Exhibit
10.7


EMPLOYMENT AGREEMENT


This EMPLOYMENT AGREEMENT is entered into as of this        day
of September, 2003, by and between Equinox Holdings, Inc., a Delaware
corporation (the “Company”),
and Scott Rosen (“Executive”).


W I T N E S S E T H:


WHEREAS, the Company desires to employ Executive as
its Executive Vice President and Chief Financial Officer, and Executive desires
to accept such employment, in each case, on the terms and conditions set forth
herein.


NOW, THEREFORE, in consideration of the premises and
the mutual covenants and promises contained herein and for other good and
valuable consideration, the Company and Executive hereby agree as follows:


Section
1.                                          Agreement to Employ; No Conflicts


Upon the terms and subject to the conditions of this Agreement,
the Company hereby agrees to employ Executive, and Executive hereby accepts
employment with the Company.  Executive
represents and warrants that (a) he
is entering into this Agreement voluntarily and that his employment hereunder
and compliance with the terms and conditions hereof will not conflict with or
result in the breach by him of any agreement to which he is a party or by
which he may be bound, (b) he
has not violated, and in connection with his employment with the Company will
not violate, any non-competition, non-solicitation or other similar covenant or
agreement by which he is or may be bound, and (c) in
connection with his employment by the Company he will not use any confidential
or proprietary information he may have obtained in connection with employment
with any prior employer.


Section
2.                                          Term; Position and Responsibilities


(a)  Term of
Employment.  Unless Executive’s
employment shall sooner terminate pursuant to Section 7 hereof, the Company
shall employ Executive for a term commencing on the date hereof (the “Commencement Date”)
and ending on the third anniversary thereof (the “Initial Term”).  Effective upon the expiration of the Initial
Term and of each Additional Term (as defined below), Executive’s employment
hereunder shall be deemed to be automatically extended, upon the same terms and
conditions, for an additional period of one year (each, an “Additional Term”),
in each such case, commencing upon the expiration of the Initial Term or
the then current Additional Term, as the case may be, unless, at
least sixty (60) days prior to the 

















 


expiration
of the Initial Term or such Additional Term, either party hereto shall
have notified the other party hereto in writing that such extension shall not
take effect.  The period during which
Executive is employed pursuant to this Agreement, including any extension
thereof in accordance with the preceding sentence, shall be referred to as the
“Employment Period.”


(b)  Position
and Responsibilities.  During the
Employment Period, Executive shall serve as Executive Vice President and Chief
Financial Officer of the Company. 
Executive shall have such duties and responsibilities as are customarily
assigned to individuals serving in such positions and such other duties
consistent with Executive’s titles and positions as the Board of Directors of
the Company (the “Board”)
shall specify from time to time. 
Executive shall devote all of his skill, knowledge and business time to
the conscientious performance of the duties and responsibilities of such
positions, except for vacation time as set forth in Section 6(c), absence for
sickness or similar disability, and performing services for any charitable,
religious or community organizations, so long as such services do not
materially interfere with the performance of Executive’s duties hereunder.


Section
3.                                          Base Salary


As compensation for the services to be performed by
Executive during the Employment Period, the Company shall pay Executive
a base salary at an annualized rate of $300,000, payable in periodic
installments on the Company’s regular payroll dates (but no less frequently
than monthly).  Commencing with the 2005
calendar year, the Board shall review Executive’s base salary annually during
the Employment Period and, in its sole discretion, may increase (but not
decrease) such base salary from time to time. 
The annual base salary payable to Executive under this
Section 3, as the same may be increased from time to time, shall
hereinafter be referred to as the “Base Salary.”


Section
4.                                          Incentive Compensation


(a)  Performance
Bonus.


(i)  In
General.  Subject to Sections
4(a)(ii) and 7 hereof, Executive shall have an annual cash incentive bonus
opportunity for each of the Company’s fiscal years during the Employment Period
(the “Incentive Bonus”),
which shall become payable if the Company achieves the performance objectives
(based on earnings before interest, taxes, depreciation and amortization (“EBITDA”) established
from time to time by the Board or a committee thereof for the applicable fiscal
year (the “Bonus Targets”)
as follows:


	
  Company Performance

  	
   

  	
  Incentive Bonus

  
	
  If Company
  performance for the applicable fiscal year is less than 90% of the Bonus
  Targets

  	
   

  	
  Executive shall
  not be entitled to receive any Incentive Bonus for such fiscal year.

  



 


 


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  If Company
  performance for the applicable fiscal year equals or exceeds 90% of the Bonus
  Targets but is less than 95% of the Bonus Targets

  	
   

  	
  Executive shall
  be entitled to receive an Incentive Bonus equal to $42,000.

