8-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 OR 15(d) of
The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) April 18, 2006

BALLY TOTAL FITNESS HOLDING CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	001-13997	36-3228107
(State or other jurisdiction	(Commission	(I.R.S. Employer
of incorporation)	File Number)	Identification No.)

8700 West Bryn Mawr Avenue, Chicago, Illinois	60631
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code (773) 380-3000

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

BALLY TOTAL FITNESS HOLDING CORPORATION
FORM 8-K
Current Report

TABLE OF CONTENTS

Consent Agreement

Consent Agreement

Consent Agreement

Amended and Restated Registration Rights Agreement

Item 1.01 Entry into a Material Definitive Agreement.

     On April 7, 2006, Bally Total Fitness Holding Corporation (“Bally” or “Company”) received consents from holders of a majority of its outstanding 10 ¹/2% Senior Notes due 2011 (the “Senior Notes”) and 9 7/8% Senior Subordinated Notes due 2007 (the “Senior Subordinated Notes” and, together with the Senior Notes, the “Notes”) to waive until July 10, 2006 the financial reporting covenant defaults under the indentures governing the Notes resulting from the Company’s previously announced failure to file its Annual Report on Form 10-K for the year ended December 31, 2005. The waiver also extends the reporting deadlines for the Company’s 10-Q for the quarter ended March 31, 2006 until July 10, 2006 and the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2006 until September 11, 2006. As previously disclosed, on March 22, 2006, Bally entered into consent agreements (the “Consent Agreements”) with holders of approximately 53% of its outstanding Senior Subordinated Notes, including entities affiliated with Tennenbaum Capital Partners, LLC, entities affiliated with Pardus Capital Management and entities affiliated with Everest Capital Limited (collectively, the “Consenting Holders”). The operative provisions of the Consent Agreements, which contain customary representations and warranties, became effective upon completion of the above-referenced consent solicitation. As payment for delivering their consents in the completed consent solicitation, the Consenting Holders elected to receive 4.444 shares of the Company’s common stock, par value $0.01 per share (the “Common Stock”), for each $1,000 in principal amount of Senior Subordinated Notes for which consents were delivered. The Consenting Holders also agreed, subject to certain exceptions set forth in the Consent Agreements, to vote their shares of Common Stock received in the consent solicitation in favor of a transaction that may result from Bally’s strategic process and approved by Bally’s Board of Directors.

     In addition, Bally agreed to provide registration rights for the benefit of holders of Notes that elected to receive shares of Common Stock in the consent solicitation. On April 18, 2006, Bally entered into an amended and restated registration rights agreement, dated as of April 13, 2006 (the “Registration Rights Agreement”), with certain of the Consenting Holders in order to provide registration rights for such holders. The Registration Rights Agreement amends and restates in its entirety the registration rights agreement entered into in connection with the Company’s 2005 consent solicitation. Under the terms of the Registration Rights Agreement, at any time and from time to time after the Company becomes eligible to use a short form registration statement on Form S-3 or any successor form, an initiating holder (as defined in the Registration Rights Agreement) may make a request on one occasion to register all or part of such holder’s shares of Common Stock. Other holders of registrable common stock are entitled to request inclusion of their Common Stock in such registration and in any registration statement whenever the Company proposes to register any of its Common Stock under the Securities Act of 1933, as amended, for sale for its own account. The right to request inclusion of the shares does not apply to a registration on Form S-4 or S-8.

     The preceding description of certain of the terms of the Consent Agreements and the Registration Rights Agreement is qualified in its entirety by reference to the text of such documents, each of which is attached as an exhibit to this Current Report on Form 8-K and incorporated herein by reference.

Item 8.01 Other Events.

     After giving effect to: (i) the issuance of shares of Common Stock in the consent solicitation; and (ii) the sale of 800,000 shares of Common Stock as described in the Company’s Current Report on Form 8-K filed on April 12, 2005, Bally would have 41,286,714 shares of Common Stock issued and outstanding as of the date hereof.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

10.1	Consent Agreement by and between Bally Total Fitness Holding Corporation and Special Value Bond Fund II, LLC, Special Value Absolute Return Fund, LLC, Special Value Opportunities Fund, LLC and Special Value Expansion Fund, LLC.
10.2	Consent Agreement by and between Bally Total Fitness Holding Corporation and Everest Capital Limited as agent for HFR ED Advantage Master Trust, Everest Capital Event Fund, LP, GMAM Investment Funds Trust II and Everest Capital Senior Debt Fund, L.P.
10.3	Consent Agreement by and between Bally Total Fitness Holding Corporation and Pardus European Special Opportunities Master Fund L.P.
10.4	Amended and Restated Registration Rights Agreement by and between Bally Total Fitness Holding Corporation and certain holders who are signatories thereto.

     Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.

	BALLY TOTAL FITNESS HOLDING CORPORATION
	Registrant
Dated: April 18, 2006	/s/ Marc D. Bassewitz
	Marc D. Bassewitz
	Senior Vice President, Secretary and General Counsel

EX-10.1

Exhibit 10.1

EXECUTION COPY

CONSENT AGREEMENT

     This Consent Agreement (“Agreement”) is dated as of March 22, 2006, and is made by and between Bally Total Fitness Holding Corporation, a Delaware corporation (“Bally” or the “Company”), and the Persons listed on the signature pages attached hereto (collectively, the “Holder”). Certain capitalized terms used herein and not otherwise defined have the meanings set forth in Article VI hereof.

     WHEREAS, the Holder is the beneficial owner of $129,235,000 in aggregate principal amount of 9 7/8% Senior Subordinated Notes due 2007 of the Company (the “Notes”) issued pursuant to the Indenture, dated as of December 16, 1998, between the Company and U.S. Bank National Association, as trustee (as amended and supplemented, the “Indenture”);

     WHEREAS, the Company desires to seek waivers (the “Waivers”) through the Waiver Expiration Dates (as defined below) of any Default or Event of Default (as such terms are defined in the Indenture) arising from the failure to comply with the covenants set forth in Sections 7.4 and 10.17 of the Indenture, which require Bally to file with the SEC, and furnish to the Trustee and holders of Notes, the reports required to be filed by the Company pursuant to the Exchange Act;

     WHEREAS, the Company will be undertaking a solicitation of consents (the “Consent Solicitation”) with respect to the Notes to obtain the Waivers; and

     WHEREAS, the Holder has agreed with the Company to give its consent to the Waivers in the Consent Solicitation, subject to the conditions set forth below.

     NOW, THEREFORE, in consideration of the premises and the representations, warranties, covenants and agreements herein contained and intending to be legally bound hereby, Bally and the Holder hereby agree as follows:

ARTICLE I
AGREEMENT TO GIVE CONSENT TO WAIVERS AND RELATED MATTERS

     Section 1.1 (a) Acknowledgement. The Holder and Bally acknowledges that Bally has failed to file or may fail to file with the SEC, and has failed or may fail to furnish to holders of Notes and the Trustee certain of the reports and notices required by Sections 7.4 and 10.17 of the Indenture and applicable provisions of the Exchange Act, including the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2005, which was required to be filed with the SEC on or before March 16, 2006.

     (b) Agreement to Give Consent. In accordance with Section 1.2 below, the Holder hereby agrees to give its consent to the Waivers in the Consent Solicitation; provided that Holder shall not be required to give its consent in the Consent Solicitation in the event that the waivers granted by giving consent in the Consent Solicitation include additional waivers not described in this Section 1.1(b). The Waivers will provide that any Default or Event of Default arising from a failure to comply with the covenants set forth in Sections 7.4 and 10.17 of the Indenture, which require Bally to file with the SEC, and furnish to the Trustee and holders of Notes, the reports required to be filed pursuant to the Exchange Act, will be waived through the Waiver Expiration

Dates. The Waivers will also provide that any Notice of Default delivered by the Holder or the Trustee relating solely to the Events of Default described in Section 1.1 hereof shall automatically be rescinded and withdrawn and shall no longer be effective. In addition, the Waivers will provide that any Default by Bally as a result of its failure to provide notice to the Trustee of a Default with respect to the matters included in the Waivers under Section 10.18(b) of the Indenture will be waived through the Waiver Expiration Dates. The “Waiver Expiration Dates” will be: (i) 5:00 pm, New York City time, on July 10, 2006, with respect to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2005 and the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2006; and (ii) 5:00 pm, New York City time, on September 11, 2006 (as may be extended by 30 days), with respect to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2006. By giving its consent to the Waivers in the Consent Solicitation, the Holder will authorize the Trustee to enter into a Supplemental Indenture in form and substance satisfactory to the Trustee for purposes of implementing the Waivers.

     Section 1.2 Further Action by Holder. Subject to Section 1.1(b) above, as soon as practicable after commencement of the Consent Solicitation, the Holder shall instruct the DTC Participant(s) that act as custodian(s) for the Notes it beneficially owns to execute and deliver a letter of consent form, which will accompany the consent solicitation materials, and shall instruct such DTC Participant(s) to take all such further action as may be necessary to effect the consent of the Holder in the Consent Solicitation on behalf of such Holder. In addition, the Holder shall, at the written request of Bally, at any time and from time to time following the execution of this Agreement, execute and deliver to Bally all such further instruments and take all such further action as may be reasonably necessary or appropriate in order to confirm or carry out its obligations under this Agreement and the transactions contemplated hereby.

     Section 1.3 Consent Payment. Within one business day after the earlier of (a) the date on which the Company has received: (i) the consent of the Majority Lenders (as defined in the Credit Agreement) under the Credit Agreement to make the payments required hereunder and (ii) requisite consents from holders of its Senior Notes in order to effect the proposed waivers under the Senior Note Indenture similar to the Waivers and (b) the date on which the Company and the Trustee have entered into a Supplemental Indenture to effect the Waivers granted in the Consent Solicitation, Bally will instruct its transfer agent to deliver to the Holder 4.4444 shares of the Company’s common stock, par value $0.01 per share (the “Common Stock”), in each case per $1,000 in principal amount of Notes (the “Consent Fee”). In addition, if Bally does not comply with the covenants set forth in Sections 7.4 and 10.17 of the Indenture with respect to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2006 by September 11, 2006, Bally will have the option to extend the Waiver Expiration Date with respect to such Quarterly Report to October 11, 2006 for an additional payment to Holder, at its election, of: (1) $3.33; or (2) 1.4815 shares of Common Stock, in each case per $1,000 in principal amount of Notes (the “Additional Fee”). Fractional shares that would otherwise be issuable will be rounded to the nearest whole number, with fractions equal to or greater than 0.5 being rounded up and fractions less than 0.5 being rounded down.

     Section 1.4 Restricted Securities. The Holder understands that the shares of Common Stock to be issued to it (the “Shares”) will be issued only in a transaction not involving any public offering in the United States within the meaning of the Securities Act, the Shares have not

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been registered under the Securities Act or any other applicable securities law, that the Shares will be “restricted securities” within the meaning of Rule 144 under the Securities Act and that (A) prior to the expiration of the holding period applicable to sales of restricted securities pursuant to Rule 144 under the Securities Act, the Shares may be offered, resold, pledged or otherwise transferred only in accordance with any applicable securities laws of any state of the United States or any other applicable jurisdiction (i) (a) in a transaction meeting the requirements of Rule 144 under the Securities Act, (b) outside the U.S. to a foreign purchaser in a transaction meeting the requirements of Regulation S, or (c) pursuant to a transaction that is otherwise exempt from the registration requirements of the Securities Act and state securities laws, (ii) to Bally or (iii) pursuant to an effective registration statement under the Securities Act and (B) the Holder will notify any subsequent purchaser from it of the resale restrictions set forth in (A) above, if then applicable. The Holder agrees that the certificates representing the Shares shall bear a restrictive legend in substantially the following form:

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ACQUIRED IN A TRANSACTION THAT WAS NOT REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES LAWS OF ANY STATE, AND MAY NOT BE SOLD OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR AN APPLICABLE EXEMPTION THEREFROM TO THE REGISTRATION REQUIREMENTS OF SUCH ACT OR LAWS.”

     Section 1.5 Prohibition of Certain Actions. (a) The Holder agrees that, for a period ending on the earliest of (a) one (1) year from the date of this Agreement, (b) the date of the first annual meeting of the Company held for the purpose of electing directors after the date of this Agreement, and (c) the occurrence of an Event of Default (as defined in the applicable document) under the Indenture, the Senior Note Indenture or Section 8.04, 8.05 or 8.09 (solely as a result of a default under Section 6.12, 6.14 or 6.15) of the Credit Agreement (as in effect on the date hereof, and provided that any waiver, consent or other action after the date hereof on the part of the lenders pursuant to the Credit Agreement, other than with respect to the Events of Default described in Section 1.1 and payment of Consent Fees and Additional Consent Fees), shall not be deemed to cure or otherwise affect such Event of Default for purposes of this Agreement), unless such action shall have been specifically invited in writing by the Board of Directors of the Company, such Holder will not, and will not direct any of its Agents, in any manner to, directly or indirectly, (A) effect or seek, offer or propose (whether publicly or otherwise) to effect, or cause or participate in or in any way assist any other person to effect or seek, offer or propose (whether publicly or otherwise) to effect or participate in (i) the nomination of any person to the Board of Directors of the Company; (ii) any “solicitation” of “proxies” (as such terms are used in the proxy rules of the SEC) or consents to vote any voting securities of the Company with respect to any director nominee that has not been nominated by the Board of Directors or a shareholder proposal that has not been supported by the Board of Directors; or (iii) or propose or publicly support any such shareholder proposal, (B) form, join or in any way participate in a “group” (as defined under Section 13d-5 of the Exchange Act), which

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may engage in any of the foregoing matters set forth in (A) above or (C) otherwise make any public announcement that is adverse or critical of the management or the Board of Directors of the Company.

     (b) The Holder further agrees that, for a period ending on the earliest of (a) one (1) year from the date of this Agreement, (b) the date of the first annual meeting of the Company held for the purpose of electing directors after the date of this Agreement, and (c) the occurrence of an Event of Default (as defined in the applicable document) under the Indenture, the Senior Note Indenture or Section 8.04, 8.05 or 8.09 (solely as a result of a default under Section 6.12, 6.14 or 6.15) of the Credit Agreement (as in effect on the date hereof, and provided that any waiver, consent or other action after the date hereof on the part of the lenders pursuant to the Credit Agreement, other than with respect to the Events of Default described in Section 1.1 and payment of Consent Fees and Additional Consent Fees), shall not be deemed to cure or otherwise affect such Event of Default for purposes of this Agreement), at any meeting (whether annual or special and whether or not an adjourned or postponed meeting) of the holders of capital stock of the Company, however called, or in connection with any written consent of the holders of capital stock of the Company solicited by the Board of Directors, the Holder will appear at the meeting or otherwise cause all shares of Common Stock held by the Holder to be counted as present at such meeting for purposes of establishing a quorum and vote or consent (or cause to be voted or consented) all shares of Common Stock held by the Holder (i) in favor of any proposed strategic transaction (including a merger or consolidation of the Company with another entity or the sale of substantially all of the Company’s assets) approved by the Board of Directors (a “Board-Approved Transaction”) and (ii) against any amendment of the Company’s articles of incorporation or bylaws, or other proposal or transaction involving the Company or any of its subsidiaries, which amendment or other proposal or transaction was initiated for the sole purpose of preventing the Board-Approved Transaction; provided, in each case, that the Holder holds shares of Common Stock on the record date for such meeting or as of the date of such written consent; provided, further, that this Section 1.5(b) shall no longer apply after any Person has formally initiated (whether by tender offer, proxy solicitation or other filing that has been or will be mailed directly to holders of the Company’s Common Stock) a bona fide potential strategic transaction that is not a Board-Approved Transaction and such transaction would, if consummated, result in a transaction that the Holder believes in good faith is reasonably capable of being financed and more favorable to the Holders from a financial point of view than the Board-Approved Transaction.

     (c) Notwithstanding the foregoing, none of the covenants in Sections 1.5(a) or (b) shall become effective unless and until the Consent Fee has been paid to the Holder pursuant to Section 1.3.

