Document:

Exhibit 10.55

                                 PROMISSORY NOTE

$500,000.00                                               Atlanta, Georgia
                                                          Dated:  May 2, 2004

FOR VALUE RECEIVED, the undersigned, R.M.S. Titanic, Inc. (RMST), promises to
pay to the order Joseph Marsh and William Marino, jointly and severally, the sum
of FIVE HUNDRED THOUSAND ($500,000.00) U.S. DOLLARS plus interest to be
calculated at the Prime Interest Rate plus six percent (6%) per annum. Interest
payments are subject to and will correspond with the Prime Interest Rate as
published in the Wall Street Journal. Payments in the sum of twenty-five
thousand dollars (U.S.$25,000) plus interest will commence on July 26, 2004, and
will be made quarterly thereafter until such time as this Note is paid in full.
This Note shall be paid in full no later than five (5) years from the date
hereof.

         For further consideration and value received, the undersigned agrees to
issue 30,000 (thirty thousand) shares of RMST common stock securities, which
shall be legend, to Joseph Marsh and William Marino, to be held jointly and
severally, such shares to be issued on or before July 26, 2004.

         This Note may be prepaid, at any time, in whole or in part, without
penalty. All prepayments shall be applied in reverse order of maturity.

         The obligations set forth in this Note are unsecured.

         The undersigned and all other parties to this Note, agree to remain
fully bound hereunder until this Note shall be fully paid and waives demand,
presentment, protest and all notices of every kind, and further agree to remain
bound, notwithstanding any extension, renewal, modification, waiver, or other
indulgence by any holder or upon the discharge or release of any obligor
hereunder or to this Note, or upon the exchange, substitution, or release of any
collateral granted as security for this Note. No modification or indulgence by
any holder hereof shall be binding unless in writing; and any indulgence on any
one occasion shall not be an indulgence for any other or future occasion. Any
modification or change of terms, hereunder granted by any holder hereof, shall
be valid and binding upon the undersigned, notwithstanding the acknowledgment of
the undersigned, and the undersigned does hereby irrevocably grants a power of
attorney to enter into any such modification on its behalf. The rights of any
holder hereof shall be cumulative and not necessarily successive. This Note
shall take effect as a sealed instrument and shall be construed, governed and
enforced in accordance with the laws of the state of Georgia. The undersigned
hereby executes this Note as principal and not as surety.

                                               R.M.S. TITANIC, INC.

                                               By: ________________________

                                               Its:  ________________________Exhibit 4.1

 

 

EQUINOX
HOLDINGS, INC.,

as Issuer

THE GUARANTORS PARTY HERETO FROM TIME TO TIME,

as Guarantors

9% Senior Notes due 2009

INDENTURE

Dated as of December 16, 2003

U.S. Bank National Association,

as Trustee

 

 

 

CROSS-REFERENCE TABLE*

 

	
  Trust Indenture Act Section

  	
   

  	
  Indenture Section

  
	
   

  	
   

  	
   

  
	
  310

  	
  (a)(1)

  	
   

  	
  7.10

  
	
   

  	
  (a)(2)

  	
   

  	
  7.10

  
	
   

  	
  (a)(3)

  	
   

  	
  N.A.

  
	
   

  	
  (a)(4)

  	
   

  	
  N.A.

  
	
   

  	
  (a)(5)

  	
   

  	
  7.10

  
	
   

  	
  (b)

  	
   

  	
  7.3, 7.8, 7.10

  
	
   

  	
  (c)

  	
   

  	
  N.A.

  
	
  311

  	
  (a)

  	
   

  	
  7.11

  
	
   

  	
  (b)

  	
   

  	
  7.11

  
	
   

  	
  (c)

  	
   

  	
  N.A.

  
	
  312

  	
  (a)

  	
   

  	
  2.5

  
	
   

  	
  (b)

  	
   

  	
  12.3

  
	
   

  	
  (c)

  	
   

  	
  12.3

  
	
  313

  	
  (a)

  	
   

  	
  7.6

  
	
   

  	
  (b)(1)

  	
   

  	
  N.A.

  
	
   

  	
  (b)(2)

  	
   

  	
  7.6

  
	
   

  	
  (c)

  	
   

  	
  7.6, 12.2

  
	
  314

  	
  (a)

  	
   

  	
  4.3, 4.4, 12.5

  
	
   

  	
  (b)

  	
   

  	
  N.A.

  
	
   

  	
  (c)(1)

  	
   

  	
  12.4

  
	
   

  	
  (c)(2)

  	
   

  	
  12.4

  
	
   

  	
  (c)(3)

  	
   

  	
  12.4

  
	
   

  	
  (d)

  	
   

  	
  N.A.

  
	
   

  	
  (e)

  	
   

  	
  12.5

  
	
   

  	
  (f)

  	
   

  	
  N.A.

  
	
  315

  	
  (a)

  	
   

  	
  7.1

  
	
   

  	
  (b)

  	
   

  	
  7.5, 12.2

  
	
   

  	
  (c)

  	
   

  	
  7.1

  
	
   

  	
  (d)

  	
   

  	
  7.1

  
	
   

  	
  (e)

  	
   

  	
  6.12

  
	
  316

  	
  (a)(last sentence)

  	
   

  	
  2.9

  
	
   

  	
  (a)(1)(A)

  	
   

  	
  6.5

  
	
   

  	
  (a)(1)(B)

  	
   

  	
  6.4

  
	
   

  	
  (a)(2)

  	
   

  	
  N.A.

  
	
   

  	
  (b)

  	
   

  	
  6.7

  
	
   

  	
  (c)

  	
   

  	
  N.A.

  
	
  317

  	
  (a)(1)

  	
   

  	
  6.8

  
	
   

  	
  (a)(2)

  	
   

  	
  6.10

  
	
   

  	
  (b)

  	
   

  	
  2.4

  

 

*                                         This
Cross-Reference Table shall not, for any purpose, be deemed a part of the
Indenture.

 

 

	
  318

  	
  (a)

  	
   

  	
  12.1

  
	
   

  	
  (b)

  	
   

  	
  N.A.

  
	
   

  	
  (c)

  	
   

  	
  12.1

  

 

N.A. means not applicable.

 

 

TABLE OF CONTENTS

 

	
  ARTICLE I.

  
	
   

  	
   

  	
   

  	
   

  
	
  DEFINITIONS AND INCORPORATION BY REFERENCE

  
	
   

  	
   

  
	
  Section 1.1.

  	
   

  	
  Definitions

  	
   

  
	
  Section 1.2.

  	
   

  	
  Other Definitions

  	
   

  
	
  Section 1.3.

  	
   

  	
  Incorporation by Reference of Trust Indenture
  Act

  	
   

  
	
  Section 1.4.

  	
   

  	
  Rules of Construction

  	
   

  
	
  Section 1.5.

  	
   

  	
  Acts of Holders

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II.

  
	
   

  	
   

  	
   

  	
   

  
	
  THE NOTES

  
	
   

  	
   

  
	
  Section 2.1.

  	
   

  	
  Form and Dating

  	
   

  
	
  Section 2.2.

  	
   

  	
  Execution and Authentication

  	
   

  
	
  Section 2.3.

  	
   

  	
  Registrar and Paying Agent

  	
   

  
	
  Section 2.4.

  	
   

  	
  Paying Agents to Hold Money in Trust

  	
   

  
	
  Section 2.5.

  	
   

  	
  Holder Lists

  	
   

  
	
  Section 2.6.

  	
   

  	
  Transfer and Exchange

  	
   

  
	
  Section 2.7.

  	
   

  	
  Replacement Notes

  	
   

  
	
  Section 2.8.

  	
   

  	
  Outstanding Notes

  	
   

  
	
  Section 2.9.

  	
   

  	
  Treasury Notes

  	
   

  
	
  Section 2.10.

  	
   

  	
  Temporary Notes

  	
   

  
	
  Section 2.11.

  	
   

  	
  Cancellation

  	
   

  
	
  Section 2.12.

  	
   

  	
  Defaulted Interest

  	
   

  
	
  Section 2.13.

  	
   

  	
  Persons Deemed Owners

  	
   

  
	
  Section 2.14.

  	
   

  	
  CUSIP Numbers

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III.

  
	
   

  	
   

  	
   

  	
   

  
	
  REDEMPTION AND REPURCHASE

  
	
   

  	
   

  
	
  Section 3.1.

  	
   

  	
  Notices to Trustee

  	
   

  
	
  Section 3.2.

  	
   

  	
  Selection of Notes

  	
   

  
	
  Section 3.3.

  	
   

  	
  Notice of Optional Redemption

  	
   

  
	
  Section 3.4.

  	
   

  	
  Effect of Notice of Redemption

  	
   

  
	
  Section 3.5.

  	
   

  	
  Deposit of Redemption Price or Purchase
  Price

  	
   

  
	
  Section 3.6.

  	
   

  	
  Notes Redeemed or Repurchased in Part

  	
   

  
	
  Section 3.7.

  	
   

  	
  Optional Redemption

  	
   

  
	
  Section 3.8.

  	
   

  	
  Optional Redemption upon Public Equity
  Offerings

  	
   

  

 

 

 

	
  Section 3.9.

  	
   

  	
  Repurchase upon Change of Control Offer

  	
   

  
	
  Section 3.10.

  	
   

  	
  Repurchase upon Application of Excess
  Proceeds

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV.

  
	
   

  	
   

  	
   

  	
   

  
	
  COVENANTS

  
	
   

  	
   

  
	
  Section 4.1.

  	
   

  	
  Payment of Principal and Interest

  	
   

  
	
  Section 4.2.

  	
   

  	
  Maintenance of Office or Agency

  	
   

  
	
  Section 4.3.

  	
   

  	
  Reports to Holders.

  	
   

  
	
  Section 4.4.

  	
   

  	
  Compliance Certificate.

  	
   

  
	
  Section 4.5.

  	
   

  	
  Taxes.

  	
   

  
	
  Section 4.6.

  	
   

  	
  Stay,
  Extension and Usury Laws

  	
   

  
	
  Section 4.7.

  	
   

  	
  Limitation on Restricted Payments.

  	
   

  
	
  Section 4.8.

  	
   

  	
  Limitation on Dividend and Other Payment
  Restrictions Affecting Subsidiaries.

  	
   

  
	
  Section 4.9.

  	
   

  	
  Limitation on Incurrence of Additional
  Indebtedness.

  	
   

  
	
  Section 4.10.

  	
   

  	
  Limitation on Asset Sales.

  	
   

  
	
  Section 4.11.

  	
   

  	
  Limitations on Transactions with Affiliates

  	
   

  
	
  Section 4.12.

  	
   

  	
  Limitation on Liens.

  	
   

  
	
  Section 4.13.

  	
   

  	
  Continued Existence.

  	
   

  
	
  Section 4.14.

  	
   

  	
  Insurance Matters.

  	
   

  
	
  Section 4.15.

  	
   

  	
  Offer to Repurchase upon Change of Control.

  	
   

  
	
  Section 4.16.

  	
   

  	
  Additional Subsidiary Guarantees

  	
   

  
	
  Section 4.17.

  	
   

  	
  Limitation on Preferred Stock of Restricted
  Subsidiaries

  	
   

  
	
  Section 4.18.

  	
   

  	
  Limitation on Designation of Unrestricted
  Subsidiaries

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V.

  
	
   

  	
   

  	
   

  	
   

  
	
  SUCCESSORS

  
	
   

  	
   

  
	
  Section 5.1.

  	
   

  	
  Merger,
  Consolidation and Sale of Assets

  	
   

  
	
  Section 5.2.

  	
   

  	
  Successor Corporation Substituted

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI.

  
	
   

  	
   

  	
   

  	
   

  
	
  DEFAULTS AND REMEDIES

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 6.1.

  	
   

  	
  Events of Default

  	
   

  
	
  Section 6.2.

  	
   

  	
  Acceleration

  	
   

  
	
  Section 6.3.

  	
   

  	
  Other Remedies

  	
   

  
	
  Section 6.4.

  	
   

  	
  Waiver of Existing Defaults

  	
   

  
	
  Section 6.5.

  	
   

  	
  Control by Majority

  	
   

  
	
  Section 6.6.

  	
   

  	
  Limitation on Suits

  	
   

  
	
  Section 6.7.

  	
   

  	
  Rights of Holders of Notes to Receive
  Payment

  	
   

  
	
  Section 6.8.

  	
   

  	
  Collection Suit by Trustee

  	
   

  

 

 

ii

 

 

	
  Section 6.9.

  	
   

  	
  Notice

  	
   

  
	
  Section 6.10.

  	
   

  	
  Trustee May File Proofs of Claim

  	
   

  
	
  Section 6.11.

  	
   

  	
  Priorities.

  	
   

  
	
  Section 6.12.

  	
   

  	
  Undertaking for Costs

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII.

  
	
   

  	
   

  	
   

  	
   

  
	
  TRUSTEE

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 7.1.

  	
   

  	
  Duties of Trustee

  	
   

  
	
  Section 7.2.

  	
   

  	
  Rights of Trustee

  	
   

  
	
  Section 7.3.

  	
   

  	
  Individual Rights of Trustee

  	
   

  
	
  Section 7.4.

  	
   

  	
  Trustee’s Disclaimer

  	
   

  
	
  Section 7.5.

  	
   

  	
  Notice of Defaults

  	
   

  
	
  Section 7.6.

  	
   

  	
  Reports by Trustee to Holder of the Notes

  	
   

  
	
  Section 7.7.

  	
   

  	
  Compensation,
  Reimbursement and Indemnity

  	
   

  
	
  Section 7.8.

  	
   

  	
  Replacement
  of Trustee

  	
   

  
	
  Section 7.9.

  	
   

  	
  Successor
  Trustee by Merger, Etc.

  	
   

  
	
  Section 7.10.

  	
   

  	
  Eligibility; Disqualification

  	
   

  
	
  Section 7.11.

  	
   

  	
  Preferential Collection of Claims Against Company

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VIII.

  
	
   

  	
   

  	
   

  	
   

  
	
  LEGAL DEFEASANCE AND COVENANT DEFEASANCE

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 8.1.

  	
   

  	
  Option to Effect Legal Defeasance or
  Covenant Defeasance

  	
   

  
	
  Section 8.2.

  	
   

  	
  Legal Defeasance and Discharge

  	
   

  
	
  Section 8.3.

  	
   

  	
  Covenant Defeasance

  	
   

  
	
  Section 8.4.

  	
   

  	
  Conditions to Legal or Covenant Defeasance

  	
   

  
	
  Section 8.5.

  	
   

  	
  Deposited Money and U.S. Government
  Obligations to Be Held in Trust; Other Miscellaneous Provisions

  	
   

  
	
  Section 8.6.

  	
   

  	
  Repayment to the Company

  	
   

  
	
  Section 8.7.

  	
   

  	
  Reinstatement

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IX.

  
	
   

  
	
  AMENDMENT, SUPPLEMENT AND WAIVER

  
	
   

  	
   

  
	
  Section 9.1.

  	
   

  	
  Without Consent of Holders of Notes

  	
   

  
	
  Section 9.2.

  	
   

  	
  With Consent of Holders of Notes

  	
   

  
	
  Section 9.3.

  	
   

  	
  Compliance with Trust Indenture Act

  	
   

  
	
  Section 9.4.

  	
   

  	
  Revocation and Effect of Consents

  	
   

  
	
  Section 9.5.

  	
   

  	
  Notation on or Exchange of Notes

  	
   

  
	
  Section 9.6.

  	
   

  	
  Trustee
  to Sign Amendment, Etc.

  	
   

  
	
   

  	
   

  	
   

  	
   

  

 

iii

 

 

	
  ARTICLE X.

  
	
   

  
	
  GUARANTEE

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 10.1.

  	
   

  	
  Unconditional Guarantee.

  	
   

  
	
  Section 10.2.

  	
   

  	
  Severability

  	
   

  
	
  Section 10.3.

  	
   

  	
  Limitation of Guarantor’s Liability

  	
   

  
	
  Section 10.4.

  	
   

  	
  Release of Guarantor

  	
   

  
	
  Section 10.5.

  	
   

  	
  Contribution

  	
   

  
	
  Section 10.6.

  	
   

  	
  Waiver of Subrogation

  	
   

  
	
  Section 10.7.

  	
   

  	
  Notation Not Required

  	
   

  
	
  Section 10.8.

  	
   

  	
  Waiver of Stay, Extension or Usury Laws

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XI.

  
	
   

  	
   

  	
   

  	
   

  
	
  SATISFACTION AND DISCHARGE

  
	
   

  	
   

  
	
  Section 11.1.

  	
   

  	
  Satisfaction and Discharge

  	
   

  
	
  Section 11.2.

  	
   

  	
  Application of Trust

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XII.

  
	
   

  	
   

  	
   

  	
   

  
	
  MISCELLANEOUS

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 12.1.

  	
   

  	
  Trust Indenture Act Controls

  	
   

  
	
  Section 12.2.

  	
   

  	
  Notices

  	
   

  
	
  Section 12.3.

  	
   

  	
  Communication by Holders of Notes with
  Other Holders of Notes

  	
   

  
	
  Section 12.4.

  	
   

  	
  Certificate and Opinion as to Conditions
  Precedent

  	
   

  
	
  Section 12.5.

  	
   

  	
  Statements Required in Certificate or
  Opinion

  	
   

  
	
  Section 12.6.

  	
   

  	
  Rules by Trustee and Agents

  	
   

  
	
  Section 12.7.

  	
   

  	
  No Personal Liability of Directors,
  Officers, Employees and Stockholders

  	
   

  
	
  Section 12.8.

  	
   

  	
  Governing Law; Submission to Jurisdiction; Waiver
  of Jury Trial

  	
   

  
	
  Section 12.9.

  	
   

  	
  No Adverse Interpretation of Other
  Agreements

  	
   

  
	
  Section 12.10.

  	
   

  	
  Successors

  	
   

  
	
  Section 12.11.

  	
   

  	
  Severability

  	
   

  
	
  Section 12.12.

  	
   

  	
  Counterpart Originals

  	
   

  
	
  Section 12.13.

  	
   

  	
  Table of Contents, Headings, Etc.

  	
   

  
	
  Section 12.14.

  	
   

  	
  Qualification of Indenture

  	
   

  

 

iv

 

	
  Schedule A

  	
   

  	
  Guarantors

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  EXHIBITS

  
	
   

  	
   

  	
   

  	
   

  
	
  Exhibit
  A

  	
   

  	
  Form
  of Series A Note

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Exhibit
  B

  	
   

  	
  Form
  of Series B Note

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Exhibit
  C

  	
   

  	
  Form
  of Supplemental Indenture In Respect of Guarantee

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Exhibit
  D(1)

  	
   

  	
  Form
  of Regulation S Certification

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Exhibit
  D(2)

  	
   

  	
  Form
  of Certificate To Be Delivered upon Exchange or Registration of Transfer of
  Notes

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Exhibit
  E

  	
   

  	
  Form
  of Certificate To Be Delivered in Connection with Transfers to Non-QIB
  Accredited Investors

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Exhibit
  F

  	
   

  	
  Form
  of Certificate To Be Delivered in Connection with Transfers Pursuant to
  Regulation S

  	
   

  

 

v

 

INDENTURE

 

INDENTURE dated as of December 16, 2003 among Equinox Holdings,
Inc., a Delaware corporation (the “Company”), the Guarantors (as defined
herein) listed on Schedule A hereto, and U.S. Bank National Association, a
national banking corporation, as trustee (the “Trustee”).

 

Each party agrees as follows for the benefit of the other parties and
for the equal and ratable benefit of the Holders (as defined below) of the
Company’s 9% Senior Notes due 2009:

 

ARTICLE I.

 

DEFINITIONS AND INCORPORATION BY REFERENCE

 

Section 1.1.                                   Definitions.

 

“Acquired Indebtedness” means Indebtedness of a Person or any of
its Subsidiaries existing at the time such Person becomes a Restricted
Subsidiary or at the time it merges or consolidates with the Company or any of
its Restricted Subsidiaries or assumed in connection with the acquisition of
assets from such Person and in each case not incurred by such Person in connection
with, or in anticipation or contemplation of, such Person becoming a Restricted
Subsidiary or such acquisition, merger or consolidation.

 

“Additional Interest” means all additional interest then owing
pursuant to Section 2 of the Registration Rights Agreement.

 

“Additional Notes” means 9% Senior Notes due 2009 issued after
the Issue Date pursuant to Article II and in compliance with
Section 4.9.

 

“Affiliate” means, with respect to any specified Person, any
other Person who directly or indirectly through one or more intermediaries
controls, or is controlled by, or is under common control with, such specified
Person.  The term “control” means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise; and the terms
“controlling” and “controlled” have meanings correlative of the foregoing.

 

“Agent” means any Registrar, Paying Agent or co-registrar.

 

“Asset Acquisition” means (1) an Investment by the Company
or any Restricted Subsidiary in any other Person pursuant to which such Person
shall become a Restricted Subsidiary or shall be merged with or into the
Company or any Restricted Subsidiary, or (2) the acquisition by the
Company or any Restricted Subsidiary of the assets of any Person (other than a
Restricted Subsidiary) which constitute all or substantially all of the assets
of such Person or comprise any division or line of business of such Person or
any other properties or assets of such

 

 

 

Person other than in the ordinary course of business, including,
without limitation, the acquisition of an individual health club.

 

“Asset Sale” means any direct or indirect sale, issuance,
conveyance, transfer, lease (other than operating leases entered into in the
ordinary course of business), assignment or other transfer for value by the
Company or any of its Restricted Subsidiaries (including any Sale and Leaseback
Transaction) to any Person other than the Company or a Restricted Subsidiary
of:  (1) any Capital Stock of any
Restricted Subsidiary; or (2) any other property or assets of the Company
or any Restricted Subsidiary other than in the ordinary course of business; provided,
however, that Asset Sales shall not include:  (a) any transaction or series of related transactions for
which the Company or its Restricted Subsidiaries receive aggregate consideration
of less than $1.0 million; (b) the sale, lease, conveyance, disposition or
other transfer of all or substantially all of the assets of the Company as
permitted under Article V; (c) disposals or replacements of obsolete
equipment in the ordinary course of business; (d) the sale, lease,
conveyance, disposition or other transfer by the Company or any Restricted Subsidiary
of assets or property to the Company or one or more Restricted Subsidiaries;
and (e) any Restricted Payment permitted under Section 4.7, any
Permitted Investment or any Permitted Lien.

 

“Bankruptcy Law” means Title 11, U.S. Code or any similar
Federal or state law for the relief of debtors.

 

“Board of Directors” means, as to any Person, the board of
directors of such Person or any duly authorized committee thereof.

 

“Board Resolution” means, with respect to any Person, a copy of
a resolution certified by the Secretary or an Assistant Secretary or any
Officer of such Person to have been duly adopted by the Board of Directors of
such Person and to be in full force and effect on the date of such
certification, and delivered to the Trustee.

 

“Business Day” means a day other than a Saturday, Sunday or
other day on which commercial banking institutions (including, without
limitation, the Federal Reserve System) or the Corporate Trust Office of the
Trustee are authorized or required by law to close in New York City.

 

“Capitalized Lease Obligation” means, as to any Person, the
obligations of such Person under a lease that are required to be classified and
accounted for as capital lease obligations under GAAP and, for purposes of this
definition, the amount of such obligations at any date shall be the capitalized
amount of such obligations at such date, determined in accordance with GAAP.

 

“Capital Stock” means:

 

(1)                                  with
respect to any Person that is a corporation, any and all shares, interests,
participations or other equivalents (however designated and whether or not
voting) of corporate stock, including each class of Common Stock and Preferred
Stock of such Person;

 

2

 

(2)                                  with
respect to any Person that is not a corporation, any and all partnership,
membership or other equity interests of such Person; and

 

(3)                                  any
warrants, rights or options to purchase or acquire any of the foregoing,
including, without limitation, the Warrants.

 

“Cash Equivalents” means:

 

(1)                                  marketable
direct obligations issued by, or unconditionally guaranteed by, the United
States Government or issued by any agency thereof and backed by the full faith
and credit of the United States (or, with respect to funds generated by
operations outside the United States, the United Kingdom or another member of
the European Union (as in existence on the Issue Date)), in each case maturing
within one year from the date of acquisition thereof;

 

(2)                                  marketable
direct obligations issued by any state of the United States of America or any
political subdivision of any such state or any public instrumentality thereof
maturing within one year from the date of acquisition thereof and, at the time
of acquisition, having one of the two highest ratings obtainable from either
S&P or Moody’s;

 

(3)                                  commercial
paper maturing no more than one year from the date of creation thereof and, at
the time of acquisition, having a rating of at least A-1 from S&P or at
least P-1 from Moody’s;

 

(4)                                  overnight
deposits, and time deposit accounts, certificates of deposit or bankers’
acceptances maturing within one year from the date of acquisition thereof issued
by any bank organized under the laws of the United States of America or any
state thereof or the District of Columbia (or, with respect to funds generated
by operations outside the United States, the United Kingdom or another member
of the European Union (as in existence on the Issue Date)) or any U.S. branch
of a foreign bank having at the date of acquisition thereof combined capital
and surplus of not less than $250.0 million (or the foreign currency
equivalent);

 

(5)                                  repurchase
obligations with a term of not more than seven days for underlying
securities of the types described in clause (1) above entered into with
any bank meeting the qualifications specified in clause (4) above; and

 

(6)                                  investments
in money market funds that invest substantially all their assets in securities
of the types described in clauses (1) through (5) above.

 

“Certificated Notes” means, collectively, the U.S. Certificated
Notes and the Offshore Certificated Notes.

 

“Change of Control” means the occurrence of one or more of the
following events:

 

3

 

(1)                                  any
sale, lease, exchange or other transfer (in one transaction or a series of
related transactions) of all or substantially all of the assets of the Company
to any Person or group of related Persons for purposes of Section 13(d) of
the Exchange Act (other than any such group existing solely by virtue of the
Stockholders Agreement or the Limited Partnership, if the Permitted Holders
continue to have the right to designate a majority of the Board of Directors of
the Company) (a “Group”), together with any Affiliates thereof (whether
or not otherwise in compliance with the provisions of this Indenture), other
than to a Permitted Holder;

 

(2)                                  the
approval by the holders of Capital Stock of the Company of any plan or proposal
for the liquidation or dissolution of the Company (whether or not otherwise in
compliance with the provisions of this Indenture);

 

(3)                                  any
Person or Group, other than a Permitted Holder, shall become the owner,
directly or indirectly, beneficially or of record, of shares representing more
than 50% of the aggregate ordinary voting power represented by the issued and
outstanding Capital Stock of the Company; or

 

(4)                                  the
replacement of a majority of the Board of Directors of the Company over a
two-year period from the directors who constituted the Board of Directors of
the Company at the beginning of such period, and such replacement shall not
have been approved by one or more Permitted Holders or by a vote of at least a
majority of the Board of Directors of the Company then still in office who either
were members of such Board of Directors at the beginning of such period or
whose election as a member of any such Board of Directors was previously so
approved.

 

“Change of Control Offer” has the meaning set forth in
Section 4.15.

 

“Change of Control Payment Date” has the meaning set forth in
Section 3.9(b).

 

“Clearstream” shall mean Clearstream Banking, Société Anonyme,
Luxembourg.

 

“Commission” means the Securities and Exchange Commission or any
successor agency thereto.

 

“Common Stock” of any Person means any and all shares, interests
or other participations in, and other equivalents (however designated and
whether voting or non-voting) of, such Person’s common stock, whether
outstanding on the Issue Date or issued after the Issue Date, and includes,
without limitation, all series and classes of such common stock.

 

“Company” means Equinox Holdings, Inc., a Delaware corporation,
until a successor Person shall have become such pursuant to the applicable
provisions of this Indenture, and thereafter means such successor Person.

 

“Consolidated EBITDA” means, for any period, the sum (without
duplication) of:

 

(1)                                  Consolidated
Net Income for such period; and

 

4

 

(2)                                  to
the extent Consolidated Net Income has been reduced thereby,

 

(a)                                  all
income taxes of the Company and its Restricted Subsidiaries paid or accrued in
accordance with GAAP for such period (other than income taxes attributable to
extraordinary or nonrecurring gains or losses or taxes attributable to sales or
dispositions outside the ordinary course of business);

 

(b)                                 Consolidated
Interest Expense for such period; and

 

(c)                                  Consolidated
Non-cash Charges for such period less any non-cash items increasing
Consolidated Net Income for such period,

 

all as determined on a consolidated basis for the Company and its
Restricted Subsidiaries in accordance with GAAP.

 

“Consolidated Fixed Charge Coverage Ratio” means the ratio of
Consolidated EBITDA during the four full fiscal quarters for which financial
statements are available (the “Four Quarter Period”) ending on or prior
to the date of the transaction giving rise to the need to calculate the
Consolidated Fixed Charge Coverage Ratio (the “Transaction Date”) to
Consolidated Fixed Charges for the Four Quarter Period.  In addition to and without limitation of the
foregoing, for purposes of this definition, “Consolidated EBITDA” and
“Consolidated Fixed Charges” shall be calculated after giving effect on a pro forma
(including any pro forma expense and cost reductions calculated on a basis
consistent with Regulation S-X under the Securities Act) basis for the
period of such calculation to:

 

(1)                                  the
incurrence or repayment of any Indebtedness of the Company or any of its
Restricted Subsidiaries (and the application of the proceeds thereof) giving
rise to the need to make such calculation and any incurrence or repayment of
other Indebtedness (and the application of the proceeds thereof), other than
the incurrence or repayment of Indebtedness in the ordinary course of business
for working capital purposes pursuant to working capital facilities, occurring
during the Four Quarter Period or at any time subsequent to the last day of the
Four Quarter Period and on or prior to the Transaction Date, as if such
incurrence or repayment, as the case may be (and the application of the proceeds
thereof), occurred on the first day of the Four Quarter Period; and

 

(2)                                  any
Asset Sales (without giving effect to the exceptions in clauses (a) and (e) in
the definition thereof) or Asset Acquisitions (including, without limitation,
any Asset Acquisition giving rise to the need to make such calculation as a
result of the Company or one of its Restricted Subsidiaries (including any
Person who becomes a Restricted Subsidiary as a result of the Asset
Acquisition) incurring, assuming or otherwise being liable for Acquired
Indebtedness and also including any Consolidated EBITDA attributable to the
assets that are the subject of the Asset Acquisition or any Asset Sales
(without giving effect to the exceptions in clauses (a) and (e) in the
definition thereof) during the Four Quarter Period) occurring during the Four
Quarter Period or at any time subsequent to the last day of the Four Quarter Period
and on or prior to the Transaction Date, as if such asset sale or Asset
Acquisition (including the incurrence,

 

5

 

assumption or liability for any such Acquired
Indebtedness) occurred on the first day of the Four Quarter Period.  If the Company or any of its Restricted
Subsidiaries directly or indirectly guarantees Indebtedness of a third Person,
the preceding sentence shall give effect to the incurrence of such guaranteed
Indebtedness as if the Company or any such Restricted Subsidiary had directly
incurred or otherwise assumed such guaranteed Indebtedness but only to the
extent of such guarantee.

 

Furthermore, in calculating “Consolidated Fixed Charges” for purposes
of determining the denominator (but not the numerator) of this “Consolidated
Fixed Charge Coverage Ratio”:

 

(1)                                  interest
on outstanding Indebtedness determined on a fluctuating basis as of the
Transaction Date and that will continue to be so determined thereafter shall be
deemed to have accrued at a fixed rate per annum equal to the rate of interest
on such Indebtedness in effect on the Transaction Date;

 

(2)                                  if
interest on any Indebtedness actually incurred on the Transaction Date may optionally
be determined at an interest rate based upon a factor of a prime or similar
rate, a eurocurrency interbank offered rate, or other rates, then the interest
rate shall be calculated by applying such optional rate as the Company shall
designate; and

 

(3)                                  notwithstanding
clause (1) above, interest on Indebtedness determined on a fluctuating
basis, to the extent such interest is covered by agreements relating to Interest
Swap Obligations, shall be deemed to accrue at the rate per annum resulting
after giving effect to the operation of such agreements.

 

“Consolidated Fixed Charges” means, with respect to the Company
for any period, the sum, without duplication, of:

 

(1)                                  Consolidated
Interest Expense for such period; plus

 

(2)                                  the
product of

 

(a)                                  the
amount of all dividend payments on any series of Preferred Stock of the Company
(other than dividends paid or accrued in Qualified Capital Stock) paid, accrued
or scheduled to be paid or accrued during such period (without duplication),
and

 

(b)                                 a
fraction, the numerator of which is one and the denominator of which is one
minus the then current effective consolidated federal, state and local income
tax rate of such Person, expressed as a decimal.

 

“Consolidated Interest Expense” means, for any period, the sum
of, without duplication:

 

(1)                                  the
aggregate of the interest expense of the Company and its Restricted
Subsidiaries for such period determined on a consolidated basis in accordance
with

 

6

 

GAAP, including without limitation, all such
interest expense consisting of

 

(a)                                  any
amortization of debt discount;

 

(b)                                 the
net costs under Interest Swap Obligations;

 

(c)                                  all
capitalized interest; and

 

(d)                                 the
interest portion of any deferred payment obligation; and

 

(2)                                  the
interest component of Capitalized Lease Obligations paid, accrued and/or
scheduled to be paid or accrued by the Company and its Restricted Subsidiaries
during such period as determined on a consolidated basis in accordance with
GAAP.

 

“Consolidated Net Income” means, with respect to the Company,
for any period, the aggregate net income (or loss) of the Company and its
Restricted Subsidiaries for such period on a consolidated basis, determined in
accordance with GAAP; provided that there shall be excluded therefrom:

 

(1)                                  after-tax
gains or losses from Asset Sales (without regard to the $1.0 million limitation
set forth in the definition thereof) or abandonments or reserves relating
thereto;

 

(2)                                  extraordinary
or nonrecurring gains or losses;

 

(3)                                  the
net income (but not loss) of any Restricted Subsidiary to the extent that the
declaration of dividends or similar distributions by that Restricted Subsidiary
of that income is restricted by a contract, operation of law or otherwise;

 

(4)                                  the
net income of any Person, other than the Company or a Restricted Subsidiary,
except to the extent of cash dividends or distributions paid to the Company or
to a Restricted Subsidiary by such Person;

 

(5)                                  income
or loss attributable to discontinued operations (including, without limitation,
operations disposed of during such period whether or not such operations were
classified as discontinued);

 

(6)                                  any
non-cash compensation charge arising from any grant of stock, stock options or
other equity based awards;

 

(7)                                  any
non-cash income or expense arising from changes in the fair market value of the
Warrants;

 

(8)                                  fees,
expenses and charges associated with the Transactions; and

 

(9)                                  in
the case of a successor to the Company by consolidation or merger or as a
transferee of the Company’s assets, any net income of the successor corporation
prior to such consolidation, merger or transfer of assets.

 

7

 

“Consolidated Non-cash Charges” means, for any period, the
aggregate depreciation, amortization and other non-cash expenses of the Company
(including, without limitation, charges related to the impairment of long-lived
assets and non-cash compensation expense) and its Restricted Subsidiaries
reducing Consolidated Net Income of the Company for such period, determined on
a consolidated basis in accordance with GAAP (including deferred rent but
excluding any other such charge which requires an accrual of or a reserve for
cash charges for any future period).

 

“Corporate Trust Office of the Trustee” means the principal
office of the Trustee at which at any time its corporate trust business shall
be administered, which office at the date hereto is located at 100 Wall St.,
New York, New York, Attention:  U.S.
Bank National Association, Corporate Trust Services, or such other address as
the Trustee may designate from time to time by notice to the Holders and the
Company, or the principal corporate trust office of any successor Trustee (or
such other address as such successor Trustee may designate from time to time by
notice to the Holders and the Company).

 

“Credit Agreement” means the Credit Agreement dated as of the
Issue Date by and among the Company, the lenders from time to time party
thereto in their capacities as lenders thereunder and Merrill Lynch Capital, a
division of Merrill Lynch Business Financial Services Inc., as agent, together
with all agreements, instruments and other documents relating thereto (including,
without limitation, any guarantee agreements and security documents), in each
case as such agreements, instrument or other document may be amended (including
any amendment and restatement thereof), supplemented or otherwise modified from
time to time, and including any agreement, instrument or other document
extending the maturity of, refinancing, replacing, renewing, refunding or
otherwise restructuring (including increasing the amount of available
borrowings thereunder or adding Subsidiaries of the Company as additional
borrowers or guarantors thereunder) all or any portion of the Indebtedness
under such agreement or any successor or replacement agreement and whether by
the same or any other agent, lender or group of lenders.

 

“Credit Facility” means one or more debt facilities (including,
without limitation, the Credit Agreement) providing for revolving credit loans,
term loans, letters of credit or other Indebtedness, including all agreements,
instruments and documents executed and delivered pursuant to or in connection
with any of the foregoing (including notes, letters of credit, guarantees,
security agreements, mortgages and other collateral documents), in each case as
the same may be amended, amended and restated, supplemented, modified, refunded,
renewed or extended, refinanced, replaced or otherwise restructured, in whole
or in part from time to time (including in-creasing the amount of available
borrowings thereunder or adding Restricted Subsidiaries of the Company as
additional borrowers or guarantors thereunder) with respect to all or any
portion of the Indebtedness under such agreement or agreements or any successor
or replacement agreement or agreements and whether by the same or any other
agent, lender or group of lenders and whether provided under any original
Credit Facility or one or more other credit agreements, financing agreements or
other Credit Facilities or otherwise.

