3,852)
Accretion of redeemable senior
preferred stock dividend ($157.90
per share plus accretion to
liquidation value)................ -- (6,658)
Deferred compensation recorded in
connection with the issuance of
stock options..................... 422 (422)
Other comprehensive income, net of
taxes:
Net income........................
Foreign currency translation
adjustment...................... 9
Total comprehensive income......
------ ---- --------- -- -------- -------- ----
Balance at December 31, 2001.... 3,822 265 1,028,698 1 (22,245) (422) 21
Common stock issued in connection
with warrant exercises............ 147,345 1
Vesting of restricted common stock
issued in connection with
subordinated credit facility...... 917
Compensation expense incurred in
connection with Series B Preferred
stock options..................... 1,137
Amortization of unearned
compensation...................... 70
Accretion of Series B preferred
stock dividend ($10.20 per
share)............................ 38 (38)
Accretion of Series A redeemable
preferred stock dividend ($28.71
per share)........................ (4,409)
Accretion of redeemable senior
preferred stock dividend ($177.40
per share plus accretion to
liquidation value)................ (7,438)
Forfeiture of unvested options..... (74) 74
Other comprehensive income, net of
taxes:
Net income........................
Foreign currency translation
adjustment...................... 272
Total comprehensive income......
------ ---- --------- -- -------- -------- ----
Balance at December 31, 2002.... 3,822 $303 1,176,043 $1 $(32,149) $ (278) $293
====== ==== ========= == ======== ======== ====
<Caption>
ACCUMULATED TOTAL
(DEFICIT)/RETAINED STOCKHOLDERS'
EARNINGS DEFICIT
------------------ -------------
Balance at January 1, 2000......... $(22,294) $(28,813)
Stock commitment in connection with
subordinated credit facility...... 1,360
Compensation expense incurred in
connection with Series B Preferred
stock options..................... 867
Amortization of unearned
compensation...................... 969
Accretion of Series B preferred
stock dividend ($7.85 per
share)............................ --
Accretion of Series A redeemable
preferred stock dividend ($21.90
per share)........................ (3,364)
Accretion of redeemable senior
preferred stock dividend ($140.55
per share plus accretion to
liquidation value)................ (5,963)
Forfeiture of unvested options..... --
Exercise of stock options.......... 61
Repurchase of shares............... (451)
Other comprehensive income, net of
taxes:
Net income........................ 4,831 4,831
Foreign currency translation
adjustment...................... -- 12
--------
Total comprehensive income...... 4,843
-------- --------
Balance at December 31, 2000.... (17,463) (30,491)
Common stock issued in connection
with subordinated credit
facility.......................... --
Compensation expense incurred in
connection with Series B Preferred
stock options..................... 993
Amortization of unearned
compensation...................... 156
Accretion of Series B preferred
stock dividend ($8.63 per
share)............................ --
Accretion of Series A redeemable
preferred stock dividend ($25.07
per share)........................ (3,852)
Accretion of redeemable senior
preferred stock dividend ($157.90
per share plus accretion to
liquidation value)................ (6,658)
Deferred compensation recorded in
connection with the issuance of
stock options..................... --
Other comprehensive income, net of
taxes:
Net income........................ 7,046 7,046
Foreign currency translation
adjustment...................... 9
--------
Total comprehensive income...... 7,055
-------- --------
Balance at December 31, 2001.... (10,417) (32,797)
Common stock issued in connection
with warrant exercises............ 1
Vesting of restricted common stock
issued in connection with
subordinated credit facility...... 917
Compensation expense incurred in
connection with Series B Preferred
stock options..................... 1,137
Amortization of unearned
compensation...................... 70
Accretion of Series B preferred
stock dividend ($10.20 per
share)............................ --
Accretion of Series A redeemable
preferred stock dividend ($28.71
per share)........................ (4,409)
Accretion of redeemable senior
preferred stock dividend ($177.40
per share plus accretion to
liquidation value)................ (7,438)
Forfeiture of unvested options..... --
Other comprehensive income, net of
taxes:
Net income........................ 10,507 10,507
Foreign currency translation
adjustment...................... 272
--------
Total comprehensive income...... 10,779
-------- --------
Balance at December 31, 2002.... $ 90 $(31,740)
======== ========
</Table>
See notes to consolidated financial statements.
F-5
TOWN SPORTS INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
ALL FIGURES $'000
FOR THE YEARS ENDED DECEMBER 31, 2000, 2001 AND 2002
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
<Table>
<Caption>
YEARS ENDED DECEMBER 31,
------------------------------
2000 2001 2002
-------- -------- --------
Cash flows from operating activities:
Net income................................................ $ 4,831 $ 7,046 $ 10,507
-------- -------- --------
Adjustments to reconcile net income to net cash provided
by operating activities:
Compensation expense incurred in connection with stock
options............................................... 1,836 1,149 1,207
Depreciation and amortization........................... 26,642 32,667 32,025
Goodwill impairment write-off........................... -- -- 1,301
Club closure costs...................................... -- -- 996
Amortization of debt issuance costs..................... 1,531 1,882 1,928
Noncash rental expense, net of noncash rental income.... 2,976 4,224 1,670
Net change in certain working capital components........ 9,392 3,475 2,413
Increase in deferred tax asset.......................... (3,326) (4,526) (1,162)
(Decrease) increase in deferred membership costs........ (2,745) (1,162) 340
Other................................................... (564) (407) (420)
-------- -------- --------
TOTAL ADJUSTMENTS..................................... 35,742 37,302 40,298
-------- -------- --------
NET CASH PROVIDED BY OPERATING ACTIVITIES............. 40,573 44,348 50,805
-------- -------- --------
Cash flows from investing activities:
Capital expenditures, net of effect of acquired
businesses.............................................. (47,454) (57,811) (41,393)
Acquisition of businesses, net of cash acquired........... (24,053) (1,272) (2,322)
Investment in affiliate................................... (210) -- --
Intangible and other assets............................... (359) -- --
Landlord contributions.................................... 2,028 725 3,533
-------- -------- --------
NET CASH USED IN INVESTING ACTIVITIES................. (70,048) (58,358) (40,182)
-------- -------- --------
Cash flows from financing activities:
Redemption and liquidation of stock, including expenses... (390) -- --
Net credit line borrowings (repayments)................... 9,000 13,745 (8,245)
Subordinated credit borrowings, net of expenses........... -- 5,762 2,810
Repayments of borrowings.................................. (2,895) (3,404) (5,095)
-------- -------- --------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES... 5,715 16,103 (10,530)
-------- -------- --------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS........................................ (23,760) 2,093 93
Cash and cash equivalents at beginning of period............ 27,125 3,365 5,458
-------- -------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD............ $ 3,365 $ 5,458 $ 5,551
======== ======== ========
Summary of the change in certain working capital components,
net of effects of acquired businesses:
Decrease (increase) in accounts receivable................ $ 151 $ (304) $ (443)
Decrease (increase) in inventory.......................... 213 (433) 194
Decrease (increase) in prepaid expenses and other current
assets.................................................. 392 (514) (527)
Increase in accounts payable and accrued expenses......... 4,990 1,745 3,751
(Increase) decrease in prepaid corporate income taxes..... (624) 1,828 (3,012)
Increase in deferred revenue.............................. 4,270 1,153 2,450
-------- -------- --------
NET CHANGE IN CERTAIN WORKING CAPITAL COMPONENTS...... $ 9,392 $ 3,475 $ 2,413
======== ======== ========
</Table>
See notes to consolidated financial statements.
F-6
TOWN SPORTS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
ALL FIGURES $'000, EXCEPT SHARE DATA
1. NATURE OF BUSINESS
Town Sports International, Inc. and Subsidiaries (the "Company") owns and
operates 127 fitness clubs ("clubs") and partly owns and operates two additional
clubs as of December 31, 2002. The Company operates in a single segment. The
Company operates 85 clubs in the New York metropolitan market, 20 clubs in the
Boston market, 15 clubs in the Washington, D.C. market, six in the Philadelphia
market and three clubs in Switzerland. The Company's geographic concentration in
the New York metropolitan market may expose the Company to adverse developments
related to competition, demographic changes, real estate costs, acts of
terrorism and economic down turns. The Company's Swiss operations are immaterial
to the Company's financial position, results of operations, and cash flows.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. PRINCIPLES OF CONSOLIDATION
The accompanying consolidated financial statements include the accounts of
Town Sports International, Inc. ("TSI") and all wholly owned subsidiaries. All
significant intercompany accounts and transactions have been eliminated in
consolidation.
Certain reclassifications were made to the reported amounts at December 31,
2000 and 2001 to conform to the presentation at December 31, 2002.
B. REVENUE RECOGNITION
The Company receives a one-time non-refundable initiation fee and monthly
dues from its members. Substantially all of the Company's members join on a
month-to-month basis and can therefore cancel their membership at any time with
30 days notice. Initiation fees and related direct expenses, primarily salaries
and sales commissions payable to membership consultants, are deferred and
recognized, on a straight-line basis, in operations over an estimated membership
life of twenty four (24) months. The amount of costs deferred do not exceed the
related deferred revenue for the periods presented. Dues that are received in
advance are recognized on a pro-rata basis over the periods in which services
are to be provided. Revenues from ancillary services are recognized as services
are performed. Management fees earned for services rendered are recognized at
the time the related services are performed.
The Company recognizes revenue from merchandise sales upon delivery to the
member.
In connection with advance receipts of fees or dues, the Company is
required to maintain surety bonds totaling $3,317 pursuant to various state
consumer protection laws.
C. INVENTORY
Inventory consists of athletic equipment, supplies, headsets for the club
entertainment system and clothing for sale to members. Inventories are valued at
the lower of cost or market by the first-in, first-out method.
D. FIXED ASSETS
Fixed assets are recorded at cost and depreciated on a straight-line basis
over the estimated useful lives of the assets, which are thirty years for
building and improvements, five years for club equipment, furniture, fixtures
and computer equipment, and three years for computer software. Leasehold
improvements are amortized over the shorter of their estimated
F-7
TOWN SPORTS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
useful lives or the remaining period of the lease. Expenditures for maintenance
and repairs are charged to operations as incurred. The cost and related
accumulated depreciation or amortization of assets retired or sold are removed
from the respective accounts and any gain or loss is recognized in operations.
The costs related to developing web applications, developing HTML web pages and
installing developed applications on the web servers are capitalized and
classified as computer software. Web site hosting fees and maintenance costs are
expensed as incurred.
E. ADVERTISING AND CLUB PREOPENING COSTS
Advertising costs and club preopening costs are charged to operations
during the period in which they are incurred except for production costs related
to television and radio advertisements, which are expensed when the related
commercials are first aired. Total advertising costs incurred by the Company
during the years ended December 31, 2000, 2001 and 2002 totaled $7,387, $9,327,
and $8,888, respectively.
F. USE OF ESTIMATES
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the dates of the financial statements and the reported amounts of revenues and
expenses during the reporting periods. Actual results could differ from those
estimates.
The most significant assumptions and estimates relate to the allocation and
fair value ascribed to assets acquired in connection with the acquisition of
clubs under the purchase method of accounting, the useful lives, recoverability
and impairment of fixed and intangible assets, deferred income tax valuation,
valuation of and expense incurred in connection with stock options and warrants,
legal contingencies and the estimated membership life.
G. CORPORATE INCOME TAXES
Deferred tax liabilities and assets are recognized for the expected future
tax consequences of events that have been included in the financial statements
or tax returns. Under this method, deferred tax liabilities and assets are
determined on the basis of the difference between the financial statement and
tax bases of assets and liabilities ("temporary differences") at enacted tax
rates in effect for the years in which the temporary differences are expected to
reverse. A valuation allowance is recorded to reduce deferred tax assets to the
amount that is more likely than not to be realized.
F-8
TOWN SPORTS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
H. STATEMENTS OF CASH FLOWS
Supplemental disclosure of cash flow information:
<Table>
<Caption>
YEARS ENDED DECEMBER 31,
---------------------------
2000 2001 2002
------- ------- -------
Cash paid:
Interest (net of amounts capitalized)............ $13,353 $13,887 $15,035
Income taxes..................................... 9,054 10,087 13,187
Noncash investing and financing activities:
Acquisition of fixed assets included in accounts
payable and accrued expenses.................. 3,757 7,538 3,901
Acquisition of equipment and software financed by
lessors....................................... 3,951 2,853 2,575
See Notes 6, 9, 10 and 11 for additional noncash
investing and financing activities
</Table>
I. CASH AND CASH EQUIVALENTS
The Company considers all highly liquid debt instruments which have
original maturities of three months or less when acquired to be cash
equivalents. The carrying amounts reported in the balance sheets for cash and
cash equivalents approximate fair value.
J. DEFERRED LEASE LIABILITIES AND NONCASH RENTAL EXPENSE
The Company recognizes rental expense for leases with scheduled rent
increases on the straight-line basis over the life of the lease.
K. FOREIGN CURRENCY
Transactions denominated in a foreign currency have been translated into
U.S. dollars at the rates of exchange at the transaction dates. Assets and
liabilities have been translated at the respective year-end exchange rates. For
all periods presented foreign exchange gains and losses were not material.
In March 2000, the Company acquired two Swiss clubs that were previously
managed by the Company. In December 2001, the Company opened a third Swiss club.
These clubs use the local currency as their functional currency and,
accordingly, their assets and liabilities are translated into U.S. dollars at
year-end exchange rates while their income and expense items are translated into
U.S. dollars at the average exchange rate for the period. Adjustments resulting
from the translation of foreign functional currency financial statements into
U.S. dollars are included in the currency translation adjustment in
stockholders' deficit. Comprehensive income represents changes to stockholders'
deficit except those resulting from investments from, and distributions to,
stockholders. The difference between the Company's net income and comprehensive
income is the effect of foreign exchange translation adjustments, which was
immaterial for 2000 and 2001, and was $272 for 2002.
L. INVESTMENTS IN AFFILIATED COMPANIES
The Company has investments in Capitol Hill Squash Club Associates
("CHSCA") and Kalorama Sports Management Associates ("KSMA") (collectively
referred to as the "Affiliates"). The Company has a limited partnership interest
in CHSCA, which provides the
F-9
TOWN SPORTS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Company with approximately 20% of the CHSCA profits, as defined. The Company has
a co-general partnership and limited partnership interest in KSMA, which
entitles it to receive approximately 45% of the KSMA profits, as defined. The
Affiliates have operations, which are similar, or related to, those of the
Company. The Company accounts for these Affiliates in accordance with the equity
method. The assets, liabilities, equity and operating results of the Affiliates
and the Company's pro rata share of the Affiliates' net assets and operating
results were not material for all periods presented.
M. INTANGIBLE ASSETS, GOODWILL AND DEBT ISSUANCE COSTS
Intangible assets consist of membership lists, a beneficial lease and
covenants-not-to-compete. Such intangibles are stated at cost and are being
amortized by the straight-line method over their estimated lives. Membership
lists are amortized over 24 months and covenants-not-to-compete are amortized
over the contractual life, generally five years. The beneficial lease is being
amortized over the remaining life of the underlying club lease.
In accordance with the Statement on Financial Accounting Standards ("SFAS")
No. 142 ("SFAS 142"), Goodwill and Other Intangible Assets, goodwill has not
been amortized subsequent to December 31, 2001. For the years ended December 31,
2000 and December 31, 2001 goodwill was amortized by the straight-line method
over the remaining lives of the underlying club leases, five to fifteen years.
See also Note 4 for further discussion on Goodwill and Other Intangible Assets.
Debt issuance costs are classified within other assets and are being
amortized as additional interest expense over the life of the underlying debt,
four to seven years, using the interest method. Amortization of debt issue costs
was $1,531, $1,882, and $1,928 for December 31, 2000, 2001 and 2002,
respectively.
N. ACCOUNTING FOR THE IMPAIRMENT OF LONG-LIVED ASSETS
Long-lived assets, such as fixed assets and intangible assets are reviewed
for impairment when events or circumstances indicate that their carrying value
may not be recoverable. Estimated undiscounted expected future cash flows are
used to determine if an asset is impaired, in which case the asset's carrying
value would be reduced to fair value.
Effective January 1, 2002, the Company adopted SFAS No. 144, "Accounting
for the Impairment or Disposal of Long-lived Assets," which replaces SFAS No.
121, "Accounting for the Impairment of Long-Lived Assets and Long-Lived Assets
to Be Disposed Of." SFAS No. 144 provides updated guidance concerning the
recognition and measurement of an impairment loss for certain types of
long-lived assets, expands the scope of discontinued operation to include a
component of an entity and eliminates the exemption to consolidation when
control over a subsidiary is likely to be temporary. In 2002, the Company
discontinued operations at two wholly-owned clubs. As a result of the adoption
of SFAS No. 144 the Company has accounted for these two clubs as discontinued
operations. See Note 17 for further discussion on discontinued operations.
O. CONCENTRATIONS OF CREDIT RISK
Financial instruments which potentially subject the Company to
concentrations of credit risk are cash and cash equivalents. Such amounts are
held, primarily, in a single commercial bank. The Company holds no collateral
for these financial instruments.
F-10
TOWN SPORTS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
P. STOCK-BASED EMPLOYEE COMPENSATION
For financial reporting purposes, the Company accounts for stock-based
compensation in accordance with the intrinsic value method ("APB No. 25"). In
accordance with this method, no compensation expense is recognized in the
accompanying financial statements in connection with the awarding of stock
option grants to employees provided that, as of the grant date, all terms
associated with the award are fixed and the fair value of the Company's stock is
not greater than the amount an employee must pay to acquire the stock as
defined; however, to the extent that stock options are granted to employees with
variable terms or if the fair value of the Company's stock as of the measurement
date is greater than the amount an employee must pay to acquire the stock, then
the Company will recognize compensation expense. The fair value of options or
warrants granted to nonemployees for financing are recorded as deferred
financing costs and amortized into interest expense using the interest method.
See Note 10 for further discussion on stock options and warrants.
The following table illustrates the effect on net loss attributed to common
stockholders if the Company had applied the fair value recognition provisions of
Financial Accounting Standards Board issued Statement No. 123, ("SFAS 123")
Accounting for Stock-Based Compensation, to stock-based employee compensation.
<Table>
<Caption>
YEARS ENDED DECEMBER 31,
---------------------------
2000 2001 2002
------- ------- -------
Net loss attributed to common stockholders, as
reported.......................................... $(4,185) $(3,155) $(1,036)
Deduct:
Total stock-based employee compensation expense
(income) determined under fair value based
method for all stock option awards, net of
related tax effects............................ (235) 145 104
------- ------- -------
Pro forma net loss attributed to common stock-
holders........................................... $(3,950) $(3,300) $(1,140)
======= ======= =======
</Table>
Since option grants vest over several years and additional grants are
expected in the future, the pro forma results noted above are not likely to be
representative of the effects on future years of the application of the fair
value based method.
For the purposes of the above pro forma information, the fair value of each
option granted was estimated on the date of grant using the Black-Scholes option
pricing model. For the years ended December 31, 2000 and 2001, the
weighted-average fair value of the option grants was approximately $47.11 and
$111.89, respectively. The following weighted-average assumptions were used in
computing the fair value of options grants: expected volatility of 69% for the
year ended December 31, 2000 and 72% for the year ended December 31, 2001,
risk-free interest rate of approximately 6.6% and 4.6% for December 31, 2000 and
2001, respectively, expected lives of five years for December 31, 2000 and 2001,
and a zero divided yield for all periods.
Q. RECENT ACCOUNTING PRONOUNCEMENTS
In April 2002, the Financial Accounting Standards Board ("FASB") issued
Statement No. 145, Rescission of FASB Statements No. 4, 44 and 64, Amendment of
FASB Statement No. 13, and Technical Corrections ("SFAS 145"). SFAS 145 rescinds
SFAS No. 4, Reporting Gains
F-11
TOWN SPORTS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
and Losses from Extinguishment of Debt, and SFAS No. 64, Extinguishment of Debt
Made to Satisfy Sinking -- Fund Requirements. The provisions of this statement
are effective January 1, 2003. This Statement also amends SFAS No. 13,
Accounting for Leases, to require sale-leaseback accounting for certain lease
modifications that have economic impact similar to sale-leaseback transactions
and amends certain other authoritative pronouncements. These provisions of SFAS
No. 145, adopted in May 2002, had no impact on our consolidated financial
position or results of operations. In the event we extinguish our long-term debt
obligations prior to their original maturities, the related debt extinguishment
costs will be reported within operating income, rather than an extraordinary
item.
In July 2002, the FASB issued Statement No. 146, ("SFAS 146") Accounting
for Costs Associated with Exit or Disposal Activities, which we are required to
adopt on January 1, 2003. SFAS 146 requires companies to recognize costs
associated with exit or disposal activities when they are incurred rather than
at the date of a commitment to an exit or disposal plan. We do not expect that
adoption of the standard will have a material adverse effect on our consolidated
financial position or results of operations.
In November 2002, the FASB issued Interpretation No. 45, Guarantor's
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others. Interpretation No. 45 requires the
disclosure of certain guarantees existing at December 31, 2002. In addition,
Interpretation No. 45 requires the recognition of a liability for the fair value
of the obligation of qualifying guarantee activities that are initiated or
modified after December 31, 2002. Accordingly, the Company will apply the
recognition provisions of Interpretation No. 45 prospectively to guarantee
activities initiated after December 31, 2002.
In December, 2002, the FASB issued Statement No. 148, Accounting for
Stock-Based Compensation -- Transition and Disclosure, an amendment of SFAS 123,
which provided alternative transition methods to the expensing of employee
stock-based compensation under SFAS 123. The Company is not required to adopt
the fair value method prescribed by SFAS 123 and, accordingly, will continue to
account for stock-based compensation under the intrinsic value method in
accordance with APB No. 25.
R. SERIES A REDEEMABLE PREFERRED STOCK
As described in Note 9, the Company has issued 153,637 shares of Series A
Redeemable Preferred Stock ("Series A"). The Company has reclassified its 2001
financial statements to account for a redemption feature included in the Series
A stock in accordance with the guidance in EITF Topic No. D-98: Classification
and Measurement of Redeemable Securities ("EITF Topic No. D-98"). EITF Topic No.
D-98 provided additional guidance on the appropriate classification of
redeemable preferred stock upon the occurrence of an event that is not solely
within the control of an issuer. EITF Topic No. D-98 requires retroactive
application in the first fiscal quarter ending after December 15, 2001 by
reclassifying financial statements of prior periods. The carrying value of the
Series A stock, which was previously presented as a component of stockholders'
deficit, has been reclassified as redeemable preferred stock outside of
stockholders' deficit. The reclassification of the 2001 financial statements for
the Series A stock had no effect on the Company's net income, net loss
attributable to common stockholders or total
F-12
TOWN SPORTS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
assets. The following sets forth the overall effect of the reclassification on
the Company's stockholders' deficit at December 31, 2001:
<Table>
Stockholders' deficit prior to reclassification............. $ (2,365)
Reclassification of Series A stock.......................... $(30,432)
Stockholders' deficit after the reclassification............ $(32,797)
</Table>
3. FIXED ASSETS
Fixed assets as of December 31, 2001 and 2002, are shown at cost, less
accumulated depreciation and amortization, and are summarized below:
<Table>
<Caption>
DECEMBER 31,
-------------------
2001 2002
-------- --------
Leasehold improvements.................................... $177,315 $211,480
Club equipment............................................ 45,547 50,937
Furniture, fixtures and computer equipment................ 27,717 33,779
Computer software......................................... 3,769 4,503
Building and improvements................................. 4,995 4,995
Land...................................................... 986 986
Construction in progress.................................. 18,471 8,631
-------- --------
278,800 315,311
Less, Accumulated depreciation and amortization......... 78,680 104,488
-------- --------
$200,120 $210,823
======== ========
</Table>
Depreciation and leasehold amortization expense for the years ended
December 31, 2000, 2001 and 2002, was $20,484, $25,780 and $30,645,
respectively.
