Consent to Extension of Credit Agreement Default Date among Bally Total Fitness Holding Corporation and Lenders (August 9, 2005)

Summary

This agreement is a consent between Bally Total Fitness Holding Corporation and its lenders, including JPMorgan Chase Bank, N.A., to extend the date on which a default would occur under their existing credit agreement due to certain financial reporting issues. The lenders agree to move the default date to August 31, 2005, provided specific conditions are met, including payment of fees and execution by the required parties. Bally agrees to pay a consent fee to approving lenders. All other terms of the original credit agreement remain unchanged.

EX-10.1 2 ex10_1-081505.htm EXHIBIT 10.1 - 08/15/2005 FORM 8-K EXHIBIT 10.1 - 08/15/2005 FORM 8-K

EXHIBIT 10.1

CONSENT

CONSENT, dated as of August 9, 2005 (this “Consent”), under the CREDIT AGREEMENT, dated as of November 18, 1997, as amended and restated as of October 14, 2004 and as amended and waived by the First Amendment and Waiver dated as of March 31, 2005 (as in effect on the date immediately prior to the date hereof, the “Credit Agreement”), among BALLY TOTAL FITNESS HOLDING CORPORATION, a Delaware corporation (the “Borrower”), the lenders parties thereto (the “Lenders”), JPMORGAN CHASE BANK, N.A., as agent for the Lenders (the “Agent”), DEUTSCHE BANK SECURITIES, INC., as Syndication Agent, and LASALLE BANK NATIONAL ASSOCIATION, as Documentation Agent. Terms used herein, but not defined, shall have the respective meanings set forth in the Credit Agreement.

W I T N E S S E T H:

1. The requisite holders under the Borrower’s Subordinated Notes Indenture have delivered a notice of default dated August 4, 2005, and the trustee under each of the Borrower’s Subordinated Notes Indenture and Senior Unsecured Notes Indenture has delivered a notice of default dated August 5, 2005 (collectively, the “August 2005 Default Notices”), in each case under Section 5.1(c) thereof with respect to the Borrower’s failure to satisfy certain financial reporting and delivery obligations thereunder.

2. Pursuant to Section 8.07 of the Credit Agreement a Default and Event of Default will arise under the Credit Agreement 10 days after delivery of the August 2005 Default Notices (“Credit Agreement Default Date”).

3. The Borrower wishes to extend the Credit Agreement Default Date as a result of the delivery of the August 2005 Default Notices to August 31, 2005.

4. The consent of the Majority Lenders is required to so extend the Credit Agreement Default Date.

NOW, THEREFORE, the parties hereto hereby agree as follows:

1. Consent. With respect to the August 2005 Default Notices, the Lenders consent to the extension of the Credit Agreement Default Date to August 31, 2005.

2. Conditions to Effectiveness of this Consent. This Consent shall become effective as of the date first set forth above (the “Effective Date”) at such time as:

(i) the Agent shall have received counterparts of this Consent duly executed and delivered by a duly authorized officer of each of the Borrower, each Guarantor and the Majority Lenders; and

(ii) the Agent shall have received payment of all fees and expenses of the Agent and the Lenders that are earned, due and payable on or prior to the Effective Date in connection with this Consent.

3. Consent Fee. The Borrower agrees to pay to the Agent for the account of each Lender which executes and delivers this Consent by 5:00 pm EST on August 12, 2005 (each, an “Approving Lender”), a consent fee equal to .05% of the sum of such Lender’s Term Advances and Revolving Credit Commitments on the Effective Date, earned, due and payable on the Effective Date.

4. Representations and Warranties. The Borrower represents and warrants to each Lender that as of the Effective Date after giving effect to this Consent: (a) the representations and warranties made by the Credit Parties in the Credit Documents are true and correct in all material respects on and as of the date hereof (except to the extent that such representations and warranties are expressly stated to relate to an earlier date, in which case such representations and warranties shall have been true and correct in all material respects on and as of such earlier date) and (b) no Default or Event of Default shall have occurred and be continuing as of the date hereof.

5. Counterparts. This Consent may be executed by one or more of the parties to this Consent on any number of separate counterparts (including by facsimile transmission), and all of said counterparts taken together shall be deemed to constitute one and the same instrument. The execution and delivery of this Amendment by any Lender shall be binding upon each of its successors and assigns and binding in respect of all of its Commitments and Advances, including any acquired subsequent to its execution and delivery hereof and prior to the effectiveness hereof.

6. Continuing Effect; No Other Amendments. This Consent is to be narrowly constructed. Except to the extent the Credit Agreement is expressly amended hereby, all of the terms and provisions of the Credit Agreement and the other Credit Documents are and shall remain in full force and effect. This Consent shall constitute a Credit Document.

