S-4/A

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As filed with the Securities and Exchange Commission on July 15, 2004

Registration No. 333-112531

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

AMENDMENT NO. 1 TO
FORM S-4/A
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

EQUINOX HOLDINGS, INC.
(Exact name of Registrant as specified in its charter)

Delaware
(State or other jurisdiction of incorporation or organization) 7991
(Primary Standard Industrial Classification Code Number) 13-4034296
(I.R.S. Employer Identification No.)

895 Broadway
New York, New York, 10003
(212) 677-0181
(Address, including zip code, and telephone number, including area code, of Registrant's principal executive offices)

See Next Page for Co-Registrants

Jeffrey M. Weinhaus, Esq.
Rosen Weinhaus, LLP
40 Wall Street, 32^nd Floor
New York, NY 10005
(212) 877-6900
(Name, address, including zip code, and telephone number, including area code, of Registrant's agent for service)

With copy to:
Paul D. Brusiloff, Esq.
Debevoise & Plimpton LLP
919 Third Avenue
New York, New York
10022 (212) 909-6000

Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective.

        If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box.    o

        If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

        If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

OTHER REGISTRANTS

Name of Registrant	Jurisdiction of Organization	Primary Standard Industrial Classification Code	IRS Employee Identification Number	Address of Principal Executive Office
EQX Holdings, LLC	Delaware	7991	13-4034296	895 Broadway, New York, New York 10003
Equinox 92nd Street, Inc.	New York	7991	13-3809519	895 Broadway, New York, New York 10003
Equinox-85th Street, Inc.	New York	7991	13-3841492	895 Broadway, New York, New York 10003
Equinox-76th Street Inc.	New York	7991	13-3606196	895 Broadway, New York, New York 10003
Equinox 63rd Street, Inc.	New York	7991	13-3874315	895 Broadway, New York, New York 10003
Equinox-54th Street, Inc.	New York	7991	13-4002110	895 Broadway, New York, New York 10003
Equinox 50th Street Inc.	New York	7991	13-4044765	895 Broadway, New York, New York 10003
Equinox 44th Street, Inc.	New York	7991	13-4098306	895 Broadway, New York, New York 10003
Equinox-43rd Street, Inc.	New York	7991	13-4049519	895 Broadway, New York, New York 10003
Equinox Columbus Centre, Inc.	New York	7991	60-0002632	895 Broadway, New York, New York 10003
Equinox Greenwich Avenue, Inc.	New York	7991	13-4112533	895 Broadway, New York, New York 10003
Broadway Equinox, Inc.	New York	7991	13-3740437	895 Broadway, New York, New York 10003
Equinox Tribeca, Inc.	New York	7991	13-4173627	895 Broadway, New York, New York 10003
Equinox Tribeca Office, Inc.	New York	7991	02-0651780	895 Broadway, New York, New York 10003
Equinox Wall Street, Inc.	New York	7991	13-4098303	895 Broadway, New York, New York 10003
Equinox White Plains Road, Inc.	New York	7991	13-4007808	895 Broadway, New York, New York 10003
Equinox Woodbury, Inc.	New York	7991	01-0738956	895 Broadway, New York, New York 10003
Equinox Greenvale, Inc.	New York	7991	56-2397071	895 Broadway, New York, New York 10003
The Equinox Group, Inc.	New York	7991	13-3981646	895 Broadway, New York, New York 10003
Energy Wear, Inc.	New York	7991	13-3734825	895 Broadway, New York, New York 10003
Equinox Darien, Inc.	Connecticut	7991	41-2048453	895 Broadway, New York, New York 10003
Equinox Lincoln Park, Inc.	Illinois	7991	02-0580290	895 Broadway, New York, New York 10003
Equinox Highland Park, Inc.	Illinois	7991	02-0651787	895 Broadway, New York, New York 10003
Equinox Gold Coast, Inc.	Illinois	7991	02-0651787	895 Broadway, New York, New York 10003
Equinox West Hollywood, Inc.	California	7991	03-0394730	895 Broadway, New York, New York 10003
Equinox Fitness Pasadena, Inc.	California	7991	22-3803586	895 Broadway, New York, New York 10003
Equinox Pine Street, Inc.	California	7991	56-2396525	895 Broadway, New York, New York 10003
Equinox Mamaroneck, Inc.	New York	7991	56-2422596	895 Broadway, New York, New York 10003
Equinox Fitness Santa Monica, Inc.	California	7991	56-2422601	895 Broadway, New York, New York 10003

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and we are not soliciting an offer to buy these securities in any state where such solicitation or offer is not permitted.

SUBJECT TO COMPLETION, DATED JULY 15, 2004

PROSPECTUS

$                    

Equinox Holdings, Inc.

Offer to Exchange $160,000,000 Outstanding
9% Senior Notes due 2009
for $160,000,000 Registered
9% Senior Notes due 2009

The New Notes:

•

The form and terms of the new notes are identical in all material respects to the terms of the old notes except that the new notes are registered under the Securities Act of 1933 and will not contain restrictions on transfer or provisions relating to additional interest, will bear a different CUSIP number from the old notes and will not entitle their holders to registration rights.

        Investing in the new notes involves risks. You should carefully review the risk factors beginning on page 12 of this prospectus.

The Exchange Offer:

•

Our offer to exchange old notes for new notes will be open until 5:00 p.m., New York City time, on            , 2004, unless we extend the offer.



•

No public market currently exists for the old notes or the new notes. We do not intend to apply for listing of the new notes on any national securities exchange or arrange for them to be quoted on any automated dealer quotation system.



•

Old notes may be tendered only in integral multiples of $1000.

The Guarantees:

•

All of our subsidiaries existing on the date of the issuance of the notes and certain subsidiaries formed or acquired subsequent to the issuance of the notes will jointly and severally guarantee the notes fully and unconditionally on a senior basis. Each guarantee will be unsecured and rank equally with all existing and future unsubordinated obligations of the guarantor, subject to release as provided for in the indenture for the notes.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

The date of this prospectus is                        , 2004.

TABLE OF CONTENTS

	Page
Summary	1
Risk Factors	12
Forward-Looking Statements	18
The Exchange Offer	19
Use of Proceeds	27
Capitalization	28
Selected Consolidated Financial Information and Other Data	29
Management's Discussion and Analysis of Financial Condition and Results of Operations	32
Business	46
Management	57
Security Ownership of Certain Beneficial Owners and Management	63
Related Party Transactions	64
Description of Capital Stock	67
Description of Certain Indebtedness	70
Description of Notes	71
Material United States Federal Tax Considerations	111
Plan of Distribution	115
Legal Matters	116
Experts	116
Where You Can Find More Information	116
Index to Consolidated Financial Statements	F-1

We have not authorized anyone to give you any information or to make any representations about the transactions we discuss in this prospectus other than those contained in this prospectus. If you are given any information or representation about these matters that is not discussed, you must not rely on that information. This prospectus is not an offer to sell or a solicitation of an offer to buy securities anywhere or to anyone where or to whom we are not permitted to offer to sell securities under applicable law.

In making an investment decision investors must rely on their own examination of the issuer and the terms of the offering, including the merits and risks involved. These securities have not been recommended by any federal or state securities commission or regulatory authority. Furthermore, the foregoing authorities have not confirmed the accuracy or determined the adequacy of this document. Any representation to the contrary is a criminal offense.

TRADEMARKS AND TRADE NAMES

        We own or have rights to trademarks or trade names that we use in conjunction with the operation of our business. In addition, our name, logo and website name and address are our service marks or trademarks. Each trademark, trade name or service mark by any other company appearing in this prospectus belongs to its holder. Some of the more important trademarks that we own or have rights to include Equinox and Equinox Fitness Clubs.

MARKET AND INDUSTRY DATA

        Market data used throughout this prospectus were obtained from internal company surveys, consultants' reports and industry publications. Consultants' reports and industry publications generally state that the information contained therein has been obtained from sources believed to be reliable, but that the accuracy and completeness of such information is not guaranteed. We have not independently verified this market data. Similarly, internal company surveys, while believed by us to be reliable, have not been verified by any independent sources. Unless otherwise indicated, market data used throughout this prospectus refers to the U.S. population, U.S. industries and U.S. market segments only. The market and industry data relating to fitness club membership, used throughout this prospectus, are sourced from industry publications relating to the fitness club industry as a whole. Industry data for 2003 will not be available until late 2004.

        The market and industry data used throughout this prospectus relating to financial performance metrics including revenue per member, revenue from ancillary services, and membership retention rates, are sourced from the same industry publications, but relating to the commercial fitness club sector only.

i

SUMMARY

The following summary contains basic information about us and this offering. It likely does not contain all the information that is important to you. You should read the entire prospectus, including the financial data and related notes, before making an investment decision. This summary contains forward-looking statements that involve risks and uncertainties. Our actual results may differ significantly from the results discussed in the forward-looking statements. Factors that might cause or contribute to such differences include those discussed in "Forward-Looking Statements" and "Risk Factors." In this prospectus, "Company," "Equinox," "we," "our," and "us," refer to Equinox Holdings, Inc. and its subsidiaries.

Equinox

        Equinox operates upscale, full-service fitness clubs that offer an integrated selection of Equinox-branded programs, services and products. We currently operate twenty-one fitness clubs: sixteen in the New York City metropolitan area, two in Los Angeles and three in the Chicago area. During 2003 we opened four new clubs. Two of the twenty-one clubs currently in operation were opened in January 2004, one of these in New York City and the other in the Chicago area. In addition, we have five new locations under development, consisting of two in the New York City metropolitan area in Mamaroneck and Roslyn, two in San Francisco and one in Santa Monica projected to be opened during 2004 and early 2005. We cluster clubs near the highest concentrations of our target members' areas of both employment and residence, typically in densely populated major metropolitan regions. Our target member is a well-educated professional between 25 and 55 years of age with significant discretionary income and who considers fitness an essential part of their active lifestyle.

        Our strategy is to continue to capitalize on our investment of newer clubs, continue opening new clubs in existing markets and enter select new markets and increase revenues per member. Once we have saturated our existing markets, specifically the New York City Metropolitan area, we may encounter difficulties entering new markets. In addition we may not have as much demand at our current pricing structure. We charge our members an up-front membership fee which ranges typically between $245 to $545, depending on the type of membership. Monthly dues range between $95 to $143 per month. Total revenues increased by $6.8 million or 25.5% to $33.5 million for the three months ended March 31, 2004 from $26.7 million for the three months ended March 31, 2003. Total revenues increased by $20.8 million or 21.9% to $116.1 million for the year ended December 31, 2003 from $95.3 million for the year ended December 31, 2002. Revenues per member for the twelve months ended March 31, 2004 increased to $1,988 from $1,870 for the twelve months ended March 31, 2003. Revenues per member are $1,977 and $1,934 for the years ended December 31, 2003 and 2002, respectively. Our revenue per member metrics exceeded the 2002 industry range of approximately $625 to $1,406 per average member.

        Our members are offered Equinox-branded programs, services and products, including strength and cardio training, group fitness classes, personal training, spa services and products, apparel, food/juice bars and swimming pools. Our members increased by approximately 20.1% to 70,000 at March 31, 2004 from 58,000 at March 31, 2003. Members are encouraged to participate in our programs and services, and as a percentage of revenue our ancillary products and services are 35.2% and 36.3% for the three months ended March 31, 2004 and 2003, respectively, 34.6% and 35.2% for the twelve month period ended March 31, 2004 and 2003, respectively and 34.8% and 33.5% for the years ended December 31, 2003 and 2002, respectively, compared to the 2002 industry average of 24.9%.

        For the three months ended March 31, 2004 and 2003 our net loss is $(557,000) and $(290,000), respectively. For the years ended December 31, 2003, 2002 and 2001 our net (loss) income was $(7.3) million, $1.8 million and $3.0 million, respectively. The 498.4% decrease in net income for 2003 was due to $33.7 million of interest expense primarily related to our private offering of 9% senior notes due 2009, which increased to $21.0 million from $12.7 million of interest expense for the year ended

1

December 31, 2002. The 39.2% decrease in net income for 2002 from 2001 was due to a $3.6 million increase in total other expense related to a $4.1 million increase related to marking our warrants to market, offset by a decrease in interest expense. As such, our EBITDA as defined on page 11 is $5.7 million, $29.9 million, $5.6 million and $22.3 million for the three and twelve months ended March 31, 2004 and 2003, respectively and $29.9 million, $25.5 million and $23.9 million for the years ended December 31, 2003 2002 and 2001, respectively. As a percentage of revenue, EBITDA is 16.9%, 24.3%, 21.1% and 23.1% for the three and twelve months ended March 31, 2004 and 2003, respectively and was 25.7%, 26.8% and 30.1% for the years ended December 31, 2003, 2002 and 2001, respectively, compared to the industry average of 25.4% for fiscal 2002. We present EBITDA because we believe it provides investors with useful information regarding our liquidity.

        Adjusted EBITDA as defined on page 11 is a key component in the determination of our compliance with certain covenants under our credit agreement and is material to our financial statements and we believe it provides investors with useful information regarding our liquidity.

        Under the terms of our credit agreement, we may incur additional debt so long as the pro forma ratio of total debt to Adjusted EBITDA is less than or equal to 5.5 to 1.0 at December 31, 2003 and for the twelve months ended March 31, 2004 and 5.0 to 1 at December 31, 2004. If we fail to meet this ratio test, as well as other ratios, our ability to incur new debt may be significantly limited. Our ratio of total debt to Adjusted EBITDA is 5.15 to 1.0 at March 31, 2004.

        See "Management's Discussion and Analysis" for a discussion of the components of Adjusted EBITDA.

*    *    *

        Equinox Holdings, Inc. was incorporated in 1998 under the laws of the State of Delaware. Our principal executive offices are located at 895 Broadway, 3rd Floor, New York, New York 10003. Our telephone number is (212) 677-0180. We maintain the following web site: www.equinoxfitness.com. Our web site provides information about club locations, program offerings and on-line promotions. Information contained on this web site, however, is not incorporated by reference in or otherwise a part of this prospectus.

2

Summary of the Terms of the Exchange Offer

        On December 16, 2003, we completed a private offering of $160,000,000 principal amount of 9% senior notes due 2009. In this prospectus, we refer to (1) the old notes sold in the original offering as the old notes, (2) the notes offered hereby in exchange for the old notes as the new notes and (3) the old notes and the new notes together as the notes.

The Exchange Offer	You may exchange old notes for new notes. Old notes may be tendered, and new notes will be issued, only in integral multiples of $1,000.
Resale of New Notes	We believe the new notes that will be issued in this exchange offer may be resold by most investors without compliance with the registration and prospectus delivery provisions of the Securities Act, subject to certain conditions. You should read the discussion under the heading "The Exchange Offer" for further information regarding the exchange offer and resale of the new notes.
Registration Rights Agreement	We have undertaken this exchange offer pursuant to the terms of a registration rights agreement entered into with the initial purchasers of the old notes. See "The Exchange Offer" and "Description of Notes—Exchange Offer; Registration Rights".
Consequence of Failure to Exchange Old Notes	You will continue to hold old notes that remain subject to their existing transfer restrictions if:
	•	you do not tender your old notes, or
	•	you tender your old notes and they are not accepted for exchange.
	We may reject any and all notes that we determine have not been properly tendered or any old notes which, if accepted, would, in the opinion of counsel for us, be unlawful. We may waive any irregularities or conditions of tender of the old notes. With some limited exceptions, we will have no obligation to register the old notes after we consummate the exchange offer. See "The Exchange Offer—Terms of the Exchange Offer" "—Consequences of Failure to Exchange" and "Description of Notes—Registration Rights."
Expiration Date	The exchange offer will expire at 5:00 p.m., New York City time, on                        , 2004 (the "Expiration Date"), unless we, in our sole discretion, extend it, in which case "Expiration Date" means the latest date and time to which the exchange offer is extended.

3

Interest on the New Notes	The new notes will accrue interest from the most recent date to which interest has been paid or provided for on the old notes or, if no interest has been paid on the old notes, from the date of original issue of the old notes.
Conditions to the Exchange Offer	The exchange offer is subject to several customary conditions, which we may waive. We will not be required to accept for exchange, or to issue new notes in exchange for, any old notes and may terminate or amend the exchange offer if:
	•	we determine in our reasonable judgment that the exchange offer violates applicable law, any applicable interpretation of the SEC or its staff or any order of any governmental agency or court of competent jurisdiction;
	•	at any time any stop order is threatened or in effect with respect to the registration statement of which this prospectus constitutes a part; or
	•	at any time any stop order is threatened or in effect with respect to the qualification of the indenture governing the notes under the Trust Indenture Act of 1939, as amended.
	See "The Exchange Offer—Conditions". We reserve the right to terminate or amend the exchange offer at any time prior to the applicable expiration date upon the occurrence of any of the foregoing events.
Procedures for Tendering Old Notes	If you wish to accept the exchange offer and your old notes are held by a custodial entity such as a bank, broker, dealer, trust company or other nominee, you must instruct the custodial entity to tender your old notes on your behalf pursuant to the procedures of the custodial entity. If your old notes are registered in your name, you must complete, sign and date the accompanying letter of transmittal, or a facsimile of the letter of transmittal, according to the instructions contained in this prospectus and the letter of transmittal. You then must mail or otherwise deliver the letter of transmittal, or a facsimile of the letter of transmittal, together with the old notes and any other required documents (including, if applicable, a substitute Form W-9, bond powers, evidence of payment of applicable transfer taxes and a certification of foreign status), to the exchange agent prior to 5:00 p.m. Eastern time, on the expiration date at the address set forth on the cover page of the letter of transmittal.

4

	Custodial entities that are participants in The Depository Trust Company, which we refer to as the "Depositary" or "DTC," may tender old notes through DTC's Automated Tender Offer Program which we refer to as the ATOP which enables a custodial entity, and the beneficial owner on whose behalf the custodial entity is acting, to electronically agree to be bound by the letter of transmittal. A confirmation of such book-entry transfer of such old notes into the exchange agent's account at DTC must be received by the exchange agent prior to 5:00 p.m. Eastern time, on the expiration date. A letter of transmittal need not accompany tenders effected through ATOP.
	Pursuant to the terms of the letter of transmittal, you will agree, upon request, to execute and deliver any additional documents deemed by us to be necessary and desirable to complete the sale, assignment and transfer of the old notes tendered. By tendering your old notes in either of these manners, you will make and agree to the representations that appear under "The Exchange Offer—Procedures for Tendering."
Guaranteed Delivery Procedures	If you wish to tender your old notes, but cannot properly do so prior to the expiration date, you must tender your old notes according to the guaranteed delivery procedures set forth in "The Exchange Offer—Guaranteed Delivery Procedures".
Withdrawal Rights	Tenders of old notes may be withdrawn at any time prior to 5:00 p.m., New York City time, on the expiration date. To withdraw a tender of old notes, a written or facsimile transmission notice of withdrawal must be received by the exchange agent at its address set forth in "The Exchange Offer—Exchange Agent" prior to 5:00 p.m. on the expiration date.

5

Acceptance of Old Notes and Delivery of New Notes	Subject to the conditions to the exchange offer, any and all old notes that are validly tendered in the exchange offer prior to 5:00 p.m., New York City time, on the expiration date will be accepted for exchange. The new notes issued pursuant to the exchange offer will be delivered promptly following the expiration date. We may reject any and all notes that we determine have not been properly tendered or any old notes which, if accepted, would, in the opinion of counsel for us, be unlawful. We may waive any irregularities or conditions of tender of the old notes. With some limited exceptions, we will have no obligation to register the old notes after we consummate the exchange offer. See "The Exchange Offer—Terms of the Exchange Offer" "—Consequences of Failure to Exchange" and "Description of Notes—Registration Rights."
Material United States Federal Tax Considerations	The exchange of the old notes for new notes will not constitute a taxable exchange for U.S. federal income tax purposes. See "Material United States Federal Tax Considerations."
Exchange Agent	U.S. Bank National Association is serving as exchange agent.

6

Summary of the Terms of the New Notes

        The terms of the new notes are identical in all material respects to the terms of the old notes except that the new notes:

•

will be registered under the Securities Act, and therefore will not be subject to restrictions on transfer,



•

will not be subject to provisions relating to additional interest,



•

will bear a different CUSIP number from the old notes, and



•

will not entitle their holders to registration rights.

Maturity	December 15, 2009.
Interest payment dates	June 15 and December 15, beginning June 15, 2004.
Guarantees	All of our subsidiaries existing on the date of the issuance of the notes will jointly and severally guarantee the notes fully and unconditionally on a senior basis. Future subsidiaries may also be required to guarantee the notes fully and unconditionally on a senior basis.
Ranking	The notes will be unsecured and will rank equally with our existing and future unsubordinated obligations and senior to our subordinated obligations. Each guarantee will be unsecured and will rank equally with all unsecured existing and future unsubordinated obligations of the guarantors and senior to all subordinated obligations of the guarantors. The notes and guarantees will also be effectively subordinated to all of our secured obligations and secured obligations of the subsidiary guarantors to the extent of the value of the assets securing such obligations.
	As of March 31, 2004, after giving effect to the initial offering of the notes and the use of proceeds therefrom,
	•	in addition to our obligations under our new senior secured revolving credit facility, we and the guarantors have outstanding approximately $3.3 million of capitalized lease obligations and other secured indebtedness to which the notes and the guarantees would have been effectively subordinated, and
	•	we and the guarantors have outstanding approximately $0.5 million of additional unsubordinated indebtedness that would have ranked equally with the notes.

7

Optional redemption	We may redeem some or all of the notes at any time on or after December 15, 2006 at the redemption prices set forth in this prospectus. See "Description of Notes—Redemption—Optional Redemption."
Public equity offering optional redemption	Before December 15, 2006, we may redeem up to 35% of the aggregate principal amount of the notes with the net proceeds of one or more public equity offerings at 109% of the principal amount of the notes, plus accrued interest, so long as at least 65% of the aggregate principal amount of the notes issued remains outstanding after such redemption.
Change of control	Upon the occurrence of certain change of control events, holders of notes may require us to repurchase all or a portion of their notes at a purchase price equal to 101% of the principal amount of the notes, plus accrued interest. See "Description of Notes—Change of Control."
Covenants	The indenture governing the notes contains covenants that, among other things, limit our ability and the ability of our subsidiaries to:
	•	incur additional indebtedness and issue or sell preferred stock,
	•	make restricted payments,
	•	make investments,
	•	create certain liens,
	•	sell assets,
	•	in the case of our restricted subsidiaries, restrict the ability to make dividend or other payments to us,
	•	in the case of our subsidiaries, guarantee indebtedness,
	•	engage in transactions with affiliates,
	•	create unrestricted subsidiaries, and
	•	consolidate, merge or transfer all or substantially all of our assets and the assets of our subsidiaries on a consolidated basis.
	These covenants are subject to important exceptions and qualifications. See "Description of Notes."

Risk Factors

You should refer to the section entitled "Risk Factors" beginning on page 12 for an explanation of some of the risks relating to us, our business, and an investment in the notes.

8

Summary Consolidated Financial and Other Data

        You should read the summary consolidated financial and other data below in conjunction with our consolidated financial statements and the accompanying notes contained in this prospectus. We derived the historical financial data as of and for the years ended December 31, 2001, 2002 and 2003 from our audited consolidated financial statements. We derived the historical financial data as of March 31, 2004 and for the three months ended March 31, 2004 and 2003 and for the 12 month period ended March 31, 2004 from our unaudited consolidated financial statements and our unaudited interim consolidated financial statements. You should also read "Selected Consolidated Financial Information and Other Data" and the accompanying "Management's Discussion and Analysis of Financial Condition and Results of Operations" contained elsewhere in this prospectus.

			Year Ended December 31,									Three Months Ended March 31,						Twelve(A) Months Ended March 31,
			2001			2002			2003			2003			2004			2004
			(restated)			(restated)
				(in thousands, except for ratios and operating data)
Statement of Operations Data:
Revenues:
	Membership fees		$	52,489		$	63,369		$	75,677		$	17,004		$	21,716		$	80,387
	Personal training			15,024			17,709			25,000			6,011			7,273			26,263
	Other revenue			11,907			14,197			15,450			3,682			4,520			16,288
		Total revenues		79,420			95,275			116,127			26,697			33,509			122,938
Expenses:
	Compensation and related expenses			31,274			37,572			48,202			11,429			14,463			51,235
	Rent and occupancy			9,793			11,870			16,646			4,273			4,911			17,285
	General and administrative			13,378			15,976			21,280			4,931			8,784			25,133
	Other expenses(1)			2,222			1,477			1,042			433			402			1,011
	Depreciation and amortization			5,785			6,850			9,750			2,253			2,936			10,433
		Total operating expenses		62,452			73,745			96,920			23,319			31,496			105,097
		Income from operations		16,968			21,530			19,207			3,378			2,013			17,841
Other income (expense):
	Interest expense			(13,298	)		(12,708	)		(33,693	)		(3,941	)		(3,791	)		(33,543	)
	Interest income			149			8			132			36			51			148
	Other income (expense)(2)			1,188			(2,869	)		900			—			714			1,614
		Total other expense		(11,961	)		(15,569	)		(32,661	)		(3,905	)		(3,026	)		(31,781	)
		Income before provision for income taxes		5,007			5,961			(13,454	)		(527	)		(1,013	)		(13,940	)
Benefit from (provision for) income taxes				(2,007	)		(4,137	)		6,189			237			456			6,407
		Net income	$	3,000		$	1,824		$	(7,265	)	$	(290	)	$	(557	)	$	(7,533	)

(A)

Twelve months ended March 31, 2004 is included to facilitate comparability of ratio analysis and revenues per average member data.

9

	Year Ended December 31,									Three Months Ended March 31,						Twelve(A) Months Ended March 31,
	2001			2002			2003			2003			2004			2004
	(restated)			(restated)
		(in thousands, except for ratios and club related data)
Balance Sheet Data:
Cash and marketable securities	$	2,806		$	1,302		$	42,779		$	17,260		$	41,476		$	41,476
Total assets		101,088			113,515			189,303			139,702			196,946			196,946
Total debt		98,778			102,615			163,999			103,915			163,815			163,815
Stockholders' deficit		(34,319	)		(36,580	)		(35,074	)		(26,847	)		(35,646	)		(35,646	)
Pro forma Data:
Interest expense(3)		—			—		$	15,931		$	4,083		$	3,791		$	15,638
Net income (loss)		—			—			2,368			(368	)		(557	)		2,183
Other Financial Data:
Net cash provided by operating activities	$	16,714		$	17,641		$	16,271		$	5,879		$	9,745		$	20,137
Net cash used in investing activities		(18,590	)		(21,377	)		(27,009	)		(4,993	)		(9,954	)		(31,970	)
Net cash provided by financing activities		3,669			2,266			52,202			15,073			(1,025	)		36,104
Earnings to fixed charges(4)		1.3			1.4			0.6			0.9			0.8			0.6
Club Data:
Number of clubs at end of period		13			15			19			16			21			21
Members at end of period		45,978			54,911			67,400			58,013			70,054			70,054
Revenues per average member(5)	$	1,943		$	1,934		$	1,977		$	488		$	487		$	1,988
Ancillary revenues as a % of total revenues		33.9	%		33.5	%		34.8	%		36.3	%		35.2	%		34.8	%
Revenue growth from comparable fitness clubs(6)		14.5	%		7.7	%		8.2	%		13.4	%		6.7	%		6.6	%

(footnotes continued on following page)

(1)

Includes fees and expenses paid to certain principal stockholders under certain contractual arrangements. See "Related Party Transactions."

(2)

Consists of non-cash charges resulting from the mark-to-market adjustments of our common stock put warrants and our interest rate swap. See "Description of Capital Stock—Common Stock Put Warrants."

        The following table reconciles net income (loss) to EBITDA and illustrates components of Adjusted EBITDA as that amount is used in our calculations under the covenants contained in our credit facility:

	Year Ended December 31,								Three Months Ended March 31,						Twelve Months(A) Ended March 31,
	2001			2002		2003			2003			2004			2004
	(restated)			(restated)
		(in thousands)
Net income (loss)	$	3,000		$	1,824	$	(7,265	)	$	(290	)	$	(557	)	$	(7,533	)
Depreciation and amortization		5,785			6,850		9,750			2,253			2,936			10,433
Provision for (benefit from) income taxes		2,007			4,137		(6,189	)		(237	)		(456	)		(6,407	)
Interest expense, net of interest income		13,149			12,700		33,560			3,905			3,740			33,395
EBITDA(7)	$	23,941		$	25,511	$	29,856		$	5,631		$	5,663		$	29,888
Components of Adjusted EBITDA:
Stock compensation expense		1,022			313		35			—			—			35
Related-party management fees and expenses(a)		1,199			1,164		1,007			433			402			976
Non-cash deferred rent		975			1,088		2,496			786			785			2,495
Other (income) expense(b)		(1,188	)		2,869		(900	)		—			(714	)		(1,614	)

(a)

As discussed under "Related Party Transactions," we are contractually obligated to make these cash payments and such payments are not subordinated to the notes. However, we are presenting these adjustments to provide a clearer indication of the EBITDA and Adjusted EBITDA associated with our operations.  

10

(b)

Consists of non-cash charges resulting from the mark-to-market adjustments of our common stock put warrants and our interest rate swap. See "Description of Capital Stock—Common Stock Put Warrants." Under the terms of our credit facility definitions, this line item must be added back to net income (loss) in calculating EBITDA.

(3)

Pro forma interest expense assumes our previously outstanding revolving credit facility, senior notes due 2007, senior subordinated notes due 2008, preferred stock, certain related party debt, and other debt and certain fees were satisfied, or redeemed and that the issuance of the new senior notes occurred as of the beginning of 2003.

(4)

The ratio of earnings to fixed charges has been computed by dividing earnings before income taxes and fixed charges before preferred stock dividends (increased to reflect the pre-tax earnings requirement related thereto) by the fixed charges. Fixed charges consist of interest and related charges on debt, preferred stock dividends and the portion of rentals for real and personal properties in an amount deemed to be representative of the interest factor.

(5)

Based on average number of members for the 12 months ended.

(6)

Revenue growth of clubs that had been open for at least 12 months.

(7)

We define EBITDA as net income (loss) before interest expense, income taxes and depreciation and amortization. We present EBITDA because we believe it provides investors with useful information regarding our liquidity, including compliance under our debt covenants. Adjusted EBITDA is defined in our $25.0 million credit agreement as EBITDA, adjusted for mark-to-market adjustments for our common stock put warrants, stock compensation expense, write-off of other receivables, management fees and expenses paid to our principal stockholders and non-cash deferred rent. Non-cash deferred rent expense reflects the difference between accrued rent expense in accordance with generally accepted accounting principles in the United States of America ("GAAP") and cash rent expense actually paid in a given period, which difference is typically positive in the early years of a lease and negative in the later years of a lease. EBITDA and Adjusted EBITDA are not measures of financial performance under GAAP. We present the components of Adjusted EBITDA because this measure is a key component in the determination of our compliance with certain covenants under our credit agreement as more fully described in our liquidity section of our Management's Discussion and Analysis contained herein. EBITDA and Adjusted EBITDA should not be considered in isolation, or as a substitute for net income, cash flows, or other consolidated income (loss) or cash flow data presented in accordance with GAAP or as a measure of our liquidity or financial condition. Because EBITDA and Adjusted EBITDA are not measures determined in accordance with GAAP and is thus susceptible to varying calculations, Adjusted EBITDA as discussed may not be comparable to other similarly titled measures of other companies.

11

RISK FACTORS

You should carefully consider the risks described below before making an investment decision. Any of the following risks could materially and adversely affect our financial condition or results of operations. In such case, you may lose all or part of your original investment.

Risks Related to Our Substantial Debt

Our substantial indebtedness could have a material adverse effect on our financial health and our ability to obtain financing in the future and to react to changes in our business.

        We have a significant amount of debt. As of March 31, 2004, we had approximately $163.8 million of debt outstanding. Our significant amount of debt and other contractual commitments could have important consequences to you. For example, it could:

•

make it more difficult for us to satisfy our obligations to you under the notes and to the lenders under our new revolving credit facility;



•

increase our vulnerability to adverse economic and general industry conditions;



•

require us to dedicate a substantial portion of our cash flow from operations to principal and interest payments on our debt, which would reduce the availability of our cash flow from operations to fund capital expenditures or other general corporate purposes;



•

limit our flexibility in planning for, or reacting to, changes in our business and industry;



•

place us at a disadvantage compared to competitors that have proportionately less debt;



•

limit our ability to borrow additional funds in the future, if we need them; and



•

prevent us from obtaining financing to repurchase the notes from you upon a change of control or otherwise limit our ability to make such repurchase.

        Despite current indebtedness levels, we may be able to incur substantial additional indebtedness in the future. The terms of the indenture governing the notes and the terms of the new revolving credit facility will limit, but not prohibit, us from doing so, and our new revolving credit facility will provide for borrowings of up to $25.0 million, subject to certain limitations. Those borrowings would be secured and effectively senior to the notes and the guarantees to the extent of the value of the collateral securing such borrowings. If new debt is added to our and our subsidiaries' current debt levels, the related risks that we and they now face would intensify.

Our ability to generate the significant amount of cash needed to make payments on and otherwise satisfy the notes and our other debt and contractual commitments and to operate our business depends on many factors beyond our control.

        Our ability to make payments on and otherwise satisfy the notes and our other debt and contractual commitments and to fund working capital needs and planned capital expenditures and expansion plans will depend on our ability to generate cash and secure financing in the future. Among our contractual commitments are (1) contractual payments to our founding stockholders on the earlier of a qualified public offering, a change of control or December 15, 2010 and (2) a contingent obligation to use our best efforts to purchase common stock put warrants representing approximately 8% of our fully-diluted equity (as of the date hereof), at their fair market value if a majority of the warrant holders so require following December 15, 2006 if a qualifying initial public offering of our common stock has not previously occurred. We cannot assure you that we will be able to satisfy our obligations to purchase the warrants or that a dispute relating to our use of "best efforts" will not arise. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Contractual and Commercial Commitments Summary."

        Our ability to meet these obligations is subject to general economic, financial, competitive, legislative, regulatory and other factors beyond our control. If our business does not generate sufficient cash flow from operations, and sufficient future borrowings are not available to us under our new

12

revolving credit facility or from other sources of financing, we may not be able to repay the notes or our other debt or satisfy our other contractual commitments, operate our business or fund our other liquidity needs. We cannot assure you that we will be able to obtain additional financing or comply with our obligations with respect to our founding stockholders and warrant holders, particularly because of our anticipated levels of debt and the debt incurrence restrictions imposed by the agreements governing our debt. Our significant contractual obligations, including our obligations to our founding stockholders and the potential issuance of our preferred stock, could make it more difficult for us to effect a financing transaction, including an initial public offering of our common stock. If we cannot meet or refinance our obligations when they are due, we may have to sell assets, reduce capital expenditures or take other actions which could have a material adverse effect on our financial condition and results of operations and on the value of your investment in the notes.

The agreements and instruments governing our debt contain restrictions and could limit our ability to operate our business.

        Our new revolving credit facility and the indenture governing the notes contain, and any of our future indebtedness could contain a number of significant covenants that will restrict, among other things, our ability and the ability of our subsidiaries to:

•

pay dividends or make other distributions;



•

make certain investments or acquisitions;



•

enter into transactions with affiliates;



•

dispose of assets or enter into business combinations;



•

incur or guarantee additional debt;



•

issue equity;



•

repurchase or redeem equity interests and debt;



•

create or permit to exist certain liens; and



•

pledge assets.

        These restrictions could limit our ability to obtain future financing, make acquisitions or needed capital expenditures, withstand a future downturn in our business or the economy in general, conduct operations or otherwise take advantage of business opportunities that may arise. Furthermore, our new revolving credit facility requires us to meet specified financial ratios and tests. Our ability to comply with these provisions may be affected by events beyond our control. The breach of any of these covenants would result in a default under our new revolving credit facility, which could place us in default under the indenture governing the notes.

Risks Related to Our Business

Our business is geographically concentrated, and adverse regional conditions or events could adversely affect us.

        We currently operate in three metropolitan areas, and our clubs in and around New York City generated approximately 86.9% of our revenues for the twelve month period ended March 31, 2004. Adverse economic conditions or increased competition in those areas, especially in New York City, could have adverse effects on our financial condition and results of operations. Moreover, a catastrophic event in any of those areas, such as the attacks of September 11, 2001, could adversely affect our members, damage our clubs and harm our business.

We may be unable to attract and retain members, which could have a negative effect on our business.

        The performance of our fitness clubs is dependent on our ability to attract and retain members, and we cannot assure you that we will be successful in these efforts, or that the membership levels at our clubs will not materially decline. There are numerous factors that could lead to a decline in

13

membership levels at established clubs or that could prevent us from increasing our membership levels at newer clubs, including harm to our reputation, a decline in our ability to deliver quality service at a competitive cost, the presence of direct and indirect competition in the areas in which the clubs are located, the public's interest in sports and fitness clubs and general economic conditions. As a result of these factors, we cannot assure you that our membership levels will be adequate to maintain or permit the expansion of our operations. In addition, a decline in membership levels may have a material adverse effect on our financial condition and results of operations.

We may not be able to successfully execute our growth strategy or effectively manage our growth.

        We intend to increase our number of fitness clubs from 21 today to approximately 40 by the end of 2006. Currently, we consider nine out of our 21 fitness clubs to be mature (i.e., open for 48 months or longer at the beginning of the fiscal year). Successful implementation of this growth strategy will require considerable expenditures before any significant associated revenues are generated. In addition, many of our existing clubs are still relatively new. We cannot assure you that our existing immature or future fitness clubs will generate revenues and cash flow comparable with those generated by our existing mature clubs.

        Our expansion will also place significant demands on our management resources. We will be required to identify attractive club locations, negotiate favorable rental terms and open new fitness clubs on a timely and cost-effective basis while maintaining a high level of quality, efficiency and performance at both mature and newly opened fitness clubs. Moreover, we plan to expand into markets where we have little or no direct prior experience, and we could encounter unanticipated problems, cost overruns or delays in opening fitness clubs in new markets or in the market acceptance for our clubs.

        We may not be able to effectively manage this expansion, and any failure to do so could have a material adverse effect on our business, financial condition and results of operations.

We may not be able to continue to compete effectively in each of our markets in the future.

        The fitness industry is highly fragmented. Within each market in which we operate, we compete with other commercial fitness centers, physical fitness and recreational facilities established by local governments, hospitals and businesses for their employees, YMCAs and similar organizations and, to a certain extent, with racquet, tennis and other athletic clubs, country clubs, weight-reducing salons and the home-use fitness equipment industry. Competitive conditions may limit our ability to maintain or increase initiation fees or membership dues, attract new members and keep existing members, and could adversely affect our business, financial condition and results of operation. See "Business—Competition."

We could be subject to personal injury claims related to the use of our clubs.

        Members or guests could assert claims of personal injury in connection with their use of our services and facilities. If we cannot successfully defend any large claim or maintain our general liability insurance on acceptable terms or maintain adequate coverage against potential claims, our financial results could be adversely affected.

We are subject to government regulation. Changes in these regulations or a failure to comply with them could have a negative effect on our financial condition.

        Our operations and business practices are subject to federal, state and local government regulations in the various jurisdictions in which our fitness centers are located, including:

•

general rules and regulations of the Federal Trade Commission, state and local consumer protection agencies and state statutes that prescribe provisions of membership contracts and that govern the advertising, sale, financing and collection of membership fees and dues; and



•

state and local health regulations and building codes.

14

        If we were to fail to comply with these statutes, rules and regulations, we could suffer fines or other penalties. These may include regulatory or judicial orders enjoining or curtailing aspects of our operations. It is difficult to predict the future development of such laws or regulations, and although we are not aware of any proposed changes, any changes in such laws could have a material adverse effect on our financial condition and results of operations.

If we do not retain key management personnel and/or fail to attract and retain highly qualified personnel, our business will suffer.

        The success of our business depends on the leadership of our key management personnel. If any of these persons were to leave, it might be difficult to replace them, and our business could be harmed. See "Management." In addition, we cannot assure you that we can attract and retain sufficient qualified personnel to meet our business needs.

Our trademarks and trade names may be misappropriated or challenged by others.

        We believe our brand name and related intellectual property are important to our continued success. We attempt to protect our trademarks and trade names by exercising our rights under applicable trademark and copyright laws. If we were to fail to protect our intellectual property rights for any reason, it could have an adverse effect on our business, results of operations and financial condition.

The interests of our controlling shareholders may be in conflict with your interests as a holder of notes.

        Funds managed by North Castle Partners, L.L.C. and J.W. Childs Associates, L.P. indirectly own approximately 93% of our outstanding common stock and together have the ability to elect a majority of the board of directors and generally to control the affairs and policies of our company. Circumstances may occur in which the interests of either North Castle or J.W. Childs, as our shareholders, could be in conflict with the interests of the holders of the notes. For example, if we encounter financial difficulties or are unable to pay our debts as they mature, their interests as equity holders and as counterparties to a consulting agreement might conflict with your interests as a holder of notes. See "Security Ownership of Certain Beneficial Owners and Management" and "Related Party Transactions."

Risks Related to the Notes

We are a holding company and the notes and guarantees are effectively junior to all of our and the guarantors' existing and future senior secured obligations to the extent of the collateral.

        As a holding company, all of our revenues are generated by our subsidiaries and substantially all of our assets are owned by our subsidiaries. As a result, we are dependent upon dividends, incidental expense reimbursement and inter-company transfer of funds from our subsidiaries to meet our payment obligations on the notes and our other obligations.

        The notes and the guarantees provided by the guarantors will be general unsecured obligations. This means that you will have no recourse to our or the guarantors' specific assets upon any event of default under the indenture governing the notes and the guarantees. Accordingly, the notes and the guarantees will be effectively subordinated to any of our and the guarantors' secured obligations to the extent of the value of the assets securing such obligations, including our and the guarantors' obligations under the new revolving credit facility. Under certain circumstances, we may also incur secured debt owing to other creditors that will have the right to be repaid out of specific property. We and the guarantors may also issue additional unsecured and unsubordinated debt, which will also rank equally with your right to be repaid under the notes and the guarantees.

        If we default on the notes, become bankrupt, liquidate or reorganize:

•

you will be entitled to be repaid from our remaining assets only after any secured creditors have been paid out of proceeds from the sale of their collateral; and

15

•

to the extent there are assets available after all of the foregoing creditors have been paid, then you will be entitled to be repaid on a pro rata basis with and only to the extent that there are sufficient assets to repay any of our other obligations or the guarantors' obligations that rank equally with the notes in right of payment.

        If we and the guarantors have no secured debt at the time of a bankruptcy, liquidation, reorganization or similar proceeding relating to us or the guarantors, holders of the notes will participate ratably with all of our and the guarantors' other unsecured and unsubordinated creditors, including unsecured trade creditors and tort claimants, in our and the guarantors' assets.

        As of March 31, 2004, the notes and the guarantees would have been effectively subordinated to approximately $163.8 million of secured debt (including capitalized lease obligations). Under the terms of the indenture governing the notes and the expected terms of our new revolving credit facility, we will be permitted to borrow substantial additional indebtedness, including secured debt, in the future, subject to certain limitations.

We may not have the funds to purchase the notes upon a change of control as required by the indenture for the notes.

        The source of funds for any purchase of the notes would be our available cash or cash generated from other sources, including borrowings, sales of assets, sales of equity or funds provided by our existing or new equity holders. We cannot assure you that any of these sources will be available or sufficient. Upon the occurrence of a change of control event, we may seek to refinance the indebtedness outstanding under our new revolving credit facility and the notes. However, it is possible that we will not be able to complete such refinancing on commercially reasonable terms or at all. In such event, we would not have the funds necessary to finance the required change of control offer. See "Description of Notes—Change of Control."

Our being subject to certain fraudulent transfer and conveyance statutes may have adverse implications for the holders of the notes.

        If, under relevant federal and state fraudulent transfer and conveyance statutes, in a bankruptcy or reorganization case or a lawsuit by or on behalf of unpaid creditors of Equinox or the guarantors, a court were to find that, at the time the notes were issued by Equinox or guaranteed by the guarantors:

•

Equinox issued the notes or a guarantor guaranteed the notes with the intent of hindering, delaying or defrauding current or future creditors, or we or the guarantors received less than reasonably equivalent value or fair consideration for issuing or guaranteeing the notes, as applicable; and



•

Equinox or a guarantor, as the case may be:



•

was insolvent or was rendered insolvent by reason of the incurrence or guarantee, as applicable, of the indebtedness constituting the notes;



•

was engaged, or was about to be engaged, in a business or transaction for which its assets constituted unreasonably small capital;



•

intended to incur, or believed that it would incur, debts beyond its ability to pay as those debts matured (as all of the foregoing terms are defined in or interpreted under the relevant fraudulent transfer or conveyance statutes); or



•

was a defendant in an action for money damages, or had a judgment for money damages docketed against it (if, in either case, after final judgment the judgment is unsatisfied);

such court could avoid or subordinate the notes or the relevant guarantee to presently existing and future indebtedness of Equinox or the guarantor, as the case may be, and take other action detrimental to the holders of the notes, including, under certain circumstances, invalidating the notes or the guarantees.

16

        The measure of insolvency for purposes of the foregoing considerations will vary depending upon the law of the jurisdiction that is being applied in any such proceeding. Generally, however, we or a guarantor would be considered insolvent if, at the time it incurs or guarantees, as the case may be, the indebtedness constituting the notes, either:

•

the sum of its debts (including contingent liabilities) is greater than its assets, at a fair valuation; or



•

the present fair saleable value of its assets is less than the amount required to pay the probable liability on its total existing debts and liabilities (including contingent liabilities) as they become absolute and matured.

        There can be no assurance as to what standards a court would use to determine whether we or a guarantor, as the case may be, was solvent at the relevant time, or whether, whatever standard was used, the notes or guarantees would not be avoided on another of the grounds set forth above.

        We and the guarantors believe that at the time the notes are initially issued by us and guaranteed by the guarantors, we and the guarantors will be neither insolvent nor rendered insolvent thereby, will be in possession of sufficient capital to run their respective businesses effectively and incurring debts within their respective abilities to pay as the same mature or become due and will have sufficient assets to satisfy any probable money judgment against them in any pending action.

        In reaching the foregoing conclusions, we and the guarantors have relied upon our and their analyses of internal cash flow projections and estimated values of assets and liabilities. There can be no assurance, however, that a court passing on such questions would reach the same conclusions.

There is no public market for the notes, and we cannot be sure that a market for the notes will develop.

No active trading market currently exists for the notes. If any of the notes are traded after their initial issuance, they may trade at a discount from their initial offering price, depending upon prevailing interest rates, the market for similar securities and other factors, including general economic conditions, our financial condition, performance and prospects, and prospects for companies in our industry in general. In addition, the liquidity of the trading market in the notes and the market prices quoted for the notes may be adversely affected by changes in the overall market for high-yield securities.

You may have difficulty selling the old notes that you do not exchange.

        If you do not exchange your old notes for the new notes offered in the exchange offer, your old notes will continue to be subject to significant restrictions on transfer. Those transfer restrictions are described in the indentures governing the notes and arose because we originally issued the old notes under exemptions from the registration requirements of the Securities Act. The old notes may not be offered, sold or otherwise transferred, except in compliance with the registration requirements of the Securities Act, pursuant to an exemption from registration under the Securities Act or in a transaction not subject to the registration requirements of the Securities Act, and in compliance with applicable state securities laws. We did not register the old notes, and we do not intend to do so under the Securities Act. If you do not exchange your old notes, your ability to sell those notes will be significantly limited.

        If a large number of outstanding old notes are exchanged for new notes issued in the exchange offer, it may be more difficult for you to sell your unexchanged old notes due to the limited amounts of old notes that would remain outstanding following the exchange offer.

17

FORWARD-LOOKING STATEMENTS

        This prospectus includes forward-looking statements regarding, among other things, our plans, strategies and prospects, both business and financial. All statements contained in this document other than historical information are forward-looking statements. Forward-looking statements include, but are not limited to, statements that represent our beliefs concerning future operations, strategies, financial results or other developments, and contain words and phrases such as "may," "expects," "should," or similar expressions. Because these forward-looking statements are based on estimates and assumptions that are subject to significant business, economic and competitive uncertainties, many of which are beyond our control or are subject to change, actual results could be materially different. Although we believe that our plans, intentions and expectations reflected in or suggested by these forward-looking statements are reasonable, we cannot assure you that we will achieve or realize these plans, intentions or expectations. Forward-looking statements are inherently subject to risks, uncertainties and assumptions. Important factors that could cause actual results to differ materially from the forward-looking statements include, but are not limited to:

•

changes in general economic conditions in the United States;



•

changes in operations and prospects;



•

the degree to which we are leveraged;



•

the relative success and timing of our business strategies;



•

our ability to execute and manage our growth strategy;



•

adverse regional conditions;



•

availability and terms of capital;



•

increased competition in the fitness industry;



•

actions of third parties, such as legislative bodies and government regulatory agencies; and



•

protection of our trademarks; and



•

various other factors beyond our control.

        Consequently, such forward-looking statements should be regarded solely as our current plans, estimates and beliefs. We do not intend, and do not undertake, any obligation to update any forward-looking statements to reflect future events or circumstances after the date of such statements.

        You should review carefully the section captioned "Risk Factors" in this prospectus for a more complete discussion of the risks of an investment in the notes.

18

THE EXCHANGE OFFER

        The following contains a summary of the material provisions of the registration rights agreement. It does not contain all of the information that may be important to an investor in the notes. Reference is made to the provisions of the registration rights agreement, which has been filed as an exhibit to the registration statement. Copies are available as set forth under the heading "Where You Can Find More Information."

Terms of the Exchange Offer

        General.    In connection with the issuance of the old notes pursuant to a purchase agreement, dated as of December 9, 2003, between Equinox and the initial purchasers, the initial purchasers and their respective assignees became entitled to the benefits of the registration rights agreement.

        Under the registration rights agreement, we have agreed to use our reasonable best efforts to (1) file with the Commission the registration statement of which this prospectus is a part with respect to a registered offer to exchange the old notes for the new notes on or prior to 60 days after initial issuance of the old notes, (2) to cause the registration statement to be declared effective under the Securities Act on or prior to 180 days after the initial issuance of the old notes and (3) to commence the Exchange Offer and issue, on or prior to 211 days after the initial issuance of the old notes, new notes in exchange for all old notes tendered prior thereto. We will keep the exchange offer open for the period required by applicable law, but in any event for at least 20 business days after the date notice of the exchange offer is mailed to holders of the old notes.

        Upon the terms and subject to the conditions set forth in this prospectus and in the letter of transmittal, all old notes validly tendered and not withdrawn prior to 5:00 p.m., New York City time, on the Expiration Date will be accepted for exchange. New notes will be issued in exchange for an equal principal amount of outstanding old notes accepted in the exchange offer. Old notes may be tendered only in integral multiples of $1,000. This prospectus, together with the letter of transmittal, is being sent to all registered holders as of                        , 2004. The exchange offer is not conditioned upon any minimum principal amount of old notes being tendered for exchange. However, the obligation to accept old notes for exchange pursuant to the exchange offer is subject to certain customary conditions as set forth herein under "—Conditions."

        Old notes shall be deemed to have been accepted as validly tendered when, as and if we have given oral or written notice of such acceptance to the exchange agent. The exchange agent will act as agent for the tendering holders of old notes for the purposes of receiving the new notes and delivering new notes to such holders.

        Based on interpretations by the Staff of the Commission as set forth in no-action letters issued to third parties (including Exxon Capital Holdings Corporation (available May 13, 1988), Morgan Stanley & Co. Incorporated (available June 5, 1991), K-III Communications Corporation (available May 14, 1993) and Shearman Sterling (available July 2, 1993)), we believe that the new notes issued pursuant to the exchange offer may be offered for resale, resold and otherwise transferred by any holder of such new notes, other than any such holder that is a broker-dealer or an "affiliate" of us within the meaning of Rule 405 under the Securities Act, without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that:

•

such new notes are acquired in the ordinary course of business,



•

at the time of the commencement of the exchange offer such holder has no arrangement or understanding with any person to participate in a distribution of such new notes, and



•

such holder is not engaged in, and does not intend to engage in, a distribution of such new notes.

19

        We have not sought, and do not intend to seek, a no-action letter from the Commission with respect to the effects of the exchange offer, and there can be no assurance that the Staff would make a similar determination with respect to the new notes as it has in such no-action letters.

        By tendering old notes in exchange for new notes and executing the letter of transmittal, each holder will represent to us that:

•

any new notes to be received by it will be acquired in the ordinary course of business,



•

it has no arrangements or understandings with any person to participate in the distribution of the old notes or new notes within the meaning of the Securities Act, and



•

it is not our "affiliate," as defined in Rule 405 under the Securities Act.

If such holder is a broker-dealer, it will also be required to represent that the old notes were acquired as a result of market-making activities or other trading activities and that it will deliver a prospectus in connection with any resale of new notes. See "Plan of Distribution." If such holder is not a broker-dealer, it will be required to represent that it is not engaged in and does not intend to engage in the distribution of the new notes. Each holder, whether or not it is a broker-dealer, shall also represent that it is not acting on behalf of any person that could not truthfully make any of the foregoing representations contained in this paragraph. If a holder of old notes is unable to make the foregoing representations, such holder may not rely on the applicable interpretations of the Staff of the Commission and must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any secondary resale transaction unless such sale is made pursuant to an exemption from such requirements.

        Each broker-dealer that receives new notes for its own account in exchange for old notes where such new notes were acquired by such broker-dealer as a result of market-making or other trading activities, must acknowledge that it will deliver a prospectus meeting the requirements of the Securities Act and that it has not entered into any arrangement or understanding with us or an affiliate of ours to distribute the new notes in connection with any resale of such new notes. Each letter of transmittal states that by so acknowledging and by delivering a prospectus, a broker dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of new notes received in exchange for old notes, where such old notes were acquired by such broker-dealer as a result of market-making activities or other trading activities. We have agreed that, for a period of 90 days after each applicable expiration date (as defined herein), we will make this prospectus available to any broker-dealer for use in connection with any such resale. See "Plan of Distribution."

        Upon consummation of the exchange offer, any old notes not tendered will remain outstanding and continue to accrue interest at the rate of 9% but, with limited exceptions, holders of old notes who do not exchange their old notes for new notes in the exchange offer will no longer be entitled to registration rights and will not be able to offer or sell their old notes, unless such old notes are subsequently registered under the Securities Act, except pursuant to an exemption from, or in a transaction not subject to, the Securities Act and applicable state securities laws. We will generally have no obligation to register the old notes upon the consummation of the exchange offer except for in the limited circumstances specified in the registration rights agreement which is filed as an exhibit to this registration statement. See "Description of Notes—Registration Rights."

        Expiration Date; Extensions; Amendments; Termination.    The Expiration Date shall be, New York City time, on 2004, unless Equinox, in its sole discretion, extends the exchange offer, in which case the Expiration Date shall be the latest date to which the exchange offer is extended.

        To extend the Expiration Date, we will notify the exchange agent of any extension by oral or written notice and will notify the holders of old notes by means of a press release or other public announcement prior to 9:00 AM., New York City time, on the next business day after the previously scheduled Expiration Date. Such announcement may state that we are extending the exchange offer for a specified period of time.

20

        With regards to the exchange offer, we reserve the right

1.

to delay acceptance of any old notes, to extend the exchange offer or to terminate the exchange offer and not permit acceptance of old notes not previously accepted if any of the conditions set forth under "—Conditions" shall have occurred and shall not have been waived by us prior to the Expiration Date, by giving oral or written notice of such delay, extension or termination to the exchange agent, or



2.

to amend the terms of the exchange offer in any manner deemed by us to be advantageous to the holders of the old notes.

Any such delay in acceptance, extension, termination or amendment will be followed as promptly as practicable by oral or written notice of such delay, extension or termination or amendment to the exchange agent. If the terms of the exchange offer are amended in a manner determined by us to constitute a material change, we will promptly disclose such amendment in a manner reasonably calculated to inform the holders of the old notes of such amendment.

        Without limiting the manner in which we may choose to make public announcement of any delay, extension or termination of the exchange offer, we shall have no obligations to publish, advertise, or otherwise communicate any such public announcement, other than by making a timely release to an appropriate news agency.

Interest on the New Notes

        Each new note will accrue interest at the rate of 9% per annum from the last interest payment date on which interest was paid on the old note surrendered in exchange for such new note to the day before the consummation of the exchange offer and thereafter, at the rate of 9% per annum, provided, that if an old note is surrendered for exchange on or after a record date for an interest payment date that will occur on or after the date of such exchange and as to which interest will be paid, interest on the new note received in exchange for such old note will accrue from the date of such interest payment date. Interest on the new notes is payable on June 15 and December 15 of each year. No additional interest will be paid on old notes tendered and accepted for exchange.

Procedures for Tendering

        To tender in the exchange offer, a holder must complete, sign and date the letter of transmittal, or a facsimile of such letter of transmittal, have the signatures on such letter of transmittal guaranteed if required by such letter of transmittal, and mail or otherwise deliver such letter of transmittal or such facsimile, together with any other required documents, to the exchange agent prior to 5:00 p.m., New York City time, on the Expiration Date. In addition, either

•

certificates of old notes must be received by the exchange agent along with the applicable letter of transmittal, or



•

a timely confirmation of a book-entry transfer of such old notes, if such procedure is available, into the exchange agent's account at the book-entry transfer facility, The Depository Trust Company, pursuant to the procedure for book-entry transfer described below, must be received by the exchange agent prior to the Expiration Date with the applicable letter of transmittal, or



•

the holder must comply with the guaranteed delivery procedures described below.

We will only issue new notes in exchange for old notes that are timely and properly tendered. The method of delivery of old notes, letter of transmittal and all other required documents is at the election and risk of the note holders. If such delivery is by mail, it is recommended that registered mail, properly insured, with return receipt requested, be used. In all cases, sufficient time should be allowed to assure timely delivery. No old notes, letters of transmittal or other required documents should be sent to us. Delivery of all old notes (if applicable), letters of transmittal and other documents must be made to the exchange agent at its address set forth below. Holders may also request their respective

21

brokers, dealers, commercial banks, trust companies or nominees to effect such tender for such holders. Neither we nor the exchange agent are required to tell you of any defects or irregularities with respect to your old notes or the tenders thereof.

        The tender by a holder of old notes will constitute an agreement between such holder and us in accordance with the terms and subject to the conditions set forth in this prospectus and in the applicable letter of transmittal. Any beneficial owner whose old notes are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and who wishes to tender should contact such registered holder promptly and instruct such registered holder to tender on his behalf.

        Signatures on a letter of transmittal or a notice of withdrawal, as the case may be, must be guaranteed by any member firm of a registered national securities exchange or of the National Association of Securities Dealers, Inc., a commercial bank or trust company having an office or correspondent in the United States or an "eligible guarantor" institution within the meaning of Rule 17Ad-15 under the Securities Exchange Act of 1934 (each an "Eligible Institution") unless the old notes tendered pursuant to such letter of transmittal or notice of withdrawal, as the case may be, are tendered (1) by a registered holder of old notes who has not completed the box entitled "Special Issuance Instructions" or "Special Delivery Instructions" on the letter of transmittal or (2) for the account of an Eligible Institution.

        If a letter of transmittal is signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such person should so indicate when signing, and unless waived by us, provide evidence satisfactory to us of their authority to so act must be submitted with such letter of transmittal.

        All questions as to the validity, form, eligibility, time of receipt and withdrawal of the tendered old notes will be determined by us in our sole discretion, which determination will be final and binding. We reserve the absolute right to reject any and all old notes not properly tendered or any old notes which, if accepted, would, in the opinion of counsel for us, be unlawful. We also reserve the absolute right to waive any irregularities or conditions of tender as to the old notes. Our interpretation of the terms and conditions of the exchange offer, including the instructions in the letter of transmittal, will be final and binding on all parties. Unless waived, any defects or irregularities in connection with tenders of old notes must be cured within such time as we shall determine. Neither we, the exchange agent nor any other person shall be under any duty to give notification of defects or irregularities with respect to tenders of old notes, nor shall any of them incur any liability for failure to give such notification. Tenders of old notes will not be deemed to have been made until such irregularities have been cured or waived. Any old notes received by the exchange agent that are not properly tendered and as to which the defects or irregularities have not been cured or waived will be returned without cost to such holder by the exchange agent, unless otherwise provided in the letter of transmittal, as soon as possible following the Expiration Date.

        By executing and delivering the accompanying letter of transmittal or effecting delivery by book-entry transfer, a holder is representing to us, among other things, that (i) the person receiving the new notes pursuant to the exchange offer, whether or not this person is the holder, is receiving them in the ordinary course of business, (ii) neither the holder nor any other person receiving the exchange notes pursuant to the exchange offer has an arrangement or understanding with any person to participate in the distribution of such new notes and that such holder is not engaged in, and does not intend to engage in, a distribution of the new notes, and (iii) neither the holder nor any other person receiving the new notes pursuant to the exchange offer is an "affiliate" of ours with in the meaning of Rule 405 under the Securities Act.

        In addition, we reserve the right in our sole discretion, subject to the provisions of the indentures pursuant to which the notes are issued,

•

to purchase or make offers for any old notes, that remain outstanding subsequent to the Expiration Date or, as set forth under "—Conditions," to terminate the exchange offer,

22

•

to redeem old notes as a whole or in part at any time and from time to time, as set forth under "Description of Notes—Optional Redemption," and



•

to the extent permitted under applicable law, to purchase old notes in the open market, in privately negotiated transactions or otherwise.

        The terms of any such purchases or offers could differ from the terms of the exchange offer.

Acceptance of Old Notes for Exchange; Delivery of New Notes

        Upon satisfaction or waiver of all of the conditions to the exchange offer, all old notes properly tendered will be accepted promptly after the Expiration Date, and the new notes will be issued promptly after acceptance of the old notes. See "—Conditions." For purposes of the exchange offer, old notes shall be deemed to have been accepted as validly tendered for exchange when, as and if we have given oral or written notice thereof to the exchange agent. For each old note accepted for exchange, the holder of such old note will receive a new note having a principal amount equal to that of the surrendered old note.

        In all cases, issuance of new notes for old notes that are accepted for exchange pursuant to the exchange offer will be made only after timely receipt by the exchange agent of

•

certificates for such old notes or a timely book-entry confirmation of such old notes into the exchange agent's account at the applicable book-entry transfer facility,



•

a properly completed and duly executed letter of transmittal, and



•

all other required documents.

        If any tendered old notes are not accepted for any reason set forth in the terms and conditions of the exchange offer, such unaccepted or such non-exchanged old notes will be returned without expense to the tendering holder of such notes, if in certificated form, or credited to an account maintained with such book-entry transfer facility as promptly as practicable after the expiration or termination of the exchange offer.

Book-Entry Transfer

        The exchange agent will make a request to establish an account with respect to the old notes at the book-entry transfer facility for purposes of the exchange offer within two business days after the date of this prospectus. Any financial institution that is a participant in the book-entry transfer facility's systems may make book-entry delivery of old notes by causing the book-entry transfer facility to transfer such old notes into the exchange agent's account at the book-entry transfer facility in accordance with such book-entry transfer facility's procedures for transfer. However, although delivery of old notes may be effected through book-entry transfer at the book-entry transfer facility, the letter of transmittal or facsimile thereof with any required signature guarantees and any other required documents must, in any case, be transmitted to and received by the exchange agent at one of the addresses set forth below under "—Exchange Agent" on or prior to the Expiration Date or the guaranteed delivery procedures described below must be complied with.

Exchanging Book-Entry Notes

        The exchange agent and the book-entry transfer facility have confirmed that any financial institution that is a participant in the book-entry transfer facility may utilize the book-entry transfer facility Automated Tender Offer Program ("ATOP") procedures to tender old notes.

        Any participant in the book-entry transfer facility may make book-entry delivery of old notes by causing the book-entry transfer facility to transfer such old notes into the exchange agent's account in accordance with the book-entry transfer facility's ATOP procedures for transfer. However, the exchange for the old notes so tendered will only be made after a book-entry confirmation of the book-entry transfer of old notes into the exchange agent's account, and timely receipt by the exchange agent of an

23

agent's message and any other documents required by the letter of transmittal. The term "agent's message" means a message, transmitted by the book-entry transfer facility and received by the exchange agent and forming part of a book-entry confirmation, which states that the book-entry transfer facility has received an express acknowledgement from a participant tendering old notes that are the subject of such book-entry confirmation that such participant has received and agrees to be bound by the terms of the letter of transmittal, and that we may enforce such agreement against such participant.

Guaranteed Delivery Procedures

        If the procedures for book-entry transfer cannot be completed on a timely basis, a tender may be effected if

•

the tender is made through an Eligible Institution,



•

prior to the Expiration Date, the exchange agent receives by facsimile transmission, mail or hand delivery from such Eligible Institution a properly completed and duly executed letter of transmittal and notice of guaranteed delivery, substantially in the form provided by us, which



(1)

sets forth the name and address of the holder of old notes and the principal amount of old notes tendered,



(2)

states the tender is being made thereby, and



(3)

guarantees that within three New York Stock Exchange ("NYSE") trading days after the date of execution of the notice of guaranteed delivery, the certificates for all physically tendered old notes, in proper form for transfer, or a book-entry confirmation, as the case may be, and any other documents required by the letter of transmittal will be deposited by the Eligible Institution with the exchange agent, and



•

the certificates for all physically tendered old notes, in proper form for transfer, or a book-entry confirmation, as the case may be, and all other documents required by the letter of transmittal are received by the exchange agent within three NYSE trading days after the date of execution of the notice of guaranteed delivery.

Withdrawal of Tenders

        Tenders of old notes may be withdrawn at any time prior to 5:00 p.m., New York City time, on the Expiration Date. If the applicable expiration date has been extended, tenders pursuant to the applicable exchange offer as of the previously scheduled expiration date may not be withdrawn after such previously scheduled expiration date.

        For a withdrawal to be effective, a written notice of withdrawal must be received by the exchange agent prior to 5:00 p.m., New York City time, on the Expiration Date at the address set forth below under "—Exchange Agent." Any such notice of withdrawal must

•

specify the name of the person having tendered the old notes to be withdrawn,



•

identify the old notes to be withdrawn, including the principal amount of such old notes,



•

in the case of old notes tendered by book-entry transfer, specify the number of the account at the book-entry transfer facility from which the old notes were tendered and specify the name and number of the account at the book-entry transfer facility to be credited with the withdrawn old notes and otherwise comply with the procedures of such facility.



•

contain a statement that such holder is withdrawing its election to have such old notes exchanged,



•

be signed by the holder in the same manner as the original signature on the letter of transmittal by which such old notes were tendered, including any required signature guarantees, or be accompanied by documents of transfer to have the trustee with respect to the old notes register the transfer of such old notes in the name of the person withdrawing the tender, and

24

•

specify the name in which such old notes are registered, if different from the person who tendered such old notes.

All questions as to the validity, form, eligibility and time of receipt of such notice will be determined by us, in our sole discretion, which determination shall be final and binding on all parties. Any old notes so withdrawn will be deemed not to have been validly tendered for exchange for purposes of the exchange offer. Any old notes which have been tendered for exchange but which are not exchanged for any reason will be returned to the tendering holder of such notes without cost to such holder, in the case of physically tendered old notes, or credited to an account maintained with the book-entry transfer facility for the old notes as soon as practicable after withdrawal, rejection of tender or termination of the exchange offer. Properly withdrawn old notes may be retendered by following one of the procedures described under "—Procedures for Tendering" and —Book-Entry Transfer" above at any time on or prior to 5:00 p.m., New York City time, on the Expiration Date.

Conditions

        Notwithstanding any other provision of the exchange offer, we shall not be required to accept for exchange, or to issue new notes in exchange for, any old notes and may terminate or amend the exchange offer if at any time prior to 5:00 p.m., New York City time, on the Expiration Date, we determine in our reasonable judgment that the exchange offer violates applicable law, any applicable interpretation of the Staff of the Commission or any order of any governmental agency or court of competent jurisdiction.

        The foregoing conditions are for our sole benefit and may be asserted by us regardless of the circumstances giving rise to any such condition or may be waived by us in whole or in part at anytime and from time to time in our reasonable discretion. Our failure at any time to exercise any of the foregoing rights shall not be deemed a waiver of any such right. All conditions to the offer, other than those dependent upon the receipt of governmental approval, must be satisfied or waived prior to expiration of the offer.

        In addition, we will not accept for exchange any old notes tendered, and no new notes will be issued in exchange for any such old notes, if at any such time any stop order shall be threatened or in effect with respect to the registration statement of which this prospectus constitutes a part or the qualification of either indenture under the Trust Indenture Act of 1939, as amended. We are required to use every reasonable effort to obtain the withdrawal of any order suspending the effectiveness of the registration statement at the earliest possible time.

Exchange Agent

        U.S. Bank National Association has been appointed as exchange agent for the exchange offer. Questions and requests for assistance and requests for additional copies of this prospectus or of the letter of transmittal should be directed to the exchange agent addressed as follows:

By Mail, Hand Delivery or Overnight Courier:
US Bank National Association
Corporate Trust Services
60 Livingston Avenue
St. Paul, Minnesota 55107
Attn: Specialized Finance
Transmission Number: (651) 495-8158

Fax cover sheets should provide a call back phone
number and request a call back, upon receipt.

25

Fees and Expenses

        The expenses of soliciting tenders pursuant to the exchange offer will be borne by us. The principal solicitation for tenders pursuant to the exchange offer is being made by mail; however, additional solicitations may be made by telegraph, telephone, telecopy or in person by our officers and regular employees.

        We will not make any payments to or extend any commissions or concessions to any brokers, dealers or other persons soliciting acceptances of the exchange offer. We will, however, pay the exchange agent reasonable and customary fees for its services and will reimburse the exchange agent for its reasonable out-of-pocket expenses in connection therewith. We may also pay brokerage houses and other custodians, nominees and fiduciaries the reasonable out-of-pocket expenses incurred by them in forwarding copies of the prospectus and related documents to the beneficial owners of the old notes, and in handling or forwarding tenders for exchange.

        The expenses to be incurred by us in connection with the exchange offer will be paid by us, including fees and expenses of the exchange agent and trustee and accounting, legal, printing and related fees and expenses.

        We will pay all transfer taxes, if any, applicable to the exchange of old notes pursuant to the exchange offer. If, however, new notes or old notes for principal amounts not tendered or accepted for exchange are to be registered or issued in the name of any person other than the registered holder of the old notes tendered, or if tendered old notes are registered in the name of any person other than the person signing the letter of transmittal, or if a transfer tax is imposed for any reason other than the exchange of old notes pursuant to the exchange offer, then the amount of any such transfer taxes imposed on the registered holder or any other persons will be payable by the tendering holder. If satisfactory evidence of payment of such taxes or exemption therefrom is not submitted with the letter of transmittal, the amount of such transfer taxes will be billed directly to such tendering holder.

Consequences of Failure to Exchange

        Holders of old notes who do not exchange their old notes for new notes pursuant to the exchange offer will continue to be subject to the restrictions on transfer of such old notes as set forth in the legend on the old notes as a consequence of the issuance of the old notes pursuant to exemptions from, or in transactions not subject to, the registration requirements of the Securities Act and applicable state securities laws. In general, the old notes may not be offered or sold, unless registered under the Securities Act, except pursuant to an exemption from, or in a transaction not subject to, the Securities Act and applicable state securities laws. Equinox does not currently anticipate that it will register the old notes under the Securities Act. To the extent that old notes are tendered and accepted in the exchange offer, the trading market for untendered and tendered but unaccepted old notes could be adversely affected because the liquidity of this market will be diminished and their restrictions on transfer will make them less attractive to potential investors than the new notes.

Regulatory Requirements

        Following the effectiveness of the registration statement covering the exchange offer, no material federal or state regulatory requirement must be complied with in connection with this exchange offer.

26

USE OF PROCEEDS

        We will not receive any cash proceeds from the issuance of the new notes under the exchange offer. In consideration for issuing the new notes as contemplated by this prospectus, we will receive the old notes in like principal amount, the terms of which are identical in all material respects to the new notes. The old notes surrendered in exchange for the new notes will be retired and canceled and cannot be reissued. Accordingly, the issuance of the new notes will not result in any increase in our indebtedness or capital stock.

        The net proceeds from the original offering were $152.0 million, after deducting discounts, commissions and expenses of the original offering payable by us. The proceeds from the original offering:

•

repaid the entire outstanding principal amount of approximately $27.6 million under our then existing credit agreement and terminated all related commitments;



•

repaid the entire outstanding principal amount of $25.3 million under our then existing senior notes due 2007, plus accrued and unpaid interest;



•

repaid the entire outstanding principal amount of $52.5 million under our then existing senior subordinated notes due 2008, plus accrued and unpaid interest;



•

redeemed approximately $1.3 million of our preferred stock;



•

paid a contractually required amount of $5.0 million to our founding stockholders;



•

paid related redemption premiums, transaction fees and expenses (including an amendment fee to holders of our common stock put warrants); and



•

will fund our planned expansion to approximately 40 fitness clubs by the end of 2006 and be used for other general corporate purposes.

27

CAPITALIZATION

        The following table sets forth our audited cash and marketable securities and capitalization as of March 31, 2004. This table should be read in conjunction with our historical financial statements and other financial information appearing elsewhere in this prospectus.

			As of March 31, 2004
			(dollars in millions)
Cash and restricted cash			$	45.2
Debt:
	9% senior notes due 2009 and notes payable			161.6
	Capital leases			2.2
		Total debt	$	163.8
Total stockholders' equity (deficit)				(35.6	)
Total capitalization			$	128.2

28

SELECTED CONSOLIDATED FINANCIAL INFORMATION AND OTHER DATA

You should read the selected financial information and other data below in conjunction with our consolidated financial statements and the accompanying notes contained in this prospectus. We derived the historical financial data as of December 31, 2001, 2002 and 2003 and for the years ended December 31, 2000, 2001, 2002 and 2003 from our audited consolidated financial statements. We derived the historical financial data as of December 31, 1999 and 2000 and for the year ended December 31, 1999 and for the three months ended March 31, 2004 and 2003 and for the twelve month period ended March 31, 2004 from our unaudited consolidated financial statements and our unaudited interim consolidated financial statements. You should also read the accompanying "Management's Discussion and Analysis of Financial Condition and Results of Operations" contained elsewhere in this prospectus. Amounts below may not total due to rounding.

			Year Ended December 31,															Three Months Ended March 31,						Twelve(A) Months Ended March 31,
			1999			2000			2001			2002			2003			2003			2004			2004
			(restated)			(restated)			(restated)			(restated)
			(in thousands, except for ratios and operating data)
Statement of Operations:
Revenues:
	Membership fees		$	32,131		$	42,646		$	52,489		$	63,369		$	75,677		$	17,004		$	21,716		$	80,387
	Personal training			10,430			14,133			15,024			17,709			25,000			6,011			7,273			26,263
	Other revenue			5,260			6,326			11,907			14,197			15,450			3,682			4,520			16,288
		Total revenues		47,821			63,105			79,420			95,275			116,127			26,697			33,509			122,938
Expenses:
	Compensation and related expenses			21,257			25,759			31,274			37,572			48,202			11,429			14,463			51,235
	Rent and occupancy			4,111			8,763			9,793			11,870			16,646			4,273			4,911			17,285
	General and administrative			10,028			10,159			13,378			15,976			21,280			4,931			8,784			25,133
	Recapitalization expenses			—			5,608			—			—			—			—			—			—
	Other expenses(1)			235			3,158			2,222			1,477			1,042			433			402			1,011
	Depreciation and amortization			3,573			4,360			5,785			6,850			9,750			2,253			2,936			10,433
		Total operating expenses		39,204			57,807			62,452			73,745			96,920			23,319			31,496			105,097
		Income from operations		8,617			5,298			16,968			21,530			19,207			3,378			2,013			17,841
Other income (expense):
	Interest expense			(888	)		(2,420	)		(13,298	)		(12,708	)		(33,693	)		(3,941	)		(3,791	)		(33,543	)
	Interest income			90			122			149			8			132			36			51			148
	Other income (expense)(2)			—			—			1,188			(2,869	)		900			—			714			1,614
		Total other expense		(798	)		(2,298	)		(11,961	)		(15,569	)		(32,661	)		(3,905	)		(3,026	)		(31,781	)
		Income before provision for income taxes		7,819			3,000			5,007			5,961			(13,454	)		(527	)		(1,013	)		(13,940	)
	Benefit from (provision for) income taxes			403			3,057			(2,007	)		(4,137	)		6,189			237			456			6,407
		Net income (loss)	$	8,222		$	6,057		$	3,000		$	1,824		$	(7,265	)	$	(290	)	$	(557	)	$	(7,533	)

(A)

Twelve months ended March 31, 2004 is included to facilitate comparability of ratio analysis and revenues per average member data.

Balance Sheet Data:
Cash and marketable securities	$	5,938	$	1,017		$	2,806		$	1,302		$	42,779		$	17,260		$	41,476		$	41,476
Total assets		49,297		83,624			101,088			113,515			189,303			139,702			196,946			196,946
Total debt		17,449		93,476			98,778			102,615			163,999			103,915			163,815			163,815
Stockholders' equity (deficit)		10,294		(39,338	)		(34,319	)		(36,580	)		(35,074	)		(26,847	)		(35,646	)		(35,646	)
Pro forma Data:
Interest expense(3)	$	—	$	—		$	—		$	—		$	15,931		$	4,083		$	3,791		$	15,638
Net income		—		—			—			—			2,368			(362	)		(557	)		2,183

29

	Year Ended December 31,															Three Months Ended March 31,						Twelve(A) Months Ended March 31,
	1999			2000			2001			2002			2003			2003			2004			2004
	(restated)			(restated)			(restated)			(restated)
	(in thousands except for ratios and club related data)
Other Financial Data:
Earnings to fixed charges(4)		5.1			1.7			1.3			1.4			0.6			0.9			0.9			0.6
Net cash provided by operating activities	$	19,145		$	11,543		$	16,714		$	17,641		$	16,271		$	5,879		$	9,745		$	20,137
Net cash used in investing activities		(17,263	)		(22,298	)		(18,590	)		(21,377	)		(27,009	)		(4,993	)		(9,954	)		(31,970	)
Net cash (used in) provided by financing activities		2,341			5,850			3,669			2,266			52,202			15,073			(1,025	)		36,104
Club Data:
Number of clubs at end of period		7			11			13			15			19			16			21			21
Members at end of period		30,414			37,904			45,978			54,911			67,400			58,013			70,054			70,054
Revenues per average member(5)	$	1,755		$	1,912		$	1,943		$	1,934		$	1,977		$	488		$	487		$	1,988
Ancillary revenues as a % of total revenues		32.8	%		32.4	%		33.9	%		33.5	%		34.8	%		36.3	%		35.2	%		34.8	%
Revenue growth from comparable fitness clubs(6)		22.5	%		14.7	%		14.5	%		7.7	%		8.2	%		13.4	%		6.7	%		6.6	%

(1)

Includes fees and expenses paid to certain principal stockholders under contractual arrangements. See "Related Party Transactions."

