Document:

Exhibit
4.5

 

THIS WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE OF
THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE TRANSFERRED,
SOLD OR OTHERWISE DISPOSED OF WITHOUT COMPLIANCE WITH THE REGISTRATION OR
QUALIFICATION PROVISIONS OF APPLICABLE FEDERAL OR STATE SECURITIES LAWS OR
APPLICABLE EXEMPTIONS THEREFROM.

 

THE COMPANY’S OBLIGATIONS TO THE HOLDER PURSUANT TO SECTION 9.1(C)
OF THIS WARRANT ARE SUBJECT TO A SUBORDINATION AGREEMENT DATED AS OF
DECEMBER 15, 2000 AMONG EQUINOX HOLDINGS, INC. CERTAIN PARTIES NAMED
THEREIN AS GUARANTORS, AND BANKERS TRUST COMPANY, AS AGENT, AND THE HOLDERS OF
THE SENIOR SUBORDINATED NOTES, WHICH AMONG OTHER THINGS, SUBORDINATES THE COMPANY’S
OBLIGATIONS UNDER SECTION 9.1(C) HEREOF TO THE COMPANY’S OBLIGATIONS TO
CERTAIN HOLDERS OF SENIOR DEBT, AS MORE FULLY DESCRIBED IN THAT SUBORDINATION
AGREEMENT.

 

EQUINOX HOLDINGS, INC.

 

Common Stock Purchase Warrant

 

	
  No.        

  	
   

  	
  New York, New
  York

  
	
  PPN 29477# AA 4

  	
   

  	
  December 15,
  2000

  

 

EQUINOX HOLDINGS, INC.,
a Delaware corporation (the “Company”), for value received, hereby
certifies that [NAME OF MEZZANINE FUND], or its registered permitted assigns,
is entitled to purchase from the Company [                          ]
(the “Initial
Warrant Shares”) duly authorized, validly issued, fully paid and
nonassessable shares of Common Stock, par value $0.01 per share (the “Common
Stock”),
of the Company at the purchase price per share of $.01 (the “Initial Warrant
Price”), at any time or from time to time prior to 5:00 P.M., New
York City time, on December 15, 2009 or such earlier date as provided in Section 9
hereof (such date, the “Expiration Date”), all subject to the
terms, conditions and adjustments set forth below in this Warrant (as defined
below).

 

This Warrant is one of
the Common Stock Purchase Warrants (each a “Warrant” and collectively,
the “Warrants,”
such term to include any such warrants issued in substitution therefor)
originally issued in connection with the execution and delivery of that certain
Senior Subordinated Note and Warrant Purchase Agreement dated as of
December 15, 2000 (as may be amended from time to time, the “Purchase
Agreement”) by and among the Company, certain parties named therein
as guarantors and the Purchasers named therein (the “Purchasers”).  The Warrants originally so issued evidence
rights to purchase an aggregate of 783,020 shares of Common Stock, subject to
adjustment as provided herein and therein. 
All capitalized terms used herein which are not otherwise defined in Section 14
hereof shall have the meanings set forth in the Purchase Agreement.

 

 

1.                                      EXERCISE
OR CONVERSION OF WARRANT

 

1.1                               Manner of Exercise or Conversion;
Payment.

 

1.1.1                        Exercise.  This Warrant may be exercised by the holder
hereof, in whole or in part, during normal business hours on any Business Day
on or prior to the Expiration Date, by surrender of this Warrant to the Company
at its office maintained pursuant to Section 13.2(a) hereof,
accompanied by a subscription in substantially the form attached to this
Warrant (or a reasonable facsimile thereof) duly executed by such holder and
accompanied by payment, (i) in cash, (ii) by certified check payable to the
order of the Company, (iii) by wire transfer, or (iv) by the surrender by such
holder to the Company, at the aforesaid offices, of any of the Company’s Senior
Subordinated Notes due December 15, 2008 (the “Notes”) held by such
holder, and all such Notes so surrendered shall be credited against such
payment in an amount equal to the principal amount of such Notes plus accrued
interest thereon to the date of the surrender, or by any combination of any of
the foregoing methods, in the amount obtained by multiplying (a) the number of
Initial Warrant Shares (without giving effect to any adjustment thereof, other
than pursuant to Section 2.5) designated in such subscription by (b) the
Initial Warrant Price (such product, the “Exercise Price”), and such holder shall
thereupon be entitled to receive the number of duly authorized, validly issued,
fully paid and nonassessable shares of Common Stock (or Other Securities),
adjusted as provided in Sections 2 through 4 hereof (other than
any adjustment under Section 2.5, it being understood that Section 2.5,
if applicable, shall operate solely to increase the number of Initial Warrant
Shares for which this Warrant may be exercised, converted or exchanged); provided
that the amount of payment per share of Common Stock (or Other Securities)
(after giving effect to any adjustments as provided in Sections 2
through 4 hereof) upon exercise, conversion or exchange shall never be
less than the par value per share of Common Stock (or Other Securities) at the
time of such exercise.  To the extent
necessary, the Exercise Price shall be deemed to have been amended to reflect
the effects of the foregoing proviso.

 

1.1.2                        Conversion.  If instead of exercising this Warrant
pursuant to the terms of Section 1.1.1 above, the holder hereof
elects to convert this Warrant, in whole or in part, into shares of Common
Stock, then such holder shall surrender this Warrant to the Company at its
office maintained pursuant to Section 13.2(a) hereof during normal
business hours on any Business Day on or prior to the Expiration Date
accompanied by a conversion notice in substantially the form attached to this
Warrant (or a reasonable facsimile thereof) duly executed by such holder, and
such holder shall thereupon be entitled to receive a number of duly authorized,
validly issued, fully paid and nonassessable shares of Common Stock (or Other
Securities) equal to the quotient of:

 

(i)                                     the
difference between:

 

(a)                                  the
product of (x) the number of shares of Common Stock (or Other Securities)
determined as provided in Sections 2 through 4 hereof (other than
any adjustment under Section 2.5, it being understood that Section 2.5,
if applicable, shall operate solely to increase the number of Initial Warrant
Shares for which this Warrant may be exercised, converted or exchanged) which
such holder would be entitled to receive upon exercise of this

 

2

 

Warrant for the
number of Initial Warrant Shares designated in such conversion notice multiplied
by (y) the Current Market Price of each such share of Common Stock
(or such Other Securities) so receivable upon such exercise

 

minus

 

(b)                                 the
Exercise Price

 

divided by

 

(ii)                                  such
Current Market Price of each such share of Common Stock (or Other Securities).

 

1.1.3                        Exchange.  If instead of exercising or converting this
Warrant pursuant to the terms of Section 1.1.1 or Section 1.1.2
above, the holder hereof exchanges this Warrant,  in whole or in part, for shares of Common Stock, then such holder
shall surrender this Warrant to the Company at its office maintained pursuant
to Section 14.2(a) hereof during normal business hours on any Business Day
on or prior to the Expiration Date accompanied by an exchange notice in
substantially the form attached to this Warrant (or a reasonable facsimile
thereof) duly executed by such holder, and such holder shall thereupon be
entitled to receive a number of duly authorized, validly issued, fully paid and
non assessable shares of Common Stock (or Other Securities) equal to the
quotient of:

 

(i)                                     the
difference between:

 

(a)                                  the
product of the number of shares of Common Stock (or Other Securities)
determined as provided in Sections 2 through 4 hereof (other than
any adjustment under Section 2.5, it being understood that Section 2.5,
if applicable, shall operate solely to increase the number of Initial Warrant
Shares for which this Warrant may be exercised, converted or exchanged) which
such holder would be entitled to receive upon exercise of this Warrant for the
number of Initial Warrant Shares designated in such exchange notice multiplied
by the Current Market Price of each such share of Common Stock (or
such Other Securities) so receivable upon such exercise.

 

minus

 

(b)                                 the
Exercise Price

 

divided by

 

(ii)                                  such
Current Market Price of each such share of Common Stock (or Other Securities).

 

3

 

For all purposes of this
Warrant (other than this Section 1.1), any reference herein to the
exercise of this Warrant shall be deemed to include a reference to the
conversion or exchange of this Warrant into Common Stock (or Other Securities)
in accordance with the terms of this Section 1.1.2 and Section 1.1.3.

 

1.2                               When
Exercise Effective. 
Each exercise of this Warrant shall be deemed to have been effected
immediately prior to the close of business on the Business Day on which this
Warrant shall be deemed to have been surrendered to the Company as provided in Section 1.1
hereof, and at such time the Person or Persons in whose name or names any
certificate or certificates for shares of Common Stock (or Other Securities)
shall be issuable upon such exercise as provided in Section 1.3
hereof shall be deemed to have become the holder or holders of record thereof.

 

1.3                               Delivery of Stock Certificates, etc.  As soon as practicable after each exercise
of this Warrant, in whole or in part, and in any event within five (5) Business
Days thereafter, the Company at its sole expense (including the payment by it
of any applicable issue taxes) will cause to be issued in the name of and
delivered to the holder hereof or, subject to Section 10 hereof, as
such holder (upon payment by such holder of any applicable transfer taxes) may
direct:

 

(a)                                  a
certificate or certificates for the number of duly authorized, validly issued,
fully paid and nonassessable shares of Common Stock (or Other Securities) to
which such holder shall be entitled upon such exercise plus, in lieu of
any fractional share to which such holder would otherwise be entitled, cash in
an amount equal to the same fraction of the Market Price per share on the Business
Day next preceding the date of such exercise; and

 

(b)                                 in
case such exercise is in part only, a new Warrant or Warrants of like tenor,
dated the date hereof and calling in the aggregate on the face or faces thereof
for the number of shares of Common Stock equal (without giving effect to any
adjustment thereof) to the number of such shares called for on the face of this
Warrant minus the number of such shares designated by the holder upon such
exercise as provided in Section 1.1 hereof.

 

1.4                               Company to Reaffirm Obligations.
 The Company will, at the time of
each exercise of this Warrant, upon the request of the holder hereof,
acknowledge in writing its continuing obligation to afford to such holder all
rights (including without limitation any rights to registration, pursuant to
the Registration Rights Agreement referred to in Section 8 hereof
and any other rights afforded to such holder pursuant to the Stockholders
Agreement with respect to the shares of Common Stock or Other Securities issued
upon such exercise) to which such holder shall continue to be entitled after
such exercise in accordance with the terms of this Warrant; provided, however,
that if the holder of this Warrant shall fail to make any such request, such
failure shall not affect the continuing obligation of the Company to afford
such rights to such holder.

 

2.                                      ADJUSTMENT
OF COMMON STOCK ISSUABLE UPON EXERCISE.

 

2.1                               General; Number of Shares; Warrant
Price.  The number of
shares of Common Stock which the holder of this Warrant shall be entitled to
receive upon each exercise hereof shall be determined by multiplying the number
of shares of Common Stock which would otherwise (but for the provisions of this
Section 2) be issuable upon such exercise, as designated by the
holder hereof pursuant to Section 1.1 hereof, by the fraction of
which (a) the numerator is the Initial Warrant Price and (b) the denominator is
the Warrant

 

4

 

Price in effect on the
date of such exercise; provided, however, that notwithstanding
anything to the contrary contained in this Section 2, the Warrant
Price shall not be adjusted for:

 

(a)                                  issuances,
grants or sales of Additional Shares of Common Stock (or Options or Convertible
Securities for Additional Shares of Common Stock) to employees, directors or
non-affiliated consultants of the Company or its Subsidiaries, in each case,
that are not affiliated with the Sponsors, pursuant to one or more stock option
plans that have terms that are identical or are substantially similar to the
terms of the Company’s 2000 Stock Incentive Plan (the “Management Options”);

 

(b)                                 any
issuances of Additional Shares of Common Stock or any issuance of Additional
Shares of Common Stock (or Options or Convertible Securities for Additional
Shares of Common Stock) in which the holder participates by exercising such
holder’s pre-emptive rights set forth in Section 2.7 of the Stockholders
Agreement; or

 

(c)                                  any
issuances or sales of Additional Shares of Common Stock (or Options or
Convertible Securities for Additional Shares of Common Stock) that are issued
or sold together with other stock, securities or other assets of the Company
for an aggregate consideration of at least equal to their aggregate fair market
value, as determined by the Board of Directors in good faith; or

 

(d)                                 any
sales of Additional Shares of Common Stock in a Qualified Public Offering and
any issuances, grants or sales of Additional Shares of Common Stock (or Options
or Convertible Securities) made thereafter; or

 

(e)                                  any
issuances of Additional Shares of Common Stock by the Company into escrow
pursuant to Section 2.11 of the Merger Agreement, but upon release from
escrow to any Person other than the Company, the Warrant Price shall be
adjusted if such adjustment is otherwise required by this Section 2.

