Exhibit 10.5
SHAREHOLDERS AGREEMENT
SHAREHOLDERS AGREEMENT ("AGREEMENT"), dated as of December 10, 1996,
by and among TOWN SPORTS INTERNATIONAL, INC., a New York corporation (the
"COMPANY"), BRUCKMANN, XXXXXX, XXXXXXXX & CO., L.P., a Delaware limited
partnership ("BRS"), the individuals and entities listed on the BRS Investor
Signature Pages hereto (each, a "BRS INVESTOR", and collectively, the "BRS
INVESTORS"), FARALLON CAPITAL PARTNERS, L.P., a California limited partnership
("FCP"), FARALLON CAPITAL INSTITUTIONAL PARTNERS, L.P., a California limited
partnership ("FCIP"), RR CAPITAL PARTNERS, L.P., a Delaware limited partnership
("RRC"), and FARALLON CAPITAL INSTITUTIONAL PARTNERS II, L.P., a California
limited partnership (together with FCP, FCIP and RRC, the "FARALLON INVESTORS",
and individually, a "FARALLON INVESTOR"), CANTERBURY MEZZANINE CAPITAL, L.P., a
Delaware limited partnership ("CANTERBURY"), and certain shareholders of the
Company listed on the Executive Signature Page hereto (each, an "EXECUTIVE",
collectively, the "EXECUTIVES") (BRS, the BRS Investors, Farallon, Canterbury
and the Executives are referred to collectively herein, together with each of
their respective Permitted Transferees (as defined herein), as the
"Shareholders"). Capitalized terms used herein but not otherwise defined shall
have the meanings assigned to such terms in Section 1.
WHEREAS, BRS, the BRS Investors and the Farallon Investors have
acquired shares of the Company's Class A Common Stock, par value $.001 per share
(the "CLASS A COMMON"), and shares of the Company's Series A Preferred Stock,
par value $1.00 per share (the "SERIES A PREFERRED"), pursuant to Stock Purchase
Agreements, dated as of the date hereof, with the Company (in each case, as the
same may be amended, restated or modified from time to time, the "INVESTOR
AGREEMENTS").
WHEREAS, the Executives hold shares of the Company's Class A Common
pursuant to Executive Stock Agreements, dated as of the date hereof, with the
Company (in each case, as the same may be amended, restated or modified from
time to time, the "EXECUTIVE AGREEMENTS") and/or have been granted options to
purchase shares of the Class A Common, pursuant to Common Stock Option
Agreements, dated as of the date hereof, by and between the Company and each of
the Executives (in each case, as the same may be amended, restated or modified
from time to time, the "COMMON OPTION AGREEMENTS").
WHEREAS, certain of the Executives have acquired shares of the
Company's Series B Preferred Stock, par value $1.00 per share (the "SERIES B
PREFERRED"), pursuant to the Executive Agreements and/or have been granted
options to purchase shares of the Series B Preferred pursuant to Preferred Stock
Option Agreements, dated as of the date hereof, by and between the Company and
each such Executive (as the same may be amended, restated or modified from time
to time, the "PREFERRED OPTION AGREEMENTS").
WHEREAS, Canterbury has acquired a warrant (together with all warrants
issued in substitution or replacement therefor, the "WARRANT") exercisable for
shares of Class A Common pursuant to the Warrant Agreement, dated as of the date
hereof, by and between Canterbury and the
Company (as the same may be amended, restated or modified from time to time, the
"WARRANT AGREEMENT").
WHEREAS, the Company and the Shareholders desire to enter into this
Agreement for the purposes, among others, of (i) establishing the composition of
the Company's Board of Directors (as in effect from time to time, the "BOARD"),
(ii) assuring continuity in the management and ownership of the Company and
(iii) limiting the manner and terms by which the Shareholder Shares may be
transferred.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties to this Agreement hereby agree as
follows:
1. DEFINITIONS. As used herein, the following terms shall have
the following meanings:
"AFFILIATE" shall mean, as to any Person, any other Person which
directly or indirectly controls, or is under common control with, or is
controlled by, such Person. As used in this definition, "control" (including,
with its correlative meanings, "controlled by" and "under common control with")
shall mean possession, directly or indirectly, of power to direct or cause the
direction of management or policies (whether through ownership of securities or
partnership or other ownership interests, by contract or otherwise).
"APPROVED SALE" means the sale of the Company, in a single transaction
or a series of related transactions, to an Unaffiliated Third Party (a) pursuant
to which such Unaffiliated Third Party proposes to acquire all of the
outstanding Common Stock (whether by merger, consolidation, recapitalization,
reorganization, purchase of the outstanding Common Stock or otherwise) or all or
substantially all of the consolidated assets of the Company, (b) which has been
approved by the Board and holders of a majority of the outstanding BRS Shares,
voting together as a single class, and (c) pursuant to which all holders of
Shareholder Shares and Preferred Shares receive at the same time (whether in
such transaction or, with respect to an asset sale, upon a subsequent
liquidation) the same form and amount of consideration (x) per share of Common
Stock (as adjusted for any consideration payable by such holders in connection
with the exercise of any Warrants or Options) with respect to holders of
Shareholder Shares, and (y) per share of Preferred Stock (which shall in no
event be less than the Liquidation Value (plus accrued and unpaid dividends) as
adjusted for any consideration payable by, or special accrual payable to, such
holders in connection with the exercise of any Preferred Options) with respect
to holders of Preferred Shares, or if any holders of Shareholder Shares or
Preferred Shares are given an option as to the form and amount of consideration
received, all such holders of Shareholder Shares or Preferred Shares, as the
case may be, are given the same option; PROVIDED, that such consideration shall
be deemed to include any other consideration paid or payable by such
Unaffiliated Third Party to any holder of Stockholder Shares in connection with
such transaction, or otherwise directly or indirectly related to such
transaction, which is not in exchange for or attributable to securities of the
Company held by such holder.
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"BRS SHARES" means Shareholder Shares owned by BRS and the BRS
Investors, or any of their respective Permitted Transferees.
"COMMON OPTIONS" means, collectively, the options to purchase Class A
Common granted to certain Executives pursuant to the Town Sports International,
Inc. 1996 Stock Option Plan and the Common Option Agreements.
"COMMON STOCK" means, collectively, the Class A Common, the Class B
Common, and any other class of common stock of the Company, or if such
outstanding Common Stock is hereafter changed into or exchanged for different
securities of the Company, such other securities.
"EXECUTIVE SHARES" means Shareholder Shares owned by the Executives or
any of their respective Permitted Transferees.
"FAMILY GROUP" means, with respect to an individual Shareholder, such
Shareholder's spouse and descendants (whether natural or adopted) and any trust
solely for the benefit of such Shareholder and/or such Shareholder's spouse,
their respective ancestors and/or descendants.