7. GOVERNING LAW. THIS CONSENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

[Rest of page intentionally left blank]

IN WITNESS WHEREOF, the parties hereto have caused this Consent to be duly executed and delivered by their proper and duly authorized officers as of the day and year first above written.

BALLY TOTAL FITNESS HOLDING CORPORATION

	By:	/s/ Carl J. Landeck

	Name:	Carl J. Landeck
	Title:	Senior Vice President
		Chief Financial Officer

JPMORGAN CHASE BANK, N.A., individually and as
Agent

	By:	/s/ Barry Bergman

	Name:	Barry Bergman
	Title:	Managing Director

Bally Total Fitness Holding Corporation Consent dated as
of August 9, 2005 to the Amended and Restated Credit
Agreement:

LASALLE BANK NATIONAL ASSOCIATION

	By:	/s/ Patrick R. Keller

	Name:	Patrick R. Keller
	Title:	First Vice President

ADAR INVESTMENT FUND LTD

	By:	ADAR Investment Management LLC,
		Investment Manager

	By:	/s/ Aaron Morse

	Name:	Aaron Morse
	Title:	Chief Operating Officer

ANCHORAGE CROSSOVER CREDIT OFFSHORE
MASTER FUND, LTD.

	By:	/s/ Kevin Ulrich

	Name:	Kevin Ulrich
	Title:	Director

Sankaty Advisors, LLC as Collateral Manager for AVERY
POINT CLO, LTD.

	By:	/s/ Diane J. Exter

	Name:	Diane J. Exter
	Title:	Managing Director Portfolio
		Manager

Sankaty Advisors, Inc. as Collateral Manager for BRANT
POINT CBO 1999-1 LTD.

	By:	/s/ Diane J. Exter

	Name:	Diane J. Exter
	Title:	Managing Director Portfolio
		Manager

Sankaty Advisors, LLC as Collateral Manager for BRANT
POINT II CBO 2000-1 LTD.

	By:	/s/ Diane J. Exter

	Name:	Diane J. Exter
	Title:	Managing Director Portfolio
		Manager

Sankaty Advisors, LLC as Collateral Manager for
CASTLE HILL I INGOTS, LTD.

	By:	/s/ Diane J. Exter

	Name:	Diane J. Exter
	Title:	Managing Director Portfolio
		Manager

Sankaty Advisors, LLC as Collateral Manager for CASTLE
HILL II INGOTS, LTD.

	By:	/s/ Diane J. Exter

	Name:	Diane J. Exter
	Title:	Managing Director Portfolio
		Manager

HARBOUR TOWN FUND LLC

	By:	/s/ Cristina Higgins

	Name:	Cristina Higgins
	Title:	Assistant Vice President

Sankaty Advisors, LLC as Collateral Manager for LOAN
FUNDING XI LLC

	By:	s/ Diane J. Exter

	Name:	Diane J. Exter
	Title:	Managing Director Portfolio
		Manager

Sankaty Advisors, LLC as Collateral Manager for RACE
POINT CLO, LIMITED

	By:	s/ Diane J. Exter

	Name:	Diane J. Exter

	Title:	Managing Director Portfolio
		Manager

Sankaty Advisors, LLC as Collateral Manager for RACE
POINT II CLO, LIMITED

	By:	/s/ Diane J. Exter

	Name:	Diane J. Exter
	Title:	Managing Director Portfolio
		Manager

SANKATY HIGH YIELD PARTNERS III, L.P.

	By:	/s/ Diane J. Exter

	Name:	Diane J. Exter
	Title:	Managing Director Portfolio
		Manager

BLACK DIAMOND OFFSHORE, LTD.

	By:	Carlson Capital, L.P., its investment advisor
	By:	Asgard Investment Corp., its general partner

	By:	/s/ Clint D. Carlson

	Name:	Clint D. Carlson
	Title:	President

DOUBLE BLACK DIAMOND OFFSHORE LDC

	By:	Carlson Capital, L.P., its investment advisor
	By:	Asgard Investment Corp., its general partner

	By:	/s/ Clint D. Carlson

	Name:	Clint D. Carlson
	Title:	President

RED FOX FUNDING LLC

	By:	/s/ Cristina Higgins

	Name:	Cristina Higgins
	Title:	Assistant Vice President

CANYON CAPITAL CDO 2002-1, LTD

	By:	/s/ R. Christian B. Evensen

	Name:	R. Christian B. Evensen
	Title:	Managing Director

By: Canyon Capital Advisors LLC,
a Delaware Limited Liability Company,
its Collateral Manager

