EXHIBIT 26
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CONSENT AGREEMENT
This Consent Agreement ("AGREEMENT") is dated as of March 22, 2006,
and is made by and between Bally Total Fitness Holding Corporation, a Delaware
corporation ("BALLY" or the "COMPANY"), and the Person listed on the signature
page attached hereto (the "HOLDER"). Certain capitalized terms used herein and
not otherwise defined have the meanings set forth in Article VI hereof.
WHEREAS, the Holder is the beneficial owner of $10,500,000 in
aggregate principal amount of 9 7/8% Senior Subordinated Notes due 2007 of the
Company (the "NOTES") issued pursuant to the Indenture, dated as of December
16, 1998, between the Company and U.S. Bank National Association, as trustee
(as amended and supplemented, the "INDENTURE");
WHEREAS, the Company desires to seek waivers (the "WAIVERS") through
the Waiver Expiration Dates (as defined below) of any Default or Event of
Default (as such terms are defined in the Indenture) arising from the failure
to timely comply with the covenants set forth in Sections 7.4 and 10.17 of the
Indenture with respect to the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 2005 and the Company's Quarterly Reports on Form
10-Q for the fiscal periods ended March 31 and June 30, 2006 (the "WAIVED
MATTERS"), which require Bally to file with the SEC, and furnish to the Trustee
and holders of Notes, the reports required to be filed by the Company pursuant
to the Exchange Act;
WHEREAS, the Company will be undertaking a solicitation of consents
(the "CONSENT Solicitation") with respect to the Notes to obtain the Waivers;
and
WHEREAS, the Holder has agreed with the Company to give its consent to
the Waivers in the Consent Solicitation, subject to the conditions set forth
below.
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements herein contained and
intending to be legally bound hereby, Bally and the Holder hereby agree as
follows:
ARTICLE I
AGREEMENT TO GIVE CONSENT TO WAIVERS AND RELATED MATTERS
SECTION 1.1 (a) ACKNOWLEDGEMENT. The Holder acknowledges that Bally
may fail to timely file with the SEC, and may fail to timely furnish to holders
of Notes and the Trustee certain of the reports and notices required by
Sections 7.4 and 10.17 of the Indenture and applicable provisions of the
Exchange Act.
(b) AGREEMENT TO GIVE CONSENT. In accordance with Section 1.2 below,
the Holder hereby agrees to give its consent to the Waivers in the Consent
Solicitation. The Waivers will provide that any Default or Event of Default
arising from a failure to comply with the covenants set forth in Sections 7.4
and 10.17 of the Indenture, which require Bally to file with the SEC, and
furnish to the Trustee and holders of Notes, the reports required to be filed
pursuant to the Exchange Act, will be waived through the Waiver Expiration
Dates. The Waivers will also provide that any Notice of Default in respect of
the Waived Matters delivered by the Holder or the Trustee prior to the earlier
of the termination of this Agreement and effectiveness of the Supplemental
Indenture (as defined below) shall automatically be rescinded and withdrawn and
shall no longer be effective. In addition, the Waivers will provide that any
Default by Bally as a result of its failure to provide notice to the Trustee of
a Default with respect to the Waived Matters under Section 10.18(b) of the
Indenture will be waived through the Waiver Expiration Dates. The "WAIVER
EXPIRATION DATES" will be: (i) 5:00 pm, New York City time, on July 10, 2006,
with respect to the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 2005 and the Company's Quarterly Report on Form 10-Q for the
quarter ended March 31, 2006; and (ii) 5:00 pm, New York City time, on
September 11, 2006 (as may be extended by 30 days), with respect to the
Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2006. By
giving its consent to the Waivers in the Consent Solicitation, the Holder will
authorize the Trustee to enter into a Supplemental Indenture in form and
substance satisfactory to the Trustee for purposes of implementing the Waivers
(the "SUPPLEMENTAL INDENTURE").
SECTION 1.2 FURTHER ACTION BY HOLDER. As soon as practicable after
commencement of the Consent Solicitation, the Holder shall instruct the DTC
Participant(s) that act as custodian(s) for the Notes it beneficially owns to
execute and deliver a letter of consent form, which will accompany the consent
solicitation materials, and shall instruct such DTC Participant(s) to take all
such further action as may be necessary to effect the consent of the Holder in
the Consent Solicitation on behalf of such Holder. In addition, the Holder
shall, at the written request of Bally, at any time and from time to time
following the execution of this Agreement, execute and deliver to Bally all
such further instruments and take all such further action as may be reasonably
necessary or appropriate in order to confirm or carry out its obligations under
this Agreement and the transactions contemplated hereby.