"FARALLON SHARES" means Shareholder Shares owned by the Farallon
Investors or their respective Permitted Transferees.
"INITIAL PUBLIC OFFERING" means the sale, in the initial underwritten
public offering registered under the Securities Act, of shares of the Company's
Common Stock where, after such offering, the Common Stock sold in such offering
is subject to being traded on the NASDAQ National Market or a national
securities exchange.
"INVESTORS" means, collectively, BRS and the Farallon Investors.
"LIQUIDATION VALUE" means, with respect to any share of any series of
Preferred Stock, the "Liquidation Value" for such series as defined and
determined in accordance with the Company's Certificate of Incorporation, as in
effect from time to time.
"OTHER SHAREHOLDERS" means, with respect to a Shareholder, all
Shareholders other than such Shareholder.
"OWNERSHIP RATIO" means, as to a Shareholder at the time of
determination, the percentage obtained by dividing the amount of shares of
Common Stock held by such Shareholder on a fully diluted basis at such time by
the aggregate amount of shares of Common Stock outstanding on a fully diluted
basis at such time.
"PERMITTED TRANSFEREES" has the meaning set forth in Section 4(c).
"PERSON" means an individual, a partnership, a corporation, a limited
liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated
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organization, any other entity or a governmental entity (or any department,
agency or political subdivision thereof).
"PREFERRED OPTIONS" means, collectively, the options to purchase
Series B Preferred granted to certain Executives pursuant to the Preferred
Option Agreements.
"PREFERRED SHARES" means,(i) any Preferred Stock now held or
hereafter acquired by the Shareholders, (ii) any Preferred Stock issued or
issuable upon exercise of the Preferred Options, and (iii) any securities issued
or issuable directly or indirectly with respect to the securities described in
clauses (i) and (ii) above by way of stock dividend, stock split, or in
connection with a combination of shares, recapitalization, merger, consolidation
or other reorganization. As to any particular Shares constituting Preferred
Shares, such shares will cease to be Preferred Shares when they have been sold
in an Approved Sale, transferred pursuant to Section 4(a) or 4(b) hereof, or
upon the consummation of an Initial Public Offering. For purposes of this
Agreement, a Person will be deemed a holder of Preferred Shares whenever such
Person has the rights to acquire directly or indirectly such Preferred Shares
(upon conversion or exercise in connection with a transfer of securities or
otherwise, but disregarding any restrictions or limitations upon the exercise of
such right), whether or not such acquisition has actually been effected.
"PREFERRED STOCK" means, collectively, the Series A Preferred, the
Series B Preferred and any other class of preferred stock of the Company, or if
such outstanding Preferred Stock is hereafter changed into or exchanged for
different securities of the Company, such other securities.
"PUBLIC SALE" means any sale of Shareholder Shares to the public
pursuant to an offering registered under the Securities Act or to the public
effected through a broker, dealer or market maker pursuant to the provisions of
Rule 144 under the Securities Act.
"SECURITIES ACT" means the Securities Act of 1933, as amended from
time to time.
"SHAREHOLDER SHARES" means (i) any Common Stock now held or hereafter
acquired by the Shareholders, (ii) any Common Stock issued or issuable upon
exercise of the Warrant, (iii) Common Stock issued or issuable upon exercise of
the Common Options, and (iv) any equity securities issued or issuable directly
or indirectly with respect to the securities referred to in clauses (i), (ii),
and (iii) above by way of stock dividend or stock split or in connection with a
combination of shares, recapitalization, merger, consolidation or other
reorganization. As to any particular shares constituting Shareholder Shares,
such shares will cease to be Shareholder Shares when they have been sold or
acquired in a Public Sale or in an Approved Sale, transferred pursuant to
Section 4(a) or 4(b) hereof or upon the consummation of an Initial Public
Offering. For purposes of this Agreement, a Person will be deemed to be a
holder of Shareholder Shares whenever such Person has the right to acquire
directly or indirectly such Shareholder Shares (upon conversion or exercise in
connection with a transfer of securities or otherwise, but disregarding any
restrictions or limitations upon the exercise of such right), whether or not
such acquisition has actually been effected.
"SUBSIDIARY" means, with respect to any Person, any corporation,
partnership, association or other business entity of which (i) if a corporation,
a majority of the total voting power
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of shares of stock entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof
is at the time owned or controlled, directly or indirectly, by that Person or
one or more of the other Subsidiaries of that Person or a combination thereof,
or (ii) if a partnership, association or other business entity, a majority of
the partnership or other similar ownership interest thereof is at the time owned
or controlled, directly or indirectly, by any Person or one or more Subsidiaries
of that Person or a combination thereof. For purposes hereof, a Person or
Persons shall be deemed to have a majority ownership interest in a partnership,
association or other business entity if such Person or Persons shall be
allocated a majority of partnership, association or other business entity gains
or losses or shall be or control the managing director or a general partner of
such partnership, association or other business entity.
"TRANSACTION DOCUMENTS" means, collectively, (i) this Agreement, (ii)
the Registration Rights Agreement, dated as of the date hereof, by and among the
parties hereto, (iii) the Investor Agreements, (iv) the Warrant Agreement, (v)
the Executive Agreements, (vi) the Common Option Agreements and (vii) the
Preferred Option Agreements, in each case, as the same may be amended, restated
or modified from time to time.
"UNAFFILIATED THIRD PARTY" means any Person who, immediately prior to
the contemplated transaction (i) does not own in excess of 5% of the Common
Stock on a fully diluted basis (a "5% OWNER"), (ii) is not controlling,
controlled by or under common control with any such 5% Owner and (iii) is not
the spouse or descendent (by birth or adoption) of any such 5% Owner or a trust
for the benefit of such 5% Owner and/or such other Persons.
2. BOARD OF DIRECTORS.
(a) Until the provisions of this Section 2 cease to be effective,
to the extent permitted by law, each Shareholder shall vote all voting
securities of the Company over which such Shareholder has voting control, and
shall take all other necessary or desirable actions within such Shareholder's
control (whether in such Shareholder's capacity as a Shareholder, director,
member of a board committee or officer of the Company or otherwise, and
including, without limitation, attendance at meetings in Person or by proxy for
purposes of obtaining a quorum and execution of written consents in lieu of
meetings), and the Company shall take all necessary and desirable actions within
its control (including, without limitation, calling special board and
Shareholder meetings), so that:
(i) the authorized number of directors on the Board shall be
established at six directors;
(ii) the following Persons shall be elected to the Board:
(A) for so long as BRS holds at least 10% of the Shareholder
Shares held by it as of the date hereof, two (2) representatives
designated by BRS determined by a vote or consent of the holders of a
majority of the BRS Shares (the "BRS DIRECTORS");
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(B) Xxxx Xxxxx, for so long as he is then acting and duly
elected Chief Executive Officer of the Company and willing and capable
to serve as a director, and after such time, one individual determined
by the vote or consent of Shareholders owning a majority of the
Executive Shares, voting together as a single class (the "EXECUTIVE
DIRECTOR");
(C) for so long as the Farallon Investors hold, in the
aggregate, at least 10% of the aggregate number of Shareholder Shares
held by them as of the date hereof, one (1) representative designated
by the Farallon Investors determined by a vote or consent of the
holders of a majority of the Farallon Shares (the "FARALLON
DIRECTOR");
(D) two (2) representatives designated by the holders of the
Class A Common, determined by the vote or consent of the holders of a
majority of the Class A Common, who shall initially be Xxxx X. Xxxxxx
and Xxxxxxx X. May (each, an "INDEPENDENT DIRECTOR").