  
	
  If Company
  performance for the applicable fiscal year equals or exceeds 95% of the Bonus
  Targets but is less than or equal to 100% of the Bonus Targets

  	
   

  	
  Executive shall
  be entitled to receive an Incentive Bonus equal to $63,000, plus $8,400 for
  each one percent (1%) of the Bonus Targets achieved in excess of 95%,
  subject to a maximum Incentive Bonus payable of $105,000 for performance
  equal to 100% of the Bonus Targets.

  
	
  If Company
  performance for the applicable fiscal year exceeds 100% of the Bonus Targets

  	
   

  	
  Executive shall
  be entitled to receive an Incentive Bonus equal to $105,000, plus $10,500 for
  each one percent (1%) of the Bonus Targets achieved in excess of 100%,
  subject to a maximum Incentive Bonus payable of $210,000 for performance equal
  to 110% of the Bonus Targets.

  



 


For each fiscal year during the Employment Period, the
Company’s actual EBITDA shall be reviewed and confirmed by the Company’s
outside auditors and, following such review and confirmation, the Board or a
committee thereof shall determine whether and to what extent the Bonus Targets
have been achieved for such fiscal year. 
Any determinations made by the Board or applicable committee thereof
pursuant to this Agreement shall be final, binding and conclusive upon all
parties and for all purposes.  The
Incentive Bonus calculated pursuant to this Section 4(a) shall be paid to
Executive as soon as reasonably practicable following the end of the applicable
fiscal year but in no event later than April 10th following the end
of such fiscal year.  This Section 4
supercedes all other Company plans, programs, policies or practices that would
otherwise provide incentive compensation to Executive during the Employment
Period.


(ii)  2003
Pro-Rata Incentive Bonus.  Subject
to Section 7 hereof, Executive shall have a cash incentive bonus opportunity
for 2003 equal to the product of (A) the
Incentive Bonus that Executive would have been entitled to receive if Executive
had been employed for the Company’s entire 2003 fiscal year, multiplied by (B) a fraction, the numerator of
which is equal to the number of days Executive was employed by the Company
during the Company’s 2003 fiscal year and the denominator of which is equal
to 365.


(b)  Signing
Bonus.  Subject to the continuous
employment of Executive through the payment date, Executive shall be entitled
to receive a signing bonus (the “Signing Bonus”) equal to $55,000, which will
be payable in cash in lump sum during January 2004.


(c)  Options.  Pursuant to and in accordance with the
Equinox Holdings, Inc. 2000 Stock Incentive Plan (the “Plan”), Executive
shall be granted options (the “Options”) to 


 


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purchase
up to 100,000 shares of common stock, par value, $.01 per share, of the Company
(“Common Stock”).  The Options shall be evidenced by an option
agreement to be entered into by Executive and the Company, which shall be
substantially similar to the form option agreement most recently approved by
the Board.


Section
5.                                          Employee Benefits


During the Employment Period, Executive shall be
entitled to participate in the Company’s 401(k) plan, all insurance programs,
and all medical, dental and other welfare benefit plans, in each case,
maintained by the Company for its senior executive officers on terms and
conditions set forth in such plans, programs, policies or practices (as amended
from time to time).  Subject to the
terms and conditions of the Company’s 401(k) plan and applicable law, for each
calendar year during the Employment Period, the Company shall contribute to the
Company’s 401(k) plan up to 25% of Executive’s contributions to such plan for
such calendar year.


Section
6.                                          Perquisites and Expenses


(a)  General.  During the Employment Period, Executive
shall be entitled to participate in all perquisite programs maintained by the
Company for its senior executive officers, on a basis that is commensurate
with Executive’s position and duties with Company hereunder, in accordance with
the terms thereof, as the same may be amended and in effect from time to time.


(b)  Business
Travel, Lodging, etc.  The Company
shall reimburse Executive for reasonable travel, lodging, meal and other
reasonable expenses incurred by him in connection with his performance of
services hereunder upon submission of evidence, satisfactory to the Company, of
the incurrence and purpose of each such expense and otherwise in accordance
with the Company’s expense substantiation policy applicable to its senior
executives as in effect from time to time.


(c)  Vacation.  During the Employment Period, Executive
shall be entitled to three weeks of paid vacation per calendar year, without
carryover accumulation, which shall accrue in equal installments on a monthly
basis.


(d)  Company
Products and Services.  During the
Employment Period, Executive shall be entitled to receive, at no cost, an “All
Access” membership to use Company facilities, and shall be entitled to receive
any applicable employee discounts for the purchase of all other Company
services and products.


