EXHIBIT 4.6
WARRANT AGREEMENT
BETWEEN
BALLY TOTAL FITNESS HOLDING CORPORATION
AND
LADENBURG XXXXXXXX CAPITAL CORPORATION
Dated as of July 11, 1997
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TABLE OF CONTENTS
Page
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ARTICLE I
Issuance of Warrants...................................................... 1
Section 1.1 Issuance of Warrants; Form of Warrants.................. 1
Section 1.2 Registration............................................ 2
Section 1.3 Transfer................................................ 2
ARTICLE II
Warrant Exercise Price and Exercise of Warrants
......................................................................... 3
Section 2.1 Exercise Price.............................................. 3
Section 2.2 Registration of Common Stock and Exercisability
of Warrants.............................................. 4
Section 2.3 Procedure for Exercise of Warrants.......................... 4
Section 2.4 Issuance of Common Stock.................................... 4
Section 2.5 Certificates for Unexercised Warrants....................... 5
Section 2.6 Reservation of Shares....................................... 5
ARTICLE III
Adjustments, Notice Provisions and Restrictions
on Issuance of Additional Securities
......................................................................... 6
Section 3.1 Adjustment of Exercise Price................................ 6
Section 3.2 Sales of Certain Securities................................. 9
Section 3.3 No Adjustments to Exercise Price........................... 11
Section 3.4 Adjustment of Number of Shares............................. 12
Section 3.5 Reorganizations............................................ 12
Section 3.6 Verification of Computations............................... 13
Section 3.7 Exercise Price Not Less Than Par Value..................... 14
Section 3.8 Notice of Certain Actions.................................. 14
Section 3.9 Certificate of Adjustments................................. 15
Section 3.10 Warrant Certificate Amendments............................. 15
Section 3.11 Fractional Shares.......................................... 16
ARTICLE IV
Other Provisions Relating to Rights of the Holders
........................................................................ 16
Section 4.1 Rights of the Holders...................................... 16
Section 4.2 Lost, Stolen, Mutilated or Destroyed Warrant
Certificates............................................ 17
ARTICLE V
Other Matters............................................................ 17
Section 5.1 Payment of Taxes and Charges............................... 17
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Page
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Section 5.2 Changes to Agreement.................. .................... 18
Section 5.3 Assignment................................................. 18
Section 5.4 Successor to Company....................................... 18
Section 5.5 Notices.................................................... 18
Section 5.6 Defects in Notice.......................................... 19
Section 5.7 Governing Law.............................................. 19
Section 5.8 Standing................................................... 19
Section 5.9 Headings................................................... 20
Section 5.10 Counterparts............................................... 20
Section 5.11 Entire Agreement........................................... 20
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WARRANT AGREEMENT
THIS WARRANT AGREEMENT ("Agreement") is made as of this 11th day of July,
1997, between Bally Total Fitness Holding Corporation, a Delaware corporation
(the "Company"), and Ladenburg Xxxxxxxx Capital Corporation, a Delaware
corporation ("LTCC").
WHEREAS, the Company has agreed to issue to LTCC warrants (the "Initial
Warrant") to purchase One Hundred Twenty-Five Thousand (125,000) shares of the
company's common stock, par value $.01 per share ("Common Stock"), and, in
certain circumstances, to issue warrants to purchase an additional 125,000
shares of Common Stock ("Second Warrant" and collectively, with the Initial
Warrant, the "Warrants").
NOW, THEREFORE, in consideration of the premises and the mutual agreements
set forth herein and for other good and valuable consideration the parties
hereto agree as follows:
ARTICLE I
Issuance of Warrants
Section 1.1 Issuance of Warrants; Form of Warrants. Simultaneously with
the execution and delivery of this Agreement, the Company is issuing and
delivering to LTCC the Initial Warrant to purchase One Hundred Twenty-Five
Thousand (125,000) shares of Common Stock, and in the event the Company borrows
any money under that certain Credit Agreement dated of even date herewith, to
issue the Second Warrant to purchase One Hundred Twenty-Five Thousand (125,000)
shares of Common Stock (such shares receivable upon exercise of either or both
Warrants, collectively, the "Warrant Shares"), subject to adjustment as provided
herein. The text of the
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Warrants and the form of Election to Purchase shall be substantially as set
forth in Exhibits A and B, respectively, attached hereto.