(iii) the composition of the board of directors of each of the
Company's Subsidiaries (a "SUB BOARD") shall be as determined by the Board;
(iv) the Board shall create a Compensation Committee, which shall
consist of two BRS Directors and the Executive Director, which shall have
the duties and functions set forth in the Company's by-laws;
(v) any committees of the Board or a Sub Board (other than the
Compensation Committee) shall be created only upon the approval of a
majority of the members of the Board and the composition of each such
committee (if any) shall consist of at least one BRS Director;
(vi) any BRS Director, Executive Director, Farallon Director or
Independent Director shall be removed from the Board, a Sub Board or any
committee thereof (with or without cause) at the written request of the
Shareholder or Shareholders which have the right to designate such director
hereunder, but only upon such written request and under no other
circumstances (in each case, determined on the basis of a vote or consent
of the Shareholders referred to in clause (ii)(A), (ii)(B), (ii)(C) or
(ii)(D) as the case may be);
(vii) in the event that any representative designated hereunder for
any reason ceases to serve as a member of the Board or a Sub Board or any
committee thereof during such representative's term of office, the
resulting vacancy on the Board or such Sub Board or committee shall be
filled by a representative designated by the Shareholders referred to in
clause (ii)(A), (ii)(B), (ii)(C), or (ii)(D), as the case may be; and
(b) The Company shall pay the reasonable out-of-pocket expenses
incurred by each director or observer in connection with attending the meetings
of the Board or any Sub Board and any committee thereof. In addition, the
Company shall pay such additional compensation to
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directors who are not employees of the Company or any of its Subsidiaries as the
Board so determines.
(c) The provisions of this Section 2 shall terminate automatically
and be of no further force and effect upon the consummation of an Initial Public
Offering.
(d) If any party fails to designate a representative to fill a
directorship pursuant to the terms of this Section 2, the election of a Person
to such directorship shall be accomplished in accordance with the Company's
bylaws and applicable law (provided that such party may subsequently remove and
replace such Person). In the event that any provision of the Company's bylaws
or articles of incorporation is inconsistent with any provision of this Section
2, the Shareholders shall take such action as may be necessary to amend any such
provision in the Company's bylaws or certificate of incorporation to remedy such
inconsistency.
(e) So long as Xxxxxx Xxxxxxxx, Xxxxxxxxx Xxxxxxxxxxxxx, and
Xxxxxxx Xxxx (all of whom are Executives, each, an "OBSERVER") each owns at
least 10% of the Stockholder Shares held by him as of the date hereof, the
Company shall give each Observer written notice of each meeting of the Board,
at the same time and in the same manner as notice is given to the directors, and
the Company shall permit each Observer to attend, as an observer, all such
meetings unless attendance at such meeting, in the Board's reasonable judgment,
would create a conflict of interest for such Observer; PROVIDED, that in the
case of telephonic meetings, such Observer need receive only actual notice
thereof at the same time and in the same manner as notice is given to the
directors, and such Observer shall be given the opportunity to listen to such
telephonic meetings. Each Observer shall be entitled to receive all written
materials and other information (including, without limitation, copies of
meeting minutes) given to directors of the Company in connection with such
meetings at the same time such materials and information are given to such
directors unless, in the Board's reasonable judgment, receipt of such materials
would create a conflict of interest by such Observer. The Company shall give
written notice of any action by written consent in lieu of a meeting of
directors to such Observer prior to the effective date of such consent
describing in reasonable detail the nature and substance of such action.
3. REPRESENTATIONS AND WARRANTIES. Each Shareholder represents
and warrants that (a) effective as of the date hereof such Shareholder is the
record owner of the number of Shareholder Shares and Preferred Shares set forth
opposite its name on SCHEDULE A attached hereto (assuming all such shares and
options therefor have become fully vested), (b) this Agreement has been duly
authorized, executed and delivered by such Shareholder and constitutes the valid
and binding obligation of such Shareholder, enforceable in accordance with its
terms, and (c) such Shareholder has not granted and is not a party to any proxy,
voting trust or other agreement which is inconsistent with, conflicts with or
violates any provision of this Agreement. No holder of Shareholder Shares shall
grant any such proxy or become party to any such voting trust or other agreement
which is inconsistent with, conflicts with or violates any provision of this
Agreement.
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4. RESTRICTIONS ON TRANSFER.
(a) TAG ALONG RIGHTS. Subject to Sections 4(c) and 4(d) and other
than in connection with a Public Sale or Approved Sale, at least 30 days prior
to any sale, transfer, assignment, pledge or other disposal (a "TRANSFER") of
Shareholder Shares or Preferred Shares by BRS, BRS shall deliver a written
notice (the "SALE NOTICE") to the Company and the Other Shareholders, specifying
in reasonable detail the identity of the prospective transferee(s) and the terms
and conditions of the Transfer. The Other Shareholders may elect to participate
in the contemplated Transfer by delivering written notice to BRS within 15 days
after delivery of the Sale Notice. If any Other Shareholders have elected to
participate in such Transfer, BRS and such Other Shareholders shall be entitled
to sell in the contemplated Transfer, at the same price and on the same terms,
(x), with respect to Shareholder Shares, a number of Shareholder Shares equal to
the product of (i) the quotient determined by dividing the number of Shareholder
Shares owned by such Person by the aggregate number of Shareholder Shares owned
by all Shareholders participating in such Transfer and (ii) the aggregate number
of Shareholder Shares to be sold in the contemplated Transfer and (y), with
respect to Preferred Shares, a number of Preferred Shares equal to the product
of (i) the quotient determined by dividing the number of Preferred Shares owned
by such Person by the aggregate number of Preferred Shares owned by all
Shareholders participating in such Transfer and (ii) the aggregate number of
Preferred Shares to be sold in the contemplated Transfer; PROVIDED, that if the
Sale Notice includes a Transfer of both Shareholder Shares and Preferred Shares,
and any Other Shareholder elects to participate in such Transfer, such Other
Shareholder must sell the number of Preferred Shares calculated in accordance
with clause (y) (or if such Shareholder holds a lesser number of Preferred
Shares, all Preferred Shares held by such Shareholder).
