Document:

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                                                                    EXHIBIT 10.6

                                                             EXECUTION AGREEMENT

                              TAX SHARING AGREEMENT

                  This Tax Sharing Agreement (the "Agreement"), dated as of
February 4, 2004, is made by and among Town Sports International Holdings, Inc.,
a Delaware corporation ("Holdings"), Town Sports International, Inc., a New York
corporation ("TSI"), and the other signatories to this Agreement (the
"Subsidiaries").

                  WHEREAS, Holdings is the common parent corporation of an
affiliated group of corporations within the meaning of Section 1504(a) of the
Internal Revenue Code of 1986, as amended (the "Code"); and

                  WHEREAS, TSI is a member of the affiliated group of which
Holdings is the common parent corporation, and each of the Subsidiaries is a
wholly-owned subsidiary of TSI; and

                  WHEREAS, Holdings, TSI and the Subsidiaries will file
consolidated income tax returns as required by Section 1501 of the Code and
similar laws of other jurisdictions; and

                  WHEREAS, Holdings, TSI and the Subsidiaries desire to agree
upon a method for determining the financial consequences to each party resulting
from the filing of a consolidated income tax return; and

                  NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, the parties hereby agree as follows:

1.       DEFINITIONS.

         (a)      For purposes of this Agreement, the terms set forth below
shall have the following meanings.

                  (i)      "Alternative Minimum Tax" shall mean the tax imposed
by Section 55(a) of the Code.

                  (ii)     "Consolidated Federal Tax Liability" shall mean, with
respect to any taxable year, the Alternative Minimum Tax and Regular Tax to be
actually paid by the Holdings Group with respect to such taxable year (without
taking into account any carry-backs of tax attributes from later taxable years).

                  (iii)    The "Federal Tax Liability" of any Subgroup shall
mean, with respect to any taxable year, the sum of the Subgroup's liability for
Regular Tax and for Alternative Minimum Tax for such taxable year, and any
interest, penalties, and other additions to such taxes for such taxable year,
computed as if the Subgroup were not part of the Holdings Group, but rather were
a separate affiliated group of corporations filing a consolidated United States
federal income tax return pursuant to Section 1501 of the Code. Such computation
shall be made (A) without regard to the income, deductions (including net
operating loss and capital loss deductions) and credits in any year of any
member of the Holdings Group which is not a member of the Subgroup, (B) with
regard to net operating loss and capital loss carry-forwards from earlier years
(but not carry-backs from later years) of the Subgroup, (C) with regard to the

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minimum tax credits of the Subgroup and (D) as though the highest rate of tax
specified in subsection (b) of Section 11 of the Code were the only Regular Tax
rate applicable to the Subgroup.

                  (iv)     "Holdings Group" shall mean Holdings, TSI and the
Subsidiaries and any other corporation that, from time to time, joins with
Holdings in the filing of a consolidated United States federal income tax
return.

                  (v)      "Regular Tax" shall mean the tax imposed by Section
11 of the Code.

                  (vi)     "Subgroup" shall be comprised of any member of the
Holdings Group (other than Holdings) and its direct corporate subsidiaries that
would be eligible, from time to time, to join with such member in the filing of
a consolidated United States federal income tax return if such member were not a
member of the Holdings Group.

                  (vii)    "Subgroup Additional Tax Amount" shall mean the
excess of (A) the sum of a Subgroup's Federal Tax Liability for the period
beginning when such Subgroup entered the Holdings Group and ending in the
taxable year at issue over (B) the sum of such Subgroup's Subgroup Payment for
the period beginning when such Subgroup entered the Holdings Group and ending in
the taxable year at issue.

                  (viii)   "Subgroup Parent" means the corporation that is the
controlling member of a Subgroup. In the case of a Subgroup that consists of a
single corporation, Subgroup Parent means that corporation.

         (b)      For all purposes of this Agreement, unless the context
otherwise requires, the definitions of terms not defined herein shall be
determined by reference to applicable law.

2.       UNITED STATES FEDERAL INCOME TAXES.

         (a)      References. All references in this Section 2 to taxes or
matters related to taxes are references to United States federal income taxes
and related United States federal income tax matters.

         (b)      Tax Sharing.

                  (i)      With respect to any taxable year of each Subgroup,
each Subgroup Parent shall pay to Holdings an amount equal to the lesser of (A)
the Subgroup's Federal Tax Liability or (B) the amount equal to the product of
the Consolidated Federal Tax Liability for such Taxable year and a fraction (1)
the numerator of which is the taxable income of such Subgroup for such taxable
year (or zero, if such taxable income is negative), where the taxable income is
calculated on the basis of the assumption that such Subgroup had filed separate
federal income tax returns for such taxable year and all prior years and (II)
the denominator of which is the sum of the taxable income for such taxable year
of each Subgroup of the Holdings Group which has positive taxable income for
such taxable year, where taxable income of a Subgroup of the Holdings Group is
calculated on the basis of the assumption that such Subgroup had filed a
separate federal income tax return for such taxable year and all prior taxable
years. The actual

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amount of tax required to be paid by any Subgroup pursuant to the preceding
sentence is hereinafter referred to as the "Subgroup Payment."

                  (ii)     In the event that the Consolidated Federal Tax
Liability for any taxable year exceeds the sum of the Subgroup Payments of the
Subgroups for such year (such excess hereinafter referred to as the "Additional
Tax Amount"), Holdings may collect from each Subgroup an amount equal to the
lesser of (A) the Subgroup Additional Tax Amount of such Subgroup and (B) an
amount equal to the product of the Additional Tax Amount and a fraction (I) the
numerator of which is the Subgroup Additional Tax Amount of such Subgroup and
(II) the denominator of which is the sum of the Subgroup Additional Tax Amounts
for all Subgroups.