 


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Section
7.                                          Termination of Employment


(a)  Termination
Due to Death or Disability.  In the
event that Executive’s employment hereunder terminates due to his death or is
terminated by the Company due to Executive’s Disability (as defined below),
Executive shall not be entitled to receive any payments or benefits pursuant to
this Agreement except as provided in Section 7(f)(iii).  For purposes of this Agreement, “Disability” shall
mean a physical or mental disability that prevents or is reasonably
expected to prevent the performance by Executive of his duties hereunder for
a continuous period of 90 days or longer or for 180 days or more
in any 12-month period.  The determination
of Executive’s Disability shall (i) be
made by an independent physician who is reasonably acceptable to the Company
and Executive (or his representative), (ii) be
final and binding on the parties hereto and (iii) be
made taking into account such competent medical evidence as shall be presented
to such independent physician by Executive and/or the Company or by any
physician or group of physicians or other competent medical experts employed by
Executive and/or the Company to advise such independent physician.


(b)  Termination
by the Company for Cause.  Executive
may be terminated by the Company for Cause (as defined below), provided that if
the basis for the Company’s so terminating Executive is described by
clauses (i) or (iv) of the definition of Cause, Executive shall have been
given prior written notice of any proposed termination of his employment for
Cause, which notice specifies in reasonable detail the circumstances claimed to
provide the basis for such termination, and Executive shall not have corrected
such circumstances, in a manner reasonably satisfactory to the Board, within
20 days of receipt of such written notice.  For purposes of this Agreement, “Cause” shall mean (i) the willful failure of Executive
substantially to perform the duties specified in Section 2(b) hereof
(other than any such failure due to Executive’s physical or mental illness), (ii) Executive’s engaging in willful
and serious misconduct that has caused or is reasonably expected to result in
material injury to the Company or any of its Affiliates, (iii) Executive’s conviction of, or
entering a plea of guilty or nolo
contendere to, a crime that constitutes a felony, or (iv) the willful and material breach
by Executive of any of his obligations hereunder or under any other written
agreement or written covenant with the Company or any of
its Affiliates.  A termination for
Cause shall include a determination by the Board following the termination of
the Employment Period that circumstances existed during the Employment Period
that would have justified a termination by the Company for Cause.


(c)  Termination
by Company Without Cause. 
Executive’s employment hereunder may be terminated by the Company
Without Cause.  A termination “Without Cause” shall
mean a termination of Executive’s employment by the Company other than due
to Disability as described in Section 7(a) or for Cause as described in
Section 7(b).


 


 


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(d)  Termination
by Executive.  Except in the case of
a termination for Good Reason (as defined below), Executive may terminate his
employment for any other reason upon 60 days prior written notice
delivered to the Company.  For purposes
of this Agreement, “Good
Reason” shall mean Executive’s termination of his employment
with the Company by providing a Notice of Termination (as defined below) to the
Company within 60 days following the occurrence of any of the following
events and the failure of the Company to correct the circumstances set forth in
Executive’s notice within 20 days of receipt of such notice: (i) the assignment to Executive of
duties and responsibilities which are in the aggregate significantly different
from, and that result in a substantial diminution of, the duties and
responsibilities that he has or is to assume on the Commencement Date pursuant
to Section 2(b) hereof, (ii) a
reduction in the rate of Executive’s Base Salary or Incentive Bonus, (iii) a material breach of this
Agreement by the Company; or (iv) the
Company requiring Executive to be based anywhere other than the New York
metropolitan area, except for travel reasonably required by the Company.  Executive agrees that a corporate
reorganization by the Company and/or its Affiliates pursuant to which the
Company ceases to exist shall not constitute Good Reason hereunder so long as
there is no substantial diminution or significant change in the nature of
Executive’s duties or responsibilities as described in Section 2(b)
hereof.


(e)  Notice
of Termination.  Any termination of
Executive’s employment by Company pursuant to Section 7(a), 7(b)
or 7(c), or by Executive pursuant to Section 7(d), shall be
communicated by a written Notice of Termination addressed to the other
parties to this Agreement.  A ”Notice of Termination”
shall mean a notice stating that Executive’s employment with Company has
been or will be terminated, the effective date of such termination, the
specific provisions of this Section 7 under which such termination is
being effected, and which provides in reasonable detail the circumstances
claimed to provide the basis for such termination.


(f)  Payments Upon Certain Terminations.


(i)  Payments
Upon Qualifying Terminations.  In
the event of a termination of Executive’s employment by Company Without
Cause or a termination by Executive of his employment for Good Reason in
either such case during the Employment Period (any such termination, a “Qualifying Termination”),
the Company shall pay to Executive (or, following his death, to Executive’s
beneficiaries):


(w) any
accrued and unpaid Base Salary through the Date of Termination, within 10
business days after the Date of Termination;


(x) the
Incentive Bonus for the Company’s fiscal year ending prior to the Date of
Termination if, on or prior to the Date of Termination, Executive has not been
paid such Incentive Bonus for such prior fiscal year, plus a pro rata Incentive Bonus calculated in 


 


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accordance with clause (z) of
Section 7(f)(iii) hereof, payable in accordance with the provisions of
such clause, provided that the conditions of such clause have been satisfied;


