Document:

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                                                                    EXHIBIT 10.2

                                 FIRST AMENDMENT

                  FIRST AMENDMENT (this "Amendment"), dated as of January 27,
2004, among TOWN SPORTS INTERNATIONAL, INC. (the "Borrower"), the financial
institutions party to the Credit Agreement referred to below (the "Lenders"),
and DEUTSCHE BANK TRUST COMPANY AMERICAS, as Administrative Agent (in such
capacity, the "Administrative Agent"). All capitalized terms used herein and not
otherwise defined herein shall have the respective meanings provided such terms
in the Credit Agreement referred to below.

                              W I T N E S S E T H:

                  WHEREAS, the Borrower, the Lenders and the Administrative
Agent are parties to a Credit Agreement, dated as of April 16, 2003 (the "Credit
Agreement");

                  WHEREAS, the parties hereto wish to amend and otherwise modify
certain provisions of the Credit Agreement as herein provided; and

                  WHEREAS, subject to the terms and conditions of this
Amendment, the parties hereto agree as follows;

                  NOW, THEREFORE, it is agreed:

                  1.       Section 3.03 of the Credit Agreement is hereby
amended by inserting the following new clause (i) at the end thereof:

                  "(i)     In addition to any other mandatory commitment
         reductions pursuant to this Section 3.03, to the extent that Holdco
         receives any cash proceeds from any incurrence of Indebtedness for
         borrowed money by Holdco (other than cash proceeds received from the
         issuance of the Holdco Notes on the First Amendment Effective Date),
         any asset sale by Holdco or from any Recovery Event, the Net Debt
         Proceeds, the Net Asset Sale Proceeds or the New Recovery Event
         Proceeds therefrom, as the case may be, shall be treated as if (and,
         notwithstanding anything to the contrary contained herein, be deemed)
         received by the Borrower and shall be applied as, and to the extent,
         required by Section 3.03(c), (d) or (e), as the case may be."

                  2.       Sections 8.01(b) and (c) of the Credit Agreement are
hereby restated in their entirety as follows:

                  "(b)     Quarterly Financial Statements. Within 45 days after
         the close of each of the first three quarterly accounting periods in
         each fiscal year of the Borrower and Holdco, (i) the consolidated
         balance sheet of each of the Borrower and its Subsidiaries and Holdco
         and its Subsidiaries as at the end of such quarterly accounting period
         and the related consolidated statements of income and retained earnings
         (or accumulated deficit, as the case may be) and statement of cash
         flows for such quarterly accounting period and for the elapsed portion
         of the fiscal year ended with the last day of such quarterly accounting
         period, in each case setting forth comparative figures for the
         corresponding

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         quarterly accounting period in the prior fiscal year and comparable
         budgeted figures for such quarterly accounting period as set forth in
         the respective budget delivered pursuant to Section 8.01(e), all of
         which shall be certified by an Authorized Financial Officer of the
         Borrower or Holdco that they fairly present in all material respects in
         accordance with generally accepted accounting principles the financial
         condition of the Borrower and its Subsidiaries and Holdco and its
         Subsidiaries as of the dates indicated and the results of their
         operations for the periods indicated, subject to normal year-end audit
         adjustments and the absence of footnotes, and (ii) management's
         discussion and analysis of the important operational and financial
         developments during such quarterly accounting period (it being
         understood and agreed that (x) any such management's discussion and
         analysis set forth in the Borrower's or Holdco's Form 10-Q filed with
         the SEC for the respective quarterly accounting period shall satisfy
         the requirements of this sub-clause (ii) so long as a copy of such Form
         10-Q has been delivered to the Lenders pursuant to this Section 8.01(b)
         or Section 8.01(h) and (y) in satisfying the requirements of this
         Section 8.01(b), if at the time the financial statements referenced
         herein are to be delivered, Holdco owns no capital stock or other
         equity interests of any Person other than the Borrower and has no other
         material assets or liabilities (other than pursuant to the Credit
         Agreement, the Holdco Note Documents or its guaranty of the Senior
         Notes), then one set of consolidated financial statements of Holdco and
         its Subsidiaries may be delivered pursuant to this Section 8.01(b) so
         long as any differences in the consolidated financial statements of
         Holdco and its Subsidiaries from those of the Borrower and its
         Subsidiaries are indicated by footnotes in the respective consolidated
         financial statements.).

                  (c)      Annual Financial Statements. Within 90 days after the
         close of each fiscal year of the Borrower and Holdco, (i) the
         consolidated balance sheet of each of the Borrower and its Subsidiaries
         and Holdco and its Subsidiaries as at the end of such fiscal year and
         the related consolidated statements of income and retained earnings (or
         accumulated deficit, as the case may be) and statement of cash flows
         for such fiscal year setting forth comparative figures for the
         preceding fiscal year and certified by PricewaterhouseCoopers LLP or
         other independent certified public accountants of recognized national
         standing reasonably acceptable to the Administrative Agent, together
         with a report of such accounting firm stating that in the course of its
         regular audit of the financial statements of each of the Borrower and
         its Subsidiaries and Holdco and its Subsidiaries, which audit was
         conducted in accordance with generally accepted auditing standards,
         such accounting firm obtained no knowledge of any Default or Event of
         Default relating to financial or accounting matters which has occurred
         and is continuing or, if in the opinion of such accounting firm such a
         Default or an Event of Default has occurred and is continuing, a
         statement as to the nature thereof, and (ii) management's discussion
         and analysis of the important operational and financial developments
         during such fiscal year (it being understood and agreed that (x) any
         such management's discussion and analysis set forth in the Borrower's
         or Holdco's Form 10-K filed with the SEC for the respective fiscal year
         shall satisfy the requirements of this sub-clause (ii) so long as a
         copy of such Form 10-K has been delivered to the Lenders pursuant to
         this Section 8.01(c) or Section 8.01(h) and (y) in satisfying the
         requirements of this Section 8.01(c), if at the time the financial
         statements referenced herein are to be delivered, Holdco owns no
         capital stock or other equity interests of any Person other than the

                                       -2-
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         Borrower and has no other material assets or liabilities (other than
         pursuant to the Credit Agreement, the Holdco Note Documents or its
         guaranty of the Senior Notes), then one set of consolidated financial
         statements of Holdco and its Subsidiaries may be delivered pursuant to
         this Section 8.01(c) so long as any differences in the consolidated
         financial statements of Holdco and its Subsidiaries from those of the
         Borrower and its Subsidiaries are indicated by footnotes in the
         respective consolidated financial statements).

                  3.       Section 9.03(iii) of the Credit Agreement is hereby
restated in its entirety as follows:

                  "(iii)   the Borrower may pay cash Dividends to Holdco so long
         as Holdco promptly uses such proceeds solely to redeem or repurchase
         outstanding shares of Holdco's common stock (or options to purchase
         such common stock) following the death, disability, retirement or
         termination of employment of officers, directors or employees of the
         Borrower or any of its Subsidiaries, provided that (x) neither the
         Borrower nor any of its Subsidiaries shall have any obligations in
         respect of such redemptions or repurchases, (y) the aggregate amount of
         Dividends paid by the Borrower to Holdco pursuant to this Section
         9.03(iii) shall not exceed (I) $750,000 in any fiscal year of the
         Borrower plus (II) the aggregate amount of cash proceeds received by
         the Borrower in connection with the issuance of its common stock to
         officers, directors or employees of the Borrower and its Subsidiaries
         after the Effective Date and prior to the First Amendment Effective
         Date plus (III) the aggregate amount of cash proceeds received by the
         Borrower from Holdco in connection with the issuance of Holdco's common
         stock to officers, directors or employees of the Borrower and its
         Subsidiaries after the First Amendment Effective Date plus (IV) any
         cash proceeds received by the Borrower (or received by Holdco and
         contributed to the Borrower) from key man life insurance policies
         obtained solely for the purpose of making such redemptions or
         repurchases and (z) at the time of any Dividend permitted to be made
         pursuant to this Section 9.03(iii), no Default or Event of Default
         shall then exist or result therefrom;".