FOR EXAMPLE, if the Sale Notice contemplates a sale of 100 Shareholder
Shares and 100 Preferred Shares by BRS, and if BRS at such time owns
30% of all Shareholder Shares and Preferred Shares and if one Other
Shareholder elects to participate and owns 20% of all Shareholder
Shares and Preferred Shares, BRS would be entitled to sell 60
Shareholder Shares (30% DIVIDED BY 50% x 100 shares) and 60 Preferred
Shares (30% DIVIDED BY 50% x 100 shares) and the Other Shareholder
would be entitled to sell 40 Shareholder Shares (20% DIVIDED BY 50% x
100 shares) and would be entitled and obligated to sell 40 Preferred
Shares (20% DIVIDED BY 50% x 100 shares).
(b) FIRST OFFER RIGHTS.
(i) Subject to Sections 4(c) and 4(d) and other than in
connection with a Public Sale or Approved Sale, at least thirty (30) days prior
to any Transfer of Shareholder Shares by any Shareholder (other than holders of
BRS Shares or Farallon Shares), the Shareholder making such Transfer (the
"TRANSFERRING SHAREHOLDER") shall deliver a written notice (the "TRANSFER
NOTICE") to the Company and the Investors specifying in reasonable detail the
number of shares proposed to be transferred (the "TRANSFER SHARES"), the
proposed purchase price and the other terms and conditions of the Transfer. The
Company may elect to purchase all (but not less than all) of the Transfer Shares
upon the same terms and conditions as those set forth in the Transfer Notice, by
delivering a written notice of such election to the Transferring Shareholder
within fifteen (15) days after the Transfer Notice has been delivered to the
Company. If the Company has not elected to purchase all
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of the Transfer Shares, the Investors (or their designees) may elect to purchase
all (but not less than all) of the Transfer Shares, upon the same terms and
conditions as those set forth in the Transfer Notice, by giving written notice
of such election to the Transferring Shareholder within 15 days after the
Transfer Notice has been given to the Investors. If each of the Investors
elects to purchase the Transfer Shares, the Transfer Shares to be purchased by
each Investor shall be allocated among the Investors based upon the relative
number of Shareholder Shares then held by each such Investor unless otherwise
agreed upon by the Investors. If neither the Company nor the Investors elects
to purchase all of the Transfer Shares specified in the Transfer Notice, then
the Transferring Shareholder may transfer the Transfer Shares specified in the
Transfer Notice at a price and on terms in the aggregate not materially more
favorable to the transferee(s) thereof than specified in the Transfer Notice
during the 90-day period immediately following the date on which the Transfer
Notice has been given to the Company and the Investors. Any Transfer Shares not
transferred within such 90-day period will continue to be subject to the
provisions of this Section 4(b)(i) upon any subsequent proposed Transfer.
(ii) Subject to Sections 4(c) and 4(d) and other than in
connection with a Public Sale or Approved Sale, at least thirty (30) days prior
to Transfer of any Shareholder Shares by any Farallon Investor, such Farallon
Investor shall deliver written notice (the "FARALLON SALE NOTICE") to BRS
specifying in reasonable detail the number of shares proposed to be transferred
(the "PROPOSED SHARES"). Upon receipt of the Farallon Sale Notice, BRS shall
within thirty (30) days deliver a written offer to such Farallon Investor to
purchase the Proposed Shares specifying in reasonable detail the amount and type
of consideration to be offered for the Proposed Shares and the other terms and
conditions of such offer (the "BRS REPURCHASE NOTICE"). Upon receipt of the BRS
Repurchase Notice, such Farallon Investor shall within ten (10) days deliver to
BRS a written acceptance or rejection of the offer contained in the Repurchase
Notice. If such Farallon Investor rejects the offer contained in the BRS
Repurchase Notice, such Farallon Investor may transfer the Proposed Shares
specified in the Farallon Sale Notice at a price and on terms in the aggregate
materially not more favorable to the transferee(s) thereof than specified in the
BRS Repurchase Notice during the 90-day period immediately following the date on
which the Farallon Sale Notice has been given to BRS. Any Proposed Shares not
transferred within such 90-day period will continue to be subject to the
provisions of this Section 4(b)(ii) upon any subsequent proposed Transfer.
(iii) Any purchase by the Company and/or the Investors
pursuant to this Section 4(b) shall be closed at the Company's executive offices
within (x) 45 days after the Transfer Notice (in the case of purchase pursuant
to Section 4(b)(i)) or (y) 30 days after the acceptance by the applicable
Farallon Investor of the offer set forth in the BRS Repurchase Notice pursuant
to Section 4(b)(ii). At the closing, the purchaser or purchasers shall pay the
purchase price by certified check or wire transfer of immediately available
funds, and the seller or sellers shall deliver the certificate or certificates
(or duly executed affidavits of lost certificates in accordance with the
Certificate of Incorporation) representing the Shareholder Shares and/or
Preferred Shares, as the case may be, to such purchaser or purchaser or their
nominees, accompanied by duly executed stock powers.
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(c) PERMITTED TRANSFERS. The restrictions contained in this
Section 4 shall not apply with respect to any Transfer of Shareholder Shares (or
Preferred Shares, to the extent this Section 4 applies to Preferred Shares) by
any Shareholder (i) in the case of an individual Shareholder, pursuant to
applicable laws of descent and distribution or among such Shareholder's Family
Group, (ii) in the case of holders of the BRS Shares and its Permitted
Transferees, (A) among their Affiliates, partners and employees (provided that
in the case of a distribution to BRS' partners, such distribution shall be made
PRO RATA to all such partners in accordance with the terms of its agreement of
limited partnership), (B) to any employee, prospective employee, director or
prospective director of the Company or any Subsidiary of the Company as
incentive compensation, (C) to any former or prospective employee, director or
prospective director of BRS or any Affiliate of BRS or (D) to any BRS Investor
or BRS, (iii) in the case of Canterbury, any Farallon Investor and their
respective Permitted Transferees, (A) among their respective Affiliates, members
and partners (provided that in the case of a distribution to Farallon's or
Canterbury's members or partners, such distribution shall be made PRO RATA to
all such partners in accordance with the terms of their respective agreements of
limited partnership) and (B) to any employee, director or prospective director
of the Company or any Subsidiary of the Company as incentive compensation, (iv)
in the case of Canterbury, to any assignee or participant in the subordinated
loan provided to the Company by Canterbury pursuant to the Subordinated Loan
Agreement, dated as of the date hereof, by and among the Company, Canterbury and
the other lenders named therein (as amended, restated, modified from time to
time, the "SUBORDINATED LOAN AGREEMENT") only if Canterbury is required to do so
pursuant to its agreement of limited partnership or in connection with any
dissolution of Canterbury pursuant to its agreement of limited partnership
agreement, or (v) in the case of any Farallon Investor, to another Farallon
Investor; PROVIDED, that the rights and restrictions contained in this Section 4
shall continue to be applicable to such Shareholder Shares or Preferred Shares,
as the case may be, after any such Transfer as if such Shareholder Shares or
Preferred Shares, as the case may be, were held by the transferor; and PROVIDED
FURTHER, that the transferees of such Shareholder Shares or Preferred Shares, as
the case may be, shall have agreed in writing to be bound by the provisions of
this Agreement which affect the Shareholder Shares or Preferred Shares, as the
case may be, so transferred by executing a joinder in substantially the form
attached hereto as EXHIBIT A. All transferees permitted under this Section 4(c)
are collectively referred to herein as "PERMITTED TRANSFEREES."
