Exhibit 10.1
EXECUTION COPY
THIRD AMENDMENT AND WAIVER
          THIRD AMENDMENT AND WAIVER, dated as of March 24, 2006 (this
“Amendment”), under the CREDIT AGREEMENT, dated as of November 18, 1997, as
amended and restated as of October 14, 2004 (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:
          WHEREAS, the Borrower has requested, and the undersigned Lenders wish
to consent to, certain amendments to and waivers of the Credit Agreement;
          NOW, THEREFORE, the parties hereto hereby agree as follows:
          1. Amendments to Credit Agreement. (a) Section 1.01 of the 2006 Credit
Agreement is amended by adding the following new definitions in proper
alphabetical order:
     “Third Amendment” means the Third Amendment and Waiver dated as of
March 24, 2006 to this Agreement.
     “2006 Bond Waivers” means the waivers with respect to the Senior Unsecured
Notes Indenture and the Subordinated Notes Indenture described in the Third
Amendment.
               (b) Section 1.01 of the Credit Agreement is amended by deleting
the text “less, for purposes of Section 6.12 only...” to the end of the
definition of “Consolidated Interest Expense” and replacing it with the
following text:
, less, for purposes of Section 6.12 only and without duplication, to the extent
added in determining such aggregate amount of interest for such period, any
amortization of consent fees and expenses paid by the Borrower (x) in connection
with the Bond Waivers including, but not limited to, fees paid to the Agent and
the Lenders in connection with the Bond Waivers and the extension of the Credit
Agreement Default Date and (y) in connection with the 2006 Bond Waivers,
including, but not limited to, fees paid to the Agent and the Lenders.

 

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               (c) Section 7.08(d) of the Credit Agreement is hereby amended by
inserting in clause (1) thereof following the phrase “the value of such
dispositions does not exceed $10,000,000 in any fiscal year, including the 2004
fiscal year” the following parenthetical:
(it being understood that as of the effectiveness date of the Third Amendment,
the Borrower and its Subsidiaries have no more capacity to exclude Reinvestment
Proceeds from the calculation of any Net Cash Proceeds received in the
Borrower’s 2006 fiscal year; and provided, further, that in the 2006 fiscal
year, the value of the assets subject to such dispositions shall not exceed
$15,000,000)
               (d) Section 9.01 of the Credit Agreement is hereby amended by
adding the following paragraph at the end thereof:
If the time period provided for delivery of documents or notices required under
any provision of the Credit Documents would end on a day which is not a Banking
Day, such time period shall be extended to the next Banking Day.
          2. Waivers; Acknowledgements.
          (a) Notwithstanding the provisions of Section 7.04 of the Credit
Agreement, the Lenders consent to the amendments and waivers of the Senior
Unsecured Notes Indenture and the Subordinated Notes Indenture and the payments
related thereto on the terms and conditions set forth in Exhibit A to this
Amendment.
          (b) The Lenders waive any Default or Event of Default that has
resulted or might result from the occurrence of any of the following:
     (i) failure by the Borrower to deliver (A) audited financial statements of
the Borrower and its Subsidiaries for the Borrower’s 2005 fiscal year, together
with the related accountants’ certification, as required pursuant to
Section 6.03(b)(ii) of the Credit Agreement, (B) the officer’s certificate
required to be delivered in connection with the financial statements referred to
in clause (A) pursuant to Section 6.03(e) of the Credit Agreement and (C) copies
of the combined balance sheet, statements of income and retained earnings of the
Unrestricted Subsidiaries required to be delivered in connection with the
financial statements referred to in clause (A) pursuant to Section 6.03(j) of
the Credit Agreement, in each case, on the date required by such provisions,
provided, that (x) unaudited consolidated financial statements of the Borrower
and its Subsidiaries of the types described in Sections 6.03(b)(ii) and 6.03(j)
for the Borrower’s 2005 fiscal year, together with the officer’s certificate
referred to in clause (B) above, are delivered no later than April 14, 2006, and
(y) audited financial statements of the Borrower and its Subsidiaries for the
Borrower’s 2005 fiscal year, together with the related accountants’
certification, as required by Section 6.03(b)(ii) of the Credit Agreement, and
the related officer’s certificate, as required by Section 6.03(e) of the Credit
Agreement, are delivered as required by the Credit Agreement no later than
July 10, 2006;
     (ii) failure by the Borrower to deliver (A) unaudited financial statements
of the Borrower for the first quarter of the Borrower’s 2006 fiscal year as
required pursuant to Section 6.03(a) of the Credit Agreement, together with the
related officer’s certificate,