Section 1.2 Registration. The Warrants shall be numbered and shall be
registered on the books of the Company (the "Warrant Register"). The Company
shall be entitled to treat the holder of a Warrant as it appears on the Warrant
Register (the "Holder") as the owner in fact thereof for all purposes and shall
not be bound to recognize any equitable or other claim to or interest in such
Warrant on the part of any other person, and shall not be liable for any
registration of transfer of Warrants which are registered or to be registered in
the name of a fiduciary or the nominee of a fiduciary unless made with the
actual knowledge that a fiduciary or nominee is committing a breach of trust in
requesting such registration of transfer, or with such knowledge of such facts
that its participation therein amounts to bad faith.
Section 1.3 Transfer. The Warrants may not be sold, transferred,
assigned, hypothecated or otherwise disposed of, in whole or in part, for a
period of one year after their respective dates of original issuance. This
restriction shall be conspicuously noted on the Warrant Certificates. After such
one year period, the Warrants shall be transferable at any time. The Warrants
shall be transferable only on the books of the Company maintained at the
principal office of the Company upon delivery thereof duly endorsed by the
Holder or by his duly authorized attorney or representative, or accompanied by
proper evidence of succession, assignment or authority to transfer. In all cases
of transfer by an attorney, the original power of attorney, duly approved, or a
copy thereof, duly certified, shall be deposited and remain with the Company. In
case of transfer by executors, administrators, guardians or other legal
representatives, duly authenticated evidence of their authority shall be
produced, and may be required to be deposited and remain with the Company in its
discretion. Upon any registration of transfer, the Company shall deliver a new
Warrant or
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Warrants to the persons entitled thereto. The Warrants may be exchanged at the
option of the Holder thereof, when surrendered at the principal office of the
Company, for another Warrant, or other Warrants of different denominations, of
like tenor and representing in the aggregate the right to purchase a like number
of Warrant Shares.
ARTICLE II
Warrant Exercise Price and Exercise of Warrants
Section 2.1 Exercise Price. Each Warrant Certificate shall, when signed
by the Chairman or President or any Vice President and by the Secretary or
Assistant Secretary of the Company, entitle the Holder to purchase from the
Company one share of Common Stock for each Warrant evidenced thereby, at the
purchase price (the "Initial Exercise Price") of Ten Dollars ($10.00) per share
or such adjusted number of shares at such adjusted purchase price as may be
established from time to time pursuant to the provisions of Article III hereof,
payable in full at the time of exercise of the Warrant; provided, however, that
if the Company sells shares of Common Stock to the public in connection with a
firmly underwritten public offering pursuant to a registration statement that
becomes effective under the Securities Act of 1933, as amended, within 90 days
from the date hereof, the Initial Exercise Price will equal the lesser of (a)
$10.00 and (b) the product of the offering price to the public for a share of
Common Stock sold pursuant to such registration statement times 1.2, as adjusted
pursuant to Article III hereof. Except as the context otherwise requires, the
term "Exercise Price" as used in this Agreement shall mean the purchase price of
one share of Common Stock, reflecting all appropriate adjustments made in
accordance with the provisions of Article III hereof.
Section 2.2 Registration of Common Stock and Exercisability of Warrants.
Each Warrant may be exercised at any time on or after the date hereof, but in
all events not after 5:00 P.M., New
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York City time, on July 11, 2002 (the "Exercise Deadline"). The Company will
take all such action required under and in accordance with the Registration
Rights Agreement dated as of an even date herewith between the Company and LTCC.
