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

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

 

2

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.
[Rest of page intentionally left blank]

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

 

3

     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

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

 

4

                  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

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

 

5

                  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

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

 

6

                  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

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

 

7

                  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

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

 

8

                  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

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

 

9

                  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

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

 

10

                  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

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

 

11

                  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

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

 

12

                  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

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

 

13

                  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.

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

 

14

                  BALLY TOTAL FITNESS OF MINNESOTA, INC.     TIDELANDS HOLIDAY
HEALTH CLUBS, INC.     U.S. HEALTH, INC.     59TH STREET GYM LLC     708 GYM LLC
    ACE, LLC     BTF/CFI, INC.     CRUNCH 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