 

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as required pursuant to Section 6.03(e) of the Credit Agreement, and (B) copies
of the combined balance sheet, statements of income and retained earnings of the
Unrestricted Subsidiaries required to be delivered in connection with the
financial statements referred to in clause (A) pursuant to Section 6.03(j) of
the Credit Agreement, in each case, on the date required by such provisions,
provided, that such financial statements and certificate are delivered as
required by the Credit Agreement no later than July 10, 2006;
     (iii) failure by the Borrower to deliver (A) unaudited financial statements
of the Borrower for the second quarter of the Borrower’s 2006 fiscal year as
required pursuant to Section 6.03(a) of the Credit Agreement, together with the
related officer’s certificate, as required pursuant to Section 6.03(e) of the
Credit Agreement, and (B) copies of the combined balance sheet, statements of
income and retained earnings of the Unrestricted Subsidiaries required to be
delivered in connection with the financial statements referred to in clause
(A) pursuant to Section 6.03(j) of the Credit Agreement, in each case, on the
date required by such provisions, provided, that such financial statements and
certificate are delivered as required by the Credit Agreement no later than
September 11, 2006, or in the event that the Borrower elects its option to
extend under the 2006 Bond Waivers, October 11, 2006; and
     (iv) with respect to Section 8.07 of the Credit Agreement, any breach of
Section 10.17 of the Senior Unsecured Notes Indenture or Section 10.17 of the
Subordinated Notes Indenture as a result of the failure of the Borrower to
timely file financial statements with the SEC for the Borrower’s 2005 fiscal
year; provided, that notwithstanding the foregoing such Default or Event of
Default shall arise relating to the financial statements for the Borrower’s 2005
fiscal year, on the later of (x) April 14, 2006 and (y) 10 days after a notice
of default of the type described in Section 5.1(c) of the Senior Unsecured Note
Indenture or Section 5.1(c) of the Subordinated Note Indenture shall have been
delivered, unless such default shall have been cured or waived, or such notice
of default shall have been withdrawn.
          3. Conditions to Effectiveness of this Amendment. This Amendment 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 Amendment 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 due and payable on or prior to the Effective
Date in connection with this Amendment.
          4. Consent Fee. The Borrower agrees to pay to the Agent for the
account of each Lender which executes and delivers this Amendment by 5:00 p.m.
EST on March 30, 2006, an amendment fee equal to 0.75% 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; provided, that in the event the
Borrower elects its option to extend the 2006 Bond Waivers in respect of its
unaudited financial statements for the second quarter of the Borrower’s 2006
fiscal

 

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year until October 11, 2006, each Lender under the Credit Agreement shall be
entitled to an additional amendment fee equal to 0.125% of the sum of such
Lender’s Term Advances and Revolving Credit Commitments on the date the Borrower
makes such election (which may be no later than September 11, 2006), earned, due
and payable on such date.
          5. Representations and Warranties. The Borrower represents and
warrants to each Lender that as of the Effective Date after giving effect to
this Amendment: (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 after giving effect
to this Amendment.
          6. Counterparts. This Amendment may be executed by one or more of the
parties to this Amendment 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.
          7. Continuing Effect; No Other Amendments. This Amendment 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
Amendment shall constitute a Credit Document.
          8. GOVERNING LAW. THIS AMENDMENT 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]

 

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      IN WITNESS WHEREOF, the parties hereto have caused this Amendment 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: Carl J. Landeck) [c03942c0394202.gif]

 

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  Name: Carl J. Landeck   Title:     Senior V.P., CFO     JPMORGAN CHASE BANK,
N.A., individually   and as Agent

  By:

 

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  Name:   Title:

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      IN WITNESS WHEREOF, the parties hereto have caused this Amendment 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:

 

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  Name:   Title:     JPMORGAN CHASE BANK, N.A., individually   and as Agent

  By: Barry Bergman [c03942c0394203.gif]

 

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  Name: Barry Bergman   Title:     Managing Director

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   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.  
59TH STREET GYM LLC   708 GYM LLC   ACE, LLC   BTF/CFI, INC.   CRUNCH L.A. LLC  
CRUNCH WORLD LLC   FLAMBE LLC   MISSION IMPOSSIBLE, LLC   SOHO HO LLC   WEST
VILLAGE GYM AT THE ARCHIVES LLC

