Exhibit 10.14


 


OPTION
AGREEMENT


 


OPTION AGREEMENT (this “Agreement”), dated as
of «Grant_Date», by and between the
Company and the grantee, the individual’s whose name appears on the signature
page hereof (the “Grantee”).


 


W  I
T  N  E  S  S  E  T  H:


 


WHEREAS, the Board has determined that it is in the
best interests of the Company and its shareholders for the Company to grant
from time to time options to purchase Common Stock to executive officers or key
employees of, or consultants to, or any key employees of any entity which
provides services to, the Company or its Subsidiaries in order to motivate and
align the interests of such individuals with those of the Company’s
shareholders, and in connection therewith, the Board has established the
Equinox Holdings, Inc. 2000 Stock Incentive Plan (as the same may be
amended from time to time, the “Plan”);


 


WHEREAS, pursuant to the Plan, the Board has
authorized the grant to the Grantee of non-qualified stock options to purchase
shares of Common Stock pursuant to the Plan; and


 


WHEREAS, the Grantee and the Company desire to enter
into an agreement to evidence and confirm the grant of such stock options on
the terms and conditions set forth herein;


 


NOW, THEREFORE, to evidence the stock options so
granted, and to set forth the terms and conditions governing such stock
options, the Company and the Grantee hereby agree as follows:


 


1.                                       Certain
Definitions.  Capitalized terms used
herein without definition shall have the meaning assigned to them in the Plan,
provided however, that whenever the term “Participant” appears in the Plan such
term shall be substituted with the term “Grantee” (as defined in the
introductory paragraph hereof).  As used
in this Agreement, the following terms shall have the following meanings:


 


(a)                                  “Affiliate”
shall mean, with respect to any Person, any other Person that, directly or
indirectly through one or more intermediaries, Controls, is Controlled by, or
is under common Control with the first Person, including but not limited to
a Subsidiary of the first Person, a Person of which the first Person
is a Subsidiary, or another Subsidiary of a Person of which the first
Person is also a Subsidiary.


 


(b)                                 “Control”
(including the terms “controlled by” and “under common control with”) shall
mean, with respect to any Person, the possession, directly or indirectly,
severally or jointly, of the power to direct or cause the direction of the


 





















 


management policies of such Person, whether through the ownership of
voting securities, by contract or credit arrangement, as trustee or executor,
or otherwise.


 


(c)                                  “Exercise
Date” shall have the meaning set forth in Section 6 hereof.


 


(d)                                 “Exercise
Price” shall have the meaning set forth in Section 6 hereof.


 


(e)                                  “Exercise
Shares” shall have the meaning set forth in Section 6 hereof.


 


(f)                                    “Grant
Date” shall mean the date hereof, which is the date on which the Options
are granted to the Grantee.


 


(g)                                 “Grantee”
shall have the meaning set forth in the introductory paragraph hereto.


 


(h)                                 “Normal
Termination Date” shall mean the tenth anniversary of the date hereof.


 


(i)                                     “Option
Price” shall mean, with respect to each Share covered by an Option, the
exercise price at which the Grantee may purchase such Share pursuant to such
Option as determined in Section 2(b) hereof.


 


(j)                                     “Person”
shall mean any natural person, firm, partnership, limited liability company,
association, corporation, company, trust, business trust, governmental
authority or other entity.


 


(k)                                  “Plan”
shall have the meaning set forth in the recitals to this Agreement.


 


(l)                                     “Rule 144”
shall mean Rule 144 promulgated under the Securities Act.


 


(m)                               “Shares”
shall mean the shares of Common Stock subject to the Options.


 


(n)                                 “Sponsors”
shall mean the North Castle Partners, L.L.C., and Childs.


 


(o)                                 “Successor”
shall mean, with respect to any Person, a Person that succeeds to the
first Person’s assets and liabilities by merger, liquidation, dissolution or
otherwise by operation of law, or a Person to which all or substantially
all the assets and/or business of the first Person are transferred.


 


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2.                                       Grant
of Options.


 


(a)                                  Confirmation
of Grant.  The Company hereby
evidences and confirms its grant to the Grantee, effective as of the date
hereof, of «Total_Options» Options.  The Options are not intended to be incentive
stock options under the U.S. Internal Revenue Code of 1986, as amended.  This Agreement is subordinate to, and the
terms and conditions of the Options granted hereunder are subject to, the terms
and conditions of the Plan.  If there is
any inconsistency between the terms hereof and the terms of the Plan, the terms
of the Plan shall govern.