Section 2.3 Procedure for Exercise of Warrants. During the period
specified in and subject to the provisions of Section 2.2 hereof, Warrants may
be exercised by surrendering the Warrant Certificates representing such Warrants
to the Company at its principal offices at 0000 Xxxx Xxxx Xxxx Xxxxxx, Xxxxxxx,
XX 00000 ("Principal Office"), Attention: President, with the Election to
Purchase duly completed and executed, accompanied by payment in full to the
Company of the Exercise Price in effect at the time of such exercise, together
with such taxes as are specified in Section 5.1 hereof, for each share of Common
Stock with respect to which such Warrants are being exercised. Such Exercise
Price and taxes shall be paid in full by certified check or money order, payable
in United States currency to the order of the Company The date on which Warrants
are exercised in accordance with this Section 2.3 is sometimes referred to
herein as the "Date of Exercise" of such Warrants.
Section 2.4 Issuance of Common Stock. As soon as practicable after the
Date of Exercise of any Warrants, the Company shall issue a certificate or
certificates for the number of full shares of Common Stock to which the Holder
is entitled, registered in accordance with the instructions set forth in the
Election to Purchase. All shares of Common Stock issued upon the exercise of any
Warrants shall be validly authorized and issued, fully paid and non-assessable,
and free from all taxes, liens and charges created by the Company in respect of
the issue thereof. Each person in whose name any such certificate for shares of
Common Stock is issued shall for all purposes be deemed to have become the
holder of record of the Common Stock represented thereby on the Date of Exercise
of
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the Warrants resulting in the issuance of such shares, irrespective of the date
of issuance or delivery of such certificate for shares of Common Stock.
Section 2.5 Certificates for Unexercised Warrants. In the event that
fewer than all of the Warrants represented by a Warrant Certificate are
exercised, the Company shall execute and mail, by first-class mail, within ten
(10) days of the Date of Exercise, to the Holder a new Warrant Certificate
representing the number of full warrants not exercised. In no event shall a
fraction of a Warrant be exercised, and the Company shall distribute no Warrant
Certificates representing fractions of Warrants under this or any other section
of this Agreement.
Section 2.6 Reservation of Shares. The Company shall at all times
reserve and keep available for issuance upon the exercise of Warrants a number
of its authorized but unissued shares or treasury shares, or both, of Common
Stock that will be sufficient to permit the exercise in full of all outstanding
Warrants.
ARTICLE III
Adjustments, Notice Provisions and Restrictions
on Issuance of Additional Securities
Section 3.1 Adjustment of Exercise Price. Subject to the provisions of
this Article III, the Exercise Price in effect from time to time shall be
subject to adjustment, as follows:
(a) In case the Company shall (i) declare a dividend or make a
distribution on the outstanding shares of its Common Stock in shares of
its Common Stock, (ii) subdivide or reclassify the outstanding shares of
its Common Stock into a greater number of shares, or (iii) combine or
reclassify the outstanding shares of its Common Stock into a smaller
number of shares, then it is the intention of the parties that the Holder
be treated as if the Warrant had
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been exercised prior thereto as follows: the Exercise Price in effect
immediately after the record date for such dividend or distribution or the
effective date of such subdivision, combination or reclassification shall
be adjusted so that it shall equal the price determined by multiplying the
Exercise Price in effect immediately prior thereto by a fraction, of which
the numerator shall be the number of shares of Common Stock outstanding
immediately before such dividend, distribution, subdivision, combination
or reclassification, and of which the denominator shall be the number of
shares of Common Stock outstanding immediately after such dividend,
distribution, subdivision, combination or reclassification. Any shares of
Common Stock of the Company issuable in payment of a dividend shall be
deemed to have been issued immediately prior to the record date for such
dividend for purposes of calculating the number of outstanding shares of
Common Stock of the Company under Subsections 3.1(b), 3.1(c) and 3.2(a)
hereof. Such adjustment shall be made successively whenever any event
specified above shall occur.