(y) the
Signing Bonus within 10 business days after the Date of Termination if, on or
prior to the Date of Termination, Executive has not been paid the Signing Bonus
and the Date of Termination occurs after January 1, 2004; and


(z) as
liquidated damages in respect of claims based on provisions of this Agreement,
and provided Executive executes and delivers a general release of claims in
form and substance reasonably satisfactory to the Company and Executive, (I) continue his Base Salary for six months,
plus (II) continue his Base
Salary for one additional month for each twelve month period that Executive has
been employed with the Company as of such Date of Termination, subject to a
maximum of nine such additional months (or 15 months in the aggregate) (the “Severance Period”),
which shall be payable in installments on Company’s regular payroll dates.


(ii)  Continued
Benefits Upon Qualifying Terminations. 
If Executive’s employment shall terminate and he is entitled to receive
continued payments of his Base Salary under clause (z) of
Section 7(f)(i) hereof, the Company shall continue to provide to Executive
during the Severance Period the welfare benefits referred to in Section 5
hereof (the “Continued
Benefits”).


(iii)  Payments
Upon Other Terminations.  If
Executive’s employment shall terminate due to his death or Disability or if the
Company shall terminate Executive’s employment for Cause or Executive shall
terminate his employment without Good Reason in any such case during the
Employment Period, the Company shall pay Executive (or, in the event of his
death, his beneficiaries):


(x) any
accrued and unpaid Base Salary through the Date of Termination, within 10
business days after the Date of Termination;


(y) if
Executive’s employment shall terminate due to his death or Disability, or
Executive shall terminate his employment without Good Reason in any such case
during the Employment Period, the Incentive Bonus for the Company’s fiscal year
ending prior to the Date of Termination if, on or prior to the Date of
Termination, Executive has not been paid such Incentive Bonus for such prior
fiscal year; and


(z) if
Executive’s employment shall terminate due to his death or Disability in either
case during the Employment Period, the Signing Bonus within 10 business days
after the Date of Termination if, on or prior to the Date of Termination,
Executive has not been paid the Signing Bonus and the Date of Termination
occurs after January 1, 2004, plus if the Company has achieved the Bonus
Targets (pro rated on the basis of the 


 


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fraction described in clause (II) of this
Section 7(f)(iii)(z)), an amount, payable in one lump sum as soon as
reasonably practicable following the end of the applicable fiscal year but in
no event later than April 10th following the end of such fiscal
year, equal to the product of (I) the
Incentive Bonus that would have been payable to Executive for such fiscal year
multiplied by (II) a fraction,
the numerator of which is equal to the number of days in such fiscal year
that precede the Date of Termination and the denominator of which is equal
to 365.


(iv)  Other
Payments.  Executive shall be
entitled to receive all amounts payable and benefits accrued under any
otherwise applicable plan, policy, program or practice of the Company
(including, but not limited to, its vacation policies) in which Executive was a
participant during his employment with Company in accordance with the terms
thereof; provided that Executive shall not be entitled to receive any payments
or benefits under any such plan, policy, program or practice providing any
severance, bonus or incentive compensation (excluding any payments or benefits
in respect of the Incentive Bonus, the Signing Bonus, or the Options) and the provisions
of this Section 7(f) shall supersede the provisions of any such plan,
policy, program or practice.  In
addition, notwithstanding anything to the contrary contained in this Agreement
and except as set forth in Sections 7(f)(i)(x) or 7(f)(iii)(z) hereof,
Executive shall be entitled to receive an Incentive Bonus for any given fiscal
year under this Agreement only if he is employed on the last day of such fiscal
year.


(g)  Date of
Termination.  As used in this
Agreement, the term “Date
of Termination” shall mean (i) if
Executive’s employment is terminated by his death, the date of his death, (ii) under any other circumstances,
the later of (A) the date of
termination specified in the Notice of Termination, (B) the date any applicable correction period ends and (C) the expiration of any required
notice period; provided that in the case of Executive’s termination of
employment by the Company Without Cause or by Executive without Good Reason,
such date is at least 30 days after the date on which Notice of
Termination is given as contemplated by Section 7(e).


(h)  Resignation
upon Termination.  Effective as of
any Date of Termination under this Section 7 or otherwise as of the date
of Executive’s termination of employment with Company, Executive shall resign,
in writing, from all positions then held by him with the Company and its
Affiliates.


(i)  Cessation
of Professional Activity.  Upon
delivery of a Notice of Termination by any party, the Company may relieve
Executive of his responsibilities described in Section 2(b) and require
Executive to immediately cease all professional activity on behalf of the
Company.


 


 


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(j)  No Duty
to Mitigate.  Executive shall not be
required to mitigate the amounts payable by the Company pursuant to
Section 7(f) hereof by seeking other employment or otherwise, and such
payments shall not be subject offset.