 


(b)                                 Option
Price.  Each Option granted hereunder
shall have the option price per share set forth opposite the number of Options
on Schedule A attached hereto, which in each case is not less than the
Fair Market Value on the Grant Date.


 


3.                                       Vesting
and Exercisability.


 


(a)                                  Options.  Upon the occurrence of a Change of Control or
Public Offering, if the Sponsors realize an internal rate of return of at least
twenty percent (20%), thirty-three and one third (331/3%)
of the Options shall become vested and exercisable; provided, that, for each
one percent (1%) (or portion thereof) increase in such return (above 20%)
realized by the Sponsors upon the occurrence of such event, an additional six
and two-thirds percent (62/3%) (or portion thereof) of
the Options shall become vested and exercisable; provided, further, that, one
hundred percent (100%) of the Options shall become vested and exercisable upon
the occurrence of such event if the return realized by the Sponsors equals or
exceeds thirty percent (30%).  The
Sponsors’ realized internal rate of return will be calculated after giving full
effect to the dilution of the Sponsors’ interest in the Company by the value of
the outstanding Options that can be exercised upon such Change of Control or
Public Offering.  In the event less than
100% of the Options granted hereunder become vested as a result of the first
Change in Control or Public Offering, upon any and all subsequent Public
Offerings or divestitures of the Sponsor’s interests (until the Sponsors
beneficially own less that 5% of the total outstanding equity interests in the
Company), the foregoing internal rates of returns shall be recalculated in the
same manner as provided above and, to the extent such recalculation results in
an increased internal rate of return that would result in more Options becoming
vested and exercisable, such additional Options shall become vested and exercisable.


 


(b)                                 Conditions.  The Board, in its sole discretion, may
accelerate the vesting and exercisability of any Option, all Options or any
class of Options, at any time and from time to time.  Shares covered by Options which are vested
and exercisable may, subject to the provisions hereof, be purchased at any time
and from time to time on or after the date the corresponding Options become
exercisable in accordance with the provisions of this Section 3 until the
date one day prior to the date on which such Options terminate, provided that
any such purchase shall be effected pursuant and subject to


 


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Sections 5 and 6 hereof and the provisions contained in the
Shareholders Agreement and the Stock Subscription Agreement related to the
purchase of such Shares.


 


4.                                       Termination
of Options.


 


(a)                                  Normal
Termination Date.  Subject to
Sections 4(b) and 8 hereof, the Options shall terminate and be canceled on
the Normal Termination Date.


 


(b)                                 Early
Termination.


 


(i)                                     Termination
Other Than For Cause.  If the
Grantee’s employment with a member of the Company Group terminates for any
reason other than for Cause, then a percentage of Options granted hereunder
that has not become vested and exercisable pursuant to Section 3 shall
terminate and be cancelled immediately upon such termination of employment in
accordance with the following table:


 




	
  Length of time from Grant

  Date to date of termination

  	
   

  	
  % of Options granted

  hereunder terminated

  	
   

  
	
  Less than 1 year

  	
   

  	
  100

  	
  %

  
	
  1 year but less than 2 years

  	
   

  	
  75

  	
  %

  
	
  2 years but less than 3 years

  	
   

  	
  50

  	
  %

  
	
  3 years but less than 4 years

  	
   

  	
  25

  	
  %

  
	
  4 years or more

  	
   

  	
  0

  	
  %

  






 


With respect to any Options that are not terminated
and canceled upon the Grantee’s termination of employment in accordance with
the above table (the “Remaining Options”), the Company shall have the
option to (A) permit the Grantee to exercise such Remaining Options
(whether or not then vested or exercisable) until the first to occur of (x)
the 90th day after the effective date of the Grantee’s termination
of employment or, in the case of a termination for death or Disability, the
twelve month anniversary of such effective date; and (y) the Normal
Termination Date, (B) permit such Remaining Options to remain
outstanding and subject to provisions contained herein without modification,
except that the provisions of the first sentence of this Section 4(b)(i),
Section 4(b)(iii) hereof and Section 6 of the Plan shall no
longer apply or (C) purchase all or any portion of the Remaining
Options in accordance with Section 5(c). 
Any Options held by a Participant for which the Company has selected the
Option provided in clause (A) above that are not exercised within the
applicable periods described in this paragraph shall terminate and be canceled
upon the expiration of such period.