(b) In case the Company shall fix a record date for the issuance
of rights, options, warrants or convertible or exchangeable securities to
all holders of its Common Stock entitling them (for a period expiring
within sixty (60) days after such record date) to subscribe for or
purchase shares of its Common Stock at a price per share less than the
Current Market Price (as such term is defined in Subsection 3.1(d) hereof)
of a share of Common Stock of the Company on such record date, the
Exercise Price shall be adjusted immediately thereafter so that it shall
equal the price determined by multiplying the Exercise Price in effect
immediately prior thereto by a fraction, of which the numerator shall be
the number of shares of Common Stock outstanding on such record date plus
the number of shares of Common Stock which the aggregate offering price of
the total number of shares of Common Stock so
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offered for subscription or purchase would purchase at the Current Market
Price per share, and of which the denominator shall be the number of
shares of Common Stock outstanding on such record date plus the number of
additional shares of Common Stock so offered for subscription or purchase.
Such adjustment shall be made successively whenever such a record date is
fixed. To the extent that any such rights, options, warrants or
convertible or exchangeable securities are not so issued or expire
unexercised, the Exercise Price then in effect shall be readjusted to the
Exercise Price which would then be in effect if such unissued or
unexercised rights, options, warrants or convertible or exchangeable
securities had not been issuable.
(c) In case the Company shall fix a record date for the making
of a distribution to all holders of shares of its Common Stock (i) of
shares of any class other than its Common Stock or (ii) of evidences of
its indebtedness or (iii) of assets (excluding cash dividends or
distributions (other than extraordinary cash dividends or distributions),
and dividends or distributions referred to in Subsection 3.1(a) hereof) or
(iv) of rights, options, warrants or convertible or exchangeable
securities (excluding those rights, options, warrants or convertible or
exchangeable securities referred to in Subsection 3.1(b) hereof), then in
each such case the Holder, upon the exercise of the Warrants, shall be
entitled to receive the securities and property which the Holder would
have held on the Date of Exercise if the Holder had been the holder of
record of the number of shares of the Common Stock subscribed for upon
such exercise and, during the period from the date of the initial issuance
of the Warrants to and including the date of such exercise, had retained
such shares and the securities and properties receivable by the Holder
during such period.
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(d) For the purpose of any computation under Subsection 3.1(b)
or 3.1(c) hereof, the "Current Market Price" per share at any date (the
"Computation Date") shall be deemed to be the average of the daily Closing
Prices (as defined below) of the Common Stock of five (5) consecutive
trading days ending the trading day before such date; provided, however,
that if there shall have occurred prior to the Computation Date any event
described in Subsection 3.1(a), 3.1(b) or 3.1(c) which shall have become
effective with respect to market transactions at any time (the
"Market-Effect Date") on or after the beginning of such five-day period,
the Closing Price for each trading day preceding the Market-Effect Date
shall be adjusted, for purposes of calculating such average, by
multiplying such Closing Price by a fraction the numerator of which is the
Exercise Price as in effect immediately prior to the Computation Date and
the denominator of which is the Exercise Price as in effect immediately
prior to the Market-Effect Date, it being understood that the purpose of
this proviso is to ensure that the effect of such event on the market
price of the Common Stock shall, as nearly as possible, be eliminated in
order that the distortion in the calculation of the Current Market Price
may be minimized. For the purposes of this Agreement, "Closing Price" for
each day shall mean the last reported sales price of the Common Stock
(trading regular way) or, in case no such reported sale takes place on
such day, the average of the reported closing bid and asked prices regular
way, in either case as reported on the New York Stock Exchange or, if such
security is not listed or admitted for trading on the New York Stock
Exchange, on the Nasdaq National Market of the National Association of
Securities Dealers, Inc. Automated Quotations System ("NASDAQ"), or if
such security is not quoted on such Nasdaq National Market, the average of
the closing bid and asked prices on such day in the over-the-counter
market as reported by NASDAQ or, if bid and asked prices for such security
on such day shall
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not have been reported through NASDAQ, the average of the bid and asked
prices on such day, as furnished by any New York Stock Exchange member
firm making a market in the Common Stock selected from time to time by the
Board of Directors of the Company for that purpose.
(e) All calculations under this Section 3.1 shall be made to the
nearest cent.
Section 3.2 Sales of Certain Securities.