4. GOODWILL AND INTANGIBLE ASSETS
Effective January 1, 2002 we implemented SFAS 142. There were no changes to
the estimated useful lives of amortizable intangible assets due to the SFAS 142
implementation. In connection with the SFAS 142 transitional impairment test the
Company recorded a $1,301 write-off of goodwill. A deferred tax benefit of $612
was recorded as a result of this goodwill write-off, resulting in a net
cumulative effect of change in accounting principle of $689, in the first
quarter of 2002. The write-off of goodwill related to four, remote
underperforming clubs. The impairment test was performed with discounted
estimated future cash flows as the criteria for determining fair market value.
Goodwill has been allocated to reporting units that closely reflect the regions
served by our four trade names; New York Sports Club, Boston Sports Club,
Washington Sports Club and Philadelphia Sports Club, with certain more remote
clubs that do not benefit from a regional cluster being considered single
reporting units.
F-13
TOWN SPORTS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
A reconciliation of reported net income for the years ended December 31,
2000 and 2001 to net income adjusted for the impact of SFAS 142 over that same
period is as follows:
<Table>
<Caption>
FOR THE YEARS ENDED
DECEMBER 31,
-------------------
2000 2001
-------- --------
Net income as reported...................................... $ 4,831 $ 7,046
Goodwill amortization....................................... 3,545 4,436
Deferred tax benefit........................................ (1,064) (1,344)
------- -------
NET INCOME AS ADJUSTED.................................... $ 7,312 $10,138
======= =======
</Table>
A summary of our acquired amortizable intangible assets and goodwill as of
December 31, 2001 and 2002 is as follows:
<Table>
<Caption>
DECEMBER 31, 2001
-------------------------------------
GROSS
CARRYING ACCUMULATED NET
AMOUNT AMORTIZATION INTANGIBLES
-------- ------------ -----------
Acquired intangible assets:
Membership lists.............................. $ 9,753 $ (8,906) $ 847
Covenants-not-to-compete...................... 1,276 (901) 375
Beneficial lease.............................. 223 (151) 72
------- -------- -------
$11,252 $ (9,958) $ 1,294
======= ======== =======
Goodwill........................................ $55,702 $(13,557) $42,145
======= ======== =======
</Table>
<Table>
<Caption>
DECEMBER 31, 2002
-------------------------------------
GROSS
CARRYING ACCUMULATED NET
AMOUNT AMORTIZATION INTANGIBLES
-------- ------------ -----------
Acquired intangible assets:
Membership lists.............................. $11,054 $ (9,605) $ 1,449
Covenants-not-to-compete...................... 876 (711) 165
Beneficial lease.............................. 223 (162) 61
------- -------- -------
$12,153 $(10,478) $ 1,675
======= ======== =======
Goodwill........................................ $58,557 $(13,026) $45,531
======= ======== =======
</Table>
F-14
TOWN SPORTS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The amortization expense of the above acquired intangible assets for each
of the five years ending December 31, 2007 will be as follows:
<Table>
<Caption>
AMORTIZATION
YEAR ENDING DECEMBER 31, EXPENSE
- ------------------------ ------------
2003........................................................ $1,045
2004........................................................ 590
2005........................................................ 11
2006........................................................ 11
2007........................................................ 11
Thereafter.................................................. 7
------
$1,675
======
</Table>
Amortization expense of intangible assets for the years ended December 31,
2000, 2001 and 2002, was $5,765, $6,403 and $1,103, respectively.
5. ACCRUED EXPENSES
Accrued expenses consist of the following:
<Table>
<Caption>
DECEMBER 31,
-----------------
2001 2002
------- -------
Accrued payroll............................................. $ 6,334 $ 7,817
Accrued interest............................................ 2,782 2,731
Accrued construction in progress and equipment.............. 3,845 2,650
Accrued occupancy costs..................................... 3,324 3,514
Accrued other............................................... 2,633 4,922
------- -------
$18,918 $21,634
======= =======
</Table>
6. LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS
Long-term debt and capital lease obligations consist of the following:
<Table>
<Caption>
DECEMBER 31,
-------------------
2001 2002
-------- --------
Series B 9 3/4% Senior Notes, due 2004..................... $125,000 $125,000
Line of credit borrowings.................................. 22,745 14,500
Subordinated credit borrowings............................. 6,000 9,000
Notes payable for acquired businesses...................... 2,931 6,230
Capital lease obligations.................................. 7,303 6,213
-------- --------
163,979 160,943
Less, Current portion due within one year................ 4,015 5,178
-------- --------
LONG-TERM PORTION..................................... $159,964 $155,765
======== ========
</Table>
F-15
TOWN SPORTS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The aggregate long-term debt and capital lease obligations maturing during
the next five years and thereafter is as follows:
<Table>
<Caption>
YEAR ENDING DECEMBER 31, AMOUNT DUE
- ------------------------ ----------
2003........................................................ $ 5,178
2004........................................................ 152,242
2005........................................................ 1,188
2006........................................................ 619
2007........................................................ 632
Thereafter.................................................. 1,084
--------
$160,943
========
</Table>
In October 1997, the Company issued $85,000 of Series B 9 3/4% Senior Notes
("Senior Notes"), due October 2004. The net proceeds from the Senior Notes
totaled approximately $81,700. The transaction fees of approximately $3,300,
were accounted for as deferred financing costs. In June 1999, the Company issued
$40,000 of Senior Notes at a price of 98.75%, providing the Company with $39,500
of proceeds before expenses relating to the issuance. The transaction fees of
approximately $3,900 were accounted for as deferred financing costs. The Senior
Notes bear interest at an annual rate of 9 3/4%, payable semi-annually. The
Senior Notes are redeemable at the option of the Company on or after October 15,
2001. For redemption prior to October 15, 2004, the Company would be required to
pay a premium as defined. The Senior Notes are non-collateralized and rank "pari
passu" with all unsubordinated debt and senior in right of payment with all
subordinated indebtedness of the Company. The note indenture under which the
Senior Notes were issued contains certain covenants that, among other things,
limit the Company's ability to incur additional indebtedness, pay dividends or
make certain other restricted payments, engage in transactions with affiliates,
incur liens and engage in asset sales.
The Company has a line of credit with its principal bank for direct
borrowings and letters of credit of up to $25,000. The line of credit carries
interest at the Company's option based upon the Eurodollar borrowing rate plus
2.50% or the bank's prime rate plus 1.50%, as defined and the Company is
required to pay a commitment commission of 0.375% per annum based upon the daily
unutilized amount. There were $10,500 of Eurodollar and $4,000 of prime rate
based borrowings outstanding against this line as of December 31, 2002. The
amount available for borrowing has been further reduced by outstanding letters
of credit totaling $1,900 (see Note 8). Amounts available for future borrowings
as of December 31, 2002 were $8,600. The interest rate charged on the Eurodollar
borrowings and prime rate based borrowings outstanding at December 31, 2002 were
4.0% and 6.25%, respectively. In May 2001, the Credit Agreement was amended to
extend the maturity date to July 15, 2004. The Company paid $188 in bank
structuring fees and $50 in legal fees related to this amendment. The line, as
amended, contains various covenants including interest coverage and a leverage
ratio as well as restrictions on the payment of dividends. The line is
collateralized by a mortgage on land, building and equipment, which, as of
December 31, 2002, had an aggregate book value of approximately $3,848, and by
all other assets of the Company.
In November 2000, the Company entered into a Subordinated Credit Agreement
(the "Subordinated Agreement") with an affiliate of a stockholder of the
Company. This Subordinated Agreement provides for up to $20,000 of principal
borrowings and expires December 31, 2004. Interest on principal borrowings
accrues at 12.75% per annum; 9.75% of which is payable on a monthly basis and
the remaining 3% is accruable and payable, at the
F-16
TOWN SPORTS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
option of the Company, through maturity. The total amount of accrued and unpaid
interest may not exceed $2,500. The Company is charged a fee of 0.083% per month
based on the portion of the facility not utilized. In connection with this
agreement the Company paid a commitment fee of $225 to the lender, approximately
$73 of legal fees, and committed to issue 16,000 shares of common stock to the
lender. Such shares were issued during December 2001 and had an estimated fair
value of $1,360 as of the date the lender committed to provide the financing.
The aforementioned legal fees and fair value of the common stock were accounted
for as deferred financing costs at the time the agreement was entered into. In
December 2001 the Company issued an additional 7,000 shares of restricted common
stock to the lender, which would have been forfeited by the lender in the event
that the agreement was terminated prior to November 30, 2002. As the agreement
was not terminated, these restricted shares became unrestricted in November
2002. The Agreement contains similar, but less restrictive covenants than those
with the line of credit, as amended. There were $9,000 of Subordinated credit
borrowings outstanding as of December 31, 2002. In 2002, an additional
commitment fee of $125 was paid to the lender pending an increase in the
facility of $5,500.
Notes payable were incurred upon the acquisition of various clubs and are
subject to the Company's right of offset for possible post acquisition
adjustments arising out of operations of the acquired clubs. These notes are
stated at rates of between 5% and 9%, and are non-collateralized. The notes are
due on various dates through 2012.
The carrying value of long-term debt, other than the Senior Notes,
approximates fair market value as of December 31, 2001 and 2002 as the debt is
generally short-term in nature. The Senior Notes have a fair value of
approximately $128,125 and $125,000, based on the quoted market price as of
December 31, 2001 and 2002, respectively.
The Company's interest expense and capitalized interest related to funds
borrowed to finance club facilities under construction for the years ended
December 31, 2000, 2001 and 2002 are as follows:
<Table>
<Caption>
YEARS ENDED DECEMBER 31,
---------------------------
2000 2001 2002
------- ------- -------
Interest costs expensed............................ $14,300 $14,918 $16,559
Interest costs capitalized......................... 660 907 354
------- ------- -------
$14,960 $15,825 $16,913
======= ======= =======
</Table>
The Company leases equipment under noncancelable capital leases. The
initial lease terms range from three to five years, after which the Company has
the right to purchase the equipment at amounts defined by the agreements.
As of December 31, 2002, minimum rental payments, under all capital leases,
including payments to acquire leased equipment, are as follows:
<Table>
<Caption>
MINIMUM
YEAR ENDING DECEMBER 31, ANNUAL RENTAL
- ------------------------ -------------
2003........................................................ $4,172
2004........................................................ 2,827
2005........................................................ 478
------
7,477
Less, Amounts representing interest....................... 1,264
------
PRESENT VALUE OF MINIMUM CAPITAL LEASE PAYMENTS........ $6,213
======
</Table>
F-17
TOWN SPORTS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The cost of leased equipment included in club equipment was approximately
$10,083 and $12,658 at December 31, 2001 and 2002, respectively; and the related
accumulated depreciation was $3,421 and $5,686, respectively.
7. RELATED PARTY TRANSACTIONS
The Company entered into a professional service agreement with Bruckmann,
Rosser, Sherrill & Co., Inc. ("BRS"), a stockholder of the Company for strategic
and financial advisory services on December 10, 1996. Fees for such services are
$250 per annum, and are payable while BRS owns 20% or more of the outstanding
Common stock of the Company. No amounts were due BRS at December 31, 2001 and
2002.
The Company's Subordinated Agreement was entered into with an affiliate of
a stockholder of the Company.
8. LEASES
The Company leases office, warehouse and multi-recreational facilities and
certain equipment under noncancelable operating leases. In addition to base
rent, the facility leases generally provide for additional rent based on
increases in real estate taxes and other costs. Certain leases give the Company
the right to acquire the leased facility at defined prices based on fair value
and provide for additional rent based upon defined formulas of revenue, cash
flow or operating results of the respective facilities. Under the provisions of
certain of these leases, the Company is required to maintain irrevocable letters
of credit, which total $1,900 as of December 31, 2002.
The leases expire at various times through December 31, 2027, and certain
leases may be extended at the Company's option.
Future minimum rental payments under noncancelable operating leases are as
follows:
<Table>
<Caption>
MINIMUM
YEAR ENDING DECEMBER 31, ANNUAL RENTAL
- ------------------------ -------------
2003........................................................ $ 46,276
2004........................................................ 47,527
2005........................................................ 47,462
2006........................................................ 47,328
2007........................................................ 45,425
Aggregate thereafter........................................ 355,940
--------
$589,958
========
</Table>
Rent expense, including the effect of deferred lease liabilities, for the
years ended December 31, 2000, 2001 and 2002 was $33,293, $42,341 and $52,085,
respectively. Such amounts include additional rent of $4,962, $7,119 and $8,368,
respectively.
The Company, as landlord, leases space to third party tenants under
noncancelable operating leases and licenses. In addition to base rent, certain
leases provide for additional rent based on increases in real estate taxes,
indexation, utilities and defined amounts based on the
F-18
TOWN SPORTS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
operating results of the lessee. The leases expire at various times through
December 31, 2008. Future minimum rentals receivable under noncancelable leases
are as follows:
<Table>
<Caption>
MINIMUM
YEAR ENDING DECEMBER 31, ANNUAL RENTAL
- ------------------------ -------------
2003........................................................ $1,383
2004........................................................ 1,014
2005........................................................ 619
2006........................................................ 480
2007........................................................ 284
Aggregate thereafter........................................ 116
------
$3,896
======
</Table>
Rental income, including noncash rental income, for the years ended
December 31, 2000, 2001 and 2002 was $1,706, $1,879 and $2,132, respectively.
Such amounts include additional rental charges above the base rent of $630, $775
and $807, respectively.
9. REDEEMABLE PREFERRED STOCK
Redeemable Senior Preferred Stock
During November 1998, the Company issued 40,000 shares of mandatorily
redeemable Senior stock ("Senior") and 143,261 warrants. During 2002, 71,630 of
these warrants were exercised. The Senior stock has no voting rights except as
required by law. The warrants have an exercise price of $0.01, expire in
November 2008 and are exercisable into an equal number of shares of Class A
Common Stock. After payment of fees and expenses of approximately $365, the
Company received net proceeds of $39,635. Upon issuance, a $3,416 value was
ascribed to the warrants. The initial fair value of the Senior stock ($36,219)
is being accreted to its liquidation value using the interest method. The Senior
stock is redeemable in November 2008. In the event that certain defined events
occur, the number of warrants exercisable will be reduced. The Company, at its
option, can redeem the Senior stock at any time without premium.
The Senior stock has liquidation preferences over Series A, Series B and
Common Stock. The Senior stock may, at the option of the holder, be converted
into Common Stock upon the initial public offering ("IPO") of the Company's
common stock at a conversion rate equal to the IPO price.
The Senior stock has a liquidation value of $1,000 per share plus
cumulative unpaid dividends of $24,512, as of December 31, 2002. The Senior
stockholders are entitled to a cumulative 12% annual dividend, based upon the
per share price of $1,000.
F-19
TOWN SPORTS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
A summary of transactions related to the Senior stock is as follows:
<Table>
<Caption>
CARRYING LIQUIDATION
VALUE VALUE
-------- -----------
Proceeds received in connection with the November 1998
issuance of Senior stock and warrants..................... $40,000 $40,000
Expenses incurred in connection with issuance............... (365) --
Fair value ascribed to warrants at issuance................. (3,416) --
------- -------
Value of senior stock at date of issuance.............. 36,219 40,000
Accretion to Senior stock liquidation value................. 369 --
Accretion of Senior stock dividends......................... 5,478 5,478
------- -------
January 1, 2000 Senior stock................................ 42,066 45,478
Accretion to Senior stock liquidation value................. 341 --
Accretion of Senior stock dividends......................... 5,622 5,622
------- -------
December 31, 2000 Senior stock.............................. 48,029 51,100
Accretion to Senior stock liquidation value................. 342 --
Accretion of Senior stock dividends......................... 6,316 6,316
------- -------
December 31, 2001 Senior stock.............................. 54,687 57,416
Accretion to Senior stock liquidation value................. 342 --
Accretion of Senior stock dividends......................... 7,096 7,096
------- -------
December 31, 2002 Senior stock.............................. $62,125 $64,512
======= =======
</Table>
Cumulative unpaid dividends on Senior stock are payable upon certain
defined events which include: the dissolution, liquidation or winding up of the
Company; the redemption of such shares; or the sale of substantially all of the
assets of the Company.
Series A Redeemable Preferred Stock
During fiscal years 1997 and 1998, the Company issued 152,455 and 1,182
shares, respectively, of Series A redeemable preferred stock. As of December 31,
2001 and 2002, 153,637 shares of Series A stock were outstanding. Series A stock
has liquidation preferences over Common Stock in the event of a liquidation,
dissolution or winding up of the Company. Series A stock has no conversion
features or voting rights except as required by law, and rank "pari passu."
Series A stock has a liquidation value of $100 per share plus cumulative unpaid
dividends of $19,479 as of December 31, 2002. Series A stockholders are entitled
to a cumulative 14% annual dividend based upon the per share price of $100. The
Company may, at its sole discretion, pay any dividends by cash or by the
issuance of additional Series A shares. The Company may at any time redeem all
or any portion of the Series A stock at a price equal to the liquidation value
plus cumulative unpaid dividends.
F-20
TOWN SPORTS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
A summary of transactions related to Series A stock is as follows:
<Table>
<Caption>
CARRYING
SHARES VALUE
------- --------
Proceeds received in connection with the issuance of Series
A stock................................................... 153,637 $15,364
Accretion of Series A stock dividends....................... -- 7,852
------- -------
January 1, 2000 Series A stock.............................. 153,637 23,216
Accretion of Series A stock dividends....................... -- 3,364
------- -------
December 31, 2000 Series A stock............................ 153,637 26,580
Accretion to Series A stock dividends....................... -- 3,852
------- -------
December 31, 2001 Series A stock............................ 153,637 30,432
Accretion to Series A stock dividends....................... -- 4,409
------- -------
December 31, 2002 Series A stock............................ 153,637 $34,841
======= =======
</Table>
In the event of a change in control as defined, each holder of Series A
stock then outstanding may require the Corporation, and the Corporation shall be
obligated, to redeem all or any portion of the Series A stock owned by such
holder.
10. STOCKHOLDERS' DEFICIT
A. CAPITALIZATION
The Company's certificate of incorporation, as amended, provides for the
issuance of up to 3,500,000 shares of capital stock, consisting of 2,500,000
shares of Class A Voting Common Stock ("Class A"), par value $0.001 per share;
500,000 shares of Class B Non-voting Common Stock ("Class B"), par value of
$0.001 per share, (Class A and Class B are collectively referred to herein as
"Common Stock"); and 200,000 shares of Series B Preferred Stock ("Series B") par
value $1.00 per share.
All stockholders have preemptive rights to purchase a pro-rata share of any
future sales of securities, as defined.
Common Stock
Class A stock and Class B stock each have identical terms with the
exception that Class A stock is entitled to one vote per share, while Class B
stock has no voting rights, except as required by law. In addition, Class B
stock is convertible into an equal number of Class A shares, at the option of
the holder of the majority of the Class B stock. To date, the Company has not
issued Class B stock.
Series B Preferred Stock
During December 1996, the Company issued 3,857 shares of Series B preferred
stock, 3,822 shares of which are outstanding as of December 31, 2001 and 2002.
Series B stock has liquidation preferences over Common Stock in the event of a
liquidation, dissolution or winding up of the Company. Series B stock has no
voting rights except as required by law, and rank "pari passu." Upon
consummation of an IPO, at the option of the holder, each Series B stock is
convertible into Class A Common Stock at prices, at which the Class A Common
Stock is sold in such IPO. The Company may at any time redeem all or any portion
of the Series B stock at a
F-21
TOWN SPORTS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
price equal to the liquidation value plus cumulative unpaid dividends. Series B
stock has a liquidation value of $35 per share plus cumulative unpaid dividends
of $170 as of December 31, 2002. Series B stockholders are entitled to a
cumulative 14% annual dividend based upon the per share price of $35. The
Company may, at its sole discretion, pay any dividends by cash or by the
issuance of additional Series B shares.
In the event of a change in control, as defined, each holder of Series B
stock then outstanding may require the Corporation, and the Corporation shall be
obligated, to redeem all or any portion of the Series B stock owned by such
holder. The Series B preferred stockholders do not control a majority of the
votes of the board of directors through direct representation or other rights.
B. STOCK OPTIONS AND WARRANTS
Class A Common Stock Options
During the year ended May 31, 1997, the Company adopted the Town Sports
International Inc. Common Stock Option Plan (the "Plan"). The provisions of the
Plan, as amended and restated, provide for the Company's Board of Directors to
grant to executives and key employees options to acquire 107,274 shares of Class
A stock.
Grants vest in full at various dates between December 2007 and 2010. The
vesting of these grants will be accelerated in the event that certain defined
events occur including the achievement of annual equity values or the sale of
the Company. The term of each of these grants is ten or eleven years.
In accordance with APB No. 25, Accounting for Stock Issued to Employees,
the Company recorded unearned compensation in connection with the 1998 Grants
and the 2001 Grants. Such amount is included within stockholders' deficit and
represented the difference between the estimated fair value of the Class A stock
on the date of amendment or grant, respectively, and the exercise price.
Unearned compensation will be amortized as compensation expense over the vesting
period. During the years ended December 31, 2000, 2001 and 2002, amortization of
unearned compensation totaled $969, $156 and $70, respectively.
As of December 31, 2002, there were 13,729 shares reserved for future
option awards.
As of December 31, 2000, 2001 and 2002, a total of 68,279, 76,474 and
75,819 Class A Common stock options were exercisable, respectively.
Series B Preferred Stock Options
During the year ended May 31, 1997, the Company granted 164,783 options
("Series B Options") to certain employees which entitle the holders to purchase
an equal number of shares of Series B stock at an exercise price of $10.00 per
share. Series B Options were fully vested on the date of grant and expire on
December 31, 2021. The terms of the Series B Options also contain provisions
whereby the exercise price will be reduced, or in certain cases, the option
holder will receive cash in accordance with a formula as defined. The aggregate
value of, either a reduction in exercise price, or the distribution of cash is
deemed compensatory and, accordingly, is recorded as a compensation expense. For
the years ended December 31, 2000, 2001 and 2002 compensation expense recognized
in connection with Series B Options totaled $867, $993 and $1,137, respectively.
There are no shares of Series B Preferred Stock reserved for future option
grants.
All Series B Preferred stock options were exercisable upon grant.
