Document:

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                                                                    EXHIBIT 10.1

                         TERMINATION AND MUTUAL RELEASE

          This Termination and Mutual Release (this "Termination and Release"),
dated April 1, 2006, is entered into by and between Centerpointe Property, LLC,
a Florida limited liability company ("Centerpointe"), as authorized agent for
PMW Hospitality, LLC and RFW Hospitality, LLC, and National Health Partners,
Inc., an Indiana corporation (the "Company") (each a "Party" and collectively,
the "Parties").

                                   WITNESSETH:

          WHEREAS, the Parties entered into a Commercial Office Lease (the
"Lease") on June 13, 2005 with respect to office space located in the
Centerpointe Office Building located at 2033 Main Street, Sarasota, Florida
34237; and

          WHEREAS, the Parties have agreed to terminate the Lease effective
April 1, 2006; and

          WHEREAS, the Parties wish to agree on matters relating to the
termination of Lease on the terms set forth herein.

          NOW, THEREFORE, in consideration of the promises and conditions set
forth herein, the receipt and sufficiency of which is hereby acknowledged, and
intending to be legally bound hereby, the Parties hereby agree as follows:

          1. Termination. The Parties hereby agree to terminate the Lease
effective April 1, 2006.

          2. Payment. The Company shall issue 10,000 shares of its common stock,
$.001 par value per share ("Common Stock"), to Centerpointe in full payment of
all rent and other expenses that were due and payable by the Company under the
Lease on April 1, 2006.

          3. Company Property. By April 14, 2006, the Company shall provide to
Centerpointe a list of all office furniture, computer equipment and other
personal property of the Company that it wishes to remove from the Centerpointe
Office Building. Any such property not identified by the Company by such date
shall become the property of Centerpointe; provided, however, that Centerpointe
shall pay the Company an amount equal to the fair market value of all such
personal property not so identified by the Company on such list by such date.

          4. Survival. The provisions of the Lease that by their terms are
intended to survive the termination of the Lease shall survive the termination
effected hereby.

          5. Release. Subject to Section 4 above, each Party (each Party, a
"Releasing Party") does hereby fully and irrevocably remise, release and forever
discharge the other Parties, and their respective subsidiaries, directors,
officers, shareholders, employees, agents, attorneys, accountants, successors
and assigns (collectively, the "Released Parties"), of and from any and all
manner of claims, actions, causes of action, grievances, liabilities,
obligations, promises,

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damages, agreements, rights, debts and expenses (including claims for attorneys'
fees and costs), of every kind, either in law or in equity, whether contingent,
mature, known or unknown, or suspected or unsuspected, including, without
limitation, any claims arising under any federal, state, local or municipal law,
common law or statute, whether arising in contract or in tort, and any claims
arising under any other laws or regulations of any nature whatsoever, that the
Releasing Party ever had, now has or may have, for or by reason of any cause,
matter or thing whatsoever, from the beginning of the world to the date hereof,
arising out of or related in any way to the Lease (collectively, "Claims"). The
Releasing Party represents, warrants and covenants that he, she or it has not
sold, assigned, transferred, or otherwise conveyed to any other person or entity
all or any portion of his, her or its rights, claims, demands, actions, or
causes of action herein released. The Releasing Party further agrees and
covenants not to sue or to bring, or assign to any third person, any claims or
charges against any of the Released Parties with respect to any matter covered
by the release set forth in this Section 5, and not to assert against any of the
Released Parties any action, grievance, suit, litigation or proceeding for any
matter covered by the release set forth in this Section 5.

          6. Scope of Release. THE RELEASE SET FORTH IN SECTION 5 IS INTENDED TO
BE ENFORCEABLE AGAINST THE UNDERSIGNED AND OTHER RELEASING PARTIES IN ACCORDANCE
WITH THE EXPRESS TERMS AND SCOPE THEREOF NOTWITHSTANDING ANY EXPRESS NEGLIGENCE
RULE OR ANY SIMILAR DIRECTIVE THAT WOULD PROHIBIT OR OTHERWISE LIMIT RELEASES
BECAUSE OF THE SIMPLE OR GROSS NEGLIGENCE (WHETHER SOLE, CONCURRENT, ACTIVE OR
PASSIVE) OR OTHER FAULT OR STRICT LIABILITY OF ANY OF THE RELEASED PARTIES.

          7. Construction. The release set forth in Section 5 shall be construed
as broadly as may be permitted by law to protect the Released Parties against
litigation and liability and, to effect this intent, each of the undersigned, on
behalf of the undersigned and each of the other Releasing Parties, hereby agrees
that the language of the release set forth in Section 5 is to be strictly
construed against the Releasing Parties and in favor of release of the Released
Parties, individually and collectively.