(a) In case the Company shall on or after the date hereof issue
rights, options, warrants or convertible or exchangeable securities
containing the right to subscribe for or purchase shares of its Common
Stock (excluding Excluded Securities, as defined in Subsection 3.2(b)
below) at a price per share less than the Closing Price of a share of
Common Stock on the date of such issuance, then the Exercise Price shall
be adjusted immediately thereafter so that it shall equal the price
determined by multiplying the Exercise Price in effect immediately prior
thereto by a fraction, of which the numerator shall be the number of
shares of Common Stock outstanding immediately prior to such issuance plus
the number of additional shares of Common Stock the Aggregate
Consideration Receivable (as defined in Subsection 3.2(d) below) would
purchase at the Closing Price per share on such date, and of which the
denominator shall be the number of shares of Common Stock outstanding
immediately prior to such issuance plus the number of additional shares of
Common Stock offered for subscription or purchase. Such adjustment shall
be made successively whenever such issuance shall occur. To the extent
that any such rights, options, warrants or convertible or exchangeable
securities are not so issued or expire unexercised, the Exercise Price
then in effect shall be readjusted to the Exercise Price which would then
9
be in effect if such unissued or unexercised rights, options, warrants or
convertible or exchangeable securities had not been issuable.
(b) "Excluded Securities" means (i) rights, options, warrants,
or convertible or exchangeable securities issued in any of the
transactions described in Subsections 3.1(b) or (c) or Section 3.5 hereof;
(ii) shares of Common Stock issuable upon exercise of the warrants issued
by the Company as of December 29, 1995 or the Warrants; and (iii) shares
of Common Stock issuable upon exercise of rights, options or warrants or
conversion or exchange of convertible or exchangeable securities issued or
sold under circumstances causing an adjustment pursuant to this Section
3.2.
(c) The price per share of Common Stock referred to in
Subsection 3.2(a) above shall be determined by dividing (i) the Aggregate
Consideration Receivable in respect of such rights, options, warrants or
convertible or exchangeable securities, by (ii) the total number of shares
of Common Stock covered by such rights, options, warrants or convertible
or exchangeable securities.
(d) "Aggregate Consideration Receivable" means the aggregate
amount paid to the Company for such rights, options, warrants or
convertible or exchangeable securities, plus the aggregate consideration
or premiums stated in such rights, options, warrants or convertible or
exchangeable securities to be payable for the shares of Common Stock
covered thereby.
(e) In case the Company shall sell and issue rights, options,
warrants or convertible or exchangeable securities containing the right to
subscribe for or purchase shares of Common Stock, for a consideration
consisting, in whole or in part, of property other than cash or its
equivalent, then in determining the "price per share of Common Stock"
referred
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to in Subsections 3.2(a) and 3.2(c) above and the "Aggregate Consideration
Receivable" referred to in Subsections 3.2(a), (c) and (d) above, the
Board of Directors of the Company shall determine, in good faith and on a
reasonable basis, the fair value of said property.
(f) All calculations under this Section 3.2 shall be made to the
nearest cent.
Section 3.3 No Adjustments to Exercise Price. No adjustment in the
Exercise Price in accordance with the provisions of Subsection 3.1(a) or (b) or
Subsection 3.2(a) hereof need be made unless such adjustment would amount to a
change of at least $0.05 in such Exercise Price; provided, however, that the
amount by which any adjustment is not made by reason of the provisions of this
Section 3.3 shall be carried forward and taken into account at the time of any
subsequent adjustment in the Exercise Price.
Section 3.4 Adjustment of Number of Shares. Upon each adjustment of the
Exercise Price pursuant to Subsection 3.1(a) or (b), or Subsection 3.2(a)
hereof, each Warrant shall thereupon evidence the right to purchase that number
of shares of Common Stock (calculated to the nearest hundredth of a share)
obtained by multiplying the number of shares of Common Stock purchasable
immediately prior to such adjustment upon exercise of the Warrant by the
Exercise Price in effect immediately prior to such adjustment and dividing the
product so obtained by the Exercise Price in effect immediately after such
adjustment.