(2)

Consists of non-cash charges resulting from the mark-to-market adjustments of our common stock put warrants and our interest rate swap. See "Description of Capital Stock—Common Stock Put Warrants."

        The following table reconciles EBITDA to net cash provided by operating activities:

			Year Ended December 31,
			2001			2002			2003
EBITDA			$	23,941		$	25,511		$	29,856
Adjustments to reconcile EBITDA to net cash provided by operating activities:
	Allowance for doubtful accounts net of write-offs			(223	)		11			23
	Interest expense			(10,437	)		(10,007	)		(14,484	)
	Changes in fair market value of put warrants			(1,336	)		2,849			(888	)
	Write-off of other receivables			—			169			—
Stock compensation expense				1,022			313			35
	Accretive interest expense related to payable to founding stockholders			568			677			—
Deferred rent				975			1,088			2,521
	Deferred income taxes			(148	)		(1,724	)		—
Changes in operating assets and liabilities:
	Accounts receivable			(668	)		237			(59	)
	Due (to) from affiliates			398			176			787
	Prepaid expenses and other current assets			(2,067	)		(2,989	)		(2,422	)
	Other assets			(96	)		(585	)		(3,436	)
	Accounts payable			(745	)		(527	)		160
	Accrued expenses			2,832			346			(1,065	)
	Deferred revenue			2,698			2,096			5,243
		Net cash provided by operating activities	$	16,714		$	17,641		$	16,271

30

        The following table reconciles net income (loss) to EBITDA and illustrates components of Adjusted EBITDA as that amount is used in our calculations under the covenants contained in our credit facilty:

	Year Ended December 31,														Three Months Ended March 31,						Twelve(A) Months Ended March 31,
	1999			2000			2001			2002		2003			2003			2004			2004
	(restated)			(restated)			(restated)			(restated)
	(in thousands)
Net income (loss)	$	8,222		$	6,057		$	3,000		$	1,824	$	(7,265	)	$	(290	)	$	(557	)	$	(7,533	)
Depreciation and amortization		3,573			4,360			5,785			6,850		9,750			2,253			2,936			10,433
Provision for (benefit from) income taxes		(403	)		(3,057	)		2,007			4,137		(6,189	)		(237	)		(456	)		(6,407	)
Interest expense, net of interest income		799			2,298			13,149			12,700		33,560			3,905			3,740			33,395
EBITDA(7)	$	12,191		$	9,658		$	23,941		$	25,511	$	29,856		$	5,631		$	5,663		$	29,888
Components of Adjusted EBITDA:
Recapitalization expenses		—			5,608			—			—		—			—			—			—
Stock compensation expense		235			3,158			1,022			313		35			—			—			35
Write-off of other receivables		—			186			—			—		—			—			—			—
Write-off of other assets		1,028			—			—			—		—			—			—			—
Related-party management fees and expenses(a)		—			—			1,199			1,164		1,007			433			402			976
Other (income) expense(b)		—			—			(1,188	)		2,869		(900	)		—			(714	)		(1,614	)
Non-cash deferred rent		479			1,475			975			1,088		2,496			786			785			2,495

(a)

As discussed under "Related Party Transactions," we are contractually obligated to make these cash payments and such payments are not subordinated to the notes. However, we are presenting these adjustments to provide a clearer indication of the EBITDA and Adjusted EBITDA associated with our operations.



(b)

Consists of non-cash charges resulting from the mark to market adjustments of our common stock put warrants and our interest rate swap. See "Description of Capital Stock—Common Stock Put Warrants." Under the terms of our credit facility definitions, this line item must be added back to net income (loss) in calculating EBITDA.

(3)

Pro forma interest expense assumes our previously outstanding revolving credit facility, senior notes due 2007, senior subordinated notes due 2008, preferred stock, certain related party debt, and other debt and certain fees were satisfied, or redeemed and that the issuance of the new senior notes occurred as of the beginning of 2003.

(4)

The ratio of earnings to fixed charges has been computed by dividing earnings before income taxes and fixed charges before preferred stock dividends (increased to reflect the pre-tax earnings requirement related thereto) by the fixed charges. Fixed charges consist of interest and related charges on debt, preferred stock dividends and the portion of rentals for real and personal properties in an amount deemed to be representative of the interest factor.

(5)

Based on average number of members during the period.

(6)

Revenue growth of clubs that had been open for at least 12 months at the beginning of the period.

(7)

We define EBITDA as net income (loss) before interest expense, income taxes and depreciation and amortization. We present EBITDA because we believe it provides investors with useful information regarding our liquidity, including compliance under our debt covenants. Adjusted EBITDA, is defined in our $25.0 million credit agreement as EBITDA, adjusted for mark-to-market adjustments for our common stock put warrants, stock compensation expense, write-off of other receivables, management fees and expenses paid to our principal stockholders and non-cash deferred rent. Non-cash deferred rent expense reflects the difference between accrued rent expense in accordance with generally accepted accounting principles in the United States of America ("GAAP") and cash rent expense actually paid in a given period, which difference is typically positive in the early years of a lease and negative in the later years of a lease. EBITDA and Adjusted EBITDA are not measures of financial performance under GAAP. We present the components of Adjusted EBITDA because this measure is a key component in the determination of our compliance with certain covenants under our credit agreement as more fully described in our liquidity section of our Management's Discussion and Analysis contained herein. EBITDA and Adjusted EBITDA should not be considered in isolation, or as a substitute for net income, cash flows, or other consolidated income (loss) or cash flow data presented in accordance with GAAP or as a measure of our liquidity or financial condition. Because EBITDA and Adjusted EBITDA are not measures determined in accordance with GAAP and is thus susceptible to varying calculations, Adjusted EBITDA as discussed may not be comparable to other similarly titled measures of other companies.

31

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion of our financial condition and results of operations should be read in conjunction with the "Selected Consolidated Financial Information and Other Data" and our consolidated financial statements and related notes included elsewhere in this prospectus.

This prospectus contains, in addition to historical information, forward-looking statements that include risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements.

        The following discussion makes reference to EBITDA and Adjusted EBITDA. EBITDA is defined as earnings before interest, taxes, depreciation and, amortization. We present EBITDA because we believe it provides investors with useful information regarding our liquidity. Adjusted EBITDA is defined in our credit agreement as EBITDA adjusted for mark-to-market adjustments for our common stock put warrants, stock compensation expense, write-off or other receivables, management fees and expenses paid to our principal stockholders, and non-cash deferred rent. We present Adjusted EBITDA because this measure is a key component in the determination of our compliance with certain covenants under our credit agreement which may limit the Company's ability to incur additional indebtedness.

        Investors should be aware that the items excluded from the calculation of EBITDA, such as depreciation and amortization, are significant components in an accurate assessment of our financial performance. EBITDA and Adjusted EBITDA should not be considered in isolation or as a substitute for net income, cash flows or other consolidated income or cash flow data prepared in accordance with GAAP or as a measure of our profitability or liquidity.

Equinox

        Equinox operates upscale, full-service fitness clubs with spas in the New York City metropolitan area, with growing operations in Los Angeles and Chicago. We currently operate twenty-one fitness clubs: sixteen in the New York City metropolitan area, two in Los Angeles and three in Chicago. During 2003 the Company opened four new clubs. Two of the twenty-one clubs currently in operation were opened in January 2004, one of these in New York City and the other in Chicago. In addition, we have five new locations under development, consisting of two in the New York City metropolitan area in Mamaroneck and Roslyn, Santa Monica, and two in San Francisco projected to be opened during 2004 and early 2005. As of March 31, 2004 we had approximately 70,000 members. In the second half of 2004 the Company will begin consolidating the results of Eclipse Development Corporation, a variable interest entity as defined by FASB Interpretation No. 46. The consolidation of Eclipse Development Corporation will not materially effect our statement of operations or financial position.

        As used in this section the terms listed below have the following meanings:

        Revenue.    As club memberships are sold, each member is charged an initiation fee as well as membership dues. The initiation fee is due up front and amortized over an estimated membership life of 24 months, commencing with the first month of the new member contract. The initial contract period is twelve months. Membership dues for members who pay annual dues up-front (both new membership sales and membership renewals) are amortized over a 12-month period commencing with the first month of the new member contract or renewal contract, as applicable. Membership dues for members who pay monthly are recognized in the period in which facility access is provided.

        Sales commissions and other direct expenditures paid with regard to deferred membership revenue are amortized over the period in which the related revenue is recognized as income. Deferred costs do not exceed related deferred revenue for the periods presented. Such costs are amortized over the life of the membership agreement. Revenues for ancillary services are recognized as services are performed. The Company recognizes revenue from merchandise sales upon delivery to the customer. Other income, which consists of license fees paid to the Company under concession and operating agreements, is recognized on a periodic basis according to these agreements.

32

Compensation and Related Expenses.    Compensation and related expenses is comprised of all operations and general and administrative salaries, bonus, commissions, recruiting expenses and related payroll taxes, and benefits.

        Rent and Occupancy.    Rent and occupancy expense is comprised of rent, real estate taxes and other facilities costs for all of our health clubs and general and administrative offices.

        General and Administrative Expense.    General and administrative expenses consist primarily of costs for general corporate functions including accounting and legal, bad debt expense, club supplies, utilities, marketing and promotional expenses comprised of professional fees, utilities, and club supplies.

        Our fixed costs include rent, certain payroll expenses, utilities, janitorial expenses and depreciation. Our variable costs include commissions and other payroll expenses, advertising and supplies. Cost of goods sold for our retail business represents a small portion of our total operating expenses and is included in general and administrative expenses. We refer to "club contribution" as the excess of a club's revenues over its operating expenses (operating income before depreciation and other non-cash expenses and allocation of corporate expenses).

        When we open a new fitness club, our fixed costs increase (as do our variable costs to some degree), but without the membership revenue base of a mature fitness club. As a new fitness club increases its membership base, fixed costs are typically spread over an increasing revenue base and its club contribution tends to improve. Based on our experience, revenues of a fitness club increase significantly during its first four years of operation. By the end of the first full year of operations, a fitness club has typically achieved modest club contribution. By the end of the second full year of operations, a fitness club has typically generated significantly better club contribution as the member base grows with minimal incremental fixed operating costs. By the end of the fourth full year of operations, a typical fitness club has matured, with memberships at or near capacity. The following table illustrates our fitness club locations, opening dates and months of operations as of December 31, 2001, 2002 and 2003 and for the three months ended March 31, 2004 and 2003:

				December 31,			March 31,
		Date Club Opened	Total Months of Operation
Name				2001	2002	2003	2003	2004
Equinox 76th Street, Inc.		09/23/91	150	12	12	12	3	3
Broadway Equinox, Inc.		11/27/93	124	12	12	12	3	3
Equinox 92nd Street, Inc.		11/08/95	100	12	12	12	3	3
Equinox 85th Street, Inc.		08/27/96	91	12	12	12	3	3
Equinox 63rd Street, Inc.		12/11/97	75	12	12	12	3	3
Equinox White Plains Road, Inc.		04/08/99	48	12	12	12	3	3
Equinox 54th Street, Inc.		05/03/99	59	12	12	12	3	3
Equinox 50th Street, Inc.		02/03/00	50	12	12	12	3	3
Equinox 43rd Street, Inc.		03/09/00	49	12	12	12	3	3
Equinox Wall Street, Inc.		11/30/00	40	12	12	12	3	3
Equinox 44th Street, Inc.		12/23/00	39	12	12	12	3	3
Equinox Pasadena, Inc.		11/28/01	28	1	12	12	3	3
Equinox Greenwich Avenue, Inc.		12/30/01	27	1	12	12	3	3
Equinox Darien, Inc.		12/12/02	15	0	1	12	3	3
Equinox Lincoln Park, Inc.		12/30/02	15	0	0	12	3	3
Equinox Tribeca, Inc.		03/22/03	12	0	0	9	1	3
Equinox Woodbury Inc.		04/01/03	12	0	0	9	0	3
Equinox West Hollywood, Inc.		07/02/03	9	0	0	6	0	3
Equinox Gold Coast, Inc. (900N Michigan)		12/24/03	0	0	0	0	0	3
Equinox Highland Park, Inc.		01/29/04	0	0	0	0	0	2
Equinox Columbus Centre, Inc.		01/31/04	0	0	0	0	0	2
	Total			134	157	204	46	61

33

        Currently, 12 of our 21 fitness clubs have been in operation for less than 48 months. Based on the historical performance of our mature fitness clubs, we expect that, even in difficult economic times, our newer fitness clubs will grow significantly faster over the first four years than our average mature fitness club, while requiring only a minimal level of maintenance capital expenditures. We expect growth in revenues to continue as recently opened fitness clubs continue to mature. In addition, we expect growth in revenues as we implement long-term strategic plans to expand the brand with new clubs in existing markets and selected new markets and with new programs, services and products. However, we expect significant variability in our results as we implement our plans to bring our total fitness clubs up to approximately 40 by the end of 2006, as our mix of newer and more mature clubs varies.

        For purposes of comparison on a "same-store basis," we refer to "comparable fitness clubs" as those clubs that were operated by us for the entire period presented and for the entire comparable period of the preceding year. We use "total months of club operations" as one measure of the number of fitness clubs operating in a given period. We define "total months of club operations" as the aggregate number of full months of operation during a given period for the fitness clubs open at the end of such period. Because new fitness club openings result in a total increase in fixed and variable costs, an increase in total months of club operations can signal significant increases in our operating costs.

        During 2001, we implemented a new management information system that integrates all aspects of our operations. The system brings applications such as electronic funds transfer, point-of-sale transactions, employee time clocks and the front desk check-in area together into one nationally integrated system. With this system we now have the ability to better track facilities usage, monitor revenues per average member and eliminate most paper records. In addition, more useful information on how members use the fitness clubs enables us to focus our marketing efforts on sales of ancillary programs and services, such as personal training and spa services, as well as to facilitate seamless information exchange between our club locations. We continue to refine the system to add desired functionality, such as prospect management and proprietary business protocols. In addition, we have begun implementation of an automated human resources system to improve our ability to manage our employees.

        Under so-called state "cooling off" statutes, a member has the right to cancel his or her membership for a period of three days after becoming a member and, in such event, is entitled to a refund of any payment made. In addition, our membership agreements provide that a member may cancel his or her membership at any time for qualified medical reasons or if the member relocates a certain distance away from any of our facilities. The specified procedures for cancellation in these circumstances vary due to differing state laws. In each instance, the canceling member is entitled to cancellation of any further obligation and a refund of prepaid amounts only. Furthermore, where permitted by law, we assess a cancellation fee that we offset against any refunds owed.

34

Results of Operations

The following table sets forth our results of operations as a percentage of revenue for the periods indicated:

	For the years ended December 31,						Three Months Ended March 31,				Twelve Months(A) Ended March 31,
	2001		2002		2003		2003		2004		2004
	% of Revenue						% of Revenue
Revenues:
Membership fees	66.1	%	66.5	%	65.2	%	63.7	%	64.8	%	65.4	%
Personal training	18.9	%	18.6	%	21.5	%	22.5	%	21.7	%	21.4	%
Other revenue	15.0	%	14.9	%	13.3	%	13.8	%	13.5	%	13.2	%
Total revenue	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%
Expenses:
Compensation and related expenses	39.4	%	39.4	%	41.5	%	42.8	%	43.2	%	41.7	%
Rent and occupancy	12.3	%	12.5	%	14.3	%	16.0	%	14.7	%	14.1	%
General and administrative	16.8	%	16.8	%	18.3	%	18.5	%	26.2	%	20.4	%
Related-party management fees and expenses	1.5	%	1.2	%	0.9	%	1.6	%	1.2	%	0.8	%
Stock compensation expense	1.3	%	0.3	%	0.0	%	0.0	%	0.0	%	0.0	%
Depreciation and amortization	7.3	%	7.2	%	8.4	%	8.4	%	8.8	%	8.5	%
Total operating expenses	78.6	%	77.4	%	83.5	%	87.4	%	94.0	%	85.5	%
Income from operations	21.4	%	22.6	%	16.5	%	12.7	%	6.0	%	14.5	%
Other income (expense):
Interest expense	(16.7	)%	(13.3	)%	(29.0	)%	(14.8	)%	(11.3	)%	(27.3	)%
Interest income	0.2	%	—		0.1	%	0.1	%	0.2	%	0.1	%
Other income (expense)	1.4	%	(3.0	)%	0.8	%	0.0	%	2.1	%	1.3	%
Total other expense	(15.1	)%	(16.3	)%	(28.1	)%	(14.6	)%	(9.0	)%	(25.9	)%
Income before provision for income taxes	6.3	%	6.3	%	(11.6	)%	2.0	%	(3.0	)%	(11.3	)%
Benefit from (provision for) income taxes	2.5	%	(4.3	)%	5.3	%	.9	%	(1.4	)%	5.6	%
Net income (loss)	3.8	%	1.9	%	(6.3	)%	(1.1	)%	(1.7	)%	(5.7	)%

        Certain reclassifications have been made to the 2001 financial statements to conform with the 2002 and 2003 presentation.

Three Months Ended March 31, 2004 Compared to the Three Months Ended March 31, 2003

        Revenues.    Total revenues are $33.5 million for the three months ended March 31, 2004 compared to $26.7 million for the three months ended March 31, 2003, an increase of $6.8 million or 25.5%. Membership fees increased to $21.7 million for the three months ended March 31, 2004, an increase of $4.7 million or 27.7% from $17.0 million for the prior year's first quarter. Personal training revenue increased to $7.3 million for the three months ended March 31, 2004, an increase of $1.3 million or 21.0% from $6.0 million for the prior year's first quarter. Other revenue increased to $4.5 million for the three months ended March 31, 2004, an increase of $838,000 or 22.8% from $3.7 million for the prior year's first quarter. These increases in revenue are due to an increase in membership base and a 3% increase in our monthly dues. Our membership base increased to 70,000 an increase of approximately 12,000 or 20.8% from 58,000 as of March 31, 2003. This increase in members is predominantly from new and recently opened clubs. There were twenty-one clubs open as of March 31, 2004 compared to sixteen as of March 31, 2003.

35

        Compensation and Related Expenses.    Compensation and related expenses increased to $14.5 million for the three months ended March 31, 2004, an increase of $3.0 million or 26.5% from $11.4 million for the prior year's first quarter. This increase was due to a 21.3% increase in employees to 2,487 at March 31, 2004 from 2,051 at March 31, 2003 and a 32.6% increase in total months of club operations to 61 months for the three months ended March 31, 2004 from 46 months for the prior year's first quarter. In addition, our personal trainer's wages increased consistently with the increase in our personal training revenue. As a percentage of total revenue compensation and related expenses increased to 43.2% from 42.8%. This increase as a percentage of revenue is due to new clubs which by definition have not reached maximum membership capacity and incur certain fixed compensation and related expenses.

        Rent and Occupancy.    Rent and occupancy expense increased to $4.9 million for the three months ended March 31, 2004, an increase of $639,000 or 15.0% from $4.3 million for the prior year's first quarter. This increase was due to our five new clubs opened between April 2003 and January 2004, which represents a 32.6% increase in total months of club operations to 61 for the three months ended March 31, 2004 from 46 for the prior year's first quarter. In addition we experienced an increase in property taxes. As a percentage of total revenue, rent and occupancy expenses decreased to 14.7% from 16.0% for the prior year's first quarter. This decrease is due to increased revenues from the ramp up of recently opened clubs that incur fixed rent and occupancy expense.

        General and Administrative Expenses.    General and administrative expenses increased to $8.8 million for the three months ended March 31, 2004, an increase of 78.1% from $4.9 million for the prior year's first quarter. This increase is due to $144,000 in additional expense associated with our ancillary products, an increase of $900,000 for professional fees, a $1.1 million increase in repairs and maintenance and supplies, marketing and advertising increased by $1.4 million, and credit card fees increased by $147,000. These increases are due primarily to our five new clubs opened between April 2003 and January 2004, which represents a 32.6% increase in total months of club operations to 61 for the three months ended March 31, 2004 from 46 for the prior year's first quarter. In addition our marketing expense increased by $1.2 million due to our new 2004 campaign and we incurred approximately $750,000 in connection with a landlord disputes. As a percentage of total revenue, general and administrative expenses increased to 26.2% for the three months ended March 31, 2004 from 18.5% for the prior year's first quarter. This increase as a percentage of total revenue is primarily due to approximately $2.0 million incurred in marketing and legal and professional fees related to a landlord dispute in the first three months of 2004 over the prior year's first quarter.

        Related-Party Management Fees and Expenses.    Related-party management fees and expenses decreased to $402,000 for the three months ended March 31, 2004 from $433,000 for the prior year's first quarter. Related-party management fees and expenses represent contractual fees of $800,000 per annum for consulting services plus expenses due to our investors as per our recapitalization agreement.

        Depreciation and Amortization.    Depreciation and amortization expense increased to $2.9 million for the three months ended March 31, 2004, an increase of 30.4% from $2.3 million for the prior year's first quarter. This increase is due to an increase of $34.6 million of fixed asset additions principally for leasehold improvements in connection with our new club openings during 2003 and 2004.

        Total Operating Expenses.    Total operating expenses increased to $31.5 million for the three months ended March 31, 2004, an increase of $8.2 million or 35.1% from $23.3 million for the prior year's first quarter. This increase is primarily due to higher compensation, rent and occupancy, general and administrative and depreciation and amortization. We experienced these increases in connection with our five new clubs opened between April 2003 and January 2004, which represents a 32.6% increase in total months of club operations to 61 for the three months ended March 31, 2004 from 46 for the prior year's first quarter. As a percentage of total revenue, total operating expenses increased to 94.0% from 87.3% for the prior year's first quarter. This increase as a percentage of revenue is due to new clubs

36

which have not reached maximum membership capacity and incur fixed costs and additional fixed asset additions resulting in higher depreciation expense, additional marketing and legal and professional fees in connection with landlord disputes.

        Other Expense.    Other expense decreased to $3.0 million or 22.5% for the three months ended March 31, 2004, from $3.9 million for the first quarter of the prior year. The decrease is primarily due to our marking our warrants to market resulting in other income in the first quarter of 2004.

Year Ended December 31, 2003 Compared to the Year Ended December 31, 2002

        Revenues.    Total revenues were $116.1 million in fiscal 2003 as compared to $95.3 million in fiscal 2002, an increase of $20.9 million, or 21.9%. Membership fees increased to $75.7 million in fiscal 2003, an increase of approximately $12.3 million or 19.4% from $63.4 million for the prior year. Personal training revenue increased to $25.0 million in fiscal 2003, an increase of approximately $7.3 million or 41.2% from $17.7 million in fiscal 2002. Other revenue increased to $15.5 million in fiscal 2003, an increase of approximately $1.3 or 8.8% from $14.2 million. These increases in revenue are due to an increase in our membership base and pricing increases. Our membership base increased to 67,000 at December 31, 2003, an increase of approximately 12,000 members or 22.7%. This increase in members was predominantly from recently opened and new clubs. In addition to an overall increase in our membership base, our pricing structure increased by approximately 3%.

        Compensation and Related Expenses.    Compensation and related expenses increased to $48.2 million for the year ended December 31, 2003, an increase of $10.6 million or 28.3% from $37.6 for the prior year. This increase was due to a 31.6% increase in employees to 2,128 from 1,617, and a 29.9% increase total months of club operations to 204 months for 2003 from approximately 157 months in 2002. In addition, our personal trainers' wages increased consistently with the increase in our personal training revenue. As a percentage of total revenue, compensation and related expenses increased to 41.5% from 39.4%. This increase is due to new clubs added in 2003, which have not reached maximum membership capacity and incur fixed compensation and related expenses. In addition compensation related expenses for general and administrative staff increased slightly.

        Rent and Occupancy.    Rent and occupancy expense increased to $16.6 million for the year ended December 31, 2003, an increase of $4.8 million or 40.2% from $11.9 million for the prior year. This increase was due to additional rent and related expenses incurred in connection with our four new clubs opened during 2003, a 29.9% increase in total months of club operations to 204 months for 2003 from approximately 157 months in 2002 which includes the four new clubs, additional office space, and increased property taxes. As a percentage of revenue, rent and occupancy expense increased to 14.3% from 12.5% for the prior year. This increase as a percentage of revenue is due to new clubs, which by definition have not reached maximum membership capacity and incur fixed rent and occupancy expenses.

        General and Administrative Expenses.    General and administrative expenses increased to $21.3 million for the year ended December 31, 2003, an increase of $5.3 million or 33.2% from $16.0 million for the prior year. This increase is due to $641,000 in additional expenses associated with our ancillary products, $385,000 increase in credit card fees, $864,000 increase in utilities, $873,000 increase in advertising, $525,000 increase in insurance expense and approximately $2.0 million in other operating expenses. These increases are primarily due to a 29.9% increase in total months of club operations to 204 months for 2003 from approximately 157 months in 2002. In addition we had $700,000 in expenses associated with our refinancing and continued investments in our finance department, information technology and marketing. We will likely incur approximately $2.0 million of additional costs related to this landlord dispute in 2004 consisting of approximately $1.3 million for legal fees and $700,000 for other rents. As a percentage of total revenue, general and administrative expenses increased to 18.3% from 16.8% for the prior year.

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        Related-Party Management Fees and Expenses.    Related party management fees and expenses decreased to $1.0 million from $1.2 million for the prior year. Related management fees and expenses represents contractual annual fees of $800,000 for consulting services plus expenses due to our investors related to our recapitalization agreement. As a percentage of revenue related party management fees and expenses decreased to .86% from 1.21% for the prior year.

        Stock Compensation Expense.    In connection with the granting of stock options to non-employees, we recognized stock compensation expense of approximately $35,000 and $313,000 for the years ended December 31, 2003 and 2002, respectively.

        Depreciation and Amortization.    Depreciation and amortization expense increased to $9.7 million, an increase of $2.9 million from $6.8 million in the prior year. This increase is due to approximately $27.0 million of fixed asset additions principally for leasehold improvements in connection with our new club openings during 2003 compared to $21.4 million for the prior year.

        Total Operating Expenses.    Total operating expenses increased to $96.9 million, an increase of $23.2 million or 31.4% from $73.7 million for the prior year. This increase is due primarily to higher compensation costs, rent and occupancy and other expenses related to a 29.9% increase in total months of club operations to 204 months for 2003 from approximately 157 months in 2002. As a percentage of revenue, operating expenses increased to 83.5% from 77.4% for the prior year. This increase as a percentage of revenue is due to new clubs, which have not reached maximum membership capacity and incur fixed rent and occupancy expenses upon the clubs opening.

        Other Expense.    Other expense increased to $32.7 million for the year ended December 31, 2003, an increase of $17.1 million or 109.8% from $15.6 million for the prior year. This increase was due to the interest expense in connection with the repayment of certain debt in connection with our offering of 9% senior notes due 2009 at the end of 2003 and included interest expense on our senior notes, line of credit, term loan, original issue discount and prepayment penalties of $23.4 million, $5.8 million in deferred financing costs related to our prior debt that were written-off, and $3.2 million of accelerated interest that was included in the $5.0 million paid to our founding shareholders. In addition we incurred approximately $592,000 of interest costs related to our offering of senior notes. Other interest costs including interest under capital leases totaled approximately $300,000.

        Provision (benefit) for Income Taxes.    The provision (benefit) for income taxes was $(6.2) million in fiscal 2003 as compared to $4.1 million in fiscal 2002, a decrease of $10.3 million. Our effective tax rate in fiscal 2003 decreased to (46)% from 69% in fiscal 2002, primarily as the result of the loss before income taxes in 2003, permanent differences relating to mark-to-market adjustment for the common stock put warrants issued to the holders of our senior subordinated notes and the impact of state and local taxes in the jurisdictions in which we operate fitness clubs.

Year Ended December 31, 2002 Compared to the Year Ended December 31, 2001

        Revenues.    Total revenues were $95.3 million in fiscal 2002 as compared to $79.4 million in fiscal 2001, an increase of $15.9 million, or 20.0%. Membership fees increased to $63.4 million in fiscal 2002, an increase of approximately $10.9 million or 20.7% from $52.5 million for the prior year. Personal training revenue increased to $17.7 million in fiscal 2002, an increase of approximately $2.7 million or 17.9% from $15.0 million in fiscal 2001. Other revenue increased to $14.2 million in fiscal 2002, an increase of approximately $2.3 million or 19.2% from $11.9 million for the prior year. These increases in revenue are due to an increase in our membership base and price increases. Our membership base increased to 55,000 at December 31, 2002, an increase of approximately 8,933 members or 19.4%. This increase in members was predominantly from recently opened and new clubs. In addition to an overall increase in our membership base, our pricing structure increased by approximately 2.6%.

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        Compensation and Related Expenses.    Compensation and related expenses increased to $37.6 million for the year ended December 31, 2002, an increase of $6.3 million or 20.1% from $31.3 for the prior year. This increase was due to a 19.6% increase in employees to 1,617 from 1,352, and a 17.2% increase total months of club operations to 157 months for 2002 from approximately 134 months in 2001. As a percentage of revenue compensation and related expenses remained at 39.4% for both 2002 and 2001.

        Rent and Occcupancy.    Rent and occupancy expense increased to $11.9 million for the year ended December 31, 2002, an increase of $2.1 million or 21.2% from $9.8 million for the prior year. This increase was due to increased real estate taxes and a full twelve months of rent from clubs opened in 2001, as well as related expenses incurred in connection with two new clubs opened during 2002, a 17.2% increase in total months of club operations to 157 months for 2002 from approximately 134 months in 2001 which includes the two new additional clubs. As a percentage of revenue, rent and occupancy increased to 12.5% from 12.3% for the prior year. This increase as a percentage of revenue is due to new clubs, which by definition have not reached maximum member capacity and incur fixed rent and occupancy expenses.

        General and Administrative Expenses.    General and administrative expenses increased to $16.0 million for the year ended December 31, 2002, an increase of $2.6 million or 19.4% from $13.4 for the prior year. This increase was due to $552,000 in additional expenses associated with our ancillary products, $629,000 increase in credit card fees, $373,000 increase in insurance, $267,000 increase in additional marketing, advertising and promotional expenses, $239,000 increase in bad debt, $300,000 increase in club supplies, approximately $139,000 in repairs and maintenance, and approximately $101,000 related to additional expenses incurred with our 2 new clubs, which represents a 17.2% increase total months of club operations to 157 months for 2002 from approximately 134 months in 2001. As a percentage of revenue, general and administrative expenses remained at 16.8% for both periods.

        Related-Party Management Fees and Expenses.    Related party management fees and expenses remained at approximately $1.2 million for the years ended December 31, 2002 and 2001. Related management fees and expenses represents contractual annual fees of $800,000 for consulting services plus expenses due to our investors related to our recapitalization agreement. As a percentage of revenue related party management fees and expenses decreased to 1.2% from 1.5% for the prior year.

        Stock Compensation Expense.    In connection with the granting of stock options to non-employees, we recognized stock compensation expense of approximately $313,000 and $1.0 million for the years ended December 31, 2002 and 2001, respectively.

        Depreciation and Amortization.    Depreciation and amortization expense increased to $6.8 million, an increase of approximately $1.1 million from $5.8 million in the prior year. This increase is due to approximately $21.4 million of fixed asset additions including leasehold improvements in connection with our new club openings during 2002.

        Total Operating Expenses.    Total operating expenses increased to $73.7 million, an increase of $11.3 million or 18.0% from $62.5 million for the prior year. This increase is due to increased compensation, rent and occupancy and other expenses related to a 17.2% increase in total months of club operations to 157 months for 2002 from approximately 134 months in 2001. As a percentage of revenue, operating expenses decreased to 77.4% from 78.6% for the prior year. This decrease as a percentage of revenue is due to expenses from new clubs being outpaced by an increase in revenues.

        Other Expense.    Other expense increased to $15.6 million for the year ended December 31, 2002, an increase of $3.6 million or 30.2% from $12.0 million for the prior year. This increase is mainly due

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to marking our warrants to market of $2.9 million compared to $(1.2) million in 2001, offset by a decrease in net interest expense of approximately $449,000.

        Provision for Income Taxes.    The provision for income taxes was $4.1 million in fiscal 2002 as compared to $2.0 million in fiscal 2001, an increase of $2.1 million, or 106%. Our effective tax rate in fiscal 2002 increased to 69% from 40% in fiscal 2001, primarily as the result of permanent differences relating to mark-to-market adjustment for the common stock put warrants issued to the holders of our senior subordinated notes and the impact of state and local taxes in the jurisdictions in which we operate fitness clubs.

Liquidity and Capital Resources

        Historically, we have satisfied our liquidity needs through cash from operations and various borrowing arrangements. Principal liquidity needs have included the development of new fitness clubs, debt service requirements and other capital expenditures necessary to maintain existing facilities. Our regular cash requirements consist principally of scheduled payments of principal and interest on outstanding indebtedness, capital expenditures and lease expenses. In June 2004, we made our first semiannual interest payment of approximately $7.2 million on our senior notes. In addition to these and other regular liquidity requirements, liquidity requirements include our obligation to pay up to $15 million to our Founding Stockholders on the earlier of a qualified public offering, a change of control or December 15, 2010 and approximately $800,000 plus expenses, annually to our principal investors for consulting services. In addition, commencing on December 15, 2006, holders of a majority interest in the common stock put warrants will have a right to require us to use our best efforts to purchase all of our outstanding warrants at fair market value if we have not previously consummated a qualifying initial public offering of our common stock. Although each warrant holder will receive preferred stock equal to the value of its warrant if we fail to purchase the warrants within 60 days, such a demand, if made, could result in additional liquidity requirements. The future value of the warrants cannot presently be predicted but we expect it to be material. The value of the warrants, as marked to market at March 31, 2004, was approximately $8.9 million. Based upon our current level of operations and the anticipated maturation of our immature club base, we believe that the proceeds from the offering of our 9% senior notes due 2009 and the entering into of our new senior secured revolving credit facility, our cash flow from operations and available cash will be adequate to meet our short and long term liquidity requirements including our plan to expand to approximately 40 clubs by 2006. We estimate each club opening requires between $4.0 million and $9.0 million, depending on size and location as well as approximately $100,000 capitalized expenses to maintain existing clubs. Clubs undergo major renovations every 5-7 years which range from $500,000 to $1.0 million.

        Our credit facility was undrawn at March 31, 2004, with availability subject to specified actions with respect to collateral and subject to a borrowing base formula (except for up to $3.5 million of cash collateralized standby letters of credit under this facility or issued by another financial institution). The revolving credit facility will help enable us to fund our plans to expand and develop new fitness clubs in existing markets and in select new markets. Our revolving credit facility contains restrictive affirmative and negative covenants and financial covenants including leverage ratios, an interest coverage ratio and capital expenditure and dividend payment restrictions. The facility is guaranteed by all of our existing and future domestic subsidiaries and secured by substantially all our assets, other than real property leases, but including capital stock of our subsidiaries and cash and deposit accounts. See "Description of Certain Indebtedness." Our significant contractual obligations, including our obligations to our Founding Stockholders and the potential issuance of our preferred stock, could make it more difficult for us to effect a financing transaction, including an initial public offering of our common stock. In addition, our common stock is not publicly traded and therefore equity financing is not available to us on the same basis as it is for companies that have publicly traded stock.

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        We have included information in this Registration Statement with respect to Adjusted EBITDA because it is a key component in the determination of our compliance with certain of the covenants under our past and current credit agreements.

        Under the terms of our current credit agreement, we may incur additional debt so long as the pro forma ratio of total debt to Adjusted EBITDA is less than or equal to 5.5 to 1.0 through March 31, 2004, which decreases ratably to 3.0 to 1.0 at December 31, 2008. If we fail to meet the ratio test, as well as other ratios, our ability to incur new debt will be significantly limited. Pursuant to our credit agreement, the aggregate amount of Capital Expenditures for any Fiscal Year may not exceed the sum of: (i) for the Fiscal Year ending December 31, 2003, $40,000,000 or (ii) for any Fiscal Year ending thereafter, $60,000,000. If the entire amount of Capital Expenditures permitted in any period set forth above is not utilized, we may carry forward to the immediately succeeding period only: (i) one hundred percent (100%) of such unutilized amount up to an aggregate amount of $15,000,000 and (ii) fifty percent (50%) of the unutilized amount in excess of $15,000,000 (in each case with Capital Expenditures made in such succeeding period applied last to such carried forward amount).

        Our Interest Coverage Ratio as of the last day of each fiscal quarter ending during the periods set forth below to be less than the ratio set forth below for such period:

Period	Ratio
Closing Date through December 31, 2004	1.55
January 1, 2005 through December 31, 2005	2.05
January 1, 2006 through December 31, 2006	2.55
January 1, 2007 and thereafter	3.10

        The Company is in compliance with its covenants at March 31, 2004.

        The following illustrates our net income and EBITDA and Adjusted EBITDA calculations, total debt and ratio of total debt to Adjusted EBITDA:

	Year Ended December 31,								Twelve Months Ended March 31,
	2001			2002		2003			2004
	(in thousands-except ratios)
Net income (loss)	$	3,000		$	1,824	$	(7,265	)	$	(7,533	)
Depreciation and amortization		5,785			6,850		9,750			10,433
Provision for (benefit from) income taxes		2,007			4,137		(6,189	)		(6,407	)
Interest expense, net of interest income		13,149			12,700		33,560			33,395
EBITDA		23,941			25,511		29,856			29,888
Stock compensation expense		1,022			313		35			35
Other expense (income)		(1,188	)		2,869		(900	)		(1,614	)
Related-party management fees and expenses		1,199			1,164		1,007			976
Non-cash deferred rent		975			1,088		2,496			2,495
Adjusted EBITDA	$	25,949		$	30,945	$	32,494		$	31,780
Total debt as defined	$	98,778		$	102,615	$	163,999		$	163,815
Ratio of total debt to Adjusted EBITDA		3.81			3.3		5.05			5.15

        Pursuant to our credit agreement, Adjusted EBITDA is calculated for the twelve months then ended.

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Our Recapitalization

        In December 2000, as part of a recapitalization, we repurchased shares of our then outstanding common stock from the founding stockholder group (the "Founding Stockholders"). We then issued new shares to North Castle, J.W. Childs and other shareholders (the "Incoming Investors") to complete the initial recapitalization transaction. We funded the recapitalization with a combination of cash from Incoming Investors, a credit facility consisting of a $37 million term loan and up to $23 million of available revolving credit commitments and a $50 million investment by institutional investors in senior subordinated notes, which were issued with common stock put warrants representing approximately 8% of our common equity on a fully diluted basis (as of the date hereof). Commencing on December 15, 2006, holders of a majority interest in the warrants will have a right to require us to use our best efforts to purchase the warrants at fair market value unless we have previously consummated a qualifying initial public offering of our common stock. Our net income will also be affected by our continuing need to mark-to-market our common stock put warrant obligations. In accordance with a cash escrow agreement under the recapitalization agreement, we retained restricted cash in the amount of $4.4 million to secure indemnification obligations of the Founding Stockholders. In early 2002, these indemnification obligations expired, and the restricted cash was remitted to the Founding Stockholders, with a corresponding charge to equity. At March 31, 2004, the Founding Stockholders held 7% of the outstanding common stock and the Incoming Investors held 93% of the outstanding common stock of Equinox. As a result of the repayment of the existing credit facility and the senior subordinated notes, we had an obligation under the recapitalization agreement to pay the Founding Stockholders $5.0 million. This was paid in 2003 in connection with our private offering of $160 million in 9% senior notes due 2009. We have an obligation under the recapitalization agreement to pay the Founding Stockholders up to $15.0 million in cash upon the earlier of an initial public offering, a change of control or December 2010.

        Operating Activities.    Net cash provided by operating activities was $9.7 million in the first three months of fiscal 2004 as compared to $5.9 million during the same period in fiscal 2003. As a result of our $160.0 million private offering, our accrued expenses, principally for interest expense on the senior notes, increased to $10.2 million at March 31, 2004 from $4.2 million at December 31, 2003. Net cash provided by operating activities was $16.3 million and $17.6 million for the years ended December 31, 2003 and 2002, respectively. With the exception of our corporate membership program, we have no material accounts receivable. Within our corporate membership program, no single corporation accounts for more than 7% of our gross accounts receivable. We currently have a working capital surplus and plan to finance operations through operating cash flows.

        Net cash provided by operating activities was $17.6 million in fiscal 2002 as compared to $16.7 million in fiscal 2001. The increase in cash provided by operating activities was primarily due to the improved profitability of our recently opened fitness clubs, offset by fitness clubs opened in fiscal 2002 or 2003 which are operating at margins lower than those of mature clubs.

        Investing Activities.    Primarily as a result of our expansion efforts, we invested $10.0 million in capital expenditures, net of landlord contributions of $925,000, and asset purchases in the first three months of fiscal 2004 as compared to $5.0 million during the same period in fiscal 2003, net of landlord contributions of approximately $1.9 million. We estimate that for the year ended December 31, 2004, we will invest an additional $30.0 million in capital expenditures, primarily to build new clubs and maintain existing fitness clubs. These expenditures will be funded by cash flow generated from operations and available cash. Primarily as a result of our expansion efforts, we invested $27.0 million in capital expenditures and asset purchases, net of landlord contributions during 2003 as compared to $21.4 million in 2002 of the $27.0 million, net of $5.8 million of landlord contributions, approximately $24.4 million was paid towards new clubs during 2003. We expect to continue investing in capital expenditures in accordance with our expansion strategy.

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        Financing Activities.    Net cash (used) by financing activities was $(1.0) million in the first three months of fiscal 2004 as compared to $15.1 million of net cash provided by financing activities during the same period in fiscal 2003. In January 2003, some existing shareholders purchased additional shares of common stock for $10.0 million and a new lender purchased $25.0 million of senior notes. We used the proceeds to pay down our existing revolving credit facility, leaving approximately $15.1 million of net proceeds. Net cash provided by financing activities was approximately $52.2 million for the year ended December 31, 2003 as compared to $2.3 million of net cash used in financing activities for the year ended December 31, 2002. During 2003 we completed our private offering of $160.0 million of 9% senior notes due 2009, a new lender purchased $25.0 million of senior notes and certain existing shareholders purchased additional shares of common stock for $10.0 million. We used the net proceeds of approximately $152.0 million from our offering of senior notes to repay our existing revolving credit facility of $16.9 million, repay the entire outstanding principal amount plus accrued interest of our senior notes due 2007 of $55.7 million, repay the entire principal amount plus accrued interest of $53.3 million of senior subordinated notes due 2008, redeem $1.3 million of our preferred stock and pay our Founding Stockholders a contractually required amount of $5.0 million. We plan to utilize the remaining proceeds to fund our expansion and for general corporate purposes. In March 2002, we distributed $4.4 million (representing escrowed proceeds) to the Founding Stockholders in accordance with the applicable transaction agreements.

        Net cash provided by financing activities was $2.3 million in fiscal 2002, reflecting draws against the revolving credit facility partially offset by the distribution to Founding Stockholders, as compared to $3.7 million of net cash provided by financing activities during the same period in fiscal 2001. The primary sources of cash from financing activities in fiscal 2001 were draws against the revolving credit facility. Net cash provided by financing activities was $3.7 million in fiscal 2001.

        As a direct result of the offering of our 9% senior notes due 2009, we expensed deferred finance charges incurred in connection with debt to be refinanced as well as original issue discount associated with the senior subordinated notes issued in December 2000. The amount of deferred finance charges and original issue discount charged to expense and equity was $5.9 million and $6.9 million, respectively, as of December 31, 2003. In connection with the offering of senior notes and in accordance with contractual obligations, we paid approximately $3.9 million of early redemption premiums to the holders of our then outstanding senior notes and senior subordinated notes and a $1.0 million amendment fee to holders of our common stock put warrants, both of which was charged to expense, and we paid $5.0 million to the Founding Stockholders. As a result of redeeming of all of the outstanding preferred stock, we reduced Stockholders' Equity by $1.3 million.

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Contractual and Commercial Commitments Summary

        Our aggregate long-term debt, capital lease obligations, operating lease obligations and other material contractual obligations as of March 31, 2004, after giving effect to the payment of $5.0 million to the Founding Stockholders at the close of our offering, are as follows:

	Total		Less than 1 year		1-3 years		4-5 years		After 5 years
Long-term debt(1)	$	$161,642,988		126,625		318,633		80,338	$	161,117,392
Capital lease obligations(2)		2,342,716		982,230		1,019,475		341,011		—
Operating lease obligations		304,992,639		17,079,478		37,926,623		38,540,036		211,446,502
Payment to Founding Stockholders(3)		15,000,000		—		—		—		15,000,000
Common stock put warrants(4)		8,941,605		—		8,941,605		—		—
	$	492,919,948	$	18,188,333	$	48,206,336	$	38,961,385	$	387,563,894

(1)

The long-term debt contractual cash obligations include principal payment requirements only. Semi-annual interest payments of $7.2 million commenced on June 15, 2004 and will be payable on June 15 and December 15 thereafter until December 15, 2009.

(2)

Capital lease obligations represent principal and interest payments.

(3)

Represents the maximum obligation under the recapitalization agreement to pay the Founding Stockholders upon the earlier of a qualified public offering, a change of control or December 15, 2010.

(4)

Includes the obligation to purchase the common stock put warrants at fair market value if we have not consummated a qualifying initial public offering of our common stock prior to December 15, 2006. The amount presented is the fair market value of the warrants at March 31, 2004 and has been calculated using the Black-Scholes option pricing model; the actual fair market value at the time of any purchase will not be based upon a Black-Scholes calculation and could vary materially from the amount presented.

Use of Estimates and Material Accounting Policies

        The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

        The most significant assumptions and estimates relate to the useful lives, recoverability and impairment of fixed and intangible assets, the allocation and fair value ascribed to assets acquired in connection with acquisition of businesses under the purchase method of accounting, valuation of and expense incurred in connection with stock options and warrants, valuation of accounts receivable and related reserves, legal contingencies, deferred income tax valuation and the estimated membership life.

        Our one-time member initiation fees and related direct expenses are deferred and recognized on a straight-line basis in operations over an estimated membership life of 24 months. As our new club management system allows us to continue to refine the actual amount of time that our members remain active, we may adjust our estimate of membership life. Consequently, the amount of initiation fees and direct expenses deferred by us could increase or decrease in proportion to our revised estimate of membership life. Since initiation fees were only 1.8% of our revenues for the twelve months

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ended March 31, 2004, a change in estimated membership life is not expected to impact our financial results materially.

        The rights of holders of our common stock put warrants to require us to use our best efforts to purchase their warrants associated with the senior subordinated notes are being valued on each report date using the Black-Scholes option pricing model. As the exercise price of the warrants is only $0.01, this model is subject to changes in the fair market value of our common stock, average volatility of comparable publicly traded companies and changes in risk-free interest rates.

        Long-lived assets, such as fixed assets, goodwill and intangible assets are reviewed for impairment when events or circumstances indicate that the carrying value may not be recoverable. Estimated future cash flows are used to determine if an asset is impaired, in which case the asset's carrying value would be reduced to fair value. Actual cash flows realized could differ from those estimated and could result in asset impairments in the future. Our primary long-lived assets are fixed assets; goodwill comprises less than 2% of our total assets as of March 31, 2004.

        We implemented SFAS 142 and 144 beginning on January 1, 2002. There were no changes to the estimated useful lives of amortizable intangible assets due to the SFAS 142 and 144 implementation.

Internal Controls and Procedures

        In connection with the audit of our financial statements for the year ended December 31, 2003 and for the three month period ended March 31, 2004, we were advised by our auditors, KPMG LLP, of significant deficiencies concerning our internal controls and their operation during the year. The significant deficiencies are as follows: (1) we did not complete timely formal reconciliations between subsidiary records and the general ledger for certain of our balance sheet accounts; and (2) we had clerical and accounting errors that could have been averted through greater management review and approval of reports, statements and reconciliations. In addition, we were advised by our auditors that the Company should hire at least one new director who is considered to be "financially literate" so this person could serve on the audit committee of the Company.

        We understand that these significant deficiencies, if unaddressed, could adversely affect our ability to record, process and report financial data consistent with our assertions in the financial statements. Since October of 2003, we have taken steps to strengthen our internal control structure and procedures for financial reporting and our disclosure controls and procedures. In the third quarter of 2003, we hired a new chief financial officer who has significant public company accounting experience. We are in the process of establishing a formal disclosure committee that will meet at least once a quarter and will be responsible for establishing and reviewing our disclosure controls and procedures for ensuring the accuracy and completeness of the information contained in our financial statements, books and records. We also anticipate further accounting staff hires, a more formal financial quality review process and other process and system control improvements. We believe that we are appropriately addressing each of these internal control issues, but there can be no assurance that similar or other issues will not arise in the future.

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BUSINESS

        Equinox operates upscale, full-service fitness clubs that offer an integrated selection of Equinox-branded programs, services and products to meet the fitness needs and active lifestyles of our members. By delivering an exceptional member experience, the Equinox brand has achieved national recognition for both our ability to inspire and motivate members to get results and for the quality, innovation and design of our facilities. Operating in the middle- to upper-end market segment of the fragmented fitness industry, we target an attractive demographic and psychographic member profile. Our typical member is a well-educated professional between 25 and 55 years of age with significant discretionary income and who considers fitness an essential part of their active lifestyle. As of March 31, 2004 we operate 21 fitness clubs: 16 in the New York City metropolitan area, two in Los Angeles and three in Chicago. In January 2004, we opened Equinox Columbus Centre, in New York City and Equinox Highland Park in Chicago. In addition, we have five new locations under development, consisting of two in the New York City metropolitan area in Mamaroneck and Roslyn, Equinox Fitness Santa Monica, San Mateo and our first fitness club in San Francisco. We offer our 70,000 members Equinox-branded programs, services and products, including strength and cardio training, group fitness classes, personal training, spa services and products, apparel and food/juice bars.

        Our members enjoy the benefits of our emphasis on service, value, quality, expertise, innovation and attention to detail. We encourage our members to participate in our programs and services and to use our facilities frequently. We believe that participating members will get results and will be more likely to renew their memberships and to refer new members. Participating members are also more likely to use high-margin ancillary programs and services, such as personal training and spa services. As a result, our member retention rate has consistently been between 66%-67%, comparable to the median retention rate of fitness clubs nationwide, and member referrals account for 42% of new membership sales. In addition, 34.6% of our revenues are derived from ancillary programs and services, and our revenues per average member of $1,988 for the twelve months ended March 31, 2004 were almost triple the industry median for 2002.

        We have a distinctive operating model, consisting of disciplined procedures for developing and operating a fitness club, with a rigorous focus on execution and cost control. This operating model leverages the strengths of our active lifestyle brand and contributes significantly to our attractive financial performance.

        Revenues for the twelve months ended March 31, 2004 and 2003 are $122.9 million and $96.5 million, respectively, an increase of 27.4%. For the three months ended March 31, 2004 our revenues increased to $33.5 million compared to $26.7 for the first quarter of the prior year, a 25.5% increase. Our revenues were $116.1 million, $95.3 million and $79.4 million for the years ended December 31, 2003, 2002 and 2001, respectively. We had net income (loss) of $(7.3) million, $1.8 million and $3.0 million for the years ended December 31, 2003, 2002 and 2001, respectively. Our 2003 loss was predominantly due to $33.7 million of interest expense compared to $12.7 million in the prior year. Interest expense increased in 2003 due to our refinancing of debt in connection with our private bond offering. Between 1994 and 2003, we grew our revenues from $11.7 million to $116.1 million, representing a 9 year compounded annual growth rate of 33.2%. Over the same period, club contribution (operating income before depreciation and other non-cash expenses and allocation of corporate expenses) grew from $3.5 million to $42.7 million, representing a 9 year compounded annual growth rate of 36.7%. More recently, during the challenging economic times since 2001, our membership grew 52.5% and we produced strong financial results with revenues and EBITDA increasing by 46.2% and 24.7%, respectively. Our financial performance and recent record pre-opening memberships at certain of our recently opened clubs demonstrate the resiliency of our operating model and the demand for our programs and services. For the year ended December 31, 2003, 2002 and 2001, Equinox generated EBITDA of $29.9 million, $25.5 million and $23.9 million, respectively. Revenues for the three months ended March 31, 2004, on a "same-store basis" increased by 6.7% over the same period in 2003.

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Industry Overview

        Fitness industry growth patterns and demographics present an attractive business environment, particularly in the middle- to high-end niche that Equinox targets. The fitness industry includes commercial facilities, YMCA facilities, non-profit facilities, gyms, hospital-operated facilities and country clubs. Total industry revenues in 2002 were approximately $13.1 billion.

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In the fifteen years between 1987 and 2002, overall fitness club memberships increased at a compounded annual growth rate of 5.0%, from 17.3 million to 36.3 million.



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The percent of the US population with fitness club memberships increased from 7.1% in 1987 to 14.1% in 2002.



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Between 1987 and 2002 the number of "core" members (who visited health clubs 100 or more days during a year) increased from 5.3 million to 14.6 million.

        The fitness industry remains highly fragmented. The five largest fitness club owner/operators, excluding franchise operators, accounted for less than 7% of commercial fitness clubs in the United States in 2002. This fragmentation creates a significant opportunity for a multi-club operator with a proven record of growth and profitability to increase its market share.

        We expect that favorable attitudes about health and well-being, together with demographics, will fuel further growth in the fitness industry. Government and medical reports urge exercise, active and healthy living, and the benefits of physical exercise to reduce the risks associated with obesity and sedentary lifestyles. For example, the Surgeon General's Report on Physical Activity and Health emphasizes findings that health benefits occur from physical activity and that the amount of health benefit is directly related to the amount of regular physical activity. According to the Surgeon General, more than 60% of adults do not achieve the recommended amount of physical activity and 25% of adults are not physically active at all. As awareness of the health benefits of being physically fit continues to increase, we expect that the percent of the population with health club memberships will continue to grow at rates consistent with recent trends.

        Today, approximately 69% of fitness club members have a household income in excess of $50,000, which is approximately 18% higher than the 2002 national median, and this member-segment has increased 35% over the past five years, which is more than ten times as fast as those earning less than $50,000.

        Equinox's focus on the middle- to high-end market segment of the fitness industry includes baby boomers (Americans aged 35-54). We believe that baby boomers and the elderly place an increasingly greater emphasis on fitness as an important component of healthy living. In absolute terms, the baby boomer segment of the fitness industry grew 143% between 1987 and 2002. In 2002, baby boomers accounted for 13.1 million members, 36% of the health club population. In addition, baby boomers generally have discretionary income available for the ancillary products and services that a fitness club like Equinox offers.

Competitive Strengths

        Strong Lifestyle Brand.    Within the fitness industry, we believe we have one of the most recognizable brand platforms for geographic expansion and product diversification and extension. According to an independent focus-group study conducted by Bouchez Kent, the Equinox lifestyle brand represents service, value, quality, expertise, innovation, attention to detail, market leadership and results. Throughout our 12-year history, the press has consistently recognized our leadership and innovation in the fitness industry. Highlights include Vogue's article featuring our strategy to become "a national megabrand" and our new club in Pasadena, New York magazine's "Spa & Fitness" and "Best Spas in the City" issues featuring Equinox on the cover, regular mentions in the Style Section of The New York Times and NBC's Today Show featuring Equinox-branded apparel. Equinox has been referred to as the "Best of New York" by New York magazine, the "Best Gym" by Allure, the "Most

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Cutting-Edge Gym in the Country" by Fitness and the "Ace of Clubs" by Interior Design. In 2002, management estimates that Equinox generated over $8 million in marketing value, including more than 40 press mentions per month. We expect monthly media placements to continue to grow throughout 2004. We believe this brand awareness will continue to drive our strong member retention and enhances our ability to grow sales of ancillary Equinox-branded products and services.

        Focus On Member Experience with Innovative Programming.    Our core operating philosophy revolves around the member experience, from the design and layout of our facilities to our high standards of operations, attention to detail and extensive programming. To motivate and satisfy our members, we offer an integrated selection of high quality Equinox-branded programs, services and products that help our members get results. In addition to basic services, such as strength and cardio training and over 1,000 group fitness classes per week, we offer a wide range of ancillary programs and services, including personal training, spa services and products, apparel and accessories and food and juice bars. Our highly qualified personal trainers enhance our reputation for offering some of the most progressive personal training programs in the country. In addition to having a national certification or a relevant college degree, we require all of our personal trainers to participate in our proprietary educational program, the Equinox Fitness Training Institute. Many of our ancillary programs and services have been recognized as among the best in the industry by Allure, Elle, Fitness, GQ, New York magazine and others. We constantly improve our programs and develop new initiatives such as our Cycletech program, which simulates outdoor cycling in spinning classes, and TRIP, which offers adventure travel beyond the "four walls" of Equinox to national and international destinations.

        Ancillary programs and services generate additional revenues and require minimal incremental capital investment or fixed costs. As a result, they not only produce high margins, but also enhance the Equinox brand, improve member retention, increase our revenues per average member and diversify our revenue. For the year ended December 31, 2003, we generated approximately 34.8% of revenues from ancillary programs and services compared to the most recently available median of 27% for the industry in 2002.

        Operating Model.    Our operating model includes specific protocols for developing and operating a fitness club. Our typical clubs range between 20,000 and 40,000 square feet. Our development team has created a distinctive club prototype that increases speed to market, reduces design inefficiencies, lowers construction risk and the likelihood of cost overruns and maximizes purchasing efficiencies. We have incorporated the core elements of fitness club design and layout into distinct models that provide flexibility in terms of size, programming, price and construction cost. We determine which model is appropriate for a prospective site based on local demographics and psychographics, population density, market demand and the structural characteristics of a particular building. We leverage the brand awareness and programming generated by our larger fitness clubs to serve a broader market area without sacrificing quality or profitability. We have also established standard operating procedures, controls and appropriate corporate infrastructure to manage additional clubs with limited incremental overhead. Our commitment to employee training ensures that we are able to staff new clubs with highly skilled management teams.

        Historically, we have generated positive club contribution within 12 months of opening and achieved an average return on investment (club contribution as a percentage of cumulative capital investment) in excess of 50% by the fourth year of operations. We attribute our high returns to (i) our ability to achieve premium pricing by selling value to a discriminating consumer with significant discretionary income, (ii) our high percentage of revenues from ancillary programs and services, (iii) our ability to use our reputation and desirability as a tenant to secure attractive locations and favorable lease terms, (iv) our ability to creatively use space to minimize occupancy costs and to maximize member through-put, and (v) our disciplined operating strategy that controls operating costs. We have never closed an Equinox fitness club, and every Equinox fitness club generates positive club contribution.

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        Attractive Facilities and Prime Locations.    We have consistently received national recognition for our award-winning architectural designs and have established a reputation for building and operating extraordinary facilities. We have a team dedicated to identifying and evaluating expansion sites based upon our market research and our disciplined and rigorous criteria for development. In addition, given the attractive demographic and psychographic profile of our members, we receive numerous unsolicited proposals from prospective developers/landlords to be an anchor tenant or amenity in a mixed use or office development or to reposition property. From a wide variety of opportunities, we select future locations efficiently and lease superior real estate on attractive terms.

        Experienced Management Team.    Led by our President and CEO, Harvey Spevak, we believe our management team has the vision, experience and passion to manage our continued growth. Since Mr. Spevak's appointment in January 1999, the team has opened 16 new locations and increased revenues from $38.0 million in 1998 to $122.9 million for the twelve months ended March 31, 2004. Our management team has a proven track record of strengthening our brand by increasing our member base and enhancing financial performance through disciplined expansion, site selection and club design combined with rigorous execution. We have assembled a management team with experience in every aspect of the business by recruiting from a wide variety of related professional industries. Our senior management team has developed a corporate culture that emphasizes the complete understanding of the Equinox vision, member experience and results orientation. We reinforce the understanding of our corporate culture by maintaining ongoing recruiting and training programs to successfully identify and develop new managers and employees to support our club growth in both our new and existing markets. The management team, including some of our club managers, have shares or options to purchase shares constituting approximately 11.7% of our common stock on a fully diluted basis as of March 31, 2004.

Business Strategy

        Capitalize on Existing Investment in Newer Fitness Clubs.    We intend to capitalize on our investments in our recently opened clubs. Based on our past experience, membership levels reach maturity in four years. With four clubs opened in the past year and 17 opened since January 1999, we expect these recently opened clubs to account for a significant portion of our growth over the next three years with minimal required capital expenditures. We have a twelve year operating history of successfully launching and maximizing the returns of new locations. Specifically, at each of our five fitness clubs opened during the past year we have met or exceeded our pre-opening membership targets and the average return on investment of our seven mature clubs at the end of the fourth year of operations was in excess of 50%.

        Open New Clubs in Existing Markets and Enter Select New Markets.    We intend to continue to develop regional clusters of Equinox fitness clubs in the New York City, Los Angeles and Chicago metropolitan areas, and in similar markets. In 2002, we opened our first Chicago fitness club, which produced positive club contribution approximately six months after opening. In July 2003, we opened our second Los Angeles area fitness club, which generated more pre-opening memberships than any Equinox location in the history of the Company. In December 2003 we successfully opened our 900 N. Michigan Ave. club (Chicago). Our initial success in Chicago and Los Angeles demonstrates the demand for and portability of the Equinox brand outside New York and the transportability of our business model. Our business plan calls for increasing the number of our fitness clubs from 19 at December 31, 2003 to approximately 40 by the end of 2006, with possible locations in major metropolitan markets that are similar to New York, Los Angeles and Chicago, where significant demand for the Equinox brand exists. In addition to the Equinox Columbus Centre, NY and Equinox Highland Park, Chicago locations opened in January, 2004, we plan to open four more fitness clubs in 2004 and one in the first quarter of 2005.

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Current Announced New Fitness Club Openings

Location	Square footage	Target opening date
Roslyn (Long Island), NY	24,000	2nd Quarter 2004
Santa Monica, Ca.	28,930	3rd Quarter 2004
San Francisco, Ca.	31,850	4th Quarter 2004
Mamaroneck, NY	25,314	4th Quarter 2004
San Mateo, Ca.	24,847	1st Quarter 2005

        Increase Revenues Per Average Member.    Through focused sales and marketing programs, we plan to continue to increase the number of existing members who purchase Equinox-branded programs, services and products. We plan to develop new branded offerings based on member demand and market opportunities, such as TRIP, an outdoor adventure travel program offered through Equinox with services provided by upscale travel partners, and a progressive nutrition program that includes the sales of customized programs and vitamins and supplements. We also believe we can extend the Equinox brand through targeted licensing opportunities with third-party manufacturers that share our reputation for quality and value.

Sales, Membership and Marketing

        Sales.    Our sales strategy, whether for membership, personal training or other ancillary services and products, focuses on value. Membership advisors are rigorously trained in selling the unique benefits of an Equinox membership and are paid a base salary plus commissions. Commissions are tied to unit sales and overall revenues (both membership and ancillary) generated at the point-of-sale. Advisors are also compensated on a commission basis for membership renewals. This policy encourages membership advisors to focus on attracting new members who will take advantage of ancillary programs and services and ensures that they will maintain contact with members long after the initial sale. We currently employ 76 membership advisors at our 21 fitness clubs as of March 31, 2004. Unlike some fitness club operators, our membership advisors are not permitted to manipulate membership prices or incentives. By offering our services to all potential customers at the same location at the same price, we are able to carefully control the quality and professionalism of the sales process. Moreover, this ensures that membership advisors emphasize the value and unique benefits of an Equinox membership over price, a strategy that we believe translates into increased sales and ancillary revenues. Our membership advisors convert approximately 40% of all prospects into sales.

        The sales process further distinguishes us by providing professional and personalized service. Upon a prospective member's first visit, the membership advisor will invite him or her on a private tour of the facility. The membership advisors are trained to tailor the tour and the information they provide to the specific interests, goals and concerns of the prospective member. During this process, membership advisors stress our commitment to our members achieving results and enjoying the unique benefits of Equinox, including the complimentary Equifit fitness assessment, and the advantages of personal training, spa services and other amenities. The sales process continues after a prospective member's initial visit to a club. The membership advisor, following our protocol, diligently follows up with each prospect by phone, mail and e-mail encouraging him or her to join Equinox. Additionally, we encourage the prospect to use the club as a guest. We enter each prospect's name, telephone number and address into our database to assist in the follow-up process.

        In the second half of 2000, we initiated a corporate membership program targeting professional organizations to generate additional membership growth.

        Membership.    Membership advisors offer prospective members several membership options. A Select membership offers access to one club while an All Access membership allows the use of all

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Equinox facilities. With the growth in the club portfolio, we have been diligently up-selling our Select members, increasing the ratio of All Access memberships to total memberships from 17% in 2000 to 39% at March 31, 2004. Because All Access memberships will allow members to take advantage of a national portfolio of clubs, facilities near work and home, and different locations with different amenities, we believe that we will be able to further increase this ratio, particularly as we develop more regional urban clusters and expand into suburban markets near these clusters.

        Initiation fees vary by location and club model. Our initiation fees currently range from $245 to $545. Monthly dues for a Select membership range from $110 to $125 at our urban facilities and from $95 to $108 at our suburban facilities. Monthly dues for an All Access membership are currently $143.

        We do not discount monthly dues or offer different prices to individuals for the same individual membership at the same location. We do, however, offer an incentive to prospective members, usually in the form of a discount off the initiation fee. In general, all individual members at a specific location pay the same dues, but may have paid a different initiation fee at the time they joined.

        We offer two payment options: monthly and paid-in-full. Membership agreements are for a minimum of one year. Paid-in-full members pay the initiation fee and the equivalent of 11 months of membership dues upfront; in return, they receive one free month, for a total of 12 months of membership. Paid-in-full memberships expire after 12 months and need to be renewed annually. We also offer a monthly payment option, which also has a minimum one-year duration, but does not expire unless cancelled. Monthly membership dues are collected through electronic funds transfer, whereby each customer submits a credit card or bank account authorization and is automatically billed each month. As of March 31, 2004, approximately 37.2% of our members had paid-in-full memberships, and the remaining 62.8% had monthly memberships.

        Marketing, advertising and public relations.    We maintain an ongoing marketing, advertising and public relations program aimed at increasing our brand recognition and generating sales prospects. In 2003 and 2002, we spent approximately $4.2 million and $3.8 million, or 3.6% and 3.9%, respectively of total operating revenues, on marketing and public relations. For the three months ended March 31, 2004 our marketing, advertising and public relations expense was approximately $2.5 million. In January of 2004 we launched our new marketing campaign called "It's not Fitness. It's Life." We reach prospective and existing customers through referrals, direct mail, cable television and print advertisements in publications such as The New York Times, The Los Angeles Times, New York magazine and Hamptons Magazine, and other venues such as outdoor advertising on buses and telephone kiosks. We also use the window space of our clubs, which are often in high-traffic areas, to create an integrated brand image.

        We believe that member referrals and word of mouth are our most effective means of marketing. To foster this cost effective and efficient source of marketing, we maintain a number of incentives for members to continuously produce new member leads, including a free month's membership or Equinox gift cards with monetary credit that can be used to purchase Equinox-branded programs, services or products at our clubs. Several times a year we also target former members by direct mail. We launched our current advertising campaign in January 2002 around the theme and brand position "Equinox makes you feel good." This integrated campaign is designed to increase brand awareness and highlight the unique benefits of an Equinox membership.

        A separate but integrated public relations effort results in extensive press coverage that affirms the Equinox brand status and profile. We maintain a public relations department that is responsible for pitching ideas as well as responding to press inquiries. We believe that by leveraging our press relationships, we are able to perpetuate the Equinox brand and maintain a high profile in local and national media at a low cost. As part of the public relations strategy, we regularly distribute press releases and stage major press events to introduce new and innovative programming. In addition, an integral part of our marketing strategy involves partnering with premier brands, corporate partners and/

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or properties that have similar member demographics and characteristics and embrace core values similar to ours. With such programs, we and our partners jointly market our products and services to a group of targeted customers. In addition, we are very active in our local communities. Giving back to selected charities is important to our management team, employees and member base further emphasizing our brand values.

Facilities and Properties

        Our facilities are meticulously designed, maintained and updated to inspire, motivate and create energy and excitement for our members. We design and program our facilities to cater to the needs of the local market and maximize membership flow and revenue potential. We have incorporated the core elements of facility design and layout into distinct club models that vary primarily in terms of size, programming, pricing and construction cost. We determine which club model is appropriate for a location based on the local demographic, population density, market demand, and structural characteristics of a particular building. Our three club models enable us to minimize the time between site identification and club opening and helps leverage the experience gained in our larger clubs to profitably serve a larger market area without sacrificing quality or profits.

        We use Eclipse Development Corporation, a company wholly owned by Mr. Paul Boardman, exclusively to provide site selection, acquisition, design, construction and maintenance services. A service agreement we entered into with Eclipse in February 2001 prohibits Eclipse and Mr. Boardman from performing any services for anyone that competes with our fitness clubs and spa facilities. Eclipse is thinly capitalized and highly dependent upon our business. For the three months ended March 31, 2004 and in fiscal 2003, over 90% of our capital expenditures were paid to Eclipse.

        We operate 21 fitness clubs in four states. We lease all of our facilities pursuant to long-term leases (generally with initial terms of 15 years with renewal options). We also lease our corporate offices, which are located in New York City. Our leases generally contain customary terms such as restrictions on transfers and changes in control and requirements that we pay real estate taxes, insurance and maintenance costs.

        The following table provides information about our existing fitness clubs:

Location	Square footage	Date opened
Amsterdam Avenue & 76th Street, NYC	25,050	Sep 1991
Broadway & 19th Street, NYC	39,048	Nov 1993
Broadway & 92nd Street, NYC	29,780	Nov 1995
Third Avenue & 85th Street, NYC	33,050	Aug 1996
Lexington Avenue & 63rd Street, NYC	40,959	Dec 1997
800 White Plains Road, Scarsdale, NY	20,097	Mar 1999
Second Avenue & 54th Street, NYC	32,448	May 1999
Broadway & 50th Street, NYC	28,543	Feb 2000
Fifth Avenue & 43rd Street, NYC	27,546	Mar 2000
Wall Street & Nassau Street, NYC	36,900	Nov 2000
Lexington Avenue & 44th Street, NYC	29,600	Dec 2000
Pasadena, CA	26,500	Nov 2001
Greenwich Avenue & 12th Street, NYC	40,000	Dec 2001
Darien, CT	26,000	Dec 2002
1750 N. Clark, Chicago, IL	33,000	Dec 2002
West Broadway & Church Street, NYC	27,000	Mar 2003
Woodbury (Long Island), NY	22,600	Apr 2003
West Hollywood, CA	29,491	Jul 2003
900 N. Michigan Ave., Chicago, IL	30,021	Dec 2003

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Columbus Centre, NYC	41,756	Jan 2004
Highland Park, IL	30,700	Jan 2004

Services

        We believe we set the industry standard of excellence with our quality and innovative programming. We believe that a member's experience and loyalty is driven by the results achieved through group fitness classes, personal training, spa and other service and product offerings. Our core program centers around group fitness, which is included in the price of membership. We offer additional programming, such as personal training, pilates and spa services, on a fee-for-service basis, thereby generating ancillary revenues. Because of our fully integrated lifestyle platform and our broad range of programming at each club, we believe we generate some of the highest revenues per member in the industry. For the three months ended March 31, 2004 and the year ended December 31, 2003, ancillary programs and services generated approximately 35.0% of our total revenues. We believe ancillary revenues will continue to be a significant source of high-margin growth in the future.

        Group fitness.    Our group fitness programming categories include cardio and dance, yoga, pilates, spinning, body sculpting, core training, kickboxing, aquatics, strength training and conditioning, sports training, and boxing and martial arts. Our group fitness program is recognized for its original offerings, quality instruction and comprehensive lifestyle approach. Weekly at each fitness club, we offer on average over 100 classes, many characterized as the "best of the best" by Fitness and New York magazine. Many of these classes are offered only at our facilities. We introduce proprietary new classes each year. We focus on quality, integrity and expertise in the origination of programming, and average class size ranges from 15 to 60 individuals, with participation varying based on the class, location and time offered.

        Our group fitness team constantly seeks new and innovative programming and instructors to keep Equinox at the forefront of fitness programming. Each club location maintains its own selection of programming designed to meet the needs of its local demographics. Instructors are carefully selected for their knowledge, expertise and ability to communicate with and motivate members. We pride ourselves on not only identifying and recruiting talent, but also developing our own instructors. Our instructors frequently present at national and international conventions and are often featured in prominent print media such as GQ, Men's Journal, Allure, Vogue and Self.

        Personal training.    We believe personal training is one of the most effective ways to help our members reach their health and fitness goals. Our personal trainers are highly visible throughout each fitness club, assisting members with equipment and providing informal tips on a complimentary basis. Each of our clubs maintains approximately 35-60 personal trainers, depending upon club layout, membership and usage patterns.

        Our personal training is customized to the needs of each member within our proprietary training methodology and system. Upon enrollment, we give each new member a complimentary 30-minute Equifit fitness assessment and a one-hour personal training session. All personal trainers are instructed to cross sell our offerings, including personal training packages and other services that will help the member achieve his or her goals. This initial contact with the personal trainer is designed to motivate our members to actively participate and purchase additional services. Approximately 10% of new members purchase personal training at this time. Our personal training pricing is structured to appeal to the widest demographic. We offer both single- and multi-session packages with price dependent upon the number of sessions and the certification level and experience of the personal trainer. Our personal trainers are divided into three levels based upon education and expertise: Elite, Comprehensive and Elite Plus. All of our personal trainers agree to limit their training activities outside of Equinox, and they earn a commission based on the training revenues they generate. The commission payout increases

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as trainers attain higher levels of certification, which we believe motivates trainers to sell personal training services and to attain higher levels of certification.

        In addition to having a national certification or a relevant college degree, we require all of our personal trainers to participate in our proprietary educational program, the Equinox Fitness Training Institute or EFTI. EFTI not only provides a comprehensive curricula of professional development for our personal trainers but also serves as a primary source of progressive program development. As our trainers complete certain classes provided by EFTI, they are eligible to train at a higher level and earn higher commissions.

        The Spa at Equinox.    Our spas complement our integrated lifestyle approach to health and fitness by offering an environment in which members can receive massages and facial or body-care services while focusing on relaxation and rejuvenation. We currently operate full-service day spas that have been designed to invoke a sense of luxury and comfort. In addition, we maintain treatment rooms in our other facilities that offer massage services to further integrate the spa concept. Our spas are staffed with knowledgeable and experienced therapists. Our spas are open to both members and non-members.

        The Shop.    The Shop is our retail business that sells Equinox-branded products and other name brand merchandise that have been carefully selected to complement the Equinox brand image. The Shop has been recognized by Women's Wear Daily for identifying trends and offering hard-to-find, lesser-known styles and manufacturers before they become popular. Much of The Shop's product line prominently displays the Equinox logo, providing increased visibility and exposure in addition to reinforcing the brand image. Equinox-branded apparel has been featured in nationally televised programs, such as HBO's Sex and the City, as well as in prominent consumer publications. With the exception of one location, The Shop operates in all Equinox facilities and is open to both members and non-members.

Finance and Management Information Systems

        During 2001, we implemented a new management information system that integrates all aspects of our operations. The system brings applications such as electronic funds transfer, point-of-sale transactions, employee time clocks and the front desk check-in area together into one nationally integrated system. With this system we now have the ability to better track facilities usage, monitor revenues per member and electronically store most paper records. In addition, more useful information on how members use the fitness clubs enables us to focus our marketing efforts on sales of ancillary programs and services, such as personal training and spa services, as well as to facilitate seamless information exchange between our club locations. We continue to refine the system to add desired functionality, such as prospect management and proprietary business protocols. In addition, we have begun implementation of an automated human resources system to improve our ability to manage our employees. Currently, we are upgrading our accounting systems and in the process of integrating an online-realtime purchasing system.

Trademarks

        We believe that our trademarks and other proprietary rights are important to our success and we aggressively protect such trademarks. All of our trademarks are either registered or have pending registration applications. We are not aware of any current or pending suits in connection with our trademarks. We currently hold 18 trademarks. We have registrations for trademarks in an aggregate of 22 countries. We have also registered a series of Internet domain names relating to our business, services and products.

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Competition

        The fitness industry is highly competitive and fragmented. The five largest fitness club owner/operators, excluding franchise operators, accounted for less than 7% of commercial fitness clubs in the United States in 2002.

        Budget clubs offer limited services, primarily free weights and strength-training machines with a modest group fitness class schedule, if any, and usually charge a nominal initiation fee and low monthly membership fees. We do not compete directly with budget clubs, such as those offered by Bally's and Gold's Gyms, as we do not target customers with the same demographic characteristics as the members of budget clubs.

        Full-service clubs offer a combination of workout alternatives, including strength training equipment, free weights, cardio equipment, group fitness and personal training. Full-service clubs, such as those operated by Town Sports International, Crunch, New York Health & Racquet, Multiplex and Lake Shore Athletic Clubs, generally command a premium to the budget clubs and can be further classified based on price and amenities. Our membership fees are higher than many of our full-service competitors. We believe we are able to maintain such pricing based upon the perceived value of our commitment to the member experience combined with our innovative and diverse programming, high-quality member services, superior club design and overall high standards for operating our facilities.

        Urban country clubs, such as the East Bank Club in Chicago and clubs operated by The Sports Club Company, are generally larger than 100,000 square feet, with additional sports facilities such as basketball courts, swimming pools and tennis courts and featuring non-fitness amenities such as restaurants, salons, laundry/dry-cleaning services and executive locker rooms. Urban country clubs charge high initiation fees and membership dues. We believe we compare favorably with the urban country clubs, based upon price, the convenience of our numerous locations, and services offered.

        In addition, employers, residential buildings, and public and other not-for-profit organizations (including parks, YMCAs and college clubs) offer fitness facilities. These facilities provide alternatives to membership in a commercial fitness club, and constitute a competitive factor in the industry.

        We believe several competitive factors influence success in the fitness club business, including convenience, price, customer service, quality of operations, quality programming and ability to secure prime real estate at economical rates. We believe that our integrated, branded lifestyle offering focused on enabling our targeted customer base to get results and the price-to-value relationship are very attractive compared to that of our competitors. The combination of an exceptional member experience created through innovative programming, high-quality service and operations and superior club design positions us as one of the few recognized brands within the industry. Our offering of ancillary services and products further distinguishes us as a lifestyle brand.