  By: -s- Carl J. Landeck [c03942c0394202.gif]

 

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  Name: Carl J. Landeck   Title:     Senior V.P., CFO                for each of
the Guarantors listed above

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  Bally Total Fitness Holding Corporation Third Amendment and Waiver dated as of
March 24, 2006 to the Amended and Restated Credit Agreement.     WELLS FARGO
FOOTHILL, LLC

  By: Juan Barrera [c03942c0394205.gif]

 

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  Name: Juan Barrera   Title:     Vice President

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  Bally Total Fitness Holding Corporation Third Amendment and Waiver dated as of
March 24, 2006 to the Amended and Restated Credit Agreement.     The Foothill
Group, Inc.

  By: Michael R. Bohannon [c03942c0394206.gif]

 

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  Name: Michael R. Bohannon   Title:     SVP

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  Bally Total Fitness Holding Corporation Third Amendment and Waiver dated as of
March 24, 2006 to the Amended and Restated Credit Agreement.     GREGORY W.
FRENZEL [c03942c0394207.gif]  

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            Citigroup Financial Products Inc.

  By:

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  Name: GREGORY W. FRENZEL   Title:     Managing Director

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  Bally Total Fitness Holding Corporation Third Amendment and Waiver dated as of
March 24, 2006 to the Amended and Restated Credit Agreement.     GENERAL
ELECTRIC CAPITAL   CORPORATION, as Administrator for,   MERRITT CLO HOLDING LLC

  By:  -s- Brian P. Schwinn [c03942c0394208.gif]

 

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  Name: Brian P. Schwinn   Title:   Duly Authorized Signatory

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  Bally Total Fitness Holding Corporation Third Amendment and Waiver dated as of
March 24, 2006 to the Amended and Restated Credit Agreement.     Boldwater CBNA
Loan Funding LLC,   for itself or an agent for   Boldwater CFPI Loan Funding LLC

  By:  -s- MIKUS N. KINS [c03942c0394209.gif]

 

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  Name: MIKUS N. KINS   Title:   Attorney-in-fact

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  Bally Total Fitness Holding Corporation Third Amendment and Waiver dated as of
March 24, 2006 to the Amended and Restated Credit Agreement.        

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  ADAR Investment Fund LTD   by ADAR Investment Management LLC,   Its Investment
Manager

  By:  -s- Aaron Morse [c03942c0394210.gif]

 

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  Name: Aaron Morse   Title:   Chief Operating Officer

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  Bally Total Fitness Holding Corporation Third   Amendment and Waiver dated as
of March 24, 2006   to the Amended and Restated Credit Agreement     CELERITY
CLO LIMITED   By: TCW Advisors, Inc.,   as Agent

  By: 

  -s- Jonathan R. Insull [c03942c0394211.gif]    

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  Name:        Jonathan R. Insull

  Title: Managing Director

  By: 

  -s- Vikas Mavinkurve [c03942c0394212.gif]    

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  Name:        Vikas Mavinkurve

  Title: Vice President

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  Bally Total Fitness Holding Corporation Third   Amendment and Waiver dated as
of March 24, 2006   to the Amended and Restated Credit Agreement

  DAR IEN LOAN FUNDING COMPANY

  By: TCW Advisors as its Interim   Interim Collateral Manager

  By: 

  -s- Jonathan R. Insull [c03942c0394211.gif]    

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  Name:        Jonathan R. Insull

  Title: Managing Director

  By: 

  -s- Vikas Mavinkurve [c03942c0394212.gif]    

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  Name:        Vikas Mavinkurve

  Title: Vice President

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  Bally Total Fitness Holding Corporation Third   Amendment and Waiver dated as
of March 24, 2006   to the Amended and Restated Credit Agreement

  F IRST 2004-I CLO, LTD.

  By: TCW Advisors as its Interim   Interim Collateral Manager

  By: 

  -s- Jonathan R. Insull [c03942c0394211.gif]    

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  Name:        Jonathan R. Insull

  Title: Managing Director

  By: 

  -s- Vikas Mavinkurve [c03942c0394212.gif]    

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  Name:        Vikas Mavinkurve

  Title: Vice President

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  Bally Total Fitness Holding Corporation Third
Amendment and Waiver dated as of March 24,
2006 to the Amended and Restated Credit
Agreement

  F IRST 2004-II CLO, LTD.