         (c)      Estimated Payments. Not later than thirty days prior to each
date on which an estimated federal income tax installment is due (a "Tax Payment
Date"), Holdings shall determine, and notify each Subgroup Parent of, (i) the
amount of the applicable required installment of the required annual payment of
the Holdings Group under Section 6655(d) of the Code and (ii) the amount of such
required installment calculated solely by reference to the Subgroup consistent
with the methodology under Section 2(b) of this Agreement (the "Subgroup
Estimated Payment"). Each Subgroup Parent shall then pay to Holdings, on (but no
earlier than) the date which is three business days prior to such Tax Payment
Date, the Subgroup Estimated Payment thus determined.

         (d)      Payment of Taxes at Year-End.

                  (i)      Holdings shall determine, and notify each Subgroup
Parent of, the Subgroup Payment within 60 days following the end of the taxable
year for which the payment is to be made. On (but no earlier than) the date
which is three business days prior to the last date prescribed by law for
payment of the consolidated United States federal income tax liability of the
Holdings Group for such year, each Subgroup Parent shall pay to Holdings an
amount equal to the excess, if any, of the Subgroup Payment over the total
Subgroup Estimated Payments with respect to such taxable year. A similar rule
shall apply to the extent the amount of the Subgroup Payment determined within
the 60-day period specified in this clause (i) is adjusted at or prior to the
time at which the consolidated federal income tax return for such year is filed.

                  (ii)     If, as a result of the operation of Section 2(c), the
aggregate amount of the Subgroup Payments for a Subgroup for a given taxable
year is greater than the applicable Subgroup Payment, then Holdings shall
promptly remit the excess to such Subgroup Parent. A similar rule shall apply to
the extent the amount of the Subgroup Payment determined within the 60-day
period specified in clause (i) of this Section 2(d) is adjusted at or prior to
the time at which the consolidated federal income tax return for such year is
filed. If Holdings shall fail to remit such excess, the applicable Subgroup
Parent may offset such excess against any future payments due from such Subgroup
Parent to Holdings under this Agreement (such right to offset not limiting any
other rights a Subgroup Parent may have as a result of such failure).

         (e)      Treatment of Adjustments. If any adjustment (including an
adjustment resulting in a refund of tax) is made in a tax return of the Holdings
Group after the filing thereof, in which income or loss of any Subgroup is
included, then at the time the adjustment is agreed to by Holdings or becomes
final and nonappealable as a matter of law, the Subgroup Parent shall pay

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to Holdings or Holdings shall pay to the Subgroup Parent, as the case may be,
the difference between all payments actually made under Sections 2(b)-2(d) with
respect to the taxable year covered by such tax return and all payments that
would have been made under Sections 2(b)-2(d) taking such adjustment into
account, together with any penalties and interest actually paid or received.

         (f)      Treatment of Refunds. If the Holdings Group carries back a net
operating loss or capital loss generated by any Subgroup on a stand-alone basis
and thereby obtains a refund of a prior year's tax, or otherwise receives a
refund of a prior year's tax, Holdings shall pay such refund to the Subgroup
Parent from which such refund originates.

         (g)      Preparation of Returns. So long as the Holdings Group elects
to file consolidated federal income tax returns as permitted by Section 1501 of
the Code, Holdings shall prepare and timely file such returns and any other
returns, documents or statements required to be filed with the Internal Revenue
Service (the "IRS") with respect to the determination of the federal income tax
liability of the Holdings Group. Each member of the Holdings Group appoints
Holdings as its agent, as long as such corporation is a member of the Holdings
Group, for purposes of filing such consolidated federal income tax returns,
making any election or application, or taking any action in connection therewith
on behalf of the members of the Holdings Group. Each member of the Holdings
Group consents to the filing of such returns and the making of such elections
and application.

         (h)      Cooperation. Holdings, TSI and each Subsidiary shall cooperate
in the filing of any consolidated federal income tax returns for the Holdings
Group by maintaining such books and records and providing such information as
may be necessary or useful in the filing of such returns and executing any
documents and taking any actions which Holdings or any member of the Holdings
Group may reasonably request in connection therewith. Holdings and each member
of the Holdings Group will provide one another with such information concerning
such returns and the application of this Agreement as Holdings or such member
may reasonably request. Holdings shall preserve all records relating to taxes
for which any Subgroup Parent is liable hereunder until the expiration of the
applicable statute of limitations and shall make such records available to such
Subgroup Parent upon the Subgroup Parent's reasonable request.

         (i)      No Application to Other Federal Taxes. Without limitation of
the other provisions of this Agreement, any United States taxes, other than
those imposed by Sections 11 and 55 of the Code, for which the Holdings Group
may become liable shall not be subject to this Agreement.

         (j)      Payment of Tax; Indemnification. Holdings will timely pay or
discharge, or cause to be timely paid or discharged, the consolidated federal
income tax liability of the Holdings Group for each taxable year of the Holdings
Group. Holdings will defend, indemnify and hold harmless each member of the
Holdings Group from and against all liability relating to federal income taxes
(including interest, penalties and additions to tax), and all costs and expenses
described in paragraph 4 hereof, for each taxable year except to the extent that
a Subgroup Parent within the Holdings Group has agreed to make a payment in
respect of such liability under the provisions of this Agreement which payment
has not been made.

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3.       STATE AND LOCAL TAXES. If any tax based on or measured by net income
imposed by any state or local government for any taxable period is determined by
combining or consolidating all or part of the income, losses, properties,
payrolls, sales or other attributes of any Subgroup with those of Holdings,
whether or not a combined or consolidated return is filed with such state or
local government, the applicable Subgroup Parent shall make payments to Holdings
in satisfaction of such state or local tax, and Holdings shall make payments to
the Subgroup Parent with respect to such tax, according to the same general
sharing provisions as described above in Sections 2(b) through 2(e). If any
refund is received from any such state or local government, such refund shall be
paid to the Subgroup Parent according to the same general sharing provisions as
described above in Sections 2(e) and 2(f).

4.       TERM. The term of this Agreement shall commence as of the date hereof,
for the taxable year including the date hereof and for which a consolidated
federal income tax return for the Holdings Group is filed. This Agreement shall
expire with respect to any member of the Holdings Group upon the date on which
it shall cease to be a subsidiary corporation includible in a consolidated
return of the Holdings Group for United States federal income tax purposes;
provided, however, that all rights and obligations arising hereunder with
respect to a taxable period ended at or prior to expiration shall survive until
they are fully effectuated or performed.