F-22
TOWN SPORTS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The following table summarizes the stock option activity for the years
ended December 31, 2000, 2001 and 2002:
<Table>
<Caption>
WEIGHTED WEIGHTED
AVERAGE AVERAGE
CLASS A EXERCISE SERIES B EXERCISE
COMMON PRICE PREFERRED PRICE
------- -------- --------- --------
Balance at January 1, 2000............. 81,562 $ 11.42 163,690 $10.00
Granted.............................. 17,446 $ 75.00(i) --
Exercised............................ (4,035) $ 3.42 (5,384) $10.00
Forfeited............................ (2,291) $ 14.58 --
------- ---------
Balance at December 31, 2000........... 92,682 $ 23.88 158,306 $10.00
Granted.............................. 7,400 $100.00(ii) --
Exercised............................ (788) $ 32.53 --
Forfeited............................ (512) $ 25.76 --
------- ---------
Balance at December 31, 2001........... 98,782 $ 29.32 158,306 $10.00
Exercised............................ (3,100) $ 22.93 --
Forfeited............................ (2,200) $ 84.57 --
------- ---------
Balance at December 31, 2002........... 93,482 $ 28.23 158,306 $10.00
======= =========
</Table>
- ---------------
(i) Option exercise price was equal to market price on the grant date
(ii) Option exercise price of these options were less than the estimated fair
value on the grant date.
The following table summarizes stock option information as of December 31,
2002:
<Table>
<Caption>
OPTIONS OUTSTANDING OPTIONS EXERCISABLE
------------------------------------- -----------------------
WEIGHTED-
AVERAGE WEIGHTED- WEIGHTED-
REMAINING AVERAGE AVERAGE
NUMBER CONTRACTUAL EXERCISE NUMBER EXERCISE
OUTSTANDING LIFE PRICE EXERCISABLE PRICE
----------- ----------- --------- ----------- ---------
Class A Common:
1997 Grants......... 50,936 48 months $ 1.00 50,936 $ 1.00
1998 Grants......... 9,200 64 months $ 17.50 9,200 $ 17.50
1999 Grants......... 10,300 72 months $ 53.00 7,210 $ 53.00
2000 Grants......... 16,946 84 months $ 75.00 8,473 $ 75.00
2001 Grants......... 6,100 103 months $100.00 -- $100.00
----------- -----------
Total Grants.......... 93,482 75,819 --
=========== ===========
Series B Preferred.... 158,306 239 months $ 10.00 158,306 $ 10.00
=========== ===========
</Table>
Warrants to buy Common Stock
In connection with the issuance of a Subordinated note (which has
subsequently been repaid) on December 10, 1996, warrants to buy 124,022 Class A
Common Shares were issued at an exercise price of $0.01 per share. Original
issue discount arising upon this issue totaled approximately $123. 10,000
warrants were exercised on December 10, 1996. The amount of warrants outstanding
was reduced in November 1998 by 38,308 to 75,714 in
F-23
TOWN SPORTS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
connection with the issuance of the Senior stock. During 2002, these warrants
were fully exercised.
11. ASSET ACQUISITIONS
During the period from January 1, 2000 through December 31, 2002, the
Company completed the acquisition of 19 fitness clubs. With the exception of the
Health Development Corporation ("HDC") acquisition discussed below, the
individual acquisitions were not material to the financial position, results of
operations or cash flows of the Company. The table below summarizes the
aggregate purchase price and the purchase price allocation to assets acquired:
<Table>
<Caption>
YEARS ENDED DECEMBER 31,
-------------------------
2000 2001 2002
------- ------ ------
Number of clubs acquired............................. 13 2 4
======= ====== ======
Purchase prices payable in cash at closing........... $24,053 $1,272 $2,322
Issuance and assumption of notes payable............. 2,238 250 4,725
------- ------ ------
TOTAL PURCHASE PRICES........................... $26,291 $1,522 $7,047
======= ====== ======
Allocation of purchase prices:
Goodwill........................................... $19,926 $1,316 $4,479
Fixed assets....................................... 6,809 235 1,955
Membership lists................................... 3,548 181 1,432
Covenants-not-to-compete........................... 25 -- --
Other net liabilities acquired..................... (372) (172) (108)
Deferred revenue................................... (3,645) (38) (711)
------- ------ ------
TOTAL ALLOCATION OF PURCHASE PRICES............. $26,291 $1,522 $7,047
======= ====== ======
</Table>
For financial reporting purposes, these acquisitions have been accounted
for under the purchase method and, accordingly, the purchase prices have been
assigned to the assets and liabilities acquired on the basis of their respective
fair values on the date of acquisition. The excess of purchase prices over the
net tangible assets acquired has been allocated to membership lists acquired,
covenants-not-to-compete and goodwill. The results of operations of the clubs
have been included in the Company's consolidated financial statements from the
respective dates of acquisition and with the exception of HDC, the impact of
these acquisitions on the consolidated financial statements of the Company was
not material.
In July 2000, the Company acquired HDC, a Massachusetts Corporation. HDC's
operations included eight clubs in Massachusetts and one club in New Hampshire.
HDC also provided management services at three facilities in the greater Boston
area. HDC was purchased for $18,700 in cash. Including approximately $525 of
transaction costs, the aggregate purchase price amounted to $19,200.
Assuming the acquisition of HDC occurred at the beginning of 2000,
unaudited pro forma revenues would have been $234,771, unaudited pro forma net
income would have been $4,179 and unaudited pro forma net loss to common
shareholders would have been $4,837. This unaudited pro forma information has
been prepared assuming the HDC acquisition had taken place at the beginning of
the respective periods reported herein. The pro forma adjustments give effect in
amortization of goodwill, amortization of membership lists, interest expense on
acquisition debt, adjustment to rent expense and the related income tax effects.
F-24
TOWN SPORTS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Immediately prior to the acquisition HDC sold the land and buildings related to
two of its fitness clubs and entered into leases with the new landlords of these
clubs. Rent expense, interest on mortgages and building depreciation related to
those two clubs have also been adjusted. The unaudited pro forma financial
information for HDC is presented for information purposes only and may not be
indicative of the results of operations as they would have been had the Company
completed the acquisition as of and for the periods noted above, nor is it
indicative of the results of operations which may occur in the future.
Anticipated efficiencies form the consolidation of HDC and the Company have been
excluded from the amounts included in the pro forma summaries presented above.
12. REVENUE FROM CLUB OPERATIONS
Revenues from club operations for the years ended December 31, 2000, 2001
and 2002 are summarized below:
<Table>
<Caption>
YEARS ENDED DECEMBER 31,
------------------------------
2000 2001 2002
-------- -------- --------
Membership dues................................ $181,415 $227,073 $257,917
Initiation Fees................................ 10,969 13,287 14,361
Other club revenues............................ 28,826 37,840 42,717
-------- -------- --------
$221,210 $278,200 $314,995
======== ======== ========
</Table>
13. CORPORATE INCOME TAXES
The provision (benefit) for income taxes for the year ended December 31,
2000, 2001 and 2002 consists of the following:
<Table>
<Caption>
YEAR ENDED DECEMBER 31, 2000
-----------------------------
STATE
FEDERAL AND LOCAL TOTAL
------- --------- -------
Current............................................ $ 5,875 $ 2,482 $ 8,357
Deferred........................................... (3,170) (156) (3,326)
------- ------- -------
$ 2,705 $ 2,326 $ 5,031
======= ======= =======
</Table>
<Table>
<Caption>
YEAR ENDED DECEMBER 31, 2001
-----------------------------
STATE
FEDERAL AND LOCAL TOTAL
------- --------- -------
Current............................................ $ 7,964 $ 3,415 $11,379
Deferred........................................... (3,357) (1,169) (4,526)
------- ------- -------
$ 4,607 $ 2,246 $ 6,853
======= ======= =======
</Table>
<Table>
<Caption>
YEAR ENDED DECEMBER 31, 2002
-----------------------------
STATE
FEDERAL AND LOCAL TOTAL
------- --------- -------
Current............................................ $ 6,483 $ 4,388 $10,871
Deferred........................................... (536) (626) (1,162)
------- ------- -------
$ 5,947 $ 3,762 $ 9,709
======= ======= =======
</Table>
F-25
TOWN SPORTS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The components of the net deferred tax asset as of, December 31, 2001 and
2002 are summarized below:
<Table>
<Caption>
DECEMBER 31,
-----------------
2001 2002
------- -------
Deferred tax assets:
Deferred lease liabilities................................ $ 9,129 $ 9,821
Deferred revenue.......................................... 6,013 5,954
Fixed assets and intangible assets........................ 5,993 5,032
Compensation expense incurred in connection with stock
options................................................ 4,444 4,855
State net operating loss carry-forwards................... 411 1,151
Other..................................................... 47 (1)
------- -------
26,037 26,812
------- -------
Deferred tax liabilities:
Deferred costs............................................ (6,387) (6,174)
Acquired membership liabilities........................... (274) --
------- -------
(6,661) (6,174)
------- -------
NET DEFERRED TAX ASSETS, PRIOR TO VALUATION
ALLOWANCE......................................... 19,376 20,638
Valuation allowance......................................... (284) (384)
------- -------
NET DEFERRED TAX ASSETS.............................. $19,092 $20,254
======= =======
</Table>
As of December 31, 2002, the Company has state net operating loss ("NOL")
carry-forwards of approximately $12,525. Such amounts expire between December
31, 2003 and December 31, 2021. The Company's $384 valuation allowance has been
maintained for NOL carryforwards in Virginia, where the Company is not
generating taxable income.
Foreign income and the effect of foreign income taxes was immaterial.
The following table accounts for the differences between the actual
provision and the amounts obtained by applying the statutory U.S. Federal income
tax rate of 35% to the income before provision for corporate income taxes:
<Table>
<Caption>
YEARS ENDED DECEMBER 31,
-------------------------
2000 2001 2002
----- ----- -----
Federal statutory tax rate................................. 35% 35% 35%
State and local income taxes, net of federal tax benefit
and change of valuation allowance........................ 8 8 9
Change in state effective income tax rate.................. 3 1 --
Non-deductible goodwill and other permanent differences.... 4 3 1
Other...................................................... (1) -- --
-- -- --
49% 47% 45%
== == ==
</Table>
F-26
TOWN SPORTS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
14. SEPTEMBER 11, 2001 EVENTS
The terrorist attacks of September 11, 2001 ("the September 11 events"),
resulted in a tremendous loss of life and property. Secondarily, those events
have interrupted the operations at four clubs located in downtown Manhattan.
Three of the affected four clubs were back in operation by October 2001, while
the fourth club reopened in September 2002.
The Company carries business interruption insurance to mitigate certain
lost revenue and profits experienced with the September 11 events. In this
regard in the third quarter of 2001 a $175 insurance receivable was recorded
representing an estimate of costs incurred in September 2001. Such costs
included rent, payroll benefits, and other club operating costs incurred during
period of closure. In 2002, we collected this $175 receivable and received
additional on account payments of $1,025. These on account payments were
classified with fees and other revenues.
Although we have business interruption insurance to cover certain lost
profits at all four clubs, we cannot predict with any degree of certainty what
future amounts will actually be received from the insurance carriers.
Furthermore we cannot, at this time, determine whether the assets related to the
fourth club location have been permanently impaired. We will continue to gather
information to better assess whether or not the assets of this club have been
permanently impaired. We are communicating with our insurance carrier on an
ongoing basis in order to better assess the relief we could expect to receive
for such coverage. In January 2003, we received and recorded an additional
$1,300 on account payment.
15. CONTINGENCIES
On February 13, 2003, an individual filed suit against the Company in the
Supreme Court, New York County, alleging that on January 14, 2003, he sustained
an injury at one of our club locations resulting in serious bodily injury. His
complaint seeks $250,000 in damages for personal injuries, in addition to
$250,000 of punitive damages. The Company has in force $51,000 of insurance
coverage to cover claims of this nature. The Company intends to vigorously
contest this lawsuit and presently anticipates that these matters will be
covered by insurance.
The Company is a party to various lawsuits arising in the normal course of
business. Management believes that the ultimate outcome of these matters will
not have a material effect on the Company's consolidated financial position,
results of operations or cash flows.
16. EMPLOYEE BENEFIT PLAN
The Company maintains a 401(k) defined contribution plan and is subject to
the provisions of the Employee Retirement Income Security Act of 1974 ("ERISA").
The Plan provides for the Company to make discretionary contributions; however,
the Company elected not to make contributions for the year ended December 31,
2000. The Plan was amended, effective January 1, 2001, to provide for an
employer matching contribution in an amount equal to 25% of the participant's
contribution with a limit of five hundred dollars per individual, per annum.
Employer matching contributions totaling $200 were made in February 2002 and
2003 for the Plan years ended December 31, 2001 and 2002, respectively.
17. DISCONTINUED OPERATIONS
In the fourth quarter of 2002, the Company closed two remote
underperforming, wholly-owned clubs. In connection with the closure of one of
the clubs the Company recorded club
F-27
TOWN SPORTS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
closure costs of $996 related to the write-off of fixed assets. The Company has
accounted for these two clubs as discontinued operations and, accordingly, the
results of their operations have been classified as discontinued in the
consolidated statement of operations and prior periods have been reclassified in
accordance with SFAS No. 144.
Revenues and pre-tax losses for these discontinued clubs were $1,221 and
$597 in 2000, $1,659 and $894 in 2001, and $1,606 and $322 in 2002,
respectively.
18. SUBSEQUENT EVENTS
In January 2003, an executive officer of the Company exercised 9,530 Series
B options to purchase Series B stock. On February 24, 2003, several officers of
the Company exercised 148,775 Series B options. All Series B stock issued in
connection with these February exercises were sold to affiliates of Rosewood
Capital L.P., a stockholder of the Company.
19. GUARANTORS
The Company and all of its domestic subsidiaries have unconditionally
guaranteed the $255,000 of 9 5/8% Senior Notes. However the Company's Swiss
subsidiaries have not provided guarantees on these Senior Notes.
The following schedules set forth condensed consolidating financial
information as required by Rule 3-10 of Securities and Exchange Commission
Regulation S-X for 2000, 2001 and 2002. The financial information illustrates
the composition of the combined guarantors.
F-28
TOWN SPORTS INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING BALANCE SHEET
ALL FIGURES $'000
DECEMBER 31, 2002
<Table>
<Caption>
NON-
SUBSIDIARY GUARANTOR
PARENT GUARANTORS SUBSIDIARIES ELIMINATIONS CONSOLIDATED
--------- ---------- ------------ ------------ ------------
ASSETS
Current assets:
Cash and cash equivalents........... $ 1,575 $ 3,635 $ 341 $ -- $ 5,551
Accounts receivable, net............ 1,840 1,173 99 (1,779) 1,333
Inventory........................... -- 1,106 26 -- 1,132
Prepaid corporate income taxes...... 3,012 -- -- -- 3,012
Intercompany receivable (payable)... (18,996) 20,469 (1,473) -- --
Prepaid expenses and other current
assets............................ 5,837 2,093 -- (3,500) 4,430
--------- -------- ------- --------- --------
Total current assets............ (6,732) 28,476 (1,007) (5,279) 15,458
Investment in subsidiaries............ 206,413 -- -- (206,413) --
Fixed assets, net..................... 11,273 198,050 1,500 -- 210,823
Goodwill, net......................... -- 44,927 604 -- 45,531
Intangible assets, net................ -- 1,569 106 -- 1,675
Deferred tax assets, net.............. 20,866 (490) (122) -- 20,254
Deferred membership costs............. -- 14,408 -- -- 14,408
Other assets.......................... 5,038 1,063 -- -- 6,101
--------- -------- ------- --------- --------
Total assets.................... $ 236,858 $288,003 $ 1,081 $(211,692) $314,250
========= ======== ======= ========= ========
LIABILITIES, REDEEMABLE PREFERRED STOCK, AND STOCKHOLDERS' DEFICIT
Current liabilities:
Current portion of long-term debt
and capital lease obligations..... $ 5,178 $ -- $ -- $ -- $ 5,178
Accounts payable.................... 214 5,114 -- -- 5,328
Accrued expenses.................... 9,470 13,398 545 (1,779) 21,634
Deferred revenue.................... -- 26,510 -- -- 26,510
--------- -------- ------- --------- --------
Total current liabilities....... 14,862 45,022 545 (1,779) 58,650
Long-term debt and capital lease
obligations......................... 155,765 3,500 -- (3,500) 155,765
Deferred lease liabilities............ 625 23,019 -- -- 23,644
Deferred revenue...................... 7 3,345 83 -- 3,435
Other liabilities..................... 373 7,157 -- -- 7,530
--------- -------- ------- --------- --------
Total liabilities............... 171,632 82,043 628 (5,279) 249,024
--------- -------- ------- --------- --------
REDEEMABLE PREFERRED STOCK
Redeemable senior preferred stock..... 62,125 -- -- -- 62,125
Series A preferred stock.............. 34,841 -- -- -- 34,841
--------- -------- ------- --------- --------
96,966 -- -- -- 96,966
--------- -------- ------- --------- --------
Stockholders' deficit
Series B preferred stock............ 303 -- -- -- 303
Common stockholders' deficit........ (32,336) 205,960 160 (206,120) (32,336)
Accumulated other comprehensive
income............................ 293 -- 293 (293) 293
--------- -------- ------- --------- --------
Total stockholders' deficit..... (31,740) 205,960 453 (206,413) (31,740)
--------- -------- ------- --------- --------
Total liabilities, redeemable
preferred stock and
stockholders' deficit:....... $ 236,858 $288,003 $ 1,081 $(211,692) $314,250
========= ======== ======= ========= ========
</Table>
F-29
TOWN SPORTS INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING BALANCE SHEET
ALL FIGURES $'000
DECEMBER 31, 2001
<Table>
<Caption>
NON-
SUBSIDIARY GUARANTOR
PARENT GUARANTORS SUBSIDIARIES ELIMINATIONS CONSOLIDATED
-------- ---------- ------------ ------------ ------------
ASSETS
Current assets:
Cash and cash equivalents............ $ 190 $ 5,192 $ 76 $ -- $ 5,458
Accounts receivable, net............. 1,614 1,110 60 (1,429) 1,355
Inventory............................ -- 1,305 21 -- 1,326
Intercompany receivable (payable).... 8,757 (6,948) (1,809) -- --
Prepaid expenses and other current
assets............................. 5,135 1,478 -- (3,500) 3,113
-------- -------- -------- --------- --------
Total current assets............. 15,696 2,137 (1,652) (4,929) 11,252
Investment in subsidiaries........... 172,786 -- -- (172,786) --
Fixed assets, net.................... 11,002 187,743 1,375 -- 200,120
Goodwill, net........................ -- 41,541 604 -- 42,145
Intangible assets, net............... -- 1,240 54 -- 1,294
Deferred tax assets, net............. 19,681 (491) (98) -- 19,092
Deferred membership costs............ 19 14,729 -- -- 14,748
Other assets......................... 6,213 1,141 -- -- 7,354
-------- -------- -------- --------- --------
Total assets..................... $225,397 $248,040 $ 283 $(177,715) $296,005
======== ======== ======== ========= ========
LIABILITIES, REDEEMABLE PREFERRED STOCK, AND STOCKHOLDERS' DEFICIT
Current liabilities:
Current portion of long-term debt and
capital lease obligations.......... $ 4,015 $ -- $ -- $ -- 4,015
Accounts payable..................... 199 7,416 -- -- 7,615
Accrued expenses..................... 8,062 12,052 233 (1,429) 18,918
Deferred revenue..................... -- 23,269 -- -- 23,269
-------- -------- -------- --------- --------
Total current liabilities........ 12,276 42,737 233 (1,429) 53,817
Long-term debt and capital lease
obligations.......................... 159,723 3,500 241 (3,500) 159,964
Deferred lease liabilities............. 682 20,828 -- -- 21,510
Deferred revenue....................... -- 3,540 69 -- 3,609
Other liabilities...................... 394 4,389 -- -- 4,783
-------- -------- -------- --------- --------
Total liabilities................ 173,075 74,994 543 (4,929) 243,683
-------- -------- -------- --------- --------
REDEEMABLE PREFERRED STOCK
Redeemable senior preferred stock...... 54,687 -- -- -- 54,687
Series A preferred stock............... 30,432 -- -- -- 30,432
-------- -------- -------- --------- --------
85,119 -- -- -- 85,119
-------- -------- -------- --------- --------
Stockholders' deficit
Series B preferred stock............. 265 -- -- -- 265
Common shareholders' deficit......... (33,083) 173,046 (281) (172,765) (33,083)
Accumulated other comprehensive
income............................. 21 -- 21 (21) 21
-------- -------- -------- --------- --------
Total stockholders' deficit...... $(32,797) 173,046 (260) (172,786) (32,797)
-------- -------- -------- --------- --------
Total liabilities, redeemable
preferred stock and
stockholders' deficit......... $225,397 $248,040 $ 283 $(177,715) $296,005
======== ======== ======== ========= ========
</Table>
F-30
TOWN SPORTS INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
ALL FIGURES $'000
FOR THE YEAR ENDED DECEMBER 31, 2002
<Table>
<Caption>
NON-
SUBSIDIARY GUARANTOR
PARENT GUARANTORS SUBSIDIARIES ELIMINATIONS CONSOLIDATED
-------- ---------- ------------ ------------ ------------
Revenues:
Club operations.......................... $ 241 $310,926 $ 3,828 $ -- $314,995
Fees and other........................... 2,187 6,290 -- (4,045) 4,432
-------- -------- -------- -------- --------
2,428 317,216 3,828 (4,045) 319,427
-------- -------- -------- -------- --------
Operating expenses:
Payroll and related...................... 22,184 105,390 1,531 -- 129,105
Club operating........................... 564 101,088 945 (3,484) 99,113
General and administrative............... 437 21,149 343 (561) 21,368
Depreciation and amortization............ 2,857 28,509 382 -- 31,748
-------- -------- -------- -------- --------
26,042 256,136 3,201 (4,045) 281,334
-------- -------- -------- -------- --------
Operating income......................... (23,614) 61,080 627 -- 38,093
Interest expense........................... 16,548 351 10 (350) 16,559
Interest income............................ (488) -- -- 350 (138)
-------- -------- -------- -------- --------
Income from continuing operations before
provision for corporate income taxes... (39,674) 60,729 617 -- 21,672
Provision for corporate income taxes....... (17,766) 27,296 179 -- 9,709
-------- -------- -------- -------- --------
Income from continuing operations before
equity earnings........................ (21,908) 33,433 438 -- 11,963
Equity earnings from subsidiaries.......... 32,415 -- -- (32,415) --
Loss on discontinued operations, net of
income tax benefit of $551............... -- (767) -- -- (767)
Cumulative effect of a change in accounting
principle, net of income tax benefit of
$612..................................... -- (689) -- -- (689)
-------- -------- -------- -------- --------
Net income............................... $ 10,507 $ 31,977 $ 438 $(32,415) $ 10,507
======== ======== ======== ======== ========
</Table>
F-31
TOWN SPORTS INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
ALL FIGURES $'000
FOR THE YEAR ENDED DECEMBER 31, 2001
<Table>
<Caption>
NON-
SUBSIDIARY GUARANTOR
PARENT GUARANTORS SUBSIDIARIES ELIMINATIONS CONSOLIDATED
-------- ---------- ------------ ------------ ------------
Revenues:
Club operations.......................... $ 113 $275,482 $ 2,605 $ -- $278,200
Fees and other........................... 1,272 6,012 -- (3,851) 3,433
-------- -------- -------- -------- --------
1,385 281,494 2,605 (3,851) 281,633
-------- -------- -------- -------- --------
Operating expenses:
Payroll and related...................... 20,083 91,537 1,146 -- 112,766
Club operating........................... 447 91,089 705 (3,300) 88,941
General and administrative............... 390 18,658 288 (551) 18,785
Depreciation and amortization............ 2,636 29,021 528 -- 32,185
-------- -------- -------- -------- --------
23,556 230,305 2,667 (3,851) 252,677
-------- -------- -------- -------- --------
Operating income......................... (22,171) 51,189 (62) -- 28,956
Interest expense........................... 14,904 352 12 (350) 14,918
Interest income............................ (722) (19) -- 350 (391)