 

“Currency Agreement” means any foreign exchange contract,
currency swap agreement or other similar agreement or arrangement designed to
protect the Company or any

 

8

 

Restricted Subsidiary of the Company against fluctuations in currency
values.

 

“Default” means an event or condition the occurrence of which
is, or with the lapse of time or the giving of notice or both would be, an
Event of Default.

 

“Depositary” means, with respect to the Notes issuable in whole
or in part in global form, the Person specified in Section 2.6 as the
Depositary with respect to the Notes, until a successor shall have been
appointed and become such pursuant to the applicable provisions of this
Indenture, and, thereafter, “Depositary” shall mean or include such successor.

 

“Designation” has the meaning set forth in Section 4.18(a).

 

“Designation Amount” has the meaning set forth in
Section 4.18(a).

 

“Disqualified Capital Stock” means that portion of any Capital
Stock which, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable), or upon the happening of any
event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation
or otherwise, or is redeemable at the sole option of the holder thereof on or
prior to the final maturity date of the Notes; provided, however,
that (i) if such Capital Stock is issued to any employee in the ordinary
course of business or to any plan for the benefit of employees of the Company
or its Subsidiaries or by any such plan to such employees, such Capital Stock
shall not constitute Disqualified Capital Stock solely because it may be
required to be repurchased by the Company in order to satisfy applicable
statutory or regulatory obligations or as a result of such employee’s
termination, death or disability, and (ii) such Capital Stock shall not
constitute Disqualified Capital Stock solely because it may be required to be
repurchased by the Company upon the occurrence of a change in ownership of the
Company. “Disqualified Capital Stock” shall not include the Warrants or the
Warrant Preferred Stock, as each are in effect on the Issue Date or as the
terms thereof have been established as of the Issue Date.

 

“Domestic Restricted Subsidiary” means a Restricted Subsidiary
incorporated or otherwise organized or existing under the laws of the United
States or any state thereof.

 

“Equity Offering” means an underwritten public offering of
Qualified Capital Stock of the Company that generates gross proceeds to the
Company of at least $35.0 million.

 

“Euroclear” means Morgan Guaranty Trust Company of
New York, Brussels office, as operator of the Euroclear System.

 

“Exchange Act” means the Securities Exchange Act of 1934, as
amended, or any successor statute or statutes thereto.

 

“Exchange Offer” means the offer that shall be made by the
Company pursuant to the Registration Rights Agreement to exchange Series A
Notes for Series B Notes.

 

“Exit Payment” means any exit payment or additional exit payment
to the founding shareholders provided for in the Stock Purchase Agreement and
Plan of Merger by and

 

9

 

among certain shareholders of the Company, the Company, NCP-EH
Recapitalization Corp. and NCP-EH, L.P. dated as of October 16, 2000 (as
amended as of December 14, 2000), as amended, modified, supplemented or
replaced from time to time.

 

“fair market value” means, with respect to any asset or
property, the price which could be negotiated in an arm’s-length, free market
transaction, for cash, between a willing seller and a willing and able buyer,
neither of whom is under undue pressure or compulsion to complete the
transaction.  Fair market value shall be
determined by the Board of Directors of the Company acting in good faith and
shall be conclusive and evidenced by a Board Resolution of the Board of
Directors of the Company.

 

“Foreign Restricted Subsidiary” means any Restricted Subsidiary
that is not a Domestic Restricted Subsidiary.

 

“GAAP” means generally accepted accounting principles set forth
in the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession of the United States, which are in effect as of the
Issue Date.  All ratios and computations
based on GAAP contained in this Indenture shall be computed in conformity with
GAAP applied on a consistent basis, except that calculations made for purposes
of determining compliance with the terms of the covenants and with other
provisions of this Indenture shall be made without giving effect to
(i) the deduction or amortization of any premiums, fees and expenses
incurred in connection with any financings or any other permitted incurrence of
Indebtedness and (ii) depreciation, amortization or other expenses
recorded as a result of the application of purchase accounting in accordance
with Accounting Principles Board Opinion Nos. 16 and 17 and FASB
Nos. 141 and 142.

 

“Guarantee” has the meaning set forth in Section 10.1.

 

“Guarantor” means: 
(i) each of the Guarantors listed on Schedule A; and
(ii) each of the Company’s Restricted Subsidiaries that in the future
executes a supplemental indenture in which such Restricted Subsidiary agrees to
be bound by the terms of this Indenture as a Guarantor; provided that
any Person constituting a Guarantor as described above shall cease to constitute
a Guarantor when its respective Guarantee is released in accordance with the
terms of this Indenture.

 

“Holder” means a Person in whose name a Note is registered.

 

“incur” has the meaning set forth in Section 4.9(a).

 

“Indebtedness” means with respect to any Person, without
duplication:

 

(1)                                  all
Obligations of such Person for borrowed money;

 

(2)                                  all
Obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments;

 

10

 

(3)                                  all
Capitalized Lease Obligations of such Person;

 

(4)                                  all
Obligations of such Person issued or assumed as the deferred purchase price of
property, all conditional sale obligations and all Obligations under any title
retention agreement (but excluding trade accounts payable and other accrued liabilities
arising in the ordinary course of business);

 

(5)                                  all
Obligations of such Person for the reimbursement of any obligor on any letter
of credit, banker’s acceptance or similar credit transaction;

 

(6)                                  guarantees
of such Person and other contingent obligations of such Person in respect of
Indebtedness of any other Person of the type referred to in clauses (1)
through (5) above and clause (8) below to the extent of the lesser of the
maximum amount of such guarantee, or the outstanding amount of such
Indebtedness of such other Person;

 

(7)                                  all
Obligations of any other Person of the type referred to in clauses (1)
through (6) above which are secured by any Lien on any property or asset of the
first such Person, the amount of such Obligation being deemed to be the lesser
of the fair market value of such property or asset and the amount of the
Obligation so secured;

 

(8)                                  all
Obligations of such Person under currency swap agreements and interest swap
agreements of such Person; and

 

(9)                                  all
Disqualified Capital Stock issued by such Person and all Preferred Stock issued
by Restricted Subsidiaries of such Person with the amount of Indebtedness
represented by such Disqualified Capital Stock or Preferred Stock being equal
to the greater of its voluntary or involuntary liquidation preference and its
maximum fixed repurchase price.

 

For purposes hereof, the “maximum fixed repurchase price” of any
Disqualified Capital Stock that does not have a fixed repurchase price shall be
calculated in accordance with the terms of such Disqualified Capital Stock as
if such Disqualified Capital Stock were purchased on any date on which
Indebtedness shall be required to be determined pursuant to this Indenture, and
if such price is based upon, or measured by, the fair market value of such
Disqualified Capital Stock, such fair market value shall be determined
reasonably and in good faith by the Board of Directors of the Company.  The principal amount of Indebtedness of any
Person at any date shall be the outstanding balance on such date of all
unconditional Obligations as described above, and the maximum liability with
respect to principal upon the occurrence of the contingency giving rise to the
Obligation, on any contingent Obligations at such date; provided, however,
that the amount outstanding at any time of any Indebtedness incurred with original
issue discount is the face amount of such Indebtedness less the remaining
unamortized portion of the original issue discount of such Indebtedness at such
time as determined in conformity with GAAP.

 

“Indenture” means this Indenture, as amended or supplemented
from time to time.

 

11

 

“Independent Financial Advisor” means an accounting, banking or
valuation firm:  (1) that does not,
and whose directors, officers and employees or Affiliates do not, have a direct
or indirect financial interest in the Company; and (2) that, in the sole
judgment of the Board of Directors of the Company, is qualified to perform the
task for which it is to be engaged.  A
firm shall not be deemed to have a financial interest in the Company merely by
virtue of an indirect interest in Capital Stock in the Company unless such
interest constitutes Beneficial Ownership (as defined in Rule 13d-3 of the
Exchange Act) of more than a de minimus amount.

 

“Initial Lien” has the meaning set forth in Section 4.12.

 

“Initial Purchasers” means Merrill Lynch, Pierce, Fenner &
Smith Incorporated, UBS Securities LLC and Wachovia Capital Markets, LLC.

 

“Institutional Accredited Investors” means institutional
accredited investors as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act.

 

“Interest Swap Obligations” means the obligations of any Person
pursuant to any arrangement with any other Person, whereby, directly or
indirectly, such Person is entitled to receive from time to time periodic
payments calculated by applying either a floating or a fixed rate of interest
on a stated notional amount in exchange for periodic payments made by such
other Person calculated by applying a fixed or a floating rate of interest on
the same notional amount and shall include, without limitation, interest rate
swaps, caps, floors, collars and similar agreements.

 

“Investment” means, with respect to any Person, any direct or
indirect loan or other extension of credit or credit support (including, without
limitation, a guarantee of or other direct or indirect liability for
Indebtedness) or capital contribution to (by means of any transfer of cash or
other property to others or any payment for property or services for the account
or use of others), or any purchase or acquisition by such Person of any Capital
Stock, bonds, notes, debentures or other securities or evidences of Indebtedness
issued by, any other Person. 
“Investment” shall exclude extensions of trade credit by the Company and
its Restricted Subsidiaries on commercially reasonable terms in accordance with
normal trade practices of the Company or such Restricted Subsidiary, as the
case may be, as determined in good faith by the Company.  If the Company or any Restricted Subsidiary
sells or otherwise disposes of any Common Stock of any direct or indirect
Restricted Subsidiary such that, after giving effect to any such sale or disposition,
it ceases to be a Subsidiary of the Company, the Company shall be deemed to
have made an Investment on the date of any such sale or disposition equal to
the fair market value of the Common Stock of such Restricted Subsidiary not
sold or disposed of.

 

“Issue Date” means December 16, 2003.

 

“Landlord Loans” has the meaning set forth under clause (4) of
the definition of “Permitted Indebtedness.”

 

“Lien” means any lien, mortgage, deed of trust, pledge, security
interest, charge or encumbrance of any kind (including any conditional sale or
other title retention agreement, any

 

12

 

lease in the nature thereof and any agreement to give any security
interest).

 

“Limited Partnership” means Equinox Holdings, L.P., a Delaware
limited partnership, and its related organizational documents and limited
partnership agreement, as amended, modified or supplemented and in effect from
time to time.

 

“Management Agreement” means the Consulting Agreement, dated as
of December 15, 2000, among North Castle Partners, J.W. Childs Associates,
L.P. and the Company, as amended.

 

“Moody’s” means Moody’s Investors Service, Inc.

 

“Net Cash Proceeds” means, with respect to any Asset Sale, the
proceeds in the form of cash or Cash Equivalents including payments in respect
of deferred payment obligations when received in the form of cash or Cash
Equivalents (other than the portion of any such deferred payment constituting
interest) received by the Company or any of its Restricted Subsidiaries from
such Asset Sale net of:

 

(1)                                  reasonable
out-of-pocket expenses and fees relating to such Asset Sale (including, without
limitation, legal, accounting and investment banking fees and sales
commissions);

 

(2)                                  taxes
paid or payable after taking into account any reduction in consolidated tax
liability due to available tax credits or deductions and any tax sharing arrangements;

 

(3)                                  repayment
of Indebtedness that is secured by the assets sold in the relevant Asset Sale
and that is required to be repaid in connection with such Asset Sale; and

 

(4)                                  appropriate
amounts to be provided by the Company or any Restricted Subsidiary, as the case
may be, as a reserve, in accordance with GAAP, against any liabilities
associated with such Asset Sale and retained by the Company or any Restricted
Subsidiary, as the case may be, after such Asset Sale, including, without
limitation, pension and other post-employment benefit liabilities, liabilities
related to environmental matters and liabilities under any indemnification
obligations associated with such Asset Sale.

 

“Note Custodian” means the Trustee, as custodian with respect to
the Notes in global form, or any successor entity thereto.

 

“Notes” means the Series A Notes and the Series B
Notes, if any, that are issued under this Indenture, as amended or supplemented
from time to time.

 

“Obligations” means all obligations for principal, premium,
interest, penalties, fees, indemnifications, reimbursements, damages and other
liabilities payable under the documentation governing any Indebtedness.

 

13

 

“Officer” means (a) with respect to any Person that is a
corporation, the Chairman of the Board, the Chief Executive Officer, the
President, the Chief Operating Officer, the Chief Financial Officer, the
Treasurer, the Controller, the Secretary or any Vice-President of such Person
and (b) with respect to any other Person, the individuals selected by such
Person to perform functions similar to those of the officers listed in
clause (a).

 

“Officer’s Certificate” means a certificate signed on behalf of
the Company by one Officer of the Company, who must be either the Chief
Executive Officer, the Chief Financial Officer, the Treasurer or the principal
accounting officer of the Company, that meets the requirements of
Sections 12.4 and 12.5.  Any such
certificate shall comply with the requirements of the TIA and any other
requirements set forth in this Indenture.

 

“Offshore Certificated Notes” means permanent Certificated Notes
in registered form in substantially the form set forth in Exhibit A,
issued pursuant to Section 2.6 in exchange for interests in the Rule 144A
Global Note or the Regulation S Global Note.

 

“Opinion of Counsel” means an opinion from legal counsel who is
reasonably acceptable to the Trustee that meets the requirements of
Sections 12.4 and 12.5.  Any such
opinion shall comply with the requirements of the TIA and any other
requirements set forth in this Indenture. 
The counsel may be an employee of or counsel to the Company, any Subsidiary
of the Company or the Trustee.

 

“Permitted Business” means the business of the Company and its
Restricted Subsidiaries as existing on the Issue Date or businesses reasonably
related thereto.

 

“Permitted Holder” means any of North Castle Partners, J.W.
Childs Associates, L.P. or their respective Affiliates.

 

“Permitted Indebtedness” means, without duplication, each of the
following:

 

(1)                                  Indebtedness
represented by the Notes issued under this Indenture in an aggregate principal
amount not to exceed $160.0 million (and the Exchange Notes issued in exchange
therefor) and the related Guarantees;

 

(2)                                  Indebtedness
incurred pursuant to the Credit Agreement or any other Credit Facility in an
aggregate principal amount at any time outstanding not to exceed $30.0 million
to the extent incurred under this clause (2), plus the principal amount of
Indebtedness not utilized under clause (4) below not to exceed $5.0
million, less the amount of all required principal payments actually made by
the Company in respect of the loans under the Credit Agreement that were
incurred under this clause (2) in accordance with the provisions set forth
under Section 4.10 (which, in the case of revolving loans, are accompanied
by a corresponding permanent commitment reduction);

 

(3)                                  other
Indebtedness (including Capitalized Lease Obligations) of the Company and its
Restricted Subsidiaries outstanding on the Issue Date;

 

(4)                                  Purchase
Money Indebtedness, Indebtedness to lessors of real property

 

14

 

incurred in connection with the initial
development and construction of a fitness club to be located at such real
property (“Landlord Loans”) and Capitalized Lease Obligations in an
aggregate principal amount for all Indebtedness incurred by the Company and its
Restricted Subsidiaries pursuant to this clause (4) not to exceed $10.0 million
outstanding at any one time, plus the principal amount of Indebtedness not
utilized under clause (2) above but not to exceed $5.0 million;

 

(5)                                  Interest
Swap Obligations covering Indebtedness of the Company or any of its Restricted
Subsidiaries; provided, however, that such Interest Swap Obligations
are entered into to protect the Company and its Restricted Subsidiaries from
fluctuations in interest rates on Indebtedness incurred in accordance with this
Indenture to the extent the notional principal amount of such Interest Swap
Obligation does not exceed, at the time of incurrence thereof, the principal
amount of the Indebtedness to which such Interest Swap Obligation relates;

 

(6)                                  Indebtedness
under Currency Agreements; provided that in the case of Currency
Agreements which relate to Indebtedness, such Currency Agreements do not
increase the Indebtedness of the Company and its Restricted Subsidiaries
outstanding other than as a result of fluctuations in foreign currency exchange
rates or by reason of fees, indemnities and compensation payable thereunder;

 

(7)                                  Indebtedness
of a Restricted Subsidiary to the Company or to another Restricted Subsidiary
for so long as such Indebtedness is held by the Company, a Restricted
Subsidiary or a holder of a Lien permitted under this Indenture, in each case
subject to no Lien held by a Person other than the Company, a Restricted
Subsidiary or a holder of a Lien permitted under this Indenture; provided
that if as of any date any Person other than the Company, a Restricted
Subsidiary or a holder of a Lien permitted under this Indenture owns or holds
any such Indebtedness or holds a Lien in respect of such Indebtedness, such
date shall be deemed the incurrence of Indebtedness not constituting Permitted
Indebtedness by the issuer of such Indebtedness pursuant to this
clause (7);

 

(8)                                  Indebtedness
of the Company to a Restricted Subsidiary for so long as such Indebtedness is
held by a Restricted Subsidiary or a holder of a Lien permitted under this
Indenture, in each case subject to no Lien other than a Lien permitted under
this Indenture; provided that (a) any Indebtedness of the Company
to any Restricted Subsidiary that is not a Guarantor is unsecured and by its
express terms subordinated in right of payment, pursuant to a written
agreement, to the Company’s monetary obligations under this Indenture and the
Notes and (b) if as of any date any Person other than a Restricted
Subsidiary or a holder of a Lien permitted under this Indenture owns or holds
any such Indebtedness or any Person holds a Lien in respect of such
Indebtedness, such date shall be deemed the incurrence of Indebtedness not
constituting Permitted Indebtedness by the Company under this clause (8);

 

(9)                                  Indebtedness
arising from the honoring by a bank or other financial institution of a check,
draft or similar instrument inadvertently (except in the case of daylight
overdrafts) drawn against insufficient funds in the ordinary course of business;

 

15

 

provided, however,
that such Indebtedness is extinguished within four Business Days of incurrence;

 

(10)                            Indebtedness
of the Company or any of its Restricted Subsidiaries represented by letters of
credit for the account of the Company or such Restricted Subsidiary, as the
case may be, in order to provide security for workers’ compensation claims,
payment obligations in connection with self-insurance or similar requirements
in each case in the ordinary course of business;

 

(11)                            Refinancing
Indebtedness;

 

(12)                            Indebtedness
represented by guarantees by the Company or its Restricted Subsidiaries of
Indebtedness otherwise permitted to be incurred under this Indenture; provided
that, in the case of a guarantee by a Restricted Subsidiary, such Restricted Subsidiary
complies with Section 4.16 to the extent applicable;

 

(13)                            Indebtedness
of the Company or any of its Restricted Subsidiaries in respect of bid, payment
and performance bonds, bankers’ acceptances, workers’ compensation claims,
surety or appeal bonds, payment obligations in connection with self-insurance
or similar obligations, and bank overdrafts (and letters of credit in respect
thereof) in the ordinary course of business; and

 

(14)                            additional
Indebtedness of the Company and its Restricted Subsidiaries in an aggregate
principal amount not to exceed $5.0 million at any one time outstanding
(which amount may, but need not, be incurred in whole or in part under the
Credit Agreement).

 

For purposes of determining any particular amount of Indebtedness under
Section 4.9, guarantees, Liens or letter of credit obligations supporting
Indebtedness otherwise included in the determination of such particular amount
shall not be included.  For purposes of
determining compliance with Section 4.9 in the event that an item of
Indebtedness meets the criteria of more than one of the categories of Permitted
Indebtedness described in clauses (1) through (14) above or is permitted
to be incurred pursuant to the Consolidated Fixed Charge Coverage Ratio
provisions of Section 4.9, the Company shall, in its sole discretion,
classify (or later reclassify) such item of Indebtedness in any manner that
complies with Section 4.9.  Accrual
of interest, accretion or amortization of original issue discount, the payment
of interest on any Indebtedness in the form of additional Indebtedness with the
same terms, the payment of dividends on Disqualified Capital Stock in the form
of additional shares of the same class of Disqualified Capital Stock and change
in the amount outstanding due solely to the result of fluctuations in the
exchange rates of currencies will not be deemed to be an incurrence of
Indebtedness for purposes of Section 4.9.

 

“Permitted Investments” means:

 

(1)                                  Investments
by the Company or any Restricted Subsidiary in any Person that is or will
become immediately after such Investment a Restricted Subsidiary or that

 

16

 

will merge or consolidate into the Company or
a Restricted Subsidiary;

 

(2)                                  Investments
in the Company by any Restricted Subsidiary; provided that any
Indebtedness incurred by the Company evidencing such Investment by a Restricted
Subsidiary that is not a Guarantor is unsecured and subordinated, pursuant to a
written agreement, to the Company’s obligations under the Notes and this
Indenture;

 

(3)                                  Investments
in cash and Cash Equivalents;

 

(4)                                  loans
and advances to directors, employees and officers of the Company and its
Restricted Subsidiaries in the ordinary course of business for bona fide
business purposes not in excess of $1.0 million at any one time outstanding;

 

(5)                                  Currency
Agreements and Interest Swap Obligations entered into in the ordinary course of
the Company’s or a Restricted Subsidiary’s businesses and otherwise in
compliance with this Indenture;

 

(6)                                  other
Investments, including Investments in Unrestricted Subsidiaries, not to exceed
$5.0 million at any one time outstanding;

 

(7)                                  Investments
in securities of trade creditors or members received pursuant to any plan of
reorganization or similar arrangement upon the bankruptcy or insolvency of such
trade creditors or members or in good faith settlement of delinquent obligations
of such trade creditors or members;

 

(8)                                  Investments
represented by guarantees that are otherwise permitted under this Indenture;

 

(9)                                  Investments
the payment for which is Qualified Capital Stock of the Company;

 

(10)                            Investments
made by the Company or its Restricted Subsidiaries as a result of consideration
received in connection with an Asset Sale (or an asset sale that is not an
Asset Sale) made in compliance with Section 4.10; and

 

(11)                            the
acquisition by the Company of obligations of one or more officers, directors or
employees of the Company or any of its Subsidiaries in connection with such
officers’, directors’ or employees’ acquisition of shares of Capital Stock of
the Company so long as no cash is paid by the Company or any of its
Subsidiaries to such officers, directors or employees in connection with the
acquisition of any such obligations.

 

“Permitted Liens” means the following types of Liens:

 

(1)                                  Liens
for taxes, assessments or governmental charges or claims either

 

(a)                                  not
delinquent or

 

17

 

(b)                                 contested
in good faith by appropriate proceedings and as to which the Company or its
Restricted Subsidiaries shall have set aside on its books such reserves as may
be required pursuant to GAAP;

 

(2)                                  statutory
and contractual Liens of landlords and Liens of carriers, warehousemen,
mechanics, suppliers, materialmen, repairmen and other Liens imposed by law
incurred in the ordinary course of business for sums not yet delinquent or
being contested in good faith, if such reserve or other appropriate provision,
if any, as shall be required by GAAP shall have been made in respect thereof;

 

(3)                                  Liens
incurred or deposits made in the ordinary course of business in connection with
workers’ compensation, unemployment insurance and other types of social
security, including any Lien securing letters of credit issued in the ordinary
course of business consistent with past practice in connection therewith, or to
secure the performance of tenders, statutory obligations, surety and appeal
bonds, bids, leases, government contracts, performance and return-of-money
bonds and other similar obligations (exclusive of obligations for the payment
of borrowed money);

 

(4)                                  judgment
Liens not giving rise to an Event of Default;

 

(5)                                  (a) easements,
rights-of-way, building and zoning restrictions and other similar charges or
encumbrances in respect of real property not interfering in any material respect
with the ordinary conduct of the business of the Company or of any of its
Restricted Subsidiaries, (b) mortgages, liens, security interests,
restrictions, encumbrances or any other matters of record placed by any
developer or landlord on property over which the Company or any Subsidiary has
easement rights or on any leased property, and subordination or similar
agreements relating thereto, and (c) any condemnation or eminent domain
proceedings affecting any real property;

 

(6)                                  (a) any
interest or title of a lessor under any Capitalized Lease Obligation; provided
that such Liens do not extend to any property or asset other than the leased
property subject to such Capitalized Lease Obligation (including multiple
leased properties subject to the same Capitalized Lease Obligation with the
same lessor) or (b) Landlord Loans secured by assets (other than by Capital
Stock or assets located at a property other than the fitness club to which such
Landlord Loan relates);

 

(7)                                  purchase
money Liens to finance property or assets of the Company or any Restricted
Subsidiary acquired after the Issue Date; provided, however, that

 

(a)                                  the
related Purchase Money Indebtedness shall not exceed the cost of such property
or assets and shall not be secured by property or assets of the Company or any
Restricted Subsidiary other than the property and assets so acquired and

 

(b)                                 the
Lien securing such Indebtedness shall be created within 90 days of such
acquisition;

 

18

 

(8)                                  Liens
upon specific items of inventory or other goods and proceeds of any Person
securing such Person’s obligations in respect of bankers’ acceptances issued or
created for the account of such Person to facilitate the purchase, shipment or
storage of such inventory or other goods;

 

(9)                                  Liens
securing reimbursement obligations with respect to commercial letters of credit
which encumber documents and other property relating to such letters of credit
and products and proceeds thereof;

 

(10)                            Liens
encumbering deposits made to secure obligations arising from statutory,
regulatory, contractual or warranty requirements of the Company or any of its Restricted
Subsidiaries, including rights of offset and set-off;

 

(11)                            Liens
securing Interest Swap Obligations which Interest Swap Obligations relate to
Indebtedness that is otherwise permitted to be secured under this Indenture;

 

(12)                            Liens
securing Indebtedness under Currency Agreements relating to debt permitted to
be secured under this Indenture;

 

(13)                            Liens
on assets of a Restricted Subsidiary that is not a Guarantor to secure
Indebtedness and other obligations of such Restricted Subsidiary that are
otherwise permitted under this Indenture;

 

(14)                            leases,
subleases, licenses and sublicenses granted to others that do not materially
interfere with the ordinary course of business of the Company and its
Restricted Subsidiaries;

 

(15)                            banker’s
Liens, rights of set-off and similar Liens with respect to cash and Cash
Equivalents on deposit in one or more bank accounts in the ordinary course of
business;

 

(16)                            Liens
arising from filing Uniform Commercial Code financing statements regarding
leases;

 

(17)                            Liens
in favor of customs and revenue authorities arising as a matter of law to secure
payment of customs duties in connection with the importation of goods;

 

(18)                            Liens
existing on property or assets of a Person at the time such Person becomes a
Restricted Subsidiary of the Company (or at the time the Company or a Subsidiary
acquires such property or assets); provided, however, that such Liens
are not created in connection with, or in contemplation of, such other Person
becoming such a Restricted Subsidiary (or such acquisition of such property or
assets), and that such Liens are limited to all or part of the same property or
assets (plus improvements, accessions, proceeds or dividends or distributions
in respect thereof) that secured (or, under the written arrangements under
which such Liens arose, could secure) the obligations to which such Liens
related;

 

19

 

(19)                            Liens
on Capital Stock or other securities of an Unrestricted Subsidiary that secure
Indebtedness or other obligations of such Unrestricted Subsidiary;

 

(20)                            any
encumbrance or restriction (including, but not limited to, put and call
agreements) with respect to Capital Stock of any joint venture or similar
arrangement pursuant to any joint venture or similar agreement or securing the
obligations of such joint venture or similar arrangement;

 

(21)                            Liens
(a) arising by operation of law (or by agreement to the same effect) in the
ordinary course of business, (b) on property or assets under construction (and
related rights) in favor of a contractor or developer or arising from progress
or partial payments by a third party relating to such property or assets, (c)
on receivables (including related rights), (d) on cash set aside at the time of
the incurrence of any Indebtedness or government securities purchased with such
cash, in either case to the extent that such cash or government securities
prefund the payment of interest on such Indebtedness and are held in an escrow
account or similar arrangement to be applied for such purpose, (e) in favor of
the Company or any Restricted Subsidiary (other than Liens on property or assets
of the Company in favor of any Restricted Subsidiary that is not a Guarantor)
or (f) arising out of conditional sale, title retention, consignment or similar
arrangements for the sale of goods entered into in the ordinary course of business;
and

 

(22)                            additional
Liens securing Obligations in respect of an aggregate principal amount of
outstanding Indebtedness in a principal amount not to exceed $5.0 million
at any one time.

 

“Person” means an individual, partnership, corporation, limited
liability company, unincorporated organization, trust or joint venture, or a
governmental agency or political subdivision thereof.

 

“PORTAL Market” means the Portal Market operated by the National
Association of Securities Dealers, Inc. or any successor thereto.

 

“Preferred Stock” of any Person means any Capital Stock of such
Person that has preferential rights to any other Capital Stock of such Person
with respect to dividends or redemptions or upon liquidation.

 

“Purchase Date” means, with respect to any Note to be
repurchased, the date fixed for such repurchase by or pursuant to this
Indenture.

 

“Purchase Money Indebtedness” means Indebtedness of the Company
or its Restricted Subsidiaries incurred for the purpose of financing all or any
part of the purchase price, or the cost of installation, construction or
improvement of, any property.

 

“Purchase Price” means the amount payable for the repurchase of
any Note on a Purchase Date, exclusive of accrued and unpaid interest and
Additional Interest (if any) thereon to the Purchase Date, unless otherwise
specifically provided.

 

20

 

“QIB” means a qualified institutional buyer as defined in
Rule 144A under the Securities Act.

 

“Qualified Capital Stock” means any Capital Stock that is not
Disqualified Capital Stock.

 

“Redemption Date” means, with respect to any Note to be
redeemed, the date fixed for such redemption by or pursuant to this Indenture.

 

“Redemption Price” means the amount payable for the redemption
of any Note on a Redemption Date, exclusive of accrued and unpaid interest and
Additional Interest (if any) thereon to the Redemption Date, unless otherwise
specifically provided.

 

“Refinance” means, in respect of any security or Indebtedness,
to refinance, extend, renew, refund, repay, prepay, redeem, defease or retire,
or to issue a security or Indebtedness in exchange or replacement for, such
security or Indebtedness in whole or in part. 
“Refinanced” and “Refinancing” shall have correlative
meanings.

 

“Refinancing Indebtedness” means any Refinancing by the Company
or any Restricted Subsidiary of the Company of Indebtedness incurred in
accordance with Section 4.9 (other than pursuant to clause (2), (4),
(5), (6), (7), (8), (9), (10), (12), (13) or (14) of the definition of
“Permitted Indebtedness”), in each case that does not:

 

(1)                                  result
in an increase in the aggregate principal amount of Indebtedness of such Person
as of the date of such proposed Refinancing (plus the amount of any fees and
premium required to be paid under the terms of the instrument governing such
Indebtedness and plus the amount of reasonable expenses incurred by the Company
or any Restricted Subsidiary in connection with such Refinancing); or

 

(2)                                  create
Indebtedness with a Weighted Average Life to Maturity that is less than the
Weighted Average Life to Maturity of the Indebtedness being Refinanced; or

 

(3)                                  if
the Indebtedness being refinanced is subordinated Indebtedness, create
Indebtedness with a final maturity earlier than the final maturity of the
Indebtedness being Refinanced (or, if shorter, the final stated maturity of the
Notes); provided that (a) if such Subordinated Indebtedness being
Refinanced is Indebtedness solely of the Company or a Guarantor, then such
Refinancing Indebtedness shall be Indebtedness solely of the Company or a
Guarantor and (b) such Refinancing Indebtedness shall be subordinate to
the Notes or such Guarantee at least to the same extent and in the same manner
as the Indebtedness being Refinanced.

 

“Registration Rights Agreement” means the Registration Rights
Agreement dated as of the Issue Date among the Company, the Guarantors and the
Initial Purchasers.

 

“Regulation S” means Regulation S as promulgated under
the Securities Act.

 

“Replacement Assets” means assets of a kind used or usable in the
business of the

 

21

 

Company and its Restricted Subsidiaries as conducted on the date of the
relevant Asset Sale.

 

“Responsible Officer” shall mean, when used with respect to the
Trustee, any officer within the corporate trust department of the Trustee,
including any vice president, assistant vice president, assistant secretary,
assistant treasurer, trust officer or any other officer of the Trustee who customarily
performs functions similar to those performed by the Persons who at the time
shall be such officers, respectively, or to whom any corporate trust matter is
referred because of such person’s knowledge of and familiarity with the
particular subject and who shall have direct responsibility for the administration
of this Indenture.

 

“Restricted Subsidiary” means any Subsidiary of the Company that
has not been designated by the Board of Directors of the Company, by a Board
Resolution of the Company delivered to the Trustee, as an Unrestricted
Subsidiary pursuant to and in compliance with Section 4.18.  Any such Designation may be revoked by a
Board Resolution of the Company delivered to the Trustee, subject to the provisions
of Section 4.18.

 

“Revocation” has the meaning set forth under
Section 4.18(b).

 

“Rule 144A” means Rule 144A promulgated under the
Securities Act.

 

“S&P” means Standard & Poor’s Ratings Service.

 

“Sale and Leaseback Transaction” means any direct or indirect
arrangement with any Person or to which any such Person is a party, providing for
the leasing to the Company or a Restricted Subsidiary of any property, whether
owned by the Company or any Restricted Subsidiary at the Issue Date or later
acquired, which has been or is to be sold or transferred by the Company or by
such Restricted Subsidiary to such Person or to any other Person from whom
funds have been or are to be advanced by such Person on the security of such
Property.

 

“Securities Act” means the Securities Act of 1933, as amended,
or any successor statute or statutes thereto.

 

“Senior Subordinated Note and Warrant Purchase Agreement” has
the meaning assigned to such term in the definition of “Transactions.”

 

“Series A Notes” means the Company’s 9% Senior Notes due
2009.

 

“Series B Notes” means notes issued by the Company
hereunder containing terms identical to the Series A Notes (except
(i) that interest thereon shall accrue from the last date on which
interest was paid on the Series A Notes or, if no such interest has been
paid, from the date of original issuance, (ii) that the legend or legends
relating to transferability and other related matters set forth on the
Series A Notes, including the Private Placement Legend, shall be removed
or appropriately altered and (iii) as otherwise set forth herein), to be
offered to Holders of Series A Notes in exchange for Series B Notes
pursuant to the Exchange Offer or any exchange offer specified in any
registration rights agreement relating to the Additional Notes or to be offered
in connection with any issuance of Additional Notes pursuant to a registration
statement filed pursuant to the Securities Act.

 

22

 

“Significant Subsidiary” will have the meaning set forth in
Rule 1.02(w) of Regulation S-X under the Securities Act.

 

“Stockholders Agreement” means the Stockholders Agreement dated
as of December 15, 2000 among the Company and the holders of Capital Stock
of the Company party thereto, as amended, modified or supplemented and in
effect from time to time.

 

“Subordinated Indebtedness” means Indebtedness of the Company or
any Guarantor that is by its express terms subordinated in right of payment to
the Notes or the Guarantee of such Guarantor, as the case may be.

 

“Subsidiary” means, with respect to any Person:

 

(1)                                  any
corporation of which the outstanding Capital Stock having at least a majority
of the votes entitled to be cast in the election of directors under ordinary
circumstances shall at the time be owned, directly or indirectly, by such Person;
or

 

(2)                                  any
other Person of which at least a majority of the voting interest under ordinary
circumstances is at the time, directly or indirectly, owned by such Person.

 

“TIA” means the Trust Indenture Act of 1939 (15 U.S.C.
§§ 77aaa-77bbbb) as in effect on the date on which this Indenture is qualified
under the TIA; provided that in the event the Trust Indenture Act of
1939 is amended after such date, “TIA” means, to the extent required by any
such amendment, the Trust Indenture Act of 1939 as so amended.

 

“Transactions” means the following transactions contemplated in
connection with the offering of the Notes: (1) the repayment of the
outstanding principal amount under the Credit Agreement, dated as of
December 15, 2000, among the Company, the Lenders party thereto, and
Bankers Trust Company, individually and as administrative agent, and the
termination of all related commitments; (2) the repayment of the entire
outstanding principal amount under the Company’s outstanding 13.25% Senior
Notes due 2007 and the satisfaction of all obligations of the Company under the
Senior Note Purchase Agreement, dated as of January 28, 2003, among the
Company and Capital Source Finance LLC; (3) the repayment of the entire
outstanding principal amount under the Company’s 16% Senior Subordinated Notes
due 2008, issued pursuant to the Senior Subordinated Note and Warrant Purchase
Agreement (the “Senior Subordinated Note and Warrant Purchase Agreement”),
dated as of December 15, 2000, among the Company, the guarantors named
therein and the Purchasers named in Schedule I thereto, as amended;
(4) the redemption of the Company’s 10% Cumulative Preferred Stock, par
value $0.01 per share, outstanding on the Issue Date; (5) a payment of
$5.0 million that is required to be paid by the Company to its founding
stockholders pursuant to the Stock Purchase Agreement and Plan of Merger, dated
as of October 16, 2000, as amended and restated on December 14, 2000,
among the Company, NCP-EH Recapitalization Corp., a Delaware corporation,
Equinox Holdings, L.P., a Delaware limited partnership and the “Rollover
Stockholders” party thereto; and (6) the payment of accrued and unpaid
interest, redemption premiums, transaction fees and expenses (including
amendment fees paid to holders of the Warrants) related to the foregoing.

