Item 1.01 Entry into a Material Definitive Agreement.

On December 28, 2020 (the "Closing Date"), Town Sports International Holdings, Inc. (the "Company"), entered into a credit agreement (the "Credit Agreement") with the several lenders party thereto (the "Lenders") and Alter Domus (US) LLC, as administrative agent (the "Administrative Agent") pursuant to which the Lenders agreed to provide senior secured first lien term loans in an aggregate principal amount of up to $100.0 million to the Company consisting of (a) initial senior secured first lien term loans in an aggregate principal amount of $5.0 million (the "Initial Loans"), which Initial Loans were drawn at closing, and (b) senior secured first lien delayed draw term loans in an aggregate principal amount of up to $95.0 million (the "Delayed Draw Term Loans" and, together with the Initial Loans, the "Loans"), in each case, subject to the terms and conditions set forth in the Credit Agreement. The proceeds of the Loans are to be used for general corporate purposes.

In order to incur any of the Delayed Draw Term Loans, the Company must satisfy certain conditions, including, but not limited to, the following: (i) if the incurrence of such Delayed Draw Term Loans occurs on or prior to June 30, 2021, (a) unless made in connection with any acquisition approved by the majority of the Board, the proceeds of such Delayed Draw Term Loans must be used in compliance with the Approved Budget (as defined in the Credit Agreement), and (b) the Unrestricted Cash (as defined in the Credit Agreement) of the Company and its subsidiaries immediately prior to such incurrence may not exceed $5.0 million and, (ii) if the incurrence occurs after June 30, 2021, the Consolidated Total Leverage Ratio (as defined in the Credit Agreement) for the prior four fiscal quarter period may not exceed 4.00 to 1.00 after giving pro forma effect to the incurrence of such Delayed Draw Term Loans.

The Company's obligations under the Credit Agreement are guaranteed by certain subsidiaries of the Company (collectively with the Company, the "Guarantors"). On the Closing Date, the Company, the Guarantors and the Administrative Agent entered into a guarantee and collateral agreement (the "Guarantee and Collateral Agreement") pursuant to which the Guarantors guaranteed the debt under the Credit Agreement and the Company and the Guarantors granted a first-priority lien on substantially all of their assets (subject to certain exceptions) in favor of the Administrative Agent and the Lenders.

On the Closing Date, the Company paid in-kind in the form of additional term loans a closing fee equal to $10.0 million, representing 10.0% of the aggregate principal amount of the commitments provided by the Lenders as of the Closing Date. Borrowings under the Credit Agreement accrue interest at a rate of either 10.0% per annum payable in cash or 12.0% per annum payable in-kind. The Credit Agreement will mature on December 28, 2025 (or, if such day is not a business day, the immediately precedent business day). Prior to the second anniversary of the Closing Date, the Loans may be prepaid at their principal amount plus a make whole premium. On or after the second anniversary of the Closing Date, the Company may prepay the Loans, in whole or in part, at any time, subject to a prepayment premium equal to (a) 10.0% of the principal amount prepaid if prepaid before the third anniversary of the Closing Date and (b) 5.0% of the principal amount prepaid if prepaid after the third anniversary of the Closing Date but prior to the fourth anniversary of the Closing Date. Thereafter, no prepayment premium is applicable.

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The Credit Agreement also provides that PW Partners Capital Management LLC may elect to provide, on or prior to January 29, 2021, up to $10.0 million of additional commitments to lend Delayed Draw Term Loans, subject to the terms and conditions set forth in the Credit Agreement, including the payment by the Company of a closing fee representing 10.0% of such additional commitments to be paid in-kind in the form of additional term loans and the issuance of shares of Common Stock.

The Credit Agreement contains customary covenants, including, but not limited to, restrictions on the Company's ability to incur indebtedness, grant liens or security interests on assets, make acquisitions, loans, advances or investments, pay dividends, sell or otherwise transfer assets, or enter into transactions with affiliates.

Additionally, the Credit Agreement provides that, upon the occurrence of certain events of default, the Company's obligations thereunder may be accelerated and the lending commitments with respect to the Delayed Draw Term Loans terminated. Such events of default include payment defaults to the Lenders, material . . .