 

2.2                               Adjustment of Warrant Price.

 

2.2.1                        Issuance
of Additional Shares of Common Stock. 
In the event the Company at any time or from time to time after the date
hereof shall issue or sell Additional Shares of Common Stock (including
Additional Shares of Common Stock deemed to be issued pursuant to Section 2.3
or 2.4 hereof) without consideration or for consideration per share less
than the Current Market Price in effect immediately prior to such issue or
sale, then, and in each such case, subject to Section 2.8 hereof,
such Warrant Price shall be reduced, concurrently with such issue or sale, to a
price (calculated to the nearest .001 of a cent) determined by multiplying such
Warrant Price by a fraction:

 

(a)                                  the
numerator of which shall be (i) the number of shares of Common Stock
outstanding immediately prior to such issue or sale plus (ii) the number
of shares of Common Stock which the aggregate consideration received by the
Company for the total number of

 

5

 

such Additional Shares of
Common Stock so issued or sold would purchase at the Current Market Price; and

 

(b)                                 the
denominator of which shall be the number of shares of Common Stock outstanding
immediately after such issue or sale.

 

2.2.2                        Dividends
and Distributions. 
In the event that the Company at any time or from time to time after the
date hereof declares, orders, pays or makes a dividend or other distribution
(including without limitation any distribution of cash, other or additional
stock or other securities or property or Options, by way of dividend or
spin-off, reclassification, recapitalization or similar corporate rearrangement
or otherwise) on the Common Stock, other than a dividend payable in Additional
Shares of Common Stock that is subject to Section 2.4 hereof, then,
and in each such case the holder hereof shall be entitled to receive an amount
of cash equal to such dividend or other distribution when the same is made to
the beneficial owners of the Common Stock as if this Warrant had been converted
into shares of Common Stock in accordance with the provisions of Section 1.1.2
immediately prior to the close of business on the day immediately preceding the
record date.

 

2.3                               Treatment of Options and Convertible
Securities.   In the event that the Company at any time or from time to time
after the date hereof issues, sells, grants or assumes, or fixes a record date
for the determination of holders of any class of securities entitled to receive,
any Options or Convertible Securities, then, and in each such case, the maximum
number of Additional Shares of Common Stock (as set forth in the instrument
relating thereto, without regard to any provisions contained therein for a
subsequent adjustment of such number the purpose of which is to protect against
dilution) at any time issuable upon the exercise of such Options or, in the
case of Convertible Securities and Options therefor, the conversion or exchange
of such Convertible Securities, shall be deemed to be Additional Shares of Common
Stock issued as of the time of such issue, sale, grant or assumption or, in
case such a record date shall have been fixed, as of the close of business on
such record date (or, if the Common Stock trades on an ex-dividend basis, on
the date immediately prior to the commencement of ex-dividend trading); provided,
however, that such Additional Shares of Common Stock shall not be deemed
to have been issued unless the consideration per share (determined pursuant to Section 2.6
hereof) of such shares would be less than the Current Market Price in effect on
the date of and immediately prior to such issue, sale, grant or assumption or
immediately prior to the close of business on such record date (or, if the
Common Stock trades on an ex-dividend basis, on the date immediately prior to
the commencement of ex-dividend trading), as the case may be; and provided,
further, that in any such case in which Additional Shares of Common
Stock are deemed to be issued:

 

(a)                                  no
further adjustment of the Warrant Price shall be made upon the exercise of such
Options or the conversion or exchange of such Convertible Securities and the
consequent issue or sale of Convertible Securities or shares of Common Stock;

 

(b)                                 if
such Options or Convertible Securities by their terms provide, with the passage
of time or otherwise, for any increase in the consideration payable to the
Company, or decrease in the number of Additional Shares of Common Stock
issuable, upon the exercise, conversion or exchange thereof (by change of rate
or otherwise), then the Warrant Price computed upon the original issue, sale,
grant or assumption thereof (or upon the occurrence of the record date, or the
date immediately prior to the commencement of ex-dividend trading, as the case
may be, with respect thereto), and any subsequent adjustments based thereon,
shall, upon any such increase or

 

6

 

decrease becoming
effective, be recomputed to reflect such increase or decrease insofar as it
affects such Options, or the rights of conversion or exchange under such
Convertible Securities, which are outstanding at such time;

 

(c)                                  upon
the expiration (or purchase by the Company and cancellation or retirement) of
any such Options which have not been exercised, or the expiration of any rights
of conversion or exchange under any such Convertible Securities which (or
purchase by the Company and cancellation or retirement of any such Convertible
Securities the rights of conversion or exchange under which) have not been
exercised, the Warrant Price computed upon the original issue, sale, grant or
assumption thereof (or upon the occurrence of the record date, or date
immediately prior to the commencement of ex-dividend trading, as the case may
be, with respect thereto), and any subsequent adjustments based thereon, shall,
upon (and effective as of) such expiration (or such cancellation or retirement,
as the case may be), be recomputed as if:

 

(i)                                     in
the case of Options or Convertible Securities, the only Additional Shares of
Common Stock issued or sold were the Additional Shares of Common Stock, if any,
actually issued or sold upon the exercise of such Options or upon the
conversion or exchange of such Convertible Securities and the consideration
received therefor was the consideration actually received by the Company for
the issue, sale, grant or assumption of all such Options, whether or not
exercised, plus the consideration actually received by the Company upon
such exercise, or for the issue or sale of all such Convertible Securities
which were actually converted or exchanged, plus the additional
consideration, if any, actually received by the Company upon such conversion or
exchange; and

 

(ii)                                  in
the case of Options for Convertible Securities, only the Convertible
Securities, if any, actually issued or sold upon the exercise of such Options
were issued at the time of the issue, sale, grant or assumption of such
Options, and the consideration received by the Company for the Additional
Shares of Common Stock deemed to have been then issued was the consideration
actually received by the Company for the issue, sale, grant or assumption of
all such Options, whether or not exercised, plus the consideration
deemed to have been received by the Company (pursuant to Section 2.6
hereof) upon the issue or sale of such Convertible Securities with respect to
which such Options were actually exercised; and

 

(d)                                 no
readjustment pursuant to clause (b) or (c) above (either
individually or cumulatively together with all prior readjustments as made in
respect of such Options or Convertible Securities) shall have the effect of
increasing the Warrant Price by a proportion (relative to the Warrant Price in
effect immediately prior to such readjustment) in excess of the inverse of the
aggregate proportional adjustment thereof made in respect of the issue, sale,
grant or assumption of such Options or Convertible Securities.

 

If the consideration
provided for in any Option or the additional consideration, if any, payable
upon the conversion or exchange of any Convertible Security shall be reduced,
or the rate at which any Option is exercisable or any Convertible Security is
convertible into or exchangeable for shares of Common Stock shall be increased,
at any time under or by reason of provisions with respect thereto designed to
protect against dilution, then, effective concurrently with each such change,
the Warrant Price then in effect shall first be

 

7

 

adjusted to eliminate the
effects (if any) of the issuance (or deemed issuance) of such Option or
Convertible Security on the Warrant Price and then readjusted as if such Option
or Convertible Security had been issued on the date of such change with the
terms in effect after such change, but only if as a result of such adjustment
the Warrant Price then in effect hereunder is thereby reduced.

 

2.4                               Treatment of Stock Dividends, Stock
Splits, etc.  In the
event the Company at any time or from time to time after the date hereof shall
declare or pay any dividend on the Common Stock payable in Common Stock, or
shall effect a subdivision of the outstanding shares of Common Stock into a
greater number of shares of Common Stock (by reclassification or otherwise than
by payment of a dividend in Common Stock), then, and in each such case,
Additional Shares of Common Stock shall be deemed to have been issued (a) in
the case of any such dividend, immediately after the close of business on the
record date for the determination of holders of any class of securities
entitled to receive such dividend, or (b) in the case of any such subdivision,
at the close of business on the day immediately prior to the day upon which
such corporate action becomes effective.

 

2.5                               Treatment of 2000 Contingent Share
Payment.  In the event
that the Escrow Agent distributes the Escrowed Shares to the Shareholders
pursuant to Section 2.11 of the Merger Agreement, then the Initial Warrant
Shares shall be increased, as of December 15, 2000, by the applicable
number of Earn Out Shares.  If the
Escrowed Shares are released as contemplated by this Section 2.5,
the Company will notify each holder of Warrants of such release and shall
reflect the resulting increase in the aggregate Initial Warrant Shares in the
Company’s books and records as of December 15, 2000.  The existence of such release and any
resulting increase in the Initial Warrant Shares shall not be required to be
noted on the face of this Warrant.  If
one or more new warrant certificates are issued (1) in exchange for this
warrant certificate, (2) to replace a lost certificate, (3) as a result of
partial exercise, conversion or exchange for Common Stock, (4) as a result of
transfer or partial transfer, or (5) under any other circumstances, then (A)the
number of Initial Warrant Shares shown on the face of each such new certificate
shall, for simplicity and ease of reference, continue to exclude the number of
Earn Out Shares applicable to such Initial Warrant Shares and (B) the Company’s
books and records shall continue to reflect the increase in Initial Warrant
Shares, if any, as a result of the application of this Section 2.5.  Once the Escrowed Shares are released and
the Company has duly reflected in its books and records any increase in the
number of Initial Warrant Shares required to be made pursuant to this Section 2.5,
the provisions of this Section 2.5 shall no longer serve as the
basis for any other adjustments pursuant to this Warrant.

 

2.6                               Computation of Consideration.  For the purposes of this Section 2:

 

(a)                                  the
consideration for the issue or sale of any Additional Shares of Common Stock
shall, irrespective of the accounting treatment of such consideration:

 

(i)                                     insofar
as it consists of cash, be computed at the amount of cash actually received by
the Company net of any expenses paid or incurred by the Company or any
commissions or compensations paid or concessions or discounts allowed to
underwriters, dealers or others performing similar services in connection with
such issue or sale;

 

8

 

(ii)                                  insofar
as it consists of property (including securities) other than cash actually
received by the Company, be computed at the fair market value thereof (as
determined by the Board of Directors) at the time of such issue or sale;

 

(iii)                               insofar
as it consists neither of cash nor of other property, be computed as having no
value; and

 

(iv)                              in
the event Additional Shares of Common Stock are issued or sold together with
other stock or securities or other assets of the Company for a consideration
which covers both, be the portion of such consideration so received, computed
as provided in clauses (i), (ii) and (iii) above,
allocable to such Additional Shares of Common Stock, all as determined in good
faith by the Board of Directors of the Company, provided that no such
allocation shall be necessary if the Board of Directors determines that such
Additional Shares of Common Stock, together with the other stock, securities or
other assets, were sold together for an aggregate consideration at least equal
to their fair market value;

 

(b)                                 Additional
Shares of Common Stock deemed to have been issued pursuant to Section 2.3
hereof shall be deemed to have been issued for a consideration per share
determined by dividing:

 

(i)                                     the
total amount of cash and other property, if any, received and receivable by the
Company as direct consideration for the issue, sale, grant or assumption of the
Options or Convertible Securities in question, plus the minimum
aggregate amount of additional consideration (as set forth in the instruments
relating thereto, without regard to any provision contained therein for a
subsequent adjustment of such consideration the purpose of which is to protect
against dilution) payable to the Company upon the exercise in full of such
Options or the conversion or exchange of such Convertible Securities or, in the
case of Options for Convertible Securities, the exercise of such Options for
Convertible Securities and the conversion or exchange of such Convertible
Securities, in each case computing such consideration as provided in the
foregoing clause (a),

 

by

 

(ii)                                  the
maximum number of shares of Common Stock (as set forth in the instruments
relating thereto, without regard to any provision contained therein for a
subsequent adjustment of such number the purpose of which is to protect against
dilution) issuable upon the exercise of such Options or upon the conversion or
exchange of such Convertible Securities; and

 

(c)                                  Additional
Shares of Common Stock deemed to have been issued pursuant to Section 2.4
hereof shall be deemed to have been issued for no consideration.