                  4.       Section 9.03 of the Credit Agreement is hereby
further amended by (i) deleting the word "and" appearing at the end of clause
(iv) thereof, (ii) deleting the period appearing at the end of clause (v)
thereof and inserting the text "; and" in lieu thereof and (iii) inserting the
following new clause (vi) at the end thereof:

                  "(vi)    the Borrower may pay cash Dividends to Holdco so long
         as the proceeds thereof are promptly used by Holdco solely to pay
         operating expenses incurred in the ordinary course of business
         (including, without limitation, professional fees and expenses) and
         other similar corporate overhead costs and expenses, provided that the
         aggregate amount of all cash Dividends paid pursuant to this clause
         (vi) shall not exceed $250,000 in any fiscal year of the Borrower."

                  5.       Section 9.04(xi) of the Credit Agreement is hereby
amended by inserting the text "(other than Indebtedness owed to Holdco)"
immediately after the text "the Borrower and its Subsidiaries" appearing
therein.

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                  6.       Section 9.05(xi) of the Credit Agreement is hereby
amended by inserting the text "prior to the First Amendment Effective Date"
immediately after the text "the Borrower may acquire" and "acquisition of shares
of capital stock of the Borrower" appearing therein.

                  7.       Section 9.05(xiii) of the Credit Agreement is hereby
amended by inserting the text "(other than Investments in or to Holdco)"
immediately after the text "not otherwise permitted by this Section 9.05"
appearing therein.

                  8.       Section 9.06 of the Credit Agreement is hereby
amended by (i) deleting the word "and" appearing at the end of clause (v)
thereof, (ii) deleting the period appearing at the end of clause (vi) thereof
and inserting "; and" in lieu thereof and (iii) inserting the following new
clause (vii) immediately following such clause (vi):

                  "(vii) the Borrower may enter into, and may make payments
         under, the Holdco Tax Sharing Agreement."

                  9.       Section 9.11(iv) of the Credit Agreement is hereby
amended by inserting the text "(including the Holdco Tax Sharing Agreement)"
immediately after the text "any Tax Sharing Agreement" appearing in sub-clause
(y) thereof.

                  10.      Section 10.02 of the Credit Agreement is hereby
amended by inserting the text "or Holdco" immediately after the text "any Credit
Party" appearing therein.

                  11.      Section 10.07 of the Credit Agreement is hereby
amended by inserting the text "or Holdco" immediately after the text "any Credit
Party" appearing therein.

                  12.      Section 10 of the Credit Agreement is hereby further
amended by (i) inserting the word "or" at the end of Section 10.10 thereof and
(ii) inserting the following new Section 10.11 immediately following such
Section 10.10:

                  "10.11 Holdco Guaranty. After the execution and delivery
         thereof, the Holdco Guaranty or any provision thereof shall cease to be
         in full force or effect as to Holdco, or Holdco or any Person acting
         for or on behalf of Holdco shall deny or disaffirm Holdco's obligations
         under the Holdco Guaranty or a "Holdco Event of Default" shall occur
         and be continuing;".

                  13.      The definition of "BRS Investors" appearing in
Section 11.01 of the Credit Agreement is hereby amended by deleting the text
"Effective Date" appearing therein and inserting the text "First Amendment
Effective Date" in lieu thereof.

                  14.      The definition of "Change of Control" appearing in
Section 11.01 of the Credit Agreement is hereby restated in its entirety as
follows:

                  "Change of Control" shall mean any of (i) prior to the date on
         which a Qualified IPO occurs, (x) the Management Investors, BRS, the
         BRS Investors and their Permissible Transferees shall in the aggregate
         cease to own Holdco Common Stock representing more than 50% of the
         common voting equity interest in Holdco's capital stock on a
         fully-diluted basis (assuming the exercise of all securities,
         exercisable, convertible or

                                      -4-
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         exchangeable for or into common equity interests of Holdco) or (y) BRS,
         the BRS Investors and their Permissible Transferees shall in the
         aggregate cease to own Holdco Common Stock representing at least 35% of
         the voting common equity interests in Holdco's capital stock on a
         fully-diluted basis (assuming the exercise of all securities
         exercisable, convertible or exchangeable for or into common equity
         interests of Holdco), (ii) from and after the date on which a Qualified
         IPO occurs, (w) the Management Investors, BRS, the BRS Investors and
         their Permissible Transferees shall cease to own Holdco Common Stock
         representing not less than 33% of the common voting equity interest in
         Holdco's capital stock on a fully-diluted basis (assuming the exercise
         of all securities, exercisable, convertible or exchangeable for or into
         common equity interest of Holdco) or (x) BRS, the BRS Investors and
         their Permissible Transferees shall in the aggregate cease to own
         Holdco Common Stock representing at least 20% of the common voting
         equity interests in Holdco's capital stock on a fully diluted basis
         (assuming the exercise of all securities exercisable, convertible or
         exchangeable for into common equity interests of Holdco) or (y) any
         "Person" or "Group" (within the meaning of sections 13(d) and 14(d)
         under the Exchange Act as in effect on the Effective Date) of Persons,
         owns (beneficially or of record) a greater percentage than BRS, the BRS
         Investors and their Permissible Transferees of common equity interest
         in Holdco's capital stock, in each case, on a fully-diluted basis
         (assuming the exercise of all securities exercisable, convertible or
         exchangeable for or into common equity interests of Holdco), (iii)
         Holdco shall cease to own 100% of the capital stock of the Borrower, or
         (iv) a "change of control" pursuant to, and as defined in, the Senior
         Note Documents or the Holdco Note Documents shall occur.

                  15.      The definition of "Consolidated EBITDA" appearing in
Section 11.01 of the Credit Agreement is hereby amended by (i) inserting "(i)"
immediately after the text "subtracting therefrom" appearing in sub-clause (y)
thereof and (ii) inserting the following new sub-clause (y)(ii) immediately
before the semicolon appearing at the end of sub-clause (y) thereof:

         " and (ii) the amount of all cash Dividends paid by the Borrower to
         Holdco pursuant to Section 9.03(vi) for such period to the extent not
         otherwise deducted in arriving at Consolidated Net Income for such
         period".

                  16.      The definition of "Credit Documents" appearing in
Section 11.01 of the Credit Agreement is hereby amended by inserting the text
"the Holdco Guaranty," immediately after the text "the Subsidiaries Guaranty,"
appearing therein.

                  17.      The definition of "Management Investors" appearing in
Section 11.01 of the Credit Agreement is hereby restated in its entirety as
follows:

                  "Management Investors" shall mean the directors, executive
         officers and senior management investors of Holdco or the Borrower
         party to the Stockholders Agreement on the First Amendment Effective
         Date or who become party thereto after the First Amendment Effective
         Date with the approval of the Board of Directors of Holdco.

                                      -5-
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                  18.      The definition of "Maximum Permitted Consideration"
appearing in Section 11.01 of the Credit Agreement is hereby amended by (i)
deleting the text "the common stock of the Borrower" each place such text
appears in clause (i) of said definition and inserting the text "the common
stock of Holdco" in lieu thereof in each such place, (ii) deleting the text "the
Board of Directors of the Borrower" appearing in clauses (i) and (ii) of said
definition and inserting the text "the Board of Directors of Holdco" in lieu
thereof in each such place and (iii) deleting the text "Qualified Preferred
Stock of the Borrower" appearing in clause (ii) of said definition and inserting
the text "Qualified Preferred Stock of Holdco" in lieu thereof.

                  19.      The definition of "Permissible Transferee" appearing
in Section 11.01 of the Credit Agreement is hereby amended by deleting the text
"in the Borrower" each place such text appears in clause (i)(B) thereof and
inserting the text "in Holdco" in lieu thereof in each such place.

