EXHIBIT 10-1 - 10/05/2004 FORM 8-K



Exhibit 10.1


AMENDMENT NO. 8 TO
SERIES 2001-1 SUPPLEMENT

          
This AMENDMENT NO. 8 TO SERIES 2001-1 SUPPLEMENT (this
“Amendment”) made as of October 4, 2004 and effective as of
September 29, 2004, among H & T RECEIVABLE FUNDING CORPORATION, a Delaware
corporation (“Transferor”), as Transferor, BALLY TOTAL FITNESS
CORPORATION, a Delaware corporation, as Servicer (“Servicer”),
and JPMORGAN CHASE BANK, as Trustee (the “Trustee”).



          
WHEREAS, Transferor, Servicer and Trustee are a party to that certain Amended
and Restated Pooling and Servicing Agreement (as amended, the
“Pooling Agreement”), dated as of December 16, 1996;


          
WHEREAS, Transferor, Servicer and Trustee are a party to that certain Series
2001-1 Supplement to the Pooling Agreement (as amended, the “Series
2001-1 Supplement”), dated as of November 28, 2001, pursuant to which
the Series 2001-1 Certificates were issued; 


          
WHEREAS, the parties hereto desire to amend the Series 2001-1 Supplement as
provided herein; 


          
WHEREAS, these recitals shall be construed as part of this Amendment and
capitalized terms used but not otherwise defined in this Amendment shall have
the meanings ascribed to them in the Pooling Agreement and the Series 2001-1
Supplement. 


          
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto, intending to be legally
bound, agree as follows: 


          
1.        Amendment; Consent.


          
(a)      Amendment. Provided that the requisite
lenders under the Senior Bank Agreement have consented to the amendment
contained in Section 1(a)(i) below, the Series 2001-1 Supplement is amended as
follows:


          
           (i)       The
definition of “Commitment Amount” as set forth in Section 2 of the Series 2001-1
Supplement is hereby amended and restated in its entirety to read as
follows:


	  	          
“Commitment Amount” shall mean $100,000,000; provided,
however, that as of the first day of the November 2004 Monthly Period,
the Commitment Amount shall be $91,666,666.66 and shall be reduced by an
additional $8,333,333.33 on the first day of each Monthly Period thereafter.




          
           (ii)      Section
7 of the Series 2001-1 Supplement is hereby amended by restating Section 7(t) in
its entirety as follows:


	  	         
(t)     Bally’s 9 7/8% senior subordinated notes issued
pursuant to the Indentures, shall cease to be rated at least CCC+ by S&P and
Caa2 by Moody’s;




          
(b)      Amendment. If the requisite lenders
under the Senior Bank Agreement have not consented to the amendment contained in
Section 1(a)(i) above, the Series 2001-1 Supplement shall not be amended as set
forth in Section 1 above, but shall be amended as follows:









          
           (i)      Section
7 of the Series 2001-1 Supplement is hereby amended by restating Section 7(t) in
its entirety as follows:


	  	         
(t)     on and after November 1, 2004, Bally’s 9
7/8% senior subordinated notes issued pursuant to the Indentures, shall cease to
be rated at least CCC+ by S&P and Caa1 by Moody’s;




          
(c)      Consent. Notwithstanding the provisions
of Section 5.3 of the Series 2001-1 Supplement, the Transferor and BTFC shall
not be required to provide to the Trustee and to the Administrative Agent,
Bally’s quarterly report on Form 10-Q for the fiscal quarter ended June 30, 2004
until November 1, 2004 and the Administrative Agent hereby waives until November
1, 2004 any current default that may have occurred as a result
thereof.