(d) TERMINATION OF RESTRICTIONS. The restrictions set forth in
this Section 4 shall continue with respect to each Shareholder Share or
Preferred Share until the earlier of (i) the Transfer of such Shareholder Share
or Preferred Share in a Public Sale or an Approved Sale, (ii) the consummation
of a an Initial Public Offering or (iii) the Transfer of such Shareholder Share
or Preferred Share (other than to another Shareholder or the Company) pursuant
to Section 4(a) or 4(b) hereof. In addition, the provisions of this Section 4
shall terminate on the date on which BRS holds less than 10% of the Shareholder
Shares held by it as of the date hereof
5. SALE OF THE COMPANY.
(a) In the event of an Approved Sale, each Shareholder will
(i) consent to and raise no objections against the Approved Sale or the process
pursuant to which the Approved Sale was arranged, (ii) waive any dissenter's
rights and other similar rights, and (iii) if the Approved Sale
-10-
is structured as a sale of stock, each Shareholder will agree to sell its
Shareholder Shares and Preferred Shares on the terms and conditions of the
Approved Sale. Each Shareholder will take all reasonably necessary and
desirable actions as directed by the Board and the holders of a majority of the
BRS Shares in connection with the consummation of any Approved Sale, including,
without limitation, executing the applicable purchase agreements, which shall
include customary and reasonable representations, warranties, indemnities and
contribution rights (provided that any such indemnification or contribution
obligations of any Shareholder shall be limited to the total consideration
received by such Shareholder in connection with such Approved Sale).
(b) If the Company or the holders of the Company's securities enter
into any negotiation or transaction for which Rule 506 (or any similar rule then
in effect) under the Securities Act may be available with respect to such
negotiation or transaction (including a merger, consolidation or other
reorganization), the Other Shareholders (other than Canterbury and Farallon, who
shall act on their own behalf) will, at the request of the Company, appoint a
purchaser representative (as such term is defined in Rule 501) reasonably
acceptable to the Company. If any Other Shareholder appoints a purchaser
representative designated by the Company, the Company will pay the fees of such
purchaser representative, but if any Other Shareholder declines to appoint the
purchaser representative designated by the Company such holder will appoint
another purchaser representative (reasonably acceptable to the Company), and
such holder will be responsible for the fees of the purchaser representative so
appointed.
(c) All Shareholders will bear their PRO RATA share (based upon the
number of shares sold) of the reasonable costs of any sale of Shareholder Shares
and Preferred Shares pursuant to an Approved Sale to the extent such costs are
incurred for the benefit of all selling Shareholders and are not otherwise paid
by the Company or the acquiring party. Costs incurred by any Shareholder on its
own behalf will not be considered costs of the transaction hereunder.
(d) This Section 5 shall automatically terminate upon the earlier
of (i) the consummation of a Initial Public Offering or (ii) the date on which
BRS hold less than 20% of the Common Stock on a fully diluted basis.
6. PREEMPTIVE RIGHTS. If the Company issues any equity securities
or any securities containing options or rights to acquire any equity securities
or any securities convertible or exchangeable for equity securities in each
case, after the date hereof to any Person (other than the Executives) (the
"OFFEREE"), the Company will offer to sell to each Shareholder, a number of such
securities ("OFFERED SHARES") so that the Ownership Ratio immediately after the
issuance of such securities for each Shareholder would be equal to the Ownership
Ratio for such Shareholder immediately prior to such issuance of securities;
PROVIDED, that if the antidilution provisions set forth in Section 12 of the
Warrant Agreement adjust the terms of the Warrants as a result of such issuance,
the Company shall not be required to offer Canterbury the Offered Shares with
respect to the Shareholder Shares attributable to the Warrant. The Company
shall give each Shareholder at least 30 days prior written notice of any
proposed issuance, which notice shall disclose in reasonable detail the proposed
terms and conditions of such issuance (the "ISSUANCE NOTICE"). Each Shareholder
will be entitled to purchase such securities at the same price, on the same
terms, and at the same time as the securities are issued to the Offeree by
delivery of written notice to the Company of such
-11-
election within 15 days after delivery of the Issuance Notice (the "ELECTION
NOTICE"); PROVIDED, that if more than one type of security was issued, each
Shareholder shall, if it exercises its rights pursuant to this Section 6,
purchase such securities in the same ratio as issued. If any of the Shareholders
have elected to purchase any Offered Shares, the sale of such shares shall be
consummated as soon as practical (but in any event within 10 days) after the
delivery of the Election Notice. In the event any Shareholder elects not to
exercise its rights pursuant to this Section 6, no other Shareholder shall have
the right to purchase the securities offered to such Shareholder. This Section
6 will terminate automatically, and be of no further force and effect, upon the
consummation of a Initial Public Offering.
7. LEGEND. In addition to any legend required by any other
Transaction Document, each certificate evidencing Shareholder Shares or
Preferred Shares and each certificate issued in exchange for or upon the
transfer of any Shareholder Shares or Preferred Shares (if such shares remain
Shareholder Shares or Preferred Shares, as the case may be, as defined herein
after such transfer) shall be stamped or otherwise imprinted with a legend in
substantially the following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE
ORIGINALLY ISSUED ON DECEMBER 10, 1996, AND HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
THE SECURITIES REPRE-SENTED BY THIS CERTIFICATE ARE SUBJECT
TO A SHAREHOLDERS AGREEMENT DATED AS OF DECEMBER 10, 1996 BY
AND AMONG THE ISSUER OF SUCH SECURITIES (THE "COMPANY") AND
CERTAIN OF THE COMPANY'S SHAREHOLDERS. A COPY OF SUCH
SHAREHOLDERS AGREEMENT WILL BE FURNISHED WITHOUT CHARGE BY
THE COMPANY TO THE HOLDER HEREOF UPON WRITTEN REQUEST."