5.       SUCCESSORS. This agreement shall be binding on and inure to the benefit
of any successor, by merger, acquisition of assets or otherwise, to any of the
parties hereto (including but not limited to any successor of Holdings or any
member of the Holdings Group succeeding to the tax attributes of such party
under Section 381 of the Code), to the same extent as if such successor had been
an original party hereto. If any corporation other than the members of the
Holdings Group as of the date hereof joins with Holdings in the filing of a
consolidated United States federal income tax return after the date hereof, then
Holdings shall cause such corporation to sign a joinder agreement and become
bound by the terms hereof.

6.       AUTHORIZATION, ETC. Each of the parties hereto hereby represents and
warrants that it has the power and authority to execute, deliver and perform
this Agreement, that this Agreement has been duly authorized by all necessary
corporate action on the part of such party, that this Agreement constitutes a
legal, valid and binding obligation of each such party and that the execution,
delivery and performance of this Agreement by such party does not contravene or
conflict with any provision of law or of its charter or bylaws or any agreement,
instrument or order binding on such party.

7.       SECTION CAPTIONS. Section captions used in this Agreement are for
convenience and reference only and shall not affect the construction of this
Agreement.

8.       GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO LAWS
AND PRINCIPLES RELATING TO CONFLICTS OF LAW.

9.       COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same Agreement.

                                       5

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10.      WAIVERS AND AMENDMENTS. This Agreement shall not be waived, amended or
otherwise modified except in writing, duly executed by all of the parties
hereto.

                                       6

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                  IN WITNESS WHEREOF, each of the parties hereto has caused this
Tax Sharing Agreement to be executed by a duly authorized officer as of the date
first above written.

                                      TOWN SPORTS INTERNATIONAL HOLDINGS, INC.

                                      By: /s/ Richard Pyle
                                          ---------------------------------
                                          Name: Richard Pyle
                                          Title: Chief Financial Officer

                                      TOWN SPORTS INTERNATIONAL, INC.

                                      By: /s/ Richard Pyle
                                          ---------------------------------
                                          Name: Richard Pyle
                                          Title: Chief Financial Officer

                                      TSI ALEXANDRIA, LLC,
                                      TSI ALLSTON, INC.,
                                      TSI ANDOVER, INC.,
                                      TSI ARDMORE, LLC,
                                      TSI ARTHRO-FITNESS SERVICES, INC.,
                                      TSI ASTORIA, INC.
                                      TSI BATTERY PARK, INC.,
                                      TSI BETHESDA, LLC,
                                      TSI BROADWAY, INC.,
                                      TSI 217 BROADWAY, INC.,
                                      TSI BROOKLYN BELT, INC.,
                                      TSI BRUNSWICK, INC.,
                                      TSI BULFINCH, INC.,
                                      TSI CASH MANAGEMENT, INC.,
                                      TSI CENTRAL SQUARE, INC.,
                                      TSI CENTREVILLE, LLC,
                                      TSI CHERRY HILL, LLC,
                                      TSI CHEVY CHASE, INC.,
                                      TSI CLARENDON, LLC,
                                      TSI COBBLE HILL, INC.,
                                      TSI COLONIA, LLC,
                                      TSI COMMACK, INC.,
                                      TSI CONNECTICUT AVENUE, INC.,

                                      By: /s/ Richard Pyle
                                          ---------------------------
                                          Name: Richard Pyle
                                          Title: Chief Financial Officer

<PAGE>

                                      TSI COPLEY, INC.,
                                      TSI COURT STREET, INC.,
                                      TSI CROTON, INC.,
                                      TSI DANBURY, INC.,
                                      TSI DANVERS, INC.,
                                      TSI DOWNTOWN CROSSING, INC.,
                                      TSI DUPONT CIRCLE, INC.,
                                      TSI DUPONT II, INC.,
                                      TSI EAST CAMBRIDGE, INC.,
                                      TSI EAST MEADOW, INC.,
                                      TSI EAST 23, INC.,
                                      TSI EAST 31, INC.,
                                      TSI EAST 34, INC.,
                                      TSI EAST 36, INC.
                                      TSI EAST 41, INC.,
                                      TSI EAST 51, INC.,
                                      TSI EAST 59, INC.,
                                      TSI EAST 76, INC.,
                                      TSI EAST 86, INC.,
                                      TSI EAST 91, INC.,
                                      TSI F STREET, INC.,
                                      TSI FAIRFAX, LLC,
                                      TSI FENWAY, INC.,
                                      TSI FIFTH AVENUE, INC.,
                                      TSI FIRST AVENUE, INC.,
                                      TSI FOREST HILLS, INC.,
                                      TSI FORT LEE, LLC,
                                      TSI FRAMINGHAM, INC.,
                                      TSI FRANKLIN (MA), INC.,
                                      TSI FRANKLIN PARK, LLC,
                                      TSI FREEHOLD, LLC,
                                      TSI GALLERY PLACE, INC.,
                                      TSI GARDEN CITY, INC.,
                                      TSI GERMANTOWN, LLC,
                                      TSI GARDEN CITY, INC.,
                                      TSI GERMANTOWN, LLC,
                                      TSI GLOVER, INC.,
                                      TSI GRAND CENTRAL, INC.,
                                      TSI GREAT NECK, INC.,
                                      TSI GREENWICH, INC.,
                                      TSI HERALD, INC.,

                                      By: /s/ Richard Pyle
                                          -----------------------------
                                          Name: Richard Pyle
                                          Title: Chief Financial Officer