Employees

        We have approximately 2,487 as of March 31, 2004 employees, of which approximately 890 are employed full-time. Approximately 99 employees compose our corporate staff working in Manhattan. None of our employees are subject to collective bargaining agreements or union representation. Although we experience turnover of non-management personnel, we have not experienced difficulty in finding new employees. We believe relations with our employees are good. We believe that we offer competitive compensation and employee benefits. We have developed a corporate culture that emphasizes a complete understanding of the Equinox vision, member experience and results orientation. We reinforce our team's understanding of our corporate culture by maintaining ongoing recruiting and training programs to identify and develop new managers and employees to support our

55

growth in both new and existing markets. In addition to EFTI, we have formal training programs for our general managers-in-training and membership advisors.

Government Regulation

        Our operations and business practices are subject to regulation at the federal, state and, in some cases, local levels. State and local consumer protection laws and regulations govern our advertising, sales and other trade practices.

        Statutes and regulations affecting the fitness industry have been enacted in states in which we conduct business. Typically, these statutes and regulations prescribe certain forms and provisions of membership contracts, including:

•

Giving the member the right to cancel the contract, in most cases, within three business days after signing;



•

Requiring an escrow of funds received from pre-opening sales or the posting of a bond or proof of financial responsibility; and



•

Establishing maximum prices and terms for membership contracts.

        In addition, we are subject to other types of federal and state regulations governing the sale of memberships. These laws and regulations are subject to varying interpretations by a number of states and federal enforcement agencies and the courts. We maintain internal review procedures in order to comply with these requirements and believe that our activities are in substantial compliance with all applicable statutes, rules and decisions.

        Under so-called state "cooling off" statutes, a member has the right to cancel his or her membership for a period of three days and, in such event, is entitled to a refund of any payment made. In addition, our membership agreements provide that a member may cancel his or her membership at any time for qualified medical reasons or if the member relocates a certain distance away from any of our facilities. The specified procedures for cancellation in these circumstances vary due to differing state laws. In each instance, the canceling member is entitled to a refund of prepaid amounts only. Further, where permitted by law, we assess a cancellation fee that we offset against any refunds owed.

        Our locations are also subject to zoning and other regulations relating to the operation of health clubs and other facilities open to the public.

Legal Proceedings

        We are involved in various claims and lawsuits arising in the normal course of business. We believe that the ultimate outcome of these matters will not have a material adverse affect on our business, results of operations, cash flows or financial condition.

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MANAGEMENT

        The names, ages and positions of the directors and executive officers of Equinox as of March 31, 2004 are set forth below. Directors are elected annually and hold office until their successors are elected and qualified, or until their earlier removal or resignation.

Name	Age	Position
Charles F. Baird, Jr.	50	Director, Chairman
Harvey Spevak	39	Director, President and Chief Executive Officer
Scott Rosen	45	Executive Vice President and Chief Financial Officer
Christopher J. Peluso	43	Executive Vice President and Chief Operating Officer
Jeff Grayson	34	Vice President, Chief Technology Officer
Glenn Hopkins	38	Director
Benjamin B. James(1)	46	Director
John Richards	54	Director
Adam Saltzman(2)	34	Director
Mark Tricolli	32	Director
William E. Watts(1)	50	Director
Edward D. Yun(2)	36	Director

(1)

Member, Compensation Committee.

(2)

Member, Audit Committee. None of our Audit Committee members at present would be considered to be independent within the meaning of the Sarbanes-Oxley Act of 2002.

        Each of our officers is elected by the Board of Directors to hold office until the next succeeding annual meeting of the Board of Directors. None of our officers has any family relationship with any director or other officer. "Family relationship" for this purpose means any relationship by blood, marriage or adoption, not more remote than first cousin.

        The business experience of each of the directors, executive officers and employees listed above is as follows:

        Charles F. Baird, Jr. was elected Chairman of Equinox in December 2000. Mr. Baird is the founder and a Managing Director of North Castle. Prior to founding North Castle in 1997, Mr. Baird served as a Managing Director of AEA Investors, Inc., and from 1978 to 1989 he worked at Bain & Company as an Executive Vice President and North American Management Committee member. Mr. Baird is a trustee of the Alger Fund. He currently serves as chairman of the Board of Directors for Leiner Health Products, Grand Expeditions, EAS and Elizabeth Arden Salon Holdings, Inc., corporations in which investment partnerships managed by North Castle have investments. Mr. Baird also serves on the Boards of Directors of the Ultimate Juice Company, Enzymatic Therapy, Inc., and CRC Health Group, Inc., corporations in which investment partnerships managed by North Castle have investments.

        Harvey Spevak has been President and Chief Executive Officer of Equinox since December 1999 after joining as President and Chief Operating Officer in January 1999. He became a member of the Board of Directors in January 1999. Prior to joining Equinox, he served as Vice President of Chelsea Piers. Mr. Spevak is on the Board of Directors of Elizabeth Arden Salon Holdings, Inc. and is a member of the Young Presidents Organization and the Council for the Fresh Air Fund.

        Scott Rosen was elected Executive Vice President and Chief Financial Officer upon joining the Company in August 2003. Prior to joining Equinox, Mr. Rosen served as Executive Vice President and Chief Financial Officer for J. Crew Group from 1994 to 2003. Prior to J. Crew, Mr. Rosen was Vice President and Divisional Controller for the Women's Sportswear Group, a division of Liz Claiborne, Inc.

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        Christopher J. Peluso was elected Executive Vice President and Chief Operating Officer upon joining the Company in December 2002. Before joining Equinox, Mr. Peluso was a vice president at JPMorgan Asset Management where he was employed since 1999. From 1997 to 1999, he was President and Chief Operating Officer of WH Smith USA, where he operated their book and music division and served as a senior vice president of Marketing for Borders Group, Inc.

        Jeff Grayson has nine years of technology industry experience including roles ranging from software developer to Chief Technology Officer. Prior to joining the Equinox team, Jeff was CTO of ReferralNetworks where he managed the IT department, defined product strategy and drove the deal which resulted in the company's successful sale. In previous roles, Jeff has led teams of technologists for Deutsch Bank, Keyspan Energy, Lucent Technologies, Sputnik7 Media, RadioShack, Wit Capital and SportsYA! Media. Jeff's background includes a BA from the University of Pennsylvania, and a Masters from NYU combining Computer Science from The Courant Institute of Mathematics and MBA work from The Stern School of Business.

        Glenn Hopkins became a member of the Board of Directors in December 2000. He is a Partner of J.W. Childs and has been at J.W. Childs since 1995.

        Benjamin B. James became a member of the Board of Directors in December 2000. He is a Principal of North Castle since 1998. Prior to joining North Castle, Mr. James co-founded the Private Finance Group at PPM America. Mr. James currently serves on the Board of Directors of Enzymatic Therapy, Inc. and Leiner Health Products, corporations in which investment partnerships managed by North Castle have an investment.

        John Richards became a member of the Board of Directors in February 2003. He is the President and Chief Executive Officer of Elizabeth Arden Salon Holdings, Inc. Before joining Elizabeth Arden Salon Holdings, Inc. in October 2001, Mr. Richards served as the President and Chief Executive Officer of Dean & Deluca after serving as President of North American Operations for Starbucks Coffee Company.

        Adam Saltzman became a member of the Board of Directors in December 2000. He is a Vice President of North Castle. Prior to joining North Castle, Mr. Saltzman spent four years as an associate with merchant banking firm StoneCreek Capital. Mr. Saltzman currently serves on the Board of Directors of Elizabeth Arden Salon Holdings, Inc. and Healthnotes, corporations in which investment partnerships managed by North Castle have an investment.

        Mark Tricolli became a member of the Board of Directors in 2003. He is a Vice President of J.W. Childs and has been at J.W. Childs since 2000. Previously, he was an associate in the Merchant Banking Division of Goldman Sachs from 1999 to 2000. Mr. Tricolli is also a director of InSight Holdings Corp., a corporation in which an investment partnership managed by J.W. Childs has an investment.

        William E. Watts became a member of the Board of Directors in January 2001. He is an Operating Partner of J.W. Childs and has been at J.W. Childs since 2001. Previously, he was President and Chief Executive Officer of General Nutrition Companies, Inc. from 1991 until 2001. Prior to being named President and Chief Executive Officer in 1991, he held the positions of President and Chief Operating Officer of General Nutrition, Inc., President and Chief Operating Officer of General Nutrition Center, Inc., Senior Vice President of Retailing and Vice President of Retail Operations.

        Edward D. Yun became a member of the Board of Directors in December 2000. He is a Partner of J.W. Childs and has been at J.W. Childs since 1996. Mr. Yun is also a director of InSight Holdings Corp. and Universal Hospital Services, Inc., corporations in which investment partnerships managed by J.W. Childs have an investment.

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Compensation of Directors

        Members of the Board of Directors of Equinox are not compensated; however, all directors are reimbursed for travel and reasonable expenses incurred in performing their duties as directors.

Compensation of Executive Officers

        The following table sets forth the compensation earned by our Chief Executive Officer and each of the three additional most highly compensated executive officers (each, a "Named Executive Officer") during or with respect to the last three fiscal years.

								Long-Term Compensation
				Annual Compensation
Name and Principal Position								Securities Underlying Options(#)	All Other Compensation ($)(2)
			Year	Salary($)		Bonus($)
Harvey Spevak			2003	$	373,962	$	288,235	—	$	24,000
	President and Chief Executive Officer		2002	$	350,000	$	201,250	34,397		24,000
			2001		300,000		125,000	—		24,000
Scott Rosen(1)			2003		103,846		25,000	100,000		—
	Executive Vice President and Chief Financial Officer
Kenneth P. Fleischer			2003		247,200		96,655	—
	Executive Vice President and Chief		2002		247,200		96,655	—		24,000
		Financial Officer	2001		240,000		75,000	178,000		24,000
Chris Peluso			2003		238,846		—	15,000		—
	Chief Operating Officer		2002		8,846			35,000
			2001		—		—	—		—
Jeff Grayson			2003		166,154		19,200	5,000		—
	Vice President, Chief Technology		2002		91,154		19,200	10,000		—
	Officer

(1)

Scott Rosen joined the Company in August 2003 as Executive Vice President and Chief Financial Officer.

(2)

During 2003, each of Messrs. Spevak and Fleischer received a travel and expense allowance of $2,000 per month.

Option Grants During 2003

        The following table sets forth information concerning individual grants of stock options made during 2003 to the Named Executive Officers.

							Potential Realizable Value at Assumed Annual Rates of Stock Appreciation for Option Term
		% of Total Options Granted to Employees during 2003
	Number of securities underlying options granted(1)
				Exercise Price ($/share)		Expiration Date
							5%(2)		10% (2)
Harvey Spevak	—	—			—	—		—
Scott Rosen	100,000	54.5	%	$	12.00	9/3/2013	$	755,000	$	1,912,000
Kenneth P. Fleischer	—	—			—	—		—		—
Chris Peluso	15,000	8.2	%	$	12.00	9/3/2013	$	113,250	$	286,800
Jeff Grayson	5,000	2.7	%	$	12.00	9/3/2013	$	37,750	$	95,600

(1)

All options were granted under the Equinox Holdings, Inc. 2000 Stock Incentive Plan, which is administered by our Board of Directors. Generally, the options granted under this plan become

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exercisable upon a change of control or public offering (as each such term is defined in the plan) if our certain holders of our common stock achieve a specified rate of return.

(2)

Potential realizable value is based on the assumed annual growth for each of the grants, shown over their ten-year option term. Actual gains, if any, on stock option exercises are dependent on the future value of the stock.

Fiscal Year-End Option Value Table

        The following table sets forth information for each named executive officer with regard to the aggregate value of options held at December 31, 2003. No options were exercised by such executive officers during the year ended December 31, 2003.

	Number of Securities Underlying Unexercised Options at December 31, 2003
			Value of Unexercised In-the-Money Options at December 31, 2003($)(1)
Name
	Exercisable	Unexercisable	Exercisable		Unexercisable
Harvey Spevak	95,123	380,397	$	1,140,525	$	654,283
Scott Rosen	—	100,000		—		—
Kenneth P. Fleischer	25,000	—		299,750		—
Chris Peluso	—	—		—		—
Jeff Grayson	—	20,000		—		17,200

(1)

The fair market value of our common stock used to calculate the value of unexercised in-the-money options at December 31, 2003 is based on the per share price at which we sold shares of our common stock on January 28, 2003.

Employment and Other Agreements with our Named Executive Officers

        Harvey Spevak.    During December 2000, Equinox entered into an employment agreement with Mr. Spevak, whereby he agreed to continue as our Chief Executive Officer and a member of our board of directors. This employment agreement had an initial term of three years and currently renews automatically for successive one-year periods (unless either party gives prior written notice). Pursuant to this employment agreement, Mr. Spevak currently receives an annual base salary of $372,000, and is entitled to an annual bonus based upon the satisfaction of certain performance targets as determined by our board of directors and to participate in benefit and perquisite programs of Equinox to the same extent as other senior executives of Equinox. Also, Mr. Spevak received a commencement grant of options to purchase 380,397 shares of our common stock pursuant to our Stock Incentive Plan.

        If Equinox terminates Mr. Spevak's employment other than for Cause (as defined in the employment agreement), or Mr. Spevak terminates his employment for Good Reason (as defined in the employment agreement), then Equinox will pay Mr. Spevak his full salary through the date of termination, a pro-rata bonus through the date of termination and all other earned but unpaid amounts, if any, to which Mr. Spevak is entitled. Further, Equinox will pay Mr. Spevak an amount equal to Mr. Spevak's base salary for 18 months following the expiration of the term of the employment agreement and will continue to provide Mr. Spevak the welfare benefits provided to him prior to his termination. If Mr. Spevak's employment is terminated by Equinox for Cause or by Mr. Spevak other than for Good Reason, Equinox will pay to Mr. Spevak his full salary through the date of termination in addition to any other amounts owed to Mr. Spevak under any compensation or benefit plan or program of Equinox excluding, in the case of a termination by Mr. Spevak for Cause, any accrued but unpaid incentive bonus. Upon termination of Mr. Spevak's employment for any reason, Mr. Spevak will also be subject to customary 18-month post-termination non-compete, non-solicitation and non-disparagement provisions.

        Scott Rosen.    During September 2003, Equinox entered into an employment agreement with Mr. Rosen, whereby he became our Executive Vice President and Chief Financial Officer. This employment agreement has an initial term of three years and will renew automatically for successive

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one-year periods (unless either party gives prior written notice). Pursuant to this employment agreement, Mr. Rosen currently receives an annual base salary of $300,000, which will be reviewed annually beginning in 2005. Mr. Rosen is entitled to an annual bonus based upon the satisfaction of certain performance targets as determined by our board of directors, subject to a maximum annual bonus of $210,000. For 2003, Mr. Rosen was also paid a pro-rata incentive bonus, and a signing bonus in the amount of $55,000. Mr. Rosen is eligible to participate in benefit and perquisite programs of Equinox to the same extent as other senior executives of Equinox. Also, Mr. Rosen received a commencement grant of options to purchase up to 100,000 shares of our common stock pursuant to our Stock Incentive Plan.

        If Equinox terminates Mr. Rosen's employment other than for Cause (as defined in the employment agreement), or Mr. Rosen shall terminate his employment for Good Reason (as defined in the employment agreement), then Equinox will pay Mr. Rosen his full salary through the date of termination, a pro-rata bonus through the date of termination and all other earned but unpaid amounts, if any, to which Mr. Rosen is entitled. Further, following the expiration of the term of the employment agreement, Equinox will pay Mr. Rosen an amount equal to Mr. Rosen's base salary for six months, plus one additional month for each year Mr. Rosen had been employed with Equinox prior to his termination, subject to a maximum of 15 months total, and will continue to provide Mr. Rosen the welfare benefits provided to him prior to his termination. If Mr. Rosen's employment is terminated by Equinox for Cause or by Mr. Rosen other than for Good Reason, Equinox will pay to Mr. Rosen his full salary through the date of termination in addition to any other amounts owed to Mr. Rosen under any compensation or benefit plan or program of Equinox excluding, in the case of a termination by Mr. Rosen for Cause, any accrued but unpaid incentive bonus. Upon termination of Mr. Rosen's employment for any reason, Mr. Rosen will also be subject to customary nine-month post-termination non-compete, non-solicitation and non-disparagement provisions.

        Chris Peluso.    During November 2002, Equinox entered into an employment agreement with Mr. Peluso, whereby he became our Chief Operating Officer. Pursuant to this employment agreement, Mr. Peluso currently receives an annual base salary of $230,000 and is entitled to an annual bonus based upon the satisfaction of certain performance targets as determined by our board of directors. Also, Mr. Peluso received a commencement grant of options to purchase 85,000 shares of our common stock.

        If Mr. Peluso's employment is terminated by Equinox other than for Cause (as defined in the employment agreement), he will be entitled to receive severance pay equal to five months' base salary if terminated prior to the second anniversary of his employment. Thereafter, the amount of severance pay will increase by one month's base salary at each anniversary of Mr. Peluso's employment. If Mr. Peluso's employment is terminated for any other reason, Mr. Peluso will be entitled to receive any accrued and unpaid base salary. Upon termination of Mr. Peluso's employment for any reason, Mr. Peluso will also be subject to customary 12-month post-termination non-compete, 18-month non-solicitation and 18-month non-disparagement provisions.

        Jeff Grayson.    During April 2002, Equinox entered into an employment agreement with Mr. Grayson, whereby he became our Chief Technology Officer. Pursuant to this employment agreement, Mr. Grayson currently receives an annual base salary of $165,000 and is entitled to an annual bonus based upon the satisfaction of certain performance targets as determined by our board of directors. Also, Mr. Grayson received a commencement grant of options to purchase 10,000 shares of our common stock and a $5,000 bonus.

        If Mr. Grayson's employment is terminated by Equinox other than for Cause (as defined in the employment agreement), he will be entitled to receive severance pay equal to one week's salary for each six months of service to Equinox at the time of his termination. The amount of Mr. Grayson's severance will not exceed more than one-half of his base salary at the time of termination. Upon termination of Mr. Grayson's employment for any reason, Mr. Grayson will also be subject to customary 12-month post-termination non-compete, 18-month non-solicitation and 18-month non-disparagement provisions.

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        Kenneth P. Fleischer.    During March 2003, Equinox entered into a separation agreement with Mr. Fleischer. Pursuant to this agreement, Mr. Fleischer generally received approximately $268,000, plus a pro-rata incentive bonus in respect of Equinox's 2002 fiscal year. This amount was generally payable in installments over a nine-month period and was in consideration for Mr. Fleischer's agreement to provide us with certain transitional services, his agreement to cancel his options, excluding 25,000 options granted to him under our 1998 Stock Incentive Plan, which remain outstanding following his termination, a mutual release of claims and amounts due under Mr. Fleischer's employment agreement. In addition, Mr. Fleischer agreed to continue to be bound by customary non-compete, non-solicitation and non-disparagement provisions for a period of nine months following the completion of his transition assistance.

Compensation Committee Interlocks And Insider Participation

        The Board of Directors established a Compensation Committee to review all compensation arrangements for executive officers of Equinox. The individuals serving on the Compensation Committee during 2002 were Benjamin B. James and William E. Watts, both non-employee directors. North Castle and J.W. Childs receive an annual fee for management and financial consulting services they provide to us and are reimbursed for out-of-pocket expenses. Equinox has also agreed to indemnify the members of the boards employed by North Castle and J.W. Childs against certain liabilities incurred under the federal securities laws, other laws regulating our business and certain other claims and liabilities with respect to their services for Equinox. See "Related Party Transactions."

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

        The following table sets forth certain information regarding the beneficial ownership of Equinox common stock as of March 31, 2004, by: (i) each person or entity who owns of record or beneficially more than 5% or more of any class of our voting securities; (ii) each director and each of Named Executive Officer of Equinox; and (iii) all directors and Named Executive Officers of Equinox as a group.

Name and Address of Beneficial Owner(1)	Number of Shares of Common Stock Beneficially Owned(1)	Percent of Class(1)
Equinox Holdings, L.P.(2) c/o North Castle Partners, L.L.C. 183 East Putnam Avenue Greenwich, CT 06830	8,773,075	92.90	%
Executive Officers and Directors
Charles F. Baird, Jr.(2)	—	—
Glenn A. Hopkins(2)	—	—
Benjamin B. James(2)	—	—
Christopher J. Peluso	—	—
John Richards	—	—
Scott Rosen	—	—
Adam M. Saltzman(2)	—	—
Harvey Spevak(3)	96,406	1.02	%
Mark J. Tricolli(2)	—	—
William E. Watts(2)	—	—
Edward D. Yun(2)	—	—
Jeff Grayson	—	—
Executive Officers and Directors as a Group
(12 persons)	96,406	1.02	%

(1)

"Beneficial owner" refers to a person who has or shares the power to vote or direct the voting of a security or the power to dispose or direct the disposition of the security or who has the right to acquire beneficial ownership of a security within 60 days. More than one person may be deemed to be a beneficial owner of the same securities. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, shares subject to options and warrants held by that person that are currently exercisable or exercisable within 60 days of March 31, 2004 are deemed outstanding. Such shares, however, are not deemed outstanding for the purpose of computing the percentage ownership of any other person.

(2)

NCP-EH GP, L.L.C. is one of the general partners of Equinox Holdings, L.P. The sole member of NCP-EH GP, L.L.C. is North Castle Partners II, L.P., a private investment fund managed by North Castle Partners LLC. JWC-EH, LLC is the second general partner of Equinox Holdings, L.P. The sole member of JWC-EH, LLC is J.W. Childs Equity Partners II, L.P., a private investment fund managed by J.W. Childs Associates, L.P. By virtue of their status, North Castle and J.W. Childs may be deemed to be beneficial owners of the shares owned by Equinox Holdings, L.P. Mr. Baird and Mr. James are partners of North Castle and Mr. Saltzman is a vice president of North Castle and by virtue of their status may be deemed to share voting and investment power with respect to the shares in which North Castle has direct or indirect beneficial ownership. Mr. Hopkins, Mr. Watts and Mr. Yun are partners of J. W. Childs Associates, L.P. and Mr. Tricolli is a vice president of J.W. Childs Associates, L.P. By virtue of their status, Mr. Hopkins, Mr. Watts, Mr. Yun and Mr. Tricolli may be deemed to share voting and investment power with respect to the shares in which J.W. Childs Associates, L.P. has direct or indirect beneficial ownership. 97,263 of these shares are held indirectly through Equinox Holdings, L.P. by a third party financial institution.

(3)

Consists of (i) 1,283 shares held of record and (ii) 95,123 shares issuable upon exercise of rollover options that have already vested or will vest within 60 days.

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RELATED PARTY TRANSACTIONS

North Castle Partners, L.L.C. and J.W. Childs Associates, L.P.

        Equinox Holdings, L.P. currently holds 91% of the outstanding common stock of Equinox. One of the two general partners of Equinox Holdings, L.P. is NCP-EH GP, L.L.C., whose sole member is North Castle Partners II, L.P., a private investment fund managed by North Castle Partners, L.L.C. ("North Castle"). Charles F. Baird, Jr., a Partner of North Castle, is a Director of Equinox and has served as Chairman since December 2000. Benjamin B. James is a Partner of North Castle and a Director of Equinox. Adam Saltzman is a Vice President of North Castle and a Director of Equinox.

        The second general partner of Equinox Holdings, L.P. is JWC-EH, LLC, whose sole member is J.W. Childs Equity Partners II, L.P. The general partner of J.W. Childs Equity Partners II, L.P. is J.W. Childs Advisors II, L.P. J.W. Childs Equity Partners II, L.P. is a private investment fund managed by J.W. Childs Associates, L.P. ("J.W. Childs"). Glenn A. Hopkins, William E. Watts and Edward D. Yun are Partners of J.W. Childs and Directors of Equinox. Mark J. Tricolli is a Vice President of J.W. Childs and a Director of Equinox.

Consulting Agreement

        Pursuant to a consulting agreement dated as of December 15, 2000, North Castle and J.W. Childs receive from Equinox (1) an annual fee for business, management and financial consulting services provided to Equinox and (2) reimbursement of out-of-pocket expenses. Such consulting services include helping Equinox establish and maintain banking, legal and other business relationships, and assisting management in developing and implementing corporate and business strategies for improving our operational, marketing and financial performance. The annual fee was established by means of an arms length negotiation among us and North Castle and J.W. Childs at the time of their intial investment in Equinox during our December 2002 recapitalization, at levels they believed were appropriate to the nature and types of services being performed. The consulting agreement currently provides for an annual fee of $0.8 million, payable semi-annually, which we may increase, but not decrease without the consent of both North Castle and J.W. Childs. However, any increase in the annual fee is subject to applicable limitations under the terms of our existing and future debt. The consulting agreement also provides that Equinox will indemnify North Castle, J.W. Childs, certain affiliates and their respective directors, officers, partners, members, managers, employees, agents and controlling persons against certain liabilities arising under the federal securities laws, other laws regulating our business and certain other claims and liabilities. The consulting agreement also provides that North Castle and J.W. Childs will perform financial advisory, investment banking and similar services with respect to proposals for any acquisition (by merger, asset acquisition or otherwise) by Equinox and its subsidiaries. The fee for such services in connection with future transactions would be an amount equal to 1% of the transaction value for the applicable transaction. North Castle and J.W. Childs will not be paid a fee for this transaction.

Stockholders Agreement

        Equinox is party to a stockholders agreement, dated as of December 15, 2000, as amended, under which the parties thereto have made certain agreements regarding matters further described below, including the voting of their shares and the governance of Equinox.

        Board of Director and Designation Rights.    The stockholders agreement provides that the board of directors of Equinox will consist of ten members, nine individuals nominated by Equinox Holdings, L.P. and, so long as certain stockholders own collectively 5% of the Company's outstanding common stock, Donato Errico, Jr. At any time at which a vacancy is created on the board as a result of the death, disability, retirement, resignation or removal before the expiration of his or her term as director, then the party that nominated such director will have the right to nominate a replacement.

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        Actions of the Board; Affiliate Agreements.    The stockholders agreement provides that actions of the board will require the affirmative vote of at least a majority of the directors present at a duly convened meeting at which a quorum is present or the unanimous written consent of the board. The affirmative vote of at least six directors is required to take certain actions.

        Board Committees.    The stockholders agreement provides for Equinox to have an audit committee and a compensation committee. Each committee will have two directors, consisting of members nominated by Equinox Holdings, L.P.'s nominees.

        Observation and Information Rights.    The stockholders agreement provides that a certain stockholder will have the right to designate a representative to attend meetings of the board of directors and to receive copies of all written materials provided to the board. The representative will not have any right to vote on any matter presented to the board. The representative may be obliged to maintain the confidentiality of information received in connection with the exercise of their respective rights.

        Transfer Restrictions.    Subject to certain exceptions, the stockholder parties to the stockholders agreement may not transfer any shares of Equinox's common stock prior to an initial public offering.

Registration Rights Agreement

        In connection with our recapitalization in 2000, we entered into a registration rights agreement, dated as of December 15, 2000, with Equinox Holdings, L.P., NCP Co-Investment Fund, L.P., certain holders of our common stock put warrants, certain members of management and other Equinox shareholders. Pursuant to the terms of the registration rights agreement, Equinox Holdings, L.P. may, at any time, request that Equinox effect the registration under the Securities Act of all or part of its registrable securities (as defined below). After an initial public offering, holders of 51% or more of the warrants relating to Equinox's common stock may also request that we effect the registration under the Securities Act of all or part of such holder's registrable securities. Upon receipt of such a request, Equinox is required to promptly give written notice of such requested registration to all holders of registrable securities and, thereafter, to use its reasonable best efforts to effect the registration under the Securities Act of all registrable securities which it has been requested to register pursuant to the terms of the registration rights agreement. Equinox will pay all expenses in connection with the first four successfully effected registrations requested by Equinox Holdings, L.P. and up to two successfully effected registrations requested by the warrant holders.

        "Registrable securities" means:

•

shares of Equinox common stock issued in connection with the recapitalization to members of management or directors of Equinox for so long as any such shares constitute restricted securities;



•

shares of Equinox common stock issuable pursuant to any stock subscription agreement;



•

shares of Equinox common stock issued upon exercise of the common stock put warrants; and



•

any securities issued or issuable with respect to Equinox common stock referred to above as a result of a conversion, exchange, stock dividend or distribution, stock split or reverse stock split, combination, recapitalization, merger, consolidation or other reorganization thereof.

        The registration rights agreement also provides that, with certain exceptions, the parties thereto will have certain incidental registration rights in the event that the company at any time proposes to register any of its equity securities and the registration form to be used may be used for the registration of securities otherwise registrable under the registration rights agreement.

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        In addition to the provisions set forth above, the registration rights agreement contains other terms and conditions including those customary to agreements of this kind.

Related Party Leases

        Donato Errico, Jr., a former member of our Board of Directors during 2003 and current shareholder, is a partner in partnerships that lease space to us at two locations. The partnerships received approximately $1.0 million for each location pursuant to the leases and related agreements for the fiscal years ending December 31, 2002 and 2003.

Exit Payment

        Under our Amended and Restated Stock Purchase Agreement and Plan of Merger as amended as of December 14, 2000, we must pay our founding stockholders $10 million on the earlier of an initial public offering, a change of control or December 15, 2010. We must pay an additional $5.0 million at the same time if the internal rate of return of our equity sponsors exceeds a specified amount.

Stock Option Plans

        Under the terms of the Equinox Holdings, Inc. 1998 Stock Incentive Plan (the "1998 Plan"), options to purchase 1,000,000 shares of common stock may be granted. The 1998 Plan is closed and there are no further options available for grant. As of March 31, 2004, there were 284,919 outstanding options granted under the 1998 Plan. As of March 31, 2004, 1,085,450 options were authorized under the Equinox Holdings, Inc. 2000 Stock Incentive Plan and options to purchase 961,104 shares of Equinox common stock were outstanding.

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DESCRIPTION OF CAPITAL STOCK

        Pursuant to our Certificate of Incorporation, we are authorized to issue 20 million shares of common stock with a par value $0.01 per share (the "Common Stock"), of which 9,443,247 shares were outstanding as of December 31, 2003. We are also authorized to issue 400,000 shares of preferred stock with a par value of $0.01 per share. We redeemed our 130,166 shares of preferred stock and at December 31, 2003 had no preferred shares outstanding. These redeemed shares are authorized and unissued.

        We filed a Certificate of Designation setting forth the rights, preferences and terms of 100,000 shares of our designated Senior Redeemable Preferred Stock. We may not issue the Senior Redeemable Preferred Stock other than under the contingent circumstances described below under "—Common Stock Put Warrants."

        Our Certificate of Incorporation provides that to the fullest extent permitted by the General Corporation Law of the State of Delaware (including, without limitation, Section 102(b)(7)), as amended from time to time, none of our directors shall be personally liable to us or to our stockholders for monetary damages for breach of fiduciary duty as a director.

        The following summary of certain provisions of the capital stock does not purport to be complete and is subject to, and qualified in its entirety by, the provisions of our Certificate of Incorporation, our By-laws, the Certificate of Designation for the Senior Redeemable Preferred Stock, the instruments governing the common stock put warrants and by the provisions of applicable law.

Common Stock

        Holders of shares of our Common Stock are entitled to the rights, preferences and privileges, subject to the qualifications, limitations and restrictions, as set forth in the Certificate of Incorporation or otherwise required by law. Subject to the Stockholder's Agreement described under "Related Party Transactions," holders of our Common Stock are entitled to one vote per share on all matters to be voted on by the Company's stockholders.

        Dividends may be paid on the Common Stock, as and when declared by our board of directors. Any such dividend may be paid in cash, property, or shares of the Corporation's capital stock, subject to all of the rights of the preferred stock and any applicable provisions of law.

        During 2003 we issued approximately 833,000 shares of Common Stock for approximately $10.0 million. In addition options to purchase 5,000 shares were exercised during 2003 for approximately $51,000.

Common Stock Put Warrants

        In connection with the issuance of our outstanding subordinated notes, we issued common stock put warrants to purchase, at a purchase price of $0.01 per share, an aggregate of 879,214 shares of our Common Stock (or approximately 8% of the Company on a fully diluted basis as of the date hereof). The common stock put warrants will remain outstanding following repayment of the subordinated notes.

        The common stock put warrants contain anti-dilution and other protective provisions and contain affirmative covenants requiring us to, among other things, furnish specified financial statements, maintain proper books and records and maintain appropriate insurance. The common stock put warrants also contain negative covenants that, among other things, restrict our ability to change our certificate of incorporation and restrict, in a manner similar to the notes offered hereby, our ability to engage in transactions with affiliates.

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        In addition, commencing on December 15, 2006, holders of a majority interest in the common stock put warrants will have a right to require us to use our best efforts to purchase the common stock put warrants at fair market value unless we have previously consummated a qualifying initial public offering of our common stock. Effective on the issue date of the notes offered hereby, the common stock put warrants will provide that if we fail to purchase the warrants within 60 days of such a demand by holders of a majority interest in the common stock put warrants, each warrant holder's right under the common stock put warrants, including the holder's right to purchase shares of Common Stock, will convert automatically and irrevocably without any further action or acknowledgement on the part of the Company or the holder, into Senior Redeemable Preferred Stock equal to the value of that holder's common stock put warrants. The holders' rights relating to our obligation to purchase the common stock put warrants will be subordinated to the prior payment in full in cash of all of our indebtedness (including the notes offered hereby and amounts under our new revolving credit facility) in the event of an insolvency, liquidation, winding-up, bankruptcy or similar event.

        The Senior Redeemable Preferred Stock referred to above, if issued, will rank senior to all our other preferred stock, equity or equity-linked securities (other than the debt portion of convertible debt), whether now in existence or created hereafter ("Junior Securities").

        Dividends on the Senior Redeemable Preferred Stock will accrue daily and be cumulative and compounded quarterly, at a rate of 18% per annum from the date of issuance. The dividend rate will increase by 1% per annum every six months up to a maximum rate per share of 22% per annum. We will have the option to pay the quarterly dividends in cash. All dividends paid with respect to the shares of the Senior Redeemable Preferred Stock will be paid pro rata to the holders.

        Optional Redemption.    We may redeem the Senior Redeemable Preferred Stock, at our option and at any time, for an amount equal to $1,000 multiplied by the number of Senior Redeemable Preferred Stock shares redeemed, together plus all accrued and unpaid dividends thereon to the applicable redemption date. Any such optional redemption shall be on a pro rata basis.

        Mandatory Redemption.    We will be required to redeem the Senior Redeemable Preferred Stock, for a redemption price per share equal to $1,000 plus the amount of all accrued and unpaid dividends thereon through the date of redemption, in cash, upon the earliest to occur of: (a) six months following the stated or accelerated maturity of the notes being offered in this offering, (b) 91 days following a complete refinancing or complete redemption of the notes, (c) an extension in the maturity or an increase in the principal amount of the notes, (d) the closing of our first underwritten offering of Common Stock to the public pursuant to an effective registration statement under the Securities Act, provided that such offering exceeds $35 million and our Common Stock is listed for trading on the New York Stock Exchange or the American Stock Exchange or for quotation on the NASDAQ National Market by us or any subsidiary, (e) 91 days following a "Change of Control" as defined under the notes, and (f) an insolvency event. Notwithstanding the foregoing, all obligations to effect such a mandatory redemption are subject to the prior satisfaction of any similar put or redemption obligations under the notes.

        Liquidation.    In the event of any liquidation or winding-up of the Company, holders of Senior Redeemable Preferred Stock will be entitled to receive, in preference of Junior Securities, an amount equal to the full amount of the Senior Redeemable Preferred Stock outstanding (which will be calculated as the number of preferred stock shares outstanding multiplied by $1,000) plus all accrued and unpaid dividends.

        Certain Rights of Holders.    The Senior Redeemable Preferred Stock will contain affirmative covenants. We will be required to deliver to the holders of the Senior Redeemable Preferred Stock all information publicly filed with the SEC. We will be required to obtain the consent of the holders of a majority of the outstanding shares of Senior Redeemable Preferred Stock to take certain actions,

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including but not limited to the following: (1) declaring and paying dividends and making distributions in respect to our capital stock, other than dividends on Junior Securities paid-in-kind and the making of the Exit Payment described under "Related Party Transactions," (2) amending or changing our organizational documents in a manner adverse to holders of Senior Redeemable Preferred Stock, (3) authorizing or issuing securities ranked senior or equally to the Senior Redeemable Preferred Stock, (4) altering or changing the rights, preferences or privileges of the Senior Redeemable Preferred Stock, (5) repurchasing or redeeming our capital stock (with the exception of certain repurchases of equity of management and employees), (6) increasing the authorized number of shares of Senior Redeemable Preferred Stock, (7) permitting the purchase or redemption of any Junior Securities by any entity directly or indirectly controlled by the Company, (8) entering into certain transactions with affiliates, and (9) taking any other action that could adversely alter or change the preferences, rights, privileges or powers of, or the restrictions provided for the benefit of, the Senior Redeemable Preferred Stock.

        In addition, the consent of each holder of Senior Redeemable Preferred Stock will be required to reduce the stated value per share or the dividend rate or to amend any provisions relating to the time of payment, ranking or mandatory redemption features of the Senior Redeemable Preferred Stock.

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DESCRIPTION OF CERTAIN INDEBTEDNESS

        We have no outstanding indebtedness other than the old notes and an aggregate of $2.2 million in capital leases and similar obligations. In addition, we expect to have up to $3.5 million of reimbursement obligations for cash collateralized standby letters of credit under our new revolving credit facility or issued by another financial institution and, subject to conditions described below, approximately $21.5 million of additional commitments under our new revolving credit facility.

New Revolving Credit Facility

        The following summarizes the basic terms of our new revolving credit facility. The closing of the new revolving credit facility was a condition to the closing of the offering of the old notes. Availability of the new revolving credit facility is subject to specified post-closing actions with respect to collateral which we expect to accomplish prior to needing access to the facility and subject to a borrowing base formula.

        Our new revolving credit facility, with Merrill Lynch Capital, a division of Merrill Lynch Business Financial Services Inc., as administrative agent and lead arranger, UBS Loan Finance LLC, as syndication agent, and Wachovia Bank, National Association, as documentation agent, has a maturity of five years, provides for borrowings of up to $25.0 million (with a subfacility for the issuance of letters of credit) expiring on December 16, 2008.

        Prepayments (without permanent reductions to the commitments) under the new revolving credit facility are required in an amount equal to 100% of (a) certain insurance proceeds received by us, (b) the net cash proceeds of issuances of certain equity and debt securities and (c) the net cash proceeds of certain asset sales and dispositions by us, in each case subject to certain exceptions and reinvestment rights.

        Voluntary prepayments and commitment reductions are permitted in whole or in part, subject to minimum prepayment or reduction requirements. Such voluntary prepayments and commitment reductions may be made without premium or penalty other than customary LIBOR breakage costs.

        All of our obligations under the new revolving credit facility are unconditionally guaranteed by each of our existing and subsequently acquired or organized domestic subsidiaries. The new revolving credit facility and the related guarantees will be secured by a first-priority security interest in substantially all of our and our domestic subsidiaries' present and future assets and all present and future assets of each guarantor, including but not limited to (i) a first-priority pledge of all of the outstanding capital stock owned by us and each domestic guarantor and (ii) perfected first-priority security interests in all of our present and future tangible and intangible assets and the present and future tangible and intangible assets of each guarantor, in each case, subject to certain exceptions.

        Loans under the new revolving credit facility, at our option, will bear interest at either the prime rate or a floating rate equal to the reserve adjusted London inter-bank offered rate ("LIBOR"), in each case plus a margin based on leverage. In addition to paying interest on any outstanding principal amount under the new revolving credit facility, we will be required to pay an unused revolving credit facility fee. For each letter of credit we issue, we will be required to pay at a rate per annum equal to the applicable margin for LIBOR loans. The applicable interest rate will increase by 2% during any payment default.

        The credit agreement documentation contains certain customary representations and warranties and contains customary restrictive affirmative, negative and financial covenants including leverage ratios and an interest coverage ratio and capital expenditure and dividend payment restrictions.

        Events of default under the credit agreement include (i) our failure to pay principal or interest when due, (ii) our material breach of any representations or warranty, (iii) covenant defaults, (iv) events of bankruptcy and (v) a change of control. We will pay the senior lenders and agents certain syndication and administration fees, reimburse certain expenses and provide certain indemnities to the senior lenders and the agents, in each case which are customary for credit facilities of this type.

        In the event of default, our loan commitment will terminate and all of the obligations shall become immediately due and payable without presentment, demand, protest or other notice of any kind.

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DESCRIPTION OF NOTES

General

        We issued the old notes, and will issue the new notes, under an indenture (the "Indenture") dated as of December 16, 2003 among Equinox Holdings, Inc., the Guarantors and U.S. Bank National Association, as Trustee. The terms of the new notes are identical in all material respects to the terms of the old notes, except that the new notes will be registered under the Securities Act, and therefor will not contain restrictions on transfer, will not contain provisions relating to additional interest, will bear a different CUSIP number from the old notes and will not entitle their holders to registration rights. The new notes will otherwise evidence the same debt as the old notes and will be entitled to the benefits of the Indenture.

        The following summary of the Indenture does not purport to be complete and is subject to, and is qualified in its entirety by reference to, the Trust Indenture Act of 1939, as amended (the "TIA"), and to all of the provisions of the Indenture (a copy of the form of which may be obtained from us), including the definitions of certain terms therein and those terms made a part of the Indenture by reference to the TIA as in effect on the date of the Indenture. The definitions of most of the capitalized terms used in the following summary are set forth below under "—Certain Definitions." For purposes of this "Description of Notes," references to the "Company" are to Equinox Holdings, Inc. and not to any of its Subsidiaries.

        The Notes will be our unsecured obligations, ranking equal in right of payment to all of our unsubordinated debt. The Notes will be effectively subordinated to all existing and future secured debt of the Company to the extent of the value of the assets securing such debt. As of December 31, 2003, the aggregate principal amount of secured Indebtedness of the Company and its subsidiaries who are Guarantors was $3.3 million, and the Company had an additional $21.5 million of secured borrowings available under the Credit Agreement, subject to conditions on availability.

        We will issue the Notes in fully registered form only, without coupons, in denominations of $1,000 and integral multiples thereof. Initially, the Trustee will act as Paying Agent and Registrar for the Notes. The Notes may be presented for registration or transfer and exchange at the offices of the Registrar, which initially will be the Trustee's corporate trust office. We may change any Paying Agent and Registrar without notice to holders of the Notes. We will pay principal (and premium, if any) on the Notes at the Trustee's corporate office in New York, New York. At our option, interest may be paid at the Trustee's corporate trust office or by check mailed to the registered address of Holders.

Principal, Maturity and Interest

        The Notes will be unlimited in aggregate principal amount, with $160 million aggregate principal amount issued on December 16, 2003, and will mature on December 15, 2009. Additional Notes ("Additional Notes") may be issued from time to time under the Indenture in an unlimited amount, subject to the limitations set forth under "—Certain Covenants—Limitation on Incurrence of Additional Indebtedness." The Notes and any such Additional Notes will be treated as a single class for all purposes under the Indenture.

        Interest on the Notes will accrue at the rate per annum set forth on the front cover of this prospectus and will be payable semiannually in cash on each June 15 and December 15 to the persons who are registered Holders at the close of business on the June 1 and December 1 immediately preceding the applicable interest payment date. Interest on the Notes was first payable on June 15, 2004. Interest on the Notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from and including the date of issuance.

        The Notes will not be entitled to the benefit of any mandatory sinking fund.

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Redemption

        Optional Redemption.    The Notes will be redeemable, at the Company's option, in whole at any time or in part from time to time, on and after December 15, 2006, upon not less than 30 nor more than 60 days' notice, at the following redemption prices (expressed as percentages of the principal amount thereof) if redeemed during the twelve-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	Percentage
2006	104.500	%
2007	102.250	%
2008 and thereafter	100.000	%

        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 (as defined below) to redeem up to 35% of the principal amount of Notes issued under the Indenture at a redemption price equal to 109% of the principal amount thereof plus accrued and unpaid interest thereon, if any, to the date of redemption; provided that:

(1)

at least 65% of the principal amount of Notes issued under the Indenture remains outstanding immediately after any such redemption; and

(2)

the Company shall make such redemption not more than 120 days after the consummation of any such Equity Offering.

        As used in the preceding paragraph, "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.

Selection and Notice of Redemption

        In the event that less than all of the Notes are to be redeemed at any time, selection of such Notes for redemption will be made by the Trustee 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; provided, however:

(1)

that no Notes of a principal amount of $1,000 or less shall be redeemed in part; and



(2)

that if a partial redemption is made with the proceeds of an Equity Offering, selection of the Notes or portions thereof for redemption shall be made by the Trustee 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.

        Notice of redemption shall be mailed by first-class mail at least 30 but not more than 60 days before the redemption date to each Holder of Notes to be redeemed at its registered address. If any Note is to be redeemed in part only, the notice of redemption that relates to such Note shall state the portion of the principal amount thereof to be redeemed. A new Note in a principal amount equal to the unredeemed portion thereof will be issued in the name of the Holder thereof upon cancellation of the original Note. On and after the redemption date, interest will cease to accrue on Notes or portions thereof called for redemption as long as the Company has deposited with the Paying Agent funds in satisfaction of the applicable redemption price pursuant to the Indenture.

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Guarantees

        All of the Company's existing subsidiaries as of December 16, 2003 have jointly and severally guaranteed the Company's obligations under the Indenture and the Notes fully and unconditionally on a senior unsecured basis. In the future, any Domestic Restricted Subsidiary of a specified size, and any subsidiary that guarantees Indebtedness of the Company, will guarantee the Company's obligations under the Indenture and the Notes on a senior unsecured basis as described under "—Certain Covenants—Additional Subsidiary Guarantees." The obligations of each Guarantor under its Guarantee will be limited as necessary to prevent the Guarantee from constituting a fraudulent conveyance or fraudulent transfer under applicable law.

        Each Guarantor may consolidate with or merge into or sell all or substantially all of its assets to the Company or another Guarantor that is a Restricted Subsidiary of the Company without limitation, or with other Persons upon the terms and conditions set forth in the Indenture. See "—Certain Covenants—Merger, Consolidation and Sale of Assets." In the event a Guarantor ceases to be a Subsidiary of the Company in a transaction that complies with the provisions set forth in "—Certain Covenants—Limitation on Asset Sales" and the other covenants contained in the Indenture, then the Guarantor's Guarantee will be released.

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 of such Holder's Notes pursuant to the offer described below (the "Change of Control Offer"), at a purchase price equal to 101% of the principal amount thereof plus accrued and unpaid interest to the date of purchase; provided that the Company shall not be obligated to make a Change of Control Offer pursuant to this covenant 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 in accordance with the provisions described under "—Redemption—Optional Redemption" and it subsequently has not failed to consummate such redemption. Upon any failure to consummate the redemption for which such notice was given, the Company's obligation to offer to repurchase Notes pursuant to this covenant shall be reinstated.

        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, which notice shall govern the terms of the Change of Control Offer. Such notice will state, among other things, 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"). Holders electing to have a Note purchased pursuant to a Change of Control Offer will be required to surrender the Note, with the form entitled "Option of Holder to Elect Purchase" on the reverse of the Note completed, to the 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.

        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 the 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.

        If a Change of Control Offer is made, there can be no assurance that the Company will have available funds sufficient to pay the Change of Control purchase price for all the Notes that might be delivered by Holders seeking to accept the Change of Control Offer. The Credit Agreement contains, and any future other agreements relating to other indebtedness to which we become a party may contain, restrictions or prohibitions on the Company's ability to repurchase Notes or may provide that an occurrence of a Change of Control constitutes an event of default under, or otherwise requires

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payments of amounts borrowed under, those agreements. If a Change of Control occurs at a time when the Company is prohibited from repurchasing the Notes, we could seek the consent of our then existing lenders to the repurchase of the Notes or could attempt to refinance the Credit Agreement. If the Company does not obtain such consent or repay the indebtedness, it would remain prohibited from repurchasing the Notes. In that case, failure to repurchase tendered Notes would constitute an Event of Default under the Indenture and may constitute a default under the terms of other indebtedness that we may enter into from time to time. In the event the Company is required to purchase outstanding Notes pursuant to a Change of Control Offer, the Company expects that it would seek third party financing to the extent it does not have available funds to meet our purchase obligations. However, there can be no assurance that the Company would be able to obtain such financing.

        Neither the Board of Directors of the Company nor the Trustee may waive the covenant relating to a Holder's right to redemption upon a Change of Control. Restrictions in the Indenture described herein on the ability of the Company and its Restricted Subsidiaries to incur additional Indebtedness, to grant liens on its property, to make Restricted Payments and to make Asset Sales may also make more difficult or discourage a takeover of the Company, whether favored or opposed by the management of the Company. Consummation of any such transaction in certain circumstances may require redemption or repurchase of the Notes, and there can be no assurance that the Company or the acquiring party will have sufficient financial resources to effect such redemption or repurchase. Such restrictions and the restrictions on transactions with Affiliates may, in certain circumstances, make more difficult or discourage any leveraged buyout of the Company or any of its Subsidiaries by the management of the Company. While such restrictions cover a wide variety of arrangements that have traditionally been used to effect highly leveraged transactions, the Indenture may not afford the Holders of Notes protection in all circumstances from the adverse aspects of a highly leveraged transaction, reorganization, restructuring, merger or similar transaction.

        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 the "Change of Control" provisions of the Indenture, the Company shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under the "Change of Control" provisions of the Indenture by virtue thereof.

Certain Covenants

        The Indenture contains, among others, the following covenants:

        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

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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.

        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 final maturity,



(b)

any scheduled or mandatory 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 the covenant described under paragraph (a) of the "—Limitation on Incurrence of Additional Indebtedness" covenant; 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

75

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 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 "—Limitation on Designations of Unrestricted Subsidiaries," 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 will 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



(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

76

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 is by its express terms subordinate in right of payment to the Notes following a Net Proceeds Offer or Change of Control Offer after complying with the covenants set forth under "—Limitation on Asset Sales" and "—Change of Control";



(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 the covenant set forth under "—Limitation on Incurrence of Additional Indebtedness";



(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 the covenant described under "—Merger, Consolidation and Sale of Assets."

In determining the aggregate amount of Restricted Payments made subsequent to 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.

        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

77

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 the 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:

(1)

to (i) 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 covenant, 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 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, not just the amount in excess of $10.0 million, shall be applied as required pursuant to the preceding paragraph). To the extent the

78

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 the 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 immediately preceding paragraphs, 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.

        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.

        The Company shall 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 Net Proceeds Offer. To the extent that the provisions of any securities laws or regulations conflict with the "Asset Sale" provisions of the Indenture, the Company shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under the "Asset Sale" provisions of the Indenture by virtue thereof.

        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 Capital Stock;



(2)

make loans or advances or to 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)

the Indenture, the Notes and the Guarantees;

79

(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 the 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 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 the 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 the Indenture imposed by the holder of such Lien;



(l)

restrictions imposed by any agreement to sell assets or Capital Stock permitted under the 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

80

(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 clause (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 clause (b) and (d) through (k) above.

        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.

        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, are 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 Guarantees, as the case may be, are 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 the Indenture and that has been incurred in accordance with the provisions of the 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, refinanced, 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

81

property or assets securing all such Initial Liens or of all of the 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.

        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 will 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 of 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, the 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 the covenant described under paragraph (a) of the "—Limitation on Incurrence of Additional Indebtedness" covenant;



(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 officers' certificate and an opinion of counsel, each stating to the effect that all conditions precedent in the Indenture relating to such transaction have been satisfied.

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

        The Indenture will provide that upon any consolidation, combination or merger or any transfer of all or substantially all of the assets of the Company in accordance with the foregoing, in which the Company is not the continuing corporation, the Surviving Entity shall succeed to, and be substituted

82

for, and may exercise every right and power of, the Company under the 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 the 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.

        Each Guarantor (other than any Guarantor whose Guarantee is to be released in accordance with the terms of the Guarantee and the Indenture in connection with any transaction complying with the provisions of "—Limitation on Asset Sales") 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 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 covenant.

        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.

Limitation on Transactions with Affiliates.

(1)

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:



(a)

Affiliate Transactions permitted under paragraph (2) below; and



(b)

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 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.

83

(2)

The restrictions set forth in paragraph (1) shall not apply to:



(a)

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;



(b)

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 the Indenture;



(c)

Restricted Payments and Permitted Investments permitted by the Indenture;



(d)

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



(e)

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;



(f)

the Transactions;



(g)

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 the 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



(h)

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.

        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 guarantor, 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 guarantee all of the Company's obligations under the Notes and the Indenture on the terms set forth in the Indenture; and



(2)

deliver to the Trustee one or more opinions 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 the Indenture; provided, however, that 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.

84

        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 by filing with the Commission or (if not filing with the Commission) by sending to the registered holders of Notes with a copy to the Trustee:

(1)

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



(2)

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 contemplated by the Registration Rights Agreement, 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.

        Limitation on Designations of Unrestricted Subsidiaries.    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 the 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; and



(2)

the Company would be permitted under the 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 the covenant described under "—Limitation on Restricted Payments" for all purposes of the Indenture in the Designation Amount.

        The Indenture further provides that 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 the Indenture.

85

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

Events of Default

        The following events are defined in the Indenture as "Events of Default":

(1)

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;



(2)

the failure to pay the principal on 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;



(3)

a default in the observance or performance of any other covenant or agreement contained in the Indenture 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 the covenant described under "—Certain Covenants—Merger, Consolidation and Sale of Assets," which will constitute an Event of Default with such notice requirement but without such passage of time requirement);



(4)

the failure to pay at final 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, 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 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;



(5)

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 nonappealable;



(6)

certain events of bankruptcy affecting the Company or any of its Significant Subsidiaries; or



(7)

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 under its Guarantee (other than by reason of release of a Guarantor in accordance with the terms of the Indenture).

        If an Event of Default (other than an Event of Default specified in clause (6) above relating to the Company) shall occur and be continuing, the Trustee or the Holders of at least 25% in 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" (its "Acceleration Notice"), and the same shall become immediately due and payable. If an Event of Default specified in clause (6) above relating 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.

86

        The Indenture provides that, at any time after a declaration of acceleration with respect to the Notes as described in the preceding paragraph, the Holders of a majority in principal amount of the Notes may rescind and cancel such declaration and its consequences:

(1)

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



(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, interest on overdue installments of interest and overdue principal, which 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 (6) of the description above of Events of Default, the Trustee shall have received an officers' certificate and an opinion of counsel that such Event of Default has been cured or waived.

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

        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.

        Holders of the Notes may not enforce the Indenture or the Notes except as provided in the Indenture and under the TIA. Subject to the provisions of the Indenture relating to the duties of the Trustee, the Trustee is under no obligation to exercise any of its rights or powers under the Indenture at the request, order or direction of any of the Holders, unless such Holders have offered to the Trustee reasonable indemnity. Subject to all provisions of the Indenture and applicable law, the Holders of a majority in aggregate principal amount of the then outstanding Notes have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on the Trustee.

        Under the Indenture, the Company is required to provide an officers' 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 at least annually whether or not they 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.

Legal Defeasance and Covenant Defeasance

        The Company may, at its option and at any time, elect to have its obligations and the obligations of the Guarantors discharged with respect to the outstanding Notes ("Legal Defeasance"). Such Legal Defeasance means that the Company shall be deemed to have paid and discharged the entire indebtedness represented by the outstanding Notes, except for:

(1)

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;



(2)

the Company's obligations with respect to the Notes concerning



•

issuing temporary Notes,



•

registration of Notes,



•

mutilated, destroyed, lost or stolen Notes and

87

•

the maintenance of an office or agency for payments;



(3)

the rights, powers, trust, duties and immunities of the Trustee and our obligations in connection therewith; and



(4)

the Legal Defeasance provisions of the Indenture.

        In addition, the Company may, at its option and at any time, elect to have the obligations of the Company released with respect to certain covenants that are described in the Indenture ("Covenant Defeasance") and thereafter any omission to comply with such obligations shall not constitute a Default or an Event of Default with respect to the Notes. In the event Covenant Defeasance occurs, certain events (not including non-payment, bankruptcy, receivership, reorganization and insolvency events) described under "Events of Default" will no longer constitute an Event of Default with respect to the 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, non-callable U.S. government obligations, or a combination thereof, in such amounts as will be sufficient, in the opinion of a nationally recognized firm of independent public accountants, 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 reasonably acceptable to the Trustee confirming that



(a)

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



(b)

since the date of the 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 reasonably acceptable to the Trustee 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 an 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, the Indenture (other than a Default or an Event of 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;

88

(6)

the Company shall have delivered to the Trustee an officers' certificate stating that the deposit was not made by the Company with the intent of preferring the Holders over any other creditors of the Company or with the intent of defeating, hindering, delaying or defrauding any other creditors of the Company or others;



(7)

the Company shall have delivered to the Trustee an officers' 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;



(8)

the Company shall have delivered to the Trustee an opinion of counsel to the effect that assuming no intervening bankruptcy of the Company between the date of deposit and the 91st day following the date of deposit and that no Holder is an insider of the Company, after the 91st day following the date of deposit, the trust funds will not be subject to the effect of any applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors' rights generally; and



(9)

certain other customary conditions precedent are satisfied.

        Notwithstanding the foregoing, the opinion of counsel required by clauses (2)(a) and (3) above need not be delivered if all the 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 such Trustee in the name, and at the expense, of the Company.

Satisfaction and Discharge

        The Indenture will be discharged and will cease to be of further effect (except as to surviving rights or registration of transfer or exchange of the Notes, as expressly provided for in the Indenture) as to all Notes then outstanding when:

(1)

either



(a)

all the Notes theretofore authenticated and delivered (except lost, stolen or destroyed Notes which have been replaced or paid 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 become due and payable at their stated maturity 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 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 the Indenture; and



(3)

the Company has delivered to the Trustee an officers' certificate and an opinion of counsel stating that all conditions precedent under the Indenture relating to the satisfaction and discharge of the Indenture have been complied with.

89

Modification of the Indenture

        From time to time, the Company, the Guarantors and the Trustee, without the consent of the Holders, may amend the Indenture for certain specified purposes, including curing ambiguities, defects or inconsistencies or so long as such change does not adversely affect the rights of any of the Holders in any material respect. Other modifications and amendments of the Indenture may be made with the consent of the Holders of a majority in principal amount of the then outstanding Notes issued under the Indenture, except that, without the consent of each Holder affected thereby, no amendment may:

(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 the 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 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 the 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 Guarantee; provided that ranking shall not be affected by the existence or lack thereof of a security interest or by priority with respect to a security interest.

Governing Law

        The Indenture provides that it, and the Notes, will 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 Trustee

        The Indenture provides that, except during the continuance of an Event of Default, the Trustee will perform only such duties as are specifically set forth in the Indenture. During the existence of an Event of Default, the Trustee will exercise such rights and powers vested in it by the Indenture, and use the same degree of care and skill in its exercise as a prudent person would exercise or use under the circumstances in the conduct of his own affairs.

        The Indenture and the provisions of the TIA contain certain limitations on the rights of the Trustee, should it become a creditor of the Company or of a Subsidiary of the Company, to obtain payments of claims in certain cases or to realize on certain property received in respect of any such claim as security or otherwise. Subject to the TIA, the Trustee will be permitted to engage in other transactions; provided that if the Trustee acquires any conflicting interest as described in the TIA, it must eliminate such conflict or resign.

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Certain Definitions

        Set forth below is a summary of certain of the defined terms used in the Indenture. Reference is made to the Indenture for the full definition of all such terms, as well as any other terms used herein for which no definition is provided.

        "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.

        "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.

        "Affiliate Transaction" has the meaning set forth under "—Certain Covenants—Limitation on Transactions with Affiliates."

        "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 "—Certain Covenants—Merger, Consolidation and Sale of Assets,"



(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 "—Certain Covenants—Limitation on Restricted Payments," or any Permitted Investment or Permitted Lien.

91

        "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 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 in 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)

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.

92

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

(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 the 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 the 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 any 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 under "—Change of Control."

        "Change of Control Payment Date" has the meaning set forth under "—Change of Control."

        "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.

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

(1)

Consolidated Net Income for such period; and



(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

93

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 Asset Sale (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, 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

94

(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 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 abandonment 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.

        "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

95

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).

        "Covenant Defeasance" has the meaning set forth under "—Legal Defeasance and Covenant Defeasance."

        "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 increasing 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 Restricted Subsidiary 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.

        "Designation" has the meaning set forth under "—Certain Covenants—Limitation on Designations of Unrestricted Subsidiaries."

        "Designation Amount" has the meaning set forth under "—Certain Covenants—Limitation on Designations of Unrestricted Subsidiaries."

        "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

96

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" has the meaning set forth under "—Redemption—Optional Redemption Upon Public Equity Offerings."

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

        "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 among certain shareholders of 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 a 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 the 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 the 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" means each guarantee of the Company's obligations under the Indenture and the Notes by the Guarantors.

        "Guarantor" means: (1) each of the Guarantors listed on Schedule A to the Indenture; and (2) 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 the 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 the Indenture.

        "incur" has the meaning set forth under "—Certain Covenants—Limitation on Incurrence of Additional Indebtedness."

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        "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;



(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) 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 or 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 the 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.

        "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.

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

        "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 by 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."

        "Legal Defeasance" has the meaning set forth under "—Legal Defeasance and Covenant Defeasance."

        "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 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.

        "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);

99

(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.

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

        "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 in the Offering and the 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 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 "—Certain Covenants—Limitation on Asset Sales" (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 from lessors of real property 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 the 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;

100

(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 the 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 the 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 the 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 the Indenture, in each case subject to no Lien other than a Lien permitted under the 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 the Indenture and the Notes, and



(b)

if as of any date any Person other than a Restricted Subsidiary or the holders of a Lien permitted under the 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; 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 the Indenture; provided that, in the case of a guarantee by a Restricted Subsidiary, such Restricted Subsidiary complies with the covenant described under "—Certain Covenants—Additional Subsidiary Guarantees" 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 the 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).

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        For purposes of determining any particular amount of Indebtedness under the "Limitation on Incurrence of Additional Indebtedness" covenant, 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 the "Limitation on Incurrence of Additional Indebtedness" covenant, 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 such covenant, the Company shall, in its sole discretion, classify (or later reclassify) such item of Indebtedness in any manner that complies with such covenant. 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 the "Limitation on Incurrence of Additional Indebtedness" covenant.

        "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 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 the 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 the 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 the 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 the covenant described under "—Certain Covenants—Limitation on Asset Sales;" 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

102

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



(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 assets 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;



(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

103

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 the Indenture;



(12)

Liens securing Indebtedness under Currency Agreements relating to debt permitted to be secured under the 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 the 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 setoff 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 custom 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)

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

104

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.

        "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 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.

        "Qualified Capital Stock" means any Capital Stock that is not Disqualified Capital Stock.

        "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 Indebtedness incurred in accordance with the covenant described under "—Certain Covenants—Limitation on Incurrence of Additional Indebtedness" (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 December 16, 2003 among the Company and the Initial Purchasers.

        "Replacement Assets" means assets of a kind used or usable in the business of the Company and its Restricted Subsidiaries as conducted on the date of the relevant Asset Sale.

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        "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 the covenant described under "—Certain Covenants—Limitation on Designations of Unrestricted Subsidiaries." Any such Designation may be revoked by a Board Resolution of the Company delivered to the Trustee, subject to the provisions of such covenant.

        "Revocation" has the meaning set forth under "—Certain Covenants—Limitation on Designations of Unrestricted Subsidiaries."

        "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.

        "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", with respect to any Person, means:

(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.

        "Surviving Entity" has the meaning set forth under "—Certain Covenants—Merger, Consolidation and Sale of Assets."

        "Transactions" means the following transactions contemplated in connection with the offering of the Notes: (1) the repayment of the outstanding principal amount under the Company's existing credit agreement and the termination of all related commitments; (2) the repayment of the entire outstanding principal amount under the Company's existing senior notes due 2007; (3) the repayment of the entire outstanding principal amount under the Company's existing senior subordinated notes due 2008; (4) the redemption of the Company's preferred stock outstanding on the Issue Date; (5) a payment of $5.0 million that is contractually required to be paid by the Company to its founding stockholders; 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.

        "Unrestricted Subsidiary" means any Subsidiary of the Company designated as such pursuant to and in compliance with the covenant described under "—Certain Covenants—Limitation on Designations of Unrestricted Subsidiaries." Any such designation may be revoked by a Board Resolution of the Company delivered to the Trustee, subject to the provisions of such covenant.

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        "Warrants" means those Common Stock Purchase Warrants summarized under "Description of Capital Stock," as amended by an amendment thereto 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



(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.

Book-Entry, Delivery and Form

        The new notes will be represented by one or more notes in registered, global form ("Global Notes") deposited with the trustee as custodian for the Depository Trust Company, New York, New York ("DTC") and registered in the name of Cede &Co. as nominee of DTC, in each case for credit to the accounts of DTC participants and indirect participants (each described below) including, without limitation, the Euroclear System and Clearstream Banking. All interests in a Global Note may be subject to the procedures and requirements of DTC.

        Except in the limited circumstances set forth below, notes in certificated form will not be issued.

Depository Procedures

        The following description of the operations and procedures of DTC are provided solely as a matter of convenience. These operations and procedures are solely within their control and are subject to changes by them from time to time. We take no responsibility for these operations and procedures and urge you to contact the system or their participants directly to discuss these matters.

        DTC has advised us that DTC is a limited-purpose trust company organized under the laws of the State of New York, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the Uniform Commercial Code and a "Clearing Agency" registered pursuant to the provisions of Section 17A of the Exchange Act. DTC was created to hold securities for its participants and to facilitate the clearance and settlement of transactions in such securities between participants through electronic book-entry changes in accounts of its participants, thereby eliminating the need for physical transfer and delivery of certificates. Participants include securities brokers and dealers, banks and trust companies, clearing corporations and certain other organizations. Access to DTC's system is also available to other entities such as banks, brokers, dealers and trust companies, which we refer to as "indirect participants", that clear through or maintain a custodial relationship with a participant,

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either directly or indirectly. Persons who are not participants may beneficially own securities held by or on behalf of DTC only through the participants or the indirect participants.

        We expect that pursuant to procedures established by DTC:

•

upon the deposit of the Global Notes, DTC will credit, on its internal system, the principal amount of notes of the individual beneficial interests represented by such global securities to the respective accounts of persons who have accounts with such depositary; and



•

ownership of beneficial interests in the Global Notes will be shown on, and the transfer of such ownership will be effected only through, records maintained by DTC (with respect to interests of participants) and the records of participants (with respect to interests of persons other than participants).

        So long as DTC, or its nominee, is the registered owner or holder of the notes, DTC or such nominee, as the case may be, will be considered the sole owner or holder of the notes represented by such Global Notes for all purposes under the indenture governing the notes. No beneficial owner of an interest in any of the Global Notes will be able to transfer that interest except in accordance with DTC's procedures, in addition to those provided for under the indenture with respect to the notes.

        Payments of the principal of, premium (if any) and interest (as defined) on the Global Notes will be made to DTC or its nominee, as the case may be, as the registered owner thereof. None of us, the Trustee or any Paying Agent will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests in the Global Notes or for maintaining, supervising or reviewing any records relating to such beneficial ownership interest.

        We expect that DTC or its nominee, upon receipt of any payment of principal, premium (if any) or interest in respect of the Global Notes, will credit participants' accounts with payments in amounts proportionate to their respective beneficial interests in the principal amount of the Global Notes as shown on the records of DTC or its nominee. We also expect that payments by participants to owners of beneficial interests in the Global Notes held through such participants will be governed by standing instructions and customary practice, as is now the case with securities held for the accounts of customers registered in the names of nominees for such customers. Such payments will be the responsibility of such participants.

        Transfers between participants in DTC will be effected in the ordinary way in accordance with DTC rules and will be settled in clearinghouse funds. If a holder requires physical delivery of a certificated security for any reason, including to sell notes to persons in states which require physical delivery of the notes, or to pledge such securities, such holder must transfer its interest in such Global Note, in accordance with the normal procedures of DTC and with the procedures set forth in the indenture governing the notes.

        DTC has advised us that it will take action permitted to be taken by a holder of notes only at the direction of one or more participants to whose account the DTC interests in such Global Note are credited and only in respect of such portion of the aggregate principal amount of notes as to which such participant or participants has or have given such direction. However, if there is an event of default under the indenture governing the notes, DTC reserves the right to exchange the Global Notes for legended notes in certificated form, which it will distribute to its participants.

        Although DTC, Euroclear and Clearstream Banking have agreed to the foregoing procedures in order to facilitate transfers of interests in the Global Notes among participants of DTC, Euroclear and Clearstream Banking, they are under no obligation to perform such procedures, and such procedures may be discontinued at any time. Neither we nor the Trustee nor any of their respective agents will have any responsibility for the performance by DTC Euroclear or Clearstream Banking or their

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respective participants or indirect participants of their respective obligations under the rules and procedures governing their operations.

        Certificated Securities

        Under certain limited conditions, a person having a beneficial interest in a Global Note may receive notes in the form of certificated securities in exchange for such beneficial interests. Upon any such issuance, the trustee is required to register such certificated securities in the name of, and cause the same to be delivered to, such person or persons (or the nominee of any thereof). We will issue definitive notes in exchange for the Global Notes if at any time:

•

DTC is unwilling or unable to continue as a depositary for the Global Notes and we do not appoint a successor depositary within 90 days, or



•

an event of default under the indenture has occurred and is continuing, or



•

we, in our sole discretion, notify the trustee in writing that we elects to cause the issuance of notes in the form of certificated securities under the indenture.

        Neither we nor the trustee will be liable for any delay by the global notes holder or DTC in identifying the beneficial owners of notes and we and the trustee may conclusively rely on, and will be protected in relying on, instructions from the global notes holder or DTC for these purposes.

Registration Rights

        The summary set forth below of certain provisions of the registration rights agreement does not purport to be complete and is subject to, and is qualified in its entirety by reference to, all the provisions of the registration rights agreement, a copy of which is filed as an exhibit to the registration statement of which this prospectus is a part.

        Pursuant to the registration rights agreement with the initial purchasers we and the guarantors have agreed to use our reasonable best efforts to file with the SEC a registration statement for this exchange offer and to use our reasonable best efforts to cause it to become effective. The registration statement of which this prospectus is a part constitutes the registration statement to be filed pursuant to the Registration Rights Agreement. The Registration Rights Agreement provides that, unless the exchange offer would not be permitted by applicable law or SEC policy, we and the guarantors will use our reasonable best efforts to:

•

file the exchange offer registration statement with the SEC on or prior to 60 days after the issue date,



•

cause the exchange offer registration statement to be declared effective by the SEC on or prior to 180 days after the issue date, and



•

commence the exchange offer and issue, on or prior to 211 days after the issue date, new notes in exchange for all notes tendered prior thereto in the exchange offer.

We agreed to use our reasonable best efforts to file with the SEC a shelf registration statement (the "Shelf Registration Statement") to cover resale of the Transfer Restricted Notes (as defined in the Registration Rights Agreement) by the holders thereof if:

•

we are not permitted to file the exchange offer registration statement or to consummate the exchange offer because the exchange offer is not permitted by applicable law or SEC policy,



•

the exchange offer is not for any other reason consummated within 211 days after the issue date, or

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•

any holder of notes notifies us within a specified time period that (a) due to a change in law or policy it is not entitled to participate in the exchange offer, (b) due to a change in law or policy it may not resell the Exchange Notes acquired by it in the exchange offer to the public without delivering a prospectus and the prospectus contained in the exchange offer registration statement is not appropriate or available for such resale by such holder, or (c) it is an Initial Purchaser that is a broker-dealer and owns notes acquired directly from us or an affiliate of ours,

If obligated to file a Shelf Registration Statement, we will use our reasonable best efforts to file prior to 60 days after such filing obligation arises and use our reasonable best efforts to cause the Shelf Registration Statement to be declared effective by the SEC on or prior to 120 days after such obligation arises.

        We will use our reasonable best efforts to keep such Shelf Registration Statement continuously effective, supplemented and amended until the second anniversary of the effective date of the Shelf Registration Statement or such shorter period that will terminate when all the Transfer Restricted Notes covered by the Shelf Registration Statement have been sold pursuant thereto. We will have a right to suspend the effectiveness of the Shelf Registration Statement under certain circumstances, for a limited period.

        If (i) we fail to file any of the registration statements required by the Registration Rights Agreement on or before the date specified for such filing, (ii) any of such registration statements are not declared effective by the SEC on or prior to the date specified for such effectiveness (the "Effectiveness Target Date"), subject to certain limited exceptions, (iii) we fail to consummate the Exchange Offer within 45 days of the Effectiveness Target Date with respect to the Exchange Offer Registration Statement, or (iv) the Shelf Registration Statement or the Exchange Offer Registration Statement is declared effective but thereafter, subject to certain limited exceptions, ceases to be effective or usable in connection with the Exchange Offer or resale of Transfer Restricted Notes, as the case may be, during the periods specified in the Registration Rights Agreement (each such event referred to in clauses (i) through (iv) above, a "Registration Default"), then we will pay additional interest ("Additional Interest") in cash to each holder of Transfer Restricted Notes, with respect to the first 90-day period (or portion thereof) while a Registration Default is continuing immediately following the occurrence of such Registration Default, in an amount equal to 0.25% per annum of the principal amount of the notes. The amount of Additional Interest will increase by an additional 0.25% per annum of the principal amount of the notes for each subsequent 90-day period (or portion thereof) while a Registration Default is continuing until all Registration Defaults have been cured, up to a maximum amount of 1.00% per annum of the principal amount of the notes. Following the cure of a particular Registration Default, the accrual of Additional Interest with respect to such Registration Default will cease and the interest rate will revert to the prior rate.

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MATERIAL UNITED STATES FEDERAL TAX CONSIDERATIONS

        The following is a summary of the material United States federal income tax consequences of the exchange of old notes for new notes pursuant to the exchange offer and the ownership and disposition of the new notes to the beneficial owners, and the principal U.S. estate tax consequences of the ownership of the notes to the individuals who are non-U.S. holders (as defined below).

        This summary is based on provisions of the U.S. Internal Revenue Code of 1986, as amended (the "Code"), existing and proposed U.S. Treasury regulations promulgated thereunder (the "Treasury Regulations") and administrative and judicial interpretations thereof, all as of the date hereof and all of which are subject to change, possibly on a retroactive basis.

        This summary applies only to a beneficial owner of an old note that acquired such old note at the initial offering for the original offering price and that acquires a new note pursuant to the exchange offer. This summary assumes that the new notes are held as capital assets. This summary does not address all of the tax consequences that may be relevant to particular holders in light of their personal circumstances, or to certain types of holders (such as banks and other financial institutions, real estate investment trusts, regulated investment companies, insurance companies, entities that are treated as partnerships for U.S. federal income tax purposes or other pass-through entities, tax-exempt organizations, dealers in securities, persons whose functional currency is not the U.S. dollar, or persons who hold the notes as part of a hedge or a straddle with other investments). In addition, this summary does not include any description of the tax laws of any state, local or non-U.S. government that may be applicable to a particular holder.

        HOLDERS OF NOTES ARE URGED TO CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE PARTICULAR U.S. FEDERAL INCOME AND ESTATE TAX CONSEQUENCES TO THEM OF THE EXCHANGE, OWNERSHIP AND DISPOSITION OF THE NOTES, AS WELL AS THE TAX CONSEQUENCES UNDER STATE, LOCAL, NON-U.S. AND OTHER U.S. FEDERAL TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN TAX LAWS.

Exchange Offer

        The exchange of an old note for a new note will not constitute a taxable exchange of the old note. As a result, the new notes will have the same issue price as the old notes, and each holder will have the same adjusted tax basis in the new notes as it had in the old notes immediately before the exchange and the holding period of the new notes will include the holding period of the old notes.

Taxation of U.S. Holders

        As used herein, the term "U.S. holder" means a holder of a note that is, for U.S. federal income tax purposes,

        (a)   an individual who is a citizen or resident of the United States,

        (b)   a corporation or other entity treated as a corporation created or organized in the United States or under the laws of the United States or any political subdivision thereof,

        (c)   an estate the income of which is subject to U.S. federal income tax purposes regardless of its source or

        (d)   a trust if

        (1)   a court within the United States is able to exercise primary supervision over the administration of the trust and at least one U.S. person has authority to control all substantial decisions of the trust, or

        (2)   the trust was in existence on August 20, 1996, and has elected to continue to be treated as a U.S. person.

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        Payment of Interest on the Notes Other than Certain Additional Payments.    In general, interest paid on a note will be taxable to a U.S. holder as ordinary interest income, as received or accrued, in accordance with such holder's method of accounting for federal income tax purposes.

        Certain Additional Payments.    At the time we issued the old notes, there was a possibility that we would have been obliged to pay additional interest if the exchange offer registration statement were not timely filed or declared effective within the applicable time periods, as described above under the heading "Description of Notes—Registration Rights", or we would have been obliged to pay 101% of the principal amount of the notes in case of a redemption described above under the heading "Description of Notes—Change of Control", and that, in each case, the notes would be treated as contingent payment debt instruments. At the time we issued the old notes, we took the position that the likelihood that such additional interest would become payable, or that such redemption would take place was remote or incidental, and therefore the possibility that payments of such additional interest may be made or that such redemption may occur should not cause the notes to be treated as contingent payment debt instruments. Notwithstanding the fact that a small amount of additional interest has become payable, we continue to believe that the payment of such additional interest is incidental and the possibility of such redemption is remote or incidental and that neither the old notes nor the new notes are contingent payment debt instruments. Accordingly, such additional interest should be taxable to a U.S. holder as ordinary interest income, as received or accrued, in accordance with such holder's method of accounting for federal income tax purposes. The Company's position is binding on each U.S. holder for federal income tax purposes, unless such U.S. holder discloses in the proper manner to the IRS that it is taking a different position. Our position is not, however, binding on the Internal Revenue Service (the "IRS"), and if the IRS were successfully to maintain that the notes are contingent payment debt instruments, the timing and character of income and gain realized on the notes may be different from the consequences described herein.

        U.S. holders should consult their tax advisors as to the tax considerations relating to debt instruments providing for certain additional payments.

        Sale, Exchange or Retirement of the Notes.    Upon the sale, exchange, redemption, or other taxable disposition of a new note, a U.S. holder will generally recognize taxable gain or loss equal to the difference between the sum of the cash and the fair market value of all other property received on such disposition (except to the extent such cash or property is attributable to accrued interest, which will be taxable as ordinary income to the extent not previously included in income) and such U.S. holder's adjusted tax basis in the note, which should be the U.S. holder's purchase price for the old notes exchanged.

        Gain or loss recognized on the disposition of a note generally will be capital gain or loss, and will be long-term capital gain or loss if, at the time of such disposition, the U.S. holder's holding period for the note is more than one year. A reduced tax rate on long-term capital gain will apply to an individual U.S. holder. The deduction for net capital losses is subject to certain limitations.