 

2.7                               Adjustment for Combinations, etc.  In case the outstanding shares of Common
Stock shall be combined or consolidated, by reclassification or otherwise, into
a lesser number of shares of Common

 

9

 

Stock, the Warrant Price
in effect immediately prior to such combination or consolidation shall,
concurrently with the effectiveness of such combination or consolidation, be
proportionately increased.

 

2.8                               Minimum Adjustment of Warrant Price.  If 
the amount of any adjustment of the Warrant Price required pursuant to
this Section 2 would be less than one-tenth (1/10) of one percent
(1%) of the Warrant Price in effect at the time such adjustment is otherwise so
required to be made, then such amount shall be carried forward and adjustment
shall be made with respect thereto at the time of and together with any
subsequent adjustment which, together with such amount and any other amount or
amounts so carried forward, shall aggregate at least one tenth (1/10) of one
percent (1%) of such Warrant Price.

 

2.9                               Shares Deemed Outstanding.  For all purposes of the computations to
be made pursuant to this  Section 2,
(i) there shall be deemed to be outstanding all shares of Common Stock issuable
pursuant to the exercise of Options and conversion of Convertible Securities
outstanding on December 15, 2000, including, without limitation, the
Warrants, (ii) immediately after all Additional Shares of Common Stock are
deemed to have been issued pursuant to Section 2.3 or 2.4
hereof, such Additional Shares shall be deemed to be outstanding, (iii)
treasury shares shall not be deemed to be outstanding and (iv) no adjustment
shall be made in the Warrant Price upon the issuance of shares of Common Stock
pursuant to Options and Convertible Securities so deemed to be outstanding, but
this Section 2.9 shall not prevent other adjustments in the Warrant
Price arising by virtue of such outstanding Options or Convertible Securities
pursuant to the provisions of Section 2.3 hereof; provided, however,
that, for purposes of calculating adjustments to the Warrant Price, there shall
be deemed to be outstanding immediately after giving effect to any issuance of
shares of Common Stock, Options or Convertible Securities all shares of Common
Stock issuable upon the exercise of Options and conversion of Convertible
Securities then outstanding (including, without limitation, the Warrants) after
giving effect to antidilution provisions contained in all such outstanding
Options and Convertible Securities which cause an adjustment in the number of
shares of Common Stock so issuable, either by virtue of such issuance of shares
of Common Stock, Options or Convertible Securities or by virtue of the
operation of such antidilution provisions.

 

2.10                        Contest
and Appraisal Rights.  (a) If
the holders of Warrants entitling such holders to purchase a majority of the
Warrant Shares subject to purchase upon exercise of Warrants at the time
outstanding (the “Required Interest”) shall, for any reason
whatsoever, disagree with the Company’s determination of the Market Price of
the Common Stock or of the fair market value of any property (or securities)
given to the Company as consideration for the issue or sale of Additional
Shares of Common Stock, then such holders shall by notice to the Company (an “Appraisal
Notice”) given within thirty (30) days after the Company’s
determination elect to dispute such determination, and such dispute shall be
resolved as set forth in clause (b) of this Section.  Notwithstanding the foregoing, the Required
Interest shall not be entitled to seek an appraisal pursuant to this Section 2.10
for the Market Price of any Common Stock (i) which the board of directors
determines was issued for an aggregate consideration at least equal to their
fair market value, and (ii) which was issued to an unaffiliated institutional
investor or investment fund with assets under management in excess of
$100,000,000 and that has experience in private equity investments.

 

(b)                                 The
Company shall within thirty (30) days after an Appraisal Notice shall have been
given, engage an Appraiser to make an independent determination of the Fair
Market Price for the Common Stock or of the fair market value of any property
(or securities) given to the Company as consideration for the issue or sale of
additional shares of Common Stock, as the case may be (the “Appraiser’s
Determination”).   In
arriving at its determination, the Appraiser shall base any valuation upon (i)
in the case

 

10

 

of the fair Market Price
of the Common Stock, the fair market value of the Company assuming that the
Company were sold as a going concern, without regard to the existence of any
control block, and (ii) in the case of the fair market value of any property
(or securities) given to the Company as consideration for the issue or sale of
Additional Shares of Common Stock, the fair market value of such property (or
securities) assuming that such property (or securities) were sold to an
unaffiliated third party in an arm’s-length transaction.  The Appraiser’s Determination shall be final
and binding on the Company and the holders of the Warrants.  The costs of conducting an appraisal shall
be borne entirely by the Company; provided, however, that:

 

(i)                                     in
the case of a determination of the Market Price for the Common Stock, if the
Appraiser’s Determination is greater than or less than Company’s determination
and adverse to the holder by more than 15%, then the costs of conducting the
appraisal shall be borne ratably by the holders of the Warrants; and

 

(ii)                                  in
the case of a determination of the fair market value of any property (or
securities) given to the Company as consideration for the issue or sale of
Additional Shares of Common Stock, if the Appraiser’s Determination is greater
than or less than the Company’s determination 
and adverse to the holder by more than 15%, then the costs of conducting
the appraisal shall be borne ratably by the holders of the Warrants.

 

3.                                      CONSOLIDATION,
MERGER, ETC.

 

3.1                               Adjustments for Consolidation,
Merger, Sale of Assets, Reorganizations, etc.  In the event the Company after the date
hereof (a) shall consolidate with or merge into any other Person and shall not
be the continuing or surviving corporation of such consolidation or merger, or
(b) shall permit any other Person to consolidate with or merge into the Company
and the Company shall be the continuing or surviving Person but, in connection
with such consolidation or merger, the Common Stock or Other Securities shall
be changed into or exchanged for stock or other securities of any other Person
or cash or any other Property, or (c) shall transfer all or substantially all
of its properties or assets to any other Person, or (d) shall effect a capital
reorganization or reclassification of the Common Stock or Other Securities
(other than a capital reorganization or reclassification to the extent that
such capital reorganization or reclassification results in the issuance of
Additional Shares of Common Stock for which adjustment in the Warrant Price is
provided in Section 2.2.1 or 2.2.2 hereof), then, and in the
case of each such transaction, proper provision shall be made so that, upon the
basis and the terms and in the manner provided in this Warrant, the holder of
this Warrant, upon the exercise hereof at any time after the consummation of
such transaction, shall be entitled to receive (at the aggregate Warrant Price
in effect at the time of such consummation for all Common Stock or Other Securities
issuable upon such exercise immediately prior to such consummation), in lieu of
the Common Stock or Other Securities issuable upon such exercise prior to such
consummation, the greatest amount of securities, cash or other property to
which such holder would actually have been entitled as a shareholder upon such
consummation if such holder had exercised the rights represented by this
Warrant immediately prior thereto, subject to adjustments (subsequent to such
consummation) as nearly equivalent as possible to the adjustments provided for
in Sections 2, 3 and 4 hereof; provided, however,
that if a purchase, tender or exchange offer shall have been made to and
accepted by the holders of more than 50% of the outstanding shares of Common
Stock, and if the holder of such Warrants so designates in a notice given to
the Company on or before the date immediately preceding the date of the
consummation of such transaction, then the holder of such Warrants shall be
entitled to receive the greatest amount of securities, cash or other property
to which such

 

11

 

holder would actually
have been entitled as a shareholder if the holder of such Warrants had
exercised such Warrants prior to the expiration of such purchase, tender or
exchange offer and accepted such offer, subject to adjustments (from and after
the consummation of such purchase, tender or exchange offer) as nearly
equivalent as possible to the adjustments provided for in Sections 2, 3
and 4 hereof.

 

3.2                               Assumption of Obligations.  Notwithstanding anything contained in the
Warrants or in the Purchase Agreement to the contrary, the Company will not
effect any of the transactions described in clauses (a) through (d)
of Section 3.1 hereof (other than a transaction prior to a
Qualified Public Offering that qualifies as an Approved Sale, which is governed
by Section 3.3 below) unless, prior to the consummation thereof,
each person (other than the Company) which may be required to deliver any
stock, securities, cash or property upon the exercise of this Warrant as
provided herein shall assume, by written instrument delivered to, and
reasonably satisfactory to, the holder of this Warrant, (a) the obligations of
the Company under this Warrant (and if the company shall survive the
consummation of such transaction, such assumption shall be in addition to, and
shall not release the Company from, any continuing obligations of the Company
under this Warrant), (b) the obligations of the Company under the Registration
Rights Agreement and the Stockholders Agreement and (c) the obligation to
deliver to such holder such shares of stock, securities, cash or property as,
in accordance with the foregoing provisions of this Section 3, such
holder may be entitled to receive, and such Person shall have similarly
delivered to such holder an opinion of counsel for such Person, which counsel
and opinion shall be reasonably satisfactory to such holder, stating that this
Warrant shall thereafter continue in full force and effect and the terms hereof
(including without limitation all of the provisions of this Section 3)
shall be applicable to the stock, securities, cash or property which such
Person may be required to deliver upon any exercise of this Warrant or the
exercise of any rights pursuant hereto. 
Nothing in this Section 3 shall be deemed to authorize the
Company to enter into any transaction not otherwise permitted by the Purchase
Agreement.

 

3.3                                 Approved
Sale.  In the event of an Approved
Sale prior to a Qualified Public Offering, the provisions of this Section 3.3,
shall apply, and to the extent that such provisions conflict with or are
otherwise inconsistent with any other provisions of this Warrant or the
Stockholders Agreement, the provisions of this Section 3.3 shall
control;

 

3.3.1                        Consideration
for Warrants.  In the event of such
Approved Sale, the holder of this Warrant will be given the opportunity to
either:

 

(a)                                  exercise,
convert or exchange this Warrant (in whole, or if permitted by the terms of the
Approved Sale, in part) in the manner contemplated by Section 1.1
prior to the consummation of the Approved Sale and thereafter participate in
such Approved Sale as a holder of Common Stock; or

 

(b)                                 upon
the consummation of the Approved Sale, receive in exchange this Warrant (in
whole, or if permitted by the terms of the Approved Sale, in part)
consideration (of the kind specified in the Stockholders Agreement) equal to
the product of:

 

(1)                                  the
amount of consideration on a per share basis received by the holders of the
Common Stock in connection with the Approved Sale minus the Initial Warrant
Price; and

 

12

 

(2)                                  if
the purchaser in such Approved Sale would not be adversely affected by the
failure of the holder to exercise, convert or exchange this Warrant prior to
the Approved Sale, the number of shares of Common Stock (or Other Securities)
determined as provided in Sections 2 through 4 hereof which such
holder would be entitled to receive upon such full or partial exercise of this
Warrant) immediately prior to the consummation of the Approved Sale.

