EXHIBIT 10.1
EXECUTION VERSION
AMENDMENT NO. 1 TO LIMITED WAIVER AND FORBEARANCE AGREEMENT
     AMENDMENT NO. 1 TO LIMITED WAIVER AND FORBEARANCE AGREEMENT, dated as of
July 13, 2007 (this “Amendment”), by and between Bally Total Fitness Holding
Corporation, a corporation organized under the laws of Delaware (the “Company”),
the Guarantors listed on Exhibit A hereto (the “Guarantors”) and the Persons
listed on Exhibit B hereto (each, a “Holder” and collectively, the “Holders”).
Capitalized terms used and not otherwise defined herein shall have the meanings
ascribed to them in the Limited Waiver and Forbearance Agreement (as defined
below).
     WHEREAS, the Holders are the beneficial owners of the 10 1/2% Senior Notes
due 2011 of the Company (the “Notes”) issued pursuant to an Indenture, dated as
of July 2, 2003 (as amended or supplemented, the “Indenture”), between the
Company, the Guarantors and U.S. Bank National Association, as trustee (the
“Trustee”), and consequently, the Holders are the beneficial owners of a
majority in aggregate principal amount of Notes outstanding;
     WHEREAS, pursuant to a Limited Waiver and Forbearance Agreement, dated as
of May 14, 2007 (the “Limited Waiver and Forbearance Agreement”), by and between
the Company, the Guarantors and the Holders, the Holders waived certain Defaults
or Events of Defaults under the Indenture relating to the Reporting Obligations,
the Interest Payment Default, the Sale and Leaseback Matters and the Notice
Obligations (collectively, the “Waived Matters”);
     WHEREAS, the waiver of the Waived Matters expired as of the date hereof in
accordance with the terms of the Limited and Waiver Forbearance Agreement;
     WHEREAS, the Company desires to seek an extension of the Forbearance from
holders of the Notes to July 31, 2007, subject to the terms hereof.
     NOW, THEREFORE, in consideration of the promises and the representations,
warranties, covenants and agreements herein contained, and intending to be
legally bound hereby, the Company and the Holders hereby agree as follows:
ARTICLE I.
AMENDMENTS
     Section 1.1 Amendments to Limited Waiver and Forbearance Agreement. The
Limited Waiver and Forbearance Agreement is, effective as of the date hereof and
subject to the satisfaction of the conditions precedent set forth in Section 2.1
hereof, hereby amended as follows:
          (a) Section 1.1 is deleted in its entirety and replaced with the
following:
          “Section 1.1 Reserved. [Reserved]”
          (b) Section 1.3(a) is deleted in its entirety and replaced with the
following:
          "(a) Pursuant to Section 5.12 of the Indenture, and notwithstanding
any notice from any holder of the Notes, but subject to the remaining provisions
of this Section 1.3(a), each

 