 

23

 

“Transfer Restricted Security” means a Note that is a restricted
security as defined in Rule 144(a)(3) under the Securities Act.

 

“Trustee” means the party named as such above until a successor
replaces it in accordance with the applicable provisions of this Indenture, and
thereafter means the successor serving hereunder.

 

“Unrestricted Subsidiary” means any Subsidiary of the Company
designated as such pursuant to and in compliance with Section 4.18.  Any such designation may be revoked by a
Board Resolution of the Company delivered to the Trustee, subject to the
provisions of Section 4.18.

 

“U.S. Certificated Notes” means permanent U.S. Certificated
Notes in registered form in substantially the form set forth in Exhibit A
that are offered and sold to Institutional Accredited Investors.

 

“U.S. Government Obligations” shall mean securities which are
(i) direct obligations of the United States of America for the payment of
which its full faith and credit is pledged or (ii) obligations of a person
controlled or supervised by and acting as an agency or instrumentality of the
United States of America, the payment of which is unconditionally guaranteed as
a full faith and credit obligation by the United States of America, which, in either
case, are not callable or redeemable at the option of the issuer thereof, and
shall also include a depository receipt issued by a bank or trust company as
custodian with respect to any such U.S. Government Obligations or a specific
payment of interest on or principal of any such U.S. Government Obligations
held by such custodian for the account of the holder of a depository receipt; provided
that (except as required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of such depository receipt from
any amount received by the custodian in respect of the U.S. Government
Obligations or the specific payment of interest on or principal of the U.S.
Government Obligations evidenced by such depository receipt.

 

“U.S. Person” means any U.S. Person as defined in
Regulation S.

 

“Warrants” means those Common Stock Purchase Warrants issued
pursuant to the Senior Subordinated Note and Warrant Purchase Agreement, as
amended by an amendment thereto dated as of November 8, 2003, as in effect
on the Issue Date.

 

“Warrant Preferred Stock” means the Senior Redeemable Preferred
Stock of the Company which may be issued upon exercise of the Warrant Put, as
such is in effect or contemplated to be put into effect as of the Issue Date.

 

“Warrant Put” means those provisions in Section 9 of the
Warrants, as in effect on the Issue Date.

 

“Weighted Average Life to Maturity” means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (1) the
then outstanding aggregate principal amount of such Indebtedness into
(2) the sum of the total of the products obtained by multiplying

 

24

 

(a) the amount of each then remaining installment, sinking fund,
serial maturity or other required payment of principal, including payment at
final maturity, in respect thereof, by (b) the number of years (calculated
to the nearest one-twelfth) which will elapse between such date and the making
of such payment.

 

“Wholly Owned Restricted Subsidiary” means any Restricted
Subsidiary of which all the outstanding voting securities (other than in the
case of a foreign Restricted Subsidiary, directors’ qualifying shares or an
immaterial amount of shares required to be owned by other Persons pursuant to
applicable law) are owned by the Company or another Wholly Owned Restricted Subsidiary.

 

Section 1.2.                                   Other Definitions.

 

	
  Term

  	
   

  	
  Defined in Section

  
	
   

  	
   

  	
   

  
	
  “Affiliate Transaction”

  	
   

  	
  4.11

  
	
  “Agent Members”

  	
   

  	
  2.6(b)

  
	
  “Covenant Defeasance”

  	
   

  	
  8.3

  
	
  “Event of Default”

  	
   

  	
  6.1

  
	
  “Foreign Person”

  	
   

  	
  2.6(c)

  
	
  “Global Notes”

  	
   

  	
  2.1

  
	
  “Legal Defeasance”

  	
   

  	
  8.2

  
	
  “Net Proceeds Offer”

  	
   

  	
  4.10

  
	
  “Net Proceeds Offer Amount”

  	
   

  	
  4.10

  
	
  “Net Proceeds Offer Trigger Date”

  	
   

  	
  4.10

  
	
  “Paying Agent”

  	
   

  	
  2.3

  
	
  “Permanent Regulation S Global Note”

  	
   

  	
  2.1

  
	
  “Private Placement Legend”

  	
   

  	
  2.6(h)

  
	
  “Registrar”

  	
   

  	
  2.3

  
	
  “Regulation S Global Note”

  	
   

  	
  2.1

  
	
  “Restricted Payment”

  	
   

  	
  4.7

  
	
  “Rule 144A Global Note”

  	
   

  	
  2.1

  
	
  “Surviving Entity”

  	
   

  	
  5.1

  
	
  “Temporary Regulation S Global Note”

  	
   

  	
  2.1

  

 

Section 1.3.                                   Incorporation by
Reference of Trust Indenture Act.

 

Whenever this Indenture refers to a provision of the TIA, the provision
is incorporated by reference in and made a part of this Indenture.

 

The following TIA terms used in this Indenture have the following
meanings:

 

“indenture securities” means the Notes;

 

25

 

“indenture security holder” means a Holder;

 

“indenture to be qualified” means this Indenture;

 

“indenture trustee” or “institutional trustee” means the
Trustee;

 

“obligor” on the Notes means the Company and any successor
obligor upon the Notes.

 

All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by Commission rule under
the TIA have the meanings so assigned to them.

 

Section 1.4.                                   Rules of
Construction.

 

Unless the context otherwise requires:

 

(a)           a term has the
meaning assigned to it;

 

(b)           an accounting term
not otherwise defined has the meaning assigned to it in accordance with GAAP;

 

(c)           “or” is not exclusive;

 

(d)           words in the singular include the
plural, and in the plural include the singular;

 

(e)           provisions apply to successive events
and transactions; and

 

(f)            references to sections of or rules
under the Securities Act, the Exchange Act and the TIA shall be deemed to
include substitute, replacement and successor sections or rules adopted by the
Commission from time to time.

 

Section 1.5.                                   Acts of Holders.

 

(a)           Any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be given or taken by Holders may be
embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by an agent duly appointed in
writing; and, except as herein otherwise expressly provided, such action shall
become effective when such instrument or instruments are delivered to the
Trustee and, where it is hereby expressly required, to the Company.  Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as the
“Act” of Holders signing such instrument or instruments.  Proof of execution of any such instrument or
of a writing appointing any such agent shall be sufficient for any purpose of
this Indenture and (subject to Section 7.1) conclusive in favor of the Trustee
and the Company,

 

26

 

if made in the manner provided in this Section.

 

(b)           The
fact and date of the execution by any Person of any such instrument or writing may
be proved by the affidavit of a witness of such execution or by the certificate
of any notary public or other officer authorized by law to take acknowledgments
of deeds, certifying that the individual signing such instrument or writing
acknowledged to him or her the execution thereof.  Where such execution is by an officer of a corporation or a
member of a partnership, on behalf of such corporation or partnership, such
certificate or affidavit shall also constitute sufficient proof of his or her
authority.

 

(c)           The
ownership of Notes shall be proved by the register maintained by the Registrar.

 

(d)           Any
request, demand, authorization, direction, notice, consent, waiver or other Act
of the Holder of any Note shall bind every future Holder of the same Note and
the Holder of every Note issued upon the registration of transfer thereof or in
exchange therefor or in lieu thereof in respect of anything done or suffered to
be done by the Trustee or the Company in reliance thereon, whether or not
notation of such action is made upon such Note.

 

ARTICLE II.

 

THE NOTES

 

Section 2.1.                                   Form and Dating.

 

The Series A Notes and the Trustee’s certificate of authentication
relating thereto shall be substantially in the form of Exhibit A.  The Notes may have notations, legends or
endorsements required by law, stock exchange rule or usage in addition to those
set forth in Exhibit A.  The
Series B Notes shall be substantially in the form of Exhibit B.  Each Note shall be dated the date of its
authentication.  The Notes shall be in
denominations of $1,000 and integral multiples thereof.

 

The terms and provisions contained in the Notes shall constitute, and
are hereby expressly made, a part of this Indenture and the Company, the
Guarantors and the Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and to be bound thereby.

 

Notes offered and sold in reliance on Rule 144A shall be issued
initially in the form of a single permanent global Note in registered form,
substantially in the form set forth in Exhibit A (the “Rule 144A
Global Note”), deposited with the Trustee, as custodian for the Depositary,
duly executed by the Company and authenticated by the Trustee as hereinafter
provided and shall bear the Private Placement Legend.  The aggregate principal amount of the Rule 144A Global Note
may from time to time be increased or decreased by adjustments made on the
records of the Trustee, as custodian for the Depositary or its nominee, as
hereinafter provided.

 

27

 

Notes offered and sold in offshore transactions in reliance on
Regulation S shall be issued initially in the form of a single temporary
global Note in registered form, substantially in the form set forth in Exhibit
A (the “Temporary Regulation S Global Note”), deposited with
the Trustee, as custodian for the Depositary, duly executed by the Company and
authenticated by the Trustee as hereinafter provided and shall bear the Private
Placement Legend and the Temporary Regulation S Global Note Legend in the form
set forth in Exhibit A (the “Temporary Regulation S Global Note
Legend”).  At any time following
40 days after the later of the commencement of the offering of the Notes
and the Issue Date, upon receipt by the Trustee and the Company of a duly
executed certificate substantially in the form of Exhibit D(1), a
single permanent Global Note in registered form substantially in the form set
forth in Exhibit A (the “Permanent Regulation S Global Note,”
and together with the Temporary Regulation S Global Note, the “Regulation S
Global Note”) duly executed by the Company and authenticated by the Trustee
as hereinafter provided shall be deposited with the Trustee, as custodian for
the Depositary, and the Registrar shall reflect on its books and records the
date and a decrease in the principal amount of the Regulation S Global
Note in an amount equal to the principal amount of the beneficial interest in
the Regulation S Global Note transferred.

 

The Rule 144A Global Note and the Regulation S Global Note
are sometimes referred to herein as the “Global Notes.”

 

Section 2.2.                                   Execution
and Authentication.

 

One Officer of the Company shall sign the Notes for the Company by
manual or facsimile signature.

 

If an Officer whose signature is on a Note was an Officer at the time
of such execution but no longer holds that office or position at the time a
Note is authenticated, the Note shall nevertheless be valid.  This Indenture shall be executed on behalf
of each Guarantor listed on Schedule A hereto.  Any Restricted Subsidiary that becomes a Guarantor after the date
hereof in accordance with Section 4.16 shall execute a Supplement
Indenture in the manner set forth in Section 10.7.

 

A Note shall not be valid until authenticated by the manual signature of
the Trustee.  The signature shall be
conclusive evidence that the Note has been authenticated under this Indenture.

 

The Trustee, upon a written order of the Company signed by one Officer
of the Company, together with the other documents required by Sections 12.4
and 12.5, shall authenticate (i) Series A Notes for original issue on
the Issue Date in the aggregate principal amount not to exceed $160.0 million
and (ii) subject to Section 4.9, Additional Notes.  The Trustee, upon written order of the
Company signed by one Officer of the Company, together with the other documents
required by Sections 12.4 and 12.5, shall authenticate Series B
Notes; provided that such Series B Notes shall be issuable only
upon the valid surrender for cancellation of Series A Notes of a like
aggregate principal amount in accordance with the Exchange Offer or

 

28

 

an exchange offer specified in any registration rights agreement
relating to the Additional Notes or to be offered in connection with any
issuance of Additional Notes pursuant to a registration statement filed
pursuant to the Securities Act.  Such
written order of the Company shall specify the amount of Notes to be
authenticated and the date on which the original issue of Notes is to be
authenticated.  Any Additional Notes
shall be part of the same issue as the Notes being issued on the Issue Date and
will vote on all matters as one class with the Notes being issued on the Issue
Date, including, without limitation, waivers, amendments, redemptions, Change
of Control Offers and Net Proceeds Offers. 
For the purposes of this Indenture, except for Section 4.9, references
to the Notes include Additional Notes, if any.

 

The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Notes.  Unless
otherwise provided in the appointment, an authenticating agent may authenticate
Notes whenever the Trustee may do so. 
Each reference in this Indenture to authentication by the Trustee
includes authentication by such agent. 
An authenticating agent has the same rights as an Agent to deal with the
Company or with any Affiliate of the Company.

 

Section 2.3.                                   Registrar
and Paying Agent.

 

The Company shall maintain an office or agency where Notes may be presented
or surrendered for registration of transfer or for exchange (“Registrar”)
and an office or agency where Notes may be presented for payment (“Paying
Agent”).  The Registrar shall keep a
register of the Notes and of their transfer and exchange.  At the option of the Company, payment of
interest and Additional Interest may be made by check mailed to the Holders at
their addresses set forth in the register of Holders; provided that
payment by wire transfer of immediately available funds will be required with
respect to principal, Redemption Price and Purchase Price of, and interest and
Additional Interest (if any) on, all Global Notes and all other Notes the
Holders of which shall have provided wire transfer instructions to the Trustee
or the Paying Agent.  The Company may
appoint one or more co-registrars and one or more additional paying
agents.  The term “Registrar” includes
any co-registrar and the term “Paying Agent” includes any additional paying
agent.  The Company may change any
Paying Agent or Registrar without notice to any Holder.  The Company shall notify the Trustee in
writing of the name and address of any Paying Agent not a party to this
Indenture.  If the Company fails to appoint
or maintain another entity as Registrar or Paying Agent, the Trustee shall act
as such.  The Company may act as Paying
Agent or Registrar.  The Depositary
shall, by acceptance of a Global Note, agree that transfers of beneficial
interests in such Global Note may be effected only through a book-entry system
maintained by the Depositary (or its agent), and that ownership of a beneficial
interest in the Note shall be required to be reflected in a book entry.

 

The Company initially appoints the Trustee to act as the Registrar and
Paying Agent and to act as Note Custodian with respect to the Global Notes,
until such time as the Trustee has resigned or a successor has been
appointed.  The Notes may be presented
for registration or transfer and exchange at the offices of the Registrar,
which initially will be the Corporate Trust Office of the Trustee.

 

29

 

Section 2.4.                                   Paying
Agents to Hold Money in Trust.

 

The Company shall require each Paying Agent other than the Trustee to
agree in writing that such the Paying Agent shall hold in trust for the benefit
of Holders or the Trustee all money held by the Paying Agent for the payment of
principal and of any premium, if any, interest and Additional Interest, if any,
on the Notes, and shall notify the Trustee of any default by the Company in
making any such payment.  While any such
default continues, the Trustee may require a Paying Agent to pay all money held
by it to the Trustee.  The Company at
any time may require a Paying Agent to pay all money held by it to the Trustee
and account for any money disbursed. 
Upon payment over to the Trustee, the Paying Agent (if other than the
Company) shall have no further liability for the money.  If the Company acts as Paying Agent, it
shall segregate and hold in a separate trust fund for the benefit of the Holders
all money held by it as Paying Agent. 
Upon any bankruptcy or reorganization proceedings relating to the
Company, the Trustee shall serve as Paying Agent for the Notes.

 

Section 2.5.                                   Holder Lists.

 

The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA § 312(a).  If the Trustee is not the Registrar, the
Company or the Guarantors shall furnish or cause the Registrar to furnish to
the Trustee at least five Business Days before each interest payment date and
at such other times as the Trustee may request in writing, a list in such form
and as of such date as the Trustee may reasonably require of the names and
addresses of the Holders of Notes, and the Company shall otherwise comply with
TIA § 312(a).

 

Section 2.6.                                   Transfer
and Exchange.

 

(a)           Transfer
and Exchange Generally:  Book Entry
Provisions.  Upon surrender for
registration of transfer of any Note to the Registrar, and satisfaction of the
requirements for such transfer set forth in this Section 2.6, the Company shall
execute, and the Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Notes of any authorized
denominations and of a like aggregate principal amount and bearing such
restrictive legends as may be required by this Indenture.

 

Notes may be exchanged for other Notes of any authorized denominations
and of a like aggregate principal amount, upon surrender of the Notes to be
exchanged at any such office or agency maintained by the Company pursuant to
Section 4.2.  Whenever any Notes
are so surrendered for exchange, the Company shall execute, and the Trustee
shall authenticate and deliver, the Notes which the Holder making the exchange
is entitled to receive bearing registration numbers not contemporaneously outstanding.

 

30

 

All Notes presented or surrendered for registration of transfer or
exchange shall be duly endorsed, or be accompanied by a written instrument or
instruments of transfer in form satisfactory to the Company and the Registrar,
and the Notes shall be duly executed by the Holder thereof or his attorney duly
authorized in writing.  Except as
otherwise provided in this Indenture, and in addition to the requirements set
forth in the Private Placement Legend, in connection with any transfer of
Transfer Restricted Securities any request for transfer shall be accompanied by
a certification to the Trustee relating to the manner of such transfer
substantially in the form of Exhibit D(2).

 

(b)           Book-Entry
Provisions for the Global Notes. 
The Rule 144A Global Note and Regulation S Global Note initially shall
(i) be registered in the name of the Depositary or the nominee of such
Depositary, (ii) be delivered to the Trustee as custodian for the Depositary
and (iii) bear legends as set forth in Section 2.6(h).

 

Members of, or participants in, the Depositary (“Agent Members”)
shall have no rights under this Indenture with respect to any Rule 144A
Global Note or Regulation S Global Note, as the case may be, held on their
behalf by the Depositary, or the Trustee as its custodian, or under the
Rule 144A Global Note or Regulation S Global Note, as the case may be,
and the Depositary may be treated by the Company, the Trustee and any agent of
the Company or the Trustee as the absolute owner of Rule 144A Global Note
or Regulation S Global Note, as the case may be, for all purposes
whatsoever.  Notwithstanding the foregoing,
nothing herein shall prevent the Company, the Trustee or any agent of the
Company or the Trustee, from giving effect to any written certification, proxy
or other authorization furnished by the Depositary or impair, as between the
Depositary and its Agent Members, the operation of customary practices
governing the exercise of the rights of a holder of any Note.

 

Transfers of the Rule 144A Global Note and the Regulation S
Global Note shall be limited to transfers of such Rule 144A Global Note or
Regulation S Global Note in whole, but not in part, to the Depositary, its
successors or their respective nominees. 
Beneficial interests in the Rule 144A Global Note and the
Regulation S Global Note may be transferred in accordance with the
applicable rules and procedures of the Depositary and the provisions of this
Section 2.6.  The registration of
transfer and exchange of beneficial interests in the Global Note, which does
not involve the issuance of a Certificated Note, shall be effected through the
Depositary, in accordance with this Indenture (including the restrictions on
transfer set forth herein) and the procedures of the Depositary therefor.  The Trustee shall have no responsibility or
liability for any act or omission of the Depositary.

 

At any time (i) the Depositary notifies the Company that the Depositary
is unwilling or unable to continue as a Depositary for the Rule 144A Global
Note or the Permanent Regulation S Global Note, as the case may be, or if at
any time the Depositary ceases to be a “clearing agency” registered under the
Exchange Act, and a successor depositary is not appointed by the Company within
90 days of such notice, or (ii) an Event of Default has occurred and is continuing
or (iii) the Company, in its sole discretion, notifies the Trustee in writing
that it elects to cause the issuance of Certificated Notes under this
Indenture; then, at the request of the beneficial holder of an interest in the
Rule 144A Global Note or Permanent Regulation S Global Note to obtain
a Certificated

 

31

 

Note, such beneficial holder shall be entitled to obtain a Certificated
Note upon written request to the Trustee and the Note Custodian in accordance
with the standing instructions and procedures existing between the Note Custodian
and Depositary for the issuance thereof. 
Upon receipt of any such request, the Trustee, or the Note Custodian at
the direction of the Trustee, will cause, in accordance with the standing
instructions and procedures existing between the Depositary and the Note
Custodian, the aggregate principal amount of the Rule 144A Global Note or
Permanent Regulation S Global Note, as appropriate, to be reduced by the
principal amount of the Certificated Note issued upon such request to such beneficial
holder and, following such reduction, the Company will execute and the Trustee
will authenticate and deliver to such beneficial holder (or its nominee) a
Certificated Note or Certificated Notes in the appropriate aggregate principal
amount in the name of such beneficial holder (or its nominee) and bearing such
restrictive legends as may be required by this Indenture.

 

(c)           Transfers
to Non-QIB Institutional Accredited Investors.  The following provisions shall apply with respect to the
registration of any proposed transfer of a Transfer Restricted Security to any
Institutional Accredited Investor that is not a QIB (other than any Person that
is not a U.S. Person as defined under Regulation S, a “Foreign Person”):

 

(i)                                     the Registrar
shall register the transfer of any Note, whether or not such Note bears the
Private Placement Legend, if (x) (A) the requested transfer is at
least two years after the later of the Issue Date of the Notes and (B) the
proposed transferee has certified to the Registrar that the requested transfer
is at least two years after last date on which such Note was held by an
Affiliate of the Company, or (y) the proposed transferee has delivered to
the Registrar (A) a certificate substantially in the form of Exhibit E
and (B) such certifications, legal opinions and other information as the
Trustee and the Company may reasonably request to confirm that such transaction
is in compliance with the Securities Act; and

 

(ii)                                  if the proposed
transferor is an Agent Member holding a beneficial interest in the Global Note,
upon receipt by the Registrar of (x) the documents, if any, required by
clause (i) and (y) instructions given in accordance with the
Depositary’s and the Registrar’s procedures, the Registrar shall reflect on its
books and records the date and a decrease in the principal amount of the Global
Note in an amount equal to the principal amount of the beneficial interest in
the Global Note to be transferred, and the Company shall execute, and the
Trustee shall authenticate and deliver, one or more Certificated Notes of like
tenor and amount.

 

(d)           Transfers
to QIBs.  The following provisions
shall apply with respect to the registration of any proposed transfer of a
Transfer Restricted Security to a QIB (other than Foreign Persons):

 

(i)                                     if the Note to be
transferred consists of Certificated Notes or an interest in the
Regulation S Global Note, the Registrar shall register the transfer if
such transfer is being made by a proposed transferor who has checked the box provided
for on a certificate substantially in the form of Exhibit D(2)
stating, or has otherwise advised the Company and the Registrar in writing,
that the sale has been made in compliance with the provisions of Rule 144A
to a transferee who is a QIB within the meaning of Rule 144A and is aware
that the sale to it is being made in reliance on Rule 144A; and

 

32

 

(ii)                                  if the proposed
transferee is an Agent Member, and the Note to be transferred consists of
Certificated Notes or an interest in the Regulation S Global Note, upon
receipt by the Registrar of the documents referred to in clause (i) and
instructions given in accordance with the Depositary’s and the Registrar’s
procedures, the Registrar shall reflect on its books and records the date and
an increase in the principal amount of the Rule 144A Global Note in an
amount equal to the principal amount of the Certificated Notes or the interest
in the Regulation S Global Note, as the case may be, to be transferred,
and the Trustee shall cancel the Certificated Notes or decrease the amount of
the Regulation S Global Note so transferred.

 

(e)           Transfers
of Interests in the Temporary Regulation S Global Note.  The following provisions shall apply with
respect to the registration of any proposed transfer of interests in the
Temporary Regulation S Global Note:

 

(i)                                     the Registrar
shall register the transfer of an interest in the Temporary Regulation S
Global Note if (x) the proposed transferor has delivered to the Registrar
a certificate substantially in the form of Exhibit F stating, among
other things, that the proposed transferee is a Foreign Person or (y) the
proposed transferee is a QIB and the proposed transferor has checked the box
provided for on a certificate substantially in the form of Exhibit D(2)
stating, or has otherwise advised the Company and the Registrar in writing,
that the sale has been made in compliance with the provisions of Rule 144A
to a transferee who is a QIB within the meaning of Rule 144A, and is aware
that the sale to it is being made in reliance on Rule 144A; and

 

(ii)                                  if the proposed
transferee is an Agent Member, upon receipt by the Registrar of the documents
referred to in clause (i)(y) above and instructions given in accordance
with the Depositary’s and the Registrar’s procedures, the Registrar shall
reflect on its books and records the date and an increase in the principal
amount of the Rule 144A Global Note in an amount equal to the principal
amount of the Temporary Regulation S Global Note to be transferred, and
the Trustee, as Note Custodian, shall decrease the amount of the Temporary
Regulation S Global Note.

 

(f)            Transfers
to Foreign Persons.  The following
provisions shall apply with respect to any transfer of a Transfer Restricted
Security to a Foreign Person:

 

(i)                                     the Registrar
shall register any proposed transfer of a Note to a Foreign Person upon receipt
of a certificate substantially in the form of Exhibit F from the
proposed transferor and such certifications, legal opinions and other
information as the Trustee or the Company may reasonably request; and

 

(ii)                                  (a) if the
proposed transferor is an Agent Member holding a beneficial interest in the
Rule 144A Global Note or the Note to be transferred consists of Certificated
Notes, upon receipt by the Registrar of (x) the documents, if any,
required by paragraph (i) and (y) instructions in accordance with the
Depositary’s and the Registrar’s procedures, the Registrar shall reflect on its
books and records the date and a decrease in the principal amount of the
Rule 144A Global Note in an amount equal to the principal amount of the
beneficial interest in the Rule 144A Global Note or cancel the
Certificated Notes, as the case may be, to be transferred, and (b) if the
proposed transferee is an Agent Member, upon receipt by the Registrar

 

33

 

of instructions given in accordance with the
Depositary’s and the Registrar’s procedures, the Registrar shall reflect on its
books and records the date and an increase in the principal amount of the
Regulation S Global Note in an amount equal to the principal amount of the
Certificated Notes to be transferred, and the Trustee shall decrease the amount
of the Rule 144A Global Note.

 

(g)           The
Depositary.  The Depositary shall be
a clearing agency registered under the Exchange Act.  The Company initially appoints The Depository Trust Company to
act as Depositary with respect to the Global Note.  Initially, the Rule 144A Global Note and the Regulation S Global
Note shall be issued to the Depositary, registered in the name of Cede &
Co., as the nominee of the Depositary, and deposited with the Note Custodian
for Cede & Co.

 

Notes in Certificated form
issued in exchange for all or a part of a Global Note pursuant to this Section
2.6 shall be registered in such names and in such authorized denominations as
the Depositary, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Trustee.  Upon execution and authentication, the
Trustee shall deliver such Certificated Notes in Certificated form to the
persons in whose names such Notes in Certificated form are so registered.

 

(h)           Legends.

 

(i)            Except as permitted by the following
paragraphs (ii) and (iii), each Note certificate evidencing Global Notes and
Certificated Notes (and all Notes issued in exchange therefor or substitution
thereof) shall (x) be subject to the restrictions on transfer set forth in this
Section 2.6 (including those set forth in the legend below) unless such
restrictions on transfer shall be waived by written consent of the Company, and
the Holder of each Transfer Restricted Security, by such Holder’s acceptance
thereof, agrees to be bound by all such restrictions on transfer and (y) bear
the legend set forth below (the “Private Placement Legend”):

 

THE NOTES
EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES
ACT OF 1933 (THE “SECURITIES ACT’) AND MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED EXCEPT (A)(1) TO A PERSON WHO THE SELLER REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF
RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR
THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (2) IN AN OFFSHORE TRANSACTION COMPLYING
WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES
ACT, (3) TO AN INSTITUTIONAL ACCREDITED INVESTOR IN A TRANSACTION EXEMPT
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, (4) PURSUANT TO
AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY
RULE 144 THEREUNDER (IF AVAILABLE) OR (5) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (B) IN ACCORDANCE WITH
ALL APPLICABLE SECURITIES LAWS OF THE

 

34

 

STATES OF THE
UNITED STATES.

 

(ii)                                  Upon
any sale or transfer of a Transfer Restricted Security (including any Transfer
Restricted Security represented by a Global Note) pursuant to Rule 144
under the Securities Act or pursuant to an effective registration statement
under the Securities Act:

 

(a)                                  in the case of any
Transfer Restricted Security that is a Certificated Note, the Registrar shall
permit the Holder thereof to exchange such Transfer Restricted Security for a
Certificated Note that does not bear the legend set forth in (i) above and
rescind any restriction on the transfer of such Transfer Restricted Security;
and

 

(b)                                 in the case of any
Transfer Restricted Security represented by a Global Note, such Transfer
Restricted Security shall not be required to bear the legend set forth in (i)
above, but shall continue to be subject to the provisions of
Section 2.6(b); provided, however, that with respect to any
request for an exchange of a Transfer Restricted Security that is represented
by a Global Note for a Certificated Note that does not bear the legend set
forth in (i) above, which request is made in reliance upon Rule 144, the
Holder thereof shall certify in writing to the Registrar that such request is
being made pursuant to Rule 144 (such certifications to be substantially
in the form of Exhibit D(2)).

 

(iii)                               Notwithstanding
the foregoing, upon consummation of the Exchange Offer, the Company shall issue
and, upon receipt of an authentication order in accordance with Section 2.2,
the Trustee shall authenticate Series B Notes in exchange for
Series A Notes accepted for exchange in the Exchange Offer, which Series B
Notes shall not bear the legend set forth in (i) above, and the Registrar shall
rescind any restriction on the transfer of such Series A Notes, in each
case unless the Company has notified the Registrar in writing that the Holder
of such Series A Notes is either (A) a broker-dealer, (B) a
Person participating in the distribution of the Series A Notes or
(C) a Person who is an affiliate (as defined in Rule 144A) of the Company.

 

(iv)                              Each
Global Note, whether or not a Transfer Restricted Security, shall also bear the
following legend on the fact thereof:

 

THIS NOTE IS A
GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS
REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY OR A
SUCCESSOR DEPOSITARY.  THIS NOTE IS NOT
EXCHANGEABLE FOR NOTES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE
DEPOSITARY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
INDENTURE, AND NO TRANSFER OF THIS NOTE (OTHER THAN A TRANSFER OF THIS NOTE AS
A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE
DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE
REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

 

35

 

UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE COMPANY OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE &
CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.

 

(v)                                 Any
Global Note may be endorsed with or have incorporated in the text thereof such
legends or recitals or changes not inconsistent with the provisions of this
Indenture as may be required by the Note Custodian, the Depositary or by the
National Association of Securities Dealers, Inc. in order for the Notes to be
tradable on the PORTAL Market or tradable on Euroclear or Clearstream or as may
be required for the Notes to be tradable on any other market developed for
trading of securities pursuant to Rule 144A or Regulation S under the
Securities Act or required to comply with any applicable law or any regulation
thereunder or with the rules and regulations of any securities exchange or
automated quotation system upon which the Notes may be listed or traded or to
conform with any usage with respect thereto, or to indicate any special
limitations or restrictions to which any particular Notes are subject.

 

(i)         Cancellation
and/or Adjustment of Global Notes. 
At such time as all beneficial interests in Global Notes have been
exchanged for Certificated Notes, redeemed, repurchased or canceled, all Global
Notes shall be returned to or retained and canceled by the Trustee in
accordance with Section 2.11.  At
any time prior to such cancellation, if any beneficial interest in a Global
Note is exchanged for Certificated Notes, redeemed, repurchased or canceled,
the principal amount of Notes represented by such Global Notes shall be reduced
accordingly and an endorsement shall be made on such Global Note by the Trustee
or the Note Custodian, at the direction of the Trustee, to reflect such
reduction.  In the event of any transfer
of any beneficial interest between the Rule 144A Global Note and the
Regulation S Global Note in accordance with the standing procedures and
instructions between the Depositary and the Note Custodian and the transfer
restrictions set forth herein, the aggregate principal amount of each of the
Rule 144A Global Note and the Regulation S Global Note shall be
appropriately increased or decreased, as the case may be, and an endorsement
shall be made on each of the Rule 144A Global Note and the
Regulation S Global Note by the Trustee or the Note Custodian, at the
direction of the Trustee, to reflect such reduction or increase.

 

(j)            General
Provisions Relating to Transfers and Exchanges.

 

(i)                                     To
permit registrations of transfers and exchanges, the Company shall execute and
the Trustee shall authenticate Certificated Notes and Global Notes at the Registrar’s
request.

 

(ii)                                  No
service charge shall be made to a Holder for any registration of transfer, fee

 

36

 

or exchange,
but the Company may require payment of a sum sufficient to cover any transfer
tax or similar governmental charge payable in connection therewith (other than
any such transfer taxes or similar governmental charge payable upon exchange or
transfer pursuant to Sections 3.6 and 9.5).

 

(iii)                               The
Registrar shall not be required to register the transfer of or exchange any Note
selected for redemption in whole or in part, except the unredeemed portion of
any Note being redeemed in part.

 

(iv)                              All
Certificated Notes and Global Notes issued upon any registration of transfer or
exchange of Certificated Notes or Global Notes shall be the valid obligations
of the Company, evidencing the same debt, and entitled to the same benefits under
this Indenture, as the Certificated Notes or Global Notes surrendered upon such
registration of transfer or exchange.

 

(v)                                 The
Company shall not be required:

 

(a)                                  to issue, to register
the transfer of or to exchange Notes during a period beginning at the opening
of business 15 days before the day of any selection of Notes for
redemption under Section 3.2 and ending at the close of business on the day
of selection; or

 

(b)                                 to register the
transfer of or to exchange any Note so selected for redemption in whole or in
part, except the unredeemed portion of any Note being redeemed in part; or

 

(c)                                  to register the
transfer of or to exchange a Note between a record date and the next succeeding
interest payment date.

 

(vi)                              Prior
to due presentment of the registration of a transfer of any Note, the Trustee,
any Agent and the Company may deem and treat the Person in whose name any Note
is registered as the absolute owner of such Note for the purpose of all
payments with respect to such Notes, and neither the Trustee, any Agent nor the
Company shall be affected by notice to the contrary.

 

(vii)                           The
Trustee shall authenticate Certificated Notes and Global Notes in accordance
with the provisions of Section 2.2.

 

Section 2.7.                                   Replacement Notes.

 

If any mutilated Note is surrendered to the Trustee or either the
Company or the Trustee receives evidence to its satisfaction of the
destruction, loss or theft of any Note, the Company shall issue and the
Trustee, upon receipt of an authentication order in accordance with
Section 2.2, shall authenticate a replacement Note if the Trustee’s requirements
for replacement of Notes are met.  If
required by the Trustee or the Company, an indemnity bond must be supplied by
the Holder that is sufficient in the judgment of the Trustee and the Company to

 

37

 

protect the Company, the Trustee, any Agent and any authenticating
agent from any loss that any of them may suffer if a Note is replaced.  The Trustee and the Company each may charge
such Holder for their expenses in replacing such Note.

 

Every replacement Note is an additional obligation of the Company and
shall be entitled to all of the benefits of this Indenture equally and
proportionately with all other Notes duly issued hereunder.

 

Section 2.8.                                   Outstanding Notes.

 

The Notes outstanding at any time are all the Notes that have been
authenticated by the Trustee except for those canceled by it, those delivered
to it for cancellation, those reductions in the interest in a Global Note
effected by the Trustee or the Note Custodian in accordance with the provisions
hereof, and those described in this Section as not outstanding.  Except as set forth in Section 2.9, a
Note does not cease to be outstanding because the Company or any of its
Affiliates holds the Note.

 

If a Note is replaced pursuant to Section 2.7, it shall cease to
be outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser for value.

 

If the principal amount of any Note is considered paid under
Section 4.1, it ceases to be outstanding and interest on it ceases to
accrue.

 

If the Paying Agent (other than the Company, a Subsidiary or an
Affiliate of any thereof) holds, on a redemption date or maturity date, money
sufficient to pay Notes payable on that date, then on and after that date such
Notes shall be deemed to be no longer outstanding and shall cease to accrue interest.

 

Section 2.9.                                   Treasury Notes.

 

In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, Notes owned by the
Company, the Guarantors or by any Affiliate thereof shall be considered as
though not outstanding, except that for the purposes of determining whether the
Trustee shall be protected in relying on any such direction, waiver of consent,
only Notes that a Responsible Officer of the Trustee knows are so owned shall
be so disregarded.  The Company agrees
to notify the Trustee of the existence of any such treasury Notes or Notes
owned by the Company, any Guarantor or an Affiliate thereof.

 

38

 

Section 2.10.                             Temporary Notes.

 

Until Certificated Notes are ready for delivery, the Company may
prepare and the Trustee, upon receipt of an authentication order in accordance
with Section 2.2, shall authenticate temporary Notes.  Temporary Notes shall be substantially in
the form of Certificated Notes, but may have such variations as the Company
considers appropriate for temporary Notes and as shall be reasonably acceptable
to the Trustee.  Without unreasonable
delay, the Company shall prepare and the Trustee shall, as soon as practicable
upon its receipt of an authentication order, authenticate Certificated Notes in
exchange for temporary Notes.

 

Holders of temporary Notes shall be entitled to all of the benefits of
this Indenture.

 

Section 2.11.                             Cancellation.

 

The Company at any time may deliver Notes to the Trustee for
cancellation.  The Registrar and Paying
Agent shall forward to the Trustee any Notes surrendered to them for
registration of transfer, exchange or payment. 
The Trustee, or at the direction of the Trustee, the Registrar or Paying
Agent, and no one else shall cancel all Notes surrendered for registration of
transfer, exchange, payment, replacement or cancellation and shall dispose of
all canceled Notes in accordance with the Trustee’s usual procedures.  The Trustee shall maintain a record of all
canceled Notes.  All cancelled Notes
shall be delivered to the Company. 
Subject to Section 2.7 the Company may not issue new Notes to
replace Notes that have been paid or that have been delivered to the Trustee
for cancellation.