  By: TCW Advisors, Inc.   Its Collateral Manager

  By: (-s- Jonathan R. Insull) [c03942c0394211.gif]

 

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  Jonathan R. Insull

  Title: Managing Director

  By: (-s- Vikas Mavinkurve) [c03942c0394212.gif]

 

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  Vikas Mavinkurve

  Title: Vice President

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  Bally Total Fitness Holding Corporation Third
Amendment and Waiver dated as of March 24,
2006 to the Amended and Restated Credit
Agreement     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- Jonathan R. Insull) [c03942c0394211.gif]

 

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  Jonathan R. Insull

  Title: Managing Director

  By: (-s- Vikas Mavinkurve) [c03942c0394212.gif]

 

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  Vikas Mavinkurve

  Title: Vice President

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  Bally Total Fitness Holding Corporation Third
Amendment and Waiver dated as of March 24,
2006 to the Amended and Restated Credit
Agreement     TCW SELECT LOAN FUND, LIMITED
By: TCW Advisors, Inc. as its
Collateral Manager

  By: (-s- Jonathan R. Insull) [c03942c0394211.gif]

 

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  Jonathan R. Insull

  Title: Managing Director

  By: (-s- Vikas Mavinkurve) [c03942c0394212.gif]

 

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  Vikas Mavinkurve

  Title: Vice President

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  Bally Total Fitness Holding Corporation Third
Amendment and Waiver dated as of March 24,
2006 to the Amended and Restated Credit
Agreement     TCW Senior Secured Loan Fund, LP
By: TCW Advisors, Inc., as its Investment Advisor

  By: (-s- Jonathan R. Insull) [c03942c0394211.gif]

 

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  Jonathan R. Insull

  Title: Managing Director

  By: (-s- Jonathan R. Insull) [c03942c0394212.gif]

 

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  Vikas Mavinkurve

  Title: Vice President

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  Bally Total Fitness Holding Corporation Third
Amendment and Waiver dated as of March 24,
2006 to the Amended and Restated Credit
Agreement     VELOCITY CLO, LTD
TCW Advisors, Inc., its Collateral Manager

  By: (-s- Jonathan R. Insull) [c03942c0394211.gif]

 

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  Jonathan R. Insull

  Title: Managing Director

  By: (-s- Jonathan R. Insull) [c03942c0394212.gif]

 

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  Vikas Mavinkurve

  Title: Vice President

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  Bally Total Fitness Holding Corporation Third
Amendment and Waiver dated as of March 24,
2006 to the Amended and Restated Credit
Agreement     Q FUNDING III, L.P. [LENDER]
By: Prufrock Onshore, L.P., its General Partner   By: J. Alfred Onshore, LLC,
its General Partner

  By: (-s- Robert McCormick) [c03942c0394213.gif]

 

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  Name: Robert McCormick

  Title: Vice President

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

  By:  (-s- Clint D. Carlson) [c03942c0394214.gif]

 

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  Name: Clint D. Carlson   Title:   President

 

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  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) [c03942c0394214.gif]

 

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  Name: Clint D. Carlson   Title:      President

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  Bally Total Fitness Holding Corporation Third   Amendment and Waiver dated as
of March 24,   2006 to the Amended and Restated Credit   Agreement     HARBOUR
TOWN FUNDING LLC

  By:  (-s- M. Cristina Higgins) [c03942c0394215.gif]

 

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  Name: M. Cristina Higgins   Title:  Assistant Vice President

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  Bally Total Fitness Holding Corporation Third   Amendment and Waiver dated as
of March 24,   2006 to the Amended and Restated Credit   Agreement     LONG LANE
MASTER TRUST IV

  By:  (-s- M. Cristina Higgins) [c03942c0394215.gif]

 

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  Name: M. Cristina Higgins   Title:  Authorized Agent

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  Bally Total Fitness Holding Corporation Third   Amendment and Waiver dated as
of March 24,   2006 to the Amended and Restated Credit   Agreement     RED FOX
FUNDING LLC

  By:  (-s- M. Cristina Higgins) [c03942c0394215.gif]

 

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  Name: M. Cristina Higgins   Title:  Assistant Vice President

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  Bally Total Fitness Holding Corporation Third   Amendment and Waiver dated as
of March 24,   2006 to the Amended and Restated Credit   Agreement     SEMINOLE
FUNDING LLC