-------- -------- -------- -------- --------
Income from continuing operations before
provision for corporate income taxes... (36,353) 50,856 (74) -- 14,429
Provision for corporate income taxes....... (17,268) 24,108 13 -- 6,853
-------- -------- -------- -------- --------
Income from continuing operations before
equity earnings........................ (19,085) 26,748 (87) -- 7,576
Equity earnings from subsidiaries.......... 26,131 -- -- (26,131) --
Loss on discontinued operations, net of
income tax benefit of $364............... -- (530) -- -- (530)
-------- -------- -------- -------- --------
Net income............................... $ 7,046 $ 26,218 $ (87) $(26,131) $ 7,046
======== ======== ======== ======== ========
</Table>
F-32
TOWN SPORTS INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
ALL FIGURES $'000
FOR THE YEAR ENDED DECEMBER 31, 2000
<Table>
<Caption>
NON-
SUBSIDIARY GUARANTOR
PARENT GUARANTORS SUBSIDIARIES ELIMINATIONS CONSOLIDATED
-------- ---------- ------------ ------------ ------------
Revenues:
Club operations.......................... $ 5 $219,462 $1,744 $ (1) $221,210
Fees and other........................... 1,142 5,261 -- (3,785) 2,618
-------- -------- ------ -------- --------
$ 1,147 $224,723 $1,744 $ (3,786) $223,828
-------- -------- ------ -------- --------
Operating expenses:
Payroll and related...................... 17,818 72,274 709 -- 90,801
Club operating........................... 239 71,368 419 (3,220) 68,806
General and administrative............... 1,128 13,866 198 (566) 14,626
Depreciation and amortization............ 1,783 23,868 597 -- 26,248
-------- -------- ------ -------- --------
$ 20,968 $181,376 $1,923 $ (3,786) $200,481
-------- -------- ------ -------- --------
Operating income......................... (19,821) 43,347 (179) -- 23,347
Interest expense........................... 14,243 389 18 (350) 14,300
Interest income............................ (1,525) (5) -- 350 (1,180)
-------- -------- ------ -------- --------
Income from continuing operations before
provision for corporate income taxes... (32,539) 42,963 (197) -- 10,227
Provision for corporate income taxes....... (16,003) 21,037 (3) -- 5,031
-------- -------- ------ -------- --------
Income from continuing operations before
equity earnings........................ (16,536) 21,926 (194) -- 5,196
Equity earnings from subsidiaries.......... 21,367 -- -- (21,367) --
Loss on discontinued operations, net of
income tax benefit of $232............... -- (365) -- -- (365)
-------- -------- ------ -------- --------
Net income............................... $ 4,831 $ 21,561 $ (194) $(21,367) $ 4,831
======== ======== ====== ======== ========
</Table>
F-33
TOWN SPORTS INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
ALL FIGURES $'000
FOR THE YEAR ENDED DECEMBER 31, 2002
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
<Table>
<Caption>
NON-
SUBSIDIARY GUARANTOR
PARENT GUARANTORS SUBSIDIARIES ELIMINATIONS CONSOLIDATED
------- ---------- ------------ ------------ ------------
Cash flows from operating activities:
Net income......................... $10,507 $ 31,977 $ 438 $(32,415) $ 10,507
------- -------- ------- -------- --------
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization...... 2,857 28,786 382 -- 32,025
Goodwill impairment write-off and
club closure costs............... -- 2,297 -- -- 2,297
Compensation expense in connection
with stock options............... 1,207 -- -- -- 1,207
Noncash rental expense, net of
noncash rental income............ (78) 1,748 -- -- 1,670
Amortization of debt issuance
costs............................ 1,928 -- -- -- 1,928
Changes in operating assets and
liabilities...................... (3,483) 4,768 306 -- 1,591
Other.............................. (32,061) (742) (32) 32,415 (420)
------- -------- ------- -------- --------
Total adjustments.............. (29,630) 36,857 656 32,415 40,298
------- -------- ------- -------- --------
Net cash provided by operating
activities......................... (19,123) 68,834 1,094 -- 50,805
Net cash used in investing
activities......................... (3,128) (36,805) (249) -- (40,182)
Net cash used in financing
activities......................... 23,636 (33,586) (580) -- (10,530)
------- -------- ------- -------- --------
Net change in cash and cash
equivalents........................ 1,385 (1,557) 265 -- 93
Cash and cash equivalents at
beginning of period................ 190 5,192 76 -- 5,458
------- -------- ------- -------- --------
Cash and cash equivalents at end of
period............................. $ 1,575 $ 3,635 $ 341 $ -- $ 5,551
======= ======== ======= ======== ========
</Table>
F-34
TOWN SPORTS INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
ALL FIGURES $'000
FOR THE YEAR ENDED DECEMBER 31, 2001
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
<Table>
<Caption>
NON-
SUBSIDIARY GUARANTOR
PARENT GUARANTORS SUBSIDIARIES ELIMINATIONS CONSOLIDATED
-------- ---------- ------------ ------------ ------------
Cash flows from operating
activities:
Net income (loss)................. $ 7,046 $ 26,218 $ (87) $(26,131) $ 7,046
-------- -------- ----- -------- --------
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization..... 2,636 29,503 528 -- 32,667
Compensation expense in connection
with stock options.............. 1,149 -- -- -- 1,149
Noncash rental expense, net of
noncash rental income........... 56 4,168 -- -- 4,224
Amortization of debt issuance
costs........................... 1,882 -- -- -- 1,882
Changes in operating assets and
liabilities..................... (6,317) 4,005 99 (2,213)
Other............................. (26,775) 229 8 26,131 (407)
-------- -------- ----- -------- --------
Total adjustments............. (27,369) 37,905 635 26,131 37,302
-------- -------- ----- -------- --------
Net cash provided by (used) in
operating activities.............. (20,323) 64,123 548 -- 44,348
Net cash used in investing
activities........................ (3,893) (53,751) (714) -- (58,358)
Net cash provided by (used) in
financing activities.............. 24,349 (8,491) 245 -- 16,103
-------- -------- ----- -------- --------
Net change in cash and cash
equivalents................... 133 1,881 79 -- 2,093
Cash and cash equivalents at
beginning of period............... 57 3,311 (3) -- 3,365
-------- -------- ----- -------- --------
Cash and cash equivalents at end of
period............................ $ 190 $ 5,192 $ 76 $ -- $ 5,458
======== ======== ===== ======== ========
</Table>
F-35
TOWN SPORTS INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
ALL FIGURES $'000
FOR THE YEAR ENDED DECEMBER 31, 2000
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
<Table>
<Caption>
NON-
SUBSIDIARY GUARANTOR
PARENT GUARANTORS SUBSIDIARIES ELIMINATIONS CONSOLIDATED
-------- ---------- ------------ ------------ ------------
Cash flows from operating
activities:
Net income (loss)................. $ 4,831 $ 21,561 $ (194) $(21,367) $ 4,831
-------- -------- ------- -------- --------
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization..... 1,783 24,262 597 -- 26,642
Compensation expense in connection
with stock options.............. 1,836 -- -- -- 1,836
Noncash rental expense, net of
noncash rental income........... (8) 2,984 -- -- 2,976
Amortization of debt issuance
costs........................... 1,531 -- -- -- 1,531
Changes in operating assets and
liabilities..................... (669) 4,036 (46) -- 3,321
Other............................. (21,952) 21 21,367 (564)
-------- -------- ------- -------- --------
Total adjustments............. (17,479) 31,303 551 21,367 35,742
-------- -------- ------- -------- --------
Net cash provided by operating
activities........................ (12,648) 52,864 357 -- 40,573
Net cash used in investing
activities........................ (24,920) (43,731) (1,397) -- (70,048)
Net cash provided by (used) in
financing activities.............. 37,257 (32,579) 1,037 -- 5,715
-------- -------- ------- -------- --------
Net change in cash and cash
equivalents....................... (311) (23,446) (3) -- (23,760)
Cash and cash equivalents at
beginning of period............... 368 26,757 -- -- 27,125
-------- -------- ------- -------- --------
Cash and cash equivalents at end of
period............................ $ 57 $ 3,311 $ (3) $ -- $ 3,365
======== ======== ======= ======== ========
</Table>
F-36
TOWN SPORTS INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
ALL FIGURES $'000, EXCEPT SHARE DATA
MARCH 31, 2003
<Table>
<Caption>
MARCH 31,
2003
------------
(UNAUDITED)
ASSETS
Current assets:
Cash and cash equivalents................................. $ 9,052
Accounts receivable, net of allowance for doubtful
accounts of $113 at March 31, 2003..................... 636
Inventory................................................. 1,021
Prepaid corporate income taxes............................ 2,404
Prepaid expenses and other current assets................. 4,247
--------
Total current assets.............................. 17,360
Fixed assets, net of accumulated depreciation of $112,472 at
March 31, 2003............................................ 210,606
Goodwill.................................................... 45,676
Intangible assets, net of accumulated amortization of
$10,701 at March 31, 2003................................. 1,315
Deferred tax asset, net..................................... 17,350
Deferred membership costs................................... 14,569
Other assets................................................ 5,641
--------
Total assets...................................... $312,517
========
LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS'
DEFICIT
Current liabilities:
Current portion of long-term debt and capital lease
obligations............................................ $ 4,991
Accounts payable.......................................... 4,540
Accrued expenses.......................................... 22,581
Deferred revenue.......................................... 30,532
--------
Total current liabilities......................... 62,644
Long-term debt and capital lease obligations................ 143,847
Deferred lease liabilities.................................. 24,295
Deferred revenue............................................ 3,623
Other liabilities........................................... 7,395
--------
Total liabilities................................. 241,804
--------
REDEEMABLE PREFERRED STOCK:
Redeemable senior preferred stock, $1.00 par value;
liquidation value $66,391 at March 31, 2003; authorized
100,000 shares; 40,000 shares issued and outstanding at
March 31, 2003............................................ 64,089
Series A preferred stock, at liquidation value 153,637
shares issued and outstanding at March 31, 2003........... 36,061
--------
100,150
--------
Stockholders' deficit:
Series B preferred stock, at liquidation value issued and
outstanding 109,541 at March 31, 2003.................. 9,005
Class A voting common stock, $.001 par value; issued and
outstanding 1,176,043 shares........................... 1
Paid-in capital........................................... (41,130)
Unearned compensation..................................... (268)
Accumulated other comprehensive income (currency
translation adjustment)................................ 338
Retained earnings......................................... 2,617
--------
Total stockholders' deficit....................... (29,437)
--------
Total liabilities, redeemable preferred stock and
stockholders' deficit............................. $312,517
========
</Table>
See notes to the condensed consolidated financial statements.
F-37
TOWN SPORTS INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2002 AND 2003
ALL FIGURES $'000
<Table>
<Caption>
THREE MONTHS ENDED
MARCH 31,
--------------------------
2002 2003
----------- -----------
(UNAUDITED) (UNAUDITED)
Revenues:
Club operations........................................... $75,940 $84,690
Fees and other............................................ 934 2,212
------- -------
76,874 86,902
------- -------
Operating expenses:
Payroll and related....................................... 31,034 32,770
Club operating............................................ 24,150 26,662
General and administrative................................ 4,941 5,021
Depreciation and amortization............................. 7,857 8,299
------- -------
67,982 72,752
------- -------
Operating income.......................................... 8,892 14,150
Interest expense............................................ 4,124 4,232
Interest income............................................. (39) (22)
------- -------
Income from continuing operations before provision for
corporate income taxes................................. 4,807 9,940
Provision for corporate income taxes........................ 2,387 4,099
------- -------
Income from continuing operations......................... 2,420 5,841
Loss on discontinued operations, net of income tax benefit
of $48.................................................... (66) --
Cumulative effect of a change in accounting principle, net
of income tax benefit of $612............................. (689) --
------- -------
Net income................................................ 1,665 5,841
Accreted dividends on preferred stock....................... (2,779) (3,226)
------- -------
Net income (loss) loss attributable to common
stockholders........................................... $(1,114) $ 2,615
======= =======
</Table>
See notes to the condensed consolidated financial statements.
F-38
TOWN SPORTS INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2002 AND 2003
ALL FIGURES $'000
<Table>
<Caption>
THREE MONTHS ENDED
MARCH 31,
--------------------------
2002 2003
----------- -----------
(UNAUDITED) (UNAUDITED)
Cash flows from operating activities:
Net income................................................ $ 1,665 $ 5,841
-------- --------
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization............................. 7,965 8,299
Goodwill impairment write-off............................. 1,301 --
Compensation expense in connection with stock options..... 281 187
Noncash rental expense, net of noncash rental income...... 713 522
Share of net income in affiliated companies............... (157) (211)
Amortization of debt issuance costs....................... 471 597
Change in certain working capital components.............. 10,573 5,564
Decrease (increase) in deferred tax asset................. (1,413) 2,903
Increase in deferred membership costs..................... (856) (160)
Other..................................................... 26 64
-------- --------
Total adjustments....................................... 18,904 17,765
-------- --------
Net cash provided by operating activities............... 20,569 23,606
-------- --------
Cash flows from investing activities:
Capital expenditures, net of effects of acquired
businesses in 2002...................................... (20,101) (7,418)
Acquisition of business................................... (275) --
Landlord contributions.................................... 1,283 --
-------- --------
Net cash used in investing activities................... (19,093) (7,418)
-------- --------
Cash flows from financing activities:
Net line of credit repayment.............................. -- (10,500)
Repurchase of preferred stock............................. -- (583)
Repayments of borrowings.................................. (1,105) (1,604)
-------- --------
Net cash used in financing activities................... (1,105) (12,687)
-------- --------
Net increase in cash and cash equivalents............... 371 3,501
Cash and cash equivalents at beginning of period............ 5,458 5,551
-------- --------
Cash and cash equivalents at end of period.............. $ 5,829 $ 9,052
======== ========
Summary of change in certain working capital components, net
of effects of acquired businesses:
Decrease in accounts receivable........................... 247 $ 697
Decrease in inventory..................................... 118 111
Decrease in prepaid expenses, prepaid income taxes, and
other current assets.................................... 938 1,002
(Decrease) increase in accounts payable and accrued
expenses................................................ 4,230 (455)
Increase in deferred revenue.............................. 5,040 4,209
-------- --------
Net changes in working capital.......................... $ 10,573 $ 5,564
======== ========
Supplemental disclosures of cash flow information:
Noncash investing and financing activities:
</Table>
The Company assumed $445 of long term debt in connection with a club
acquisition during the three month period ended March 31, 2002.
The Company acquired $950 of club equipment financed by lessors during the
three month period ended March 31, 2002.
See also Note 7 for cashless stock option exercises in 2003.
See notes to the condensed consolidated financial statements.
F-39
TOWN SPORTS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2003
ALL FIGURES $'000, EXCEPT SHARE DATA
(UNAUDITED)
1. BASIS OF PRESENTATION
The condensed consolidated financial statements included herein have been
prepared by the Company pursuant to the rules and regulations of the Securities
and Exchange Commission ("SEC"). The condensed consolidated financial statements
should be read in conjunction with the Company's December 31, 2002 consolidated
financial statements and notes thereto, included on Form 10-K. The year-end
condensed balance sheet data was derived from audited financial statements, but
does not include all disclosures required by accounting principles generally
accepted in the United States of America. Certain information and footnote
disclosures which are normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted pursuant to SEC rules and regulations. The Company believes that the
disclosures made are adequate to make the information presented not misleading.
The information reflects all adjustments which, in the opinion of Management,
are necessary for a fair presentation of the financial position and results of
operations for the interim periods set forth herein. All such adjustments,
except for the cumulative effect of a change in accounting principle, are of a
normal and recurring nature. The results for the quarter ended March 31, 2003
are not necessarily indicative of the results for the entire fiscal year ending
December 31, 2003.
2. LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS
<Table>
<Caption>
MARCH 31,
2003
(000'S)
---------
Series B 9 3/4% Senior Notes, due 2004...................... $125,000
Line of Credit borrowings................................... 4,000
Subordinated credit borrowings.............................. 9,000
Notes payable for acquired businesses....................... 5,659
Capital lease obligations................................... 5,179
--------
148,838
Less, Current portion due within one year................... 4,991
--------
Long-term portion........................................... $143,847
========
</Table>
The Company has a line of credit, with its principal banks for direct
borrowings and letters of credit of up to $25,000. The line of credit carries
interest at the Company's option, based upon the Eurodollar borrowing rate plus
2.50% or the bank's prime rate plus 1.50%, as defined. There were $4,000 of
prime rate borrowings outstanding as of March 31, 2003 and outstanding letters
of credit issued totaled $2,000. As of March 31, 2003 the interest rate charged
on the outstanding prime rate borrowings was 5.75%. The unutilized portion of
the line of credit as of March 31, 2003, was $19,000. This line of credit was
terminated April 16, 2003 and replaced with a new credit facility (See Note 9).
The line of credit contains various covenants including interest coverage
and a leverage ratio as well as restrictions on the payment of dividends.
In November 2000, the Company entered into a Subordinated Credit Agreement
(the "Agreement") which provides for up to $20,000 of principal borrowings. The
interest on principal borrowings accrues at the greater of 12.75% or the bank's
prime rate plus 3.0% per
F-40
annum. On a monthly basis, 9.75% is payable and the remaining 3.0% is accruable
or payable at the option of the Company through maturity. As of March 31, 2003
the rate in effect was 12.75%. There were $9,000 of outstanding borrowings under
the Agreement as of March 31, 2003. The Agreement contains similar, but less
restrictive covenants than those of the line of credit. This Subordinated Credit
Agreement was terminated on April 16, 2003 in connection with a refinancing of
the Company's debt. (See Note 9)
3. SEPTEMBER 11, 2001 EVENTS
The terrorist attacks of September 11, 2001 ("the September 11 events"),
resulted in a tremendous loss of life and property. Secondarily, those events
have interrupted the operations at four clubs located in downtown Manhattan.
Three of the affected four clubs were back in operation by October 2001, while
the fourth club reopened in September 2002.
The Company carries business interruption insurance to mitigate certain
lost revenue and profits experienced with the September 11 events. In this
regard in the third quarter in 2001 a $175 insurance receivable was recorded
representing an estimate of costs incurred in September 2001. Such costs
included rent, payroll benefits, and other club operating costs incurred during
period of closure. In 2002, we collected this $175 receivable and received
additional on-account payments of $1,025. In January 2003, we received and
recorded an additional $1,300 on-account payment. These on-account payments have
been classified with fees and other revenues.
Although we have business interruption insurance to cover certain lost
profits at all four clubs, we cannot predict with any degree of certainty what
future amounts will actually be received from the insurance carriers.
Furthermore we cannot, at this time, determine whether the assets related to the
fourth club location have been permanently impaired. We will continue to gather
information to better assess whether or not the assets of this club have been
permanently impaired. We are communicating with our insurance carrier on an
ongoing basis in order to better assess the relief we could expect to receive
for such coverage.
4. GOODWILL AND OTHER INTANGIBLES
Effective January 1, 2002 the Company implemented the Financial Accounting
Standards Board Statement No. 141 Business Combinations and Statement No. 142,
Goodwill and Other Intangible Assets ("SFAS 142"). In connection with the SFAS
142 transition impairment test the Company recorded a $1.3 million write-off of
goodwill in the quarter ended March 31, 2002. A deferred tax benefit of $612 was
recorded with this goodwill write-off, resulting in a net cumulative effect of
change in accounting principle of $689, in the first quarter of 2002. The
write-off of goodwill related to four, remote underperforming clubs. The
impairment test was performed with discounted estimated future cash flows as the
criteria for determining fair market value. Goodwill has been allocated to
reporting units that closely reflect the regions served by the four trade names;
New York Sports Club, Boston Sports Club, Washington Sports Club and
Philadelphia Sports Club, with certain more remote clubs that do not benefit
from a regional cluster being considered a single reporting unit. The Company
performed an impairment test in the quarter ended March 31, 2003 and determined
that goodwill was not impaired.
F-41
Below is a summary of the Company's acquired goodwill and intangible assets
as of March 31, 2003.
<Table>
<Caption>
AS OF MARCH 31, 2003
($'000'S)
------------------------------------------------------------------
GROSS CARRYING AMOUNT ACCUMULATED AMORTIZATION NET INTANGIBLES
--------------------- ------------------------ ---------------
Membership Lists................ $10,917 $ (9,782) $ 1,135
Covenants-not-to-compete........ 876 (754) 122
Beneficial Lease................ 223 (165) 58
------- -------- -------
$12,016 $(10,701) $ 1,315
======= ======== =======
Goodwill........................ $58,742 $(13,066) $45,676
======= ======== =======
</Table>
The amortization expense of the above acquired intangible assets for each
of the five years ended December 31, 2007 is as follows:
<Table>
<Caption>
AGGREGATE AMORTIZATION EXPENSE ($000'S)
- ---------------------------------------
For the year ended 12/31/03(a) $ 939
For the year ended 12/31/04 591
For the year ended 12/31/05 11
For the year ended 12/31/06 11
For the year ended 12/31/07 11
-------
$ 1,563
=======
</Table>
- ---------------
(a) Amortization expense for the three months ended March 31, 2003 amounted to
$248,000.
5. STOCK-BASED EMPLOYEE COMPENSATION
For financial reporting purposes, the Company accounts for stock-based
compensation in accordance with the intrinsic value method ("APB No. 25"). In
accordance with this method, no compensation expense is recognized in the
accompanying financial statements in connection with the awarding of stock
option grants to employees provided that, as of the grant date, all terms
associated with the award are fixed and the fair value of the Company's stock is
not greater than the amount an employee must pay to acquire the stock as
defined; however, to the extent that stock options are granted to employees with
variable terms or if the fair value of the Company's stock as of the measurement
date is greater than the amount an employee must pay to acquire the stock, then
the Company will recognize compensation expense. The fair value of options or
warrants granted to nonemployees for financing are recorded as deferred
financing costs and amortized into interest expense using the interest method.