          
2.       Conditions to Effectiveness of this
Amendment. This Amendment is effective as of September 29, 2004 (the
“Effective Date”) once each of the following conditions precedent is
satisfied:


          
(a)      the Transferor, the Servicer and the Trustee
shall have executed and delivered this Amendment;


          
(b)      Canadian Imperial Bank of Commerce, as
Administrative Agent and as managing agent on behalf of the Series 2001-1
Certificateholders in its ownership group (“Managing Agent”), and
Lexington Parker Capital Company, LLC shall have consented to the execution and
delivery of this Amendment and the Administrative Agent shall have received such
fee at the time and in the manner set forth in the fee letter delivered in
connection herewith; and


          
(c)      the Servicer shall have completed, executed
and delivered to the Administrative Agent, the Disclosure Statement in the form
attached hereto as Exhibit A.


          
3.       Miscellaneous.


          
(a)      Absence of Pay-Out Events and Unmatured
Pay-Out Events. The Transferor and the Servicer hereby severally represent
and warrant that, on and as of the date hereof and on and as of the Effective
Date (as defined above), after giving effect to the amendments to the Series
2001-1 Supplement as provided herein, no Pay-Out Event has occurred and is
continuing and no event has occurred and is continuing which, if such event
remains uncured, will, with the lapse of time, constitute a Pay-Out
Event.


          
(b)      Governing Law. THIS AMENDMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS WITHOUT REFERENCE
TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF
THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS.


          
(c)      Captions. The various captions in this
Amendment are provided solely for convenience of reference and shall not affect
the meaning or interpretation of any provision of this Amendment.


          
(d)      Execution in Counterparts. This
Amendment may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed shall be deemed
to be an original and all of which when taken together shall constitute one and
the same agreement. Delivery of an executed signature page to Amendment by
telecopy or electronic transmission shall be effective as delivery of a manually
executed signature page to this Amendment.


          
(e)      Severability of Provisions. If any one
or more of the provisions or terms of this Amendment shall be held invalid for
any reason whatsoever, then such provisions or terms shall be 


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deemed severable from the
remaining provisions or terms of this Amendment and shall in no way affect the
validity or enforceability of the other provisions of this Amendment. If the
invalidity of any part, provision, representation or warranty of this Amendment
shall deprive any party of the economic benefit intended to be conferred by this
Amendment, the parties shall negotiate in good-faith to develop a structure the
economic effect of which is as nearly as possible the same as the economic
effect of this Amendment without regard to such invalidity.


          
(f)      Successors and Assigns. This Amendment
shall be binding upon, and shall inure to the benefit of, Transferor, the
Servicer, the Trustee, the Series 2001-1 Certificateholders and their respective
successors and assigns.


          
(g)      References. Any reference to the Series
2001-1 Supplement contained in any notice, request, certificate, or other
document executed concurrently with or after the execution and delivery of this
Amendment shall be deemed to include this Amendment unless the context shall
otherwise require.


          
(h)      Continued Effectiveness.
Notwithstanding anything contained herein, the terms of this Amendment are not
intended to and do not serve to effect a novation as to the Series 2001-1
Supplement or the Pooling Agreement. The parties hereto ratify and reaffirm that
the Pooling Agreement and the Series 2001-1 Supplement, as amended hereby, shall
remain in full force and effect.


          
(i)      Entire Agreement. This Amendment
constitutes the entire agreement of the parties hereto with respect to the
subject matter hereof and supersedes all other understandings, oral or written,
with respect to the subject matter hereof.


          
(j)      Managing Agent. No provision of this
Amendment may be modified, terminated or waived without the Managing Agent’s
consent. The Managing Agent shall be an express third-party beneficiary hereof.
The Managing Agent, on behalf of the Owners in the CIBC Ownership Group, hereby
certifies that the Owners in the CIBC Ownership Group constitute 100% of the
Invested Amount of the Series 2001-1 Certificates.


          
(k)      Direction; Ratification. The Trustee,
at the direction of the Managing Agent on behalf of the Owners in the CIBC
Ownership Group, and the Administrative Agent, hereby waive the notice
requirements in Section 10 of the Series 2001-1 Supplement and the requirement
in Section 10 of the Series 2001-1 Supplement that a Reduction of the Invested
Amount by the Transferor occur on a Distribution Date. The Managing Agent on
behalf of the Owners in the CIBC Ownership Group hereby ratifies the actions
taken by the Trustee in connection with this Amendment.