        Backup Withholding and Information Reporting.    In general, the Company will report to each U.S. holder and the IRS amounts paid on or with respect to the notes unless such U.S. holder is an exempt recipient (such as a corporation).

        Certain non-corporate U.S. holders of the notes (including all individuals) may be subject to backup withholding. In general, backup withholding with respect to the notes will apply to a non-corporate U.S. holder if the U.S. holder:

•

fails to furnish its Taxpayer Identification Number, or TIN (which for an individual is the U.S. holder's Social Security number);



•

furnishes an incorrect TIN;



•

is notified by the IRS that it has failed to properly report payments of interest and dividends; or

112

•

under certain circumstances, fails to certify, under penalties of perjury, that it has furnished a correct TIN and has not been notified by the IRS that it is subject to backup withholding due to underreporting of interest or dividends, or otherwise fails to comply with applicable requirements of the backup withholding rules.

        The backup withholding rate is currently 28%.

        The amount of any backup withholding from a payment to a U.S. holder will be allowed as a refund or a credit against such U.S. holder's U.S. federal income tax liability, provided that the required procedures are followed.

Taxation of Non-U.S. Holders

        The following is a general discussion of the U.S. federal income and estate tax considerations relating to the ownership and disposition of the notes by a non-U.S. holder. As used herein, the term "non-U.S. holder" means:

•

an individual who is neither a citizen nor a resident of the United States;



•

a corporation (or any entity treated as a corporation for U.S. federal income tax purposes) that is not created or organized in or under the laws of the United States or any political subdivision thereof;



•

an estate the income of which is not subject to U.S. federal income taxation regardless of its source; or



•

a trust unless (1) it is subject to the primary supervision of a court within the United States and one or more U.S. persons have the authority to control all substantial decisions of the trust or (2) it has a valid election in effect under applicable U.S. Treasury Regulations to be treated as a U.S. person.

        For purposes of the following discussion, interest and gain on the sale, exchange or other disposition of the notes will be considered "U.S. trade or business income" if such income or gain (a) is effectively connected with the conduct of a trade or business in the United States, and (b) in the case of a resident of a country with an income tax treaty between that country and the United States qualifying for the benefits of such treaty, is attributable to a permanent establishment in the United States, in each case of a particular non-U.S. holder.

        U.S. Federal Withholding Tax.    A non-U.S. holder will generally be subject to U.S. federal withholding tax at a 30% rate (or, if certain tax treaties apply, such lower rate as provided therein), in respect of interest income on the notes. Such withholding tax will not apply, however, if each of the following requirements is satisfied:

•

the non-U.S. holder provides to the Company or the Company's paying agent its name, address and certain other information on an appropriate IRS form (or substitute form) and certifies, under penalties of perjury, that it is not a U.S. person, or the non-U.S. holder holds its new notes through certain foreign intermediaries or certain foreign partnerships and certain certification requirements are satisfied;



•

the non-U.S. holder does not actually or constructively own 10% or more of the Company's voting stock; and



•

the non-U.S. holder is not a controlled foreign corporation, within the meaning of the Code, that is actually or constructively related to the Company.

        In general, U.S. federal withholding tax will not apply to any gain or income realized by a non-U.S. holder on the disposition of the notes.

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        U.S. Federal Income Tax.    If the interest is considered U.S. trade or business income with respect to a non-U.S. holder, withholding tax will not apply to interest income on the notes paid to such non-U.S. holder if certain certification requirements are satisfied. Such non-U.S. holder generally will be subject to U.S. federal income tax with respect to such income in the same manner as U.S. holders, as described above. Additionally, in such event, non-U.S. holders that are corporations may be subject to a branch profits tax on such income at a rate of 30% (or at a reduced rate under an applicable income tax treaty).

        A non-U.S. holder generally will not be subject to U.S. federal income tax in respect of gain or income realized upon the sale, exchange, redemption or other taxable disposition of the notes, unless (a) the gain is U.S. trade or business income, in which case such gain or income will be taxed on a net income basis in the same manner as interest that is U.S. trade or business income with respect to a non-U.S. holder (including the possible application of the branch profits tax) or (b) the holder is an individual who is present in the United States for a period or periods aggregating 183 or more days in the taxable year of the disposition and certain other conditions are met, in which case the non-U.S. holder will be subject to a 30% tax on the excess, if any, of such gain plus all other U.S. source capital gains recognized during the same taxable year over the non-U.S. holder's U.S. source capital losses recognized during such taxable year.

        As described under "—Taxation of U.S. Holders—Certain Additional Payments," the notes provide for the payment of certain additional payments. Non-U.S. holders should consult their tax advisors as to the tax considerations relating to debt instruments providing for such payments.

        Estate Tax.    Notes held by an individual who at the time of death is a non-U.S. holder generally will not be subject to U.S. federal estate tax, provided that (a) the individual does not at the time of death actually or constructively own 10% of more of the total combined voting power of all classes of stock of the Company entitled to vote and (b) the interest income on the notes is not effectively connected with the conduct of a U.S. trade or business by the individual.

        Recently enacted U.S. federal tax legislation provides for reductions in U.S. federal estate tax through 2009 and the elimination of such estate tax entirely in 2010. Under the legislation, such estate tax would be fully reinstated, as in effect prior to the reductions, in 2011.

        Backup Withholding and Information Reporting.    Generally, the amount of interest on the notes paid to a non-U.S. holder and the amount of any tax withheld from such payments must be reported annually to the IRS and to the non-U.S. holder. Copies of the information returns reporting such interest and withholding also may be made available to the tax authorities in the country in which a non-U.S. holder is a resident under the provisions of an applicable income tax treaty or agreement. Under certain circumstances, information reporting could also apply to payments of principal on the notes.

        Under certain circumstances, information reporting could also apply to payments of principal on the notes and backup withholding at applicable rates of U.S. federal income tax could apply to payments of principal and interest on the notes to a non-U.S. holder if such holder fails to certify under penalties of perjury that it is not a U.S. person or if the Company has actual knowledge or reason to know that the payee is a U.S. person.

        Payments of the proceeds of the sale, exchange, redemption or other taxable disposition of a note to or though a foreign office of a U.S. broker or of a foreign broker with certain specified U.S. connections will be subject to information reporting requirements, but generally not backup withholding, unless the payee is an exempt recipient or such broker has evidence in its records that the payee is not a U.S. person. Payments of the proceeds of the sale, exchange, redemption or other taxable disposition of a note to or through the U.S. office of a broker will be subject to information reporting and backup withholding at applicable rates unless the payee certifies as to his or her status as a non-U.S. person or otherwise establishes an exemption.

        Any amounts withheld under the backup withholding rules from a payment to a non-U.S. holder will be allowed as a refund or a credit against such non-U.S. holder's U.S. federal income tax liability, provided that the required procedures are followed.

114

PLAN OF DISTRIBUTION

        Each broker-dealer that receives new notes for its own account pursuant to the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of such new notes. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of new notes received in exchange for old notes where such old notes were acquired as a result of market-making activities or other trading activities. We agreed that, for a period of 90 days after the expiration date, it will make this prospectus, as amended or supplemented, available to any broker-dealer for use in connection with any such resale. In addition, until                        , 2004, all dealers effecting transactions in the new notes may be required to deliver a prospectus.

        We will not receive any proceeds from any sale of new notes by broker-dealers. New notes received by broker-dealers for their own account pursuant to the exchange offer may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on the new notes or a combination of such methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market prices or negotiated prices. Any such resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any such broker-dealer or the purchasers of any such new notes. Any broker-dealer that resells Exchange Securities that were received by it for its own account pursuant to the exchange offer and any broker or dealer that participates in a distribution of such new notes may be deemed to be an "underwriter" within the meaning of the Securities Act and any profit on any such resale of new notes and any commission or concessions received by any such persons may be deemed to be underwriting compensation under the Securities Act. The Letter of Transmittal states that, by acknowledging that it will deliver and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act.

        For a period of 90 days after the expiration date we will promptly send additional copies of this prospectus and any amendment or supplement to this prospectus to any broker-dealer that requests such documents in the letter of transmittal. We have agreed to pay all expenses incident to the exchange offer other than commissions or concessions of any brokers or dealers and will indemnify certain holders of the notes (including any broker-dealers) against certain liabilities, including liabilities under the Securities Act.

        Based on interpretations by the Staff of the Commission as set forth in no-action letters issued to third parties (including Exxon Capital Holdings Corporation (available May 13, 1988), Morgan Stanley & Co. Incorporated (available June 5, 1991), K-III Communications Corporation (available May 14, 1993) and Shearman & Sterling (available July 2, 1993), we believe that the new notes issued pursuant to the exchange offer may be offered for resale, resold and otherwise transferred by any holder of such new notes, other than any such holder that is a broker-dealer or an "affiliate" of us within the meaning of Rule 405 under the Securities Act, without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that:

•

such new notes are acquired in the ordinary course of business,



•

at the time of the commencement of the exchange offer such holder has no arrangement or understanding with any person to participate in a distribution of such new notes, and



•

such holder is not engaged in, and does not intend to engage in, a distribution of such new notes.

        We have not sought, and do not intend to seek, a no-action letter from the Commission with respect to the effects of the exchange offer, and there can be no assurance that the Staff would make a similar determination with respect to the new notes as it has in such no-action letters.

115

LEGAL MATTERS

        The validity of the new notes and the guarantees will be passed upon for the Company by Rosen & Weinhaus, LLP, general counsel to the Company.

EXPERTS

        The consolidated financial statements and schedule of Equinox Holdings, Inc. as of December 31, 2003 and 2002 and for each of the years in the three-year period ended December 31, 2003, have been included herein and in the registration statement in reliance upon the report of KPMG LLP, independent registered public accounting firm, appearing elsewhere herein, and upon the authority of said firm as experts in accounting and auditing.

WHERE YOU CAN FIND MORE INFORMATION

        In connection with the exchange offer, we have filed with the Securities and Exchange Commission, or the SEC, a registration statement on Form S-4 under the Securities Act of 1933 relating to the new notes to be issued in the exchange offer. For a more complete understanding of this exchange offer, you should refer to the registration statement, including its exhibits. Statements contained in this prospectus as to the contents of any contract or other document referred to are not necessarily complete and, in each instance, if the contract or document is filed as an exhibit, we refer you to the copy of the contract or other document filed as an exhibit to the registration statement, each statement being qualified in all respects by that reference.

        The indenture pursuant to which the notes are issued requires us to distribute to the holders of the notes annual reports containing our financial statements audited by our independent public accountants and quarterly reports containing unaudited condensed consolidated financial statements for the first three quarters of each fiscal year. Following completion of the exchange offer, we will file annual, quarterly and current reports and other information with the SEC. The public may read and copy any reports or other information that we file with the SEC at the SEC's public reference room, Room 1024 at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549. The public may obtain information on the operation of the public reference room by calling the SEC at 1-800-SEC-0330. These documents are also available to the public at the web site maintained by the SEC at http://www.sec.gov. You may also obtain a copy of the exchange offer registration statement at no cost by writing or telephoning us at the following address:

Equinox Holdings, Inc.
895 Broadway
3^rd Floor
New York, New York 10003
Attention: Chief Financial Officer
Telephone: (212) 677-0181

        IN ORDER TO OBTAIN TIMELY DELIVERY, YOU MUST REQUEST DOCUMENTS FROM US NO LATER THAN            , 2004, WHICH IS FIVE DAYS BEFORE THE EXPIRATION DATE OF THE EXCHANGE OFFER ON             , 2004.

116

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2003, 2002 (restated) and 2001 (restated)

	Page
Independent Auditor's Report	F-2
Consolidated Balance Sheets at December 31, 2003 and December 31, 2002 (restated)	F-3
Consolidated Statements of Income for the years ended December 31, 2003, 2002 (restated) and 2001 (restated)	F-4
Consolidated Statements of Changes in Stockholders' Deficit and Comprehensive Income for the years ended December 31, 2003, 2002 (restated) and 2001 (restated)	F-5
Consolidated Statements of Cash Flows for the years ended December 31, 2003, 2002 (restated) and 2001 (restated)	F-6
Notes to Consolidated Financial Statements	F-7
Unaudited Interim Financial Statements:
Consolidated Condensed Balance Sheets as of March 31, 2004 and December 31, 2003 (restated)	F-28
Consolidated Condensed Statements of Income for each of the three months ended September 30, 2003 and 2002	F-29
Consolidated Condensed Statements of Cash Flows for each of the three months ended March 31, 2004 and 2003	F-30
Notes to Unaudited Consolidated Condensed Financial Statement	F-31
SCHEDULE II
Valuation and Qualifying Accounts	F-32

F-1

Report of Independent Registered Public Accounting Firm

To the Board of Directors
Equinox Holdings, Inc.:

We have audited the accompanying consolidated balance sheets of Equinox Holdings, Inc. and subsidiaries as of December 31, 2003 and 2002, and the related consolidated statements of income, stockholders' equity (deficit) and comprehensive income, and cash flows for each of the three years in the period ended December 31, 2003. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Equinox Holdings, Inc. and subsidiaries as of December 31, 2003 and 2002, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2003, in conformity with accounting principles generally accepted in the United States of America.

As discussed in Note 2 to the accompanying consolidated financial statements, the Company has restated the consolidated balance sheet as of December 31, 2002, and the related consolidated statements of income, stockholders' deficit and comprehensive income, and cash flows for the years ended December 31, 2002 and 2001.

KPMG LLP

New York, New York
June 16, 2004

F-2

EQUINOX HOLDINGS, INC.

Consolidated Balance Sheets

			December 31,
			2003			2002
						(restated)
Assets
Current assets:
	Cash		$	42,709,057		$	1,244,913
	Marketable securities			69,914			57,260
	Accounts receivable—members, less allowance for doubtful accounts as of December 31, 2003 and 2002 of $112,420 and $89,399, respectively			1,545,565			1,509,622
	Deferred income taxes			2,526,809			2,360,123
	Prepaid expenses and other current assets (Note 5)			8,969,749			6,547,363
		Total current assets		55,821,094			11,719,281
	Property and equipment, net			114,627,750			94,302,318
	Deferred income taxes			4,374,866			—
	Other assets			5,015,120			1,578,753
	Goodwill, net (Note 3(e))			2,503,054			2,503,054
	Deferred financing costs, net (Note 9)			6,961,231			3,411,385
		Total assets	$	189,303,115		$	113,514,791
Liabilities and Stockholders' Deficit
Current liabilities:
	Accounts payable		$	1,086,705		$	926,915
	Accrued expenses			4,248,311			5,313,094
	Deferred revenue			24,966,440			19,824,913
	Current installments of long-term debt			123,375			9,087,134
	Current installments of capital lease obligations			1,251,799			1,655,583
	Due to affiliated entities			786,644			—
		Total current liabilities		32,463,274			36,807,639
	Deferred revenue			495,160			393,187
	Long-term debt, excluding current installments (Note 9)			161,500,647			83,527,573
	Capital lease obligations, net of current installments			1,123,401			1,429,829
	Deferred income taxes			—			1,647,053
	Deferred rent (Note 16)			16,206,119			11,535,718
	Common stock put warrants (Note 10)			9,653,768			10,541,775
	Due to founding stockholders (Note 4)			2,935,192			4,212,153
		Total long term liabilities		191,914,287			113,287,288
		Total liabilities		224,377,561			150,094,927
Commitments and contingencies
Stockholders' deficit:
	10% Cumulative preferred stock; $0.01 par value. Authorized 400,000 shares; 120,872 shares issued and outstanding as of December 31, 2002. None issued and outstanding as of December 31, 2003			—			1,208,725
	Common stock, $0.01 par value. Authorized 20,000,000 shares 9,443,247 8,604,913 shares issued and outstanding as of December 31, 2003 and 2002, respectively			94,432			86,049
	Additional paid-in capital			82,920,208			72,842,183
	Accumulated other comprehensive income			14,078			1,423
	Accumulated deficit			(118,103,164	)		(110,718,516	)
		Total stockholders' deficit		(35,074,446	)		(36,580,136	)
		Total liabilities and stockholders' deficit	$	189,303,115		$	113,514,791

F-3

EQUINOX HOLDINGS, INC.

Consolidated Statements of Income

			For the years ended December 31,
			2003			2002			2001
						(restated)			(restated)
Membership fees			$	75,677,255		$	63,369,094		$	52,489,482
Personal training				24,999,924			17,709,161			15,023,607
Other revenue				15,449,506			14,196,434			11,907,117
		Total revenue		116,126,685			95,274,689			79,420,206
Expenses:
	Compensation and related			48,201,876			37,572,450			31,273,802
	Rent and occupancy			16,645,996			11,869,691			9,793,216
	General and administrative			21,280,466			15,975,858			13,378,238
	Related-party management fees			1,007,063			1,164,031			1,199,455
	Stock compensation expense			35,000			312,516			1,022,260
	Depreciation and amortization			9,749,647			6,849,914			5,785,024
		Total operating expenses		96,920,048			73,744,460			62,451,995
		Income from operations		19,206,637			21,530,229			16,968,211
Other income (expense):
	Interest expense			(33,692,518	)		(12,707,900	)		(13,297,540	)
	Interest income			132,139			7,923			148,762
	Other income (expense)			900,247			(2,869,311	)		1,187,789
		Total other expense		(32,660,132	)		(15,569,288	)		(11,960,989	)
		Income before benefit from (provision) for income taxes		(13,453,495	)		5,960,941			5,007,222
Benefit from (provision for) income taxes				6,188,608			(4,137,258	)		(2,007,507	)
		Net income (Loss)	$	(7,264,887	)	$	1,823,683		$	2,999,715

F-4

EQUINOX HOLDINGS, INC.
Consolidated Statements of Changes in Stockholders' Deficit and Comprehensive Income (Loss)
Years ended December 31, 2003, 2002 (restated) and 2001 (restated)

		Preferred shares		Preferred stock			Common shares	Common stock		Additional paid-in capital			Accumulated other comprehensive income			Retained earnings (accumulated deficit			Total
Balance, December 31, 2000 (restated)		—			—		7,632,284	$	76,323	$	71,517,133		$	37,347		$	(110,968,951	)	$	(39,338,148	)
	Net income	—			—		—		—		—			—			2,999,715			2,999,715
	Unrealized loss on available for sale securities	—			—		—		—		—			(2,750	)		—			(2,750	)
	Comprehensive income																			2,996,965
	Issuance of preferred stock to investors for cash	100,000			1,000,000		—		—		—			—			—			1,000,000
	Accrued dividends on preferred stock	9,474			94,741		—		—		—			—			(94,741	)		—
	Options granted	—			—		—		—		1,022,260			—			—			1,022,260
	2000 contingent share payment	—			—		972,629		9,726		(9,726	)		—			—			—
Balance, December 31, 2001 (restated)		109,474			1,094,741		8,604,913		86,049		72,529,667			34,597			(108,063,977	)		(34,318,923	)
	Net income	—			—		—		—		—			—			1,823,683			1,823,683
	Unrealized loss on available for sale securities	—			—		—		—		—			(33,174	)		—			(33,174	)
	Comprehensive income																			1,790,509
	Options granted	—			—		—		—		312,516			—			—			312,516
	Accrued dividends on preferred stock	11,398			113,984		—		—		—			—			(113,984	)		—
	Payment of escrowed restricted cash to former shareholders	—			—		—		—		—			—			(4,364,238	)		(4,364,238	)
Balance, December 31, 2002 (restated)		120,872			1,208,725		8,604,913		86,049		72,842,183			1,423			(110,718,516	)		(36,580,136	)
	Net loss	—			—		—		—		—			—			(7,264,887	)		(7,264,887	)
	Unrealized gain on available for sale securities	—			—		—		—		—			12,655			—			12,655
	Comprehensive loss																			(7,252,232	)
	Issuance of common stock to investors for cash	—			—		833,334		8,333		9,991,675			—			—			10,000,008
	Options exercised	—			—		5,000		50		51,350			—			—			51,400
	Options granted										35,000									35,000
	Payment of preferred capital to former shareholders	(120,872	)		(1,328,486	)														(1,328,486	)
	Accrued dividends on preferred stock				119,761												(119,761	)		—
Balance, December 31, 2003		—		$	—		9,443,247	$	94,432	$	82,920,208		$	14,078		$	118,103,164		$	(35,074,446	)

F-5

EQUINOX HOLDINGS, INC.

Consolidated Statements of Cash Flows

					For the years ended December 31,
					2003			2002			2001
								(restated)			(restated)
Cash flows from operating activities:
	Net (loss) income				$	(7,264,887	)	$	1,823,683		$	2,999,715
	Adjustments to reconcile net (loss) income to net cash provided by operating activities:
		Depreciation and amortization				9,749,647			6,849,914			5,785,024
		Allowance for doubtful accounts, net of write-offs				23,021			10,553			(223,125	)
		Interest expense				15,353,319			2,693,291			2,712,072
		Changes in fair market value of common stock put warrants				(888,007	)		2,848,652			(1,336,404	)
		Write-off of other receivables				—			169,274			—
		Stock compensation expense				35,000			312,516			1,022,260
		Accretive interest expense related to payable to founding stockholders				3,723,039			676,642			567,946
		Deferred rent				2,521,330			1,087,871			974,914
		Deferred income taxes				(6,188,608	)		2,413,257			1,859,906
		Changes in operating assets and liabilities:
			Accounts receivable—members			(58,964	)		236,901			(668,393	)
			Due (to) from affiliated entities, net			786,644			175,765			397,678
			Prepaid expenses and other current assets			(2,422,386	)		(2,989,240	)		(2,066,567	)
			Other assets			(3,436,370	)		(584,989	)		(96,382	)
			Accounts payable			159,793			(526,868	)		(744,590	)
			Accrued expenses			(1,064,780	)		347,268			2,832,233
			Deferred revenue			5,243,498			2,096,070			2,697,512
				Net cash provided by operating activities		16,271,289			17,640,560			16,713,799
Cash flows from investing activities:
	Purchases of property and equipment					(27,009,412	)		(21,376,996	)		(18,590,275	)
				Net cash used in investing activities		(27,009,412	)		(21,376,996	)		(18,590,275	)
Cash flows from financing activities:
	Payment to repurchase and retire preferred shares pursuant to the Recapitalization					(1,328,486	)		—			—
	Distributions to founding shareholder group					(5,000,000	)		—			—
	Proceeds from long-term debt					185,000,000			—			—
	Payment of deferred financing costs					(9,420,943	)		—			—
	Issuance of common stock to existing shareholders for cash					10,051,408			—			—
	Restricted cash					—			4,424,491			(237,491	)
	Payment of restricted cash to founding shareholder group					—			(4,364,238	)		—
	Repayment of notes payable					(125,898,307	)		(7,053,387	)		(47,546	)
	Repayment of capital lease obligations					(1,626,805	)		(1,540,896	)		(1,546,418	)
	Proceeds from notes payable					425,400			10,799,600			4,500,000
	Proceeds from issuance of preferred stock					—			—			1,000,000
				Net cash provided by financing activities		52,202,267			2,265,570			3,668,545
				Net (decrease) increase in cash and cash equivalents		41,464,144			(1,470,866	)		1,792,069
Cash at beginning of period						1,244,913			2,715,779			923,710
Cash at end of period					$	42,709,057		$	1,244,913		$	2,715,779
Supplemental disclosures of cash flow information:
	Cash paid during the period for:
		Interest			$	17,747,619		$	9,955,982		$	8,712,237
		Income taxes			$	1,292,680		$	1,718,000		$	1,442,619
Supplemental disclosures of noncash investing and financing activities:
	Capital lease obligations entered into for equipment				$	916,593		$	868,664		$	1,768,374
	Deferred rent capitalized during build-out				$	2,282,182		$	1,610,491		$	735,390
	Issuance of warrants pursuant to debt financing (Note 10)				$	—		$	—		$	987,912

F-6

EQUINOX HOLDINGS, INC.

Notes to Consolidated Financial Statements

(1) Description, Organization and Development of Business

(a)

Description of Business

        Equinox Holdings, Inc. (the Company) is engaged in the operation of full service fitness clubs under the trade name "Equinox Fitness Club" in New York, California, Illinois and Connecticut.

(b)

Organization and Development of Business

        The Company was formed on January 1, 1999 and consolidates the following wholly owned subsidiaries: Equinox 76^th Street, Inc.; Broadway Equinox, Inc.; Equinox 92^nd Street, Inc.; Equinox 85^th Street, Inc.; Equinox 63^rd Street, Inc.; Equinox White Plains Road, Inc.; Equinox 54^th Street, Inc.; Equinox 50^th Street, Inc.; Equinox 43^rd Street, Inc.; Equinox 44^th Street, Inc.; Equinox Wall Street, Inc.; Energy Wear, Inc.; Equinox Greenwich Avenue, Inc.; Equinox Fitness Pasadena, Inc.; Equinox Darien, Inc.; Equinox Lincoln Park, Inc.; Equinox Tribeca, Inc.; Equinox Columbus Centre, Inc.; Equinox West Hollywood, Inc.; Equinox Woodbury, Inc.; Equinox Gold Coast, Inc.; Equinox Tribeca Office, Inc.; Equinox Highland Park, Inc.; Equinox Wellness Center; Westchester Health and Fitness, Inc.; Equinox Management Company, Inc.; and The Equinox Group, Inc.

        During 2001, the Company opened fitness clubs in Greenwich Village (New York City) and in Pasadena, California. Additionally, the Company formed the following companies for which related fitness clubs remained unopened as of December 31, 2002: Equinox Tribeca, Inc. and Equinox Columbus Centre, Inc.

        During 2002, the Company opened fitness clubs in Darien, Connecticut and in Lincoln Park in Chicago, Illinois. Additionally, the Company formed the following companies for which related fitness clubs (and corporate office in the case of Equinox Tribeca Office, Inc.) remained unopened as of December 31, 2002: Equinox West Hollywood, Inc.; Equinox Woodbury, Inc.; Equinox Gold Coast, Inc.; Equinox Tribeca Office, Inc.; and Equinox Highland Park, Inc.

        During 2003, the Company opened fitness clubs in Tribeca (New York City), Woodbury, New York, West Hollywood, California, North Michigan in Chicago, Illinois and the corporate offices co-located with the Tribeca fitness club. The Company also formed the following companies for which related fitness clubs remained unopened as of December 31, 2003: Equinox Roslyn, Inc., Equinox Pine Street, Inc., Equinox Fitness Santa Monica, Inc., and Equinox Mamaroneck, Inc.

(2) Restatement of Previously Issued Financial Statements

        The Company has restated its balance sheet and statement of operations and stockholder's equity as of December 31, 2002 and for the years ended December 31, 2002 and 2001. The adjustment reduced the amounts of membership fees revenue recognized by $609,722 and $196,525 in 2002 and 2001, respectively. In addition $396,843 of previously recognized personal training revenue was prematurely recognized in 2002 and has been correctly reported in 2003. Revenues from members that were billed monthly were previously recognized when billed. The Company reviewed this practice and determined that it had incorrectly recorded revenue as monthly members were being billed one month in advance. As a result of this finding, the Company determined that it is more appropriate to recognize revenue from its monthly members in the month that they use the facilities. These revisions impacted previously reported deferred revenue, the beginning and ending accumulated deficit, deferred taxes, total revenue, income from operations, income before provision for income taxes and net income in each period. The effect of the adjustments prior to the year ending December 31, 2001 and impact to the Company's accumulated deficit as of January 1, 2001 was $1,558,769.

F-7

        The impacts to the Company's Statements of Operations are as follows:

		2002			2001
Total revenues as previously reported		$	96,281,254		$	79,616,731
Adjustment:
	Membership revenue		(609,722	)		(196,525	)
	Personal training revenue		(396,843	)		—
	Total revenues as restated	$	95,274,689		$	79,420,206
Income from operations as previously reported		$	22,536,794		$	17,164,736
Adjustment:
	Membership revenue		(609,722	)		(196,525	)
	Personal training revenue		(396,843	)		—
Income from operations, as restated		$	21,530,229		$	16,968,211
Income before provision for income taxes, as previously reported		$	6,967,506		$	5,203,747
Adjustment:
	Membership revenue		(609,722	)		(196,525	)
	Personal training revenue		(396,843	)		—
Income before provision for income taxes, as restated		$	5,960,941		$	5,007,222
Provision for income tax, as previously reported		$	(4,590,212	)	$	(2,095,943	)
Adjustment:
	Tax effect of reporting membership and personal training revenues		452,954			88,436
Provision for income tax, as restated		$	(4,137,258	)	$	(2,007,507	)
	Net income, as previously reported	$	2,377,294		$	3,107,804
Adjustment:
	Membership revenue		(609,722	)		(196,525	)
	Personal training revenue		(396,843	)		—
	Income tax adjustment		452,954			88,436
	Net income, as restated	$	1,823,683		$	2,999,715

F-8

        The impacts to the Company's Consolidated Balance Sheets are as follows:

		2002			2001
	Current portion of deferred revenue, as previously reported	$	15,787,694		$	14,798,650
Adjustment:
	Membership revenue		3,640,376			3,030,651
	Personal training revenue		396,843			—
	Current portion of deferred revenue, as restated	$	19,824,913		$	17,829,301
	Current portion of deferred income taxes, as previously reported	$	543,373		$	1,148,802
Adjustment:
	Tax effect of reporting membership and personal training revenues		1,816,750			1,363,793
	Current portion of deferred income taxes, as restated	$	2,360,123		$	2,512,595
	Accumulated deficit, as previously reported	$	(108,498,047	)	$	(106,397,119	)
Adjustment:
	Membership revenue		(3,640,376	)		(3,030,651	)
	Personal training revenue		(396,843	)		—
	Current deferred income tax		1,816,750			1,363,793
	Accumulated deficit, as restated	$	(110,718,516	)	$	(108,063,977	)

        There was no change in the Company's net operating cash flows, net cash used in investing activities or net cash provided from financing activities included in the Company's Statement of Cash Flows in 2002 and 2001. The impacts to the Company's cash flows within the operating activities are as follows:

		2002			2001
	Net income previously reported	$	2,377,294		$	3,107,804
Adjustment:
	Membership revenue		(609,722	)		(196,525	)
	Personal training revenue		(396,843	)		—
	Tax effect of reporting membership and other revenues		452,954			88,436
	Restated net income	$	1,823,683		$	2,999,715
	Deferred income taxes, as previously reported	$	2,866,211		$	1,948,342
Adjustment:
	Tax effect of reporting membership and other revenues		(452,954	)		(88,436	)
	Deferred income taxes, as restated	$	2,413,257		$	1,859,906
	Deferred revenue, as previously reported	$	1,089,505		$	2,500,987
Adjustment:
	Membership revenue		609,722			196,525
	Personal training revenue		396,843			—
	Deferred revenue, as restated	$	2,096,070		$	2,697,512

F-9

(3) Summary of Significant Accounting Policies

(a)

Principles of Consolidation

        The consolidated financial statements include the accounts of the Company and its subsidiaries, all of which are wholly-owned. All inter-company accounts and transactions have been eliminated in consolidation.

(b)

Cash and Cash Equivalents

        The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents.

(c)

Marketable Investment Securities

        The Company classifies its investments in marketable investment securities, which include only mutual fund investments, as available-for-sale in accordance with Statement of Financial Accounting Standards (SFAS) No. 115, Accounting for Certain Investments in Debt and Equity Securities. Such securities are reported at fair value, with unrealized gains and losses included in equity. Gains and losses on the disposition of securities are recognized in earnings using the specific identification method in the period in which they occur. A decline, which is deemed to be other than temporary, in the market value of any available-for-sale security below cost results in a reduction in the carrying amount to fair value. Such impairment would be charged to earnings and would establish a new cost basis for the security.

(d)

Long-Lived Assets

        In accordance with SFAS No. 144, the Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets in question may not be recoverable. The Company reviews its long-lived assets at the individual fitness club level and groups its long-lived assets according to asset class (for machinery and equipment), and by location (for facilities) for purposes of assessing potential impairment. Impairment is measured based upon a comparison of the expected undiscounted future cash flows for each location to the carrying amount of asset groupings. Prior to the adoption of SFAS No. 144, the Company accounted for long-lived assets in accordance with SFAS No. 121, Accounting for Impairment of Long-Lived Assets to be Disposed of. There were no impairment charges recorded on long-lived assets.

(e)

Goodwill, Net

        The Company accounts for goodwill under SFAS No. 142, Goodwill and other Intangible Assets. Under SFAS No. 142, goodwill and intangible assets with indefinite lives are no longer amortized but are reviewed annually (or more frequently, if impairment indicators arise) for impairment. Separable intangible assets that are not deemed to have indefinite lives are amortized over their useful lives (but with no maximum life).

        The Company adopted this standard effective January 1, 2002 and, accordingly, those intangible assets that continue to be classified as goodwill are not amortized. The Company assessed its intangible assets to identify goodwill separately from other identifiable intangibles during 2002. No adjustment was deemed necessary. In accordance with SFAS No. 142, intangible assets, including purchased goodwill, are evaluated periodically for impairment. Prior to the adoption of SFAS No. 142, goodwill was being amortized over 15 years. Amortization of goodwill (which arose from the Company's acquisition of

F-10

Energy Wear in December of 2000) was $178,790 in 2001. Goodwill, net is $2.5 million at December 31, 2003 and 2002.

        An independent valuation firm performed the Company's SFAS 142 evaluation as of the annual impairment testing date of December 31, 2003. The evaluation utilized an income valuation approach and contains reasonable and supportable assumptions and projections and reflect management's best estimate of future cash flows. The valuation firm's capitalization of cash flow valuation used a range of return rates that represented the Company's cost of capital and included an evaluation relative to the value of other relevant companies within the reporting unit's industry. The assumptions utilized by in these evaluations are consistent with those utilized in the Company's annual planning process. If the assumptions and estimates underlying the goodwill impairment evaluation are not achieved, the amount of the impairment could be adversely affected. Future impairment tests will be performed at least annually in conjunction with the Company's annual budgeting and forecasting process, with any impairment classified as an operating expense.

(f)

Restricted Cash

        In accordance with a cash escrow agreement (the Escrow Agreement), the Company had restricted $4,424,491 of its cash (including accrued interest) at December 31, 2001 to secure the former shareholder group's indemnification obligations under the Recapitalization agreement (see Note 4). The Escrow Agreement expired on March 15, 2002, and these escrowed funds were remitted to the former shareholders. The Company recorded an additional charge to stockholders' equity to reflect the resolution of this contingent portion of the original share purchase in the Recapitalization. At December 31, 2003, the Company has $3,717,258 in cash collateral located in other assets related to continuing letters of credit issued during 2003.

(g)

Derivative Instruments

        The Company accounts for its derivative financial instruments under SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities. SFAS No. 133, as amended by SFAS No. 137 and SFAS No. 138, became effective for the Company as of January 1, 2001.

        In May 2001, the Company entered into an interest rate swap agreement with a counterparty relating to the Company's term loan and revolving loan commitment. The swap agreement converted $15 million from floating rates to a fixed rate of 4.27% per annum. The net payments or receipts from this interest rate swap have been recorded as part of interest expense. The Company recorded a loss of $148,615 for the mark-to-market adjustment of the derivative instrument in the statement of income for 2001. The agreement expired on April 5, 2002 and the Company recorded a gain of $148,615 for the mark to market adjustment in the Statement of Income for 2002. There were no derivative instruments in effect as of December 31, 2002 and 2003.

(h)

Property and Equipment

        Property and equipment is stated at cost. Depreciation is calculated on a straight-line basis over the estimated useful life except leasehold improvements. For leasehold improvements, amortization is

F-11

calculated on a straight-line basis over the shorter of the estimated useful life or the lease term of the related asset. The estimated useful lives are as follows:

Leasehold improvements	Shorter of term of lease or useful life
Fitness equipment	5 years
Computer equipment and software	5 years
Other equipment	5 years
Office equipment	5 to 7 years
Furniture and fixtures	7 years

        Leased equipment meeting certain criteria is capitalized and the present value of the related lease payments is recorded as a liability. Amortization of capitalized leased assets is computed on the straight-line method over the term of the lease. Interest costs and rents incurred during the construction period of the Company's facilities are capitalized as leasehold improvements.

(i)

Accounting for Leases

        The Company has entered into various operating leases for property and equipment. All leases are payable in monthly installments, and rent expense is accounted for on a straight-line basis over the term of the lease. The Company capitalizes rent during the build out phase of its facilities.

(j)

Comprehensive Income (Loss)

        The Company complies with the provisions of SFAS No. 130, Reporting Comprehensive Income, which requires companies to report all changes in equity during a period, except those resulting from investments by owners and distributions to owners. Comprehensive income (loss) is the total of net income and all other nonowner changes in equity (other comprehensive income) such as unrealized gains or losses on securities classified as available-for-sale. Comprehensive income (loss) was approximately $(7.3) million, $1.8 million and $3.0 million for the years ended December 31, 2003, 2002 and 2001, respectively.

(k)

Start-Up Costs

        The Company complies with the provisions of Statement of Position (SOP) 98-5, Reporting on the Costs of Start-Up Activities. SOP 98-5 requires costs of start-up activities and organization costs to be expensed as incurred. Pursuant to this standard, the Company has expensed all start-up costs related to newly formed clubs.

(l)

Deferred Financing Costs

        Deferred financing costs which resulted from the Company's procurement of long-term debt pursuant to the Recapitalization, (see note 4(a)) had been amortized as interest expense over the life of the credit agreement. In December 2003, upon the private offering (see note 9(c)) the balance of the Company's deferred financing costs of $4.6 million was expensed. In connection with our 2003 private offering and new senior secured revolving credit facility, approximately $7.0 million in deferred financing costs was capitalized and will be expensed through December 2009. The 2003 expense related to the amortization of the new deferred financing costs for the new senior notes issued in December 2003 was $51,000.

F-12

(m)

Revenue and Expense Recognition

        As club memberships are sold, each member is charged an initiation fee as well as membership dues. The initiation fee is due up front and amortized over an estimated membership life of 24 months, commencing with the first month of the new member contract. The initial contract period is twelve months. Membership dues for members who pay annual dues up-front (both new membership sales and membership renewals) are amortized over a 12-month period commencing with the first month of the new member contract or renewal contract, as applicable. Membership dues for members who pay monthly are recognized in the period in which facility access is provided.

        Sales commissions and other direct expenditures paid with regard to deferred membership revenue are amortized over the period in which the related revenue is recognized as income. Deferred costs do not exceed related deferred revenue for the periods presented. Such costs are amortized over the life of the membership agreement. Revenues for ancillary services are recognized as services are performed. The Company recognizes revenue from merchandise sales upon delivery to the customer. Other income, which consists of license fees paid to the Company under concession and operating agreements, is recognized on a periodic basis according to these agreements.

(n)

Income Taxes

        The Company accounts for income taxes under the asset and liability method in accordance with SFAS No. 109, Accounting for Income Taxes. Under the asset and liability method, deferred income tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement and tax bases of existing assets and liabilities and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Differences between assets and liabilities for financial statement and tax return purposes are principally related to deferred revenue and depreciable lives of assets.

(o)

Fair Value of Financial Instruments

        The Company complies with the provisions of SFAS No. 107, Disclosures about Fair Value of Financial Instruments. The carrying value of all financial instruments reflected in the accompanying consolidated balance sheets approximated fair value at December 31, 2003 and 2002.

(p)

Stock-Based Compensation

        In December 2002, the FASB issued SFAS No. 148, Accounting for Stock-Based Compensation-Transition and Disclosure (SFAS No. 148). SFAS No. 148 provides alternative methods of transition for a voluntary change to the fair value method of accounting for stock-based employee compensation as originally provided by SFAS No. 123, Accounting for Stock-Based Compensation. Additionally, SFAS No. 148 amends the disclosure requirements of SFAS No. 123 to require prominent disclosure in both annual and interim financial statements about the method of accounting for stock-based compensation and the effect of the method used on reported results. The transitional requirements of SFAS No. 148 are effective for all financial statements for fiscal years ending after December 12, 2002. The application of the disclosure portion of this standard has had no impact on our consolidated financial position or results of operations. As permitted under SFAS No 123, the Company applies the intrinsic

F-13

value-based method prescribed by Accounting Principles Board Opinion (APB) No. 25, Accounting for Stock Issued to Employees and related interpretations) including FASB Interpretation No. 44, Accounting for Certain Transactions Involving Stock Compensation—an interpretation of APB No. 25, issued in March 2000, in accounting for its stock compensation plans. Under APB No. 25, the Company generally does not recognize compensation expense upon the issuance of its stock options because the exercise price equals the estimated fair market value at grant date.

(q)

Concentration of Credit Risk

        The Company's mix of accounts receivable from members is diverse. Approximately 88.7% and 92.6% of the Company's revenues are derived from operations in the Metropolitan New York area for the years ended December 31, 2003 and 2002, respectively.

(r)

Use of Estimates

        The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions relating to the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

(s)

Recently Issued Accounting Pronouncements

        In June 2001, the FASB issued SFAS No. 143, Accounting for Asset Retirement Obligations, which establishes an accounting standard requiring the recording of the fair value of liabilities associated with the retirement of long-lived assets in the period in which they are incurred. The Company adopted SFAS No. 143 on January 1, 2003 and has determined that the adoption of SFAS No. 143 had no material effect on the Company's consolidated financial statements.

        On January 17, 2003, the FASB issued FASB Interpretation No. 46, "Consolidation of Variable Interest Entities" ("FIN 46"). Such Interpretation addresses the consolidation of variable interest entities ("VIEs"), including special purpose entities ("SPEs"), that are not controlled through voting interests or in which the equity investors do not bear the residual economic risks and rewards. The provisions of FIN 46 were effective immediately for transactions entered into by the Company subsequent to January 31, 2003 and became effective for all other transactions as of July 1, 2003. However, in October 2003, the FASB permitted companies to defer the July 1, 2003 effective date to December 31, 2003, in whole or in part. On December 24, 2003, the FASB issued a complete replacement of FIN 46 ("FIN 46R"), which clarified certain complexities of FIN 46 and generally requires adoption no later than December 31, 2003 for entities that were considered SPEs under previous guidance, and no later than March 31, 2004 for all other entities.

        Management believes that upon adoption of FIN 46 in the second quarter of 2004 the Company would consolidate Eclipse Development Inc. ("Eclipse"). Eclipse, wholly owned by Mr. Paul Boardman, provides an exclusive service to the Company for the site selection, acquisition, design, construction and maintenance services of its clubs. A master service agreement prohibits Eclipse and Mr. Boardman from performing services for anyone that competes with the Company's facilities. Eclipse is thinly capitalized and is highly dependent upon the business provided by the Company. Management believes that the impact on the consolidated balance sheet for 2004 would not be material as a result of this change in accounting principle since the historical payments made to Eclipse have been principally for

F-14

capital expenditures. Further, the Company believes that the stock compensation costs recorded by the Company would decrease as a result of no longer treating Mr. Boardman and various other Eclipse employees as a non-employees of Equinox Holdings, Inc. Such costs amounted to $35,000, $312,516 and $1,022,260 for the years ended December 31, 2003, 2002 and 2001, respectively.

        Effective July 1, 2003, the company adopted the FASB's consensus on EITF Issue No. 00-21, "Accounting for Revenue Arrangements with Multiple Deliverables." This issue addresses how to account for arrangements that may involve the delivery or performance of multiple products, services, and/or rights to use assets. The final consensus of this issue is applicable to agreements entered into in fiscal periods beginning after June 15, 2003. Adoption of this issue had no material impact on the company's consolidated financial position, consolidated results of operations, or liquidity.

(t)

Reclassifications

        Certain reclassifications have been made to the 2001 and 2002 consolidated financial statements to conform to the 2003 presentation.

(4) Recapitalization

(a)

Repurchase of Shares and Distribution

        As part of a transaction (the "Recapitalization") that was completed on December 15, 2000 (the "Closing Date"), the Company initially repurchased 10,370,760 shares of its then outstanding common stock from the founding stockholder group (the Founding Stockholders) for aggregate consideration of $99,127,665, retired those shares and its existing stock then held in treasury and paid $17,064,918 in net distributions ($19,448,749 less $2,383,831 owed to the Company by certain Founding Stockholders) to the same group, which does not include distributions made prior to the Recapitalization. The Company then issued new shares to other shareholders (the Incoming Investors) for net aggregate consideration of $66,445,134 to complete the initial Recapitalization transaction. The Company funded the Recapitalization with a combination of financing arrangements (see note 9) and cash from the Incoming Investors.

        During 2001, pursuant to the 2000 contingent share payment, the Company released an additional 972,629 shares of common stock, previously escrowed, to the Founding Stockholders based on the resolution of the contingency associated with operating results for 2000 which were agreed to in 2001, resulting in a net repurchase of 9,398,131 shares of common stock in the Recapitalization for the original aggregate consideration of $99,127,655. The Founding Stockholders subsequently sold 897,811 shares of common stock directly to the Incoming Investors, resulting in final adjusted share ownership of 7,941,024 shares by the Incoming Investors and 663,889 shares by the Founding Shareholders, or approximately 92% and 8%, respectively.

        As described in note 4(f), pursuant to the Escrow Agreement, the Company had retained restricted cash to secure indemnification obligations of the Founding Stockholders. During 2002, these contingent obligations were met, and the restricted cash in the amount of $4,364,238 was remitted to the Founding Stockholders, with a corresponding charge to equity.

F-15

(b)

Repurchase of Options

        Pursuant to the Recapitalization, all stock option holders became fully vested. Each such option holder existing at the Closing Date had the option of either: i) rolling over these options into their equivalent in the newly recapitalized company, or ii) cashing out such options at a defined value per option and obtaining options in the recapitalized company equal to a defined value of their pre-existing options. Due to the acceleration of vesting, the entire amount of deferred compensation was charged to expense in 2000.

(c)

Costs of Recapitalization

        In connection with the 2000 Recapitalization, the Company recorded one-time charges to its consolidated statements of income of $5,608,142 primarily related to financing expenses, legal and professional fees that could not be capitalized and certain management compensation costs as defined in the Recapitalization agreement. Furthermore, the Company charged $5,969,429 against additional paid-in capital for certain fees directly attributed to the new equity investment.

(d)

2004 Contingent Additional Cash Payment

        In accordance with the Recapitalization agreement, if certain earnings thresholds, as defined, were met in 2004, the Company would be obligated to pay additional cash consideration up to $10.0 million to the Founding Stockholders.

(e)

Deferred Payment

        In accordance with the Recapitalization agreement a cash payment of $5,000,000 was paid in 2003 to the Founding Stockholders as additional consideration for the repurchase of their shares.

F-16

(f)

Exit Payment

        Upon the earlier of a qualified public offering, a change of control, or December 15, 2010, the Company will pay $10,000,000 as additional consideration to the Founding Stockholders provided that the Company has satisfied its obligations under the Debt Financing (defined as the term loan and revolving loan commitment (see note 9(a)) and the Senior Subordinated Notes. The Company must pay an additional $5.0 million at the same time if the internal rate of return of our equity sponsors exceeds a specified amount. In connection with the Recapitalization, the Company has recorded the present value of its obligation to the Founding Shareholders as a long-term liability as it concluded that the satisfaction of its obligations under the Debt Financing represented a de facto subordination and that the obligation to the Founding Stockholders would ultimately be paid. As such, the Company has recorded the present value of the obligation on the accompanying balance sheets and the accretion in value as non-cash interest expense of approximately $471,509, $395,767 and $332,190 in 2003, 2002 and 2001, respectively. The Company used a discount rate of 17% to determine the present value of the liability, as that rate represented the Company's weighted average cost of capital at that time.

(g)

Non-Competition Agreements

        In accordance with the 2001 Recapitalization agreement, certain of the Founding Stockholders have agreed to a non-competition period of three years.

(5) Prepaid Expenses and Other Current Assets

	December 31,
	2003		2002
Commissions	$	1,556,487	$	1,215,190
Insurance		1,007,095		341,696
Inventory		695,135		506,959
Income taxes		5,004,330		3,684,574
Other		706,702		798,944
	$	8,969,749	$	6,547,363

(6) Property and Equipment

        Property and equipment, net, consists of:

	December 31,
	2003			2002
Construction-in-progress	$	2,626,908		$	1,819,083
Leasehold improvements		121,765,313			98,184,739
Fitness equipment		11,395,189			9,388,340
Furniture and fixtures		4,283,658			4,216,443
Computer equipment		5,339,691			3,342,819
Other equipment		3,927,621			2,781,690
Office equipment		1,101,522			749,047
		150,439,902			120,482,161
Less accumulated depreciation and amortization		(35,812,152	)		(26,179,843	)
	$	114,627,750		$	94,302,318

F-17

        Property and equipment includes amounts acquired under capital leases of $2,721,966 and $3,473,932 net of accumulated depreciation of $4,578,485 and $3,144,582 at December 31, 2003 and 2002, respectively. Depreciation expense was $9.7 million, $6.8 million and $5.8 million in 2003, 2002 and 2001, respectively. Interest costs incurred in the construction of facilities, totaling $561,067, $314,896 and $436,733 for the years ended December 31, 2003, 2002 and 2001, respectively, have been capitalized. Rent incurred during the construction period is capitalized as a leasehold improvement.

(7) Accrued Expenses

        Accrued expenses consist of:

	December 31,
	2003		2002
Interest expense	$	719,387	$	1,689,150
Payroll and related benefits and taxes		924,336		1,941,709
Other		2,604,588		1,682,235
	$	4,248,311	$	5,313,094

(8) Capital Lease Obligations

        The Company leases fitness equipment under capital leases that expire at various dates through 2008. The leases require monthly payments of principal and interest imputed at interest rates ranging from approximately 5% to 9.5% per annum.

        Future minimum lease payments under capital leases as of December 31, 2003, are as follows:

2004		$	1,370,916
2005			661,599
2006			271,635
2007			211,238
2008			41,031
Thereafter			—
			2,556,419
Less amount representing interest			(181,219	)
			2,375,200
Less current installments			(1,251,799	)
	Capital lease obligations, less current installments	$	1,123,401

(9) Long-Term Debt

(a)

Credit Agreement

        Pursuant to the Recapitalization (see note 4(a)), the Company paid off its then-existing debt and entered into a new credit agreement with several financial institutions, with one bank acting as administrative agent for the others (the Credit Agreement). Borrowings under the Credit Agreement,

F-18

which are in the form of a term loan and revolving loan commitment (i) and (ii) in Note 9(c) below) are collateralized by certain tangible and intangible assets of the Company and are guaranteed by each wholly owned subsidiary of the Company. The Credit Agreement allows for maximum borrowings of $37,000,000 for the term loan and $23,000,000 for the revolving loan commitment. The Credit Agreement calls for maintenance of certain covenants. This Credit agreement was repaid pursuant to the December 2003 private offering.

        In December 2003, the Company entered into a new revolving credit facility with several financial institutions with one bank acting as administrative agent for the others (the Credit Agreement). Borrowings under the Credit Agreement, which are in the form of a term loan and revolving loan commitment are collateralized by certain assets of the Company and are guaranteed by each wholly owned subsidiary of the Company. The Credit Agreement allows for maximum borrowings of $25.0 million reduced by up to $3.5 million of outstanding cash collateralized standby letters of credit under this facility or issued by another institution. The Credit Agreement calls for maintenance of certain financial and operating covenants. The Company is in compliance with its financial and operating covenants and has not borrowed any funds from this credit agreement as of December 31, 2003. The new revolving credit facility expires on December 16, 2008

        The amounts borrowed bear interest, at the Company's option, at either the prime rate plus an applicable margin or if a LIBOR loan then at the sum of the LIBOR plus the applicable LIBOR margin.

        Under the bank credit facilities, the Company has agreed to pay commitment fees equal to the difference between the loan commitment and the average daily balance of the loan outstanding multiplied by the applicable unused line rate, as defined in the credit agreement.

        In April 2004, the Company issued a $1.5 million irrevocable standby letter of credit to a landlord in connection with a new fitness club due to open in late 2004.

(b)

Senior Subordinated Note and Warrant Purchase Agreement

        Pursuant to the Recapitalization in 2000 (see note 4(a)), the Company entered into a Senior Subordinated Note and Warrant Purchase Agreement (the Subordinated Note Agreement) with several financial institutions under which borrowings are collateralized by certain tangible and intangible assets of the Company and are guaranteed by each wholly owned subsidiary of the Company. The Subordinated Note Agreement ((iii) below) allowed for maximum borrowings of $50,000,000 (plus additional principal accrued as described in (c) below) and called for maintenance of certain covenants. The Senior Subordinated Note and Warrant Purchase Agreement were repaid pursuant to the 2003 $160.0 million debt.

        In addition, $5,268,473 of direct costs related to these agreements was capitalized as deferred financing costs and had been amortized over the remaining terms of the respective agreements. Amortization charged as non-cash interest expense was approximately $875,000 in 2001 and 2002, respectively, and the balance was expensed during 2003 upon repayment.

        Furthermore, as described in Note 4(f), the Company is obligated to make cash payments of $10,000,000 to $15,000,000 to the Founding Stockholders as additional consideration for the repurchase of their shares as described more fully in Notes 4(e) and 4(f). During 2003, as described in Note 4(e), $5.0 million was paid in 2003.

F-19

        In January 2003 a new lender purchased $25.0 million of Senior Notes, which were to mature in December 2007. The Senior Notes were senior to the Senior Subordinated Notes and subordinated to the Company's other credit facility. Interest on the Senior Notes was payable quarterly in cash at a rate of the greater of prime rate or 10% per annum. In addition, the Senior Notes accrued pay-in-kind interest quarterly at a rate of 3.25% per annum. In addition to amendment fees paid at closing to existing lenders, the Company agreed to increase the interest rate payable under the Credit agreement and to increase the pay-in-kind interest for the Senior Subordinated Notes. The lenders under the Credit Agreement also agreed to modify the repayment terms for the Term Loan, reducing the amount due in 2003 from $9.0 million to $3.25 million and the amount due in 2004 from $10.0 million to $7.0 million, with the remaining principal outstanding due in 2005. The January 2003 Senior Notes were repaid pursuant to the December 2003 private offering (see note 9(c)).

(c)

9% Senior Notes

        In December 2003 the Company completed a private offering of $160,000,000 principal amount of 9% Senior Notes due 2009. The net proceeds from the Senior Notes totaled approximately $152.0 million. The transaction fees of approximately $7.0 million were accounted for as deferred financing costs. Interest is payable semi-annually in June and December at the annual rate of 9% and the notes mature on December 15, 2009. Prior to December 15, 2006 we may redeem up to 35% of the aggregate principal amount of the notes with the net proceeds of one or more public equity offerings at 109% so long as at least 65% of the aggregate principal amount of the notes issued remains outstanding. Upon a change of control, holders may require us to repurchase all, or a portion of their notes at 101% of the principal amount plus accrued interest.

        Beginning in December 2006, the notes are redeemable in whole or in part at the option of the Company, at 104.5% in 2006 with annual reductions to 102.25% in 2007 and 100% in 2008 and thereafter, plus accrued and unpaid interest, subject to certain conditions.

        The Company has agreed to use its reasonable best efforts to consummate, within 211 days after the issue date of the notes, an offer to exchange the 9% Senior Notes for registered notes with substantially identical terms to those notes, except that the registered exchange notes will generally be freely transferable in certain circumstances, and to file and cause to become effective a shelf registration statement with respect to the resale of the registered exchange notes. Under certain circumstances if the Company is not in compliance with these obligations, the Company will be required to pay additional interest for the period it is not in compliance. If (i) the Company fails to file any of the registration statements required by the Registration Rights Agreement on or before the date specified for such filing, (ii) any of such registration statements are not declared effective by the SEC on or prior to the date specified for such effectiveness (the "Effectiveness Target Date"), subject to certain limited exceptions, (iii) we fail to consummate the Exchange Offer within 45 days of the Effectiveness Target Date with respect to the Exchange Offer Registration Statement, or (iv) the Shelf Registration Statement or the Exchange Offer Registration Statement is declared effective but thereafter, subject to certain limited exceptions, ceases to be effective or usable in connection with the Exchange Offer or resale of Transfer Restricted Notes, as the case may be, during the periods specified in the Registration Rights Agreement (each such event referred to in clauses (i) through (iv) above, a "Registration Default"), then we will pay additional interest ("Additional Interest") in cash to each holder of Transfer Restricted Notes, with respect to the first 90-day period (or portion thereof) while a Registration Default is continuing immediately following the occurrence of such Registration Default,

F-20

in an amount equal to 0.25% per annum of the principal amount of the notes. The amount of Additional Interest will increase by an additional 0.25% per annum of the principal amount of the notes for each subsequent 90-day period (or portion thereof) while a Registration Default is continuing until all Registration Defaults have been cured, up to a maximum amount of 1.00% per annum of the principal amount of the notes. Following the cure of a particular Registration Default, the accrual of Additional Interest with respect to such Registration Default will cease and the interest rate will revert to the prior rate.

        The note indenture under which the Senior Notes were issued contains certain covenants that, among other things, limit the Company's ability to incur additional indebtedness, issue or sell preferred stock, make certain other restricted payments, make investments, engage in transactions with affiliates, incur liens, engage in asset sales and certain dividend payments. The Company is in compliance with its financial and operating covenants of its financing arrangements as of December 31, 2003.

        The Senior Notes and the bank credit facility, are unsecured and rank equally with our existing and future subordinated obligations and senior in right of payment to all subordinated obligations.

        The proceeds of the private offering were used to:

•

repay the entire principal amount of approximately $27.6 million under the prior credit agreement and terminated all related commitments;



•

repay the entire outstanding principal amount of $25.3 million under the existing senior notes due 2007, plus accrued and unpaid interest;



•

repay the entire principal amount of $52.5 million under the existing senior subordinated notes due 2008, plus accrued and unpaid interest;



•

redeem approximately $1.3 million of our preferred stock and;



•

pay a contractually required amount of $5.0 million to our founding stockholders.

        Long-term debt consists of the following outstanding amounts:

	December 31,
	2003		2002
Term loan (i)	$	—	30,000,000
Revolving loan commitment (ii)		—	16,845,098
Senior subordinated notes (iii)		—	51,391,279
Notes payable (iv)		1,624,022	1,293,636
9% Senior Notes due 2009 (v)		160,000,000	—
		161,624,022	99,530,013
Less warrant-related discount, net of accretion		—	(6,915,306	)
	$	161,624,022	92,614,707

(i)

As of December 31, 2002, the Company had a term loan with several financial institutions. The Credit Agreement matures on December 15, 2005 and, accordingly, has been classified as long-term in the accompanying consolidated balance sheets, net of its current installments. The Company is charged interest at the Eurodollar Rate plus a margin of 3% (an aggregate of 4.4375% as of December 31, 2002). The term loan was repaid as of December 31, 2003.

F-21

(ii)

As of December 31, 2002, the Company had a revolving credit agreement with the same financial institutions (see (i) above). The Credit Agreement matures on December 15, 2005 and, accordingly, has been classified as long-term in the accompanying consolidated balance sheets. The Company is charged interest at the Eurodollar Rate plus a margin of 3% (an aggregate of 4.5729% as of December 31, 2002). This revolving credit agreement was repaid as of December 31, 2003.



(iii)

The Senior Subordinated Notes (the "Notes") accrue cash interest, payable quarterly, at a rate of 12.5% per annum, commencing on April 15, 2001. In addition, the Notes accrue additional principal at an amount of 1.5% per annum, which is added quarterly to the principal amount of the notes, also commencing on April 15, 2001. The Notes and any unpaid accrued interest thereon mature on December 15, 2008, and, accordingly, have been classified as long-term in the accompanying consolidated balance sheets. These Notes were repaid as of December 31, 2003.



(iv)

Notes payable consist of three notes payable to unrelated parties. They bear interest at imputed rates ranging from 8.5% to 12% per annum and are payable in monthly installments through 2018.



(v)

The 9% Senior Notes due 2009 and any unpaid accrued interest thereon mature on December 15, 2009, and, accordingly, have been classified as long-term in the accompanying consolidated balance sheets.

        Aggregate maturities of long-term debt as of December 31, 2003, are as follows:

Year ending December 31:
	2004			123,375
	2005			136,909
	2006			108,307
	2007			73,417
	2008			80,336
	Thereafter			161,101,678
				161,624,022
	Less:
		Current installments		(123,375	)
			Long-term debt, net of current installments	161,500,647

(10) Common Stock Put Warrants

        Pursuant to the Subordinated Note Agreement, the Company issued, to holders of its senior subordinated notes, warrants to purchase 879,214 shares of its common stock at an exercise price of $0.01 per share. The warrants are, under certain conditions, redeemable in cash at the option of the holder or by surrender of the Company's senior subordinated notes due December 15, 2008 (the "Senior Subordinated Notes"). If the Company does not complete a qualified initial public offering of common stock, as defined, by December 2006, then at such time or any time thereafter, the warrant holders may put 100% of their warrants to the Company, which would have 60 days to redeem the warrants at fair market value. In the event that the Company does not redeem the warrant within 60 days, all of the rights represented by the warrant shall convert automatically into an unsecured junior subordinated obligation. This obligation would be payable at the earlier of (i) the maturity of the Senior Subordinated Notes or (ii) refinancing of senior debt, with interest accruing quarterly at 14%

F-22

per annum, increasing by one percent up to 16% for each quarter that the obligation is not repaid. If the Company does not complete a qualified public offering by December 2007, the Company may call the warrants and repurchase all, but not less than all, of the warrant at fair market value.

        The fair value of these warrants at the date of issuance was $9,029,528, which reduced long-term debt in the accompanying consolidated balance sheet. This amount is being accreted as additional interest expense using the effective interest rate over the term of the Senior Subordinated Notes, which mature on December 15, 2008. Accretion charged as non-cash interest was approximately $1.0 million in fiscal 2001 and 2002 and 2003.

        Based on the net-cash settlement requirement, the Company has recorded the warrants as a liability. The fair market value of these warrants is shown as a long-term liability in the accompanying consolidated balance sheets. Changes in the fair market value of the warrant are marked to market with the adjustment shown as other income (expense) in the consolidated statement of income as follows: $888,007, ($2,848,652) and $1,187,789, for the years ended December 31, 2003 and 2002 and 2001, respectively.

(11) Preferred Stock

        During 2001, the Company sold 100,000 shares of preferred stock to investors for cash of $1,000,000. The preferred stock is cumulative with dividends payable in kind at a rate of 2.5% per quarter, which accordingly have been recognized periodically and added to preferred stock in the accompanying financial statements. The preferred stock has no conversion features and allows for an optional redemption at face value by the Company at any time. The preferred stock must be redeemed at face value upon an exit event (as defined in the Recapitalization agreement), provided that all payments to the founding stockholders have been satisfied and that such redemption is permitted by appropriate debt agreements. The outstanding preferred stock was redeemed by the Company in December 2003 for approximately $1.3 million.

(12) Common Stock

        In January 2003, the Company completed a financing transaction in which the existing shareholders purchased 833,334 shares of common stock for $10.0 million. In addition options to purchase 5,000 shares of common stock was exercised during 2003.

(13) Income Taxes

        The provision for (benefit from) income taxes is comprised of the following:

			Fiscal years ended December 31,
			2003			2002	2001
Current:
	Federal		$	—		1,297,361	—
	State and local			—		426,640	147,601
				—		1,724,001	147,601
Deferred:
	Federal			(3,850,594	)	1,908,281	1,456,823
	State and local			(2,338,014	)	504,976	403,083
				(6,188,608	)	2,413,257	1,859,906
		Total	$	(6,188,608	)	4,137,258	2,007,507

F-23

        The tax effects of temporary differences that give rise to significant portions of deferred tax assets and deferred tax liabilities are as follows:

			December 31,
			2003		2002
Deferred tax assets:
	Accrued compensation		$	142,093	122,217
	Allowance for bad debts			980,585	845,669
	Deferred rent			641,719	1,025,911
	Deferred revenue			1,336,477	1,395,669
	Net operating losses			7,957,243	—
	Other			63,370	41,803
		Total gross deferred tax assets		11,121,487	3,431,269
Deferred tax liabilities:
	Depreciation			4,179,076	2,677,463
	Others			40,736	40,736
		Total gross deferred tax liabilities		4,219,812	2,718,199
Net deferred tax assets			$	6,901,675	713,070

        The Company believes that, based upon its consistent history of profitable operations and existing deferred tax liabilities, it is more likely than not that the deferred tax assets generated through December 31, 2003 will be realized. The Company has net operating loss carryforwards totaling $17,682,763.

        Reconciliation of the statutory Federal income tax rate to the Company's effective tax rate is as follows:

					Fiscal years ended December 31,
					2003		2002		2001
U.S. Federal statutory rate					(34.0	)%	34.0	%	34.0	%
Increase (decrease) in taxes resulting from:
	State and local income taxes, net of federal income tax benefit				(11.5)	%	10.3	%	11.2	%
	Permanent differences:
		Changes in fair market value of common stock put warrants			(2.2	)%	16.2	%	(9.5	)%
		Interest expense related to amount due to founding stockholders			1.7	%	3.9	%	4.1	%
			Other		—		5.0	%	.3	%
				Effective income tax rate	(46.0	)%	69.4	%	40.1	%

(14) Related Party Transactions

        Simultaneous with the Recapitalization (see note 3(a)), the Company entered into a consulting agreement with certain of the Incoming Investors. Under the terms of the consulting agreement, the Company is obligated to pay, in semi-annual installments, an annual fee of $800,000 for consulting services rendered (as defined) and to reimburse certain out-of-pocket expenses incurred by the Incoming Investors. This $800,000 annual fee was paid in 2001, 2002 and 2003. The Company was further obligated to pay a fee of $200,000 when the escrowed shares were distributed in 2001 (see note 3(c)). In addition during 2003, the Company paid approximately $207,000 in other related party fees. The consulting agreement expires on the tenth anniversary of the Closing Date or at the direction

F-24

of the board of directors. The costs of this consulting agreement are included within related party management fees and expenses in the accompanying consolidated financial statements.

        A member of the Board of Directors is a partner in partnerships that lease space to the Company at two locations. For the fiscal years ended December 31, 2001, 2002 and 2003, the partnerships received approximately $1.0 million per annum for each location pursuant to their leases.

(15) Stock Option Plans

        The Company currently maintains two stock option plans: i) the Equinox Holdings Inc. 1998 Stock Option Plan (the 1998 Plan) and ii) the Equinox Holdings, Inc. 2000 Stock Incentive Plan (the 2000 Plan).

(a)    1998 Plan

        Under the terms of the 1998 Plan, options to purchase 1,000,000 shares of authorized, but not issued common stock may be granted. Options may be granted to key employees, directors, and consultants who provide services to the Company. Requirements for vesting are set forth by the board of directors when the award is granted. As part of the Recapitalization (See Note 4(a)), all options outstanding under this plan, with exercise prices ranging from $0.01 to $0.90 per share, were either exercised, vested in full or cancelled, and any deferred compensation at the date of the Recapitalization was recognized. There were no additional grants under this plan subsequent to the Recapitalization. The 1998 Plan is closed, and there are no further options available for grant. No pro forma disclosures have been provided due to the compensatory nature of the options granted. At December 31, 2003 and 2002, 142,614 of the outstanding options had an exercise price of $0.90 per share. As of December 31, 2003 there are 284,919 outstanding options at a weighted average exercise price of $.46. No options have been granted, exercised or forfeited since December 31, 2000. The 1998 plan terminates on the first to occur of (i) the 10th anniversary of board adoption; (ii) the 10th anniversary of stockholder approval, and (iii) the date the board terminates the plan. Any outstanding options on the termination date will remain outstanding until they have been exercised, terminated or expire by their terms.

(b)    2000 Plan

        Under the terms of the 2000 Plan, only nonqualified stock options may be granted. Furthermore, the number of options available for grant may not exceed 10% of the fully diluted shares of common stock outstanding as of the Closing Date including any outstanding warrants of the Company issued to the holders of the subordinated notes (see Note 9(b)). Under the provisions of the Plan, options to purchase 1,085,450 shares of authorized, but not issued common stock may be granted to key employees, directors, and consultants who provide services to the Company. Stock options can be granted with an exercise price less than, equal to or greater than the fair market value of the common stock on the date of the grant. Requirements for vesting are set forth by the board of directors when the award is granted. All options granted under the 2000 Plan have a term of ten years.

        As of December 31, 2003, 2002 and 2001, respectively, there were, 961,104, 975,537 and 812,000 stock options outstanding under the 2000 Plan. As of December 31, 2003, the number of shares available to be granted was 124,346. All of these options were granted at an exercise price equivalent to fair market value of the underlying common stock and are held by senior management and outside consultants. All of these outstanding options vest only upon the occurrence of certain events, as defined in the 2000 Plan, including a qualified initial public offering or a change of control. Accordingly, no

F-25

compensation expense has been recorded for options granted to employees, and no pro forma disclosures have been provided due to the contingent nature of the vesting of these options.

        During the years ended December 31, 2003, 2002 and 2001, the Company has granted approximately 5,000, 55,707 and 158,000 stock options, respectively to certain consultants. No pro-forma disclosures have been provided due to the compensatory nature of the options granted, pursuant to which charges of $35,000, $312,516 and $1,022,260 were recorded as of December 31, 2003, 2002 and 2001, respectively. The following weighted average assumptions were used in the calculation in 2003: stock volatility of 42% (representing the average volatility of comparable publicly traded companies), risk free interest rate of 3.5% and no dividends during the expected term of 10 years. The Company used the Black-Scholes option-pricing model to estimate the grant date fair value of its option grants to the outside consultants. The following weighted average assumptions were used in the calculation in 2002: stock volatility of 37% (representing the average volatility of comparable publicly traded companies), risk-free interest rate of 4% and no dividends during the expected term of 10 years. The following weighted average assumptions were used in the calculation in 2001: stock volatility of 44% (representing the average volatility of comparable publicly traded companies), risk-free interest rate of 5% and no dividends during the expected term of 10 years.

        Stock option activity under the 2000 Plan during the periods indicated is as follows:

		Number of shares		Weighted average exercise price
Balance at December 31, 2000		346,000			10.28
	Granted	466,000			10.28
Balance at December 31, 2001		812,000			10.28
	Granted	243,537			10.96
	Forfeited	(80,000	)		10.28
Balance at December 31, 2002		975,537			10.45
	Granted	183,567			12.00
	Exercised	(5,000	)		10.28
	Forfeited	(193,000	)		10.28
Balance at December 31, 2003		961,104		$	10.78

(16) Commitments and Contingencies

(a)    Leases

        The Company leases space under noncancelable operating leases, which expire at various dates through 2023. The leases contain provisions for scheduled rent increases. The accompanying consolidated balance sheet at December 31, 2003 includes deferred rent obligations of $16,206,119, representing accumulated rent expense charged to operations from the inception of certain leases in

F-26

excess of the required lease payments, through December 31, 2003.Minimum future rental obligations under these non-cancelable operating leases at December 31, 2003, are as follows:

2004	$	14,758,553
2005		16,062,503
2006		15,869,175
2007		16,012,560
2008		16,145,968
Thereafter		176,876,256
	$	255,725,015

        Rent expense charged to operations amounted to $16,685,996, $11,869,691 and $9,793,216 for the years ended December 31, 2003, 2002, and 2001, respectively. Included in these amounts are $2,496,492, $1,087,871, and $974,914, respectively of rent expense in excess of required lease payments in those periods.

(b)    Employment Agreement

        The Company has employment agreements with three of its executive officers for terms of up to three years. The employment agreements call for a base salary and certain bonus arrangements. Financial terms under the employment agreements are not material to the Company's consolidated statements of income.

(c)    Letters of Credit

        As of December 31, 2002, the Company had $2.0 million in standby letters of credit with the same banks described in Note 9 and these were released during 2003. The Company has $3.5 million in continuing letters of credit issued during 2003, in connection with the new $25.0 million letter of credit as described in Note 9.

(d)    Litigation

        In the normal course of business, the Company is a party to various claims and/or litigation. Management believes that, based on the advice of legal counsel, the settlement of all such claims and/or litigation, considered in the aggregate, will not have a material adverse effect on the Company's financial statements.

(e)    Benefit Plans

        The Company maintains a defined contribution 401(k) benefit plan for eligible employees. The Company's discretionary matching contributions to this plan were $121,626, $110,002 and $108,163 for the years ended December 31, 2003, 2002, and 2001, respectively.

(17) Financial Information for Guarantors of the Company's Debt

        The Company and all of its domestic subsidiaries have unconditionally guaranteed the $160.0 million of 9% Senior Notes (See Note 9(c)). The parent Company has no independent assets or operations, the guarantees are full and unconditional and joint and several, there are no subsidiaries of the parent other than subsidiary guarantors.

F-27

EQUINOX HOLDINGS, INC.
Unaudited Consolidated Condensed Balance Sheets

			March 31, 2004			December 31, 2003
Assets
Current assets:
	Cash		$	41,475,921		$	42,709,057
	Marketable securities			—			69,914
	Accounts receivable—members, less allowance for doubtful accounts of $32,793 and $112,420, respectively			1,441,411			1,545,565
	Deferred income taxes			3,100,106			2,526,809
	Due from affiliated entities			337,938			—
	Prepaid expenses and other current assets			9,150,409			8,969,749
		Total current assets		55,505,785			55,821,094
Property and equipment, net				122,408,391			114,627,750
Deferred income taxes				4,374,866			4,374,866
Other assets				4,903,526			5,015,120
Goodwill, net				2,503,054			2,503,054
Deferred financing costs, net				7,249,946			6,961,231
		Total assets	$	196,945,568		$	189,303,115
Liabilities and Stockholders' Deficit
Current liabilities:
	Accounts payable		$	824,933		$	1,086,705
	Accrued expenses			10,152,275			4,248,311
	Due to affiliated entities			—			786,644
	Deferred revenue			27,691,386			24,966,440
	Current installments of long-term debt			126,625			123,375
	Current installments of capital lease obligations			1,253,108			1,251,799
		Total current liabilities		40,048,327			32,463,274
Deferred revenue				600,848			495,160
Long-term debt, excluding current installments				161,516,363			161,500,647
Capital lease obligations, net of current installments				919,007			1,123,401
Deferred rent				17,498,760			16,206,119
Common stock put warrants				8,941,605			9,653,768
Due to founding stockholders				3,066,546			2,935,192
		Total long term liabilities		192,543,129			191,914,287
		Total liabilities		232,591,456			224,377,561
Commitments and contingencies
Stockholders' deficit:
	Common stock, $0.01 par value. Authorized 20,000,000 shares; 9,438,247 and 8,604,913 shares issued and outstanding			94,432			94,432
	Additional paid-in capital			82,920,208			82,920,208
	Accumulated other comprehensive income (loss)			—			14,078
	Accumulated deficit			(118,660,528	)		(118,103,164	)
		Total stockholders' deficit		(35,645,888	)		(35,074,446	)
		Total liabilities and stockholders' deficit	$	196,945,568		$	189,303,115

See accompanying notes to unaudited consolidated condensed financial statements.

F-28

EQUINOX HOLDINGS, INC.
Unaudited Consolidated Condensed Statements of Income

			For the three months ended March 31,
			2004			2003
Revenues:
	Membership fees		$	21,715,365		$	17,004,701
	Personal training			7,273,221			6,010,620
	Other revenue			4,519,952			3,681,582
		Total revenue		33,508,538			26,696,903
Expenses:
	Compensation and related expenses			14,462,700			11,429,453
	Rent and occupancy			4,911,245			4,272,484
	General and administrative			8,783,707			4,931,219
	Related-party management fees and expenses			402,118			433,131
	Depreciation and amortization			2,936,231			2,252,539
		Total operating expenses		31,496,001			23,318,826
		Income from operations		2,012,537			3,378,077
Other income (expense):
	Interest expense			(3,791,265	)		(3,940,691	)
	Interest income			51,309			35,413
	Other income (expense)			714,029			—
		Total other expense		(3,025,927	)		(3,905,278	)
		Income before provision for income taxes		(1,013,390	)		(527,201	)
Benefit (provision) for income taxes				456,026			237,240
		Net income	$	(557,364	)	$	(289,961	)

See accompanying notes to unaudited consolidated condensed financial statements.

F-29

EQUINOX HOLDINGS, INC.
Consolidated Statements of Cash Flow

					For the three months ended March 31,
					2004			2003
Cash flows from operating activities:
	Net loss				$	(557,364	)	$	(289,961	)
	Adjustments to reconcile net income to net cash provided by operating activities:
			Depreciation and amortization			2,936,231			2,252,539
			Allowance for doubtful accounts, net of write-offs			(79,628	)		(23,386	)
			Interest expense			351,904			782,833
			Changes in fair market value of common stock put warrants			(712,163	)		—
			Deferred rent			784,974			634,364
			Accretive interest expense related payable to founding stockholders			131,354			—
			Deferred income taxes			(573,297	)		(3,732,319	)
			Changes in operating assets and liabilities:
			Accounts receivable—members			183,782			119,688
			Due (to) from affiliated entities, net			(1,124,582	)		1,056,234
			Prepaid expenses and other current assets			(180,660	)		363,011
			Other assets			111,597			402,515
			Accounts payable			(261,775	)		(448,629	)
			Accrued expenses			5,903,961			1,608,225
			Deferred revenue			2,830,639			3,153,917
				Net cash provided by operating activities		9,744,973			5,879,031
Cash flows from investing activities:
Redemption of marketable securities						55,836			—
	Purchases of property and equipment					(10,009,348	)		(4,992,676	)
				Net cash used in investing activities		(9,953,512	)		(4,992,676	)
Cash flows from financing activities:
	Proceeds from long-term debt					—			25,000,000
	Payment of deferred financing costs					(621,653	)		(2,432,624	)
	Issuance of common stock to existing shareholders for cash					—			10,000,008
	Payment of restricted cash to founding shareholder group					—			188,500
	Repayment of note payable					—			(17,278,724	)
	Repayment of capital lease obligations					(402,944	)		(404,223	)
				Net cash (used) provided by financing activities		(1,024,597	)		15,072,937
				Net (decrease) increase in cash and cash equivalents		(1,233,136	)		15,959,292
Cash at beginning of period						42,709,057			1,244,913
Cash at end of period					$	41,475,921			17,204,205
Supplemental disclosures of cash flow information:
	Cash paid for:
		Interest			$	97,303		$	2,487,331
		Income taxes			$	5,325		$	1,185,262
Supplemental disclosure of noncash investing and financing activities:
		Capital lease obligations entered into for fitness equipment			$	199,857		$	434,954
		Deferred rent capitalized during build-out			$	145,904		$	461,996

F-30

EQUINOX HOLDINGS, INC.
Notes to Unaudited Consolidated Condensed Financial Statements

(1)   Basis of Presentation

Equinox Holdings, Inc. (the 'Company') is engaged in the operation of full service fitness clubs under the trade name 'Equinox Fitness Club' in New York, California, Illinois and Connecticut.