F-42
The following table illustrates the effect on net income (loss) attributed
to common stockholders if the Company had applied the fair value recognition
provisions of Financial Accounting Standards Board issued Statement No. 123,
("SFAS 123") Accounting for Stock-Based Compensation, to stock-based employee
compensation.
<Table>
<Caption>
QUARTERS ENDED
MARCH 31,
($'000'S)
----------------
2002 2003
------- ------
Net income (loss) attributed to common stockholders, as
reported.................................................. $(1,114) $2,615
Add:
Stock-based employee compensation expense included in
reported net income (loss) attributed to common
stockholders, net of related tax effects............... 23 6
Deduct:
Total stock-based employee compensation expense determined
under fair value based method for all stock option
awards net of related tax effects...................... (32) (48)
------- ------
Pro forma net income (loss) attributed to common
stockholders.............................................. $(1,123) $2,573
======= ======
</Table>
Since option grants vest over several years and additional grants are
expected in the future, the pro forma results noted above are not likely to be
representative of the effects on future years of the application of the fair
value based method.
6. DISCONTINUED OPERATIONS
In the fourth quarter of 2002, the Company sold or closed two remote
underperforming, wholly-owned clubs. The Company has accounted for these two
clubs as discontinued operations and, accordingly, the results of their
operations have been classified as discontinued in the consolidated statement of
operations, and prior periods have been reclassified in accordance with the
Financial Accounting Standards Board issued Statement No. 144, Accounting for
the Impairment or Disposal of Long-lived Assets. Revenues and pre-tax losses for
these discontinued clubs were $434 and $114 respectively in the first quarter
ended March 31, 2002.
7. EXERCISE OF STOCK OPTIONS
In January 2003, an executive officer of the Company exercised 9,530 Series
B preferred stock, and in turn these newly issues shares were repurchased by the
Company for $540 and were retired. In addition, the same officer sold 548
previously held shares of Series B preferred stock back to the Company for $43
which were also retired. On February 24, 2003, several executives of the Company
exercised and converted 148,775 Series B preferred stock options into 106,267
shares of Series B preferred stock. The difference between the 148,775 options
exercised and the 106,267 shares issued is due to the remittance of these shares
to the Company to cover the purchase price of the stock. The remitted shares
were subsequently retired by the Company. The executives sold all of Series B
preferred stock issued in connection with these February exercises to an
affiliate of Rosewood Capital L.P., a stockholder of the Company.
8. CONTINGENCIES
On February 13, 2003, an individual filed suit against the Company in the
Supreme Court, New York County, alleging that on January 14, 2003, he sustained
an injury at one of the Company's club locations resulting in serious bodily
injury. His complaint seeks $250,000 in damages for personal injuries, in
addition to $250,000 of punitive damages. The Company has
F-43
in force $51,000 of insurance coverage to cover claims of this nature. The
Company intends to vigorously contest this lawsuit and presently anticipates
that these matters will be covered by insurance.
In addition, the Company is a party to various lawsuits arising in the
normal course of business. Management believes that the ultimate outcome of
these matters will not have a material effect on the Company's consolidated
financial position, results of operations or cash flows.
NOTE 9. SUBSEQUENT EVENT
On April 16, 2003 the Company successfully completed a refinancing of its
debt. This refinancing included an offering of $255,000 of Senior Notes
("Notes") that will mature April 15, 2011, and the entering into of a new
$50,000 senior secured revolving credit facility (the "Senior Credit Facility")
that will expire April 15, 2008. The Notes accrue interest at 9 5/8% per annum
and interest is payable semiannually on April 15, and October 15. The Company
will file a registration statement with the Securities and Exchange Commission
within 120 days of the issue date of the Notes, for notes having substantially
identical terms as the Notes as part of an offer to exchange freely tradable
exchange notes for the Notes. The Company will use its best efforts to cause
that registration to become effective within 210 days of the issue date. The use
of proceeds from the Note offering are as follows:
<Table>
($000'S)
--------
Redemption of existing Series B Senior Notes, principal and
interest.................................................. $126,049
Call premium on existing Series B Senior Notes.............. 3,048
Redemption of Senior Preferred Stock........................ 66,975
Repayment of line of credit principal borrowings and
interest.................................................. 4,013
Repayment of subordinated credit principal borrowings and
interest.................................................. 9,060
Underwriting fees and other closing costs................... 7,743
Available for general corporate purposes.................... 38,112
--------
Total use of funds.......................................... $255,000
========
</Table>
The Senior Credit Facility contains various covenants including limits in
capital expenditures, the maintenance of a Consolidated Interest Coverage ratio
of not less than 2.25:1.00 during 2003, and a maximum permitted total leverage
ratio of 4.00:1.00 during 2003.
NOTE 10. GUARANTORS
The Company and all of its domestic subsidiaries have unconditionally
guaranteed the $255,000 of 9 5/8% Senior Notes. However the Company's Swiss
subsidiaries have not provided guarantees on these Senior Notes.
The following schedules set forth condensed consolidating financial
information as required by Rule 3-10 of Securities and Exchange Commission
Regulation S-X for the three month periods ended March 31, 2002 and 2003. The
financial information illustrates the composition of the combined guarantors.
F-44
TOWN SPORTS INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING BALANCE SHEET
ALL FIGURES IN $'000
MARCH 31, 2003
(UNAUDITED)
<Table>
<Caption>
NON-
SUBSIDIARY GUARANTOR
PARENT GUARANTORS SUBSIDIARIES ELIMINATIONS CONSOLIDATED
--------- ----------- ------------- ------------- -------------
ASSETS
Current assets:
Cash and equivalents.............. $ 508 $ 8,057 $ 487 $ -- $ 9,052
Accounts receivable, net.......... 1,924 476 103 (1,867) 636
Inventory......................... -- 993 28 -- 1,021
Prepaid corporate income taxes.... 2,404 -- -- -- 2,404
Intercompany receivable
(payable)....................... (22,419) 23,990 (1,571) -- --
Prepaid expenses and other current
assets.......................... 4,402 3,345 -- (3,500) 4,247
--------- -------- ------- --------- --------
Total current assets.......... (13,181) 36,861 (953) (5,367) 17,360
Investment in subsidiaries.......... 216,248 -- -- (216,248) --
Fixed assets, net................... 10,823 198,325 1,458 -- 210,606
Goodwill, net....................... -- 44,945 731 -- 45,676
Intangible assets, net.............. -- 1,322 (7) -- 1,315
Deferred tax assets, net............ 17,966 (491) (125) -- 17,350
Deferred membership costs........... -- 14,569 -- -- 14,569
Other assets........................ 4,590 1,051 -- -- 5,641
--------- -------- ------- --------- --------
Total assets.................. $ 236,446 $296,582 $ 1,104 $(221,615) $312,517
========= ======== ======= ========= ========
LIABILITIES, REDEEMABLE PREFERRED STOCK, AND STOCKHOLDERS' DEFICIT
Current liabilities:
Current portion of long-term debt
and capital lease obligations... $ 4,991 $ -- $ -- $ -- $ 4,991
Accounts payable.................. 112 4,428 -- -- 4,540
Accrued expenses.................. 10,112 13,964 372 (1,867) 22,581
Deferred revenue.................. -- 30,532 -- -- 30,532
--------- -------- ------- --------- --------
Total current liabilities..... 15,215 48,924 372 (1,867) 62,644
Long-term debt and capital lease
obligations....................... 149,528 (2,181) -- (3,500) 143,847
Deferred lease liabilities.......... 613 23,682 -- -- 24,295
Deferred revenue.................... 10 3,528 85 -- 3,623
Other liabilities................... 367 7,028 -- -- 7,395
--------- -------- ------- --------- --------
Total liabilities............. 165,733 80,981 457 (5,367) 241,804
--------- -------- ------- --------- --------
REDEEMABLE PREFERRED STOCK
Redeemable senior preferred stock... 64,089 -- -- -- 64,089
Series A preferred stock............ 36,061 -- -- -- 36,061
--------- -------- ------- --------- --------
100,150 -- -- -- 100,150
--------- -------- ------- --------- --------
Stockholders' deficit
Series B preferred stock.......... 9,005 -- -- -- 9,005
Common stockholders' deficit...... (38,780) 215,601 309 (215,910) (38,780)
Accumulated other comprehensive
income.......................... 338 -- 338 (338) 338
--------- -------- ------- --------- --------
Total stockholder's deficit... (29,437) 215,601 647 (216,248) (29,437)
--------- -------- ------- --------- --------
Total liabilities, redeemable
preferred stock and
stockholder's deficit:..... $ 236,446 $296,582 $ 1,104 $(221,615) $312,517
========= ======== ======= ========= ========
</Table>
F-45
TOWN SPORTS INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
ALL FIGURES IN $'000
MARCH 31, 2003
(UNAUDITED)
<Table>
<Caption>
NON-
SUBSIDIARY GUARANTOR
PARENT GUARANTORS SUBSIDIARIES ELIMINATIONS CONSOLIDATED
------- ---------- ------------ ------------ ------------
Revenues:
Club operations............................. $ 25 $83,475 $1,190 -- $84,690
Fees and other.............................. 1,600 1,617 -- $(1,005) 2,212
------- ------- ------ ------- -------
$ 1,625 $85,092 $1,190 (1,005) $86,902
------- ------- ------ ------- -------
Operating expenses:
Payroll and related......................... 5,481 26,863 426 -- 32,770
Club operating.............................. (937) 28,111 353 (865) 26,662
General and administrative.................. (420) 5,483 98 (140) 5,021
Depreciation and amortization............... 809 7,401 89 -- 8,299
------- ------- ------ ------- -------
$ 4,933 $67,858 $ 966 $(1,005) $72,752
------- ------- ------ ------- -------
Operating income............................ (3,308) 17,234 224 -- 14,150
Interest expense.............................. 4,272 48 -- (88) 4,232
Interest income............................... (110) -- -- 88 (22)
------- ------- ------ ------- -------
Income before provision for corporate income
taxes..................................... (7,470) 17,186 224 -- 9,940
Provision for corporate income taxes.......... (3,519) 7,545 73 -- 4,099
------- ------- ------ ------- -------
Income before Equity earnings............... $(3,951) $ 9,641 $ 151 $ -- $ 5,841
Equity earnings from subsidiaries............. 9,792 -- -- (9,792) --
------- ------- ------ ------- -------
Net Income.................................. $ 5,841 $ 9,641 $ 151 $(9,792) $ 5,841
======= ======= ====== ======= =======
</Table>
F-46
TOWN SPORTS INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
ALL FIGURES IN $'000
MARCH 31, 2002
(UNAUDITED)
<Table>
<Caption>
NON-
SUBSIDIARY GUARANTOR
PARENT GUARANTORS SUBSIDIARIES ELIMINATIONS CONSOLIDATED
------- ---------- ------------ ------------ ------------
Revenues:
Club operations............................. $ 4 $75,066 $870 $ -- $75,940
Fees and other.............................. 471 1,412 -- (949) 934
------- ------- ---- ------- -------
475 76,478 870 (949) 76,874
------- ------- ---- ------- -------
Operating expenses:
Payroll and related......................... 5,618 25,072 344 -- 31,034
Club operating.............................. 89 24,651 219 (809) 24,150
General and administrative.................. (21) 5,014 88 (140) 4,941
Depreciation and amortization............... 729 7,002 126 7,857
------- ------- ---- ------- -------
6,415 61,739 777 (949) 67,982
------- ------- ---- ------- -------
Operating income............................ (5,940) 14,739 93 -- 8,892
Interest expense.............................. 4,121 88 3 (88) 4,124
Interest income............................... (127) -- -- 88 (39)
------- ------- ---- ------- -------
Income from continuing operations before
provision for corporate income taxes...... (9,934) 14,651 90 -- 4,807
Provision for corporate income taxes.......... (4,933) 7,293 27 -- 2,387
------- ------- ---- ------- -------
Income from continuing operations before
equity earnings........................... (5,001) 7,358 63 -- 2,420
Equity earnings from subsidiaries........... 6,666 -- -- (6,666) --
Loss on discontinued operations, net of
income tax benefit of $48................. -- (66) -- -- (66)
Cumulative effect of a change in accounting
principle, net of income tax benefit of
$612........................................ -- (689) -- -- (689)
------- ------- ---- ------- -------
Net income.................................. $ 1,665 $ 6,603 $ 63 $(6,666) $ 1,665
======= ======= ==== ======= =======
</Table>
F-47
TOWN SPORTS INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
ALL FIGURES IN $'000
MARCH 31, 2003
(UNAUDITED)
<Table>
<Caption>
NON-
SUBSIDIARY GUARANTOR
PARENT GUARANTORS SUBSIDIARIES ELIMINATIONS CONSOLIDATED
-------- ---------- ------------ ------------ ------------
Cash flows from operating
activities:
Net income........................ $ 5,841 $ 9,641 $ 151 (9,792) $ 5,841
-------- -------- -------- -------- --------
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization..... 809 7,401 89 -- 8,299
Compensation expense in connection
with stock options.............. 187 -- -- -- 187
Noncash rental expense, net of
noncash rental income........... (17) 539 -- -- 522
Share of net income in affiliated
companies....................... (211) -- -- -- (211)
Amortization of debt issuance
costs........................... 597 -- -- -- 597
Changes in operating assets and
liabilities..................... 5,402 3,079 (174) -- 8,307
Other............................. (9,729) (28) 29 9,792 64
-------- -------- -------- -------- --------
Total adjustments............. (2,962) 10,991 (56) 9,792 17,765
-------- -------- -------- -------- --------
Net cash provided by operating
activities........................ 2,879 20,632 95 -- 23,606
Net cash used in investing
activities........................ (360) (7,011) (47) -- (7,418)
Net cash used in financing
activities........................ (3,586) (9,199) 98 -- (12,687)
-------- -------- -------- -------- --------
Net change in cash and cash
equivalents....................... (1,067) 4,422 146 -- 3,501
Cash and cash equivalents at
beginning of period............... 1,575 3,635 341 -- 5,551
-------- -------- -------- -------- --------
Cash and cash equivalents at end of
period............................ $ 508 $ 8,057 $ 487 $ -- $ 9,052
======== ======== ======== ======== ========
</Table>
F-48
TOWN SPORTS INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
ALL FIGURES IN $'000
MARCH 31, 2002
(UNAUDITED)
<Table>
<Caption>
NON-
SUBSIDIARY GUARANTOR
PARENT GUARANTORS SUBSIDIARIES ELIMINATIONS CONSOLIDATED
------- ---------- ------------ ------------ ------------
Cash flows from operating activities:
Net income......................... $ 1,665 $ 6,603 $ 63 $(6,666) $ 1,665
------- -------- -------- ------- --------
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization...... 729 7,110 126 -- 7,965
Goodwill impairment write-off...... -- 1,301 -- 1,301
Compensation expense in connection
with stock options............... 281 -- -- -- 281
Noncash rental expense, net of
noncash rental income............ (15) 728 -- -- 713
Share of net income in affiliated
companies........................ (157) -- -- -- (157)
Amortization of debt issuance
costs............................ 471 -- -- -- 471
Changes in operating assets and
liabilities...................... 3,244 5,041 19 8,304
Other.............................. (6,601) 41 (80) 6,666 26
------- -------- -------- ------- --------
Total adjustments.............. (2,048) 14,221 65 6,666 18,904
------- -------- -------- ------- --------
Net cash provided by operating
activities..................... (383) 20,824 128 -- 20,569
Net cash used in investing
activities......................... (821) (18,240) (32) -- (19,093)
Net cash provided by (used) in
financing activities............... 1,189 (2,399) 105 -- (1,105)
------- -------- -------- ------- --------
Net change in cash and cash
equivalents........................ (15) 185 201 -- 371
Cash and cash equivalents at
beginning of period................ 190 5,192 76 -- 5,458
------- -------- -------- ------- --------
Cash and cash equivalents at end of
period............................. $ 175 $ 5,377 $ 277 $ -- $ 5,829
======= ======== ======== ======= ========
</Table>
F-49
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Through and including , 2003, (the 90th day after the date of
this prospectus) all dealers that effect transactions in these securities,
whether or not participating in this exchange offer, may be required to deliver
a prospectus. This is in addition to the dealers' obligation to deliver a
prospectus when acting as underwriters and with respect to unsold allotments or
subscriptions.
TOWN SPORTS INTERNATIONAL, INC.
9 5/8% SENIOR EXCHANGE NOTES DUE 2011
------------------------
PROSPECTUS
------------------------
, 2003
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
(a) Town Sports International, Inc. is a corporation organized under the laws of
the State of New York.
Article Eight of Town Sports International, Inc.'s Certificate of
Incorporation provides that:
The Corporation shall, to the fullest extent permitted by Article 7 of the
Business Corporation Law of the State of New York, as the same may be amended
and supplemented, indemnify any and all persons whom it shall have power to
indemnify under said Article from and against any and all of the expenses,
liabilities, or other matters referred to in or covered by said Article, and the
indemnification provided for herein shall not be deemed exclusive of any other
rights to which any person may be entitled under any By-Law, resolution of
shareholders, resolution of directors, agreement, insurance policy or otherwise
as permitted by said Article, as to action in any capacity in which he or she
served at the request of the Corporation.
Without in any way limiting the foregoing, except to the extent expressly
prohibited by the Business Corporation Law, the Corporation shall indemnify each
person made or threatened to be made a party to any action or proceeding,
whether civil or criminal, by reason of the fact that such person or such
person's testator or intestate is or was a director or officer of the
Corporation or serves or served at the request of the Corporation any other
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise in any capacity, against judgments, fines, penalties, amounts paid in
settlement and reasonable expenses, including attorneys' fees, incurred in
connection with such action or proceeding, or any appeal therein, provided that
no such indemnification shall be made if a judgment or other final adjudication
adverse to such person establishes that his or her acts were committed in bad
faith or were the result of active and deliberate dishonesty and were material
to the cause of action so adjudicated, or that he or she personally gained in
fact a financial profit or other advantage to which he or she was not legally
entitled, and provided further that no such indemnification shall be required
with respect to any settlement or other nonadjudicated disposition of any
threatened or pending action or proceeding unless the Corporation has given its
prior consent to such settlement or other disposition.
The Corporation shall advance or promptly reimburse upon request any person
entitled to indemnification hereunder for all expenses, including attorneys'
fees, reasonably incurred in defending any action or proceeding in advance of
the final disposition thereof upon receipt of an undertaking by or on behalf of
such person to repay such amount if such person is ultimately found not to be
entitled to the indemnification or, where indemnification is granted, to the
extent the expenses so advanced or reimbursed exceed the amount to which such
person is entitled, provided, however, that such person shall cooperate in good
faith with any request by the Corporation that common counsel be utilized by the
parties to an action or proceeding who are similarly situated unless to do so
would be inappropriate due to actual or potential differing interests between or
among such parties.
Anything herein to the contrary notwithstanding, no elimination of or
amendment to this Article adversely affecting the right of any person to
indemnification or advancement of expenses hereunder shall be effective until
the 60th day following notice to such person of such action, and no elimination
of or amendment to this Article shall deprive any person of his or her rights
hereunder arising out of alleged or actual occurrences, acts or failures to act
prior to such 60th day.
The Corporation shall not, except by elimination of or amendment to this
Article in a manner consistent with the preceding paragraph, take any corporate
action or enter into any
II-1
agreement which prohibits, or otherwise limits the rights of any person to,
indemnification in accordance with the provisions of this Article. The
indemnification of any person provided by this Article shall continue after such
person has ceased to be a director or officer of the Corporation and shall inure
to the benefit of such person's heirs, executors, administrators and legal
representatives.
The Corporation is authorized to enter into agreements with any of its
directors or officers extending rights to indemnification and advancement of
expenses to such person to the fullest extent permitted by applicable law, but
the failure to enter into any such agreement shall not affect or limit the
rights of such person pursuant to this Article, it being expressly recognized
hereby that all directors and officers of the Corporation, by serving as such
after the adoption hereof, are acting in reliance hereon and that the
Corporation is estopped to contend otherwise.
In case any provision in this Article shall be determined at any time to be
unenforceable in any respect, the other provisions shall not in any way be
affected or impaired thereby, and the affected provision shall be given the
fullest possible enforcement in the circumstances, it being the intention of the
Corporation to afford indemnification and advancement of expenses to its
directors and officers, acting in such capacities or in the other capacities
mentioned herein to the fullest extent permitted by law.
For purposes of this Article, the Corporation shall be deemed to have
requested a person to serve an employee benefit plan where the performance by
such person of his or her duties to the Corporation also imposes duties on, or
otherwise involves services by, such person to the plan or participants or
beneficiaries of the plan, and excise taxes assessed on a person with respect to
an employee benefit plan pursuant to applicable law shall be considered
indemnifiable expenses. For purposes of this Article, the term "Corporation"
shall include any legal successor to the Corporation, including any corporation
which acquires all or substantially all of the assets of the Corporation in one
or more transactions.
Article Nine of Town Sports International, Inc.'s Certificate of
Incorporation provides that:
The personal liability of the Directors of the Corporation is eliminated to
the fullest extent permitted by the provisions of paragraph (b) of Section 402
of the Business Corporation Law of the State of New York, as the same may be
amended and supplemented. No amendment, modification or repeal of this Article
shall adversely affect any right or protection of any director that exists at
the time of such amendment, modification or repeal.
Article VIII of Town Sports International, Inc's By-Laws provides that:
Indemnification. The Corporation shall indemnify its directors and
officers to the fullest extent permitted and in the manner provided by law.
(b) The companies listed in Annex A are limited liability companies organized
under the laws of the State of Delaware.
Article IX of the Limited Liability Company Operating Agreements of the
companies listed in Annex A provides that:
Limitation of Liability; Indemnity
Section 9.1 Liability of Members. The Members shall not have any liability
for the obligations or liabilities of the Company except to the extent provided
in the Act.
Section 9.2 Exculpation of Members; Officers. A Member and any officer of
the Company appointed by the Members shall not be liable for any breach of duty
in such capacity, unless a judgment or other final adjudication adverse to such
Member establishes that such Member's acts or omissions were in bad faith or
involved intentional misconduct or a knowing violation of law or that such
Member personally gained in fact a financial profit or other advantage to which
such Member was not legally entitled.
II-2
Section 9.3 Indemnification. The Company shall indemnify and hold harmless
each Member and its respective directors, shareholders, officers, employees and
agents, and the officers, employees and agents of the Company (each an
"indemnitee"), against all costs, liabilities, claims, demands, damages and
expenses, including reasonable attorneys' fees (collectively "Indemnifiable
Losses") paid or incurred by any such Indemnitee in connection with the conduct
of the business of the Company; provided, that, such indemnification shall not
apply, in the case of any Indemnitee, for any Indemnifiable Losses incurred by
reason of conduct by such Indemnitee that constitutes willful misfeasance,
fraud, gross negligence or reckless disregard of duty.
(c) TSI East 86, LLC is a limited liability company organized under the laws of
the State of New York.