<PAGE>

                                      TSI HIGHPOINT, LLC,
                                      TSI HOBOKEN, LLC,
                                      TSI HOLDINGS (CIP), INC.,
                                      TSI HOLDINGS (DC), INC.,
                                      TSI HOLDINGS (IP), LLC,
                                      TSI HOLDINGS (MA), INC.,
                                      TSI HOLDINGS (MD), INC.,
                                      TSI HOLDINGS (NJ), INC.,
                                      TSI HOLDINGS (PA), INC.,
                                      TSI HOLDINGS (VA), INC.,
                                      TSI HUNTINGTON, INC.,
                                      TSI INSURANCE, INC.,
                                      TSI INTERNATIONAL, INC.,
                                      TSI IRVING PLACE, INC.,
                                      TSI JERSEY CITY, LLC,
                                      TSI K STREET, INC.,
                                      TSI LARCHMONT, INC.,
                                      TSI LEXINGTON (MA), INC.,
                                      TSI LINCOLN, INC.,
                                      TSI LIVINGSTON, LLC,
                                      TSI LONG BEACH, INC.,
                                      TSI LYNNFIELD, INC.,
                                      TSI M STREET, INC.,
                                      TSI MADISON, INC.,
                                      TSI MAHWAH, LLC,
                                      TSI MAMARONECK, INC. ,
                                      TSI MARKET STREET, LLC,
                                      TSI MARLBORO, LLC
                                      TSI MATAWAN, LLC,
                                      TSI MONTCLAIR, LLC,
                                      TSI MURRAY HILL, INC.,
                                      TSI NANUET, INC.,
                                      TSI NASHUA, LLC,
                                      TSI NATICK, INC.,
                                      TSI NEWARK, LLC,
                                      TSI NEWBURY STREET, INC.,
                                      TSI NORTH BETHESDA, LLC,
                                      TSI NORWALK, INC.,
                                      TSI OCEANSIDE, INC.,
                                      TSI OLD BRIDGE, LLC,
                                      TSI PARSIPPANY, LLC,

                                      By: /s/ Richard Pyle
                                          -------------------------------
                                          Name: Richard Pyle
                                          Title: Chief Financial Officer

<PAGE>

                                      TSI PLAINSBORO, LLC,
                                      TSI PRINCETON, LLC,
                                      TSI RAMSEY, LLC,
                                      TSI READE STREET, INC.,
                                      TSI RIDGEWOOD, LLC,
                                      TSI RITTENHOUSE, LLC,
                                      TSI RODIN PLACE, LLC,
                                      TSI RYE, INC.,
                                      TSI SCARSDALE, INC.,
                                      TSI SEAPORT, INC.,
                                      TSI SHERIDAN, INC.,
                                      TSI SILVER SPRING, LLC,
                                      TSI SOCIETY HILL, LLC,
                                      TSI SOHO, INC.,
                                      TSI SOMERSET, LLC,
                                      TSI SOUTH PARK SLOPE, INC.,
                                      TSI SPRINGFIELD, LLC,
                                      TSI STAMFORD DOWNTOWN, INC.,
                                      TSI STAMFORD POST, INC.,
                                      TSI STAMFORD RINKS, INC.,
                                      TSI STATEN ISLAND, INC.,
                                      TSI STERLING, LLC,
                                      TSI SUPPLEMENTS, INC.,
                                      TSI SYOSSET, INC.,
                                      TSI WALL STREET, INC.,
                                      TSI WALTHAM, LLC,
                                      TSI WASHINGTON, INC.,
                                      TSI WATER STREET, INC.,
                                      TSI WELLESLEY, INC.,
                                      TSI WEST CALDWELL, LLC,
                                      TSI WEST NEWTON, INC.,
                                      TSI WEST NYACK, INC.,
                                      TSI WEST SPRINGFIELD, LLC ,
                                      TSI WEST 14, INC.,
                                      TSI WEST 16, INC.,
                                      TSI WEST 23, INC.,
                                      TSI WEST 38, INC.,
                                      TSI WEST 41, INC.,
                                      TSI WEST 44, INC.,
                                      TSI WEST 48, INC.,
                                      TSI WEST 52, INC.,

                                      By: /s/ Richard Pyle
                                          ------------------------------
                                          Name: Richard Pyle
                                          Title: Chief Financial Officer

<PAGE>

                                      TSI WEST 73, INC.,
                                      TSI WEST 76, INC.,
                                      TSI WEST 80, INC.,
                                      TSI WEST 94, INC.,
                                      TSI WEST 125, INC.,
                                      TSI WESTPORT, INC.,
                                      TSI WESTWOOD, LLC,
                                      TSI WEYMOUTH, INC.,
                                      TSI WHITE PLAINS, INC.,
                                      TSI WHITESTONE, INC.,
                                      TSI WOODMORE, INC.

                                       By: /s/ Richard Pyle
                                          ------------------------------
                                          Name: Richard Pyle
                                          Title: Chief Financial Officer<PAGE>

                                                                    EXHIBIT 10.7

                                                                           FINAL
                    TOWN SPORTS INTERNATIONAL HOLDINGS, INC.
                          2004 COMMON STOCK OPTION PLAN

                                    ARTICLE I
                                 Purpose of Plan

                  The 2004 Common Stock Option Plan (the "Plan") of TOWN SPORTS
INTERNATIONAL HOLDINGS, INC., a Delaware corporation (the "Company"), adopted by
the board of directors of the Company on February 4, 2004, for executive and
other key employees of the Company and its Subsidiaries, is intended to advance
the best interests of the Company by providing those persons who have a
substantial responsibility for its management and growth with additional
incentives by allowing them to acquire an ownership interest in the Company and
thereby encouraging them to contribute to the success of the Company and to
remain in its employ. The availability and offering of stock options under the
Plan also increases the Company's ability to attract and retain individuals of
exceptional managerial talent upon whom, in large measure, the sustained
progress, growth and profitability of the Company depends. The Plan is a
compensatory benefit plan within the meaning of Rule 701 of the Securities Act
(as defined below) and, unless and until the Common Stock is publicly traded,
the issuance of the options and the Common Stock pursuant to the Plan is
intended to qualify for the exemption from registration under the Securities Act
provided by such Rule 701.

                                   ARTICLE II
                                   Definitions

                  For purposes of the Plan, except where the context clearly
indicates otherwise, the following terms shall have the meanings set forth
below:

                  "Board" shall mean the board of directors of the Company.