(k)  Limitation
on Benefits.  Notwithstanding
anything contained in this Agreement, the Plan or any option agreement to the
contrary, to the extent that any of the payments and benefits provided for
under this Agreement, the Plan, or any other agreement or arrangement between
the Company and Executive (collectively, the “Payments”) would constitute a “parachute
payment” within the meaning of section 280G of the Internal Revenue Code of
1986, as amended (the “Code”),
the amount of such Payments shall be reduced to the amount that would result in
no portion of the Payments being subject to the excise tax imposed pursuant to
section 4999 of the Code.  If Payments
that would otherwise be reduced or eliminated, as the case may be, pursuant to
the immediately preceding sentence would not be so reduced or eliminated, as
the case may be, if the shareholder approval requirements of section 280G(b)(5)
of the Internal Revenue Code are capable of being satisfied, the Company shall
use its reasonable best efforts to cause such payments to be submitted for such
approval prior to the change in control giving rise to such Payments.


Section
8.                                          Restrictive Covenants


(a)  Unauthorized
Disclosure.  From the date hereof,
and during any period of employment with the Company or its Affiliates and the
five-year period following any termination thereof, without the prior written
consent of the Board or its authorized representative, except to the extent
required by an order of a court having jurisdiction or under subpoena from
an appropriate government agency, in which event, Executive shall use his
reasonable best efforts to consult with the Board prior to responding to any
such order or subpoena, and except as required in the performance of his duties
hereunder, Executive shall not disclose any confidential or proprietary trade
secrets, customer lists, drawings, designs, information regarding product development,
marketing plans, sales plans, manufacturing plans, management organization
information (including but not limited to data and other information relating
to members of the Board, the Company or any of its Affiliates or to management,
the Company or any of its Affiliates), operating policies or manuals, business
plans, financial records, packaging design or other financial, commercial,
business or technical information (i) relating
to the Company or any of its Affiliates or (b) that
the Company or any of its Affiliates may receive belonging to suppliers,
customers or others who do business with the Company or any of its Affiliates
(collectively, “Confidential
Information”) to any third person unless such Confidential
Information has been previously disclosed to the public or is in the public
domain (in each case, other than by reason of Executive’s breach of this
Section 8(a)).


 


 


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(b)  Non-Disparagement.  During the period commencing on the date
hereof and ending nine months after the termination of Executive’s employment
with the Company or, if longer, the period during which Executive is receiving
continued payments of Base Salary pursuant to Section 7(f)(i) hereof (the “Restriction Period”),
Executive will not directly or indirectly (i)
engage in any conduct or make any statement, whether in commercial or
noncommercial speech, disparaging or criticizing in any way the Company, any
Subsidiary, North Castle Partners, L.L.C. (“North Castle”), J.W. Childs &
Associates, L.P. (“Childs”),
any Affiliate of any of these, or any products or services offered by any of
these, or (ii) engage in any
other conduct or make any other statement, in each case, which could be
reasonably expected to impair the goodwill of the Company, any Subsidiary,
North Castle, Childs, or any Affiliate of any of these, the reputation of
Company products or the marketing of Company products except to the extent
required by law and then only after consultation with North Castle and Childs to
the extent possible, or in connection with any dispute between Executive and
any of the foregoing entities.  During
the Restriction Period, the Company, any Subsidiary,
North Castle, Childs and any Affiliate of any of these will not
directly or indirectly (i) engage
in any conduct or make any statement, whether in commercial or non-commercial
speech, disparaging or criticizing Executive in any way, or (ii) engage in any other conduct or make
any other statement, in each case, which could reasonably be expected to impair
the business reputation of Executive except to the extent provided by law and
then only after consultation with Executive to the extent possible, in
connection with any dispute between the Company, any Subsidiary,
North Castle, Childs or any Affiliate of these, and Executive, or in
connection with any conduct or statement which is reasonably required to manage
the Company and is internal to or amongst the Company, any Subsidiary,
North Castle, Childs, any Affiliate of any of these, or any other
Person which holds an ownership interest in any of the foregoing.


(c)  Non-Competition.  Executive covenants and agrees that during
the Restriction Period, the Executive shall not, directly or indirectly, own
any interest in, operate, join, control or participate as a manager, member,
stockholder, partner, director, principal, officer, or agent of, enter into the
employment of, act as a consultant to, or perform any services for any entity
which has material operations which compete with any health or fitness club or
spa business in any jurisdiction in which the Company or its Immediate
Affiliates is engaged, or in which any of the foregoing has documented plans to
become engaged of which Executive has knowledge at the time of Executive’s
termination of employment. 
Notwithstanding anything herein to the contrary, this Section 8(c)
shall not prevent the Executive from acquiring as an investment securities
representing not more than five percent (5%) of the outstanding voting
securities of any publicly-held corporation.