 


(ii)                                  Notification.  The Company shall notify the Grantee of its
election under Section 4(b)(i) within ten business days after the
effective date of the Grantee’s termination of employment; provided that, in
the case of a termination for any reason other than death, Disability or for
Cause, a failure by the Company


 


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to timely notify such
Grantee shall be deemed to be an election by the Company of the option
described in clause (A) of Section 4(b)(i); provided further that, in
the case of a termination for death or Disability, a failure to timely notify
such Grantee shall be deemed to be an election by the Company of the option
described in clause (B) of Section 4(b)(i).


 


(iii)                               Termination
for Cause.  Notwithstanding anything
else contained in this Agreement, if the Grantee’s employment with a member of
the Company Group is terminated for Cause, all Options (whether or not then
vested or exercisable) shall automatically terminate and be canceled
immediately upon such termination.


 


5.                                       Restrictions
on Exercise; Non-Transferability of Options; Repurchase of Remaining Options.


 


(a)                                  Restrictions on Exercise.  Once
exercisable in accordance with the provisions of this Agreement, the Options
may be exercised only with respect to full shares of Common Stock.  No fractional shares of Common Stock shall be
issued.  Notwithstanding any other
provision of this Agreement, the Options may not be exercised in whole or in
part, and no certificates representing Shares shall be delivered, (A) unless
all requisite approvals and consents of any governmental authority of any kind
having jurisdiction over the exercise of the Options or the delivery of the
Shares upon exercise of the Options shall have been secured, provided that the
Company shall use its reasonable efforts to obtain any such approvals or
consents unless the Board determines in its sole discretion that the Company
would incur material costs, fees or expenses or which would require registration
of the securities with such governmental authority, (B) unless the
purchase of the Shares upon the exercise of the Options shall be exempt from
registration under applicable U.S. federal and state securities laws, or the
purchase of the Shares shall have been registered under such laws, and (C) unless
all applicable U.S. federal, state and local tax withholding requirements shall
have been satisfied.


 


(b)                                 Non-Transferability
of Options.  The Options may be
exercised only by the Grantee or, following his death, by the Grantee’s
estate.  Each Option is not assignable or
transferable, in whole or in part, and it may not, directly or indirectly, be
offered, transferred, sold, pledged, assigned, alienated, hypothecated or
otherwise disposed of or encumbered (including without limitation by gift,
operation of law or otherwise) other than by will or by the laws of descent and
distribution to the estate of the Grantee upon the Grantee’s death.


 


(c)                                  Purchase
of Options on Termination of Employment.


 


(i)                                     Termination
of Employment.  If the Grantee’s
active employment with the Company or any Subsidiary thereof that employs the
Grantee is, or has been, terminated for any reason other than for Cause, the
Company shall have an option to purchase all or any portion of the Remaining
Options and/or the Options


 


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that have become vested
and exercisable pursuant to Section 3 (the “Vested Options”) held
by the Grantee (or, if the Grantee’s employment was terminated by the Grantee’s
death or the Grantee dies after his termination of employment, the Grantee’s
estate) and shall have ten business days from the date of the Grantee’s
termination of employment (such ten business day period being hereinafter
referred to as the “First Purchase Period”) during which to give notice
in writing to the Grantee of its election to exercise or not to exercise such
right to purchase, in whole or in part, the Remaining Options or Vested
Options, as the case may be.  The Company
hereby undertakes to use reasonable efforts to act as promptly as practicable
following such date of termination to make such election.  If the Company fails to give notice that it
intends to exercise its right to purchase the Remaining Options or Vested
Options, as the case may be, within the First Purchase Period, or chooses to
purchase none or only a portion of the Remaining Options, or Vested Options, as
the case may be, by giving such notice, the North Castle Fund shall have the
right to purchase all or any portion of the Remaining Options or Vested
Options, as the case may be, not purchased by the Company, and shall have until
the expiration of the earlier of (x) five business days following the
end of the First Purchase Period or (y) five business days from the date
of receipt by the North Castle Fund of written notice from the Company as to
whether it intends to exercise its right to purchase any of the Remaining
Options or Vested Options, as the case may be (such five business day period
being hereinafter referred to as the “Second Purchase Period”), to give
notice in writing to the Grantee (or the Grantee’s estate) of the North Castle
Fund’s exercise of its right to purchase all or any portion of such Remaining
Options or Vested Options, as the case may be. 
The Grantee (or the Grantee’s estate) shall be entitled to retain any
Remaining Options and Vested Options that are not purchased by the Company or
the North Castle Fund pursuant to this Section 5(c), subject to all of the
provisions of this Agreement (including, without limitation, Section 3(a))
except that the provisions of the first sentence of Section 4(b)(i),
Section 4(b)(iii) hereof and Section 6 of the Plan shall no
longer apply with respect to such Remaining Options or Vested Options.  For all purposes under this Agreement, the
terms “employment” or “termination of employment” with respect to a person who
is not an employee shall mean services with, or the termination of services
with, (i) the entity for whom the Participant provides services to, (ii) the
Company, or (iii) the Company by the entity from whom the Participant
provides services to.