SECTION 1.3 DELIVERY OF CONSENT TO WAIVERS; CONSENT PAYMENT. When
(i) Bally receives sufficient consents so that it has received consents from a
majority in aggregate principal amount of Notes outstanding under the Indenture
and (ii) the other conditions set forth in the consent solicitation materials
(which are identified in, and limited to, those contained in Article V hereof)
are satisfied, Bally will enter into the Supplemental Indenture with the
Trustee as soon as practicable thereafter; PROVIDED, that the continued
effectiveness of the Supplemental Indenture will be contingent upon payment of
the Consent Fee on the terms set forth in the Consent Solicitation. In
consideration of the Waivers and subject to Article V hereof, Bally will offer
to pay or deliver (directly or through an agent) and shall pay or deliver
(directly or through an agent) to all beneficial owners participating in the
Consent Solicitation, including the Holder, at their election: (i) $10.00; or
(ii) 4.4444 shares of the Company's common stock, par value $0.01 per share
(the "COMMON STOCK"), in each case per $1,000 in principal amount of Notes (the
"CONSENT FEE"). In addition, if Bally does not comply with the covenants set
forth in Sections 7.4 and 10.17 of the Indenture with respect to the Company's
Quarterly Report on Form 10-Q for the quarter ended June 30, 2006 by September
11, 2006, Bally will have the option to extend the Waiver Expiration Date with
respect to such Quarterly Report to October 11, 2006 for an additional payment
of: (i) $3.33; or (ii) 1.4815 shares of Common Stock, in each case per $1,000
in principal amount of Notes (the "ADDITIONAL FEE"). Only beneficial owners
that certify to the Company that they are "Accredited Investors" as that term
is defined in Rule 501 under the Securities Act will be offered the ability to
elect to receive shares of Common Stock offered in the Consent Solicitation. In
connection with its consent delivered pursuant to the Consent Solicitation, the
Holder will elect to receive shares of Common Stock in respect of the Notes it
beneficially owns.
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SECTION 1.4 RESTRICTED SECURITIES. The Holder understands that the
shares of Common Stock to be issued to it pursuant to this Agreement (the
"SHARES") will be issued only in a transaction not involving any public
offering in the United States within the meaning of the Securities Act, the
Shares have not been registered under the Securities Act or any other
applicable securities law, that the Shares will be "restricted securities"
within the meaning of Rule 144 under the Securities Act and that (A) prior to
the expiration of the holding period applicable to sales of restricted
securities pursuant to Rule 144 under the Securities Act, the Shares may be
offered, resold, pledged or otherwise transferred only in accordance with any
applicable securities laws of any state of the United States or any other
applicable jurisdiction (i) (a) in a transaction meeting the requirements of
Rule 144 under the Securities Act, (b) outside the U.S. to a foreign purchaser
in a transaction meeting the requirements of Regulation S, or (c) pursuant to a
transaction that is otherwise exempt from the registration requirements of the
Securities Act and state securities laws, (ii) to Bally or (iii) pursuant to an
effective registration statement under the Securities Act and (B) the Holder
will notify any subsequent purchaser from it of the resale restrictions set
forth in (A) above, if then applicable. The Holder agrees that the certificates
representing the Shares shall bear a restrictive legend in substantially the
following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE
WERE ACQUIRED IN A TRANSACTION THAT WAS NOT
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR UNDER THE SECURITIES LAWS OF ANY
STATE, AND MAY NOT BE SOLD OR OTHERWISE
DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT AND
APPLICABLE STATE SECURITIES LAWS OR AN
APPLICABLE EXEMPTION THEREFROM TO THE
REGISTRATION REQUIREMENTS OF SUCH ACT OR LAWS."