ARTICLE II
REPRESENTATIONS AND WARRANTIES OF BALLY

     The Company represents and warrants to the Holder as follows:

     Section 2.1 Organization and Standing of the Company. The Company is a corporation duly organized, validly existing and in good standing under the laws of its state of incorporation and has all requisite corporate power and authority (i) to own, lease and operate its

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properties, to carry on its business as now being conducted and (ii) to execute, deliver and perform its obligations under this Agreement, including entering into the Supplemental Indenture, and the other agreements to be executed by the Company in connection herewith and to consummate the transactions contemplated hereby and thereby. The Company and its Subsidiaries are duly qualified to do business and are in good standing in all jurisdictions wherein such qualification is necessary and where failure so to qualify would have a material adverse effect on their business, properties, operations, condition (financial or other), results of operations or prospects of the Company and its Subsidiaries, taken as a whole. The Company has no equity investment in any person other than its Subsidiaries.

     Section 2.2 Issuance of the Shares. The Shares will be duly authorized and when issued in accordance with the terms hereof will be validly issued, fully paid and nonassessable. There are no preemptive or similar rights of any stockholder of the Company or any other person to acquire the Shares.

     Section 2.3 Consent Agreement and Other Transaction Documents. This Agreement and the other agreements and instruments contemplated hereby have been duly and validly authorized by the Company, this Agreement has been, and each of the other agreements contemplated by this Agreement will be, duly executed and delivered by the Company and this Agreement is, and each of the other agreements contemplated by this Agreement will be, a valid and binding obligation of the Company enforceable in accordance with its terms, subject as to enforceability to general principles of equity and to bankruptcy, insolvency, moratorium and other similar laws affecting the enforcement of creditors’ rights generally.

     Section 2.4 Non-Contravention. The execution and delivery by the Company of this Agreement and the other agreements and transactions contemplated hereby to which the Company is a party, do not and will not, with or without the giving of notice or the lapse of time, or both (i) result in any violation of any terms of the charter documents of the Company; (ii) conflict with or result in a breach by the Company or any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust or other agreement or instrument to which the Company is a party or by which the Company or any of its properties or assets is bound or affected (other than provisions of the Credit Agreement that may prohibit the Waivers and similar waivers under the Senior Note Indenture and the related consent payments) or (iii) violate or contravene any applicable law, rule or regulation or any applicable decree, judgment or order of any court or Governmental Body having jurisdiction over the Company or any of its properties or assets.

     Section 2.5 Certain Securities Law Matters. Assuming the accuracy of the representations and warranties of the Holder set forth in Article III hereof, the Shares may be issued to the Holder pursuant to this Agreement without registration under the Securities Act by reason of Section 4(2) thereof and similar provisions under applicable state securities laws.

     Section 2.6 Capitalization. The authorized capital stock of the Company is (a) 60,200,000 shares of Common Stock and (b) 10,000,000 shares of preferred stock, par value $.01 per share (the “Preferred Stock”). All of the outstanding shares of capital stock of the Company have been duly authorized and validly issued and are fully paid and nonassessable, have no preemptive rights and, to its knowledge, have been issued in accordance with applicable

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securities laws. As of March 17, 2006, there were: (a) 38,529,964 shares of Common Stock outstanding; and (b) there were no shares of Preferred Stock outstanding. As of March 17, 2006, without giving effect to the Company’s stockholder rights plan pursuant to which each outstanding share of Common Stock is accompanied by the right to purchase one one-thousandth (1/1000th) of a share of Series B Junior Participating Preferred Stock (the “Rights Plan”), the Company had outstanding options, warrants and similar rights entitling the holders to purchase or acquire 4,829,792 shares of Common Stock and 54,500 shares of Common Stock reserved for future grants under the Company’s equity incentive plans. Other than as set forth in the preceding sentence and with respect to the Rights Plan, the Company does not have outstanding any securities (or obligation to issue any such securities) convertible into, exchangeable for or otherwise entitling the holders thereof to acquire shares of Common Stock. The Company has duly reserved from its authorized and unissued shares of Common Stock the full number of shares required for (a) all options, warrants, convertible securities and other rights to acquire shares of Common Stock which are outstanding and (b) all shares of Common Stock and options and other rights to acquire shares of Common Stock which may be issued or granted under the stock option and similar plans which have been adopted by the Company or any of its Subsidiaries.

ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE HOLDER

     The Holder represents and warrants to the Company as follows:

     Section 3.1 Organization and Standing of the Holder. The Holder is duly organized, validly existing and in good standing under the laws of its jurisdiction of its incorporation or formation and has all requisite power and authority to own and operate its properties, to carry on its business as now conducted and to enter into and, as applicable, perform its obligations hereunder.

     Section 3.2 Consent Agreement and Other Transaction Documents. This Agreement and each other agreement contemplated hereby to which the Holder is a party have been duly and validly authorized on behalf of the Holder. This Agreement has been, and each of the other agreements contemplated by this Agreement will be, duly executed and delivered by the Holder and this Agreement is, and each of the other agreements contemplated by this Agreement will be, a valid and binding obligation of the Holder enforceable in accordance with their terms, subject as to enforceability to general principles of equity and to bankruptcy, insolvency, moratorium and other similar laws affecting the enforcement of creditors’ rights generally.

     Section 3.3 Non-Contravention. The execution and delivery by the Holder of this Agreement and the transactions contemplated hereby to which the Holder is a party, do not and will not, with or without the giving of notice or the lapse of time, or both (i) result in any violation of any terms of the organizational documents of the Holder; (ii) conflict with or result in a breach by the Holder or any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust or other agreement or instrument to which the Holder is a party or by which the Holder or any of its properties or assets is bound or affected or (iii) violate or contravene any applicable law, rule or regulation or any applicable decree, judgment or order

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of any court or Governmental Body having jurisdiction over the Holder or any of its properties or assets.

     Section 3.4 Ownership. The Holder is the beneficial owner of the aggregate principal amount of Notes as set forth under Holder’s name on the signature page hereto. There are no outstanding agreements, arrangements or understandings under which such Holder or its nominee may be obligated to Transfer any of the Notes.

     Section 3.5 Investor Representations. The Holder is knowledgeable, sophisticated and experienced in making, and is qualified to make, decisions with respect to investments in shares representing an investment decision like that involved in the acquisition of the Shares, including investments in securities issued by the Company. The Holder is acquiring the number of Shares set forth in Section 1.3 above in the ordinary course of its business and for its own account for investment (as defined for purposes of the Hart-Scott-Rodino Antitrust Improvement Act of 1976 and the regulations thereunder) only, and has no present intention of distributing any of the Shares nor any arrangement or understanding with any other persons regarding the distribution of such Shares within the meaning of Section 2(11) of the Securities Act. The Holder is an “accredited investor” within the meaning of Rule 501 of Regulation D promulgated under the Securities Act. The Holder understands that the Shares are being issued to it in reliance on specific exemptions from the registration requirements of United States federal and state securities laws and that the Company is relying upon the truth and accuracy of, and the Holder’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of the Holder set forth herein in order to determine the availability of such exemptions and the eligibility of the Holder to acquire the shares of Common Stock.

     Section 3.6 Information Provided. The Holder has received and has had an opportunity to review, and has been furnished with, all materials relating to the business, finances and operations of the Company and materials relating to the issuance of the Shares which have been requested by the Holder. The Holder has been afforded the opportunity to ask questions of the Company and has received satisfactory answers to any such inquiries; and the Holder understands that its investment in the Shares involves a high degree of risk and that no Governmental Body has passed on or made any recommendation or endorsement of the Shares.

     Section 3.7 Terms of Consent. The terms of this Agreement were the result of negotiations between the Holder, the Company, and representatives of the Company and the Holder and the Holder was given the opportunity to review and comment upon the proposed terms of this Agreement.

ARTICLE IV
CERTAIN COVENANTS AND AGREEMENTS OF THE PARTIES

     Section 4.1 Further Action by Bally. (a) Bally shall, at the written request of the Holder, at any time and from time to time following the execution of this Agreement, execute and deliver to the Holder all such further instruments and take all such further action as may be reasonably necessary or appropriate in order to confirm or carry out its obligations under this Agreement and the transactions contemplated hereby.

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     (b) So long as the restrictions in Sections 1.5(a) or (b) above are effective, Bally shall provide to Holder an officer’s certificate with respect to compliance with the covenants described in clause (c) of Section 1.5(a) within one business day after a compliance certificate is required to be delivered to the Agent under the Credit Agreement pursuant to Section 6.03(e) of the Credit Agreement.

     (c) Bally acknowledges that each of the Indenture and the Senior Note Indenture provides that the holders of at least a majority in aggregate principal amount of outstanding Notes and Senior Notes, as the case may be, may consent to the requested Waivers of a Default under the Indenture or Senior Note Indenture, respectively. Bally further acknowledges that the Majority Lenders (as defined in the Credit Agreement) may consent to the requested amendment or waiver of the Credit Agreement. Bally agrees that it will work in good faith and use best efforts to obtain, as promptly as possible after the date hereof (i) the consent of the Majority Lenders under the Credit Agreement to make the payments required hereunder and (ii) the requisite consents from holders of its Senior Notes in order to effect the proposed waivers under the Senior Note Indenture similar to the Waivers, in each case such that the payment to the Holder pursuant to Section 1.3 can be made.

     Section 4.2 Publicity. Neither the Company nor the Holder shall, nor shall they permit their respective Agents to, issue or cause the publication of any press release or make any other public statement, filing or announcement with respect to this Agreement and the transactions contemplated hereby without the prior approval of the other party; provided, however, that the Company shall be entitled, without the prior approval of the Holder, to make any press release or other public disclosure with respect to such transactions as is required by applicable law or the NYSE; provided, further, that the Company shall not specifically name the Holder in any such release without the prior approval of the Holder unless specifically required by applicable law or the NYSE to name the Holder. The Company and the Holder shall cooperate in issuing press releases or otherwise making public statements with respect to this Agreement and the transactions contemplated hereby, which cooperation shall include first consulting the other party hereto concerning the requirement for, and timing and content of, such public announcement.

     Section 4.3 Registration of Shares. (a) Effective upon the execution of this Agreement, that certain Registration Rights Agreement, dated as of January 17, 2006, among the Company and the holders of Common Stock named therein, is hereby amended, pursuant to Section 11 thereof as follows:

(i) the definition of “Registrable Securities” is hereby amended and restated in its entirety to read as follows: “Registrable Common Stock” means any of the Common Stock owned by the Holders from time to time, whether now or in the future, and any other securities issued or issuable with respect to or in exchange for such shares of Common Stock; provided, however, that a share of Common Stock will cease to be Registrable Common Stock after it has been sold: (a) under a registration statement effected pursuant hereto; or (b) pursuant to Rule 144 promulgated under the Securities Act.

     (b) All expenses incident to the Company’s performance of or compliance with its obligations under the registration rights agreement will be borne by the Company, including,

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without limitation, the reimbursement of the eligible holders thereunder for the reasonable expenses of one legal counsel incurred relating to the registration of Registrable Common Stock as set forth above.

     Section 4.4 Approval Right. Without the prior approval of the Holder, Bally will not: (i) pay any holder of the Notes for the Waivers or any holder of the Senior Notes for similar waivers under the Senior Notes Indenture with respect to Bally’s failure to comply with its reporting obligations thereunder, in either case in excess of the Consent Fee and the Additional Fee (provided that any initial consent fee paid in cash shall not be in excess of $10.00 per $1,000 in principal amount) or (ii) pay the lenders under the Credit Agreement for their approval of the waivers under the Indenture and the Senior Notes Indenture and the related consent payments in excess of the Consent Fee and the Additional Fee (provided that any initial consent fee paid in cash shall not be in excess of $10.00 per $1,000 in principal amount).

ARTICLE V
CONDITIONS PRECEDENT TO EFFECTIVENESS

     The effectiveness of the Waivers provided by the Holder pursuant to the Consent Solicitation will be subject to the conditions set forth in the consent solicitation materials, including, without limitation, the following conditions:

     Section 5.1 Consents. Bally having received: (i) requisite consents from holders of its Senior Notes in order to effect proposed waivers under the Senior Note Indenture similar to the Waivers; (ii) consents relating to the Waivers and the similar waivers under the Senior Note Indenture and the related consent payments having been received from the necessary lenders under the Credit Agreement.

     Section 5.2 No Violations. In the sole judgment of the Company, there shall not be any law or regulation, any injunction or action or other proceeding (pending or threatened) that (in the case of any action or proceeding if adversely determined) would make unlawful, invalid or enjoin the implementation of the Waivers or payment of the Consent Fee or the Additional Fee or that would question the legality or validity thereof.

ARTICLE VI
DEFINITIONS

     Section 6.1 Definitions. As used in this Agreement, in addition to the terms defined elsewhere, the following terms shall have the meanings set forth below, unless the context otherwise requires:

     “Agent” shall mean, with respect to any Person, any officer, director, employee, stockholder, controlling person (within the meaning of the Securities Act), affiliate or authorized agent of such Person.

     “Credit Agreement” shall mean the Credit Agreement, dated as of November 18, 1997 (as amended and restated as of October 14, 2004 and as further amended and supplemented from time to time), among Bally Total Fitness Holding Corporation, as Borrower, the Several Banks

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and Other Financial Institutions Parties Thereto, JPMorgan Chase Bank, as Agent, Deutsche Bank Securities Inc., as Syndication Agent, LaSalle Bank National Association, as Documentation Agent, and JPMorgan Securities Inc., as Sole Lead Arranger and Sole Bookrunner.

     “DTC” shall mean The Depository Trust Company, a limited purpose trust company.

     “DTC Participant” shall mean a participating organization in DTC.

     “Exchange Act” means the Securities Exchange Act of 1934, as amended.

     “Governmental Body” shall mean any government or political subdivision thereof, whether federal, state, local or foreign, or any agency or instrumentality of any such government or political subdivision thereof, or any federal or state court or arbitrator.

     “Holder” shall have the definition set forth in the first paragraph of this Agreement and all of its successors and assigns.

     “Person” means any individual, corporation, partnership, joint venture, trust, estate, limited liability company, unincorporated organization or governmental agency.

     “SEC” means the Securities and Exchange Commission.

     “Securities Act” means the Securities Act of 1933, as amended.

     “Senior Note Indenture” means the Indenture, dated as of July 2, 2003 (as supplemented on July 22, 2003, December 7, 2004 and September 2, 2005), by and among Bally Total Fitness Holding Corporation, as Issuer, the Guarantors party thereto and U.S. Bank National Association, as Trustee.

     “Senior Notes” means the 10 ¹/2% Senior Notes due 2011 of Bally Total Fitness Holding Corporation.

     “Subsidiary” means any Person, a majority of the capital stock of which is owned by the Company or another Subsidiary of the Company.

     “Trustee” shall mean U.S. Bank National Association.

ARTICLE VII
MISCELLANEOUS

     Section 7.1 Costs, Expenses and Taxes. Each party shall bear its own costs and expenses in connection with the preparation, execution and delivery of this Agreement and the issuance of the Shares and payment of the cash consideration; provided, however, that the Company will pay for the reasonable fees and expenses of counsel to the Holder in connection with this Agreement and the transactions contemplated hereby, including, without limitation, any actions requested by the Company pursuant to Section 1.2. The Company shall pay any and all

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stamp and other taxes payable or determined to be payable in connection with the execution and delivery of this Agreement and the delivery of consent for the cash and Shares.

     Section 7.2 Survival of Representations. The representations, warranties, covenants and agreements of the Holder and the Company contained in this Agreement shall survive the execution of the Supplemental Indenture.

     Section 7.3 Prior Agreements. This Agreement and the other agreements contemplated hereby constitute the entire agreement between the parties concerning the subject matter hereof and supersedes any prior representations, understandings or agreements. There are no representations, warranties, agreements, conditions or covenants, of any nature whatsoever (whether express or implied, written or oral) between the parties hereto with respect to such subject matter except as expressly set forth herein and in the other agreements contemplated hereby.

     Section 7.4 Severability. The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision or the validity and enforceability of this Agreement in any other jurisdiction.

     Section 7.5 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO ITS CHOICE OF LAW RULES.

     Section 7.6 Headings. Section headings in this Agreement are included herein for convenience of reference only and shall not constitute a part of, or affect the interpretation of, this Agreement.

     Section 7.7 Counterparts. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument, and either of the parties hereto may execute this Agreement by signing any such counterpart. A facsimile transmission of this Agreement bearing a signature on behalf of a party hereto shall be legal and binding on such party.

