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
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 execut