 

3.3.2                        Assumption
of Obligations.  If the holder
elects to exercise this Warrant prior to the consummation of the Approved Sale,
the Company will not consummate the Approved Sale, unless prior to the
consummation thereof, the holder of this Warrant has received (i) that number
of duly authorized, validly issued, fully paid and nonassessable shares of
Common Stock (or Other Securities) determined as provided in Sections 2 through
4 hereof; and (iii) a written instrument executed by the Company (or any
successor or assignee), satisfactory to the holder, that acknowledges all of
the continuing obligations of the Company (or such successor or assign) under
the Stockholders Agreement, if any, and provides the holder with other rights
at least as favorable as those afforded to other holders of capital stock of
the Company.

 

4.                                      OTHER
DILUTIVE EVENTS.  In case any event
shall occur as to which the provisions of Section 2 or 3
hereof are not strictly applicable but the failure to make any adjustment would
not, in the reasonable opinion of the holder of the Required Interest, fairly
protect the purchase rights represented by this Warrant in accordance with the
essential intent and principles of such Sections, then, in each such case, at
the request of such holder, the Company shall appoint a firm of independent
investment bankers of recognized national standing (which shall be completely
independent of the Company and shall be satisfactory to the holder or the
holders of the Required Interest), which shall give their opinion upon the
adjustment, if any, on a basis consistent with the essential intent and
principles established in Sections 2 and 3 hereof, necessary to
preserve, without dilution, the purchase rights represented by this
Warrant.  Upon receipt of such opinion,
the Company will promptly mail a copy thereof to the holder of this Warrant and
shall make the adjustments described therein. 
The cost of such opinion shall be borne entirely by the Company except
in the event that such firm of investment bankers determines that no adjustment
is necessary, in which case, the costs of such opinion shall be borne entirely
by the holders.

 

5.                                      NO
DILUTION OR IMPAIRMENT.  The Company
shall not, by amendment of its certificate of incorporation or through any
consolidation, merger, reorganization, transfer of assets, dissolution, issue
or sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms of this Warrant, but will at all
times in good faith assist in the carrying out of all such terms and in the
taking of all such action as may be necessary or appropriate in order to
protect the rights of the holder of this Warrant against dilution or other impairment.  Without limiting the generality of the
foregoing, the Company (a) will not permit the par value of any shares of stock
receivable upon the exercise of this Warrant to exceed the amount payable
therefor upon such exercise, (b) will take all such action as may be necessary
or appropriate in order that the Company may validly and legally issue fully
paid and nonassessable shares of stock on the exercise of the Warrants from
time to time outstanding, and (c) will not take any action which results in any
adjustment of the Warrant Price if the total number of shares of Common Stock
(or Other Securities) issuable after the action upon the exercise of all of the
Warrants would exceed the total number of shares of Common Stock (or Other
Securities) then authorized by the Company’s certificate of incorporation and
available for the purpose of issuance upon such exercise.

 

13

 

6.                                      ACCOUNTANTS’
REPORT AS TO ADJUSTMENTS.  In each
case of any adjustment or readjustment in the shares of Common Stock (or Other
Securities) issuable upon the exercise of this Warrant, the Company at its sole
expense will promptly compute such adjustment or readjustment in accordance
with the terms of this Warrant and cause independent certified public
accountants of recognized national standing (which may be the regular auditors
of the Company) selected by the Company to verify such computation (other than
(i) any computation of the fair market value of property or (ii) any
determination of Market Price, both as determined in good faith by the Board of
Directors of the Company) and, in connection with the preparation of the
Company’s quarterly financial statements prepare a report setting forth such
adjustment or readjustment and showing in reasonable detail the method of
calculation thereof and the facts upon which such adjustment or readjustment is
based, including a statement of (a) the consideration received or to be
received by the Company for any Additional Shares of Common Stock issued or
sold or deemed to have been issued, (b) the number of shares of Common Stock
outstanding or deemed to be outstanding, and (c) the Warrant Price in effect
immediately prior to such issue or sale and as adjusted and readjusted (if
required by Section 2 hereof) on account thereof.  The Company will forthwith mail a copy of
each such report to each holder of a Warrant and will, upon the written request
at any time of any holder of a Warrant, furnish to such holder a like report
setting forth the Warrant Price at the time in effect and showing in reasonable
detail how it was calculated.  The
Company will also keep copies of all such reports at its office maintained
pursuant to Section 13.2(a) hereof and will cause the same to be
available for inspection at such office during normal business hours by any
holder of a Warrant or any prospective purchaser of a Warrant designated by the
holder thereof.

 

7.                                      NOTICES OF
CORPORATE ACTION.  In the
event of

 

(a)                                  any
taking by the Company of a record of the holders of any class of securities for
the purpose of determining the holders thereof who are entitled to receive any
dividend or other distribution, or any right to subscribe for, purchase or
otherwise acquire any shares of stock of any class or any other securities or property,
or to receive any other right, or

 

(b)                                 any
capital reorganization of the Company, any reclassification or recapitalization
of the capital stock of the Company or any consolidation or merger involving
the Company and any other Person or any transfer of all or substantially all
the assets of the Company to any other Person, or

 

(c)                                  any
voluntary or involuntary dissolution, liquidation or winding-up of the Company,
or

 

(d)                                 any
issuance of any Common Stock, Convertible Security or Option by the Company,

 

the Company will mail to
each holder of a Warrant a notice specifying (i) the date or expected date on
which any such record is to be taken for the purpose of such dividend,
distribution or right, and the amount and character of such dividend, distribution
or right, (ii) the date or expected date on which any such reorganization,
reclassification, recapitalization, consolidation, merger, transfer,
dissolution, liquidation or winding-up is to take place, (iii) the time, if any
such time is to be fixed, as of which the holders of record of Common Stock (or
Other Securities) shall be entitled to exchange their shares of Common Stock
(or Other

 

14

 

Securities) for the
securities or other property deliverable upon such reorganization,
reclassification, recapitalization, consolidation, merger, transfer,
dissolution, liquidation or winding-up and a description in reasonable detail
of the transaction and (iv) the date of such issuance, together with a
description of the security so issued and the consideration received by the
Company therefor.  Such notice shall be
mailed at least forty-five (45) days prior to the date therein specified.

 

8.                                      REGISTRATION
OF WARRANTS AND COMMON STOCK.  If
any shares of Common Stock required to be reserved for purposes of exercise of
this Warrant require registration with or approval of any governmental
authority under any federal or state law (other than the Securities Act) before
such shares may be issued upon exercise, the Company will, at its sole expense
and as expeditiously as possible, use its best efforts to cause such shares to
be duly registered or approved, as the case may be.  The shares of Common Stock (and Other Securities) issuable upon
exercise of this Warrant shall constitute Registrable Securities (as such term
is defined in the Registration Rights Agreement).  Each holder of any shares of Common Stock (and Other Securities)
issued upon exercise of this Warrant shall be entitled to all of the benefits
afforded to a holder of any such Registrable Securities under the Registration
Rights Agreement and such holder, by its acceptance of this Warrant, agrees to
be bound by and to comply with the terms and conditions of the Registration
Rights Agreement applicable to such holder as a holder of such Registrable
Securities.  At any such time as Common
Stock is listed on any national securities exchange, the Company will, at its
sole expense, obtain promptly and maintain the approval for listing on each
such exchange, upon official notice of issuance, the shares of Common Stock
issuable upon exercise of the then outstanding Warrants (which have been
registered pursuant to the Registration Rights Agreement) and maintain the
listing of such shares after their issuance; and the Company will also list on
such national securities exchange, will register under the Exchange Act and
will maintain such listing of, any Other Securities (which have been registered
pursuant to the Registration Rights Agreement) that at any time are issuable upon
exercise of the Warrants, if and at the time that any securities of the same
class shall be listed on such national securities exchange by the Company.

 

9.                                      REDEMPTION
AND CANCELLATION OF WARRANTS.

 

9.1                               Put Right.  (a) 
If  the Company has not completed
a Qualified Public Offering by the sixth anniversary of the Closing Date, then
at such time or at any time thereafter, the holder or holders of the Required
Interest may demand that the Company purchase all (100%) of the Warrants held
by all holders at the Redemption Price by delivery of a written notice to the
Company (the date such notice is delivered to the Company shall hereinafter be
referred to as, the “Put Demand Date”).  The Company shall use its best efforts to
pay the Redemption Price to such holder in immediately available funds as soon
as reasonably practicable (the “Put Payment Date”), but in no event later
than sixty (60) days after the Put Demand Date, upon surrender of this Warrant
to the Company at its office maintained pursuant to Section 13.2(a)
hereof or, if requested by such holder without surrender of this Warrant, by
wire transfer to any account in The City of New York specified by notice to the
Company.

 

(b)                                 Upon
surrender of this Warrant in accordance with the procedures set forth in Section 9.1(a),
the right to purchase shares of Common Stock represented by this Warrant shall
terminate, and this Warrant shall represent the right of the holder to receive
only the applicable Redemption Price from the Company in accordance with Section 9.1.
The holder’s right to demand redemption of this Warrant pursuant to this Section 9.1
shall be referred to herein as the holder’s “Put Right.”

 

15

 

(c)                                  Default;
Automatic Conversion into Debt.  In
the event that the Company fails to purchase this Warrant within sixty (60)
days of the Put Demand Date (the “Put Demand Period”), then on the next
succeeding day, all of the rights heretofore represented by this Warrant,
including the holder’s right to purchase shares of Common Stock represented by
this Warrant, shall convert, automatically and irrevocably and without any
further action or acknowledgment on the part of the Company or the holder, into
an unsecured junior subordinated obligation (which shall be subordinated to the
Notes and shall be subordinated to the Senior Debt pursuant to the Senior
Credit Subordination Agreement) of the Company to pay to such holder, on the
earlier to occur of (a) the maturity of the Notes (whether by acceleration,
redemption or otherwise), and (b) a refinancing of the then existing Senior
Debt, an amount equal to the Redemption Price, together with accrued interest
(based on a 360-day year of 30-day months) on the unpaid principal amount
thereof at a rate of fourteen percent (14%) per annum, compounded quarterly and
payable in arrears by the issuance of additional unsecured junior subordinated
obligations of the Company on the same terms until such obligation is paid or
prepaid in full.  The rate of interest
payable on such obligations shall increase by one percent (1.00%) as of the end
of each three month period after the Put Demand Period until such obligations
are paid or prepaid in full or until such interest rate reaches the lesser of
(i) a maximum rate of sixteen percent (16.00%) per annum or (ii) the maximum
rate permitted by applicable law. 
Nothing in this subsection 9.1(c) shall require the Company
to pay interest at a rate in excess of the maximum rate permitted by applicable
law.  The obligations of the Company
created pursuant to this subsection 9.1(c)  may be prepaid by the Company at any time
without premium or penalty and must be prepaid upon the consummation of a
Qualified Public Offering.  The entire
principal amount of the obligations and any interest accrued thereon shall
become immediately due and payable upon acceleration by the Noteholders of any
of the Notes or upon the occurrence of an Event of Default specified in
Section  8.5 of the Purchase Agreement. 
All payments of principal and interest on such obligation shall be made
by wire transfer of immediately available funds to an account or accounts
designated in writing by the holder.

 

9.2                               Call Right.  (a) If the Company has not completed a
Qualified Public Offering, then at any time on or after the seventh anniversary
of the Closing Date the Company may repurchase all (100%) but not less than
all, of the Warrants held by all holders at the Redemption Price by delivery of
a notice to all holders of the Warrants (the date such notice is delivered to
the holders shall hereinafter be referred to as, the “Call Redemption Date”).  The Company shall use its best efforts to
pay the Redemption Price to such holders in immediately available funds as soon
as reasonably practicable, but in no event later than sixty (60) days after the
Call Redemption Date (such date, the “Call Payment Date”), upon surrender of this
Warrant to the Company at its office maintained pursuant to Section 13.2(a)
hereof or, if requested by such holder without surrender of this Warrant, by
wire transfer to any account in The City of New York specified by notice to the
Company.