 


(ii)                                  Purchase
Price, etc.  All purchases pursuant
to this Section 5(c) by the Company or the North Castle Fund shall be
for a purchase price and effected in the manner prescribed by
Sections 5(f), (g) and (h).


 


(d)                                 Notice
of Termination. The Company shall give written notice of any termination of
the Grantee’s employment to the North Castle Fund, except that if such
termination (if other than as a result of death) is by the Grantee, the Grantee
shall


 


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give written notice of such termination to the Company and the Company
shall give written notice of such termination to the North Castle Fund.


 


(e)                                  Public
Offering.  In the event that a Public
Offering has been consummated, neither the Company nor the North Castle Fund
shall have any rights to purchase the Remaining Options or Vested Options
pursuant to Section 5(c).


 


(f)                                    Purchase
Price.  Subject to
Section 11(c) hereof, the purchase price to be paid to the Grantee
(or the Grantee’s estate) for the Remaining Options or Vested Options, as the
case may be, purchased pursuant to Section 5(c) (the “Purchase
Price”) shall be equal to the excess, if any, of (i) the
aggregate Fair Market Value, as of the Determination Date, of the shares of
Common Stock then covered by the Remaining Options or Vested Options, as the
case may be, being purchased over (ii) the aggregate Option Price
for such Remaining Options or Vested Options, as the case may be.


 


(g)                                 Closing
of Purchase; Payment of Purchase Price. 
Subject to Section 11, the closing of a purchase of any Remaining
Options or Vested Options, as the case may be, pursuant to this Section 5
shall take place at the principal office of the Company on the tenth business
day following the receipt by the Grantee (or his or her estate) of the
Company’s or the North Castle Fund’s, as the case may be, notice of exercise of
its right to purchase any such Remaining Options or Vested Options, as the case
may be, pursuant to Section 5(c). 
At the closing, the Company or the North Castle Fund, as the case may
be, shall pay the Purchase Price to the Grantee (or his or her estate) for the
Remaining Options or Vested Options, as the case may be, being purchased by
delivery of a check for such Purchase Price payable to the order of the Grantee
(or his or her estate) and (ii) the Grantee (or his or her estate)
shall deliver to the Company such instruments as the Company may reasonably
request, signed by the Grantee (or his or her estate), free and clear of all
security interests, liens, claims, encumbrances, charges, options, restrictions
on transfer, proxies and voting and other agreements of whatever nature.


 


(h)                                 Withholding.  Whenever Shares are to be issued pursuant to
the Options, the Company may require the recipient of the Shares to remit to
the Company an amount in cash sufficient to satisfy any applicable U.S.
federal, state and local tax withholding requirements as a condition to the
issuance of such Shares.  In the event
any cash is paid to the Grantee pursuant to this Agreement or the Plan, the
Company shall have the right to withhold an amount from such payment sufficient
to satisfy any applicable U.S. federal, state and local tax withholding requirements.  If shares of Common Stock are traded on a
national securities exchange or bid and ask prices for shares of Common Stock
are quoted on the Nasdaq, the Company may, if requested by the Grantee,
withhold Shares to satisfy the minimum applicable withholding requirements,
subject to the provisions of the Plan and any rules adopted by the Board
regarding compliance with applicable law, including, but not limited to,
Section 16(b) of the Exchange Act.