  By:  (-s- M. Cristina Higgins) [c03942c0394215.gif]

 

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  Name: M. Cristina Higgins   Title:  Assistant Vice President

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  Bally Total Fitness Holding Corporation Third Amendment and Waiver dated as of
March 24, 2006 to the Amended and Restated Credit Agreement     WB Loan
Funding 2, LLC

  By: 

  -s- Diana M. Himes [c03942c0394216.gif]  

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  Name:        Diana M. Himes

  Title: Associate

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  Bally Total Fitness Holding Corporation Third Amendment and Waiver dated as of
March 24, 2006 to the Amended and Restated Credit Agreement          

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  Deutsche Bank Trust Company Americas

  By: 

  -s- Brenda Casey [c03942c0394217.gif]  

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  Name:        Brenda Casey

  Title: Director

  By: 

  -s- Steven P. Laphan [c03942c0394227.gif]  

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  Name:         Steven P. Lapham

  Title: Managing Director

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  Bally Total Fitness Holding Corporation Third Amendment and Waiver dated as of
March 24, 2006 to the Amended and Restated Credit Agreement     Credit Genesis
CLO 2005-1  

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  [LENDER]

  By: 

  -s- TK DECCAN [c03942c0394218.gif]  

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  Name:        TK DECCAN

  Title: Managing Principal

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  Bally Total Fitness Holding Corporation Third Amendment and Waiver dated as of
March 24, 2006 in the Amended and Restated Credit Agreement     -s- Alice L.
Wagner [c03942c0394219.gif]    

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  TRS LEDA LLC

  By: 

     

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      Name: Alice L. Wagner

  Title: Vice President

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  Bally Total Fitness Holding Corporation Third Amendment and Waiver dated as of
March 24, 2006 to the Amended and Restated Credit Agreement     GENERAL ELECTRIC
CAPITAL CORPORATION

  By: 

  -s- Dwayne L. Coker [c03942c0394228.gif]  

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  Name:        Dwayne L. Coker

  Title: Duly Authorized signatory

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  Bally Total Fitness Holding Corporation Third Amendment and Waiver dated as of
March 24, 2006 to the Amended and Restated Credit Agreement     Sankaty
Advisors, LLC as Collateral Manager for AVERY POINT CLO, LTD., as Term Lender

  By: 

  -s- Michelle L. Rocha [c03942c0394220.gif]  

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  Name:        Michelle L. Rocha

  Title: Authorized Signatory

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  Bally Total Fitness Holding Corporation Third Amendment and Waiver dated as of
March 24, 2006 to the Amended and Restated Credit Agreement     Sankaty
Advisors, LLC as Collateral Manager for Race Point II CLO, Limited, as Term
Lender

  By:  -s- Michelle L. Rocha [c03942c0394220.gif]

 

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  Name:   Title:

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  Bally Total Fitness Holding Corporation Third Amendment and Waiver dated as of
March 24, 2006 to the Amended and Restated Credit Agreement     Sankaty
Advisors, LLC as Collateral Manager for Castle Hill I - INGOTS, Ltd., as Term
Lender

  By:  -s- Michelle L. Rocha [c03942c0394220.gif]

 

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  Name:   Title:

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  Bally Total Fitness Holding Corporation Third Amendment and Waiver dated as of
March 24, 2006 to the Amended and Restated Credit Agreement     Sankaty
Advisors, LLC as Collateral Manager for Loan Funding XI LLC, as Term Lender

  By:  -s- ------- - -------- [c03942c0394220.gif]

 

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  Name:   Title:

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  Bally Total Fitness Holding Corporation Third Amendment and Waiver dated as of
March 24, 2006 to the Amended and Restated Credit Agreement     Sankaty
Advisors, Inc., as Collateral Manager for Brant Point CBO 1999-1 LTD., as Term
Lender

  By:  -s- ------- - -------- [c03942c0394220.gif]

 

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  Name:   Title:

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  Bally Total Fitness Holding Corporation Third Amendment and Waiver dated as of
March 24, 2006 to the Amended and Restated Credit Agreement     Sankaty
Advisors, LLC as Collateral Manager for Race Point CLO, Limited, as Term Lender

  By:  -s- ------- - -------- [c03942c0394220.gif]

 

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  Name:   Title:

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  Bally Total Fitness Holding Corporation Third Amendment and Waiver dated as of
March 24, 2006 to the Amended and Restated Credit Agreement     Sankaty High
Yield Partners, III, L.P.