The Company shall imprint such legend on certificates evidencing Shareholder
Shares or Preferred Shares outstanding prior to the date hereof. The legend set
forth above shall be removed from the certificates evidencing any shares which
cease to be Shareholder Shares or Preferred Shares, as the case may be.
8. TRANSFERS IN VIOLATION OF AGREEMENT. Any Transfer or attempted
Transfer of any Shareholder Shares in violation of any provision of this
Agreement shall be null and void, and the Company shall not record such Transfer
on its books or treat any purported transferee of such Shareholder Shares as the
owner of such shares for any purpose.
9. TRANSFER OF SHAREHOLDER SHARES.
(a) Shareholder Shares are transferable only pursuant to (i) public
offerings registered under the Securities Act, (ii) subject to the provisions of
Section 4 above, Rule 144, Rule 144A or Rule 701 (or any similar rule or rules
then in effect) of the Securities and Exchange
-12-
Commission if such rule is available, (iii) Section 4(c), and (iv) subject to
Section 4 and Section 9(b) below, any other legally available means of Transfer.
(b) In connection with the Transfer of any Shareholder Shares other
than a Transfer described in clause (i) or (ii) of Section 9(a) above, the
holder thereof shall deliver written notice to the Company describing in
reasonable detail the Transfer or proposed Transfer, together with an opinion of
counsel reasonably acceptable to the Company to the effect that such Transfer of
Shareholder Shares may be effected without registration of such Shareholder
Shares under the Securities Act. In addition, if the holder of the Shareholder
Shares delivers to the Company an opinion of counsel that no subsequent Transfer
of such Shareholder Shares shall require registration under the Securities Act,
the Company shall promptly upon such contemplated Transfer deliver new
certificates for such Shareholder Shares which do not bear the legend set forth
in Section 6 above. If the Company is not required to deliver new certificates
for such Shareholder Shares not bearing such legend, the holder thereof shall
not Transfer the same until the prospective transferee has confirmed to the
Company in writing its agreement to be bound by the conditions contained in this
Section 9 and Section 7 above.
(c) Upon the request of a holder of Shareholder Shares, the Company
shall promptly supply to such Person or its prospective transferees all
information regarding the Company required to be delivered in connection with a
Transfer pursuant to Rule 144A (or any similar rule or rules then in effect) of
the Securities and Exchange Commission.
(d) Upon the request of any holder of Shareholder Shares, the
Company shall remove the legend set forth in Section 7 above from the
certificates for such holder's Shareholder Shares (or the eligible portion
thereof); PROVIDED, that such Shareholder Shares have been either registered
under the Securities Act or are eligible for sale pursuant to Rule 144 (or any
similar rule or rules then in effect) of the Securities and Exchange Commission.
10. AMENDMENT AND WAIVER. Except as otherwise provided herein, no
modification, amendment or waiver of any provision of this Agreement shall be
effective against the Company or the Shareholders unless such modification,
amendment or waiver is approved in writing by the Company or the holders of not
less than 70% of the Shareholder Shares, respectively; PROVIDED, that no such
amendment or action which materially adversely affects any one or more
Shareholder(s) shall be effective against such Shareholder(s) without the prior
written consent of each such Shareholder. For avoidance of doubt, an amendment
to add another party to this Agreement is not an action which, in and of itself,
affects any Shareholder materially adversely. The failure of any party to
enforce any of the provisions of this Agreement shall in no way be construed as
a waiver of such provisions and shall not affect the right of such party
thereafter to enforce each and every provision of this Agreement in accordance
with its terms.
-13-
11. AFFILIATE TRANSACTIONS. The Company will not, and will not
permit any of its Subsidiaries, to enter into any transaction or series of
transactions after the date hereof, whether or not in the ordinary course of
business with any Affiliate or 5% Owner (or any Affiliate of such 5% Owner);
PROVIDED, that the foregoing shall not apply to (i) the declaration and payment
of dividends approved by the Board, (ii) employment arrangements with any
Executive or employees of the Company entered into in the ordinary course of
business, (iii) any transactions expressly permitted or contemplated by this
Agreement, the Registration Rights Agreement, the Investor Agreements, the
Executive Agreements, the Common Option Agreements, the Preferred Option
Agreements, the Warrant Agreement, the Subordinated Loan Agreement (and all
documents entered into in connection therewith), and the Professional Services
Agreement date as of the date hereof by and among the Company and an Affiliate
of BRS, or (iv) any transaction consented to by not less than 70% of the
Shareholder Shares excluding for purposes of this clause (iv) Shareholder Shares
held by such Affiliate or 5% Owner).
12. MISCELLANEOUS.
(a) SEVERABILITY. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision or any other jurisdiction, but this Agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
(b) ENTIRE AGREEMENT. Except as otherwise expressly set forth
herein, this Agreement and the other Transaction Documents embody the complete
agreement and understanding among the parties hereto with respect to the subject
matter hereof and supersede and preempt any prior understandings, agreements or
representations by or among the parties, written or oral, which may have related
to the subject matter hereof in any way; it being understood and agreed that
nothing herein is intended to impair or affect in any way Canterbury's rights in
its capacity as a lender or agent under the Subordinated Loan Agreement.
(c) SUCCESSORS AND ASSIGNS. Except as otherwise provided herein,
this Agreement shall bind and inure to the benefit of and be enforceable by the
Company and its successors and assigns and the Shareholders and any subsequent
holders of Shareholder Shares and the respective successors and assigns of each
of them, so long as they hold Shareholder Shares; it being understood that any
transferee of Shareholder Shares or Preferred Shares pursuant to Section 4(a) or
4(b) (other than Shareholders) shall not succeed to the rights or obligations of
the transferor hereunder.
-14-
(d) COUNTERPARTS. This Agreement may be executed in separate
counterparts each of which shall be an original and all of which taken together
shall constitute one and the same agreement.
(e) REMEDIES. The parties hereto shall be entitled to enforce
their rights under this Agreement specifically to recover damages by reason of
any breach of any provision of this Agreement and to exercise all other rights
existing in their favor. The parties hereto agree and acknowledge that money
damages may not be an adequate remedy for any breach of the provisions of this
Agreement and that the Company, BRS, the BRS Investors, Farallon, Canterbury and
any Executive may in its sole discretion apply to any court of law or equity of
competent jurisdiction for specific performance and/or injunctive relief
(without posting a bond or other security) in order to enforce or prevent any
violation of the provisions of this Agreement.
(f) NOTICES. All notices, demands or other communications to be
given or delivered under or by reason of the provisions of this Agreement will
be in writing and will be deemed to have been given when delivered personally,
mailed by certified or registered mail, return receipt requested and postage
prepaid, or sent via a nationally recognized overnight courier, or sent via
facsimile to the recipient. Such notices, demands and other communications will
be sent to the address indicated below:
To the Company:
Town Sports International, Inc.