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Holder hereby agrees to forbear, and directs the Trustee to forbear, at all
times from the Effective Date to, but not including, the Forbearance and Waiver
Expiration Date, from taking or exercising any Enforcement Action in connection
with the Waived Matters (the “Forbearance”); provided, however, that no Holder
shall be required to expend any funds or indemnify the Trustee in connection
with the Forbearance or any related direction to the Trustee. Notwithstanding
the foregoing sentence or any other provisions of this Agreement, nothing in
this Agreement shall impair any right of any Holders to declare all unpaid
principal of, premium, if any, and accrued interest on the indebtedness
outstanding under the Indenture to be due and payable; provided, however, that
the Company and the Guarantors reserve (i) all of their rights to contest the
validity and enforceability of any such declaration, and (ii) any and all other
rights with respect to any such declaration or any effects thereof.”
          (c) Article IV is amended by inserting Section 4.3, as follows,
immediately following the end of Section 4.2:
          “Section 4.3 Assumption by Transferees. (a) If, following execution of
this Agreement by a Holder, such Holder hypothecates, pledges, conveys,
transfers, assigns or sells (collectively, a “Transfer”) all or a part of the
Notes held by such Holder to any Person (each such Person, a “Transferee”), the
Transferee must, as a condition precedent to the settlement of such Transfer,
execute an assumption in substantially the form attached hereto as Exhibit E
(the “Assumption Agreement”). To the maximum extent permitted by applicable law,
any Transfer that is made in violation of the immediately preceding sentence
shall be null and void. A Holder shall provide to the Company a copy of the
executed Assumption Agreement within three business days of the execution of an
agreement (or trade confirmation) in respect of such Transfer.”
          (d) Section 6.1(f)(A) is amended by deleting the phrase “July 13,
2007” and replacing it with the phrase “July 31, 2007”.
          (e) Article VII is amended by inserting Section 7.14, as follows,
immediately following the end of Section 7.13:
          “Section 7.14 Holders. Notwithstanding any other provision hereof, for
purposes this Agreement, as amended by Amendment No. 1 to this Agreement, dated
July 13, 2007, the Holders under this Agreement shall constitute “Holders” under
the Indenture and the Company shall not contest the validity of a notice sent by
any such Holders pursuant to section 5.2 of the Indenture on the grounds that
such Holders are not registered owners of Notes.”
          (f) Exhibit C attached hereto is inserted in the Agreement as
Exhibit E to the Agreement immediately following Exhibit D to the Agreement.
ARTICLE II.
CONDITIONS OF EFFECTIVENESS
     Section 2.1 Conditions of Effectiveness. This Amendment shall become
effective as of the date first above written when:

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          (a) the Company shall have received counterparts of this Amendment
executed by holders of a majority in aggregate principal amount outstanding of
the Notes;
          (b) The Senior Subordinated Notes Forbearance Agreement shall have
been amended in the form attached hereto as Exhibit D, and such amendment shall
become effective contemporaneously with this Amendment;
          (c) The Credit Agreement Forbearance Agreement shall have been amended
in the form attached hereto as Exhibit E, and such amendment shall become
effective contemporaneously with this Amendment; and
          (d) Holders of a majority in aggregate principal amount of the Notes
shall have executed a direction letter to the Trustee extending the Forbearance
and Waiver Expiration Date to July 31, 2007, in the form attached hereto as
Exhibit F.
ARTICLE III.
MISCELLANEOUS
     Section 3.1 Reference to Limited Waiver and Forbearance Agreement. On and
after the effectiveness of this Amendment, each reference in the Limited Waiver
and Forbearance Agreement to “this Agreement,” “hereunder,” “hereof” or words of
like import referring to the Limited Waiver and Forbearance Agreement shall mean
and be a reference to the Limited Waiver and Forbearance Agreement as amended by
this Amendment.
     Section 3.2 Full Force and Effect. The Limited Waiver and Forbearance
Agreement, as specifically amended by this Amendment, is and shall continue to
be in full force and effect and is hereby in all respects ratified and
confirmed.
     Section 3.3 No Waiver. The execution, delivery and effectiveness of this
Amendment shall not, except as expressly provided herein, operate as a waiver of
any right, power or remedy of any party under the Limited Waiver and Forbearance
Agreement, nor constitute a waiver of any provision of the Limited Waiver and
Forbearance Agreement.
     Section 3.4 Execution in Counterparts. This Amendment may be executed in
any number of counterparts, all of which taken together shall constitute one and
the same instrument, and each of the parties hereto may execute this Amendment
by signing any such counterpart. A facsimile or electronic mail transmission of
this Amendment bearing a signature on behalf of a party hereto shall be legal
and binding on such party.
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     IN WITNESS WHEREOF, the parties hereto, intending to be legally bound
hereby, have caused this Amendment to be executed by their respective duly
authorized officers, as of the date first above written.