                  20.      The definition of "Qualified IPO" appearing in
Section 11.01 of the Credit Agreement is hereby restated in its entirety as
follows:

                  "Qualified IPO" shall mean a bona fide underwritten sale to
         the public of common stock of Holdco pursuant to a registration
         statement (other than on Form S-8 or any other form relating to
         securities issuable under any benefit plan of Holdco, the Borrower or
         any of their respective Subsidiaries) that is declared effective by the
         SEC and such offering results in gross cash proceeds to Holdco
         (exclusive of underwriter's discount and commissions and other
         expenses) of at least $75,000,000 and such proceeds (net of costs and
         expenses) are contributed by Holdco to the Borrower.

                  21.      The definition of "Qualified Preferred Stock"
appearing in Section 11.01 of the Credit Agreement is hereby restated in its
entirety as follows:

                  "Qualified Preferred Stock" shall mean any preferred stock of
         the Borrower or Holdco so long as (A) in each case the terms of any
         such preferred stock (i) do not contain any mandatory put, redemption,
         repayment, sinking fund or other similar provision, (ii) do not require
         the cash payment of dividends, (iii) do not contain any covenants
         (other than financial reporting covenants), (iv) do not grant the
         holders thereof any voting rights except for (x) voting rights required
         to be granted to such holders under applicable law and (y) limited
         customary voting rights on fundamental matters such as mergers,
         consolidations, sales of all or substantially all of the assets of the
         Borrower or Holdco, as the case may be, or liquidations involving the
         Borrower or Holdco, as the case may be, and (v) are otherwise
         reasonably satisfactory to the Administrative Agent, and (B) in the
         case of any preferred stock issued by the Borrower, the only holder
         thereof is Holdco.

                  22.      The definition of "Security Documents" appearing in
Section 11.01 of the Credit Agreement is hereby amended by inserting the
following text at the end thereof:

         ", the Holdco Pledge Agreement and the Holdco Security Agreement".

                  23.      The definition of "Stockholders Agreement" appearing
in Section 11.01 of the Credit Agreement is hereby restated in its entirety as
follows:

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                  "Stockholders Agreement" shall mean the Shareholders Agreement
         to be entered into on or prior to the First Amendment Effective Date by
         and among BRS, the BRS Investors, Farallon, Canterbury Detroit
         Partners, L.P., Canterbury Mezzanine Capital, L.P., Rosewood Capital,
         L.P., the Management Investors and each other shareholder of Holdco
         party thereto, as the same may be amended, modified or supplemented
         from time to time in accordance with the terms hereof and thereof.

                  24.      Section 11.01 of the Credit Agreement is hereby
further amended by inserting the following new definitions in the appropriate
alphabetical order:

                  "First Amendment" shall mean the First Amendment to this
         Agreement, dated as of January 27, 2004.

                  "First Amendment Effective Date" shall have the meaning
         provided in the First Amendment.

                  "Holdco" shall mean Town Sports International Holdings, Inc.,
         a corporation organized under the laws of Delaware.

                  "Holdco Common Stock" shall mean the shares of common stock of
         Holdco as constituted on the First Amendment Effective Date.

                  "Holdco Credit Documents" shall mean and include each of the
         Holdco Guaranty, the Holdco Pledge Agreement and the Holdco Security
         Agreement.

                  "Holdco Event of Default" shall mean a "Holdco Event of
         Default" under, and as defined in, the Holdco Guaranty.

                  "Holdco Guaranty" shall mean the guaranty to be made by Holdco
         in favor of the Administrative Agent for the benefit of the Secured
         Creditors in accordance with the terms of the First Amendment pursuant
         to which Holdco shall guaranty the obligations of the Borrower owing to
         the Secured Creditors pursuant to the Credit Documents and the Interest
         Rate Protection Agreements and Other Hedging Agreements to which the
         Borrower is a party to, as such guaranty may be amended, modified or
         supplemented from time to time in accordance with the terms hereof and
         thereof.

                  "Holdco Note Documents" shall mean the Holdco Note Indenture,
         the Holdco Notes and each other document or agreement relating to the
         issuance of the Holdco Notes.

                  "Holdco Note Indenture" shall mean the Indenture to be entered
         into between Holdco and the trustee thereunder, as the same may be
         amended, modified or supplemented from time to time in accordance with
         the terms hereof and thereof.

                  "Holdco Notes" shall mean Holdco's Senior Discount Notes due
         2014 to be issued pursuant to the Holdco Note Indenture.

                                      -7-
<PAGE>

                  "Holdco Pledge Agreement" shall mean the pledge agreement to
         be entered into between Holdco and the Collateral Agent for the benefit
         of the Secured Creditors in accordance with the terms of the First
         Amendment pursuant to which Holdco shall pledge the Collateral
         thereunder (including 100% of the capital stock of the Borrower) to
         secure its obligations under the Holdco Guaranty and the other Holdco
         Credit Documents to which it is a party to, as such pledge agreement
         may be amended, modified or supplemented from time to time in
         accordance with the terms hereof and thereof.

                  "Holdco Security Agreement" shall mean the security agreement
         to be entered into between Holdco and the Collateral Agent for the
         benefit of the Secured Creditors in accordance with the terms of the
         First Amendment pursuant to which Holdco shall pledge the Collateral
         thereunder to secure its obligations under the Holdco Guaranty and the
         other Holdco Credit Documents to which it is a party to, as such
         security agreement may be amended, modified or supplemented from time
         to time in accordance with the terms hereof and thereof.

                  "Holdco Tax Sharing Agreement" shall mean the Tax Sharing
         Agreement entered into between the Borrower and Holdco in the form
         delivered to the Administrative Agent and the Lenders pursuant to the
         First Amendment, as the same may be amended, modified or supplemented
         from time to time in accordance with the terms hereof and thereof.

                  25.      This Amendment shall become effective on the date
(the "First Amendment Effective Date") when:

                  (i) the Borrower and the Required Lenders shall have signed a
         counterpart hereof (whether the same or different counterparts) and
         shall have delivered (including by way of facsimile transmission) the
         same to the Administrative Agent at the Notice Office;

                  (ii) Holdco shall have issued the Holdco Notes;

                  (iii) Holdco shall have duly authorized, executed and
         delivered to the Administrative Agent counterparts of the Holdco
         Guaranty, the Holdco Pledge Agreement and the Holdco Security Agreement
         (each of which shall be in form and substance reasonably acceptable to
         the Administrative Agent), and shall have delivered to the Collateral
         Agent, as pledgee under the Holdco Pledge agreement, stock certificates
         representing 100% of the outstanding capital stock of the Borrower,
         together with executed and undated stock powers with respect thereto;

                  (iv) Holdco shall have taken all such other actions, and shall
         have executed and delivered all such further documentation (including,
         but not limited to, opinions of counsel, UCC-1 financing statements,
         officers' certificates, board of director resolutions, certified
         charter documents and good standing certificates), in each case as
         Holdco would otherwise have been required to take pursuant to Section
         9.15 of the Credit Agreement if Holdco were a Domestic Subsidiary of
         the Borrower (and with all such actions and documentation referred to
         above in this clause (iv) to be in form and substance reasonably
         satisfactory to the Administrative Agent); and

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<PAGE>

                  (v) the Administrative Agent and the Lenders shall have
         received a true and correct copy of the Holdco Note Documents, the
         Stockholders Agreement and the Holdco Tax Sharing Agreement (each of
         which shall be in form and substance reasonably satisfactory to the
         Administrative Agent).

                  26.      In order to induce the Lenders to enter into this
Amendment, the Borrower hereby represents and warrants that (i) no Default or
Event of Default exists on the First Amendment Effective Date, both before and
after giving effect to this Amendment, and (ii) on the First Amendment Effective
Date, both before and after giving effect to this Amendment, all representations
and warranties contained in the Credit Agreement and in the other Credit
Documents are true and correct in all material respects (it being understood and
agreed that any representation or warranty which by its terms is made as of a
specified date shall be required to be true and correct in all material respects
only as of such specified date).