     Section 7.8 Assignment; Binding Effect. The Holder shall not convey, assign or otherwise transfer any of its rights or obligations under this Agreement without the express written consent of Bally, and Bally shall not convey, assign or otherwise transfer any of its rights and obligations under this Agreement without the express written consent of the Holder. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns. Nothing in this Agreement will limit or otherwise restrict the ability of the Holder to transfer its Notes, but the agreement of the Holder to give its consent to the Waivers, and only such agreement, will bind every subsequent holder of the Notes.

     Section 7.9 Waiver; Remedies. No delay on the part of any Holder or Bally in exercising any right, power or privilege under this Agreement shall operate as a wavier thereof, nor shall any waiver on the part of any Holder or Bally of any right, power or privilege under this Agreement operate as a waiver of any other right, power or privilege of such party under this

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Agreement, nor shall any single or partial exercise of any right, power or privilege under this Agreement preclude any other or further exercise thereof or the exercise of any other right, power or privilege under this Agreement.

     Section 7.10 Amendment. This Agreement may be modified or amended only by written agreement of the parties to this Agreement.

     Section 7.11 Termination. This Agreement shall automatically terminate without any action by the parties hereto if the Supplemental Indenture implementing the Waivers has not been executed and become effective by 6:00pm Eastern Daylight Time on May 15, 2006. In addition, the Holder may terminate this Agreement at any time after April 14, 2006 if it has not received the Consent Fee by such date. Such termination by the Holder shall not relieve any party hereto of liability for breach of this Agreement.

     Section 7.12 Liability. The obligations hereunder of each of the entities on the signature pages hereto that comprise the Holder shall be several, and not joint, and each such entity shall only be obligated with respect to its pro rata portion of any such obligation based on its percentage ownership of the aggregate principal amount of Notes reflected on the signature pages hereto.

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     IN WITNESS WHEREOF, the parties hereto, intending to be legally bound, have caused this Agreement to be executed by their respective duly authorized officers, as of the date first above written.

	BALLY TOTAL FITNESS HOLDING CORPORATION
	By:	/s/ Marc D. Bassewitz
	Name:
	Title:
Date: March 22, 2006
	SPECIAL VALUE BOND FUND II, LLC
	By:	SVIM/MSM II, LLC
	Its:	Managing Member
	By:	TENNENBAUM & CO., LLC
	Its:	Managing Member
	By:	/s/ Howard Levkowitz
	Name:
	Title:
	SPECIAL VALUE ABSOLUTE RETURN FUND, LLC
	By:	SVAR/MM, LLC
	Its:	Managing Member
	By:	TENNENBAUM CAPITAL PARTNERS, LLC
	Its:	Managing Member
	By:	TENNENBAUM & CO., LLC
	Its:	Managing Member
	By:	/s/ Howard Levkowitz
	Name:
	Title:

SPECIAL VALUE OPPORTUNITIES FUND, LLC
By:	/s/ Howard Levkowitz
Name:
Title:
SPECIAL VALUE EXPANSION FUND, LLC
By:	/s/ Howard Levkowitz
Name:
Title:

EX-10.2

Exhibit 10.2

EXECUTION COPY

CONSENT AGREEMENT

     This Consent Agreement (“Agreement”) is dated as of March 22, 2006, and is made by and between Bally Total Fitness Holding Corporation, a Delaware corporation (“Bally” or the “Company”), and the Persons listed on the signature pages attached hereto (collectively, the “Holder”). Certain capitalized terms used herein and not otherwise defined have the meanings set forth in Article VI hereof.

     WHEREAS, the Holder is the beneficial owner of $19,157,000 in aggregate principal amount of 9 7/8% Senior Subordinated Notes due 2007 of the Company (the “Notes”) issued pursuant to the Indenture, dated as of December 16, 1998, between the Company and U.S. Bank National Association, as trustee (as amended and supplemented, the “Indenture”);

     WHEREAS, the Company desires to seek waivers (the “Waivers”) through the Waiver Expiration Dates (as defined below) of any Default or Event of Default (as such terms are defined in the Indenture) arising from the failure to comply with the covenants set forth in Sections 7.4 and 10.17 of the Indenture, which require Bally to file with the SEC, and furnish to the Trustee and holders of Notes, the reports required to be filed by the Company pursuant to the Exchange Act;

     WHEREAS, the Company will be undertaking a solicitation of consents (the “Consent Solicitation”) with respect to the Notes to obtain the Waivers; and

     WHEREAS, the Holder has agreed with the Company to give its consent to the Waivers in the Consent Solicitation, subject to the conditions set forth below.

     NOW, THEREFORE, in consideration of the premises and the representations, warranties, covenants and agreements herein contained and intending to be legally bound hereby, Bally and the Holder hereby agree as follows:

ARTICLE I
AGREEMENT TO GIVE CONSENT TO WAIVERS AND RELATED MATTERS

     Section 1.1 (a) Acknowledgement. The Holder and Bally acknowledges that Bally has failed to file or may fail to file with the SEC, and has failed or may fail to furnish to holders of Notes and the Trustee certain of the reports and notices required by Sections 7.4 and 10.17 of the Indenture and applicable provisions of the Exchange Act, including the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2005, which was required to be filed with the SEC on or before March 16, 2006.

     (b) Agreement to Give Consent. In accordance with Section 1.2 below, the Holder hereby agrees to give its consent to the Waivers in the Consent Solicitation; provided that Holder shall not be required to give its consent in the Consent Solicitation in the event that the waivers granted by giving consent in the Consent Solicitation include additional waivers not described in this Section 1.1(b). The Waivers will provide that any Default or Event of Default arising from a failure to comply with the covenants set forth in Sections 7.4 and 10.17 of the Indenture, which require Bally to file with the SEC, and furnish to the Trustee and holders of Notes, the reports required to be filed pursuant to the Exchange Act, will be waived through the Waiver Expiration Dates. The Waivers will also provide that any Notice of Default delivered by the Holder or the Trustee relating solely to the Events of Default described in Section 1.1 hereof shall automatically be rescinded and withdrawn and shall no longer be effective. In addition, the Waivers will provide that any Default by Bally as a result of its failure to provide notice to the Trustee of a Default with respect to the matters included in the Waivers under Section 10.18(b) of the Indenture will be waived through the Waiver Expiration

Dates. The “Waiver Expiration Dates” will be: (i) 5:00 pm, New York City time, on July 10, 2006, with respect to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2005 and the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2006; and (ii) 5:00 pm, New York City time, on September 11, 2006 (as may be extended by 30 days), with respect to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2006. By giving its consent to the Waivers in the Consent Solicitation, the Holder will authorize the Trustee to enter into a Supplemental Indenture in form and substance satisfactory to the Trustee for purposes of implementing the Waivers.

     Section 1.2 Further Action by Holder. Subject to Section 1.1(b) above, as soon as practicable after commencement of the Consent Solicitation, the Holder shall instruct the DTC Participant(s) that act as custodian(s) for the Notes it beneficially owns to execute and deliver a letter of consent form, which will accompany the consent solicitation materials, and shall instruct such DTC Participant(s) to take all such further action as may be necessary to effect the consent of the Holder in the Consent Solicitation on behalf of such Holder. In addition, the Holder shall, at the written request of Bally, at any time and from time to time following the execution of this Agreement, execute and deliver to Bally all such further instruments and take all such further action as may be reasonably necessary or appropriate in order to confirm or carry out its obligations under this Agreement and the transactions contemplated hereby.

     Section 1.3 Consent Payment. Within one business day after the earlier of (a) the date on which the Company has received: (i) the consent of the Majority Lenders (as defined in the Credit Agreement) under the Credit Agreement to make the payments required hereunder and (ii) requisite consents from holders of its Senior Notes in order to effect the proposed waivers under the Senior Note Indenture similar to the Waivers and (b) the date on which the Company and the Trustee have entered into a Supplemental Indenture to effect the Waivers granted in the Consent Solicitation, Bally will instruct its transfer agent to deliver to the Holder 4.4444 shares of the Company’s common stock, par value $0.01 per share (the “Common Stock”), in each case per $1,000 in principal amount of Notes (the “Consent Fee”). In addition, if Bally does not comply with the covenants set forth in Sections 7.4 and 10.17 of the Indenture with respect to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2006 by September 11, 2006, Bally will have the option to extend the Waiver Expiration Date with respect to such Quarterly Report to October 11, 2006 for an additional payment to Holder, at its election, of: (1) $3.33; or (2) 1.4815 shares of Common Stock, in each case per $1,000 in principal amount of Notes (the “Additional Fee”). Fractional shares that would otherwise be issuable will be rounded to the nearest whole number, with fractions equal to or greater than 0.5 being rounded up and fractions less than 0.5 being rounded down.

     Section 1.4 Restricted Securities. The Holder understands that the shares of Common Stock to be issued to it pursuant to this Agreement and the terms of the Consent Solicitation (the “Shares”) will be issued only in a transaction not involving any public offering in the United

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States within the meaning of the Securities Act, the Shares have not been registered under the Securities Act or any other applicable securities law, that the Shares will be “restricted securities” within the meaning of Rule 144 under the Securities Act and that (A) prior to the expiration of the holding period applicable to sales of restricted securities pursuant to Rule 144 under the Securities Act, the Shares may be offered, resold, pledged or otherwise transferred only in accordance with any applicable securities laws of any state of the United States or any other applicable jurisdiction (i) (a) in a transaction meeting the requirements of Rule 144 under the Securities Act, (b) outside the U.S. to a foreign purchaser in a transaction meeting the requirements of Regulation S, or (c) pursuant to a transaction that is otherwise exempt from the registration requirements of the Securities Act and state securities laws, (ii) to Bally or (iii) pursuant to an effective registration statement under the Securities Act and (B) the Holder will notify any subsequent purchaser from it of the resale restrictions set forth in (A) above, if then applicable. The Holder agrees that the certificates representing the Shares shall bear a restrictive legend in substantially the following form:

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ACQUIRED IN A TRANSACTION THAT WAS NOT REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES LAWS OF ANY STATE, AND MAY NOT BE SOLD OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR AN APPLICABLE EXEMPTION THEREFROM TO THE REGISTRATION REQUIREMENTS OF SUCH ACT OR LAWS.”

     Section 1.5 Prohibition of Certain Actions. (a) The Holder further agrees that, for a period ending on the earliest of (a) one (1) year from the date of this Agreement, (b) the date of the first annual meeting of the Company held for the purpose of electing directors after the date of this Agreement, and (c) the occurrence of an Event of Default (as defined in the applicable document) under the Indenture, the Senior Note Indenture or Section 8.04, 8.05 or 8.09 (solely as a result of a default under Section 6.12, 6.14 or 6.15) of the Credit Agreement (as in effect on the date hereof, and provided that any waiver, consent or other action after the date hereof on the part of the lenders pursuant to the Credit Agreement, other than with respect to the Events of Default described in Section 1.1 and payment of Consent Fees and Additional Consent Fees), shall not be deemed to cure or otherwise affect such Event of Default for purposes of this Agreement), at any meeting (whether annual or special and whether or not an adjourned or postponed meeting) of the holders of capital stock of the Company, however called, or in connection with any written consent of the holders of capital stock of the Company solicited by the Board of Directors, the Holder will appear at the meeting or otherwise cause the Shares to be counted as present at such meeting for purposes of establishing a quorum and vote or consent (or cause to be voted or consented) the Shares (i) in favor of any proposed strategic transaction (including a merger or consolidation of the Company with another entity or the sale of substantially all of the Company’s assets) approved by the Board of Directors (a “Board-Approved Transaction”) and (ii) against any amendment of the Company’s articles of incorporation or bylaws, or other proposal or transaction involving the Company or any of its

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subsidiaries, which amendment or other proposal or transaction was initiated for the sole purpose of preventing the Board-Approved Transaction; provided, in each case, that the Holder holds any Shares on the record date for such meeting or as of the date of such written consent; provided, further, that this Section 1.5(a) shall no longer apply after any Person has formally initiated (whether by tender offer, proxy solicitation or other filing that has been or will be mailed directly to holders of the Company’s Common Stock) a bona fide potential strategic transaction that is not a Board-Approved Transaction and such transaction would, if consummated, result in a transaction that the Holder believes in good faith is reasonably capable of being financed and more favorable to the Holders from a financial point of view than the Board-Approved Transaction.

     (b) Notwithstanding the foregoing, none of the covenants in Section 1.5(a) shall become effective unless and until the Consent Fee has been paid to the Holder pursuant to Section 1.3.

ARTICLE II
REPRESENTATIONS AND WARRANTIES OF BALLY

     The Company represents and warrants to the Holder as follows:

     Section 2.1 Organization and Standing of the Company. The Company is a corporation duly organized, validly existing and in good standing under the laws of its state of incorporation and has all requisite corporate power and authority (i) to own, lease and operate its properties, to carry on its business as now being conducted and (ii) to execute, deliver and perform its obligations under this Agreement, including entering into the Supplemental Indenture, and the other agreements to be executed by the Company in connection herewith and to consummate the transactions contemplated hereby and thereby. The Company and its Subsidiaries are duly qualified to do business and are in good standing in all jurisdictions wherein such qualification is necessary and where failure so to qualify would have a material adverse effect on their business, properties, operations, condition (financial or other), results of operations or prospects of the Company and its Subsidiaries, taken as a whole. The Company has no equity investment in any person other than its Subsidiaries.

     Section 2.2 Issuance of the Shares. The Shares will be duly authorized and when issued in accordance with the terms hereof will be validly issued, fully paid and nonassessable. There are no preemptive or similar rights of any stockholder of the Company or any other person to acquire the Shares.

     Section 2.3 Consent Agreement and Other Transaction Documents. This Agreement and the other agreements and instruments contemplated hereby have been duly and validly authorized by the Company, this Agreement has been, and each of the other agreements contemplated by this Agreement will be, duly executed and delivered by the Company and this Agreement is, and each of the other agreements contemplated by this Agreement will be, a valid and binding obligation of the Company enforceable in accordance with its terms, subject as to enforceability to general principles of equity and to bankruptcy, insolvency, moratorium and other similar laws affecting the enforcement of creditors’ rights generally.

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     Section 2.4 Non-Contravention. The execution and delivery by the Company of this Agreement and the other agreements and transactions contemplated hereby to which the Company is a party, do not and will not, with or without the giving of notice or the lapse of time, or both (i) result in any violation of any terms of the charter documents of the Company; (ii) conflict with or result in a breach by the Company or any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust or other agreement or instrument to which the Company is a party or by which the Company or any of its properties or assets is bound or affected (other than provisions of the Credit Agreement that may prohibit the Waivers and similar waivers under the Senior Note Indenture and the related consent payments) or (iii) violate or contravene any applicable law, rule or regulation or any applicable decree, judgment or order of any court or Governmental Body having jurisdiction over the Company or any of its properties or assets.

     Section 2.5 Certain Securities Law Matters. Assuming the accuracy of the representations and warranties of the Holder set forth in Article III hereof, the Shares may be issued to the Holder pursuant to this Agreement without registration under the Securities Act by reason of Section 4(2) thereof and similar provisions under applicable state securities laws.

     Section 2.6 Capitalization. The authorized capital stock of the Company is (a) 60,200,000 shares of Common Stock and (b) 10,000,000 shares of preferred stock, par value $.01 per share (the “Preferred Stock”). All of the outstanding shares of capital stock of the Company have been duly authorized and validly issued and are fully paid and nonassessable, have no preemptive rights and, to its knowledge, have been issued in accordance with applicable securities laws. As of March 17, 2006, there were: (a) 38,529,964 shares of Common Stock outstanding; and (b) there were no shares of Preferred Stock outstanding. As of March 17, 2006, without giving effect to the Company’s stockholder rights plan pursuant to which each outstanding share of Common Stock is accompanied by the right to purchase one one-thousandth (1/1000th) of a share of Series B Junior Participating Preferred Stock (the “Rights Plan”), the Company had outstanding options, warrants and similar rights entitling the holders to purchase or acquire 4,829,792 shares of Common Stock and 54,500 shares of Common Stock reserved for future grants under the Company’s equity incentive plans. Other than as set forth in the preceding sentence and with respect to the Rights Plan, the Company does not have outstanding any securities (or obligation to issue any such securities) convertible into, exchangeable for or otherwise entitling the holders thereof to acquire shares of Common Stock. The Company has duly reserved from its authorized and unissued shares of Common Stock the full number of shares required for (a) all options, warrants, convertible securities and other rights to acquire shares of Common Stock which are outstanding and (b) all shares of Common Stock and options and other rights to acquire shares of Common Stock which may be issued or granted under the stock option and similar plans which have been adopted by the Company or any of its Subsidiaries.

ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE HOLDER

     The Holder represents and warrants to the Company as follows:

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     Section 3.1 Organization and Standing of the Holder. The Holder is duly organized, validly existing and in good standing under the laws of its jurisdiction of its incorporation or formation and has all requisite power and authority to own and operate its properties, to carry on its business as now conducted and to enter into and, as applicable, perform its obligations hereunder.

     Section 3.2 Consent Agreement and Other Transaction Documents. This Agreement and each other agreement contemplated hereby to which the Holder is a party have been duly and validly authorized on behalf of the Holder. This Agreement has been, and each of the other agreements contemplated by this Agreement will be, duly executed and delivered by the Holder and this Agreement is, and each of the other agreements contemplated by this Agreement will be, a valid and binding obligation of the Holder enforceable in accordance with their terms, subject as to enforceability to general principles of equity and to bankruptcy, insolvency, moratorium and other similar laws affecting the enforcement of creditors’ rights generally.

     Section 3.3 Non-Contravention. The execution and delivery by the Holder of this Agreement and the transactions contemplated hereby to which the Holder is a party, do not and will not, with or without the giving of notice or the lapse of time, or both (i) result in any violation of any terms of the organizational documents of the Holder; (ii) conflict with or result in a breach by the Holder or any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust or other agreement or instrument to which the Holder is a party or by which the Holder or any of its properties or assets is bound or affected or (iii) violate or contravene any applicable law, rule or regulation or any applicable decree, judgment or order of any court or Governmental Body having jurisdiction over the Holder or any of its properties or assets.

     Section 3.4 Ownership. The Holder is the beneficial owner of the aggregate principal amount of Notes as set forth under Holder’s name on the signature page hereto. There are no outstanding agreements, arrangements or understandings under which such Holder or its nominee may be obligated to Transfer any of the Notes.

     Section 3.5 Investor Representations. The Holder is knowledgeable, sophisticated and experienced in making, and is qualified to make, decisions with respect to investments in shares representing an investment decision like that involved in the acquisition of the Shares, including investments in securities issued by the Company. The Holder is acquiring the number of Shares set forth in Section 1.3 above in the ordinary course of its business and for its own account for investment (as defined for purposes of the Hart-Scott-Rodino Antitrust Improvement Act of 1976 and the regulations thereunder) only, and has no present intention of distributing any of the Shares nor any arrangement or understanding with any other persons regarding the distribution of such Shares within the meaning of Section 2(11) of the Securities Act. The Holder is an “accredited investor” within the meaning of Rule 501 of Regulation D promulgated under the Securities Act. The Holder understands that the Shares are being issued to it in reliance on specific exemptions from the registration requirements of United States federal and state securities laws and that the Company is relying upon the truth and accuracy of, and the Holder’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of the Holder set forth herein in order to determine the availability of such exemptions and the eligibility of the Holder to acquire the shares of Common Stock.

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     Section 3.6 Information Provided. The Holder has received and has had an opportunity to review, and has been furnished with, all materials relating to the business, finances and operations of the Company and materials relating to the issuance of the Shares which have been requested by the Holder. The Holder has been afforded the opportunity to ask questions of the Company and has received satisfactory answers to any such inquiries; and the Holder understands that its investment in the Shares involves a high degree of risk and that no Governmental Body has passed on or made any recommendation or endorsement of the Shares.

     Section 3.7 Terms of Consent. The terms of this Agreement were the result of negotiations between the Holder, the Company, and representatives of the Company and the Holder and the Holder was given the opportunity to review and comment upon the proposed terms of this Agreement.

ARTICLE IV
CERTAIN COVENANTS AND AGREEMENTS OF THE PARTIES

     Section 4.1 Further Action by Bally. (a) Bally shall, at the written request of the Holder, at any time and from time to time following the execution of this Agreement, execute and deliver to the Holder all such further instruments and take all such further action as may be reasonably necessary or appropriate in order to confirm or carry out its obligations under this Agreement and the transactions contemplated hereby.

     (b) So long as the restrictions in Section 1.5(a) above are effective, Bally shall provide to Holder an officer’s certificate with respect to compliance with the covenants described in clause (c) of Section 1.5(a) within one business day after a compliance certificate is required to be delivered to the Agent under the Credit Agreement pursuant to Section 6.03(e) of the Credit Agreement.

     (c) Bally acknowledges that each of the Indenture and the Senior Note Indenture provides that the holders of at least a majority in aggregate principal amount of outstanding Notes and Senior Notes, as the case may be, may consent to the requested Waivers of a Default under the Indenture or Senior Note Indenture, respectively. Bally further acknowledges that the Majority Lenders (as defined in the Credit Agreement) may consent to the requested amendment or waiver of the Credit Agreement. Bally agrees that it will work in good faith and use best efforts to obtain, as promptly as possible after the date hereof (i) the consent of the Majority Lenders under the Credit Agreement to make the payments required hereunder and (ii) the requisite consents from holders of its Senior Notes in order to effect the proposed waivers under the Senior Note Indenture similar to the Waivers, in each case such that the payment to the Holder pursuant to Section 1.3 can be made.

     Section 4.2 Publicity. Neither the Company nor the Holder shall, nor shall they permit their respective Agents to, issue or cause the publication of any press release or make any other public statement, filing or announcement with respect to this Agreement and the transactions contemplated hereby without the prior approval of the other party; provided, however, that the Company shall be entitled, without the prior approval of the Holder, to make any press release or other public disclosure with respect to such transactions as is required by applicable law or the NYSE; provided, further, that the Company shall not specifically name the Holder in any such

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release without the prior approval of the Holder unless specifically required by applicable law or the NYSE to name the Holder. The Company and the Holder shall cooperate in issuing press releases or otherwise making public statements with respect to this Agreement and the transactions contemplated hereby, which cooperation shall include first consulting the other party hereto concerning the requirement for, and timing and content of, such public announcement.

     Section 4.3 Registration of Shares. (a) Effective upon the execution of this Agreement, that certain Registration Rights Agreement, dated as of January 17, 2006, among the Company and the holders of Common Stock named therein, is hereby amended, pursuant to Section 11 thereof as follows:

(i) the definition of “Registrable Securities” is hereby amended and restated in its entirety to read as follows: “Registrable Common Stock” means any of the Common Stock owned by the Holders from time to time, whether now or in the future, and any other securities issued or issuable with respect to or in exchange for such shares of Common Stock; provided, however, that a share of Common Stock will cease to be Registrable Common Stock after it has been sold: (a) under a registration statement effected pursuant hereto; or (b) pursuant to Rule 144 promulgated under the Securities Act.

     (b) All expenses incident to the Company’s performance of or compliance with its obligations under the registration rights agreement will be borne by the Company, including, without limitation, the reimbursement of the eligible holders thereunder for the reasonable expenses of one legal counsel incurred relating to the registration of Registrable Common Stock as set forth above.

     Section 4.4 Approval Right. Without the prior approval of the Holder, Bally will not: (i) pay any holder of the Notes for the Waivers or any holder of the Senior Notes for similar waivers under the Senior Notes Indenture with respect to Bally’s failure to comply with its reporting obligations thereunder, in either case in excess of the Consent Fee and the Additional Fee (provided that any initial consent fee paid in cash shall not be in excess of $10.00 per $1,000 in principal amount) or (ii) pay the lenders under the Credit Agreement for their approval of the waivers under the Indenture and the Senior Notes Indenture and the related consent payments in excess of the Consent Fee and the Additional Fee (provided that any initial consent fee paid in cash shall not be in excess of $10.00 per $1,000 in principal amount).

ARTICLE V
CONDITIONS PRECEDENT TO EFFECTIVENESS

     The effectiveness of the Waivers provided by the Holder pursuant to the Consent Solicitation will be subject to the conditions set forth in the consent solicitation materials, including, without limitation, the following conditions:

     Section 5.1 Consents. Bally having received: (i) requisite consents from holders of its Senior Notes in order to effect proposed waivers under the Senior Note Indenture similar to the Waivers; (ii) consents relating to the Waivers and the similar waivers under the Senior Note

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Indenture and the related consent payments having been received from the necessary lenders under the Credit Agreement.

     Section 5.2 No Violations. In the sole judgment of the Company, there shall not be any law or regulation, any injunction or action or other proceeding (pending or threatened) that (in the case of any action or proceeding if adversely determined) would make unlawful, invalid or enjoin the implementation of the Waivers or payment of the Consent Fee or the Additional Fee or that would question the legality or validity thereof.

ARTICLE VI
DEFINITIONS

     Section 6.1 Definitions. As used in this Agreement, in addition to the terms defined elsewhere, the following terms shall have the meanings set forth below, unless the context otherwise requires:

     “Agent” shall mean, with respect to any Person, any officer, director, employee, stockholder, controlling person (within the meaning of the Securities Act), affiliate or authorized agent of such Person.

     “Credit Agreement” shall mean the Credit Agreement, dated as of November 18, 1997 (as amended and restated as of October 14, 2004 and as further amended and supplemented from time to time), among Bally Total Fitness Holding Corporation, as Borrower, the Several Banks and Other Financial Institutions Parties Thereto, JPMorgan Chase Bank, as Agent, Deutsche Bank Securities Inc., as Syndication Agent, LaSalle Bank National Association, as Documentation Agent, and JPMorgan Securities Inc., as Sole Lead Arranger and Sole Bookrunner.

     “DTC” shall mean The Depository Trust Company, a limited purpose trust company.

     “DTC Participant” shall mean a participating organization in DTC.

     “Exchange Act” means the Securities Exchange Act of 1934, as amended.

     “Governmental Body” shall mean any government or political subdivision thereof, whether federal, state, local or foreign, or any agency or instrumentality of any such government or political subdivision thereof, or any federal or state court or arbitrator.

     “Holder” shall have the definition set forth in the first paragraph of this Agreement and all of its successors and assigns.

     “Person” means any individual, corporation, partnership, joint venture, trust, estate, limited liability company, unincorporated organization or governmental agency.

     “SEC” means the Securities and Exchange Commission.

     “Securities Act” means the Securities Act of 1933, as amended.

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     “Senior Note Indenture” means the Indenture, dated as of July 2, 2003 (as supplemented on July 22, 2003, December 7, 2004 and September 2, 2005), by and among Bally Total Fitness Holding Corporation, as Issuer, the Guarantors party thereto and U.S. Bank National Association, as Trustee.

     “Senior Notes” means the 10 ¹/2% Senior Notes due 2011 of Bally Total Fitness Holding Corporation.

     “Subsidiary” means any Person, a majority of the capital stock of which is owned by the Company or another Subsidiary of the Company.

     “Trustee” shall mean U.S. Bank National Association.

ARTICLE VII
MISCELLANEOUS

     Section 7.1 Costs, Expenses and Taxes. Each party shall bear its own costs and expenses in connection with the preparation, execution and delivery of this Agreement and the issuance of the Shares and payment of the cash consideration; provided, however, that the Company will pay for the reasonable fees and expenses of counsel to the Holder in connection with this Agreement and the transactions contemplated hereby, including, without limitation, any actions requested by the Company pursuant to Section 1.2. The Company shall pay any and all stamp and other taxes payable or determined to be payable in connection with the execution and delivery of this Agreement and the delivery of consent for the cash and Shares.

     Section 7.2 Survival of Representations. The representations, warranties, covenants and agreements of the Holder and the Company contained in this Agreement shall survive the execution of the Supplemental Indenture.

     Section 7.3 Prior Agreements. This Agreement and the other agreements contemplated hereby constitute the entire agreement between the parties concerning the subject matter hereof and supersedes any prior representations, understandings or agreements. There are no representations, warranties, agreements, conditions or covenants, of any nature whatsoever (whether express or implied, written or oral) between the parties hereto with respect to such subject matter except as expressly set forth herein and in the other agreements contemplated hereby.

     Section 7.4 Severability. The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision or the validity and enforceability of this Agreement in any other jurisdiction.

     Section 7.5 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO ITS CHOICE OF LAW RULES.

     Section 7.6 Headings. Section headings in this Agreement are included herein for convenience of reference only and shall not constitute a part of, or affect the interpretation of, this Agreement.

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     Section 7.7 Counterparts. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument, and either of the parties hereto may execute this Agreement by signing any such counterpart. A facsimile transmission of this Agreement bearing a signature on behalf of a party hereto shall be legal and binding on such party.

     Section 7.8 Assignment; Binding Effect. The Holder shall not convey, assign or otherwise transfer any of its rights or obligations under this Agreement without the express written consent of Bally, and Bally shall not convey, assign or otherwise transfer any of its rights and obligations under this Agreement without the express written consent of the Holder. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns. Nothing in this Agreement will limit or otherwise restrict the ability of the Holder to transfer its Notes, but the agreement of the Holder to give its consent to the Waivers, and only such agreement, will bind every subsequent holder of the Notes.

     Section 7.9 Waiver; Remedies. No delay on the part of any Holder or Bally in exercising any right, power or privilege under this Agreement shall operate as a wavier thereof, nor shall any waiver on the part of any Holder or Bally of any right, power or privilege under this Agreement operate as a waiver of any other right, power or privilege of such party under this Agreement, nor shall any single or partial exercise of any right, power or privilege under this Agreement preclude any other or further exercise thereof or the exercise of any other right, power or privilege under this Agreement.

     Section 7.10 Amendment. This Agreement may be modified or amended only by written agreement of the parties to this Agreement.

     Section 7.11 Termination. This Agreement shall automatically terminate without any action by the parties hereto if the Supplemental Indenture implementing the Waivers has not been executed and become effective by 6:00pm Eastern Daylight Time on May 15, 2006. In addition, the Holder may terminate this Agreement at any time after April 14, 2006 if it has not received the Consent Fee by such date. Such termination by the Holder shall not relieve any party hereto of liability for breach of this Agreement.

     Section 7.12 Liability. The obligations hereunder of each of the entities on the signature pages hereto that comprise the Holder shall be several, and not joint, and each such entity shall only be obligated with respect to its pro rata portion of any such obligation based on its percentage ownership of the aggregate principal amount of Notes reflected on the signature pages hereto.

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     IN WITNESS WHEREOF, the parties hereto, intending to be legally bound, have caused this Agreement to be executed by their respective duly authorized officers, as of the date first above written.

	BALLY TOTAL FITNESS HOLDING CORPORATION
	By:	/s/ Marc D. Bassewitz
	Name:
	Title:
Date: March 22, 2006
	EVEREST CAPITAL LIMITED, as agent for
	HFR ED Advantage Master Trust
	Everest Capital Event Fund, LP
	GMAM Investment Funds Trust II
	Everest Capital Debt Opportunity Fund, LP
	By:	/s/ Malcom Stott
	Name:	Malcom Stott
	Title:	Chief Operating Officer
	By:	/s/ Eric Graham
	Name:	Eric Graham
	Title:	Principal

EX-10.3

Exhibit 10.3

EXECUTION COPY

CONSENT AGREEMENT

     This Consent Agreement (“Agreement”) is dated as of March 22, 2006, and is made by and between Bally Total Fitness Holding Corporation, a Delaware corporation (“Bally” or the “Company”), and the Person listed on the signature page attached hereto (the “Holder”). Certain capitalized terms used herein and not otherwise defined have the meanings set forth in Article VI hereof.

     WHEREAS, the Holder is the beneficial owner of $10,500,000 in aggregate principal amount of 9 7/8% Senior Subordinated Notes due 2007 of the Company (the “Notes”) issued pursuant to the Indenture, dated as of December 16, 1998, between the Company and U.S. Bank National Association, as trustee (as amended and supplemented, the “Indenture”);

     WHEREAS, the Company desires to seek waivers (the “Waivers”) through the Waiver Expiration Dates (as defined below) of any Default or Event of Default (as such terms are defined in the Indenture) arising from the failure to timely comply with the covenants set forth in Sections 7.4 and 10.17 of the Indenture with respect to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2005 and the Company’s Quarterly Reports on Form 10-Q for the fiscal periods ended March 31 and June 30, 2006 (the “Waived Matters”), which require Bally to file with the SEC, and furnish to the Trustee and holders of Notes, the reports required to be filed by the Company pursuant to the Exchange Act;

     WHEREAS, the Company will be undertaking a solicitation of consents (the “Consent Solicitation”) with respect to the Notes to obtain the Waivers; and

     WHEREAS, the Holder has agreed with the Company to give its consent to the Waivers in the Consent Solicitation, subject to the conditions set forth below.