                  "Business Day-" means any day other than a Saturday or Sunday
or a day on which commercial banks are required or authorized to close in New
York, New York.

                  "Cause" means any of the following with respect to the
Participant: (i) a material breach of the Participant's covenants under this
Agreement or any other agreement with the Company or its Subsidiaries
(including, without limitation, the Option Agreement, the Stockholders Agreement
and the Registration Rights Agreement) not cured within 15 days after delivery
of written notice of such breach by the Company; (ii) the commission by the
Participant of a felony, a crime involving moral turpitude or other act causing
material harm to the standing and reputation of the Company or any of its
Subsidiaries; (iii) the Participant's repeated and deliberate failure to comply
with the lawful and reasonable written directives of the Board; or (iv) theft or
embezzlement of a material amount of money or property of the Company or any of
its Subsidiaries, perpetration of fraud, or participation in a fraud, on the
Company or any of its Subsidiaries.

<PAGE>

                  "Certificate of Incorporation" means the Company's Certificate
of Incorporation as in effect as of the date of adoption hereof, as the same may
be amended, restated or modified from time to time.

                  "Code" means the Internal Revenue Code of 1986, as amended,
and any successor statute.

                  "Committee" shall mean the compensation committee of the Board
which may be designated by the Board to administer the Plan or, if for any
reason the Board has not designated such a committee, the Board. The Committee,
if other than the Board, shall be composed of two or more directors as appointed
from time to time by the Board.

                  "Common Stock" means the Company's Class A Common Stock, par
value $0.001 per share (the "Class A Common"), and the Company's Class B Common
Stock, par value $0.001 per share (the "Class B Common"), or if such outstanding
Common Stock is hereafter changed into or exchanged for different securities of
the Company, such other securities.

                  "Disability" means the inability, due to illness, accident,
injury, physical or mental incapacity or other disability, of the Participant to
carry out his duties and obligations to the Company or to participate actively
in the management of the Company or a Subsidiary of the Company for a period of
at least 90 consecutive days or for shorter periods aggregating at least 120
days (whether or not consecutive)during any twelve-month period, as determined
by the Board in good faith.

                  "Executive Stock Agreement" has the meaning set forth in
Section 6.2 hereof.

                  "Fair Market Value" means, as of any date of determination,
(i) for each share of Common Stock, the average of the closing per share prices
of the sales of the Common Stock on all securities exchanges on which the Common
Stock may at the time be listed, or, if there have been no sales on any such
exchange on any day, the average of the highest bid and lowest asked prices on
all such exchanges at the end of such day, or, if on any day the Common Stock is
not so listed, the average of the representative bid and asked per share prices
quoted in the NASDAQ National Market System as of 4:00 P.M., New York time, or,
if on any day the Common Stock is not quoted in the NASDAQ National Market
System, the average of the highest bid and lowest asked per share prices on such
day in the domestic over-the-counter market as reported by the NASDAQ National
Quotation Bureau, Incorporated, or any similar successor organization, in each
such case averaged over a period of 21 trading days consisting of the day as of
which the Fair Market Value is being determined and the 20 consecutive trading
days prior to such day. If at any time the Common Stock is not so listed on any
securities exchange or quoted in the NASDAQ National Market System or the
domestic over-the-counter market, the Fair Market Value will be the fair value
of the Common Stock as determined in good faith by the Board and set forth in a
written notice to the Participant; provided, that if the Participant objects to
such determination in writing within 10 days of receipt of such determination
from the Board, the Fair Market Value shall be determined by an independent
investment banking firm mutually selected by the Board and the Participant; and
the costs of such investment banking firm shall be borne by

                                       2
<PAGE>

the party whose determination is farthest from the determination of such
investment banking firm.

                  "Option Agreement" has the meaning set forth in Section 6.2
hereof.

                  "Option Shares" means, collectively, (i) all shares of Class A
Common issued or issuable upon the exercise of an Option, and (ii) any shares of
the Company's capital stock issued with respect to the shares of Common Stock
set forth in clause (i) by way of merger, consolidation, reclassification, stock
split, reverse stock split, stock dividend or other recapitalization. Option
Shares shall continue to be Option Shares in the hands of any holder other than
the Participant to whom the related Options were granted (including, without
limitation, any Permitted Transferee of such Participant), except for the
Company, any Person specified in the related Option Agreement or any transferee
in an underwritten public offering registered under the Securities Act. Except
as otherwise provided herein, each other holder of Option Shares will succeed to
the rights and obligations attributable to the Participant as a holder of Option
Shares hereunder.

                  "Options" shall have the meaning set forth in Article IV
hereof.

                  "Participant" shall mean any executive or other key employee
of the Company who has been selected to participate in the Plan by the Committee
or the Board.

                  "Permitted Transferee" means, as to any Person, the "Permitted
Transferees" (as defined in the Stockholders Agreement) of such Person.

                  "Person" means an individual, a partnership, a corporation, a
limited liability company, an association, a joint stock company, a trust, a
joint venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.

                  "Registration Rights Agreement" means the Registration Rights
Agreement, dated as of February 4, 2004 by and among the Company and certain
stockholders of the Company, from time to time party thereto, as the same may be
amended, restated or modified from time to time.

                  "Securities Act" means the Securities Act of 1933, as amended.

                  "Stockholders Agreement" means the Stockholders Agreement
dated as of February 4, 2004 by and among the Company and certain stockholders
of the Company from time to time party thereto, as the same may be amended,
restated or modified from time to time.

                  "Subsidiary" means, with respect to any Person, any
corporation, partnership, limited liability company association or other
business entity of which (i) if a corporation or a limited liability company, a
majority of the total voting power of securities entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers or
trustees thereof is at the time owned or controlled, directly or indirectly, by
that Person or one or more of the other Subsidiaries of that Person or a
combination thereof, or (ii) if a partnership, association or other business
entity, a majority of the partnership or other similar ownership

                                       3
<PAGE>

interest thereof is at the time owned or controlled, directly or indirectly, by
any Person or one or more Subsidiaries of that Person or a combination thereof.
For purposes hereof, a Person or Persons shall be deemed to have a majority
ownership interest in a partnership, association or other business entity if
such Person or Persons shall be allocated a majority of partnership, association
or other business entity gains or losses or shall be or control the managing
director or general partner of such partnership, association or other business
entity.