                  27.      This Amendment may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which counterparts when executed and delivered shall be an original, but all
of which shall together constitute one and the same instrument. A complete set
of counterparts shall be delivered to the Borrower and the Administrative Agent.

                  28.      THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW
OF THE STATE OF NEW YORK.

                  29.      From and after the First Amendment Effective Date,
all references in the Credit Agreement and each of the other Credit Documents to
the Credit Agreement shall be deemed to be references to the Credit Agreement as
modified hereby.

                  30.      This Amendment is limited as specified and shall not
constitute a modification, acceptance or waiver of any other provision of the
Credit Agreement or any other Credit Document.

                                      * * *

                                      -9-
<PAGE>

                  IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this Amendment to be duly executed and delivered as of the date
first above written.

                                              TOWN SPORTS INTERNATIONAL, INC.

                                              By: /s/ Richard Pyle
                                                  ----------------------------
                                                  Name: Richard Pyle
                                                  Title: Chief Financial Officer

                                              DEUTSCHE BANK TRUST COMPANY
                                              AMERICAS, Individually and as
                                              Administrative Agent

                                              By: /s/ Scottye Lindsey
                                                  ----------------------------
                                                  Name: Scottye Lindsey
                                                  Title: Vice President

                                              BNP PARIBAS

                                              By: /s/ Cecile Scherer
                                                  -----------------------------
                                                  Name: Cecile Scherer
                                                  Title: Director Merchant
                                                    Banking Group

                                              By: /s/ M. Ginkelman
                                                  -----------------------------
                                                  Name: M. Ginkelman
                                                  Title: Managing Director

                                              CIT LENDING SERVICES CORPORATION

                                              By: ____________________________
                                                  Name:
                                                  Title:

<PAGE>

                                      MERRILL LYNCH CAPITAL, a division of
                                      MERRILL LYNCH BUSINESS FINANCIAL
                                      SERVICES INC.

                                      By: /s/ Francois Delangle
                                          --------------------------
                                          Name: Francois Delangle
                                          Title: Vice President<PAGE>

                                                                    EXHIBIT 10.3

                        TOWN SPORTS INTERNATIONAL, INC.

                             RESTRUCTURING AGREEMENT

                  This RESTRUCTURING AGREEMENT (this "Agreement") is made as of
February 4, 2004, by and among Town Sports International, Inc., a New York
corporation (the "Company"), Town Sports International Holdings, Inc., a
Delaware corporation ("Holdings"), BRUCKMANN, ROSSER, SHERRILL & CO., L.P., a
Delaware limited partnership ("BRS"), the individuals and entities listed on the
BRS Affiliate Signature Pages hereto (the "BRS Affiliates" and, collectively
with BRS, the "BRS Investors", and individually with BRS, each a "BRS
Investor"), FARALLON CAPITAL PARTNERS, L.P., a California limited partnership
("FCP"), FARALLON CAPITAL INSTITUTIONAL PARTNERS, L.P., a California limited
partnership ("FCIP"), RR CAPITAL PARTNERS, L.P., a Delaware limited partnership
("RRC"), and FARALLON CAPITAL INSTITUTIONAL PARTNERS II, L.P., a California
limited partnership ("FII" and, collectively with FCP, FCIP, and RRC, the
"Farallon Investors", and individually, a "Farallon Investor"), CANTERBURY
DETROIT PARTNERS, L.P., a Delaware limited partnership ("Canterbury Detroit"),
CANTERBURY MEZZANINE CAPITAL, L.P., a Delaware limited partnership ("Canterbury
Mezzanine" and, together with Canterbury Detroit, the "Canterbury Investors",
and individually, a "Canterbury Investor"), ROSEWOOD CAPITAL, L.P., a Delaware
limited partnership ("Rosewood"), ROSEWOOD CAPITAL IV, L.P., a Delaware limited
partnership ("Rosewood IV"), ROSEWOOD CAPITAL IV ASSOCIATES, L.P., a Delaware
limited partnership ("Rosewood Associates" and, collectively with Rosewood and
Rosewood IV, the "Rosewood Investors", and individually, a "Rosewood Investor"),
CAPITALSOURCE HOLDINGS LLC, a Delaware limited liability company
("CapitalSource"), KEITH ALESSI ("Alessi"), PAUL ARNOLD ("Arnold"), and certain
stockholders of the Company listed on the Executive Signature Page hereto (each,
an "Executive", collectively, the "Executives") (the BRS Investors, the Farallon
Investors, the Canterbury Investors, the Rosewood Investors, CapitalSource,
Alessi, Arnold and the Executives are referred to collectively herein as the
"Contributors", and individually herein as a "Contributor").

                  WHEREAS, the Contributors own all of the issued and
outstanding capital stock of the Company;

                  WHEREAS, the Contributors and the Company desire to
restructure the Company by creating Holdings, a holding company which shall own
all of the issued and outstanding capital stock of the Company;

                  WHEREAS, following the restructuring of the Company, the
Contributors shall own all of the issued and outstanding capital stock of
Holdings on the same terms and in the same proportion as is held currently in
the Company by the Contributors; and

                  WHEREAS, on January 20, 2004, Holdings was incorporated in the
State of Delaware to effectuate such restructuring.

<PAGE>

                  NOW, THEREFORE, in consideration of the premises and the
mutual promises herein made, and in consideration of the representations,
warranties, and covenants herein contained, the parties hereto agree as follows.

                  1.       CONTRIBUTION TO HOLDINGS. On the date of this
Agreement, each Contributor agrees to contribute and deliver to Holdings
certificates representing the number of shares of (a) Series A Preferred Stock,
par value $1.00 per share, of the Company (the "Company Series A Preferred"),
(b) Series B Preferred Stock, par value $1.00 per share, of the Company (the
"Company Series B Preferred"), and (c) Class A Common Stock, par value $.001 per
share, of the Company (the "Company Class A Common" and, collectively with the
Company Series A Preferred and the Company Series B Preferred, the "Company
Shares", and individually, a "Company Share"), as applicable, as specified for
each such Contributor on Schedule 1 attached hereto, endorsed in blank or
accompanied by duly executed assignment documents, and in exchange therefore,
Holdings agrees to issue and deliver to each Contributor the number of shares of
(a) Series A Preferred Stock, par value $1.00 per share, of Holdings (the
"Holdings Series A Preferred"), (b) Series B Preferred Stock, par value $1.00
per share, of Holdings (the "Holdings Series B Preferred"), and (c) Class A
Common Stock, par value $.001 per share, of Holdings (the "Holdings Class A
Common" and, collectively with the Holdings Series A Preferred and the Holdings
Series B Preferred, the "Holdings Shares", and individually, a "Holdings
Share"), as applicable, as specified for each such Contributor on Schedule 1
attached hereto (in each case, in the form of stock certificates issued by
Holdings representing such shares). The parties hereto intend that the
transactions described in this Section 1 (the "Initial Exchange") be
characterized as an exchange under Section 351(a) of the Internal Revenue Code
of 1986, as amended.

                  2.       CONTRIBUTION TO THE COMPANY. Immediately following
the Initial Exchange, Holdings agrees to contribute and deliver to the Company
the certificates representing all of the Company Shares contributed to it
pursuant to the Initial Exchange, endorsed in blank or accompanied by duly
executed assignment documents, and in exchange therefore, the Company agrees to
(a) issue and deliver to Holdings 1,000 shares of Company Class A Common (in the
form of stock certificates issued by the Company representing such shares), and
(b) cancel on its books and records the certificates representing Company Shares
contributed to it by Holdings pursuant to this Section 2. The parties hereto
intend that the transactions described in this Section 2 (the "Second Exchange"
and, together with the Initial Exchange, the "Restructuring") be characterized
as an exchange under Section 351(a) of the Internal Revenue Code of 1986, as
amended.

                  3.       REPRESENTATIONS AND WARRANTIES CONCERNING THE
                           TRANSACTION.

                  (a)      Representations and Warranties with respect to the
Company. The Company represents and warrants to each of the Contributors that
its statements contained in this Section 3(a) are true and correct as of the
date of this Agreement.