          
(l)      No Proceedings. Each of the parties
hereto agrees that until one year plus one day since the last day on which any
commercial paper note or other indebtedness of a Conduit Purchaser shall not
have been paid in full, it shall not file, or join in the filing of, cooperate
with any Person in the filing of, or encourage any Person with respect to the
filing of a petition against such Conduit Purchaser under the Federal Bankruptcy
Code, or join in the commencement of any bankruptcy, reorganization,
arrangement, insolvency, liquidation or other similar proceeding against such
Conduit Purchaser.


          
(m)      No Recourse. (i) The obligations of a
Conduit Purchaser under this Amendment, or any other agreement, instrument,
document or certificate executed and delivered by or issued by a Conduit
Purchaser or any officer thereof are solely the corporate or partnership
obligations of such Conduit Purchaser. No recourse shall be had for payment of
any fee or other obligation or claim arising out of or relating to the
Certificate Purchase Agreement or any other agreement, instrument, document or
certificate executed and delivered or issued by a Conduit Purchaser or any
officer thereof in connection 


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therewith, against any
stockholder, limited partner, employee, officer, member, director or
incorporator of such Conduit Purchaser.


          
(ii) Notwithstanding anything in this Amendment or the Certificate Purchase
Agreement to the contrary, the Conduit Purchasers shall not have any obligation
to pay any amount required to be paid by it hereunder in excess of any amount
available to any Conduit Purchaser after paying or making provision for the
payment of its commercial paper or other indebtedness. All payment obligations
of the Conduit Purchasers hereunder are contingent on the availability of funds
in excess of the amounts necessary to pay its commercial paper or other
indebtedness; and each of the other parties hereto agrees that it will not have
a claim under Section 101(5) of the Bankruptcy Code if and to the extent that
any such payment obligation owed to it by the Conduit Purchasers exceeds the
amount available to the Conduit Purchasers to pay such amount after paying or
making provision for the payment of its commercial paper or other
indebtedness.


          
(n)      Survival. All representations,
warranties, covenants, guaranties and indemnifications contained in this
Amendment, including Sections 3(l) and 3(m), shall survive the sale, transfer,
termination or repayment of the Certificates.


* * * * *




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IN WITNESS WHEREOF, the parties have executed this Amendment by their respective
officers thereunto duly authorized as of the date first above written.


		H & T RECEIVABLE FUNDING CORPORATION,

    as Transferor






		By: /s/ William G. Fanelli

Name: William G. Fanelli

Title: Senior Vice President and Acting Chief
Financial Officer






		BALLY TOTAL FITNESS CORPORATION,

    as Servicer






		By: /s/ William G. Fanelli

Name: William G. Fanelli

Title: Senior Vice President and Acting Chief
Financial Officer






		JPMORGAN CHASE BANK, a New York banking

corporation, not individually but solely as Trustee






		By: /s/ Esther Antoine

Name: Esther Antoine

Title:  Trust Officer



The undersigned, as
Administrative Agent and as Managing Agent on behalf of the Owners in the CIBC
Ownership Group, hereby consents to the execution and delivery of this
Amendment. 


CANADIAN IMPERIAL BANK OF

COMMERCE, as Administrative Agent and as

as Managing Agent for the CIBC Ownership Group 


By: /s/ Robert L. Stern Jr.

Name: Robert L. Stern Jr.

Title: Authorized Signatory


By: /s/ James W. Lees

Name: James W. Lees

Title: Authorized Signatory


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The undersigned hereby
consents to the execution and delivery of this Amendment. 


LEXINGTON PARKER CAPITAL

COMPANY, LLC


By: /s/ Thomas J. Irvin

Name: Thomas J. Irvin

Title: Manager


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