(d)  Non–Solicitation
of Employees.  During the
Restriction Period, Executive shall not, directly or indirectly, for his own
account or for the account of any other Person 


 


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in any
jurisdiction in which the Company or any of its Affiliates has commenced or has
made plans to commence operations at the time of Executive’s employment, (i) solicit for employment, employ or
otherwise interfere with the relationship of the Company or any of its Affiliates
with any natural person throughout the world who, during the six-month period
prior to such solicitation, employment, or interference, is or was employed by
or otherwise engaged to perform services for the Company or any of its
Immediate Affiliates, or any Affiliate of the Company to whom Executive was
introduced to by virtue of his relationship with the Company or any of its
Immediate Affiliates, other than any such solicitation or employment on behalf
of the Company or any of its Affiliates during Executive’s employment with the
Company, or (ii) induce any
employee of the Company or any of its Affiliates who is a member of
management to engage in any activity which Executive is prohibited from
engaging in under any of paragraphs of this Section 8 or to terminate his
or her employment with the Company.


(e)  Non–Solicitation
of Customers.  During the
Restriction Period, Executive shall not, directly or indirectly, for his own
account or for the account of any other Person, in any jurisdiction in which
the Company or any of its Affiliates has commenced or made plans to commence
operations, solicit or otherwise attempt to establish any business relationship
of a nature that is competitive with the business or relationship of the
Company or any of its Affiliates with any Person throughout the world which,
during the six-month period prior to any such solicitation is or was
a customer, client, distributor, supplier or vendor of the Company or any
of its Immediate Affiliates, or an Affiliate of the Company to whom Executive
was introduced to by virtue of his relationship with the Company or any of its
Immediate Affiliates, other than any such solicitation on behalf of the Company
or any of its Affiliates during Executive’s employment with the Company.


(f)  Return
of Documents.  In the event of the
termination of Executive’s employment for any reason, Executive shall deliver
to the Company all of (i) the
property of each of the Company and its Affiliates then in Executive’s
possession, and (ii) the
documents and data of any nature and in whatever medium of each of the Company
and its Affiliates, and he shall not take with him any such property, documents
or data or any reproduction thereof, or any documents containing or pertaining
to any Confidential Information.


Section
9.                                          Certain Acknowledgments; Injunctive
Relief with Respect to Covenants.


(a)  Certain
Acknowledgments.  Executive
acknowledges and agrees that Executive will have a prominent role in the
management of the business, and the development of the goodwill, of the Company
and its Affiliates and will establish and develop relations and contacts with
the principal customers and suppliers of the Company 


 


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and its
Affiliates in the United States of America and the rest of the world, all of
which constitute valuable goodwill of, and could be used by Executive to
compete unfairly with, the Company and its Affiliates and that (i) in the course of his employment
with the Company, Executive will obtain confidential and proprietary
information and trade secrets concerning the business and operations of the
Company and its Affiliates in the United States of America and the rest of the
world that could be used to compete unfairly with the Company and its Affiliates;
(ii) the covenants and
restrictions contained in Section 8 are intended to protect the legitimate
interests of the Company and its Affiliates in their respective goodwill, trade
secrets and other confidential and proprietary information; and (iii) Executive desires to be bound by
such covenants and restrictions.


(b)  Injunctive
Relief.  Executive acknowledges and
agrees that the covenants, obligations and agreements of Executive contained in
Section 8 relate to special, unique and extraordinary matters and that
a violation of any of the terms of such covenants, obligations or
agreements will cause the Company irreparable injury for which adequate
remedies are not available at law. 
Therefore, Executive agrees that the Company shall be entitled to an injunction,
restraining order or such other equitable relief (without the requirement to
post bond) as a court of competent jurisdiction may deem necessary or
appropriate to restrain Executive from committing any violation of such
covenants, obligations or agreements. 
These injunctive remedies are cumulative and in addition to any other
rights and remedies the Company may have.


Section
10.                                   Entire Agreement


This Agreement and the option agreement referenced to
in Section 4(c) hereof constitute the entire agreement among the parties
hereto with respect to the subject matter hereof.  All prior correspondence and proposals (including but not limited
to summaries of proposed terms) and all prior promises, representations, understandings,
practices and agreements relating to such subject matter (including but not
limited to those made to or with Executive by any other Person) are merged
herein and superseded hereby.