Section 3.5 Reorganizations. In case of any capital reorganizations
other than in the cases referred to in Section 3.1 hereof, or the consolidation
or merger of the Company with or into another corporation (other than a merger
or consolidation in which the Company is the continuing corporation and which
does not result in any reclassification of the outstanding shares of Common
Stock or the conversion of such outstanding shares of Common Stock into shares
of other stock or other securities or property), or the sale of the property of
the Company as an entirety or substantially
11
as an entirety (collectively such actions being hereinafter referred to as
"Reorganizations"), there shall thereafter be deliverable upon exercise of any
Warrant (in lieu of the number of shares of Common Stock theretofore
deliverable) the number of shares of stock or other securities or property to
which a holder of the number of shares of Common Stock which would otherwise
have been deliverable upon the exercise of such Warrant would have been entitled
upon such Reorganization if such Warrant had been exercised in full immediately
prior to such Reorganization. In case of any Reorganization, appropriate
adjustment, as determined in good faith by the Board of Directors of the
Company, shall be made in the application of the provisions herein set forth
with respect to the rights and interests of each Holder so that the provisions
set forth herein shall thereafter be applicable, as nearly as possible, in
relation to any shares or other property thereafter deliverable upon exercise of
Warrants. Any such adjustment shall be made by and set forth on the books of the
Company, or any successor thereto, and shall for all purposes hereof
conclusively be deemed to be an appropriate adjustment. The Company shall not
effect any such Reorganizations unless upon or prior to the consummation thereof
the successor corporation, or if the Company shall be the surviving corporation
in any such Reorganization and is not the issuer of the shares of stock or other
securities or property to be delivered to holders of shares of the Common Stock
outstanding at the effective time thereof, then such issuer, shall assume by
written instrument the obligation to deliver to each Holder such shares of
stock, securities, cash or other property as such Holder shall be entitled to
purchase in accordance with the foregoing provisions. In the event of sale or
conveyance or other transfer of all or substantially all of the assets of the
Company as a part of a plan for liquidation of the Company, all rights to
exercise any Warrant shall terminate thirty (30) days after the Company gives
written notice to each Holder that such sale or conveyance or other transfer has
been consummated.
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Section 3.6 Verification of Computations. The Company shall select a
firm of independent public accountants, which selection may be changed from time
to time, to verify the computations made in accordance with this Article III.
The certificate, report or other written statement of any such firm shall be
conclusive evidence of the correctness of any computation made under this
Article III. Promptly upon its receipt of such certificate, report or statement
from such firm of independent public accountants, the Company shall deliver a
copy thereof to each Holder.
Section 3.7 Exercise Price Not Less Than Par Value. In no event shall
the Exercise Price be adjusted below the par value per share of the Common
Stock.
Section 3.8 Notice of Certain Actions. In the event the Company shall:
(a) declare any dividend payable in stock to the holders of its
Common Stock or make any other distribution in property other than cash to
the holders of its Common Stock; or
(b) offer to the holders of its Common Stock rights to subscribe
for or purchase any shares of any class of stock or any other rights or
options; or
(c) effect any reclassification of its Common Stock (other than
a reclassification involving merely the subdivision or combination of
outstanding shares of Common Stock) or any capital reorganization or any
consolidation or merger (other than a merger in which no distribution of
securities or other property is made to holders of Common Stock), or any
sale, transfer or other disposition of its property, assets and business
substantially as an entirety, or the liquidations dissolution or winding
up of the Company;
then, in each such case, the Company shall cause notice of such proposed action
to be mailed to each Holder at least thirty (30) days prior to such action. Such
notice shall specify the date on which the books of the Company shall close, or
a record be taken, for determining holders of Common Stock
13
entitled to receive such stock dividend or other distribution or such rights or
options, or the date on which such reclassification reorganization,
consolidation, merger, sale, transfer, other disposition, liquidations
dissolution, winding up or exchange shall take place or commence, as the case
may be, and the date as of which it is expected that holders of record of Common
Stock shall be entitled to receive securities or other property deliverable upon
such action, if any such date has been fixed. Such notice shall be mailed in the
case of any action covered by paragraph (a) or (b) of this Section 3.8, at least
ten (10) days prior to the record date for determining holders of the Common
Stock for purposes of receiving such payment or offer, and in the case of any
action covered by paragraph (c) of this Section 3.8, at least ten (10) days
prior to the earlier of the date upon which such action is to take place or any
record date to determine holders of Common Stock entitled to receive such
securities or other property.