SECTION 1.5 VOTING AGREEMENT. Upon satisfaction of the conditions
precedent set forth in ARTICLE V hereof, the Holder further agrees for a period
from the date hereof through December 31, 2006 that at any meeting (whether
annual or special and whether or not an adjourned or postponed meeting) of the
holders of capital stock of the Company, however called, or in connection with
any written consent of the holders of capital stock of the Company solicited by
the Board of Directors, the Holder will appear at the meeting or otherwise
cause the Shares to be counted as present at such meeting for purposes of
establishing a quorum and vote or consent (or cause to be voted or consented)
the Shares (i) in favor of any proposed strategic transaction (including a
merger or consolidation of the Company with another entity or the sale of
substantially all of the Company's assets) approved by the Board of Directors
(a "BOARD-APPROVED TRANSACTION") and (ii) against any merger, consolidation,
combination, sale of substantial assets, reorganization, recapitalization,
dissolution, liquidation or winding up of or by the Company or any other
acquisition proposal (other than a Board-Approved Transaction); PROVIDED, that
the Holder holds the Shares on the record date for such meeting or as of the
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date of such written consent; PROVIDED, FURTHER, that this Section 1.5 will not
apply to (x) the extent any Person has formally initiated (whether by tender
offer, proxy solicitation or other filing that has been or will be mailed
directly to holders of the Company's Common Stock) a bona fide potential
strategic transaction that is fully financed or reasonably capable of being
financed and not a Board-Approved Transaction and such transaction would, if
consummated, result in a transaction more favorable to the holders of the
Company's Common Stock from a financial point of view than the Board-Approved
Transaction and (y) any shares of Common Stock which are owned, directly or
indirectly, by the Holder or any of its affiliates other than the Shares issued
pursuant to this Agreement.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF BALLY
The Company represents and warrants to the Holder as follows:
SECTION 2.1 ORGANIZATION AND STANDING OF THE COMPANY. The Company
is a corporation duly organized, validly existing and in good standing under
the laws of its state of incorporation and has all requisite corporate power
and authority (i) to own, lease and operate its properties, to carry on its
business as now being conducted and (ii) to execute, deliver and perform its
obligations under this Agreement, including entering into the Supplemental
Indenture, and the other agreements to be executed by the Company in connection
herewith and to consummate the transactions contemplated hereby and thereby.
The Company and its Subsidiaries are duly qualified to do business and are in
good standing in all jurisdictions wherein such qualification is necessary and
where failure so to qualify would have a material adverse effect on their
business, properties, operations, condition (financial or other), results of
operations or prospects of the Company and its Subsidiaries, taken as a whole.
The Company has no equity investment in any person other than its Subsidiaries.
SECTION 2.2 ISSUANCE OF THE SHARES. The Shares will be duly
authorized and when issued in accordance with the terms hereof will be validly
issued, fully paid and nonassessable. There are no preemptive or similar rights
of any stockholder of the Company or any other person to acquire the Shares.
SECTION 2.3 CONSENT AGREEMENT AND OTHER TRANSACTION DOCUMENTS. This
Agreement and the other agreements and instruments contemplated hereby have
been duly and validly authorized by the Company, this Agreement has been, and
each of the other agreements contemplated by this Agreement will be, duly
executed and delivered by the Company and this Agreement is, and each of the
other agreements contemplated by this Agreement will be, a valid and binding
obligation of the Company enforceable in accordance with its terms, subject as
to enforceability to general principles of equity and to bankruptcy,
insolvency, moratorium and other similar laws affecting the enforcement of
creditors' rights generally.
SECTION 2.4 NON-CONTRAVENTION. The execution and delivery by the
Company of this Agreement and the other agreements and transactions
contemplated hereby to which the Company is a party, do not and will not, with
or without the giving of notice or the lapse of time, or both (i) result in any
violation of any terms of the charter documents of the Company; (ii) conflict
with or result in a breach by the Company or any of the terms or provisions of,
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or constitute a default under, any indenture, mortgage, deed of trust or other
agreement or instrument to which the Company is a party or by which the Company
or any of its properties or assets is bound or affected (other than provisions
of the Credit Agreement that may prohibit the Waivers and similar waivers under
the Senior Note Indenture and the related consent payments) or (iii) violate or
contravene any applicable law, rule or regulation or any applicable decree,
judgment or order of any court or Governmental Body having jurisdiction over
the Company or any of its properties or assets.