 


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6.                                       Manner
of Exercise.  Options may be
exercised, in whole or in part, by notice to the Secretary of the Company in
writing given at least 15 business days prior to the date as of which the
Grantee will so exercise the Options (the “Exercise Date”), specifying
the number of whole Shares with respect to which the Options are being
exercised (the “Exercise Shares”) and the aggregate Option Price for
such Exercise Shares, provided that if shares of Common Stock are traded on a
U.S. national securities exchange or bid and ask prices for shares of Common
Stock are quoted over Nasdaq, notice may be given five business days before the
Exercise Date.  On or before the Exercise
Date, the Company and the Grantee shall enter into (x) a Joinder
Agreement, and (y) a Stock Subscription Agreement.  In accordance with the Stock Subscription
Agreement, (i) on or before the Exercise Date, the Grantee shall
deliver to the Company full payment for the Exercise Shares in United States
dollars in cash or immediately available funds in an amount equal to the
product of the number of Exercise Shares, multiplied by the Option Price (the “Exercise
Price”) and (ii) the Company shall deliver to the Grantee a
certificate or certificates representing the Exercise Shares, registered in the
name of the Grantee and bearing appropriate legends as provided in
Section 7(b) hereof.  If, as of
the Exercise Date, shares of Common Stock are traded on a U.S. national
securities exchange or bid and ask prices for shares of Common Stock are quoted
over Nasdaq, the Grantee may, in lieu of tendering cash, tender shares of
Common Stock that have an aggregate Fair Market Value on the Exercise Date
equal to the Exercise Price or may deliver a combination of cash and such
shares of Common Stock having an aggregate Fair Market Value equal to the
difference between the Exercise Price and the amount of such cash as payment of
the Exercise Price, subject to such rules and regulations as may be
adopted by the Board to provide for the compliance of such payment procedure
with applicable law, including section 16(b) of the Exchange
Act.  The Company may require the Grantee
to furnish or execute such other documents as the Company shall reasonably deem
necessary (i) to evidence such exercise, (ii) to
determine whether registration is then required under the Securities Act and (iii) to
comply with or satisfy the requirements of the Securities Act, applicable state
securities laws or any other applicable law.


 


7.                                       Grantee’s
Representations, Warranties and Covenants.


 


(a)                                  Investment
Intention.  The Grantee represents
and warrants that the Options have been, and any Exercise Shares will be,
acquired by the Grantee solely for the Grantee’s own account for investment and
not with a view to or for sale in connection with any distribution
thereof.  The Grantee agrees that the
Grantee will not, directly or indirectly, offer, transfer, sell, pledge,
hypothecate or otherwise dispose of all or any of the Options or any of the
Exercise Shares (or solicit any offers to buy, purchase or otherwise acquire or
take a pledge of all or any of the Options or any of the Exercise Shares),
except in compliance with the Securities Act and the rules and regulations
of the Commission thereunder, and in compliance with applicable state or
foreign securities or “blue sky” laws. 
The Grantee further understands, acknowledges and agrees that none of
the Exercise Shares may be transferred, sold, pledged, hypothecated or
otherwise


 


8





















 


disposed of unless the provisions of the Shareholders Agreement and
Stock Subscription Agreement shall have been complied with or have expired.


 


(b)                                 Legends.  The Grantee acknowledges that any certificate
representing the Exercise Shares shall bear an appropriate legend, which will
include, without limitation, the following language:


 


“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “ACT”), AND MAY NOT BE OFFERED, SOLD, ASSIGNED,
PLEDGED, HYPOTHECATED, TRANSFERRED OR OTHERWISE DISPOSED OF (EACH, A
“TRANSFER”) UNLESS AND UNTIL REGISTERED UNDER THE ACT AND ANY APPLICABLE STATE
SECURITIES LAWS OR UNLESS SUCH TRANSFER IS (A) EXEMPT FROM
REGISTRATION OR IS OTHERWISE IN COMPLIANCE WITH THE ACT AND SUCH LAWS IN THE
OPINION OF COUNSEL TO THE SHAREHOLDER, WHICH COUNSEL MUST BE, AND THE
FORM AND SUBSTANCE OF WHICH OPINION ARE, REASONABLY SATISFACTORY TO THE
ISSUER AND (B) IN COMPLIANCE WITH THE SHAREHOLDERS AGREEMENT OF THE
ISSUER, DATED AS OF DECEMBER 15, 2000 AND ANY AMENDMENTS, SUPPLEMENTS OR
MODIFICATIONS THERETO (THE “SHAREHOLDERS AGREEMENT”).