     NOW, THEREFORE, in consideration of the premises and the representations, warranties, covenants and agreements herein contained and intending to be legally bound hereby, Bally and the Holder hereby agree as follows:

ARTICLE I
AGREEMENT TO GIVE CONSENT TO WAIVERS AND RELATED MATTERS

     Section 1.1 (a) Acknowledgement. The Holder acknowledges that Bally may fail to timely file with the SEC, and may fail to timely furnish to holders of Notes and the Trustee certain of the reports and notices required by Sections 7.4 and 10.17 of the Indenture and applicable provisions of the Exchange Act.

     (b) Agreement to Give Consent. In accordance with Section 1.2 below, the Holder hereby agrees to give its consent to the Waivers in the Consent Solicitation. The Waivers will provide that any Default or Event of Default arising from a failure to comply with the covenants set forth in Sections 7.4 and 10.17 of the Indenture, which require Bally to file with the SEC, and furnish to the Trustee and holders of Notes, the reports required to be filed pursuant to the Exchange Act, will be waived through the Waiver Expiration Dates. The Waivers will also provide that any Notice of Default in respect of the Waived Matters delivered by the Holder or the Trustee prior to the earlier of the termination of this Agreement and effectiveness of the

Supplemental Indenture (as defined below) shall automatically be rescinded and withdrawn and shall no longer be effective. In addition, the Waivers will provide that any Default by Bally as a result of its failure to provide notice to the Trustee of a Default with respect to the Waived Matters under Section 10.18(b) of the Indenture will be waived through the Waiver Expiration Dates. The “Waiver Expiration Dates” will be: (i) 5:00 pm, New York City time, on July 10, 2006, with respect to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2005 and the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2006; and (ii) 5:00 pm, New York City time, on September 11, 2006 (as may be extended by 30 days), with respect to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2006. By giving its consent to the Waivers in the Consent Solicitation, the Holder will authorize the Trustee to enter into a Supplemental Indenture in form and substance satisfactory to the Trustee for purposes of implementing the Waivers (the “Supplemental Indenture”).

     Section 1.2 Further Action by Holder. As soon as practicable after commencement of the Consent Solicitation, the Holder shall instruct the DTC Participant(s) that act as custodian(s) for the Notes it beneficially owns to execute and deliver a letter of consent form, which will accompany the consent solicitation materials, and shall instruct such DTC Participant(s) to take all such further action as may be necessary to effect the consent of the Holder in the Consent Solicitation on behalf of such Holder. In addition, the Holder shall, at the written request of Bally, at any time and from time to time following the execution of this Agreement, execute and deliver to Bally all such further instruments and take all such further action as may be reasonably necessary or appropriate in order to confirm or carry out its obligations under this Agreement and the transactions contemplated hereby.

     Section 1.3 Delivery of Consent to Waivers; Consent Payment. When (i) Bally receives sufficient consents so that it has received consents from a majority in aggregate principal amount of Notes outstanding under the Indenture and (ii) the other conditions set forth in the consent solicitation materials (which are identified in, and limited to, those contained in Article V hereof) are satisfied, Bally will enter into the Supplemental Indenture with the Trustee as soon as practicable thereafter; provided, that the continued effectiveness of the Supplemental Indenture will be contingent upon payment of the Consent Fee on the terms set forth in the Consent Solicitation. In consideration of the Waivers and subject to Article V hereof, Bally will offer to pay or deliver (directly or through an agent) and shall pay or deliver (directly or through an agent) to all beneficial owners participating in the Consent Solicitation, including the Holder, at their election: (i) $10.00; or (ii) 4.4444 shares of the Company’s common stock, par value $0.01 per share (the “Common Stock”), in each case per $1,000 in principal amount of Notes (the “Consent Fee”). In addition, if Bally does not comply with the covenants set forth in Sections 7.4 and 10.17 of the Indenture with respect to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2006 by September 11, 2006, Bally will have the option to extend the Waiver Expiration Date with respect to such Quarterly Report to October 11, 2006 for an additional payment of: (i) $3.33; or (ii) 1.4815 shares of Common Stock, in each case per $1,000 in principal amount of Notes (the “Additional Fee”). Only beneficial owners that certify to the Company that they are “Accredited Investors” as that term is defined in Rule 501 under the Securities Act will be offered the ability to elect to receive shares of Common Stock offered in the Consent Solicitation. In connection with its consent delivered pursuant to the Consent

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Solicitation, the Holder will elect to receive shares of Common Stock in respect of the Notes it beneficially owns.

     Section 1.4 Restricted Securities. The Holder understands that the shares of Common Stock to be issued to it pursuant to this Agreement (the “Shares”) will be issued only in a transaction not involving any public offering in the United States within the meaning of the Securities Act, the Shares have not been registered under the Securities Act or any other applicable securities law, that the Shares will be “restricted securities” within the meaning of Rule 144 under the Securities Act and that (A) prior to the expiration of the holding period applicable to sales of restricted securities pursuant to Rule 144 under the Securities Act, the Shares may be offered, resold, pledged or otherwise transferred only in accordance with any applicable securities laws of any state of the United States or any other applicable jurisdiction (i) (a) in a transaction meeting the requirements of Rule 144 under the Securities Act, (b) outside the U.S. to a foreign purchaser in a transaction meeting the requirements of Regulation S, or (c) pursuant to a transaction that is otherwise exempt from the registration requirements of the Securities Act and state securities laws, (ii) to Bally or (iii) pursuant to an effective registration statement under the Securities Act and (B) the Holder will notify any subsequent purchaser from it of the resale restrictions set forth in (A) above, if then applicable. The Holder agrees that the certificates representing the Shares shall bear a restrictive legend in substantially the following form:

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ACQUIRED IN A TRANSACTION THAT WAS NOT REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES LAWS OF ANY STATE, AND MAY NOT BE SOLD OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR AN APPLICABLE EXEMPTION THEREFROM TO THE REGISTRATION REQUIREMENTS OF SUCH ACT OR LAWS.”

     Section 1.5 Voting Agreement. Upon satisfaction of the conditions precedent set forth in Article V hereof, the Holder further agrees for a period from the date hereof through December 31, 2006 that at any meeting (whether annual or special and whether or not an adjourned or postponed meeting) of the holders of capital stock of the Company, however called, or in connection with any written consent of the holders of capital stock of the Company solicited by the Board of Directors, the Holder will appear at the meeting or otherwise cause the Shares to be counted as present at such meeting for purposes of establishing a quorum and vote or consent (or cause to be voted or consented) the Shares (i) in favor of any proposed strategic transaction (including a merger or consolidation of the Company with another entity or the sale of substantially all of the Company’s assets) approved by the Board of Directors (a “Board-Approved Transaction”) and (ii) against any merger, consolidation, combination, sale of substantial assets, reorganization, recapitalization, dissolution, liquidation or winding up of or by the Company or any other acquisition proposal (other than a Board-Approved Transaction); provided, that the Holder holds the Shares on the record date for such meeting or as of the date of

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such written consent; provided, further, that this Section 1.5 will not apply to (x) the extent any Person has formally initiated (whether by tender offer, proxy solicitation or other filing that has been or will be mailed directly to holders of the Company’s Common Stock) a bona fide potential strategic transaction that is fully financed or reasonably capable of being financed and not a Board-Approved Transaction and such transaction would, if consummated, result in a transaction more favorable to the holders of the Company’s Common Stock from a financial point of view than the Board-Approved Transaction and (y) any shares of Common Stock which are owned, directly or indirectly, by the Holder or any of its affiliates other than the Shares issued pursuant to this Agreement.

ARTICLE II
REPRESENTATIONS AND WARRANTIES OF BALLY

     The Company represents and warrants to the Holder as follows:

     Section 2.1 Organization and Standing of the Company. The Company is a corporation duly organized, validly existing and in good standing under the laws of its state of incorporation and has all requisite corporate power and authority (i) to own, lease and operate its properties, to carry on its business as now being conducted and (ii) to execute, deliver and perform its obligations under this Agreement, including entering into the Supplemental Indenture, and the other agreements to be executed by the Company in connection herewith and to consummate the transactions contemplated hereby and thereby. The Company and its Subsidiaries are duly qualified to do business and are in good standing in all jurisdictions wherein such qualification is necessary and where failure so to qualify would have a material adverse effect on their business, properties, operations, condition (financial or other), results of operations or prospects of the Company and its Subsidiaries, taken as a whole. The Company has no equity investment in any person other than its Subsidiaries.

     Section 2.2 Issuance of the Shares. The Shares will be duly authorized and when issued in accordance with the terms hereof will be validly issued, fully paid and nonassessable. There are no preemptive or similar rights of any stockholder of the Company or any other person to acquire the Shares.

     Section 2.3 Consent Agreement and Other Transaction Documents. This Agreement and the other agreements and instruments contemplated hereby have been duly and validly authorized by the Company, this Agreement has been, and each of the other agreements contemplated by this Agreement will be, duly executed and delivered by the Company and this Agreement is, and each of the other agreements contemplated by this Agreement will be, a valid and binding obligation of the Company enforceable in accordance with its terms, subject as to enforceability to general principles of equity and to bankruptcy, insolvency, moratorium and other similar laws affecting the enforcement of creditors’ rights generally.

     Section 2.4 Non-Contravention. The execution and delivery by the Company of this Agreement and the other agreements and transactions contemplated hereby to which the Company is a party, do not and will not, with or without the giving of notice or the lapse of time, or both (i) result in any violation of any terms of the charter documents of the Company; (ii) conflict with or result in a breach by the Company or any of the terms or provisions of, or

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constitute a default under, any indenture, mortgage, deed of trust or other agreement or instrument to which the Company is a party or by which the Company or any of its properties or assets is bound or affected (other than provisions of the Credit Agreement that may prohibit the Waivers and similar waivers under the Senior Note Indenture and the related consent payments) or (iii) violate or contravene any applicable law, rule or regulation or any applicable decree, judgment or order of any court or Governmental Body having jurisdiction over the Company or any of its properties or assets.

     Section 2.5 Certain Securities Law Matters. Assuming the accuracy of the representations and warranties of the Holder set forth in Article III hereof, the Shares may be issued to the Holder pursuant to this Agreement without registration under the Securities Act by reason of Section 4(2) thereof and similar provisions under applicable state securities laws.

     Section 2.6 Capitalization. The authorized capital stock of the Company is (a) 60,200,000 shares of Common Stock and (b) 10,000,000 shares of preferred stock, par value $.01 per share (the “Preferred Stock”). All of the outstanding shares of capital stock of the Company have been duly authorized and validly issued and are fully paid and nonassessable, have no preemptive rights and, to its knowledge, have been issued in accordance with applicable securities laws. As of March 17, 2006, there were: (a) 38,529,964 shares of Common Stock outstanding; and (b) there were no shares of Preferred Stock outstanding. As of March 17, 2006, without giving effect to the Company’s stockholder rights plan pursuant to which each outstanding share of Common Stock is accompanied by the right to purchase one one-thousandth (1/1000th) of a share of Series B Junior Participating Preferred Stock (the “Rights Plan”), the Company had outstanding options, warrants and similar rights entitling the holders to purchase or acquire 4,829,792 shares of Common Stock and 54,500 shares of Common Stock reserved for future grants under the Company’s equity incentive plans. Other than as set forth in the preceding sentence and with respect to the Rights Plan, the Company does not have outstanding any securities (or obligation to issue any such securities) convertible into, exchangeable for or otherwise entitling the holders thereof to acquire shares of Common Stock. The Company has duly reserved from its authorized and unissued shares of Common Stock the full number of shares required for (a) all options, warrants, convertible securities and other rights to acquire shares of Common Stock which are outstanding and (b) all shares of Common Stock and options and other rights to acquire shares of Common Stock which may be issued or granted under the stock option and similar plans which have been adopted by the Company or any of its Subsidiaries.

     Section 2.7 Rights Agreement and DGCL 203.

          (a) Subject to the accuracy of Section 3.4(b), the execution, delivery and performance of this Agreement by the Company and the Holder does not in any way trigger, or raise any rights or obligations under, that certain stockholder rights plan adopted by the Board of Directors of the Company on October 18, 2005 and evidenced by that certain Rights Agreement, dated as of October 18, 2005, between the Company and LaSalle Bank National Association, as rights agent (the “Rights Agreement”), including without limitation by reason of the fact that other Persons may be entering into consent agreements with the Company similar to this Agreement. The Board of Directors of the Company has approved this Agreement and determined that the Holder and its affiliates shall not be or be deemed to be the beneficial owner

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(within the meaning of Section 1.3 of the Rights Agreement) of any of the shares of Common Stock issued by the Company to any other Person pursuant to a consent agreement that is similar to this Agreement and the transactions contemplated hereby.

          (b) Subject to the accuracy of Section 3.4(b), this Agreement and the transactions contemplated hereby will not result in the Holder or any of its affiliates becoming an Interested Stockholder (as such term is defined in Section 203 of the Delaware General Corporation Law (the “DGCL”).

ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE HOLDER

     The Holder represents and warrants to the Company as follows:

     Section 3.1 Organization and Standing of the Holder. The Holder is duly organized, validly existing and in good standing under the laws of its jurisdiction of its incorporation or formation and has all requisite power and authority to own and operate its properties, to carry on its business as now conducted and to enter into and, as applicable, perform its obligations hereunder.

     Section 3.2 Consent Agreement and Other Transaction Documents. This Agreement and each other agreement contemplated hereby to which the Holder is a party have been duly and validly authorized on behalf of the Holder. This Agreement has been, and each of the other agreements contemplated by this Agreement will be, duly executed and delivered by the Holder and assuming due authorization, execution and delivery by the Company, this Agreement is, and each of the other agreements contemplated by this Agreement will be, a valid and binding obligation of the Holder enforceable in accordance with their terms, subject as to enforceability to general principles of equity and to bankruptcy, insolvency, moratorium and other similar laws affecting the enforcement of creditors’ rights generally.

     Section 3.3 Non-Contravention. The execution and delivery by the Holder of this Agreement and the transactions contemplated hereby to which the Holder is a party, do not and will not, with or without the giving of notice or the lapse of time, or both (i) result in any violation of any terms of the organizational documents of the Holder; (ii) conflict with or result in a breach by the Holder or any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust or other agreement or instrument to which the Holder is a party or by which the Holder or any of its properties or assets is bound or affected or (iii) violate or contravene any applicable law, rule or regulation or any applicable decree, judgment or order of any court or Governmental Body having jurisdiction over the Holder or any of its properties or assets.

     Section 3.4 Ownership.

          (a) The Holder is the beneficial owner of the aggregate principal amount of Notes as set forth under Holder’s name on the signature page hereto. There are no outstanding agreements, arrangements or understandings under which such Holder or its nominee may be obligated to Transfer any of the Notes.

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          (b) Without giving effect to the transactions contemplated by this Agreement, as of the date hereof the Holder is the beneficial owner (as defined in Rules 13d-3 and 13d-5 of the Exchange Act) of 5,555,555 shares of Common Stock.

     Section 3.5 Investor Representations. The Holder is knowledgeable, sophisticated and experienced in making, and is qualified to make, decisions with respect to investments in shares representing an investment decision like that involved in the acquisition of the Shares, including investments in securities issued by the Company. The Holder is acquiring the Shares in the ordinary course of its business and for its own account for investment (as defined for purposes of the Hart-Scott-Rodino Antitrust Improvement Act of 1976 and the regulations thereunder) only, and has no present intention of distributing any of the Shares nor any arrangement or understanding with any other persons regarding the distribution of such Shares within the meaning of Section 2(11) of the Securities Act. The Holder is an “accredited investor” within the meaning of Rule 501 of Regulation D promulgated under the Securities Act. The Holder understands that the Shares are being issued to it in reliance on specific exemptions from the registration requirements of United States federal and state securities laws and that the Company is relying upon the truth and accuracy of, and the Holder’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of the Holder set forth herein in order to determine the availability of such exemptions and the eligibility of the Holder to acquire the shares of Common Stock.

     Section 3.6 Information Provided. The Holder has been afforded the opportunity to ask questions of the Company and has received satisfactory answers to any such inquiries; and the Holder understands that its investment in the Shares involves a high degree of risk and that no Governmental Body has passed on or made any recommendation or endorsement of the Shares.