 

(b)                                 The
Company shall, immediately upon receipt by the Company of the Appraiser’s
determination of the Redemption Price, deliver to the holder written notice of
such calculation (together with the Appraiser’s report), whereupon the holder
shall have ten (10) Business Days after the Call Redemption Date to elect, in a
writing delivered to the Company, to exercise the Warrant in accordance with
the terms set forth herein.

 

(c)                                  Subject
to 9.2(b) above, upon redemption in accordance with the procedures set forth in
Section 9.2(a), the right to purchase shares of Common Stock
theretofore represented by this Warrant as to which the Company has exercised
its right to purchase the Warrant shall terminate, and this Warrant shall
represent the right of the holder to receive only the applicable Redemption
Price from the Company in

 

16

 

accordance with Section 9.2.
The Company’s right to purchase this Warrant pursuant to this Section 9.2  shall be referred to hereinafter as the
Company’s “Call
Right.”

 

(d)                                 Notwithstanding
the foregoing, if on or prior to the date twelve (12) months after the Call
Payment Date (i) the Company completes a Qualified Public Offering, (ii) the
Company agrees to complete a capital reorganization or any reclassification or
recapitalization of its capital stock, (iii) the Company or any Subsidiary or
their stockholders agrees to a consolidation or merger involving the Company or
such Subsidiary and any other Person, (iv) the Company or any Subsidiary agrees
to effect a transfer of all or substantially all the assets or capital stock of
the Company or such Subsidiary to another Person, (v) a majority of the
stockholders on the date hereof sells or agrees to sell in excess of 50% of the
capital stock of the Company or (vi) the Company agrees, submits or consents to
any voluntary or involuntary dissolution, liquidation or winding-up of the
Company or any Subsidiary (each of the foregoing events being referred to as an
“Adjustment
Event”), then the Company shall pay to each holder as additional
compensation an amount equal to the product of (a) the difference between the
highest price per share paid, to be paid or deemed received by the Person or
Persons purchasing or receiving Common Stock or assets in connection with such
Adjustment Event (less underwriting commissions and other appropriate costs and
expenses) less the Redemption Price paid to the holder multiplied by (b) the
number of shares of Common Stock issuable upon exercise of this Warrant
immediately prior to the Call Redemption Date.

 

10.                               RESTRICTIONS
ON TRANSFER.

 

10.1                        Restrictive Legends.  Except as otherwise permitted by the terms
of the Stockholders Agreement, each certificate for Common Stock (or Other
Securities) issued upon the exercise of any Warrant, each certificate issued
upon the direct or indirect transfer of any such Common Stock (or Other
Securities), all Warrants originally issued pursuant to the Purchase Agreement
and each Warrant issued upon direct or indirect transfer or in substitution for
any Warrant pursuant to Section 13 hereof shall be transferable
only upon satisfaction of the conditions specified in Section 4.1
of the Purchase Agreement, the Stockholders Agreement and in this Section 10
and shall be stamped or otherwise imprinted with legends in substantially the
form required by Section 4.1 of the Purchase Agreement.

 

10.2                        Termination
of Restrictions. 
The restrictions imposed by this Section 10 upon the
transferability of Restricted Securities shall cease and terminate as to any
particular Restricted Securities (a) when such Restricted Securities shall have
been effectively registered under the Securities Act, or (b) when, in the
opinion of both counsel for the holder thereof and counsel for the Company,
such restrictions are no longer required in order to ensure compliance with the
Securities Act or Section 4.1 of the Purchase Agreement.  Whenever such restrictions shall cease and
terminate as to any Restricted Securities, the holder thereof shall be entitled
to receive from the Company, without expense (other than applicable transfer
taxes, if any), new securities of like tenor bearing the applicable legends
required by Section 10.1 hereof.

 

11.                               AVAILABILITY
OF INFORMATION.  If the Company
shall have filed a registration statement pursuant to the requirements of
Section 12 of the Exchange Act or a registration statement pursuant to the
requirements of the Securities Act, then the Company shall comply with the
reporting requirements of Section 13 and 15(d) of the Exchange Act and
shall comply with all public information reporting requirements of the
Commission (including Rule 144 promulgated by the Commission under the
Securities Act) from time to time in effect and relating to the availability of
an exemption from the Securities Act for the sale of any Restricted
Securities.  The Company shall also
cooperate with each holder of any Restricted Securities in supplying such

 

17

 

information as may be
necessary for such holder to complete and file any information reporting forms
presently or hereafter required by the Commission as a condition to the
availability of an exemption from the Securities Act for the sale of any
Restricted Securities.  The Company
shall furnish to each holder of any Warrants, promptly upon their becoming
available, copies of all financial statements, reports, notices and proxy
statements sent or made available generally by the Company to its stockholders,
and copies of all regular and periodic reports and all registration statements
and prospectuses filed by the Company with any securities exchange or with the
Commission.

 

12.                               RESERVATION
OF STOCK, ETC.  The Company shall at
all times reserve and keep available, solely for issuance and delivery upon
exercise of the Warrants, the number of shares of Common Stock of each class
(or Other Securities) from time to time issuable upon exercise of all Warrants
at the time outstanding.  All shares of
Common Stock (or Other Securities) issuable upon exercise of any Warrants shall
be duly authorized and, when issued upon such exercise, shall be validly issued
and, in the case of shares, fully paid and nonassessable with no liability on
the part of the holders thereof.  Before
taking any action that would cause a reduction of the Warrant Price pursuant to
Section 2.2 hereof below the then par value (if any) of the Common
Stock issuable upon exercise of the Warrants, the Company shall, if permitted
under the circumstances by applicable law, take any and all corporate action
(including a reduction in par value) which shall, in the opinion of counsel, be
necessary to validly and legally issue fully paid and nonassessable shares of
Common Stock at the Warrant Price as so reduced.

 

13.                               OWNERSHIP,
TRANSFER AND SUBSTITUTION OF WARRANTS.

 

13.1                        Ownership of Warrants.  The Company may treat the person in
whose name any Warrant is registered on the register kept at the office of the
Company maintained pursuant to Section 13.2(a) hereof as the owner
and holder thereof for all purposes, notwithstanding any notice to the
contrary, except that, if and when any Warrant is properly assigned in blank,
the Company may (but shall not be obligated to) treat the bearer thereof as the
owner of such Warrant for all purposes, notwithstanding any notice to the
contrary.  Subject to Section 10
hereof, a Warrant, if properly assigned, may be exercised by a new holder
without a new Warrant first having been issued.

 

13.2                        Office; Transfer and Exchange of
Warrants.

 

(a)                                  The
Company shall maintain an office (which may be an agency maintained at a bank)
in New York, New York where notices, presentations and demands in respect of
this Warrant may be made upon it.  Such
office may be maintained at 895 Broadway, New York, New York, until such time
as the Company shall notify the holders of the Warrants of any change of
location of such office within the State of New York.

 

(b)                                 The
Company shall cause to be kept at its office maintained pursuant to Section 13.2(a)
hereof a register for the registration and transfer of the Warrants (the “Warrant
Register”).  The Company shall
record all transfers of the Warrants in the Warrant Register, and entries in
the Warrant Register shall be conclusive and binding absent manifest
error.  The names and addresses of
holder of Warrants, the transfer thereof and the names and addresses of
transferees of Warrants shall be registered in such register.  The Person in whose names any Warrant shall
be so registered shall be deemed and treated as the owner and holder thereof
for all

 

18

 

purposes of this Warrant,
and the Company shall not be affected by any notice or knowledge to the
contrary.

 

(c)                                  Upon
the surrender of any Warrant, properly endorsed, for registration of transfer
or for exchange at the office of the Company maintained pursuant to Section 13.2(a)
hereof, the Company at its expense will (subject to compliance with Section 10
hereof, if applicable) execute and deliver to or upon the order of the holder
thereof a new Warrant or Warrants of like tenor, in the name of such holder or
as such holder (upon payment by such holder of any applicable transfer taxes)
may direct, calling in the aggregate on the face or faces therefor for the
number of shares of Common Stock called for on the face or faces of the Warrant
or Warrants so surrendered.

 

13.3                        Replacement of Warrants.  Upon receipt of evidence satisfactory to
the Company of the loss, theft, destruction or mutilation of any Warrant and,
in the case of any such loss, theft or destruction of any Warrant held by a
Person other than a Purchaser or any institutional investor, upon delivery of
indemnity satisfactory to the Company in form and amount or, in the case of any
such mutilation, upon surrender of such Warrant for cancellation at the office
of the Company maintained pursuant to Section 13.2(a) hereof, the
Company at its sole expense will execute and deliver, in lieu thereof, a new
Warrant of like tenor and dated the date hereof.

 

14.                               DEFINITIONS.  As used herein, unless the context otherwise
requires, the following terms have the following respective meanings:

 

“Additional Shares of Common Stock” means
all shares (including treasury shares) of Common Stock, issued or sold (or,
pursuant to Section 2.3 or 2.4 hereof, deemed to be issued)
by the Company after the date hereof, whether or not subsequently reacquired or
retired by the Company, other than the shares of Common Stock issued upon the
exercise of Warrants.

 

“Agent” means
Bankers Trust Company, as administrative agent under the Senior Credit
Agreement and any successor thereto.

 

“Appraiser” an independent
nationally recognized investment bank or other qualified financial institution
acceptable to the Company and the Required Interest.

 

“Approved Sale”
shall mean a sale pursuant to Section 2.4 or 2.5 of the Stockholders
Agreement; provided, however, that the term “Approved Sale” shall not include
any transaction that fails to satisfy each of the conditions precedent set
forth in Section 2.4 or 2.5 of the Stockholders Agreement.

 

“Business Day”
means any day other than a Saturday or a Sunday or a day on which commercial
banking institutions in New York, New York are authorized or obligated by law
or executive order to be closed.  Any
reference to “days” (unless Business Days are specified) shall mean calendar
days.

 

“Closing Date” shall have the
meaning given to such term in the Purchase Agreement.

 

“Commission” means the
Securities and Exchange Commission or any other federal agency at the time
administering the Securities Act.

 

19

 

“Common Stock” shall have the
meaning given to such term in the introduction to this Warrant, such term to
include any stock into which such Common Stock shall have been changed or any
stock resulting from any reclassification of such Common Stock, and all other
stock of any class or classes (however designated) of the Company the holders
of which have the right, without limitation as to amount, either to all or to a
share of the balance of current dividends and liquidating dividends after the
payment of dividends and distributions on any shares entitled to preference.

 

“Company” shall
have the meaning given to such term in the introduction to this Warrant, such
term to include any corporation which shall succeed to or assume the
obligations of the Company in compliance with Section 3 hereof.

 

“Convertible Securities”
means any evidences of indebtedness, shares of stock (other than Common Stock)
or other securities directly or indirectly convertible into or exchangeable for
Additional Shares of Common Stock.

 

“Current Market Price” means
on any date specified herein, the average daily Market Price during the period
of the most recent 20 days, ending on such date, on which the national
securities exchanges were open for trading, except that if no class of the
Common Stock is then listed or admitted to trading on any national securities
exchange or quoted in the over-counter market, the Current Market Price shall
be the Market Price on such date.

 

“Earn Out Shares”
means the number of shares determined by multiplying (a) a fraction, the
numerator of which shall be the Initial Warrant Shares (prior to any increase
under Section 2.5 hereof) and the denominator of which shall be
783,020, by (b) 96,194.

 

“Escrow Agent”
shall have the meaning given to such term in the Merger Agreement.

 

“Escrow Shares”
shall have the meaning given to such term in the Merger Agreement.

 

“Event of Default” shall have
the meaning given to such term in the Purchase Agreement.

 

“Exchange Act”
means the Securities Exchange Act of 1934, or any similar federal statute, and
the rules and regulations of the Commission thereunder, all as the same shall
be in effect at the time.