 


THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO THE RESTRICTIONS ON TRANSFER SET FORTH IN (I) A STOCK SUBSCRIPTION
AGREEMENT, DATED AS
OF               ,
200  , AND (II) A SHAREHOLDERS AGREEMENT, COPIES OF WHICH ARE
AVAILABLE FOR INSPECTION AT THE OFFICES OF THE COMPANY.  NO TRANSFER OF SUCH SECURITIES WILL BE MADE
ON THE BOOKS OF THE COMPANY, AND SUCH TRANSFER SHALL BE VOIDABLE, UNLESS
ACCOMPANIED BY EVIDENCE OF COMPLIANCE WITH THE TERMS OF SUCH AGREEMENTS.


 


(c)                                  Ability
to Bear Risk.  The Grantee covenants
that the Grantee will not exercise all or any of the Options unless (i) the
financial situation of the Grantee is such that the Grantee can afford to bear
the economic risk of holding the Exercise Shares for an indefinite period and (ii) the
Grantee can afford to suffer the complete loss of the Grantee’s investment in
the Exercise Shares.


 


(d)                                 Restriction
on Sale upon Public Offering.  The
Grantee agrees that, in the event that the Company files a registration
statement under the Securities Act with respect to an underwritten public
offering of any shares of its capital stock, the
Grantee


 


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will not effect any public sale or distribution of any shares of the
Common Stock (other than as part of such public offering), including but not
limited to, pursuant to Rule 144 or Rule 144A under the Securities
Act, during the 20 days prior to and the 180 days (or such lesser number of
days that the managing underwriter may require) after the effective date of
such registration statement.  The Grantee
further understands and acknowledges that any sale, transfer or other
disposition of the Exercise Shares by him following a public offering will be
subject to compliance with, and may be limited under, the federal securities
laws and/or state “blue sky” laws.


 


8.                                       Change
in Control.  Unless otherwise
determined by the Committee, in the event of a Change in Control, each
outstanding Option exercisable pursuant to Section 2(b) shall be
canceled in exchange for a payment in cash of an amount equal to the excess, if
any, of the Change in Control Price over the Option Price; provided that if the
holders of Common Stock receive property other than cash as a result of a
Change of Control, then such payment shall be made in such other property in
the same proportion as the holders of Common Stock receive less the aggregate
Option Price in connection with such Change of Control.


 


9.                                       Representations
and Warranties of the Company.  The
Company represents and warrants to the Grantee that (a) the Company
has been duly incorporated and is an existing corporation in good standing
under the laws of the state of its incorporation, (b) this
Agreement has been duly authorized, executed and delivered by the Company and
constitutes a valid and legally binding obligation of the Company enforceable
against the Company in accordance with its terms, and (c) the
Exercise Shares, when issued, delivered and paid for, upon exercise of the
Options in accordance with the terms hereof, the Joinder Agreement and the
Stock Subscription Agreement, will be duly authorized, validly issued, fully
paid and nonassessable, and free and clear of any liens or encumbrances other
than those created pursuant to this Agreement, the Shareholders Agreement, the
Stock Subscription Agreement or otherwise in connection with the transactions
contemplated hereby.


 


10.                                 Capital
Adjustments.  The number and price of
the Shares covered by the Options shall be proportionately adjusted to reflect
any stock dividend, stock split or share combination of the Common Stock or any
recapitalization of the Company.  Subject
to any required action by the shareholders of the Company and Section 7 of
the Plan, in any merger, consolidation, reorganization, exchange of shares,
liquidation or dissolution, the Options shall pertain to the securities and
other property, if any, that a holder of the number of shares of Common Stock covered
by the Options would have been entitled to receive in connection with such
event.


 


11.                                 Certain
Restrictions on Repurchases.


 


(a)                                  Financing
Agreements, etc.  Notwithstanding any
other provision of this Agreement, the Company shall not be obligated or
permitted to pay the purchase price for any Remaining Options or Vested
Options, as the case may be, that the


 


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Company may elect to purchase from the Grantee pursuant to
Section 5 if (i) the payment of such purchase price would
result in a violation of the terms or provisions of, or a default or an event
of default under, any financing or security agreement or document entered into
by the Company or any of its Subsidiaries prior to the date hereof, any refunding
thereof, or in connection with the operations of the Company or the
Subsidiaries from time to time (such agreements and documents, as each may be
amended, modified or supplemented from time to time, are referred to herein as
the “Financing Agreements”),
in each case as the same may be amended, modified or supplemented from time to
time, (ii) the payment of such purchase price would violate any of
the terms or provisions of the Certificate of Incorporation of the Company or (iii) the
Company has no funds legally available therefor under the General Corporation
Law of the State of Delaware.