                           (i)      Organization of the Company. The Company is
duly organized, validly existing, and in good standing under the laws of the
State of New York.

                                        2
<PAGE>

                           (ii)     Authorization of Transaction. The Company
has full corporate power and authority to execute and deliver this Agreement and
to perform its obligations hereunder. This Agreement constitutes a valid and
binding obligation of the Company, enforceable in accordance with its terms and
conditions. The Company need not give any notice to, make any filing with, or
obtain any authorization, consent, or approval of any government or governmental
agency in order to consummate the transactions contemplated by this Agreement.

                           (iii)    Noncontravention. Neither the execution and
the delivery of this Agreement, nor the consummation of the transactions
contemplated hereby, will (a) violate any constitution, statute, regulation,
rule, injunction, judgment, order, decree, ruling, charge, or other restriction
of any government, governmental agency, or court to which the Company is subject
or any provision of its charter or bylaws, or (b) result in a breach of or
constitute a default under, any agreement, contract, lease, license, instrument,
or other arrangement to which the Company is a party or by which it is bound or
to which any of its assets is subject.

                           (iv)     Capital Stock and Related Matters.

                                    (A)      The authorized capital stock of the
Company consists of (i) 2,500,000 shares of Company Class A Common, of which (x)
1,247,673.29 shares are issued and outstanding and 162,759 are reserved for
issuance upon exercise of employee stock options issued pursuant to the
Company's Fourth Amended and Restated 1996 Common Stock Option Plan approved by
the board of directors of the Company, in each case, immediately prior to the
Restructuring and (y) 1,000 shares will be issued and outstanding and held by
Holdings immediately after the Restructuring, (ii) 500,000 shares of Class B
Common Stock, par value $.001 per share, none of which are issued and
outstanding immediately prior to or immediately after the Restructuring, (iii)
100,000 shares of Senior Preferred Stock, par value $1.00 per share, none of
which are issued and outstanding immediately prior to or immediately after the
Restructuring, (iv) 200,000 shares of Company Series A Preferred, (x) of which
153,636.54 shares are issued and outstanding immediately prior to the
Restructuring and (y) none of which shall be issued and outstanding immediately
after the Restructuring, and (v) 200,000 shares of Company Series B Preferred,
(x) of which 109,540.68 shares are issued and outstanding immediately prior to
the Restructuring and (y) none of which shall be issued and outstanding
immediately after the Restructuring. Immediately after the Restructuring, the
Company will not have outstanding any stock or securities convertible or
exchangeable for any shares of its capital stock or containing any profit
participation features, nor any rights or options to subscribe for or to
purchase its capital stock or any stock or securities convertible into or
exchangeable for its capital stock or any stock appreciation rights or phantom
stock plans. Immediately after the Restructuring, the Company shall not be
subject to any obligation (contingent or otherwise) to repurchase or otherwise
acquire or retire any shares of its outstanding capital stock or any warrants,
options or other rights to acquire its capital stock. As of the Restructuring
and immediately thereafter, all of the outstanding shares of the Company's
capital stock shall be validly issued, fully paid and nonassessable.

                                    (B)      There are no statutory or
contractual stockholders preemptive rights or rights of refusal with respect to
the issuance of the Company Class A Common to Holdings pursuant to Section 2.
The Company has not violated any applicable federal or state securities laws in
connection with the issuance of any of its capital stock pursuant

                                       3
<PAGE>

to Section 2, and the issuance of the Company Class A Common pursuant to Section
2 does not require registration under the Securities Act of 1933, as amended
(the "Securities Act"), or any applicable state securities laws. Immediately
after the Restructuring, there will be no agreements between the Company's
stockholders with respect to the voting, transfer or registration of the
Company's capital stock.

                  (b)      Representations and Warranties with respect to
Holdings. The Company and Holdings represent and warrant, jointly and severally,
to each of the Contributors that the statements contained in this Section 3(b)
are true and correct as of the date of this Agreement.

                           (i)      Organization of Holdings. Holdings is duly
organized, validly existing, and in good standing under the laws of the State of
Delaware.

                           (ii)     Authorization of Transaction and Holdings
Shares. Holdings has full corporate power and authority to execute and deliver
this Agreement and to perform its obligations hereunder. Holdings has (i)
created the Holdings Shares by amending and restating its existing Certificate
of Incorporation in the form set forth as Exhibit A attached hereto (the
"Holdings Amended Certificate") and (ii) authorized the issuance of the Holdings
Shares to the Contributors pursuant to Section 1. This Agreement constitutes a
valid and binding obligation of Holdings, enforceable in accordance with its
terms and conditions. Holdings need not give any notice to, make any filing
with, or obtain any authorization, consent, or approval of any government or
governmental agency in order to consummate the transactions contemplated by this
Agreement, except for certain filings related to the issuance of Holdings Shares
pursuant to Section 1 to comply with the Securities Act and applicable state
securities laws.

                           (iii)    Noncontravention. Neither the execution and
the delivery of this Agreement, nor the consummation of the transactions
contemplated hereby, will violate any constitution, statute, regulation, rule,
injunction, judgment, order, decree, ruling, charge, or other restriction of any
government, governmental agency, or court to which Holdings is subject or any
provision of its charter or bylaws, or (b) result in a breach of or constitute a
default under, any agreement, contract, lease, license, instrument, or other
arrangement to which Holdings is a party or by which it is bound or to which any
of its assets is subject.

                           (iv)     Capital Stock and Related Matters

                                    (A)      The authorized capital stock of
Holdings consists of (i) 2,500,000 shares of Holdings Class A Common, (x) none
of which are issued and outstanding immediately prior to the Restructuring and
(y) of which 1,247,673.29 shares are issued and outstanding and 131,532 shares
are reserved for issuance upon exercise of employee stock options (the "Holdings
Options") issued pursuant to Holdings' 2004 Common Stock Option Plan in the form
set forth as Exhibit B attached hereto approved by the board of directors of
Holdings, in each case, immediately after the Restructuring, (ii) 500,000 shares
of Class B Common Stock, par value $.001 per share, none of which are issued and
outstanding immediately prior to or immediately after the Restructuring, (iii)
200,000 shares of Holdings Series A Preferred, (x) none of which are issued and
outstanding immediately prior to the Restructuring and (y) of which 153,636.54
shares are issued and outstanding immediately after the Restructuring, and (iv)
200,000 shares of Holdings Series B Preferred, (x) none of which are issued and
outstanding

                                       4
<PAGE>

immediately prior to the Restructuring and (y) of which 109,540.68 shares are
issued and outstanding immediately after the Restructuring. Immediately after
the Restructuring, Holdings will not have outstanding any stock or securities
convertible or exchangeable for any shares of its capital stock or containing
any profit participation features, nor any rights or options to subscribe for or
to purchase its capital stock or any stock or securities convertible into or
exchangeable for its capital stock or any stock appreciation rights or phantom
stock plans, except for the Holdings Options and the Holdings Series B
Preferred. Immediately after the Restructuring, Holdings shall not be subject to
any obligation (contingent or otherwise) to repurchase or otherwise acquire or
retire any shares of its outstanding capital stock or any warrants, options or
other rights to acquire its capital stock, except for the Holdings Options and
those obligations set forth in the Holdings Amended Certificate, the
Stockholders Agreement, dated as of the date hereof, by and among Holdings and
the Contributors in the form set forth as Exhibit C attached hereto (the
"Holdings Stockholders Agreement"), and the Registration Rights Agreement, dated
as of the date hereof, by and among Holdings and the Contributors in the form
set forth as Exhibit D attached hereto (the "Holdings Registration Agreement").
Immediately after the Restructuring, all of the outstanding shares of Holdings'
capital stock shall be validly issued, fully paid and nonassessable.

