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 $75 million. The Company expects the facility to be arranged by Deutsche Bank Securities Inc. The Company intends to use 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 ending December 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 EBITDA with respect to the bonus payments and with respect to fees and expenses associated with certain permitted transactions. The Company is seeking to close on the new 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.