CANYON CAPITAL CLO 2004-1, LTD

	By:	/s/ R. Christian B. Evensen

	Name:	R. Christian B. Evensen
	Title:	Managing Director

By: Canyon Capital Advisors LLC,
a Delaware Limited Liability Company,
its Collateral Manager

CITADEL HILL 2000 LTD

	By:	/s/ Brian Cerreta

	Name:	Brian Cerreta
	Title:	Authorized Signatory

CITADEL HILL 2004 LTD

	By:	/s/ Brian Cerreta

	Name:	Brian Cerreta
	Title:	Authorized Signatory

DEUTSCHE BANK TRUST COMPANY AMERICAS

	By:	/s/ Carin M. Keegan

	Name:	Carin M. Keegan
	Title:	Vice President

	By:	/s/ Lana Gifas

	Name:	Lana Gifas
	Title:	Vice President

HEALTH AND FITNESS TRUST

By:

Wilmington Trust Cmpany not in its

individual capacity, but solely as Owner
Trustee

	By:	/s/ Joseph B. Feil

	Name:	Joseph B. Feil
	Title:	Assistant Vice President

ALPHAGEN CREDIT FUND LIMITED

	By:	/s/ Varkki P. Chacko

	Name:	Varkki P. Chacko
	Title:

General Electric Capital Corporation as administrator for,
MERRITT CLO HOLDING LLC

	By:	/s/ Robert Kadlick

	Name:	Robert Kadlick
	Title:	Duly Authorized Signatory

GENERAL ELECTRIC CAPITAL CORPORATION

	By:	/s/ Hittie C. Lee

	Name:	Hittie C. Lee
	Title:	Duly Authorized Signatory

HBK MASTER FUND L.P.

By:

HBK Investment L.P., Investment Advisor

	By:	/s/ Jamiel A. Akhtar

	Name:	Jamiel A. Akhtar
	Title:	Authorized Signatory

LOAN FUNDING IV LLC

	By:	Highland Capital Management, L.P.,
		As Collateral Manager
	By:	Strand Advisors, Inc., Its General Partner

	By:	/s/ Chad Schramek

	Name:	Chad Schramek
	Title:	Assistant Treasurer

LOAN FUNDING VII LLC

	By:	Highland Capital Management, L.P.,
		As Collateral Manager
	By:	Strand Advisors, Inc., Its General Partner

	By:	/s/ Chad Schramek

	Name:	Chad Schramek
	Title:	Assistant Treasurer

TRS LEDA LLC

	By:	/s/ Jay Hopkins

	Name:	Jay Hopkins
	Title:	Assistant Vice President

Q FUNDING III, L.P.

	By:	Prufrock Onshore, L.P., its General Partner
	By:	J. Alfred Onshore, LLC, its General Partner

	By:	Robert McCormick

	Name:	Robert McCormick
	Title:	Vice President

SEMINOLE FUNDING LLC

	By:	/s/ Cristina Higgins

	Name:	Cristina Higgins
	Title:	Assistant Vice President

JEFFERSON-PILOT LIFE INSURANCE COMPANY

By:

TCW Advisors, Inc., as its Investment Advisor

	By:	/s/ G. Wayne Hosang

	Name:	G. Wayne Hosang
	Title:	Vice President

	By:	/s/ Stephen Suo

	Name:	Stephen Suo
	Title:	Vice President

C-SQUARED CDO LTD.

By:

TCW Advisors, Inc., as its Portfolio Manager

	By:	/s/ G. Wayne Hosang

	Name:	G. Wayne Hosang
	Title:	Vice President

	By:	/s/ Stephen Suo

	Name:	Stephen Suo
	Title:	Vice President

CELERITY CLO LIMITED

By:

TCW Advisors, Inc., as Agent

	By:	/s/ G. Wayne Hosang

	Name:	G. Wayne Hosang
	Title:	Vice President

	By:	/s/ Stephen Suo

	Name:	Stephen Suo
	Title:	Vice President

FIRST 2004-I CLO, LTD.

By:

TCW Advisors, Inc., as its Collateral Manager

	By:	/s/ G. Wayne Hosang

	Name:	G. Wayne Hosang
	Title:	Vice President

	By:	/s/ Stephen Suo

	Name:	Stephen Suo
	Title:	Vice President

FIRST 2004-II CLO, LTD.