 

Section 2.12.                             Defaulted Interest.

 

If the Company defaults in a payment of interest on the Notes, the
Company shall pay the defaulted interest in any lawful manner.  The Company may pay the defaulted interest
to the persons who are Holders on a subsequent special record date.  The Company shall fix or cause to be fixed
any such special record date and payment date to the reasonable satisfaction of
the Trustee and shall promptly mail to each Holder, with a copy to the Trustee,
a notice that states the special record date, the payment date and the amount
of defaulted interest to be paid.

 

Section 2.13.                             Persons Deemed Owners.

 

Prior to due presentment of a Note for registration of transfer and
subject to Section 2.12, the Company, the Trustee, any Paying Agent, any
co-registrar and any Registrar may deem and treat the person in whose name any
Note shall be registered upon the register of Notes kept by the Registrar as
the absolute owner of such Note (whether or not such Note shall be overdue and
notwithstanding any notation of the ownership or other writing thereon made by
anyone other than the Company, any co-registrar or any Registrar) for the
purpose of receiving all payments with respect to such Note and for all other
purposes, and none of the Company, the

 

39

 

Trustee, any Paying Agent, any co-registrar or any Registrar shall be
affected by any notice to the contrary.

 

Section 2.14.                             CUSIP Numbers.

 

The Company in issuing the Notes may use a “CUSIP” number, and if so,
the Trustee shall use the CUSIP number in notices of redemption or exchange as
a convenience to Holders; provided that any such notice may state that
no representation is made as to the correctness or accuracy of the CUSIP number
printed in the notice or on the Notes, and that reliance may be placed only on
the other identification numbers printed on the Notes.  The Company shall notify the Trustee of any
change to the CUSIP numbers.

 

ARTICLE III.

 

REDEMPTION AND REPURCHASE

 

Section 3.1.                                   Notices to
Trustee.

 

If the Company elects to redeem Notes pursuant to the provisions of
Section 3.7 or 3.8, it shall furnish to the Trustee, at least 30 days
but not more than 60 days before the Redemption Date (unless a shorter
notice period shall be satisfactory to the Trustee), an Officer’s Certificate
setting forth the Section of this Indenture pursuant to which the
redemption shall occur, the Redemption Date, the principal amount of Notes to
be redeemed and the Redemption Price.

 

If the Registrar is not the Trustee, the Company shall, concurrently
with each notice of redemption or repurchase, cause the Registrar to deliver to
the Trustee a certificate (upon which the Trustee may rely) setting forth the
principal amounts of Notes held by each Holder.

 

Section 3.2.                                   Selection of
Notes.

 

Except as set forth below, if less than all of the Notes are to be
redeemed, the Trustee shall select the Notes or portions thereof to be redeemed
in compliance with the requirements of the principal national securities
exchange, if any, on which such Notes are listed or, if such Notes are not then
listed on a national securities exchange, on a pro rata basis, by lot  or
by such method as the Trustee shall deem fair and appropriate.  In the event of partial redemption by lot,
the particular Notes or portions thereof to be redeemed shall be selected,
unless otherwise provided herein, not less than 30 nor more than 60 days
prior to the Redemption Date (unless a shorter period shall be satisfactory to
the Trustee) by the Trustee from the outstanding Notes not previously called
for redemption.

 

40

 

If less than all of the Notes tendered are to be repurchased pursuant
to the provisions of Section 3.8, the Trustee shall select the Notes only
on a pro
rata basis or on as nearly a pro rata basis as is practicable (subject
to DTC procedures), unless such method is otherwise prohibited.

 

The Trustee shall promptly notify the Company in writing of the Notes
or portions thereof selected for redemption or repurchase and, in the case of
any Note selected for partial redemption or repurchase, the principal amount
thereof to be redeemed or repurchased. 
Notes and portions thereof selected shall be in amounts of $1,000 or
integral multiples of $1,000, except that if all of the Notes of a Holder are
to be redeemed, the entire outstanding amount of Notes held by such Holder,
even if not a multiple of $1,000, shall be redeemed.  No Notes of a principal amount of $1,000 or less shall be
redeemed in part.

 

Section 3.3.                                   Notice of
Optional Redemption.

 

In the event Notes are to be redeemed pursuant to Section 3.7 or
3.8, at least 30 days but not more than 60 days before the Redemption
Date, the Company shall send, by first-class mail, a notice of redemption to
each Holder whose Notes are to be redeemed in whole or in part, with a copy to
the Trustee.

 

The notice shall identify the Notes or portions thereof to be redeemed
(including the CUSIP number, if any) and shall state:

 

(a)           the Redemption Date;

 

(b)           the Redemption Price;

 

(c)           if any Note is being redeemed in
part, the portion of the principal amount of such Note to be redeemed and that,
after the Redemption Date, upon surrender of such Note, a new Note or Notes in
principal amount equal to the unredeemed portion will be issued;

 

(d)           the name and address of the Paying
Agent;

 

(e)           that Notes called for redemption must
be surrendered to the Paying Agent to collect the Redemption Price and
Additional Interest, if any, and, unless the Redemption Date is after a record
date and or before the succeeding interest payment date, accrued interest
thereon to the Redemption Date;

 

(f)            that, unless the Company defaults in
making the redemption payment, interest and any Additional Interest on Notes
called for redemption will cease to accrue on and after the Redemption Date,
and the only remaining right of the Holders of such Notes is to receive payment
of the Redemption Price, any Additional Interest and, unless the Redemption
Date is after a record date and on or before the succeeding interest payment
date, accrued interest thereon to the Redemption Date upon surrender to the
Paying Agent of the Notes redeemed;

 

41

 

(g)           if fewer than all the Notes are to be
redeemed, the identification of the particular Notes (or portions thereof) to
be redeemed, as well as the aggregate principal amount of the Notes to be
redeemed and the aggregate principal amount of Notes to be outstanding after
such partial redemption;

 

(h)           the section of this Indenture pursuant
to which the Notes called for redemption are being redeemed; and

 

(i)            that no representation is made as to
the correctness or accuracy of the CUSIP number, if any, listed in such notice
or printed on the Notes and that reliance may be placed only on the other
identification numbers printed on the Notes.

 

At the Company’s request, the Trustee shall give the notice of
redemption in the Company’s name and at its expense; provided that the
Company shall deliver to the Trustee, at least 30 days prior to the Redemption
Date, an Officer’s Certificate requesting that the Trustee give such notice and
setting forth the information to be stated in such notice as provided in the
preceding paragraph.

 

Section 3.4.                                   Effect of Notice
of Redemption.

 

Once notice of redemption is mailed, Notes or portions thereof called
for redemption become due and payable on the Redemption Date at the Redemption
Price.  Upon surrender to any Paying
Agent, such Notes or portions thereof shall be paid at the Redemption Price, plus
Additional Interest, if any, and accrued interest to the Redemption Date; provided,
however, that installments of interest which are due and payable on or
prior to the Redemption Date shall be payable to the Holders of such Notes,
registered as such, at the close of business on the relevant record date for
the payment of such installment of interest.

 

Section 3.5.                                   Deposit of
Redemption Price or Purchase Price.

 

On or before 10:00 a.m. Eastern Time on each Redemption Date or
Purchase Date, the Company shall irrevocably deposit with the Trustee or with
the Paying Agent money sufficient to pay the aggregate amount due on all Notes
to be redeemed or repurchased on that date, including without limitation any
accrued and unpaid interest and Additional Interest, if any, to the Redemption
Date or Purchase Date.  Upon written
request by the Company, the Trustee or the Paying Agent shall promptly return
to the Company any money not required for that purpose.

 

Unless the Company defaults in making such payment, interest and any
Additional Interest on the Notes to be redeemed or repurchased will cease to
accrue on the applicable Redemption Date or Purchase Date, whether or not such
Notes are presented for payment.  If any
Note called for redemption shall not be so paid upon surrender because of the
failure of the Company to comply with the preceding paragraph, interest will be
paid on the unpaid principal, from the applicable Redemption Date or Purchase
Date until such principal is

 

42

 

paid, and on any interest not paid on such unpaid principal, in each
case at the rate provided in the Notes and in Section 4.1.

 

Section 3.6.                                   Notes Redeemed or
Repurchased in Part.

 

Upon surrender of a Note that is redeemed or repurchased in part, the
Company shall issue and the Trustee shall, as soon as practicable, authenticate
for the Holder at the expense of the Company a new Note equal in principal
amount to portion of the Note surrendered that is not to be redeemed or repurchased.

 

Section 3.7.                                   Optional
Redemption.

 

The Company may redeem any or all of the Notes at any time on or after
December 15, 2006 at the Redemption Prices set forth in paragraph 5 of the
Notes (an “Optional Redemption”). 
Any redemption pursuant to this Section 3.7 shall be made pursuant
to the provisions of Sections 3.1 through 3.6.

 

Section 3.8.                                   Optional
Redemption upon Public Equity Offerings.

 

In the event the Company completes one or more Equity Offerings on or before
December 15, 2006, the Company may, at its option, use the net cash
proceeds from any such Equity Offering to redeem up to 35% of the original
principal amount of the Notes at a Redemption Price equal to 109.000% of the
principal amount thereof, together with accrued and unpaid interest and
Additional Interest thereon, if any, to the date of redemption; provided,
however, that at least 65% of the original principal amount of the Notes
issued under this Indenture shall remain outstanding immediately after any such
redemption; and provided, further, that the Company shall make
such redemption not more than 120 days after the consummation of any such
Equity Offering.  Any redemption
pursuant to this Section 3.8 shall be made pursuant to the provisions of
Sections 3.1 through 3.6.

 

Section 3.9.                                   Repurchase upon
Change of Control Offer.

 

In the event that, pursuant to Section 4.15, the Company shall be
required to commence a Change of Control Offer, it shall follow the procedures
specified below.

 

Within 30 days following the date upon which the Change of Control
occurred, the Company must send, by first-class mail, a notice to each Holder,
with a copy to the Trustee.  The notice
shall contain all instructions and materials necessary to enable such Holders
to tender Notes pursuant to the Change of Control Offer.  The Change of Control shall be made to all

 

43

 

Holders.  The notice, which
shall govern the terms of the Change of Control Offer, shall state:

 

(a)           the transaction or transactions that
constitute the Change of Control, providing information, to the extent publicly
available, regarding the Person or Persons acquiring control, and stating that
the Change of Control Offer is being made pursuant to this Section 3.9 and
Section 4.15 and that, to the extent lawful, all Notes tendered will be
accepted for payment;

 

(b)           the Purchase Price, the last day of
the Change of Control Offer Period and the Purchase Date, which must be no
earlier than 30 days nor later than 45 days from the date such notice is
mailed, other than as may be required by law (the “Change of Control Payment
Date”);

 

(c)           that any Note not properly tendered
or otherwise not accepted for repurchase will continue to accrue interest and
Additional Interest, if any;

 

(d)           that, unless the Company defaults in
the payment of the amount due on the Change of Control Payment Date, all Notes
or portions thereof accepted for repurchase pursuant to the Change of Control
Offer shall cease to accrue interest and Additional Interest, if any, after the
Change of Control Payment Date;

 

(e)           that Holders electing to have any
Notes purchased pursuant to the Change of Control Offer will be required to
surrender the Notes, with the form entitled “Option of Holder to Elect
Purchase” on the reverse of the Notes completed, or transfer by book-entry
transfer, to the Company, a Depositary, if appointed by the Company, or a
Paying Agent at the address specified in the notice prior to the close of
business on the third Business Day prior to the Change of Control Payment Date;

 

(f)            that Holders will be entitled to
withdraw their election if the Company, the Depositary or the Paying Agent, as
the case may be, receives, not later than the Change of Control Offer Payment
Date, a telegram, facsimile transmission or letter setting forth the name of
the Holder, the principal amount of Notes delivered for repurchase, and a
statement that such Holder is withdrawing his election to have the Notes
redeemed in whole or in part; and

 

(g)           that Holders whose Notes are being
repurchased only in part will be issued new Notes equal in principal amount to
the portion of the Notes tendered (or transferred by book-entry transfer) that
is not to be repurchased, which portion must be equal to $1,000 in principal
amount or an integral multiple thereof.

 

On or before the Change of Control Payment Date, the Company shall to
the extent lawful, (i) accept for payment all Notes or portions thereof
properly tendered pursuant to the Change of Control Offer, (ii) deposit
with the Paying Agent an amount equal to the Purchase Price, together with
accrued and unpaid interest and Additional Interest, if any, thereon to the
Change of Control Payment Date in respect of all Notes or portions thereof so
tendered and accepted for repurchase and (iii) deliver or cause to be delivered
to the Trustee the Notes so

 

44

 

accepted together with an Officer’s Certificate stating the aggregate
principal amount of Notes or portions thereof being repurchased by the
Company.  The Paying Agent shall promptly
(but in any case not later than five days after the Change of Control
Payment Date) mail to each Holder of Notes so repurchased the amount due in
connection with such Notes, and the Company shall promptly issue a new Note,
and the Trustee, upon written request from the Company in the form of an
Officer’s Certificate shall authenticate and mail or deliver (or cause to
transfer by book entry) to each relevant Holder a new Note, in a principal
amount equal to any unpurchased portion of the Notes surrendered to the Holder
thereof; provided that each such new Note shall be in a principal amount
of $l,000 or and integral multiple thereof.

 

If the Change of Control Payment Date is on or after an interest record
date and on or before the related interest payment date, any accrued and unpaid
interest and Additional Interest, if any, in each case to the Change of Control
Payment Date, shall be paid to the Person in whose name a Note is registered at
the close of business on such record date, and no additional interest shall be
payable to Holders pursuant to the Change of Control Offer.

 

Section 3.10.                             Repurchase upon
Application of Excess Proceeds.

 

In the event that, pursuant to Section 4.10, the Company shall be
required to commence a Net Proceeds Offer, it shall follow the procedures
specified below.

 

Each Net Proceeds Offer will be mailed to the record Holders as shown
on the register of Holders within 30 days following the Net Proceeds Offer
Trigger Date, with a copy to the Trustee. 
The notice shall contain all instructions and materials necessary to
enable such Holders to tender Notes pursuant to the Net Proceeds Offer.  The Net Proceeds Offer shall be made to all
Holders.  Upon receiving notice of the
Net Proceeds Offer, Holders may elect to tender their Notes in whole or in part
in integral multiples of $1,000 in exchange for cash.  A Net Proceeds Offer shall remain open for a period of 20
Business Days or such longer period as may be required by law.  The notice, which shall govern the terms of
the Net Proceeds Offer, shall state:

 

(a)           that
the Net Proceeds Offer is being made pursuant to this Section 3.10 and Section
4.10;

 

(b)           the
Net Proceeds Offer Amount, the Purchase Price and the Purchase Date (which
Purchase Date shall not be less than 45 nor more than 60 days following the
applicable Net Proceeds Offer Trigger Date);

 

(c)           that
any Note not properly tendered or otherwise not accepted for repurchase shall
remain outstanding and continue to accrue interest and Additional Interest, if
any;

 

(d)           that,
unless the Company defaults in the payment of the amount due on the Purchase
Date, all Notes or portions thereof accepted for repurchase pursuant to the Net
Proceeds Offer shall cease to accrue interest and Additional Interest, if any,
after the Purchase Date;

 

 

45

 

(e)           that
Holders electing to have any Notes repurchased pursuant to any Net Proceeds
Offer shall be required to tender the Notes, with the form entitled “Option of
Holder to Elect Purchase” on the reverse of the Notes completed, or transfer by
book-entry transfer, to the Company, a Depositary, if appointed by the Company,
or a Paying Agent at the address specified in the notice prior to the close of
business on the third Business Day preceding the Purchase Date;

 

(f)            that
Holders will be entitled to withdraw their election if the Company, the
Depositary or the Paying Agent, as the case may be, receives, not later than
the Purchase Date, a telegram, facsimile transmission or letter setting forth
the name of the Holder, the principal amount of the Notes delivered for
repurchase and a statement that such Holder is withdrawing his election to have
such Notes repurchased in whole or in part;

 

(g)           that,
to the extent Holders properly tender Notes and holders of Indebtedness of the
Company and the Guarantors that ranks pari
passu in right of payment with the Notes or the Guarantees properly
tender such Indebtedness in an amount exceeding the Net Proceeds Offer Amount,
the tendered Notes and such other pari passu
Indebtedness will be purchased on a pro
rata basis based on the aggregate principal amounts of Notes and
such other pari passu Indebtedness
tendered (and the Trustee shall select the tendered Notes of tendering Holders
on a pro rata basis based on the
amount of Notes tendered); and

 

(h)           that
Holders whose Notes are being repurchased only in part will be issued new Notes
equal in principal amount to the portion of the Notes tendered (or transferred
by book-entry transfer) that is not to be repurchased, which portion must be
equal to $1,000 in principal amount or an integral multiple thereof.

 

On or before the Purchase Date, the Company shall to the extent lawful,
(i) accept for payment, on a pro rata basis in accordance with this
Indenture to the extent necessary, the Net Proceeds Offer Amount of
(A) Notes or portions thereof properly tendered pursuant to the Net
Proceeds Offer and (B) properly tendered other Indebtedness of the Company
and the Guarantors that ranks pari passu in right of payment with the Notes
or the Guarantees, or if less than the Net Proceeds Offer Amount has been
tendered, all Notes and such other pari passu Indebtedness properly tendered,
(ii) deposit with the Paying Agent an amount equal to the Purchase Price, plus
accrued and unpaid interest and Additional Interest, if any, thereon to the
Purchase Date in respect of all Notes or portions thereof so tendered and
accepted for repurchase and (iii) deliver or cause to be delivered to the
Trustee the Notes so accepted together with an Officer’s Certificate stating
the aggregate principal amount of Notes or portions thereof being repurchased
by the Company.  The Paying Agent shall
promptly (but in any case not later than five days after the Purchase
Date) mail to each Holder of Notes so repurchased the amount due in connection
with such Notes, and the Company shall promptly issue a new Note, and the
Trustee, upon written request from the Company in the form of an Officer’s
Certificate shall authenticate and mail or deliver such new Note to such
Holder, in a principal amount equal to any unpurchased portion to the Holder
thereof; provided that each such new Note shall be in a principal amount
of $1,000 or an integral multiple thereof.

 

If the Purchase Date is on or after an interest record date and on or
before the

 

46

 

related interest payment date, any accrued and unpaid interest and
Additional Interest, if any, in each case to the Purchase Date, shall be paid
to the Person in whose name a Note is registered at the close of business on
such record date, and no additional interest shall be payable to Holders to the
Net Proceeds Offer.

 

ARTICLE IV.

 

COVENANTS

 

Section 4.1.                                   Payment of
Principal and Interest.

 

The Company shall pay or cause to be paid the principal, Redemption
Price or Purchase Price, if applicable, of, and interest on the Notes on the
dates, in the amounts and in the manner provided herein and in the Notes.  Principal, Redemption Price, Purchase Price
and interest shall be considered paid on the date due if the Paying Agent, if
other than the Company, holds as of 10:00 a.m. Eastern Time on the due date
money deposited by the Company in immediately available funds and designated
for and sufficient to pay the aggregate amount then due.  The Company shall pay Additional Interest,
if any, on the dates, in the amounts and in the manner set forth in the
Registration Rights Agreement and in the Notes.

 

The Company shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal, Redemption Price and
Purchase Price at the same rate per annum on the Notes to the extent lawful; it
shall pay interest (including post-petition interest in any proceeding under
any Bankruptcy Law) on overdue installments of interest and Additional Interest
(without regard to any applicable grace period) at the same rate to the extent
lawful.

 

Section 4.2.                                   Maintenance of
Office or Agency.

 

The Company shall maintain in the Borough of Manhattan, the City of
New York, an office or agency (which may be an office of the Trustee or an
affiliate of the Trustee, Registrar or co-registrar) where Notes may be
surrendered for registration of transfer or for exchange and where notices and
demands to or upon the Company in respect of the Notes and this Indenture may
be served.  The Company shall give
prompt written notice to the Trustee of the location, and any change in the location,
of such office or agency.  If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Office
of the Trustee.

 

The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner
relieve the Company of its obligations to maintain an office or

 

47

 

agency in the Borough of Manhattan, the City of New York, for such
purposes.  The Company shall give prompt
written notice to the Trustee of any such designation or rescission and of any
change in the location of any such other office or agency.

 

The Company hereby designates the Corporate Trust Office of the Trustee
as one such office or agency of the Company in accordance with
Section 2.3.  The Trustee may
resign such agency at any time by giving written notice to the Company no later
than 30 days prior to the effective date of such resignation.

 

Section 4.3.                                   Reports to
Holders.

 

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

 

(i)                    all quarterly and annual financial
information that would be required to be contained in a filing with the
Commission on Forms 10-Q and 10-K if the Company were required to file such
Forms, including a “Management’s Discussion and Analysis of Financial Condition
and Results of Operations” that describes the financial condition and results
of operations of the Company and its consolidated Subsidiaries and, with
respect to annual financial information only, a report thereon by the Company’s
certified independent accountants; and

 

(ii)                 the information that would be required
to be included in all current reports that would be required to be filed with
the Commission on Form 8-K if the Company were required to file such reports,
in each case within the time periods specified in the Commission’s rules and
regulations (or, if later, within 180 days after the Issue Date).

 

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

 

Section 4.4.                                   Compliance
Certificate.

 

The Company shall deliver to the Trustee, within 120 days after
the end of each fiscal year, an Officer’s Certificate stating that a review of
the activities of the Company and its Subsidiaries during the preceding fiscal
year has been made under the supervision of the signing Officers with a view to
determining whether the Company has kept, observed, performed and fulfilled its
obligations under this Indenture in all material respects, and further stating,
as to each such Officer signing such certificate, that to the best of his or
her knowledge the Company has

 

48

 

kept, observed, performed and fulfilled each and every covenant contained
in this Indenture in all material respects and is not in Default in the
performance or observance of any of the terms, provisions and conditions of
this Indenture (and, if a Default or an Event of Default shall have occurred,
describing all such Defaults or Events of Default) of which he or she may have
knowledge, and that to the best of his or her knowledge no event has occurred
and remains in existence by reason of which, payments on account of the principal
of or interest, if any, on the Notes is prohibited or if such event has
occurred, a description of the event.

 

The Company shall, so long as any of the Notes are outstanding, deliver
to the Trustee, forthwith (and in any event within five Business Days) upon any
Officer of the Company becoming aware of any Default or Event of Default, an
Officer’s Certificate specifying such Default or Event of Default.

 

Section 4.5.                                   Taxes.

 

The Company shall pay or discharge, and shall cause each of its
Subsidiaries to pay or discharge, prior to delinquency, all material taxes,
assessments, and governmental levies except such as are contested in good faith
and by appropriate proceedings or where the failure to effect such payment is
not adverse in any material respect to the Holders of the Notes.

 

Section 4.6.                                   Stay,
Extension and Usury Laws.

 

The Company covenants (to the extent that it may lawfully do so) that
it shall not at any time insist upon, plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay, extension or usury law wherever
enacted, now or at any time hereafter in force, that may affect the covenants
or the performance of this Indenture; and the Company (to the extent that it
may lawfully do so) hereby expressly waives all benefit or advantage of any
such law, and covenants it shall not, by resort to any such law, hinder, delay
or impede the execution of any power herein granted to the Trustee, but shall
suffer and permit the execution of every such power as though such law has not
been enacted.

 

Section 4.7.                                   Limitation on Restricted
Payments.

 

The Company will not, and will not cause or permit any of its
Restricted Subsidiaries to, directly or indirectly:

 

(1)                                  declare or pay any
dividend or make any distribution (other than dividends or distributions
payable in the Qualified Capital Stock of the Company) on or in respect of
shares of the Company’s Capital Stock to holders of such Capital Stock;

 

(2)                                  purchase, redeem or
otherwise acquire or retire for value any Capital Stock of the Company or make
any Exit Payment;

 

(3)                                  make any principal
payment on, or purchase, defease, redeem, prepay or otherwise acquire or retire
for value, prior to (a) any scheduled maturity, (b) any scheduled or
mandatory

 

49

 

repayment or (c) any scheduled sinking
fund payment, of any Indebtedness of the Company that is by its express terms
subordinate in right of payment to the Notes (other than Indebtedness to a
Restricted Subsidiary); or

 

(4)                                  make any Investment
(other than Permitted Investments) (each of the foregoing actions set forth in
clauses (1), (2), (3) and (4) (other than any exception thereto) being
referred to as a “Restricted Payment”); if at the time of such
Restricted Payment or immediately after giving effect thereto:

 

(A)                              a
Default shall have occurred and be continuing; or

 

(B)                                the
Company is not able to incur at least $1.00 of additional Indebtedness (other
than Permitted Indebtedness) in compliance with paragraph (a) of
Section 4.9; or

 

(C)                                the
aggregate amount of Restricted Payments (including such proposed Restricted
Payment) made subsequent to the Issue Date (the amount expended for such
purposes, if other than in cash, being the fair market value of such property
as determined reasonably and in good faith by the Board of Directors of the
Company) shall exceed the sum of, without duplication:

 

(i)                                     50%
of the cumulative Consolidated Net Income (or if cumulative Consolidated Net Income
shall be a loss, minus 100% of such loss) of the Company earned subsequent to
the end of the most recent fiscal quarter immediately prior to the Issue Date
and on or prior to the end of the most recently ended fiscal quarter for which
internal financial statements are available as of the date the Restricted
Payment occurs (treating such period as a single accounting period); plus

 

(ii)                                  100%
of the amount by which Indebtedness or Disqualified Capital Stock of the
Company or any of its Restricted Subsidiaries incurred after the Issue Date is
reduced on the Company’s consolidated balance sheet upon the conversion or
exchange (other than by a Subsidiary of the Company) of such Indebtedness or
Disqualified Capital Stock into Qualified Capital Stock of the Company plus
100% of the aggregate net cash proceeds of any equity contribution received by
the Company from a holder of the Company’s Capital Stock or received by the
Company from any Person (other than a Subsidiary of the Company) from the
issuance and sale of Qualified Capital Stock of the Company, in each case subsequent
to the Issue Date and on or prior to the date the Restricted Payment occurs
(except, in each case, to the extent such proceeds are used to purchase,
redeem, or otherwise retire or acquire Capital Stock or subordinated
Indebtedness as set forth in the clause (2)(b) or (3)(b)(x) of the next paragraph),
plus

 

(iii)                               without
duplication, an amount equal to the sum of

 

(x)                                   in
the case of the disposition or repayment of any Investment in any Person or the
release of a guarantee constituting a Restricted Payment made after the Issue
Date, an amount equal to the cash proceeds of such disposition or repayment,
less the

 

50

 

cost of the disposition of such Investment
and net of taxes and, in the case of guarantees, less any amounts paid under
such guarantee;

 

(y)                                 the
aggregate amount returned in cash on or with respect to Investments (other than
Permitted Investments) made subsequent to the Issue Date, whether through
interest payments, principal payments, dividends or other distributions or
payments; provided that such amount shall not exceed the amount included as a
Restricted Payment under clause (C) above with respect to such Investment; and

 

(z)                                   so
long as the Designation thereof was treated as a Restricted Payment made after
the Issue Date, with respect to any Unrestricted Subsidiary that has been
redesignated as a Restricted Subsidiary after the Issue Date in accordance with
Section 4.18, the fair market value of the Company’s interest in such
Subsidiary; provided that such amount shall not exceed the amount included as a
Restricted Payment under clause (C) above with respect to such Designation and
any Investment in such Subsidiary.

 

Notwithstanding the foregoing, the provisions set forth in the
immediately preceding paragraph do not prohibit:

 

(1)                                  the payment of any
dividend or redemption payment within 60 days after the date of
declaration of such dividend or the mailing of such irrevocable redemption notice
if the dividend or redemption payment, as the case may be, would have been
permitted on the date of declaration or the date of mailing of such notice;

 

(2)                                  the purchase,
redemption, or other retirement or acquisition of any shares of Capital Stock
of the Company, either

 

(a)                                  solely in exchange
for shares of Qualified Capital Stock of the Company or

 

(b)                                 through the
application of net proceeds of a substantially concurrent sale for cash (other
than to a Restricted Subsidiary of the Company) of shares of Qualified Capital
Stock of the Company;

 

(3)                                  the purchase,
redemption, or other retirement or acquisition of any Indebtedness of the
Company that is by its express terms subordinate in right of payment to the
Notes either

 

(a)                                  solely in exchange
for shares of Qualified Capital Stock of the Company or

 

51

 

(b)                                 through the
application of net proceeds of a substantially concurrent sale for cash (other
than to a Restricted Subsidiary of the Company) of

 

(x)                                   shares of Qualified
Capital Stock of the Company or

 

(y)                                 Refinancing
Indebtedness;

 

(4)                                  repurchases by the Company
of Capital Stock of the Company or options or warrants to purchase Capital
Stock of the Company, stock appreciation rights or any similar equity interest
in the Company from consultants, directors, officers and employees of the
Company or any of its Subsidiaries or their authorized representatives upon the
death, disability, retirement or termination of employment of such consultants,
directors, officers or employees in an aggregate amount not to exceed $1.0
million in any calendar year plus the amount of any proceeds received under
key-man life insurance policies that are used to make such payments; provided
that any amounts not utilized under this clause (4) in any calendar year may be
carried forward to the immediately subsequent calendar year only;

 

(5)                                  so long as no Default
shall have occurred and be continuing, the purchase, redemption, defeasance or
other acquisition or retirement of Indebtedness of the Company that by its
express terms is subordinate in right of payment to the Notes following a Net
Proceeds Offer or Change of Control Offer after complying with Sections 3.9,
3.10, 4.10 and 4.15, as the case may be;

 

(6)                                  so long as no Default
shall have occurred and be continuing, Restricted Payments in an aggregate
amount since the Issue Date not to exceed $2.0 million;

 

(7)                                  any Restricted
Payments made as part of the Transactions;

 

(8)                                  so long as no Default
has occurred and is continuing, the declaration and payment of dividends or
distributions to holders of any class or series of Disqualified Capital Stock
of the Company or any of its Restricted Subsidiaries issued or incurred after
the Issue Date in accordance with Section 4.9;

 

(9)                                  the issuance of the
Warrant Preferred Stock in exchange for the Warrants following the occurrence
of any Warrant Put;

 

(10)                            the payment of any dividend
on Common Stock of the Company following an underwritten initial public
offering of Company Common Stock in an amount not to exceed 6% per annum of the
aggregate net proceeds received by the Company from such public offering; and

 

(11)                            payments to holders of
Capital Stock of the Company in lieu of the issuance of fractional shares of
such Capital Stock, in an aggregate amount since the Issue Date not to exceed
$50,000, and payments or distributions to stockholders pursuant to appraisal
rights required under applicable law in connection with any consolidation,
merger or transfer of assets that complies with Section 5.1.

 

In determining the aggregate amount of Restricted Payments made
subsequent to

 

52

 

the Issue Date in accordance with clause (C) of the second
preceding paragraph, amounts expended pursuant to clauses (1), (4), (6),
(8), (10) and (11) of the immediately preceding paragraph shall be included in
such calculation.

 

Section 4.8.                                   Limitation on
Dividend and Other Payment Restrictions Affecting Subsidiaries.

 

The Company will not, and will not cause or permit any of its
Restricted Subsidiaries to, directly or indirectly, create or otherwise cause
or permit to exist or become effective any consensual encumbrance or
restriction on the ability of any Restricted Subsidiary to:

 

(1)                                  pay dividends or make
any other distributions on or in respect of its Capital Stock;

 

(2)                                  make loans or
advances or pay any Indebtedness or other obligation owed to the Company or any
other Restricted Subsidiary; or

 

(3)                                  transfer any of its
property or assets to the Company or any other Restricted Subsidiary,

 

in each case, except for such encumbrances or restrictions existing
under or by reason of:

 

(a)           applicable
law, rule or regulation;

 

(b)           this
Indenture, the Notes and the Guarantees;

 

(c)           any
customary restriction with respect to the subletting, assignment, change of
control or transfer of any property or asset that is subject to a lease, license
or similar contract, or the assignment, change of control or transfer of any
lease, license or other contract;

 

(d)           any
transfer of, agreement to transfer, option or right with respect to, or Lien
on, any property or assets of the Company or any Restricted Subsidiary not
otherwise prohibited by this Indenture;

 

(e)           customary
provisions restricting dispositions of real property interests set forth in any
reciprocal easement agreements of the Company or any Restricted Subsidiary;

 

(f)            any
agreement governing Purchase Money Indebtedness that imposes encumbrances or
restrictions on the property or assets so acquired;

 

(g)           with
respect to any Restricted Subsidiary (or any of its property or assets), an
agreement entered into for the direct or indirect sale or disposition of all or
substantially all the Capital Stock or assets of such Restricted Subsidiary (or
the property or assets that are subject to such restriction) pending the
closing of such sale or disposition;

 

(h)           (i) any instrument governing Acquired
Indebtedness, which encumbrance or restriction was in existence at the time of
such acquisition (but not created in

 

53

 

contemplation
thereof or to provide all or any portion of the funds or credit support
utilized to consummate such acquisition) and is not applicable to any Person,
or the properties or assets of any Person, other than the Person or the
properties or assets of the Person so acquired (including, but not limited to,
such Person’s direct and indirect Subsidiaries); and (ii) any agreement
(x) with respect to a Restricted Subsidiary that was not a Restricted
Subsidiary of the Company on the Issue Date, in existence at the time such
Person becomes a Restricted Subsidiary, not incurred in connection with, or in
contemplation of, such Person becoming a Restricted Subsidiary, and not
applicable to any Person, or the properties or assets of any Person, other than
the Person or the properties or assets of the Person that becomes the
Restricted Subsidiary (including, but not limited to, such Person’s direct and
indirect Subsidiaries or (y) with respect to any asset acquired, in existence
at the time of such acquisition, not incurred in connection with or in
contemplation of such acquisition and not applicable to any assets other than
the assets so acquired;

 

(i)            agreements
existing on the Issue Date (other than the Credit Agreement) to the extent and
in the manner such agreements are in effect on the Issue Date;

 

(j)            any
Credit Facility (including the Credit Agreement) or any agreement governing any
other Indebtedness of the Company or any Restricted Subsidiary permitted to be
incurred under this Indenture; provided that, with respect to any
agreement governing such other Indebtedness, the provisions relating to such
encumbrance or restriction are no less favorable to the Company in any material
respect than the provisions contained in the Credit Agreement as in effect on
the Issue Date;

 

(k)           restrictions
on the transfer of assets subject to any Lien permitted under this Indenture
imposed by the holder of such Lien;

 

(l)            restrictions
imposed by any agreement to sell assets or Capital Stock permitted under this
Indenture to any Person pending the closing of such sale;

 

(m)          customary
provisions in joint venture agreements and other similar agreements in each
case relating solely to the respective joint venture or similar entity or to
the equity interest therein; or

 

(n)           any agreement or instrument that
extends, renews, refinances or replaces any of the agreements or instruments
containing any of the encumbrances or restrictions referred to in clauses (b)
and (d) through (k) above; provided, 
however, that the provisions relating to such encumbrance or
restriction contained in any such agreement or instrument are no less favorable
to the Company in any material respect as determined by the Board of Directors
of the Company in its reasonable and good faith judgment than the provisions
relating to such encumbrance or restriction contained in agreements referred to
in such clauses (b) and (d) through (k) above.

 

 

54

 

Section 4.9.                                   Limitation on
Incurrence of Additional Indebtedness.

 

(a)           The Company will
not, and will not permit any of its Restricted Subsidiaries to, directly or
indirectly, create, incur, issue, assume, guarantee, acquire, become liable,
contingently or otherwise, with respect to, or otherwise become responsible for
payment of (collectively, “incur”) any Indebtedness (other than
Permitted Indebtedness); provided,  however,
that the Company or any Guarantor may incur Indebtedness and any Restricted
Subsidiary may incur Acquired Indebtedness, in each case if on the date of the
incurrence of such Indebtedness, after giving effect to the incurrence thereof,
the Consolidated Fixed Charge Coverage Ratio of the Company is greater than
2.00 to 1.00 if such incurrence is before October 1, 2005 or 2.25 to 1.00 if
such incurrence is on or after October 1, 2005.

 

(b)           Notwithstanding the
provisions of the preceding paragraph, the Company will not incur any
Indebtedness if such Indebtedness is by its express terms subordinate in right
of payment to any other Indebtedness of the Company, unless such Indebtedness
is also by its express terms made subordinate in right of payment to the Notes
to the same extent and in the same manner as such Indebtedness is subordinated
to other Indebtedness of the Company; provided, that Indebtedness shall
not be considered subordinate in right of payment solely by reason of being
unsecured (or not guaranteed) or being secured (or guaranteed) to a greater or
lesser extent.

 

Section 4.10.                             Limitation on Asset
Sales.