Section
11.                                   Indemnification


The Company hereby agrees that it shall indemnify and
hold harmless Executive to the fullest extent permitted by law from and against
any and all liabilities, costs, claims and expenses, including all costs and
expenses incurred in defense of litigation (including attorneys’ fees), arising
out of the employment of Executive hereunder, except to the extent that any
such liabilities, costs, claims and expenses is found in a final judgment by a
court of competent jurisdiction to have resulted from, arising out of or based
upon the gross negligence or willful misconduct of Executive.  Costs and expenses incurred by Executive in
defense of such litigation (including attorneys’ fees) shall be paid by Company
in advance of the final disposition of such litigation upon receipt by Company 


 


12

















 


of (a) a
written request for payment, (b) appropriate
documentation evidencing the incurrence, amount and nature of the costs and
expenses for which payment is being sought, and (c) an undertaking adequate under applicable law made by
or on behalf of Executive to repay the amounts so paid if it shall ultimately
be determined that Executive is not entitled to be indemnified by the Company
under this Agreement, including but not limited to as a result of such
exception.  The Company and Executive
will consult in good faith with respect to the conduct of any such litigation,
and Executive’s counsel shall be selected with the consent of the Company.  The Company shall maintain an appropriate
level of director’s and officer’s liability insurance during the Employment
Period and during the Restriction Period.


Section
12.                                   Miscellaneous


(a)  Binding
Effect; Assignment.  This Agreement
shall be binding on and inure to the benefit of the Company, and its respective
Successors and permitted assigns.  This
Agreement shall also be binding on and inure to the benefit of Executive and
his heirs, executors, administrators and legal representatives.  This Agreement shall not be assignable by
any party hereto without the prior written consent of the other parties hereto,
except that the Company may effect such an assignment without prior written
approval of Executive upon the transfer of all or substantially all of its
business and/or assets (by whatever means).


(b)  Governing Law, etc.


(i)  Governing Law.  This agreement shall be governed in all
respects, including as to validity, interpretation and effect, by the internal
laws of the State of New York without giving effect to the conflict of
laws rules thereof to the extent that the application of the law of another
jurisdiction would be required thereby.


(ii)  Consent to Jurisdiction.  Each party hereby irrevocably submits to the
jurisdiction of the courts of the State of New York and the federal courts of
the United States of America located in the County of New York solely in
respect of the interpretation and enforcement of the provisions of this
Agreement and of the documents referred to in this Agreement, and in respect of
the transactions contemplated hereby and thereby.  Each party hereby waives and agrees not to assert, as a defense
in any action, suit or proceeding for the interpretation and enforcement
hereof, or any such document or in respect of any such transaction, that such
action, suit or proceeding may not be brought or is not maintainable in such
courts or that the venue thereof may not be appropriate or that this Agreement
or any such document may not be enforced in or by such courts.  Each party hereby consents to and grants any
such court jurisdiction over the person of 


 


13

















 


such parties and over the subject matter of any such
dispute and agree that the mailing of process or other papers in connection
with any such action or proceeding in the manner provided in Section 13(g)
or in such other manner as may be permitted by law, shall be valid and
sufficient service thereof.


(iii)  Waiver of Right to Trial by Jury.  Each party acknowledges and agrees that any
controversy which may arise under this Agreement is likely to involve
complicated and difficult issues, and therefore each party hereby irrevocably
and unconditionally waives any right such party may have to a trial by jury in
respect or any litigation directly or indirectly arising out of or relating to
this Agreement, or the breach, termination or validity of this Agreement, or
the transactions contemplated by this Agreement.  Each party certifies and acknowledges that (A) no representative, agent or
attorney of any other party has represented, expressly or otherwise, that such
other party would not, in the event of litigation, seek to enforce the
foregoing waiver, (B) each
such party understands and has considered the implications of this waiver, (C) each such party makes this waiver
voluntarily, and (D) each
such party has been induced to enter into this agreement by, among other
things, the mutual waivers and certifications in this Section 13(b).


(c)  Taxes.  The Company shall have the power to
withhold, or require Executive to remit to the Company promptly upon
notification of the amount due, an amount sufficient to satisfy the statutory
minimum amount of all Federal, state, local and foreign withholding tax
requirements with respect to any payment of cash, or issuance or delivery of
any other property hereunder, and the Company may defer any such payment of
cash or issuance or delivery of such other property  until such requirements are satisfied.


(d)  Amendments.  No provision of this Agreement may be
modified, waived or discharged unless such modification, waiver or discharge is
approved by the Board or a Person authorized thereby and is agreed to in
writing by Executive.  No waiver by any
party hereto at any time of any breach by any other party hereto of, or
compliance with, any condition or provision of this Agreement to be performed
by such other party shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or subsequent time.  No waiver of any provision of this Agreement
shall be implied from any course of dealing between or among the parties hereto
or from any failure by any party hereto to assert its rights hereunder on any
occasion or series of occasions.


(e)  Severability.  In the event that any one or more of the
provisions of this Agreement shall be or become invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not be affected thereby.


 


14

















 


(f)  Blue
Pencil.  If any court of competent
jurisdiction shall at any time deem the Restriction Period too lengthy, the
other provisions of Section 8 shall nevertheless stand and the Restriction
Period herein shall be deemed to be the longest period permissible by law under
the circumstances.  The court shall
reduce the time period to permissible duration or size.