Article IV of TSI East 86, LLC's Operating Agreement provides that:
Section 4.03. Liability for Debts of Company. (a) Except as otherwise
provided herein, neither the Member nor any employee or agent of the Company
shall be personally liable for the debts, obligations or liabilities of the
Company or each other, whether arising in tort, contract or otherwise, solely be
reason of being such member, employee or agent.
(b) Nothing in Section 4.03(a) shall be interpreted to limit the ability of
the Member to (i) lend money to or borrow money from the Company, (ii) act as a
guarantor or surety for the Company, (iii) provide collateral for the
obligations of the Company, or (iv) transact other business with the Company.
Section 4.04. Liability for Breaches of Duty. The Member shall not be
liable for damages resulting from any breach of duty in its capacity as a member
or in connection with its management of the Company unless:
(a) a judgment or other final adjudication adverse to the Member
establishes that its acts or omissions were in bad faith or involved intentional
misconduct or a knowing violation of law or that it gained in fact a financial
profit or other advantage to which it was not legally entitled or that, with
respect to a distribution the subject of Section 5.08(a) of the Act, its acts
were not performed in accordance with Section 4.09 of the Act; or
(b) such breach of duty occurred prior to the adoption of this Operating
Agreement.
Section 4.05. Indemnification. To the maximum extent permitted under the
Act, the Company shall indemnify the Member and the employees and agents of the
Company from and against any and all claims and demands arising from any acts or
omissions or alleged acts or omissions by such member, employees or agents in
advances for expenses with respect thereto.
(d) The companies listed in Annex B are corporations organized under the laws of
the State of Delaware.
Article Six of the Certificate of Incorporation of the corporations listed
on Annex B provides that:
The Corporation shall, to the full extent permitted by Section 145 of the
General Corporation Law of the State of Delaware, as amended from time to time,
indemnify all persons whom it may indemnify pursuant thereto.
II-3
Article Eight of the Certificate of Incorporation of the corporations
listed in Annex B provides that:
A director of this Corporation shall not be personally liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability:
(i) for any breach of the director's duty of loyalty to the
corporation or its stockholders,
(ii) for acts or omissions not in good faith, or which involve
intentional misconduct or a knowing violation of law,
(iii) under Section 174 of the Delaware General Corporation Law, or
(iv) for any transaction from which the director derived an improper
personal benefit.
Article VI of the By-Laws of the corporations listed in Annex B provides
that:
Indemnification. The corporation shall (a) indemnify any person who was or
is a party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the Corporation to procure a
judgment in its favor by reason of the fact that he is or was a director or
officer of the Corporation, or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit, and (b)
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (other than an action by or in
the right of the Corporation), by reason of the fact that he is or was a
director or officer of the Corporation, or served at the request of the
Corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with any such action, suit
or proceeding, in each case to the fullest extent permissible under Section 145
of the General Corporation Law of the State of Delaware or the indemnification
provisions of any successor statute. The foregoing right of indemnification
shall in no way be exclusive of any other rights of indemnification to which any
such person may be entitled, under any by-law, agreement vote of stockholders or
disinterested directors or otherwise, and shall inure to the benefit of the
heirs, executors and administrators of such a person.
(e) The companies listed in Annex C are corporations organized under the laws of
the State of Delaware.
Article Six of the Certificate of Incorporation of the corporations listed
in Annex C provides that:
The Corporation shall, to the full extent permitted by Section 145 of the
General Corporation Law, as amended from time to time, indemnify all persons
whom it may indemnify pursuant thereto.
Article VI of the By-Laws of the companies listed in Annex C provides that:
Indemnification. The corporation shall (a) indemnify any person who was or
is a party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the Corporation to procure a
judgment in its favor by reason of the fact that he is or was a director or
officer of the Corporation, or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit,
II-4
and (b) indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other than an action
by or in the right of the Corporation), by reason of the fact that he is or was
a director or officer of the Corporation, or served at the request of the
Corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with any such action, suit
or proceeding, in each case to the fullest extent permissible under Section 145
of the General Corporation Law of the State of Delaware or the indemnification
provisions of any successor statute. The foregoing right of indemnification
shall in no way be exclusive of any other rights of indemnification to which any
such person may be entitled, under any by-law, agreement vote of stockholders or
disinterested directors or otherwise, and shall inure to the benefit of the
heirs, executors and administrators of such a person.
(f) The companies listed in Annex D are corporations organized under the laws of
the State of New York.
Article Six of the Certificate of Incorporation of the corporations listed
in Annex D provides that:
The corporation shall be authorized to indemnify any and all of its
directors, officers, employees and agents, and any other person or persons, to
the fullest extent permitted under the Business Corporation Law of the State of
New York.
Article Seven of the Certificate of Incorporation of the corporations
listed in Annex D provides that:
A director of the corporation shall not be liable to the corporation, or to
any of its shareholders, for damages for any breach of duty in such capacity
arising from an act or omission, unless such act or omission (i) was in bad
faith, (ii) involved intentional misconduct or a knowing violation of law, (iii)
resulted in a financial profit or other advantage to which such director was not
legally entitled and which he personally gained in fact, or (iv) violated
Section 719 of the Business Corporation Law of the State of New York.
(g) The companies listed in Annex E are corporations organized under the laws of
the State of New York.
Article Six of the Certificate of Incorporation of the corporations listed
in Annex E provides that:
The corporation shall be authorized to indemnify any and all of its
directors, officers, employees and agents, and any other person or persons, to
the fullest extent permitted under the Business Corporation Law.
Article Seven of the Certificate of Incorporation of the corporations
listed in Annex E provides that:
The personal liability of any and all of the directors of the Corporation
to the Corporation or to its shareholders for damages with respect to any breach
of duty as a director shall be eliminated or limited to the fullest extent
permitted under the Business Corporation Law, provided that the personal
liability of any director shall not be eliminated or limited if a judgment or
other final adjudication adverse to him establishes that his acts or omissions
were in bad faith or involved intentional misconduct or a knowing violation of
law or that he personally gained in fact a financial profit or other advantage
to which he was not legally entitled or that his acts violated Section 719 of
the Business Corporation Law.
II-5
(h) TSI Arthro-Fitness Services, Inc., TSI Cobble Hill, Inc., TSI Fifth Avenue,
Inc., and TSI Lincoln, Inc. are corporations organized under the laws of the
State of New York.
Article Six of the Certificate of Incorporation of TSI Arthro-Fitness
Services, Inc., TSI Cobble Hill, Inc., TSI Fifth Avenue, Inc., and TSI Lincoln,
Inc. provides that:
The corporation shall be authorized to indemnify any and all of its
directors, officers, employees and agents, and any other person or persons, to
the fullest extent permitted under the Business Corporation Law of the State of
New York.
(i) TSI East 31, Inc., TSI East 33, Inc., and TSI East 36, Inc. are corporations
organized under the laws of the State of New York.
Article Six of the Certificate of Incorporation of TSI East 31, Inc., TSI
East 33, Inc., and TSI East 36, Inc. provides that:
The corporation shall be authorized to indemnify any and all of its
directors, officers, employees and agents, and any other person or persons, to
the fullest extent permitted under the Business Corporation Law.
Article Seven of the Certificate of Incorporation of TSI East 31, Inc., TSI
East 33, Inc., and TSI East 36, Inc. provides that:
The personal liability of each director to the Corporation or its
shareholders for damages with respect to any breach of such director's duty as a
director shall be eliminated to the fullest extent permitted under the Business
Corporation Law.
(j) TSI Insurance, Inc. is a corporation organized under the laws of the State
of New York.
Article Seven of TSI Insurance, Inc.'s Declaration and Charter provides
that:
The corporation shall be authorized to indemnify any and all of its
directors, officers, employees and agents, and any other person or persons, to
the fullest extent permitted under the Insurance Law of the State of New York
and, to the extent not inconsistent with therewith, the Business Corporation Law
of the State of New York.
Article Eight of TSI Insurance, Inc.'s Declaration and Charter provides
that:
No director shall be personally liable to the corporation or any of its
shareholders for damages for any breach of duty as a director; provided,
however, that the foregoing provision shall not eliminate or limit the liability
of a director if a judgment of other final adjudication adverse to him or her
establishes that his or her acts or omissions were in bad faith or involved
intentional misconduct or any violation of the Insurance Law of the State of New
York or a knowing violation of any other law or the he or she personally gained
in fact a financial profit or other advantage to which he or she was not legally
entitled.
(k) TSI Lexington (MA), Inc. is a corporation organized under the laws of the
State of Massachusetts.
Articles XI of TSI Lexington (MA), Inc.'s By-Laws provides that:
Transactions With Related Parties. The Corporation may enter into
contracts or transact business with one or more of its Directors, officers, or
stockholders or with any corporation, association, trust company, organization
or other concern in which any one or more of its Directors, officers or
stockholders are directors, officers, trustees, shareholders, beneficiaries or
stockholders or otherwise interested and other contracts or transactions in
which any one or more of its Directors, officers or stockholders in any way
interested; and in the absence of fraud, no such contract or transaction shall
be invalidated or in any way affected by the fact that such Directors, officers
or stockholders of the Corporation have or may have interests which are or might
be adverse to the interest of the Corporation even though the vote or action of
II-6
Directors, officers or stockholders having such adverse interests may have been
necessary to obligate the Corporation upon such contract or transaction. At any
meeting of the Board of Directors or the Corporation (or any duly authorized
committee thereof) which shall authorize or ratify any such contract or
transaction, any such Director or Directors, any vote or act thereat with like
force and effect as if he had not such interest, provided, in such case the
nature of such interest (though not necessarily the extent or details thereof)
shall be disclosed or shall have been known to the Directors or a majority
thereof. A general notice that a Director or officer is interested in any
corporation or other concern of any kind above referred to shall be a sufficient
disclosure as to such Director or officer with respect to all contracts and
transactions with such corporation or other concern. No Director shall be
disqualified from holding office as Director or officer of the Corporation by
reason of any such adverse interests. In the absence of fraud, no Director,
officer or stockholder having such adverse interest shall be liable to the
Corporation or to any stockholder or creditor thereof or to any other person for
any loss incurred by it under or by reason of such contract or transaction, nor
shall any such Director, officer or stockholder be accountable for any gains or
profits realized thereon.
Articles XII of TSI Lexington (MA), Inc's By-Laws provides that:
Indemnification Of Directors, Officers And Others. The Corporation shall,
to the extent legally permissible, indemnify any person serving or who has
served as a Director or officer of the Corporation in the manner prescribed by
the Articles of Organization, as amended and restated from time to time, of the
Corporation.
(l) TSI Holdings (MA), Inc. is a limited liability company organized under the
laws of the State of Massachusetts.
Article VII of the TSI Holdings (MA), Inc.'s By-Laws provides that:
Indemnification of Directors and Others. The corporation shall, to the
extent legally permissible, indemnify any person serving or who has served as a
Director or officer of the corporation, or at its request as a Director,
Trustee, Officer, Employee or other Agent of any organization in which the
corporation owns shares or of which its is a creditor against all liabilities
and expenses, including amounts paid in satisfaction of judgments, in compromise
or as fines and penalties, and counsel fees, reasonably incurred by him in
connection with the defense or disposition of any action, suit or other
proceeding, whether civil or criminal, in which he may be involved or with which
he may be threatened, while serving or thereafter by reason of his being or
having been such a Director, Officer, Trustee, Employee or Agent, except with
respect to any matter as to which he shall have been adjudicated in any
proceeding not to have acted in good faith in the reasonable belief that his
action was in the best interests of the corporation; provided, however, that as
to any matter disposed of by a compromise payment by such Director, Officer,
Trustee, Employee or Agent, pursuant to a consent decree or otherwise, no
indemnification either for said payment or for any other expenses shall be
provided unless:
(a) such compromise shall be approved as in the best interests of the
corporation, after notice that it involves such indemnification:
(i) by a disinterested majority of the directors then in office; or
(ii) by the holder of a majority of the outstanding stock at the
time entitled to vote for Directors, voting as a single class, exclusive
of any stock owned by any interested Director or officer; or
(b) in the absence of action by disinterested Directors or
stockholders, there has been obtained at the request of a majority of the
Directors then in office an opinion in writing of independent legal counsel
to the effect that such Director or officer appears to have acted in
II-7
good faith in the reasonable belief that his action was in the best
interests of the corporation.
Expenses including counsel fees, reasonably incurred by any such Director,
Officer, Trustee, Employee or Agent in connection with the defense or
disposition of any such action, suit or other proceeding may be paid from time
to time by the corporation in advance of the final disposition thereof upon
receipt of an undertaking by such individual to repay the amounts so paid to the
corporation if it is ultimately determined that indemnification for such
expenses is not authorized under this Article. The right of indemnification
hereby provided shall not be exclusive of or affect any other rights to which
any such Director, Officer, Trustee, Employee or Agent may be entitled. Nothing
contained in this Article shall affect any rights to indemnification to which
corporate personnel other than such Directors, Officers, Trustees, Employees or
Agents may be entitled by contract or otherwise under law. As used in this
Article the terms "Director", Officer", "Trustee", "Employee" and "Agent"
include their respective heirs, executors and administrators, and an
"interested" Director, Officer, Trustee, Employee or Agent is one against whom
in such capacity the proceedings in question or other proceedings on the same or
similar grounds is then pending.
(m) The companies listed in Annex F are corporations organized under the laws of
the State of Massachusetts.
Article VI of the Articles of Organization of the corporations listed in
Annex F provides that:
Section 3. The corporation shall, to the extent legally permissible,
indemnify each of its present or former directors and officers and any person
who may be then serving or who may have previously served at its request as a
director or officer of any other organization in which it owns or owned shares
or of which it is or was a creditor and it may, to the extent authorized by the
directors, indemnify present or former employees and other agents or any person
who may be then serving or who may have previously served at its request as an
employee or agent or any other organization in which it directly or indirectly
owns or owned shares or of which it is or was a creditor against all
liabilities, expenses and attorneys' fees, including amounts incurred or paid by
him (a) in connection with the defense or disposition of any action, suit or
proceeding, civil or criminal, and any appeal therein, in which he is made a
party or involved by reason of being or having been such director, officer,
employee or other agent, (b) in connection with any proceeding in advance of the
final disposition of such action, suit or proceeding, (c) in satisfaction of
judgments or as fine and penalties, or (d) in connection with any compromise or
settlement first approved by (i) a disinterested majority of the directors then
in office, or (ii) a majority of the disinterested directors then in office,
provided that there has been obtained an opinion in writing of independent legal
counsel to the effect that such director, officer, employee or other agent
appears to have acted in good faith in the reasonable belief that his action was
in the best interests of the corporation, or (iii) by the holders of a majority
of the outstanding stock at the time entitled to vote for directors, voting as a
single class, exclusive of any stock owned by any interests director or officer,
upon receipt of an undertaking by the person indemnified to repay such amount if
he shall be adjudicated to be not entitled to indemnification. An "interested"
directors is one against whom in such capacity the proceedings in question or
another proceeding on the same or similar grounds in then pending.
Such indemnification may include payment by the corporation of expenses
incurred in defending a civil or criminal action or proceeding in advance of the
final disposition of such action or proceeding, upon receipt of an undertaking
by the person indemnified to repay such payment if he shall be
II-8
Notwithstanding the foregoing, indemnification shall not be provided for
any person with respect to any matter as to which he shall have been adjudicated
in any proceeding not to have acted in good faith in the reasonable belief that
his action was in the best interests of the corporation.
Any right to indemnification arising hereunder shall inure to the benefit
of the heirs, executors or administrators of any such officer or director,
employee or other agent and shall be in addition to all other rights to which
such officer, director, employee or other agent may be entitled as a matter of
law.
The corporation may purchase and maintain insurance on behalf of any such
director, officer, employee or other agent above-mentioned against any liability
incurred by him in any such capacity or arising out of his status as such,
whether or not the corporation would have the power to indemnify him against
such liability.
Section 6. No contract or other transaction between this corporation and
any other firm or corporation shall be affected or invalidated by reason of the
fact that any one or more of the directors or officers of this corporation is or
are interested in, or is a member, stockholder, director, or officer, or are
members, stockholders, directors, or officers of such other firm or corporation;
and any director or officer of officers, individually or jointly, may be a party
or parties to, or may be interested in, any contract transaction of this
corporation or in which this corporation is interested, and no contract, act or
transaction of this corporation with any person or persons, firm, association or
corporation, shall be affected or invalidated by reason of the fact that any
director or directors or officer or officers of this corporation is a party or
are parties to, or interested in, such contract, act or transaction, or in any
way connected with such person or persons, firm, association or corporation, and
each and every person who may become a director or officer of this corporation
is hereby relieved from any liability that might otherwise exist from thus
contracting with this corporation for the benefit of himself or any firm,
association or corporation which he may be anyway interested.
Section 7. No director shall be personally liable to the Corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director
notwithstanding any provision of laws imposing such liability; provided,
however, that this provision shall not affect the liability of a director, to
the extent that such liability is imposed by applicable law, (i) for any breach
of the director's duty of loyalty to the Corporation or its stockholders, (ii)
for acts or omissions not in good faith or which involve intentional misconduct
or a knowing violation of law, (iii) under Section 61 or 62 or successor
provisions of the Massachusetts Business Corporation Law, or (iv) for any
transaction from which the director derived an improper personal benefit. In
addition, to the fullest extent that the Business Corporation Law may hereafter
be amended to enlarge upon the ability of the Corporation to provide herein for
the elimination or limitation of the liability of directors, no director shall
be personally liable to the Corporation or its stockholders for breach of his
fiduciary duty as a director. No amendment to or repeal of this provision shall
apply to or have any effect upon the liability or alleged liability of any
director for or with respect to any acts of omissions of such director occurring
prior to the effective date of such amendment or repeal.
Article XI of the By-Laws of the corporations listed in Annex F provides
that:
Transactions With Related Parties. The Corporation may enter into
contracts or transact business with one or more of its Directors, officers, or
stockholders or with any corporation, association, trust company, organization
or other concern in which any one or more of its Directors, officers or
stockholders are directors, officers, trustees, shareholders, beneficiaries or
stockholders or otherwise interested and other contracts or transactions in
which any one or more of its Directors, officers or stockholders in any way
interested; and in the absence of
II-9
fraud, no such contract or transaction shall be invalidated or in any way
affected by the fact that such Directors, officers or stockholders of the
Corporation have or may have interests which are or might be adverse to the
interest of the Corporation even though the vote or action of Directors,
officers or stockholders having such adverse interests may have been necessary
to obligate the Corporation upon such contract or transaction. At any meeting of
the Board of Directors or the Corporation (or any duly authorized committee
thereof) which shall authorize or ratify any such contract or transaction, any
such Director or Directors, any vote or act thereat with like force and effect
as if he had not such interest, provided, in such case the nature of such
interest (though not necessarily the extent or details thereof) shall be
disclosed or shall have been known to the Directors or a majority thereof. A
general notice that a Director or officer is interested in any corporation or
other concern of any kind above referred to shall be a sufficient disclosure as
to such Director or officer with respect to all contracts and transactions with
such corporation or other concern. No Director shall be disqualified from
holding office as Director or officer of the Corporation by reason of any such
adverse interests. In the absence of fraud, no Director, officer or stockholder
having such adverse interest shall be liable to the Corporation or to any
stockholder or creditor thereof or to any other person for any loss incurred by
it under or by reason of such contract or transaction, nor shall any such
Director, officer or stockholder be accountable for any gains or profits
realized thereon.
Articles XII of the By-Laws of the corporations listed in Annex F provides
that:
Indemnification Of Directors, Officers And Others. The Corporation shall,
to the extent legally permissible, indemnify any person serving or who has
served as a Director or officer of the Corporation in the manner prescribed by
the Articles of Organization, as amended and restated from time to time, of the
Corporation.
(n) TSI Framingham, Inc. is a limited liability company organized under the laws
of the State of Massachusetts.
Article 3 of TSI Framingham, Inc.'s Articles of Organization provides that:
Section 3. The Corporation shall be authorized to indemnify any and all of
its directors, officers, employees and agents, and any other person or persons,
to the fullest extent permitted under G.L. c. 156B.
Section 4. A director of this Corporation shall not be personally liable to
the Corporation or its stockholders for monetary damages for breach of fiduciary
duty as director notwithstanding any provisions of law imposing such liability;
provided, that this provision shall not eliminate or limit the liability of a
director:
a. for any breach of the director's duty of loyalty to the Corporation
or its stockholders;
b. for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law;
c. under G.L. c. 156B, sec. 61 (unauthorized distributions) and
sec. 62 (loans to insiders); and
d. for any transaction from which the director derived an improper
personal benefit.
Article VI of the By-Laws of TSI Framingham, Inc. provides that:
Indemnification. The corporation shall (a) indemnify any person who was or
is a party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the Corporation to procure a
judgment in its favor by reason of the fact that he is or was a director or
officer of the Corporation, or is or was serving at the request of the
II-10
Corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit, and (b)
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (other than an action by or in
the right of the Corporation), by reason of the fact that he is or was a
director of officer of the Corporation, or served at the request of the
Corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with any such action, suit
or proceeding, in each case to the fullest extent permissible under the General
Laws, Chapter 156B of the Commonwealth of Massachusetts or the indemnification
provisions of any successor statue. The foregoing right of the indemnification
shall in no way be exclusive of any other rights of indemnification to which any
such person may be entitled, under any by-law, agreement, vote of stockholders
or disinterested directors or otherwise, and shall inure to the benefit of the
heirs, executors and administrators of such a person.
II-11
ANNEX
A
TSI Alexandria, LLC
TSI Ardmore, LLC
TSI Bethesda, LLC
TSI Bryn Mawr, LLC
TSI Centreville, LLC
TSI Cherry Hill, LLC
TSI Clarendon, LLC
TSI Colonia, LLC
TSI Fairfax, LLC,
TSI Fort Lee, LLC
TSI Franklin Park, LLC
TSI Freehold, LLC
TSI Germantown, LLC
TSI Highpoint, LLC
TSI Hoboken, LLC
TSI Holdings (IP), LLC
TSI Jersey City, LLC
TSI Mahwah, LLC
TSI Market Street, LLC
TSI Marlboro, LLC
TSI Matawan, LLC
TSI Montclair, LLC
TSI Nashua, LLC
TSI Newark, LLC
TSI North Bethesda, LLC
TSI Old Bridge, LLC
TSI Parsippany, LLC
TSI Plainsboro, LLC
TSI Princeton, LLC
TSI Ramsey, LLC
TSI Ridgewood, LLC
TSI Rittenhouse, LLC
TSI Rodin Place, LLC
TSI Silver Spring, LLC
TSI Society Hill, LLC
TSI Somerset, LLC
TSI Springfield, LLC
TSI Sterling, LLC
TSI Waltham, LLC
TSI West Caldwell, LLC
TSI West Springfield, LLC
TSI Westwood, LLC
II-12
ANNEX B
TSI Allston, Inc.
TSI Bulfinch, Inc.
TSI Central Square, Inc.
TSI Chevy Chase, Inc.
TSI Connecticut Avenue, Inc.
TSI Danbury, Inc.
TSI Downtown Crossing, Inc.
TSI Dupont II, Inc.
TSI East Cambridge, Inc.
TSI F Street, Inc.