  By:  -s- ------- - -------- [c03942c0394220.gif]

 

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  Name:   Title:

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  Bally Total Fitness Holding Corporation Third
Amendment and Waiver dated as of March 24, 2006
to the Amended and Restated Credit Agreement     Sankaty Advisors, LLC as
Collateral Manager for Castle Hill II — INGOTS, Ltd., as Term Lender

  By:  (-s- SignatureToCome) [c03942c0394220.gif]
_____________________________________
Name:
Title:

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  Bally Total Fitness Holding Corporation Third
Amendment and Waiver dated as of March 24, 2006
to the Amended and Restated Credit Agreement

Sankaty Advisors, LLC as Collateral Manager
for Prospect Funding I, LLC as Term Lender

  By:  (-s- SignatureToCome) [c03942c0394220.gif]
_____________________________________
Name:
Title:

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  Bally Total Fitness Holding Corporation Third
Amendment and Waiver dated as of March 24, 2006
to the Amended and Restated Credit Agreement

Sankaty Advisors, LLC as Collateral Manager
for Brant Point II CBO 2000-1 Ltd., as Term Lender

  By:  (-s- SignatureToCome) [c03942c0394220.gif]
_____________________________________
Name:
Title:

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  Bally Total Fitness Holding Corporation Third Amendment and Waiver dated as of
March 24, 2006 to the Amended and Restated Credit Agreement     Sankaty
Advisors, LLC as Collateral Manager for Race Point III, CLO Ltd. as Term Lender

  By: -s- Illegible [c03942c0394220.gif]

 

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  Name:   Title:

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  Bally Total Fitness Holding Corporation Third Amendment and Waiver dated as of
March 24, 2006 to the Amended and Restated Credit Agreement     Canyon Capital
CDO 2002-1 Ltd.   [LENDER]

  By:  -s- Illegible [c03942c0394221.gif]

 

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  Name:      Mitchell R. Julis   Title:      Managing Director

  By:  Canyon Capital Advisors LLC,

        a Delaware limited liability company,         its Collateral Manager

--------------------------------------------------------------------------------

 

  Bally Total Fitness Holding Corporation Third Amendment and Waiver dated as of
March 24, 2006 to the Amended and Restated Credit Agreement     FIELD POINT I,
LTD.

  By:  -s- Illegible [c03942c0394222.gif]

 

--------------------------------------------------------------------------------

  Name:      Richard Petrill   Title:      Authorized Signatory

--------------------------------------------------------------------------------

 

  Bally Total Fitness Holding Corporation Third Amendment and Waiver dated as of
March 24, 2006 to the Amended and Restated Credit Agreement.     FIELD POINT II,
LTD.

  By:  (-s- Richard Petrill) [c03942c0394222.gif]

  Name: Richard Petrill   Title:  Authorized Signatory

--------------------------------------------------------------------------------

 

  Bally Total Fitness Holding Corporation Third Amendment and Waiver dated as of
March 24, 2006 to the Amended and Restated Credit Agreement.    

--------------------------------------------------------------------------------

  LaSalle Bank N.A.

  By:  (-s- David Shapiro) [c03942c0394223.gif]

  Name: David Shapiro   Title:  Senior Vice President

--------------------------------------------------------------------------------

 

  Bally Total Fitness Holding Corporation Third Amendment and Waiver dated as of
March 24, 2006 to the Amended and Restated Credit Agreement.    

--------------------------------------------------------------------------------

  ANCHORAGE CROSSOVER CREDIT   OFFSHORE MASTER FUND, LTD.

  By:  ANCHORAGE ADVISORS, LLC.,

  Its Advisor

  By:  (-s- Michael Aglialoro) [c03942c0394224.gif]

 

--------------------------------------------------------------------------------

  Name: Michael Aglialoro   Title:  Executive Vice President

--------------------------------------------------------------------------------

 

  Bally Total Fitness Holding Corporation Third Amendment and Waiver dated as of
March 24, 2006 to the Amended and Restated Credit Agreement.     SBZ PARTNERS,
L.P.  