000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxxxxxxxx
Facsimile No.: (000) 000-0000
With copies to (which shall not constitute notice to the
Company):
Bruckmann, Xxxxxx, Xxxxxxxx & Co., Inc.
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxxx
Facsimile No.: (000) 000-0000
Xxxxxxxx & Xxxxx
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxx X. Xxxxx, Esq.
Facsimile No.: (000) 000-0000
To BRS:
Bruckmann, Xxxxxx, Xxxxxxxx & Co., Inc.
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
-15-
Attention: Xxxxxxx Xxxxxxx
Facsimile No.: (000) 000-0000
With a copy to (which shall not constitute notice to BRS):
Xxxxxxxx & Xxxxx
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxx X. Xxxxx, Esq.
Facsimile No.: (000) 000-0000
To Farallon:
x/x Xxxxxxxx Xxxxxxx Xxxxxxxxxx, X.X.X.
Xxx Xxxxxxxx Xxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxx
Facsimile No.: (000) 000-0000
With a copy to (which shall not constitute notice to Farallon):
Richards, Spears, Xxxxx & Orbe
One Chase Xxxxxxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxx, Esq.
Facsimile No.: (000) 000-0000
To Canterbury:
Canterbury Mezzanine Capital, L.P.
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. X. Xxxxxx
Facsimile No.: (000) 000-0000
With a copy to (which shall not constitute notice to
Canterbury):
Xxxxxxx Xxxxxx & Xxxxx
Worldwide Plaza
000 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxx Xxxxx, Esq.
Facsimile No.: (000) 000-0000
-16-
To any of the Executives:
[EXECUTIVE'S NAME]
c/o Town Sports International, Inc.
000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000
or such other address or to the attention of such other Person as the recipient
party shall have specified by prior written notice to the sending party.
(g) WAIVER OF JURY TRIAL. Each of the parties hereto waives any
right it may have to trial by jury in respect of any litigation based on,
arising out of, under or in connection with this agreement or any course of
conduct, course of dealing, verbal or written statement or action of any party
hereto.
(h) GOVERNING LAW. ALL QUESTIONS CONCERNING THE CONSTRUCTION,
VALIDITY AND INTERPRETATION OF THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE DOMESTIC LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING
EFFECT TO ANY CHOICE OF LAW OR CONFLICT OF LAW PROVISION OR RULE (WHETHER OF THE
STATE OF NEW YORK OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF
THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF NEW YORK.
(i) TIME IS OF THE ESSENCE; COMPUTATION OF TIME. Time is of the
essence for each and every provision of this Agreement. Whenever the last day
for the exercise of any privilege or the discharge of any duty hereunder shall
fall upon a Saturday, Sunday, or any date on which banks in New York, New York
are authorized to be closed, the party having such privilege or duty may
exercise such privilege or discharge such duty on the next succeeding day which
is a regular business day.
(j) DESCRIPTIVE HEADINGS. The descriptive headings of this
Agreement are inserted for convenience only and do not constitute a part of this
Agreement.
* * * * *
-17-
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
TOWN SPORTS INTERNATIONAL, INC.
By: /s/ X. Xxxxxxxxxxxxx
--------------------------------
Name: Xxxxxxxxx Xxxxxxxxxxxxx
Title: Executive Vice President
BRUCKMANN, XXXXXX, XXXXXXXX & CO., L.P.
By: BRS Partners, Limited Partnership
Its: General Partner
By: /s/ Xxxxxxx Xxxxxxx
--------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Vice President
CANTERBURY MEZZANINE CAPITAL, L.P.
By: Canterbury Capital, L.L.C.
Its: General Partner
By: /s/ Xxxxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Member
By: /s/
--------------------------------
Name:
Title: Member
FARALLON CAPITAL PARTNERS, L.P.
By: Farallon Partners, L.L.C.
Its: General Partner
By: /s/ Xxxxx X. Xxxxx
--------------------------------
Name: Xxxxx X. Xxxxx
Title: Managing Member
FARALLON CAPITAL INSTITUTIONAL PARTNERS, L.P.
By: Farallon Partners, L.L.C.
Its: General Partner
By: /s/ Xxxxx X. Xxxxx
--------------------------------
Name: Xxxxx X. Xxxxx
Title: Managing Member
RR CAPITAL PARTNERS, L.P.
By: Farallon Partners, L.L.C.
Its: General Partner
By: /s/ Xxxxx X. Xxxxx
--------------------------------
Name: Xxxxx X. Xxxxx
Title: Managing Member
FARALLON CAPITAL INSTITUTIONAL PARTNERS II,
L.P.
By: Farallon Partners, L.L.C.