 

“Expiration Date”
shall have the meaning given to such term in the introduction to this Warrant.

 

“Fully Diluted Basis” means at
any time (i) as applied to any calculation of the number of securities of the
Company, after giving effect to (x) all shares of Common Stock and Other
Securities of the Company outstanding at the time of determination, and (y) all
shares of the Company’s Common Stock or Other Securities issuable upon the
exercise of any Convertible Security or Option outstanding on the Closing Date;
and (ii) as applied to any calculation of value, after giving effect to the
foregoing securities and the payment of any consideration payable upon the
exercise of any Convertible Security or Option referred to in clause (y)
above if such Convertible Security or Option were exercisable at such time.

 

“Market Price” means
on any date specified herein, the amount per share of Common Stock equal to (a)
the last sale price of Common Stock, regular way, on such date or, if no such
sale takes place on such

 

20

 

date, the average of the
closing bid and asked prices thereof on such date, in each case as officially
reported on the principal national securities exchange on which Common Stock is
then listed or admitted to trading, or (b) if Common Stock is not then listed
or admitted to trading on any national securities exchange but is designated as
a national market system security by the NASD, the last trading price of Common
Stock on such date, or (c) if there shall have been no trading on such date or
if Common Stock is not so designated or if Common Stock is not then listed or
admitted to trading on any national exchange or quoted in the over-the-counter
market, or if the asset to be valued is property, then the fair market value
thereof determined in good faith by the Board of Directors of the Company as of
a date which is within fifteen (15) days of the date as of which the
determination is to be made.

 

“Merger Agreement” means
“Merger Agreement” as defined in the Purchase Agreement.

 

“NASD” means the
National Association of Securities Dealers, Inc.

 

“Options”  means
rights, options or warrants to subscribe for, purchase or otherwise acquire
either Additional Shares of Common Stock or Convertible Securities.

 

“Other Securities”
means any stock (other than Common Stock) and other securities of the Company
or any other Person (corporate or otherwise) which the holders of the Warrants
at any time shall be entitled to receive, or shall have received, upon the exercise
of Warrants, in lieu of or in addition to Common Stock, and which at any time
shall be issuable or shall have been issued in exchange for or in replacement
of Common Stock or Other Securities pursuant to Section 3 hereof or
otherwise.

 

“Person” means an
individual, a partnership, a limited liability company, a corporation, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization or any federal, state, county or municipal governmental or
quasi-governmental agency, department, commission, board, bureau,
instrumentality or similar entity, foreign or domestic, having jurisdiction
over either the Company or any holder of a Warrant.

 

“Purchase Agreement” shall
have the meaning given to such term in the introduction to this Warrant.

 

“Purchasers” shall
have the meaning given to such term in the introduction to this Warrant.

 

“Qualified Public Offering”
means the closing of the Company’s first underwritten offering to the public
pursuant to an effective registration statement under the Securities Act
provided that (i) such registration statement covers the offer and sale of
Common Stock of which the aggregate net proceeds attributable to sales for the
account of the Company exceed $35,000,000 and (ii) such Common Stock is listed
for trading on either the New York Stock Exchange, the American Stock Exchange
or the NASDAQ National Market.

 

“Redemption Price” means the
fair market value of the Warrant as of the Put Demand Date or the Call
Redemption Date, as applicable, in each case as determined by the Appraiser and
based upon an independent valuation of the Company.  For purposes of determining fair market value, the Company shall
be valued at the fair market value of the Company if sold as a going concern,
without regard to the existence

 

21

 

of a control block, the
lack or depth of a market for the Common Stock, the Warrants and any other
factors affecting the liquidity or marketability of the Common Stock or the
Warrants.

 

“Registration Rights Agreement” means
that certain Registration Rights Agreement by and between the Company and the
Purchasers dated as of 
December 15, 2000, as from time to time in effect.

 

“Restricted Securities”
means all of the following: (a) any Warrants bearing the applicable legend or
legends referred to in Section 10.1 hereof, (b) any shares of
Common Stock (or other Securities) which have been issued upon the exercise of
Warrants and which are evidenced by a certificate or certificates bearing the
applicable legend or legends referred to in such Section, and (c) unless the
context otherwise requires, any shares of Common Stock (or Other Securities)
which are at the time issuable upon the exercise of Warrants and which, when so
issued, will be evidenced by a certificate or certificates bearing the
applicable legend or legends referred to in such Section.

 

“Securities Act”
means the Securities Act of 1933, or any similar federal statute, and the rules
and regulations of the Commission thereunder, all as the same shall be amended
and in effect at the time.

 

“Senior Debt” means the
“Senior Debt” as defined in the Senior Credit Subordination Agreement.

 

“Senior Credit Agreement”
shall have the meaning given to such term in the Purchase Agreement.

 

“Senior Credit Subordination Agreement”
means that certain Subordination Agreement dated as of even date herewith by
and among Bankers Trust Company, the Purchasers, the Company and certain
guarantors named therein.

 

“Stockholder” shall
have the meaning given to such term in the Merger Agreement.

 

“Stockholders Agreement” means
that certain Stockholders Agreement by and between the Company, the Purchasers
and the stockholders named therein dated as of December 15, 2000, as from
time to time in effect.

 

“Warrant Price”
shall have the meaning given to such term in Section 2.1 hereof.

 

“Warrants” shall
have the meaning given to such term in the introduction of this Warrant.

 

15.                               REMEDIES.  The Company stipulates that the remedies at
law available to the holder of this Warrant in the event of any default or
threatened default by the Company in the performance of or compliance with any
of the terms of this Warrant are not and will not be adequate and that, to the
fullest extent permitted, such terms may be specifically enforced by a decree
for the specific performance of any agreement contained herein or by an
injunction against a violation of any of the terms hereof or otherwise.

 

16.                               NO
RIGHTS OR LIABILITIES AS STOCKHOLDER.  Nothing
contained in this Warrant shall be construed as conferring upon the holder
hereof any rights as a stockholder of the Company or as imposing any obligation
on such holder to purchase any securities or as imposing any liabilities on
such holder as a

 

22

 

stockholder of the
Company, whether such obligation or liabilities are asserted by the Company or
by creditors of the Company.

 

17.                               NOTICES.  Any notice or other communication in
connection with this Warrant shall be deemed to be delivered if in writing (or,
in the form of a telex or telecopy) addressed as hereinafter provided and if
either (x) actually delivered at said address (evidenced in the case of a telex
by receipt of the correct answerback) or (y) in the case of a letter, three
Business Days shall have elapsed after the same shall have been deposited in
the United States mails, postage prepaid and registered or certified; (a) if to
any holder of any Warrant, at the registered address of such holder as set
forth in the register kept at the office of the Company maintained pursuant to Section 13.2(a)
hereof; or (b) if to the Company, to the attention of its President at its
office maintained pursuant to Section 13.2(a) hereof; provided,
however, that the exercise of any Warrant shall be effective in the
manner provided in Section 1 hereof.

 

18.                               MISCELLANEOUS.  This Warrant and any term hereof may be
changed, waived, discharged or terminated only by an instrument in writing
signed by the Company and the Required Interest; provided however that no such
change, waiver, discharge or termination that would treat the holder of this
Warrant in a discriminatory manner may be made without the prior written
consent of the holder of this Warrant. This Warrant shall be construed,
interpreted, and enforced in accordance with, and governed by, the laws of the
State of New York without giving effect to doctrines relating to conflicts of
laws.  The section headings in this
Warrant are for purposes of convenience only and shall not constitute a part
hereof.

 

[The remainder of this page was
intentionally left blank.]

 

23

 

	
   

  	
  EQUINOX HOLDINGS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Adam Saltzman

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
					

 

[SIGNATURE PAGE TO WARRANT]

 

24

 

FORM OF SUBSCRIPTION

 

[To be executed
only upon exercise of Warrant]

 

To  EQUINOX HOLDINGS, INC.

 

The undersigned
registered holder of the within Warrant hereby irrevocably exercises such
Warrant for, and purchases thereunder,
          (1) Initial Warrant
Shares (consisting of (A)
          Initial Warrant Shares,
which is the number of Initial Warrant Shares (or portion thereof in the case
of partial exercise) set forth on the face of the Warrant plus (B)
          Earn Out Shares, if any,
which are the Earn Out Shares, if any, (or pro rata portion of such Earn Out
Shares in the case of a partial exercise) by which such number of Initial
Warrant Shares was increased) and herewith makes payment of
$                       
therefor, and requests that the certificates for such shares be issued in the
name of, and delivered to
                                                 ,
whose address is
                                                                           .

 

 

	
  Dated:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (Signature must conform
  in all respects to name of holder as specified on the face of Warrant)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (Street Address)

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (City)

  	
  (State)

  	
  (Zip Code)

  

 

 

(1)                                  Insert
here the number of Initial Warrant Shares (including the number of any Earn Out
Shares, if any, resulting from an increase under Section 2.5 of the
Warrant) called for on the face of this Warrant (or, in the case of a partial
exercise, the portion thereof as to which this Warrant is being exercised), in
either case without making any adjustment (other than any adjustment under Section 2.5,
it being understood that Section 2.5, if applicable, shall operate
solely to increase the number of Initial Warrant Shares for which this Warrant
may be exercised, converted or exchanged) for Additional Shares of Common Stock
or any other stock or other securities or property or cash which, pursuant to
the adjustment provisions of this Warrant, may be delivered upon exercise.  In the case of a partial exercise, a new
Warrant or Warrants will be issued and delivered, representing the unexercised
portion of the Warrant, to the holder surrendering the Warrant.

 

25

 

FORM OF CONVERSION NOTICE

 

[To be executed
only upon exercise of Warrant]

 

To EQUINOX HOLDINGS, INC.

 

The undersigned
registered holder of the within Warrant hereby irrevocably converts such
Warrant  with respect to
         (2) Initial Warrant
Shares (consisting of (A)          
Initial Warrant Shares, which is the number of Initial Warrant Shares (or
portion thereof in the case of partial conversion) set forth on the face of the
Warrant plus
(B)           Earn Out Shares, if
any, which are the Earn Out Shares, if any, (or pro rata portion of such Earn
Out Shares in the case of a partial conversion) by which such number of Initial
Warrant Shares was increased) which such holder would be entitled to receive
upon the exercise hereof,  and requests
that the certificates for such shares be issued in the name of, and delivered
to
                                                 ,
whose address is                                                                           .

 

 

	
  Dated:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (Signature must conform
  in all respects to name of holder as specified on the face of Warrant)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (Street Address)

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (City)

  	
  (State)

  	
  (Zip Code)

  

 

 

(2)                                  Insert
here the number of Initial Warrant Shares (including the number of any Earn Out
Shares, if any, resulting from an increase under Section 2.5 of the
Warrant) called for on the face of this Warrant (or, in the case of a partial
exercise, the portion thereof as to which this Warrant is being exercised), in
either case without making any adjustment (other than any adjustment under Section 2.5,
it being understood that Section 2.5, if applicable, shall operate
solely to increase the number of Initial Warrant Shares for which this Warrant
may be exercised, converted or exchanged) for Additional Shares of Common Stock
or any other stock or other securities or property or cash which, pursuant to the
adjustment provisions of this Warrant, may be delivered upon exercise.  In the case of a partial exercise, a new
Warrant or Warrants will be issued and delivered, representing the unexercised
portion of the Warrant, to the holder surrendering the Warrant.

 

26

 

FORM OF EXCHANGE NOTICE

 

[To be executed
only upon exercise of Warrant]

 

To EQUINOX HOLDINGS, INC.