--------------------------------------------------------------------------------

  [LENDER]

  By: Martin Bious [c03942c0394225.gif]

 

--------------------------------------------------------------------------------

  Name: Martin Bious

  Title: Co-manager, SBZ copy illegible, GP, LLC, Its General Partner

--------------------------------------------------------------------------------

 

  Bally Total Fitness Holding Corporation Third Amendment and Waiver dated as of
March 24, 2006 to the Amended and Restated Credit Agreement.     Sunrise
Partners Limited Partnership  

--------------------------------------------------------------------------------

  [LENDER]

  By: Michael J. Berner [c03942c0394226.gif]

 

--------------------------------------------------------------------------------

  Name: Michael J. Berner   Title:     Vice President

--------------------------------------------------------------------------------

 

  Bally Total Fitness Holding Corporation Third Amendment and Waiver dated as of
March 24, 2006 to the Amended and Restated Credit Agreement.     The Alphagen
Credit Fund LP  

--------------------------------------------------------------------------------

  [LENDER]

  By: Varkks Chacico [c03942c0394229.gif]

 

--------------------------------------------------------------------------------

  Name: Varkks Chacko

  Title: Signing in his capacity
as Fund Manager,
[Illegible] Global Investments

--------------------------------------------------------------------------------

 

EXHIBIT A
Amendments and Waivers to Senior
Unsecured Notes Indenture and
Subordinated Notes Indenture
Senior Unsecured Notes Indenture:
WAIVERS
Waiver of any Default or Event of Default (as such terms are defined in the
Senior Unsecured Notes Indenture) (A) arising from a failure to comply with the
covenants set forth in Section 7.4 and 10.17 of the Senior Unsecured Notes
Indenture (the “Reporting Covenants”), which require the Borrower to file with
the SEC and to furnish to the Trustee and holders under the Senior Unsecured
Notes Indenture, the reports required to be filed pursuant to the Securities
Exchange Act of 1934 and (B) arising from the Borrower’s failure to provide
notice to the Trustee under the Senior Unsecured Notes Indenture of any
Reporting Covenant Default under Section 10.19(b) of the Senior Unsecured Notes
Indenture.
Waiver extends through July 10, 2006 with respect to the Borrower’s 2005 10-K
Report and first quarter 2006 10-Q Report and through September 11, 2006 with
respect to the Borrower’s second quarter 2006 10-Q Report, with an option to
extend to October 11, 2006.
CONSIDERATION
A fee, at the election of the holder under the Senior Unsecured Notes Indenture
of (i) $10.00 or (ii) 4.4444 shares of the Borrower’s common stock, par value
$0.01 per share (“Common Stock”), in each case per $1,000 in principal amount of
Senior Unsecured Notes.
In addition, if the Borrower elects the option to extend the delivery of its
second quarter 2006 10-Q Report by 30 additional days to October 11, 2006, a fee
of (i) $3.33 or (ii) 1.4815 shares of Common Stock per $1,000 in principal
amount of Senior Unsecured Notes.
Subordinated Notes Indenture:
WAIVERS
Waiver of any Default or Event of Default (as such terms are defined in the
Subordinated Notes Indenture) (A) arising from a failure to comply with the
covenants set forth in Section 7.4 and 10.17 of the Subordinated Notes Indenture
(the “Reporting Covenants”), which require the Borrower to file with the SEC and
to furnish to the Trustee and holders under the Subordinated Notes Indenture,
the reports required to be filed pursuant to the Securities Exchange Act of 1934
and (B) arising from the Borrower’s failure to provide notice to the Trustee
under the Subordinated Notes

 

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Indenture of any Reporting Covenant Default under Section 10.18(b) of the
Subordinated Notes Indenture.
Waiver extends through July 10, 2006 with respect to the Borrower’s 2005 10-K
Report and first quarter 2006 10-Q Report and through September 11, 2006 with
respect to the Borrower’s second quarter 2006 10-Q Report, with an option to
extend to October 11, 2006.
CONSIDERATION
A fee, at the election of the holder under the Subordinated Notes Indenture of
(i) $10.00 or (ii) 4.4444 shares of the Borrower’s common stock, par value $0.01
per share (“Common Stock”), in each case per $1,000 in principal amount of
Subordinated Notes.
In addition, if the Borrower elects the option to extend the delivery of its
second quarter 2006 10-Q Report by 30 additional days to October 11, 2006, a fee
of (i) $3.33 or (ii) 1.4815 shares of Common Stock per $1,000 in principal
amount of Subordinated Notes.