exv10w2



 





EXHIBIT 10.2




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”), and the Persons listed on Exhibit
A 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 9 7/8% Senior Subordinated Notes due
2007 of the Company (the “Notes”) issued pursuant to an Indenture, dated as of December 16,
1998 (as amended or supplemented, the “Indenture”), between the Company 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 and the Holders,
the Holders (i) waived certain Defaults or Events of Defaults under the Indenture relating to the
Reporting Obligations, the Sale and Leaseback Matters and the Notice Obligations (collectively, the
“Waived Matters”) and (ii) agreed to forbear, and directed the Trustee to forbear, from
taking or exercising any Enforcement Action in connection with the Waived Matters and the Interest
Payment Default;



     WHEREAS, pursuant to Sections 5.13 and 10.19 of the Indenture, the Company desires to seek
waivers from holders of the Notes from the Effective Date to, but not including, the Forbearance
and Waiver Expiration Date of any Default or Event of Default (as such terms are defined in the
Indenture) arising from any declaration that all unpaid principal of, premium, if any, and accrued
interest on the indebtedness outstanding under the Senior Notes Indenture is due and payable; and



     WHEREAS, the Company desires to seek an extension of the Forbearance and Waiver Expiration
Date from holders of the Notes to July 31, 2007.



     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) The second recital is deleted in its entirety and replaced with the following:




 









 








     “WHEREAS, pursuant to Sections 5.13 and 10.19 of the Indenture, the Company desires to seek
waivers from holders of the Notes from the Effective Date (as defined in Section 5.1 hereof) to,
but not including, the Forbearance and Waiver Expiration Date (as defined in Section 6.1 hereof) of
any Default or Event of Default (as such terms are defined in the Indenture) arising from (i) the
failure to file timely such reports as the Company is or may be required to file with the SEC
pursuant to Sections 13(a) or 15(d) of the Exchange Act and furnish such reports to the Trustee and
holders of the Notes in accordance with Sections 7.4 and 10.17 of the Indenture (the “Reporting
Obligations”), (ii) any declaration that all unpaid principal of, premium, if any, and accrued
interest on the indebtedness outstanding under the Senior Notes Indenture is due and payable (the
“Senior Notes Acceleration Notice”) and (iii) the failure to provide notice to the Trustee
of a Default or Event of Default arising in connection with the Reporting Obligations or the Senior
Notes Acceleration Notice in accordance with Section 10.18 of the Indenture (the “Notice
Obligations” and, together with the Reporting Obligations, the Senior Notes Acceleration Notice
and the Sale and Leaseback Matters (as defined in Section 7.1 hereof), the “Waived
Matters”);”



          (b) Section 6.1(f)(A) is amended by deleting the phrase “July 13, 2007” and replacing it with
the phrase “July 31, 2007”.




          (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 D
(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) Exhibit B attached hereto is inserted in the Agreement as Exhibit D to the
Agreement immediately following Exhibit C 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:



          (a) the Company shall have received counterparts of this Amendment executed by holders of a
majority of the aggregate principal amount outstanding of the Notes;




          (b) The Senior Notes Forbearance Agreement shall have been amended in the form attached hereto
as Exhibit C, and such amendment shall become effective contemporaneously with this
Amendment;




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          (c) The Credit Agreement Forbearance Agreement shall have been amended in the form attached
hereto as Exhibit D, 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 E.




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:	 	 	 	 






[SIGNATURES CONTINUE ON FOLLOWING PAGE]




 









 








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:
	 	 
	 

	 	 






 









 








EXHIBIT A




	 	 	 
	 	 	Aggregate Principal Amount
	Name of Holder	 	of Notes Held Beneficially
	 
	 	 






A-1









 








EXHIBIT B




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 Persons 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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B-1





 









 








     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:
	 	 
	 

	 	 





B-2