Its: General Partner
By: /s/ Xxxxx X. Xxxxx
--------------------------------
Name: Xxxxx X. Xxxxx
Title: Managing Member
EXECUTIVE SIGNATURE PAGE
/s/ Xxxxx X. Xxxxxx
--------------------------------------
EXECUTIVE
Name:(Print): Xxxxx X. Xxxxxx
------------------------
EXECUTIVE SIGNATURE PAGE
/s/ Xxxx X. Derlent
--------------------------------------
EXECUTIVE
Name:(Print): Xxxx X. Derlent
------------------------
EXECUTIVE SIGNATURE PAGE
/s/ Xxxxxxx Xxxxxxxx
--------------------------------------
EXECUTIVE
Name:(Print): Xxxxxxx Xxxxxxxx
------------------------
EXECUTIVE SIGNATURE PAGE
/s/ Xxxxxxxx X. Xxxxxxx
--------------------------------------
EXECUTIVE
Name:(Print): Xxxxxxxx X. Xxxxxxx
------------------------
EXECUTIVE SIGNATURE PAGE
/s/ Xxx Xxxxx
--------------------------------------
EXECUTIVE
Name:(Print): Xxx Xxxxx
------------------------
EXECUTIVE SIGNATURE PAGE
/s/ Xxxx X. Xxxxxx
--------------------------------------
EXECUTIVE
Name:(Print): Xxxx X. Xxxxxx
------------------------
EXECUTIVE SIGNATURE PAGE
/s/ Xxxxx Xxxxxxxx
--------------------------------------
EXECUTIVE
Name:(Print): Xxxxx Xxxxxxxx
------------------------
EXECUTIVE SIGNATURE PAGE
/s/ Nina Dachaine
--------------------------------------
EXECUTIVE
Name:(Print): Nina Dachaine
------------------------
EXECUTIVE SIGNATURE PAGE
/s/ Xxxxxx Xxxxxxx
--------------------------------------
EXECUTIVE
Name:(Print): Xxxxxx Xxxxxxx
------------------------
EXECUTIVE SIGNATURE PAGE
/s/ Xxxxxx Kimeding
--------------------------------------
EXECUTIVE
Name:(Print): Xxxxxx Kimeding
------------------------
EXECUTIVE SIGNATURE PAGE
/s/ X.X. Xxxxx (Xxxxxx)
--------------------------------------
EXECUTIVE
Name:(Print): X.X. Xxxxx (Xxxxxx)
------------------------
EXECUTIVE SIGNATURE PAGE
/s/ X.X. Xxxx
--------------------------------------
EXECUTIVE
Name:(Print): X.X. Xxxx
------------------------
EXECUTIVE SIGNATURE PAGE
/s/ X. Xxxxxxxxxxxxx
--------------------------------------
EXECUTIVE
Name:(Print): Xxxxxxxxx Xxxxxxxxxxxxx
------------------------
EXECUTIVE SIGNATURE PAGE
/s/ Xxxxxx Xxxxxxxx
--------------------------------------
EXECUTIVE
Name:(Print): Xxxxxx Xxxxxxxx
------------------------
EXECUTIVE SIGNATURE PAGE
/s/ Xxxx Xxxxx
--------------------------------------
EXECUTIVE
Name:(Print): Xxxx Xxxxx
------------------------
EXECUTIVE SIGNATURE PAGE
/s/ Heinz Ritscuard
--------------------------------------
EXECUTIVE
Name:(Print): Heinz Ritscuard
------------------------
BRS INVESTOR SIGNATURE PAGE
/s/ Xxxxx Xxxxxxxxx
--------------------------------------
BRS INVESTOR
Name: (Print): Xxxxx Xxxxxxxxx
----------------------
Title (if any): Attorney-in-fact
BRS INVESTOR SIGNATURE PAGE
/s/ Xxxxxx Xxxxxxxxx
--------------------------------------
BRS INVESTOR
Name: (Print): Xxxxxx Xxxxxxxxx
----------------------
Title (if any): Attorney-in-fact
BRS INVESTOR SIGNATURE PAGE
/s/ BCB Partnership
--------------------------------------
BRS INVESTOR
Name: (Print): BCB Partnership
----------------------
Title (if any): Attorney-in-fact
BRS INVESTOR SIGNATURE PAGE
/s/ NAZ Partnership
--------------------------------------
BRS INVESTOR
Name: (Print): NAZ Partnership
----------------------
Title (if any): Attorney-in-fact
BRS INVESTOR SIGNATURE PAGE
/s/ Xxxxxx X. Xxxxxx
--------------------------------------
BRS INVESTOR
Name: (Print): Xxxxxx X. Xxxxxx
----------------------
Title (if any): Attorney-in-fact
BRS INVESTOR SIGNATURE PAGE
/s/ Xxxxxx Xxxxxxxx
--------------------------------------
BRS INVESTOR
Name: (Print): Xxxxxx Xxxxxxxx
----------------------
Title (if any): Attorney-in-fact
BRS INVESTOR SIGNATURE PAGE
/s/ Xxxxxxx Xxxxxxxx
--------------------------------------
BRS INVESTOR
Name: (Print): Xxxxxxx Xxxxxxxx
----------------------
Title (if any): Attorney-in-fact
BRS INVESTOR SIGNATURE PAGE
/s/ Xxxxx Xxxxx
--------------------------------------
BRS INVESTOR
Name: (Print): Xxxxx Xxxxx
----------------------
Title (if any): Attorney-in-fact
BRS INVESTOR SIGNATURE PAGE
/s/ Xxxx X. Xxxxxxxx
--------------------------------------
BRS INVESTOR
Name: (Print): Xxxx X. Xxxxxxxx
----------------------
Title (if any): Attorney-in-fact
BRS INVESTOR SIGNATURE PAGE
/s/ Xxxx X. Xxxxxxxx
--------------------------------------
BRS INVESTOR
Name: (Print): Xxxx X. Xxxxxxxx
----------------------
Title (if any): Attorney-in-fact
SCHEDULE A
----------
EXHIBIT A
---------
FORM OF JOINDER TO
SHAREHOLDERS AGREEMENT
----------------------
THIS JOINDER to the Shareholders Agreement, dated as of December __,
1996 by and among Town Sports International, Inc., a New York corporation (the
"COMPANY"), and certain shareholders of the Company (the "AGREEMENT"), is made
and entered into as of _____________, ____ by and between the Company and
____________ ("HOLDER"). Capitalized terms used herein but not otherwise
defined shall have the meanings set forth in the Agreement.
WHEREAS, Holder has acquired certain shares of Common Stock ("HOLDER
STOCK"), and the Agreement and the Company requires Holder, as a holder of
Common Stock, to become a party to the Agreement, and Holder agrees to do so in
accordance with the terms hereof.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties to this Joinder hereby agree as
follows:
1. AGREEMENT TO BE BOUND. Holder hereby agrees that upon
execution of this Joinder, it shall become a party to the Agreement and shall
be fully bound by, and subject to, all of the covenants, terms and conditions of
the Agreement as though an original party thereto and shall be deemed a
Shareholder [AND ______] for all purposes thereof. In addition, Holder hereby
agrees that all Common Stock held by Holder shall be deemed Shareholder Shares
for all purposes of the Agreement.
2. SUCCESSORS AND ASSIGNS. Except as otherwise provided herein,
this Joinder shall bind and inure to the benefit of and be enforceable by the
Company and its successors and assigns and Holder and any subsequent holders of
Holder Stock and the respective successors and assigns of each of them, so long
as they hold any shares of Holder Stock.
3. COUNTERPARTS. This Joinder may be executed in separate
counterparts each of which shall be an original and all of which taken together
shall constitute one and the same agreement.
4. NOTICES. For purposes of Section 12(f) of the Agreement, all
notices, demands or other communications to the Holder shall be directed to:
[Name]
[Address]
[Facsimile Number]
5. GOVERNING LAW. ALL QUESTIONS CONCERNING THE CONSTRUCTION,
VALIDITY AND INTERPRETATION OF THIS JOINDER SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE DOMESTIC LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING
EFFECT TO ANY CHOICE OF LAW OR CONFLICT OF LAW PROVISION OR RULE (WHETHER OF THE
STATE OF NEW YORK OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF
THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF NEW YORK.
6. DESCRIPTIVE HEADINGS. The descriptive headings of this Joinder
are inserted for convenience only and do not constitute a part of this Joinder.
* * * * *
-24-
IN WITNESS WHEREOF, the parties hereto have executed this Joinder as
of the date first above written.
TOWN SPORTS INTERNATIONAL, INC.
By:
------------------------------
Name:
Title:
[HOLDER]
By:
------------------------------