SECTION 2.5 CERTAIN SECURITIES LAW MATTERS. Assuming the accuracy
of the representations and warranties of the Holder set forth in Article III
hereof, the Shares may be issued to the Holder pursuant to this Agreement
without registration under the Securities Act by reason of Section 4(2) thereof
and similar provisions under applicable state securities laws.
SECTION 2.6 CAPITALIZATION. The authorized capital stock of the
Company is (a) 60,200,000 shares of Common Stock and (b) 10,000,000 shares of
preferred stock, par value $.01 per share (the "PREFERRED STOCK"). All of the
outstanding shares of capital stock of the Company have been duly authorized
and validly issued and are fully paid and nonassessable, have no preemptive
rights and, to its knowledge, have been issued in accordance with applicable
securities laws. As of March 17, 2006, there were: (a) 38,529,964 shares of
Common Stock outstanding; and (b) there were no shares of Preferred Stock
outstanding. As of March 17, 2006, without giving effect to the Company's
stockholder rights plan pursuant to which each outstanding share of Common
Stock is accompanied by the right to purchase one one-thousandth (1/1000th) of
a share of Series B Junior Participating Preferred Stock (the "RIGHTS Plan"),
the Company had outstanding options, warrants and similar rights entitling the
holders to purchase or acquire 4,829,792 shares of Common Stock and 54,500
shares of Common Stock reserved for future grants under the Company's equity
incentive plans. Other than as set forth in the preceding sentence and with
respect to the Rights Plan, the Company does not have outstanding any
securities (or obligation to issue any such securities) convertible into,
exchangeable for or otherwise entitling the holders thereof to acquire shares
of Common Stock. The Company has duly reserved from its authorized and unissued
shares of Common Stock the full number of shares required for (a) all options,
warrants, convertible securities and other rights to acquire shares of Common
Stock which are outstanding and (b) all shares of Common Stock and options and
other rights to acquire shares of Common Stock which may be issued or granted
under the stock option and similar plans which have been adopted by the Company
or any of its Subsidiaries.
SECTION 2.7 RIGHTS AGREEMENT AND DGCL 203.
(a) Subject to the accuracy of Section 3.4(b), the execution,
delivery and performance of this Agreement by the Company and the Holder does
not in any way trigger, or raise any rights or obligations under, that certain
stockholder rights plan adopted by the Board of Directors of the Company on
October 18, 2005 and evidenced by that certain Rights Agreement, dated as of
October 18, 2005, between the Company and LaSalle Bank National Association, as
rights agent (the "RIGHTS AGREEMENT"), including without limitation by reason
of the fact that other Persons may be entering into consent agreements with the
Company similar to this Agreement. The Board of Directors of the Company has
approved this Agreement and determined that the Holder and its affiliates shall
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not be or be deemed to be the beneficial owner (within the meaning of Section
1.3 of the Rights Agreement) of any of the shares of Common Stock issued by the
Company to any other Person pursuant to a consent agreement that is similar to
this Agreement and the transactions contemplated hereby.
(b) Subject to the accuracy of Section 3.4(b), this Agreement
and the transactions contemplated hereby will not result in the Holder or any
of its affiliates becoming an Interested Stockholder (as such term is defined
in Section 203 of the Delaware General Corporation Law (the "DGCL").
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE HOLDER
The Holder represents and warrants to the Company as follows:
SECTION 3.1 ORGANIZATION AND STANDING OF THE HOLDER. The Holder is
duly organized, validly existing and in good standing under the laws of its
jurisdiction of its incorporation or formation and has all requisite power and
authority to own and operate its properties, to carry on its business as now
conducted and to enter into and, as applicable, perform its obligations
hereunder.
SECTION 3.2 CONSENT AGREEMENT AND OTHER TRANSACTION DOCUMENTS. This
Agreement and each other agreement contemplated hereby to which the Holder is a
party have been duly and validly authorized on behalf of the Holder. This
Agreement has been, and each of the other agreements contemplated by this
Agreement will be, duly executed and delivered by the Holder and assuming due
authorization, execution and delivery by the Company, this Agreement is, and
each of the other agreements contemplated by this Agreement will be, a valid
and binding obligation of the Holder enforceable in accordance with their
terms, subject as to enforceability to general principles of equity and to
bankruptcy, insolvency, moratorium and other similar laws affecting the
enforcement of creditors' rights generally.