 


(b)                                 Delay
of Repurchase.  In the event that the
payment of the purchase price for any Remaining Options or Vested Options, as
the case may be, by the Company otherwise permitted under Section 5 is
prevented solely by the terms of Section 11(a), (i) the
payment of such purchase price will be postponed and will be made without the
application of further conditions or impediments (other than as set forth in
Section 5 hereof or in this Section 11) at the first opportunity
thereafter when the Company has funds legally available therefor and when the
payment of such purchase price will not result in any default, event of default
or violation under any of the Financing Agreements or in a violation of any
term or provision of the Certificate of Incorporation of the Company and (ii) the
Grantee’s right to receive payment of such purchase price shall rank against
other similar rights with respect to shares of Common Stock or options in
respect thereof according to priority in time of the effective date of the
event giving rise to any such right, provided that any such right as to which a
common date determines priority shall be of equal priority and shall share pro
rata in any purchase payments made pursuant to clause (i) above.


 


(c)                                  Purchase
Price Adjustment.  In the event that
a repurchase of Remaining Options or Vested Options, as the case may be, from
the Grantee is delayed pursuant to this Section 11, the purchase price per
Share when the repurchase of such Remaining Options or Vested Options, as the
case may be, eventually takes place as contemplated by
Section 11(b) shall equal the sum of (i) the Purchase
Price determined in accordance with Section 6 hereof at the time that the
repurchase of such Remaining Options or Vested Options, as the case may be,
would have occurred but for the operation of this Section 11, plus (ii) an amount equal to
interest on such Purchase Price for the period from the date on which the
completion of the repurchase would have taken place but for the operation of
this Section 11 to the date on which such repurchase actually takes place
(the “Delay Period”) at a
rate equal to the average annual cost to the Company of its and its
Subsidiaries bank indebtedness obligations outstanding during the Delay Period
or, if there are no such obligations outstanding, one percentage point greater
than the average prime rate charged during such period by a nationally
recognized bank designated by the Company.


 


11





















 


12.                                 Miscellaneous.


 


(a)                                  Notices.  All notices and other communications required
or permitted to be given under this Agreement shall be in writing and shall be
deemed to have been given if delivered personally or sent by certified or
express mail, return receipt requested, postage prepaid, or by any recognized
international equivalent of such delivery, to the Company, the Sponsors or the
Grantee, as the case may be, at the following addresses or to such other address
as the Company, the Sponsors or the Grantee, as the case may be, shall specify
by notice to the others:


 


(i)                                     if
to the Company, to it at:


 


Equinox
Holdings, Inc.

895 Broadway

New York, New York  10003

Fax:  212-777-9510

Telephone:  212-677-0180

Attention:  Harvey J. Spevak


 


(ii)                                  if
to the Grantee, to the Grantee at the address set forth on the signature
page hereof:


 


(iii)                               if
to the North Castle Fund, to:


 


c/o
North Castle Partners, L.L.C.

183 E. Putnam Avenue

Greenwich, CT  06830

Fax:  (203) 862-3273

Telephone:  (203) 862-3259

Attention:  Adam Saltzman


 


All such
notices and communications shall be deemed to have been received on the date of
delivery if delivered personally or on the third business day after the mailing
thereof, provided that the party giving such notice or communication
shall have attempted to telephone the party or parties to which notice is being
given during regular business hours on or before the day such notice or
communication is being sent, to advise such party or parties that such notice
is being sent.  Copies of any notice or
other communication given under this Agreement shall also be given to:


 


North
Castle Partners, L.L.C.

183 E. Putnam Avenue

Greenwich, CT 06830

Fax:  (203) 862-3273

Telephone:  (203) 862-3250

Attention:  Peter J.
Shabecoff, Esq.


 


12





















 


and


 


Debevoise &
Plimpton

919 Third Avenue

New York, New York  10022

Fax:  (212) 909-6836

Telephone:  (212) 909-6000

Attention:  Franci J.
Blassberg, Esq.