          8. Parties in Interest. This Termination and Release is for the
benefit of the Released Parties and shall be binding on the undersigned and the
undersigned's legal representatives and the other Releasing Parties.

          9. Governing Law. This Termination and Release and the rights and
obligations of the undersigned hereunder shall be governed by and construed and
enforced in accordance with the substantive laws (but not the rules governing
conflict of laws) of the Commonwealth of Pennsylvania.

          10. Severability. If any provision of this Termination and Release is
held to be illegal, invalid or unenforceable under present or future laws, that
provision shall be severable and this Termination and Release shall be construed
and enforced as if that illegal, invalid or unenforceable provision never
comprised a part hereof, and the remaining provisions hereof shall remain in
full force and effect and shall not be affected by the illegal, invalid or
unenforceable provision, and there shall be added automatically as part of this
Termination and Release a

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provision as similar in terms to such illegal, invalid or unenforceable
provision as may be possible and be legal, valid and enforceable.

          11. Counterparts. This Termination and Release may be executed and
delivered by facsimile in two or more counterparts, each of which shall be
deemed to be an original, but all of which together shall constitute one and the
same agreement.

                  [Remainder of page intentionally left blank]

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          IN WITNESS WHEREOF, the parties have executed this Termination and
Release as of the date set forth below.

                                        NATIONAL HEALTH PARTNERS, INC.

                                        By: /s/ Alex Soufflas
                                            ------------------------------------
                                            Name: Alex Soufflas
                                            Title: CFO and EVP

                                        CENTERPOINTE PROPERTY, LLC, as agent for
                                        PMW Hospitality, LLC and RFW
                                        Hospitality, LLC

                                        By: /s/ Don L. Wilson
                                           -------------------------------------
                                           Name: Don L. Wilson
                                           Title: Manager

                                        4exv4w1

 

 

 

TOWN SPORTS INTERNATIONAL, INC.

as Issuer

 

Supplemental Indenture

Dated as of May 12, 2006

 

Supplementing the Indenture

Dated as of April 16, 2003

with respect to $255,000,000

9 5/8% Senior Notes due 2011

 

The Bank of New York,

as Trustee

 

 

 

 

SUPPLEMENTAL INDENTURE

          SUPPLEMENTAL INDENTURE, dated as of May 12, 2006 (this “Supplemental Indenture”), made
between Town Sports International Inc., a New York corporation (the “Company”) and The Bank
of New York, as Trustee (the “Trustee”) to the Original Indenture (as defined).

RECITALS

          WHEREAS, the Company, certain Guarantors and the Trustee have heretofore entered into an
Indenture dated as of April 16, 2003 (the “Original Indenture”), pursuant to the provisions of
which the Company has heretofore issued $255,000,000 in aggregate principal amount of its 9 5/8%
Senior Notes due 2011 (the “Notes”);

          WHEREAS the Company and the Trustee desire to amend and supplement the Original Indenture in
accordance with its terms;

          WHEREAS, the Company commenced a tender offer (the “Tender Offer”) for up to
$85,000,000 aggregate principal amount of the Notes on May 4, 2006, and in conjunction with the
Tender Offer solicited consents to the adoption of certain proposed amendments to the Original
Indenture (the “Solicitation”).

          WHEREAS, Section 9.2 of the Original Indenture provides that the Original Indenture may be
amended or supplemented with the consent of the holders of at least a majority in principal amount
of the Notes then outstanding;

          WHEREAS, pursuant to the Solicitation, holders of more than a majority in principal amount of
Notes then outstanding validly delivered consents to the proposed amendments to the Original
Indenture; and

          WHEREAS, all conditions and requirements necessary to authorize the execution and delivery of
this Supplemental Indenture have been duly complied with or done and performed by the Company, and
all actions necessary to make this Supplemental Indenture and the Original Indenture, as
supplemented by this Supplemental Indenture, valid, binding and legal instruments according to
their terms (and, with respect to this Supplemental Indenture, in accordance with the terms of the
Original Indenture) have been complied with or done and performed;

          NOW, THEREFORE, for and in consideration of the premises and of the mutual covenants herein
contained, and for other valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and the Guarantors covenant and agree with the Trustee, for the benefit
of all present and future Holders of the Notes, as follows:

          Section 1. Section 4.3 of the Original Indenture is hereby amended and replaced in its
entirety by the following text:

     SECTION 4.3. Reports to Holders.