                                   ARTICLE III
                                 Administration

                  The Plan shall be administered by the Committee; provided,
that if for any reason the Committee shall not have been appointed by the Board,
all authority and duties of the Committee under the Plan shall be vested in and
exercised by the Board. Subject to the limitations of the Plan, the Committee
shall have the sole and complete authority to: (i) select Participants, (ii)
grant Options to Participants in such forms and amounts as it shall determine,
(iii) impose such limitations, restrictions and conditions upon such Options as
it shall deem appropriate, (iv) interpret the Plan and adopt, amend and rescind
administrative guidelines and other rules and regulations relating to the Plan,
(v) correct any defect or omission or reconcile any inconsistency in the Plan or
in any Option granted hereunder, and (vi) make all other determinations and take
all other actions necessary or advisable for the implementation and
administration of the Plan. The Committee's determinations on matters within its
authority shall be conclusive and binding upon the Participants, the Company and
all other Persons. All expenses associated with the administration of the Plan
shall be borne by the Company. The Committee may, as approved by the Board and
to the extent permissible by law, delegate any of its authority hereunder to
such persons as it deems appropriate.

                                   ARTICLE IV
                         Limitation on Aggregate Shares

                  The number of shares of Common Stock with respect to which
options may be granted under the Plan (the "Options") and which may be issued
upon the exercise thereof shall not exceed, in the aggregate 162,759 shares;
provided, that (i) the type and the aggregate number of shares which may be
subject to Options shall be subject to adjustment in accordance with the
provisions of Section 6.9 below, and (ii) to the extent any Options expire
unexercised or are canceled, terminated or forfeited in any manner without the
issuance of Common Stock thereunder, or if any Options are exercised and the
shares of Common Stock issued thereunder are repurchased by the Company, such
shares shall again be available under the Plan. The 162,759 shares of Common
Stock available under the Plan may be either authorized and unissued shares,
treasury shares or a combination thereof, as the Committee shall determine.

                                    ARTICLE V
                                     Awards

         Section 5.1 Options. The Committee may grant Options to Participants in
accordance with this Article V.

                                       4
<PAGE>

         Section 5.2 Form of Option. Options granted under this Plan may be
"nonqualified" stock options or "incentive stock options" within the meaning of
Section 422 of the Code or any successor provision as specified by the
Committee; provided, than no incentive stock option may be granted to any Person
who owns more than 10% of the combined voting power of all classes of capital
stock of the Company (a "Ten Percent Holder") except subject to the limitations
set forth in Sections 5.3, 5.4, and 5.7 below and such other statutory
requirements as the Committee determines may be applicable.

         Section 5.3 Exercise Price. The Option exercise price per share of
Common Stock (the "Exercise Price") shall be fixed by the Committee.

         Section 5.4 Exercisability; Vesting. Options shall be exercisable (i)
at such time or times as the Committee shall determine at or subsequent to
grant, and (ii) only to the extent such Options shall have vested; provided,
that any Option intended to be an incentive stock option shall be treated as
such only to the extent that the aggregate Fair Market Value of the Common Stock
(determined as of the date of the Option grant) with respect to which incentive
stock options (but not non-qualified options) are exercisable for the first time
by any Participant during any calendar year (under all stock option plans of the
Company and its Subsidiaries) does not exceed $100,000. Unless otherwise
specified in the Option Agreement or as determined by the Committee, Options
will vest on the ninth anniversary of the date of such grant. Any Options which
shall have so vested are referred to as "Vested Options", and any Options which
have not vested are referred to as the "Unvested Options". In addition, Options
shall vest on an accelerated or decelerated basis as the Committee shall
determine as specified in any Option Agreement.

         Section 5.5 Exercise Procedure. Options shall be exercised in whole or
in part by written notice to the Company (to the attention of the Company's
Secretary) accompanied by a statement of the Participant that the Participant
has read and has been afforded an opportunity to ask questions of management of
the Company regarding all financial and other information provided to the
participant regarding the Company together with payment in full of an amount
(the "Option Price")equal to the product of (i) the applicable Exercise Price
for the applicable Options multiplied by (ii) the number of Option Shares to be
acquired. Payment of the Exercise Price may be made (i) in cash (including
certified check, bank draft or money order or the equivalent thereof acceptable
to the Company), (ii) if approved by the Committee prior to exercise (in the
case of an incentive stock option, if approved by the Committee in the grant),
by delivery of a full recourse promissory note of the Participant bearing
interest at a rate not less than the applicable federal rate determined pursuant
to Section 1274 of the Code as of the date of purchase or exercise, (iii) by the
delivery of shares of Common Stock valued at their Fair Market Value as of the
date of exercise as provided in Section 5.6 below, or (iv) in a combination of
the foregoing. Unless otherwise specified in the Option grant or as determined
by the Committee, no Option may be exercised for a fraction of a share of Common
Stock.

         Section 5.6 Exchange of Previously Acquired Stock. The Committee, in
its discretion and subject to such conditions as the Committee may determine,
may permit the Exercise Price for the shares being acquired to be paid, in full
or in part, by the delivery to the Company of a number of shares of Common Stock
having an aggregate Fair Market Value as of the date of exercise equal to the
Exercise Price for the shares being acquired. In the case of incentive stock

                                       5
<PAGE>

options, the Committee shall specify in the Option grant whether the option
holder may satisfy the Exercise Price with respect to shares of Common Stock
purchased upon exercise of such Option by delivering to the Company shares of
previously acquired Common Stock.

         Section 5.7 Terms of Options. The Committee shall determine the term of
each Option, which term shall in no event exceed ten (10) years from the date of
grant. Notwithstanding the foregoing, any Option granted to any Ten Percent
Holder shall expire no later than five (5) years from the date on which such
Option was granted. In addition, each Option shall be subject to early
termination in accordance with Section 6.6 below.