 

The Company will not, and will not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale unless:

 

(1)                                  the Company or the
applicable Restricted Subsidiary, as the case may be, receives consideration at
the time of such Asset Sale at least equal to the fair market value of the
assets sold or otherwise disposed of (as determined in good faith by the Board
of Directors of the Company); and

 

(2)                                  at least 75% of the
consideration received by the Company or the applicable Restricted Subsidiary,
as the case may be, from such Asset Sale shall be in the form of cash or Cash
Equivalents and shall be received at the time of such disposition; provided,
 however,  that the amount of (a) any liabilities
(as shown on the Company’s or such Restricted Subsidiary’s most recent balance
sheet or the notes thereto) of the Company or any Restricted Subsidiary (other
than Indebtedness that by its terms is expressly subordinate in right of
payment to the Notes) that are assumed by the transferee in such Asset Sale and
from which the Company or such Restricted Subsidiary is released or is
otherwise no longer liable and (b) any notes or other obligations received
by the Company or by any such Restricted Subsidiary from such transferee that
are immediately converted by the Company or by such Restricted Subsidiary into
cash or Cash Equivalents (to the extent of the cash or Cash Equivalents
received) shall be deemed to be cash for purposes of this provision.

 

Upon the consummation of an Asset Sale, the Company shall apply, or
cause the applicable Restricted Subsidiary to apply, an amount equal to the Net
Cash Proceeds relating to such Asset Sale within 360 days of receipt
thereof either:

 

55

 

(1)                                  (i) to
permanently reduce Indebtedness under any Credit Facility (and, in the case of
any such Indebtedness under any revolving credit facility, effect a corresponding
permanent reduction in the availability under such revolving credit facility),
any senior secured Indebtedness, any Capitalized Lease Obligations or other
Indebtedness ranking pari  passu with the Notes or Guarantees and
(ii) in the case of an Asset Sale by a Restricted Subsidiary that is not a
Guarantor, permanently reduce Indebtedness of such Restricted Subsidiary; provided,
however, that if the Company permanently reduces unsecured Indebtedness
that ranks pari
passu with the Notes pursuant to this Section 4.10 it must make
an equal and ratable Net Proceeds Offer to all holders of Notes as provided in
the following paragraph,

 

(2)                                  to make an Investment
in properties and assets that replace the properties and assets that were the
subject of such Asset Sale or in properties and assets that will be used in the
Permitted Business, including in each case, without limitation, by way of
capital expenditures or the purchase of Capital Stock in a Person engaged in a
Permitted Business that becomes a Restricted Subsidiary (“Replacement Assets”)
or

 

(3)                                  a combination of
prepayment and investment permitted by the foregoing clauses (1) and (2).

 

On the 361st day after an Asset Sale or such earlier date, if any, as
the Board of Directors of the Company or of such Restricted Subsidiary
determines not to apply the Net Cash Proceeds relating to such Asset Sale as
set forth in the preceding paragraph (each, a “Net Proceeds Offer Trigger
Date”), such aggregate amount of Net Cash Proceeds that have not been applied
on or before such Net Proceeds Offer Trigger Date as permitted in the preceding
paragraph (each a “Net Proceeds Offer Amount”) shall be applied by the
Company or such Restricted Subsidiary to make an offer to purchase (the “Net
Proceeds Offer”) on a date not less than 45 nor more than 60 days
following the applicable Net Proceeds Offer Trigger Date, the maximum principal
amount of Notes and, if the Company so elects, other Indebtedness of the Company
and the Guarantors that ranks pari  passu in right of payment with the Notes
or the Guarantees, as the case may be (to the extent required by the instrument
governing such other Indebtedness), that may be purchased out of the Net
Proceeds Offer Amount.  Any Notes and
other Indebtedness to be purchased pursuant to a Net Proceeds Offer shall be
purchased pro
rata based on the aggregate principal amount of Notes and such other
Indebtedness outstanding, and all Notes shall be purchased at an offer price in
cash in an amount equal to 100% of the principal amount thereof, plus accrued
and unpaid interest to the date of purchase. 
To the extent the aggregate principal amount of Notes and other
Indebtedness validly tendered and not withdrawn by holders exceeds the Net
Proceeds Offer Amount, Notes and other Indebtedness, if any, shall be purchased
pro rata
based on the aggregate principal amount of tendered Notes and other
Indebtedness, if any.  The Net Proceeds
Offer shall be made in compliance with the applicable procedures set forth in
Article III and shall include all instructions and materials necessary to
enable Holders to tender their Notes.

 

The Company may defer the Net Proceeds Offer until there is an
aggregate unutilized Net Proceeds Offer Amount equal to or in excess of $10.0
million resulting from one or more Asset Sales (at which time, the entire
unutilized Net Proceeds Offer Amount, and not

 

56

 

just the amount in excess of $10.0 million, shall be applied as
required pursuant to this Section 4.10). 
To the extent the aggregate principal amount of Notes and other
Indebtedness tendered pursuant to a Net Proceeds Offer is less than the Net
Proceeds Offer Amount, the Company may use such deficiency in any manner
otherwise permitted by this Indenture. Upon completion of the purchase of all
Notes and other Indebtedness tendered pursuant to a Net Proceeds Offer, the
amount of the Net Proceeds Offer Amount, if any, shall be reset to zero.

 

Notwithstanding the four preceding paragraphs of this
Section 4.10, the Company and its Restricted Subsidiaries will be
permitted to consummate an Asset Sale without complying with such paragraphs to
the extent:

 

(1)                                  at least 75% of the
consideration for such Asset Sale constitutes Replacement Assets; and

 

(2)                                  the Company or the
applicable Restricted Subsidiary, as the case may be, receives consideration at
the time of such Asset Sale at least equal to the fair market value of the
assets sold or otherwise disposed of (as determined in good faith by the Board
of Directors of the Company);

 

provided that any consideration not
constituting Replacement Assets received by the Company or any of its
Restricted Subsidiaries in connection with any Asset Sale permitted to be consummated
under this paragraph shall constitute Net Cash Proceeds subject to the provisions
of the four preceding paragraphs of this Section 4.10.

 

The Company shall comply with the requirements of Rule 14e-1 under
the Exchange Act and any other securities laws and regulations to the extent
such laws and regulations are applicable in connection with the repurchase of
Notes pursuant to a Net Proceeds Offer. 
To the extent that the provisions of any securities laws or regulations
conflict with this Section 4.10, the Company shall comply with the
applicable securities laws and regulations and shall not be deemed to have
breached its obligations under this Section 4.10 by virtue thereof.

 

Section 4.11.                             Limitations on
Transactions with Affiliates.

 

The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, enter into or permit to exist any
transaction or series of related transactions (including, without limitation,
the purchase, sale, lease or exchange of any property or the rendering of any
service) with, or for the benefit of, any of its Affiliates (other than a
transaction not directly or indirectly with an Affiliate that has the effect of
benefiting all Shareholders proportionally) (each, an “Affiliate Transaction”),
other than (x) Affiliate Transactions permitted under the third paragraph
of this Section 4.11 and (y) Affiliate Transactions on terms that are
no less favorable than those that might reasonably have been obtained in a
comparable transaction at such time on an arm’s-length basis from a Person that
is not an Affiliate of the Company or such Restricted Subsidiary.

 

All Affiliate Transactions (and each series of related Affiliate
Transactions which

 

57

 

are similar or part of a common plan) involving aggregate payments or
other property with a fair market value in excess of $1.0 million will be
approved by the Board of Directors of the Company, such approval to be
evidenced by a Board Resolution stating that such Board of Directors has
determined that such transaction complies with the foregoing provisions.  If the Company or any Restricted Subsidiary
enters into an Affiliate Transaction (or a series of related Affiliate
Transactions related to a common plan) that involves payments or other property
with an aggregate fair market value of more than $7.5 million, the Company or
such Restricted Subsidiary, as the case may be, will, prior to the consummation
thereof, obtain an opinion from an Independent Financial Advisor stating that
such transaction or series of related transactions are fair to the Company or
to the relevant Restricted Subsidiary, as the case may be, from a financial
point of view.

 

The restrictions set forth in the first paragraph of this
Section 4.11 shall not apply to:

 

(1)                                  reasonable fees and
compensation paid to and indemnity provided on behalf of officers, directors,
employees or consultants of the Company or any Restricted Subsidiary as
determined in good faith by the Company’s Board of Directors;

 

(2)                                  transactions
exclusively between or among the Company and any of its Restricted Subsidiaries
or exclusively between or among such Restricted Subsidiaries provided
that such transactions are not otherwise prohibited by this Indenture;

 

(3)                                  Restricted Payments
and Permitted Investments permitted by this Indenture;

 

(4)                                  any sale, issuance or
grant of any equity interest (other than Disqualified Capital Stock);

 

(5)                                  transactions arising
out of agreements existing on the Issue Date to the extent and in the manner
such agreements are in effect on the Issue Date;

 

(6)                                  the Transactions;

 

(7)                                  transactions with
customers, suppliers or purchasers or sellers of goods or services, in each
case in the ordinary course of business and otherwise in compliance with the
terms of this Indenture, on customary terms no less favorable than those that
might reasonably have been obtained in a comparable transaction at such time on
an arm’s length basis from a Person that is not an Affiliate of the Company or
such Restricted Subsidiary; and

 

(8)                                  management or
advisory fees to North Castle Partners and J.W. Childs Associates, L.P. or
their respective affiliates in accordance with the terms of the Management
Agreement as in effect on the Issue Date, as the same may be modified or
amended so long as such modification or amendment does not increase the amount
of management or advisory fees to be paid thereunder, plus reimbursement of
reasonable out-of-pocket expenses.

 

58

 

Section 4.12.                             Limitation on Liens.

 

The Company will not, and will not cause or permit any of its
Restricted Subsidiaries to, directly or indirectly, create, incur, assume or
permit or suffer to exist any Lien (an “Initial Lien”) upon any property
or assets of the Company or any of its Restricted Subsidiaries whether owned on
the Issue Date or acquired after the Issue Date, or any proceeds therefrom unless:

 

(1)                                  in the case of Liens
securing Subordinated Indebtedness, the Notes or the Guarantee of such
Guarantor, as the case may be, is secured by a Lien on such property, assets or
proceeds that is senior in priority to such Liens for so long as such
Subordinated Indebtedness is secured by such Lien; and

 

(2)                                  in all other cases,
the Notes or the Guarantee of such Guarantor, as the case may be, is secured on
an equal and ratable basis for so long as such Lien is in place,

 

except for

 

(a)                                  Liens existing as of
the Issue Date to the extent and in the manner such Liens are in effect on the
Issue Date;

 

(b)                                 Liens securing
Obligations in respect of a principal amount of Indebtedness incurred under any
Credit Facility in an aggregate principal amount not to exceed the amount
permitted to be incurred under clause (2) of the definition of “Permitted
Indebtedness”;

 

(c)                                  Liens securing the
Notes and Guarantees;

 

(d)                                 Liens on assets of any
Restricted Subsidiary of the Company in favor of the Company or any Restricted
Subsidiary and Liens on the assets of the Company in favor of a Restricted
Subsidiary that is a Guarantor;

 

(e)                                  Liens in favor of the
Company or any Guarantor;

 

(f)                                    Liens securing
Refinancing, refunding, extension, renewal or replacement (in whole or in part)
of any Indebtedness or other Obligation that has been secured by a Lien
permitted under this Indenture and that has been incurred in accordance with
the provisions of this Indenture; provided, however, that such
new Liens are limited to all or part of the same property or assets of the
Company or any of its Restricted Subsidiaries (plus improvements, decisions,
proceeds or dividends or distributions in respect thereof) securing the
Indebtedness or other obligation so Refinanced, refunded, extended, renewed or
replaced; and

 

(g)                                 Permitted Liens.

 

Any such Lien thereby created in favor of the Notes or any Guarantee
will be automatically and unconditionally released and discharged upon
(i) the release and discharge of all Initial Liens to which it relates or
(ii) any sale, exchange or transfer to any Person not an Affiliate of the
Company of the property or assets securing all such Initial Liens or of all of
the

 

59

 

Capital Stock held by the Company or any Restricted Subsidiary in, or
all or substantially all the assets of, any Restricted Subsidiary creating all
such Initial Liens.

 

Section 4.13.                             Continued Existence.

 

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

 

Section 4.14.                             Insurance Matters.

 

The Company shall provide or cause to be provided, for itself and each
of its Subsidiaries, insurance (including appropriate self-insurance) against
loss or damage of the kinds that, in the reasonable, good faith opinion of the
Company, are adequate and appropriate for the conduct of the business of the
Company and its Subsidiaries in a prudent manner, with reputable insurers or
with the government of the United States of America or an agency or
instrumentality thereof, in such amounts, with such deductibles, and by such
methods as shall be either (i) consistent with past practices of the
Company or the applicable Subsidiary or (ii) customary, in the reasonable,
good faith opinion of the Company, for corporations similarly situated in the
industry, unless the failure to provide such insurance (together with all other
such failures) would not have a material adverse effect on the financial
condition or results of operations of the Company and its Subsidiaries, taken
as a whole.

 

Section 4.15.                             Offer to Repurchase
upon Change of Control.

 

Upon the occurrence of a Change of Control, each Holder will have the
right to require that the Company purchase all or a portion (equal to $1,000 or
an integral multiple thereof) of such Holder’s Notes (a “Change of Control
Offer”) at a Purchase Price equal to 101% of the principal amount thereof,
plus accrued and unpaid interest and Additional Interest, if any, thereon to
the Change of Control Payment Date; provided that the Company shall not
be obligated to make a Change of Control Offer pursuant to this
Section 4.15 if, no later than the 30th day after the Change of Control,
it has mailed an irrevocable notice of redemption for all of the Notes pursuant
to Section 3.7 and in accordance with Section 3.3 and the Company
subsequently has not failed to consummate such Optional Redemption.  Upon any failure by the Company to
consummate the Optional Redemption for which such irrevocable notice of
redemption was given, the Company’s obligation to offer to repurchase Notes
pursuant to this Section 4.15 shall be reinstated.  The Change of Control Offer shall be made in
compliance with the applicable procedures set forth in Article III and
shall include all instructions and materials necessary to enable Holders to
tender their Notes.

 

60

 

The Company will not be required to make a Change of Control Offer upon
a Change of Control if a third party makes the Change of Control Offer in the
manner, at the times and otherwise in compliance with the requirements set
forth in this Indenture applicable to a Change of Control Offer made by the
Company and purchases all Notes validly tendered and not withdrawn under such
Change of Control Offer.

 

The Company will comply with the requirements of Rule 14e-1 under
the Exchange Act and any other securities laws and regulations thereunder to
the extent such laws and regulations are applicable in connection with the
repurchase of Notes pursuant to a Change of Control Offer.  To the extent that the provisions of any
securities laws or regulations conflict with this Section 4.15, the
Company shall comply with the applicable securities laws and regulations and
shall not be deemed to have breached its obligations under this
Section 4.15 by virtue thereof.

 

Section 4.16.                             Additional Subsidiary
Guarantees.

 

If (a) any Subsidiary of the Company that is not a Guarantor
guarantees or becomes otherwise obligated for any of the Company’s Indebtedness
(other than solely as a result of a guarantee by the Company of such
Subsidiary’s primary obligations), or (b) the Company or any of its
Restricted Subsidiaries transfers or causes to be transferred, in one
transaction or a series of related transactions, any property to any Domestic
Restricted Subsidiary that is not a Guarantor having total assets (after giving
effect to such transfer) with a book value in excess of $500,000, or if the
Company or any of its Restricted Subsidiaries shall organize, acquire or otherwise
invest in another Domestic Restricted Subsidiary having total assets with a
book value in excess of $500,000, then such transferee or acquired or other
Restricted Subsidiary shall:

 

(1)                                  execute and deliver
to the Trustee a supplemental indenture in form reasonably satisfactory to the
Trustee pursuant to which such Restricted Subsidiary shall unconditionally
guarantee all of the Company’s obligations under the Notes and this Indenture
on the terms set forth in this Indenture; and

 

(2)                                  deliver to the Trustee
an Opinion of Counsel to the effect that such supplemental indenture has been
duly authorized, executed and delivered by such Restricted Subsidiary and
constitutes a legally valid, binding and enforceable obligation of such Restricted
Subsidiary.

 

Thereafter, such Restricted Subsidiary shall be a Guarantor for all
purposes of this Indenture; provided, however, to the extent that
a Restricted Subsidiary is subject to any instrument governing Acquired
Indebtedness, as in effect at the time of acquisition thereof, that prohibits
such Restricted Subsidiary from issuing a Guarantee, such Restricted Subsidiary
shall not be required to execute such a supplemental indenture until it is
permitted to issue such Guarantee pursuant to the terms of such Acquired Indebtedness.

 

61

 

Section 4.17.                             Limitation on Preferred
Stock of Restricted Subsidiaries.

 

The Company will not permit any of its Restricted Subsidiaries that are
not Guarantors to issue any Preferred Stock (other than to the Company or to a
Wholly Owned Restricted Subsidiary) or permit any Person (other than the
Company or a Wholly Owned Restricted Subsidiary) to own any Preferred Stock of
any Restricted Subsidiary that is not a Guarantor.

 

Section 4.18.                             Limitation on
Designation of Unrestricted Subsidiaries.

 

(a)           The Company may designate any
Subsidiary of the Company (other than a Subsidiary of the Company that, following
such designation, would own Capital Stock of a Restricted Subsidiary) as an
“Unrestricted Subsidiary” under this Indenture (a “Designation”) only
if:

 

(1)                                  no Default shall have
occurred and be continuing at the time of or after giving effect to such
Designation;

 

(2)                                  the Company would be
permitted under this Indenture to make an Investment at the time of Designation
(assuming the effectiveness of such Designation) in an amount (the “Designation
Amount”) equal to the fair market value of the Investments of the Company
and its Restricted Subsidiaries in such Subsidiary on such date.

 

In the event of any such Designation, the Company shall be deemed to
have made an Investment constituting a Restricted Payment pursuant to
Section 4.7 for all purposes of this Indenture in the Designation Amount.

 

(b)           The Company may revoke any
Designation of a Subsidiary as an Unrestricted Subsidiary (a “Revocation”),
whereupon such Subsidiary shall then constitute a Restricted Subsidiary, if:

 

(1)                                  no
Default shall have occurred and be continuing at the time of and after giving
effect to such Revocation; and

 

(2)                                  all
Liens and Indebtedness of such Unrestricted Subsidiary outstanding immediately
following such Revocation would, if incurred at such time, have been permitted
to be incurred for all purposes of this Indenture.

 

All Designations and Revocations must be evidenced by Board Resolutions
of the Company certifying compliance with the foregoing provisions.

 

62

 

ARTICLE V.

 

SUCCESSORS

 

Section 5.1.                                   Merger,
Consolidation and Sale of Assets.

 

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

 

(1)                                  either:

 

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

 

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

 

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

 

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

 

(2)                                  except in the case of
a transaction solely involving the Company and a Guarantor, immediately after
giving effect to such transaction and the assumption contemplated by
clause(1)(b)(y) above (including giving effect to any Indebtedness and Acquired
Indebtedness incurred or anticipated to be incurred in connection with or in respect
of such transaction), the Company or such Surviving Entity, as the case may be,
shall be able to incur at least $1.00 of additional Indebtedness (other than
Permitted Indebtedness) in compliance with paragraph (a) of Section 4.9;

 

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

 

(4)                                  the Company or the
Surviving Entity shall have delivered to the Trustee an Officer’s Certificate
and an Opinion of Counsel, each stating to the effect that all conditions
precedent in this Indenture relating to such transaction have been satisfied.

 

For purposes of the foregoing, the transfer (by lease, assignment, sale
or

 

63

 

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

 

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

 

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

 

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

 

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

 

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

 

None of the foregoing shall prohibit any transfer by the Company of the
Capital Stock of, or other Investments in, one or more of its Subsidiaries to
any Guarantor.

 

Section 5.2.                                   Successor
Corporation Substituted.

 

Upon any consolidation, combination or merger or any transfer of all or
substantially all of the assets of the Company in accordance with
Section 5.1 in which the Company is not the continuing corporation, the
Surviving Entity shall succeed to, and be substituted for, and may exercise
every right and power of, the Company under this Indenture and the Notes with
the same effect as if such Surviving Entity had been named as such.  Thereafter the predecessor Company shall be
relieved of all obligations and covenants under this Indenture, except that the
predecessor Company in the case of a lease of all or substantially all of its
assets will not be released from the obligation to pay the principal of and
interest on the Notes.

 

64

 

ARTICLE VI.

 

DEFAULTS AND
REMEDIES

 

Section 6.1.                                   Events of Default.

 

Each of the following constitutes an “Event of Default”:

 

(a)           the
failure to pay interest on any Note when the same becomes due and payable and
the default continues for a period of 30 days;

 

(b)           the
failure to pay the principal of any Note, when such principal becomes due and
payable, at maturity, upon redemption or otherwise (including the failure to
make a payment to purchase Notes tendered pursuant to a Change of Control Offer
or a Net Proceeds Offer) on the date specified for such payment in the
applicable offer to purchase;

 

(c)           a
default in the observance or performance of any other covenant or agreement
contained herein which default continues for a period of 30 days after the
Company receives written notice specifying the default (and demanding that such
default be remedied) from the Trustee or the Holders of at least 25% of the
outstanding principal amount of the Notes (except in the case of a default with
respect to Section 5.1, which will constitute an Event of Default with such notice
requirement but without such passage of time requirement);

 

(d)           the
failure to pay at final stated maturity (giving effect to any applicable grace
periods and any extensions thereof) the principal amount of any Indebtedness of
the Company or any Restricted Subsidiary of the Company, or the acceleration of
the final stated maturity of any such Indebtedness (which acceleration is not
rescinded, annulled or otherwise cured within 20 days of receipt by the Company
or such Restricted Subsidiary of notice of any such acceleration), if the
aggregate principal amount of such Indebtedness, together with the principal
amount of any other such Indebtedness in default for failure to pay principal
at final stated maturity or which has been accelerated (in each case with
respect to which the 20-day period described above has passed), aggregates $5.0
million or more at any time;

 

(e)           one
or more judgments in an aggregate amount in excess of $5.0 million (to the
extent not covered by insurance) shall have been rendered against the Company
or any of its Significant Subsidiaries and such judgments remain undischarged,
unpaid or unstayed for a period of 60 days after such judgment or judgments
become final and non-appealable;

 

(f)            the
Company or any Significant Subsidiary of the Company:

 

(i)                                     commences
a voluntary case under any Bankruptcy Law,

 

(ii)                                  consents
to the entry of an order for relief against it in an involuntary case,

 

65

 

(iii)                               consents
to the appointment of a custodian or receiver of it or for all or
substantially, all of its property, or

 

(iv)                              makes
a general assignment for the benefit of its creditors; or

 

(g)           a
court of competent jurisdiction enters an order or decree under any Bankruptcy
Law that:

 

(i)                         is for relief in an
involuntary case against the Company or any Significant Subsidiary of the Company,

 

(ii)                      appoints a custodian or receiver
of the Company or any Significant Subsidiary or for all or substantially all of
the property of any of the foregoing, or

 

(iii)                   orders the liquidation of the
Company or any of its Significant Subsidiaries,

 

and the order or decree remains unstayed and in effect for 60
consecutive days; or

 

(h)           any Guarantee of a Significant
Subsidiary ceases to be in full force and effect or any Guarantee of a
Significant Subsidiary is declared to be null and void and unenforceable or any
Guarantee of a Significant Subsidiary is found to be invalid or any Guarantor
that is a Significant Subsidiary denies its liability in writing under its Guarantee
(other than by reason of release of a Guarantor in accordance with the terms of
this Indenture).

 

Section 6.2.                                   Acceleration.

 

If an Event of Default (other than an Event of Default specified in
clause (f) or (g) of Section 6.1 with respect to the Company) shall
occur and be continuing, the Trustee or the Holders of at least 25% in
aggregate principal amount of outstanding Notes may declare the principal of
and accrued interest on all the Notes to be due and payable by notice in writing
to the Company and the Trustee specifying the respective Event of Default and
that it is a “notice of acceleration” and the same shall become immediately due
and payable.  If an Event of Default
specified in clause (f) or (g) of Section 6.1 with respect to the
Company occurs and is continuing, then all unpaid principal of and premium, if
any, and accrued and unpaid interest on all of the outstanding Notes shall ipso facto become
and be immediately due and payable without any declaration or other act on the
part of the Trustee or any Holder.

 

The Holders of not less than a majority in principal amount of the
Notes by written notice to the Company and the Trustee may, on behalf of the
Holders of all of the Notes, rescind such declaration and its consequences:

 

(1)                                  if the rescission
would not conflict with any judgment or decree;

 

66

 

(2)                                  if all existing
Events of Default have been cured or waived except nonpayment of principal or
interest that has become due solely because of the acceleration;

 

(3)                                  to the extent the
payment of such interest is lawful, if interest on overdue installments of
interest and overdue principal that has become due otherwise than by such
declaration of acceleration has been paid;

 

(4)                                  if the Company has paid
the Trustee its reasonable compensation and reimbursed the Trustee for its expenses,
disbursements and advances; and

 

(5)                                  in the event of the
cure or waiver of an Event of Default of the type described in clause (f)
or (g) of Section 6.1, if the Trustee shall have received an Officer’s
Certificate and an Opinion of Counsel stating that such Event of Default has
been cured or waived.

 

No such rescission shall affect any subsequent Default or impair any
right consequent thereto.

 

Section 6.3.                                   Other Remedies.

 

If an Event of Default occurs and is continuing, the Trustee may pursue
any available remedy to collect the payment of principal, premium, if any,
interest or Additional Interest, if any, on the Notes or to enforce the
performance of any provision of the Notes or this Indenture.

 

The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding, and any
recovery or judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, be for the ratable benefit of the Holders of the Notes.  A delay or omission by the Trustee or any
Holder in exercising any right or remedy accruing upon an Event of Default
shall not impair the right or remedy or constitute a waiver of or acquiescence
in the Event of Default.  All remedies
are cumulative to the extent permitted by law.

 

Section 6.4.                                   Waiver of
Existing Defaults.

 

The Holders of a majority in aggregate principal amount of the Notes
may waive any existing Default under this Indenture, and its consequences,
except a default in the payment of the principal of or interest or Additional
Interest, if any, on any Notes.  Upon
any such waiver, such Default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been cured for every purpose of this
Indenture; but no such waiver shall extend to any subsequent or other Default
or impair any right consequent thereon.

 

67

 

Section 6.5.                                   Control by
Majority.

 

Holders of a majority in aggregate principal amount of the then
outstanding Notes may direct the time, method and place of conducting any
proceeding for exercising any remedy available to the Trustee or exercising any
trust or power conferred on it. 
However, the Trustee may refuse to follow any direction that conflicts
with applicable law or this Indenture that the Trustee reasonably determines
may be unduly prejudicial to the rights of other Holders of Notes or that may
result in the incurrence of liability by the Trustee and shall be entitled to
the benefit of Sections 7.1(c)(iii) and (e).

 

Section 6.6.                                   Limitation on
Suits.

 

A Holder of a Note may pursue a remedy with respect to this Indenture
or the Notes only if:

 

(a)           the Holder of a Note gives to the
Trustee written notice of a continuing Event of Default;

 

(b)           the
Holders of at least 25% in principal amount of the then outstanding Notes make
a written request to the Trustee to pursue the remedy;

 

(c)           such
Holder or Holders of Notes offer and, if requested, provide to the Trustee
indemnity satisfactory to the Trustee against any loss, liability or expense;

 

(d)           the
Trustee does not comply with the request within 60 days after receipt of the
request and the offer and, if requested, the provision of indemnity; and

 

(e)           during
such 60-day period the Holders of a majority in principal amount of the then
outstanding Notes do not give the Trustee a direction inconsistent with the
request.

 

 

A Holder of a Note may not use this Indenture to prejudice the rights
of another Holder of a Note or to obtain a preference or priority over another
Holder of a Note.

 

Section 6.7.                                   Rights of Holders
of Notes to Receive Payment.

 

Notwithstanding any other provision of this Indenture, the right of any
Holder of a Note to receive payment of principal of, or premium, if any,
interest or Additional Interest, if any, on the Note, on or after the
respective due dates thereon (including in connection with an offer to repurchase),
or to bring suit for the enforcement of any such payment on or after such
respective dates, shall not be impaired or affected without the written consent
of such Holder.

 

68

 

Section 6.8.                                   Collection Suit
by Trustee.

 

If an Event of Default specified in Section 6.l(a) or (b) occurs
and is continuing, the Trustee is authorized to recover judgment in its own
name and as trustee of an express trust against the Company for the whole
amount of principal of, premium and Additional Interest, if any, and interest
remaining unpaid on the Notes and interest on overdue principal and, to the
extent lawful, interest and Additional Interest, if any, and such further
amounts as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expense, disbursements and advances of
the Trustee, its agents and counsel.

 

Section 6.9.                                   Notice.

 

The Company shall provide an Officer’s Certificate to the Trustee
promptly upon any such Officer obtaining knowledge of any Default or Event of
Default (provided that such Officers shall provide such certification
pursuant to Section 4.4 hereof whether or not such Officers know of any
Default or Event of Default) that has occurred and, if applicable, describe
such Default or Event of Default and the status thereof.

 

Section 6.10.                             Trustee May File Proofs
of Claim.

 

The Trustee is authorized to file such proofs of claim and other papers
or documents as may be necessary or advisable in order to have the claims of
the Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents (including accountants,
experts or such other professionals as the Trustee deems necessary, advisable
or appropriate) and counsel and the Holders of the Notes allowed in any
judicial proceedings relative to the Company (or any other obligor upon the
Notes), its creditors or its property and shall be entitled and empowered to
collect, receive and distribute any money or other property payable or
deliverable on any such claims, and any custodian in any such judicial
proceeding is hereby authorized by each Holder to make such payments to the
Trustee, and in the event that the Trustee shall consent to the making of such
payments directly to the Holders, to pay to the Trustee any amount due to it
for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.7.  To the extent that
the payment of any such compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel, and any other amounts due the Trustee
under Section 7.7 out of the estate in any such proceeding, shall be
denied for any reason, payment of the same shall be secured by a lien on, and
shall be paid out of, any and all distributions, dividends, money, securities
and other properties that the Holders may be entitled to receive in such
proceeding whether in liquidation or under any plan of reorganization or
arrangement or otherwise.  Nothing
herein contained shall be deemed to authorize the Trustee to authorize or
consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder, or to authorize the Trustee to vote in respect of the
claim of any Holder in any such proceeding.

 

69

 

Section 6.11.                             Priorities.

 

If the Trustee collects any money pursuant to this Article VI, it
shall pay out the money in the following order:

 

First:  to the Trustee, its agents and attorneys for
amounts due under Section 7.7;

 

Second:  to Holders of Notes for amounts due and
unpaid on the Notes for principal, Purchase Price or Redemption Price, if any,
and Additional Interest, if any, and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the Notes for
principal, Purchase Price, Redemption Price and Additional Interest, if any,
and interest, respectively; and

 

Third:  to the Company, the Guarantors or to such
party as a court of competent jurisdiction shall direct.

 

The Trustee may fix a special record date and payment date for any
payment to Holders of Notes pursuant to this Section 6.11.

 

Section 6.12.                             Undertaking for Costs.

 

In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable attorneys’
fees, against any party litigant in the suit, having due regard to the merits
and good faith of the claims or defenses made by the party litigant.  This Section 6.12 shall not apply to a
suit by the Trustee, a suit by a Holder pursuant to Section 6.7, or a suit
by Holders of more than 10% in aggregate principal amount of the then outstanding
Notes.

 

ARTICLE VII.

 

TRUSTEE

 

Section 7.1.                                   Duties of Trustee.

 

(a)           If
an Event of Default has occurred and is continuing, the Trustee shall exercise
such rights and powers vested in it by this Indenture, and use the same degree
of care and skill in its exercise thereof, as a prudent Person would exercise
or use under the circumstances in the conduct of such Person’s own affairs.

 

(b)           Except
during the continuance of an Event of 
Default:

 

70

 

(i)                                     the
duties of the Trustee shall be determined solely by the express provisions of
this Indenture and the TIA and the Trustee need perform only those duties that
are specifically set forth in this Indenture and no others, and no implied
covenants or obligations shall be read into this Indenture or the TIA against
the Trustee; and

 

(ii)                                  in
the absence of bad faith on its part, the Trustee may conclusively rely,
without investigation, as to the truth or the statements and the correctness of
the opinions expressed therein, upon and statements, certificates or opinions
furnished to the Trustee and conforming to the requirements of this Indenture
but need not verify the contents thereof.

 

However, the
Trustee shall examine the certificates and opinions to determine whether or not
they conform on their face to the requirements of this Indenture.

 

(c)           The
Trustee may not be relieved from liabilities for its own negligent action, its
own negligent failure to act, or its own willful misconduct, except that:

 

(i)                                     this
paragraph does not limit the effect of paragraph (b) of this Section;

 

(ii)                                  the
Trustee shall not be liable for any error of judgment made in good faith by a
Responsible Officer, unless it is proved that the Trustee was negligent in ascertaining
the pertinent facts; and

 

(iii)                               the
Trustee shall not be liable with respect to any action it takes or omits to
take in good faith in accordance with a direction received by it pursuant to
Section 6.2, 6.4 or 6.5.

 

(d)           Whether
or not therein expressly so provided, every provision of this Indenture that in
any way relates to the Trustee is subject to this paragraphs (a), (b) and (c)
of Section 7.1 and Section 7.2.

 

(e)           No
provision of this Indenture shall require the Trustee to expend or risk its own
funds or incur any liability.  The
Trustee shall be under no obligation to exercise any of its rights and powers
under this Indenture at the request of any Holders, pursuant to the provisions
of this Indenture, including, without limitation, Section 6.5, unless such
Holder shall have offered to the Trustee security and indemnity satisfactory to
it against any loss, liability or expense which might be incurred by it in
compliance with such request or direction.

 

(f)            The
Trustee shall not be liable for interest on any money received by it except as
the Trustee may agree in writing with the Company.  Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law.

 

Section 7.2.                                   Rights of Trustee.

 

(a)           The
Trustee may conclusively rely and shall be protected in acting or refraining
from acting upon any document believed by it to be genuine and to have been
signed or presented by the proper Person. 
The Trustee need not investigate any fact or matter stated in the
document.

 

71

 

(b)           Before
the Trustee acts or refrains from acting, it may require an Officer’s
Certificate or an Opinion of Counsel or both. 
The Trustee shall not be liable for any action it takes or omits to take
in good faith in reliance on such Officer’s Certificate or Opinion of
Counsel.  The Trustee may consult with
counsel of its own selection and the advice of such counsel and Opinions of
Counsel with respect to legal matters relating to this Indenture and the Notes
shall be full and complete authorization and protection from liability in
respect of any action taken, suffered or omitted by it hereunder in good faith
and in reliance thereon.

 

(c)           The
Trustee may act through its attorneys, accountants, experts and such other
professionals as the Trustee deems necessary, advisable or appropriate and
shall not be responsible for the misconduct or negligence of any attorney,
accountant, expert or other such professional appointed with due care.

 

(d)           The
Trustee shall not be liable for any action it takes or omits to take in good
faith that it believes to be authorized or within the rights or powers
conferred upon it by this Indenture.

 

(e)           Unless
otherwise specifically provided in this Indenture, any demand, request,
direction or notice from the Company shall be sufficiently evidenced by a
written order signed by one Officer of the Company.

 

(f)            The
Trustee shall not be charged with knowledge of any Default or Event of Default
under Section 6.1 (other than under Section 6.1(a) (subject to the following
sentence) or Section 6.1(b)) unless either (i) a Responsible Officer shall have
actual knowledge thereof, or (ii) the Trustee shall have received notice
thereof in accordance with Section 12.2 from the Company or any Holder of the
Notes.  The Trustee shall not be charged
with knowledge of the Company’s obligation to pay Additional Interest, or the
cessation of such obligation, unless the Trustee receives written notice
thereof from the Company or any Holder.

 

(g)           The
rights, privileges, protections, immunities and benefits given to the Trustee,
including, without limitation, its right to be indemnified, are extended to,
and shall be enforceable by, the Trustee in each of its capacities hereunder,
and each agent, custodian and other Person employed to act hereunder.

 

The Trustee may request that the Company deliver an Officer’s
Certificate setting forth the names of individuals and/or titles of officers
authorized at such time to take specified actions pursuant to this Indenture,
which Officer’s Certificate may be signed by any person specified as so
authorized in any such certificate previously delivered and not superseded.

 

Section 7.3.                                   Individual Rights
of Trustee.

 

The Trustee may become the owner or pledgee of Notes and may otherwise
deal with the Company or any Affiliate of the Company with the same rights it
would have if it were not Trustee. 
However, in the event that the Trustee acquires any conflicting interest
within the meaning of the TIA it must eliminate such conflict within
90 days, or apply (subject to the consent of the Company) to the
Commission for permission to continue as trustee or resign.  Any

 

72

 

Agent may do the same with like rights and duties.  The Trustee is also subject to Sections 7.10
and 7.11.