 

The undersigned
registered holder of the within Warrant hereby irrevocably exchanges such
Warrant with respect to
         (3) Initial Warrant
Shares (consisting of (A)
          Initial Warrant Shares,
which is the number of Initial Warrant Shares (or portion there of in the case
of partial exchange) set forth on the face of the Warrant plus (B)
          Earn Out Shares, if any,
which are the Earn Out Shares, if any, (or pro rata portion of such Earn Out
Shares in the case of a partial exchange) by which such number of Initial
Warrant Shares was increased) which such holder would be entitled to receive upon
the exercise hereof, and requests that the certificates for such shares be
issued in the name of, and delivered to
                                         ,
whose address is
                                                          .

 

 

	
  Dated:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (Signature must conform
  in all respects to name of holder as specified on the face of Warrant)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (Street Address)

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (City)

  	
  (State)

  	
  (Zip Code)

  
	
   

  	
   

  	
   

  	
   

  
	
  Signed in the presence
  of:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
								

 

 

(3)                                  Insert
here the number of Initial Warrant Shares (including the number of any Earn Out
Shares, if any, resulting from an increase under Section 2.5 of the
Warrant) called for on the face of this Warrant (or, in the case of a partial
exercise, the portion thereof as to which this Warrant is being exercised), in
either case without making any adjustment (other than any adjustment under Section 2.5,
it being understood that Section 2.5, if applicable, shall operate
solely to increase the number of Initial Warrant Shares for which this Warrant
may be exercised, converted or exchanged)for Additional Shares of Common Stock
or any other stock or other securities or property or cash which, pursuant to
the adjustment provisions of this Warrant, may be delivered upon exercise.  In the case of a partial exercise, a new
Warrant or Warrants will be issued and delivered, representing the unexercised
portion of the Warrant, to the holder surrendering the Warrant.

 

27

 

FORM OF ASSIGNMENT

 

[To be executed only
upon transfer of Warrant]

 

For value received, the
undersigned registered holder of the within Warrant hereby sells, assigns and
transfers unto
                                         
the rights represented by such Warrant to purchase
          (4) Initial Warrant
Shares (which number is the number of Initial Warrant Shares (or portion
thereof, in the case of partial assignment) set forth on the face of the
Warrant, without giving effect to any increase or adjustment under Sections
2 through 4 of the Warrant) of EQUINOX HOLDINGS, INC. to which such
Warrant relates, and appoints
                                         
Attorney to make such transfer on the books of EQUINOX HOLDINGS, INC.
maintained for such purpose, with full power of substitution in the premises.

 

 

	
  Dated:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (Signature must conform
  in all respects to name  of holder as
  specified on the face of Warrant)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (Street Address)

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (City)

  	
  (State)

  	
  (Zip Code)

  
	
   

  	
   

  	
   

  	
   

  
	
  Signed in the presence
  of:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Acknowledged and
  accepted:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  EQUINOX HOLDINGS, INC.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  	
   

  	 

	
   

  	
  Title:

  	
   

  	
   

  	
   

  	 

															

 

 

(4)                                  Insert
here the number of Initial Warrant Shares applicable to the Warrant that are
shown on the face of the Warrant (excluding the number of Earn Out Shares, if
any, resulting from an increase under Section 2.5 of the Warrant)
called for on the face of this Warrant (or, in the case of a partial exercise,
the portion thereof as to which this Warrant is being exercised), in either
case without making any adjustment for Additional Shares of Common Stock or any
other stock or other securities or property or cash which, pursuant to the
adjustment provisions of this Warrant, may be delivered upon exercise.  In the case of a partial exercise, a new
Warrant or Warrants will be issued and delivered, representing the unexercised
portion of the Warrant, to the holder surrendering the Warrant.  The number of Initial Warrant Shares on any
new Warrant should reflect the remaining number of Initial Warrant Shares before
any adjustment (including before any adjustment under Section 2.5
of the Warrant).

 

28Exhibit 10.1

MASTER SERVICES
AGREEMENT

This MASTER SERVICES
AGREEMENT is entered into and effective as of this 22nd day of
February, 2001, among Equinox Holdings, Inc., a Delaware corporation
(“Holdings”), Eclipse
Development Corporation, a Delaware corporation (“Development”) and Paul Boardman (“Executive” and, together with
Development and Holdings, the “Parties”
and, each individually, a “Party”).

W I T N E S S E T H :

WHEREAS, Executive is the
sole shareholder of Development and serves as the Managing Director of
Development;

WHEREAS, Development is
in the business of locating suitable properties for, and the design,
construction and maintenance of, health and fitness clubs and spa facilities;

WHEREAS, Holdings is in
the business of operating health and fitness clubs and spa facilities;

WHEREAS, Development and
Holdings currently intend to enter into construction contracts (the “Construction Contracts”) which provide
for the design and construction of health and fitness clubs and spa facilities
and, notwithstanding the terms and conditions of such Construction Contracts,
desire to govern their relationship on the terms and conditions set forth
herein;

WHEREAS, Development has informed Executive, and
Executive acknowledges and agrees that, Executive’s entering into this
Agreement is a material inducement for Holdings agreeing to enter into such
Construction Contracts; and

WHEREAS, Development will materially benefit from the
Construction Contracts and, as the sole shareholder of Development, Executive
will materially participate in Development’s benefit.

NOW, THEREFORE, in
consideration of the premises and mutual covenants contained herein including
but not limited to Holdings entering into the Construction Contracts with
Development and for other good and valuable consideration, the receipt of which
is hereby acknowledged, the Parties hereby agree as follows:

Section 1.                          Engagement

Holdings hereby engages Development, and Development
hereby agrees, to provide site acquisition, design, construction and maintenance
services to Holdings

 

commencing on the date hereof and continuing until the
tenth anniversary of such date unless this Agreement is sooner terminated
pursuant to Section 3 hereof.  Holdings
shall use Development to provide some or all of the services outlined in
Section 2 on at least one occasion.

Section 2.                          Services

Development hereby agrees during the term of this
Agreement to assist, advise and consult with the management of Holdings in such
manner and on such site acquisition, design, construction and maintenance
matters, as may be reasonably requested from time to time by the management of
Holdings, including but not limited to assistance, advice or consultation in:

(i)            the selection and acquisition of
suitable property for health and fitness clubs and spa facilities for Holdings;

(ii)           the planning, design and construction
of health and fitness clubs and spa facilities for Holdings;

(iii)          the maintenance and repair of existing
and future health and fitness clubs and spa facilities for Holdings; and

(iv)          the renovation of existing health and
fitness clubs and spa facilities for Holdings.

Section 3.                          Termination

(a)  Termination
by Mutual Agreement. 
Notwithstanding any of the provisions of this Agreement to the contrary,
the Parties may terminate this Agreement by mutual consent upon 30 days prior
written notice.

(b)  Termination
by Holdings.  This Agreement may be
terminated by Holdings with or without Cause. 
A termination for “Cause”
shall mean (i) any material breach by Executive or Development of
any of their respective obligations hereunder or under any other written
agreement or written covenant with Holdings or any of its subsidiaries; (ii)
the failure of Executive or Development to substantially perform the duties
specified in Section 2 hereof, (iii) the termination of Executive’s
employment with Development for any reason, (iv) Executive’s conviction
of, or entering a plea of guilty or nolo  contendere to, a crime
that constitutes a felony, and (v) Executive’s or Development’s engaging
in misconduct that has caused or is reasonably expected to result in injury to
Holdings or any of its Affiliates,  provided
that if the basis for Holdings so terminating is described by clauses (i) or
(ii) of the definition of Cause, Executive or Development, as the case may be,
shall have been given prior written notice of any proposed termination for
Cause, which notice specifies in reasonable detail the circumstances claimed to
provide the basis 

 

2

 

for such
termination, and Executive or Development, as the case may be, shall not have
corrected such circumstances, in a manner reasonably satisfactory to Holdings,
within 10 business days of receipt of such written notice.

(c)  Termination
by Executive or Development.  This
Agreement may be terminated by Executive or Development with or without Good
Reason.  A termination for “Good Reason” shall mean any material
breach by Holdings of any of its obligations hereunder; provided that Holdings
shall have been given prior written notice of any proposed termination for Good
Reason, which notice specifies in reasonable detail the circumstances claimed
to provide the basis for such termination, and Holdings shall not have
corrected such circumstances, in a manner reasonably satisfactory to Executive
or Development, within 10 business days of receipt of such written notice.

(d)  Notice
of Termination.  Any termination of
this Agreement by Holdings pursuant to Section 4(b), or by Executive or
Development pursuant to Section 4(c), 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 this Agreement has been or will be terminated, the
effective date of such termination, the specific provisions of this
Section 4 under which such termination is being effected, and which
provides in reasonable detail the circumstances claimed to provide the basis
for such termination.  Any termination
of Executive’s employment with Development shall be communicated by Development
by written notice to Holdings within two business days of the earlier of the
date that (i) Executive provides notice (whether written or otherwise)
to Development or (ii) Development provides notice (whether written or
otherwise) to Executive, in each case, terminating Executive’s employment.  Executive shall provide written notice to
Holdings within two business days of the date of any conviction, plea of guilty
or nolo contendre, to a crime that constitutes a felony.

(e)  Date of
Termination.  As used in this
Agreement, the term “Date of Termination”
shall mean 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 a termination of this Agreement by Holdings
without Cause, or by Executive or Development without Good Reason such date is
at least 90 days after the date on which Notice of Termination is given as
contemplated by Section 7(e).

(f)  Payments
Upon Certain Terminations.

(i)  In the
event of a termination of this Agreement by Holdings without Cause, or by
Executive or Development for Good Reason, Holdings shall pay to Development an
amount equal to $195,000 as liquidated damages in respect of claims based on
provisions of this Agreement, which shall be payable in lump sum as soon as
reasonably practicable but in no event later than 10 business days following
the Date of Termination.

 

3

 

(ii)  In the
event of a termination of this Agreement by Holdings with Cause, or by
Executive or Development without Good Reason and notwithstanding the provisions
of any Construction Contract, Development shall pay to Holdings, an amount
equal to the funds advanced by Holdings to Development which have not been
applied against the expenses incurred by Development under the Construction
Contracts, which shall be payable in lump sum as soon as reasonably practicable
but in no event later than 10 business days following the Date of Termination.

(g)  Proof
of Application.  During the term of
this Agreement, Development shall provide to Holdings written notice of the
application of funds advanced by Holdings to expenses incurred by Development
under the Construction Contracts within three business days of such application
of funds.

(h)  Survival
of Provisions.  The provisions of
this Agreement shall survive any termination of this Agreement except for the
provisions of Section 1 and 2.

(i)  Works
in Progress.  The termination of
this Agreement by any of the Parties or by mutual agreement shall not terminate
or release any Party from any other agreement or arrangement with any other
Party.

Section 4.                          Restrictive Covenants

(a)  Unauthorized
Disclosure.  From the date hereof
and until the expiration of the five-year period following any termination of
this Agreement, without the prior written consent of the Board of Directors
(the “Holdings 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, Development and Executive shall use their
reasonable best efforts to consult with Holdings prior to responding to any
such order or subpoena, and except as required in the performance of the
services contemplated herein, Executive and Development, its employees,
officers, directors and Affiliates 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 Holdings Board, Holdings or
any of its Affiliates or to the management of Holdings or any of its
Affiliates), operating policies or manuals, business plans, financial records,
packaging design or other financial, commercial, business or technical
information (a) relating to Holdings or any of its Affiliates or (b) that
Holdings or any of its Affiliates may receive belonging to suppliers, vendors,
customers or others who do business with Holdings or any of its Affiliates
(collectively, “Confidential Information”)
to any third person or otherwise use such Confidential Information (other than
in connection with this Agreement or the Construction Contracts) unless such
Confidential Information has been

 

4

 

previously
disclosed to the public or is in the public domain (in each case, other than by
reason of Development’s breach of this Section 4(a)).