SECTION 3.3 NON-CONTRAVENTION. The execution and delivery by the
Holder of this Agreement and the transactions contemplated hereby to which the
Holder is a party, do not and will not, with or without the giving of notice or
the lapse of time, or both (i) result in any violation of any terms of the
organizational documents of the Holder; (ii) conflict with or result in a
breach by the Holder or any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust or other agreement or
instrument to which the Holder is a party or by which the Holder or any of its
properties or assets is bound or affected or (iii) violate or contravene any
applicable law, rule or regulation or any applicable decree, judgment or order
of any court or Governmental Body having jurisdiction over the Holder or any of
its properties or assets.
SECTION 3.4 OWNERSHIP.
(a) The Holder is the beneficial owner of the aggregate
principal amount of Notes as set forth under Holder's name on the signature
page hereto. There are no outstanding agreements, arrangements or
understandings under which such Holder or its nominee may be obligated to
Transfer any of the Notes.
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(b) Without giving effect to the transactions contemplated by
this Agreement, as of the date hereof the Holder is the beneficial owner (as
defined in Rules 13d-3 and 13d-5 of the Exchange Act) of 5,555,555 shares of
Common Stock.
SECTION 3.5 INVESTOR REPRESENTATIONS. The Holder is knowledgeable,
sophisticated and experienced in making, and is qualified to make, decisions
with respect to investments in shares representing an investment decision like
that involved in the acquisition of the Shares, including investments in
securities issued by the Company. The Holder is acquiring the Shares in the
ordinary course of its business and for its own account for investment (as
defined for purposes of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvement Act of 1976
and the regulations thereunder) only, and has no present intention of
distributing any of the Shares nor any arrangement or understanding with any
other persons regarding the distribution of such Shares within the meaning of
Section 2(11) of the Securities Act. The Holder is an "accredited investor"
within the meaning of Rule 501 of Regulation D promulgated under the Securities
Act. The Holder understands that the Shares are being issued to it in reliance
on specific exemptions from the registration requirements of United States
federal and state securities laws and that the Company is relying upon the
truth and accuracy of, and the Holder's compliance with, the representations,
warranties, agreements, acknowledgments and understandings of the Holder set
forth herein in order to determine the availability of such exemptions and the
eligibility of the Holder to acquire the shares of Common Stock.
SECTION 3.6 INFORMATION PROVIDED. The Holder has been afforded the
opportunity to ask questions of the Company and has received satisfactory
answers to any such inquiries; and the Holder understands that its investment
in the Shares involves a high degree of risk and that no Governmental Body has
passed on or made any recommendation or endorsement of the Shares.
SECTION 3.7 TERMS OF CONSENT. The terms of this Agreement were the
result of negotiations between the Holder, the Company, and representatives of
the Company and the Holder and the Holder was given the opportunity to review
and comment upon the proposed terms of this Agreement.
ARTICLE IV
CERTAIN COVENANTS AND AGREEMENTS OF THE PARTIES
SECTION 4.1 FURTHER ACTION BY BALLY. Bally shall, at the written
request of the Holder, at any time and from time to time following the
execution of this Agreement, execute and deliver to the Holder all such further
instruments and take all such further action as may be reasonably necessary or
appropriate in order to confirm or carry out its obligations under this
Agreement and the transactions contemplated hereby.
SECTION 4.2 PUBLICITY. Neither the Company nor the Holder shall,
nor shall they permit their respective Agents to, issue or cause the
publication of any press release or make any other public statement, filing or
announcement with respect to this Agreement and the transactions contemplated
hereby without the prior approval of the other party; PROVIDED, HOWEVER, that
both the Company and the Holder shall be entitled, without the prior approval
of the Holder, to make any press release or other public disclosure with
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respect to such transactions as is required by applicable law or the NYSE. The
Company and the Holder shall cooperate in issuing press releases or otherwise
making public statements with respect to this Agreement and the transactions
contemplated hereby, which cooperation shall include first consulting the other
party hereto concerning the requirement for, and timing and content of, such
public announcement.
SECTION 4.3 REGISTRATION OF SHARES. (a) Promptly after the
execution of this Agreement, the Company will enter into a registration rights
agreement for the benefit of the holders that will be issued shares of Common
Stock in exchange for the Waivers (the "ELIGIBLE HOLDERS"), in the form
attached hereto as EXHIBIT A.