2

 

     Whether or not required by the rules and regulations of the Commission, so long as any Notes
are outstanding, the Company will furnish the Holders, with a copy to the Trustee:

     (i) all quarterly and annual financial information that would be required to be
contained in a filing with the Commission on Forms 10-Q and 10-K if the Company were
required to file such Forms, including a “Management’s Discussion and Analysis of Financial
Condition and Results of Operations’’ that describes the financial condition and results of
operations of the Company and its consolidated Subsidiaries (showing in reasonable detail,
either on the face of the financial statements or in the footnotes thereto and in
“Management’s Discussion and Analysis of Financial Condition and Result of Operations,’’ the
financial condition and results of operations of the Company and its Restricted Subsidiaries
separate from the financial condition and results of operations of the Unrestricted
Subsidiaries of the Company, if any) and, with respect to the annual information only, a
report thereon by the Company’s certified independent accountants; and

     (ii) the information that would be required to be included in all current reports that
would be required to be filed with the Commission on Form 8-K if the Company were required
to file such reports, in each case within the time periods specified in the Commission’s
rules and regulations.

     In addition, following the consummation of the Exchange Offer, whether or not required by the
rules and regulations of the Commission, the Company will file a copy of all such information and
reports with the Commission for public availability within the time periods specified in the
Commission’s rules and regulations (unless the Commission will not accept such a filing) and make
such information available to securities analysts and prospective investors upon request. In
addition, the Company has agreed that, for so long as any Notes remain outstanding, it will furnish
to the Holders and to securities analysts and prospective investors, upon their request, the
information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.

     Notwithstanding the foregoing, the Company shall not be required to (1) furnish the Holders or
the Trustee any of the information described in clauses (i) and (ii) above, or (2) file a copy of
any such information or reports with the Commission, or make such information available to
securities analysts and prospective investors, in each case if the Company is a Subsidiary of any
Person that files reports, statements or other documents with the Commission that, when required by
the rules and regulations of the Commission, include condensed consolidating financial information
with respect to the Company and such reports, statements or other documents are filed within the
time periods specified in the Commission’s rules and regulations.

          Section 2. Section 4.13 of the Original Indenture is hereby amended and replaced in its
entirety by the following text:

     SECTION 4.13. Continued Existence.

3

 

     Subject to Article V, each of the Company and the Guarantors shall do or cause to be done all
things necessary to preserve and keep in full force and effect (i) its corporate or other existence
in accordance with the organizational documents (as the same may be amended from time to time) of
the Company or such Guarantor and (ii) the material rights (charter or statutory), licenses and
franchises of the Company or such Guarantor, except to the extent that the applicable Board of
Directors determines in good faith that the preservation of such right, license or franchise, or
the existence of any such Guarantor, in either case is no longer necessary or desirable in the
conduct of the business of the Company or such Guarantor and that the loss thereof is not
disadvantageous in any material respect to the Holders. Notwithstanding the foregoing and for
avoidance of doubt, the Company and any Guarantor that is a corporation may convert into a limited
liability company form of organization.

          Section 3. Section 5.1 of the Original Indenture is hereby amended and replaced in its
entirety by the following text:

SECTION 5.1. Merger, Consolidation and Sale of Assets.

     The Company will not, in a single transaction or series of related transactions, consolidate
or merge with or into any Person, or sell, assign, transfer, lease, convey or otherwise dispose of
(or cause or permit any Restricted Subsidiary to sell, assign, transfer, lease, convey or otherwise
dispose of) all or substantially all of the Company’s assets (determined on a consolidated basis
for the Company and its Restricted Subsidiaries) whether as an entirety or substantially as an
entirety to any Person, unless:

     (1) either:

     (a) the Company shall be the surviving or continuing entity; or

     (b) the Person (if other than the Company) formed by such consolidation or into
which the Company is merged or the Person which acquires by sale, assignment,
transfer, lease, conveyance or other disposition the properties and assets of the
Company and of its Restricted Subsidiaries substantially as an entirety (the
“Surviving Entity’’):

     (x) will be an entity organized or formed and validly existing under
the laws of the United States or any State thereof or the District of
Columbia; and

     (y) will expressly assume, by supplemental indenture (in form and
substance reasonably satisfactory to the Trustee), executed and delivered to
the Trustee, the due and punctual payment of the principal of and premium,
if any, and interest on all of the Notes and the performance of every
covenant of the Notes, this Indenture and the Registration Rights Agreement
on the part of the Company to be performed or observed;

     (2) immediately after giving effect to such transaction and the assumption contemplated
by clause (1)(b)(y) above (including giving effect to any Indebtedness and

4

 

Acquired Indebtedness incurred or anticipated to be incurred in connection with or in
respect of such transaction), the Company or such Surviving Entity, as the case may be,
shall be able to incur at least $1.00 of additional Indebtedness (other than Permitted
Indebtedness) pursuant to Section 4.9;

     (3) immediately before and immediately after giving effect to such transaction and the
assumption contemplated by clause (1)(b)(y) above (including, without limitation, giving
effect to any Indebtedness and Acquired Indebtedness incurred or anticipated to be incurred
and any Lien granted in connection with or in respect of the transaction), no Default or
Event of Default shall have occurred or be continuing; and

     (4) the Company or the Surviving Entity shall have delivered to the Trustee an
Officers’ Certificate and an Opinion of Counsel, each stating that such consolidation,
merger, sale, assignment, transfer, lease, conveyance or other disposition and, if a
supplemental indenture is required in connection with such transaction, such supplemental
indenture comply with the applicable provisions of this Indenture and that all conditions
precedent in this Indenture relating to such transaction have been satisfied.