The accompanying consolidated financial statements are unaudited. In the opinion of the Company's management, these unaudited consolidated financial statements reflect all adjustments necessary, consisting of normal recurring adjustments, for a fair presentation of such data on a basis consisted with that of the audited data presented herein. The Company uses an annual effective tax rate that is based upon the expected annual income, statutory rates and tax planning opportunities to determine its quarterly provision for income taxes. The accompanying unaudited consolidated financial statements include the accounts of the Company and its subsidiaries, all of which are wholly-owned. All inter-company accounts and transactions have been eliminated in consolidation. The consolidated results of operations and financial position for interim periods are not necessarily indicative of those to be expected for a full year due, in part, to seasonal fluctuations, which are normal for the Company's business. Further, the Company has made a number of estimates and assumptions relating to the assets and liabilities, the disclosure of contingent assets and liabilities and the reporting of revenue and expenses to prepare these financial statements in conformity with generally accepted accounting principles. Actual results could differ from those estimates.

F-31

EQUINOX HOLDINGS, INC.

Schedule II.—Valuation and Qualifying Accounts

	Balance at beginning of period		Charges to costs and expenses	Deductions		Balance at end of period
Allowance for Doubtful Accounts (deducted from Accounts Receivable)
fiscal year ended:
December 31, 2001	$	323,075	388,863	(611,986	)	$	99,952
December 31, 2002	$	99,952	840,204	(850,757	)	$	89,399
December 31, 2003	$	89,399	866,757	(843,736	)	$	112,420

F-32

Equinox Holdings, Inc.

Offer to exchange
its 9% Senior Notes Due 2009

                        , 2004

Dealer Prospectus Delivery Obligation

Until                        , 2004, all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers' obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 20. INDEMNIFICATION OF OFFICERS AND DIRECTORS

Indemnification of Officers and Directors under Delaware General Corporation Law

        Section 145 of the Delaware Corporation Law, as amended, provides with respect to indemnification of directors and officers as follows:

        "145 INDEMNIFICATION OF OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS; INSURANCE.—(a) A corporation shall have power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with such action, suit or proceeding if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful.

        (b)   A corporation shall have power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys' fees) actually and reasonably incurred by the person in connection with the defense or settlement of such action or suit if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper.

        (c)   To the extent that a present or former director or officer of a corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in subsections (a) and (b) of this section, or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by such person in connection therewith.

        (d)   Any indemnification under subsections (a) and (b) of this section (unless ordered by a court) shall be made by the corporation only as authorized in the specific case upon a determination that indemnification of the present or former director, employee or agent is proper in the circumstances because the person has met the applicable standard of conduct set forth in

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subsections (a) and (b) of this section. Such determination shall be made, with respect to a person who is a director or officer at the time of such determination (1) by a majority vote of the directors who are not parties to such action, suit or proceeding, even though less than a quorum, or (2) by a committee of such directors designated by majority vote of such directors, even though less than a quorum, or (3) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion, or (4) by the stockholders.

        (e)   Expenses (including attorneys' fees) incurred by an officer or director in defending any civil, criminal, administrative or investigative action, suit or proceeding may be paid by the corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by the corporation as authorized in this section. Such expenses (including attorneys' fees) incurred by former directors and officers and agents may be so paid upon such terms and conditions, if any, as the corporation deems appropriate.

        (f)    The indemnification and advancement of expenses provided by, or granted pursuant to the other subsections of this section shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in such person's official capacity and as to action in another capacity while holding such office.

        (g)   A corporation shall have power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person's status as such, whether or not the corporation would have the power to indemnify such person against such liability under this section.

        (h)   For purposes of this section, references to "the corporation" shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, and employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under this section with respect to the resulting or surviving corporation as such person would have with respect to such constituent corporation if its separate existence had continued.

        (i)    For purposes of this section, references to "other enterprises" shall include employee benefit plans; references to "fines" shall include any excise taxes assessed on a person with respect to any employee benefit plan; and references to "serving at the request of the corporation" shall include any service as a director, officer, employee or agent of the corporation which imposes duties on, or involves services by, such as director, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner "not opposed to the best interests of the corporation" as referred to in this section.

        (j)    The indemnification and advancement of expenses provided by, or granted pursuant to, this section shall, unless otherwise provided when authorized or ratified, continue as to a person

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who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person."

        (k)   The Court of Chancery is hereby vested with exclusive jurisdiction to hear and determine all actions for advancement of expenses or indemnification brought under this section or under any bylaw, agreement, vote of stockholders or disinterested directors, or otherwise. The Court of Chancery may summarily determine a corporation's obligation to advance expenses (including attorneys' fees).

Indemnification of Officers and Directors under New York Corporation Law

        Sections 721to726 of the New York Business Corporation Law, as amended, provides with respect to indemnification of directors and officers as follows:

"721 NONEXCLUSIVITY OF STATUTORY PROVISIONS FOR INDEMNIFICATION OF DIRECTORS AND OFFICERS.

        The indemnification and advancement of expenses granted pursuant to, or provided by, this article shall not be deemed exclusive of any other rights to which a director or officer seeking indemnification or advancement of expenses may be entitled, whether contained in the certificate of incorporation or the by-laws or, when authorized by such certificate of incorporation or by-laws, (i) a resolution of shareholders, (ii) a resolution of directors, or (iii) an agreement providing for such indemnification, provided that no indemnification may be made to or on behalf of any director or officer if a judgment or other final adjudication adverse to the director or officer establishes that his acts were committed in bad faith or were the result of active and deliberate dishonesty and were material to the cause of action so adjudicated, or that he personally gained in fact a financial profit or other advantage to which he was not legally entitled. Nothing contained in this article shall affect any rights to indemnification to which corporate personnel other than directors and officers may be entitled by contract or otherwise under law.

        722 AUTHORIZATION FOR INDEMNIFICATION OF DIRECTORS AND OFFICERS.

        (a)   A corporation may indemnify any person, made, or threatened to be made, a party to an action or proceeding other than one by or in the right of the corporation to procure a judgment in its favor, whether civil or criminal, including an action by or in the right of any other corporation of any type or kind, domestic or foreign, or any partnership, joint venture, trust, employee benefit plan or other enterprise, which any director or officer of the corporation served in any capacity at the request of the corporation, by reason of the fact that he, his testator or intestate, was a director or officer of the corporation, or served such other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise in any capacity, against judgments, fines, amounts paid in settlement and reasonable expenses, including attorney's fees actually and necessarily incurred as a result of such action or proceeding, or any appeal therein, if such director or officer acted, in good faith, for a purpose which he reasonably believed to be in, or, in the case of service for any other corporation or any partnership, joint venture, trust, employee benefit plan or other enterprise, not opposed to, the best interests of the corporation and, in criminal actions or proceedings, in addition, had no reasonable cause to believe that his conduct was unlawful.

        (b)   The termination of any such civil or criminal action or proceeding by judgment, settlement, conviction or upon a plea of nolo contendere, or its equivalent, shall not in itself create a presumption that any such director or officer did not act, in good faith, for a purpose which he reasonably believed to be in, or, in the case of service for any other corporation or any partnership, joint venture, trust, employee benefit plan or other enterprise, not opposed to, the best interests of the corporation or that he had reasonable cause to believe that his conduct was unlawful.

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        (c)   A corporation may indemnify any person made, or threatened to be made, a party to an action by or in the right of the corporation to procure a judgment in its favor by reason of the fact that he, his testator or intestate, is or was a director or officer of the corporation, or is or was serving at the request of the corporation as a director or officer of any other corporation of any type or kind, domestic or foreign, of any partnership, joint venture, trust, employee benefit plan or other enterprise, against amounts paid in settlement and reasonable expenses, including attorneys' fees, actually and necessarily incurred by him in connection with the defense or settlement of such action, or in connection with an appeal therein if such director or officer acted, in good faith, for a purpose which he reasonably believed to be in, or, in the case of service for any other corporation or any partnership, joint venture, trust, employee benefit plan or other enterprise, not opposed to, the best interests of the corporation, except that no indemnification under this paragraph shall be made in respect of (1) a threatened action, or a pending action which is settled or otherwise disposed of, or (2) any claim issue or matter as to which such person shall have been adjudged to be liable to the corporation, unless and only to the extent that the court on which the action was brought, or, if no action was brought, any court of competent jurisdiction, determines upon application that, in view of all the circumstances of the case, the person is fairly and reasonably entitled to indemnity for such portion of the settlement amount and expenses as the court deems proper.

        (d)   For the purpose of this section, a corporation shall be deemed to have requested a person to serve an employee benefit plan where the performance by such person of his duties to the corporation also imposes duties on, or otherwise involves services by, such person to the plan or participants or beneficiaries of the plan; excise taxes assessed on a person with respect to an employee benefit plan pursuant to applicable law shall be considered fines; and action taken or omitted by a person with respect to an employee benefit plan in the performance of such person's duties for a purpose reasonably believed by such person to be in the interest of the participants and beneficiaries of the plan shall be deemed to be for a purpose which is not opposed to the best interests of the corporation.

        723 PAYMENT OF INDEMNIFICATION OTHER THAN BY COURT AWARD.

        (a)   A person who has been successful, on the merits or otherwise, in the defense of a civil or criminal action or proceeding of the character described in section 722 shall be entitled to indemnification as authorized in such section.

        (b)   Except as provided in paragraph (a), any indemnification under section 722 or otherwise permitted by section 721, unless ordered by a court under section 724 (Indemnification of directors and officers by a court), shall be made by the corporation, only if authorized in the specific case:

        (1)   By the board acting by a quorum consisting of directors who are not parties to such action or proceeding upon a finding that the director or officer has met the standard of conduct set forth in section 722 or established pursuant to section 721, as the case may be, or,

        (2)   If a quorum under subparagraph (1) is not obtainable or, even if obtainable, a quorum of disinterested directors so directs;

        (A)  By the board upon the opinion in writing of independent legal counsel that indemnification is proper in the circumstances because the applicable standard of conduct set forth in such sections has been met by such director or officer, or

        (B)  By the shareholders upon a finding that the director or officer has met the applicable standard of conduct set forth in such sections.

        (c)   Expenses incurred in defending a civil or criminal action or proceeding may be paid by the corporation in advance of the final disposition of such action or proceeding upon receipt of an

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undertaking by or on behalf of such director or officer to repay such amount as, and to the extent, required by paragraph (a) of section 725.

        724 INDEMNIFICATION OF DIRECTORS AND OFFICERS BY A COURT.

        (a)   Notwithstanding the failure of a corporation to provide indemnification, and despite any contrary resolution of the board or of the shareholders in the specific case under section 723 (Payment of indemnification other than by court award), indemnification shall be awarded by a court to the extent authorized under section 722 (Authorization for indemnification of directors and officers), and paragraph (a) of section 723. Application therefore may be made, in every case, either:

        (1)   In the civil action or proceeding in which the expenses were incurred or other amounts were paid, or

        (2)   To the supreme court in a separate proceeding, in which case the application shall set forth the disposition of any previous application made to any court for the same or similar relief and also reasonable cause for the failure to make application for such relief in the action or proceeding in which the expenses were incurred or other amounts were paid.

        (b)   The application shall be made in such manner and form as may be required by the applicable rules of court or, in the absence thereof, by direction of a court to which it is made. Such application shall be upon notice to the corporation. The court may also direct that notice be given at the expense of the corporation to the shareholders and such other persons as it may designate in such manner as it may require.

        (c)   Where indemnification is sought by judicial action, the court may allow a person such reasonable expenses, including attorneys' fees, during the pendency of the litigation as are necessary in connection with his defense therein, if the court shall find that the defendant has by his pleadings or during the course of the litigation raised genuine issues of fact or law.

        725 OTHER PROVISIONS AFFECTING INDEMNIFICATION OF DIRECTORS AND OFFICERS.

        (a)   All expenses incurred in defending a civil or criminal action or proceeding which are advanced by the corporation under paragraph (c) of section 723 (Payment of indemnification other than by court award) or allowed by a court under paragraph (c) of section 724 (Indemnification of directors and officers by a court) shall be repaid in case the person receiving such advancement or allowance is ultimately found, under the procedure set forth in this article, not to be entitled to indemnification or, where indemnification is granted, to the extent the expenses so advanced by the corporation or allowed by the court exceed the indemnification to which he is entitled.

        (b)   No indemnification, advancement or allowance shall be made under this article in any circumstance where it appears:

        (1)   That the indemnification would be inconsistent with the law of the jurisdiction of incorporation of a foreign corporation which prohibits or otherwise limits such indemnification;

        (2)   That the indemnification would be inconsistent with a provision of the certificate of incorporation, a by-law, a resolution of the board or of the shareholders, an agreement or other proper corporate action, in effect at the time of the accrual of the alleged cause of action asserted in the threatened or pending action or proceeding in which the expenses were incurred or other amounts were paid, which prohibits or otherwise limits indemnification; or

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        (3)   If there has been a settlement approved by the court, that the indemnification would be inconsistent with any condition with respect to indemnification expressly imposed by the court in approving the settlement.

        (c)   If any expenses or other amounts are paid by way of indemnification, otherwise than by court order or action by the shareholders, the corporation shall, not later than the next annual meeting of shareholders unless such meeting is held within three months from the date of such payment, and in any event, within fifteen months from the date of such payment, mail to its shareholders of record at the time entitled to vote for the election of directors a statement specifying the persons paid, the amounts paid, and the nature and status at the time of such payment of the litigation or threatened litigation.

        (d)   If any action with respect to indemnification of directors and officers is taken by way of amendment of the by-laws, resolution of directors, or by agreement, then the corporation shall, not later than the next annual meeting of shareholders, unless such meeting is held within three months from the date of such action, and, in any event, within fifteen months from the date of such action, mail to its shareholders of record at the time entitled to vote for the election of directors a statement specifying the action taken.

        (e)   Any notification required to be made pursuant to the foregoing paragraph (c) or (d) of this section by any domestic mutual insurer shall be satisfied by compliance with the corresponding provisions of section one thousand two hundred sixteen of the insurance law.

        (f)    The provisions of this article relating to indemnification of directors and officers and insurance therefor shall apply to domestic corporations and foreign corporations doing business in this state, except as provided in section 1320 (Exemption from certain provisions).

        726 INSURANCE FOR INDEMNIFICATION OF DIRECTORS AND OFFICERS.

        (a)   Subject to paragraph (b), a corporation shall have power to purchase and maintain insurance:

        (1)   To indemnify the corporation for any obligation which it incurs as a result of the indemnification of directors and officers under the provisions of this article, and

        (2)   To indemnify directors and officers in instances in which they may be indemnified by the corporation under the provisions of this article, and

        (3)   To indemnify directors and officers in instances in which they may not otherwise be indemnified by the corporation under the provisions of this article provided the contract of insurance covering such directors and officers provides, in a manner acceptable to the superintendent of insurance, for a retention amount and for co-insurance.

        (b)   No insurance under paragraph (a) may provide for any payment, other than cost of defense, to or on behalf of any director or officer:

        (1)   if a judgment or other final adjudication adverse to the insured director or officer establishes that his acts of active and deliberate dishonesty were material to the cause of action so adjudicated, or that he personally gained in fact a financial profit or other advantage to which he was not legally entitled, or

        (2)   in relation to any risk the insurance of which is prohibited under the insurance law of this state.

        (c)   Insurance under any or all subparagraphs of paragraph (a) may be included in a single contract or supplement thereto. Retrospective rated contracts are prohibited.

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        (d)   The corporation shall, within the time and to the persons provided in paragraph (c) of section 725 (Other provisions affecting indemnification of directors or officers), mail a statement in respect of any insurance it has purchased or renewed under this section, specifying the insurance carrier, date of the contract, cost of the insurance, corporate positions insured, and a statement explaining all sums, not previously reported in a statement to shareholders, paid under any indemnification insurance contract.

        (e)   This section is the public policy of this state to spread the risk of corporate management, notwithstanding any other general or special law of this state or of any other jurisdiction including the federal government."

Indemnification of Officers and Directors under California Corporation Law

        Section 317 of the California General Corporation Law, as amended, provides with respect to indemnification of directors and officers as follows:

        "317 INDEMNIFICATION OF CORPORATE AGENTS.

        (a)   For the purposes of this section, "agent" means any person who is or was a director, officer, employee or other agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another foreign or domestic corporation, partnership, joint venture, trust or other enterprise, or was a director, officer, employee or agent of a foreign or domestic corporation which was a predecessor corporation of the corporation or of another enterprise at the request of the predecessor corporation; "proceeding" means any threatened, pending or completed action or proceeding, whether civil, criminal, administrative or investigative; and "expenses" includes without limitation attorneys' fees and any expenses of establishing a right to indemnification under subdivision (d) or paragraph (4) of subdivision (e).

        (b)   A corporation shall have power to indemnify any person who was or is a party or is threatened to be made a party to any proceeding (other than an action by or in the right of the corporation to procure a judgment in its favor) by reason of the fact that the person is or was an agent of the corporation, against expenses, judgments, fines, settlements, and other amounts actually and reasonably incurred in connection with the proceeding if that person acted in good faith and in a manner the person reasonably believed to be in the best interests of the corporation and, in the case of a criminal proceeding, had no reasonable cause to believe the conduct of the person was unlawful. The termination of any proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent shall not, of itself, create a presumption that the person did not act in good faith and in a manner which the person reasonably believed to be in the best interests of the corporation or that the person had reasonable cause to believe that the person's conduct was unlawful.

        (c)   A corporation shall have power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending, or completed action by or in the right of the corporation to procure a judgment in its favor by reason of the fact that the person is or was an agent of the corporation, against expenses actually and reasonably incurred by that person in connection with the defense or settlement of the action if the person acted in good faith, in a manner the person believed to be in the best interests of the corporation and its shareholders.

        No indemnification shall be made under this subdivision for any of the following:

        (1)   In respect of any claim, issue or matter as to which the person shall have been adjudged to be liable to the corporation in the performance of that person's duty to the corporation and its shareholders, unless and only to the extent that the court in which the proceeding is or was pending shall determine upon application that, in view of all the

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circumstances of the case, the person is fairly and reasonably entitled to indemnity for expenses and then only to the extent that the court shall determine.

        (2)   Of amounts paid in settling or otherwise disposing of a pending action without court approval.

        (3)   Of expenses incurred in defending a pending action which is settled or otherwise disposed of without court approval.

(d)

To the extent that an agent of a corporation has been successful on the merits in defense of any proceeding referred to in subdivision (b) or (c) or in defense of any claim, issue, or matter therein, the agent shall be indemnified against expenses actually and reasonably incurred by the agent in connection therewith.

        (e)   Except as provided in subdivision (d), any indemnification under this section shall be made by the corporation only if authorized in the specific case, upon a determination that indemnification of the agent is proper in the circumstances because the agent has met the applicable standard of conduct set forth in subdivision (b) or (c), by any of the following:

        (1)   A majority vote of a quorum consisting of directors who are not parties to such proceeding.

        (2)   If such a quorum of directors is not obtainable, by independent legal counsel in a written opinion.

        (3)   Approval of the shareholders (Section 153), with the shares owned by the person to be indemnified not being entitled to vote thereon.

        (4)   The court in which the proceeding is or was pending upon application made by the corporation or the agent or the attorney or other person rendering services in connection with the defense, whether or not the application by the agent, attorney or other person is opposed by the corporation.

        (f)    Expenses incurred in defending any proceeding may be advanced by the corporation prior to the final disposition of the proceeding upon receipt of an undertaking by or on behalf of the agent to repay that amount if it shall be determined ultimately that the agent is not entitled to be indemnified as authorized in this section. The provisions of subdivision (a) of Section 315 do not apply to advances made pursuant to this subdivision.

        (g)   The indemnification authorized by this section shall not be deemed exclusive of any additional rights to indemnification for breach of duty to the corporation and its shareholders while acting in the capacity of a director or officer of the corporation to the extent the additional rights to indemnification are authorized in an article provision adopted pursuant to paragraph (11) of subdivision (a) of Section 204. The indemnification provided by this section for acts, omissions, or transactions while acting in the capacity of, or while serving as, a director or officer of the corporation but not involving breach of duty to the corporation and its shareholders shall not be deemed exclusive of any other rights to which those seeking indemnification may be entitled under any bylaw, agreement, vote of shareholders or disinterested directors, or otherwise, to the extent the additional rights to indemnification are authorized in the articles of the corporation. An article provision authorizing indemnification "in excess of that otherwise permitted by Section 317" or "to the fullest extent permissible under California law" or the substantial equivalent thereof shall be construed to be both a provision for additional indemnification for breach of duty to the corporation and its shareholders as referred to in, and with the limitations required by, paragraph (11) of subdivision (a) of Section 204 and a provision for additional indemnification as referred to in the second sentence of this subdivision. The rights to indemnity hereunder shall continue as to a person who has ceased to be a director, officer, employee, or agent and shall

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inure to the benefit of the heirs, executors, and administrators of the person. Nothing contained in this section shall affect any right to indemnification to which persons other than the directors and officers may be entitled by contract or otherwise.

        (h)   No indemnification or advance shall be made under this section, except as provided in subdivision (d) or paragraph (4) of subdivision (e), in any circumstance where it appears:

        (1)   That it would be inconsistent with a provision of the articles, bylaws, a resolution of the shareholders, or an agreement in effect at the time of the accrual of the alleged cause of action asserted in the proceeding in which the expenses were incurred or other amounts were paid, which prohibits or otherwise limits indemnification.

        (2)   That it would be inconsistent with any condition expressly imposed by a court in approving a settlement.

        (i)    A corporation shall have power to purchase and maintain insurance on behalf of any agent of the corporation against any liability asserted against or incurred by the agent in that capacity or arising out of the agent's status as such whether or not the corporation would have the power to indemnify the agent against that liability under this section. The fact that a corporation owns all or a portion of the shares of the company issuing a policy of insurance shall not render this subdivision inapplicable if either of the following conditions are satisfied: (1) if the articles authorize indemnification in excess of that authorized in this section and the insurance provided by this subdivision is limited as indemnification is required to be limited by paragraph (11) of subdivision (a) of Section 204; or (2)(A) the company issuing the insurance policy is organized, licensed, and operated in a manner that complies with the insurance laws and regulations applicable to its jurisdiction of organization, (B) the company issuing the policy provides procedures for processing claims that do not permit that company to be subject to the direct control of the corporation that purchased that policy, and (C) the policy issued provides for some manner of risk sharing between the issuer and purchaser of the policy, on one hand, and some unaffiliated person or persons, on the other, such as by providing for more than one unaffiliated owner of the company issuing the policy or by providing that a portion of the coverage furnished will be obtained from some unaffiliated insurer or reinsurer.

        (j)    This section does not apply to any proceeding against any trustee, investment manager, or other fiduciary of an employee benefit plan in that person's capacity as such, even though the person may also be an agent as defined in subdivision (a) of the employer corporation. A corporation shall have power to indemnify such a trustee, investment manager, or other fiduciary to the extent permitted by subdivision (f) of Section 207."

Indemnification of Officers and Directors under Connecticut Corporation Law

        Sections 33-770 to 33-779 of the Connecticut Business Corporation Act, as amended, provides with respect to indemnification of directors and officers as follows:

        "33-770 DEFINITIONS.

        As used in sections 33-770 to 33-779, inclusive:

        (1)   "Corporation" includes any domestic or foreign predecessor entity of a corporation in a merger.

        (2)   "Director" or "officer" means an individual who is or was a director or officer, respectively, of a corporation or who, while a director or officer of the corporation, is or was serving at the corporation's request as a director, officer, partner, trustee, employee or agent of another domestic or foreign corporation, partnership, joint venture, trust, employee benefit plan or other entity. A director or officer is considered to be serving an employee benefit plan at the

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corporation's request if his duties to the corporation also impose duties on, or otherwise involve services by, him to the plan or to participants in or beneficiaries of the plan. "Director" or "officer" includes, unless the context requires otherwise, the estate or personal representative of a director or officer.

        (3)   "Disinterested director" means a director who at the time of a vote referred to in subsection (c) of section 33-773, or a vote or selection referred to in subsection (b) or (c) of section 33-775, is not (a) a party to the proceeding or (b) an individual having a familial, financial, professional or employment relationship with the director whose indemnification or advance for expenses is the subject of the decision being made, which relationship would, in the circumstances, reasonably be expected to exert an influence on the director's judgment when voting on the decision being made.

        (4)   "Expenses" include counsel fees.

        (5)   "Liability" means the obligation to pay a judgment, settlement, penalty, fine, including an excise tax assessed with respect to an employee benefit plan, or reasonable expenses incurred with respect to a proceeding.

        (6)   "Official capacity" means: (A) When used with respect to a director, the office of director in a corporation; and (B) when used with respect to an individual other than a director, as contemplated in section 33-776, the office in a corporation held by the officer or the employment or agency relationship undertaken by the employee or agent on behalf of the corporation. "Official capacity" does not include service for any other domestic or foreign corporation or any partnership, joint venture, trust, employee benefit plan or other entity.

        (7)   "Party" means an individual who was, is or is threatened to be made a defendant or respondent in a proceeding.

        (8)   "Proceeding" means any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative, arbitrative or investigative and whether formal or informal.

        33-771 AUTHORITY TO INDEMNIFY.

        (a)   Except as otherwise provided in this section, a corporation may indemnify an individual who is a party to a proceeding because he is a director against liability incurred in the proceeding if: (1) (A) He conducted himself in good faith; (B) he reasonably believed (i) in the case of conduct in his official capacity, that his conduct was in the best interests of the corporation; and (ii) in all other cases, that his conduct was at least not opposed to the best interests of the corporation; and (C) in the case of any criminal proceeding, he had no reasonable cause to believe his conduct was unlawful; or (2) he engaged in conduct for which broader indemnification has been made permissible or obligatory under a provision of the certificate of incorporation as authorized by subdivision (5) of subsection (b) of section 33-636.

        (b)   A director's conduct with respect to an employee benefit plan for a purpose he reasonably believed to be in the interests of the participants in and beneficiaries of the plan is conduct that satisfies the requirement of subparagraph (ii) of subdivision (1) of subsection (a) of this section.

        (c)   The termination of a proceeding by judgment, order, settlement or conviction or upon a plea of nolo contendere or its equivalent is not, of itself, determinative that the director did not meet the relevant standard of conduct described in this section.

        (d)   Unless ordered by a court under section 33-774, a corporation may not indemnify a director under this section: (1) In connection with a proceeding by or in the right of the corporation except for reasonable expenses incurred in connection with the proceeding if it is

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determined that the director has met the relevant standard of conduct under subsection (a) of this section; or (2) in connection with any proceeding with respect to conduct for which he was adjudged liable on the basis that he received a financial benefit to which he was not entitled, whether or not involving action in his official capacity.

        (e)   Notwithstanding any provision of this section to the contrary, a corporation which was incorporated under the laws of this state, whether under chapter 599 of the general statutes, revised to January 1, 1995, or any other general law or special act, prior to January 1, 1997, shall, except to the extent that the certificate of incorporation expressly provides otherwise, indemnity under sections 33-770 to 33-779, inclusive, except subdivision (2) of subsection (a) of this section, a director to the same extent the corporation is permitted to provide the same to a director pursuant to subdivision (1) of subsection (a) and subsections (b), (c) and (d) of this section as limited by the provisions of section 33-775.

        33-772 MANDATORY INDEMNIFICATION.

        A corporation shall indemnify a director who was wholly successful, on the merits or otherwise, in the defense of any proceeding to which he was a party because he was a director of the corporation against reasonable expenses incurred by him in connection with the proceeding.

        33-773 ADVANCE FOR EXPENSES.

        (a)   A corporation may, before final disposition of a proceeding, advance funds to pay for or reimburse the reasonable expenses incurred by a director who is a party to a proceeding because he is a director if he delivers to the corporation: (1) A written affirmation of his good faith belief that he has met the relevant standard of conduct described in section 33-771, or that the proceeding involves conduct for which liability has been limited under a provision of the certificate of incorporation as authorized by subdivision (4) of subsection (b) of section 33-636; and (2) his written undertaking to repay any funds advanced if he is not entitled to mandatory indemnification under section 33-772, and it is ultimately determined under section 33-772 that he has not met the relevant standard of conduct described in section 33-771.

        (b)   The undertaking required by subdivision (2) of subsection (a) of this section must be an unlimited general obligation of the director but need not be secured and may be accepted without reference to the financial ability of the director to make repayment.

        (c)   Authorizations under this section shall be made: (1) By the board of directors: (A) if there are two or more disinterested directors, by a majority vote of all the disinterested directors, a majority of whom shall for such purpose constitute a quorum, or by a majority of the members of a committee of two or more disinterested directors appointed by such a vote; or (B) if there are fewer than two disinterested directors, by the vote necessary for action by the board in accordance with section 33-752, in which authorization directors who do not qualify as disinterested directors may participate; or (2) by the shareholders, provided shares owned by or voted under the control of a director who at the time does not qualify as a disinterested director may not be voted on the authorization.

        33-774 COURT-ORDERED INDEMNIFICATION.

        (a)   A director who is a party to a proceeding because he is a director may apply for indemnification or an advance for expenses to the court conducting the proceeding or to another court of competent jurisdiction. After receipt of an application and after giving any notice it considers necessary, the court shall: (1) Order indemnification if it determines that the director is entitled to mandatory indemnification under section 33-772; (2) order indemnification or advance for expenses if the court determines that the director is entitled to indemnification or advance for expenses pursuant to a provision authorized by subsection (a) of section 33-778; or (3) order

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indemnification or advance for expenses if the court determines, in view of all the relevant circumstances, that it is fair and reasonable (A) to indemnify the director or (B) to advance expenses to the director, even if he has not met the relevant standard of conduct set forth in subsection (a) of section 33-771, failed to comply with section 33-773, or was adjudged liable in a proceeding referred to in subdivision (1) or (2) of subsection (d) of section 33-771, provided if he was adjudged so liable his indemnification shall be limited to reasonable expenses incurred in connection with the proceeding.

        (B)  If the court determines that the director is entitled to indemnification under subdivision (1) of subsection (a) of this section or to indemnification or advance for expenses under subdivision (2) of subsection (a) of this section, it shall also order the corporation to pay the director's reasonable expenses incurred in connection with obtaining court-ordered indemnification or advance for expenses. If the court determines that the director is entitled to indemnification or advance for expenses under subdivision (3) of subsection (a) of this section, it may also order the corporation to pay the director's reasonable expenses to obtain court-ordered indemnification or advance for expenses.

        33-775 DETERMINATION AND AUTHORIZATION OF INDEMNIFICATION.

        (a)   A corporation may not indemnify a director under section 33-771 unless authorized for a specific proceeding after a determination has been made that indemnification of the director is permissible because he has met the relevant standard of conduct set forth in said section.

        (b)   The determination shall be made:

        (1)   If there are two or more disinterested directors, by the board of directors by a majority vote of all the disinterested directors, a majority of whom shall for such purpose constitute a quorum, or by a majority of the members of a committee of two or more disinterested directors appointed by such a vote;

        (2)   By special legal counsel (A) selected in the manner prescribed in subdivision (1) of this subsection, or (B) if there are fewer than two disinterested directors, selected by the board of directors, in which selection directors who do not qualify as disinterested directors may participate; or

        (3)   By the shareholders, but shares owned by or voted under the control of a director who at the time does not qualify as a disinterested director may not be voted on the determination.

        (c)   Authorization of indemnification shall be made in the same manner as the determination that indemnification is permissible, except that if there are fewer than two disinterested directors, or if the determination is made by special legal counsel, authorization of indemnification shall be made by those entitled under subparagraph (B) of subdivision (2) of subsection (b) of this section to select special legal counsel.

        33-776 INDEMNIFICATION OF AND ADVANCE FOR EXPENSES TO OFFICERS, EMPLOYEES AND AGENTS.

        (a)   A corporation may indemnify and advance expenses under sections 33-770 to 33-779, inclusive, to an officer, employee or agent of the corporation who is a party to a proceeding because he is an officer, employee or agent of the corporation (1) to the same extent as a director, and (2) if he is an officer, employee or agent but not a director, to such further extent, consistent with public policy, as may be provided by contract, the certificate of incorporation, the bylaws or a resolution of the board of directors. A corporation may delegate to its general counsel or other specified officer or officers the ability under this subsection to determine that indemnification or advance for expenses to such officer, employee or agent is permissible and the ability to authorize

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payment of such indemnification or advance for expenses. Nothing in this subdivision shall in any way limit either the ability or the obligation of a corporation to indemnify and advance expenses under other applicable law to any officer, employee or agent who is not a director.

        (b)   The provisions of subdivision (2) of subsection (a) of this section shall apply to an officer, employee or agent who is also a director if the basis on which he is made a party to the proceeding is an act or omission solely as an officer, employee or agent.

        (c)   An officer, employee or agent of a corporation who is not a director is entitled to mandatory indemnification under section 33-772, and may apply to a court under section 33-774, for indemnification or advance for expenses, in each case to the same extent to which a director may be entitled to indemnification or advance for expenses under said sections.

        (d)   A corporation which was incorporated under the laws of this state, whether under chapter 599 of the general statutes, revised to January 1, 1995, or any other general law or special act, prior to January 1, 1997, shall, except to the extent that the certificate of incorporation expressly provides otherwise, indemnify under sections 33-770 to 33-779, inclusive, except subdivision (2) of subsection (a) of section 33-771, each officer, employee or agent of the corporation who is not a director to the same extent as the corporation is permitted to provide the same to a director pursuant to subdivision (1) of subsection (a) and subsections (b), (c) and (d) of section 33-771, as limited by section 33-775, and for this purpose the determination required by section 33-775 may in addition be made by the general counsel of the corporation, or such other or additional officer or officers as the board of directors may specify.

        33-777 INSURANCE.

        A corporation may purchase and maintain insurance on behalf of an individual who is¹ a director, officer, employee or agent of the corporation, or who, while a director, officer, employee or agent of the corporation, serves at the corporation's request as a director, officer, partner, trustee, employee or agent of another domestic or foreign corporation, partnership, joint venture, trust, employee benefit plan or other entity, against liability asserted against or incurred by him in that capacity or arising from his status as a director, officer, employee or agent, whether or not the corporation would have power to indemnify or advance expenses to him against the same liability under sections 33-770 to 33-779, inclusive.

        33-778 VALIDITY AND APPLICABILITY OF INDEMNIFICATION PROVISIONS.

        (a)   A corporation may, by a provision in its certificate of incorporation or bylaws or in a resolution adopted or a contract approved by its board of directors or shareholders, obligate itself in advance of the act or omission giving rise to a proceeding to provide indemnification in accordance with section 33-771 or advance funds to pay for or reimburse expenses in accordance with section 33-773. Any such obligatory provision shall be deemed to satisfy the requirements for authorization referred to in subsection (c) of section 33-773 and subsection (c) of section 33-775, as amended by this act. Any such provision that obligates the corporation to provide indemnification to the fullest extent permitted by law shall be deemed to obligate the corporation to advance funds to pay for or reimburse expenses in accordance with section 33-773 to the fullest extent permitted by law, unless the provision specifically provides otherwise.

        (b)   Any provision pursuant to subsection (a) of this section shall not obligate the corporation to indemnify or advance expenses to a director of a predecessor of the corporation, pertaining to conduct with respect to the predecessor, unless otherwise specifically provided. Any provision for indemnification or advance for expenses in the certificate of incorporation, bylaws or resolution of the board of directors or shareholders of a predecessor of the corporation in a merger or in a contract to which the predecessor is a party, existing at the time the merger takes effect, shall be governed by subdivision (3) of subsection (a) of section 33-820.

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        (c)   A corporation may, by a provision in its certificate of incorporation, limit any of the rights to indemnification or advance for expenses created by or pursuant to sections 33-770 to 33-779, inclusive.

        (d)   Sections 33-770 to 33-779, inclusive, do not limit a corporation's power to pay or reimburse expenses incurred by a director in connection with his appearance as a witness in a proceeding at a time when he is not a party.

        33-779 EXCLUSIVITY OF PROVISIONS.

        A corporation may provide indemnification of or advance expenses to a director, officer, employee or agent only as permitted by sections 33-770 to 33-779, inclusive.

Indemnification of Officers and Directors under Illinois Corporation Law

        Section 8.75 of the Illinois Business Corporation Act of 1983, as amended, provides with respect to indemnification of directors and officers as follows:

        "5/8.75 INDEMNIFICATION OF OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS; INSURANCE.

        (a)   A corporation may indemnify any person who was or is a party, or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that he or she is or was a director, officer, employee or agent of the corporation, or who is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding, if such person acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he or she reasonably believed to be in or not opposed to the best interests of the corporation or, with respect to any criminal action or proceeding, that the person had reasonable cause to believe that his or her conduct was unlawful.

        (b)   A corporation may indemnify any person who was or is a party, or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that such person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit, if such person acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to, the best interests of the corporation, provided that no indemnification shall be made with respect to any claim, issue, or matter as to which such person has been adjudged to have been liable to the corporation, unless, and only to the extent that the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability, but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses as the court shall deem proper.

        (c)   To the extent that a present or former director, officer or employee of a corporation has been successful, on the merits or otherwise, in the defense of any action, suit or proceeding

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referred to in subsections (a) and (b), or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by such person in connection therewith, if the person acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to, the best interests of the corporation.

        (d)   Any indemnification under subsections (a) and (b) (unless ordered by a court) shall be made by the corporation only as authorized in the specific case, upon a determination that indemnification of the present or former director, officer, employee or agent is proper in the circumstances because he or she has met the applicable standard of conduct set forth in subsections (a) or (b). Such determination shall be made with respect to a person who is a director or officer at the time of the determination: (1) by the majority vote of the directors who are not parties to such action, suit or proceeding, even though less than a quorum, (2) by a committee of the directors designated by a majority vote of the directors, even though less than a quorum, (3) if there are no such directors, or if the directors so direct, by independent legal counsel in a written opinion, or (4) by the shareholders.

        (e)   Expenses (including attorney's fees) incurred by an officer or director in defending a civil or criminal action, suit or proceeding may be paid by the corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of the director or officer to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by the corporation as authorized in this Section. Such expenses (including attorney's fees) incurred by former directors and officers or other employees and agents may be so paid on such terms and conditions, if any, as the corporation deems appropriate.

        (f)    The indemnification and advancement of expenses provided by or granted under the other subsections of this Section shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any by-law, agreement, vote of shareholders or disinterested directors, or otherwise, both as to action in his or her official capacity and as to action in another capacity while holding such office.

        (g)   A corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or who is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against any liability asserted against such person and incurred by such person in any such capacity, or arising out of his or her status as such, whether or not the corporation would have the power to indemnify such person against such liability under the provisions of this Section.

        (h)   If a corporation indemnifies or advances expenses to a director or officer under subsection (b) of this Section, the corporation shall report the indemnification or advance in writing to the shareholders with or before the notice of the next shareholders meeting.

        (i)    For purposes of this Section, references to "the corporation" shall include, in addition to the surviving corporation, any merging corporation (including any corporation having merged with a merging corporation) absorbed in a merger which, if its separate existence had continued, would have had the power and authority to indemnify its directors, officers, and employees or agents, so that any person who was a director, officer, employee or agent of such merging corporation, or was serving at the request of such merging corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under the provisions of this Section with respect to the surviving corporation as such person would have with respect to such merging corporation if its separate existence had continued.

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        (j)    For purposes of this Section, references to "other enterprises" shall include employee benefit plans; references to "fines" shall include any excise taxes assessed on a person with respect to an employee benefit plan; and references to "serving at the request of the corporation" shall include any service as a director, officer, employee or agent of the corporation which imposes duties on, or involves services by such director, officer, employee, or agent with respect to an employee benefit plan, its participants, or beneficiaries. A person who acted in good faith and in a manner he or she reasonably believed to be in the best interests of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner "not opposed to the best interest of the corporation" as referred to in this Section.

        (k)   The indemnification and advancement of expenses provided by or granted under this Section shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director, officer, employee, or agent and shall inure to the benefit of the heirs, executors, and administrators of that person.

        (l)    The changes to this Section made by this amendatory Act of the 92nd General Assembly apply only to actions commenced on or after the effective date of this amendatory Act of the 92nd General Assembly.

Director and Officer Indemnification and Insurance Provisions in the By-laws of Equinox Holdings, Inc.

        The by-laws of Equinox Holdings, Inc. (the "Corporation") provide that it shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he or she is or was or has agreed to become a director or officer of the Corporation, or is or was serving or has agreed to serve at the request of the Corporation as a director or officer, of another corporation, partnership, joint venture, trust or other enterprise, or by reason of any action alleged to have been taken or omitted in such capacity, and may indemnify any person who was or is a party or is threatened to be made a party to such an action, suit or proceeding by reason of the fact that he or she is or was or has agreed to become an employee or agent of the Corporation, or is or was serving or has agreed to serve at the request of the Corporation as an employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her or on his or her behalf in connection with such action, suit or proceeding and any appeal therefrom, if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding had no reasonable cause to believe his or her conduct was unlawful; except that in the case of an action or suit by or in the right of the Corporation to procure a judgment in its favor (1) such indemnification shall be limited to expenses (including attorneys' fees) actually and reasonably incurred by such person in the defense or settlement of such action or suit, and (2) no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the Delaware Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Delaware Court of Chancery or such other court shall deem proper.

        The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he or she reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his or her conduct was unlawful.

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        Section 6.07 of the by-laws of Equinox Holdings, Inc. provides that it may purchase and maintain insurance on behalf of any person who is or was or has agreed to become a director or officer of the Corporation, or is or was serving at the request of the Corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him or her and incurred by him or her or on his or her behalf in any such capacity, or arising out of his or her status as such, whether or not the Corporation would have the power to indemnify him or her against such liability under the provisions of article 6 of the by-laws, provided that such insurance is available on acceptable terms, which determination shall be made by a vote of a majority of the entire Board of Directors.

Director and Officer Indemnification and Insurance Provisions in the by-laws of other registrants

        The by-laws of all of the registrant subsidiaries of Equinox Holdings, Inc. provide that the respective subsidiary will indemnify its directors and officers to the fullest extent allowed by law.

Indemnification Provisions in the employment agreements of officers of the registrants

        The employment agreement of certain officers of registrants with Equinox Holdings, Inc. provides that Equinox Holdings, Inc. shall indemnify and hold harmless the officer to the fullest extent permitted by law from and against any and all liabilities, costs, claims and expenses, including all costs and expenses incurred in defense of litigation (including attorneys' fees), arising out of the employment of the officer under the employment agreement, except to the extent that any such liabilities, costs, claims and expenses is found in a final judgment by a court of competent jurisdiction to have resulted from, arising out of or based upon the gross negligence or willful misconduct of the officer. Costs and expenses incurred by the officer in defense of such litigation (including attorneys' fees) shall be paid by Equinox Holdings, Inc. in advance of the final disposition of such litigation upon receipt by Equinox Holdings, Inc. of (a) a written request for payment, (b) appropriate documentation evidencing the incurrence, amount and nature of the costs and expenses for which payment is being sought, and (c) an undertaking adequate under applicable law made by or on behalf of the officer to repay the amounts so paid if it shall ultimately be determined that executive is not entitled to be indemnified by the Equinox Holdings, Inc. under the employment agreement, including but not limited to as a result of such exception. Equinox Holdings, Inc. and officer will consult in good faith with respect to the conduct of any such litigation, and officer's counsel shall be selected with the consent of Equinox Holdings, Inc. Equinox Holdings, Inc. shall maintain an appropriate level of director's and officer's liability insurance during the employment period and during the restrictive period.

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ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a)

List of Exhibits.

Exhibit Number	Description of Document
2.1	Amended and Restated Stock Purchase Agreement and Plan of Merger, dated as of October 16, 2000, as amended as of December 14, 2000, by and among the holders of shares of Common Stock listed on Annex I to the agreement, Equinox Holdings, Inc., NCP-EH Recapitalization Corp., and NCP-EH, L.P.
3.1.1	Certificate of Incorporation of Equinox Holdings, Inc., amended.
3.1.2	Certificate of Incorporation of Equinox-92nd Street Inc.
3.1.3	Certificate of Incorporation of Equinox-85th Street Inc. (See Schedule I to Exhibit 3.1.2 hereto)
3.1.4	Certificate of Incorporation of Equinox—76th Street Inc.
3.1.5	Certificate of Incorporation of Equinox 63rd Street Inc. (See Schedule I to Exhibit 3.1.2 hereto)
3.1.6	Certificate of Incorporation of Equinox-54th Street, Inc.
3.1.7	Certificate of Incorporation of Equinox-50th Street, Inc. (See Schedule I to Exhibit 3.1.2 hereto)
3.1.8	Certificate of Incorporation of Equinox 44th Street Inc. (See Schedule I to Exhibit 3.1.2 hereto)
3.1.9	Certificate of Incorporation of Equinox-43rd Street Inc. (See Schedule I to Exhibit 3.1.2 hereto)
3.1.10	Certificate of Incorporation of Equinox Columbus Centre, Inc.
3.1.11	Certificate of Incorporation of Equinox Greenwich Avenue, Inc. (See Schedule I to Exhibit 3.1.2 hereto)
3.1.12	Certificate of Incorporation of Broadway Equinox Inc., amended.
3.1.13	Certificate of Incorporation of Equinox Tribeca, Inc.
3.1.14	Certificate of Incorporation of Equinox Tribeca Office, Inc.
3.1.15	Certificate of Incorporation of Equinox Wall Street Inc. (See Schedule I to Exhibit 3.1.2 hereto)
3.1.16	Certificate of Incorporation of Equinox White Plains Road, Inc.
3.1.17	Certificate of Incorporation of Equinox Woodbury, Inc.
3.1.18	Certificate of Incorporation of Equinox Greenvale, Inc.
3.1.19	Certificate of Incorporation of The Equinox Group, Inc. (See Schedule I to Exhibit 3.1.2 hereto)
3.1.20	Certificate of Incorporation of Energy Wear Inc.
3.1.21	Certificate of Incorporation of Equinox Darien, Inc.
3.1.22	Articles of Incorporation of Equinox Lincoln Park, Inc.
3.1.23	Articles of Incorporation of Equinox Highland Park, Inc. (See Schedule I to Exhibit 3.1.22 hereto)

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3.1.24	Articles of Incorporation of Equinox Gold Coast, Inc. (See Schedule I to Exhibit 3.1.22 hereto)
3.1.25	Articles of Incorporation of Equinox West Hollywood, Inc.
3.1.26	Articles of Incorporation of Equinox Fitness Pasadena, Inc.
3.1.27	Articles of Incorporation of Equinox Pine Street, Inc.
3.1.28	Certificate of Incorporation of Equinox Mamaroneck, Inc.
3.1.29	Articles of Incorporation of Equinox Fitness Santa Monica, Inc.
3.2.1	Amended and Restated By-laws of Equinox Holdings, Inc.
3.2.2	By-laws of Equinox-92nd Street Inc.
3.2.3	By-laws of Equinox-85th Street Inc. (See Schedule I to Exhibit 3.2.2 hereto)
3.2.4	By-laws of Equinox Fitness Club Inc. (See Schedule I to Exhibit 3.2.2 hereto)
3.2.5	By-laws of Equinox 63rd Street Inc. (See Schedule I to Exhibit 3.2.2 hereto)
3.2.6	By-laws of Equinox-54th Street, Inc. (See Schedule I to Exhibit 3.2.2 hereto)
3.2.7	By-laws of Equinox-50th Street, Inc. (See Schedule I to Exhibit 3.2.2 hereto)
3.2.8	By-laws of Equinox 44th Street Inc. (See Schedule I to Exhibit 3.2.2 hereto)
3.2.9	By-laws of Equinox-43rd Street Inc. (See Schedule I to Exhibit 3.2.2 hereto)
3.2.10	By-laws of Equinox Columbus Centre, Inc.
3.2.11	By-laws of Equinox Greenwich Avenue, Inc.
3.2.12	By-laws of Broadway Equinox Inc.
3.2.13	By-laws of Equinox Tribeca, Inc.
3.2.14	By-laws of Equinox Tribeca Office, Inc.
3.2.15	By-laws of Equinox Wall Street Inc. (See Schedule I to Exhibit 3.2.2 hereto)
3.2.16	By-laws of Equinox White Plains Road, Inc. (See Schedule I to Exhibit 3.2.2 hereto)
3.2.17	By-laws of Equinox Woodbury, Inc.
3.2.18	By-laws of Equinox Greenvale, Inc.
3.2.19	By-laws of The Equinox Group, Inc. (See Schedule I to Exhibit 3.2.2 hereto)
3.2.20	By-laws of Energy Wear Inc. (See Schedule I to Exhibit 3.2.12 hereto)
3.2.21	By-laws of Equinox Darien, Inc.
3.2.22	By-laws of Equinox Lincoln Park, Inc.
3.2.23	By-laws of Equinox Highland Park, Inc.
3.2.24	By-laws of Equinox Gold Coast, Inc.
3.2.25	By-laws of Equinox West Hollywood, Inc.
3.2.26	By-laws of Equinox Fitness Pasadena, Inc.
3.2.27	By-laws of Equinox Pine Street, Inc.
3.2.28	By-laws of Equinox Mamaroneck, Inc.
3.2.29	By-laws of Equinox Fitness Santa Monica, Inc.

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4.1	Indenture, dated as of December 16, 2003 among Equinox Holdings, Inc., the Guarantors named therein and U.S. Bank National Association with respect to Equinox Holdings, Inc.'s 9% Senior Notes due 2009.
**4.2	Registration Rights Agreement, dated as of December 16, 2003, among Equinox Holdings, Inc., the Guarantors named therein, Merrill Lynch & Co., UBS Securities LLC. and Wachovia Capital Markets, LLC.
4.3	Form of Exchange Note (Included in Exhibit 4.1 hereto)
4.5	Form of Common Stock Purchase Warrant.
*5.1	Opinion of Rosen Weinhaus, LLP.
10.1	Master Services Agreement, dated February 22, 2001, among Equinox Holdings, Inc., Eclipse Development Corporation, and Paul Boardman.
10.3	Registration Rights Agreement, dated December 15, 2000, among Equinox Holdings, Inc., Equinox Holdings, L.P., NCP Co-Investment Fund, L.P. and certain holders of common stock put warrants, certain members of management and other Equinox shareholders.
10.4	Consulting Agreement, dated as of December 15, 2000, among Equinox Holdings, Inc., North Castle Partners, L.L.C., J.W. Childs Associates, L.P. and J.W. Childs Advisors II, L.P.
10.5	Stockholders Agreement, dated as of December 15, 2000, as amended as of February 21, 2003, among Equinox Holdings, Inc., NCP-EH, L.P., NCP Co-Investment Fund, L.P., each of the stockholders listed on Schedule I to the agreement, each of the rollover optionholders listed on Schedule II to the agreement, Albion Alliance Mezzanine Fund, L.P., Albion Alliance Mezzanine Fund II, L.P., Deutsche Bank Securities Inc., Exeter Capital Partners IV, L.P., Exeter Equity Partners, L.P., Bill and Melinda Gates Foundation, Arrow Investment Partners, and each other person who is, or becomes, a party to the Agreement pursuant to Section 4.14 of the Agreement, North Castle Partners II, L.P. and Friends of North Castle Fund, L.P.
10.6	Employment Agreement by and between Equinox Holdings, Inc. and Harvey Spevak.
*10.7	Employment Agreement by and between Equinox Holdings, Inc., Scott Rosen and the Company.
*10.8	Termination Agreement by and between Equinox Holdings, Inc. and Kenneth P. Fleischer.
*10.9	Employment Agreement by and between Equinox Holdings, Inc. and Chris Peluso.
*10.10	Employment Agreement by and between Equinox Holdings, Inc. and Jeff Grayson.
*10.11	Credit Agreement by and among Equinox Holdings, Inc., Merrill Lynch Capital, UBS Securities, Inc., and Wachovia Securities, Inc.
*12.1	Computation of Ratio of Earnings to Fixed Charges.
**21.1	List of Subsidiaries.
23.1	Consent of KPMG LLP.
*23.2	Consent of Rosen Weinhaus, LLP (contained in Exhibit 5.1).
23.3	Consent of Bouchez Kent
**24.1	Powers of Attorney (contained on signature pages).
*25.1	Statement of Eligibility of U.S. Bank National Association on Form T-1
99.1	Form of Letter of Transmittal.

II-20

99.2	Form of Notice of Guaranteed Delivery.
99.3	Form of Instruction to Registered Holder and/or Book Entry Transfer Participant from Beneficial Owner for Tender of 9% Senior Notes due 2009 for registered 9% Senior Notes due 2009.

*

To be filed by amendment.

**

Previously filed.

ITEM 22. UNDERTAKINGS

        The undersigned registrant hereby undertakes:

        (1)   To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

        (a)   To include any prospectus required by section 10(a)(3) of the Securities Act of 1933;

        (b)   To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement;

        (c)   To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.

        (2)   That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offering therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

        (3)   To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

        (4)   Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been informed that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

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        (5)   The undersigned registrant hereby undertakes to respond to requests for information that is incorporated by reference into the prospectus pursuant to Items 4, 10(b), 11, or 13 of this form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request.

        (6)   The undersigned registrant hereby undertakes to supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective.

II-22

SIGNATURES

        Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant has duly caused this Amendment No. 1 to Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized in the New York, State of New York, on July 14, 2004.

EQUINOX HOLDINGS, INC.
By:	/s/  HARVEY SPEVAK
Name:	Harvey Spevak
Title:	Director, President and Chief Executive Officer

        Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
/s/  HARVEY SPEVAK Harvey Spevak	Director, President and Chief Executive Officer	July 14, 2004
* Charles F. Baird	Director, Chairman	July 14, 2004
* Scott Rosen	Executive Vice President and Chief Financial Officer	July 14, 2004
* Glenn Hopkins	Director	July 14, 2004
* Benjamin B. James	Director	July 14, 2004
* John Richards	Director	July 14, 2004
* Adam Saltzman	Director	July 14, 2004
* Mark Tricolli	Director, Vice President and Secretary	July 14, 2004

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* William E. Watts	Director	July 14, 2004
* Edward D. Yun	Director	July 14, 2004

*By:
/s/  HARVEY SPEVAK Name: Harvey Spevak
Attorney-In-Fact

II-24

SIGNATURES

        Pursuant to the requirements of the Securities Act of 1933, as amended, each Registrant other than Equinox Holdings, Inc. has duly caused this Amendment No. 1 to Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized in the New York, State of New York, on July 14, 2004.

By:	/s/  HARVEY SPEVAK
Name:	Harvey Spevak
Title:	Director, President and Chief Executive Officer

        Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
/s/  HARVEY SPEVAK Harvey Spevak	Director, President and Chief Executive Officer	July 14, 2004
* Scott Rosen	Treasurer and Chief Financial Officer	July 14, 2004
* Mark Tricolli	Secretary	July 14, 2004
* Adam Saltzman	Director	July 14, 2004
* Edward D. Yun	Director	July 14, 2004

*By:
/s/  HARVEY SPEVAK Harvey Spevak
Attorney-In-Fact

II-25

QuickLinks

OTHER REGISTRANTS
TABLE OF CONTENTS
TRADEMARKS AND TRADE NAMES
MARKET AND INDUSTRY DATA
SUMMARY
Equinox
Summary of the Terms of the Exchange Offer
Summary of the Terms of the New Notes
Risk Factors
Summary Consolidated Financial and Other Data
RISK FACTORS
FORWARD-LOOKING STATEMENTS
THE EXCHANGE OFFER
USE OF PROCEEDS
CAPITALIZATION
SELECTED CONSOLIDATED FINANCIAL INFORMATION AND OTHER DATA
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
BUSINESS
MANAGEMENT
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
RELATED PARTY TRANSACTIONS
DESCRIPTION OF CAPITAL STOCK
DESCRIPTION OF CERTAIN INDEBTEDNESS
DESCRIPTION OF NOTES
MATERIAL UNITED STATES FEDERAL TAX CONSIDERATIONS
PLAN OF DISTRIBUTION
LEGAL MATTERS
EXPERTS
WHERE YOU CAN FIND MORE INFORMATION
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Years Ended December 31, 2003, 2002 (restated) and 2001 (restated)
Report of Independent Registered Public Accounting Firm
EQUINOX HOLDINGS, INC. Consolidated Balance Sheets
EQUINOX HOLDINGS, INC. Consolidated Statements of Income
EQUINOX HOLDINGS, INC. Consolidated Statements of Cash Flows
EQUINOX HOLDINGS, INC. Notes to Consolidated Financial Statements
EQUINOX HOLDINGS, INC. Unaudited Consolidated Condensed Balance Sheets
EQUINOX HOLDINGS, INC. Unaudited Consolidated Condensed Statements of Income
EQUINOX HOLDINGS, INC. Consolidated Statements of Cash Flow
EQUINOX HOLDINGS, INC. Notes to Unaudited Consolidated Condensed Financial Statements
EQUINOX HOLDINGS, INC.
PART II INFORMATION NOT REQUIRED IN PROSPECTUS
SIGNATURES
SIGNATURES

EX-2.1

Exhibit 2.1

EXECUTION COPY

AMENDED AND RESTATED

STOCK PURCHASE AGREEMENT AND PLAN OF MERGER

by and among

THE SHAREHOLDERS LISTED ON ANNEX I HERETO,

EQUINOX HOLDINGS, INC.,

NCP-EH RECAPITALIZATION CORP,

and

NCP-EH, L.P.

dated as of October 16, 2000,

as amended as of December 14, 2000

TABLE OF CONTENTS

SECTION 1.				DEFINITIONS
SECTION 2.				MERGER AND STOCK PURCHASE
	2.1.	Merger; Purchase of Shares
	2.2.	Issuance of Purchased Shares and Cash Payment
	2.3.	Conversion or Cancellation of Shares
	2.4.	Exchange Of Certificates
	2.5.	Certificate of Incorporation; By-Laws
	2.6.	Directors and Officers of the Surviving Corporation
	2.7.	Effective Time
	2.6.	Options
	2.9.	Cash Escrow Deposit
	2.10.	Closing
	2.11.	2000 Contingent Share Payment
	2.12.	2003 Contingent Payment
	2.13.	Exit Payment
	2.14.	Payment of 2003 Contingent Payment, Exit Payment and Additional Exit Payment
	2.15.	Accounting Policies and Practices in Determining Adjusted EBITDA
SECTION 3.			REPRESENTATIONS AND WARRANTIES REGARDING THE COMPANY
	3.1.	Organization and Good Standing of the Company
	3.2.	Subsidiaries
	3.3.	Capitalization; Title to Shares
	3.4.	Authority, Approvals and Consents
	3.5.	Financial Statements
	3.6.	Absence of Material Adverse Change; Conduct of Business
	3.7.	Taxes
	3.8.	Legal Matters
	3.9.	Real Property
	3.10.	Contracts
	3.11.	Employee Benefit Plans
	3.12.	Intellectual Property

i

	3.13.	Brokers
	3.14.	Environmental Matters
	3.15.	Transactions with the Shareholders
	3.16.	Insurance
	3.17.	Labor Matters
	3.18.	Assets
	3.19.	Undisclosed Liabilities, etc
	3.20.	Energy Wear EBITDA
	3.21.	No Other Representations or Warranties
SECTION 4.			REPRESENTATIONS AND WARRANTIES REGARDING PURCHASER
	4.1.	Organization of the Purchaser
	4.2.	Power; Authorization; Consents
	4.3.	Brokers
	4.4.	Investment Intent of the Purchaser
	4.5.	Financing Commitments
	4.6.	Litigation
SECTION 5.				COVENANTS
	5.1.	Access; Confidentiality
	5.2.	Announcements
	5.3.	Consents; Cooperation
	5.4.	Additional Agreements
	5.5.	Notification of Certain Matters
	5.6.	Hart-Scott-Rodino
	5.7.	Further Assurances
	5.8.	Retention of Books and Records
	5.9.	Employee Benefit Plans
	5.10.	Conduct of Business Prior to the Closing
	5.11.	Shareholders’ Rights with Respect to Resales
	5.12.	Transfer Taxes
	5.13.	Landlord Consents
	5.14.	Termination of Existing Shareholder Agreements
	5.15.	Indemnification

ii

	5.16.	Access to Tax Records
	5.17.	Liquidation of Certain Subsidiaries
	5.18.	Use of Business Marks
	5.19.	Non-Competition; Non-Disparagement
	5.20.	Non-Solicitation of Employees
	5.21.	Cash Adjustments; Capital Expenditures
	5.22.	No Solicitation
	5.23.	Special Distribution
	5.24.	Release of Shareholder Guarantees
	5.25.	Section 338 Election
	5.26.	Promotions and Sales Efforts
SECTION 6.			CONDITIONS TO THE OBLIGATIONS OF PURCHASER
	6.1.	Representations and Warranties; Covenants
	6.2.	Hart-Scott-Rodino
	6.3.	Absence of Injunction
	6.4.	Directors
	6.5.	Section1445(b)(2) Affidavit
	6.6.	Certificates
	6.7.	No Material Adverse Effect
	6.8.	Financing
	6.9.	Corporate Proceedings
	6.10.	Shareholders Agreement and Registration Rights Agreement
	6.11.	Lien Releases
	6.12.	Governmental Consents
	6.13.	Construction Contracts
	6.14.	Opinions
	6.15.	Option Consents
	6.16.	Cash Adjustments Calculation
	6.17.	Lessor Notice
SECTION 7.			CONDITIONS TO THE OBLIGATIONS OF THE SHAREHOLDERS
	7.1.	Representations and Warranties; Covenants.
	7.2.	Hart-Scott-Rodino

iii

	7.3.	Absence of Injunction
	7.4.	Certificates
	7.5.	Corporate Proceedings
	7.6.	Opinions
	7.7.	Option Consents
	7.8.	Cash Adjustments Calculation
SECTION 8.					TERMINATION
	8.1.	Termination
	8.2.	Effect of Termination
SECTION 9.				SURVIVAL AND INDEMNIFICATION
	9.1.	Survival
	9.2.	Shareholders’ Indemnification
	9.3.	The Purchaser’s Indemnification
	9.4.	Claims by Third Parties
	9.5.	Apportionment of Taxes
	9.6.	Tax Returns.
	9.7.	Contests
	9.8.	Indemnification for Taxes
	9.9.	Post Allocation Date Taxes
SECTION 10.			MISCELLANEOUS
	10.1.	Headings
	10.2.	Notices
	10.3.	Assignment
	10.4.	Entire Agreement
	10.5.	Amendment; Waiver
	10.6.	Counterparts
	10.7.	Governing Law
	10.8.	Severability
	10.9.	Consent to Jurisdiction
	10.10.	Third Person Beneficiaries
	10.11.	Representations and Warranties; Disclosure Schedule; No Waiver
	10.12.	United States Dollars

iv

	10.13.	Expenses
	10.14.	Shareholders’ Representative
	10.15.	Options
Annex I		The Shareholders
Annex II		Cashed Out and Rollover Common Shares
Annex III		Cashed Out and Rollover Options
Annex IV		Directors and Officers of Surviving Corporation
Exhibit A		Form of Certificate of Incorporation of the Surviving Corporation
Exhibit B		Form of Bylaws of the Surviving Corporation
Exhibit C		Form of Shareholders Agreement
Exhibit D		Form of Registration Rights Agreement
Exhibit E		Form of Opinion of Cleary, Gottlieb, Steen & Hamilton
Exhibit F		Form of Opinion of Debevoise & Plimpton
Exhibit G		Form of Cash Escrow Agreement
Exhibit H		Form of Share Escrow Agreement

v

AMENDED AND RESTATED STOCK PURCHASE AGREEMENT AND PLAN OF MERGER

THIS AMENDED AND RESTATED STOCK PURCHASE AGREEMENT AND PLAN OF MERGER dated as of this     day of December, 2000, with effect as of the 16th day of October, 2000, by and among the holders of shares of Common Stock listed on Annex I hereto (each a “Shareholder” and collectively, the “Shareholders”). Equinox Holdings, Inc., a Delaware corporation (the “Company”). NCP-EH Recapitalization Corp., a Delaware corporation (“MergerCo”), and NCP-EH, L.P., a Delaware limited partnership (the “Purchaser”).

RECITALS

WHEREAS, the Shareholders are the record and beneficial owners of all of the issued and outstanding shares of capital stock of the Company, in the respective proportions set forth opposite their names in Annex I hereto;

WHEREAS, the Board of Directors of MergerCo has approved, and deems it advisable and in the best interests of the shareholders of MergerCo to participate in, the recapitalization (the “Recapitalization”) of the Company, upon the terms and subject to the conditions set forth herein;

WHEREAS, the Board of Directors of the Company has approved, and deems it advisable and in the best interests of the shareholders of the Company to consummate, the Recapitalization, upon the terms and subject to the conditions set forth herein;

WHEREAS, in furtherance of the Recapitalization, the Board of Directors of the Company and the Board of Directors of MergarCo have each approved this Agreement and the merger of MergerCo with and into the Company in accordance with the terms of this Agreement and the Delaware General Corporation Law (the “DGCL”):

WHEREAS, in connection with the Recapitalization, the Purchaser desires to purchase and the Company desires to issue and sell to the Purchaser shares of common stock of the Company on the terms and conditions set forth in this Agreement;

WHEREAS, certain employees and consultants of the Company have options to purchase shares of Common Stock (the “Options”) pursuant to the Equinox Holdings, Inc. 1998 Stock Option Plan (the “Stock Option Plan”) or other agreements;

WHEREAS, the parties hereto wish to provide for the termination or liquidation of certain Options held by certain Persons (subject to the consent of such Persons) and the conversion of the remaining Options held by such Persons, into options to purchase shares of Surviving Corporation Common Stock, and

WHEREAS, the parties hereto amend and restate in its entirety hereby the Stock Purchase Agreement and Plan of Merger, dated as of October 16, 2000, by the execution of this Agreement.

Accordingly, in consideration of the premises and of the respective covenants and agreements contained herein, the parties hereto hereby agree as follows;

SECTION 1.  DEFINITIONS

In this Agreement, except as expressly provided herein or as the context otherwise requires:

“2000 Adjusted EBITDA” means the sum of (i) EBITDA of the Company and its Subsidiaries (which shall not include Bell Development Corporation) for the 12 months ended December 31, 2000, (ii) EBITDA of Energy Wear for the 12 months ended December 31, 2000, (iii) transaction fees and expenses incurred by the Company in connection with the transactions contemplated by this Agreement (including special bonuses and similar non-recurring compensation related to the transactions contemplated by this Agreement paid to employees of the Company and its Subsidiaries to the extent deducted in arriving at the amount referred to in the foregoing clause (i)) and (iv) any lease or rental expense for the period January through March, 2000 only relating to the Company’s Scarsdale, New York facility to the extent deducted in arriving at the amount referred to in the foregoing clause (i).

“2000 EBITDA Certificate” shall have the meaning given such term in Section 2.11.

“2000 Escrow Agent Certificate” shall have the meaning given such term in Section 2.11.

“2000 Financials” shall have the meaning given such term in Section 2.11.

“2003 Adjusted EBITDA” means the EBITDA of the Company and its Subsidiaries for the 12 months ended December 31, 2003; provided that the “2003 Adjusted EBITDA” shall: (i) include EBITDA in respect of third party investments made or businesses acquired by the Company or its Subsidiaries from and after the date hereof only to the extent that (A) such investments or acquired businesses represent no more than two health club facilities, and (B) the contribution to EBITDA from such investments or acquisitions is positive; and (ii) include only EBITDA relating to health club facilities that have commenced full operations on or prior to December 31, 2002.

“2003 Contingent Payment” shall have the meaning given such term in Section 2.12.

“2003 EBITDA Certificate” shall have the meaning given such term in Section 2.12.

“2003 Financials” shall have the meaning given such term in Section 2.12.

“Additional Exit Payment” shall have the meaning given such term in Section 2.13.

“Affiliate” means with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under direct or indirect common control with, such Person. A Person will be deemed to control a corporation if such Person possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of such corporation, whether through the ownership of voting securities, by contract or otherwise. Notwithstanding the foregoing, for purposes of this Agreement, neither the Company nor any Subsidiary shall be an Affiliate of a Shareholder.

2

“Agreement” means this Agreement and Plan of Merger, including all recitals, schedules and the Disclosure Schedule relating hereto.

“Ancillary Agreements” means the Registration Rights Agreement, the Shareholders Agreement, the Cash Escrow Agreement and the Share Escrow Agreement.

“Assets” shall have the meaning given such term in Section 3.18.

“beneficial ownership” shall have the meaning ascribed to it in Rule 13d-3 under the Securities Exchange Act of 1934.

“Business Day” means any day which is not a Saturday, Sunday or any other day on which banks in the State of New York are authorized or required by law to close.

“Cash” means cash on hand or in a demand deposit account maintained with a commercial bank or trust company having a total capital and surplus of at least $100,000,000.

“Cash Adjustments” means the excess of (i) the sum of: (A) Net Debt immediately prior to the Closing; (B) the aggregate amount of Company Advisory Fees; (C) the Special Distribution Amount; (D) any state or local sales tax refund received by the Company on or before the Closing and (E) the amount of any Transaction Bonuses, over (ii) the lesser of $1,500,000 and the excess of (x) the Net Debt immediately prior to the Closing over (y) the Net Debt as of September 30, 2000.

“Cash Escrow Agreement” means the Cash Escrow Agreement, dated the Closing Date, by and between the Surviving Corporation and the Shareholders, substantially in the form of Exhibit G hereto, with respect to the administration and disposition of the Escrowed Funds.

“Cash Out Consent” shall have the meaning given such term in Section 2.8.

“Cashed Out Option” shall have the meaning given such term in Section 2.8.

“Cashed Out Option Ratio” means the product of the Fractional Share and the aggregate number of Cashed Out Option Shares.

“Cashed Out Option Shares” means the shares of Common Stock underlying the Cashed Out Options.

“Cashed Out Qptionholder” shall mean a holder of a Cashed Out Option.

“Cashed Out Share Ratio” means the product of the Fractional Share and the number of Common Shares immediately prior to the Effective Time.

“Cash Payment” shall have the meaning given such term in Section 2.14.

“Certificate of Merger” shall have the meaning given such term in Section 2.7.

“Childs” shall have the meaning given such term in Section 4.5.

3

“Closing” means the consummation of the Recapitalization and related transactions contemplated by this Agreement.

“Closing Date” means the date on which the Closing occurs as determined by Section 2.10 of this Agreement.

“Code” means the Internal Revenue Code of 1986, as amended.

“Common Shares” means, as of any date, all shares of Common Stock issued and outstanding on such date.

“Common Stock” means the common stock, par value $0.01 per share, of the Company.

“Company Advisory Fees” means all fees and expenses owing by the Company to Bear, Stearns & Co., H&F Capital Services, Arthur Andersen LLP and Cleary, Gottlieb, Steen & Hamilton and all other fees and expenses owing to any other advisor to the Company or otherwise payable by the Company in connection with the transactions contemplated hereby.

“Company Agreement” means any mortgage, indenture, note, agreement, contract, lease, license, instrument or other commitment, arrangement or understanding of any kind, to which the Company or a Subsidiary is a party or by which the Company or a Subsidiary or any of their respective properties may be bound or affected.

“Company Intellectual Property” shall have the meaning given such term in Section 3.12.

“Competing Transaction” shall have the meaning given such term in Section 5.24.

“Confidentiality Agreement” means the Confidentiality Agreement between the Purchaser and the Company dated April 25, 2000.

“Consent” means any consent, approval, authorization, waiver, permit, grant, franchise, concession, agreement, license, certificate, exemption, order, registration, declaration, filing, report or notice of, with or to any Person.

“Converted Option” shall have the meaning given such term in Section 2.8.

“Contest” means any audit, court proceeding or other dispute with respect to any Tax matter that affects the Company or any of the Subsidiaries, as the case may be.

“Debt” shall mean (i) obligations for borrowed money, (ii) capitalized lease obligations, (iii) obligations under interest rate agreements and currency agreements, (iv) obligations which are evidenced by notes, acceptances or other instruments, (v) obligations representing the deferred purchase price of property or services (other than accounts payable arising in the ordinary course of business) and (vi) guarantees of any of the foregoing, provided that Debt shall not include standby letters of credit and any New Debt Financing.

“Deferred Payment” shall have the meaning given such term in Section 2.13A.

“Delaware Secretary of State” shall have the meaning given such term in Section 2.7.

4

“Disclosure Schedule” means the disclosure schedule relating to this Agreement, delivered by the Shareholders to the Purchaser concurrently with the execution of this Agreement.

“Dispute Auditor” shall have the meaning given such term in Section 2.11.

“EBITDA” with respect to any period shall mean audited net income for such period plus, without duplication: net interest expense (interest expense less interest income); Taxes; depreciation; amortization; owners’ expenses to the extent that they do not continue to be payable to the Shareholders post-Closing; management, advisory or similar fees; all salary and benefits paid or payable to non-employee shareholders (or their affiliates); the amount of non-cash stock compensation expenses (net of non-cash stock compensation income) to the extent deducted or included in arriving at audited net income; the amount of the net change in deferred rent from the beginning of such period to the end of the period, as shown on the balance sheet of the Company contained in the audited financial statements of the Company for such period, all determined in accordance with GAAP as in effect on the date of this Agreement in a manner consistent with the Financial Statements as illustrated in Section 3.5 of the Disclosure Schedule.

“Effective Time” shall have the meaning given such term in Section 2.7.

“Employee Benefit Plan” shall have the meaning given such term in Section 3.11.

“Energy Wear” means Energy Wear, Inc., a New York corporation.

“Entity” shall have the meaning given such term in Section 5.19.

“Environmental Law” means any and all federal, state or local laws, ordinances or regulations relating to pollution, the protection of human health or safety or the environment and the discharge or release of materials into the environment.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

“Escrow Account” shall have the meaning given such term in Section 2.9.

“Escrow Agent” means an escrow agent appointed by the Purchaser and the Shareholders’ Representative pursuant to the Cash Escrow Agreement or the Share Escrow Agreement, as the case may be.

“Escrow Agent Termination Certificate” shall have the meaning given such term in Section 2.11.

“Escrow Withholding Amount” shall have the meaning given such term in Section 2.4.

“Escrowed Funds” shall have the meaning given such term in Section 2.9.

“Escrowed Shares” shall have the meaning given such term in Section 2.11.

“Exit Event” shall mean (i) any sale, merger or other transaction as a result of which NCP, Childs and their Affiliates shall have disposed, directly or indirectly, for cash of beneficial ownership of 75% or more of the shares of Surviving Corporation Common Stock held by them

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at the Closing or (ii) any underwritten public offering of Surviving Corporation Common Stock as a result of which a majority of the shares of Surviving Corporation Common Stock held by the Purchaser and its Affiliates at the Closing shall have been disposed of.

“Exit Payment” shall have the meaning given such term in Section 2.13.

“Exit Payment Date” shall have the meaning given such term in Section 2.13.

“Financial Statements” means the consolidated balance sheets of the Company as of December 31, 1999 and June 30, 2000 (which at such dates did not include Energy Wear), and the related statements of income, stockholders equity and cash flow for the periods then ended and the notes thereto accompanied, in the case of the statements as at and for the fiscal year ended December 31, 1999, by the audit or review report thereon of Arthur Andersen LLP.

“Fractional Share” means the fraction the numerator of which is one (1) and the denominator of which is the sum of (i) the total number of Common Shares immediately prior to the Effective Time and (ii) the total number of Cashed Out Option Shares.

“GAAP” shall mean United States generally accepted accounting principles.

“Governmental Authority” shall mean any court, arbitral tribunal, administrative agency or commission or other governmental or regulatory authority, whether domestic or foreign.

“Hazardous Material” shall mean any substance, chemical, compound, product, solid, gas, liquid, waste or byproduct which is classified or regulated as “hazardous” or “toxic” pursuant to any Environmental Law and includes, without limitation, asbestos, PCBs and petroleum (including crude oil or any fraction thereof).

“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

“Impairments” has the meaning given such term in Section 3.9.

“Indemnitee” shall mean the Purchaser Indemnitees or the Shareholders upon receipt by, as the case may be, the Purchaser Indemnitees, the Shareholders or the Company of a Third Party Claim.

“Indemnitor” shall mean any of the Purchaser Indemnitors or the Shareholders upon receipt by, as the case may be, the Purchaser Indemnitors or the Shareholders of a claim for indemnification from the Indemnitee pursuant to a Third Party Claim.

“Initial Escrowed Shares” means a number of shares of Surviving Corporation Common Stock equal to $10,000,000 divided by the Value Per Share, rounded to the nearest whole number of shares.

“Intellectual Property” means all of the following: (i) United States and foreign trademarks and service marks (registered or unregistered), applications to register, or renewal of registrations of, trademarks and service marks, and trade names, and all goodwill associated therewith; (ii) United States and foreign patents, patentable inventions, discoveries, improvements, ideas, know-how and processes; (iii) trade secrets and the right to limit the use

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or disclosure thereof; (iv) copyrights in all works; (v) computer software, data and documentation; and (vi) domain names.

“Knowledge of the Shareholders”, or words of similar import, means the actual knowledge of the Principal Shareholders after due inquiry of appropriate officers of the Company.

“Knowledge of the Purchaser”, or words of similar import, means the actual knowledge of Benjamin James, Adam Saltzman and Marc Magliacano.

“Leased Property” shall have the meaning given such term in Section 3.9 hereof.

“Legal Requirements” means all statutes, ordinances, codes, rules, regulations. standards, judgments, decrees, writs, rulings, injunctions, orders and other requirements of any Governmental Authority that are applicable to the Company and any of its property.

“Lien” means any encumbrance, mortgage, charge, right or other security interest.

“Liquidation Subsidiary” shall have the meaning given such term in Section 5.17.

“Losses” means, in respect of the Purchaser Indemnitees or the Shareholders, any and all losses, liabilities, claims and reasonable expenses of defense thereof (including, without limitation, fees and disbursements of counsel, but excluding compensation paid to employees of the Purchaser indemnitees or the Shareholders or their respective Affiliates, as the case may be, in connection with such defense); provided, however, that the amount of any Losses shall be net of any amounts recovered or recoverable under applicable insurance policies; and provided, further, that Losses incurred by the Purchaser Indemnitees shall not include (a) any losses, liabilities, claims or expenses relating to any matter to the extent there is included in the Financial Statements a liability or reserve relating to such matter, but only to the extent of such liability or reserve, or (b) consequential, exemplary or punitive damages, losses or liabilities (except with respect to Sections 5.18, 5.19 and 5.20).

“Material Adverse Effect” means any material adverse effect on the business, operations, assets, financial condition, properties or results of operations of the Company and its Subsidiaries, taken as a whole.