 


and


 


J.W.
Childs Equity Partners II, L.P.

c/o J.W. Childs Associates L.P.

One Federal Street

Boston, Massachusetts  02110

Fax:  617-753-1101

Telephone:  617-753-1100

Attention:  Glenn A. Hopkins


 


and


 


Kaye, Scholer, Fierman, Hays and Handler LLP

425 Park Avenue

New York, New York  10022

Fax:  212-836-6419

Telephone:  212-836-8019

Attention:  Stephen C.
Koval, Esq.


 


(b)                                 No
Right to Employment.  Nothing in this
Agreement shall be deemed to confer on the Grantee any right to continue in the
employ of the Company or any other member of the Company Group, or to interfere
with or limit in any way the right of the Company or any other member of the
Company Group to terminate such employment at any time.


 


(c)                                  Binding
Effect; Benefits.  This Agreement
shall be binding upon and inure to the benefit of the parties to this Agreement
and their respective successors and assigns. 
Except as provided in Section 5, nothing in this Agreement, express
or implied, is intended or shall be construed to give any person other than the
parties to this Agreement or their respective successors or assigns any legal
or equitable right, remedy or claim under or in respect of any agreement or any
provision contained herein.


 


(d)                                 Waiver;
Amendment.


 


(i)                                     Waiver.  Any party hereto or beneficiary hereof may by
written notice to the other parties (A) extend the time for the
performance of any of the


 


13





















 


obligations or other
actions of the other parties under this Agreement, (B) waive
compliance with any of the conditions or covenants of the other parties
contained in this Agreement and (C) waive or modify performance of
any of the obligations of the other parties under this Agreement; provided that
any waiver of the provisions of Section 4 must be consented to in writing by
the Sponsors.  Except as provided in the
preceding sentence, no action taken pursuant to this Agreement, including,
without limitation, any investigation by or on behalf of any party or
beneficiary, shall be deemed to constitute a waiver by the party or beneficiary
taking such action of compliance with any representations, warranties,
covenants or agreements contained herein. 
The waiver by any party hereto or beneficiary hereof of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of
any preceding or succeeding breach and no failure by a party or beneficiary to
exercise any right or privilege hereunder shall be deemed a waiver of such
party’s or beneficiary’s rights or privileges hereunder or shall be deemed a
waiver of such party’s or beneficiary’s rights to exercise the same at any
subsequent time or times hereunder.


 


(ii)                                  Amendment.  This Agreement may not be amended, modified
or supplemented orally, but only by a written instrument executed by the
Grantee and the Company, and (in the case of any amendment, modification or
supplement that adversely affects the rights of the Sponsors hereunder)
consented to by the Sponsors, as the case may be, in writing.  The parties hereto acknowledge that the
Company’s consent to an amendment or modification of this Agreement may be
subject to the terms and provisions of the Financing Agreements (as defined in
the Stock Subscription Agreement).


 


(e)                                  Assignability.  Neither this Agreement nor any right, remedy,
obligation or liability arising hereunder or by reason hereof shall be
assignable by the Grantee without the prior written consent of the other
parties, and the Sponsors.


 


(f)                                    Applicable
Law.  THIS AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REFERENCE TO PRINCIPLES OF CONFLICT OF LAWS WHICH WOULD REQUIRE OR
PERMIT APPLICATION OF THE LAW OF ANOTHER JURISDICTION, EXCEPT TO THE EXTENT
THAT THE CORPORATE LAW OF THE STATE OF INCORPORATION OF THE COMPANY
SPECIFICALLY AND MANDATORILY APPLIES.


 


(g)                                 Section and
Other Headings, etc.  The
section and other headings contained in this Agreement are for reference
purposes only and shall not affect the meaning or interpretation of this
Agreement.


 


(h)                                 Counterparts.  This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original and all of
which together shall constitute one and the same instrument.


 


14





















 


IN WITNESS WHEREOF, the Company and the Grantee have
executed this Agreement as of the date first above written.


 


	
   

  	
  EQUINOX HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE GRANTEE:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name: «Name»

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  «Address»

  



 


15





















 


Schedule A


 




	
  Number of Options

  	
   

  	
  Option Price

  	
   

  
	
  «Total_Options»

  	
   

  	
  «Exercise_Price»

  	
   

  






 


16