 

Section 7.4.                                   Trustee’s
Disclaimer.

 

The Trustee shall not be responsible for and makes no representation as
to the validity or adequacy of this Indenture, or the Notes, it shall not be
accountable for the Company’s use of the proceeds from the Notes or any money
paid to the Company or upon the Company’s direction under any provision of this
Indenture, it shall not be responsible for the use or application of any money
received by any Paying Agent other than the Trustee, and it shall not be
responsible for any statement or recital herein or any statement in the Notes
or any other document in connection with the sale of the Notes or pursuant to
this Indenture other than its certificate of authentication.

 

Section 7.5.                                   Notice of
Defaults.

 

If a Default or Event of 
Default occurs and is continuing, the Trustee shall mail to Holders of
Notes a notice of the Default or Event of Default within 90 days after
such Event of Default becomes known to the Trustee.  Except in the case of a Default in payment on any Note (including
the failure to make a mandatory repurchase pursuant hereto), the Trustee may
withhold the notice if and so long as a committee of its Responsible Officers
in good faith determines that withholding the notice is in the interests of the
Holders of the Notes.

 

Section 7.6.                                   Reports by
Trustee to Holder of the Notes.

 

Within 60 days after each May 1 beginning with the May 1
following the date of this Indenture, and for so long as Notes remain
outstanding, the Trustee shall mail to the Holders of the Notes a brief report
dated as of such reporting date that complies with TIA § 313(a) (but if no
event described in TIA § 313(a) has occurred within the twelve months
preceding the reporting date, no report need be transmitted).  The Trustee also shall comply with TIA
§ 313(b).  The Trustee shall also
transmit by mail all reports as required by TIA § 313(c).

 

A copy of each report at the time of its mailing to the Holders of
Notes shall be mailed to the Company and filed with the Commission and each
stock exchange on which the Notes are listed in accordance with TIA
§ 313(d).  The Company shall
promptly notify the Trustee when the Notes are listed on any stock exchange.

 

73

 

Section 7.7.                                   Compensation,
Reimbursement and Indemnity.

 

The Company shall pay to the Trustee from time to time such
compensation for its acceptance of this Indenture and the rendering by it of
the services required hereunder as shall be agreed upon in writing by the
Company and the Trustee.  The Trustee’s
compensation shall not be limited by any law on compensation of a trustee of an
express trust.  The Company shall
reimburse the Trustee promptly upon request for all reasonable disbursements,
advances and expenses incurred or made by or on behalf of it in addition to the
compensation for its services.  Such
expenses shall include the reasonable compensation, disbursements and expenses
of the Trustee’s attorneys, accountants, experts and such other professionals
as the Trustee deems necessary, advisable or appropriate.

 

The Company and the Guarantors shall jointly and severally indemnify
the Trustee (which for purposes of this Section 7.7 shall include its
officers, directors, employees, agents and shareholders), and hold harmless
against, any and all losses, liabilities, claims, damages or expenses,
including taxes (other than taxes based upon, measured by or determined by the
income of the Trustee) and reasonable attorneys’ fees and expenses, incurred by
it arising out of or in connection with the acceptance or administration of its
duties under this Indenture (including its duties under Section 9.6),
including the costs and expenses of enforcing this Indenture or any Guarantee
against the Company or a Guarantor (including this Section 7.7) and
defending itself against or investigating any claim (whether asserted by the
Company, any Guarantor, any Holder or any other Person) or liability in
connection with the exercise or performance of any of its powers or duties
hereunder, except to the extent any such loss, liability or expense may be
attributable to its negligence, willful misconduct or bad faith.  The Trustee shall notify the Company
promptly of any claim for which it may seek indemnity.  Failure by the Trustee to so notify the
Company shall not relieve the Company of its obligations hereunder.  At the Trustee’s sole discretion, the Company
shall defend any claim or threatened claim asserted against the Trustee, with
counsel reasonably satisfactory to the Trustee, and the Trustee shall cooperate
in the defense at the Company’s expense. 
The Trustee may have separate counsel and the Company shall pay the
reasonable fees and expenses of such counsel. 
The Company need not pay for any settlement made without its consent,
which consent shall not be unreasonably withheld.

 

The obligations of the Company and the Guarantors under this
Section 7.7 shall survive the resignation or removal of the Trustee, the
satisfaction and discharge of this Indenture and the termination of this Indenture.

 

To secure the Company’s payment obligations in this Section 7.7,
the Trustee shall have a Lien prior to the Notes on all money or property held
or collected by the Trustee, except that held in trust to pay principal,
Redemption Price or Purchase Price of or Additional Interest, if any, or
interest on, particular Notes.  Such
Lien shall survive the resignation or removal of the Trustee, the satisfaction
and discharge of this Indenture and the termination of this Indenture.

 

When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.1(f) or (g) occurs, the expenses and the
compensation for the services (including the fees and expenses of its agents
and counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.

 

74

 

In no event shall the Trustee be liable for any indirect, special,
punitive or consequential loss or damage of any kind whatsoever, including, but
not limited to, lost profits, even if the Trustee has been advised of the
likelihood of such loss or damage and regardless of the form of action.

 

In no event shall the Trustee be liable for any failure or delay in the
performance of its obligations hereunder because of circumstances beyond its
control, including, but not limited to, acts of God, flood, war (whether
declared or undeclared), terrorism, fire, riot, embargo, government action,
including any laws, ordinances, regulations, governmental action or the like
which delay, restrict or prohibit the providing of the services contemplated by
this Agreement.

 

Section 7.8.                                   Replacement
of Trustee.

 

A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee’s acceptance of
appointment as provided in this Section.

 

The Trustee may resign in writing at any time and be discharged from
the trust hereby created by so notifying the Company.  The Holders of Notes of a majority in principal amount of the
then outstanding Notes may remove the Trustee by so notifying the Trustee and
the Company in writing.  The Company may
remove the Trustee if:

 

(a)           the
Trustee fails to comply with Section 7.10;

 

(b)           the
Trustee is adjudged a bankrupt or an insolvent or an order for relief is
entered with respect to the Trustee under any Bankruptcy Law;

 

(c)           a
custodian, receiver or public officer takes charge of the Trustee or its
property for the purpose of rehabilitation, conversation or liquidation; or

 

(d)           the
Trustee becomes incapable of acting.

 

If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee.  Within one year
after the date on which the successor Trustee takes office, the Holders of a
majority in principal amount of the then outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.

 

If a successor Trustee does not take office within 30 days after
the retiring trustee resigns or is removed, the retiring Trustee, the Company,
or the Holders of Notes of at least 10% in principal amount of the then
outstanding Notes may petition any court of competent jurisdiction, in the case
of the Trustee, at the expense of the Company, for the appointment of a successor
Trustee.

 

75

 

If the Trustee, after written request by any Holder of a Note who has
been a bona fide holder of a Note or Notes for at least six months, fails to
comply with Section 7.10, such Holder of a Note may petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of a
successor Trustee.

 

A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company.  Thereupon, the resignation or removal of the
retiring Trustee shall become effective, and the successor Trustee shall have
all the rights, powers and duties of the Trustee under this Indenture.  The Company shall mail a notice of its
succession to each Holder of a Note. 
The retiring Trustee shall promptly transfer all property held by it as
Trustee to the successor Trustee; provided all sums owing to the Trustee
hereunder have been paid and subject to the Lien provided for in
Section 7.7.  Notwithstanding
replacement of the Trustee pursuant to this Section 7.8, the Company’s
obligations under Section 7.7 shall continue for the benefit of the
retiring Trustee.

 

Section 7.9.                                   Successor
Trustee by Merger, Etc.

 

If the Trustee consolidates, merges or converts into, or transfers all
or substantially all of its corporate trust business to, another corporation
that is eligible under Section 7.10, the successor corporation without any
further act shall be the successor Trustee.

 

Section 7.10.                             Eligibility;
Disqualification.

 

There shall at all times be a Trustee hereunder that is a corporation
organized and doing business under the laws of the United States of America or
of any state thereof (including the District of Columbia) that is authorized
under such laws to exercise corporate trust power, that is subject to
supervision or examination by federal or state authorities and that has (or, in
the case of a corporation included in a bank holding company system, the
related bank holding company shall have) a combined capital and surplus of at
least $50.0 million as set forth in its (or its related bank holding company’s)
most recent published annual report of condition.

 

This Indenture shall always have a Trustee who satisfies the
requirements of TIA §§ 310(a)(1), (2) and (5).  The Trustee is subject to TIA § 310(b).

 

Section 7.11.                             Preferential
Collection of Claims Against Company.

 

The Trustee is subject to TIA § 311(a), excluding any creditor
relationship listed in TIA § 311(b). 
A Trustee who has resigned or been removed shall be subject to TIA
§ 311(a) to the extent indicated therein.

 

76

 

ARTICLE VIII.

 

LEGAL DEFEASANCE AND COVENANT DEFEASANCE

 

Section 8.1.                                   Option to Effect
Legal Defeasance or Covenant Defeasance.

 

The Company may, at the option of its Board of Directors evidenced by a
Board Resolution set forth in an Officer’s Certificate, at any time, elect to
have either Section 8.2 or 8.3 applied to all outstanding Notes upon
compliance with the conditions set forth below in this Article VIII.

 

Section 8.2.                                   Legal Defeasance
and Discharge.

 

Upon the Company’s exercise under Section 8.1 of the option
applicable to this Section 8.2, the Company shall, subject to the
satisfaction of the conditions set forth in Section 8.4, be deemed to have
been discharged from its obligations with respect to all outstanding Notes on
the date the conditions set forth below are satisfied (hereinafter, “Legal Defeasance”).  For this purpose, Legal Defeasance means
that the Company shall be deemed to have paid and discharged the entire
Indebtedness represented by the outstanding Notes, which shall thereafter be
deemed to be “outstanding” only for the purposes of Section 8.5 and the other
Sections of this Indenture referred to in clauses (a) through (d) below,
and to have satisfied all their other obligations under such Notes and this
Indenture (and the Trustee, on demand of and at the expense of the Company,
shall execute proper instruments acknowledging the same), except for the
following provisions that shall survive until otherwise terminated or
discharged hereunder:

 

(a)           the
rights of Holders to receive payments in respect of the principal of, premium,
if any, and interest on the Notes when such payments are due;

 

(b)           the
Company’s obligations with respect to the Notes concerning issuing temporary
Notes, registration of Notes, mutilated, destroyed, lost or stolen Notes and
the maintenance of an office or agency for payments;

 

(c)           the
rights, powers, trust, duties and immunities of the Trustee and the Company’s
obligations in connection therewith; and

 

(d)           the Legal Defeasance provisions of
this Article VIII.

 

Subject to compliance with this Article VIII, the Company may
exercise its option under this Section 8.2, notwithstanding the prior
exercise of its option under Section 8.3.

 

77

 

Section 8.3.                                   Covenant
Defeasance.

 

Upon the Company’s exercise under Section 8.1 of the option
applicable to this Section 8.3, the Company shall, subject to the
satisfaction of the conditions set forth in Section 8.4, be released from
its obligations under the covenants contained in Sections 3.9, 3.10, 4.5, 4.7
through 4.12, 4.13 (except to the extent that it applies to the Company’s
existence), and 4.14 through 4.19, both inclusive, and Section 5.1 with
respect to the outstanding Notes on and after the date the conditions set forth
below are satisfied (hereinafter, “Covenant Defeasance”), and the Notes
shall thereafter be deemed not “outstanding” for the purposes of any direction,
waiver, consent or declaration or act of Holders (and the consequences of any
thereof) in connection with such covenants, but shall continue to be deemed
“outstanding” for all other purposes hereunder (it being understood that such
Notes shall not be deemed outstanding for accounting purposes, unless the
Company has been advised by its independent public accountants that, under the
accounting literature in effect at such time, the Notes must continue to be
treated as outstanding for accounting purposes).  For this purpose, Covenant Defeasance means that, with respect to
the outstanding Notes, the Company may omit to comply with and shall have no
liability in respect of any term, condition or limitation set forth in any such
covenant, whether directly or indirectly, by reason of any reference elsewhere
herein to any such covenant or by reason of any reference in any such covenant
to any other provision herein or in any other document, and such omission to
comply shall not constitute a Default or an Event of Default under
Section 6.1, but, except as specified above, the remainder of this
Indenture and such Notes shall be unaffected thereby.  In addition, upon the Company’s exercise under Section 8.1
of the option applicable to this Section 8.3, subject to the satisfaction
of the conditions set forth in Section 8.4, Sections 6.1(c) through 6.1(e)
and 6.1(h) shall not constitute Events of Default.

 

Section 8.4.                                   Conditions to
Legal or Covenant Defeasance.

 

The following are the conditions precedent to the application of either
Section 8.2 or 8.3 to the outstanding Notes:

 

In order to exercise either Legal Defeasance or Covenant Defeasance:

 

(1)                                  the Company must
irrevocably deposit with the Trustee, in trust, for the benefit of the Holders
cash in U.S. dollars, U.S. Government Obligations, or a combination thereof, in
such amounts as will be sufficient, in the written opinion of a nationally
recognized firm of independent public accountants (a copy of which shall be provided
to the Trustee), to pay the principal of, premium, if any, and interest on the
Notes on the stated date for payment thereof or on the applicable redemption
date, as the case may be;

 

(2)                                  in the case of Legal
Defeasance, the Company shall have delivered to the Trustee an Opinion of
Counsel in the United States confirming that:

 

(a)                                  the Company has
received from, or there has been published by, the Internal Revenue Service a
ruling; or

 

78

 

(b)                                 since the date of this
Indenture, there has been a change in the applicable federal income tax law,

 

in either case to the effect that, and based
thereon such Opinion of Counsel shall confirm that, the Holders will not
recognize income, gain or loss for federal income tax purposes as a result of
such Legal Defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been the case
if such Legal Defeasance had not occurred;

 

(3)                                  in the case of
Covenant Defeasance, the Company shall have delivered to the Trustee an Opinion
of Counsel in the United States confirming that the Holders will not recognize
income, gain or loss for federal income tax purposes as a result of such
Covenant Defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been the case
if such Covenant Defeasance had not occurred;

 

(4)                                  no Default shall have
occurred and be continuing on the date of such deposit (other than a Default or
Event of Default resulting from the borrowing of funds to be applied to such
deposit and the grant of any Lien securing such borrowings);

 

(5)                                  such Legal Defeasance
or Covenant Defeasance shall not result in a breach or violation of, or
constitute a default under this Indenture (other than a Default or an Event or
Default resulting from the borrowing of funds to be applied to such deposit and
the grant of any Lien securing such borrowings) or any other material agreement
or instrument to which the Company or any of its Subsidiaries is a party or by
which the Company or any of its Subsidiaries is bound; and

 

(6)                                  the Company shall
have delivered to the Trustee an Officer’s Certificate and an Opinion of
Counsel, each stating that all conditions precedent provided for or relating to
the Legal Defeasance or the Covenant Defeasance have been complied with.

 

Notwithstanding the foregoing, the Opinion of Counsel required by
clauses (2)(a) and (3) above need not be delivered if all Notes not
theretofore delivered to the Trustee for cancellation (1) have become due
and payable, (2) will become due and payable on the maturity date within
one year or (3) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice of redemption
by the Trustee in the name, and at the expense, of the Company.

 

Section 8.5.                                   Deposited Money
and U.S. Government Obligations to Be Held in Trust; Other Miscellaneous
Provisions.

 

Subject to Section 8.6, all money and U.S. Government Obligations
(including the proceeds thereof) deposited with the Trustee (or other
qualifying trustee, collectively for purposes of this Section 8.5 only,
the “Trustee”) pursuant to Section 8.4 in respect of the outstanding Notes
shall be held in trust and applied by the Trustee, in accordance with the

 

79

 

provisions of such Notes and this Indenture, to the payment, either
directly or through any Paying Agent (other than the Company) as the Trustee
may determine, to the Holders of such Notes of all sums due and to become due
thereon in respect of principal or Redemption Price of, and Additional
Interest, if any, interest on, the Notes, that such money need not be segregated
from other funds except to the extent required by law.

 

The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the cash or U.S. Government
Obligations deposited pursuant to Section 8.4 or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding Notes.

 

Anything in this Article VIII to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon the request
of the Company any money or U.S. Government Obligations held by it as provided
in Section 8.4 which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee (which may be the opinion delivered under
Section 8.4(a)), are in excess of the amount thereof that would then be
required to be deposited to effect an equivalent Legal Defeasance or Covenant
Defeasance.

 

Section 8.6.                                   Repayment to the
Company.

 

Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal, Redemption Price or
Purchase Price of, or Additional Interest, if any, or interest on any Note and
remaining unclaimed for two years after such amount has become due and payable
shall be paid to the Company on its request or (if then held by the Company)
shall be discharged from such trust; and the Holder of such Note shall
thereafter look only to the Company for payment thereof as a general creditor,
and all liability of the Trustee or such Paying Agent with respect to such
trust money, and all liability of the Company as trustee thereof, shall
thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such repayment, at the expense
of the Company, may cause to be published once, in The New York Times and
The Wall Street Journal (national editions), notice that such money remains
unclaimed and that, after a date specified therein, which shall not be less
than 30 days after the date of such notification or publication, any unclaimed
balance of such money then remaining will be repaid to the Company.

 

Section 8.7.                                   Reinstatement.

 

If the Trustee or Paying Agent is unable to apply any United States
dollars or U.S. Government Obligations in accordance with Section 8.2 or
8.3, as the case may be, by reason of any order of judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the obligations of the Company and the Guarantors under this 

 

80

 

Indenture, and the Notes and the Guarantees shall be revived and
reinstated as though no deposit had occurred pursuant to Section 8.2 or
8.3 until such time as the Trustee or Paying Agent is permitted to apply all
such money in accordance with Section 8.2 or 8.3, as the case may be; provided,
however, that if the Company makes any payment with respect to any Note
following the reinstatement of its obligations, the Company shall be subrogated
to the rights of the Holders of such Notes to receive such payment from the
money held by the Trustee or Paying Agent.

 

ARTICLE IX.

 

AMENDMENT,
SUPPLEMENT AND WAIVER

 

Section 9.1.                                   Without Consent
of Holders of Notes.

 

Notwithstanding Section 9.2, the Company, the Guarantors and the
Trustee may amend or supplement this Indenture or the Notes without the consent
of any Holder of a Note:

 

(a)           to
cure any ambiguity, defect or inconsistency;

 

(b)           to
provide for uncertificated notes in addition to or in place of certificated
Notes;

 

(c)           to
provide for the assumption of the Company’s obligations to the Holders of the
Notes in the case of a merger or consolidation 
or sale of all or substantially all of the Company’s assets pursuant to
Article V;

 

(d)           to
comply with the requirements of the Commission in order to effect or maintain
the qualification of this Indenture under the TIA;

 

(e)           to
provide for or confirm the issuance of Additional Notes in accordance with the
other provisions of this Indenture;

 

(f)            to
add Guarantees with respect to the Notes (including Guarantees pursuant to
Section 4.16 and Article X) or to secure the Notes; or

 

(g)           to make any change that would provide
any additional rights or benefits to the Holders of the Notes or that does not
adversely affect the rights hereunder of any Holder of the Notes in any
material respect.

 

Upon the request of the Company, accompanied by a Board Resolution (evidenced
by an Officer’s Certificate) (a copy of which shall be provided to the Trustee)
authorizing the execution of any such amended or supplemental indenture, and
upon receipt by the Trustee of an Officer’s Certificate and an Opinion of
Counsel in compliance with Section 9.6, the Trustee shall join with the
Company in the execution of any amended or supplemental indenture authorized or
permitted by the terms of this Indenture and to make any further appropriate
agreements and stipulations that may be therein contained, but the Trustee
shall not be obligated to enter into such amended or supplemental Indenture
that affects its own rights,

 

81

 

duties or immunities under this Indenture or otherwise.

 

Section 9.2.                                   With Consent of
Holders of Notes.

 

Except as provided below in this Section 9.2, the Company and the
Trustee may amend or supplement this Indenture and the Notes may be amended or
supplemented with the consent of the Holders of at least a majority in
principal amount of the Notes then outstanding (including, without limitation,
consents obtained in connection with a tender offer or exchange offer for the
Notes), and, subject to Sections 6.2, 6.4 and 6.7, any existing Default or
compliance with any provision of this Indenture or the Notes may be waived with
the consent of the Holders of a majority in principal amount of the then
outstanding Notes (including consents obtained in connection with a tender offer
or exchange offer for the Notes).

 

Without the consent of each Holder affected, an amendment or waiver may
not:

 

(1)                                  reduce the amount of
Notes whose Holders must consent to an amendment;

 

(2)                                  reduce the rate of or
change the time for payment of interest, including defaulted interest, on any
Notes;

 

(3)                                  reduce the principal
of or change the fixed maturity of any Notes, or change the date on which any
Notes are subject to redemption or repurchase or reduce the redemption or
repurchase price therefor;

 

(4)                                  make any Notes
payable in money other than that stated in the Notes;

 

(5)                                  make any change in
provisions of this Indenture protecting the right of each Holder to receive
payment of principal of and interest on such Note on or after the due date
thereof or to bring suit to enforce such payment, or permitting Holders of a majority
in principal amount of Notes to waive Defaults or Events of Default;

 

(6)                                  after an obligation
arises hereunder to make and consummate a Change of Control Offer in the event
of a Change of Control or make and consummate a Net Proceeds Offer with respect
to any Asset Sale that has been consummated, amend, change or modify in any
material respect the obligation to make such Change of Control Offer or such
Net Proceeds Offer, as the case may be, or modify any of the provisions or
definitions with respect thereto; or

 

(7)                                  modify or change any
provision of this Indenture or the related definitions so as to make the Notes
or any Guarantee expressly subordinate in right of payment to other
Indebtedness of the Company or the applicable Guarantor; provided that
the Notes or any Guarantee shall not be deemed to have been so made expressly
subordinate in right of payment solely by the existence or lack thereof of a
security interest or by priority with respect to a security interest.

 

Upon the written request of the Company accompanied by a Board
Resolution (evidenced by an Officer’s Certificate) (a copy of which shall be
provided to the Trustee)

 

82

 

authorizing the execution of any such amended or supplemental indenture,
and upon the filing with the Trustee of evidence satisfactory to the Trustee of
the consent of the Holders of Notes as aforesaid, and upon receipt by the
Trustee of an Officer’s Certificate and an Opinion of Counsel in compliance
with Section 9.6, the Trustee shall join with the Company in the execution
of such amended or supplemental indenture unless such amended or supplemental Indenture
affects the Trustee’s own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion, but shall not be
obligated to, enter into such amended or supplemental indenture.

 

It shall not be necessary for the consent of the Holders of Notes under
this Section 9.2 to approve the particular form of any proposed amendment
or waiver, but it shall be sufficient if such consent approves the substance
thereof.

 

After an amendment, supplement or waiver under this Section 9.2
becomes effective, the Company shall mail to the Holders of Notes affected
thereby a notice briefly describing the amendment, supplement or waiver.  Any failure of the Company to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such amended or supplemental Indenture or waiver.

 

Section 9.3.                                   Compliance with
Trust Indenture Act.

 

Every amendment or supplement to this Indenture or the Notes shall be
set forth in an amended or supplemental indenture that complies with the TIA as
then in effect.

 

Section 9.4.                                   Revocation and
Effect of Consents.

 

Until an amendment, supplement or waiver becomes effective, a consent
to it by a Holder of a Note is a continuing consent by the Holder of a Note and
every subsequent Holder of a Note or portion of a Note that evidences the same
debt as the consenting Holder’s Note, even if notation of the consent is not
made on any Note.  However, any such
Holder of a Note or subsequent Holder of a Note may revoke the consent as to
its Note if the Trustee receives written notice of revocation before the date
the waiver, supplement or amendment becomes effective.  An amendment, supplement or waiver becomes
effective in accordance with its terms and thereafter binds every Holder.

 

The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders of Notes entitled to give their consent
or take any other action described above or required or permitted to be taken
pursuant to this Indenture.  If a record
date is fixed, then notwithstanding the immediately preceding paragraph, those
Persons who were Holders of Notes at such record date (or their duly designated
proxies), and only those Persons, shall be entitled to give such consent or to
revoke any consent previously given or to take any such action, whether or not
such Persons continue to be Holders after such record date, and no such consent
shall be valid or effective for more than 120 days after such record date.

 

83

 

Section 9.5.                                   Notation on or
Exchange of Notes.

 

The Trustee may place an appropriate notation about an amendment, supplement
or waiver on any Note thereafter authenticated.  The Company in exchange for all Notes may issue and the Trustee
shall authenticate new Notes that reflect the amendment, supplement or waiver.

 

Failure to make the appropriate notation or issue a new Note shall not
affect the validity and effect of such amendment, supplement or waiver.

 

Section 9.6.                                   Trustee
to Sign Amendment, Etc.

 

The Trustee shall sign any amended or supplemental indenture authorized
pursuant to this Article IX if the amendment or supplement does not
adversely affect the rights, duties, liabilities or immunities of the
Trustee.  The Company may not sign an
amended or supplemental indenture until the Board of Directors approves such amended
or supplemental indenture.  In executing
any amended or supplemental indenture, the Trustee shall be entitled to receive
the documents required by Sections 12.4 and 12.5, and, subject to
Section 7.1, shall be fully protected in relying upon such documents.

 

ARTICLE X.

 

GUARANTEE

 

Section 10.1.                             Unconditional Guarantee.

 

Each Guarantor hereby unconditionally guarantees (such guarantee to be
referred to herein as a “Guarantee”), on a senior unsecured basis
jointly and severally, to each Holder of a Note authenticated and delivered by
the Trustee and to the Trustee and its successors and assigns, the Notes or the
obligations of the Company hereunder or thereunder, that:  (i) the principal of and interest on
the Notes will be promptly paid in full when due, subject to any applicable
grace period, whether at maturity, by acceleration or otherwise and interest on
the overdue principal, if any, and interest on any interest, to the extent
lawful, of the Notes and all other obligations of the Company to the Holders or
the Trustee hereunder or thereunder will be promptly paid in full or performed,
all in accordance with the terms hereof and thereof; and (ii) in case of
any extension of time of payment or renewal of any Notes or of any such other
obligations, the same will be promptly paid in full when due or performed in accordance
with the terms of the extension or renewal, subject to any applicable grace
period, whether at stated maturity, by acceleration or otherwise, subject,
however, in the case of clauses (i) and (ii) above, to the limitations set
forth in Section 10.3.  Each
Guarantor hereby agrees that (to the extent permitted by law) its obligations
hereunder shall be unconditional, irrespective of the validity, regularity or
enforceability of the Notes or this Indenture, the absence of any action to
enforce the same, any waiver or consent by any Holder of the Notes with respect
to any provisions hereof or thereof, the recovery of any

 

84

 

judgment against the Company, and action to enforce the same or any
other circumstance which might otherwise constitute a legal or equitable
discharge or defense of a guarantor. 
Each Guarantor hereby waives (to the extent permitted by law) diligence,
presentment, demand of payment, filing of claims with a court in the event of
insolvency or bankruptcy of the Company, any right to require a proceeding
first against the Company, protest, notice and all demands whatsoever and
covenants that this Guarantee will not be discharged except by complete
performance of the obligations contained in the Notes, this Indenture and in
this Guarantee.  If any Holder or the
Trustee is required by any court or otherwise to return to the Company, any
Guarantor, or any custodian, trustee, liquidator or other similar official
acting in relation to the Company or any Guarantor, any amount paid by the
Company or any Guarantor to the Trustee or such Holder, this Guarantee, to the
extent theretofore discharged, shall be reinstated in full force and
effect.  Each Guarantor further agrees
that, as between each Guarantor, on the one hand, and the Holders and the
Trustee, on the other hand, (x) the maturity of the obligations guaranteed
hereby may be accelerated as provided in Article VI for the purposes of
this Guarantee, notwithstanding any stay, injunction or other prohibition
preventing such acceleration in respect of the obligations guaranteed hereby,
and (y) in the event of any acceleration of such obligations as provided
in Article VI, such obligations (whether or not due and payable) shall
forthwith become due and payable by each Guarantor for the purpose of this
Guarantee.

 

Section 10.2.                             Severability.

 

In case any provision of this Guarantee shall be invalid, illegal or
unenforceable, the validity, legality, and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.

 

Section 10.3.                             Limitation of
Guarantor’s Liability.

 

Each Guarantor and by its acceptance hereof each Holder hereby confirms
that it is the intention of all such parties that the guarantee by such
Guarantor pursuant to its Guarantee not constitute a fraudulent transfer or
conveyance for purposes of any Bankruptcy Law, the Uniform Fraudulent
Conveyance Act, the Uniform Fraudulent Transfer Act or any similar Federal or
state law.  To effectuate the foregoing
intention, the Holders and such Guarantor hereby irrevocably agree that the
obligations of such Guarantor under its Guarantee shall be limited to the
maximum amount as will, after giving effect to all other contingent and fixed
liabilities (including all of its obligations under or with respect to the
Credit Agreement and all Interest Swap Obligations and obligations under
Currency Agreements) of such Guarantor and after giving effect to any
collections from or payments made by or on behalf of any other Guarantor in
respect of the obligations of such other Guarantor under its Guarantee or
pursuant to Section 10.5, result in the obligations of such Guarantor
under the Guarantee not constituting such fraudulent transfer or conveyance.

 

85

 

Section 10.4.                             Release of Guarantor.

 

(a)           The
Guarantee of a Guarantor will be automatically and unconditionally released
without any action on the part of the Trustee or the Holders of the Notes:  (1) in connection with any sale or other
disposition of all or substantially all of the assets of that Guarantor
(including, without limitation, by way of merger or consolidation), if the
Company applies the Net Cash Proceeds of that sale or other disposition in
accordance with the applicable provisions of this Indenture; (2) in connection
with any sale of all of the Capital Stock of that Guarantor, if the Company
applies the Net Cash Proceeds of that sale in accordance with the applicable provisions
of this Indenture; (3) if the Company designates that Guarantor as an
Unrestricted Subsidiary in accordance with the applicable provisions of this
Indenture; (4) upon merger or consolidation of such Guarantor with and into the
Company or another Guarantor that is the surviving Person in such merger or
consolidation; or (5) upon the payment in full of the Notes.

 

In addition, concurrently with any Legal Defeasance or Covenant
Defeasance, the Guarantors shall be released from all of their Obligations
under their respective applicable Guarantees.

 

(b)           The
Trustee shall deliver an appropriate instrument evidencing such release upon
receipt of a request by the Company accompanied by an Officer’s Certificate and
Opinion of Counsel certifying as to the compliance with this Section 10.4.

 

Section 10.5.                             Contribution.

 

Each Guarantor that makes a payment or distribution under any Guarantee
shall have the right to seek contribution from the Company or any non-paying
Guarantor that has also Guaranteed the Notes in respect of which such payment
or distribution is made, so long as the exercise of such right does not impair
the rights of the Holders under this Guarantee.

 

Section 10.6.                             Waiver of Subrogation.

 

Until all Obligations are paid in full, each Guarantor hereby
irrevocably waives any claims or other rights which it may now or hereafter
acquire against the Company that arise from the existence, payment, performance
or enforcement of such Guarantor’s obligations under its Guarantee and this
Indenture, including, without limitation, any right of subrogation, reimbursement,
exoneration, indemnification, and any right to participate in any claim or
remedy of any Holder against the Company, whether or not such claim, remedy or
right arises in equity, or under contract, statute or common law, including,
without limitation, the right to take or receive from the Company, directly or
indirectly, in cash or other property or by set-off or in any other manner,
payment or security on account of such claim or other rights.  If any amount shall be paid to any Guarantor
in violation of the preceding sentence and the Notes shall not have been paid
in full, such amount shall have been deemed to have been paid to such Guarantor
for the benefit of, and held in trust for the benefit of, the Holders, and
shall, forthwith be paid to the

 

86

 

Trustee for the benefit of such Holders to be credited and applied upon
the Notes, whether matured or unmatured, in accordance with the terms of this
Indenture.  Each Guarantor acknowledges
that it will receive direct and indirect benefits from the financing
arrangements contemplated by this Indenture and that the waiver set forth in
this Section 10.6 is knowingly made in contemplation of such benefits.

 

Section 10.7.                             Notation Not Required.

 

Neither the Company nor any Guarantor shall be required to make a
notation on the Notes to reflect any Guarantee or any release, termination or
discharge thereof.

 

The Company shall cause each Restricted Subsidiary that is required to
become a Guarantor pursuant to Section 4.16 to execute and deliver to the
Trustee a supplemental indenture substantially in the form set forth in Exhibit
C evidencing its Guarantee on the terms and subject to the conditions set
forth in this Article X. 
Concurrently therewith, the Company shall deliver to the Trustee an
Opinion of Counsel to the effect that such supplemental indenture has been duly
authorized, executed and delivered by such Restricted Subsidiary and that,
subject to the applicable bankruptcy, insolvency, fraudulent transfer,
fraudulent conveyance, reorganization, moratorium and other laws now or
hereafter in effect affecting creditors’ rights or remedies generally and
general principles of equity, whether considered in a proceeding at law or at equity,
such supplemental indenture is a valid and binding agreement of such Restricted
Subsidiary, enforceable against such Restricted Subsidiary in accordance with
its terms.

 

Section 10.8.                             Waiver
of Stay, Extension or Usury Laws.

 

Each Guarantor covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law or any
usury law or other law that would prohibit or forgive each such Guarantor from
performing its Guarantee as contemplated herein, wherever enacted, now or at
any time hereafter in force, or which may affect the covenants or the
performance of this Indenture; and (to the extent that it may lawfully do so)
each such Guarantor hereby expressly waives all benefit or advantage of any
such law, and covenants that it will not hinder, delay or impede the execution
of any power herein granted to the Trustee, but will suffer and permit the
execution of every such power as though no such law had been enacted.

 

87

 

ARTICLE XI.

 

SATISFACTION AND DISCHARGE

 

Section 11.1.                             Satisfaction and
Discharge.

 

This Indenture will be discharged and will cease to be of further
effect (except as set forth below) and the Trustee, at the expense of the
Company, shall execute proper instruments acknowledging satisfaction and discharge
of this Indenture when:

 

(1)                                  either:

 

(a)                                  all the Notes
theretofore authenticated and delivered (except lost, stolen or destroyed Notes
which have been replaced or paid as provided in Section 2.7 and Notes for
whose payment money has theretofore been deposited in trust or segregated and
held in trust by the Company and thereafter repaid to the Company or discharged
from such trust) have been delivered to the Trustee for cancellation; or

 

(b)                                 all Notes not
theretofore delivered to the Trustee for cancellation (x) have become due and
payable, (y) will be due and payable within one year or (z) will become due and
payable within one year under arrangements reasonably satisfactory to the
Trustee for the giving of notice of redemption by the Trustee in the name, and
at the expense of, the Company and, in each case, the Company has irrevocably
deposited or caused to be deposited with the Trustee funds in an amount
sufficient to pay and discharge the entire Indebtedness on the Notes not
theretofore delivered to the Trustee for cancellation, for principal of, premium,
if any, and interest on the Notes to the date of deposit together with
irrevocable written instructions from the Company directing the Trustee to
apply such funds to the payment thereof at maturity or redemption, as the case
may be;

 

(2)                                  the Company has paid
all other sums payable by the Company under this Indenture; and

 

(3)                                  the Company has
delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel
stating that all conditions precedent under this Indenture relating to the
satisfaction and discharge of this Indenture have been complied with.

 

Notwithstanding the satisfaction and discharge of this Indenture, the
Company’s obligations in Sections 2.3, 2.4, 2.6, 2.7, 2.11, 7.7, 7.8, 12.2,
12.3 and 12.4 and the Trustee’s and Paying Agent’s obligations in
Section 11.2 shall survive until the Notes are no longer outstanding.  Thereafter, only the Company’s obligations
in Section 7.7 shall survive.

 

Section 11.2.                             Application of Trust.

 

All money deposited with the Trustee pursuant to Section 11.1
shall be held in trust and, at the written direction of the Company, be
invested prior to maturity in U.S. Government Obligations, and applied by the
Trustee in accordance with the provisions of the Notes and this Indenture, to
the payment, either directly or through any Paying Agent as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any) and interest for the payment of which money has been deposited with the
Trustee; but such money need not be segregated from other funds except to the
extent required by law.

 

88

 

ARTICLE XII.

 

MISCELLANEOUS

 

Section 12.1.                             Trust Indenture Act
Controls.

 

If any provision hereof limits, qualifies or conflicts with a provision
of the TIA or another provision that would be required or deemed under such Act
to be part of and govern this Indenture if this Indenture were subject thereto,
the latter provision shall control.  If
any provision of this Indenture modifies or excludes any provision of the TIA
that may be so modified or excluded, the latter provision shall be deemed to
apply to this Indenture as so modified or to be excluded, as the case may be.

 

Section 12.2.                             Notices.

 

Any notice or communication by the Company or the Trustee to others is
duly given if in writing and delivered in Person or mailed by first class mail
(registered or certified, return receipt requested), telex, telecopier or
overnight air courier guaranteeing next day delivery, to the others’ address:

 

If to the
Company:

Equinox Holdings, Inc.