(b) All expenses incident to the Company's performance of or
compliance with its obligations under the registration rights agreement will be
borne by the Company, including, without limitation, the reimbursement of the
Eligible Holders for the reasonable expenses of one legal counsel incurred
relating to the registration of the Shares and the Additional Shares as set
forth above.
SECTION 4.4 APPROVAL RIGHT. Without the prior approval of each
Holder, Bally will not: increase the consideration payable to the holders of
the Senior Notes for similar waivers under the Senior Notes Indenture with
respect to Bally's failure to comply with its reporting obligations thereunder
in excess of the Consent Fee and the Additional Fee.
ARTICLE V
CONDITIONS PRECEDENT TO EFFECTIVENESS
The effectiveness of: (i) the Waivers provided by the Holder pursuant
to the Consent Solicitation and the obligation of the Company to pay the
Consent Fee and the Additional Fee pursuant to the Consent Solicitation; and
(ii) the provisions set forth in SECTION 1.5 hereof, will be subject to the
following conditions to be set forth in the consent solicitation materials:
SECTION 5.1 CONSENTS. Bally having received: (i) requisite consents
having been received (and not revoked) from holders of its Senior Notes in
order to effect proposed waivers under the Senior Note Indenture similar to the
Waivers; (ii) requisite consents from the necessary lenders under the Credit
Agreement in order to effect proposed waivers under the Credit Agreement
similar to the Waivers; and (iii) consents relating to the Waivers and the
similar waivers under the Senior Note Indenture and the related consent
payments having been received from the necessary lenders under the Credit
Agreement.
SECTION 5.2 NO VIOLATIONS. In the reasonable judgment of the
Company, there shall not be any law or regulation, any injunction or action or
other proceeding (pending or threatened) that (in the case of any action or
proceeding if adversely determined) would make unlawful, invalid or enjoin the
implementation of the Waivers or payment of the Consent Fee or the Additional
Fee or that would question the legality or the validity thereof.
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ARTICLE VI
DEFINITIONS
SECTION 6.1 DEFINITIONS. As used in this Agreement, in addition to
the terms defined elsewhere, the following terms shall have the meanings set
forth below, unless the context otherwise requires:
"AGENT" shall mean, with respect to any Person, any officer, director,
employee, stockholder, controlling person (within the meaning of the Securities
Act), affiliate or authorized agent of such Person.
"CREDIT AGREEMENT" shall mean the Credit Agreement, dated as of
November 18, 1997 (as amended and restated as of October 14, 2004 and as
further amended and supplemented from time to time), among Bally Total Fitness
Holding Corporation, as Borrower, the Several Banks and Other Financial
Institutions Parties Thereto, JPMorgan Chase Bank, as Agent, Deutsche Bank
Securities Inc., as Syndication Agent, LaSalle Bank National Association, as
Documentation Agent, and JPMorgan Securities Inc., as Sole Lead Arranger and
Sole Bookrunner.
"DTC" shall mean The Depository Trust Company, a limited purpose trust
company.
"DTC PARTICIPANT" shall mean a participating organization in DTC.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"GOVERNMENTAL BODY" shall mean any government or political subdivision
thereof, whether federal, state, local or foreign, or any agency or
instrumentality of any such government or political subdivision thereof, or any
federal or state court or arbitrator.
"HOLDER" shall have the definition set forth in the first paragraph of
this Agreement and all of its successors and assigns.
"PERSON" means any individual, corporation, partnership, joint
venture, trust, estate, limited liability company, unincorporated organization
or governmental agency.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SENIOR NOTE INDENTURE" means the Indenture, dated as of July 2, 2003
(as supplemented on July 22, 2003, December 7, 2004 and September 2, 2005), by
and among Bally Total Fitness Holding Corporation, as Issuer, the Guarantors
party thereto and U.S. Bank National Association, as Trustee.
"SENIOR NOTES" means the 10 1/2% Senior Notes due 2011 of Bally Total
Fitness Holding Corporation.
"TRUSTEE" shall mean U.S. Bank National Association.