TSI Fenway, Inc.
TSI Gallery Place, Inc.
TSI Glover, Inc.
TSI Greenwich, Inc.
TSI Holdings (CIP), Inc.
TSI Holdings (NJ), Inc.
TSI Holdings (PA), Inc.
TSI Holdings (VA), Inc.
TSI Merrifield, Inc.
TSI Natick, Inc.
TSI Newbury Street, Inc.
TSI Norwalk, Inc.
TSI Stamford Downtown, Inc.
TSI Stamford Post, Inc.
TSI Stamford Rinks, Inc.
TSI West Newton, Inc.
TSI Westport, Inc.
TSI Weymouth, Inc.
TSI Supplements, Inc.
II-13
ANNEX C
TSI Holdings (MD), Inc.
TSI Brunswick, Inc.
TSI Copley, Inc.
TSI Dupont Circle, Inc.
TSI Holdings (DC), Inc.
TSI International, Inc.
TSI M Street, Inc.
TSI Washington, Inc.
II-14
ANNEX D
TSI Croton, Inc.
TSI Battery Park, Inc.
TSI 217 Broadway, Inc.
TSI Brooklyn Belt, Inc.
TSI Commack, Inc.
TSI Court Street, Inc.
TSI East Meadow, Inc.
TSI East 23, Inc.
TSI East 34, Inc.
TSI East 51, Inc.
TSI East 59, Inc.
TSI East 91, Inc.
TSI First Avenue, Inc.
TSI Forest Hills, Inc.
TSI Garden City, Inc.
TSI Grand Central, Inc.
TSI Huntington, Inc.
TSI Irving Place, Inc.
TSI Larchmont, Inc.
TSI Long Beach, Inc.
TSI Murray Hill, Inc.
TSI Nanuet, Inc.
TSI Oceanside, Inc.
TSI Rye, Inc.
TSI Sheridan, Inc.
TSI Soho, Inc.
TSI South Park Slope, Inc.
TSI Staten Island, Inc.
TSI Syosset, Inc.
TSI Water Street, Inc.
TSI West Nyack, Inc.
TSI West 14, Inc.
TSI West 16, Inc.
TSI West 23, Inc.
TSI West 38, Inc.
TSI West 41, Inc.
TSI West 44, Inc.
TSI West 48, Inc.
TSI West 52, Inc.
TSI West 73, Inc.
TSI West 76, Inc.
TSI West 94, Inc.
TSI West 125, Inc.
TSI White Plains, Inc.
TSI Whitestone, Inc.
TSI Woodmere, Inc.
II-15
ANNEX E
TSI Broadway, Inc.
TSI Cash Management, Inc.
TSI East 41, Inc.
TSI East 76, Inc.
TSI Great Neck, Inc.
TSI Herald, Inc.
TSI Madison, Inc.
TSI Mamaroneck, Inc.
TSI Reade Street, Inc.
TSI Scarsdale, Inc.
TSI Seaport, Inc.
TSI Wall Street, Inc.
TSI West 80, Inc.
II-16
ANNEX F
TSI Andover, Inc.
TSI Danvers, Inc.
TSI Franklin (MA), Inc.
TSI Lynnfield, Inc.
TSI Wellesley, Inc.
II-17
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits.
See Exhibit Index.
(b) Financial Statement Schedule.
All schedules have been omitted because they are not applicable or because
the required information is shown in the financial statements or notes thereto.
ITEM 22. UNDERTAKINGS.
The undersigned registrants hereby undertake:
(c) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement;
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which individually or in the aggregate,
represent a fundamental change in the information in the registration
statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
(d) That, for the purpose of determining by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(e) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 (the "Securities Act") may be permitted to directors, officers and
controlling persons of the registrant pursuant to the provisions described under
Item 20 or otherwise, the registrants have been advised that in the opinion of
the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other than
the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
The undersigned registrants hereby undertake:
(f) To respond to requests for information that is incorporated by
reference into the prospectus pursuant to Items 4, 10(b), 11 or 13 of this form,
within one business day of receipt of such request, and to send the incorporated
documents by first class mail or other equally prompt means. This includes
information contained in documents filed subsequent to the effective date of the
registration statement through the date of responding to the request.
(g) To supply by means of a post-effective amendment all information
concerning a transaction, and the company being acquired involved therein, that
was not the subject of and included in the registration statement when it became
effective.
II-18
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TOWN SPORTS INTERNATIONAL, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of Town
Sports International, Inc., to sign any or all amendments (including
post-effective amendments) to this registration statement and any subsequent
registration statement filed pursuant to Rule 462(b) under the Securities Act of
1933, and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorney-in-fact and agent full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------------- Chief Executive Officer and Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
/s/ KEITH ALESSI Keith Alessi
- --------------------------------------------------- Director
Keith Alessi
/s/ PAUL ARNOLD Paul Arnold
- --------------------------------------------------- Director
Paul Arnold
/s/ BRUCE BRUCKMANN Bruce Bruckmann
- --------------------------------------------------- Director
Bruce Bruckmann
</Table>
II-19
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ J. RICE EDMONDS J. Rice Edmonds
- --------------------------------------------------- Director
J. Rice Edmonds
/s/ JASON FISH Jason Fish
- --------------------------------------------------- Director
Jason Fish
</Table>
II-20
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI ALLSTON, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Allston, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-21
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI ANDOVER, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Andover, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-22
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI ARTHRO-FITNESS SERVICES, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Arthro-Fitness Services, Inc., to sign any or all amendments (including
post-effective amendments) to this registration statement and any subsequent
registration statement filed pursuant to Rule 462(b) under the Securities Act of
1933, and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorney-in-fact and agent full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-23
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI ASTORIA, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Astoria, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-24
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI BATTERY PARK, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Battery Park, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-25
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI BROADWAY, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Broadway, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-26
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI 217 BROADWAY, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
217 Broadway, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-27
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI BROOKLYN BELT, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Brooklyn Belt, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-28
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI BRUNSWICK, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Brunswick, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-29
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI BULFINCH, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Bulfinch, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-30
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI CASH MANAGEMENT, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Cash Management, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-31
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI CENTRAL SQUARE, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Central Square, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-32
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI CHEVY CHASE, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Chevy Chase, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-33
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI COBBLE HILL, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Cobble Hill, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-34
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI COMMACK, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Commack, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-35
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI CONNECTICUT AVENUE, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Connecticut Avenue, Inc., to sign any or all amendments (including
post-effective amendments) to this registration statement and any subsequent
registration statement filed pursuant to Rule 462(b) under the Securities Act of
1933, and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorney-in-fact and agent full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-36
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI COPLEY, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Copley, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-37
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI COURT STREET, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Court Street, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-38
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI CROTON, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Croton, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-39
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI DANBURY, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Danbury, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-40
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI DANVERS, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Danvers, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-41
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI DOWNTOWN CROSSING, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Downtown Crossing, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-42
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI DUPONT CIRCLE, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Dupont Circle, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-43
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI DUPONT II, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Dupont II, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-44
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI EAST CAMBRIDGE, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
East Cambridge, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-45
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI EAST MEADOW, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
East Meadow, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-46
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI EAST 23, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
East 23, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-47
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI EAST 31, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
East 31, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- ------------------------------------------------ Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- ------------------------------------------------ Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-48
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI EAST 34, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
East 34, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- ------------------------------------------------ Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- ------------------------------------------------ Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-49
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI EAST 36, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
East 36, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- ------------------------------------------------ Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- ------------------------------------------------ Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-50
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI EAST 41, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
East 41, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- ------------------------------------------------ Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- ------------------------------------------------ Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-51
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI EAST 51, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
East 51, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- ------------------------------------------------ Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- ------------------------------------------------ Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-52
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI EAST 59, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
East 59, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- ------------------------------------------------ Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- ------------------------------------------------ Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-53
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI EAST 76, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
East 76, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-54
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI EAST 91, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
East 91, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-55
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI F STREET, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI F
Street, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-56
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI FENWAY, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Fenway, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-57
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI FIFTH AVENUE, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Fifth Avenue, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-58
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI FIRST AVENUE, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
First Avenue, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-59
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI FOREST HILLS, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Forest Hills, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-60
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI FRAMINGHAM, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Framingham, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-61
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI FRANKLIN (MA), INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Franklin (MA), Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-62
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI GALLERY PLACE, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Gallery Place, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-63
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI GARDEN CITY, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Garden City, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-64
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI GLOVER, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Glover, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-65
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI GRAND CENTRAL, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Grand Central, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-66
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI GREAT NECK, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Great Neck, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-67
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI GREENWICH, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Greenwich, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-68
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI HERALD, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Herald, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-69
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI HOLDINGS (CIP), INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Holdings (CIP), Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-70
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI HOLDINGS (DC), INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Holdings (DC), Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-71
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI HOLDINGS (MA), INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Holdings (MA), Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-72
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI HOLDINGS (MD), INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Holdings (MD), Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-73
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI HOLDINGS (NJ), INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Holdings (NJ), Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-74
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI HOLDINGS (PA), INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Holdings (PA), Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-75
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI HOLDINGS (VA), INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Holdings (VA), Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-76
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI HUNTINGTON, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Huntington, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-77
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI INSURANCE, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Insurance, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ ROBERT GIARDINA Robert Giardina
- --------------------------------------------- President and Chief Executive Officer
Robert Giardina (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
/s/ ALEXANDER ALIMANESTIANU Alexander Alimanestianu
- --------------------------------------------- Director
Alexander Alimanestianu
/s/ DAN GALLAGHER Dan Gallagher
- --------------------------------------------- Director
Dan Gallagher
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Director
Mark Smith
</Table>
II-78
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI INTERNATIONAL, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
International, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-79
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI IRVING PLACE, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Irving Place, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-80
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI LARCHMONT, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Larchmont, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-81
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI LEXINGTON (MA), INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Lexington (MA), Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-82
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI LINCOLN, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Lincoln, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-83
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI LONG BEACH, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Long Beach, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-84
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI LYNNFIELD, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Lynnfield, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-85
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI M STREET, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI M
Street, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-86
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI MADISON, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Madison, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-87
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI MAMARONECK, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Mamaroneck, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-88
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI MERRIFIELD, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Merrifield, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-89
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI MURRAY HILL, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Murray Hill, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-90
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI NANUET, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Nanuet, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-91
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI NATICK, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Natick, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-92
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI NEWBURY STREET, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Newbury Street, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-93
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI NORWALK, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Norwalk, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-94
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI OCEANSIDE, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Oceanside, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-95
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI READE STREET, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Reade Street, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-96
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI RYE, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Rye, Inc., to sign any or all amendments (including post-effective amendments)
to this registration statement and any subsequent registration statement filed
pursuant to Rule 462(b) under the Securities Act of 1933, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that said attorney-in-fact and agent or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-97
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI SCARSDALE, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Scarsdale, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-98
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI SEAPORT, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Seaport, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-99
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI SHERIDAN, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Sheridan, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-100
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI SOHO, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Soho, Inc., to sign any or all amendments (including post-effective amendments)
to this registration statement and any subsequent registration statement filed
pursuant to Rule 462(b) under the Securities Act of 1933, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that said attorney-in-fact and agent or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-101
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI SOUTH PARK SLOPE, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
South Park Slope, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-102
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI STAMFORD DOWNTOWN, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Stamford Downtown, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-103
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI STAMFORD POST, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Stamford Post, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-104
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI STAMFORD RINKS, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Stamford Rinks, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-105
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI STATEN ISLAND, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Staten Island, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-106
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI SUPPLEMENTS, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Supplements, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-107
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI SYOSSET, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Syosset, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-108
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI WALL STREET, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Wall Street, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-109
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI WASHINGTON, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Washington, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-110
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI WATER STREET, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Water Street, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-111
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI WELLESLEY, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Wellesley, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-112
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI WEST NEWTON, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
West Newton, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-113
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI WEST NYACK, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
West Nyack, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-114
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI WEST 14, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
West 14, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-115
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI WEST 16, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
West 16, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-116
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI WEST 23, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
West 23, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-117
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI WEST 38, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
West 38, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-118
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI WEST 41, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
West 41, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-119
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI WEST 44, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
West 44, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-120
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI WEST 48, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
West 48, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
- --------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-121
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI WEST 52, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
West 52, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-122
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI WEST 73, INC.
BY: /s/ RICHARD PYLE
----------------------------------
NAME: RICHARD PYLE
TITLE: CHIEF FINANCIAL OFFICER
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
West 73, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-123
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI WEST 76, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
West 76, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-124
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI WEST 80, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
West 80, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-125
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI WEST 94, INC.
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
West 94, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-126
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI WEST 125, INC.
<Table>
By: /s/ RICHARD PYLE
---------------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
</Table>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
West 125, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-127
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI WESTPORT, INC.
<Table>
By: /s/ RICHARD PYLE
---------------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
</Table>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Westport, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-128
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI WEYMOUTH, INC.
<Table>
By: /s/ RICHARD PYLE
---------------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
</Table>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Weymouth, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-129
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI WHITE PLAINS, INC.
<Table>
By: /s/ RICHARD PYLE
---------------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
</Table>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
White Plains, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-130
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI WHITESTONE, INC.
<Table>
By: /s/ RICHARD PYLE
---------------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
</Table>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Whitestone, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-131
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI WOODMERE, INC.
<Table>
By: /s/ RICHARD PYLE
---------------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
</Table>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Woodmere, Inc., to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer and Sole Director
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-132
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI ALEXANDRIA, LLC
<Table>
By: /s/ RICHARD PYLE
---------------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
</Table>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Alexandria, LLC, to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-133
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI ARDMORE, LLC
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Ardmore, LLC, to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-134
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI BETHESDA, LLC
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Bethesda, LLC, to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-135
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI BRYN MAWR, LLC
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Bryn Mawr, LLC, to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-136
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI CENTREVILLE, LLC
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Centreville, LLC, to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-137
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI CHERRY HILL, LLC
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Cherry Hill, LLC, to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-138
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI CLARENDON, LLC
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Clarendon, LLC, to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-139
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI COLONIA, LLC
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Colonia, LLC, to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-140
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI EAST 86, LLC
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
East 86, LLC, to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-141
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI FAIRFAX, LLC
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Fairfax, LLC, to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-142
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI FORT LEE, LLC
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Fort Lee, LLC, to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-143
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI FRANKLIN PARK, LLC
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Franklin Park, LLC, to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-144
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI FREEHOLD, LLC
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Freehold, LLC, to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-145
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI GERMANTOWN, LLC
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Germantown, LLC, to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-146
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI HIGHPOINT, LLC
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Highpoint, LLC, to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-147
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI HOBOKEN, LLC
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Hoboken, LLC, to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-148
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI HOLDINGS (IP), LLC
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Holdings (IP), LLC, to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-149
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI JERSEY CITY, LLC
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Jersey City, LLC, to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-150
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI MAHWAH, LLC
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Mahwah, LLC, to sign any or all amendments (including post-effective amendments)
to this registration statement and any subsequent registration statement filed
pursuant to Rule 462(b) under the Securities Act of 1933, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that said attorney-in-fact and agent or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-151
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI MARKET STREET, LLC
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Market Street, LLC, to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-152
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI MARLBORO, LLC
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Marlboro, LLC, to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-153
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI MATAWAN, LLC
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Matawan, LLC, to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-154
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI MONTCLAIR, LLC
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Montclair, LLC, to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-155
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI NASHUA, LLC
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Nashua, LLC, to sign any or all amendments (including post-effective amendments)
to this registration statement and any subsequent registration statement filed
pursuant to Rule 462(b) under the Securities Act of 1933, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that said attorney-in-fact and agent or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-156
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI NEWARK, LLC
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Newark, LLC, to sign any or all amendments (including post-effective amendments)
to this registration statement and any subsequent registration statement filed
pursuant to Rule 462(b) under the Securities Act of 1933, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that said attorney-in-fact and agent or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-157
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI NORTH BETHESDA, LLC
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
North Bethesda, LLC, to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-158
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI OLD BRIDGE, LLC
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Old Bridge, LLC, to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-159
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI PARSIPPANY, LLC
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Parsippany, LLC, to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-160
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI PLAINSBORO, LLC
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Plainsboro, LLC, to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-161
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI PRINCETON, LLC
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Princeton, LLC, to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-162
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI RAMSEY, LLC
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Ramsey, LLC, to sign any or all amendments (including post-effective amendments)
to this registration statement and any subsequent registration statement filed
pursuant to Rule 462(b) under the Securities Act of 1933, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that said attorney-in-fact and agent or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-163
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI RIDGEWOOD, LLC
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Ridgewood, LLC, to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-164
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI RITTENHOUSE, LLC
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Rittenhouse, LLC, to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-165
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI RODIN PLACE, LLC
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Rodin Place, LLC, to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-166
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI SILVER SPRING, LLC
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Silver Spring, LLC, to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-167
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI SOCIETY HILL, LLC
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Society Hill, LLC, to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-168
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI SOMERSET, LLC
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Somerset, LLC, to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and
accounting officer)
</Table>
II-169
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI SPRINGFIELD, LLC
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Springfield, LLC, to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-170
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI STERLING, LLC
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Sterling, LLC, to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-171
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI WALTHAM, LLC
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Waltham, LLC, to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-172
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI WEST CALDWELL, LLC
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
West Caldwell, LLC, to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-173
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI WEST SPRINGFIELD, LLC
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
West Springfield, LLC, to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-174
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York City, in the
State of New York on June 5, 2003.
TSI WESTWOOD, LLC
By: /s/ RICHARD PYLE
----------------------------------
Name: Richard Pyle
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Pyle his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of TSI
Westwood, LLC, to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 5, 2003.
<Table>
<Caption>
SIGNATURE CAPACITY
--------- --------
/s/ MARK SMITH Mark Smith
- --------------------------------------------- Chief Executive Officer
Mark Smith (principal executive officer)
/s/ RICHARD PYLE Richard Pyle
- --------------------------------------------- Chief Financial Officer
Richard Pyle (principal financial and accounting officer)
</Table>
II-175
EXHIBIT INDEX
<Table>
3.1 Restated Certificate of Incorporation of Town Sports
International, Inc.; Certificate of Amendment of the
Certificate of Incorporation of Town Sports International,
Inc. amending the capitalization provisions set forth in
paragraph fourth; Certificate of Merger merging TSI Merger
Sub, Inc. with and into Town Sports International, Inc.;
Certificate of Amendment of the Certificate of Incorporation
of Town Sports International, Inc. amending, among other
things, the number of authorized shares of Class A common
stock; Certificate of Amendment of the Certificate of
Incorporation of Town Sports International, Inc. amending
certain terms of Series A preferred stock and Series B
preferred stock; Certificate of Amendment of the Certificate
of Incorporation of Town Sports International, Inc. amending
certain terms of the Series B preferred stock.
3.2 Certificate of Formation of TSI Alexandria, LLC
3.3 Certificate of Incorporation of TSI Allston, Inc.
3.4 Articles of Amendment of Andover Athletic Club, Inc.
amending its name to TSI Andover Inc.; Articles of amendment
of Manchester Athletic Club, Inc. amending its name to
Andover Athletic Club, Inc.; Articles of Organization of
Manchester Athletic Club, Inc.
3.5 Certificate of Formation of TSI Ardmore, LLC
3.6 Certificate of Incorporation of TSI Arthro-Fitness Services,
Inc.
3.7 Certificate of Incorporation of TSI Astoria, Inc.
3.8 Certificate of Incorporation of TSI Battery Park, Inc.
3.9 Certificate of Formation of TSI Bethesda, LLC
3.10 Certificate of Incorporation of TSI Forest Hills, Inc.;
Certificate of Amendment of the Certificate of Incorporation
of TSI Forest Hills, Inc. amending its name to TSI Broadway,
Inc.
3.11 Certificate of Incorporation of TSI 217 Broadway, Inc.
3.12 Certificate of Incorporation of TSI Brooklyn Belt, Inc.
3.13 Certificate of Incorporation of TSI Brunswick, Inc.
3.14 Certificate of Formation of TSI Bryn Mawr, LLC
3.15 Certificate of Incorporation of TSI Bulfinch, Inc.
3.16 Certificate of Incorporation of TSI Cash Management, Inc.
3.17 Certificate of Incorporation of TSI Central Square, Inc.
3.18 Certificate of Formation of TSI Centreville, LLC
3.19 Certificate of Formation of TSI Cherry Hill, LLC
3.20 Certificate of Incorporation of TSI Chevy Chase, Inc.
3.21 Certificate of Formation of TSI Clarendon, LLC
3.22 Certificate of Amendment of the Certificate of Incorporation
of Cobble Hill Racquet and Fitness Corporation amending its
name to TSI Cobble Hill, Inc.; Certificate of Incorporation
of Cobble Hill Racquet and Fitness Corporation
3.23 Certificate of Formation of TSI Colonia, LLC
3.24 Certificate of Incorporation of TSI Commack, Inc.
3.25 Certificate of Incorporation of TSI Connecticut Avenue, Inc.
3.26 Certificate of Incorporation of TSI Copley, Inc.
3.27 Certificate of Incorporation of TSI Court Street, Inc.
3.28 Certificate of Incorporation of TSI Croton, Inc.
3.29 Certificate of Incorporation of TSI Danbury, Inc.
3.30 Articles of Amendment of Hotel Clubs, Incorporated amending
its name to TSI Danvers, Inc.; Articles of Organization of
Hotel Clubs, Incorporated
</Table>
<Table>
3.31 Certificate of Incorporation of TSI Downtown Crossing, Inc.
3.32 Certificate of Incorporation of TSI Dupont Circle, Inc.
3.33 Certificate of Incorporation of TSI Dupont II, Inc.
3.34 Certificate of Incorporation of TSI East Cambridge, Inc.
3.35 Certificate of Incorporation of TSI East Meadow, Inc.
3.36 Certificate of Incorporation of TSI East 23, Inc.
3.37 Certificate of Amendment of the Certificate of Incorporation
of TSI Lexington, Inc. amending its name to TSI East 31,
Inc.; Certificate of Incorporation of TSI Lexington, Inc.
3.38 Restated Certificate of Incorporation of Abramson's &
Kieran's Arthro-Fitness Center Inc. amending its name to TSI
East 34, Inc.; Restated Certificate of Incorporation of TSI
East 34, Inc.
3.39 Certificate of Amendment of the Certificate of Incorporation
of TSI East 33, Inc. amending its name to TSI East 36, Inc.;
Certificate of Amendment of the Certificate of Incorporation
of TSI Old Slip, Inc. amending its name to TSI East 33,
Inc.; Certificate of Incorporation of TSI Old Slip, Inc.
3.40 Certificate of Amendment of the Certificate of Incorporation
of TSI 4 Park, Inc. amending its name to TSI East 41, Inc.;
Certificate of Amendment of the Certificate of Incorporation
of TSI Roosevelt, Inc. amending its name to TSI 4 Park,
Inc.; Certificate of Incorporation of TSI Roosevelt, Inc.