                                   ARTICLE VI
                               General Provisions

         Section 6.1 Conditions and Limitations on Exercise. Options may be made
exercisable in one or more installments, upon the happening of certain events,
upon the passage of a specified period of time, upon the fulfillment of certain
conditions or upon the achievement by the Company of certain performance goals,
and subject to such other terms and conditions as the Committee shall decide in
each case when the Options are granted.

         Section 6.2 Written Agreement. Each Option granted hereunder to a
Participant shall be embodied in a written agreement (an "Option Agreement")
which shall be signed by the Participant and by the Chairman, the President or
the Chief Financial Officer of the Company for and in the name and on behalf of
the Company and shall be subject to the terms and conditions of the Plan
prescribed in the Option Agreement. In addition, each Participant shall also be
required, to the extent not already a party thereto, to execute a joinder to the
Stockholders Agreement and the Registration Rights Agreement, and an executive
stock agreement (an "Executive Stock Agreement"), which shall collectively
provide, among other things, (i) the right of the Company and such other Persons
as the Committee shall designate ("Designees") to repurchase from each
Participant, and such Participant's transferees, all shares of Common Stock
issued or issuable to such Participant on the exercise of an Option in the event
of such Participant's termination of employment, (ii) rights of first refusal
granted to the Company and Designees, (iii) holdback and other registration
right restrictions in the event of a public registration of any equity
securities of the Company and (iv) any other terms and conditions which the
Committee shall deem necessary and desirable.

         Section 6.3 Listing, Registration and Compliance with Laws and
Regulations. Options shall be subject to the requirement that if at any time the
Committee shall determine, in its discretion, that the listing, registration or
qualification of the shares subject to the Options upon any securities exchange
or under any state or federal securities or other law or regulation, or the
consent or approval of any governmental regulatory body, is reasonably required
as a condition to or in connection with the granting of the Options or the
issuance or purchase of shares thereunder, no Options may be granted or
exercised, in whole or in part, unless such listing, registration,
qualification, consent or approval shall have been effected or obtained free of
any conditions not acceptable to the Committee. The holders of such Options
shall supply the Company with such certificates, representations and information
as the Company shall request and shall otherwise cooperate with the Company in
obtaining such listing, registration,

                                       6
<PAGE>

qualification, consent or approval. In the case of officers and other Persons
subject to Section 16(b) of the Securities Exchange Act of 1934, as amended, the
Committee may at any time impose any limitations upon the exercise of an Option
that, in the Committee's discretion, are necessary or desirable in order to
comply with such Section 16(b) and the rules and regulations thereunder. To the
extent specified in any Option Agreement, if the Company, as part of an offering
of securities or otherwise, finds it desirable because of federal or state
regulatory requirements to reduce the period during which any Options may be
exercised, the Committee, may, in its discretion and without the Participant's
consent, so reduce such period on not less than fifteen (15) days written notice
to the holders thereof.

         Section 6.4 Nontransferability. Options may not be transferred other
than by will or the laws of descent and distribution and, during the lifetime of
the Participant to whom they were granted, may be exercised only by such
Participant (or his legal guardian or legal representative). In the event of the
death of a Participant, exercise of Options granted hereunder shall be made
only: (i)by the executor or administrator of the estate of the deceased
Participant or the Person or Persons to whom the deceased Participant's rights
under the Option shall pass by will or the laws of descent and distribution
(provided that each beneficiary shall execute and deliver such instruments,
documents, agreements or undertakings as the Company shall request); and (ii)to
the extent that the deceased Participant was entitled thereto at the date of
such Participant's death, unless otherwise provided by the Committee in such
Participant's Option Agreement.

         Section 6.5 Expiration of Options.

                  (a)      Normal Expiration. In no event shall any part of any
Option be exercisable after the date of expiration thereof (the "Expiration
Date"), as determined by the Committee pursuant to Section 5.7 above.

                  (b)      Early Expiration Upon Termination of Employment.
Except as otherwise provided by the Committee in the applicable Option Agreement
pursuant to which Options are granted to any Participant, any portion of a
Participant's Option that was not vested and exercisable on the date of the
termination of such Participant's employment shall expire and be forfeited as of
such date, and any portion of a Participant's Option that was vested and
exercisable on the date of the termination of such Participant's employment
shall expire and be forfeited 90 days after such date.

         Section 6.6 Withholding Tax Requirements. It shall be a condition of
the exercise of any Option that the Participant exercising the Option make
appropriate payment or other provision acceptable to the Company with respect to
any withholding tax requirement arising from such exercise. The amount of
withholding tax required, if any, with respect to any Option exercise (the
"Withholding Amount") shall be reasonably determined by the Treasurer or other
appropriate officer of the Company, and the Participant shall furnish such
information as such officer requires to make such determination. If the Company
determines that withholding tax is required with respect to any Option exercise,
the Company shall notify the Participant of the Withholding Amount, and the
Participant shall pay to the Company an amount not less than the Withholding
Amount. In lieu of making such payment, the Participant may elect to pay the
Withholding Amount by either (i) delivering to the Company a number of Option
Shares having an aggregate Fair Market Value as of the "measurement date" (as
hereinafter defined) not less

                                       7
<PAGE>

than the Withholding Amount or (ii) directing the Company to withhold (and not
to deliver or issue to the Participant) a number of Option Shares otherwise
issuable upon the exercise of the Option having an aggregate Fair Market Value
as of the measurement date not less than the Withholding Amount. In addition, if
the Committee approves, a Participant may elect pursuant to the prior sentence
to deliver or direct the withholding of Option Shares having an aggregate Fair
Market Value in excess of the minimum Withholding Amount but not in excess of
the Participant's applicable highest marginal combined federal income and state
income tax rate, as estimated in good faith by such Participant. Any fractional
share interests resulting from the delivery or withholding of Option Shares to
meet withholding tax requirements shall be settled in cash. All amounts paid to
or withheld by the Company and the value of all Option Shares delivered to or
withheld by the Company pursuant to this Section 6.6 shall be deposited in
accordance with applicable law by the Company as withholding tax for the
Participant's account. If the Treasurer or other appropriate officer of the
Company determines that no withholding tax is required with respect to the
exercise of any Option (because such Option is an incentive stock option or
otherwise), but subsequently it is determined that the exercise resulted in
taxable income as to which withholding is required (as a result of a disposition
of shares or otherwise), the Participant shall promptly, upon being notified of
the withholding requirement, pay to the Company by means acceptable to the
Company the amount required to be withheld; and at its election the Company may
condition any transfer of shares issued upon exercise of an incentive stock
option upon receipt of such payment. The term "measurement date" as used in this
Section 6.6 shall mean the date on which any taxable income resulting from the
exercise of an Option is determined under applicable federal income tax law.