895 Broadway, 3rd Floor

New York, New York 10003

Attention: Chief Financial Officer

Fax: (212) 780-9769

 

With a copy
to:

Debevoise & Plimpton

919 Third Avenue

New York, New York  10022

Attention:  Paul D. Brusiloff, Esq.

Fax:  (212) 909-6836

 

If to the
Trustee:

U.S. Bank National Association

Goodwin Square

225 Asylum Street, 23rd Floor

Hartford, Connecticut 06103

Attention:  Michael M. Hopkins

 

89

 

Corporate Trust Services

Fax:  (860) 241-6889

 

With a copy
to:

Brown Rudnick Berlack Israels LLP

City Place I

Hartford, Connecticut 06103-3402

Attention:  David E. Golden, Esq.

Fax:  (860) 509-6501

 

The Company or the Trustee, by notice to the others may designate
additional or different addresses for subsequent notices or communications.

 

All notices and communications (other than those sent to Holders) shall
be deemed to have been duly given:  at
the time delivered by hand, if personally delivered; five Business Days after
being deposited in the mail, postage prepaid, if mailed; when answered back, if
telexed; when receipt acknowledged, if telecopied; and the next Business Day
after timely delivery to the courier, if sent by overnight air courier
guaranteeing next day delivery.

 

Any notice or communication to a Holder shall be mailed by first class
mail, certified or registered, return receipt requested, or by overnight air
courier guaranteeing next day delivery to its address shown on the register
kept by the Registrar.  Any notice or
communication shall also be so mailed to any Person described in TIA
§ 313(c), to the extent required by the TIA.  Failure to mail a notice or communication to a Holder or any
defect in it shall not affect its sufficiency with respect to other Holders.

 

If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the address
receives it.

 

If the Company mails a notice or communication to Holders, it shall
mail a copy to the Trustee and each Agent at the same time.

 

Section 12.3.                             Communication by
Holders of Notes with Other Holders of Notes.

 

Holders may communicate pursuant to TIA § 312(b) with other
Holders with respect to their rights under this Indenture or the Notes.  The Company, the Trustee, the Registrar and
anyone else shall have the protection of TIA § 312(c).

 

Section 12.4.                             Certificate and Opinion
as to Conditions Precedent.

 

Upon any request or application by the Company and/or any Guarantor to
the Trustee to take any action under this Indenture, the Company and/or any
Guarantor shall furnish

 

90

 

to the Trustee:

 

(a)           an
Officer’s Certificate to the effect that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture relating
to the proposed action have been satisfied; and

 

(b)           an
Opinion of Counsel to the effect that, in the opinion of such counsel, all such
conditions precedent and covenants have been satisfied.

 

Section 12.5.                             Statements Required in
Certificate or Opinion.

 

Each certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture (other than a certificate provided
pursuant to TIA § 314(a)(4)) shall comply with the provisions of TIA
§ 314(e) and shall include:

 

(a)           a
statement that the Person making such certificate or opinion has read such
covenant or condition;

 

(b)           a
brief statement as to the nature and scope of the examination or investigation
upon which the statements or opinions contained in such certificate or opinion
are based;

 

(c)           a
statement that, in the opinion of such Person, he or she has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
satisfied; and

 

(d)           a statement as to whether or not, in
the opinion of such Person, such condition or covenant has been satisfied.

 

Section 12.6.                             Rules by Trustee and
Agents.

 

The Trustee may make reasonable rules for action by or at a meeting of
Holders.  The Registrar or Paying Agent
may make reasonable rules and set reasonable requirements for its functions.

 

Section 12.7.                             No Personal Liability
of Directors, Officers, Employees and Stockholders.

 

No past, present or future director, officer, employee, incorporator,
agent or stockholder or Affiliate of the Company, as such, shall have any
liability for any obligations of the Company under the Notes, this Indenture or
for any claim based on, in respect of, or by reason of, such obligations or
their creation.  No past, present or
future director, officer, employee, incorporator, agent or stockholder or
Affiliate of any of the Guarantors, as such, shall have any liability for any obligations
of the Guarantors under the Guarantees, this Indenture or

 

91

 

for any claim based on, in respect of, or by reason of, such
obligations or their creation.  Each
Holder of Notes and Guarantees by accepting a Note and a Guarantee waives and
releases all such liabilities.  The
waiver and release are part of the consideration for issuance of the Notes and
the Guarantees.  Such waiver may not be
effective to waive liabilities under the federal securities law and it is the
view of the Commission that such a waiver is against public policy.

 

Section 12.8.                             Governing Law;
Submission to Jurisdiction; Waiver of Jury Trial.

 

THIS INDENTURE, THE GUARANTEES AND THE NOTES SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, BUT WITHOUT
GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT
SUCH PRINCIPLES ARE NOT MANDATORILY APPLICABLE BY STATUTE AND THE APPLICATION
OF THE LAW OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.  THE COMPANY AND EACH GUARANTOR HEREBY
IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY NEW YORK STATE COURT SITTING IN
THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK OR ANY FEDERAL COURT SITTING
IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK IN RESPECT OF ANY SUIT,
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE
GUARANTEES AND THE NOTES, AND IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF
ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, JURISDICTION OF THE AFORESAID
COURTS.  THE COMPANY AND EACH GUARANTOR
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT THAT IT MAY EFFECTIVELY DO SO UNDER
APPLICABLE LAW, TRIAL BY JURY AND ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT
IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING
BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.  NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE
TRUSTEE OR ANY HOLDER OF THE NOTES TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST
THE COMPANY OR ANY GUARANTOR IN ANY OTHER JURISDICTION.

 

Section 12.9.                             No Adverse
Interpretation of Other Agreements.

 

This Indenture may not be used to interpret any other indenture, loan
or debt agreement of the Company or its Subsidiaries or of any other
Person.  Any such indenture, loan or
debt agreement may not be used to interpret this Indenture.

 

92

 

Section 12.10.                       Successors.

 

All agreements of the Company in this Indenture and the Notes shall
bind their successors.  All agreements
of the Trustee in this Indenture shall bind its successors.

 

Section 12.11.                       Severability.

 

In case any provision in this Indenture or in the Notes shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.

 

Section 12.12.                       Counterpart Originals.

 

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

 

Section 12.13.                       Table of
Contents, Headings, Etc.

 

The Table of Contents, Cross-Reference Table and headings of the
Articles and Sections of this Indenture, which have been inserted for
convenience of reference only, are not to be considered a part of this
Indenture and shall in no way modify or restrict any of the terms or provisions
hereof.

 

Section 12.14.                       Qualification of Indenture.

 

The Company shall qualify this Indenture under the TIA in accordance with
the terms and conditions of the Registration Rights Agreement and shall pay all
reasonable costs and expenses (including attorneys’ fees for the Company, the
Trustee and the Holders of the Notes) incurred in connection therewith,
including, but not limited to, costs and expenses of qualification of this Indenture
and the Notes and printing this Indenture and the Notes.  The Trustee shall be entitled to receive
from the Company any such Officer’s Certificates, Opinions of Counsel or other
documentation as it may reasonably request in connection with any such
qualification of this Indenture under the TIA.

 

[Signatures on following page]

 

93

 

SIGNATURES

 

 

	
   

  	
  EQUINOX HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/. Scott Rosen

  	
   

  
	
   

  	
   

  	
  Name:  Scott Rosen

  
	
   

  	
   

  	
  Title:  Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  U.S. BANK NATIONAL ASSOCIATION,

  
	
   

  	
  as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  Michael W. Hopkins

  	
   

  
	
   

  	
   

  	
  Name:  Michael W. Hopkins

  
	
   

  	
   

  	
  Title:  Vice President

  

 

S-1

 

THE GUARANTORS

 

	
   

  	
  BROADWAY EQUINOX INC.

  
	
   

  	
  EQUINOX 92ND STREET INC.

  
	
   

  	
  EQUINOX-85TH STREET INC.

  
	
   

  	
  EQUINOX-63RD STREET, INC.

  
	
   

  	
  EQUINOX-54TH STREET, INC.

  
	
   

  	
  EQUINOX WHITE PLAINS ROAD, INC.

  
	
   

  	
  THE EQUINOX GROUP, INC.

  
	
   

  	
  EQUINOX WALL STREET, INC.

  
	
   

  	
  EQUINOX-50TH STREET INC.

  
	
   

  	
  EQUINOX-43RD STREET INC.

  
	
   

  	
  EQUINOX-76TH STREET, INC.

  
	
   

  	
  EQUINOX-44TH STREET, INC.

  
	
   

  	
  EQUINOX GREENWICH AVENUE, INC.

  
	
   

  	
  ENERGY WEAR, INC.

  
	
   

  	
  EQUINOX TRIBECA, INC.

  
	
   

  	
  EQUINOX FITNESS PASADENA, INC.

  
	
   

  	
  EQUINOX LINCOLN PARK, INC.

  
	
   

  	
  EQUINOX COLUMBUS CENTRE, INC.

  
	
   

  	
  EQUINOX WEST HOLLYWOOD, INC.

  
	
   

  	
  EQUINOX DARIEN, INC.

  
	
   

  	
  EQUINOX WOODBURY, INC.

  
	
   

  	
  EQUINOX GOLD COAST, INC.

  
	
   

  	
  EQUINOX TRIBECA OFFICE, INC.

  
	
   

  	
  EQUINOX HIGHLAND PARK, INC.

  
	
   

  	
  EQUINOX GREENVALE, INC.

  
	
   

  	
  EQUINOX PINE STREET, INC.

  
	
   

  	
  EQX HOLDINGS, LLC

  
	
   

  	
  EQUINOX MAMARONECK, INC.

  
	
   

  	
  EQUINOX FITNESS SANTA MONICA, INC.

  

 

 

	
   

  	
  By:

  	
  /s/ Scott Rosen

  	
   

  
	
   

  	
   

  	
  Name:  Scott Rosen

  
	
   

  	
   

  	
  Title:  Chief Financial
  Officer

  

 

S-2

 

SCHEDULE A

 

	
  Entity

  	
   

  	
  Ownership

  	
   

  	
  Jurisdiction of

  Organization

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Broadway Equinox Inc.

  	
   

  	
   

  	
   

  	
  New York

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Equinox 92nd Street Inc.

  	
   

  	
   

  	
   

  	
  New York

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Equinox-85th Street Inc.

  	
   

  	
   

  	
   

  	
  New York

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Equinox-63rd Street, Inc.

  	
   

  	
   

  	
   

  	
  New York

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Equinox-54th Street, Inc.

  	
   

  	
   

  	
   

  	
  New York

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Equinox White Plains Road, Inc.

  	
   

  	
   

  	
   

  	
  New York

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  The Equinox Group, Inc.

  	
   

  	
   

  	
   

  	
  New York

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Equinox Wall Street, Inc.

  	
   

  	
   

  	
   

  	
  New York

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Equinox-50th Street Inc.

  	
   

  	
   

  	
   

  	
  New York

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Equinox-43rd Street Inc.

  	
   

  	
   

  	
   

  	
  New York

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Equinox-76th Street, Inc.

  	
   

  	
   

  	
   

  	
  New York

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Equinox-44th Street, Inc.

  	
   

  	
   

  	
   

  	
  New York

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Equinox Greenwich Avenue, Inc.

  	
   

  	
   

  	
   

  	
  New York

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Energy Wear, Inc.

  	
   

  	
   

  	
   

  	
  New York

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Equinox Tribeca, Inc.

  	
   

  	
   

  	
   

  	
  New York

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Equinox Fitness Pasadena, Inc.

  	
   

  	
   

  	
   

  	
  California

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Equinox Lincoln Park, Inc.

  	
   

  	
   

  	
   

  	
  Illinois

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Equinox Columbus Centre, Inc.

  	
   

  	
   

  	
   

  	
  New York

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Equinox West Hollywood, Inc.

  	
   

  	
   

  	
   

  	
  California

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Equinox Darien, Inc.

  	
   

  	
   

  	
   

  	
  Connecticut

  

 

 

	
  Entity

  	
   

  	
  Ownership

  	
   

  	
  Jurisdiction of

  Organization

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Equinox Woodbury, Inc.

  	
   

  	
   

  	
   

  	
  New York

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Equinox Gold Coast, Inc.

  	
   

  	
   

  	
   

  	
  Illinois

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Equinox Tribeca Office, Inc.

  	
   

  	
   

  	
   

  	
  New York

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Equinox Highland Park, Inc.

  	
   

  	
   

  	
   

  	
  Illinois

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Equinox Greenvale, Inc.

  	
   

  	
   

  	
   

  	
  New York

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Equinox Pine Street, Inc.

  	
   

  	
   

  	
   

  	
  California

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EQX Holdings, LLC

  	
   

  	
   

  	
   

  	
  Delaware

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Equinox Mamaroneck, Inc.

  	
   

  	
   

  	
   

  	
  New York

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Equinox Fitness Santa Monica, Inc.

  	
   

  	
   

  	
   

  	
  California

  

 

 

EXHIBIT A

 

FORM
OF SERIES A NOTE

(Face of Note)

EQUINOX HOLDINGS, INC. 

9% SENIOR NOTE DUE 2009

 

[THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER
REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A
DEPOSITARY OR A SUCCESSOR DEPOSITARY. 
THIS NOTE IS NOT EXCHANGEABLE FOR NOTES REGISTERED IN THE NAME OF A
PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS NOTE (OTHER THAN A TRANSFER
OF THIS NOTE AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY
A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN
THE INDENTURE.

 

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE COMPANY OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.](1)

 

THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933 (THE “SECURITIES ACT’) AND MAY NOT BE OFFERED,
SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A)(1) TO A PERSON WHO THE
SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE
MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (2) IN AN OFFSHORE TRANSACTION
COMPLYING

 

(1)                                  To
be included only if the Note is issued in global form.

 

A-1

 

WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE
SECURITIES ACT, (3) TO AN INSTITUTIONAL ACCREDITED INVESTOR IN A
TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT,
(4) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (5) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (B) IN
ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED
STATES.

 

[Temporary Regulation S Global Note Legend]

 

BENEFICIAL OWNERSHIP INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL
NOTE WILL NOT BE EXCHANGEABLE FOR INTERESTS IN THE RULE 144A GLOBAL NOTE
OR THE PERMANENT REGULATION S GLOBAL NOTE OR ANY OTHER NOTE REPRESENTING
AN INTEREST IN THE NOTES REPRESENTED HEREBY WHICH DO NOT CONTAIN A LEGEND
CONTAINING RESTRICTIONS ON TRANSFER, UNTIL THE EXPIRATION OF THE “40-DAY
DISTRIBUTION COMPLIANCE PERIOD” (WITHIN THE MEANING OF RULE 903 OF
REGULATION S UNDER THE SECURITIES ACT) AND THEN ONLY UPON CERTIFICATION IN
FORM REASONABLY SATISFACTORY TO THE TRUSTEE THAT SUCH BENEFICIAL INTERESTS ARE
OWNED EITHER BY NON-U.S. PERSONS OR U.S. PERSONS WHO PURCHASED SUCH INTERESTS
IN A TRANSACTION THAT DID NOT REQUIRE REGISTRATION UNDER THE SECURITIES
ACT.  DURING SUCH 40-DAY DISTRIBUTION
COMPLIANCE PERIOD, BENEFICIAL OWNERSHIP INTERESTS IN THIS TEMPORARY
REGULATION S GLOBAL NOTE MAY ONLY BE SOLD, PLEDGED OR TRANSFERRED THROUGH
THE EUROCLEAR SYSTEM OR CLEARSTREAM BANKING, S.A. AND ONLY (A)(1) TO A
PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR
ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2) IN AN OFFSHORE
TRANSACTION COMPLYING WITH RULE 903 OR RULE 904 OF REGULATION S
UNDER THE SECURITIES ACT, (3) TO AN INSTITUTIONAL ACCREDITED INVESTOR IN A
TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT,
(4) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED
BY RULE 144 THEREUNDER (IF AVAILABLE) OR (5) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (B) IN ACCORDANCE WITH
ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES.  HOLDERS OF INTERESTS IN THIS TEMPORARY
REGULATION S GLOBAL NOTE WILL NOTIFY ANY PURCHASER OF SUCH RESALE
RESTRICTIONS, IF THEN APPLICABLE.

 

[Definitive Note Legend]

 

IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR
AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER
AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE
FOREGOING RESTRICTIONS.

 

A-2

 

EQUINOX HOLDINGS, INC.

9% SENIOR NOTE DUE 2009

 

	
   

  	
   

  	
  CUSIP No.                       

  
	
  No.                   

  	
   

  	
  $                                 

  

 

Interest Payment Dates: 
June 15 and December 15

Record Dates:  June 1 and
December 1

 

EQUINOX HOLDINGS, INC., a Delaware corporation (the “Company,”
which term includes any successor corporation under the indenture hereinafter
referred to), for value received promises to pay to _________________________
________________________________________________, or registered assigns, the
principal sum of ________________________ ________________________________
Dollars on December 15, 2009.

 

Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as set forth at this place.

 

Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Note
shall not be entitled to any benefits under the Indenture referred to on the
reverse hereof or be valid or obligatory for any purpose.

 

IN WITNESS WHEREOF, the Company has caused this Note to be duly executed.

 

	
   

  	
  Dated:

  
	
   

  	
   

  
	
   

  	
  EQUINOX HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

This is one of the Notes referred to
 in the within-mentioned Indenture:

 

	
  U.S. BANK NATIONAL ASSOCIATION,

  
	
  as Trustee

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

A-3

 

(Back of Note)

9% Senior Notes due 2009

 

Capitalized
terms used herein shall have the meanings assigned to them in the Indenture
referred to below unless otherwise indicated.

 

(1)           (a) 
Interest.  The Company
promises to pay interest on the principal amount of this Note at the rate of 9%
per annum from December 16, 2003 until maturity.  The Company will pay interest semi-annually on June 15 and
December 15 of each year, or if any such day is not a Business Day, on the
next succeeding Business Day (each an “Interest Payment Date”).  Interest on the Note will accrue from the
most recent date to which interest has been paid or, if no interest has been
paid, from the date of issuance; provided that if there is no existing
Default in the payment of interest, and if this Note is authenticated between a
record date referred to on the face hereof and the next succeeding Interest
Payment Date, interest shall accrue from such next succeeding Interest Payment
Date; provided, further, that the first Interest Payment Date
shall be June 15, 2004.  The Company
shall pay interest (including post-petition interest in any proceeding under
any Bankruptcy Law) on overdue payments of the principal, Purchase Price and
Redemption Price of this Note from time to time at the same rate per annum on
the Notes to the extent lawful. 
Interest will be computed on the basis of a 360-day year of twelve
30-day months.

 

(b)           Additional Interest.  The Holder of this Note is entitled to the
benefits of a Registration Rights Agreement, dated December 16, 2003,
among the Company, the Guarantors and the Initial Purchasers named therein (the
“Registration Rights Agreement”). 
Capitalized terms used in this paragraph (b) but not defined herein have
the meanings assigned to them in the Registration Rights Agreement.  Additional Interest will be payable in cash
semi-annually on June 15 and December 15 of each year, or if any such date
is not a Business Day, on the next succeeding business day.  The Company shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue installments of
Additional Interest, if any, hereon from time to time on demand at the same
rate to the extent lawful.

 

(2)           Method of Payment.  The Company will pay interest on the Notes
(except defaulted interest) and Additional Interest, if any, to the Persons who
are registered Holders of Notes at the close of business on the June 1 and
December 1 next preceding the Interest Payment Date, even if such Notes
are canceled after such record date and on or before such Interest Payment
Date, except as provided in Section 2.12 of the Indenture with respect to
defaulted interest.  Any such
installment of interest or Additional Interest, if any, not punctually paid or
duly provided for shall forthwith cease to be payable to the registered Holders
on such Interest Payment Date, and may be paid to the registered Holders at the
close of business on a special interest payment date to be fixed by the Trustee
for the payment of such defaulted interest, notice whereof shall be given to
the registered Holders not less than 10 days prior to such special
interest payment date, or may be paid at any time in any other lawful manner
not inconsistent with the requirements of any securities exchange on which the
Notes may be listed, and upon such notice as may be required by such exchange,
all as more fully provided in the Indenture. 
The Notes will be payable as to principal, Redemption Price, Purchase
Price, interest and

 

A-4

 

 

Additional
Interest, if any, at the office or agency of the Company maintained for such
purpose within or without the City and State of New York, or, at the
option of the Company.  Payment of
interest and Additional Interest may be made by check mailed to the Holders at
their addresses set forth in the register of Holders, provided that
payment by wire transfer of immediately available funds will be required with
respect to principal, Redemption Price and Purchase Price of, and interest and
Additional Interest (if any) on, all Global Notes and all other Notes the
Holders of which shall have provided wire transfer instructions to the Trustee
or the Paying Agent.  Such payment shall
be in such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts.

 

(3)           Paying Agent and Registrar.  Initially, U.S. Bank National Association,
the Trustee under the Indenture, will act as Paying Agent and Registrar.  The Company may change any Paying Agent or
Registrar without notice to any Holder. 
The Company or a domestically incorporated wholly-owned subsidiary may
act in any such capacity.

 

(4)           Indenture and Guarantees.  The Company issued the Notes under an Indenture
dated as of December 16, 2003 (as in effect from time to time, the “Indenture”)
between the Company, the Guarantors and the Trustee.  The terms of the Notes include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act of
1939, as amended (15 U.S.C. Code §§ 77aaa-77bbbb).  The Notes are subject to all such terms, and
Holders are referred to the Indenture and such Act for a statement of such
terms.  The Notes are general
obligations of the Company.  Payment on
each Note is guaranteed, jointly and severally, by the Guarantors pursuant to
Article X of the Indenture.  If any of
the terms or provisions contained in the Notes conflict with any of the terms
or provisions of the Indenture, those contained in the Indenture shall govern.

 

(5)           Optional Redemption.  The Company may redeem the Notes, at the Company’s
option, in whole at any time, or in part from time to time, on or after
December 15, 2006, upon not less than 30 nor more than 60 days’
notice at the following Redemption Prices (expressed as a percentage of the
principal amount), if redeemed during the 12-month period commencing on December 15
of the year set forth below, plus, in each case, accrued and unpaid interest
thereon, if any, to the date of redemption:

 

	
  Year

  	
   

  	
  Redemption

  Price

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2006

  	
   

  	
  104.500

  	
  %

  
	
  2007

  	
   

  	
  102.250

  	
  %

  
	
  2008 and thereafter

  	
   

  	
  100.000

  	
  %

  

 

If less than
all the Notes are to be redeemed, the Trustee will select the particular Notes
or portions thereof to be redeemed by lot, pro rata or by any other method the Trustee
shall deem fair and reasonable.

 

(6)           Optional Redemption upon Public
Equity Offerings.  At any time, or
from time to time, on or prior to December 15, 2006, the Company may, at
its option, use the net cash

 

A-5

 

proceeds of
one or more  Equity Offerings to redeem
up to 35% of the Notes issued under the Indenture at a Redemption Price equal
to 109% of the principal amount thereof, plus 
accrued and unpaid interest and Additional Interest (if any), to the
date of redemption, provided, that at least 65% of the principal amount
of Notes issued under the Indenture remains outstanding immediately after any
such redemption; and provided, further, that the Company shall
make such redemption not more than 120 days after the consummation of any
such Equity Offering.  If less than all
the Notes are to be redeemed, the Trustee will select the particular Notes or
portions thereof to be redeemed by lot, only on a pro rata basis or on as
nearly a pro
rata basis as is practicable (subject to DTC procedures).

 

(7)           Mandatory Redemption.  Except as set forth in Paragraph 9 below
with respect to repurchases of Notes in certain events, the Company shall not
be required to make mandatory redemption payments with respect to the Notes.

 

(8)           Notice of Redemption.  Subject to the provisions of the Indenture,
a notice of redemption will be mailed at least 30 days but not more than
60 days (or in the case of a Change of Control Offer, at least 30 days but
not more than 45 days, or in the case of a Net Proceeds Offer, within 30
days) before the applicable redemption date to each Holder whose Notes are to
be redeemed at its registered address. 
Notes in denominations larger than $1,000 may be redeemed in part but
only in whole multiples of $1,000, unless all of the Notes held by a Holder are
to be redeemed.  On and after the
redemption date interest ceases to accrue on Notes or portions thereof called
for redemption.

 

(9)           Repurchase at Option of Holder.

 

(a)           If there is a Change of Control, the
Company shall be required to make an offer (a “Change of Control Offer”)
to repurchase all or any part (equal to $1,000 or an integral multiple thereof)
of each Holder’s Notes at a Purchase Price equal to 101% of the principal
amount thereof plus accrued and unpaid interest and Additional Interest,
if any, to the date of repurchase, in accordance with the procedures set forth
in the Indenture; provided that the Company shall not be obligated to
make a Change of Control Offer if, no later than the 30th day after the Change
of Control, it has mailed an irrevocable notice of redemption for all of the
Notes pursuant to the procedures set forth in the Indenture for an Optional
Redemption and the Company subsequently has not failed to consummate such
Optional Redemption.  Upon any failure
by the Company to consummate the Optional Redemption for which such irrevocable
notice of redemption was given, the Company’s obligation to offer to repurchase
Notes shall be reinstated.  Within
30 days following any Change of Control, the Company shall send, by first
class mail, a notice to each Holder setting forth the procedures governing the
Change of Control Offer as required by the Indenture.

 

(b)           On the 361st day after an Asset Sale
or such earlier date, if any, as the Board of Directors of the Company or of
such Restricted Subsidiary determines not to apply the Net Cash Proceeds
relating to such Asset Sale as set forth in the second paragraph of Section 4.10
of the Indenture (each, a “Net Proceeds Offer Trigger Date”), such
aggregate amount of Net Cash Proceeds which have not been applied on or before
such Net Proceeds Offer Trigger Date as permitted in the second paragraph of
Section 4.10 of the Indenture (each, a “Net

 

A-6

 

Proceeds Offer Amount”) shall be applied by
the Company or such Restricted Subsidiary to make an offer to purchase (the “Net
Proceeds Offer”) on a date not less than 45 nor more than 60 days
following the applicable Net Proceeds Offer Trigger Date, the maximum principal
amount of Notes and if the Company so elects, other Indebtedness of the Company
and the Guarantors that ranks pari  passu in right of payment with the Notes
or the Guarantees, as the case may be (to the extent required by the instrument
governing such other Indebtedness), that may be purchased out of the Net
Proceeds Offer Amount.  Any Notes and
other Indebtedness to be purchased pursuant to a Net Proceeds Offer shall be
purchased pro
rata based on the aggregate principal amount of Notes and such other
Indebtedness outstanding and all Notes shall be purchased at an offer price in
cash in an amount equal to 100% of the principal amount thereof, plus accrued
and unpaid interest to the date of purchase. 
To the extent the aggregate principal amount of Notes and other
Indebtedness validly tendered and not withdrawn by holders exceeds the Net
Proceeds Offer Amount, Notes and other Indebtedness, if any, shall be purchased
pro rata
based on the aggregate principal amount of tendered Notes and other
Indebtedness, if any.  Each Net Proceeds
Offer will be mailed to the record Holders as shown on the register of Holders
within 30 days following the Net Proceeds Offer Trigger Date, with a copy
to the Trustee, and shall comply with the procedures set forth in the
Indenture.  Upon receiving notice of the
Net Proceeds Offer, Holders may elect to tender their Notes in whole or in part
in integral multiples of $1,000 in exchange for cash.  To the extent Holders properly tender Notes in an amount exceeding
the Net Proceeds Offer Amount, Notes of tendering Holders will be purchased on
a pro
rata basis (based on amounts tendered).  A Net Proceeds Offer shall remain open for a period of 20
Business Days or such longer period as may be required by law.

 

(10)         Denominations, Transfer, Exchange.  The Notes are in registered form without
coupons in denominations of $1,000 and integral multiples of $1,000.  The transfer of Notes may be registered and
Notes may be exchanged as provided in the Indenture.  The Registrar and the Trustee may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents and the
Company may require a Holder to pay any taxes and fees required by law or
permitted by the Indenture.  The Company
need not exchange or register the transfer of any Note or portion of a Note
selected for redemption, except for the unredeemed portion of any Note being
redeemed in part.  Also, it need not
exchange or register the transfer of any Notes for a period of 15 days
before a selection of Notes to be redeemed or during the period between a
record date and the corresponding Interest Payment Date.

 

(11)         Persons Deemed Owners.  The registered Holder of a Note may be
treated as its owner for all purposes.

 

(12)         Amendment, Supplement and Waiver.  Subject to certain exceptions, the Indenture
and the Notes may be amended or supplemented with the consent of the Holders of
at least a majority in principal amount of the then outstanding Notes, and any
existing default or compliance with any provision of the Indenture or the Notes
may be waived with the consent of the Holders of a majority in principal amount
of the then outstanding Notes.  Without
the consent of any Holder of a Note, the Indenture and the Notes may be amended
or supplemented to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Notes in addition to or in place of certificated Notes, to
provide for the assumption of the Company’s obligations to Holders of the Notes
in case of a merger or consolidation or sale of all or substantially all of the

 

A-7

 

Company’s
assets pursuant to Article V of the Indenture, to make any change that would
provide any additional rights or benefits to the Holders of the Notes or that
does not adversely affect the rights under the Indenture of any such Holder in
any material respect, or to comply with the requirements of the Commission in
order to effect or maintain the qualification of the Indenture under the Trust
Indenture Act.

 

(13)         Defaults and Remedies.  Events of Default include:  (i) default for 30 days in the
payment when due of interest or Additional Interest, if any, on the Notes;
(ii) default in payment when due of principal, Redemption Price or
Purchase Price of the Notes when the same becomes due and payable at maturity,
upon redemption, repurchase or otherwise (including the failure to make a
payment to purchase Notes tendered pursuant to a Change of Control Offer or a
Net Proceeds Offer); (iii) failure by the Company to comply with any covenant
contained in the Indenture for 30 days after notice to the Company
specifying the default (and demanding that such default be remedied) by the
Trustee or the Holders of at least 25% of the aggregate principal amount of the
Notes outstanding (except in the case of a default referred to in
Section 5.1 of the Indenture, which will constitute an Event of Default
with such notice requirement but without such passage of time requirement);
(iv) default under certain other agreements relating to Indebtedness of
the Company which default (a) is caused by a failure to pay any amount due at
the final stated maturity thereof or (b) results in the acceleration of such
Indebtedness prior to its express final stated maturity and, in each case, the
principal amount of such Indebtedness, together with the principal amount of
any other such Indebtedness under which there has been a default for failure to
pay principal at final stated maturity or the final stated maturity of which
has been so accelerated, aggregates $5.0 million or more and such failure shall
not have been cured or waived within 20 days thereof; (v) certain
final judgments of the Company or any Significant Subsidiary for the payment of
money that remain undischarged for a period of 60 days, provided
that the aggregate of all such undischarged judgments exceeds $5.0 million;
(vi) certain events of bankruptcy or insolvency with respect to the
Company or any Significant Subsidiary of the Company; and (vii) a Guarantee of
a Guarantor that is a Significant Subsidiary ceases to be in full force and
effect or is declared null and void and unenforceable or is found to be invalid
or a Guarantor that is a Significant Subsidiary denies its liability, in
writing, under its Guarantee (other than by reason of release of a Guarantor in
accordance with the Indenture).  If any
Event of Default occurs and is continuing, the Trustee or the Holders of at
least 25% in principal amount of the then outstanding Notes may declare all the
Notes to be due and payable immediately. 
Upon any such declaration, the entire principal amount of, and accrued
and unpaid interest and Additional Interest, if any, on the Notes shall become
immediately due and payable.  Notwithstanding
the foregoing, in the case of an Event of Default arising from certain events
of bankruptcy or insolvency with respect to the Company, all outstanding Notes
will become due and payable without further action or notice.  Holders may not enforce the Indenture or the
Notes except as provided in the Indenture and under the TIA.  Subject to certain limitations, Holders of a
majority in principal amount of the then outstanding Notes may direct the
Trustee in its exercise of any trust or power. 
The Trustee may withhold from Holders of the Notes notice of any
continuing Default or Event of Default (except a Default or Event of Default
relating to payment on any Note) if it determines that withholding notice is in
their interest.  The Holders of a
majority in principal amount of the Notes may waive any existing Default under
the Indenture, and its consequences, except a default in the payment of the
principal of, or interest on any

 

A-8

 

Notes.  The Company is required to deliver to the
Trustee annually a statement regarding compliance with the Indenture, and the
Company is required upon becoming aware of any Default or Event of Default, to
deliver to the Trustee a statement specifying such Default or Event of Default.

 

(14)         Trustee Dealings with Company.  Subject to certain limitations, the Trustee
under the Indenture, in its individual or any other capacity, may become owner
or pledge of Notes and may otherwise deal with the Company or its Affiliates as
if it were not Trustee.

 

(15)         No Recourse Against Others.  No past, present or future director,
officer, employee, incorporator or stockholder of the Company, as such, shall
have any liability for any obligations of the Company under the Notes or the
Indenture or for any claim based on, in respect of, or by reason of, such
obligations or their creation.  Each
Holder by accepting a Note waives and releases all such liability.  The waiver and release are part of the
consideration for the issuance of the Notes.

 

(16)         Authentication.  This Note shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating
agent.

 

(17)         Abbreviations.  Customary abbreviations may be used in the
name of a Holder or an assignee, such as: 
TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT
TEN (= joint tenants with right of survivorship and not as tenants in common),
CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).

 

(18)         Discharge and Defeasance.  If the Company deposits with the Trustee or
Paying Agent cash or U.S. Government Obligations sufficient to pay the
principal or Redemption Price of, and interest and Additional Interest, if any,
on, the Notes to maturity or a specified Redemption Date and satisfies certain
conditions specified in the Indenture, the Company will be discharged from the
Indenture, except for certain Sections thereof.

 

(19)         Governing Law.  The Indenture and Guarantees and this Note
shall be governed by and construed in accordance with the laws of the State of
New York but without giving effect to applicable principles of conflicts
of law to the extent that such principles are not mandatorily applicable by
statute and the application of the law of another jurisdiction would be
required thereby.  Each of the Company
and each Guarantor hereby irrevocably submits to the jurisdiction of any
New York state court sitting in the Borough of Manhattan in the City of
New York or any Federal court sitting in the Borough of Manhattan in the
City of New York in respect of any suit, action or proceeding arising out
of or relating to the Indenture and the Notes, and irrevocably accept for
itself and in respect of its property, generally and unconditionally, jurisdiction
of the aforesaid courts.  Each of the
Company and each Guarantor irrevocably waives, to the fullest extent that it
may effectively do so under applicable law, trial by jury and any objection
which it may now or hereafter have to the laying of the venue of any such suit,
action or proceeding brought in any such court and any claim that any such
suit, action or proceeding brought in any such court has been brought in an
inconvenient forum.  Nothing herein
shall affect the right of the Trustee or any Holder of the Notes to serve
process in any other manner permitted by law or to commence legal proceedings
or otherwise proceed against the

 

A-9

 

Company or any
Guarantor in any other jurisdiction.

 

(20)         CUSIP Numbers.  Pursuant to a recommendation promulgated by
the Committee on Uniform Security Identification Procedures, the Company has
caused CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP
numbers in notices of redemption as a convenience to Holders.  No representation is made as to the
correctness or accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption or repurchase and reliance may be placed
only on the other identification numbers placed thereon.

 

(21)         Registration Rights.  Pursuant to the Registration Rights
Agreement, the Company will be obligated upon the occurrence of certain events
to consummate an exchange offer pursuant to which the Holder of this Note shall
have the right to exchange this Series A Note for the Company’s 9% Senior
Notes due 2009, Series B, which have been registered under the Securities
Act, in like principal amount and having terms identical in all material
respects as the Series A Notes. 
The Holders shall be entitled to receive certain additional interest
payments in the event such exchange offer is not consummated and upon certain
other conditions, all pursuant to and in accordance with the terms of the
Registration Rights Agreement.

 

(22)         Request for Indenture.  The Company will furnish to any Holder upon
written request and without charge a copy of the Indenture.  Request may be made to:

 

Equinox
Holdings, Inc.

895 Broadway, 3rd Floor

New York, New York 10003

Attention: Chief Financial Officer

 

A-10

 

ASSIGNMENT FORM

 

To assign this Note, fill in
the form below:

 

I or we assign and transfer
this Note to

 

(Print or type assignee’s name,
address and zip code)

 

(Insert assignee’s soc. sec. or
tax I.D. No.)

 

and irrevocably appoint                                                                          
as agent to transfer this Note on the books of the Company.  The agent may substitute another to act for
him or her.

 

	
  Date:

  	
   

  	
   

  
	
   

  
	
  Your
  Signature:

  	
   

  	
   

  
	
  Sign exactly
  as your name appears on the other side of this Note.

  
					

 

	
  Signature
  Guarantee:

  
	
   

  
	
  Date:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Signature of
  Signature Guarantee

  

 

Signature must be guaranteed by
a participant in a recognized signature guaranty medallion program or other
signature guarantor acceptable to the Trustee.