     For purposes of the foregoing, the transfer (by lease, assignment, sale or otherwise, in a
single transaction or series of transactions) of all or substantially all of the properties or
assets of one or more Restricted Subsidiaries, the Capital Stock of which constitutes all or
substantially all of the properties and assets of the Company, will be deemed to be the transfer of
all or substantially all of the properties and assets of the Company.

     Upon any consolidation, combination or merger or any transfer of all or substantially all of
the assets of the Company in accordance with the foregoing in which the Company is not the
continuing entity, the Surviving Entity shall succeed to, and be substituted for, and may exercise
every right and power of, the Company under this Indenture and the Notes with the same effect as if
such Surviving Entity had been named as such.

     Each Guarantor (other than any Guarantor whose Guarantee is to be released in accordance with
the terms of the Guarantee and this Indenture in connection with any transaction complying with the
provisions of Section 4.10) will not, and the Company will not cause or permit any Guarantor to,
consolidate with or merge with or into any Person other than the Company or any other Guarantor
unless:

     (1) the entity formed by or surviving any such consolidation or merger (if other than
the Guarantor) or to which such sale, lease, conveyance or other disposition shall have been
made is a corporation, limited liability company or partnership organized and existing under
the laws of the United States or any State thereof or the District of Columbia;

     (2) such entity assumes by supplemental indenture all of the obligations of the
Guarantor on the Guarantee; and

     (3) immediately after giving effect to such transaction, no Default or Event of Default
shall have occurred and be continuing.

5

 

     Any merger or consolidation of a Guarantor with and into the Company (with the Company being
the surviving entity) or another Guarantor that is a Restricted Subsidiary need only comply with
clause (4) of the first paragraph of this Section 5.1.

          Section 4. This Supplemental Indenture is a supplemental indenture pursuant to Section 9.2 of
the Original Indenture. Upon execution and delivery of this Supplemental Indenture, all the terms
and conditions of the Original Indenture and this Supplemental Indenture shall be read together as
though they constitute one instrument, except that in case of conflict, the provisions of this
Supplemental Indenture will control.

          Section 5. Except as they have been modified in this Supplemental Indenture, each and every
term and provision of the Original Indenture shall continue in full force and effect, and all
references to the Indenture in the Original Indenture shall hereafter be deemed to mean the
Original Indenture as supplemented and amended pursuant to this Supplemental Indenture.

          Section 6. The parties may sign any number of copies of this Supplemental Indenture. Each
signed copy shall be an original, but all of them together shall represent the same agreement.

          Section 7. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS
OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAW OF ANOTHER JURISDICTION WOULD BE REQUIRED
THEREBY. THE COMPANY HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY NEW YORK STATE COURT
SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK OR ANY FEDERAL COURT SITTING IN THE
BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO THIS SUPPLEMENTAL INDENTURE, AND IRREVOCABLY ACCEPTS FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, JURISDICTION OF THE AFORESAID COURTS. THE
COMPANY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT THAT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE
LAW, TRIAL BY JURY AND ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF
ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT,
ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. NOTHING
HEREIN SHALL AFFECT THE RIGHT OF THE TRUSTEE OR ANY HOLDER OF THE NOTES TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE
COMPANY IN ANY OTHER JURISDICTION.

[SIGNATURE PAGES FOLLOW]

6

 

     IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly
executed as of the date first written above.

	 	 	 	 	 
	 	 	TOWN SPORTS INTERNATIONAL, INC.
	 
	 	 	 	 
	 

	 	By:	 	/s/  Richard Pyle
	 

	 	 	 	 
	 
	 	 	 	Name: Richard Pyle
	 

	 	 	 	Title:   Chief Financial
Officer
	 
	 	 	 	 
	 	 	THE BANK OF NEW YORK,
	 

	 	 	 	     as Trustee
	 
	 	 	 	 
	 

	 	By:	 	/s/  Julie Salovitch-Miller
	 

	 	 	 	 
	 

	 	 	 	Name: Julie Salovitch-Miller
	 

	 	 	 	Title:   Vice President

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