         Section 6.7 Notification of Inquiries and Agreements. Each Participant
and each permitted transferee shall notify the Company in writing within ten
(10) days after the date such Participant or permitted transferee (i) first
obtains knowledge of any Internal Revenue Service inquiry, audit, assertion,
determination, investigation, or question relating in any manner to the value of
Options granted hereunder; (ii) includes or agrees (including, without
limitation, in any settlement, closing or other similar agreement)to include in
gross income with respect to any Option granted under this Plan (A) any amount
in excess of the amount reported on Form 1099 or Form W-2 to such Participant by
the Company, or (B) if no such Form was received, any amount; and (iii)
exercises, sells, disposes of, or otherwise transfers an Option acquired
pursuant to this Plan. Upon request, a Participant or permitted transferee shall
provide to the Company any information or document relating to any event
described in the preceding sentence which the Company (in its sole
discretion)requires in order to calculate and substantiate any change in the
Company's tax liability as a result of such event.

         Section 6.8 Adjustments. Except as otherwise provided in any Option
Agreement, in the event of a reorganization, recapitalization, stock dividend or
stock split, or combination or other change in the shares of Common Stock, the
Board or the Committee may or may not, in its discretion, make such adjustments
in the number and type of shares authorized by the Plan, the number and type of
shares covered by outstanding Options and the Exercise Prices specified therein
as may be determined to be appropriate and equitable. The issuance by the
Company of shares of stock of any class, or options or securities exercisable or
convertible into shares of stock of any class, for cash or property, or for
labor or services either upon direct sale, or upon the exercise of rights or
warrants to subscribe therefor, or upon exercise or conversion of other

                                       8
<PAGE>

securities, shall not affect, and no adjustment by reason thereof shall be made
with respect to, the number or price of shares of Common Stock then subject to
any Options.

         Section 6.9 Employment. Nothing contained in this Plan or in any Option
Agreement shall interfere with or limit in any way the right of the Company to
terminate any Participant's employment at any time (with or without Cause), nor
confer upon any Participant any right to continue in the employ of the Company
for any period of time or to continue his present (or any other) rate of
compensation, and except as otherwise provided under this Plan or by the
Committee in the Option Agreement, in the event of any Participant's termination
of employment (including, but not limited to, the termination by the Company
without Cause) any portion of such Participant's Option that was not previously
vested and exercisable shall expire and be forfeited as of the date of such
termination. No employee shall have a right to be selected as a Participant or,
having been so selected, to be selected again as a Participant.

         Section 6.10 No Rights as Stockholder. No Participant by reason of
holding any Option shall have rights as a stockholder with respect to shares of
Common Stock subject to Options prior to the date of exercise of such Options
and payment in full of the Exercise Price.

         Section 6.11 Amendment, Suspension and Termination of Plan. The Board
or the Committee may suspend or terminate the Plan or any portion thereof at any
time and may amend it from time to time in such respects as the Board or the
Committee may deem advisable; provided that no such amendment shall be made
without stockholder approval to the extent such approval is required by law,
agreement or the rules of any exchange upon which the Common Stock is listed,
and no such amendment, suspension or termination shall impair the rights of any
Participant under outstanding Options without the consent of such Participant
unless Participants holding a majority of the aggregate number of Options (based
upon the number of Option Shares to be obtained upon exercise) granted by the
Company pursuant to this Plan consent to such amendment in writing and such
amendment affects all holders similarly. No Options shall be granted hereunder
after the tenth anniversary of the adoption of the Plan.

         Section 6.12 Amendment, Modification and Cancellation of Outstanding
Options. The Committee may amend or modify any Option in any manner to the
extent that the Committee would have had the authority under the Plan initially
to grant such Option; provided, that no such amendment or modification shall
impair the rights of any Participant under any Option without the consent of
such Participant unless Participants holding a majority of the aggregate number
of Options (based upon the number of Option Shares to be obtained upon exercise)
granted by the Company pursuant to this Plan consent to such amendment in
writing and such amendment affects all holders similarly. With the Participant's
consent, the Committee may cancel any Option and issue a new Option to such
Participant.

         Section 6.13 Indemnification. In addition to such other rights of
indemnification as they may have as members of the Board or the Committee, the
members of the Board shall be indemnified by the Company against all costs and
expenses reasonably incurred by them in connection with any action, suit or
proceeding to which they or any of them may be party by reason of any action
taken or failure to act under or in connection with the Plan or any Option
granted thereunder, and against all amounts paid by them in settlement thereof
(provided such settlement is approved by independent legal counsel selected by
the Company) or paid by them

                                       9
<PAGE>

in satisfaction of a judgment in any such action, suit or proceeding; provided,
that (i) any such Board member shall be entitled to the indemnification rights
set forth in this Section 6.13 only if such member has acted in good faith and
in a manner that such member reasonably believed to be in or not opposed to the
best interests of the Company and, with respect to any criminal action or
proceeding, had no reasonable cause to believe that such conduct was unlawful,
and (ii) upon the institution of any such action, suit or proceeding a Board
member shall give the Company written notice thereof and an opportunity, at its
own expense, to handle and defend the same before such Board member undertakes
to handle and defend it on his own behalf.

                                    * * * * *

                                       10

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