                  BALLY TOTAL FITNESS HOLDING CORPORATION    
 
           
 
  By:        
 
                Name:         Title:    
 
                THE GUARANTORS    
 
                Each Guarantor Listed on Exhibit A Hereto    
 
           
 
  By:        
 
                Name:         Title:    

[SIGNATURES CONTINUE ON FOLLOWING PAGE]

 

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SIGNATURE OF BENEFICIAL HOLDER

     
By:
   
 
   

     
Name (please print):
   
 
   

     
Title:
   
 
   

     
Address (including zip code):
   
 
   
 
     

     
Telephone Number (including area code):
   
 
   

     
Fax Number (including area code):
   
 
   

     
Tax Identification or Social Security Number:
   
 
   

     
Aggregate Principal Amount of Notes Held:
   
 
   

 

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EXHIBIT A
Bally Fitness Franchising, Inc.
Bally Franchise RSC, Inc.
Bally Franchising Holdings, Inc.
Bally Total Fitness Corporation
Bally Total Fitness Holding Corporation
Bally Total Fitness International, Inc.
Bally Total Fitness of Missouri, Inc.
Bally Total Fitness of Toledo, Inc.
Bally Total Fitness of Connecticut Coast, Inc.
Bally Total Fitness of Connecticut Valley, Inc.
Greater Philly No. 1 Holding Company
Greater Philly No. 2 Holding Company
Health & Tennis Corporation of New York
Holiday Health Clubs of the East Coast, Inc.
Bally Total Fitness of Upstate New York, Inc.
Bally Total Fitness of Colorado, Inc.
Bally Total Fitness of the Southeast, Inc.
Holiday/Southeast Holding Corp.
Bally Total Fitness of California, Inc.
Bally Total Fitness of the Mid-Atlantic, Inc.
BTF/CFI, Inc.
Bally Total Fitness of Greater New York, Inc.
Jack La Lanne Holding Corp.
Bally Sports Clubs, Inc.
New Fitness Holding Co., Inc.
Nycon Holding Co., Inc.
Bally Total Fitness of Philadelphia, Inc.
Bally Total Fitness of Rhode Island, Inc.
Rhode Island Holding Company
Bally Total Fitness of the Midwest, Inc.
Bally Total Fitness of Minnesota, Inc.
Tidelands Holiday Health Clubs, Inc.
U.S. Health, Inc.

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EXHIBIT B

              Aggregate Principal Amount   Name of Holder   of Notes Held
Beneficially  
 
       

B-1

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EXHIBIT C
Form of Assumption Agreement
     Reference is hereby made to the Limited Waiver and Forbearance Agreement,
dated as of May 14, 2007 (the “Limited Waiver and Forbearance Agreement”), among
Bally Total Fitness Holding Corporation, the Guarantors listed on Exhibit A
thereto and the Holders party thereto. Capitalized terms not otherwise defined
herein shall have the meaning ascribed to them in the Limited Waiver and
Forbearance Agreement.
     As a condition precedent to becoming the beneficial holder or owner of [•]
dollars ($•) in aggregate principal amount of Notes, the undersigned, [•] (the
“Transferee”), hereby agrees to become bound by the terms, conditions and
obligations set forth in the Limited Waiver and Forbearance Agreement.
     This agreement (this “Assumption Agreement”) shall take effect and shall
become an integral part of the Limited Waiver and Forbearance Agreement
immediately upon its execution and the Transferee shall be deemed to be bound by
all of the terms, conditions and obligations of the Limited Waiver and
Forbearance Agreement as of the date thereof.
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     IN WITNESS WHEREOF, this Assumption Agreement has been duly executed by
each of the undersigned as of the date specified below.
          Date: [•] , 200[•]
Transferee

     
By:
   
 
   

     
Name (please print):
   
 
   

     
Title:
   
 
   

     
Address (including zip code):
   
 
   
 
     

     
Telephone Number (including area code):
   
 
   

     
Fax Number (including area code):
   
 
   

     
Tax Identification or Social Security Number:
   
 
   

     
Aggregate Principal Amount of Notes Held:
   
 
   

Transferor

     
By:
   
 
   

     
Name (please print):
   
 
   

     
Title:
   
 
   

     
Address (including zip code):
   
 
   
 
     

     
Telephone Number (including area code):
   
 
   

     
Fax Number (including area code):
   
 
   

     
Tax Identification or Social Security Number:
   
 
   

     
Aggregate Principal Amount of Notes Transferred:
   
 
   

C-2