By:

TCW Advisors, Inc., as its Collateral Manager

	By:	/s/ G. Wayne Hosang

	Name:	G. Wayne Hosang
	Title:	Vice President

	By:	/s/ Stephen Suo

	Name:	Stephen Suo
	Title:	Vice President

LOAN FUNDING I LLC
a wholly owned subsidiary of Citibank, N.A.
By: TCW Advisors, Inc., as portfolio manager of Loan

Funding I LLC

	By:	/s/ G. Wayne Hosang

	Name:	G. Wayne Hosang
	Title:	Vice President

	By:	/s/ Stephen Suo

	Name:	Stephen Suo
	Title:	Vice President

TCW SELECT LOAN, LIMITED

By:

TCW Advisors, Inc., as its Collateral Manager

	By:	/s/ G. Wayne Hosang

	Name:	G. Wayne Hosang
	Title:	Vice President

	By:	/s/ Stephen Suo

	Name:	Stephen Suo
	Title:	Vice President

TCW SENIOR SECURED LOAN FUND

By:

TCW Advisors, Inc., as its Investment Advisor

	By:	/s/ G. Wayne Hosang

	Name:	G. Wayne Hosang
	Title:	Vice President

	By:	/s/ Stephen Suo

	Name:	Stephen Suo
	Title:	Vice President

VELOCITY CLO, LTD.

By:

TCW Advisors, Inc., its Collateral Manager

	By:	/s/ G. Wayne Hosang

	Name:	G. Wayne Hosang
	Title:	Vice President

	By:	/s/ Stephen Suo

	Name:	Stephen Suo
	Title:	Vice President

U.S. BANK NATIONAL ASSOCIATION

	By:	/s/ Joseph L. Svehla

	Name:	Joseph L. Svehla
	Title:	Vice President

WB LOAN FUNDING 2, LLC

	By:	/s/ Diana M. Himes

	Name:	Diana M. Himes
	Title:	Associate

WELLS FARGO FOOTHILL, LLC

	By:	/s/ Juan Barrera

	Name:	Juan Barrera
	Title:	Vice President

FOOTHILL INCOME TRUST LP

By:

FIT GP, LLC, Its Gen Parner

	By:	/s/ Richard M. Bohannon

	Name:	Richard M. Bohannon
	Title:	Managing Member

THE CONSENT IS
ACKNOWLEDGED AND AGREED:

BALLY’S FITNESS AND RACQUET CLUBS, INC.
BALLY FITNESS FRANCHISING, INC.
BALLY FRANCHISE RSC, INC.
BALLY FRANCHISING HOLDINGS, INC.
BALLY ESTATE II, LLC
REAL ESTATE III, LLC
REAL ESTATE IV, LLC
BALLY REFS WEST HARTFORD, LLC
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.
BFIT REHAB OF WEST PALM BEACH, INC.
CONNECTICUT COAST FITNESS CENTERS, INC.
CONNECTICUT VALLEY FITNESS CENTERS, INC.
GREATER PHILLY NO. 1 HOLDING COMPANY
GREATER PHILLY NO. 2 HOLDING COMPANY
HEALTH & TENNIS CORPORATION OF NEW
YORK
HOLIDAY HEALTH & FITNESS CENTERS OF NEW
   YORK, INC.
HOLIDAY HEALTH CLUBS AND FITNESS
        CENTERS, INC.
HOLIDAY HEALTH CLUBS OF THE SOUTHEAST,
        INC.
HOLIDAY HEALTH CLUBS OF THE EAST COAST,
        INC.
HOLIDAY/SOUTHEAST HOLDING CORP.
HOLIDAY SPA HEALTH CLUBS OF CALIFORNIA
HOLIDAY UNIVERSAL, INC.
JACK LALANNE FITNESS CENTERS, INC.
JACK LALANNE HOLDING CORP.
MANHATTAN SPORTS CLUB, INC.
NEW FITNESS HOLDING CO., INC.
NYCON HOLDING CO., INC.
PHYSICAL FITNESS CENTERS OF PHILADELPHIA,
        INC.
PROVIDENCE FITNESS CENTERS, INC.
RHODE ISLAND HOLDING COMPANY
SCANDINAVIAN HEALTH SPA, INC.
SCANDINAVIAN U.S. SWIM & FITNESS, INC.

TIDELANDS HOLIDAY HEALTH CLUBS, INC.
U.S. HEALTH, INC.
59TH STREET GYM LLC
708 GYM LLC
ACE, LLC
CRUNCH FITNESS INTERNATIONAL, INC.
CRUNCH L.A. LLC
CRUNCH WORLD LLC
FLAMBE LLC
MISSION IMPOSSIBLE, LLC
SOHO HO LLC
WEST VILLAGE GYM AT THE ARCHIVES LLC
BALLY TOTAL FITNESS FRANCHISING, INC.

	By:	/s/ Carl J. Landeck

	Name:	Carl J. Landeck
	Title:	Senior Vice President
		Chief Financial Officer