(b)  Non-Disparagement.  During the period commencing on the date
hereof and ending eighteen months after the Date of Termination (the “Restriction Period”), Executive,
Development and its other employees 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 Holdings or any of
its Affiliates, 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 Holdings or any of its
Affiliate, the reputation of Holdings’ products or the marketing of Holdings’
products except to the extent required by law and then only after consultation
with Holdings to the extent possible, or in connection with any dispute between
(I) Executive or Development, and (II) Holdings or any of its
Affiliates.

(c)  Non-Competition.  Executive and Development covenant and agree
that during the Restriction Period, they shall not, directly or indirectly, own
any interest in, operate, join, control or participate as a stockholder,
member, director, partner, principal, or agent of, act as a consultant to, or
perform any services for any entity which has material operations which compete
with services provided to Holdings in respect of Holdings’ health and fitness
clubs and spa facilities under Section 2 hereof in any jurisdiction in which
Holdings or any of its Affiliates has engaged Executive or Development, or in
which Holdings or any of its Affiliates has documented plans to engage
Executive or Development of which Executive or Development have knowledge at
the Date of Termination.  This
Section 4(c) shall not prevent Executive or Development from acquiring as
an investment securities representing not more than three percent (3%) of
the outstanding voting securities of any publicly-held corporation.

(d)  Non-Solicitation
of Employees.  During the
Restriction Period, Executive and Development shall not, directly or
indirectly, for their own account or for the account of any other Person in any
jurisdiction in which Holdings or any of its Affiliates has commenced or has
made plans to commence operations at the time of the termination of this
Agreement, (i) solicit for employment, employ or otherwise
interfere with the relationship of Holdings 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 Holdings or any of its Affiliates,
other than any such solicitation or employment on behalf of Holdings or any of
its Affiliates during the term of this Agreement, or (ii) induce
any employee of Holdings or any of its Affiliates who is a member of
management to engage in any activity which Executive and Development are prohibited
from engaging in under any of paragraphs of this Section 4 or to terminate his
or her employment with Holdings.

 

5

 

(e)  Non-Interference
with Vendors and Customers.  During
the Restriction Period, Executive and Development shall not, directly or
indirectly, for their own account or for the account of any other Person, in
any jurisdiction in which Holdings or any of its Affiliates has commenced or
made plans to commence operations, interfere with the relationship of Holdings
or any of its Affiliates or otherwise attempt to establish any business
relationship of a nature that is competitive with the business or relationship
of Holdings or any of its Affiliates with any Person throughout the world which,
during the six-month period prior to any such interference is or was
a vendor, supplier, customer, client or distributor of Holdings or any of
its Affiliates.

(f)  Return
of Documents.  In the event of the
termination this Agreement for any reason, Executive and Development shall
deliver to Holdings all of (a) the property of each of Holdings and
any of its Affiliates and (b) the documents and data of any nature
and in whatever medium of each of Holdings and any of its Affiliates.

Section 5.                          Injunctive Relief with Respect to
Covenants; Certain Acknowledgments

(a)  Executive
and Development acknowledge and agree that the covenants, obligations and
agreements of Executive and Development contained in Section 4 relate to
special, unique and extraordinary matters and that a violation of any of
the terms of such covenants, obligations or agreements will cause Holdings
irreparable injury for which adequate remedies are not available at law.  Therefore, Executive and Development agree
that Holdings 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 and Development from committing any violation of such covenants,
obligations or agreements.  These
injunctive remedies are cumulative and in addition to any other rights and
remedies Holdings may have.  Executive
and Development further acknowledge and agree that their entering into this
Agreement was a material inducement to Holdings to enter into the Construction
Contracts.

(b)  Executive
and Development acknowledge and agree that Executive and Development have had
and will have a prominent role in the expansion of the business, and the
development of the goodwill, of Holdings and its Affiliates and will establish
and develop relations and contacts with the principal customers and suppliers
of Holdings 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 or Development to compete unfairly with, Holdings and its Affiliates
and that (i) during the term of this Agreement, Executive and
Development will obtain confidential and proprietary information and trade secrets
concerning the business and operations of Holdings and any of its Affiliates in
the United States of America and the rest of the world that could be used to
compete unfairly with Holdings and any of its Affiliates; (ii) the
covenants and

 

6

 

restrictions
contained in Section 4 are intended to protect the legitimate interests of
Holdings and its Affiliates in their respective goodwill, trade secrets and
other confidential and proprietary information; and (iii) Executive
and Development desire to be bound by such covenants and restrictions.

Section 6.                          Representations, Warranties and
Covenants of Holdings

(a)  Holdings
is a corporation duly organized, validly existing and in good standing under
the laws of the state of its organization and is qualified to transact business
and is in good standing.

(b)  This
Agreement has been duly executed and delivered by Holdings and constitutes the
legal, valid and binding obligation of Holdings, enforceable in accordance with
its terms.  The execution, delivery and
performance of this Agreement does not and will not:  (i) conflict with, result in the breach of, constitute a
default, with or without notice and/or lapse of time, under, result in being
declared void or voidable any provision of, or result in any right to terminate
or cancel any contract, lease or agreement to which Holdings, officers or
employees is bound;  or (ii)
constitute a violation of any statute, judgment, order, decree or regulation or
rule of any applicable court, governmental authority or arbitrator.

Section 7.                          Representations, Warranties and
Covenants of Development

(a) 
Development is a corporation duly organized, validly existing and in
good standing under the laws of the state of its organization and is qualified
to transact business and is in good standing.

(b)  This
Agreement has been duly executed and delivered by Development and constitutes
the legal, valid and binding obligation of Development, enforceable in
accordance with its terms.  The execution,
delivery and performance of this Agreement does not and will not:  (i) conflict with, result in the
breach of, constitute a default, with or without notice and/or lapse of time,
under, result in being declared void or voidable any provision of, or result in
any right to terminate or cancel any contract, lease or agreement to which
Development, officers or employees is bound; 
or (ii) constitute a violation of any statute, judgment, order,
decree or regulation or rule of any applicable court, governmental authority or
arbitrator.

Section
8.                          Entire Agreement

This Agreement and the
agreements referenced to in the recitals hereto constitute the entire agreement
among the Parties 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, arrangements and agreements relating
to such subject matter are merged herein and superseded hereby.

 

7

 

Section 9.                          Independent Contractor Status

The Parties agree that Executive and Development shall
perform services to Holdings as independent contractors, retaining control over
and responsibility for their own operations and personnel.  None of Executive, Development or any of its
employees or agents shall, solely by virtue of this Agreement or the
arrangements hereunder, be considered employees or agents of Holdings or any of
its Affiliates nor shall any of them have authority to contract in the name of
or bind Holdings or any of its Affiliates, except as expressly agreed to in
writing by Holdings.

Section
10.           Miscellaneous

(a)  Binding
Effect; Assignment.  This Agreement
shall be binding on and inure to the benefit of Holdings, and its respective
successors and permitted assigns.  This
Agreement shall also be binding on and inure to the benefit of Executive and
Development, and their respective successors and permitted assigns.  This Agreement shall not be assignable by
any Party without the prior written consent of the other Parties provided that,
Holdings may effect such an assignment without prior written approval of
Executive or Development upon the transfer of all or substantially all of its
business and/or assets (by whatever means).

(b)  Governing
Law, etc.

(i)  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.  Each of the Parties 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 of the Parties 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 of the Parties
hereby consents to and grants any such court jurisdiction over the person of
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 12(f) or in such other manner
as may be permitted by law, shall be valid and sufficient service thereof.

 

8

 

(ii)  Each of
the Parties acknowledges and agrees that any controversy which may arise under
this Agreement is likely to involve complicated and difficult issues, and
therefore each of the Parties 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 of the Parties
certifies and acknowledges that (i) 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, (ii) each such Party understands and has
considered the implications of this waiver, (iii) each such Party
makes this waiver voluntarily, and (iv) each such Party has been
induced to enter into this agreement by, among other things, the mutual waivers
and certifications in this Section 12(b).

(c)  Amendments.  No provision of this Agreement may be
modified, waived or discharged unless such modification, waiver or discharge is
approved by Holdings or a Person authorized thereby and is agreed to in
writing by Executive and Development and, in the case of any such modification,
waiver or discharge affecting the rights or obligations of Holdings, is
approved by the Board or a Person authorized thereby.  No waiver by any of the Parties at any time
of any breach by any other Party, 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 of the
Parties hereto to assert their rights hereunder on any occasion or series of
occasions.

(d)  Severability.  In the event the restrictive covenants
contained in Section 4 are held by any court of competent jurisdiction or other
duly constituted legal authority to be effective in any particular area or
jurisdiction only if modified to limit their duration or scope, or to be void
or otherwise unenforceable in any particular area or jurisdiction, then such
provisions will be deemed to be amended and modified with respect to that
particular area or jurisdiction so as to comply with the order of any such
court or other duly constituted legal authority (and all other terms shall
remain in full force and effect), and as to all other areas and jurisdictions,
such provisions (and all other terms) will remain in full force and effect as
set forth in this Agreement.  Each of
the Parties further agree that, in the event the enforceability of any of the
provisions of this Agreement may depend on separate or additional compensation
or payments to be paid therefore, that Holdings shall have the right to offer
such compensation or payments so as to obtain enforceability as to such
provisions.

(e)  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 

 

9

 

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 Holdings, to it at:

  
	
   

  	
   

  
	
   

  	
  Equinox
  Holdings, Inc.

  
	
   

  	
  895 Broadway

  
	
   

  	
  New York, NY
  10003

  
	
   

  	
  Tel:  (212) 677-0180

  
	
   

  	
  Fax:  (212) 777-9510

  
	
   

  	
  Attention: 
  Harvey J. Spevak

  
	
   

  	
   

  
	
  (B) if to Executive, to him at his residential
  address currently on file with Development;

  
	
   

  	
   

  
	
  (C) if to Development, to it at:

  
	
   

  	
   

  
	
   

  	
  Eclipse
  Development Corporation

  
	
   

  	
  895 Broadway

  
	
   

  	
  New York, new
  York 10003

  
	
   

  	
  Tel: 212-674-8000

  
	
   

  	
  Attention: Paul Boardman

  

 

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

 

	
   

  	
  North Castle
  Partners, L.L.C.

  
	
   

  	
  60 Arch Street,
  Suite 1A

  
	
   

  	
  Greenwich, CT
  06830

  
	
   

  	
  Tel:  (203) 618-1700

  
	
   

  	
  Fax:  (203) 618-1860

  
	
   

  	
  Attention: 
  Adam Saltzman

  
	
   

  	
   

  
	
  and to:

  
	
   

  	
   

  
	
   

  	
  Debevoise & Plimpton

  
	
   

  	
  875 Third Avenue

  
	
   

  	
  New York, New York 10022

  
	
   

  	
  Tel: (212) 909-6000

  
	
   

  	
  Fax: (212) 909-6836

  
	
   

  	
  Attention:  Franci J.
  Blassberg, Esq.

  

 

 

10

 

	
  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.

  

 

(f)  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.

(g)  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.

(h)  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.

“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.

“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.

 

11

 

IN WITNESS WHEREOF,
Holdings, Executive and Development have each duly executed this Agreement by
their respective authorized representatives, in each case effective as of the
date first above written.

	
  EQUINOX HOLDINGS, INC.

  
	
   

  	
   

  	
   

  
	
  By:  

  	
  /s/ H. Spevak

  	
   

  
	
   

  	
  Name: H. Spevak

  	
   

  
	
   

  	
  Title: CEO

  	
   

  
	
   

  
	
  ECLIPSE DEVELOPMENT CORPORATION:

  
	
   

  
	
  By: 

  	
   /s/ Paul B.
  Boardman

  	
   

  
	
   

  	
  Name: Paul B. Boardman

  	
   

  
	
   

  	
  Title: Managing Director

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  EXECUTIVE:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Paul B. Boardman

  	
   

  
	
  Paul Boardman

  	
   

  

 

12

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00069-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00069-of-00352.parquet"}]]