Town Sports International Holdings, Inc. Commences a Solicitation of Lenders to Amend Term Loan Facility for Special One-Time

  Town Sports International Holdings, Inc. Commences a Solicitation of Lenders
  to Amend Term Loan Facility for Special One-Time Dividend

Business Wire

NEW YORK -- November 06, 2012

On November 6, 2012, Town Sports International Holdings, Inc. (the “Company”)
announced that it is commencing soliciting lenders to participate in an
amendment to its senior secured credit facility to, among other things,borrow
up to an additional $75million. The Company expects the facility to be
arranged by Deutsche Bank Securities Inc. The Companyintends touse the
proceeds from the new borrowing, together with cash on hand, to pay a special
one-time cash dividend to its stockholders (including corresponding cash bonus
payments to certain option holders) on a record date to be determined by the
Board in an aggregate amount of approximately $92 million, or approximately
$3.75 per share. If the Company is not able to obtain the amendment on
satisfactory terms, it still intends to consider the declaration of a special
one-time cash dividend. Based upon the Company’s current cash balances,
restrictions contained in its senior secured credit facility and other
relevant factors, in the absence of such amendment, the Company currently
expects any such dividend, if declared, to be in aggregate amount not to
exceed $30 million, or approximately $1.20 per share.

In addition, the amendment to the senior secured credit facility would provide
for a waiver of any prepayment required to be paid using the Company’s excess
cash flow for the period endingDecember 31, 2012, amend the restricted
payments covenant to permit the payment of the dividend and bonus payments and
permit adjustments to the Company’s calculation of consolidated EBITDAwith
respect to the bonus payments and with respect to fees and expenses associated
with certain permitted transactions.

The Company is seeking to close on thenew borrowing during November 2012
subject to, among other factors, receipt of satisfactory pricing terms and
market conditions, and to pay the special one-time cash dividend to its
stockholders in December 2012. The declaration, amount, timing and payment of
any special dividend to its stockholders will be subject to the sole
discretion of the Company’s Board of Directors and the terms of the Company’s
senior secured credit facility, as it may be amended. The Company’s decision
to declare a special dividend and if so, the amount of such dividend, will
depend on a variety of factors, including the Company’s ability to amend its
credit facility on terms acceptable to it; the Company’s results of
operations, cash requirements and financial condition; the Company’s ability
to pay dividends under applicable Delaware state law; and any other factors
deemed relevant by the Company’s Board of Directors. There can be no assurance
that the Company will be able to borrow the additional funds sought or that
the Board of Directors will declare a special dividend, or if the Board of
Directors does declare a dividend, the amount of such dividend.

Forward-Looking Statements:

Statements in this release that do not constitute historical facts, including,
without limitation, statements relating to the Company’s intention and ability
to borrow additional amounts under its senior secured credit facility and its
current consideration of a special one-time cash dividend and other statements
that are predictive in nature or depend upon or refer to events or conditions,
or that include words such as “expects,” “anticipated,” “intends,” “plans,”
“believes,” “estimates” or “could”, are “forward-looking” statements made
pursuant to the safe harbor provision of the Private Securities Litigation
Reform Act of 1995. These forward-looking statements are subject to various
risks and uncertainties, many of which are outside the Company’s control,
including, among others, the ability of the Company to receive lender consents
to the amendment to its senior secured credit facility, the actual
declaration, amount, timing and payment of any special dividend, the level of
market demand for the Company’s services, economic conditions affecting the
Company’s business, the geographic concentration of the Company’s clubs,
competitive pressures, the ability to achieve reductions in operating costs
and to continue to integrate acquisitions, environmental initiatives, any
security and privacy breaches involving customer data, the application of
Federal and state tax laws and regulations, the levels and terms of the
Company’s indebtedness, and other specific factors discussed herein and in
other releases and public filings made by the Company (including the Company’s
reports on Forms 10-K and 10-Q filed with the Securities and Exchange
Commission). The Company believes that all forward-looking statements are
based on reasonable assumptions when made; however, the Company cautions that
it is impossible to predict actual results or outcomes or the effects of
risks, uncertainties or other factors on anticipated results or outcomes and
that, accordingly, one should not place undue reliance on these statements.
Forward-looking statements speak only as of the date they were made, and the
Company undertakes no obligation to update these statements in light of
subsequent events or developments. Actual events or results may differ
materially from anticipated events or results or outcomes discussed in any
forward-looking statement.

About Town Sports International Holdings, Inc.:

New York-based Town Sports International Holdings, Inc. is a leading owner and
operator of fitness clubs in the Northeast and mid-Atlantic regions of the
United States and, through its subsidiaries, operated 160 fitness clubs as of
September 30, 2012, comprising 108 New York Sports Clubs, 25 Boston Sports
Clubs, 18 Washington Sports Clubs (two of which are partly-owned), six
Philadelphia Sports Clubs, and three clubs located in Switzerland. These clubs
collectively served approximately 522,000 members. For more information on
TSI, visit http://www.mysportsclubs.com.

From time to time we may use our Web site as a channel of distribution of
material company information. Financial and other material information
regarding the Company is routinely posted on and accessible at
http://www.mysportsclubs.com. In addition, you may automatically receive email
alerts and other information about us by enrolling your email by visiting the
“Email Alerts” section at http://www.mysportsclubs.com.

Contact:

Town Sports International Holdings, Inc., New York
Investors:
212-246-6700 extension 1650
Investor.relations@town-sports.com
or
ICR, Inc.
Joseph Teklits / Farah Soi, 203-682-8390
farah.soi@icrinc.com
 
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