Section 3.9 Certificate of Adjustments. Whenever any adjustment is to be
made pursuant to this Article III, the Company shall prepare an Officers'
Certificate setting forth such adjustment to be mailed to each Holder within
fifteen (15) days prior thereto, such notice to include in reasonable detail (i)
the events precipitating the adjustment, (ii) the computation of any
adjustments, and (iii) the Exercise Price and the number of shares or the
securities or other property purchasable upon exercise of each Warrant after
giving effect to such adjustment; provided, however, with respect to adjustments
made pursuant to Section 3.2(a) hereof, such notice shall be made as soon as
practicable thereafter.
Section 3.10 Warrant Certificate Amendments. Irrespective of any
adjustments pursuant to this Article III, Warrant Certificates theretofore or
thereafter issued need not be amended or replaced, but certificates thereafter
issued shall bear an appropriate legend or other notice of any adjustments;
provided the Company may, at its option, issue new Warrant Certificates
evidencing
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Warrants in such form as may be approved by its Board of Directors to reflect
any adjustment in the Exercise Price and number of shares of Common Stock
purchasable under the Warrant Certificates and deliver the same to each Holder
in substitution for existing Warrant Certificates.
Section 3.11 Fractional Shares. The Company shall not be required upon
the exercise of any Warrant to issue fractional shares of Common Stock which may
result from adjustments in accordance with this Article III to the Exercise
Price or number of shares of Common Stock purchasable under each Warrant. If
more than one Warrant is exercised at one time by a Holder, the number of full
shares of Common Stock which shall be deliverable shall be computed based on the
number of shares deliverable in exchange for the aggregate number of Warrants
exercised. With respect to any final fraction of a share called for upon the
exercise of any Warrant or Warrants, the Company shall pay a cash adjustment in
respect of such final fraction in an amount equal to the same fraction of the
Closing Price of a share of Common Stock, as determined by the Company on the
basis of the Closing Price per share of Common Stock on the business day next
preceding the date of such exercise. Each Holder, by its acceptance of the
Warrant Certificate, shall expressly waive any right to receive any fractional
share of Common Stock upon exercise of the Warrants. All calculations under this
Section 3.11 shall be made to the nearest hundredth of a share.
ARTICLE IV
Other Provisions Relating to Rights of the Holders
Section 4.1 Rights of the Holders. No Warrant Certificate shall entitle
a Holder to any of the rights of a stockholder of the Company, including,
without limitation, the right to vote, to receive dividends and other
distributions, to receive any notice of, or to attend, meetings of stockholders
or any other proceedings of the Company.
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Section 4.2 Lost, Stolen, Mutilated or Destroyed Warrant Certificates.
If any Warrant Certificate shall be mutilated, lost, stolen or destroyed, the
Company in its discretion may execute and deliver, in exchange and substitution
for and upon cancellation of a mutilated Warrant Certificate, or in lieu of or
in substitution for a lost, stolen or destroyed Warrant Certificate so
mutilated, lost, stolen, or destroyed but only upon receipt of evidence of such
loss, theft or destruction of such Warrant Certificate, and of the ownership
thereof, and indemnity, if requested, all satisfactory to the Company. The
Holder shall also comply with such other reasonable regulations and pay such
other reasonable charges incidental thereto as the Company may prescribe. Any
such new Warrant Certificate shall constitute an original contractual obligation
of the Company, whether or not the allegedly lost, stolen, mutilated or
destroyed Warrant Certificate shall be at any time enforceable by anyone.
ARTICLE V
Other Matters
Section 5.1 Payment of Taxes and Charges. The Company will from time to
time promptly pay, or make provisions for the payment of, all taxes and charges
that may be imposed by the United States or any state upon the Company in
connection with the issuance or delivery of shares of Common Stock upon the
exercise of any Warrants, but any transfer taxes in connection with the issuance
of Certificates for shares of Common Stock in any name other than that of the
Holder shall be paid by the Holder; and, in such case, the Company shall not be
required to issue or deliver any Certificates for shares of Common Stock until
such taxes shall have been paid or it has been established to the Company's
satisfaction that no tax is due.
