Bally Total Fitness Of Minnesota 10-K 2005 FY Annual report

Exhibit 10.39

EXECUTION COPY

FOURTH AMENDMENT

     FOURTH AMENDMENT, dated as of June 23, 2006 (this “Amendment”), under the CREDIT AGREEMENT, dated as of November 18, 1997, as amended and restated as of October 14, 2004 (as in effect on the date immediately prior to the date hereof, the “Credit Agreement”), among BALLY TOTAL FITNESS HOLDING CORPORATION, a Delaware corporation (the “Borrower”), the lenders parties thereto (the “Lenders”), JPMORGAN CHASE BANK, N.A., as agent for the Lenders (the “Agent”), DEUTSCHE BANK SECURITIES, INC., as Syndication Agent, and LASALLE BANK NATIONAL ASSOCIATION, as Documentation Agent. Terms used herein, but not defined, shall have the respective meanings set forth in the Credit Agreement.

W I T N E S S E T H:

     WHEREAS, the Borrower has requested, and the undersigned Lenders wish to consent to, an amendment to the Credit Agreement;

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

     1. Amendment to Credit Agreement. Section 8.07 of the Credit Agreement is amended by adding at the end of the second sentence the phrase “(or in the case of financial statements for the fiscal quarter ending on or about September 30, 2006, the day which is two Business Days before the day which is 30 days following delivery of any such notice of default in respect of such financial statements)”.

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

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

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

     3. Consent Fee. The Borrower agrees to pay to the Agent for the account of each Lender which executes and delivers this Amendment by 12:00 noon EST on June 23, 2006, an amendment fee equal to 0.125% of the sum of such Lender’s Term Advances and Revolving Credit Commitments on the Effective Date, earned, due and payable on the Effective Date.

     4. Representations and Warranties. The Borrower represents and warrants to each Lender that as of the Effective Date after giving effect to this Amendment: (a) the representations and warranties made by the Credit Parties in the Credit Documents are true and

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correct in all material respects on and as of the date hereof (except to the extent that such representations and warranties are expressly stated to relate to an earlier date, in which case such representations and warranties shall have been true and correct in all material respects on and as of such earlier date) and (b) no Default or Event of Default shall have occurred and be continuing as of the date hereof after giving effect to this Amendment.

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

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

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

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

BALLY TOTAL FITNESS HOLDING CORPORATION
By:	/s/ Katherine L. Abbott
	Name:	Katherine L. Abbott
	Title:	Vice President and Treasurer
JPMORGAN CHASE BANK, N.A., individually and as Agent
By:	/s/ Barry Bergman
	Name:	Barry Bergman
	Title:	Managing Director

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Bally Total Fitness Holding Corporation Fourth Amendment and Waiver dated as of June 23, 2006 to the Amended and Restated Credit Agreement
WELLS FARGO FOOTHILL, LLC
By:	/s/ Juan Barrera
	Name:	Juan Barrera
	Title:	Vice President
THE FOOTHILL GROUP, INC.
By:	/s/ Michael Bohannon
	Name:	Michael Bohannon
	Title:	Senior Vice President
CITIGROUP FINANCIAL PRODUCTS INC.
By:	/s/ Gregory W. Frenzel
	Name:	Gregory W. Frenzel
	Title:	Managing Director
GENERAL ELECTRIC CAPITAL CORPORATION, as Administrator for MERRITT CLO HOLDING LLC
By:	/s/ Dwayne L Coker
	Name:	Dwayne L. Coker
	Title:	Duly Authorized Signatory
BOLDWATER CBNA LOAN FUNDING LLC, for itself or as agent for BOLDWATER CFPI LOAN FUNDING LLC
By:	/s/ Roy Hykal
	Name:	Mikus N. Kins
	Title:	Attorney-in-fact

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ADAR INVESTMENT FUND LTD by ADAR INVESTMENT MANAGEMENT LLC, Its Investment Manager
By:	/s/ Aaron Morse
	Name:	Aaron Morse
	Title:	Chief Operating Officer
CELERITY CLO LIMITED
By:	TCW Advisors, Inc., as Agent
By:	/s/ G. Wanye Hosang
	Name:	G. Wanye Hosang
	Title:	Vice President
By:	/s/ Vikas Mavinkurve
	Name:	Vikas Mavinkurve
	Title:	Vice President
FIRST 2004-I CLO, LTD.
By:	TCW Advisors, Inc., as its Collateral Manager
By:	/s/ G. Wanye Hosang
	Name:	G. Wanye Hosang
	Title:	Vice President
By:	/s/ Vikas Mavinkurve
	Name:	Vikas Mavinkurve
	Title:	Vice President