                                    (B)      There are no statutory or
contractual stockholders preemptive rights or rights of refusal with respect to
the issuance of the Holdings Shares to the Contributors pursuant to Section 1.
Holdings has not violated any applicable federal or state securities laws in
connection with the issuance of any of its capital stock pursuant to Section 1,
and the issuance of the Holdings Shares pursuant to Section 1 does not require
registration under the Securities Act, or any applicable state securities laws.
Immediately after the Restructuring, there will be no agreements between
Holding' stockholders with respect to the voting, transfer or registration of
Holdings' capital stock, except for the Holdings Stockholders Agreement and the
Holdings Registration Agreement.

                           (v)      No Liabilities. As of immediately prior to
the Restructuring, Holdings does not have any liabilities or obligations,
whether accrued, absolute, contingent or otherwise, except for liabilities and
obligations relating to (a) its issuance of Senior Discount Notes due 2014 and
the documents related thereto executed by Holdings prior to the Restructuring,
(b) the Holdings Amended Certificate and (c) its franchise in the state of
Delaware.

                           (vi)     No Litigation. There are no actions, suits,
proceedings or investigations pending or, to the best of the Company's and
Holdings' knowledge, any basis therefore or threat thereof against Holdings.

                           (vii)    No Other Business. Holdings is engaged in
no other business, except for its ownership of the capital stock of the Company
pursuant to the Restructuring.

                  (c)      Representations and Warranties of each Contributor.
Each Contributor, severally and not jointly, for itself only and not on behalf
of any other Contributor, represents

                                       5
<PAGE>

and warrants to the Company and Holdings, as to such Contributor, that the
statements contained in this Section 3(c) are true and correct as of the date of
this Agreement.

                           (i)      Authorization of Transaction. This Agreement
constitutes the valid and legally binding obligation of such Contributor,
enforceable in accordance with its terms and conditions. Such Contributor, to
the best of its knowledge, need not give any notice to, make any filing with, or
obtain any authorization, consent, or approval of any government or governmental
agency in order to consummate the transactions contemplated by this Agreement.

                           (ii)     Noncontravention. To the best of such
Contributor's knowledge, neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which such Contributor is subject.

                           (iii)    Brokers' Fees. Such Contributor has no
liability or obligation to pay any fees or commissions to any broker, finder, or
agent with respect to the transactions contemplated by this Agreement for which
the Company could become liable or obligated.

                           (iv)     Investment. Such Contributor is acquiring
the Holdings Shares for such Contributor's own account and is not acquiring the
Holdings Shares with a view to, or for sale in connection with, any distribution
thereof within the meaning of the Securities Act.

                           (v)      Sophistication of Contributor. Such
Contributor is sophisticated in financial matters, is able to evaluate the risks
and benefits of the investment in the Holdings Shares, and has determined that
such investment in the Holdings Shares is suitable for such Contributor, based
upon such Contributor's financial situation and needs, as well as such
Contributor's other securities holdings.

                           (vi)     Economic Risk. Such Contributor is able to
bear the economic risk of such Contributor's investment in the Holdings Shares
for an indefinite period of time and such Contributor understands that the
Holdings Shares have not been registered under the Securities Act, and cannot be
sold unless subsequently registered under the Securities Act or unless an
exemption from such registration is available. Such Contributor acknowledges
that each of the Holdings Shares will be subject to the provisions of the
Holdings Stockholders Agreement.

                           (vii)    Securities Law Compliance. Such Contributor:

                                    (A)      has not filed a registration
statement which is the subject of a currently effective registration stop order
entered pursuant to any state's securities law within the last five (5) years;

                                    (B)      has not been convicted within the
last five (5) years of any felony or misdemeanor in connection with the offer,
purchase, or sale of any security or any felony involving fraud or deceit,
including, but not limited to, forgery, embezzlement, obtaining money under
false pretenses, larceny, or conspiracy to defraud;

                                       6
<PAGE>

                                    (C)      is not currently subject to any
state administrative enforcement order or judgment entered by the state
securities administrator within the last five (5) years or is subject to any
state's administrative enforcement order or judgment in which fraud or deceit,
including, but not limited to, making untrue statements of material facts and
omitting to state material facts, was found and the order or judgment was
entered within the last five (5) years;

                                    (D)      is not subject to any state's
administrative enforcement order or judgment which prohibits, denies or revokes
the use of any exemption from registration in connection with the offer,
purchase or sale of securities; and

                                    (E)      is not currently subject to any
order, judgment or decree of any court of competent jurisdiction, entered within
the last five (5) years, temporarily or preliminarily restraining or enjoining
such party from engaging in or continuing any conduct or practice in connection
with the purchase or sale of any security or involving the making of any false
filing with the state.

                           (viii)   Information. Such Contributor has had an
opportunity to ask questions and receive answers concerning the terms and
conditions of the offering of Holdings Shares and has had full access to such
other information concerning Holdings as such Contributor has requested. Such
Contributor has reviewed, or has had an opportunity to review, the Holdings
Amended Certificate and the Bylaws of Holdings, the Holdings Stockholders
Agreement and the Holdings Registration Rights Agreement.

                  4.       POST-CLOSING COVENANTS. Holdings, the Company and the
Contributors agree as follows with respect to the period following the
consummation of the transactions described herein.

                  (a)      General. Each party to this Agreement will take such
further action (including the execution and delivery of such further instruments
and documents) as is reasonably necessary to carry out the purpose of this
Agreement as any other party hereto may reasonably request, all at the sole cost
and expense of such requesting party.

                  (b)      Holdings Shares. Each Holding Share issued under this
Agreement will be imprinted with such legends as are required pursuant to the
terms and conditions of the Holdings Stockholders Agreement.

                  5.       MISCELLANEOUS.

                  (a)      Press Releases and Public Announcements. No party
hereto shall issue any press release or make any public announcement relating to
the subject matter of this Agreement without the prior written approval of
Holdings, the Company and BRS; provided, that any party hereto may make any
public disclosure it believes in good faith is required by applicable law (in
which case the disclosing party will use its reasonable best efforts to advise
the other parties hereto prior to making the disclosure).

                  (b)      Succession and Assignment. This Agreement shall be
binding upon and inure to the benefit of the parties named herein and their
respective successors and permitted

                                       7
<PAGE>

assigns. No party hereto may assign either this Agreement or any of its rights,
interests, or obligations hereunder without the prior written approval of
Holdings and the Company; provided, that CapitalSource may assign this Agreement
and its rights, interests and obligations hereunder to CS Equity LLC without the
prior consent of Holdings and the Company, so long as CS Equity LLC is an
affiliate of CapitalSource. Notwithstanding anything herein to the contrary,
each of the Contributors may, in the ordinary course of its business and in
accordance with applicable law, at any time assign to an affiliate of such
Contributor or to one or more banks or other financial institution or entities
which are not in direct competition with the Company, all or any part of the
obligations under this Agreement; provided, that each of the Contributors may
make any such assignment only if it is required to do so pursuant to its limited
partnership agreement or limited liability operating agreement or in connection
with any dissolution of such Contributor pursuant to its limited partnership
agreement or limited liability operating agreement.

                  (c)      Counterparts. This Agreement may be executed in one
or more counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.

                  (d)      Headings. The section headings contained in this
Agreement are inserted for convenience only and shall not affect in any way the
meaning or interpretation of this Agreement.

                  (e)      Notices. All notices, requests, demands, claims, and
other communications hereunder will be in writing. Any notice, request, demand,
claim, or other communication hereunder shall be deemed duly given if (and then
two business days after) it is sent by registered or certified mail, return
receipt requested, postage prepaid, and addressed to the intended recipient as
set forth below:

                  To any Contributor:

                           As specified for each such Contributor on the books
                           and records of the Company.