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Section 5.2 Changes to Agreement. The Company may, without the consent
or concurrence of the Holders make any changes or corrections in this Agreement
that the Company shall have been advised by counsel (i) are required to cure any
ambiguity or to correct any defective or inconsistent provision or clerical
omission or mistake or manifest error herein contained, (ii) add to the
covenants and agreements of the Company in this Agreement such further covenants
and agreements thereafter to be observed, or (iii) result in the surrender of
any right or power reserved to or conferred upon the Company in this Agreement,
but which changes or corrections do not or will not adversely affect, alter or
change the rights, privileges or immunities of the Holders.
Section 5.3 Assignment. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Holders shall bind and
inure to the benefit of their respective successors and permitted assigns.
Section 5.4 Successor to Company. The Company will not merge or
consolidate with or into any other corporation or sell or otherwise transfer its
property, assets and business substantially as an entirety to a successor
corporation, unless the corporation resulting from such merger, consolidation,
sale or transfer (if not the Company) shall expressly assume, by supplemental
agreement, the due and punctual performance and observance of each and every
covenant and condition of this Agreement to be performed and observed by the
Company.
Section 5.5 Notices. Any notice or demand required by this Agreement to
be given or made by a Holder to or on the Company shall be sufficiently given or
made, when received if delivered by messenger or overnight delivery service, and
three days after mailing if sent by registered mail, postage prepaid, addressed
(until another address is provided in writing by the Company to the Holder) to:
Bally Total Fitness Holding Corporation
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0000 Xxxx Xxxx Xxxx Xxxxxx
Xxxxxxx, XX 00000
Attn: Corporate Secretary
Any notice or demand required by this Agreement to be given or made by the
Company to or on a Holder shall be sufficiently given or made, when received if
delivered by messenger or overnight delivery service, and three (3) days after
mailing if sent by registered mail, postage prepaid, addressed (until another
address is provided in writing by such Holder to the Company) to the address of
such Holder as shown on the Warrant Register.
Section 5.6 Defects in Notice. Failure to file any certificate or notice
or to mail any notice, or any defect in any certificate or notice pursuant to
this Agreement shall not affect in any way the rights of the Holder or the
legality or validity of any adjustment made pursuant to Section 3.1 or Section
3.2 hereof, or any transaction giving rise to any such adjustment or the
legality or validity of any action taken or to be taken by the Company.
Section 5.7 Governing Law. This Agreement and each Warrant Certificate
issued hereunder shall be governed by the laws of the State of New York without
regard to principles of conflicts of laws thereof.
Section 5.8 Standing. Nothing in this Agreement expressed and nothing
that may be implied from any of the provisions hereof is intended, or shall be
construed, to confer upon, or give to, any person or corporation other than the
Company and each Holder any right, remedy or claim under or by reason of this
Agreement or of any covenant, condition, stipulation, promise or agreement
contained herein; and all covenants, conditions, stipulations, promises and
agreements contained in this Agreement shall be for the sole and exclusive
benefit of the Company and the Holders and their successors.
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Section 5.9 Headings. The descriptive headings of the articles and
sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
Section 5.10 Counterparts. This Agreement may be executed in any number
of counterparts, each of which so executed shall be deemed to be an original;
but such counterparts shall together constitute but one and the same instrument.
Section 5.11 Entire Agreement. This Agreement, including the Exhibits
referred to herein and the other writings specifically identified herein or
contemplated hereby, is complete, reflects the entire agreement of the parties
with respect to its subject matter, and supersedes all previous written or oral
negotiations, commitments and writings.
IN WITNESS WHEREOF, this Agreement has been duly executed by the parties
hereto under their respective corporate seals as of the day and year first above
written.
BALLY TOTAL FITNESS LADENBURG XXXXXXXX CAPITAL
HOLDING CORPORATION CORPORATION
By: By:
Name: Name:
Title: Title:
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