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FIRST 2004-II CLO, LTD.
By:	TCW Advisors, Inc., as its Collateral Manager
By:	/s/ G. Wanye Hosang
	Name:	G. Wanye Hosang
	Title:	Vice President
By:	/s/ Vikas Mavinkurve
	Name:	Vikas Mavinkurve
	Title:	Vice President
LOAN FUNDING I LLC, a wholly owned subsidiary of Citibank, N.A.
By:	TCW Advisors, Inc., as Portfolio Manager of Loan Funding I LLC
By:	/s/ G. Wanye Hosang
	Name:	G. Wanye Hosang
	Title:	Vice President
By:	/s/ Vikas Mavinkurve
	Name:	Vikas Mavinkurve
	Title:	Vice President
TCW SELECT LOAN FUND, LIMITED
By:	TCW Advisors, Inc., as its Collateral Manager
By:	/s/ G. Wanye Hosang
	Name:	G. Wanye Hosang
	Title:	Vice President
By:	/s/ Vikas Mavinkurve
	Name:	Vikas Mavinkurve
	Title:	Vice President
TCW SENIOR SECURED LOAN FUND, LP
By:	TCW Advisors, Inc., as its Investment Advisor
By:	/s/ G. Wanye Hosang
	Name:	G. Wanye Hosang
	Title:	Vice President
By:	/s/ Vikas Mavinkurve
	Name:	Vikas Mavinkurve
	Title:	Vice President

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VELOCITY CLO, LTD.
By:	TCW Advisors, Inc., as its Collateral Manager
By:	/s/ G. Wanye Hosang
	Name:	G. Wanye Hosang
	Title:	Vice President
By:	/s/ Vikas Mavinkurve
	Name:	Vikas Mavinkurve
	Title:	Vice President
VITESSE CLO, LTD.
By:	TCW Advisors, Inc., as its Collateral Manager
By:	/s/ G. Wanye Hosang
	Name:	G. Wanye Hosang
	Title:	Vice President
By:	/s/ Vikas Mavinkurve
	Name:	Vikas Mavinkurve
	Title:	Vice President
Q FUNDING III, L.P.
By:	Prufrock Onshore, L.P., its General Partner
By:	J. Alfred Onshore, LLC, its General Partner
By:	/s/ Robert McCormick
	Name:	Robert McCormick
	Title:	Vice President
BLACK DIAMOND OFFSHORE, LTD.
By:	Carlson Capital, L.P., its Investment Advisor
By:	Asgard Investment Corp., Its General Partner
By:	/s/ Clint D. Carlson
	Name:	Clint D. Carlson
	Title:	President
DOUBLE BLACK DIAMOND OFFSHORE, LDC
By:	Carlson Capital, L.P., its Investment Advisor
By:	Asgard Investment Corp., Its General Partner
By:	/s/ Clint D. Carlson
	Name:	Clint D. Carlson
	Title:	Presdient

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HARBOUR TOWN FUNDING LLC
By:	/s/ Christina L. Ramseur
	Name:	Christina L. Ramseur
	Title:	Assistant Vice President
LONG LANE MASTER TRUST IV
By:	/s/ Christina L. Ramseur
	Name:	Christina L. Ramseur
	Title:	Assistant Vice President
RED FOX FUNDING LLC
By:	/s/ Christina L. Ramseur
	Name:	Christina L. Ramseur
	Title:	Assistant Vice President
SEMINOLE FUNDING LLC
By:	/s/ Christina L. Ramseur
	Name:	Christina L. Ramseur
	Title:	Assistant Vice President
WB LOAN FUNDING 2, LLC
By:	/s/ Diana M. Himes
	Name:	Diana M. Himes
	Title:	Associate
DEUTSCHE BANK TRUST COMPANY AMERICAS
By:	/s/ Carin Keegan
	Name:	Carin Keegan
	Title:	Vice President
By:	/s/ Susan LeFevre
	Name:	Brenda Casey
	Title:	Director

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CREDIT GENESIS CLO 2005-I LTD.
By:	/s/ Jeff Rosenkranz
	Name:	Jeff Rosenkranz
	Title:	Principal
TRS LEDA LLC
By:	/s/ Alice L. Wagner
	Name:	Alice L. Wagner
	Title:	Vice President
By:	/s/ Edward Schaffer
	Name:	Edward Schaffer
	Title:	Vice President
GENERAL ELECTRIC CAPITAL CORPORATION
By:	/s/ Dwayne L. Coker
	Name:	Dwayne L. Coker
	Title:	Duly Authorized Signatory
SANKATY ADVISORS, LLC, as Collateral Manager for RACE POINT II CLO, LIMITED, as Term Lender
By:	/s/ James F. Kellogg III
	Name:	James F. Kellogg III
	Title:	Managing Director
SANKATY ADVISORS, LLC, as Collateral Manager for CASTLE HILL I —INGOTS, LTD., as Term Lender
By:	/s/ James F. Kellogg III
	Name:	James F. Kellogg III
	Title:	Managing Director