     Section 3.7 Terms of Consent. The terms of this Agreement were the result of negotiations between the Holder, the Company, and representatives of the Company and the Holder and the Holder was given the opportunity to review and comment upon the proposed terms of this Agreement.

ARTICLE IV
CERTAIN COVENANTS AND AGREEMENTS OF THE PARTIES

     Section 4.1 Further Action by Bally. Bally shall, at the written request of the Holder, at any time and from time to time following the execution of this Agreement, execute and deliver to the Holder all such further instruments and take all such further action as may be reasonably necessary or appropriate in order to confirm or carry out its obligations under this Agreement and the transactions contemplated hereby.

     Section 4.2 Publicity. Neither the Company nor the Holder shall, nor shall they permit their respective Agents to, issue or cause the publication of any press release or make any other public statement, filing or announcement with respect to this Agreement and the transactions contemplated hereby without the prior approval of the other party; provided, however, that both the Company and the Holder shall be entitled, without the prior approval of the Holder, to make any press release or other public disclosure with respect to such transactions as is required by

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applicable law or the NYSE. The Company and the Holder shall cooperate in issuing press releases or otherwise making public statements with respect to this Agreement and the transactions contemplated hereby, which cooperation shall include first consulting the other party hereto concerning the requirement for, and timing and content of, such public announcement.

     Section 4.3 Registration of Shares. (a) Promptly after the execution of this Agreement, the Company will enter into a registration rights agreement for the benefit of the holders that will be issued shares of Common Stock in exchange for the Waivers (the “Eligible Holders”), in the form attached hereto as Exhibit A.

     (b) All expenses incident to the Company’s performance of or compliance with its obligations under the registration rights agreement will be borne by the Company, including, without limitation, the reimbursement of the Eligible Holders for the reasonable expenses of one legal counsel incurred relating to the registration of the Shares and the Additional Shares as set forth above.

     Section 4.4 Approval Right. Without the prior approval of each Holder, Bally will not: increase the consideration payable to the holders of the Senior Notes for similar waivers under the Senior Notes Indenture with respect to Bally’s failure to comply with its reporting obligations thereunder in excess of the Consent Fee and the Additional Fee.

ARTICLE V
CONDITIONS PRECEDENT TO EFFECTIVENESS

     The effectiveness of: (i) the Waivers provided by the Holder pursuant to the Consent Solicitation and the obligation of the Company to pay the Consent Fee and the Additional Fee pursuant to the Consent Solicitation; and (ii) the provisions set forth in Section 1.5 hereof, will be subject to the following conditions to be set forth in the consent solicitation materials:

     Section 5.1 Consents. Bally having received: (i) requisite consents having been received (and not revoked) from holders of its Senior Notes in order to effect proposed waivers under the Senior Note Indenture similar to the Waivers; (ii) requisite consents from the necessary lenders under the Credit Agreement in order to effect proposed waivers under the Credit Agreement similar to the Waivers; and (iii) consents relating to the Waivers and the similar waivers under the Senior Note Indenture and the related consent payments having been received from the necessary lenders under the Credit Agreement.

     Section 5.2 No Violations. In the reasonable judgment of the Company, there shall not be any law or regulation, any injunction or action or other proceeding (pending or threatened) that (in the case of any action or proceeding if adversely determined) would make unlawful, invalid or enjoin the implementation of the Waivers or payment of the Consent Fee or the Additional Fee or that would question the legality or the validity thereof.

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ARTICLE VI
DEFINITIONS

     Section 6.1 Definitions. As used in this Agreement, in addition to the terms defined elsewhere, the following terms shall have the meanings set forth below, unless the context otherwise requires:

     “Agent” shall mean, with respect to any Person, any officer, director, employee, stockholder, controlling person (within the meaning of the Securities Act), affiliate or authorized agent of such Person.

     “Credit Agreement” shall mean the Credit Agreement, dated as of November 18, 1997 (as amended and restated as of October 14, 2004 and as further amended and supplemented from time to time), among Bally Total Fitness Holding Corporation, as Borrower, the Several Banks and Other Financial Institutions Parties Thereto, JPMorgan Chase Bank, as Agent, Deutsche Bank Securities Inc., as Syndication Agent, LaSalle Bank National Association, as Documentation Agent, and JPMorgan Securities Inc., as Sole Lead Arranger and Sole Bookrunner.

     “DTC” shall mean The Depository Trust Company, a limited purpose trust company.

     “DTC Participant” shall mean a participating organization in DTC.

     “Exchange Act” means the Securities Exchange Act of 1934, as amended.

     “Governmental Body” shall mean any government or political subdivision thereof, whether federal, state, local or foreign, or any agency or instrumentality of any such government or political subdivision thereof, or any federal or state court or arbitrator.

     “Holder” shall have the definition set forth in the first paragraph of this Agreement and all of its successors and assigns.

     “Person” means any individual, corporation, partnership, joint venture, trust, estate, limited liability company, unincorporated organization or governmental agency.

     “SEC” means the Securities and Exchange Commission.

     “Securities Act” means the Securities Act of 1933, as amended.

     “Senior Note Indenture” means the Indenture, dated as of July 2, 2003 (as supplemented on July 22, 2003, December 7, 2004 and September 2, 2005), by and among Bally Total Fitness Holding Corporation, as Issuer, the Guarantors party thereto and U.S. Bank National Association, as Trustee.

     “Senior Notes” means the 10 ¹/2% Senior Notes due 2011 of Bally Total Fitness Holding Corporation.

     “Trustee” shall mean U.S. Bank National Association.

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ARTICLE VII
MISCELLANEOUS

     Section 7.1 Costs, Expenses and Taxes. Each party shall bear its own costs and expenses in connection with the preparation, execution and delivery of this Agreement and the issuance of the Shares and payment of the cash consideration; provided, however, that the Company will pay for the reasonable fees and expenses of counsel to the Holder in connection with this Agreement and the transactions contemplated hereby, including, without limitation, any actions requested by the Company pursuant to Section 1.2. The Company shall pay any and all stamp and other taxes payable or determined to be payable in connection with the execution and delivery of this Agreement and the delivery of consent for the cash and Shares.

     Section 7.2 Survival of Representations. The representations, warranties, covenants and agreements of the Holder and the Company contained in this Agreement shall survive the execution of the Supplemental Indenture.

     Section 7.3 Prior Agreements. This Agreement and the other agreements contemplated hereby constitute the entire agreement between the parties concerning the subject matter hereof and supersedes any prior representations, understandings or agreements. There are no representations, warranties, agreements, conditions or covenants, of any nature whatsoever (whether express or implied, written or oral) between the parties hereto with respect to such subject matter except as expressly set forth herein and in the other agreements contemplated hereby.

     Section 7.4 Severability. The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision or the validity and enforceability of this Agreement in any other jurisdiction.

     Section 7.5 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO ITS CHOICE OF LAW RULES.

     Section 7.6 Headings. Section headings in this Agreement are included herein for convenience of reference only and shall not constitute a part of, or affect the interpretation of, this Agreement.

     Section 7.7 Counterparts. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument, and either of the parties hereto may execute this Agreement by signing any such counterpart. A facsimile transmission of this Agreement bearing a signature on behalf of a party hereto shall be legal and binding on such party.

     Section 7.8 Assignment; Binding Effect. The Holder shall not convey, assign or otherwise transfer any of its rights or obligations under this Agreement without the express written consent of Bally, and Bally shall not convey, assign or otherwise transfer any of its rights and obligations under this Agreement without the express written consent of the Holder. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns. Nothing in this Agreement will limit or otherwise

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restrict the ability of the Holder to transfer its Notes, but the agreement of the Holder to give its consent to the Waivers will bind every subsequent holder of the Notes.

     Section 7.9 Waiver; Remedies. No delay on the part of any Holder or Bally in exercising any right, power or privilege under this Agreement shall operate as a wavier thereof, nor shall any waiver on the part of any Holder or Bally of any right, power or privilege under this Agreement operate as a waiver of any other right, power or privilege of such party under this Agreement, nor shall any single or partial exercise of any right, power or privilege under this Agreement preclude any other or further exercise thereof or the exercise of any other right, power or privilege under this Agreement.

     Section 7.10 Amendment. This Agreement may be modified or amended only by written agreement of all of the parties to this Agreement.

     Section 7.11 Termination. This Agreement shall automatically terminate without any action by the parties hereto if the Supplemental Indenture implementing the Waivers has not been executed and become effective by 6:00 pm Eastern Daylight Time on May 15, 2006.

     Section 7.12 Liability. The obligations hereunder of each of the entities on the signature pages hereto that comprise the Holder shall be several, and not joint, and each such entity shall only be obligated with respect to its pro rata portion of any such obligation based on its percentage ownership of the aggregate principal amount of Notes reflected on the signature pages hereto.

[Remainder of page intentionally left blank]

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     IN WITNESS WHEREOF, the parties hereto, intending to be legally bound, have caused this Agreement to be executed by their respective duly authorized officers, as of the date first above written.

BALLY TOTAL FITNESS HOLDING CORPORATION
By:	/s/ Marc D. Bassewitz
Name:
Title:
PARDUS EUROPEAN SPECIAL OPPORTUNITIES MASTER FUND L.P.
By:	Pardus Capital Management L.P., its investment manager
By:	Pardus Capital Management LLC, its general partner
By:	/s/ Karim Samii
	Name: Karim Samii
	Title: Sole Member

Date: March 22, 2006

EX-10.4

Exhibit 10.4

AMENDED AND RESTATED

REGISTRATION RIGHTS AGREEMENT

by and among

BALLY TOTAL FITNESS HOLDING CORPORATION

and

THE HOLDERS NAMED HEREIN

Dated as of April 13, 2006

Table of Contents

		Page
1.	Definitions		1
2.	Securities Act Registration on Request		3
	(a) Request		3
	(b) Registration of Other Securities		4
	(c) Registration Statement Form		4
	(d) Effective Registration Statement		4
3.	Piggyback Registration		4
4.	Expenses		6
5.	Registration Procedures		6
6.	Piggyback Underwritten Offerings		9
	(a) Priority		9
	(b) Holders of Registrable Common Stock to be Parties to Underwriting Agreement		9
	(c) Holdback Agreements		10
7.	Postponements		10
8.	Indemnification		11
	(a) Indemnification by the Company		11
	(b) Indemnification by the Offerors and Sellers		12
	(c) Notices of Losses, etc.		12
	(d) Contribution		13
	(e) Other Indemnification		13
	(f) Indemnification Payments		13
9.	Registration Rights to Others		13
10.	Adjustments Affecting Registrable Common Stock		14
11.	Amendments and Waivers		14
12.	Nominees for Beneficial Owners		14
13.	No Assignment		14
14.	Termination of Registration Rights		14
15.	Miscellaneous		14
	(a) Further Assurances		14

		Page
	(b) Headings		15
	(c) Conflicting Instructions		15
	(d) Remedies		15
	(e) Entire Agreement		15
	(f) Notices		15
	(g) Governing Law		15
	(h) Severability		15
	(i) Counterparts		16
SCHEDULES:
SCHEDULE A –NOTICES

AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT

          AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT, dated as of April 13, 2006 (this “Agreement”), by and among Bally Total Fitness Holding Corporation, a Delaware corporation (the “Company”), and the holders of Registrable Common Stock (as hereinafter defined) who were signatories to the Original Registration Rights Agreement (the “Original Holders”).

          To induce the Original Holders to deliver their consent in connection with the waiver extension relating to the 9 7/8% Notes (as hereinafter defined) and to accept the issuance of the Common Stock by the Company, the Company has undertaken to register Registrable Common Stock under the Securities Act (as hereinafter defined) and to take certain other actions with respect to the Registrable Common Stock, the parties previously entered into a Registration Rights Agreement on January 17, 2006 (the “Original Registration Rights Agreement”). In connection with the receipt of consents in connection with a waiver relating to the 9 7/8% Notes and the 10 1/2% Notes (as hereinafter defined) on April 7, 2006, the Company has undertaken to register additional Registrable Common Stock under the Securities Act. The parties desire to amend and restate the Original Registration Rights Agreement to set forth the terms and conditions of such undertakings.

          In consideration of the premises and the mutual agreements set forth herein, the parties hereto hereby agree as follows:

     1. Definitions. Unless otherwise defined herein, capitalized terms used herein and in the recitals above shall have the following meanings:

          “Affiliate” of a Person means any Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such other Person. For purposes of this definition, “control” means the ability of one Person to direct the management and policies of another Person.

          “Business Day” means any day except a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to be closed.

          “Commission” means the U.S. Securities and Exchange Commission.

          “Common Stock” means the shares of common stock, $.01 par value per share, of the Company, as adjusted to reflect any merger, consolidation, recapitalization, reclassification, split-up, stock dividend, rights offering or reverse stock split made, declared or effected with respect to the Common Stock.

          “Company Indemnitee” has the meaning set forth in Section 8(a) hereof.

          “Consent Agreements” means the several Consent Agreements, dated as of August 24, 2005, among the Company and the Original Holders.

          “Consent Solicitation” means: (i) the Company’s receipt of consents in the Consent Agreements pursuant to which the Company obtained an extension through November

30, 2005 of a waiver to comply with certain covenants in the indenture relating to the Company’s 9 7/8% Senior Subordinated Notes due 2007 (the “9 7/8% Notes”); (ii) the related solicitation of consents described in the Offering Memorandum/Consent Solicitation Statement, dated as of October 18, 2005, and the related Letter of Consent (the “Follow-On Consent Solicitation”); and (iii) the Company’s solicitation of consents with respect to its 9 7/8% Notes and its 10 1/2% Senior Notes due 2011 (the “10 1/2% Notes”) described in the Offering Memorandum/Consent Solicitation Statements, dated as of March 27, 2006, and the related Letters of Consent (the “Third Consent Solicitation”).

          “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder, or any similar or successor statute.

          “Expenses” means all expenses incident to the Company’s performance of or compliance with its obligations under this Agreement, including, without limitation, all registration, filing, listing, stock exchange and NASD fees, all fees and expenses of complying with state securities or blue sky laws (including the reasonable fees, disbursements and other charges of counsel for the underwriters in connection with blue sky filings), all word processing, duplicating and printing expenses, messenger, telephone and delivery expenses, all rating agency fees, the fees, disbursements and other charges of counsel for the Company and of its independent public accountants, the fees and expenses incurred in connection with the listing of the securities to be registered on each securities exchange or national market system on which similar securities issued by the Company are then listed, the fees and expenses of any special experts retained by the Company in connection with such registration, the fees and expenses of other persons retained by the Company, and the reasonable fees and expenses of one legal counsel to the Original Holders (as designated by the Majority Holder) relating to the registration of the Registrable Common Stock as provided herein, but excluding applicable transfer taxes, if any, which transfer taxes shall be borne by the seller or sellers of Registrable Common Stock in all cases,.

          “Holder Indemnitee” has the meaning set forth in Section 8(b) hereof.

          “Holders” shall mean the Original Holders, the holders that received Registrable Common Stock in the Follow-On Consent Solicitation and the holders that received Registrable Common Stock in the Third Consent Solicitation.

          “Initiating Holder(s)” means at the time of any Initiating Request: (i) a Majority Holder; or (ii) one or more Original Holders which collectively own a majority of the shares of Common Stock issued in the Consent Agreements.

          “Initiating Request” has the meaning set forth in Section 2(a) hereof.

          “Loss” and “Losses” have the meanings set forth in Section 8(a) hereof.

          “Majority Holder” means any Original Holder which, together with its Affiliates, beneficially owns a majority of the shares of Common Stock issued to the Original Holders pursuant to the Consent Agreements.

          “NASD” means the National Association of Securities Dealers, Inc.

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          “NYSE” means the New York Stock Exchange.

          “Offering Documents” has the meaning set forth in Section 8(a) hereof.

          “Person” means any individual, corporation, partnership, firm, joint venture, association, joint stock company, trust, unincorporated organization, governmental or regulatory body or subdivision thereof or other entity.

          “Piggyback Requesting Holder” has the meaning set forth in Section 3 hereof.

          “Public Offering” means a public offering and sale of Common Stock pursuant to an effective registration statement (other than a registration statement on Form S-4 or Form S-8 or any successor or similar forms) under the Securities Act.

          “Registrable Common Stock” means any of the Common Stock owned by the Holders from time to time, whether now or in the future, and any other securities issued or issuable with respect to or in exchange for such shares of Common Stock; provided, however, that a share of Common Stock will cease to be Registrable Common Stock after it has been sold: (a) under a registration statement effected pursuant hereto; or (b) pursuant to Rule 144 promulgated under the Securities Act.