“Material Agreement” means each Company Agreement that is material to the business, operations, assets, financial condition or properties of the Company and its Subsidiaries, taken as a whole, including, without regard to materiality, each of the following Company Agreements:

(i)            any mortgage, indenture, note, installment obligation or other instrument, agreement or arrangement for or relating to borrowing of money by the Company or a Subsidiary in excess of $100,000, individually or in the aggregate under such Company Agreement;

(ii)           any guaranty, direct or indirect, by the Company or a Subsidiary of any obligation for borrowed money, excluding endorsements made for collection in the ordinary course of business in excess of $100,000, individually or in the aggregate under such Company Agreement;

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(iii)          any obligation to sell or to register the sale of any of the Common Shares or other securities of the Company or a Subsidiary;

(iv)          any obligation to make payments, contingent or otherwise, arising out of the prior acquisition of the business of other persons;

(v)           any collective bargaining agreement with any labor union;

(vi)          any lease or similar arrangement for the use of personal property involving payments by the Company or a Subsidiary in excess of $100,000 per annum, individually or in the aggregate under such Company Agreement;

(vii)         any Company Agreement to which any Shareholder or any Affiliate of a Shareholder is a party;

(viii)        any Company Agreement providing for aggregate payments in excess of $100,000 per annum after the Closing that is not terminable by the Company or a Subsidiary on less than 180 days’ notice without penalty;

(ix)           any Company Agreement containing non-competition covenants binding on the Company or a Subsidiary;

(x)            any partnership, joint venture or similar agreement to which the Company or a Subsidiary is a party; and

(xi)           any employment or consulting contracts, arrangements, commitments or understandings of any kind with any officer, director, employee or consultant of the Company or a Subsidiary which may not be terminated by the Company or a Subsidiary without penalty upon not more than 90 days’ notice, pursuant to which payments may be required to be made following the Closing.

“Merger” has the meaning given such term in Section 2.1.

“Merger Consideration” means the cash and shares of Surviving Corporation Common Stock paid to Shareholders and Cashed Out Optionholders pursuant to this Agreement.

“NCP” shall have the meaning given such term in Section 4.5.

“Net Debt” means, as of any time, the excess of (i) Debt of the Company and its Subsidiaries (other than (1) Debt in an amount not exceeding $360,000 in respect of the note owing by the Company and its Subsidiaries to SKW II Real Estate Limited Partnership and (2) up to $3,500,000 of capitalized lease obligations) at such time over (ii) Cash of the Company and its Subsidiaries at such time.

“New Debt Financing” shall mean, collectively, (i) the senior debt financing described in clause (i) of Section 4.5 and (ii) the Senior Subordinated Notes and the Subordinated Notes Documents (as such term is defined in the Senior Subordinated Note Agreement).

“New Equity Base” means a number equal to the product of (i) 1.07527 and (ii) the sum of the number of Purchased Shares and the number of Warrant Shares.

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“Options” shall have the meaning given such term in the Recitals.

“Option Indemnitor Shares” means the shares of Common Stock underlying Cashed Out Options held by persons who agree to be bound by the indemnification obligations of the Shareholders set forth in Section 9.2.

“Option to Share Ratio” means a fraction, the numerator of which is the number of Cashed Out Options and the denominator of which is the total number of Common Shares immediately prior to the Effective Time.

“Owned Property” shall have the meaning given such term in Section 3.9.

“Per Share Cash Consideration” means the product of (i) the excess of (A) $157,400,000 over (B) the sum of the Cash Adjustments and the Rollover Value, and (ii) the Fractional Share.

“Per Share Stock Consideration” means a number of shares of Surviving Corporation Common Stock equal to the product of (i) the sum of (A) the number of Rollover Common Shares and (B) the number of shares of Surviving Corporation Common Stock underlying the options issued pursuant to Section 2.8(b)(i) and (ii) the Fractional Share.

“Permitted Liens” are (a) Liens reflected or reserved against in the Financial Statements, to the extent so reflected or reserved, (b) Liens granted to secure obligations under the Revolving Facility, to the extent they will be released at or prior to Closing, (c) Liens for Taxes not yet due and payable or which are being contested in good faith and by appropriate proceedings, (d) easements, restrictions, covenants or other similar matters set forth in any deed conveying title to real property or any recorded instrument, agreement or plat (other than those that would have a material adverse effect on the use of the property), (e) statutory Liens of landlords for amounts not yet due and payable, (f) liens of carriers, warehousemen, mechanics and materialmen incurred in the ordinary course of business for amounts not yet due and payable, or (g) statutory liens for sums that are not yet due and payable.

“Person” means and includes an individual, corporation, partnership (limited or general), joint venture, association, trust, limited liability company, any other unincorporated organization or entity and a governmental entity or any department or agency thereto.

“Principal Shareholder” means any of Donato Errico, Jr., Vito Errico and Lavinia Errico (Ms.)

“Property Leases” shall have the meaning given such term in Section 3.9.

“Purchase Price” means the product of (a) the number of Purchased Shares and (b) the Value Per Share.

“Purchased Shares” means a number (rounded to the nearest whole share) of newly issued shares of Surviving Corporation Common Stock equal to (A)(i)(x) the Total Equity Value less the Rollover Option Value, divided by (y) the Value Per Share, less (ii) the product of (a) the number of Warrant Shares, (b) the Recap Fraction and (c) the sum of one (1) and the Option to Share Ratio, divided by (B) the sum of (i) one (1), (ii) the Recap Fraction and (iii) the product of the Recap Fraction and the Option to Share Ratio.

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“Purchaser Indemnitees” shall have the meaning given such term in Section 9.2.

“Purchaser Idemnitors” shall have the meaning given such term in Section 9.3.

“Purchaser Internal Rate of Return” shall mean the net cash on cash internal rate of return to the Purchaser on its equity investment in the Company, compounded annually (on a pro forma basis for the aggregate increase after deducting the amount of any Exit Payment and Additional Exit Payment).

“Real Property” shall mean the Owned Property and the Leased Property.

“Recapitalization” shall have the meaning given such term in the Recitals.

“Recap Fraction” shall mean 0.07527 (or 7 divided by 93).

“Registration Rights Agreement” shall have the meaning given such term in Section 6.10.

“Release” shall mean any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, or disposing into the environment.

“Resale Period” shall have the meaning given such term in Section 5.11.

“Resale Profit” shall have the meaning given such term in Section 5.11.

“Restriction Period” shall have the meaning given such term in Section 5.19.

“Revolving Facility” means the First Amended and Restated Credit Agreement, dated as of February 28, 2000, among the Company, as borrower, the Lenders party thereto and The Bank of New York, as Administrative Agent and Issuing Bank.

“Rollover Common Shares” means a number of shares of Surviving Corporation Common Stock (rounded to the nearest whole number) equal to the product of 0.07 and the New Equity Base.

“Rollover Options’’ shall have the meaning given such term in Section 2.8(c).

“Rollover Option Value” shall mean the product of (a) the number of Rollover Options and (b) the Value Per Share.

“Rollover Value” means the product of (i) the sum of the number of the Rollover Common Shares and the number of shares of Surviving Corporation Common Stock underlying the Rollover Options and the Surviving Corporation Stock Options issued pursuant to Section 2.8(b)(i) and (ii) the Value Per Share.

“Scarsdale Action” shall have the meaning given such term in Section 9.2(a).

“Senior Subordinated Note Agreement” shall mean that certain Senior Subordinated Note and Warrant Purchase Agreement, dated as of December 15, 2000, by and among the Surviving Corporation and the purchasers named therein.

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“Senior Subordinated Notes” shall mean the $ 50,000,000 aggregate principal amount of 14% Senior Subordinated Notes of the Surviving Corporation to be issued pursuant to the Senior Subordinated Note Agreement in connection with the Recapitalization.

“Share Escrow Account” shall have the meaning given such term in Section 2.11.

“Share Escrow Agreement” means the Share Escrow Agreement, to be entered into on the Closing Date, substantially in the form attached as Exhibit H hereto, by and between the Surviving Corporation and the Shareholders with respect to the administration and disposition of the Escrowed Shares.

“Shareholder Trademarks” shall have the meaning given such term in Section 3.12.

“Shareholders Agreement” shall have the meaning given such term in Section 6.10.

“Shareholders’ Representative” shall have the meaning given such term in Section 10.14.

“Special Distribution Amount” shall have the meaning given such term in Section 5.23.

“Stock Option Plan” shall have the meaning given such term in the Recitals.

“Stock Purchase” shall have the meaning given such term in Section 2.1.

“Subsidiaries” or “Subsidiary” shall mean any corporation of which the Company, directly or indirectly, owns a majority of the common stock or has the power to vote or direct the voting of sufficient securities to elect a majority of the board of directors of such corporation, including, but not limited to, those corporations listed in Section 3.2 of the Disclosure Schedule.

“Surviving Corporation” has the meaning given such term in Section 2.1.

“Surviving Corporation Common Stock” means the common stock, par value $0.01 per share, of the Surviving Corporation.

“Surviving Corporation Stock Option’’ has the meaning given such term in Section 2.8.

“Surviving Corporation Stock Option Plan” has the meaning given such term in Section 2.8.

“Tax” or “Taxes” means all taxes, charges, fees, levies or other assessments, and all estimated payments thereof, including but not limited to income, excise, property, sales, use, value added, mortgage, alternative, minimum, accumulated earnings, net worth, rent, occupancy, occupational, employment, disability, workers compensation, healthcare, escheats, environmental, franchise, payroll, transfer, gross receipts, withholding, social security, and unemployment taxes, imposed by any U.S. federal, state, county or local or non-U.S. government, or any subdivision or agency thereof, and any interest, penalties, additions to tax and expenses relating to such taxes, charges, fees, levies or other assessments.

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“Tax Returns” means all federal, state and local Tax returns, information returns, reports and declarations which are due and required to be filed by any applicable Tax law, including any schedule or attachment thereto and including any amendment of the foregoing.

“Third Party Claim” shall have the meaning given such term in Section 9.4.

“Total Equity Value” shall mean an amount equal to $81,400,000.

“Transaction Bonuses” means bonus payments in such amounts and payable to such individuals as shall be specified in writing by the Shareholders to the Purchaser at least one Business Day prior to the Closing Date.

“Transfer” shall have the meaning given such term in Section 5.11.

“Transfer Consideration” shall have the meaning given such term in Section 5.11.

“Value Per Share” means (A) the excess of (i) $157,400,000 over (ii) the Cash Adjustments, divided by (B) the sum of the total number of Common Shares immediately prior to the Effective Time and the total number of Vested Option Shares.

“Vested Options” means all Options that are vested immediately prior to, or become vested as a result of, the Closing, the Option held by Harvey Spevak for 45,000 shares of Common Stock that may have become vested on or prior to December 31, 2000 if certain performance objectives were achieved and Options held by Ken Fleischer to purchase 25,000 shares of Common Stock.

“Vested Option Shares” means the shares of Common Stock underlying the Vested Options.

“Warrant Shares” means the shares of Surviving Corporation Common Stock underlying the warrants issued to financing providers in connection with the New Debt Financing.

“Year End Date” means the date immediately preceding the Closing Date.

SECTION 2.  MERGER AND STOCK PURCHASE

2.1.          Merger; Purchase of Shares.  (a) On the terms and subject to the conditions of this Agreement and in accordance with the applicable provisions of the DGCL, at the Effective Time, MergerCo shall be merged (the “Merger”) with and into the Company and the separate corporate existence of MergerCo shall cease. After the Merger, the Company shall continue as the surviving corporation (sometimes hereinafter referred to as the “Surviving Corporation”) and shall continue to be governed by the laws of the State of Delaware. The Merger shall have the effects as provided in the applicable provisions of the DGCL. Without limiting the generality of the foregoing, upon the Merger, all the rights, privileges, immunities, powers and franchises of the Company and MergerCo shall vest in the Surviving Corporation and all restrictions, obligations, duties, debts and liabilities of the Company and MergerCo shall be the restrictions, obligations, duties, debts and liabilities of the Surviving Corporation.

(b)  On the terms and subject to the conditions of this Agreement, immediately after the Effective Time, the Surviving Corporation shall, in consideration for the payment of the

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Purchase Price, issue, transfer, deliver and sell to the Purchaser and the Purchaser shall purchase and accept from the Surviving Corporation (the “Stock Purchase”) the Purchased Shares.

2.2.          Issuance of Purchased Shares and Cash Payment. At the Closing (i) the Surviving Corporation shall deliver to the Purchaser certificates representing the Purchased Shares, duly authorized and issued in blank, free and clear of all Liens (other than Liens created by the Purchaser) and (ii) the Purchaser shall deliver or cause to be delivered to the Surviving Corporation the Purchase Price by wire transfer of imediately available funds.

2.3.          Conversion or Cancellation of Shares. The manner of converting or canceling shares of Company Common Stock and shares of common stock of MergerCo in the Merger shall be as follows:

(a)  At the Effective Time, each share of Common Stock of the Company that is issued and outstanding immediately prior to the Effective Time shall, by virtue of the Merger and without any action on the part of the holder thereof, be converted into the right to receive, without interest:

(i)            cash in an amount equal to the Per Share Cash Consideration; and

(ii)           a number of shares of Surviving Corporation Common Stock equal to the Per Share Stock Consideration.

(b)  Notwithstanding the foregoing, no fraction of a share of Surviving Corporation Common Stock shall be issued in the Merger, but in lieu thereof each holder of Common Shares otherwise entitled to a fraction of a share of Surviving Corporation Common Stock shall, upon surrender of his or her certificate or certificates, be entitled to receive an amount of cash (without interest) determined by multiplying the Value Per Share by the fractional share interest to which such holder would otherwise be entitled.

(c)  At the Effective Time, each share of Common Stock issued and held in the Company’s treasury Immediately prior to the Effective Time shall, by virtue of the Merger and without any action on the part of the holder thereof, cease to be outstanding, shall be canceled and retired without payment of any consideration therefor and shall cease to exist.

(d)  At the Effective Time, each share of common stock, par value $.01 per share, of MergerCo issued and outstanding immediately prior to the Effective Time shall, by virtue of the Merger and without any action on the part of MergerCo or the holders thereof, cease to be outstanding, shall be canceled and retired without payment of any consideration therefor and shall cease to exist.

(e)  At the Effective Time, the stock transfer books of the Company shall be closed and there shall be no transfers on the stock transfer books of the Surviving Corporation of shares of Common Stock that were outstanding immediately prior to the Effective Time.

2.4.          Exchange of Certificates. (a) At the Effective Time, upon surrender by each holder of record of a certificate or certificates, which immediately prior to the Effective Time represented outstanding shares of Common Stock, whose shares were converted

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pursuant to Section 2.3 into the right to receive the Per Share Cash Consideration and the Per Share Stock Consideration, the holder of such certificates shall be entitled to receive in exchange therefor:

(i)            a number of shares of Surviving Corporation Common Stock equal to the product of (A) the Per Share Stock Consideration and (B) the number of Common Shares formerly represented by such certificate; and

(ii)           an amount in cash equal to the product of (A) the Per Share Cash Consideration minus an amount (the “Escrow Withholding Amount”) equal to the result obtained by dividing (1) the amount of Escrowed Funds deposited with the Escrow Agent on the Closing Date by (2) the sum of the total number of Common Shares immediately prior to the Effective Time and the total number of Option Indemnitor Shares and (B) the number of Common Shares formerly represented by such certificate.

Until surrendered as contemplated by this Section 2.4, each certificate shall be deemed at any time after the Effective Time to represent only the right to receive the Per Share Cash Consideration and the Per Share Stock Consideration as contemplated by this Section 2.4.

(b)  In the event any certificate shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the Person claiming such certificate to be lost, stolen or destroyed, the Surviving Corporation will issue in exchange for such lost, stolen or destroyed certificate the Merger Consideration deliverable in respect thereof as determined in accordance with this Section 2, provided that the Person to whom the Merger Consideration is paid shall, as a condition precedent to the payment thereof, give the Surviving Corporation a bond in such sum as it may direct or otherwise indemnify the Surviving Corporation in a manner satisfactory to it against any claim that may be made against the Surviving Corporation with respect to the certificate claimed to have been lost, stolen or destroyed.

(c)  Any payment or issuance made pursuant to this Agreement shall be subject to and made net of applicable withholding Taxes.

2.5.          Certificate of Incorporation: By-Laws. (a) Certificate of Incorporation.  The certificate of incorporation of MergerCo as in effect immediately prior to the Effective Time shall, in accordance with the terms thereof and the DGCL, be amended and restated as set forth in Exhibit A and, as so amended, shall be the certificate of incorporation of the Surviving Corporation until thereafter amended in accordance with the terms thereof and the DGCL.

(b)  By-laws. The by-laws of MergerCo, as in effect immediately prior to the Effective Time shall, in accordance with the terms thereof, the certificate of incorporation and applicable law, be amended and restated as set forth in Exhibit B and, as so amended, shall be the by-laws of the Surviving Corporation until thereafter amended as provided by applicable law, the certificate of incorporation of the Surviving Corporation and such by-laws.

2.6.          Directors and Officers of the Surviving Corporation. (a) The individuals listed in Annex IV hereto shall, from and after the Effective Time, be the directors of the Surviving Corporation until their successors shall have been duly elected or appointed and qualified or until their earlier death, resignation or removal in accordance with the Surviving Corporation’s certificate of incorporation and by-laws.

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(b)  The individuals listed in Annex IV hereto shall be the officers of the Company until their respective successors are duly elected and qualified, or their earlier death, resignation or removal.

2.7.          Effective Time. On the Closing Date, MergerCo and the Company will cause the appropriate certificate of merger (the “Certificate of Merger”) to be executed and filed with the Secretary of State of the State of Delaware (the “Delaware Secretary of State”) in such form and executed as provided in Section 251(c) of the DGCL. The Merger shall become effective on the date on which the Certificate of Merger has been duly filed with the Delaware Secretary of State (the “Effective Time”).

2.8.          Options. (a) At or prior to the Effective Time, the Board of Directors of the Company (or the committee which administers the Stock Option Plan) shall accelerate the vesting of those Vested Options that would not otherwise have been vested as of the Closing.

(b)  At or immediately prior to the Effective Time, the number of shares underlying the Vested Options indicated next to each Option holder’s name on Annex III under the column labeled “Cashed Out Option” (the portion of each such Option, a “Cashed Out Option”) shall be canceled and converted into (i) the right to receive an option to purchase a number of shares of Surviving Corporation Common Stock determined by multiplying the number of shares of common stock underlying such Cashed Out Option by the Per Share Stock Consideration, which new option will otherwise be subject to the same terms and conditions as apply to such Cashed Out Option immediately prior to the consummation of the Merger (except as provided in the Shareholders Agreement) and have a per share exercise price of $.01, and (ii) the right to receive a cash payment (which will be net of applicable tax withholding) equal to the excess of (A) the product of (1) the number of shares of Common Stock underlying such Cashed Out Option and (2) the Per Share Cash Consideration (less, in the case of Option Indemnitor Shares, the Escrow Withholding Amount, which shall be deposited in the Escrow Account and governed by the Cash Escrow Agreement) over (B) the product of (1) the aggregate exercise price of the Cashed Out Option and (2) a fraction, of which the numerator is the Per Share Cash Consideration and the denominator is the Value Per Share.

(c)  At the Effective Time, the balance of Vested Options indicated next to each Option holder’s name on Annex III under the column labeled “Rollover Option” (the portion of each such Option, a “Rollover Option”) shall be converted into options to purchase, on the same terms and conditions as apply to such Rollover Options immediately prior to the consummation of the Merger (except as provided in the Shareholders Agreement), the number of shares of Surviving Corporation Common Stock equal to the number of Common Shares into which the Rollover Options were then exercisable (each such option, a “Surviving Corporation Stock Option”) and at the same exercise price. Notwithstanding the foregoing, in the case of any Rollover Option to which Section 421 of the Code applies by reason of its qualification as an incentive stock option under Section 422 of the Code, the conversion shall be adjusted if necessary to comply with Section 424(a) of the Code.

(d)  All Options that are not Vested Options shall be terminated for no consideration in accordance with the terms of the Stock Option Plan.

(e)  The Company shall use its reasonable efforts to obtain the consent prior to the Closing of each Option holder to the receipt of consideration to be paid in accordance with this Section 2.8 and an acknowledgment that the receipt of such consideration is in full

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satisfaction of any obligation of the Shareholders, the Company, the Surviving Corporation or any Subsidiary to such holder in respect of the corresponding cancelled Option.

(f)  The Surviving Corporation hereby covenants that it will take all necessary actions to assume the Options on the terms and conditions set forth in this Section 2.8.

2.9.          Cash Escrow Deposit. At the Effective Time, the Surviving Corporation shall deposit, or cause to be deposited, with the Escrow Agent, in immediately available funds to an account mutually agreed by the Purchaser and the Shareholders in accordance with the terms of the Cash Escrow Agreement (the “Escrow Account”) $4,250,000 (at any time, the amount of the funds held in the Escrow Account at such time being the “Escrowed Funds”), it being understood that all payments required to be made to any Indemnified Party under Section 9 shall be made first from the Escrowed Funds in accordance with the terms of the Cash Escrow Agreement.

2.10.        Closing. (a) Subject to the satisfaction or waiver of the conditions set forth in Sections 6 and 7 of this Agreement, the Closing will take place at the offices of Cleary, Gottlieb, Steen & Hamilton, at 10:00 A.M. on a date to be mutually agreed upon by the Shareholders and the Purchaser (the “Closing Date”), or at such other time and place as the parties may agree.

(b)  At the Closing, the Company shall pay all then outstanding Company Advisory Fees to the payees thereof. The Company shall cause such payees to deliver to it at least one Business Day prior to the Closing Date invoices for all fees and expenses in respect of periods prior to the Closing Date.

2.11.        2000 Contingent Share Payment. (a) At the Effective Time, the Surviving Corporation shall deposit, or cause to be deposited with the Escrow Agent, to an account mutually agreed upon by the Purchaser and the Shareholders, in accordance with the terms of the Share Escrow Agreement (the “Share Escrow Account”) the Initial Escrowed Shares (at any time, the number of shares of Surviving Corporation Common Stock held in the Share Escrow Account at such time being the “Escrowed Shares”).

(b)  Upon receipt of the consolidated balance sheet and statement of earnings of the Surviving Corporation at and for the 12 months ended December 31, 2000 (the “2000 Financials”), which the parties shall use reasonable efforts to occur prior to March 31, 2001, the Shareholders’ Representative shall promptly deliver to the Purchaser the 2000 Financials, together with the unqualified audit report thereon of Arthur Andersen LLP (“Arthur Andersen”), and a certificate setting forth in reasonable detail the calculation of the 2000 Adjusted EBITDA (the “2000 EBITDA Certificate”). Following delivery of the 2000 EBITDA Certificate and the 2000 Financials, the Purchaser shall have the right to review all such data and materials as is reasonably necessary to enable the Purchaser to verify the accuracy of the EBITDA Certificate and the information contained therein.

(c)  If the Purchaser does not give notice in writing to the Shareholders’ Representative of its objections to any item or items in the 2000 Financials or the 2000 EBITDA Certificate within thirty (30) days after its receipt of the 2000 EBITDA Certificate, the 2000 Adjusted EBITDA shall be deemed to be finally determined for purposes of this Agreement (as finally determined, the “Final 2000 Adjusted EBITDA”).

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(d)  If the Purchaser does give notice in writing to the Shareholders’ Representative objecting to any item or items in the 2000 Financials or the 2000 EBITDA Certificate within thirty (30) days after receipt of the 2000 EBITDA Certificate, the Shareholders’ Representative and the Purchaser shall endeavor to resolve all such objections within thirty (30) Business Days after receipt of such notice. Each notice of objection shall outline in reasonable detail the basis for each objection and, wherever reasonably possible, the dollar amount involved. If such notice is timely given and the Shareholders’ Representative and the Purchaser are able to resolve the disputed matters within such thirty (30) day period, the 2000 Adjusted EBITDA as modified in accordance with the parties’ agreement shall be deemed to be the Final 2000 Adjusted EBITDA.

(e)  If the Shareholders’ Representative and the Purchaser are unable to resolve all such objections within such thirty (30) day period, the Shareholders’ Representative and the Purchaser shall select a mutually agreed upon independent reputable accounting firm (the “Dispute Auditor”) to determine all items in dispute (without modification of any items not in dispute) and to deliver a certificate to the Shareholders’ Representative and the Purchaser as soon as practicable, which certificate shall include such firm’s determination of the 2000 Adjusted EBITDA computed pursuant to and in accordance with the provisions of this Agreement, but which otherwise may be in such form and contain such information as such firm, in its sole discretion, deems necessary or appropriate.  In resolving such disputes and providing such certificate, the Dispute Auditor shall employ such procedures as it, in its sole discretion, deems necessary or appropriate in the circumstances.

(f)  Upon the receipt by the Shareholders’ Representative and the Purchaser of the certificate of the Dispute Auditor pursuant to Section 2.9(e), the 2000 Adjusted EBITDA as so adjusted by the Dispute Auditor shall be deemed to be the Final 2000 Adjusted EBITDA and shall be binding upon the parties.

(g)  The fees and expenses of the Dispute Auditor shall be borne 40% by the Shareholders’ Representative and 60% by the Surviving Corporation; provided that if the Dispute Auditor determines that one party’s position is completely correct then such party shall not pay any of the fees, costs and expenses charged by the Dispute Auditor and the objecting party shall pay all of such fees, costs and expenses.

(h)  The Shareholders’ Representative and the Surviving Corporation shall, promptly upon the determination of the Final 2000 Adjusted EBITDA, jointly execute and deliver to the Escrow Agent a certificate setting forth the Final 2000 Adjusted EBITDA (the “2000 Escrow Agent Certificate”). In the event that the Final 2000 Adjusted EBITDA is:

(i)            less than $24,000,000, then the Shareholders’ Representative and the Surviving Corporation shall, in the 2000 Escrow Agent Certificate, instruct the Escrow Agent to distribute all of the Escrowed Shares to the Surviving Corporation, and all of such shares shall be retired; or

(ii)           at least $24,000,000, then the Shareholders’ Representative and the Surviving Corporation shall, in the 2000 Escrow Agent Certificate, instruct the Escrow Agent to distribute all of the Escrowed Shares in accordance with Section 2.11(i).

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(i)  In the event that any of the Escrowed Shares are distributed pursuant to Section 2.11(h) (other than to the Surviving Corporation), such Escrowed Shares shall be distributed as follows:

(i)            a number of Escrowed Shares equal to the product of the total number of Escrowed Shares and the Cashed Out Share Ratio shall be distributed to the Shareholders, on a pro rata basis in accordance with the proportion of the total Common Shares held by each Shareholder immediately prior to the Effective Time; and

(ii)           a number of Escrowed Shares equal to the product of the total number of Escrowed Shares and the Cashed Out Option Ratio shall be distributed to the Cashed Out Optionholders, on a pro rata basis in accordance with the proportion of the total Cashed Out Option Shares underlying the Cashed Out Options held by each Cashed Out Optionholder;

provided, that it shall be a condition to the receipt by any Shareholder or Cashed Out Optionholder of Escrowed Shares that such Shareholder or Cashed Out Optionholder shall have become a party to the Shareholders Agreement.

(j)  Notwithstanding the foregoing, no fraction of an Escrowed Share shall be released to any Shareholder or Cashed Out Optionholder. The Escrow Agent shall distribute all such fractional shares to the Surviving Corporation (which shares shall be retired). Except as otherwise required by applicable law, pending release, Escrowed Shares shall be treated for tax purposes as owned by the Shareholders and the Cashed Out Optionholders in such proportions as if they had been distributed in accordance with Section 2.11(i).

(k)  Notwithstanding anything to the contrary contained herein, in the event that the Surviving Corporation shall actually or constructively terminate, without cause, the employment of Harvey Spevak or Ken Fleischer prior to March 31, 2001, the Shareholders’ Representative and the Surviving Corporation shall, promptly following such termination, jointly execute and deliver to the Escrow Agent a certificate (the “Escrow Agent Termination Certificate”) instructing the Escrow Agent to distribute all of the Escrowed Shares in accordance with Section 2.11(i).

2.12.        2003 Contingent Payment. (a)            Upon preparation of the consolidated balance sheet and statement of earnings of the Surviving Corporation at and for the 12 months ended December 31, 2003 (the “2003 Financials”), which the Surviving Corporation shall use reasonable efforts to complete prior to March 31, 2004, the Surviving Corporation shall promptly deliver to the Shareholders’ Representative the 2003 Financials, together with the unqualified audit report thereon of Ernst & Young LLP, and a certificate setting forth in reasonable detail the calculation of the 2003 Adjusted EBITDA (the “2003 EBITDA Certificate”).  Following delivery of the 2003 EBITDA Certificate and the 2003 Financials, the Shareholders’ Representative shall have the right to review all such data and materials as is reasonably necessary to enable the Shareholders’ representatives to verify the accuracy of the 2003 EBITDA Certificate and the information contained therein.

(b)  If the Shareholders’ Representative does not give notice in writing to the Surviving Corporation of his objections to any item or items in the 2003 Financials or the 2003 EBITDA Certificate within thirty (30) days after his receipt of the 2003 EBITDA Certificate, the

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2003 Adjusted EBITDA shall be deemed to be finally determined for purposes of this Agreement (as finally determined, the “Final 2003 Adjusted EBITDA”).

(c)  If the Shareholders’ Representative does give notice in writing to the Surviving Corporation objecting to any item or items in the 2003 Financials or the 2003 EBITDA Certificate within thirty (30) days after receipt of the 2003 EBITDA Certificate, the Shareholders’ Representative and the Surviving Corporation shall endeavor to resolve all such objections within thirty (30) days after receipt of such notice. Each notice of objection shall outline in reasonable detail the basis for each objection and, wherever reasonably possible, the dollar amount involved. If such notice is timely given and the Shareholders’ Representative and the Surviving Corporation are able to resolve the disputed matters within such thirty (30) day period, the 2003 Adjusted EBITDA as modified in accordance with the parties’ agreement shall be deemed to be the Final 2003 Adjusted EBITDA.

(d)  If the Shareholders’ Representative and the Surviving Corporation are unable to resolve all such objections within such thirty (30) day period, the Shareholders’ Representative and the Surviving Corporation shall select a Dispute Auditor to determine all items in dispute (without modification of any items not in dispute) and to deliver a certificate to the Shareholders’ Representative and the Surviving Corporation as soon as practicable, which certificate shall include such firm’s determination of the 2003 Adjusted EBITDA computed pursuant to and in accordance with the provisions of this Agreement, but which otherwise may be in such form and contain such information as such firm, in its sole discretion, deems necessary or appropriate. In resolving such disputes and providing such certificate, the Dispute Auditor shall employ such procedures as it, in its sole discretion, deems necessary or appropriate in the circumstances.

(e)  Upon the receipt by the Shareholders’ Representative and the Surviving Corporation of the certificate of the Dispute Auditor pursuant to Section 2.12(d), the 2003 Adjusted EBITDA as so adjusted by the Dispute Auditor shall be deemed to be the Final 2003 Adjusted EBITDA and shall be binding upon the parties.

(f)  The fees and expenses of the Dispute Auditor shall be borne 40% by the Shareholders’ Representative and 60% by the Surviving Corporation; provided that if the Dispute Auditor determines that one party’s position is completely correct then such party shall not pay any of the fees, costs and expenses charged by the Dispute Auditor and the objecting party shall pay all of such fees, costs and expenses.

(g)  In the event that the 2003 Adjusted EBITDA, as finally determined, is: (i) equal to or greater than $65.000,000, the Surviving Corporation shall, if requested by the Shareholders’ Representative, increase the Merger Consideration by an aggregate cash amount of $15,000,000; (ii) at least $58,500,000 but less than $65,000,000, the Surviving Corporation shall, if requested by the Shareholders’ Representative, increase the Merger Consideration by an aggregate cash amount equal to the sum of (A) $10,000,000 and (B) the product of (x) the excess, if any, of the 2003 Adjusted EBITDA over $58,500,000 and (y) 0.769; or (iii) at least $55,250,000 but less than $58,500,000, the Surviving Corporation shall, if requested by the Shareholders’ Representative, increase the Merger Consideration by an aggregate cash amount equal to the sum of (A) $5,000,000 and (B) the product of (x) the excess, if any, of the 2003 Adjusted EBITDA over $55,250,000 and (y) 1.538 (such amount as finally determined, the “2003 Contingent Payment”).  The Surviving Corporation shall pay the 2003 Contingent Payment in accordance with Section 2.14 within five Business Days of the final

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determination of the 2003 Adjusted EBITDA, by wire transfer of immediately available funds to the accounts specified by the Shareholders’ Representative. Notwithstanding anything in this Section 2.12 to the contrary, the 2003 Contingent Payment shall equal zero if (A) an Exit Payment shall have become payable prior to December 31, 2003 or (B) the Shareholders’ Representative fails to give notice (in accordance with Section 10.2) to the Surviving Corporation within 10 Business Days of the determination of the Final 2003 Adjusted EBITDA requesting payment in accordance with this Section 2.12(g), For the avoidance of doubt, nothing in this Section 2.12(g) shall affect the number of Purchased Shares. For the avoidance of doubt, under no circumstances shall the Surviving Corporation be obligated to make both an Exit Payment and a 2003 Contingent Payment.

(h)  Notwithstanding anything herein to the contrary, in the event the 2003 Contingent Payment becomes payable and there is a default or an event of default under the New Debt Financing or any of the conditions contained in the agreements governing the New Debt Financing (which conditions shall be reasonably acceptable to the parties hereto) are not satisfied at such time, the 2003 Contingent Payment shall be paid not in cash but with a subordinated note of the Company. Such note shall be reasonably satisfactory to Bankers Trust Company and holders of the Senior Subordinated Notes and will in any event have the following terms and conditions: the note (i) shall be unsecured, (ii) shall not be guaranteed by any Subsidiary of the Company, (iii) shall have no maturity or amortization earlier than one year after the maturity of the Senior Subordinated Notes (as defined in the New Debt Financing documentation), and (iv) shall be pay-in-kind. The Surviving Corporation shall, no later than one (1) Business Day following the determination of the Final 2003 Adjusted EBITDA, notify the Shareholders’ Representative whether the 2003 Contingent Payment will be payable in cash or such note.

2.13.        Exit Payment. (a) In the event that no 2003 Contingent Payment shall have been theretofore paid, the Surviving Corporation shall increase the Merger Consideration by an aggregate cash amount equal to $10,000,000 (the “Exit Payment”) upon the earlier to occur of (i) an Exit Event and (ii) the tenth anniversary of the Closing Date (such earlier date, the “Exit Payment Date”); provided, that if an Exit Event occurs and the Purchaser Internal Rate of Return is greater than 40%, the Surviving Corporation shall further increase the Merger Consideration by an additional cash payment of $5,000,000, provided, that the amount of such additional increase in the Merger Consideration shall be subject to reduction to the extent necessary to ensure that the Purchaser Internal Rate of Return is greater than 40% (the amount of such increase as finally determined, the “Additional Exit Payment”). The Surviving Corporation shall pay the Exit Payment and, if applicable, the Additional Exit Payment, in accordance with Section 2.14, within five Business Days of the Exit Payment Date, by wire transfer of immediately available funds to the accounts specified by the Shareholders’ Representative. For the avoidance of doubt, nothing in this Section 2.13 shall affect the number of Purchased Shares.

(b)  Notwithstanding anything to the contrary contained in this Section 2.13 or elsewhere in this Agreement, (i) in no event shall the Exit Payment or the Additional Exit Payment be required to be paid by the Surviving Corporation (nor shall the beneficiaries of the Exit Payment and the Additional Exit Payment be entitled to receive same) until the earlier of (x) the date on which all obligations and other amounts owing in respect of the New Debt Financing shall have been paid in full in cash or (y) the waiver of any default or event of default (and/or the expiration or lapse of any right to require redemption or repurchase) arising from the event that triggered the Exit Payment (or Additional Exit Payment)) and (ii) to the extent that such

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beneficiaries shall have received any payments in respect of the Exit Payment or the Additional Exit Payment at a time when such payments are not permitted to be made pursuant to preceding clause (i), such payments shall be held by such beneficiaries in trust for, and shall immediately be delivered to, the lenders providing the New Debt Financing (or their representative) as their respective interests may appear.

2.13A      Deferred Payment. (a) Regardless of whether any 2003 Contingent Payment or Exit Payment shall have been paid or shall become payable, the Surviving Corporation shall increase the Merger Consideration by an aggregate cash amount equal to $5,000,000 (the “Deferred Payment”) upon the earliest to occur of (i) the payment in full of all obligations of the Company in respect of the Senior Subordinated Notes which will comprise a portion of the New Debt Financing at the Closing, (ii) an Exit Event and (iii) the tenth anniversary of the Closing Date, within five Business Days of such earliest date, by wire transfer of immediately available funds to the accounts specified by the Shareholders’ Representative. For the avoidance of doubt, the Deferred Payment shall be made in addition to, and not in lieu of,. the 2003 Contingent Payment and the Exit Payment, and nothing in this Section 2.13A shall affect the number of Purchased Shares. Until the Deferred Payment shall have been paid in full, the Company shall not make any payment, by way of dividend, distribution, liquidation, redemption, repurchase or otherwise, in respect of any class or series of its capital stock (other than a payment made solely in the form of additional shares of such capital stock, payments in redemption of outstanding Warrants (as defined in the Registration Rights Agreement) and other than as provided in Section 2.10 of the Shareholders Agreement).

(b)  Notwithstanding anything to the contrary contained in this Section 2.13A or elsewhere in this Agreement, (i) in no event shall the Deferred Payment be required to be paid by the Surviving Corporation (nor shall the beneficiaries of the Deferred Payment be entitled to receive same) until the earlier of (x) the date on which all obligations and other amounts owing in respect of the New Debt Financing shall have been paid in full in cash or (y) the waiver of any default or event of default (and/or the expiration or lapse of any right to require redemption or repurchase) arising from the event that triggered the Deferred Payment and (ii) to the extent that such beneficiaries shall have received any payments in respect of the Deferred Payment at a time when such payments are not permitted to be made pursuant to preceding clause (i), such payments shall be held by such beneficiaries in trust for, and shall immediately be delivered to, the lenders providing the New Debt Financing (or their representative) as their respective interests may appear.

2.14.        Payment of 2003 Contingent Payment, Exit Payment and Additional Exit Payment. At any time that the 2003 Contingent Payment, the Exit Payment, the Additional Exit Payment or the Deferred Payment (a “Cash Payment”) is to be made pursuant to Sections 2.12, 2.13 or 2.13A, such amounts shall be paid out as follows:

(a)  a portion of such Cash Payment equal to the product of the Cash Payment and the Cashed Out Share Ratio shall be paid to the Shareholders, on a pro rata basis in accordance with the proportion of the total Common Shares held by each Shareholder immediately prior to the Effective Time; and

(b)  a portion of such Cash Payment equal to the product of the Cash Payment and the Cashed Out Option Ratio shall be paid to the Cashed Out Optionholders, on a pro rata

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basis in accordance with the proportion of the total Cashed Out Option Shares underlying the Cashed Out Options held by each Cashed Out Optionholder.

2.15.        Accounting Policies and Practices in Determining Adjusted EBITDA. It is expressly understood and agreed that the purpose of the determination of 2000 Adjusted EBITDA and 2003 Adjusted EBITDA is to measure the financial performance of the Company in 2000 and 2003 and to compare such performance to that with respect to prior periods, on a comparable basis. Accordingly, the accounting policies and practices to be employed in determining 2000 Adjusted EBITDA shall be identical to those underlying the Financial Statements, and the Purchaser shall not, and shall cause the Surviving Corporation not to, modify or challenge the propriety of any of such accounting policies or practices in the context of determining 2000 Adjusted EBITDA. In addition, in the event that the Surviving Corporation shall adopt accounting policies or practices which differ in any material respect from those underlying the Financial Statements, the parties shall negotiate in good faith adjustments to the 2003 Adjusted EBITDA targets set forth in Section 2.12(g) to the extent necessary to appropriately reflect therein the adoption of such new accounting policies or practices. Nothing contained in this Section 2.15 shall limit the rights or remedies of the Purchaser with respect to any breach of Section 3.5.

SECTION 3.  REPRESENTATIONS AND WARRANTIES REGARDING THE COMPANY

The Shareholders and the Company hereby represent and warrant to the Purchaser and MergerCo as of the date hereof as follows:

3.1.          Organization and Good Standing of the Company. The Company is duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Delaware, and has the corporate power and authority to own, lease and operate the properties used in its business and to carry on its business as now being conducted. The Company is registered to do business and is in good standing in all jurisdictions in which the character of the properties owned or held under lease by it makes qualification necessary, except where the failure to be so qualified or in good standing could not reasonably be expected to have a Material Adverse Effect. The Shareholders have made available to the Purchaser true and complete copies of the Certificate of Incorporation and the By-Laws of the Company and each Subsidiary, in each case as in effect on the date hereof. The minute and stock transfer books of the Company and each Subsidiary have been made available to the Purchaser and the originals thereof will be delivered to the Purchaser at the Closing.

3.2.          Subsidiaries. The Company does not own, directly or indirectly, any debt, shares or other equity interest or securities in any corporation, partnership, joint venture or other Person, and has no agreement or commitment to purchase any such interest, in each case other than as set forth in Section 3.2 of the Disclosure Schedule. Each Subsidiary is duly incorporated, validly existing and in good standing under the laws of the jurisdiction of its incorporation and has all requisite corporate power and authority to own, lease and operate the property used in its business and to carry on its business as now being conducted. Each Subsidiary is registered to do business and is in good standing in all jurisdictions in which the character of the properties owned or held under lease by such Subsidiary makes qualification necessary, except where the failure to be so qualified or in good standing could not reasonably be expected to have a Material Adverse Effect. All of the outstanding shares of capital stock of each Subsidiary of the Company are validly issued, fully paid and non-assessable and, except as set forth in Section 3.2 of the Disclosure Schedule, none of the Subsidiaries owns or

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controls, directly or indirectly, any other equity interest in any corporation, partnership, joint venture, limited liability company, trust, firm or other entity. Except as set forth in Section 3.2 of the Disclosure Schedule, the Company owns, directly or through a Subsidiary, 100% of the outstanding capital stock of each Subsidiary and there is no security, option, warrant, right, call, subscription agreement, commitment or understanding of any nature whatsoever to which the Company or any of its Subsidiaries or the Shareholders is a party, that directly or indirectly (i) calls for the issuance, sale, pledge or other disposition of any shares of capital stock of the Subsidiaries or any securities convertible into, or other rights to acquire, any shares of capital stock of the Subsidiaries, (ii) obligates the Company or any of its Subsidiaries or the Shareholders to grant, offer or enter into any of the foregoing or (iii) relates to the voting or control of such capital stock, securities or rights.

3.3.          Capitalization; Title to Shares. The authorized capital stock of the Company consists of 20,000,000 shares of Common Stock of which 10,348,257 shares are issued and outstanding. All of the Common Shares have been validly authorized and issued, and are fully paid and nonassessable. Section 3.3 of the Disclosure Schedule sets forth the record holders of all of the Common Shares. Except as contemplated by this Agreement or as set forth in Section 3.3 of the Disclosure Schedule (which sets forth exercise prices and vesting terms), there is no security, option, warrant, right, call, subscription agreement, commitment or understanding of any nature whatsoever to which any of the Shareholders or the Company is a party, that directly or indirectly (i) calls for the issuance, sale, pledge or other disposition of any shares of capital stock of the Company or any securities convertible into, or other rights to acquire, any shares of capital stock of the Company, (ii) obligates the Shareholders or the Company to grant, offer or enter into any of the foregoing or (iii) relates to the voting or control of such capital stock, securities or rights. Except as set forth in Section 3.3 of the Disclosure Schedule, the Shareholders have good and marketable title to the Common Shares, free and clear of any Liens.

3.4.          Authority, Approvals and Consents. Each of the Company and the Shareholders has the requisite power and authority to execute, deliver and perform this Agreement and the Ancillary Agreements and to consummate the transactions contemplated hereby and thereby. Each of this Agreement and the Ancillary Agreements has been or will be duly executed and delivered by each of the Company and the Shareholders and constitutes or will constitute a valid and binding obligation of each of the Company and the Shareholders, enforceable against each of the Company and the Shareholders in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting creditors’ rights generally or by the principles governing the availability of equitable remedies. Except as set forth in Section 3.4 of the Disclosure Schedule, the execution, delivery and performance of this Agreement and the Ancillary Agreements by the Company and the Shareholders and the consummation of the transactions contemplated hereby and thereby do not and will not:

(a)  contravene any provisions of the Certificate of Incorporation or By-Laws of the Company;

(b)  after notice or lapse of time or both, conflict with, result in a breach of any provision of, constitute a default or require consent or the provision of notice under, result in the modification or cancellation of, or give rise to any right of prepayment under or termination in respect of, (i) any Material Agreement or Property Lease and (ii) any other material agreement, contract, commitment, understanding or arrangement of any kind to which the Shareholders, the

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Company or any Subsidiary is a party or to which the Shareholders or any of the Company’s or any Subsidiary’s property is subject;

(c)  violate or conflict with any Legal Requirements applicable to the Shareholders, the Company or any Subsidiary, except where such violation or conflict could not reasonably be expected to have a Material Adverse Effect; or

(d)  except for filings under the HSR Act, require any material authorization, consent, order, permit or approval of, or notice to, or filing, registration or qualification with, any Governmental Authority.

3.5.          Financial Statements. The Financial Statements attached hereto as Section 3.5 of the Disclosure Schedule have been prepared in accordance with GAAP applied on a consistent basis, and fairly present in all material respects the financial position of the Company and its Subsidiaries as of the dates indicated and the results of operations of the business of the Company and its Subsidiaries for the periods indicated (except, in the case of the Financial Statements as at and for the period ended June 30, 2000, for noncompliance with footnote disclosure requirements under GAAP and for year-end adjustments, which will not be material).

3.6.          Absence of Material Adverse Change; Conduct of Business. Except as set forth in Section 3.6 of the Disclosure Schedule or reflected in the Financial Statements, since June 30, 2000, the business of the Company and its Subsidiaries has been conducted in the ordinary course of business and the Company and its Subsidiaries have not: (i) experienced or suffered any change, occurrence or event that has had or could reasonably be expected to have a Material Adverse Effect; (ii) sold or otherwise disposed of any assets or properties material to the Company and its Subsidiaries, taken as a whole, other than sales of equipment in the ordinary course of business; (iii) waived, released or canceled any rights or indebtedness owing to the Company or any Subsidiary that are material to the Company and its Subsidiaries, taken as a whole, or prepaid any interest on any Debt; (iv) made any material changes in its accounting systems, policies, principles or practices; (v) acquired or leased any assets material to the Company and its Subsidiaries, taken as a whole, other than in the ordinary course of business; (vi) taken any of the actions addressed by Section 5.10(h) of this Agreement; (vii) declared, set aside, made or paid any dividend or other distribution in respect of its capital stock or otherwise purchased or redeemed, directly or indirectly, any shares of its capital stock; (viii) issued or sold any shares of any class of its capital stock, or any securities convertible into or exchangeable for any such shares, or issued, sold, granted or entered into any subscriptions, options, warrants, conversion or other rights, agreements, commitments, arrangements or understandings of any kind, contingently or otherwise, to purchase or otherwise acquire any such shares or any securities convertible into or exchangeable for any such shares; (ix) incurred any indebtedness for borrowed money, except for borrowings in the ordinary course of business; (x) modified any existing Material Agreement or entered into any material agreement or commitment that, pursuant to its terms, is not cancelable without penalty on less than 30 days’ notice; (xi) transferred or granted any rights or licenses under, or entered into any settlement regarding the infringement of, Intellectual Property or entered into any agreements or arrangements with respect to the licensing of any Intellectual Property; or (xii) suffered any material damage, destruction or loss (whether or not covered by insurance), or any strike or other material employment-related problem, or any material change in relations with or any loss of a supplier, customer or employee.

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3.7.          Taxes.

(a)  The Company has qualified as an “S corporation” within the meaning of section 1361 of the Code since the date of its incorporation and will qualify as an “S corporation” up to and including the Year End Date. Section 3.7(a) of the Disclosure Schedule sets forth (i) all state and local jurisdictions in which the Company files an income or franchise Tax Return and is treated as an “S corporation” for income or franchise Tax purposes and the date from which such treatment has continuously been in effect and (ii) all state and local jurisdictions in which the Company files (or has filed) an income or franchise Tax Return and is not (or with respect to any prior taxable period, was not) treated as an “S corporation” for income or franchise Tax purposes.

(b)  Except as set forth in Section 3.7 of the Disclosure Schedule, each of the Subsidiaries has constituted an “S Corporation” or a “qualified subchapter S subsidiary” within the meaning of section 1361 of the Code at all times since the date of its incorporation and will qualify as an “S corporation” or a “qualified subchapter S subsidiary” up to and including the Year End Date. Section 3.7(b) of the Disclosure Schedule sets forth, with respect to each Subsidiary, (i) all state and local jurisdictions in which such Subsidiary files an income or franchise Tax Return and is (or with respect to any prior taxable period, was) treated as an “S corporation” or as a “qualified subchapter S subsidiary” for income or franchise Tax purposes and the dates such treatment has been in effect and (ii) all state and local jurisdictions in which the Subsidiary files (or has filed) an income or franchise Tax Return and is not (or with respect to any prior taxable period, was not) treated as an “S corporation” or as a “qualified subchapter S subsidiary” for income or franchise Tax purposes.

(c)  Except as disclosed in Section 3.7(c) of the Disclosure Schedule:

(i)            the Company and the Subsidiaries have duly and timely filed (taking into account all available extensions) all Tax Returns concerning Taxes (or such Tax Returns have been duly and timely filed on behalf of the Company and the Subsidiaries) required to be filed by applicable law and have paid all amounts shown as due on those Tax Returns;

(ii)           all such Tax Returns are true, correct and complete in all material respects and accurately set forth all items to the extent required to be reflected or included in such Tax Returns by applicable U.S. Federal, state and non-U.S. and local Tax laws, regulations or rules;

(iii)          all material Taxes due (or claimed as of the date hereof by any Governmental Authority to be due) by the Company or any of its Subsidiaries (whether or not shown on any Tax Return) have been paid or have been adequately reserved for in the books and records of the Company or its Subsidiaries in accordance with GAAP;

(iv)          the Company and each of its Subsidiaries has duly and timely withheld all material Taxes required to be withheld and such withheld Taxes have been either duly and timely paid to the proper Governmental Authority or properly set aside in accounts for such purpose and will be duly and timely paid to the proper Governmental Authority if such payment is due before the Closing;

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(v)           as of the date hereof, neither the Company nor any of the Subsidiaries has executed any outstanding waivers or comparable consents regarding the application of the statute of limitations, the period of assessment or collection with respect to any Taxes or Tax Returns and no power of attorney with respect to any such Taxes has been filed with any Governmental Authority which waiver, extension or power of attorney is currently in effect; and

(vi)          neither the Company nor its Subsidiaries has requested or been granted an extension of time for filing any Tax Return to a date later than the date hereof.

(d)  As of the date hereof, there are no Liens with respect to any material Taxes upon any of the assets and properties of the Company or the Subsidiaries.

(e)  No amount will be required to be withheld under Section 1445 of the Code in connection with any of the transactions contemplated by this Agreement.

(f)  Except as disclosed in Section 3.7(f) of the Disclosure Schedule, (i) no Tax Returns of or in respect of the Company or its Subsidiaries are currently under audit, examination or investigation by any Governmental Authority and (ii) no Governmental Authority is now asserting or threatening to assert against the Company or its Subsidiaries any deficiency or claim for Taxes or any adjustment to Taxes.

(g)  Except as disclosed in Section 3.7(g) of the Disclosure Schedule, no written claim against or in respect of the Company or any of its Subsidiaries (other than a claim that has been finally settled) has ever been made by any Governmental Authority in a jurisdiction where the Company or any of its Subsidiaries, as the case may be, does not file Tax Returns or pay or collect Taxes in respect of a particular type of Tax imposed by that jurisdiction, that the Company or any of its Subsidiaries is or may be subject to an obligation to file Tax Returns or pay or collect Taxes in respect of such Tax in that jurisdiction.

(h)  Neither the Company nor any of its Subsidiaries is liable for the Taxes of any other Person (other than the Company and its Subsidiaries), whether pursuant to Treasury Regulation section 1.1502-6 (or comparable provision of state or local law), as a transferee or successor, by contract (including, without limitation, any Tax allocation, sharing, indemnity or similar agreement or arrangement) or otherwise.

(i)  Except as disclosed in Section 3.7(i) of the Disclosure Schedule, neither the Company nor any of its Subsidiaries has received or applied for a Tax ruling or has entered into a closing agreement pursuant to Section 7121 of the Code, or any predecessor provision or similar provision of state or local law which closing agreement currently is in effect.

(j)  Except as disclosed in Section 3.7(j) of the Disclosure Schedule, there are no outstanding adjustments for Tax purposes applicable to the Company or any of its Subsidiaries under Section 481 of the Code or otherwise as a result of changes in methods of accounting.

(k)  True, correct and complete copies of all income, and all material franchise, sales, use, property and payroll Tax Returns filed by or with respect to the Company or any of its Subsidiaries for the past three years have been provided to the Purchaser.

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(l)  For all taxable years through 1995, the federal income Tax Returns of the Company and its Subsidiaries have been examined and settled with the IRS, or the statutes of limitations for the assessment of federal income Taxes for such periods have expired.

(m)  The consummation of the transactions contemplated hereby shall not result in the payment of any “excess parachute payment” within the meaning of Section 280G(b)(1) of the Code.

3.8.          Legal Matters. Section 3.8 of the Disclosure Schedule sets forth a complete and correct list of all claims, actions, suits, litigation, formal investigations and proceedings pending against or, to the Knowledge of the Shareholders, threatened against, the Company or any Subsidiary before or by any Governmental Authority and sets forth all judgements, decrees, writs, injunctions and orders of any Governmental Authority to which the Company or any Subsidiary is subject. Except as set forth in Section 3.8 of the Disclosure Schedule, (i) there is no claim, action, suit, litigation, formal investigation or proceeding pending against, or, to the Knowledge of the Shareholders, threatened against, the Company or any Subsidiary before or by any Governmental Authority which could reasonably be expected to have a Material Adverse Effect and (ii) neither the Company nor any Subsidiary is subject to any judgment, decree, writ, injunction or order of any Governmental Authority which could reasonably be expected to have a Material Adverse Effect. At the Closing Date, there shall be no claim, action, suit, litigation, formal investigation or proceeding pending against the Company arising from facts, circumstances or events existing or occurring prior to the date of this Agreement, which could reasonably be expected to have a Material Adverse Effect. The business of the Company is being conducted in compliance with all material Legal Requirements. Except as set forth in Section 3.8 of the Disclosure Schedule, the Company has not received any written notice asserting any noncompliance with any material Legal Requirement.

3.9.          Real Property.

(a)  Set forth in Section 3.9 of the Disclosure Schedule are: (i) a true and complete list of all real property (the “Owned Property”) owned by the Company or a Subsidiary of the Company; (ii) a true and complete list of all real property (the “Leased Property”) with respect to which the Company or any Subsidiaries are parties to a lease, sublease, license or other use or occupancy agreement, together with a list of each lease, sublease, license or other agreement or understanding pursuant to which any party other than the Company or a Subsidiary uses or occupies such Leased Property; and (iii) a complete list of each lease, sublease, license or other agreement or understanding, oral or written, pursuant to which any party other than the Company or a Subsidiary uses or occupies all or any part of the Owned Property or the Leased Property. (The Owned Property and the Leased Property are sometimes collectively referred to as the “Real Property.”) True and complete copies of all leases, subleases, licenses and other documents, instruments, agreements and understandings to which the Company or a Subsidiary is a party, whether as lessee, lessor, sublessee, sublessor, licensee or licensor, pertaining to the current or future use or occupancy of any Real Property or any current or future right to use or occupy any Real Property, together with all material amendments, modifications and supplements thereto (collectively, the “Property Leases”) have been made available to the Purchaser.

(b)  With respect to the Property Leases, no event of default on the part of the Company or any Subsidiary or, to the Knowledge of the Shareholders, any other party thereto

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and no event that, with the giving of notice or lapse of time or both, would constitute such event of default, has occurred and is continuing. Each Property Lease is valid, binding and in full force and effect. Except as set forth in Section 3.9 of the Disclosure Schedule, all rental and other material payments due under each of the Property Leases have been duly paid in accordance with the terms of such Property Lease. Except as set forth in Section 3.9 of the Disclosure Schedule, the transactions contemplated by this Agreement do not require the consent of any party to, and will not constitute an event of default under or permit any party to terminate or change the existing terms of, any Property Lease.

(c)  The Company and, as applicable, each Subsidiary, has good and marketable title in fee simple to the Owned Property, good leasehold title to the Leased Property, and good title to all plants, buildings, fixtures and improvements located on the Real Property, in each case free and clear of any mortgages, deeds of trust, liens, security interests, judgments, options, rights, claims, charges, encroachments, easements, rights-of-way, squatters’ rights, encumbrances, covenants, conditions, restrictions and other imperfections of title (collectively, “Impairments”), except for those Impairments that are set forth in Section 3.9 of the Disclosure Schedule, or except where such Impairments could not reasonably be expected to have a Material Adverse Effect.

(d)  There is no Impairment interfering materially with the use, occupancy or operation of the Leased Property or materially encumbering the good and valid title of the lessor to any Leased Property or the plants, buildings, fixtures and improvements thereon, except for Permitted Liens or those Impairments that are set forth in Section 3.9 of the Disclosure Schedule.

(e)  All of the land, buildings, structures and other improvements used by the Company or a Subsidiary of the Company in the conduct of its business are included in either the Owned Property or the Leased Property.

(f)  Except as set forth in Section 3.9 of the Disclosure Schedules, neither the Company nor any Subsidiary of the Company is a lessor, sublessor or grantor under any lease, sublease or other instrument granting to another person any right to the possession, lease, occupancy or enjoyment of the Real Property.

(g)  Except as set forth in Section 3.9 of the Disclosure Schedule, (i) there is no material defect, structural or otherwise, with respect to any of the improvements or fixtures made or installed by the Company upon any of the Real Property, and (ii) to the Knowledge of the Shareholders, there is no other material defect, structural or otherwise, with respect to any of the Real Property; and the heating, ventilating and air conditioning, plumbing, sprinkler, electrical and drainage systems, elevators and roofs, and all other fixtures, equipment and systems at or serving any of the Real Property are in good condition, repair and working order.

(h)  Except as set forth in Section 3.9 of the Disclosure Schedule, neither the Company or any of its Subsidiaries has received any notice from any insurance company which has issued a policy with respect to any of the Real Property or from any board of fire underwriters (or other body exercising similar functions) claiming any defects or deficiencies in any of the Real Property or suggesting or requesting the performance of any repairs, alterations or other work to any of the Real Property.

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(i)  Except as set forth in Section 3.9 of the Disclosure Schedule, no portion of any of the Real Property and no method of operation of any of the Real Property is in violation of any material Legal Requirement or the material requirements of any local board of fire underwriters (or other body exercising similar functions); and there are no presently outstanding and uncured notices of any such violations.

(j)  Except as set forth in Section 3.9 of the Disclosure Schedule, no zoning variances, special exceptions or zoning board of adjustment certificates were issued for the construction or any of the Real Property or for its present use; and the buildings and improvements on any of the Real Property are not nonconforming uses or structures, except where such nonconformity could not reasonably be expected to have a Material Adverse Effect.

3.10.        Contracts.

(a)  The Shareholders have made available to the Purchaser for inspection true and complete copies of all Material Agreements. Except as set forth in Section 3.10(a) of the Disclosure Schedule, neither the Company nor any Subsidiary nor, to the Knowledge of the Shareholders, any other party to any of the Material Agreements, is in material breach of or default under any Material Agreement.  No entity which is currently supplying, or during 1999 supplied, to the Company or the Subsidiaries products and services has reduced or otherwise discontinued, or threatened to reduce or discontinue, supplying such items to the Company or the Subsidiaries on reasonable terms, except for such matters which could not reasonably be expected to have a Material Adverse Effect.

(b)  All Material Agreements are legal, valid, binding, in full force and effect and enforceable against each party thereto.

3.11.        Employee Benefit Plans. Section 3.11 of the Disclosure Schedule sets forth all pension plans, profit-sharing plans, incentive compensation plans, retirement plans, employee stock purchase or stock option plans, vacation plans, collective bargaining agreements or other employee pension benefit plans and all bonus, severance, retention, incentive, savings, insurance, welfare or other material employee benefit plans (including without limitation any such plan within the meaning of Section 3(3) of ERISA) maintained by the Company or a Subsidiary, in which any present or former employee of the Company or a Subsidiary participates (“Employee Benefit Plans”) or with respect to which the Company or any of its Subsidiaries has any liability, makes or has an obligation to make contributions. With respect to each such Employee Benefit Plan, the Purchaser has been furnished with, or has had access to, complete and correct copies of: (i) such Employee Benefit Plan, if written, or a description of such Plan if not written, and (ii) to the extent applicable to such Plan, all trust agreements, insurance contracts or other funding arrangements, the three most recent Forms 5500 required to have been filed with the IRS and all schedules thereto, the most recent IRS determination letter, the current summary plan description, any communication received from or sent to the IRS or the Department of Labor indicating that the Company or any of its Subsidiaries has or may have a material liability (including, to the Company’s knowledge, any existing written description of any oral communication) and all material amendments and modifications to any such document. Neither the Company nor any of its Subsidiaries has communicated to any employee any intention or commitment to modify any Employee Benefit Plan or to establish or implement any other employee or retiree benefit or compensation plan or arrangement. Except as set forth in Section 3.11 of the Disclosure Schedule:

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(a)  Neither the Company nor any Subsidiary is required to make contributions to any multi-employer plan (within the meaning of Section 3(37) of ERISA);

(b)  With respect to each Employee Benefit Plan and each employee benefit plan maintained by any entity which is under common control with the Company as determined under Code Section 414, no event has occurred and no condition exists that has subjected or could reasonably be expected to subject the Company or any Subsidiary, directly or indirectly, to any material liability (including liability under any indemnification agreement) under Section 412, 413, 4971, 4975, or 4980B of the Code or Section 302, 409, 502, 515, 601, 606, or Title IV of ERISA;

(c)  Each Employee Benefit Plan, has been operated and administered in all material respects in compliance with its terms, all applicable Laws and all applicable collective bargaining agreements and there is no material lawsuit or claim, other than routine claims for benefits, pending, or to the Knowledge of the Shareholders threatened, against any Employee Benefit Plan; and

(d)  No audit or investigation by any governmental authority is pending, or to the Knowledge of the Shareholders threatened, regarding any Employee Benefit Plan.

(e)  Except as set forth on the Disclosure Schedule, each Employee Benefit Plan intended to be qualified under Section 401(a) of the Code, and the trust (if any) forming a part thereof, has received a favorable determination letter from the IRS as to its qualification under the Code and to the effect that each such trust is exempt from taxation under Section 501(a) of the Code, and nothing has occurred since the date of such determination letter that could reasonably be expected to adversely affect such qualification or tax-exempt status.

(f)  No employee is or will become entitled to post-employment benefits of any kind by reason of employment with the Company or any of its Subsidiaries, including, without limitation, death or medical benefits (whether or not insured), other than (x) coverage mandated by Section 4980B of the Code, or (y) retirement benefits payable under any Employee Benefit Plan qualified under Section 401(a) of the Code.  Except as set forth in the Disclosure Schedule, the consummation of the transactions contemplated by this Agreement will not result in an increase in the amount of compensation or benefits or the acceleration of the vesting or timing of payment of any compensation or benefits payable to or in respect of any employee.

3.12.        Intellectual Property. (a) Section 3.12 of the Disclosure Schedule sets forth a complete and correct list of all registered Intellectual Property that is owned by the Company and its Subsidiaries and necessary for the conduct of, or is otherwise material to, or used or held for use in connection with, the business of the Company and its Subsidiaries (the “Company Intellectual Property”) and such Company Intellectual Property is owned by the Company or one of its Subsidiaries free of any Lien other than Permitted Liens.  Immediately after the Closing, the Company will own or have the right to use all Company Intellectual Property free from any Liens, other than Permitted Liens.

(b)  Section 3.12 of the Disclosure Schedule contains all registered Intellectual Property used or held for use in connection with, necessary for the conduct of, or otherwise material to the business of the Company. All registered Intellectual Property used or held for use in connection with, necessary for the conduct of, or otherwise material to the business of the Company which is held by the Shareholders or their affiliates (the “Shareholder

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Trademarks”) will have been validly transferred to the Company prior to the Closing. Following the Closing, the Company shall have the right to use all Intellectual Property used or held for use in connection with, necessary for the conduct of, or otherwise material to the business of the Company which is held by the Shareholders or their affiliates.

(c)  Section 3.12 of the Disclosure Schedule sets forth a complete and correct list of all material written or oral licenses and arrangements (other than shrink-wrap or click-wrap licenses) pursuant to which (y) the use by any Person of Company Intellectual Property or the Shareholder Trademarks is permitted by the Company or any of its Subsidiaries and (z) the use by the Company or any of its Subsidiaries of Intellectual Property is permitted by any Person.

(d)  The conduct by the Company or any Subsidiary of its business does not infringe in any material respect on any valid Intellectual Property rights of any other Person. Except as set forth in Section 3.12 of the Disclosure Schedule, to the Knowledge of the Shareholders, none of the Company Intellectual Property or the Shareholder Trademarks is being infringed upon by any Person. No Person has since January 1, 1997 challenged the rights of the Company or any of its Subsidiaries or any Shareholder in respect of any Company Intellectual Property or Shareholder Trademarks and, to the Knowledge of the Shareholders, there is no basis for any such challenge. The Company Intellectual Property and the Shareholder Trademarks have been duly registered with, filed in or issued by, as the case may be, the United States Patent and Trademark Office and the filing office of each jurisdiction other than the United States set forth in Section 3.12 of the Disclosure Schedule, and the same remain in full force and effect. To the Knowledge of the Shareholders, such filings are sufficient to perfect in each such jurisdiction enforceable protection for the Company Intellectual Property and the Shareholder Trademarks.

3.13.        Brokers. Except for fees and expenses payable by the Company or its Subsidiaries to Bear, Stearns & Co. and H & F Capital Services, which have been previously disclosed to the Purchaser and will be paid by the Company at the Closing and will be included in Cash Adjustments, none of the Shareholders nor the Company has incurred or will incur any broker’s, finder’s or similar fee, commission or expense, in each case in connection with the transactions contemplated by this Agreement.

3.14.        Environmental Matters.  Except as set forth in Section 3.14 of the Disclosure Schedule or otherwise disclosed in environmental reports provided to the Purchaser:

(a)  the Company’s and its Subsidiaries’ real property complies with applicable Environmental Laws, except for failures to comply that in the aggregate could not reasonably be expected to have a Material Adverse Effect;

(b)  the Company and the Subsidiaries have obtained all environmental consents, approvals, licenses and permits required for their respective operations by any applicable Environmental Law except for failures to obtain that in the aggregate could not reasonably be expected to have a Material Adverse Effect; and

(c)  except as would not have a Material Adverse Effect, neither the Shareholders nor any other Person (including the Company or any Subsidiary) has caused any Release, threatened Release or disposal of any Hazardous Material at or from the Company’s or any Subsidiary’s real property and none of such real property is adversely affected by any Release,

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threatened Release or disposal of a Hazardous Material originating or emanating from any adjoining property.

3.15.        Transactions with the Shareholders. Set forth in Section 3.15 of the Disclosure Schedule is a true and complete list of the following agreements and transactions: (i) all Company Agreements to which any Shareholder or any Affiliate of any Shareholder is a party and (ii) all transactions between the Company, a Subsidiary or any Employee Benefit Plan, on the one hand, and any Shareholder or any Affiliate of a Shareholder, on the other hand, other than benefits provided under any Employee Benefit Plan in the ordinary course of business.

3.16.        Insurance. Set forth in Section 3.16 of the Disclosure Schedule is a complete and correct schedule of all currently effective insurance policies or binders of insurance or programs of self-insurance which relate to the business of the Company and its Subsidiaries. The coverage under each such policy and binder is in full force and effect, and no notice of cancellation or nonrenewal with respect to, or disallowance of any claim under, or increase of premium for, any such policy or binder has been received by the Company or any Subsidiary, except such notices, disallowances or increases which could not reasonably be expected to have a Material Adverse Effect. The Company has complied in all material respects with the terms and provisions of such policies.

3.17.        Labor Matters. Except as set forth in Section 3.17 of the Disclosure Schedule:

(a)  The Company and the Subsidiaries are in compliance with all currently applicable material laws respecting employment and employment practices, terms and conditions of employment and wages and are not engaged in any unfair labor practice;

(b)  neither the Company nor any Subsidiary is a party, or is otherwise subject, to any collective bargaining agreement or other labor union contract applicable to its employees;

(c)  to the Knowledge of the Shareholders, there are no activities or proceedings by a labor union or representative thereof to organize any employees of the Company or any Subsidiary; and

(d)  there is not pending, and the Company and the Subsidiaries have not experienced since January 1, 1999, any labor disputes, slowdowns, work stoppages or threats thereof.

3.18.        Assets. The Company and its Subsidiaries have good title, valid leasehold interests in or valid rights under contract to use, all of the properties and assets (real, personal or mixed, tangible or intangible), used or held for use in connection with, necessary for the conduct of, or otherwise material to, the business of the Company and its Subsidiaries (the “Assets”), in each case free and clear of any Lien (other than Permitted Liens). Other than Assets used pursuant to contracts for services, such Assets constitute substantially all of the assets or property used to generate the results of operations reflected in the Financial Statements. Except as set forth in Section 3.18 of the Disclosure Schedule, none of the Shareholders or any Affiliate of any Shareholder (other than the Company and its Subsidiaries) has title to, or any possessory or ownership interest in, any of the Assets. The Assets are adequate and suitable for the purposes for which such Assets are used or held for use, and in

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good operating condition, subject only to ordinary wear and tear, and there are no facts or conditions affecting the Assets which could, individually or in the aggregate, interfere in any material respect with the use, occupancy or operation thereof.  Prior to the Closing, the Company shall furnish to the Purchaser a list of all tangible Assets that are owned by and material to the business of the Company and its Subsidiaries.

3.19.        Undisclosed Liabilities, etc. The Company and its Subsidiaries (including Energy Wear) have no material liabilities or obligations, except (a) as and to the extent disclosed on and adequately reserved against in the Financial Statements or Section 3.19 of the Disclosure Schedule, (b) for liabilities and obligations that are incurred after June 30, 2000 in the ordinary course of business consistent with past practice and are not prohibited by this Agreement, (c) for liabilities and obligations an understanding of which is reasonably apparent from a reading of another representation or warranty contained in Section 3 of this Agreement (or a corresponding section of the Disclosure Schedule), and (d) for liabilities and obligations that would have been required to be disclosed in a section of the Disclosure Schedule under another representation or warranty contained in Section 3 of this Agreement if such representation or warranty were not qualified by materiality, any dollar threshold or “Material Adverse Effect,” but is not so required to be disclosed as a result of such qualification. Since June 30, 2000, there has not occurred or come to exist any Material Adverse Effect or any event, occurrence, fact, condition, change, development or effect that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

3.20.        Energy Wear EBITDA. The EBITDA of Energy Wear for the twelve months ended June 30, 2000 was greater than zero.

3.21.        No Other Representations or Warranties. Except for the representations and warranties contained in this Section 3 or elsewhere in this Agreement, the Shareholders and the Company make no representation or warranty, express or implied, written or oral, and the Shareholders and the Company hereby disclaim any such representation or warranty, whether by the Shareholders or the Company or any of their officers, directors, employees, agents or representatives or any other Person, with respect to the Company, the Subsidiaries or their respective businesses or operations, or the execution and delivery of this Agreement or the transactions contemplated hereby, notwithstanding the delivery or disclosure to the Purchaser, any Affiliate of the Purchaser or any of its officers, directors, employees, agents or representatives or any other Person of any documentation or other information by the Shareholders or the Company or any of their Affiliates, officers, directors, employees, agents or representatives or any other Person with respect to any one or more of the foregoing. Without limiting the generality of the foregoing, the Company and the Shareholders make no representation or warranty with respect to any projections, estimates or budgets delivered to or made available to the Purchaser of revenues, results of operations (or any component thereof), cash flows or financial condition of the Company and the Subsidiaries (or any component thereof) or the business and operations of the Company and the Subsidiaries.

SECTION 4. REPRESENTATIONS AND WARRANTIES REGARDING PURCHASER

The Purchaser and MergerCo represent and warrant to the Shareholders as of the date hereof as follows:

4.1.          Organization of the Purchaser.  Each of the Purchaser and MergerCo is duly organized and is validly existing as a limited partnership or corporation, as applicable, in

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good standing under the laws of Delaware, and has the requisite power and authority to own, lease and operate the property used in its business and to carry on its business as now being conducted. Each of the Purchaser and MergerCo is registered to do business in all jurisdictions where it is required to be qualified as a foreign entity except where the failure to be so qualified would not impair the Purchaser’s or MergerCo’s, as the case may be, ability to execute, deliver and perform this Agreement and the Ancillary Agreements and consummate the transactions contemplated hereby and thereby.

4.2.          Power; Authorization; Consents. Each of the Purchaser and MergerCo has the requisite power and authority to execute, deliver and perform each of this Agreement and the Ancillary Agreements and to consummate the transactions contemplated hereby and thereby. The execution, delivery and performance of this Agreement and the Ancillary Agreements and the consummation of the transactions contemplated hereby and thereby have been duly authorized and approved by the general partner of the Purchaser and the board of directors of MergerCo, and no other proceedings on the part of the Purchaser or MergerCo are necessary to authorize and approve this Agreement and the Ancillary Agreements or any of the transactions contemplated hereby and thereby. Each of this Agreement and the Ancillary Agreements has been or will be duly executed and delivered by the Purchaser and MergerCo and constitutes and will constitute a valid and binding obligation of the Purchaser and MergerCo, enforceable against the Purchaser and MergerCo in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting creditors’ rights generally or by the principles governing the availability of equitable remedies. Except as disclosed in Section 4.2 of the Disclosure Schedule, the execution, delivery and performance of each of this Agreement and the Ancillary Agreements by the Purchaser and MergerCo and the consummation of the transactions contemplated hereby and thereby do not and will not:

(a)  contravene any provisions of the constituent or organizational instruments of the Purchaser or MergerCo;

(b)  after notice or lapse of time or both, conflict with, result in a breach of any provision of, constitute a default under, result in the modification or cancellation of, or give rise to any right of termination in respect of, any material contract, agreement, commitment, understanding or arrangement of any kind to which the Purchaser or MergerCo is a party which could reasonably be expected to have a Material Adverse Effect;

(c)  violate or conflict with any material Legal Requirement applicable to the Purchaser or MergerCo or any of their respective businesses or properties, except where such violation or conflict could not reasonably be expected to have a Material Adverse Effect; or

(d)  except for filings under the HSR Act, require any material authorization, consent, order, permit or approval of, or notice to, or filing, registration or qualification with, any Person which if not obtained or made could not reasonably be expected to have a Material Adverse Effect.

4.3.          Brokers. Except as disclosed in Section 4.3 of the Disclosure Schedule, the Purchaser has not employed any broker or finder or has incurred or will incur any broker’s, finder’s or similar fees, commissions or expenses, in each case in connection with the transactions contemplated by this Agreement except for such fees, commissions or expenses which will be borne by the Purchaser.

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4.4.          Investment Intent of the Purchaser. The Purchaser is acquiring the Purchased Shares delivered pursuant to this Agreement for investment purposes, and not with the view to or in connection with any distribution thereof.  The Purchaser understands that the Common Shares may not be sold, assigned, offered for sale, pledged or otherwise transferred unless such transaction is registered under the Securities Act of 1933, as amended, and applicable state securities laws, or exemptions from such registration requirements are available or such requirements are not applicable.

4.5.          Financing Commitments. The Purchaser has delivered to the Shareholders’ Representative true, complete and correct copies of (i) a commitment letter from Bankers Trust Company, whereby such financial institution has committed, upon the terms and subject to the conditions set forth therein, to provide senior debt financing in an amount of up to $60 million in connection with the transactions contemplated by this Agreement, (ii) a commitment letter from Bankers Trust Corporation, expressing such financial institution’s commitment, upon the terms and subject to the conditions set forth therein, to provide subordinated debt financing in the amount of $50 million in connection with the transactions contemplated by this Agreement, (iii) a complete and correct copy of a commitment letter from North Castle Partners II, L.P. (“NCP”) whereby NCP has committed, upon the terms and subject to the conditions set forth therein, to provide equity financing in the aggregate amount of $41 million in connection with the transactions contemplated by this Agreement, and (iv) a complete and correct copy of acommitment letter from J.W. Childs Partners II, L.P. (“Childs”) whereby Childs has committed, upon the terms and subject to the conditions set forth therein, to provide equity financing in the aggregate amount of $41 million in connection with the transactions contemplated by this Agreement. Each such commitment letter is valid, binding and in full force and effect, and the Purchaser knows of no reason why the conditions set forth in Section 6.8 will not be satisfied on a timely basis.

4.6.          Litigation. There is no action, suit, investigation or proceeding pending against, or to the Knowledge of the Purchaser, threatened in writing against, the Purchaser before or by any court, arbitrator, panel, agency or other governmental, administrative or judicial entity which in any manner challenges or seeks to prevent, enjoin, alter or materially delay the transactions contemplated by this Agreement.

SECTION 5.  COVENANTS

5.1.          Access; Confidentiality. Between the date hereof and the Closing, the Shareholders will cause the Company and its Subsidiaries, during normal business hours and upon reasonable notice to the Company, to (i) provide to the Purchaser and its representatives full access to the premises, property, files, books, records, documents, and other information of or concerning the Company and its Subsidiaries; (ii) furnish to the Purchaser and its representatives financial, technical and operating data and other information pertaining to the business and property of the Company and its Subsidiaries; (iii) make available for inspection and copying by the Purchaser and its representatives copies of any documents relating to the foregoing; (iv) permit the Purchaser and its representatives to conduct reasonable interviews of the employees, sales representatives and auditors of the Company and its Subsidiaries; and (v) make the officers of the Company and the Subsidiaries reasonably available to cooperate with the Purchaser in obtaining financing for the transactions contemplated hereby; provided, however, that any such investigation will be conducted in such a manner so (A) as to preserve the confidentiality of the transactions contemplated hereby and (B) as not to interfere unreasonably with the operation of the business of the Company and its Subsidiaries. During

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the period from the date hereof to the Closing, all information provided to the Purchaser or its representatives by or on behalf of the Shareholders or the Company, or their representatives (whether pursuant to this Section 5.1 or otherwise) will be governed and protected by the Confidentiality Agreement.

5.2.          Announcements. Prior to the Closing, no party hereto will issue any press release or otherwise directly or indirectly make any public statement or furnish any statement or make any announcement to its customers with respect to the transactions contemplated hereby without the prior consent of the other, except as may be required by law.