3.41 Certificate of Incorporation of TSI East 51, Inc.
3.42 Certificate of Incorporation of TSI East 59, Inc.
3.43 Certificate of Incorporation of TSI East 76, Inc.
3.44 Articles of Organization of TSI East 86, LLC
3.45 Certificate of Incorporation of TSI East 91, Inc.
3.46 Certificate of Incorporation of TSI F Street, Inc.
3.47 Certificate of Formation of TSI Fairfax, LLC
3.48 Certificate of Incorporation of TSI Fenway, Inc.
3.49 Certificate of Amendment of the Certificate of Incorporation
of TSI First Avenue, Inc. amending its name to TSI Fifth
Avenue, Inc.; Certificate of Incorporation of TSI First
Avenue, Inc.
3.50 Certificate of Incorporation of TSI First Avenue, Inc.
3.51 Certificate of Incorporation of TSI Forest Hills, Inc.
3.52 Certificate of Formation of TSI Fort Lee, LLC
3.53 Articles of Organization of TSI Framingham, Inc.
3.54 Articles of Amendment of Franklin Athletic Club, Inc.
amending its name to TSI Franklin (MA), Inc.; Articles of
Organization of Franklin Athletic Club, Inc.
3.55 Certificate of Formation of TSI Franklin Park, LLC
3.56 Certificate of Formation of TSI Freehold, LLC
3.57 Certificate of Incorporation of TSI Gallery Place, Inc.
3.58 Certificate of Incorporation of TSI Garden City, Inc.
3.59 Certificate of Formation of TSI Germantown, LLC
3.60 Certificate of Incorporation of TSI Glover, Inc.
3.61 Certificate of Incorporation of TSI Grand Central, Inc.
3.62 Certificate of Incorporation of TSI Great Neck, Inc.
3.63 Certificate of Incorporation of TSI Greenwich, Inc.
3.64 Certificate of Incorporation of TSI Herald, Inc.
3.65 Certificate of Formation of TSI Highpoint, LLC
</Table>
<Table>
3.66 Certificate of Formation of TSI Hoboken, LLC
3.67 Certificate of Incorporation of TSI Holdings (CIP), Inc.
3.68 Certificate of Incorporation of TSI Holdings (DC), Inc.
3.69 Certificate of Formation of TSI Holdings (IP), LLC
3.70 Articles of Amendment of Health Development Corporation
amending its name to TSI Holdings (MA), Inc.; Articles of
Merger merging TSI/HDC, Inc. with and into Health
Development Corporation; Articles of Amendment of Health
Development Corporation amending the number of shares and
series of stock authorized in its Articles of Organization;
Restated Articles of Organization of Sky Club, Inc. amending
its name to Health Development Corporation; Articles of
Organization of Sky Club, Inc.
3.71 Certificate of Incorporation of TSI Baltimore, Inc.;
Certificate of Amendment to the Certificate of Incorporation
on TSI Baltimore, Inc. amending its name to TSI Holdings
(MD), Inc.
3.72 Certificate of Incorporation of TSI Holdings (NJ), Inc.
3.73 Certificate of Incorporation of TSI Holdings (PA), Inc.
3.74 Certificate of Incorporation of TSI Holdings (VA), Inc.
3.75 Certificate of Incorporation of TSI Huntington, Inc.
3.76 Declaration and Charter of TSI Insurance, Inc.
3.77 Certificate of Incorporation of TSI International, Inc.
3.78 Certificate of Incorporation of TSI Irving Place, Inc.
3.79 Certificate of Formation of TSI Jersey City, LLC
3.80 Certificate of Incorporation of TSI Larchmont, Inc.
3.81 Articles of Amendment of the Lexington Club, Inc. amending
its name to TSI Lexington (MA), Inc.; Articles of Amendment
of the Lexington Club, Inc. amending the number of shares
and series of stock authorized in its Articles of
Organization; Articles of Organization of the Lexington
Club, Inc.
3.82 Certificate of Amendment of the Certificate of Incorporation
of Arriba Corporation amending its name to TSI Lincoln,
Inc.; Certificate of Amendment of the Certificate of
Incorporation of Arriba Corporation amending Article Second
of its Certificate of Incorporation regarding the purposes
for which the corporation is formed; Certificate of
Incorporation of Arriba Corporation
3.83 Restated Certificate of Incorporation of TSI Long Beach,
Inc.
3.84 Articles of Amendment of the Colonial Club, Inc. amending
its name to TSI Lynnfield, Inc.; Articles of Organization of
the Colonial Club, Inc.
3.85 Certificate of Incorporation of TSI M Street, Inc.
3.86 Certificate of Incorporation of TSI Madison, Inc.
3.87 Certificate of Formation of TSI Mahwah, LLC
3.88 Certificate of Amendment of the Certificate of Incorporation
of TSI Weight Programs, Inc. amending its name to TSI
Mamaroneck, Inc.; Certificate of Incorporation of TSI Weight
Programs, Inc.
3.89 Certificate of Formation of TSI Market Street, LLC
3.90 Certificate of Formation of TSI Marlboro, LLC
3.91 Certificate of Formation of TSI Matawan, LLC
3.92 Certificate of Incorporation of TSI Merrifield, Inc.
3.93 Certificate of Formation of TSI Montclair, LLC
3.94 Certificate of Incorporation of TSI Murray Hill, Inc.
3.95 Certificate of Incorporation of TSI Nanuet, Inc.
3.96 Certificate of Formation of TSI Nashua, LLC
</Table>
<Table>
3.97 Certificate of Amendment of TSI Framingham, Inc. amending
its name to TSI Natick, Inc.; Certificate of Amendment of
TSI Boylston, Inc. amending its name to TSI Framingham,
Inc.; Certificate of Incorporation of TSI Boylston, Inc.
3.98 Certificate of Formation of TSI Newark, LLC
3.99 Certificate of Incorporation of TSI Newbury Street, Inc.
3.100 Certificate of Amendment of TSI Rockville, LLC amending its
name to TSI North Bethesda, LLC; Certificate of Formation of
TSI Rockville, LLC
3.101 Certificate of Incorporation of TSI Norwalk, Inc.
3.102 Certificate of Incorporation of TSI Oceanside, Inc.
3.103 Certificate of Formation of TSI Old Bridge, LLC
3.104 Certificate of Formation of TSI Parsippany, LLC
3.105 Certificate of Formation of TSI Plainsboro, LLC
3.106 Certificate of Formation of TSI Princeton, LLC
3.107 Certificate of Formation of TSI Ramsey, LLC
3.108 Certificate of Amendment of the Certificate of Incorporation
of TSI Greenwich Street, Inc. amending its name to TSI Reade
Street, Inc.; Certificate of Incorporation of TSI Greenwich
Street, Inc.
3.109 Certificate of Formation of TSI Ridgewood, LLC
3.110 Certificate of Formation of TSI Rittenhouse, LLC
3.111 Certificate of Formation of TSI Rodin Place, LLC
3.112 Certificate of Incorporation of TSI Rye, Inc.
3.113 Certificate of Amendment of Certificate of Incorporation of
TSI Management Group, Inc. amending its name to TSI
Scarsdale, Inc.; Certificate of Incorporation of TSI
Management Group, Inc.
3.114 Certificate of Incorporation of TSI Seaport, Inc.
3.115 Certificate of Incorporation of TSI Sheridan, Inc.
3.116 Certificate of Formation of TSI Silver Spring, LLC
3.117 Certificate of Formation of TSI Society Hill, LLC
3.118 Certificate of Incorporation of TSI Soho, Inc.
3.119 Certificate of Formation of TSI Somerset, LLC
3.120 Certificate of Incorporation of TSI South Park Slope, Inc.
3.121 Certificate of Formation of TSI Springfield, LLC
3.122 Certificate of Incorporation of TSI Stamford Downtown, Inc.
3.123 Certificate of Incorporation of TSI Stamford Post, Inc.
3.124 Certificate of Incorporation of TSI Stamford Rinks, Inc.
3.125 Certificate of Incorporation of TSI Staten Island, Inc.
3.126 Certificate of Formation of TSI Sterling, LLC
3.127 Certificate of Amendment to the Certificate of Incorporation
of TSI Stamford-Summer, Inc. amending its name to TSI
Supplements, Inc.; Certificate of Incorporation of TSI
Stamford-Summer, Inc.
3.128 Certificate of Incorporation of TSI Syosset, Inc.
3.129 Certificate of Amendment of Certificate of Incorporation of
TSI Union Square, Inc. amending its name to TSI Wall Street,
Inc.; Certificate of Incorporation of TSI Union Square, Inc.
3.130 Certificate of Formation of TSI Waltham, LLC
3.131 Certificate of Incorporation of TSI Washington, Inc.
3.132 Certificate of Incorporation of TSI Water Street, Inc.
</Table>
<Table>
3.133 Articles of Amendment of Sportsfit, Inc. amending its name
to TSI Wellesley, Inc.; Articles of Organization of
Sportsfit, Inc.
3.134 Certificate of Formation of TSI West Caldwell, LLC
3.135 Certificate of Incorporation of TSI West Newton, Inc.
3.136 Certificate of Incorporation of TSI West Nyack, Inc.
3.137 Certificate of Amendment of TSI Springfield Virginia, LLC
amending its name to TSI West Springfield, LLC; Certificate
of Formation of TSI Springfield Virginia, LLC.
3.138 Certificate of Incorporation of TSI West 14, Inc.
3.139 Certificate of Incorporation of TSI West 16, Inc.
3.140 Certificate of Incorporation of TSI West 23, Inc.
3.141 Certificate of Incorporation of TSI West 38, Inc.
3.142 Certificate of Incorporation of TSI West 41, Inc.
3.143 Certificate of Incorporation of TSI West 44, Inc.
3.144 Certificate of Incorporation of TSI West 48, Inc.
3.145 Certificate of Incorporation of TSI West 52, Inc.
3.146 Certificate of Incorporation of TSI West 73, Inc.
3.147 Certificate of Incorporation of TSI West 76, Inc.
3.148 Certificate of Incorporation of TSI West 80, Inc.
3.149 Certificate of Incorporation of TSI West 94, Inc.
3.150 Certificate of Incorporation of TSI West 125, Inc.
3.151 Certificate of Incorporation of TSI Westport, Inc.
3.152 Certificate of Formation of TSI Westwood, LLC
3.153 Certificate of Incorporation of TSI Weymouth, Inc.
3.154 Certificate of Incorporation of TSI White Plains, Inc.
3.155 Certificate of Incorporation of TSI Whitestone, Inc.
3.156 Certificate of Incorporation of TSI Woodmere, Inc.
3.157 Bylaws of Town Sports International, Inc.; Amendment to
Bylaws of Town Sports International, Inc.
3.158 Limited Liability Company Operating Agreement of TSI
Alexandria, LLC
3.159 Bylaws of TSI Allston, Inc.
3.160 Bylaws of TSI Andover, Inc. (f/k/a Manchester Athletic Club,
Inc.)
3.161 Limited Liability Company Operating Agreement of TSI
Ardmore, LLC
3.162 Bylaws of TSI Arthro-Fitness Services, Inc.
3.163 Bylaws of TSI Astoria, Inc.
3.164 Bylaws of TSI Battery Park, Inc.
3.165 Limited Liability Company Operating Agreement of TSI
Bethesda, LLC
3.166 Bylaws of TSI Broadway, Inc. (f/k/a TSI Forest Hills, Inc.)
3.167 Bylaws of TSI 217 Broadway, Inc.
3.168 Bylaws of TSI Brooklyn Belt, Inc.
3.169 Bylaws of TSI Brunswick, Inc.
3.170 Limited Liability Company Operating Agreement of TSI Bryn
Mawr, LLC
3.171 Bylaws of TSI Bulfinch, Inc.
3.172 Bylaws of TSI Cash Management, Inc.
3.173 Bylaws of TSI Central Square, Inc.
3.174 Limited Liability Company Operating Agreement of TSI
Centreville, LLC
3.175 Limited Liability Company Operating Agreement of TSI Cherry
Hill, LLC
</Table>
<Table>
3.176 Bylaws of TSI Chevy Chase, Inc.
3.177 Limited Liability Company Operating Agreement of TSI
Clarendon, LLC
3.178 Bylaws of TSI Cobble Hill, Inc. (f/k/a Cobble Hill Racquet
and Fitness Corporation)
3.179 Limited Liability Company Operating Agreement of TSI
Colonia, LLC
3.180 Bylaws of TSI Commack, Inc.
3.181 Bylaws of TSI Connecticut Avenue, Inc.
3.182 Bylaws of TSI Copley, Inc.
3.183 Bylaws of TSI Court Street, Inc.
3.184 Bylaws of TSI Croton, Inc.
3.185 Bylaws of TSI Danbury, Inc.
3.186 Bylaws of TSI Danvers, Inc. (f/k/a Hotel Clubs,
Incorporated)
3.187 Bylaws of TSI Downtown Crossing, Inc.
3.188 Bylaws of TSI Dupont Circle, Inc.
3.189 Bylaws of TSI Dupont II, Inc.
3.190 Bylaws of TSI East Cambridge, Inc.
3.191 Bylaws of TSI East Meadow, Inc.
3.192 Bylaws of TSI East 23, Inc.
3.193 Bylaws of TSI East 31, Inc. (f/k/a TSI Lexington, Inc.)
3.194 Bylaws of TSI East 34, Inc.
3.195 Bylaws of TSI East 36, Inc. (f/k/a TSI Old Slip, Inc.)
3.196 Bylaws of TSI East 41, Inc. (f/k/a TSI Roosevelt, Inc.)
3.197 Bylaws of TSI East 51, Inc.
3.198 Bylaws of TSI East 59, Inc.
3.199 Bylaws of TSI East 76, Inc.
3.200 Operating Agreement of TSI East 86, LLC
3.201 Bylaws of TSI East 91, Inc.
3.202 Bylaws of TSI F Street, Inc.
3.203 Limited Liability Company Operating Agreement of TSI
Fairfax, LLC
3.204 Bylaws of TSI Fenway, Inc.
3.205 Bylaws of TSI Fifth Avenue, Inc. (f/k/a TSI First Avenue,
Inc.)
3.206 Bylaws of TSI First Avenue, Inc.
3.207 Bylaws of TSI Forest Hills, Inc.
3.208 Limited Liability Company Operating Agreement of TSI Fort
Lee, LLC
3.209 Bylaws of TSI Framingham, Inc.
3.210 Bylaws of TSI Franklin (MA), Inc. (f/k/a Franklin Athletic
Club, Inc.)
3.211 Limited Liability Company Operating Agreement of TSI
Franklin Park, LLC
3.212 Limited Liability Company Operating Agreement of TSI
Freehold, LLC
3.213 Bylaws of TSI Gallery Place, Inc.
3.214 Bylaws of TSI Garden City, Inc.
3.215 Limited Liability Company Operating Agreement of TSI
Germantown, LLC
3.216 Bylaws of TSI Glover, Inc.
3.217 Bylaws of TSI Grand Central, Inc.
3.218 Bylaws of TSI Great Neck, Inc.
3.219 Bylaws of TSI Greenwich, Inc.
3.220 Bylaws of TSI Herald, Inc.
</Table>
<Table>
3.221 Limited Liability Company Operating Agreement of TSI
Highpoint, LLC
3.222 Limited Liability Company Operating Agreement of TSI
Hoboken, LLC
3.223 Bylaws of TSI Holdings (CIP), Inc.
3.224 Bylaws of TSI Holdings (DC), Inc.
3.225 Limited Liability Company Operating Agreement of TSI
Holdings (IP), LLC
3.226 Bylaws of TSI Holdings (MA), Inc. (f/k/a Sky Club, Inc.)
3.227 Bylaws of TSI Holdings (MD), Inc. (f/k/a TSI Baltimore,
Inc.)
3.228 Bylaws of TSI Holdings (NJ), Inc.
3.229 Bylaws of TSI Holdings (PA), Inc.
3.230 Bylaws of TSI Holdings (VA), Inc.
3.231 Bylaws of TSI Huntington, Inc.
3.232 Bylaws of TSI Insurance, Inc.
3.233 Bylaws of TSI International, Inc.
3.234 Bylaws of TSI Irving Place, Inc.
3.235 Limited Liability Company Operating Agreement of TSI Jersey
City, LLC
3.236 Bylaws of TSI Larchmont, Inc.
3.237 Bylaws of TSI Lexington (MA), Inc. (f/k/a The Lexington
Club, Inc.)
3.238 Bylaws of TSI Lincoln, Inc. (f/k/a Arriba Corporation)
3.239 Bylaws of TSI Long Beach, Inc.
3.240 Bylaws of TSI Lynnfield, Inc. (f/k/a The Colonial Club,
Inc.)
3.241 Bylaws of TSI M Street, Inc.
3.242 Bylaws of TSI Madison, Inc.
3.243 Limited Liability Company Operating Agreement of TSI Mahwah,
LLC
3.244 Bylaws of TSI Mamaroneck, Inc. (f/k/a TSI Weight Programs,
Inc.)
3.245 Limited Liability Company Operating Agreement of TSI Market
Street, LLC
3.246 Limited Liability Company Operating Agreement of TSI
Marlboro, LLC
3.247 Limited Liability Company Operating Agreement of TSI
Matawan, LLC
3.248 Bylaws of TSI Merrifield, Inc.
3.249 Limited Liability Company Operating Agreement of TSI
Montclair, LLC
3.250 Bylaws of TSI Murray Hill, Inc.
3.251 Bylaws of TSI Nanuet, Inc.
3.252 Limited Liability Company Operating Agreement of TSI Nashua,
LLC
3.253 Bylaws of TSI Natick, Inc. (f/k/a TSI Framingham, Inc.)
3.254 Limited Liability Company Operating Agreement of TSI Newark,
LLC
3.255 Bylaws of TSI Newbury Street, Inc.
3.256 Limited Liability Company Agreement of TSI North Bethesda,
LLC (f/k/a TSI Rockville, LLC)
3.257 Bylaws of TSI Norwalk, Inc.
3.258 Bylaws of TSI Oceanside, Inc.
3.259 Limited Liability Company Operating Agreement of TSI Old
Bridge, LLC
3.260 Limited Liability Company Operating Agreement of TSI
Parsippany, LLC
3.261 Limited Liability Company Operating Agreement of TSI
Plainsboro, LLC
3.262 Limited Liability Company Operating Agreement of TSI
Princeton, LLC
3.263 Limited Liability Company Operating Agreement of TSI Ramsey,
LLC
3.264 Bylaws of TSI Reade Street, Inc. (f/k/a TSI Greenwich
Street, Inc.)
</Table>
<Table>
3.265 Limited Liability Company Operating Agreement of TSI
Ridgewood, LLC
3.266 Limited Liability Company Operating Agreement of TSI
Rittenhouse, LLC
3.267 Limited Liability Company Operating Agreement of TSI Rodin
Place, LLC
3.268 Bylaws of TSI Rye, Inc.
3.269 Bylaws of TSI Scarsdale, Inc. (f/k/a TSI Management Group,
Inc.)
3.270 Bylaws of TSI Seaport, Inc.
3.271 Bylaws of TSI Sheridan, Inc.
3.272 Limited Liability Company Operating Agreement of TSI Silver
Spring, LLC
3.273 Limited Liability Company Operating Agreement of TSI Society
Hill, LLC
3.274 Bylaws of TSI Soho, Inc.
3.275 Limited Liability Company Operating Agreement of TSI
Somerset, LLC
3.276 Bylaws of TSI South Park Slope, Inc.
3.277 Limited Liability Company Operating Agreement of TSI
Springfield, LLC
3.278 Bylaws of TSI Stamford Downtown, Inc.
3.279 Bylaws of TSI Stamford Post, Inc.
3.280 Bylaws of TSI Stamford Rinks, Inc.
3.281 Bylaws of TSI Staten Island, Inc.
3.282 Limited Liability Company Operating Agreement of TSI
Sterling, LLC
3.283 Bylaws of TSI Supplements, Inc. (f/k/a TSI Stamford-Summer,
Inc.)
3.284 Bylaws of TSI Syosset, Inc.
3.285 Bylaws of TSI Wall Street, Inc. (f/k/a TSI Union Square,
Inc.)
3.286 Limited Liability Company Operating Agreement of TSI
Waltham, LLC
3.287 Bylaws of TSI Washington, Inc.
3.288 Bylaws of TSI Water Street, Inc.
3.289 Bylaws of TSI Wellesley, Inc. (f/k/a Sportsfit, Inc.)
3.290 Limited Liability Company Operating Agreement of TSI West
Caldwell, LLC
3.291 Bylaws of TSI West Newton, Inc.
3.292 Bylaws of TSI West Nyack, Inc.
3.293 Limited Liability Company Operating Agreement of TSI West
Springfield, LLC (f/k/a TSI Springfield Virginia, LLC)
3.294 Bylaws of TSI West 14, Inc.
3.295 Bylaws of TSI West 16, Inc.
3.296 Bylaws of TSI West 23, Inc.
3.297 Bylaws of TSI West 38, Inc.
3.298 Bylaws of TSI West 41, Inc.
3.299 Bylaws of TSI West 44, Inc.
3.300 Bylaws of TSI West 48, Inc.
3.301 Bylaws of TSI West 52, Inc.
3.302 Bylaws of TSI West 73, Inc.
3.303 Bylaws of TSI West 76, Inc.
3.304 Bylaws of TSI West 80, Inc.
3.305 Bylaws of TSI West 94, Inc.
3.306 Bylaws of TSI West 125, Inc.
3.307 Bylaws of TSI Westport, Inc.
3.308 Limited Liability Company Operating Agreement of TSI
Westwood, LLC
</Table>
<Table>
3.309 Bylaws of TSI Weymouth, Inc.
3.310 Bylaws of TSI White Plains, Inc.
3.311 Bylaws of TSI Whitestone, Inc.
3.312 Bylaws of TSI Woodmere, Inc.
4.1 Indenture by and among Town Sports, the guarantors party
thereto and the Bank of New York, as Trustee, dated April
16, 2003.
4.2 Registration Rights Agreement by and among Town Sports, the
guarantors party thereto, Deutsche Bank Securities, Inc. and
BNP Paribas Securities Corp., dated April 16, 2003.
4.3 Form of Exchange Note (Included in Exhibit 4.1 hereto).
5.1 Opinion of Kirkland & Ellis.
5.2 Opinion of Epstein Becker & Green, P.C.
8.1 Opinion of Kirkland & Ellis regarding federal tax
consequences.
10.1 Credit Agreement by and among Town Sports, the various
lenders party thereto and Deutsche Bank Trust Company
Americas, as administrative agent, dated April 16, 2003.
10.2 Purchase Agreement by and among Town Sports, the guarantors
party thereto, Deutsche Bank Securities, Inc. and BNP
Paribas Corp, dated April 16, 2003.
12.1 Statement re computation of ratio of earnings to fixed
charges.
21.1 Subsidiaries of the registrant.
23.1 Consent of PricewaterhouseCoopers LLP.
23.2 Consent of Kirkland & Ellis (included in Exhibit 5.1).
23.3 Consent of Kirkland & Ellis with respect to opinion
regarding federal tax consequences (included in Exhibit
8.1).
25.1 Statement re Eligibility of Trustee.
99.1 Form of Letter of Transmittal.
99.2 Form of Notice of Guaranteed Delivery.
99.3 Form of Tender Instructions.
</Table>