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SANKATY ADVISORS, LLC, as Collateral Manager for BRANT POINT CBO 1999-1 LTD., as Term Lender
By:	/s/ James F. Kellogg III
	Name:	James F. Kellogg III
	Title:	Managing Director
SANKATY ADVISORS, LLC, as Collateral Manager for RACE POINT CLO, LIMITED, as Term Lender
By:	/s/ James F. Kellogg III
	Name:	James F. Kellogg III
	Title:	Managing Director
SANKATY HIGH YIELD PARTNERS, III, L.P.
By:	/s/ James F. Kellogg III
	Name:	James F. Kellogg III
	Title:	Managing Director
SANKATY ADVISORS, LLC, as Collateral Manager for CASTLE HILL II — INGOTS, LTD., as Term Lender
By:	/s/ James F. Kellogg III
	Name:	James F. Kellogg III
	Title:	Managing Director

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SANKATY ADVISORS, LLC, as Collateral Manager for PROSPECT FUNDING I, LLC, as Term Lender
By:	/s/ James F. Kellogg III
	Name:	James F. Kellogg III
	Title:	Managing Director
SANKATY ADVISORS, LLC, as Collateral Manager for RACE POINT III CLO, LIMITED, as Term Lender
By:	/s/ James F. Kellogg III
	Name:	James F. Kellogg III
	Title:	Managing Director
CANYON CAPITAL CDO 2002-1 LTD.
By:	/s/ Joshua S. Friedman
	Name:	Joshua S. Friedman
	Title:	Managing Partner
By:	Canyon Capital Advisors LLC, a Delaware limited liability company, its Collateral Manager

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ANCHORAGE CROSSOVER CREDIT OFFSHORE MASTER FUND, LTD.
By:	Anchorage Advisors, L.L.C., its Advisor
By:	/s/ Michael Aglialoro
	Name:	Michael Aglialoro
	Title:	Executive Vice President
SBZ PARTNERS, LP
By:	/s/ Martin Bidus
	Name:	Martin Bidus
	Title:	Co-Manager, SBZ Capital GP, LLC, its General Partner
SUNRISE PARTNERS LIMITED PARTNERSHIP
By:	/s/ Michael J. Berner
	Name:	Michael J. Berner
	Title:	Vice President

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THE FOURTH AMENDMENT IS ACKNOWLEDGED AND AGREED:

BALLY’S FITNESS AND RACQUET CLUBS, INC.

BALLY FITNESS FRANCHISING, INC.

BALLY FRANCHISE RSC, INC.

BALLY FRANCHISING HOLDINGS, INC.

BALLY ESTATE II, LLC

REAL ESTATE III, LLC

REAL ESTATE IV, LLC

BALLY REFS WEST HARTFORD, LLC

BALLY TOTAL FITNESS CORPORATION

BALLY TOTAL FITNESS HOLDING CORPORATION

BALLY TOTAL FITNESS INTERNATIONAL, INC.

BALLY TOTAL FITNESS OF MISSOURI, INC.

BALLY TOTAL FITNESS OF TOLEDO, INC.

BFIT REHAB OF WEST PALM BEACH, INC.

BALLY TOTAL FITNESS OF CONNECTICUT COAST, INC.

BALLY TOTAL FITNESS OF CONNECTICUT VALLEY, INC.

GREATER PHILLY NO. 1 HOLDING COMPANY

GREATER PHILLY NO. 2 HOLDING COMPANY

HEALTH & TENNIS CORPORATION OF NEW YORK

BALLY TOTAL FITNESS OF UPSTATE NEW YORK, INC.

BALLY TOTAL FITNESS OF COLORADO, INC.

BALLY TOTAL FITNESS OF THE SOUTHEAST, INC.

HOLIDAY HEALTH CLUBS OF THE EAST COAST, INC.

HOLIDAY/SOUTHEAST HOLDING CORP.

BALLY TOTAL FITNESS OF CALIFORNIA, INC.

BALLY TOTAL FITNESS OF THE MID-ATLANTIC, INC.

BALLY TOTAL FITNESS OF GREATER NEW YORK, INC.

JACK LALANNE HOLDING CORP.

BALLY SPORTS CLUBS, INC.

NEW FITNESS HOLDING CO., INC.

NYCON HOLDING CO., INC.

BALLY TOTAL FITNESS OF PHILADELPHIA, INC.

BALLY TOTAL FITNESS OF RHODE ISLAND, INC.

RHODE ISLAND HOLDING COMPANY

BALLY TOTAL FITNESS OF THE MIDWEST, INC.

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BALLY TOTAL FITNESS OF MINNESOTA, INC.
TIDELANDS HOLIDAY HEALTH CLUBS, INC.
U.S. HEALTH, INC.
59THSTREET GYM LLC
708 GYM LLC
ACE, LLC
BTF/CFI, INC.
CRUNCH CFI CHICAGO, LLC
CRUNCH L.A. LLC
CRUNCH WORLD LLC
FLAMBE LLC
MISSION IMPOSSIBLE, LLC
SOHO HO LLC
WEST VILLAGE GYM AT THE ARCHIVES LLC
By:	/s/ Katherine L. Abbott
	Name:	Katherine L. Abbott
	Title:	Vice President and Treasurer