FIRST AMENDMENT TO CREDIT
AGREEMENT
FIRST AMENDMENT TO
CREDIT AGREEMENT (this “ First Amendment ”),
dated as of July 15, 2009, among TOWN SPORTS INTERNATIONAL
HOLDINGS, INC., a Delaware corporation (“ Holdings
”), TOWN SPORTS INTERNATIONAL, LLC, a New York limited
liability company (the “ Borrower ”), the
lenders from time to time party to the Credit Agreement referred to
below (each a “ Lender ” and, collectively, the
“ Lenders ”), and DEUTSCHE BANK TRUST COMPANY
AMERICAS, as administrative agent (in such capacity, the “
Administrative Agent ”). Unless otherwise defined
herein, all capitalized terms used herein and defined in the Credit
Agreement referred to below are used herein as therein
defined.
WHEREAS, Holdings,
the Borrower, the Lenders and the Administrative Agent have entered
into a Credit Agreement, dated as of February 27, 2007 (as
amended, modified and supplemented through, but not including, the
date hereof, the “ Credit Agreement ”);
and
WHEREAS, subject
to the terms and conditions set forth herein, the parties hereto
wish to amend certain provisions of the Credit Agreement as
provided herein;
NOW, THEREFORE, it
is agreed;
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A.
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Reduction of Total Revolving Loan
Commitment
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On the First
Amendment Effective (as defined below) (and immediately after
giving effect thereto), the Borrower hereby agrees that the Total
Revolving Loan Commitment shall be permanently reduced to
$63,750,000 (as such amount may be further reduced from time to
time in accordance with the terms of the Credit Agreement), and
with such reduction to proportionately and permanently reduce the
Revolving Loan Commitment of each RL Lender.
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B.
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Amendment to the Credit
Agreement
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1. The
definition of “ Consolidated EBITDA ” appearing
in Section 11.01 of the Credit Agreement is hereby deleted in
its entirety and the following new definition is inserted in lieu
thereof:
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“ Consolidated EBITDA
” shall mean, for any period, Consolidated EBIT for such
period, adjusted by (x) adding thereto (i) the amount of
all amortization of intangibles and depreciation to the extent that
same was deducted in arriving at Consolidated Net Income for such
period, (ii) the amount of all Transaction Expenses to the
extent that same were deducted in arriving at Consolidated Net
Income for such period, (iii) the amount of all deferred rent
expense to the extent that same was deducted in arriving at
Consolidated Net Income for such period, (iv) the amount of
all non-cash deferred compensation expense resulting from the
issuance of capital stock, stock options or stock
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appreciation rights to former or
current directors, officers or employees of Holdings or any
Subsidiary of Holdings, or the exercise of such options or rights,
in each case, to the extent that same were deducted in arriving at
Consolidated Net Income for such period, (v) the amount of all
non-cash deferred compensation expense resulting from the
repurchase of capital stock, options and rights described in
preceding clause (iv) of this definition to the extent that
same were deducted in arriving at Consolidated Net Income for such
period, (vi) the amount of all non-cash charges resulting from
discontinued operations to the extent otherwise permitted by FAS
141 to the extent that same were deducted in arriving at
Consolidated Net Income for such period, (vii) solely for
purposes of determining compliance with Section 9.07
for the respective period, the amount of all non-cash charges
relating to the impairment or write-down of fixed assets,
intangible assets or goodwill for such period and (viii) the
amount of all transaction fees and expenses incur
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