 

A-11

 

OPTION OF HOLDER TO ELECT PURCHASE

 

If you wish to
elect to have all or any portion of this Note purchased by the Company pursuant
to Section 4.10 (“Net Proceeds Offer”) or Section 4.15 (“Change
of Control Offer”) of the Indenture, check the applicable boxes

 

	
  o

  	
  Net Proceeds Offer: 

  	
  o

  	
  Change of Control Offer:

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  in whole

  	
  o

  	
   

  	
  in whole

  	
  o

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  in part

  	
  o

  	
   

  	
  in part

  	
  o

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Amount to be

  	
   

  	
   

  	
  Amount to be

  	
   

  
	
   

  	
  purchased: $

  	
   

  	
   

  	
   

  	
  purchased: $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Your Signature:

  	
   

  	
   

  	
   

  	
   

  
	
  Sign exactly as your name appears on the other side of this Note.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Signature Guarantee:

  	
   

  	
   

  
																	

 

Signature must be
guaranteed by a participant in a recognized signature guaranty medallion
program or other signature guarantor acceptable to the Trustee.

 

	
  Social Security Number or

  
	
  Taxpayer Identification Number:

  	
   

  	
   

  

 

A-12

 

EXHIBIT B

 

FORM OF SERIES B
NOTE

(Face of Note)

EQUINOX HOLDINGS, INC.

9% SENIOR NOTE DUE 2009

 

[THIS NOTE IS A GLOBAL NOTE
WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED
IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY OR A SUCCESSOR
DEPOSITARY.  THIS NOTE IS NOT EXCHANGEABLE
FOR NOTES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS
NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO
TRANSFER OF THIS NOTE (OTHER THAN A TRANSFER OF THIS NOTE AS A WHOLE BY THE
DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO
THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT
IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

 

UNLESS THIS CERTIFICATE IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A
NEW YORK CORPORATION (“DTC”), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.](2)

 

(2)           To be included only if the Note is issued in global form

 

 

B-1

 

EQUINOX HOLDINGS, INC.

9% SENIOR NOTE DUE 2009

 

	
   

  	
  CUSIP
  No.____________________

  
	
  No.________________

  	
  $____________________________

  

 

Interest Payment Dates:  June 15 and December 15

Record Dates:  June 1 and
December 1

 

EQUINOX
HOLDINGS, INC., a Delaware corporation (the “Company,” which term
includes any successor corporation under the indenture hereinafter referred
to), for value received promises to pay to
____________________________________, or registered assigns, the principal sum
of ________________  Dollars on
December 15, 2009.

 

Reference is
hereby made to the further provisions of this Note set forth on the reverse
hereof, which further provisions shall for all purposes have the same effect as
set forth at this place.

 

Unless the
certificate of authentication hereon has been executed by the Trustee referred
to on the reverse hereof by manual signature, this Note shall not be entitled
to any benefits under the Indenture referred to on the reverse hereof or be
valid or obligatory for any purpose.

 

IN WITNESS
WHEREOF, the Company has caused this Note to be duly executed.

 

	
   

  	
  Dated:

  
	
   

  	
   

  
	
   

  	
  EQUINOX HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

B-2

 

	
  This is one
  of the Notes referred to

  	 

	
  in the
  within-mentioned Indenture:

  	 

	
   

  	 

	
  U.S. BANK
  NATIONAL ASSOCIATION,

  	 

	
  as Trustee

  	 

	
   

  	 

	
  By:

  	
   

  	
   

  	 

	
   

  	
  Name:

  
	
   

  	
  Title:

  
				

 

B-3

 

(Back of Note)

 

9% Senior Notes due 2009

 

Capitalized
terms used herein shall have the meanings assigned to them in the Indenture
referred to below unless otherwise indicated.

 

1.             Interest.  The Company promises to pay interest on the
principal amount of this Note at the rate of 9% per annum from
December 16, 2003 until maturity. 
The Company will pay interest semi-annually June 15 and December 15
of each year, or if any such day is not a Business Day, on the next succeeding
Business Day (each an “Interest Payment Date”).  Interest on the Note will accrue from the
most recent date to which interest has been paid or, if no interest has been
paid, from the date of issuance; provided that if there is no existing
Default in the payment of interest, and if this Note is authenticated between a
record date referred to on the face hereof and the next succeeding Interest
Payment Date, interest shall accrue from such next succeeding Interest Payment
Date; provided, further, that the first Interest Payment Date shall
be June 15, 2004.  The Company shall pay
interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue payments of the principal, Purchase Price and Redemption
Price of this Note from time to time at the same rate per annum on the Notes to
the extent lawful.  Interest will be
computed on the basis of a 360-day year of twelve 30-day months.

 

2.             Method of Payment.  The Company will pay interest on the Notes
(except defaulted interest) to the Persons who are registered Holders of Notes
at the close of business on the June 1 and December 1 next preceding the
Interest Payment Date, even if such Notes are canceled after such record date
and on or before such Interest Payment Date, except as provided in
Section 2.12 of the Indenture with respect to defaulted interest.  Any such installment of interest not punctually
paid or duly provided for shall forthwith cease to be payable to the registered
Holders on such Interest Payment Date, and may be paid to the registered
Holders at the close of business on a special interest payment date to be fixed
by the Trustee for the payment of such defaulted interest, notice whereof shall
be given to the registered Holders not less than 10 days prior to such
special interest payment date, or may be paid at any time in any other lawful
manner not inconsistent with the requirements of any securities exchange on
which the Notes may be listed, and upon such notice as may be required by such
exchange, all as more fully provided in the Indenture.  The Notes will be payable as to principal,
Redemption Price, Purchase Price, interest at the office or agency of the Company
maintained for such purpose within or without the City and State of
New York, or, at the option of the Company.  Payment of interest may be made by check mailed to the Holders at
their addresses set forth in the register of Holders, provided that
payment by wire transfer of immediately available funds will be required with
respect to principal, Redemption Price and Purchase Price of, and interest on,
all Global Notes and all other Notes the Holders of which shall have provided
wire transfer instructions to the Trustee or the Paying Agent.  Such payment shall be in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts.

 

3.             Paying Agent and Registrar.  Initially, U.S. Bank National Association,
the Trustee under the Indenture, 

 

B-4

 

will act as
Paying Agent and Registrar.  The Company
may change any Paying Agent or Registrar without notice to any Holder.  The Company or any domestically incorporated
wholly-owned subsidiary may act in any such capacity.

 

4.             Indenture and Guarantees.  The Company issued the Notes under an Indenture
dated as of December 16, 2003 (as in effect from time to time, the “Indenture”)
between the Company, the Guarantors and the Trustee.  The terms of the Notes include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act of
1939, as amended (15 U.S.C. Code §§ 77aaa-77bbbb).  The Notes are subject to all such terms, and Holders are referred
to the Indenture and such Act for a statement of such terms.  The Notes are general obligations of the
Company.  Payment on each Note is guaranteed,
jointly and severally, by the Guarantors pursuant to Article X of the
Indenture.  If any of the terms or
provisions contained in the Notes conflict with any of the terms or provisions
of the Indenture, those contained in the Indenture shall govern.

 

5.             Optional Redemption.  The Company may redeem the Notes, at the Company’s
option, in whole at any time, or in part from time to time, on or after
December 15, 2006, upon not less than 30 nor more than 60 days’ notice
at the following Redemption Prices (expressed as a percentage of the principal
amount), if redeemed during the 12-month period commencing on December 15
of the year set forth below, plus, in each case, accrued and unpaid interest
thereon, if any, to the date of redemption:

 

	
  Year

  	
   

  	
  Redemption

  Price

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2006

  	
   

  	
  104.500

  	
  %

  
	
  2007

  	
   

  	
  102.250

  	
  %

  
	
  2008 and thereafter

  	
   

  	
  100.000

  	
  %

  

 

If less than
all the Notes are to be redeemed, the Trustee will select the particular Notes
or portions thereof to be redeemed by lot, pro rata or by any other method the Trustee
shall deem fair and reasonable.

 

6.             Optional Redemption upon Public
Equity Offerings.  At any time, or
from time to time, on or prior to December 15, 2006, the Company may, at
its option, use the net cash proceeds of one or more  Equity Offerings to redeem up to 35% of the Notes issued under
the Indenture at a Redemption Price equal to 109% of the principal amount
thereof, plus  accrued and unpaid
interest, to the date of redemption, provided, that at least 65% of the
principal amount of Notes issued under the Indenture remains outstanding
immediately after any such redemption; and provided, further,
that the Company shall make such redemption not more than 120 days after
the consummation of any such Equity Offering. 
If less than all the Notes are to be redeemed, the Trustee will select
the particular Notes or portions thereof to be redeemed by lot, only on a pro rata
basis or on as nearly a pro rata basis as is practicable (subject
to DTC procedures).

 

7.             Mandatory Redemption.  Except as set forth in Paragraph 9 below
with respect to repurchases of Notes

 

B-5

 

in certain
events, the Company shall not be required to make mandatory redemption payments
with respect to the Notes.

 

8.             Notice of Redemption.  Subject to the provisions of the Indenture,
a notice of redemption will be mailed at least 30 days but not more than
60 days (or in the case of a Change of Control Offer, at least 30 days but
not more than 45 days, or in the case of a Net Proceeds Offer, within 30
days) before the applicable redemption date to each Holder whose Notes are to
be redeemed at its registered address. 
Notes in denominations larger than $1,000 may be redeemed in part but
only in whole multiples of $1,000, unless all of the Notes held by a Holder are
to be redeemed.  On and after the
redemption date interest ceases to accrue on Notes or portions thereof called
for redemption.

 

9.             Repurchase at Option of Holder.

 

(a)           If there is a Change of Control, the
Company shall be required to make an offer (a “Change of Control Offer”)
to repurchase all or any part (equal to $1,000 or an integral multiple thereof)
of each Holder’s Notes at a Purchase Price equal to 101% of the principal
amount thereof plus accrued and unpaid interest to the date of
repurchase, in accordance with the procedures set forth in the Indenture; provided
that the Company shall not be obligated to make a Change of Control Offer if,
no later than the 30th day after the Change of Control, it has mailed an
irrevocable notice of redemption for all of the Notes pursuant to the
procedures set forth in the Indenture for an Optional Redemption and the
Company subsequently has not failed to consummate such Optional Redemption.  Upon any failure by the Company to
consummate the Optional Redemption for which such irrevocable notice of redemption
was given, the Company’s obligation to offer to repurchase Notes shall be reinstated.  Within 30 days following any Change of
Control, the Company shall send, by first class mail, a notice to each Holder
setting forth the procedures governing the Change of Control Offer as required
by the Indenture.

 

(b)           On the 361st day after an Asset Sale
or such earlier date, if any, as the Board of Directors of the Company or of
such Restricted Subsidiary determines not to apply the Net Cash Proceeds
relating to such Asset Sale as set forth in the second paragraph of Section 4.10
of the Indenture (each, a “Net Proceeds Offer Trigger Date”), such
aggregate amount of Net Cash Proceeds which have not been applied on or before
such Net Proceeds Offer Trigger Date as permitted in the second paragraph of
Section 4.10 of the Indenture (each, a “Net Proceeds Offer Amount”)
shall be applied by the Company or such Restricted Subsidiary to make an offer
to purchase (the “Net Proceeds Offer”) on a date not less than 45 nor
more than 60 days following the applicable Net Proceeds Offer Trigger
Date, the maximum principal amount of Notes and if the Company so elects, other
Indebtedness of the Company and the Guarantors that ranks pari  passu in right of payment
with the Notes or the Guarantees, as the case may be (to the extent required by
the instrument governing such other Indebtedness), that may be purchased out of
the Net Proceeds Offer Amount.  Any
Notes and other Indebtedness to be purchased pursuant to a Net Proceeds Offer
shall be purchased pro rata based on the aggregate principal
amount of Notes and such other Indebtedness outstanding and all Notes shall be
purchased at an offer price in cash in an amount equal to 100% of the principal
amount thereof, plus accrued and unpaid interest to the date of purchase.  To the extent the aggregate principal amount
of Notes and other Indebtedness validly tendered and not withdrawn by holders

 

B-6

 

exceeds the
Net Proceeds Offer Amount, Notes and other Indebtedness, if any, shall be
purchased pro
rata based on the aggregate principal amount of tendered Notes and
other Indebtedness, if any.  Each Net
Proceeds Offer will be mailed to the record Holders as shown on the register of
Holders within 30 days following the Net Proceeds Offer Trigger Date, with
a copy to the Trustee, and shall comply with the procedures set forth in the
Indenture.  Upon receiving notice of the
Net Proceeds Offer, Holders may elect to tender their Notes in whole or in part
in integral multiples of $1,000 in exchange for cash.  To the extent Holders properly tender Notes in an amount
exceeding the Net Proceeds Offer Amount, Notes of tendering Holders will be
purchased on a pro rata basis (based on amounts tendered).  A Net Proceeds Offer shall remain open for a
period of 20 Business Days or such longer period as may be required by law.

 

10.           Denominations, Transfer, Exchange.  The Notes are in registered form without
coupons in denominations of $1,000 and integral multiples of $1,000.  The transfer of Notes may be registered and
Notes may be exchanged as provided in the Indenture.  The Registrar and the Trustee may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents and the
Company may require a Holder to pay any taxes and fees required by law or
permitted by the Indenture.  The Company
need not exchange or register the transfer of any Note or portion of a Note
selected for redemption, except for the unredeemed portion of any Note being
redeemed in part.  Also, it need not
exchange or register the transfer of any Notes for a period of 15 days
before a selection of Notes to be redeemed or during the period between a
record date and the corresponding Interest Payment Date.

 

11.           Persons Deemed Owners.  The registered Holder of a Note may be
treated as its owner for all purposes.

 

12.           Amendment, Supplement and Waiver.  Subject to certain exceptions, the Indenture
and the Notes may be amended or supplemented with the consent of the Holders of
at least a majority in principal amount of the then outstanding Notes, and any
existing default or compliance with any provision of the Indenture or the Notes
may be waived with the consent of the Holders of a majority in principal amount
of the then outstanding Notes.  Without
the consent of any Holder of a Note, the Indenture and the Notes may be amended
or supplemented to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Notes in addition to or in place of certificated Notes, to
provide for the assumption of the Company’s obligations to Holders of the Notes
in case of a merger or consolidation or sale of all or substantially of the Company’s
assets pursuant to Article V of the Indenture, to make any change that would
provide any additional rights or benefits to the Holders of the Notes or that
does not adversely affect the rights under the Indenture of any such Holder in
any material respect, or to comply with the requirements of the Commission in
order to effect or maintain the qualification of the Indenture under the Trust
Indenture Act.

 

13.           Defaults and Remedies.  Events of Default include:  (i) default for 30 days in the
payment when due of interest on the Notes; (ii) default in payment when
due of principal, Redemption Price or Purchase Price of the Notes when the same
becomes due and payable at maturity, upon redemption, repurchase or otherwise
(including the failure to make a payment to purchase Notes tendered pursuant to
a Change of Control Offer or a Net Proceeds Offer); (iii) failure by the
Company to comply with any covenant contained in the Indenture for 30 days

 

B-7

 

after notice
to the Company specifying the default (and demanding that such default be remedied)
by the Trustee or the Holders of at least 25% of the aggregate principal amount
of the Notes outstanding (except in the case of a default referred to in
Section 5.1 of the Indenture, which will constitute an Event of Default
with such notice requirement but without such passage of time requirement);
(iv) default under certain other agreements relating to Indebtedness of
the Company which default (a) is caused by a failure to pay any amount due at
the final stated maturity thereof or (b) results in the acceleration of such Indebtedness
prior to its express final stated maturity and, in each case, the principal
amount of such Indebtedness, together with the principal amount of any other
such Indebtedness under which there has been a default for failure to pay
principal at final stated maturity or the final stated maturity of which has
been so accelerated, aggregates $5.0 million or more and such failure shall not
have been cured or waived within 20 days thereof; (v) certain final
judgments of the Company or any Significant Subsidiary for the payment of money
that remain undischarged for a period of 60 days, provided that the
aggregate of all such undischarged judgments exceeds $5.0 million;
(vi) certain events of bankruptcy or insolvency with respect to the
Company or any Significant Subsidiary of the Company; and (vii) a Guarantee of
a Guarantor that is a Significant Subsidiary ceases to be in full force and
effect or is declared null and void and unenforceable or is found to be invalid
or a Guarantor that is a Significant Subsidiary denies its liability, in
writing, under its Guarantee (other than by reason of release of a Guarantor in
accordance with the Indenture).  If any
Event of Default occurs and is continuing, the Trustee or the Holders of at
least 25% in principal amount of the then outstanding Notes may declare all the
Notes to be due and payable immediately. 
Upon any such declaration, the entire principal amount of, and accrued
and unpaid interest on the Notes shall become immediately due and payable.  Notwithstanding the foregoing, in the case
of an Event of Default arising from certain events of bankruptcy or insolvency
with respect to the Company, all outstanding Notes will become due and payable
without further action or notice. 
Holders may not enforce the Indenture or the Notes except as provided in
the Indenture and under the TIA. 
Subject to certain limitations, Holders of a majority in principal
amount of the then outstanding Notes may direct the Trustee in its exercise of
any trust or power.  The Trustee may
withhold from Holders of the Notes notice of any continuing Default or Event of
Default (except a Default or Event of Default relating to payment on any Note)
if it determines that withholding notice is in their interest.  The Holders of a majority in principal
amount of the Notes may waive any existing Default under the Indenture, and its
consequences, except a default in the payment of the principal of, or interest
on any Notes.  The Company is required
to deliver to the Trustee annually a statement regarding compliance with the
Indenture, and the Company is required upon becoming aware of any Default or
Event of Default, to deliver to the Trustee a statement specifying such Default
or Event of Default.

 

14.           Trustee Dealings with Company.  Subject to certain limitations, the Trustee
under the Indenture, in its individual or any other capacity, may become owner
or pledgee of Notes and may otherwise deal with the Company or its Affiliates
as if it were not Trustee.

 

15.           No Recourse Against Others.  No past, present or future director,
officer, employee, incorporator or stockholder of the Company, as such, shall
have any liability for any obligations of the Company under the Notes or the
Indenture or for any claim based on, in respect of, or by reason of, such
obligations or their creation.  Each
Holder by accepting a Note

 

B-8

 

waives and
releases all such liability.  The waiver
and release are part of the consideration for the issuance of the Notes.

 

16.           Authentication.  This Note shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating
agent.

 

17.           Abbreviations.  Customary abbreviations may be used in the
name of a Holder or an assignee, such as: 
TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT
TEN (= joint tenants with right of survivorship and not as tenants in common),
CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).

 

18.           Discharge and Defeasance.  If the Company deposits with the Trustee or
Paying Agent cash or U.S. Government Obligations sufficient to pay the
principal or Redemption Price of, and interest and Additional Interest, if any,
on, the Notes to maturity or a specified Redemption Date and satisfies certain
conditions specified in the Indenture, the Company will be discharged from the
Indenture, except for certain Sections thereof.

 

19.           Governing Law.  The Indenture and Guarantees and this Note
shall be governed by and construed in accordance with the laws of the State of
New York but without giving effect to applicable principles of conflicts
of law to the extent that such principles are not mandatorily applicable by
statute and the application of the law of another jurisdiction would be
required thereby.  Each of the Company
and each Guarantor hereby irrevocably submits to the jurisdiction of any
New York state court sitting in the Borough of Manhattan in the City of
New York or any Federal court sitting in the Borough of Manhattan in the
City of New York in respect of any suit, action or proceeding arising out
of or relating to the Indenture and the Notes, and irrevocably accept for
itself and in respect of its property, generally and unconditionally, jurisdiction
of the aforesaid courts.  Each of the
Company and each Guarantor irrevocably waives, to the fullest extent that it
may effectively do so under applicable law, trial by jury and any objection
which it may now or hereafter have to the laying of the venue of any such suit,
action or proceeding brought in any such court and any claim that any such
suit, action or proceeding brought in any such court has been brought in an
inconvenient forum.  Nothing herein shall
affect the right of the Trustee or any Holder of the Notes to serve process in
any other manner permitted by law or to commence legal proceedings or otherwise
proceed against the Company or any Guarantor in any other jurisdiction.

 

20.           CUSIP Numbers.  Pursuant to a recommendation promulgated by
the Committee on Uniform Security Identification Procedures, the Company has
caused CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP
numbers in notices of redemption as a convenience to Holders.  No representation is made as to the
correctness or accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption or repurchase and reliance may be placed
only on the other identification numbers placed thereon.

 

The Company
will furnish to any Holder upon written request and without charge a copy of
the Indenture.  Request may be made to:

 

B-9

 

	
  Equinox
  Holdings, Inc.

  
	
  895
  Broadway, 3rd Floor

  
	
  New York,
  New York 10003

  
	
  Attention:
  Chief Financial Officer

  

 

B-10

 

ASSIGNMENT FORM

 

To assign this Note, fill in
the form below:

 

I or we assign and transfer
this Note to

 

____________________________________________________________________________________

(Print or type assignee’s name,
address and zip code)

 

____________________________________________________________________________________

(Insert assignee’s soc. sec. or
tax I.D. No.)

 

and irrevocably appoint
________________________________________as agent to transfer this Note on the
books of the Company.  The agent may
substitute another to act for him or her.

 

	
  Date:

  	
   

  	
   

  	 

	
   

  	 

	
  Your
  Signature:

  	
   

  	
   

  	 

	
  Sign exactly
  as your name appears on the other side of this Note.

  	 

	
   

  	 

	
  Signature
  Guarantee:

  	 

	
   

  	 

	
  Date:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Signature of
  Signature Guarantee

  	 

										

 

Signature must be guaranteed by
a participant in a recognized signature guaranty medallion program or other
signature guarantor acceptable to the Trustee.

 

B-11

 

OPTION OF HOLDER TO ELECT PURCHASE

 

If you wish to
elect to have all or any portion of this Note purchased by the Company pursuant
to Section 4.10 (“Net Proceeds Offer”) or Section 4.15 (“Change
of Control Offer”) of the Indenture, check the applicable boxes

 

	
  o

  	
  Net Proceeds Offer: 

  	
  o

  	
  Change of Control Offer:

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  in whole

  	
  o

  	
   

  	
  in whole

  	
  o

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  in part

  	
  o

  	
   

  	
  in part

  	
  o

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Amount to be

  	
   

  	
   

  	
  Amount to be

  	
   

  
	
   

  	
  purchased: $

  	
   

  	
   

  	
   

  	
  purchased: $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Your Signature:

  	
   

  	
   

  	
   

  
	
  Sign exactly as your name appears on the other side of this Note.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Signature Guarantee:

  	
   

  	
   

  
																

 

Signature must
be guaranteed by a participant in a recognized signature guaranty medallion
program or other signature guarantor acceptable to the Trustee.

 

	
  Social Security Number or

  
	
  Taxpayer Identification Number:

  	
   

  	
   

  

 

B-12

 

EXHIBIT C

 

FORM OF SUPPLEMENTAL INDENTURE IN RESPECT OF
GUARANTEE

 

SUPPLEMENTAL
INDENTURE, dated as of [________] (this “Supplemental Indenture”), among
[name of Guarantor[s]] (the “Guarantor[s]”), Equinox Holdings, Inc., a
Delaware corporation (together with its successors and assigns, the “Company”),
and U.S. Bank National Association, as Trustee (the “Trustee”) under the
Indenture referred to below.

 

W I T N E S S E T H:

 

WHEREAS, the
Company and the Trustee are parties to an Indenture, dated as of
December 16, 2003 (as amended, supplemented, waived or otherwise modified,
the “Indenture”), providing for the issuance of 9% Senior Notes due 2009
of the Company (the “Notes”);

 

WHEREAS,
Section 4.16 of the Indenture provides that the Company is required to
cause the Guarantor[s] to execute and deliver to the Trustee a supplemental
indenture pursuant to which the Guarantor[s] shall guarantee the Notes pursuant
to [a]  Guarantee[s] on the terms and
conditions set forth herein and in Article X of the Indenture;

 

WHEREAS,
[the][each] Guarantor desires to enter into this Supplemental Indenture for
good and valuable consideration, including substantial economic benefit in that
the financial performance and condition of such Guarantor is dependent on the
financial performance and condition of the Company; and

 

WHEREAS,
pursuant to Section 9.1 of the Indenture, the parties hereto are authorized
to execute and deliver this Supplemental Indenture to amend the Indenture,
without the consent of any Holder;

 

NOW,
THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the Guarantor[s],
the Company and the Trustee mutually covenant and agree for the benefit of the
Holders of the Notes as follows:

 

1.             Defined Terms.  As used in this Supplemental Indenture,
terms defined in the Indenture or in the preamble or recital hereto are used
herein as therein defined.  The words
“herein,” “hereof” and “hereby” and other words of similar import used in this
Supplemental Indenture refer to this Supplemental Indenture as a whole and not
to any particular section hereof.

 

2.             Agreement to Guarantee.  [The] [Each] Guarantor hereby agree[s],
jointly and severally with [all] [any] other Guarantor[s], fully and
unconditionally, to guarantee the Notes and the obligations of the Company
under the Indenture and the Notes on the terms and subject to the conditions
set forth in Article X of the Indenture and to be bound by (and shall be
entitled to the benefits of) all other applicable provisions of the Indenture
as a Guarantor.

 

C-1

 

 

3.             Termination,
Release and Discharge.  [The] [Each]
Guarantor’s  Guarantee shall terminate
and be of no further force or effect, and [the] [each] Guarantor shall be released
and discharged from all obligations in respect of its Guarantee, only as and
when provided in Section 10.4 of the Indenture.

 

4.             Parties.  Nothing in this Supplemental Indenture is
intended or shall be construed to give any Person, other than the Holders and
the Trustee, any legal or equitable right, remedy or claim under or in respect
of [the] [each] Guarantor’s Guarantee or any provision contained herein or in
Article X of the Indenture.

 

5.             Governing Law.  THIS SUPPLEMENTAL INDENTURE, THE INDENTURE,
THE GUARANTEES AND THE NOTES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK, BUT WITHOUT GIVING EFFECT TO APPLICABLE
PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT SUCH PRINCIPLES ARE NOT MANDATORILY
APPLICABLE BY STATUTE AND THE APPLICATION OF THE LAW OF ANOTHER JURISDICTION
WOULD BE REQUIRED THEREBY.  THE COMPANY
AND EACH GUARANTOR HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY NEW
YORK STATE COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK OR
ANY FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK
IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
INDENTURE, THE GUARANTEES AND THE NOTES, AND IRREVOCABLY ACCEPTS FOR ITSELF AND
IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, JURISDICTION OF THE
AFORESAID COURTS.  THE COMPANY AND EACH
GUARANTOR IRREVOCABLY WAIVES, TO THE FULLEST EXTENT THAT IT MAY EFFECTIVELY DO
SO UNDER APPLICABLE LAW, TRIAL BY JURY AND ANY OBJECTION WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION
OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM.  NOTHING HEREIN SHALL AFFECT THE
RIGHT OF THE TRUSTEE OR ANY HOLDER OF THE NOTES TO SERVE PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED
AGAINST THE COMPANY OR ANY GUARANTOR IN ANY OTHER JURISDICTION.

 

6.             Ratification of
Indenture; Supplemental Indentures Part of Indenture.  Except as expressly amended hereby, the Indenture
is in all respects ratified and confirmed and all the terms, conditions and
provisions thereof shall remain in full force and effect.  This Supplemental Indenture shall form a
part of the Indenture for all purposes, and every Holder of Notes heretofore or
hereafter authenticated and delivered shall be bound hereby.  The Trustee makes no representation or
warranty as to the validity or sufficiency of this Supplemental Indenture.

 

7.             Counterparts.  The parties hereto may sign one or more
copies of this Supplemental Indenture in counterparts, all of which together
shall constitute one and the same agreement.

 

 

C-2

 

 

8.             Headings.  The section headings herein are for
convenience of reference only and shall not be deemed to alter or affect the
meaning or interpretation of any provisions hereof.

 

 

C-3

 

 

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

 

	
   

  	
  [NAME OF GUARANTOR], as Guarantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  EQUINOX HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  U.S. BANK NATIONAL ASSOCIATION, as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
					

 

C-4

 

EXHIBIT D(1)

 

FORM OF
REGULATION S CERTIFICATE

 

_______________________,___________

 

U.S. Bank National Association

Corporate Trust Services

Goodwin Square

225 Asylum Street, 23rd Floor

Hartford, Connecticut 06103

 

Attention:  Michael M. Hopkins

 

Re:          Equinox Holdings,
Inc. (the “Company”) 

9% Senior Notes due 2009 (the “Notes”)

 

Dear Sirs:

 

This letter
relates to U.S. $ __________ principal amount at maturity of Notes represented
by a certificate (the “Legended Certificate”) which bears a legend
outlining restrictions upon transfer of such Legended Certificate.  Pursuant to Section 2.1 of the Indenture
(the “Indenture”) dated as of December 16, 2003 relating to the
Notes, we hereby certify that we are (or we will hold such securities on behalf
of) a person outside the United States to whom the Notes could be transferred
in accordance with Rule 904 of Regulation S promulgated under the U.S.
Securities Act of 1933, as amended.

 

You and the
Company are entitled to rely upon this letter and are irrevocably authorized to
produce this letter or a copy hereof to any interested party in any
administrative or legal proceedings or official inquiry with respect to the
matters covered hereby.  Terms used in
this letter have the meanings set forth in Regulation S).

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  [Name of Holder]

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Authorized Signature

  	 

						

 

 

D(1)-1

 

 

EXHIBIT D(2)

 

CERTIFICATE TO BE
DELIVERED

UPON EXCHANGE OR REGISTRATION OF TRANSFER OF NOTES

 

_______________________,___________

 

U.S. Bank National Association

Corporate Trust Services

Goodwin Square

225 Asylum Street, 23rd Floor

Hartford, Connecticut 06103

 

Attention:  Michael M. Hopkins

 

Re:          Equinox Holdings,
Inc. (the “Company”) 

9% Senior Notes due 2009 (the “Notes”)

 

Dear Sirs:

 

This
Certificate relates to $ __________ principal amount of Notes held in * __
book-entry or * __ certificated form by 
_____________(the “Transferor”).

 

The
Transferor:*

 

o has requested the Trustee by written order to
deliver in exchange for its beneficial interest in the Global Note held by the
Depositary a Note or Notes in certificated, registered form of authorized
denominations in an aggregate principal amount equal to its beneficial interest
in such Global Note (or the portion thereof indicated above); or

 

o has requested the Trustee by written order to
exchange or register the transfer of a Note or Notes.

 

In connection
with such request and in respect of each such Note, the Transferor does hereby
certify that Transferor is familiar with the Indenture relating to the above
captioned Notes and as provided in Section 2.6 of such Indenture, the
transfer of this Note does not require registration under the Securities Act
(as defined below) because:*

 

o Such Note is being acquired for the
Transferor’s own account, without transfer.

 

o Such Note is being transferred to a
“qualified institutional buyer” (as defined in Rule 144A under the 

 

*              Check applicable box

 

 

D(2)-1

 

 

Securities Act
of 1933, as amended (the “Securities Act”)) in reliance on
Rule 144A.

 

o Such Note is being transferred to an “accredited
investor” (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities
Act) in accordance with Regulation D under the Securities Act.

 

o Such Note is being transferred pursuant to an
exemption from registration in accordance with Regulation S under the
Securities Act.

 

o Such Note is being transferred in accordance
with Rule 144 under the Securities Act, or pursuant to an effective registration
statement under the Securities Act.

 

o Such Note is being transferred in reliance on
and in compliance with an exemption from the registration requirements of the
Securities Act, other than Rule 144A, 144 or Rule 904 under the Securities
Act.  An Opinion of Counsel to the
effect that such transfer does not require registration under the Securities
Act accompanies this Certificate.

 

	
   

  	
  Very truly yours,

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  [INSERT NAME OF TRANSFEROR]

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
  Date:

  	
   

  	
   

  
								

 

 

D(2)-2

 

EXHIBIT E

 

FORM OF CERTIFICATE
TO BE

DELIVERED IN CONNECTION WITH

TRANSFERS TO NON QIB ACCREDITED INVESTORS

 

_______________________,___________

 

U.S. Bank National Association

Corporate Trust Services

Goodwin Square

225 Asylum Street, 23rd Floor

Hartford, Connecticut 06103

 

Attention:  Michael M. Hopkins

 

Re:          Equinox Holdings,
Inc. (the “Company”) 

9% Senior Notes due 2009 (the “Notes”)

 

Dear Sirs:

 

In connection
with our proposed purchase of 9% Senior Notes due 2009 (the “Notes”) of
the Company, we confirm that:

 

We understand
that any subsequent transfer of the Notes is subject to certain restrictions
and conditions set forth in the Indenture dated as of December 16, 2003
relating to the Notes (the “Indenture”) and the undersigned agrees to be
bound by, and not to resell, pledge or otherwise transfer the Notes except in
compliance with such restrictions and conditions and the Securities Act of
1933, as amended (the “Securities Act”).

 

We understand
that the Notes have not been registered under the Securities Act or any other
applicable securities law, and that the Notes may not be offered, sold or otherwise
transferred except as permitted in the following sentence.  We agree, on our own behalf and on behalf of
any accounts for which we are acting as hereinafter stated, that if we should
offer, sell, transfer, pledge, hypothecate or otherwise dispose of any Notes
within two years after the original issuance of the Notes, we will do so only
(A) to the Company or any Subsidiary thereof, (B) inside the United States
to a “qualified institutional buyer” in compliance with Rule 144A under
the Securities Act, (C) inside the United States to an institutional
“accredited investor” (as defined below) that, prior to such transfer,
furnishes to you a signed letter substantially in the form of this letter, (D)
outside the United States to a foreign person in compliance with Rule 904 of
Regulation S under the Securities Act, (E) pursuant to the exemption from
registration provided by Rule 144 under the Securities Act (if available),
(F) in accordance with another exemption from the registration requirements of
the Securities Act, or (G) pursuant to an effective registration statement
under the Securities Act, and we further agree to provide to any person
purchasing any of the Notes from us a notice advising such purchaser that
resales of the Notes are restricted as stated herein and in the Indenture.

 

 

E-1

 

 

We understand
that, on any proposed transfer of any Notes prior to the later of the original
issue date of the Notes and the last date the Notes were held by an affiliate
of the Company pursuant to paragraphs 2(C), 2(D) and 2(E) above, we will be
required to furnish to you and the Company such certifications, legal opinions
and other information as you and the Company may reasonably require to confirm
that the proposed transfer complies with the foregoing restrictions.  We further understand that the Notes
purchased by us will bear a legend to the foregoing effect.

 

We are an
institutional “accredited investor” (as defined in Rule 501(a)(1), (2), (3) or
(7) under the Securities Act) and have such knowledge and experience in
financial and business matters as to be capable of evaluating the merits and
risks of our investment in the Notes, and we and any accounts for which we are
acting are acquiring the Notes for investment purposes and not with a view to,
or offer of sale in connection with, any distribution in violation of the
Securities Act, and we are each able to bear the economic risk of our or its investment.

 

We are
acquiring the Notes purchased by us for our own account or for one or more
accounts (each of which is an institutional “accredited investor”) as to each
of which we exercise sole investment discretion.

 

You and the
Company are entitled to rely upon this letter and are irrevocably authorized to
produce this letter or a copy hereof to any interested party in any
administrative or legal proceedings or official inquiry with respect to the
matters covered hereby.

 

	
   

  	
  Very truly yours,

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (Name of Transferee)

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
							

 

E-2

 

EXHIBIT F

 

FORM OF CERTIFICATE
TO BE DELIVERED

IN CONNECTION WITH TRANSFERS

PURSUANT TO REGULATION S

 

_______________________,___________

 

U.S. Bank National Association

Corporate Trust Services

Goodwin Square

225 Asylum Street, 23rd Floor

Hartford, Connecticut 06103

 

Attention:  Michael M. Hopkins

 

Re:          Equinox Holdings,
Inc. (the “Company”) 

9% Senior Notes due 2009 (the “Notes”)

 

Dear Sirs:

 

In connection
with our proposed sale of $________ aggregate principal amount at maturity of
the Notes, we confirm that such sale has been effected pursuant to and in accordance
with Regulation S under the Securities Act of 1933, as amended, and, accordingly,
we represent that:

 

(1)           the offer of the Notes was not made
to a person in the United States;

 

(2)           at the time the buy order was
originated, the transferee was outside the United States or we and any person
acting on our behalf reasonably believed that the transferee was outside the
United States;

 

(3)           no directed selling efforts have been
made by us in the United States in contravention of the requirements of Rule
903(b) or Rule 904(b) of Regulation S, as applicable; and

 

(4)           the transaction is not part of a plan
or scheme to evade the registration requirements of the U.S. Securities Act of
1933.

 

 

F-1

 

 

You and the
Company are entitled to rely upon this letter and are irrevocably authorized to
produce this letter or a copy hereof to any interested party in any
administrative or legal proceedings or official inquiry with respect to the
matters covered hereby.  Terms used in
this letter have the meanings set forth in Regulation S.

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  [Name of Transferor]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized
  Signature

  	
   

  
					

 

 

F-2

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"}]]