5.3.          Consents; Cooperation. Subject to the terms and conditions hereof, the Shareholders, the Company, MergerCo and the Purchaser will use their reasonable efforts:

(a)  subject to Section 5.13, to obtain as soon as practicable all authorizations, consents, orders, permits or approvals of, or notices to, or filings, registrations or qualifications with, any governmental, administrative or judicial authority or any other Person that are required on their respective parts, for the consummation of the transactions contemplated by this Agreement;

(b)  to defend, consistent with applicable principles and requirements of law, any lawsuit or other legal proceeding, whether judicial or administrative, whether brought derivatively or on behalf of third persons (including governmental authorities) challenging this Agreement or the transactions contemplated hereby;

(c)  to furnish to each other such information and assistance as may reasonably be requested in connection with the foregoing; and

(d)  to take, or cause to be taken, all actions and to do, or cause to be done, all things reasonably necessary, proper or advisable under applicable laws and regulations to consummate and make effective the transactions contemplated by this Agreement.

5.4.          Additional Agreements. In addition to the provisions of Section 5.3(a) hereof, the Purchaser will use reasonable efforts to eliminate any concern on the part of any court or government authority regarding the legality of the proposed transactions contemplated hereby and take or cause to be taken all such action as may reasonably be required in order to consummate the transactions contemplated hereby under applicable antitrust and other laws and regulations regarding competition.

5.5.          Notification of Certain Matters.

(a)  Between the date hereof and the Closing, the Shareholders and the Purchaser will give prompt notice in writing to the other of (i) any information known to the Shareholders or the Purchaser that indicates that any representation or warranty of the Shareholders or the Purchaser, as the case may be, contained herein will not be true and correct in any material respect as of the Closing and (ii) the occurrence of any event known to the Shareholders or the Purchaser which will result, or has a reasonable prospect of resulting, in the failure to satisfy a condition specified in Section 6 or 7 hereof.

(b)  Prior to the Closing, the Shareholders and the Company shall be permitted to amend or supplement the Disclosure Schedule to disclose additional matters arising after the

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date of this Agreement. Such amendments or supplements shall be made in writing and furnished to the Purchaser at least two Business Days prior to the Closing. The Disclosure Schedule shall be deemed to be amended and supplemented as of the Closing solely for purposes of Section 9 hereof (but not for purposes of determining the accuracy of the representations and warranties set forth in Section 3 as of the date hereof). For the avoidance of doubt, no such amendment or supplement shall be effective to modify the Disclosure Schedule for purposes of determining the satisfaction of the condition set forth in Section 6.1 hereof.

5.6.          Hart-Scott-Rodino. As soon as practicable (but in no event later than 10 days) after the date hereof, the Purchaser and the Company will prepare and file all documents with the Federal Trade Commission and the United States Department of Justice that are required to comply with the HSR Act. The Company and the Purchaser will promptly respond to any “second request” made in connection with such filings and will promptly furnish all materials requested by any of the regulatory agencies having jurisdiction over such filings.

5.7.          Further Assurances. Any time after the Closing, the Shareholders and the Purchaser will, and the Purchaser will cause the Company to, promptly execute, acknowledge and deliver any other assurances or documents reasonably requested by the Purchaser or the Shareholders, as the case may be, to satisfy or in connection with its obligations hereunder.

5.8.          Retention of Books and Records. For a period of six years after the Closing Date (or in the case of books, records and other documents relating to Taxes until the expiration of the applicable statute of limitations), the Company will retain all books, records and other documents pertaining to the Company in existence on the Closing Date and to make the same available after the Closing Date for examination and copying by the Shareholders or their representatives, at such the Shareholders’ expense, upon reasonable notice. No such books, records or documents will be destroyed by the Purchaser or the Company without first advising the Shareholders in writing and providing the Shareholders a reasonable opportunity to obtain possession or make copies thereof at the Shareholders’ expense.

5.9.          Employee Benefit Plans. For a period of two years after the Closing, the Purchaser shall cause the Company to continue to maintain employee and retiree compensation and benefit plans, programs, arrangements and policies for the benefit of employees of the Company and the Subsidiaries which provide compensation and benefits that are substantially equivalent, in the aggregate, to those provided by the Company and the Subsidiaries, as applicable, for the benefit of such employees prior to the Closing Date. The Purchaser will cause the Company and the Subsidiaries to give employees of the Company and the Subsidiaries full credit for purposes of eligibility, vesting and benefit accrual under any such plans or arrangements maintained by the Company or any Subsidiary, for such employees’ service recognized for such purposes under the Employee Benefit Plans.  The Purchaser will honor all existing agreements and obligations under the Employee Benefit Plans.

5.10.        Conduct of Business Prior to the Closing. From the date hereof to the Closing, the Shareholders shall cause the business of the Company and each of its Subsidiaries to be conducted in the ordinary course and shall cause the Company and each of its Subsidiaries to use their reasonable efforts to preserve the current business organization and existing business relationships including with customers and suppliers. In addition, the

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Shareholders shall not cause or permit the Company or any of its Subsidiaries to do any of the following without the prior written consent of the Purchaser:

(a)  except as contemplated by this Agreement, amend its Certificate of Incorporation or By-Laws;

(b)  except as set forth in Section 5.10 of the Disclosure Schedule, make or grant any increase in compensation or employee benefits or in severance or termination pay to any officer, executive officer, employee, member of the Board of Directors, agent or consultant, or enter into any employment agreement with any executive officer or other individual, in each case except as may be required under employment, collective bargaining or termination agreements in effect on the date hereof or, solely with respect to employees other than officers and members of the Board of Directors, in the ordinary course of business;

(c)  except as contemplated by this Agreement or as set forth in Section 5.10 of the Disclosure Schedule, acquire or agree to acquire by merging or consolidating with, or by purchasing a substantial portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or otherwise acquire or agree to acquire, other than in the ordinary course of business, any assets which are material, individually or in the aggregate, to the Company;

(d)  except as set forth in Section 5.10 of the Disclosure Schedule, sell, pledge, mortgage, assign, lease, give a security interest in or otherwise encumber or dispose of, or agree to do any of the foregoing with respect to, any of its assets, except in the ordinary course of business;

(e)  except in the ordinary course of business, enter into or amend any other commitment, contractual obligation or transaction which calls for aggregate payments in excess of $100,000 and which does not expire or is not terminable without cost or penalty at the Company’s option within a 180 day period;

(f)  except in the ordinary course of business, accelerate the receipt of amounts due with respect to the Company’s trade accounts receivable or any other accounts receivable;

(g)  except in the ordinary course of business, lengthen the period for payment of the Company’s accounts payable;

(h)  (i) except for the distribution of the Special Distribution Amount pursuant to Section 5.23, declare, set aside, pay or make any dividend or other distribution or payment (whether in cash, stock or property) with respect to, or, except as contemplated by this Agreement, purchase or redeem, any shares of capital stock, or (ii) except as set forth in Section 5.10 of the Disclosure Schedule, make any other payments or benefits to the Shareholders or Affiliates of the Shareholders, other than payments contemplated by this Agreement;

(l)  except as set forth in Section 5.10 of the Disclosure Schedule, (i) incur any Debt (excluding for this purpose any interest, fees or premiums accruing on Debt outstanding on the date hereof and borrowings in the ordinary course of business for seasonal working capital and budgeted capital expenditure needs or in order to make the distributions described in clause (h) of this Section 5.10 under the Revolving Facility and any interest, fees and premiums

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thereon), (ii) prepay any interest on any Debt, (iii) except in the ordinary course of business, make any loans, advances or capital contributions to, or investments in, any other person, other than the Company or any direct or indirect wholly owned Subsidiary of the Company or (iv) issue any shares of capital stock of the Company;

(j)  except in the ordinary course of business or as set forth in Section 5.10 of the Disclosure Schedule, make or agree to make any new capital expenditure or capital expenditures in excess of $100,000 in the aggregate; or

(k)  except as set forth in Section 5.10 of the Disclosure Schedule, in the ordinary course of business or as would not have a Material Adverse Effect, enter into, amend or terminate any Material Agreement.

(l)  conduct all Tax affairs relating to it other than in the ordinary course of business consistent with past practice and in good faith in substantially the same manner as such affairs would have been conducted if this Agreement had not been entered into;

(m)  intentionally take any action or intentionally omit to take any action that would result in a material breach of any of the representations and warranties set forth in Section 3;

(n)  grant any new Options to any Person, or add, delete, amend or accelerate the terms, vesting or exercisability of any outstanding Option (whether or not granted pursuant to the Stock Option Plan) other than those outstanding Options which by their terms (as in effect on the date hereof) will accelerate as a result of the Closing.

Notwithstanding the foregoing, the Company shall, and the Shareholders shall cause the Company to, make capital expenditures or otherwise accomplish capital expenditure objectives from and after the date hereof through the Closing Date substantially in accordance with the Company’s capital expenditure plan.

5.11.        Shareholders’ Rights with Respect to Resales. In the event that a Transfer (as defined below) occurs at any time during the period commencing on the Closing Date and ending on the date which is six months from the Closing Date (the “Resale Period”), the Surviving Corporation will pay or cause to be paid to the Shareholders an aggregate amount equal to 25% of the Resale Profit (as defined below) on such Transfer, such amount to be paid in the same form as the Transfer Consideration upon consummation of any such Transfer such that the Shareholders shall receive such percentage of the Resale Profit in the kind and amount of cash, securities and other property that they would have been entitled to receive had they been holders of shares of capital stock of the Company immediately prior to consummation of such Transfer. The Purchaser will not, by amendment of the Company’s charter or through a reorganization, consolidation, merger, dissolution, sale of assets or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Section 5.11, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the Shareholders to receive any Resale Profit. A Transfer consummated after the expiration of the Resale Period shall be deemed to have occurred during the Resale Period and Resale Profit shall be payable to the Shareholders in respect of such a Transfer, if such Transfer was effected pursuant to a definitive written agreement entered into prior to the expiration of the Resale Period.

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For purposes of this Section 5.11, the following terms have the meanings set forth below:

“Resale Profit” means, with respect to any Transfer, an amount equal to the excess, if any, of (I) the sum of (a) the aggregate value of the Transfer Consideration received by, payable to or inuring to the benefit of, the Purchaser and its Affiliates, directly or indirectly, as a result of such Transfer, plus (b) the value of any dividends or distributions of any kind paid, at any time following the Closing, in respect of the Common Shares or any other equity interests in the Company held by the Purchaser or its Affiliates or upon any redemption or repurchase of such shares or equity interests, over (II) the sum of (x) the Purchase Price, plus (y) the fees and expenses Incurred by the Purchaser or its Affiliates, the Surviving Corporation or any of its Subsidiaries in connection with such Transfer, plus (z) any additional equity capital contributed to the Company or its Subsidiaries by the Purchaser or its Affiliates following the Closing.

“Transfer” means any sale, conveyance, assignment, disposition or other transfer, other than to an Affiliate of any of the Purchaser who agrees in writing to be bound by the provisions of this Section 5.11, in one or a series of related transactions, of (i) all or substantially all of the assets or stock of the Company and its Subsidiaries, taken as a whole (whether by sale of stock or assets, merger, consolidation or otherwise), (ii) the consummation of any transaction (other than the sale of shares of capital stock of the Company or any Affiliate of the Company in an underwritten public offering but including, without limitation, any merger or consolidation) the result of which is that the Purchaser ceases to be the “beneficial owner” (as such term is defined in Rule 13d-3 and Rule 12d-5 under the Securities Exchange Act of 1934) of a majority of the voting capital stock of the Company, Notwithstanding the foregoing, a pledge or assignment of interests or assets of the Purchaser or the Company or any Subsidiary to a lender in the ordinary course of business (and the subsequent exercise of remedies by such lender) shall not constitute a Transfer for purposes of this Section 5.11.

“Transfer Consideration” means the value of all cash, securities and other property paid, or to be paid, directly or indirectly, by an acquirer to the Purchaser, its Affiliates or the Company in connection with the Transfer. The value of any non-cash consideration shall be the fair market value of such consideration, as determined in good faith by the Board of Directors of the Company. Transfer Consideration shall also include the aggregate amount of any liabilities assumed or paid, directly or indirectly, by the acquiror.

5.12.        Transfer Taxes. The Shareholders shall bear, and shall indemnify the Company from and against, all excise, sales, transfer, documentary, filing, recordation and other similar taxes, levies, fees and charges, if any (including all real estate transfer taxes and conveyance and recording fees, if any), that may be imposed upon, or payable or collectible or incurred in connection with, this Agreement and the transactions contemplated hereby jointly and severally. The Shareholders’ Representative shall prepare any Tax Returns relating to such transfer taxes. Fifteen days before any such Tax Return is required to be filed, the Shareholders’ Representative shall submit such Tax Return to the party or parties with the filing obligation with respect to such Tax Return together with cash equal to the amount of Transfer Taxes shown as due on such return. Upon receipt of such Tax Return, The Purchaser, Company or the Shareholders, as the case may be, agree to sign, if required by the Tax Return, and to file such Tax Return within the fifteen day period, in each case, unless there is no reasonable basis for the positions taken in the Tax Return and such positions would have a material effect on the Company. The Shareholders’ Representative shall, at his election and expense, have the right to represent the Purchaser, the Company or the Shareholders, as the

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case may be, with respect to any Contest relating to such transfer taxes; provided, however, that the Company shall have the right to participate in (but not control) any such Contest and provided further that the Shareholders Representative shall not settle any such Contest without the written consent of the Company, which consent shall not be unreasonably withheld, it being understood that it would be unreasonable to withhold consent if the settlement would have no material effect on the Company. Unless the Purchaser or the Company has previously received written notice from the Shareholders’ Representative of the existence of such a Contest, the Purchaser or the Company, as the case may be, shall give written notice to the Shareholders’ Representative within ten days of receiving written notice of such Contest, but no failure to give such notice shall relieve the Shareholders from liability hereunder except to the extent, if any, that the rights of the Shareholders with respect to such Contest are prejudiced. The Purchaser and the Company agree to assist and cooperate with the Shareholders’ Representative as reasonably requested and his representatives at no cost to the Shareholders’ Representative in a prompt and timely manner in connection with any such Contest.  Such cooperation shall include, but shall not be limited to, making available on a reasonable basis to the other Shareholders’ Representative and its representatives, all books, records, returns, documents, files, other information necessary or useful in connection with any Contest. The Shareholders shall be entitled to any refund paid to the Surviving Corporation or the Purchaser with respect to the Taxes funded by the Shareholders pursuant to this Section 5.12.  In the event that the Surviving Corporation or the Purchaser receives such a refund, such party shall pay such amount to the Shareholder’s Representative within fifteen days.

5.13.        Landlord Consents. The Shareholders and the Company shall promptly furnish the notice (together with all required documentation) with respect to the transactions contemplated by this Agreement as prescribed by the lease agreement set forth in Section 5.13 of the Disclosure Schedule. In furtherance thereof, the Purchaser shall execute and deliver to the landlord a guaranty of the obligations under such lease provided therein, but in no event shall Purchaser be required to pay any consent fees required by the landlord. In the event that the landlord under such lease objects to the transactions contemplated in this Agreement within the period prescribed in the lease, the Shareholders shall use their commercially reasonable efforts to obtain the landlord’s consent or a judicial determination that no such consent is required.

5.14.        Termination of Existing Shareholder Agreements. Each of the Shareholders hereby agree to terminate the Stockholders’ Agreement, dated as of December 31, 1998, by and among the Company and the stockholders of the Company listed on the signature pages thereof, the Errico Stockholders’ Agreement, dated as of December 31, 1998, by and among the Company, Donate Errico, Jr., Vito Errico, Lavinia Errico and Charles D. Hooker (as trustee), and if requested by the Purchaser, any other agreement between any Shareholder or any entity controlled by a Shareholder, on the one hand, and the Company or any Subsidiary, on the other hand, effective as of, and conditioned upon, the Closing.

5.15.        Indemnification. From and after the Closing Date, the Purchaser and the Company shall indemnify each present and former director and officer of the Company and its Subsidiaries from any and all claims arising out of or in connection with activities in such capacity to the fullest extent provided under Delaware law, and in addition, to the fullest extent provided in their respective charters or by-laws, as applicable, which obligations shall survive the Closing and shall continue in full force and effect for a period of not less than six years from the Closing Date; provided, however, that if any claim or claims are asserted or made within such six-year period, all rights to indemnification in respect of any such claim or claims shall

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continue until disposition of any and all such claims. Without limiting the foregoing, after the Closing Date, the Company shall advance expenses (including reasonable attorneys’ fees and expenses) incurred with respect to the foregoing, as they are incurred, to the fullest extent permitted under applicable law, provided that the person on whose behalf the expenses are advanced provides an undertaking to repay such advances if it is ultimately determined that such person is not entitled to indemnification.

5.16.        Access to Tax Records. After the Closing Date, the Purchaser, the Surviving Corporation and the Subsidiaries will make available to the Shareholders, as reasonably requested, and to any taxing authority as required by applicable law, all information, records or documents relating to the liability or potential liability for Taxes of the Shareholders that are attributable to the Shareholders’ investment in the Company, and further will preserve such information, records or documents until the expiration of any applicable statute of limitations or extensions thereof.

5.17.        Liquidation of Certain Subsidiaries. Prior to the Closing, the Company and the Shareholders shall have taken actions that are reasonably satisfactory to the Purchaser to complete the liquidation of each inactive subsidiary, including, without limitation, Equinox Cafes, Inc. and Equinox West Palm Beach, Inc. (each, a “Liquidation Subsidiary”). Any Assets held by a Liquidation Subsidiary prior to its liquidation shall remain Assets of the Company or a Subsidiary of the Company after the complete liquidation of the Liquidation Subsidiary.

5.18.        Use of Business Marks. Each Shareholder covenants that from and after the Closing, such Shareholder shall not, and shall not cause any Affiliate, associate and representative thereof to, directly or indirectly, use any of the names and marks set forth in Section 3.12 of the Disclosure Schedule or any other name or mark confusingly similar to any of those names and marks.

5.19.        Non-Competition; Non-Disparagement. During the period beginning on the Closing Date and ending on the third anniversary thereof (the “Restriction Period”), each Principal Shareholder will not, directly or indirectly, alone or in conjunction with any Entity (as defined below), (i) own, manage, operate or control or participate in the ownership, management, operation or control of, or become associated, as an employee, director, officer, advisor, agent, consultant, principal, partner, member or independent contractor with or lender to, any person, enterprise, firm, partnership, corporation, limited liability entity, cooperative or other entity (collectively, an “Entity”) engaged in or aiding others to engage in any business currently conducted by the Company or any of its Subsidiaries or any business substantially similar thereto in North America and Europe, provided that a Principal Shareholder may own less than 3% of the outstanding voting shares of any publicly held company or own an interest in any Entity no more than 10% of the gross sales revenue of which is derived from such business, or (ii) make any public statement disparaging or criticizing in any way the Company or the Purchaser or any of their respective Affiliates, or any products or services offered by any of these, except to the extent required by any Legal Requirement, and then only after consultation with the Purchaser to the extent possible.

5.20.        Non-Solicitation of Employees. During the Restriction Period, each Principal Shareholder shall not directly or indirectly, for his own account or the account of any other Person or Entity with which he shall become associated in any capacity (other than the Purchaser or the Surviving Corporation), (i) solicit for employment or engagement or employ or otherwise engage any Person who at the time of, or at any point during the twelve months (or, in

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the case of Persons actually or constructively terminated by the Surviving Corporation, six months) prior to, such solicitation is or was employed by the Purchaser or any Subsidiary of the Purchaser, regardless of whether such employment or engagement is direct or through an Entity with which such Person is employed or associated, or otherwise intentionally interfere with the relationships of the Purchaser or any Affiliate or Subsidiary of the Purchaser with any Person or Entity who or which is at the time employed by the Purchaser or any Affiliate or Subsidiary of the Purchaser or (ii) induce any employee, officer, director, consultant, advisor or contractor of the Purchaser or any Affiliate or Subsidiary of the Purchaser to engage in any activity which the Shareholders are prohibited from engaging in under this Agreement or to terminate such employment or engagement. Notwithstanding the foregoing, each Shareholder shall be permitted to employ or otherwise engage any person referred to in (i) or (ii) above who, without any solicitation or inducement by the individual, solicits such Shareholder for employment, provided that the Purchaser consents in writing to such employment or engagement, which consent shall not be unreasonably withheld.

5.21.        Cash Adjustments; Capital Expenditures.

(a)  On or prior to the first Business Day preceding the Closing Date, the Company shall deliver to the Purchaser a certificate, executed by its Chief Financial Officer, stating such officer’s best estimate of the amount of the Cash Adjustments and setting forth in reasonable detail the calculation of such estimate and attaching copies of all evidence of relevant payments and account balances. The Purchaser shall have the right to review and approve (which approval shall not be unreasonably withheld) the calculation of the Cash Adjustments.

(b)  On or prior to the second Business Day preceding the Closing Date, the Company shall deliver to the Purchaser a certificate, executed by its Chief Executive Officer and its Chief Financial Officer, certifying that the Company will have made capital expenditures or otherwise accomplished its capital expenditure objectives from and after the date hereof through the Closing Date substantially in accordance with the Company’s capital expenditure plan.

5.22.        No Solicitation. During the term of this Agreement, each of the Company and the Shareholders shall not, and shall cause any representative of the Shareholders or the Company not to, (a) directly or indirectly solicit or encourage any inquiries or proposals for, or enter into or continue any discussions with respect to, any of the following (a “Competing Transaction”): the acquisition by any Person of any of the Common Shares, any other shares of capital stock or other securities of the Company or any of its Subsidiaries, or all or a material part of the business or of the Assets of the Company or any of its Subsidiaries or (b) furnish or permit to be furnished any nonpublic information concerning the Company or any of its Subsidiaries or any of their businesses and operations to any Person (other than the Purchaser and MergerCo and their prospective lenders and investors and their respective representatives), other than information furnished in the ordinary course of business in consultation with the Purchaser and MergerCo. The Shareholders shall promptly notify the Purchaser of any inquiry or proposal received by the Shareholders or any representative thereof with respect to any such Competing Transaction. The Shareholders shall immediately cease and cause to be terminated any existing activities, discussions or negotiations with any Person other than the Purchaser in respect of any Competing Transaction.

5.23.        Special Distribution. On or immediately prior to the Year End Date, the Company will distribute on its Common Stock an amount up to $25,000,000 as determined by

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the Shareholders’ Representative (the “Special Distribution Amount”). For avoidance of doubt, any distribution made pursuant to Section 9.9 shall not be counted towards such $25,000,000 cap or included in the Special Distribution Amount.

5.24.        Release of Shareholder Guarantees. Each of the Purchaser and the Surviving Corporation shall use its reasonable efforts to cause all guarantees of any Shareholder that are listed in Section 5.24 of the Disclosure Schedule to be released and terminated in writing in form and substance reasonably satisfactory to the Shareholders’ Representative, and pending such release and termination, the Purchaser shall indemnify such Shareholder for any Losses which he or she may incur in connection with any such guaranty. For purposes of this Section 5.24, the use of “reasonable efforts” shall not be deemed to require the payment of any money (in addition to amounts payable to satisfy the guaranty obligation) to any third party.

5.25.        Section 338 Election. The Purchaser shall not make any election under section 338 (including section 338(g)) of the Code in connection with any of the transactions described in this agreement.

5.26.        Promotions and Sales Efforts. Following the Closing through December 31, 2000, the Surviving Corporation shall, and the Purchaser shall cause the Surviving Corporation to, pursue promotions and sales efforts in a manner reasonably consistent with the manner in which it pursued promotions and sales efforts in the corresponding period of 1999.

SECTION 6.  CONDITIONS TO THE OBLIGATIONS OF PURCHASER

The obligations of the Purchaser and MergerCo required to be performed by it at the Closing are subject to the satisfaction, at or prior to the Closing, of each of the following conditions, each of which may be waived by the Purchaser and MergerCo:

6.1.          Representations and Warranties; Covenants. The representations and warranties of the Shareholders and the Company contained in Section 3 of this Agreement will be true and correct as of the Closing (except for those that are made as of a certain date, which shall be true and correct as of such date) in all material respects, except that all representations and warranties that are qualified by references to “materiality” or “Material Adverse Effect” shall be true and correct in all respects. Each obligation of the Shareholders and the Company required by this Agreement to be performed by them at or prior to the Closing will have been duly performed and complied with in all material respects at the Closing. At the Closing, the Purchaser will have received certificates, dated the Closing Date and duly executed by or on behalf of each of the Shareholders and the Company (without personal liability to the signing officer, in the case of the Company), to the effect that the conditions set forth in the preceding sentences have been satisfied.

6.2.          Hart-Scott-Rodino. Any applicable waiting period under the HSR Act and the rules and regulations promulgated thereunder will have expired or been terminated.

6.3.          Absence of Injunction. No order, stay, judgment or decree will have been issued by any court and be in effect restraining or prohibiting the consummation of the transactions contemplated hereby.

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6.4.          Directors. The Purchaser will have received the written resignation of any director of the Company or any Subsidiary of the Company (or such directors will have otherwise been removed) whose resignation it has requested.

6.5.          Section 1445(b)(2) Affidavit. The Shareholders will have furnished the Purchaser an affidavit stating the United States taxpayer identification numbers of such Shareholders and that such Shareholders are not foreign persons, as contemplated by Section 1445(b)(2) of the Code.

6.6.          Certificates. The Shareholders and the Company will have furnished the Purchaser with such certificates of their respective officers and others as the Purchaser may reasonably request to evidence satisfaction of the conditions set forth in this Section 6, such certificates to be made without personal liability of such officer or other person signing such certificate.

6.7.          No Material Adverse Effect. No event, occurrence, fact, condition, change, development or effect shall exist or have occurred since the date of this Agreement that, individually or in the aggregate, has or had or resulted in, or could reasonably be expected to have a Material Adverse Effect.

6.8.          Financing. The Surviving Corporation shall have obtained debt financing, and the Purchaser shall have obtained equity financing from Childs, sufficient to enable the Surviving Corporation and the Purchaser to consummate the transactions contemplated by this Agreement on such terms as are satisfactory to the Purchaser in its reasonable judgment. This condition shall be deemed to have been met if, on the Closing Date, the funds set forth in the letters described in subclauses (i), (ii) and (iv) of Section 4.5 are available to the Surviving Corporation to be drawn upon, on the terms set forth in such letters.

6.9.          Corporate Proceedings. All corporate proceedings of the Company and all actions of the Shareholders in connection with the transactions contemplated by this Agreement and any ancillary agreements, and all documents and instruments incidental thereto, shall be reasonably satisfactory in form and substance to the Purchaser and its counsel, and the Purchaser and its counsel shall have received all such documents and instruments, or copies thereof, certified if requested, as may be reasonably requested.

6.10.        Shareholders Agreement and Registration Rights Agreement. On or prior to the Closing Date, the Shareholders shall have entered into (i) a Shareholders Agreement in substantially the form of Exhibit C (the “Shareholders Agreement”) and (ii) a Registration Rights Agreement in substantially the form of Exhibit D (the “Registration Rights Agreement”).

6.11.        Lien Releases. The Company shall have delivered evidence on or prior to the Closing Date that is reasonably satisfactory to the Purchaser that all Liens securing any Debt incurred by the Company and its Subsidiaries shall have been terminated and released; provided, that the Surviving Corporation shall, at the Closing, provide the amount of funds necessary to pay off the Debt (other than assumed capital lease obligations).

6.12.        Governmental Consents. The Company or the Subsidiaries shall have obtained and shall have delivered to the Purchaser and MergerCo on or prior to the Closing Date copies of all Consents of Governmental Authorities listed on Section 6.12 of the Disclosure Schedule.

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6.13.        Construction Contracts. On or prior to Closing, Bell Development Corporation and the Company shall have entered into construction and development contracts reasonably acceptable to the Purchaser regarding Equinox Wall Street, Inc. and Equinox 44th Street, Inc., and Eclipse Development Corporation and the Company shall have entered into construction and development contracts reasonably acceptable to the Purchaser regarding Equinox Greenwich Avenue, Inc. and any additional developments planned as of the Closing Date. On or prior to the Closing Date, Bell Development Corporation, Eclipse Development Corporation and the Shareholders shall have transferred to the Company all of their respective right, title and interest in and to, if any, all architectural plans, drawings, designs and specifications and all related documents related to each health club facility owned by any of the Subsidiaries.

6.14.        Opinions. The Purchaser and MergerCo shall have received an opinion of Cleary, Gottlieb, Steen & Hamilton, counsel to the Shareholders, substantially in the form of Exhibit E.

6.15.        Option Consents. The Company shall have received consents from each of Harvey Spevak, Paul Boardman, Ken Fleischer and Catherine Cassidy regarding the treatment of their respective Options pursuant to this Agreement.

6.16.        Cash Adjustments Calculation. The Company shall have delivered to the Purchaser, pursuant to Section 5.21 (a) hereof, a certificate, executed by its Chief Financial Officer, stating the amount of the Cash Adjustments and setting forth in reasonable detail the calculation of Cash Adjustments, and the Purchaser shall have approved such calculation in accordance with Section 5.21 (a).

6.17.        Lessor Notice. The lessor under the lease set forth in Section 5.13 of the Disclosure Schedule shall have been duly furnished with the notice with respect to the transactions contemplated by this Agreement as prescribed by such lease, and either (i) the lessor shall not have asserted within the time period prescribed by such lease that its consent is required in order to consummate such transactions, (ii) the consent of the lessor to such transactions shall have been received or (iii) there shall have been a final judicial determination that such consent is not required.

6.18.        Certain Consents. The Company shall have received the written waivers from the landlords under the leases identified in Schedule 6.18(a) of the Disclosure Schedule, in form and substance reasonably satisfactory to the Purchaser, each to the effect that the landlord irrevocably waives the security deposit and letter of credit requirements under such leases. The Company shall have received the written consent of the landlord under the lease identified in Section 6.18(b), in form and substance reasonably satisfactory to the Purchaser, to enter into the transactions contemplated by this Agreement.

SECTION 7.  CONDITIONS TO THE OBLIGATIONS OF THE SHAREHOLDERS

The obligations of the Shareholders to be performed by them at the Closing are subject to the satisfaction, at or prior to the Closing, of each of the following conditions, each of which may be waived by the Shareholders:

7.1.          Representations and Warranties; Covenants. The representations and warranties of the Purchaser and MergerCo contained in Section 4 of this Agreement will be true

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and correct as of the Closing (except for those that are made as of a certain date, which shall be true and correct as of such date) in all material respects, except that all representations and warranties that are qualified by references to “materiality” or “Material Adverse Effect” shall be true and correct in all respects. Each obligation of the Purchaser and MergerCo required by this Agreement to be performed by it at or prior to the Closing will have been duly performed in all material respects at or prior to the Closing except that the obligations of the Purchaser pursuant to Section 2.2(b) shall be performed in all respects. At the Closing, the Shareholders will have received a certificate, dated the Closing Date and duly executed by an executive officer of the Purchaser and MergerCo (without personal liability to such officer) to the effect that the conditions set forth in the preceding sentences have been satisfied.

7.2.          Hart-Scott-Rodino. Any applicable waiting period under the HSR Act and the rules and regulations promulgated thereunder will have expired or been terminated.

7.3.          Absence of Injunction. No order, stay, judgment or decree will have been issued by any court and be in effect restraining or prohibiting the consummation of the transactions contemplated hereby.

7.4.          Certificates. The Purchaser and MergerCo will have furnished the Shareholders with such certificates of its officers and others as the Shareholders may reasonably request to evidence satisfaction of the conditions set forth in this Section 7, such certificates to be made without personal liability of such officer or other person signing such certificate.

7.5.          Corporate Proceedings. All corporate proceedings of MergerCo and all actions of the Purchaser in connection with the transactions contemplated by this Agreement and any ancillary agreements, and all documents and instruments incidental thereto, shall be reasonably satisfactory in form and substance to the Company and its counsel, and the Company and its counsel shall have received all such documents and instruments, or copies thereof, certified if requested, as may be reasonably requested.

7.6.          Opinions. The Shareholders shall have received an opinion of Debevoise & Plimpton, counsel to the Purchaser, substantially in the form of Exhibit F.

7.7.          Option Consents. The Company shall have received consents from each of Harvey Spevak, Paul Boardman, Ken Fleischer and Catherine Cassidy regarding the treatment of their respective Options pursuant to this Agreement, including that any Cashed Out Option Shares beneficially owned by them will be treated as Option Indemnitor Shares.

7.8.          Cash Adjustments Calculation. The Purchaser shall have approved, in accordance with Section 5.21 (a) hereof, the calculation of Cash Adjustments set forth in the certificate delivered to the Purchaser by the Company pursuant to Section 5.21(a).

SECTION 8.  TERMINATION

8.1.          Termination. This Agreement may be terminated at any time prior to the Closing:

(a)  by mutual consent of the Purchaser and the Shareholders; or

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(b)  by the Purchaser or the Shareholders, if the Closing shall not have occurred prior to 5:00 p.m. Eastern Standard Time, on December 15, 2000; or

(c)  by the Purchaser or the Shareholders, if any court of competent jurisdiction or other Governmental Authority has issued a statute, order, decree or ruling or taken any other action restraining, enjoining or otherwise prohibiting or making illegal the transactions contemplated by this Agreement, and such statute, order, decree, ruling or other action has become final and non-appealable.

If the Purchaser or the Shareholders terminate this Agreement pursuant to the provisions hereof, such termination will be effected by written notice to the other party specifying the provision hereof pursuant to which such termination is made.

8.2.          Effect of Termination.

(a)  Upon termination of this Agreement pursuant to Section 8.1 hereof, except as provided in clause (b) below:

(i)            this Agreement will forthwith become null and void;

(ii)           such termination will be the sole remedy with respect to any breach of any representation or warranty contained in or made pursuant to this Agreement, and

(iii)          no party hereto or any of their respective officers, directors, employees, agents, consultants, stockholders or principals will have any liability or obligation hereunder or with respect hereto.

(b)  The provisions of clause (a) above notwithstanding, no party will be relieved of liability for any willful breach of this Agreement.

SECTION 9.  SURVIVAL AND INDEMNIFICATION

9.1.          Survival. Notwithstanding any otherwise applicable statute of limitations, no claim, lawsuit or other proceeding arising out of or related to the breach of any representation, warranty or covenant contained in this Agreement or otherwise for indemnification pursuant to this Section 9 may be made at any time after March 31, 2002; provided, however, that (i) such claims, lawsuits or proceedings in respect of the representations or warranties contained in Section 3.7 and 3.11(e) may be made until 30 days after the expiration of any applicable statutes of limitations, (ii) such claims, lawsuits or proceedings in respect of the representations or warranties contained in Section 3.4 may be made until the third anniversary of the Closing Date and (iii) such claims, lawsuits or proceedings in respect of the payment of consideration pursuant to Section 2 or the representations or warranties contained in Sections 3.1, 3.2 and 3.3 may be made without time limitation.

9.2.          Shareholders’ Indemnification.

(a) The Shareholders, jointly and severally, subject to the limitations set forth in this Section 9, will indemnify the Purchaser and its employees, officers, directors, beneficial

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owners and Affiliates, and after the Effective Time, the Surviving Corporation (collectively, the “Purchaser Indemnities”) against and in respect of any and all Losses which are incurred by the Purchaser Indemnitees by reason of (i) the breach of any representation or warranty made by the Shareholders and the Company in Section 3 of this Agreement as of the date hereof, (ii) the failure of any representation or warranty made by the Shareholders and the Company in Section 3 of this Agreement that are qualified by references to “materiality” or “Material Adverse Effect,” or in Section 3.3 of this Agreement, to be true and correct in all respects as of the Closing (except for those that are made as of a certain date, which must be true and correct in all respects as of that date), (iii) the failure of any representation or warranty made by the Shareholders and the Company in Section 3 of this Agreement (other than Section 3.3) that are not qualified by references to “materiality” or “Material Adverse Effect” to be true and correct in all material respects as of the Closing (except for those that are made as of a certain date, which must be true and correct in all material respects as of that date), (iv) any breach of a covenant (other than the covenants contained in Sections 5.19 and 5.20) made by the Shareholders and the Company (to the extent applicable prior to Closing, in the case of the Company) in this Agreement, (v) any of the matters set forth in Section 3.8 of the Disclosure Schedule as in effect on the date hereof, (vi) any breach of any covenant contained in Sections 5.19 and 5.20 by the Shareholders, or (vii) the action entitled Equinox White Plains Road, Inc. v. 800 Associates (the “Scarsdale Action”).

(b)  The Purchaser Indemnitees may make no claim for indemnification pursuant to Section 9.2(a): (i) unless notice of such claim (describing the basic facts or events, the existence or occurrence of which constitute or have resulted in the alleged breach of a representation or warranty made in this Agreement) has been given to the Shareholders during the applicable survival period set forth in Section 9.1; and (ii) in the case of a claim made pursuant to Section 9.2(a)(i)-(vi), until claims for which Losses are otherwise recoverable hereunder by the Purchaser Indemnitees pursuant to Section 9.2(a)(i)-(vi) exceed $1,500,000 in the aggregate, in which event all such Losses shall be indemnifiable under this Section 9. Notwithstanding the foregoing, the maximum amount of Losses in respect of which the Purchaser Indemnitees may seek indemnification pursuant to Section 9.2(a)(i)-(v) shall be $25,000,000; provided that such maximum amount shall be $100,000,000 in the case of Losses incurred by the Purchaser Indemnitees by reason of the breach by the Shareholders and the Company of the representations and warranties contained in Section 3.1, 3.2 and 3.3 of this Agreement. This Section 9.2(b) shall not apply to any claim made under Section 9.8, to any breach of the obligation to pay transfer taxes pursuant to Section 5.12, or to any breach of a representation or warranty contained in Section 3.7.

(c)  Any payment pursuant to this Section 9.2 will be deemed an adjustment to the Merger Consideration.

(d)  The rights of the Purchaser Indemnitees under Sections 5.12, 8.1, 9.1 and 9.8 and this Section 9.2 shall be the exclusive remedy of the Purchaser Indemnitees with respect to breaches by the Shareholders of the representations or warranties, or for money damages with respect to breaches by the Shareholders of covenants, contained in this Agreement, except in the case of fraud on the part of the Shareholders or the Company.

(e)  In the event that any of the Shareholders is obligated to indemnify the Purchaser Indemnitees pursuant to this Section 9, such Shareholder will, upon payment of such indemnity, be subrogated to all rights of the Purchaser Indemnitees with respect to claims to which such indemnification relates.

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(f)  Any payment required to be made to the Purchaser Indemnitees under this Section 9 shall be subject to Section 10.14 and shall be paid first out of the Escrowed Funds pursuant to the Cash Escrow Agreement and then by the Shareholders.

(g)  Except as set forth in this Section 9, Section 9.8 shall be the exclusive remedy of the Purchaser Indemnitees with respect to matters covered therein.

(h)  All rights, including the proceeds of any claim (net of any tax cost to the Surviving Corporation), of the Company or its Subsidiaries in respect of (i) the Scarsdale Action and (ii) the issuance prior to the Closing Date of guest passes by the Barbizon Hotel for use at the Company’s facility located at that site, shall be transferred to the Shareholders prior to the Closing pursuant to instruments reasonably acceptable to the Shareholders and shall not be taken into account in determining the amount of Cash Adjustments.

(i)  Each of the Purchaser, the Company and the Surviving Corporation shall acknowledge that the consummation of the transactions contemplated hereby shall not result in the payment of any “excess parachute payment” within the meaning of Section 280G(b)(1) of the Code.

(j)  If a Purchaser Indemnitee deducts for Tax purposes a Loss described in Section 9.2(a) with respect to which the Shareholders have paid indemnification directly or indirectly to such Purchaser Indemnitee, the Surviving Corporation shall return or shall cause to be returned to the Shareholders’ Representative, promptly after such deduction is utilized (which for this purpose will include a reduction in the estimated tax payments by the Surviving Corporation), a portion of such indemnification equal to the amount by which such Purchaser indemnitee’s tax liability has been reduced by such deduction (determined after any increase in Taxes arising out of the receipt of the corresponding indemnification payment made by the Shareholders). For purposes of the immediately preceding sentence, any deduction of any Loss described in Section 9.2(a) shall be deemed to be utilized only after any deduction or other Tax benefit otherwise available to the Purchaser Indemnitee has been actually utilized. If any amount is returned under this Section 9.2(j) to the Shareholders’ Representative and the deduction which gave rise to such returned amount is later disallowed or is otherwise determined to be superfluous after taking into account the ordering rule in the preceding sentence, the Shareholders’ Representative shall make an appropriate recovery payment to the Surviving Corporation or the Purchaser Indemnitee, as applicable. This Section 9.2(j) shall not apply if the Shareholders shall not have been required to pay indemnification because of any limitation set forth in Section 9.2(b). In the event that the Surviving Corporation claims that a deduction has not been utilized, the Surviving Corporation shall make available to the Shareholders’ Representative on a reasonable basis and his representatives all books, records, returns, documents, files, other information necessary or useful in connection with such determination.

9.3.          The Purchaser’s Indemnification.

(a)  The Purchaser and its employees, officers, directors, and Affiliates, and, after the Effective Time, the Surviving Corporation, (collectively, the “Purchaser Indemnitors”), subject to the limitations set forth in this Section, will indemnify the Shareholders against and in respect of any and all Losses which may be incurred by reason of (i) the breach of any representation or warranty made by the Purchaser in Section 4 hereof or (ii) any breach of any covenant made by the Purchaser in this Agreement.

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(b)  No claim for indemnification may be made by the Shareholders pursuant to Section 9.3(a)(i), (i) unless notice of such claim (describing the basic facts or events, the existence or occurrence of which constitute or have resulted in the alleged breach of a representation or warranty made in this Agreement) has been given to the Purchaser during the survival period set forth in Section 9.1, and (ii) until such claims for which Losses are otherwise recoverable hereunder by the Shareholders exceed $1,500,000 in the aggregate, in which event all such Losses shall be indemnifiable under this Section 9.

(c)  Any payment pursuant to this Section 9.3 will be deemed an adjustment to the Purchase Price.

(d)  The rights of the Shareholders under Sections 8.1, 9.1 and this Section 9.3 will be the exclusive remedy of the Shareholders with respect to breaches by the Purchaser of representations or warranties, or for money damages with respect to breaches by the Purchaser of covenants, contained in this Agreement, except in the case of fraud on the part of the Purchaser.

(e)  In the event that the Purchaser Indemnitors are obligated to indemnify the Shareholders pursuant to this Section 9, the Purchaser Indemnitors will, upon payment of such indemnity, be subrogated to all rights of the Shareholders with respect to claims to which such indemnification relates.

(f)  The principles of Section 9.2(j) shall apply mutatis mutandis, to determine the rights of the Purchaser Indemnitors to a return of indemnification payments made by them.

9.4.          Claims by Third Parties. Other than in the case of any Contest, which shall be governed by Section 9.7 of this Agreement, if a party to this Agreement seeks indemnity hereunder with respect to a claim by a third party:

(a)  For the purposes of this Section 9.4, “Third Party Claim” means any demand which has been made on, or communicated to the Purchaser, the Shareholders or the Company by or on behalf of any Person other than the entities aforementioned in this Section 9.4(a) and which, if maintained or enforced, may result in a claim for indemnification of the nature described in Section 9.2 or 9.3 of this Agreement being made.

(b)  Promptly upon receipt by Indemnitee of notice of any Third Party Claim in respect of which the Indemnitee proposes to demand indemnification from the Indemnitor, the Indemnitee shall forthwith give notice to that effect to the Indemnitor.

(c)  The Indemnitor shall have the right, exercisable by giving notice to the Indemnitee not later than 30 days after receipt of the notice described in Section 9.2 (c) or 9.3(c), as the case may be, to assume the control of the defense, compromise or settlement of the Third Party Claim.

(d)  Upon the assumption of control by the Indemnitor as aforesaid, the Indemnitor shall, at its expense, diligently proceed with the defense, compromise or settlement of the Third Party Claim at the Indemnitor’s sole expense, including employment of counsel reasonably satisfactory to the Indemnitee, and in connection therewith, the Indemnitee shall cooperate fully, but at the expense of the Indemnitor, to make available to the Indemnitor all pertinent information and witnesses under Indernnitee’s control and to make such assignments

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and take such other steps as in the opinion of counsel for the Indemnitor are necessary to enable the Indemnitor to conduct such defense, provided always that the Indemnitee shall be entitled to reasonable security from the Indemnitor for any expense, costs or other liabilities to which it may be or may become exposed by reason of such cooperation.

(e)  The final determination of any such Third Party Claim, including all related costs and expenses, will be binding and conclusive upon the parties hereto as to the validity or invalidity, as the case may be, of such Third Party Claim against the Indemnitor hereunder.

(f)  Should the Indemnitor fail to give notice to the Indemnitee as provided in clause (c) hereof or in the event the Indemnitor declines to undertake the defense of any Third Party Claim, action or proceeding when first notified thereof, the Indemnitee shall keep the Indemnitor advised as to the current status and progress thereof. The Indemnitee agrees not to make any offer of settlement without first having provided five (5) days advance written notice thereof to the Indemnitor.

(g)  In the event the Indemnitor undertakes the defense of any such claim, action or proceeding, the Indemnitee shall nevertheless be entitled to participate in (but not direct) the defense thereof with counsel of its own choice and at its own expense, and the parties agree to cooperate fully with one another in connection with the defense and/or settlement thereof; provided, however, that any decision to settle any such claim, action or proceeding shall be at the Indemnitor’s sole discretion. The foregoing notwithstanding, except with the prior written consent of the Indemnitee, which shall not be unreasonably withheld, no Indemnitor, in the defense of any such claim or litigation, shall consent to entry of any judgment or enter into any settlement that provides for injunctive or other nonmonetary relief affecting the Indemnitee or that does not include as an unconditional term thereof the giving by each claimant or plaintiff to such Indemnitee of a release from all liability with respect to such claim or litigation. From and after delivery of the notice referred to in Section 9.4(c) above, the Indemnitor shall be relieved of the obligation to reimburse the Indemnitee for any other legal, accounting or other out-of-pocket costs and expenses thereafter incurred by the Indemnitee with respect to the defense of such claim, action or proceeding notwithstanding any participation by the Indemnitee therein.

(h)  If the Indemnitee subsequently recovers all or part of the Third Party Claim from any other person legally obligated to pay the claim, the Indemnitee shall forthwith repay to the Indemnitor the amounts recovered up to an amount not exceeding the payment made by the Indemnitor to the Indemnitee by way of indemnity.

9.5.          Apportionment of Taxes. The parties agree that the transactions contemplated in this document will cause “a change of ownership of 50% or more” for the purposes of Treasury Regulation section 1.1362-3(b)(3) and shall not take any position on any Tax Return that is inconsistent with such section.

9.6.          Tax Returns. The Shareholders’ Representative shall be responsible for the preparation of all federal income Tax Returns required by law to be filed by the Company or any of its Subsidiaries after the Closing Date with respect to periods ending on or before the Year End Date (including the “S short year” (within the meaning of Treasury Regulation Section 1.1362-3) ending on the Year End Date). Such Tax Returns shall be prepared in a manner consistent with the past Tax Returns of the Company, and the Shareholders’ Representative shall consult in good faith with regard to such Tax Returns with the Purchaser and the Surviving Corporation. The Shareholders’ Representative shall deliver any such Tax

52

Returns to the Surviving Corporation 30 days before the due date of such return (taking into account all available extensions). The Surviving Corporation shall be allowed to comment on and dispute such Tax Returns.  In the event of any disagreement between the Surviving Corporation and the Shareholders’ Representative, such disagreement shall be resolved by a nationally recognized accounting firm mutually agreed to by the Surviving Corporation and the Shareholders’ Representative (the “Accountant”), and any such determination by the Accountant shall be final. The fees and expenses of the Accountant shall be borne by the Surviving Corporation and the Shareholders in inverse proportion as they may prevail on matters resolved by the Accountant, which proportionate allocations shall be determined by the Accountant at the time the determination of the Accountant is rendered on the merits of the matter submitted. If the Accountant does not resolve any differences between the Surviving Corporation and the Shareholders’ Representative with respect to such Tax Return at least 5 days prior to the due date therefor, such Tax Return shall be filed as prepared by the Shareholders’ Representative and amended to reflect the Accountant’s resolution.

9.7.          Contests.

(a)  Subject to Section 9.7(c), the Shareholders’ Representative shall, at his election, have the right to represent, settle and dispose of the Company’s or any of the Subsidiaries’, as the case may be, interests in any Contest relating to any Tax matter with respect to any Tax period (or portion thereof) ending on or prior to the Year End Date (including the “S short year” (within the meaning of Treasury Regulation Section 1.1362-3) or with respect to any contest pertaining to the subject matter of Section 3.7(m) in respect of the transactions contemplated hereby, and employ counsel of his choice at the Shareholders’ expense and to control the conduct, settlement or disposition of such Contest.

(b)  Unless the Purchaser or the Surviving Corporation has previously received written notice from the Shareholders’ Representative of the existence of such a Contest, the Purchaser or the Surviving Corporation, as the case may be, shall give written notice to the Shareholders’ Representative of the existence of any Contest relating to a Tax matter described in Section 9.7(a) within ten days from the receipt by the Purchaser or the Surviving Corporation after the Closing Date of any written notice of such Contest, but no failure to give such notice shall relieve the Shareholders of any liability hereunder except to the extent, if any, that the rights of the Shareholders with respect to such claim are materially prejudiced. Unless the Shareholders’ Representative has previously received written notice from the Surviving Corporation of the existence of such Contest, the Shareholders’ Representative shall give written notice to the Surviving Corporation of the existence of any Contest within ten days from the receipt by the Shareholders’ Representative of any written notice of such Contest.

(c)  The Purchaser, the Company and the Subsidiaries, on the one hand, and the Shareholders, on the other, agree, in each case at no cost to the other party, to cooperate with the other and the other’s representatives as reasonably requested and in a prompt and timely manner in connection with any Contest. Such cooperation shall include, but not be limited to, making available on a reasonable basis to the other party, during normal business hours, all books, records, returns, documents, files, other information (including, without limitation working papers and schedules), officers or employees (without substantial interruption of employment) or other relevant information necessary or useful in connection with any Contest requiring any such books, records and files. The Shareholders’ Representative shall consult with the Surviving Corporation regarding any such Contest and shall allow the Purchaser and the Surviving Corporation to participate in any such Contest concerning a Tax matter described in

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Section 9.7(a) and shall not settle or dispose of any such Contest without the prior written consent of the Purchaser, which consent shall not be unreasonably withheld or delayed. The Surviving Corporation shall have the right to control the conduct of any Contest in its sole discretion with respect to any other Tax matter.

9.8.          Indemnification for Taxes.   Each of the Shareholders covenants and agrees, jointly and severally, to be responsible for, defend, indemnify and hold harmless the Purchaser, the Company, each of its Subsidiaries and their respective Affiliates from and against, and to pay (i) all Taxes imposed on or with respect to the Company or any of its Subsidiaries attributable to, arising from or relating to any taxable period (or portion thereof) ending on or before the Year End Date to the extent that the total amount of such Taxes exceeds the total reserve with respect to Taxes reflected (excluding for this purpose any deferred tax liability reserves and any reserves for non-current taxes) on the Financial Statements as of June 30, 2000 (including without limitation, any such Taxes that are attributable to any transactions contemplated by this Agreement), (ii) all Taxes (other than transfer taxes described in Section 5.12) asserted against the Company or any of its Subsidiaries as a result of the Company or any of its Subsidiaries, as the case may be, having acquired assets (including by merger) from another Person prior to the Closing (whether as transferee or otherwise), and (iii) any liability for Taxes arising out of or by virtue of any inaccuracy in or breach of any representation or warranty made by the Company in Section 3.7, in each of the above cases together with any reasonable out-of-pocket fees and expenses (including reasonable attorneys’ and accountants’ fees) as incurred by the Purchaser, the Company or their Affiliates in connection with the assessment or collection thereof (provided, in the case of Section 3.7(m), that the Purchaser does not file any Tax Return which contains any position inconsistent with the representations and warranties set forth therein). For purposes of clause (i) of Section 9.8, any liability attributable to a taxable period which begins before and ends after the Year End Date shall be apportioned between the portion of such period ending on the Year End Date and the portion beginning on the day after the Year End Date (x) in the case of real and personal property Taxes and any capital Taxes, by apportioning such Taxes on a per diem basis, (y) in the case of income Taxes, on the basis of the taxable income or loss of the Company or any of its Subsidiaries, as determined from the books and records of the Company or any of its Subsidiaries for such partial period, and (z) in the case of Taxes other than Taxes described in clauses (x) and (y), on the basis of the actual activities of the Company or any of its Subsidiaries, as determined from the books and records of the Company or any of its Subsidiaries for such partial period. Neither the Company nor any of its Subsidiaries shall be deemed, for the purpose of the Shareholders’ obligation under this Section 9.8, to have the benefit of any net operating loss, net capital loss or other Tax credit or benefit that is attributable to, arises from or relates to any taxable period (or portion thereof) commencing after the Year End Date. If a Purchaser Indemnitee deducts for Tax purposes a Tax liability described in this Section 9.8 with respect to which the Shareholders have paid indemnification directly or indirectly to such Purchaser Indemnitee, the Surviving Corporation shall return or cause to be returned to the Shareholders’ Representative, promptly after such deduction is utilized (which for this purpose will include a reduction in the estimated tax payments by the Surviving Corporation), a portion of such indemnification equal to the amount by which such Purchaser Indemnitee’s Tax liability has been reduced by such deduction (determined after any increase in Taxes arising out of the receipt of the corresponding indemnification payment made by the Shareholders). For purposes of the immediately preceding sentence, any deduction of any Tax liability described in this Section 9.8 shall be deemed to be utilized only after any deduction or other Tax benefit otherwise available to the Purchaser Indemnitee has been actually utilized. If any amount is returned under this Section 9.8 to the Shareholders’ Representative and the

54

deduction which gave rise to such returned amount is later disallowed or is otherwise determined to be superfluous after taking into account the ordering rule in the preceding sentence, the Shareholders’ Representative shall make an appropriate recovery payment to the Surviving Corporation or the Purchaser Indemnitee, as applicable.  In the event that the Purchaser Indemnitee claims that a deduction has not been utilized, the Surviving Corporation shall make available to the Shareholders’ Representative and his representatives on a reasonable basis all books, records, returns, documents, files, other information necessary or useful in connection with such determination.

9.9.          Post Allocation Date Taxes. As soon as practical following the Closing, the Surviving Corporation shall pay to the Shareholders an amount equal to the product of (A) the Company’s taxable income (as computed for U.S. federal income tax purposes in accordance with Section 9.6) earned in the ordinary course of business from and including October 1, 2000 to and including the Year End Date and (B) 12.5%, provided, that in no event shall the amount distributed pursuant to this Section 9.9 exceed $500,000. Such payment shall be treated for Tax purposes as additional Merger Consideration.

SECTION 10. MISCELLANEOUS

10.1.        Headings. The section headings herein are for convenience of reference only, do not constitute part of this Agreement and will not be deemed to limit or otherwise affect any of the provisions hereof. References to Sections, unless otherwise indicated, are references to Sections of this Agreement.

10.2.        Notices. All notices to be given pursuant to this Agreement to any party must be in writing and will be deemed to have been validly given:

(a)  if delivered by hand to an officer or agent of such party at its address given below; or

(b)  if delivered by facsimile transmission, to such party at its address given below.

The address of each party for the purposes of this Agreement is as follows:

If to the Shareholders, to the addresses specified on Annex I hereto;

With a copy to:

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Cleary, Gottlieb, Steen & Hamilton
One Liberty Plaza
New York, New York 10006
Fax No.  (212) 225-3999

Attention:  Paul J. Shim, Esq.

If to the Purchaser:

NCP-EH, LP.

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

60 Arch Street

Greenwich, Connecticut 06830

Fax No. (203) 618-1860

Attention: Peter J. Shabecoff

With copies to:

Equinox Holdings, Inc.
895 Broadway
New York, NY 10003
Fax No.  (212) 777-9510

Attention: President

and

Debevoise & Plimpton

875 Third Avenue

New York, New York 10022

Fax No.  (212) 909-6836

Attention: Franci J. Blassberg, Esq.

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and

c/o J.W. Childs Associates, L.P.
One Federal Street
Boston, MA 02110
Telephone:  (617) 753-1100
Attention: Glenn A. Hopkins

and

Kaye, Scholer, Fierman, Hays & Handler, LLP

425 Park Avenue

New York, New York 10022

Fax:  (212) 836-7152

Telephone: (212) 836-8000

Attention: Stephen C. Koval, Esq.

Either party may by notice to the other change its address for notice and will so change its address for notice whenever its existing address for notice ceases to be adequate for delivery both by hand and by facsimile.

Notices so given will be deemed to be given and received:

(a)           on the date of delivery, if delivered by hand; and

(b)           upon confirmed transmission if sent by facsimile.

10.3.        Assignment. This Agreement and all provisions hereof will be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns. Neither this Agreement nor any right, interest, or obligation hereunder may be assigned by any party hereto without the prior written consent of the other party and any purported assignment or other transfer without such consent shall be void and unenforceable; provided, that the Purchaser may assign this Agreement or a portion of its rights hereunder to any Affiliate or subsidiary of the Purchaser, or to any lender to the Purchaser or any subsidiary or Affiliate thereof as security for obligations to such lender, and provided, further, that no assignment to any such lender shall in any way affect the Purchaser’s obligations or liabilities under this Agreement.

10.4.        Entire Agreement. This Agreement (including the Disclosure Schedule and Schedules hereto and thereto) and the Cash Escrow Agreement, the Share Escrow Agreement, the Shareholders Agreement and the Registration Rights Agreement embody the entire agreement and understanding of the parties with respect to the transactions contemplated hereby and thereby and supersede all prior written or oral commitments, arrangements or understandings with respect thereto (other than the Confidentiality Agreement, which will terminate at the Closing).  There is no restriction, agreement, promise, warranty, covenant or undertaking among the parties hereto with respect to the transactions contemplated hereby and thereby other than those expressly set forth herein or therein.

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10.5.        Amendment; Waiver.

(a)  This Agreement may only be amended or modified in writing signed on behalf of each of the parties hereto.

(b)  Any party hereto may, by an instrument in writing, waive compliance with any term or provision of this Agreement on the part of such other party or parties hereto. The waiver by any party hereto of a breach of any term or provision of this Agreement will not be construed as a waiver of any right or subsequent breach.

10.6.        Counterparts. This Agreement may be executed in two or more counterparts, all of which will be considered one and the same agreement and each of which will be deemed an original.

10.7.        Governing Law. This agreement wilt be governed by the laws of the State of New York (regardless of the laws that might be applicable under principles of conflicts of law that would require the application of the law of another jurisdiction) as to all matters, including but not limited to matters (except to the extent the law of the State of Delaware mandatorily applies) of validity, construction, effect and performance.

10.8.        Severability. If any one or more of the provisions of this Agreement is held to be invalid, illegal or unenforceable, the validity, legality or enforceability of the remaining provisions of this Agreement will not be affected thereby, and the Shareholders and the Purchaser will use their reasonable efforts to substitute one or more valid, legal and enforceable provisions which insofar as practicable implement the purposes and intent hereof. To the extent permitted by applicable law, each party waives any provision of law which renders any provision of this Agreement invalid, illegal or unenforceable in any respect.

10.9.        Consent to Jurisdiction. The Purchaser and the Shareholders hereby submit to the exclusive jurisdiction of the courts of the State of New York or the courts of the United States located in the State of New York in respect of the interpretation and enforcement of the provisions of this Agreement and any related agreement and hereby waive, and agree not to assert, any defense in any action, suit or proceeding for the interpretation or enforcement of this Agreement and any related agreement, that they are not subject thereto or that such action, suit or proceeding may not be brought or is not maintainable in such courts or that this Agreement may not be enforced in or by such courts or that their property is exempt or immune from execution, that the suit, action or proceeding is brought in an inconvenient forum, or that the venue of the suit, action or proceeding is improper. Service of process with respect thereto may be made upon the Purchaser, MergerCo, the Company or the Shareholders by mailing a copy thereof by registered or certified mail, postage prepaid, to such party at its address as provided in Section 10.2 hereof. Each party acknowledges and agrees that any controversy which may arise under this Agreement is likely to involve complicated and difficult issues, and therefore each party hereby irrevocably and unconditionally waives any right such party may have to a trial by jury in respect of any litigation directly or indirectly arising out of or relating to this Agreement, or the breach, termination or validity of this Agreement, or the transactions contemplated by this Agreement. Each party certifies and acknowledges that (i) no representative, agent or attorney of any other party has represented, expressly or otherwise, that such other party would not, in the event of litigation, seek to enforce the foregoing waiver, (ii) each such party understands and has considered the implications of this waiver, (iii) each such party makes this waiver voluntarily, and (iv) each such party has been induced to enter

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into this Agreement by, among other things, the mutual waivers and certifications in this Section 10.9.

10.10.      Third Person Beneficiaries. This Agreement is not intended to confer upon any Person other than the parties hereto, any rights or remedies hereunder, except that the lenders providing the New Debt Financing shall be third party beneficiaries with respect to, and may directly enforce the provisions of, Sections 2.12(h), 2.13(b) and Section 2.13A(b).

10.11.      Representations and Warranties; Disclosure Schedule; No Waiver. (a) Neither the specification of any dollar amount in the representations and warranties set forth in Section 3 nor the indemnification provisions of Section 9 nor the inclusion of any items in the Disclosure Schedule to this Agreement will be deemed to constitute an admission by the Shareholders or the Purchaser, or otherwise imply, that any such amounts or the items so included are material for the purposes of this Agreement. The inclusion of any matter in the Disclosure Schedule shall not be deemed to constitute an acknowledgment that the matter is required to be disclosed by the terms of this Agreement. All documents or information disclosed in one section of the Disclosure Schedule to this Agreement will be deemed to be incorporated by reference in another section of the Disclosure Schedule to the extent that it is reasonably apparent from a reading of such disclosure that it also qualifies or applies to such other section of the Disclosure Schedule.  For purposes of this Agreement, the determination as to whether any item, event, circumstance or amount is “material” shall be made with reference to the Company and its Subsidiaries, taken as a whole, and references to “Material Adverse Effect” shall be deemed to be qualified by “individually or in the aggregate.”

(b)   Neither the waiver by any of the parties hereto of a breach of or a default under any of the provisions of this Agreement, nor the failure by any of the parties, on one or more occasions, to enforce any of the provisions of this Agreement or to exercise any right or privilege hereunder, shall be construed as a waiver of any other breach or default of a similar nature, or as a waiver of any of such provisions, rights or privileges hereunder. Except as expressly set forth in this Agreement, the rights and remedies of any party based upon, arising out of or otherwise in respect of any inaccuracy or breach of any representation, warranty, covenant or agreement or failure to fulfill any condition shall in no way be limited by the fact that the act, omission, occurrence or other state of facts upon which any claim of any such inaccuracy or breach is based may also be the subject matter of any other representation, warranty, covenant or agreement as to which there is no inaccuracy or breach. The representations and warranties of the Shareholders shall not be affected or deemed waived by reason of any investigation made by or on behalf of the Purchaser (including but not limited to by any of its advisors, consultants or representatives) or by reason of the fact that the Purchaser or any of its advisors, consultants or representatives knew or should have known that any such representation or warranty is or might be inaccurate.

10.12.      United States Dollars. All dollar amounts referred to herein will be in lawful currency of the United States of America.

10.13.      Expenses. Except as otherwise provided herein, each of the parties hereto shall bear its own costs and expenses (including legal fees and expenses) incurred in connection with this Agreement and the transactions contemplated hereby.

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10.14.      Shareholders’ Representative.

(a)  Each of the Shareholders hereby irrevocably appoints Mr. Donate Errico, Jr. (the “Shareholders’ Representative”) as such Shareholders’ agent to take any action required or permitted to be taken by such Shareholder under the terms of this Agreement, the Cash Escrow Agreement or the Share Escrow Agreement, including, without limiting the generality of the foregoing, the giving and receipt of any notices to be delivered or received by or on behalf of any or all of the Shareholders, and agrees to be bound by any and all actions taken by such agent on such Shareholders’ behalf.

(b)  The Purchaser shall be entitled to rely exclusively upon any communications or writings given or executed by the Shareholders’ Representative and shall not be liable in any manner whatsoever for any action(s) taken or not taken in reliance upon the action(s) taken or not taken or communications or writings given or executed by the Shareholders’ Representative. The Purchaser shall be entitled to disregard any notices or communications given or made by any Shareholder unless given or made through the Shareholders’ Representative and any notice, writing or other communication given or made to the Shareholders’ Representative shall be deemed to have been given to all Shareholders.

10.15.      Options. The Purchaser acknowledges that all Options have been treated by the Company as options; and the Company and the Shareholders agree to continue to treat the Options as options.

* * *

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written.

NCP-EH RECAPITALIZATION CORP.
By:			/s/ Adam Saltzman
			Name:	Adam Saltzman
			Title:	Vice President
NCP-EH, L.P.
By:    NCP-EH GP, L.L.C., its general partner
By:		/s/ Adam Saltzman
		Name:			Adam Saltzman
		Title:			Executive Vice President
EQUINOX HOLDINGS, INC.
By:
	Name: Donato Errico, Jr. Title:  President
Donato Errico, Jr.
Vito Errico
Lavinia Errico (Jr.)
Donato Errico, Sr.
Lavinia Errico (Sr.)

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written.

NCP-EH RECAPITALIZATION CORP.
By:
			Name:
			Title:
NCP-EH, L.P.
By:
		Name:
		Title:
EQUINOX HOLDINGS, INC.
By:	/s/ Donato Errico
	Name: Donato Errico, Jr.
	Title:  President
/s/ Donato Errico, Jr.
Donato Errico, Jr.
/s/ Vito Errico
Vito Errico
/s/ Lavinia Errico (Jr.)
Lavinia Errico (Jr.)
/s/ Donato Errico, Sr.
Donato Errico, Sr.

/s/ Lavinia Errico (Sr.)

Lavinia Errico (Sr.)

/s/ Harvey Spevak

Harvey Spevak

/s/ Rakesh Ahuja

Rakesh Ahuja

/s/ Terri Bialsky

Terri Bialsky

/s/ Frances Errico

Frances Errico

Annex I

THE SHAREHOLDERS

Name	Address
Donato Errico, Jr.	71 Shipwreck Drive Amagansett, NY 11930
Vito Errico	45 Kenaco Road Kent, CT 06757
Lavinia Errico (Jr.)	1385 York Avenue New York, NY 10021
Donato Errico, Sr.	301 Beech Street Hackensack, NJ 07601
Lavinia Errico (Sr.)	301 Beech Street Hackensack, NJ 07601
Harvey Spevak	315 West 102nd Street, Apt 4A New York, NY 10025
Rakesh Ahuja	410 Westover Road Stamford, CT 06902
Terri Bialsky	33 Wooded Oak Lane East Hampton, NY 11937
Frances Errico	127 West 79th Street, Apt 6D New York, NY 10024

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Annex II

Shareholder	Total Common Shares	Cashed Out Common Shares	Rollover Common Shares
Donato Errico, Jr.	3,485,359
Vito Errico	3,230,000
Lavinia Errico (Jr.)	3,000,000
Donato Errico, Sr. and Lavinia Errico (Sr.)	62,138
Harvey Spevak	20,000
Rakesh Ahuja	250,000
Terri Bialsky	150,380
Frances Errico	150,380
TOTAL	10,348,257

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Annex III

Option holder	Total Option Shares	Cashed Out Option	Rollover Option
Paul Boardman	208,000	69,333	138,667
Catherine Cassidy	40,000	20,000	20,000
Matthew Colello	1,667	1,667	0
Robert Condon	3,333	3,333	0
Rocco Greco	10,000	10,000	0
Harvey Spevak	180,000	90,000	90,000
Ken Fleischer	25,000	0	25,000
Judy Taylor	3,333	3,333	0
TOTAL	471,333	197,666	273,667

Annex IV

Directors and Officers of Surviving Corporation

Directors

Donato Errico, Jr.

Harvey Spevak

Ben James

Ted Yun

Glenn Hopkins

Adam Saltzman

Jerry Horn

Chip Baird

Officers

Harvey Spevak, President

Adam Saltzman, Vice President

Glenn Hopkins, Vice President

Kyle Cruz, Treasurer

Marc Magliacano, Secretary

Ken Fleischer, Chief Financial Officer

EX-3.1.1

Exhibit 3.1.1

AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION

OF

EQUINOX HOLDINGS, INC.

Equinox Holdings, Inc., originally incorporated December 4, 1998.

Pursuant to Section 242 and 245 of the General

Corporation Law of the State of Delaware

FIRST:                   The name of the Corporation is Equinox Holdings, Inc.

SECOND:              The Corporation’s registered office in the State of Delaware is at Corporation Trust Center, 1209 Orange Street in the City of Wilmington, County of New Castle.  The name of its registered agent at such address is The Corporation Trust Company.

THIRD:                  The nature of the business of the Corporation and its purpose is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware.

FOURTH:              The total number of shares of stock which the Corporation shall have authority to issue is 20,400,000 shares, consisting of:

(1)           20,000,000 shares of Common Stock, par value $0.01 per share (the “Common Stock”); and

(2)           400,000 shares of Preferred Stock, par value $0.01 per share (the “Preferred Stock”).

a.             Common Stock

Subject to all of the rights of the Preferred Stock, dividends may be paid on the Common Stock, as and when declared by the Board of Directors, out of any funds of the Corporation legally available for the payment of such dividends.

b.            Preferred Stock

Shares of Preferred Stock may be issued from time to time in one or more series.  The Board of Directors of the Corporation is hereby authorized to determine and alter all rights, preferences, privileges, qualifications, limitations and restrictions thereof (including, without limitation, voting rights and the limitation and exclusion thereof) granted to or imposed upon any wholly unissued series of Preferred Stock and the number of shares constituting any such series and the designation thereof, and to increase or decrease (but not below the number of shares of such series then outstanding) the number of shares of any series subsequent to the issue of shares of that series then outstanding.  In the event that the number of shares of any series is so decreased, the shares constituting such reduction shall resume the status which such shares had prior to the adoption of the resolution originally fixing the number of shares of such series.

FIFTH:   The following provisions are inserted for the management of the business and for the conduct of the affairs of the Corporation and for the purpose of creating, defining, limiting and regulating the powers of the Corporation and its directors and stockholders:

(a)           The number of directors of the Corporation shall be fixed and may be altered from time to time in the manner provided in the By-Laws, and vacancies in the Board of Directors and newly created directorships resulting from any increase in the authorized number of directors may be filled, and directors may be removed, as provided in the By-Laws.

(b)           The election of directors may be conducted in any manner approved by the stockholders at the time when the election is held and need not be by written ballot.

(c)           All corporate powers and authority of the Corporation (except as at the time otherwise provided by law, by this Certificate of Incorporation or by the By-Laws) shall be vested in and exercised by the Board of Directors.

(d)           The Board of Directors shall have the power without the assent or vote of the stockholders to adopt, amend, alter or repeal the By-Laws of the Corporation, except to the extent that the By-Laws or this Certificate of Incorporation otherwise provide.

(e)           No director of the Corporation shall be liable to the Corporation or its stockholders for monetary damages for breach of his or her fiduciary duty as a director, provided that nothing contained in this Article shall eliminate or limit the liability of a director (i) for any breach of the director’s duty of loyalty to the

2

Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of the law, (iii) under Section 174 of the General Corporation Law of the State of Delaware or (iv) for any transaction from which the director derived an improper personal benefit.

SIXTH:                  The Corporation reserves the right to amend or repeal any provision contained in this Certificate of Incorporation in the manner now or hereafter prescribed by the laws of the State of Delaware, and all rights herein conferred upon stockholders or directors are granted subject to this reservation.

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IN WITNESS WHEREOF, the Corporation has caused the below officer to file this Amended and Restated Certificate of Incorporation on December 15, 2000.

EQUINOX HOLDINGS, INC.
	By:	/s/ Donato Errico, Jr.
		Name:  Donato Errico, Jr.

4

EX-3.1.2

Exhibit 3.1.2

CERTIFICATE OF INCORPORATION

OF

EQUINOX-92ND STREET INC.

Pursuant to Section 402 of the Business Corporation Law

I, the undersigned, a natural person of at least 18 years of age for the purpose of forming a corporation under Section 402 of the Business Corporation Law of the State of New York hereby certify:

FIRST:The name of the corporation is:

EQUINOX-92ND STREET INC.

SECOND:The purpose of the corporation is to engage in any lawful act or activity for which corporations may be organized under Article IV of the Business Corporation Law, except that is not formed to engage in any act or activity requiring the consent or approval of any state official, department, board, agency or other body without such consent or approval first being obtained.

THIRD:The office of the corporation is to be located in the Country of NEW YORK State of New York.

FOURTH:The aggregate number of shares which the corporation shall have the authority to issue is TWO HUNDRED, each of which shall be common stock with no par value.

FIFTH:The Secretary of State is designated as agent of the corporation upon whom process against it may be served.  The post office address to which the Secretary of State shall mail a copy of any process against the corporation served upon him is:

C/O THE CORPORATION

207 WEST 78TH STREET

NEW YORK, NY

SIXTH:No director of the corporation shall have personal liability to the corporation or to its shareholders for damages for any breach of duty in such capacity, provided, however, that the provision shall not eliminate or limit:

(a)        the liability of any director of the corporation if a judgment or other final adjudication adverse to him establishes that his acts or omissions were in bed faith or involved intentional misconduct or a knowing violation of law or that he personally gained in fact a financial profit or other advantage to which he was not legally entitled or, with respect to any director of the corporation, that his acts violated Section 719 of the Business Corporation Law of the State of New York or

(b)        the liability of a director for any act or omission prior to the final adoption of this article.

IN WITNESS WHEREOF, this certificate of incorporation has been subscribed by the undersigned this 02/13/95, who affirms the statements made herein are true under the penalties of perjury.

/s/ Sherri Cook

     Sherri Cook, Incorporator

XL Corporate & Research
Services, Inc.
194 Washington Avenue
Albany, New York 12210

Schedule I

In accordance with instruction 2 to Item 601 of Regulation S-K, the certificates of incorporation of the following registrants have been omitted because they are substantially identical in all material respects to this exhibit 3.1.2.  This schedule identifies the documents omitted and sets forth the material details in which such documents differ from this exhibit 3.1.2.

Exhibit	Registrant	State/County of Incorporation	Date Filed	Other Differences
3.1.3	Equinox-85th Street Inc.	NY/NY	7/7/1995	None
3.1.5	Equinox 63rd Street Inc.	NY/NY	2/21/1996	None
3.1.7	Equinox-50th Street, Inc.	NY/NY	7/18/1999	SEVENTH: The holders of any of the corporation’s equity shares shall be entitled to preemptive rights in accordance with the provisions of BCL section 622
3.1.8	Equinox 44th Street Inc.	NY/NY	1/14/2000	SEVENTH: The holders of any of the corporation’s equity shares shall be entitled to preemptive rights in accordance with the provisions of BCL section 622
3.1.9	Equinox-43rd Street Inc.	NY/NY	March 16, 1999	SEVENTH: The holders of any of the corporation’s equity shares shall be entitled to preemptive rights in accordance with the provisions of BCL section 622

3.1.11	Equinox Greenwich Avenue, Inc.	NY/NY	3/21/1999	SEVENTH: The holders of any of the corporation’s equity shares shall be entitled to preemptive rights in accordance with the provisions of BCL section 622
3.1.15	Equinox Wall Street Inc.	NY/NY	1/14/2000	SEVENTH: The holders of any of the corporation’s equity shares shall be entitled to preemptive rights in accordance with the provisions of BCL section 622
3.1.19	The Equinox Group, Inc.	NY/Westchester	12/23/1997	None

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EX-3.1.4

Exhibit 3.1.4

CERTIFICATE OF INCORPORATION

OF

EQUINOX FITNESS CLUB INC.

Under Section 402 of the Business Corporation Law

IT IS HEREBY CERTIFIED THAT:

(1)The name of the Corporation is:

EQUINOX FITNESS CLUB INC.

(2)The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized pursuant to the Business Corporation Law of the State of New York.  The Corporation is not to engage in any act or activity requiring any consents or approvals by law without such consent or approval first being obtained.

For the accomplishment of the aforesaid purposes, and in furtherance thereof, the Corporation shall have, and may exercise, all of the powers conferred by the Business Corporation Law upon corporations formed thereunder, subject to any limitations contained in Article 2 of said law or in accordance with the provisions of any other statute of the State of New York.

(3)The number of shares which the Corporation shall have the authority to issue is 200 Shares at no par value.

(4)The principal office of the corporation is to be located in the County of New York, State of New York.

(5)The Secretary of State is designated as agent of the Corporation upon whom process against it may be served.  The post office address to which the Secretary of State shall mail a copy of any process against the Corporation served upon him is;

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c/o	The Corporation
	132 West 81st Street
	New York, NY 10024

The undersigned incorporator is of the age of eighteen years or older.

IN WITNESS WHEREOF, this certificate has been subscribed this 27th day of February, 1991, by the undersigned who affirms that the statements made herein are true under the penalties of perjury.

/s/ Joan Terry	500 Central Avenue, Albany, NY 12206
Joan Terry, Incorporator	Address

2

CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION

OF

EQUINOX FITNESS CLUB, INC.

(Pursuant to Section 805 of the Business Corporation Law)

FIRST:  The name of the corporation is Equinox Fitness Club, Inc.

SECOND:  The certificate of incorporation of the corporation was filed by the Department of State on February 27, 1991.

THIRD:  The amendment of the certificate of incorporation of the corporation effected by this certificate of amendment is as follows.  Certificate of incorporation is hereby amended to change the name of the corporation.

FOURTH:  To accomplish the foregoing amendment, Article One of the certificate of incorporation of the corporation, relating to the corporate name is hereby amended and read as follows.

FIRST:  The name of the Corporation is Equinox-76th Street, Inc.

FIFTH:  The foregoing amendment was duly authorized by the written consent signed by the Board of Directors of the corporation and the foregoing amendment was duly authorized by the majority of shareholders entitled to vote thereon.

IN WITNESS WHEREOF, I have subscribed this document on the date set forth below and do hereby affirm, under penalties of perjury, the statements contained therein have been examined by me and are true and correct.

Executed on this day of February, 1999

/s/ Lavinia Errico

Lavinia Errico

Secretary

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EX-3.1.6

Exhibit 3.1.6

CERTIFICATE OF INCORPORATION

OF

EQUINOX-54TH STREET, INC.

UNDER SECTION 402 OF THE
BUSINESS CORPORATION LAW

The undersigned, natural person of the age of 18 years or more, acting as Incorporator of a Corporation under Section 402 of the Business Corporation Law, hereby adopts the following Certificate of Incorporation for such Corporation.