                  To Holdings or the Company:

                           888 Seventh Avenue, 25th Floor
                           New York, NY 10106
                           Attention:  Alex Alimanestianu
                           Facsimile No.: (212) 664-8906

                           with copies to (which shall not constitute notice to
                           Holdings or the Company):

                           Bruckmann, Rosser, Sherrill & Co., Inc.
                           126 East 56th Street, 29th Floor
                           New York, NY 10022
                           Attention:  Rice Edmonds

                                       8
<PAGE>

                           Facsimile No.:  (212) 521-3799

                           and

                           Kirkland & Ellis LLP
                           Citigroup Center
                           153 East 53rd Street
                           New York, NY 10022-4611
                           Attention:  Eunu Chun, Esq.
                           Facsimile No.:  (212) 446-4900

Any party hereto may send any notice, request, demand, claim, or other
communication hereunder to the intended recipient at the address set forth above
using any other means (including personal delivery, expedited courier, messenger
service, telecopy, telex, ordinary mail, or electronic mail), but no such
notice, request, demand, claim, or other communication shall be deemed to have
been duly given unless and until it actually is received by the intended
recipient. Any party may change the address to which notices, requests, demands,
claims, and other communications hereunder are to be delivered by giving the
other parties notice in the manner herein set forth.

                  (f)      Governing Law. All questions concerning the
construction, validity, and interpretation of this Agreement shall be governed
by and construed in accordance with the domestic laws of the State of New York
without giving effect to any choice or conflict of law provision or rule
(whether of the State of New York or any other jurisdiction) that would cause
the application of the laws of any jurisdiction other than the State of New
York.

                  (g)      Amendments and Waivers. This Agreement may be
amended, or any provision of this Agreement may be waived upon a written
approval, executed by the parties hereto. No course of dealing between or among
the parties hereto shall be deemed effective to modify, amend, or discharge any
part of this Agreement or any rights or obligations of any such party or such
holder under or by reason of this Agreement.

                  (h)      Severability. Any term or provision of this Agreement
that is invalid or unenforceable in any situation in any jurisdiction shall not
affect the validity or enforceability of the remaining terms and provisions
hereof or the validity or enforceability of the offending term or provision in
any other situation or in any other jurisdiction.

                  (i)      Expenses. Each of the Contributors and Holdings and
the Company will bear its own costs and expenses (including legal fees and
expenses) incurred in connection with this Agreement and the transactions
contemplated hereby.

                  (j)      Construction. The parties hereto have participated
jointly in the negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by the parties hereto, and no presumption or
burden of proof shall arise favoring or disfavoring any party hereto by virtue
of the authorship of any of the provisions of this Agreement.

                                     * * * *

                                       9
<PAGE>

                  IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.

                                    TOWN SPORTS INTERNATIONAL, INC.

                                    By: /s/ Richard Pyle
                                        -----------------------------------
                                        Name: Richard Pyle
                                        Title: Chief Financial Officer

                                    TOWN SPORTS INTERNATIONAL HOLDINGS, INC.

                                    By:  /s/ Richard Pyle
                                         ----------------------------------
                                         Name: Richard Pyle
                                         Title: Chief Financial Officer

                                    BRUCKMANN, ROSSER, SHERRILL & CO., L.P.

                                    By:  BRS Partners, Limited Partnership
                                    Its: General Partner

                                    By:  BRSE Associates, Inc.
                                    Its: General Partner

                                    By:  /s/ Paul Kaminski
                                         ---------------------------------
                                         Name: Paul Kaminski
                                         Title: Secretary

                                    FARALLON CAPITAL PARTNERS, L.P.

                                    By:  Farallon Partners, L.L.C.
                                    Its: General Partner

                                    By:  /s/ Monica R. Landry
                                         ---------------------------------
                                         Name: Monica R. Landry
                                         Title: Managing Member

<PAGE>

                                    FARALLON CAPITAL INSTITUTIONAL
                                    PARTNERS, L.P.

                                    By:  Farallon Partners, L.L.C.
                                    Its: General Partner

                                    By: /s/ Monica R. Landry
                                        ----------------------------------
                                        Name: Monica R. Landry
                                        Title: Managing Member

                                    RR CAPITAL PARTNERS, L.P.

                                    By:  Farallon Partners, L.L.C.
                                    Its: General Partner

                                    By: /s/ Monica R. Landry
                                        ----------------------------------
                                        Name: Monica R. Landry
                                        Title: Managing Member

                                    FARALLON CAPITAL INSTITUTIONAL PARTNERS II,
                                    L.P.

                                    By:  Farallon Partners, L.L.C.
                                    Its: General Partner

                                    By: /s/ Monica R. Landry
                                        ----------------------------------
                                        Name: Monica R. Landry
                                        Title: Managing Member

                                    CANTERBURY DETROIT PARTNERS, L.P.

                                    By:  Canterbury Detroit, LLC
                                    Its: General Partner

                                    By: /s/ Patrick Turner
                                        ----------------------------------
                                        Name: Patrick Turner
                                        Title: Manager

<PAGE>

                                    CANTERBURY MEZZANINE CAPITAL, L.P.

                                    By:  Canterbury Capital, LLC
                                    Its: General Partner

                                    By: /s/ Patrick Turner
                                        ----------------------------------
                                        Name: Patrick Turner
                                        Title: Manager

                                    ROSEWOOD CAPITAL, L.P.

                                    By: /s/ Kevin Reilly
                                        ----------------------------------
                                        Name: Kevin Reilly
                                        Title: Principal

                                    ROSEWOOD CAPITAL IV, L.P.

                                    By: /s/ Kevin Reilly
                                        ----------------------------------
                                        Name: Kevin Reilly
                                        Title: Principal

                                    ROSEWOOD CAPITAL IV ASSOCIATES, L.P.

                                    By: /s/ Kevin Reilly
                                        ----------------------------------
                                        Name: Kevin Reilly
                                        Title: Principal

                                    CAPITALSOURCE HOLDINGS LLC

                                    By: /s/ Joseph Turitz
                                        ----------------------------------
                                        Name: Joseph Turitz
                                        Title: General Counsel

                                     /s/ Keith Alessi
                                     ----------------------------------
                                     Keith Alessi
<PAGE>

                                    /s/ Paul Arnold
                                    -------------------------------
                                    Paul Arnold

<PAGE>

                         [BRS AFFILIATE SIGNATURE PAGE]

                                    /s/ Stephen Sherrill
                                    -------------------------------
                                    STEPHEN SHERRILL, as
                                    Attorney-in-Fact for each
                                    of the following Investors:

                                    Bruce Bruckmann
                                    Elizabeth McShane
                                    Beverly Place
                                    D. Bruckmann
                                    BCB Partnership
                                    NAZ Partnership
                                    Harold O. Rosser
                                    Virgil Sherrill
                                    Stephen Sherrill
                                    Nancy Zweng
                                    Paul D. Kaminski

                                    Merrill Lynch Pearce Fenner & Smith,
                                    Custodian for the Benefit of Paul D.
                                    Kaminski IRA

<PAGE>

                           [EXECUTIVE SIGNATURE PAGE]

                                    /s/ Mark Smith
                                    -------------------------------------
                                    Mark Smith

                                    /s/ Robert Giardina
                                    --------------------------------------
                                    Robert Giardina

                                    /s/ Richard Pyle
                                    --------------------------------------
                                    Richard Pyle

                                    /s/ Alexander Alimanestianu
                                    --------------------------------------
                                    Alexander Alimanestianu

                                    /s/ Debbie Smith
                                    --------------------------------------
                                    Debbie Smith

                                    /s/ Carol Cornbill
                                    --------------------------------------
                                    Carol Cornbill

                                    /s/ Edward Trainor
                                    --------------------------------------
                                    Edward Trainor

                                    /s/ Robert Calvo
                                    --------------------------------------
                                    Robert Calvo

                                    /s/ Maggie Stevens
                                    --------------------------------------
                                    Maggie Stevens

                                    /s/ Ray Dewhirst
                                    --------------------------------------
                                    Ray Dewhirst

                                    /s/ Nina Duchaine
                                    --------------------------------------
                                    Nina Duchaine