          “Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations thereunder, or any similar or successor statute.

          “Selling Holders” means the Holders of Registrable Common Stock requested to be registered pursuant to Section 2(a) or 3 hereof.

          “Transfer” means any transfer, sale, assignment, pledge, hypothecation or other disposition of any interest. “Transferor” and “Transferee” have correlative meanings.

     2. Securities Act Registration on Request.

          (a) Request. At any time and from time to time after the Company becomes eligible to use a short form registration statement on Form S-3 or any successor form and if the Company’s obligations hereunder have not terminated pursuant to and in accordance with the terms of Section 14 hereof, any Initiating Holder(s) may on one occasion make a written request (the “Initiating Request”) for the registration with the Commission under the Securities Act of all or part of the Registrable Common Stock of such Initiating Holder(s); provided, however, that such request shall specify the number of shares to be disposed of by such Holders and the proposed plan of distribution therefor; upon the receipt of any Initiating Request for registration pursuant to this paragraph, the Company promptly shall notify in writing all other Holders of Registrable Common Stock of the receipt of such request and will use its reasonable best efforts to effect, at the earliest practicable date, such registration under the Securities Act, including a shelf registration, if applicable, of:

     (i) the Registrable Common Stock which the Company has been so requested to register by such Initiating Holder(s), and

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     (ii) all other Registrable Common Stock which the Company has been requested to register by any other Holders by written request given to the Company within 15 days after the giving of written notice by the Company to such other Holders of the Initiating Request,

all to the extent necessary to permit the disposition (in accordance with Section 2(c) hereof) of the Registrable Common Stock so to be registered; provided that, any Holder whose Registrable Common Stock was to be included in any such registration pursuant to this Section 2(a), by written notice to the Company, may withdraw such request and, on receipt of such notice of the withdrawal of such request from Holders holding a percentage of Registrable Common Stock, such that the Holders that have not elected to withdraw do not hold, in the aggregate, the requisite percentage of the Registrable Common Stock to constitute Initiating Holder(s), the Company shall not effect such registration.

          (b) Registration of Other Securities. Whenever the Company shall effect a registration pursuant to Section 2(a) hereof, no securities other than Registrable Common Stock shall be included among the securities covered by such registration.

          (c) Registration Statement Form. Registrations under Section 2(a) hereof shall be on Form S-3 or such other appropriate short-form registration form prescribed by the Commission under the Securities Act as shall permit the disposition of the Registrable Common Stock pursuant to Rule 415 (or any successor rule) under the Securities Act. The Company agrees to include in any such registration statement filed pursuant to Section 2(a) hereof all information which the Selling Holders holding a majority of shares of the Registrable Common Stock covered by such registration statement effected pursuant hereto, upon advice of counsel, shall reasonably request.

          (d) Effective Registration Statement. A registration requested pursuant to Section 2(a) hereof shall not be deemed to have been effected:

     (i) unless a registration statement with respect thereto has been declared effective by the Commission and remains effective in compliance with the provisions of the Securities Act and the laws of any state or other jurisdiction applicable to the disposition of Registrable Common Stock covered by such registration statement until April 13, 2008; or

     (ii) if, after it has become effective, such registration is interfered with by any stop order, injunction or other order or requirement of the Commission or other governmental or regulatory agency or court for any reason other than a violation of applicable law solely by any Selling Holder and has not thereafter become effective.

          The Holders of Registrable Common Stock to be included in a registration statement may at any time terminate a request for registration made pursuant to Section 2(a) in accordance with Section 2(a)(ii).

     3. Piggyback Registration. If the Company proposes to register any of its Common Stock under the Securities Act by registration on any forms other than Form S-4 or S-8 (or any

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successor or similar form(s)), whether or not pursuant to registration rights granted to other holders of its Common Stock and whether or not for sale for its own account, and a registration statement filed pursuant to Section 2 hereof has not been declared effective, it shall give prompt written notice to all of the Holders of its intention to do so and of such Holders’ rights (if any) under this Section 3, which notice, in any event, shall be given at least 30 days prior to the effectiveness of such proposed registration. Upon the written request of any Holder receiving notice of such proposed registration that is a Holder of Registrable Common Stock (a “Piggyback Requesting Holder”) made within 15 days after the receipt of any such notice (10 days if the Company states in such written notice or gives telephonic notice to the relevant securityholders, with written confirmation to follow promptly thereafter, stating that (i) such registration will be on Form S-3 and (ii) such shorter period of time is required because of a planned effectiveness date), which request shall specify the Registrable Common Stock intended to be disposed of by such Piggyback Requesting Holder and the minimum offering price per share at which the Holder is willing to sell its Registrable Common Stock, the Company shall, subject to Section 6(a) hereof, effect the registration under the Securities Act of all Registrable Common Stock which the Company has been so requested to register by the Piggyback Requesting Holders thereof; provided that,

     (A) prior to the effective date of the registration statement filed in connection with such registration, promptly following receipt of notification by the Company from the managing underwriter (if an underwritten offering pursuant to Section 6) of the price at which such securities are to be sold, the Company shall so advise each Piggyback Requesting Holder of such price, and if such price is below the minimum price which any Piggyback Requesting Holder shall have indicated to be acceptable to such Piggyback Requesting Holder, such Piggyback Requesting Holder shall then have the right irrevocably to withdraw its request to have its Registrable Common Stock included in such registration statement, by delivery of written notice of such withdrawal to the Company within five Business Days of its being advised of such price, without prejudice to the rights of any Holder(s) of Registrable Common Stock to include Registrable Common Stock in any future registration (or registrations) pursuant to this Section 3 or to cause a registration to be effected under Section 2(a) hereof, as the case may be;

     (B) if at any time after giving written notice of its intention to register any securities and prior to the effective date of the registration statement filed in connection with such registration, the Company shall determine for any reason not to register or to delay registration of such securities, the Company may, at its election, give written notice of such determination to each Piggyback Requesting Holder and (i) in the case of a determination not to register, shall be relieved of its obligation to register any Registrable Common Stock in connection with such registration (but not from any obligation of the Company to pay the Expenses in connection therewith), without prejudice, however, to the rights of any Holder to include Registrable Common Stock in any future registration (or registrations) pursuant to this Section 3 or to cause a registration to be effected under Section 2(a) hereof, as the case may be, and (ii) in the case of a determination to delay registering, shall be permitted to delay registering any

5

      Registrable Common Stock, for the same period as the delay in registering such other securities; and

     (C) if such registration was initiated by the Company for its own account and involves an underwritten offering, each Piggyback Requesting Holder shall sell its Registrable Common Stock on the same terms and conditions as those that apply to the Company, and the underwriters of each such piggyback underwritten offering shall be a nationally recognized underwriter (or underwriters) selected by the Company.

          No registration effected under this Section 3 shall relieve the Company of its obligation to effect any registration upon request under Section 2(a) hereof and no registration effected pursuant to this Section 3 shall be deemed to have been effected pursuant to Section 2(a) hereof.

     4. Expenses. The Company shall pay all Expenses in connection with any registration initiated pursuant to Sections 2(a) or 3 hereof, whether or not such registration shall become effective and whether or not all or any portion of the Registrable Common Stock originally requested to be included in such registration are ultimately included in such registration.

     5. Registration Procedures. If and whenever the Company is required to effect any registration under the Securities Act as provided in Sections 2(a) and 3 hereof, the Company shall, as expeditiously as possible:

     (a) prepare and file with the Commission (within 30 days in the case of a registration initiated pursuant to Section 2(a) hereof) the requisite registration statement to effect such registration and thereafter use its reasonable best efforts to cause such registration statement to become and remain effective; provided, however, that the Company may discontinue any registration of its securities that are not shares of Registrable Common Stock (and, under the circumstances specified in Sections 3 and 7(b) hereof, its securities that are shares of Registrable Common Stock) at any time prior to the effective date of the registration statement relating thereto;

     (b) prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective and to comply with the provisions of the Securities Act and the Exchange Act with respect to the disposition of all Registrable Common Stock covered by such registration statement until April 13, 2008, or such time as all of such Registrable Common Stock has been disposed of in accordance with the method of disposition set forth in such registration statement;

     (c) furnish to each seller of Registrable Common Stock covered by such registration statement and each underwriter, if any, such number of copies of such drafts and final conformed versions of such registration statement and of each such amendment and supplement thereto (in each case including all exhibits and any documents incorporated by reference), such number of copies of such drafts and final versions of the

6

prospectus contained in such registration statement (including each preliminary prospectus and any summary prospectus) and any other prospectus filed under Rule 424 under the Securities Act, in conformity with the requirements of the Securities Act, and such other documents, as the sellers of a majority of the Registrable Common Stock covered by such registration statement or any underwriter may reasonably request in writing;

     (d) use its reasonable best efforts (i) to register or qualify all Registrable Common Stock and other securities, if any, covered by such registration statement under such other securities or blue sky laws of such states or other jurisdictions of the United States of America as the sellers of Registrable Common Stock covered by such registration statement shall reasonably request in writing, (ii) to keep such registration or qualification in effect for so long as such registration statement remains in effect and (iii) to take any other action that may be necessary or reasonably advisable to enable such sellers to consummate the disposition in such jurisdictions of the securities to be sold by such sellers, except that the Company shall not for any such purpose be required to qualify generally to do business as a foreign corporation in any jurisdiction wherein it would not but for the requirements of this subsection (d) be obligated to be so qualified, to subject itself to taxation in such jurisdiction or to consent to general service of process in any such jurisdiction;

     (e) use its reasonable best efforts to cause all Registrable Common Stock and other securities, if any, covered by such registration statement to be registered with or approved by such other federal or state governmental agencies or authorities as may be necessary in the opinion of counsel to the Company and counsel to the seller or sellers of Registrable Common Stock to enable the seller or sellers thereof to consummate the disposition of such Registrable Common Stock;

     (f) notify each seller of Registrable Common Stock and other securities covered by such registration statement, if any, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, upon discovery that, or upon the happening of any event as a result of which, the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances under which they were made, and, at the written request of any such seller of Registrable Common Stock, promptly prepare and furnish to it a reasonable number of copies of a supplement to or an amendment of such prospectus as may be necessary so that, as thereafter delivered to the purchasers of such securities, such prospectus, as supplemented or amended, shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances under which they were made;

     (g) use its reasonable best efforts to obtain the withdrawal of any order suspending the effectiveness of a registration statement relating to the Registrable Common Stock at the earliest possible moment;

7

     (h) otherwise comply with all applicable rules and regulations of the Commission and any other governmental agency or authority having jurisdiction over the offering, and make available to its security holders, as soon as reasonably practicable, an earnings statement covering the period of at least twelve months, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 promulgated thereunder, and furnish to each seller of Registrable Common Stock and to the managing underwriter, if any, at least ten days prior to the filing thereof a copy of any amendment or supplement to such registration statement or prospectus;

     (i) use its reasonable best efforts to cause all Registrable Common Stock covered by a Registration Statement to be listed on a national securities exchange on which similar securities issued by the Company are then listed, if the listing of such Registrable Common Stock is then permitted under the rules of such exchange;

     (j) provide a transfer agent and registrar for the Registrable Common Stock covered by a registration statement no later than the effective date thereof;

     (k) enter into such agreements and take such other actions as the Holders holding a majority of the shares of Registrable Common Stock covered by such registration statement shall reasonably request in order to expedite or facilitate the disposition of such Registrable Common Stock; and

     (l) if requested by the Holders holding a majority of the shares of Registrable Common Stock being sold, cooperate with such Holders to facilitate the timely preparation and delivery of certificates representing Registrable Common Stock to be sold and not bearing any restrictive legends; and enable such Registrable Common Stock to be in such share amounts and registered in such names as the managing underwriter(s) or, if none, the Holders holding a majority of the shares of Registrable Common Stock being sold, may request at least five Business Days prior to any sale of Registrable Common Stock to the underwriters;

          As a condition to the obligations of the Company to complete any registration pursuant to this Agreement with respect to the Registrable Common Stock of any particular Holder, such Holder must furnish to the Company in writing such information regarding itself, the Registrable Common Stock held by it and the intended methods of disposition of the Registrable Common Stock held by it as is necessary to effect the registration of such Holders’ Registrable Common Stock and is requested in writing by the Company. At least: (i) 20 days prior to the first anticipated filing date of a Registration Statement for registration under Section 2 of this Agreement; or (ii) 20 days prior to the anticipated effectiveness date of a Registration Statement filed under Section 3 of this Agreement, the Company will notify in writing each Holder of the information referred to in the preceding sentence which the Company is requesting from that Holder whether or not such Holder has elected to have any of its Registrable Common Stock included in the Registration Statement. If, within ten days prior to the anticipated filing date or effectiveness date, as the case may be, the Company has not received the requested information from a Holder, then the Company may file the Registration Statement without including Registrable Common Stock of that Holder.

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          Each Original Holder agrees that as of the date that a final prospectus is made available to it for distribution to prospective purchasers of Registrable Common Stock it shall cease to distribute copies of any preliminary prospectus prepared in connection with the offer and sale of such Registrable Common Stock. Each Original Holder further agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in subsection (f) of this Section 5, such Original Holder shall forthwith discontinue such Original Holder’s disposition of Registrable Common Stock pursuant to the registration statement relating to such Registrable Common Stock until such Original Holder’s receipt of the copies of the supplemented or amended prospectus contemplated by subsection (f) of this Section 5 and, if so directed by the Company, shall deliver to the Company (at the Company’s expense) all copies, other than permanent file copies, then in such Original Holder’s possession of the prospectus relating to such Registrable Common Stock current at the time of receipt of such notice. If any event of the kind described in subsection (f) of this Section 5 occurs and such event is the fault solely of an Original Holder(s), such Original Holder(s) shall pay all Expenses directly attributable to the preparation, filing and delivery of any supplemented or amended prospectus contemplated by subsection (f) of this Section 5. In the event a Holder that is not an Original Holder elects to have shares of its Registrable Common Stock included in a registration statement, such Holder will have agreed with each of the preceding requirements in the notice it provides to the Company regarding the inclusion of shares of its Registrable Common Stock in such registration statement.

     6. Piggyback Underwritten Offerings.

          (a) Priority. Prior to the effectiveness of a registration statement filed pursuant to Section 2 hereof, if the Company proposes to register any of its Common Stock under the Securities Act for its own account as contemplated by Section 3 hereof and such securities are to be distributed by or through one or more underwriters, and if the managing underwriter of such underwritten offering shall advise the Company in writing (with a copy to the Piggyback Requesting Holders) that if all the Registrable Common Stock requested to be included in such registration were so included, in its opinion, the number and type of securities proposed to be included in such registration would exceed the number and type of securities which could be sold in such offering within a price range acceptable to the Company (such writing to state the basis of such opinion and the approximate number and type of securities which may be included in such offering without such effect), then the Company shall include in such registration pursuant to Section 3, to the extent of the number and type of securities which the Company is so advised can be sold in such offering, (i) first, securities that the Company proposes to issue and sell for its own account, (ii) second, Registrable Common Stock requested to be registered by Piggyback Requesting Holders pursuant to Section 3 hereof, pro rata among the Piggyback Requesting Holders on the basis of the number of shares of Registrable Common Stock requested to be registered by all such Piggyback Requesting Holders and (iii) third, other securities, if any.

          Any Holder may withdraw its request to have all or any portion of its Registrable Common Stock included in any such offering by notice to the Company within 10 Business Days after receipt of a copy of a notice from the managing underwriter pursuant to this Section 6(b).

          (b) Holders of Registrable Common Stock to be Parties to Underwriting Agreement. The holders of Registrable Common Stock to be distributed by underwriters in an

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underwritten offering contemplated by subsection (a) of this Section 6 shall be parties to the underwriting agreement between the Company and such underwriters, but shall have only those obligations and make only those representations and warranties as are customary with respect to selling stockholders, as opposed to issuers, in an underwritten public offering.