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ARTICLE VII
MISCELLANEOUS
SECTION 7.1 COSTS, EXPENSES AND TAXES. Each party shall bear its
own costs and expenses in connection with the preparation, execution and
delivery of this Agreement and the issuance of the Shares and payment of the
cash consideration; provided, however, that the Company will pay for the
reasonable fees and expenses of counsel to the Holder in connection with this
Agreement and the transactions contemplated hereby, including, without
limitation, any actions requested by the Company pursuant to Section 1.2. The
Company shall pay any and all stamp and other taxes payable or determined to be
payable in connection with the execution and delivery of this Agreement and the
delivery of consent for the cash and Shares.
SECTION 7.2 SURVIVAL OF REPRESENTATIONS. The representations,
warranties, covenants and agreements of the Holder and the Company contained in
this Agreement shall survive the execution of the Supplemental Indenture.
SECTION 7.3 PRIOR AGREEMENTS. This Agreement and the other
agreements contemplated hereby constitute the entire agreement between the
parties concerning the subject matter hereof and supersedes any prior
representations, understandings or agreements. There are no representations,
warranties, agreements, conditions or covenants, of any nature whatsoever
(whether express or implied, written or oral) between the parties hereto with
respect to such subject matter except as expressly set forth herein and in the
other agreements contemplated hereby.
SECTION 7.4 SEVERABILITY. The invalidity or unenforceability of any
provision hereof shall in no way affect the validity or enforceability of any
other provision or the validity and enforceability of this Agreement in any
other jurisdiction.
SECTION 7.5 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO ITS CHOICE OF LAW RULES.
SECTION 7.6 HEADINGS. Section headings in this Agreement are
included herein for convenience of reference only and shall not constitute a
part of, or affect the interpretation of, this Agreement.
SECTION 7.7 COUNTERPARTS. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and
the same instrument, and either of the parties hereto may execute this
Agreement by signing any such counterpart. A facsimile transmission of this
Agreement bearing a signature on behalf of a party hereto shall be legal and
binding on such party.
SECTION 7.8 ASSIGNMENT; BINDING EFFECT. The Holder shall not
convey, assign or otherwise transfer any of its rights or obligations under
this Agreement without the express written consent of Bally, and Bally shall
not convey, assign or otherwise transfer any of its rights and obligations
under this Agreement without the express written consent of the Holder. This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and permitted assigns. Nothing in this
Agreement will limit or otherwise restrict the ability of the Holder to
transfer its Notes, but the agreement of the Holder to give its consent to the
Waivers will bind every subsequent holder of the Notes.
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SECTION 7.9 WAIVER; REMEDIES. No delay on the part of any Holder or
Bally in exercising any right, power or privilege under this Agreement shall
operate as a wavier thereof, nor shall any waiver on the part of any Holder or
Bally of any right, power or privilege under this Agreement operate as a waiver
of any other right, power or privilege of such party under this Agreement, nor
shall any single or partial exercise of any right, power or privilege under
this Agreement preclude any other or further exercise thereof or the exercise
of any other right, power or privilege under this Agreement.
SECTION 7.10 AMENDMENT. This Agreement may be modified or amended
only by written agreement of all of the parties to this Agreement.
SECTION 7.11 TERMINATION. This Agreement shall automatically
terminate without any action by the parties hereto if the Supplemental
Indenture implementing the Waivers has not been executed and become effective
by 6:00 pm Eastern Daylight Time on May 15, 2006.
SECTION 7.12 LIABILITY. The obligations hereunder of each of the
entities on the signature pages hereto that comprise the Holder shall be
several, and not joint, and each such entity shall only be obligated with
respect to its pro rata portion of any such obligation based on its percentage
ownership of the aggregate principal amount of Notes reflected on the signature
pages hereto.
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11
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound,
have caused this Agreement to be executed by their respective duly authorized
officers, as of the date first above written.
BALLY TOTAL FITNESS HOLDING CORPORATION
By: /s/ Xxxx X. Xxxxxxxxx
-------------------------
Name: Xxxx X. Xxxxxxxxx
Title:
PARDUS EUROPEAN SPECIAL OPPORTUNITIES
MASTER FUND L.P.
By: Pardus Capital Management L.P.,
its investment manager
By: Pardus Capital Management LLC,
its general partner
By: /s/ Xxxxx Xxxxx
----------------------------
Name: Xxxxx Xxxxx
Title: Sole Member
Date: March 22, 2006