                                    /s/ Heinz Ritschard
                                    --------------------------------------
                                    Heinz Ritschard

<PAGE>

                           [EXECUTIVE SIGNATURE PAGE]

                                    /s/ Peter Bazzell
                                    --------------------------------------
                                    Peter Bazzell

                                    /s/ Felicia Bachiccio
                                    --------------------------------------
                                    Felicia Bachiccio

<PAGE>

                                   SCHEDULE 1

                             CONTRIBUTED SECURITIES

<TABLE>
<CAPTION>
                CONTRIBUTOR                             CONTRIBUTED COMPANY SHARES              ISSUED HOLDINGS SHARES
                -----------                             --------------------------              ----------------------
<S>                                                <C>                                    <C>
Bruckmann, Rosser, Sherrill & Co., L.P.            104,330.35 Company Series A Preferred  104,330.35 Holdings Series A Preferred

                                                   504,456.01 Company Class A Common      504,456.01 Holdings Class A Common

Bruce Bruckmann                                    2,112.63 Company Series A Preferred    2,112.63 Holdings Series A Preferred

                                                   10,214.93 Company Class A Common       10,214.93 Holdings Class A Common

Elizabeth McShane                                  33.08 Company Series A Preferred       33.08 Holdings Series A Preferred

                                                   159.97 Company Class A Common          159.97 Holdings Class A Common

Beverly Place                                      33.08 Company Series A Preferred       33.08 Holdings Series A Preferred

                                                   159.97 Company Class A Common          159.97 Holdings Class A Common

D. Bruckmann                                       282.92 Company Series A Preferred      282.92 Holdings Series A Preferred

                                                   1,367.96 Company Class A Common        1,367.96 Holdings Class A Common

BCB Partnership                                    121.71 Company Series A Preferred      121.71 Holdings Series A Preferred

                                                   588.48 Company Class A Common          588.48 Holdings Class A Common

NAZ Partnership                                    58.73 Company Series A Preferred       58.73 Holdings Series A Preferred

                                                   283.97 Company Class A Common          283.97 Holdings Class A Common

Harold O. Rosser                                   424.44 Company Series A Preferred      424.44 Holdings Series A Preferred

                                                   2,052.23 Company Class A Common        2,052.23 Holdings Class A Common

Virgil Sherrill                                    1,414.59 Company Series A Preferred    1,414.59 Holdings Series A Preferred

                                                   6,839.79 Company Class A Common        6,839.79 Holdings Class A Common

Stephen Sherrill                                   2,178.79 Company Series A Preferred    2,178.79 Holdings Series A Preferred
</TABLE>

                               Schedule 1, Page 1

<PAGE>

<TABLE>
<CAPTION>
                CONTRIBUTOR                             CONTRIBUTED COMPANY SHARES              ISSUED HOLDINGS SHARES
                -----------                             --------------------------              ----------------------
<S>                                                <C>                                    <C>
                                                   10,534.87 Company Class A Common       10,534.87 Holdings Class A Common

Nancy Zweng                                        84.91 Company Series A Preferred       84.91 Holdings Series A Preferred

                                                   410.56 Company Class A Common          410.56 Holdings Class A Common

Paul D. Kaminski                                   238.47 Company Series A Preferred      238.47 Holdings Series A Preferred

                                                   1,153.04 Company Class A Common        1,153.04 Holdings Class A Common

Merrill Lynch Pearce Fenner & Smith Custodian
for the Benefit of Paul D. Kaminski IRA            95.39 Company Series A Preferred       95.39 Holdings Series A Preferred

                                                   461.22 Company Class A Common          461.22 Holdings Class A Common

Farallon Capital Partners, L.P.                    14,365.91 Company Series A Preferred   14,365.91 Holdings Series A Preferred

                                                   94,532.02 Company Class A Common       94,532.02 Holdings Class A Common

Farallon Capital Institutional Partners, L.P.      16,418.18 Company Series A Preferred   16,418.18 Holdings Series A Preferred

                                                   108,036.59 Company Class A Common      108,036.59 Holdings Class A Common

RR Capital Partners, L.P.                          2,052.27 Company Series A Preferred    2,052.27 Holdings Series A Preferred

                                                   13,504.57 Company Class A Common       13,504.57 Holdings Class A Common

Farallon Capital Institutional Partners II, L.P.   8,209.09 Company Series A Preferred    8,209.09 Holdings Series A Preferred

                                                   54,018.30 Company Class A Common       54,018.30 Holdings Class A Common

Keith Alessi                                       591.00 Company Series A Preferred      591.00 Holdings Series A Preferred

                                                   2,857.00 Company Class A Common        2,857.00 Holdings Class A Common

Paul Arnold                                        591.00 Company Series A Preferred      591.00 Holdings Series A Preferred

                                                   2,857.00 Company Class A Common        2,857.00 Holdings Class A Common

Canterbury Mezzanine Capital, L.P.                 121,529.24 Company Class A Common      121,529.24 Holdings Class A Common

Canterbury Detroit Partners, L.P.                  17,907.62 Company Class A Common       17,907.62 Holdings Class A Common
</TABLE>

                               Schedule 1, Page 2

<PAGE>

<TABLE>
<CAPTION>
                CONTRIBUTOR                             CONTRIBUTED COMPANY SHARES              ISSUED HOLDINGS SHARES
                -----------                             --------------------------              ----------------------
<S>                                                <C>                                    <C>
Rosewood Capital, L.P.                             17,907.62 Company Class A Common       17,907.62 Holdings Class A Common

Rosewood Capital IV, L.P.                          101,890.82 Company Series B Preferred  101,890.82 Holdings Series B Preferred

Rosewood Capital IV Associates, L.P.               7,649.86 Company Series B Preferred    7,649.86 Holdings Series B Preferred

CapitalSource Holdings, LLC                        23,000.00 Company Class A Common       23,000.00 Holdings Class A Common

Mark Smith                                         66,125.00 Company Class A Common       66,125.00 Holdings Class A Common

Robert Giardina                                    50,651.00 Company Class A Common       50,651.00 Holdings Class A Common

Richard Pyle                                       42,582.00 Company Class A Common       42,582.00 Holdings Class A Common

Alexander Alimanestianu                            42,011.00 Company Class A Common       42,011.00 Holdings Class A Common

Debbie Smith                                       15,908.00 Company Class A Common       15,908.00 Holdings Class A Common

Carol Cornbill                                     13,428.00 Company Class A Common       13,428.00 Holdings Class A Common

Edward Trainor                                     8,091.00 Company Class A Common        8,091.00 Holdings Class A Common

Robert Calvo                                       2,857.00 Company Class A Common        2,857.00 Holdings Class A Common

Maggie Stevens                                     2,274.00 Company Class A Common        2,274.00 Holdings Class A Common

Ray Dewhirst                                       1,749.00 Company Class A Common        1,749.00 Holdings Class A Common

Nina Duchaine                                      3,603.00 Company Class A Common        3,603.00 Holdings Class A Common

Heinz Ritschard                                    2,332.00 Company Class A Common        2,332.00 Holdings Class A Common

Peter Bazzell                                      1,166.00 Company Class A Common        1,166.00 Holdings Class A Common

Felicia Bochiccio                                  63.33 Company Class A Common           63.33 Holdings Class A Common
</TABLE>

                               Schedule 1, Page 3

<PAGE>

                                    EXHIBIT A

                          HOLDINGS AMENDED CERTIFICATE

See attached.

                                Exhibit A, Page 1

<PAGE>

                                    EXHIBIT B

                           HOLDINGS STOCK OPTION PLAN

See attached.

                                Exhibit B, Page 1

<PAGE>

                                    EXHIBIT C

                         HOLDINGS STOCKHOLDERS AGREEMENT

See attached.

                                Exhibit C, Page 1
<PAGE>

                                    EXHIBIT D

                         HOLDINGS REGISTRATION AGREEMENT

See attached.

                                Exhibit D, Page 1

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00064-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00064-of-00352.parquet"}]]