(g)  Notices.  Any notice or other communication required
or permitted to be delivered under this Agreement shall be (i) in
writing, (ii) delivered personally, by courier service or by
certified or registered mail, first–class postage prepaid and return
receipt requested, (iii) deemed to have been received on the date
of delivery or, if so mailed, on the third business day after the mailing
thereof, and (iv) addressed as follows (or to such other address as
the party entitled to notice shall hereafter designate in accordance with the
terms hereof):


	
  (A)

  	
   

  	
  If to the Company, to
  it at:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Equinox Holdings, Inc.

  
	
   

  	
   

  	
  895 Broadway

  
	
   

  	
   

  	
  New York, New York
  10003

  
	
   

  	
   

  	
  Tel:  (212) 677-0180

  
	
   

  	
   

  	
  Fax:  (212) 777-9510

  
	
   

  	
   

  	
  Attention: 
  Harvey Spevak

  
	
   

  	
   

  	
   

  
	
  (B)

  	
   

  	
  if to Executive, to him
  at his residential address as currently on file with the Company.

  



 


Copies of any notices or other communications given
under this Agreement shall also be given to:


	
   

  	
   

  	
  North Castle Partners,
  L.L.C.

  
	
   

  	
   

  	
  183 East Putnam Avenue

  
	
   

  	
   

  	
  Greenwich, CT 06830

  
	
   

  	
   

  	
  Tel:  (203) 862-3000

  
	
   

  	
   

  	
  Fax:  (203) 862-3273

  
	
   

  	
   

  	
  Attention: 
  Adam Saltzman

  
	
   

  	
   

  	
   

  
	
  and to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Debevoise &
  Plimpton

  
	
   

  	
   

  	
  919 Third Avenue

  
	
   

  	
   

  	
  New York, New York
  10022

  
	
   

  	
   

  	
  Tel: (212) 909-6000

  



 


 


15

















 


	
   

  	
   

  	
  Fax: (212) 909-6836

  
	
   

  	
   

  	
  Attention: 
  Franci J. Blassberg, Esq.

  
	
   

  	
   

  	
   

  
	
  and to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

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

  
	
   

  	
   

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

  
	
   

  	
   

  	
  One Federal Street

  
	
   

  	
   

  	
  Boston,
  Massachusetts  02110

  
	
   

  	
   

  	
  Attention: 
  Glenn A. Hopkins

  
	
   

  	
   

  	
   

  
	
  and to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Kaye, Scholer, Fierman,
  Hays and Handler LLP

  
	
   

  	
   

  	
  425 Park Avenue

  
	
   

  	
   

  	
  New York, New York  10022

  
	
   

  	
   

  	
  Attention: 
  Stephen C. Koval, Esq.

  



 


(h)  Further
Assurances.  Each party hereto
agrees with the other party hereto that it will cooperate with such other party
and will execute and deliver, or cause to be executed and delivered, all such
other instruments and documents, and will take such other actions, as such
other parties may reasonably request from time to time to effectuate the provisions
and purposes of this Agreement.


(i)  Legal
Review.  Executive hereby represents
that he has had the opportunity to review this Agreement carefully and to
consult with counsel prior to the execution of this Agreement and that he does
fully understand all the terms of this Agreement.


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


(k)  Headings.  The section and other headings
contained in this Agreement are for the convenience of the parties only and are
not intended to be a part hereof or to affect the meaning or
interpretation hereof.


(l)  Certain Definitions.


“Affiliate”:  with respect to any Person, means
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.


 


16

















 


“Control”:  with respect to any Person, means 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.


“Immediate
Affiliate”:  NCP-EH and
any Person which NCP-EH, directly or indirectly, Controls.


“Person”:  any natural person, firm, partnership,
limited liability company, association, corporation, company, trust, business
trust, governmental authority or other entity.


“Subsidiary”:  with respect to any Person, each corporation
or other Person in which the first Person owns or Controls, directly or
indirectly, capital stock or other ownership interests representing 50% or
more of the combined voting power of the outstanding voting stock or other
ownership interests of such corporation or other Person.


“Successor”:  of a Person means 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.


— Signature page
follows —


 


17

















 


IN WITNESS WHEREOF, the Company has duly executed this
Agreement by its authorized representative, and Executive has hereunto set his
hand, in each case effective as of the date first above written.


	
   

  	
  EQUINOX
  HOLDINGS, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:
  

  	
   

  	
  /s/  Harvey Spevak

  
	
   

  	
   

  	
   

  	
  Name:
  Harvey Spevak

  
	
   

  	
   

  	
   

  	
  Title:
  Chief Executive Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  EXECUTIVE:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  /s/  Scott Rosen

  
	
   

  	
  Scott Rosen

  



 


 


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