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an

Off-Balance Sheet Arrangement of a Registrant.

The information set forth in Item 1.01 above relating to the Credit Agreement and Guarantee and Collateral Agreement is incorporated herein by reference into this Item 2.03.

Item 3.02 Unregistered Sales of Equity Securities.

As described in Item 1.01 above, as consideration for agreeing to the provide the Loans, the Company issued the Consideration Shares to certain affiliates of KLIM on the Closing Date. No other commission or other remuneration was paid in connection with the issuance and sale of the Consideration Shares.

The issuance and sale of the Consideration Shares are exempt from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"), pursuant to Section 4(a)(2) thereof. Each recipient of the Consideration Shares was required to represent that it is (i) an "accredited investor" as defined in Rule 501 of Regulation D under the Securities Act and (ii) was acquiring the Consideration Shares for investment and not with a view to resell or distribute. The Company did not engage in general solicitation or advertising and did not offer securities to the public in connection with such issuances.

The information regarding the issuance of the Common Stock set forth in Item 1.01 above is incorporated herein by reference into this Item 3.02.

Item 5.01 Changes in Control of Registrant.

The information set forth in Item 1.01 and Item 5.02, respectively, regarding the issuance of the Consideration Shares and the Company's board of directors (the "Board") following the Closing Date are incorporated by reference into this Item 5.01.

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Item 5.02 Departure of Directors or Principal Officers; Election of Directors;

Appointment of Principal Officers.

Appointment of Directors

Pursuant to the Credit Agreement, the Company and the Board agreed to set the number of directors on the Board at five directors and provide KLIM with the right to nominate three directors to the Board. As a result, effective concurrently with the closing of the Credit Agreement,

? the Board increased the size of the Company's Board to five members;

? each of Martin Annese and Jeffery Crivello resigned from the Company's Board

and any committees of the Board on which they respectively served; and

? the remaining members of the Board elected David Chene, Brian Dubin and Doug

Logigian as members of the Board to fill the vacancies created by the increase

in Board size (with the appointment of Doug Logigian to take effect ten days

after transmission of the Information Statement on Form 14f-1 to all holders of

our Common Stock) and resignation of Martin Annese and Jeffery Crivello to

serve until the Company's next annual meeting or their earlier resignation,

termination or death.

Committee membership of the post-Transaction Board members will be determined at the first Board meeting following the Transactions.

Indemnification Agreements

On the Closing Date, the Company entered into indemnification agreements with each of its newly elected directors. Pursuant to the indemnification agreements, the Company has agreed to indemnify and hold harmless these directors to the fullest extent permitted by the Delaware General Corporation Law. The agreements generally cover expenses that a director incurs or amounts that a director becomes obligated to pay in connection with any proceeding in any way connected with, resulting from or relating to his or her service as a current or former director, officer, employee or agent of the Company or any direct or indirect subsidiary of the Company. The agreements also provide for the advancement of expenses to the directors subject to specified conditions. There are certain exceptions to the Company's obligation to indemnify the directors, including with respect to "short-swing" profit claims under Section 16(b) of the Securities Exchange Act of 1934, as amended; with respect to conduct by him or her that is established to be knowingly fraudulent or deliberately dishonest or constituted willful misconduct; and, with certain exceptions, with respect to proceedings that he or she initiates.

The foregoing description of the indemnification agreements is not complete and is subject to and qualified in its entirety by reference to the form of indemnification agreement, which is attached as Exhibit 10.4 hereto and incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.





Exhibit
No.
  4.1    Registration Rights Agreement dated as of December 28, 2020, by and among
         Town Sports International Holdings, Inc. and the holders party thereto.
  10.1   Credit Agreement dated as of December 28, 2020, by and among Town Sports
         International Holdings, Inc., the several lenders from time to time party
         thereto and Alter Domus (US) LLC
  10.2   Form of Indemnification Agreement, by and between Town Sports
         International Holdings, Inc. and each of its newly elected directors
  99.1   Press Release, dated December 24, 2020

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