          (c) Holdback Agreements. Each Original Holder agrees, if required by the managing underwriter for any underwritten offering pursuant to this Agreement, not to effect any sale or distribution of any equity securities of the Company or securities convertible into or exchangeable or exercisable for equity securities of the Company, including any sale under Rule 144 under the Securities Act, during the 10 days prior to the date on which an underwritten registration of Registrable Common Stock pursuant to Section 3 hereof in which such Original Holder is participating has become effective and until 90 days (or such lesser period as may be required by the managing underwriter) after the effective date of such underwritten registration in which such Original Holder is participating, except as part of such underwritten registration or to the extent that such Original Holder is prohibited by applicable law from agreeing to withhold securities from sale or is acting in its capacity as a fiduciary or an investment adviser. Without limiting the scope of the term “fiduciary,” a holder shall be deemed to be acting as a fiduciary or an investment adviser if its actions or the securities proposed to be sold are subject to the Employee Retirement Income Security Act of 1974, as amended, the Investment Company Act of 1940, as amended, or the Investment Advisers Act of 1940, as amended, or if such securities are held in a separate account under applicable insurance law or regulation.

          The Company agrees not to effect any Public Offering or distribution of any equity securities of the Company, or securities convertible into or exchangeable or exercisable for equity securities of the Company, during the 10 days prior to the date on which any underwritten registration pursuant to Section 2 or 3 hereof has become effective and until 90 days after the effective date of such underwritten registration, except as part of such underwritten registration.

     7. Postponements.

          (a) If the Company shall fail to file any registration statement required to be filed pursuant to a request for registration under Section 2(a) hereof within 30 days, the Initiating Holder(s) requesting such registration shall have the right to withdraw the request for registration if such withdrawal shall be made by Holders of Registrable Common Stock holding an amount of Registrable Common Stock such that the Holders that have not elected to withdraw do not hold the requisite percentage of shares of Registrable Common Stock to constitute Initiating Holders(s). In the event of such withdrawal, the request for registration shall not be counted for purposes of determining the number of registrations to which Holders are entitled pursuant to Section 2 hereof. The Company shall pay all Expenses incurred in connection with a request for registration withdrawn pursuant to this paragraph.

          (b) The Company may delay or suspend the filing or effectiveness of any registration statement, or file any amendment or supplement to any registration statement, and may suspend any Selling Holder’s rights to make sales pursuant to any effective registration statement, if the Company provides to the Selling Holders a written notice certifying that the Board of Directors of the Company has determined reasonably and in good faith that the initial

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filing of the registration statement (or any subsequent amendment or supplement thereto), the initial effectiveness of the registration statement or the continuing effectiveness thereof would require the disclosure of material non-public information that would be detrimental to the Company if so disclosed or would otherwise materially adversely affect a financing, acquisition, disposition, merger or other material transaction. The filing of a registration statement, or any amendment or supplement thereto, by the Company or the effectiveness thereof cannot be deferred or suspended, as the case may be, and the Selling Holders’ rights to make sales pursuant to an effective registration statement cannot be suspended, pursuant to the provisions of the preceding sentence for more than 30 days after the abandonment or consummation of any of the foregoing transactions; provided, however, that the Company may so defer or suspend the use of any registration statement no more than 60 days in a calendar year. If the Company suspends the Selling Holders’ rights to make sales pursuant hereto, the applicable registration period shall be extended by the number of days of such suspension.

     8. Indemnification.

          (a) Indemnification by the Company. In connection with any registration statement filed by the Company pursuant to Section 2(a) or 3 hereof, to the fullest extent permitted by law the Company shall, and hereby agrees to, indemnify and hold harmless, each Original Holder and seller of any Registrable Common Stock covered by such registration statement and each other Person, if any, who controls (within the meaning of the Exchange Act) such Original Holder or seller, and their respective stockholders, directors, officers, employees, partners, agents and Affiliates (each, a “Company Indemnitee” for purposes of this Section 8(a)), against any losses, claims, damages, liabilities (or actions or proceedings, whether commenced or threatened, in respect thereof and whether or not such Company Indemnitee is a party thereto), joint or several, and expenses, including, without limitation, the reasonable fees, disbursements and other charges of legal counsel and reasonable costs of investigation, to which such Company Indemnitee may become subject under the Securities Act or otherwise (collectively, a “Loss” or “Losses”), insofar as such Losses arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in any registration statement under which such securities were registered or otherwise offered or sold under the Securities Act or otherwise, any preliminary prospectus, final prospectus or summary prospectus related thereto, or any amendment or supplement thereto (collectively, “Offering Documents”) (or any document incorporated by reference therein), or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein in the light of the circumstances in which they were made not misleading, or any violation by the Company of any federal or state law, rule or regulation applicable to the Company and relating to action required of or inaction by the Company in connection with any such registration; provided, however, the Company shall not be liable to any particular Company Indemnitee, but only such Company Indemnitee, in any such case to the extent that any such Loss arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in such Offering Documents in reliance upon and in conformity with information furnished to the Company in a writing duly executed by such Company Indemnitee specifically stating that it is expressly for use therein. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such Company Indemnitee and shall survive the transfer of such securities by such Company Indemnitee.

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     (b) Indemnification by the Offerors and Sellers. In connection with any registration statement filed by the Company pursuant to Section 2(a) or 3 hereof in which an Original Holder has registered for sale Registrable Common Stock, each such Original Holder shall, and hereby agrees to, indemnify and hold harmless to the fullest extent permitted by law the Company and each of its directors, officers, employees, agents, partners, stockholders, Affiliates and each other Person, if any, who controls (within the meaning of the Exchange Act) the Company and each other seller and such seller’s employees, directors, officers, stockholders, partners, agents and Affiliates (each, a “Holder Indemnitee” for purposes of this Section 8(b)), against all Losses insofar as such Losses arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in any Offering Documents (or any document incorporated by reference therein) or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein in the light of circumstances in which they were made not misleading, if such untrue statement or alleged untrue statement or omission was made in reliance upon and in conformity with information furnished to the Company in writing duly executed by such Original Holder specifically stating that it is expressly for use therein; provided, however, that the liability of such indemnifying party under this Section 8(b) shall be limited to the amount of the net proceeds received by such indemnifying party in the sale of Registrable Common Stock giving rise to such liability. Such indemnity shall remain in full force and effect, regardless of any investigation made by or on behalf of the Holder Indemnitee and shall survive the transfer of such securities by such indemnifying party.

     (c) Notices of Losses, etc. Promptly after receipt by an indemnified party of written notice of the commencement of any action or proceeding involving a Loss referred to in the preceding subsections of this Section 8, such indemnified party will, if a claim in respect thereof is to be made against an indemnifying party, give written notice to the latter of the commencement of such action; provided, however, that the failure of any indemnified party to give notice as provided herein shall not relieve the indemnifying party of its obligations under the preceding subsections of this Section 8, except to the extent that the indemnifying party is materially and actually prejudiced by such failure to give notice. In case any such action is brought against an indemnified party, the indemnifying party shall be entitled to participate in and, unless in such indemnified party’s reasonable judgment a conflict of interest between such indemnified and indemnifying parties may exist in respect of such Loss, to assume and control the defense thereof, in each case at its own expense, jointly with any other indemnifying party similarly notified, to the extent that it may wish, with counsel reasonably satisfactory to such indemnified party, and after its assumption of the defense thereof, the indemnifying party shall not be liable to such indemnified party for any legal or other expenses subsequently incurred by the latter in connection with the defense thereof other than reasonable costs of investigation, unless in such indemnified party’s reasonable judgment a conflict of interest between such indemnified and indemnifying parties arises in respect of such claim after the assumption of the defense thereof. No indemnifying party shall be liable for any settlement of any such action or proceeding effected without its written consent, which shall not be unreasonably withheld. No indemnifying party shall, without the consent of the indemnified party, consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect of such Loss or which requires action on the part of such indemnified party or otherwise subjects the indemnified party to any obligation or restriction to which it would not otherwise be

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subject. Notwithstanding any of the foregoing, nothing in this Section 8 shall require the Company to reimburse the reasonable fees and expenses of more than one counsel for any indemnified parties where the Company is the indemnifying party.

          (d) Contribution. If the indemnification provided for in this Section 8 shall for any reason be unavailable to an indemnified party under subsection (a) or (b) of this Section 8 in respect of any Loss, then, in lieu of the amount paid or payable under subsection (a) or (b) of this Section 8, the indemnified party and the indemnifying party under subsection (a) or (b) of this Section 8 shall contribute to the aggregate Losses (including legal or other expenses reasonably incurred in connection with investigating the same) (i) in such proportion as is appropriate to reflect the relative fault of the Company and the prospective sellers of Registrable Common Stock covered by the registration statement which resulted in such Loss or action in respect thereof, with respect to the statements, omissions or action which resulted in such Loss or action in respect thereof, as well as any other relevant equitable considerations, or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as shall be appropriate to reflect the relative benefits received by the Company, on the one hand, and such prospective sellers, on the other hand, from their sale of Registrable Common Stock; provided that, for purposes of this clause (ii), the relative benefits received by the prospective sellers shall be deemed not to exceed the net proceeds received by such sellers. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. The obligations, if any, of the Original Holders of Registrable Common Stock to contribute as provided in this subsection (d) are several in proportion to the relative value of their respective Registrable Common Stock covered by such registration statement and not joint. In addition, no Person shall be obligated to contribute hereunder any amounts in payment for any settlement of any action or Loss effected without such Person’s consent.

          (e) Other Indemnification. The Company and each Original Holder who has registered for sale shares of its Registrable Common Stock shall, with respect to any required registration or other qualification of securities under any Federal or state law or regulation of any governmental authority other than the Securities Act, indemnify Holder Indemnitees and Company Indemnitees, respectively, against Losses, or, to the extent that indemnification shall be unavailable to a Holder Indemnitee or Company Indemnitee, contribute to the aggregate Losses of such Holder Indemnitee or Company Indemnitee in a manner similar to that specified in the preceding subsections of this Section 8 (with appropriate modifications).

          (f) Indemnification Payments. The indemnification and contribution required by this Section 8 shall be made by periodic payments of the amount thereof during the course of any investigation or defense, as and when any Loss is incurred and is due and payable.

     9. Registration Rights to Others. The Company’s Board of Directors is expressly permitted, by majority vote, to provide to any holder of newly issued shares of the Company’s Common Stock or any other securities of the Company rights with respect to the registration of such Common Stock or other securities of the Company under the Securities Act; provided that the Holders shall have the rights specified in Section 3 with respect to any applicable registration requested by other Holders.

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     10. Adjustments Affecting Registrable Common Stock. Without the written consent of Original Holders of a majority of the outstanding shares of Registrable Common Stock issued pursuant to the Consent Agreements, the Company shall not effect or permit to occur any combination, subdivision or reclassification of Registrable Common Stock that would materially adversely affect the ability of the Holders to include such Registrable Common Stock in any registration of its securities under the Securities Act contemplated by this Agreement or the marketability of such Registrable Common Stock under any such registration or other offering.

     11. Amendments and Waivers. Any provision of this Agreement may be amended, modified or waived if, but only if, the written consent to such amendment, modification or waiver has been obtained from the Original Holder(s) of at least a majority of the shares of Registrable Common Stock issued pursuant to the Consent Agreements affected by such amendment, modification or waiver.

     12. Nominees for Beneficial Owners. In the event that any Registrable Common Stock is held by a nominee for the beneficial owner thereof, the beneficial owner thereof may, at its election in writing delivered to the Company, be treated as the Holder of such Registrable Common Stock for purposes of any request or other action by any Holder(s) pursuant to this Agreement or any determination of the number or percentage of shares of Registrable Common Stock held by any Holder(s) contemplated by this Agreement. If the beneficial owner of any Registrable Common Stock so elects, the Company may require assurances reasonably satisfactory to it of such owner’s beneficial ownership of such Registrable Common Stock.

     13. No Assignment. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, successors and permitted assigns. The Holders may, at their election, at any time or from time to time, assign their rights under this Agreement, in whole or in part, to any Transferee of shares of Registrable Common Stock held by them to the extent such Transferee agrees in writing to be bound by all of the provisions applicable hereunder to the transferring Holder. The Company may not assign this Agreement or any right, remedy, obligation or liability arising hereunder or by reason hereof.

     14. Termination of Registration Rights. The Company’s obligations under Sections 2(a) and 3 hereof to register Common Stock for sale under the Securities Act shall terminate on April 13, 2008.

     15. Rule 144. The Company shall take all actions reasonably necessary to enable each Holder to sell such securities without registration under the Securities Act within the limitation of the exemptions provided by (i) Rule 144, or (ii) any similar rule or regulation hereafter adopted by the Commission including, without limitation, filing on a timely basis all reports required to be filed by the Exchange Act. Upon the request of any Holder, the Company will deliver to such Holder a written statement as to whether it has complied with such requirements.

     16. Miscellaneous

          (a) Further Assurances. Each of the parties hereto shall execute such documents and other papers and perform such further acts as may be reasonably required or

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advisable to carry out the provisions of this Agreement and the transactions contemplated hereby.

          (b) Headings. The headings in this Agreement are for convenience of reference only and shall not control or affect the meaning or construction of any provisions hereof.

          (c) Conflicting Instructions. A person or entity is deemed to be a holder of Registrable Common Stock whenever such person or entity owns of record such Registrable Common Stock. If the Company receives conflicting instructions, notices or elections from two or more persons or entities with respect to the same Registrable Common Stock, the Company will act upon the basis of instructions, notice or election received from the registered owner of such Registrable Common Stock.

          (d) Remedies. Each Original Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Agreement. The parties hereto agree that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Agreement and the parties hereto hereby agree to waive the defense in any action for specific performance that a remedy at law would be adequate.

          (e) Entire Agreement. This Agreement constitutes the entire agreement and understanding of the parties hereto in respect of the subject matter contained herein, and there are no restrictions, promises, representations, warranties, covenants, or undertakings with respect to the subject matter hereof, other than those expressly set forth or referred to herein. This Agreement supersedes all prior agreements and understandings between the parties hereto with respect to the subject matter hereof.

          (f) Notices. Any notices or other communications to be given hereunder by any party to another party shall be in writing, shall be delivered personally, by telecopy, by certified or registered mail, postage prepaid, return receipt requested, or by Federal Express or other comparable delivery service, in the case of Original Holders or the Company, to the address of the party set forth on Schedule A hereto and, in the case of other Holders, to the address found in the records of the Company’s transfer agent and registrar, or to such other address as the party to whom notice is to be given may provide in a written notice to the other parties hereto, a copy of which shall be on file with the Secretary of the Company. Notice shall be effective when delivered if given personally, when receipt is acknowledged if telecopied, three days after mailing if given by registered or certified mail as described above, and one Business Day after deposit if given by Federal Express or comparable delivery service.

          (g) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York.

          (h) Severability. Notwithstanding any provision of this Agreement, neither the Company nor any other party hereto shall be required to take any action which would be in violation of any applicable Federal or state securities law. The invalidity or unenforceability of any provision of this Agreement in any jurisdiction shall not affect the validity, legality or enforceability of any other provision of this Agreement in such jurisdiction or the validity, legality or

15

enforceability of this Agreement, including any such provision, in any other jurisdiction, it being intended that all rights and obligations of the parties hereunder shall be enforceable to the fullest extent permitted by law.

          (i) Counterparts. This Agreement may be executed by facsimile in two or more counterparts, each of which shall be deemed an original but all of which shall constitute one and the same Agreement.

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

BALLY TOTAL FITNESS HOLDING CORPORATION
By:	/s/ Marc D. Bassewitz
	Name: Marc D. Bassewitz
	Title: Senior Vice President and General Counsel

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SPECIAL VALUE BOND FUND II, LLC
By:		SVIM/MSM II, LLC
Its:		Managing Member
By:		TENNENBAUM & CO., LLC
Its:		Managing Member
By:	/s/ Howard Levkowitz
	Name: Howard Levkowitz
	Title: Principal
SPECIAL VALUE ABSOLUTE RETURN FUND, LLC
By:		SVAR/MM, LLC
Its:		Managing Member
By:		TENNENBAUM CAPITAL PARTNERS, LLC
Its:		Managing Member
By:		TENNENBAUM & CO., LLC
Its:	Managing Member
By:	/s/ Howard Levkowitz
	Name: Howard Levkowitz
	Title: Principal
SPECIAL VALUE OPPORTUNITIES FUND, LLC
By:	/s/ Howard Levkowitz
	Name: Howard Levkowitz
	Title: Authorized Signatory
SPECIAL VALUE EXPANSION FUND, LLC
By:	/s/ Howard Levkowitz
	Name: Howard Levkowitz
	Title: Authorized Signatory

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