ARTICLE 1 - - NAME

The name of the Corporation is EQUINOX-54TH STREET, INC., (hereinafter, “Corporation”).

ARTICLE 2 - - PURPOSE OF CORPORATION

This Corporation is formed to engage in any lawful act or activity for which a Corporation may be organized under the Business Corporation Law, provided that it is not formed to engage in any act or activity requiring the consent or approval of any state official, department, board, agency or other body.

ARTICLE 3 - - COUNTY OF THE OFFICE OF THE CORPORATION

The county within the State of New York, in which the office of the Corporation is to be located is New York County.

ARTICLE 4 - - INCORPORATOR

The name and street address of the incorporator of this Corporation is Elsie Sanchez at 45 John Street, Suite 711, New York, New York 10038.

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ARTICLE 5 - - CORPORATE CAPITALIZATION

5.1The maximum number of shares that this Corporation is authorized to issue is TWENTY THOUSAND (20,000) shares of common stock, each share having the par value of ONE DOLLAR ($1.00).

5.2No holder of shares of stock of any class shall have any [preemptive right to subscribe] to or purchase any additional shares of any class, or any bonds or convertible securities of any nature; provided, however, that the Board of Director(s) may, in authorizing the issuance of shares of stock of any class, confer any preemptive right that the Board of Director(s) may deem advisable in connection with such issuance.

5.3The Board of Director(s) of the Corporation may authorize the issuance from time to time of shares of its stock of any class, whether now or hereafter authorized, or securities convertible into shares of its stock of any class, whether now or hereafter authorized, for such consideration as the Board of Director(s) may deem advisable, subject to such restrictions or limitations, if any, as may be set forth in the bylaws of the Corporation.

5.4The Board of Director(s) of the Corporation may, by Restated Articles of Incorporation, classify or reclassify any unissued stock from time to time by setting or changing the preferences, conversions or other rights, voting powers, restrictions, limitations as to dividends, qualifications, or term or conditions of redemption of the stock.

ARTICLE 6 - - SHAREHOLDERS’ RESTRICTIVE AGREEMENT

All of the shares of stock of this Corporation may be subject to a Shareholders’ Restrictive Agreement containing numerous restrictions on the rights of shareholders of the Corporation and transferability of the shares of stock of the Corporation.  A copy of the Shareholders’ Restrictive Agreement, if any, is on file at the principal office of the Corporation.

ARTICLE 7 - - POWERS OF CORPORATION

The Corporation shall have the same powers as an individual to do all things necessary or convenient to carry out its business and affairs, subject to any limitations or restrictions imposed by applicable law or this Certificate of Incorporation.

ARTICLE 8 - - TERM OF EXISTENCE

This Corporation shall have perpetual existence.

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ARTICLE 9 - - REGISTERED OWNER(S)

The Corporation, to the extent permitted by law, shall be entitled to treat the person in whose name any share or right is registered on the books of the Corporation as the owner thereto, for all purposes, and except as may be agreed in writing by the Corporation, the Corporation shall not be bound to recognize any equitable or other claim to, or interest in, such share or right on the part of any other person, whether or not the Corporation shall have notice thereof.

ARTICLE 10 - - SECRETARY OF STATE AS AGENT OF CORPORATION

The Secretary of State of New York is designated agent of the corporation on whom process against it may be served.  The Secretary of State shall mail a copy of any process against the corporation served on him to 45 John Street, Suite 711, New York 10038.

ARTICLE 11 - - REGISTERED AGENT

The name of the registered agent upon whom and the address of the registered agent at which process against the corporation may be served is Spiegel & Utrera, P.A., P.C. at 45 John Street, Suite 711, New York, New York 10038.

ARTICLE 12 - - BYLAWS

The Board of Director(s) of the Corporation shall have power, without the assent or vote of the shareholders, to make, alter, amend or repeal the Bylaws of the Corporation, but the affirmative vote of a number of Directors equal to a majority of the number who would constitute a full Board of Director(s) at the time of such action shall be necessary to take any action for the making, alteration, amendment or repeal of the Bylaws.

ARTICLE 13 - - AMENDMENT

The Corporation reserves the right to amend, alter, change or repeal any provision contained in this Certificate of Incorporation, or in any amendment hereto, or to add any provision to this Certificate of Incorporation or to any amendment hereto, in any manner now or hereafter prescribed or permitted by the provisions of any applicable statute of the State of New York, and all rights conferred upon shareholders in this Certificate of Incorporation or any amendment hereto are granted subject to this reservation.

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IN WITNESS WHEREOF, this certificate has been subscribed this 9 April 1998, by the undersigned, who affirms that the statements made herein are true under penalties of perjury.

/s/ Elsie Sanchez

Elsie Sanchez, Incorporator

45 John Street, Suite 711

New York, New York, 10038

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EX-3.1.10

Exhibit 3.1.10

CERTIFICATE OF INCORPORATION

OF

EQUINOX COLUMBUS CENTRE, INC.

(Under Section 402 of the Business Corporation Law)

The undersigned, a natural person over the age of eighteen years, desiring to form a corporation pursuant to Section 402 of the Business Corporation Law of the State of New York, hereby certifies:

FIRST: The name of the corporation is: Equinox Columbus Centre, Inc., hereinafter sometimes called the “Corporation”.

SECOND:The purpose for which the Corporation is formed are as follows:

To engage in any lawful act or activity for which corporations may be formed under the Business Corporation Law of the State of New York.  The Corporation is not formed to engage in any act or activity requiring the consent or approval of any state official, department, board, agency or other body without such consent or approval first being obtained.

It is the intention that, to the extent permitted by law, the Corporation shall have all of the powers specified in Section 202 of the New York Business Corporation Law.

The foregoing shall not be deemed to limit or restrict in any manner the general powers of the Corporation and the enjoyment and exercise thereof as conferred by the laws of the State of New York upon corporations organized under the provisions of the New York Business Corporation Law.

THIRD:The office of the Corporation in the State of New York shall be located in the County of New York.

FOURTH:The aggregate number of shares which the Corporation shall have authority to issue is 200.  Such shares are to consist of one class only, designated Common Stock, zero dollar par value.

FIFTH:The Secretary of State of the State of New York is hereby designated as the agent of the Corporation upon whom process against the Corporation may be served.  The post office address to which the Secretary of State shall mail a copy of any process against the Corporation served upon it at 895 Broadway, 3^rd Floor, New York, New York  10003.

SIXTH:The registered agent of the Corporation, upon whom process against the Corporation may be served, is Jeffrey M. Weinhaus, Esq. c/o Rosen Weinhaus LLP, 40 Wall Street, 32nd floor, New York, New York 10005.

SEVENTH:No director of the Corporation shall have any personal liability to the Corporation or its shareholders for damage resulting from any breach of such director's duties as a director of the Corporation, provided that this provision shall not eliminate or limit the liability of any director if a judgment or other final adjudication adverse to him establishes that his acts or omissions were in bad faith or involved intentional misconduct or knowing violation of law or that he personally gained in fact a financial profit or other advantage to which he was not legally entitled or that his acts violated Section 719 of that New York Business Corporation Law.

EIGHTH:The Corporation shall indemnify any present or former officer or director of the Corporation or the personal representatives thereof, made or threatened to be made a party in any civil or criminal action or proceeding by reason of the fact that he, his testator or intestate is or was a director or officer of the Corporation, or served any other corporation, partnership, joint venture, trust, employee benefit plan, or other enterprise in any capacity at the request of the Corporation,

against judgments, fines (including excise tax assessed on such a person connection with service to an employee benefit plan), amounts paid in settlement and reasonable expenses, including without limitation, court costs, attorneys= fees and disbursements and those of accountants and other experts and consultants incurred as a result of such action or preceding or any appeal therein, all of which expenses as incurred shall be advanced by the Corporation pending the final disposition of such action or proceeding.  Such required indemnification shall be subject only to the exception that no indemnification may be made to or on behalf of any director or officer in the event and to the extent that a judgment or other final adjudication adverse to the director or officer establishes that his acts were committed in bad faith or were in the result of active and deliberate dishonesty and were material to the cause of action so adjudicated, or that he personally gained in fact a financial profit or other advantage to which he wan not legally entitled (provided however, that indemnification shall be made upon any successful appeal of any such adverse judgment or final adjudication).  For purposes of this article, the Corporation shall be deemed to have requested such present or former officer or director to serve an employee benefit plan where the performance by such person of his duties to the Corporation also imposes duties on, or otherwise involves services by, such person to the plan or participants or beneficiaries of the plan.  The foregoing right of indemnification shall not be deemed exclusive of any other rights to which any such person, his testator or intestate, may be entitled apart from this provision.

IN WITNESS WHEREOF, I hereunto sign my name and affirm that the statements made herein are true under the penalties of perjury, this 27^th day of December, 2001.

/s/ Jeffrey M. Weinhaus

Jeffrey M. Weinhaus

Sole Incorporator

40 Wall Street, 32nd floor

New York, New York 10005

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EX-3.1.12

Exhibit 3.1.12

CERTIFICATE OF INCORPORATION

OF

BROADWAY EQUINOX INC.

Under Section 402 of the Business Corporation Law

IT IS HEREBY CERTIFIED THAT:

1.The name of the corporation is:

BROADWAY EQUINOX INC.

2.The purpose or purposes for which the corporation is formed are as follows; to wit:

To engage in any lawful act or activity for which corporations may be formed under the Business Corporation Law.  The corporation is not formed to engage in any act or activity requiring the consent or approval of any state official, department, board, agency or other body without such consent or approval first being obtained.

To own, operate, manage, acquire and deal in property, real and personal, which may be necessary to the conduct of the business.

The corporation shall have all of the powers enumerated in Section 202 of the Business Corporation Law, subject to any limitations provided in the Business Corporation Law or any other statute in the State of New York.

3.A director of the corporation shall not be held liable to the corporation or its shareholders for damages for any breach of duty in such capacity except for

(i)liability if a judgment or other final adjudication adverse to a director establishes that his or her acts or omissions were in bad faith or involved intentional misconduct or a knowing violation of law or that the director personally gained in fact a financial profit or other advantage to which he or she was not legally entitled or that the director’s acts violated BCL Section 719, or

(ii)liability for any act or omission prior to the adoption of this provision,

4.The county in which the office of the corporation is to be located in the State of New York is:  New York

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5.The aggregate number of shares which the corporation shall have authority to issue is:  200 shares, no par value.

6.The Secretary of State is designated as agent of the corporation upon whom process against it may be served.  The post office address to which the Secretary of State shall mail a copy of any process against the corporation served upon him is:

Breger & Gorin, P.C.

595 Madison Avenue

Suite 1010

New York, New York 10022

The undersigned incorporator is of the age of eighteen years or over. 

IN WITNESS WHEREOF, this certificate has been subscribed June 15, 1993 by the undersigned who affirms that the statements made herein are true under the penalties of perjury.

/s/ Deneane M. Rogers

Deneane M. Rogers

33 Rensselaer Street

Albany, New York 12202

2

CERTIFICATE OF AMENDMENT
OF THE
CERTIFICATE OF INCORPORATION
OF
BROADWAY EQUINOX INC.

Under Section 805 of the Business Corporation Law

The undersigned, being the President and Secretary of Broadway Equinox Inc., do hereby certify as follows:

1.The name of the corporation is BROADWAY EQUINOX INC.

2.The certificate of incorporation of Broadway Equinox was filed by the Department of State on June 15, 1993.

3.(a)  Paragraph 5 of the certificate of incorporation of Broadway Equinox Inc., which sets forth the aggregate number of shares of one class only, and without par value, which the corporation shall have authority to issue, is hereby amended to read as follows:

5.The aggregate number of shares which this corporation shall have authority to issue is one thousand (1,000) shares of one class only, which shares are without par value.

(b) (i)Issued shares are not changed.

(ii)This amendment provides for a change as to 197 authorized but unissued shares, without par value, all of one

1

class.  Resulting from the change are 997 authorized but unissued shares, without par value, all of one class.  The terms of the change are to increase by 800 shares the aggregate number of shares authorized to be issued, without par value, all of one class.

4.This amendment to the certificate of incorporation of Broadway Equinox Inc. was authorized, pursuant to Section 803(a) and 615(a) of the Business Corporation Law, by vote of the board, followed by unanimous written consent, setting forth the action so taken signed by the holders of all outstanding shares entitled to vote thereon.

IN WITNESS WHEREOF, the undersigned have executed and signed this certificate this 9^th day of November 1993.

/s/  Donato Errico

Donato Errico, President

/s/  Lavinia Errico

Lavinia Errico, Secretary

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STATE OF NEW YORK

COUNTY OF NEW YORK

DONATO ERRICO being sworn says: I am the President of Broadway Equinox Inc., the corporation herein; I have read the annexed Certificate of Amendment of the Certificate of Incorporation and know the contents thereof and the same are true to my knowledge, except those matters therein which are stated to be alleged on information and belief, and as to those matters I believe them to be true.

/s/  Donato Errico

Donato Errico

Sworn to before me this

9^th day of November 1993

/s/  Joseph P. Leuzzi

Notary Public

JOSEPH P. LEUZZI

NOTARY PUBLIC STATE OF NEW YORK

NO. 32-7503965

QUALIFIED IN NEW YORK COUNTY

COMMISSION EXPIRES MARCH 30, 1994

3

EX-3.1.13

Exhibit 3.1.13

CERTIFICATE OF INCORPORATION

OF

EQUINOX TRIBECA, INC.

(Under Section 402 of the Business Corporation Law)

The undersigned, a natural person over the age of eighteen years, desiring to form a corporation pursuant to Section 402 of the Business Corporation Law of the State of New York, hereby certifies:

FIRST:The name of the corporation is: Equinox Tribeca, Inc., hereinafter sometimes called the “Corporation”.

SECOND:The purpose for which the Corporation is formed are as follows:

To engage in any lawful act or activity for which corporations may be formed under the Business Corporation Law of the State of New York.  The Corporation is not formed to engage in any act or activity requiring the consent or approval of any state official, department, board, agency or other body without such consent or approval first being obtained.

It is the intention that, to the extent permitted by law, the Corporation shall have all of the powers specified in Section 202 of the New York Business Corporation Law.

The foregoing shall not be deemed to limit or restrict in an manner the general powers of the Corporation and the enjoyment and exercise thereof as conferred by the laws of the State of New York upon corporations organized under the provisions of the New York Business Corporation Law.

THIRD:The office of the Corporation in the State of New York shall be located in the County of New York.

FOURTH:The aggregate number of shares which the Corporation shall have authority to issue is 200.  Such shares are to consist of one class only, designated Common Stock, zero dollar par value.

FIFTH:The Secretary of State of the State of New York is hereby designated as the agent of the Corporation upon whom process against the Corporation may be served.  The post office address to which the Secretary of State shall mail a copy of any process against the Corporation served upon it at 116-120 Church Street, New York, New York  10007.

SIXTH:The registered agent of the Corporation, upon whom process against the Corporation may be served, is Jeffrey M. Weinhaus, Esq. c/o Rosen Weinhaus LLP, 40 Wall Street, 32nd floor, New York, New York 10005.

SEVENTH:No director of the Corporation shall have any personal liability to the Corporation or its shareholders for damage resulting from any breach of such director's duties as a director of the Corporation, provided that this provision shall not eliminate or limit the liability of any director if a judgment or other final adjudication adverse to him establishes that his acts or omissions were in bad faith or involved intentional misconduct or knowing violation of law or that he personally gained in fact a financial profit or other advantage to which he was not legally entitled or that his acts violated Section 719 of that New York Business Corporation Law.

EIGHTH:The Corporation shall indemnify any present or former officer or director of the Corporation or the personal representatives thereof, made or threatened to be made a party in any civil or criminal action or proceeding by reason of the fact that he, his testator or intestate is or was a director or officer of the Corporation, or served any other corporation, partnership, joint venture, trust, employee benefit plan, or other enterprise in any capacity at the request of the Corporation, against judgments, fines (including excise tax assessed on such a person connection with service to

an employee benefit plan), amounts paid in settlement and reasonable expenses, including without limitation, court costs, attorneys= fees and disbursements and those of accountants and other experts and consultants incurred as a result of such action or preceding or any appeal therein, all of which expenses as incurred shall be advanced by the Corporation pending the final disposition of such action or proceeding.  Such required indemnification shall be subject only to the exception that no indemnification may be made tor or on behalf of any director or officer in the event and to the extent that a judgment or other final adjudication adverse to the director or officer establishes that his acts were committed in bad faith or were in the result of active and deliberate dishonesty and were material to the cause of action so adjudicated, or that he personally gained in fact a financial profit or other advantage to which he wan not legally entitled (provided however, that indemnification shall be made upon any successful appeal of any such adverse judgment or final adjudication).  For purposes of this article, the Corporation shall be deemed to have requested such present or former officer or director to serve an employee benefit plan where the performance by such person of his duties to the Corporation also imposes duties on, or otherwise involves services by, such person to the plan or participants or beneficiaries of the plan.  The foregoing right of indemnification shall not be deemed exclusive of any other rights to which any such person, his testator or intestate, may be entitled apart from this provision.

IN WITNESS WHEREOF, I hereunto sign my name and affirm that the statements made herein are true under the penalties of perjury, this 25^th day of April, 2001.

/s/ Jeffrey M. Weinhaus

Jeffrey M. Weinhaus

Sole Incorporator

40 Wall Street, 32nd floor

New York, New York 10005

EX-3.1.14

Exhibit 3.1.14

CERTIFICATE OF INCORPORATION

OF

EQUINOX TRIBECA OFFICE, INC.

(Under Section 402 of the Business Corporation Law)

The undersigned, a natural person over the age of eighteen years, desiring to form a corporation pursuant to Section 402 of the Business Corporation Law of the State of New York, hereby certifies:

FIRST:The name of the corporation is: Equinox Tribeca, Inc., hereinafter sometimes called the “Corporation”.

SECOND:The purpose for which the Corporation is formed are as follows:

To engage in any lawful act or activity for which corporations may be formed under the Business Corporation Law of the State of New York.  The Corporation is not formed to engage in any act or activity requiring the consent or approval of any state official, department, board, agency or other body without such consent or approval first being obtained.

It is the intention that, to the extent permitted by law, the Corporation shall have all of the powers specified in Section 202 of the New York Business Corporation Law.

The foregoing shall not be deemed to limit or restrict in an manner the general powers of the Corporation and the enjoyment and exercise thereof as conferred by the laws of the State of New York upon corporations organized under the provisions of the New York Business Corporation Law.

THIRD:The office of the Corporation in the State of New York shall be located in the County of New York.

FOURTH:The aggregate number of shares which the Corporation shall have authority to issue is 200.  Such shares are to consist of one class only, designated Common Stock, zero dollar par value.

FIFTH:The Secretary of State of the State of New York is hereby designated as the agent of the Corporation upon whom process against the Corporation may be served.  The post office address to which the Secretary of State shall mail a copy of any process against the Corporation served upon it at 116-120 Church Street, New York, New York  10007.

SIXTH:The registered agent of the Corporation, upon whom process against the Corporation may be served, is Jeffrey M. Weinhaus, Esq. c/o Rosen Weinhaus LLP, 40 Wall Street, 32nd floor, New York, New York 10005.

SEVENTH:No director of the Corporation shall have any personal liability to the Corporation or its shareholders for damage resulting from any breach of such director's duties as a director of the Corporation, provided that this provision shall not eliminate or limit the liability of any director if a judgment or other final adjudication adverse to him establishes that his acts or omissions were in bad faith or involved intentional misconduct or knowing violation of law or that he personally gained in fact a financial profit or other advantage to which he was not legally entitled or that his acts violated Section 719 of that New York Business Corporation Law.

EIGHTH:The Corporation shall indemnify any present or former officer or director of the Corporation or the personal representatives thereof, made or threatened to be made a party in any civil or criminal action or proceeding by reason of the fact that he, his testator or intestate is or was a director or officer of the Corporation, or served any other corporation, partnership, joint venture, trust, employee benefit plan, or other enterprise in any capacity at the request of the Corporation, against judgments, fines (including excise tax assessed on such a person connection with service to

an employee benefit plan), amounts paid in settlement and reasonable expenses, including without limitation, court costs, attorneys= fees and disbursements and those of accountants and other experts and consultants incurred as a result of such action or preceding or any appeal therein, all of which expenses as incurred shall be advanced by the Corporation pending the final disposition of such action or proceeding.  Such required indemnification shall be subject only to the exception that no indemnification may be made tor or on behalf of any director or officer in the event and to the extent that a judgment or other final adjudication adverse to the director or officer establishes that his acts were committed in bad faith or were in the result of active and deliberate dishonesty and were material to the cause of action so adjudicated, or that he personally gained in fact a financial profit or other advantage to which he wan not legally entitled (provided however, that indemnification shall be made upon any successful appeal of any such adverse judgment or final adjudication).  For purposes of this article, the Corporation shall be deemed to have requested such present or former officer or director to serve an employee benefit plan where the performance by such person of his duties to the Corporation also imposes duties on, or otherwise involves services by, such person to the plan or participants or beneficiaries of the plan.  The foregoing right of indemnification shall not be deemed exclusive of any other rights to which any such person, his testator or intestate, may be entitled apart from this provision.

IN WITNESS WHEREOF, I hereunto sign my name and affirm that the statements made herein are true under the penalties of perjury, this 25^th day of April, 2001.

/s/ Jeffrey M. Weinhaus

Jeffrey M. Weinhaus

Sole Incorporator

40 Wall Street, 32nd floor

New York, New York 10005

EX-3.1.16

Exhibit 3.1.16

CERTIFICATE OF INCORPORATION

EQUINOX WHITE PLAINS ROAD–INC.

Under Section 402 of the Business Corporation Law.

The undersigned, for the purpose of forming a corporation pursuant to Section 402 of the Business Corporation Law of the State of New York, does hereby certify and set forth:

FIRST:  The name of the corporation is EQUINOX WHITE PLAINS ROAD, INC.

SECOND:  The purposes for which the corporation is formed are:

To engage in any lawful act or activity for which corporations may be organised under the business corporation law, provided that the corporation is not formed to engage in any act or activity which requires the act or approval of any state official, department, board, agency or other body without such approval or consent first being obtained.

To carry on a general mercantile, industrial, investing and trading business in all its branches; to devise, invent, manufacture, fabricate, assemble, install, service, maintain, alter, buy, sell, import, export, license as licensor or licensee, lease as lessor or lessee, distribute, job, enter into, negotiate, execute, acquire and assign contracts in respect of, acquire, receive, grant, and assign licensing, arrangements, options, franchises, and other rights in respect of and generally deal in and with at wholesale and retail as principal, and as sales, business, special or general, agent, representative, broker, factor, merchant, distributor, jobber, advisor, or in any other lawful capacity goods wares, merchandise, commodities, and unimproved, improved, finished, processed and other real, personal and mixed property of any and all kinds, together with the components resultants, and by-products thereof.

To create, manufacture, contract for, buy, sell, import, export, distribute, job and generally deal in and with, whether at wholesale or retail, and the principal, agent, broker, factor, commission, merchant, licensor, licensee or otherwise, any and all kinds of goods, wares, and merchandise, and in connection therewith or independent thereof, to

1

establish and maintain, by any manner or means, buying offices, distribution centers, specialty and other shops, stores, mail order establishments, concessions, leased departments, and any and all other departments, sites and locations necessary, convenient or useful in the furtherance of any business of the corporation.

To develop, experiment with, manufacture, fabricate, produce, assemble, buy, lease or otherwise acquire, hold, own, operate, use, install, equip, maintain, service, process, possess, repossess, remodel, recondition, transport, import, export, sell, lease or otherwise dispose of and generally to deal in and with any and all kinds of raw materials, products, manufactured articles and products, equipment, machinery, devices, systems, parts, tools and implements, apparatus, and goods, wares, merchandise and tangible property of every kind, used or capable of being used for any purpose whatsoever, and wheresoever located.

To acquire by purchase, subscription, underwriting or otherwise, and to own, hold for investment, or otherwise, and to use, sell, assign, transfer, mortgage, pledge, exchange or otherwise dispose of real and personal property of every sort and description and wheresoever situated including shares of stock, bonds, debentures, notes, scrip, securities, evidences of indebtedness, contracts or obligations of any corporation or association, whether, domestic or foreign, or of any firm or individual or of the United States, or any state, territory or dependency of the United States, or any foreign country, or any municipality or local authority within or without the United States, and also to issue in exchange therefor, stocks, bonds or other securities or evidences of indebtedness of this corporation and while the owner or holder of any such property to receive, collect and dispose of the interest, dividends and income on or from such property and to possess and exercise in respect thereto all of the rights, powers and privileges of ownership, including all voting powers thereon.

To construct, build, purchase, lease or otherwise acquire, equip, held, own, improve, develop, manage, maintain, control, operate, lease, mortgage, create, liens upon, sell, convey or otherwise dispose of and turn to account, any and all plants, machinery works, implements and things or property, real and personal, of every kind and description, incidental to connected with, or suitable, necessary or convenient for any of the purposes enumerated herein, including all or any part or parts of the properties, assets, business and goodwill of any persons, firms, associations or corporations.

The powers, rights and privileges provided in this certificate are not to be deemed to be in limitation of similar, other or additional powers, rights and privileges granted or permitted to a corporation by the Business Corporation Law, it being intended that this corporation shall have all rights, powers and privileges granted or permitted to a corporation by such statute.

2

THIRD:  The office of the corporation is to be located in the County of Westchester, State of New York.

FOURTH:  The aggregate number of shares which the corporation shall have the authority to issue is Two Hundred (200) all of which shall be without par value.

FIFTH:  The Secretary of State is designated as the agent of the corporation upon whom process against it may be served.  The post office address to which the Secretary of State shall mail a copy of any process against the corporation served on him is:

Jeffrey Weinhaus, Esq.

910 East Boston Post Road

Mamaroneck, New York 10543

SIXTH:  The personal liability of directors to the corporation or its shareholders for damages for any breach of duty in such capacity is hereby eliminated except that such personal liability shall not be eliminated if a judgment or other final adjudication adverse to such director establishes that his sets or omissions were in bad faith or involved intentional, misconduct or a knowing violation of law or that he personally gained in fact a financial profit or other advantage to which he was not legally entitled or that his acts violated Section 719 of the Business Corporation Law.

3

IN WITNESS WHEREOF, this certificate has been subscribed to this 27th day of May, 1998 by the undersigned who affirms that the statements made herein are true under the penalties of perjury.

/s/  Gerald Weinberg

GERALD WEINBERG

90 State Street

Albany, New York

4

EX-3.1.17

Exhibit 3.1.17

CERTIFICATE OF INCORPORATION

OF

EQUINOX WOODBURY, INC.

(Under Section 402 of the Business Corporation Law)

The undersigned, a natural person over the age of eighteen years, desiring to form a corporation pursuant to Section 402 of the Business Corporation Law of the State of New York, hereby certifies:

FIRST:The name of the corporation is: Equinox Woodbury, Inc., hereinafter sometimes called the ACorporation@.

SECOND:The purpose for which the Corporation is formed are as follows:

To engage in any lawful act or activity for which corporations may be formed under the Business Corporation Law of the State of New York.  The Corporation is not formed to engage in any act or activity requiring the consent or approval of any state official, department, board, agency or other body without such consent or approval first being obtained.

It is the intention that, to the extent permitted by law, the Corporation shall have all of the powers specified in Section 202 of the New York Business Corporation Law.

The foregoing shall not be deemed to limit or restrict in any manner the general powers of the Corporation and the enjoyment and exercise thereof as conferred by the laws of the State of New York upon corporations organized under the provisions of the New York Business Corporation Law.

THIRD:The office of the Corporation in the State of New York shall be located in the County of Nassau.

FOURTH:The aggregate number of shares which the Corporation shall have authority to issue is 200.  Such shares are to consist of one class only, designated Common Stock, zero dollar par value.

FIFTH:The Secretary of State of the State of New York is hereby designated as the agent of the Corporation upon whom process against the Corporation may be served.  The post office address to which the Secretary of State shall mail a copy of any process against the Corporation served upon it at 7550 Jericho Turnpike, Woodbury, New York  11797.

SIXTH:The registered agent of the Corporation, upon whom process against the Corporation may be served, is Jeffrey M. Weinhaus, Esq. c/o Rosen Weinhaus LLP, 40 Wall Street, 32nd floor, New York, New York 10005.

SEVENTH:No director of the Corporation shall have any personal liability to the Corporation or its shareholders for damage resulting from any breach of such director's duties as a director of the Corporation, provided that this provision shall not eliminate or limit the liability of any director if a judgment or other final adjudication adverse to him establishes that his acts or omissions were in bad faith or involved intentional misconduct or knowing violation of law or that he personally gained in fact a financial profit or other advantage to which he was not legally entitled or that his acts violated Section 719 of that New York Business Corporation Law.

EIGHTH:The Corporation shall indemnify any present or former officer or director of the Corporation or the personal representatives thereof, made or threatened to be made a party in any civil or criminal action or proceeding by reason of the fact that he, his testator or intestate is or was a director or officer of the Corporation, or served any other corporation, partnership, joint venture, trust, employee benefit plan, or other enterprise in any capacity at the request of the Corporation, against judgments, fines (including excise tax assessed on such a person connection with service to an employee benefit plan), amounts paid in settlement and reasonable expenses, including without limitation, court costs, attorneys= fees and disbursements and those of accountants and other experts and consultants incurred as a result of such action or preceding or any appeal therein, all of which

expenses as incurred shall be advanced by the Corporation pending the final disposition of such action or proceeding.  Such required indemnification shall be subject only to the exception that no indemnification may be made to or on behalf of any director or officer in the event and to the extent that a judgment or other final adjudication adverse to the director or officer establishes that his acts were committed in bad faith or were in the result of active and deliberate dishonesty and were material to the cause of action so adjudicated, or that he personally gained in fact a financial profit or other advantage to which he wan not legally entitled (provided however, that indemnification shall be made upon any successful appeal of any such adverse judgment or final adjudication).  For purposes of this article, the Corporation shall be deemed to have requested such present or former officer or director to serve an employee benefit plan where the performance by such person of his duties to the Corporation also imposes duties on, or otherwise involves services by, such person to the plan or participants or beneficiaries of the plan.  The foregoing right of indemnification shall not be deemed exclusive of any other rights to which any such person, his testator or intestate, may be entitled apart from this provision.

IN WITNESS WHEREOF, I hereunto sign my name and affirm that the statements made herein are true under the penalties of perjury, this 10^th day of June, 2002.

/s/ Jeffrey M. Weinhaus

Jeffrey M. Weinhaus

Sole Incorporator

40 Wall Street, 32nd floor

New York, New York 10005

EX-3.1.18

Exhibit 3.1.18

New York State
Department of State
Division of Corporations State Records
and Uniform Commercial Code
Albany, NY 12231

(This form must be printed or typed in black ink)

CERTIFICATE OF INCORPORATION
OF
EQUINOX GREENVALE, INC.
(Insert corporate name)

Under Section 402 of the Business Corporation Law

FIRST:  The name of the corporation is: Equinox Greenvale, Inc.

SECOND:  This corporation is formed to engage in any lawful act or activity for which a corporation may be organized under the Business Corporation Law, provided that it is not formed to engage in any act or activity requiring the consent or approval of any state official, department, board, agency or other body without such consent or approval first being obtained.

THIRD:  The county, within this state, in which the office of the corporation is to be located is: New York

FOURTH:  The total number of shares which the corporation shall have authority to issue and a statement of the par value of each share or a statement that the shares are without par value are: 200 No Par Value

FIFTH:  The secretary of state is designated as agent of the corporation upon whom process against the corporation may be served.  The address to which the Secretary of State shall mail a copy of any process accepted on behalf of the corporation is

c/o	Rosen Weinhaus LLP, 40 Wall Street, 32nd Fl.
	New York, New York 10005

SIXTH:  (optional) The name and street address in this state of the registered agent upon whom process against the corporation may be served is.

1

SEVENTH:  (optional—the existence of the corporation begins on the date the certificate of incorporation is filed by the Department of State. Corporate existence may begin on a date not to exceed 90 days, after the date of filing by the Department of State.  Complete this paragraph only if you wish to have the corporation’s existence to begin on a later date, which is not more than 90 days after the date of filing by the Department of State.)  The date the corporate existence shall begin is:

		Incorporator Information Required
		/s/ Jeffrey M. Weinhaus
		(Signature)
		Jeffrey M. Weinhaus
		(Type or print name)
		40 Wall Street, 32nd Fl.
		(Address)
		New York, New York 10005
		(City, State, Zip code)
CERTIFICATE OF INCORPORATION OF
			[SEAL]
		EQUINOX GREENVALE, INC.
		(Insert corporate name)
Under Section 402 of the Business Corporation Law
	Jeffrey M. Weinhaus
Filed by:	Rosen Weinhaus LLP
	(Name)
	40 Wall Street, 32nd Fl.
	(Mailing address)
	New York, New York 10005
	(City, State and Zip code)

2

EX-3.1.20

Exhibit 3.1.20

CERTIFICATE OF INCORPORATION

OF

ENERGY WEAR INC.

Under Section 402 of the Business Corporation Law

IT IS HEREBY CERTIFIED THAT:

1.The name of the corporation is:

ENERGY WEAR INC.

2.The purpose or purposes for which the corporation is formed are as follows; to wit:

To engage in any lawful act or activity for which corporations may be formed under the Business Corporation Law.  The corporation is not formed to engage in any act or activity requiring the consent or approval of any state official, department, board, agency or other body without such consent or approval first being obtained.

To own, operate, manage, acquire and deal in property, real and personal, which may be necessary to the conduct of the business.

The corporation shall have all of the powers enumerated in Section 202 of the Business Corporation Law, subject to any limitations provided in the Business Corporation Law or any other statute in the State of New York.

3.A director of the corporation shall not be held liable to the corporation or its shareholders for damages for any breach of duty in such capacity except for

(i)liability if a judgment or other final adjudication adverse to a director establishes that his or her acts or omissions were in bad faith or involved intentional misconduct or a knowing violation of law or that the director personally gained in fact a financial profit or other advantage to which he or she was not legally entitled or that the director’s acts violated BCL Section 719, or

(ii)liability for any act or omission prior to the adoption of this provision.

4.The county in which the office of the corporation is to be located in the State of New York is: New York

1

5.The aggregate number of shares which the corporation shall have authority to issue is: 200 shares, no par value.

6.The Secretary of State is designated as agent of the corporation upon whom process against it may be served.  The post office address to which the Secretary of State shall mail a copy of any process against the corporation served upon him is:

Breger & Gorin

595 Madison Avenue

Suite 1010

New York, New York 10022

The undersigned incorporator is of the age of eighteen years or over.

IN WITNESS WHEREOF, this certificate has been subscribed September 20, 1993 by the undersigned who affirms that the statements made herein are true under the penalties of perjury.

/s/ Deneane M. Rogers

Deneane M. Rogers

33 Rensselaer Street

Albany, New York 12202

2

EX-3.1.21

Exhibit 3.1.21

CERTIFICATE OF INCORPORATION
STOCK CORPORATION
Office of the Secretary of the State
30 Trinity Street / P.O. Box 150470 / Hartford, CT 06115-0470 / Rev 12/1999

FILING #0002395914 PG 01 OF 02 VOL B-00483

FILED 03/22/2002 01.00 PM PAGE 00459

SECRETARY OF THE STATE

CONNECTICUT SECRETARY OF THE STATE

1.NAME OF CORPORATION:

Equinox Darien, Inc.

2.TOTAL NUMBER OF AUTHORIZED SHARES:  200 shares no par value

If the corporation has more than one class of shares, it must designate each class and the number
of shares authorized within each class below

Class Number of shares per class

3.TERMS, LIMITATIONS, RELATIVE RIGHTS AND PREFERENCES OF EACH CLASS OF SHARES AND SERIES THEREOF PURSUANT TO CONN. GEN. STAT. SECTION 33-665:

FILING #0002395914 PG 02 OF 02 VOL B-00483

FILED 03/22/2002 01:00 PM PAGE 00460

SECRETARY OF THE STATE

CONNECTICUT SECRETARY OF THE STATE

4.APPOINTMENT OF REGISTERED AGENT: (Please select only one A. or B.)
Print or type name of agent					Business address: (P.O. Box is acceptable)
A.  Individual's Name:
					Residence address: (P.O. Box is acceptable)
B.  Name of Entity:					Address (P.O. Box is acceptable)
National Registered Agents, Inc.					12 Old Boston Post Road
					Old Saybrook, CT 06475
Acceptance of appointment
National Registered Agents, Inc.
	by:		/s/ Teresa Mayor, Secretary, NRAI
Teresa Mayor		Signature of agent
5.OTHER PROVISIONS
6. EXECUTION:
Dated this 21st day of March, 2002.
Certificate must be signed by each incorporator.
PRINT OR TYPE NAME OF INCORPORATOR(S)				SIGNATURE(S)		COMPLETE ADDRESS(ES)
Jeffrey M. Weinhaus				/s/ Jeffrey M. Weinhaus		Rosen Weinhaus LLP 40 Wall Street, 32nd FL. NY, NY 10005

REQUEST FOR COPIES LIST

TRANSACTION ID

2003223056 – 002

FILING NUMBER	NUMBER OF PAGES	TYPE	VOLUME	START PAGE
0002530335	0001	B	00554	1032

* * END OF REPORT * *

ORGANIZATION AND FIRST REPORT

STOCK OR NON-STOCK CORPORATIONS

Office of the Secretary of the State

30 Trinity Street / P.O. Box 150470 / Hartford, CT 06115-0470 / Rev. 12/1999

Please see reverse for Instruction

Space for Office Use Only
	FILING #0002530335 PG 01 OF O1 VOL B-00554
	FILED 01/30/2003 08:30 AM PAGE 01032
	SECRETARY OF THE STATE
	CONNECTICUT SECRETARY OF THE STATE

1.Name of Corporation:
Equinox Darien, Inc
2.Date of Organisation Meeting:	3/	23/	02
	Month	Day	Year
3.Address of Principal Office (street, address required. P.O. Box is not acceptable):				4.Mailing address (if other than principal office address):
72 Heights Road Darien, CT 06820				c/o Equinox Holdings Inc. 895, Broadway New York, NY 10003
5. OFFICERS:
(Street address required - P.O. Box is not acceptable)

NAME	TITLE	RESIDENCE ADDRESS	BUSINESS ADDRESS
HARVEY SPEVAK	PRESIDENT	315 W. 102nd St. # 4A New YorK, NY 10025	c/o EQUINOX HOLDINGS, Inc. 895 BROADWAY NEW YORK, NY 10003
MARC MAGLIACANO	SECRETARY	204 POND TERRACE WASHINGTON TWSHP. NJ 07676	c/o EQUINOX HOLDINGS, Inc. 895 BROADWAY NEW YORK, NY 10003
KENNETH P. FLEISCHER	TREASURER	557 GENERAL KNOX RD. KING OF PRUSSIA, PA 19406	c/o EQUINOX HOLDINGS, Inc. 895 BROADWAY  NEW YORK, NY 10003

6. DIRECTORS:

(Street address required - P.O. Box is not acceptable)

NAME	RESIDENCE ADDRESS		BUSINESS ADDRESS
HARVEY SPEVAK	315 W. 102nd St. #4A NEW YORK, NY 10025		c/o EQUINOX HOLDINGS, Inc. 895 BROADWAY, NY, NY 10003
ADAM SALTZMAN	28 HOME PLACE # A1 GREENWICH CT 06830		c/o EQUINOX HOLDINGS, Inc. 895 BROADWAY, NY, NY 10003
EDWARD YUN	18 TRAILSIDE ROAD WESTON, MA 02493		c/o EQUINOX HOLDINGS, Inc. 895 BROADWAY, NY, NY 10003
Note: If additional space is needed, please reference as 8 1/2 X 11 attachment
7. EXECUTION:
Dated this 28th day of January, 2003.
Harvey Spevak		President & CEO		/s/ Harvey Spevak
Print or type name of Signatory		Capacity of signatory		Signature

EX-3.1.22

Exhibit 3.1.22

Form  BCA-2.10	ARTICLES OF INCORPORATION
(Rev. Jan. 1999)	This space for use by Secretary of State
Jesse White Secretary of State Department of Business Services Springfield, IL 62756 http://www.sos.state.il.us		SUBMIT IN DUPLICATE
	FILED: 1/10/2002 Jesse White Secretary of State	This space for use by Secretary of State
Payment must be made by certified check, cashier's check, Illinois attorney's check, Illinois C.P.A's check or money order, payable to "Secretary of State."	61973958	Date  FILED 1/10/2002
		Franchise Tax	$	25.00
		Filing Fee	$	75.00
			100.00
		Approved:	LT

1.	CORPORATE NAME:	Equinox Lincoln Park, Inc.		CP0003285
	LT
	(The corporate name must contain the word "corporation," "company," "incorporated," "limited" or an abbreviation thereof.)
2.	Initial Registered Agent:	National Registered Agents, Inc.
		First Name	Middle initial	Last name
	Initial Registered Office:	208 South LaSalle Street, Suite 1855
		Number	Street	Suite #
		Chicago                   IL	Cook	60604
		City	County	Zip Code
3.	Purpose or purposes for which the corporation is organized:			44
	(If not sufficient space to cover this point, add one or more sheets of this size.)
	To engage in any lawful act or activity for which corporations may be organized under the Illinois Business Corporation Act of 1983, as amended. The Corporation is not formed to engage in any act or activity requiring the consent or approval of any state official, department, board, agency or other body without such consent of approval first being obtained.
4.	Paragraph 1:  Authorized Shares, Issued Shares and Consideration Received:

Class	Par Value per Share	Number of Shares Authorized	Number of Shares Proposed to be Issued		Consideration to be Received Therefore
Common	$NPV	200	200		$1.00
			Total	=	$1.00
Paragraph 2:  The preferences, qualifications, limitations, restrictions and special or relative rights in respect of the shares of each class are: (if not sufficient space to cover this point, add one or more sheets of this size.)

(over)

5.		OPTIONAL:	(a)	Number of directors constituting the initial board of directors of the corporation:____.
			(b)	Names and addresses of the persons who are to serve as directors until the first annual meeting of shareholders or until their successors are elected and qualify:
				Name	Residential Address	City, State, Zip
6.		OPTIONAL:	(a)	It is estimated that the value of all property to be owned by the corporation for the following year wherever located will be:		$
			(b)	It is estimated that the value of the property to be located within the State of Illinois during the following year will be:		$
			(c)	It is estimated that the gross amount of business that will be transacted by the corporation during the following year will be:		$
			(d)	It is estimated that the gross amount of business that will be transacted from places of business in the State of Illinois during the following year will be:		$
7.		OPTIONAL:	OTHER PROVISIONS
			Attach a separate sheet of this size for any other provision to be included in the Articles of Incorporation, e.g., authorizing preemptive rights, denying cumulative voting, regulating internal affairs, voting majority requirements, fixing a duration other than perpetual, etc.
8.	NAMES(S) & ADDRESS(ES) OF INCORPORATOR(S)

The undersigned incorporator(s) hereby declare(s), under penalties of perjury, that the statements made in the foregoing Articles of Incorporation are true.

Dated	January 10, 2002
	(Month & Day)	Year

	Signature and Name		Address
1.	/s/ Jeffrey M. Weinhaus	1.	40 Wall Street, 32nd Floor
	Signature		Street
	Jeffrey M. Weinhaus		New York, NY. 10005
	(Type or Print Name)		City/Town	State	Zip Code
2.		2.
	Signature		Street
	(Type or Print Name)		City/Town	State	Zip Code
3.		3.
	Signature		Street
	(Type or Print Name)		City/Town	State	Zip Code

(Signature must be in BLACK INK on original document. Carbon copy, photocopy or rubber stamp signatures may only be used on conformed copies.)

NOTE: If a corporation acts as incorporator, the name of the corporation and the state of incorporation shall be shown and the execution shall be by its president or vice president and verified by him, and attested by its secretary or assistant secretary.

FEE SCHEDULE

•The initial franchise tax is assessed at the rate of 15/100 of 1 percent ($1.50 per $1,000) on the paid-in-capital represented in this state, with a minimum of $25.

•The filing fee is $75.

•The minimum total due (franchise tax + filing fee) is $100.
(Applies when the Consideration to be Received as set forth in Item 4 does not exceed $16,667)

•The Department of Business Services in Springfield will provide assistance in calculating the total fees if necessary.

Illinois Secretary of State	Springfield, IL 62756
Department of Business Services	Telephone (217) 782-9522 or 782-9523	C-162.20

Schedule I

In accordance with instruction 2 to Item 601 of Regulation S-K, the certificates of incorporation of the following registrants have been omitted because they are substantially identical in all material respects to this exhibit 3.1.22.  This schedule identifies the documents omitted and sets forth the material details in which such documents differ from this exhibit 3.1.22.

Exhibit	Registrant	State of Incorporation	Date Filed	Other Differences
3.1.23	Equinox Highland Park, Inc.	IL	12/26/2002	None
3.1.24	Equinox Gold Coast, Inc.	IL	8/27/2002	None

EX-3.1.25

Exhibit 3.1.25

ARTICLES OF INCORPORATION

OF

EQUINOX WEST HOLLYWOOD, INC.

FIRST:The name of the corporation is Equinox West Hollywood, Inc. (“the Corporation”).

SECOND:The purpose of the corporation is to engage in any lawful act or activity for which a corporation may be organized under the GENERAL CORPORATION LAW of California other than the banking business, the trust company business, or the practice of a profession permitted to be incorporated by the California Corporations Code.

THIRD:The name in the State of California of this corporation’s initial agent for service of process is:  GKL CORPORATE/SEARCH, INC.

FOURTH:This Corporation is authorized to issue only one class of shares of stock; and the total number of shares which the corporation is authorized to issue is 200 shares/no par value.

IN WITNESS WHEREOF, this certificate has been subscribed this 21st day of February, 2002, by the undersigned who affirms that the statements made herein are true under the penalties of perjury.

/s/ Jeffrey M. Weinhaus

Jeffrey M. Weinhaus

Sole Incorporator

Rosen Weinhaus LLP

40 Wall Street, 32nd Floor

New York, New York 10005

EX-3.1.26

Exhibit 3.1.26

[SEAL]

ARTICLES OF INCORPORATION

I

The name of this corporation is Equinox Fitness Pasadena, Inc.

II

The purpose of the corporation is to engage in any lawful act or activity for which a corporation may be organized under the GENERAL CORPORATION LAW of California other than the banking business, the trust company business, or the practice of a profession permitted to be incorporated by the California Corporations Code.

III

The name in the State of California of this corporation’s initial agent for service of process is:

GKL CORPORATE/SEARCH, INC.

IV

This corporation is authorized to issue only one class of shares of stock; and the total number of shares which this corporation is authorized to issue is 200 shares/no par value.

/s/ Brian M. Bayan

Brian M. Bayan, Incorporator

[SEAL]

OFFICE OF THE

SECRETARY OF STATE

EX-3.1.27

Exhibit 3.1.27

ARTICLES OF INCORPORATION

OF

EQUINOX PINE STREET, INC.

I.

The name of this corporation is Equinox Pine Street, Inc.

II.

The purpose of the corporation is to engage in any lawful act or activity for which a corporation may be organized under the GENERAL CORPORATION LAW of California other than the banking business, the trust company business or the practice of a profession permitted to be incorporated by the California Corporations Code.

III.

The name and address in the State of California of this corporation’s initial agent for service of process is:

GKL Corporate/Search, Inc.

This corporation is authorized to issue only one class of shares of stock; and the total number of shares which this corporation is authorized to issue is 200 shares zero par value.

/s/ Jeffrey M. Weinhaus

Jeffrey M. Weinhaus, Incorporator

Rosen Weinhaus LLP

40 Wall Street, 32^nd Floor

New York, New York  10005

EX-3.1.28

Exhibit 3.1.28

New York State
Department of State
Division of Corporations, State Records
and Uniform Commercial Code
Albany, NY 12231

(This form must be printed or typed in black ink)

CERTIFICATE OF INCORPORATION
OF

EQUINOX MAMARONECK, INC.

(Insert corporate name)

Under Section 402 of the Business Corporation Law

FIRST: The name of the corporation is: Equinox Mamaroneck, Inc.

SECOND: This corporation is formed to engage in any lawful act or activity for which a corporation may be organized under the Business Corporation Law, provided that it is not formed to engage in any act or activity requiring the consent or approval of any state official, department, board, agency or other body without such consent or approval first being obtained.

THIRD: The county, within this state, in which the office of the corporation is to be located is: Westchester

FOURTH: The total number of shares which the corporation shall have authority to issue and a statement of the par value of each share or a statement that the shares are without par value are: 200 No Par Value

FIFTH:  The secretary of state is designated as agent of the corporation upon whom process against the corporation may be served.  The address to which the Secretary of State shall mail a copy of any process accepted on behalf of the corporation is:

c/o Rosen Weinhaus LLP

40 Wall Street, 32nd Floor

New York, New York 10005

SIXTH: (optional) The name and street address in this state of the registered agent upon whom process against the corporation may be served is:

SEVENTH:  (optional — the existence of the corporation begins on the date the certificate of incorporation is filed by the Department of State.  Corporate existence may begin on a date, not to exceed 90 days, after the date of filing by the Department of State.  Complete this paragraph only if you wish to have the corporation’s existence to begin on a later date, which is not more than 90 days after the date of filing by the Department of State)  The date the corporate existence shall begin is:                              .

Incorporator Information Required

/s/ Jeffrey M. Weinhaus

(signature)

Jeffrey M. Weinhaus

(Type or print name)

40 Wall Street, 32nd Floor

(Address)

New York, New York 10005

(City, State, Zip code)

CERTIFICATE OF INCORPORATION
OF

EQUINOX MAMARONECK, INC.

(Insert corporate name)

Under Section 402 of the Business Corporation Law

Filed by:	Jeffrey M. Weinhaus
	Rosen Weinhaus LLP
	(Name)
	40 Wall Street, 32nd Floor
	(Mailing address)
	New York, New York 10005
	(City, State and Zip code)

Note:  This form was prepared by the New York State Department of State for filing a certificate of incorporation for a business corporation.  It does not contain all optional provisions under the law.  You are not required to use this form.  You may draft your own form or use forms available at legal stationery stores.  The Department of State recommends that legal documents be prepared under the guidance of an attorney.  The fee for a certificate of incorporation is $125 plus the applicable tax on shares required by Section 180 of the Tax Law.  The minimum tax on shares is $10.  The tax on 200 no par value shares is $10 (total $135).  Checks should be made payable to the Department of State for the total amount of the filing fee and tax.

EX-3.1.29

Exhibit 3.1.29

ARTICLES OF INCORPORATION

OF

EQUINOX FITNESS SANTA MONICA, INC.

I.

The name of this corporation is Equinox Fitness Santa Monica, Inc.

II.

The purpose of the corporation is to engage in any lawful act or activity for which a corporation may be organized under the GENERAL CORPORATION LAW of California other than the banking business, the trust company business or the practice of a profession permitted to be incorporated by the California Corporations Code.

III.

The name and address in the State of California of this corporation’s initial agent for service of process is:

GKL Corporate/Search, Inc.

This corporation is authorized to issue only one class of shares of stock; and the total number of shares which this corporation is authorized to issue is 200 shares zero par value.

IN WITNESS WHEREOF, the undersigned has executed these Articles of Incorporation of Equinox Fitness Santa Monica, Inc. this 10thday of December, 2003.

/s/ Jeffrey M. Weinhaus

Jeffrey M. Weinhaus, Incorporator

Rosen Weinhaus LLP

40 Wall Street, 32^nd Floor

New York, New York  10005

EX-3.2.1

Exhibit 3.2.1

EQUINOX HOLDINGS, INC.

AMENDED AND RESTATED

BY-LAWS

As amended and restated as of December 15, 2000

ARTICLE I

STOCKHOLDERS

Section 1.01.  Annual Meetings.  Subject to Section 1.12 of these By-Laws, the annual meeting of the stockholders of the Corporation for the election of directors and for the transaction of such other business as properly may come before such meeting shall be held at such place, either within or without the State of Delaware, and at 10:00 a.m. local time on the first Monday in May (or, if such day is a legal holiday, then on the next succeeding business day), or at such other date and hour, as may be fixed from time to time by resolution of the Board of Directors and set forth in the notice or waiver of notice of the meeting.  [Sections 211(a), (b).](1)

Section 1.02.  Special Meetings.  Special meetings of the stockholders may be called at any time by the President (or, in the event of his or her absence or disability, by any Vice President), or by the Board of Directors.  A special meeting shall be called by the President (or, in the event of his or her absence or disability, by any Vice President), or by the Secretary, immediately upon receipt of a written request therefor by stockholders holding in the aggregate not less than a majority of the outstanding shares of the Corporation at the time entitled to vote at any meeting of the stockholders.  If such officers or the Board of Directors shall fail to call such meeting within twenty days after receipt of such request, any stockholder executing such request may call such meeting.  Such special meetings of the stockholders shall be held at such places, within or without the State of Delaware, as shall be specified in the respective notices or waivers of notice thereof.  [Section 211(d).]

Section 1.03.  Notice of Meetings; Waiver.  The Secretary or any Assistant Secretary shall cause written notice of the place, date and hour of each meeting of the stockholders, and, in the case of a special meeting, the purpose or purposes for which such meeting is called, to be given personally or by mail, not less than ten nor more than sixty days prior to the meeting, to each stockholder of record entitled to vote at such

(1)           Citations are to the General Corporation Law of the State of Delaware as in effect on September 1, 1998 (the “GCL”). The citations are inserted for reference only, and do not constitute a part of the By-Laws. Amendments to § 211(b) [Ch. 120 L.97 effective 7/1/97] permits election of directors by written consent in lieu of annual meeting, subject to stated requirements.

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meeting. If such notice is mailed, it shall be deemed to have been given to a stockholder when deposited in the United States mail, postage prepaid, directed to the stockholder at his or her address as it appears on the record of stockholders of the Corporation, or, if he or she shall have filed with the Secretary of the Corporation a written request that notices to him or her be mailed to some other address, then directed to him or her at such other address.  Such further notice shall be given as may be required by law.

No notice of any meeting of stockholders need be given to any stockholder who submits a signed waiver of notice, whether before or after the meeting.  Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders need be specified in a written waiver of notice.  The attendance of any stockholder at a meeting of stockholders shall constitute a waiver of notice of such meeting, except when the stockholder attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business on the ground that the meeting is not lawfully called or convened.  [Sections 222, 229.]

Section 1.04.  Quorum.  Except as otherwise required by law or by the Certificate of Incorporation, the presence in person or by proxy of the holders of record of a majority of the shares entitled to vote at a meeting of stockholders shall constitute a quorum for the transaction of business at such meeting.  [Section 216.]

Section 1.05.  Voting.  If, pursuant to Section 5.05 of these By-Laws, a record date has been fixed, every holder of record of shares entitled to vote at a meeting of stockholders shall be entitled to one vote for each share outstanding in his or her name on the books of the Corporation at the close of business on such record date.  If no record date has been fixed, then every holder of record of shares entitled to vote at a meeting of stockholders shall be entitled to one vote for each share of stock standing in his or her name on the books of the Corporation at the close of business on the day next preceding the day on which notice of the meeting is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held.  Except as otherwise required by law or by the Certificate of Incorporation or by these By-Laws, the vote of a majority of the shares represented in person or by proxy at any meeting at which a quorum is present shall be sufficient for the transaction of any business at such meeting.  [Sections 212(a), 216.]

Section 1.06.  Voting by Ballot.  No vote of the stockholders need be taken by written ballot unless otherwise required by law.  Any vote which need not be taken by ballot may be conducted in any manner approved by the meeting.

Section 1.07.  Adjournment.  If a quorum is not present at any meeting of the stockholders, the stockholders present in person or by proxy shall have the power to adjourn any such meeting from time to time until a quorum is present.  Notice of any adjourned meeting of the stockholders of the Corporation need not be given if the place, date and hour thereof are announced at the meeting at which the adjournment is taken, provided, however, that if the adjournment is for more than thirty days, or if after the adjournment a new record date for the adjourned meeting is fixed pursuant to Section 5.05 of these By-Laws, a notice of the adjourned meeting, conforming to the

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requirements of Section 1.03 of these By-Laws, shall be given to each stockholder of record entitled to vote at such meeting.  At any adjourned meeting at which a quorum is present, any business may be transacted that might have been transacted on the original date of the meeting.  [Section 222(c).]

Section 1.08.  Proxies.  Any stockholder entitled to vote at any meeting of the stockholders or to express consent to or dissent from corporate action in writing without a meeting may authorize another person or persons to vote at any such meeting and express such consent or dissent for him or her by proxy.  A stockholder may authorize a valid proxy by executing a written instrument signed by such stockholder, or by causing his or her signature to be affixed to such writing by any reasonable means including, but not limited to, by facsimile signature, or by transmitting or authorizing the transmission of a telegram, cablegram or other means of electronic transmission to the person designated as the holder of the proxy, a proxy solicitation firm or a like authorized agent.  No such proxy shall be voted or acted upon after the expiration of three years from the date of such proxy, unless such proxy provides for a longer period.  Every proxy shall be revocable at the pleasure of the stockholder executing it, except in those cases where applicable law provides that a proxy shall be irrevocable.  A stockholder may revoke any proxy which is not irrevocable by attending the meeting and voting in person or by filing an instrument in writing revoking the proxy or by filing another duly executed proxy bearing a later date with the Secretary.  Proxies by telegram, cablegram or other electronic transmission must either set forth or be submitted with information from which it can be determined that the telegram, cablegram or other electronic transmission was authorized by the stockholder.  Any copy, facsimile telecommunication or other reliable reproduction of a writing or transmission created pursuant to this section may be substituted or used in lieu of the original writing or transmission for any and all purposes for which the original writing or transmission could be used, provided that such copy, facsimile telecommunication or other reproduction shall be a complete reproduction of the entire original writing or transmission.  [Sections 212(b), (c), (d), (e).]

Section 1.09.  Organization; Procedure.  At every meeting of stockholders the presiding officer shall be the President or, in the event of his or her absence or disability, a presiding officer chosen by a majority of the stockholders present in person or by proxy.  The Secretary, or in the event of his or her absence or disability, the Assistant Secretary, if any, or if there be no Assistant Secretary, in the absence of the Secretary, an appointee of the presiding officer, shall act as Secretary of the meeting.  The order of business and all other matters of procedure at every meeting of stockholders may be determined by such presiding officer.

Section 1.10.  Consent of Stockholders in Lieu of Meeting.  To the fullest extent permitted by law, whenever the vote of stockholders at a meeting thereof is required or permitted to be taken for or in connection with any corporate action, such action may be taken without a meeting, without prior notice and without a vote of stockholders, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered to the Corporation

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by delivery to its registered office in the State of Delaware, its principal place of business, or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded.  Delivery made to the Corporation’s registered office shall be by hand or by certified or registered mail, return receipt requested.

Every written consent shall bear the date of signature of each stockholder who signs the consent and no written consent shall be effective to take the corporate action referred to therein unless, within sixty days of the earliest dated consent delivered in the manner required by law to the Corporation, written consents signed by a sufficient number of holders to take action are delivered to the Corporation by delivery to its registered office in the State of Delaware, its principal place of business, or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded.  Delivery made to the Corporation’s registered office shall be by hand or by certified or registered mail, return receipt requested.  [Section 228(a), (c).]

ARTICLE II

BOARD OF DIRECTORS

Section 2.01.  General Powers.  Except as may otherwise be provided by law, by the Certificate of Incorporation or by these By-Laws, the property, affairs and business of the Corporation shall be managed by or under the direction of the Board of Directors and the Board of Directors may exercise all the powers of the Corporation.  [Section 141(a).]

Section 2.02.  Number and Term of Office.  The number of Directors constituting the entire Board of Directors shall be eight (8), which number may be modified from time to time by resolution of the Board of Directors, but in no event shall the number of Directors be less than one.  Each Director (whenever elected) shall hold office until his or her successor has been duly elected and qualified, or until his or her earlier death, resignation or removal.  [Section 141(b).]

Section 2.03.  Election of Directors.  Except as otherwise provided in Sections 2.12 and 2.13 of these By-Laws, the Directors shall be elected at each annual meeting of the stockholders.  If the annual meeting for the election of Directors is not held on the date designated therefor, the Directors shall cause the meeting to be held as soon thereafter as convenient.  At each meeting of the stockholders for the election of Directors, provided a quorum is present, the Directors shall be elected by a plurality of the votes validly cast in such election.  [Sections 211(b), (c), 216.]

Section 2.04.  Annual and Regular Meetings.  The annual meeting of the Board of Directors for the purpose of electing officers and for the transaction of such other business as may come before the meeting shall be held as soon as possible following adjournment of the annual meeting of the stockholders at the place of such annual meeting of the stockholders.  Notice of such annual meeting of the Board of Directors need not be given.  The Board of Directors from time to time may by resolution provide for the holding of regular meetings and fix the place (which may be within or without the

4

State of Delaware) and the date and hour of such meetings.  Notice of regular meetings need not be given, provided, however, that if the Board of Directors shall fix or change the time or place of any regular meeting, notice of such action shall be mailed promptly, or sent by telegram, radio or cable, to each Director who shall not have been present at the meeting at which such action was taken, addressed to him or her at his or her usual place of business, or shall be delivered to him or her personally.  Notice of such action need not be given to any Director who attends the first regular meeting after such action is taken without protesting the lack of notice to him or her, prior to or at the commencement of such meeting, or to any Director who submits a signed waiver of notice, whether before or after such meeting.  [Section 141(g).]

Section 2.05.  Special Meetings; Notice.  Special meetings of the Board of Directors shall be held whenever called by the President or, in the event of his or her absence or disability, by any Vice President, at such place (within or without the State of Delaware), date and hour as may be specified in the respective notices or waivers of notice of such meetings.  Special meetings of the Board of Directors may be called on twenty-four hours’ notice, if notice is given to each Director personally or by telephone or telegram, or on five days’ notice, if notice is mailed to each Director, addressed to him or her at his or her usual place of business.  Notice of any special meeting need not be given to any Director who attends such meeting without protesting the lack of notice to him or her, prior to or at the commencement of such meeting, or to any Director who submits a signed waiver of notice, whether before or after such meeting, and any business may be transacted thereat.  [Sections 141(g), 229.]

Section 2.06.  Quorum; Voting.  At all meetings of the Board of Directors, the presence of a majority of the total authorized number of Directors shall constitute a quorum for the transaction of business.  Except as otherwise required by law, the vote of a majority of the Directors present at any meeting at which a quorum is present shall be the act of the Board of Directors.  [Section 141(b).]

Section 2.07.  Adjournment.  A majority of the Directors present, whether or not a quorum is present, may adjourn any meeting of the Board of Directors to another time or place.  No notice need be given of any adjourned meeting unless the time and place of the adjourned meeting are not announced at the time of adjournment, in which case notice conforming to the requirements of Section 2.05 of these By-Laws shall be given to each Director.

Section 2.08.  Action Without a Meeting.  Any action required or permitted to be taken at any meeting of the Board of Directors may be taken without a meeting if all members of the Board of Directors consent thereto in writing, and such writing or writings are filed with the minutes of proceedings of the Board of Directors.  [Section 141(f).]

Section 2.09.  Regulations; Manner of Acting.  To the extent consistent with applicable law, the Certificate of Incorporation and these By-Laws, the Board of Directors may adopt such rules and regulations for the conduct of meetings of the Board of Directors and for the management of the property, affairs and business of the

5

Corporation as the Board of Directors may deem appropriate.  The Directors shall act only as a Board, and the individual Directors shall have no power as such.

Section 2.10.  Action by Telephonic Communications.  Members of the Board of Directors may participate in a meeting of the Board of Directors by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to this provision shall constitute presence in person at such meeting.  [Section 141(i).]

Section 2.11.  Resignations.  Any Director may resign at any time by delivering a written notice of resignation, signed by such Director, to the President or the Secretary.  Unless otherwise specified therein, such resignation shall take effect upon delivery.  [Section 141(b).]

Section 2.12.  Removal of Directors.  Any Director may be removed at any time, either for or without cause, upon the affirmative vote of the holders of a majority of the outstanding shares of stock of the Corporation entitled to vote for the election of such Director.  Any vacancy in the Board of Directors caused by any such removal may be filled at such meeting by the stockholders entitled to vote for the election of the Director so removed.  If such stockholders do not fill such vacancy at such meeting (or in the written instrument effecting such removal, if such removal was effected by consent without a meeting), such vacancy may be filled in the manner provided in Section 2.13 of these By-Laws.  [Section 141(k).]

Section 2.13.  Vacancies and Newly Created Directorships.  If any vacancies shall occur in the Board of Directors, by reason of death, resignation, removal or otherwise, or if the authorized number of Directors shall be increased, the Directors then in office shall continue to act, and such vacancies and newly created directorships may be filled by a majority of the Directors then in office, although less than a quorum.  A Director elected to fill a vacancy or a newly created directorship shall hold office until his or her successor has been elected and qualified or until his or her earlier death, resignation or removal.  Any such vacancy or newly created directorship may also be filled at any time by vote of the stockholders.  [Section 223.]

Section 2.14.  Compensation.  The amount, if any, which each Director shall be entitled to receive as compensation for his or her services as such shall be fixed from time to time by resolution of the Board of Directors.  [Section 141(h).]

Section 2.15.  Reliance on Accounts and Reports, etc.  A Director, or a member of any Committee designated by the Board of Directors shall, in the performance of his or her duties, be fully protected in relying in good faith upon the records of the Corporation and upon information, opinions, reports or statements presented to the Corporation by any of the Corporation’s officers or employees, or Committees designated by the Board of Directors, or by any other person as to the matters the member reasonably believes are within such other person’s professional or expert competence and who has been selected with reasonable care by or on behalf of the Corporation.  [Section 141(e).]

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ARTICLE III

EXECUTIVE COMMITTEE AND OTHER COMMITTEES

Section 3.01.  How Constituted.  The Board of Directors may designate one or more Committees, including an Executive Committee, each such Committee to consist of such number of Directors as from time to time may be fixed by the Board of Directors.  The Board of Directors may designate one or more Directors as alternate members of any such Committee, who may replace any absent or disqualified member or members at any meeting of such Committee.  Thereafter, members (and alternate members, if any) of each such Committee may be designated at the annual meeting of the Board of Directors.  Any such Committee may be abolished or re-designated from time to time by the Board of Directors.  Each member (and each alternate member) of any such Committee (whether designated at an annual meeting of the Board of Directors or to fill a vacancy or otherwise) shall hold office until his or her successor shall have been designated or until he or she shall cease to be a Director, or until his or her earlier death, resignation or removal.  [Section 141(c).]

Section 3.02.  Powers.  During the intervals between the meetings of the Board of Directors, the Executive Committee, except as otherwise provided in this section, shall have and may exercise all the powers and authority of the Board of Directors in the management of the property, affairs and business of the Corporation, including the power to declare dividends and to authorize the issuance of stock.  Each such other Committee, except as otherwise provided in this section, shall have and may exercise such powers of the Board of Diredctors as may be provided by resolution or resolutions of the Board of Directors.  Neither the Executive Committee nor any such other Committee shall have the power or authority:

(a)  to approve or adopt, or recommend to the stockholders, any action or matter expressly required by this chapter to be submitted to the stockholders for approval.

(b)  to adopt, amend or repeal any bylaw of the corporation.

The Executive Committee shall have, and any such other Committee may be granted by the Board of Directors, power to authorize the seal of the Corporation to be affixed to any or all papers which may require it.  [Section 141(c).]

Section 3.03.  Proceedings.  Each such Committee may fix its own rules of procedure and may meet at such place (within or without the State of Delaware), at such time and upon such notice, if any, as it shall determine from time to time.  Each such Committee shall keep minutes of its proceedings and shall report such proceedings to the Board of Directors at the meeting of the Board of Directors next following any such proceedings.

Section 3.04.  Quorum and Manner of Acting.  Except as may be otherwise provided in the resolution creating such Committee, at all meetings of any Committee the presence of members (or alternate members) constituting a majority of the total

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authorized membership of such Committee shall constitute a quorum for the transaction of business.  The act of the majority of the members present at any meeting at which a quorum is present shall be the act of such Committee.  Any action required or permitted to be taken at any meeting of any such Committee may be taken without a meeting, if all members of such Committee shall consent to such action in writing and such writing or writings are filed with the minutes of the proceedings of the Committee.  The members of any such Committee shall act only as a Committee, and the individual members of such Committee shall have no power as such.  [Section 141(c), (f).]

Section 3.05.  Action by Telephonic Communications.  Members of any Committee designated by the Board of Directors may participate in a meeting of such Committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to this provision shall constitute presence in person at such meeting.  [Section 141(i).]

Section 3.06.  Absent or Disqualified Members.  In the absence or disqualification of a member of any Committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he, she or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member.  [Section 141(c).]

Section 3.07.  Resignations.  Any member (and any alternate member) of any Committee may resign at any time by delivering a written notice of resignation, signed by such member, to the Chairman or the President.  Unless otherwise specified therein, such resignation shall take effect upon delivery.

Section 3.08.  Removal.  Any member (and any alternate member) of any Committee may be removed from his or her position as a member (or alternate member, as the case may be) of such Committee at any time, either for or without cause, by resolution adopted by a majority of the whole Board of Directors.

Section 3.09.  Vacancies.  If any vacancy shall occur in any Committee, by reason of disqualification, death, resignation, removal or otherwise, the remaining members (and any alternate members) shall continue to act, and any such vacancy may be filled by the Board of Directors.

ARTICLE IV

OFFICERS

Section 4.01.  Number.  The officers of the Corporation shall be chosen by the Board of Directors and shall be a President, one or more Vice Presidents, a Secretary and a Treasurer.  The Board of Directors also may elect one or more Assistant Secretaries and Assistant Treasurers in such numbers as the Board of Directors may determine.  Any number of offices may be held by the same person.  No officer need be a Director of the Corporation.  [Section 142(a), (b).]

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Section 4.02.  Election.  Unless otherwise determined by the Board of Directors, the officers of the Corporation shall be elected by the Board of Directors at the annual meeting of the Board of Directors, and shall be elected to hold office until the next succeeding annual meeting of the Board of Directors.  In the event of the failure to elect officers at such annual meeting, officers may be elected at any regular or special meeting of the Board of Directors.  Each officer shall hold office until his or her successor has been elected and qualified, or until his or her earlier death, resignation or removal.  [Section 142(b).]

Section 4.03.  Salaries.  The salaries of all officers and agents of the Corporation shall be fixed by the Board of Directors.

Section 4.04.  Removal and Resignation; Vacancies.  Any officer may be removed for or without cause at any time by the Board of Directors.  Any officer may resign at any time by delivering a written notice of resignation, signed by such officer, to the Board of Directors or the President.  Unless otherwise specified therein, such resignation shall take effect upon delivery.  Any vacancy occurring in any office of the Corporation by death, resignation, removal or otherwise, shall be filled by the Board of Directors.  [Section 142(b), (e).]

Section 4.05.  Authority and Duties of Officers.  The officers of the Corporation shall have such authority and shall exercise such powers and perform such duties as may be specified in these By-Laws, except that in any event each officer shall exercise such powers and perform such duties as may be required by law.  [Section 142(a).]

Section 4.06.  The President.  The President shall preside at all meetings of the stockholders and directors at which he or she is present, shall be the chief executive officer and the chief operating officer of the Corporation, shall have general control and supervision of the policies and operations of the Corporation and shall see that all orders and resolutions of the Board of Directors are carried into effect.  He or she shall manage and administer the Corporation’s business and affairs and shall also perform all duties and exercise all powers usually pertaining to the office of a chief executive officer and a chief operating officer of a corporation.  He or she shall have the authority to sign, in the name and on behalf of the Corporation, checks, orders, contracts, leases, notes, drafts and other documents and instruments in connection with the business of the Corporation, and together with the Secretary or an Assistant Secretary, conveyances of real estate and other documents and instruments to which the seal of the Corporation is affixed.  He or she shall have the authority to cause the employment or appointment of such employees and agents of the Corporation as the conduct of the business of the Corporation may require, to fix their compensation, and to remove or suspend any employee or agent elected or appointed by the President or the Board of Directors.  The President shall perform such other duties and have such other powers as the Board of Directors or the Chairman may from time to time prescribe.

Section 4.07.  The Vice President.  Each Vice President shall perform such duties and exercise such powers as may be assigned to him or her from time to time by the President.  In the absence of the President, the duties of the President shall be performed

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and his or her powers may be exercised by such Vice President as shall be designated by the President, or failing such designation, such duties shall be performed and such powers may be exercised by each Vice President in the order of their earliest election to that office; subject in any case to review and superseding action by the President.

Section 4.08.  The Secretary.  The Secretary shall have the following powers and duties:

(a)  He or she shall keep or cause to be kept a record of all the proceedings of the meetings of the stockholders and of the Board of Directors in books provided for that purpose.

(b)  He or she shall cause all notices to be duly given in accordance with the provisions of these By-Laws and as required by law.

(c)  Whenever any Committee shall be appointed pursuant to a resolution of the Board of Directors, he or she shall furnish a copy of such resolution to the members of such Committee.

(d)  He or she shall be the custodian of the records and of the seal of the Corporation and cause such seal (or a facsimile thereof) to be affixed to all certificates representing shares of the Corporation prior to the issuance thereof and to all instruments the execution of which on behalf of the Corporation under its seal shall have been duly authorized in accordance with these By-Laws, and when so affixed he or she may attest the same.

(e)  He or she shall properly maintain and file all books, reports, statements, certificates and all other documents and records required by law, the Certificate of Incorporation or these By-Laws.

(f)  He or she shall have charge of the stock books and ledgers of the Corporation and shall cause the stock and transfer books to be kept in such manner as to show at any time the number of shares of stock of the Corporation of each class issued and outstanding, the names (alphabetically arranged) and the addresses of the holders of record of such shares, the number of shares held by each holder and the date as of which each became such holder of record.

(g)  He or she shall sign (unless the Treasurer, an Assistant Treasurer or an Assistant Secretary shall have signed) certificates representing shares of the Corporation the issuance of which shall have been authorized by the Board of Directors.

(h)  He or she shall perform, in general, all duties incident to the office of secretary and such other duties as may be specified in these By-Laws or as may be assigned to him or her from time to time by the Board of Directors, or the President.

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Section 4.09.  The Treasurer.  The Treasurer shall be the chief financial officer of the Corporation and shall have the following powers and duties:

(a)  He or she shall have charge and supervision over and be responsible for the moneys, securities, receipts and disbursements of the Corporation, and shall keep or cause to be kept full and accurate records of all receipts of the Corporation.

(b)  He or she shall cause the moneys and other valuable effects of the Corporation to be deposited in the name and to the credit of the Corporation in such banks or trust companies or with such bankers or other depositaries as shall be selected in accordance with Section 8.05 of these By-Laws.

(c)  He or she shall cause the moneys of the Corporation to be disbursed by checks or drafts (signed as provided in Section 8.06 of these By-Laws) upon the authorized depositaries of the Corporation and cause to be taken and preserved proper vouchers for all moneys disbursed.

(d)  He or she shall render to the Board of Directors or the President, whenever requested, a statement of the financial condition of the Corporation and of all his or her transactions as Treasurer, and render a full financial report at the annual meeting of the stockholders, if called upon to do so.

(e)  He or she shall be empowered from time to time to require from all officers or agents of the Corporation reports or statements giving such information as he or she may desire with respect to any and all financial transactions of the Corporation.

(f)  He or she may sign (unless an Assistant Treasurer or the Secretary or an Assistant Secretary shall have signed) certificates representing stock of the Corporation the issuance of which shall have been authorized by the Board of Directors.

(g)  He or she shall perform, in general, all duties incident to the office of treasurer and such other duties as may be specified in these By-Laws or as may be assigned to him or her from time to time by the Board of Directors, or the President.

Section 4.10.  Additional Officers.  The Board of Directors may appoint such other officers and agents as it may deem appropriate, and such other officers and agents shall hold their offices for such terms and shall exercise such powers and perform such duties as may be determined from time to time by the Board of Directors.  The Board of Directors from time to time may delegate to any officer or agent the power to appoint subordinate officers or agents and to prescribe their respective rights, terms of office, authorities and duties.  Any such officer or agent may remove any such subordinate officer or agent appointed by him or her, for or without cause.  [Section 142(a), (b).]

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Section 4.11.  Security.  The Board of Directors may require any officer, agent or employee of the Corporation to provide security for the faithful performance of his or her duties, in such amount and of such character as may be determined from time to time by the Board of Directors.  [Section 142(c).]

ARTICLE V

CAPITAL STOCK

Section 5.01.  Certificates of Stock, Uncertificated Shares.  The shares of the Corporation shall be represented by certificates, provided that the Board of Directors may provide by resolution or resolutions that some or all of any or all classes or series of the stock of the Corporation shall be uncertificated shares.  Any such resolution shall not apply to shares represented by a certificate until each certificate is surrendered to the Corporation.  Notwithstanding the adoption of such a resolution by the Board of Directors, every holder of stock in the Corporation represented by certificates and upon request every holder of uncertificated shares shall be entitled to have a certificate signed by, or in the name of the Corporation, by the President or a Vice President, and by the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary, representing the number of shares registered in certificate form.  Such certificate shall be in such form as the Board of Directors may determine, to the extent consistent with applicable law, the Certificate of Incorporation and these By-Laws.  [Section 158.]

Section 5.02.  Signatures; Facsimile.  All of such signatures on the certificate referred to in Section 5.01 of these By-Laws may be a facsimile, engraved or printed, to the extent permitted by law.  In case any officer, transfer agent or registrar who has signed, or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if he or she were such officer, transfer agent or registrar at the date of issue.  [Section 158.]

Section 5.03.  Lost, Stolen or Destroyed Certificates.  The Board of Directors may direct that a new certificate be issued in place of any certificate theretofore issued by the Corporation alleged to have been lost, stolen or destroyed, upon delivery to the Board of Directors of an affidavit of the owner or owners of such certificate, setting forth such allegation.  The Board of Directors may require the owner of such lost, stolen or destroyed certificate, or his or her legal representative, to give the Corporation a bond sufficient to indemnify it against any claim that may be made against it on account of the alleged loss, theft or destruction of any such certificate or the issuance of any such new certificate.  [Section 167.]

Section 5.04.  Transfer of Stock.  Upon surrender to the Corporation or the transfer agent of the Corporation of a certificate for shares, duly endorsed or accompanied by appropriate evidence of succession, assignment or authority to transfer, the Corporation shall issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books.  Within a reasonable time after the

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transfer of uncertificated stock, the Corporation shall send to the registered owner thereof a written notice containing the information required to be set forth or stated on certificates pursuant to Sections 151, 156, 202(a) or 218(a) of the General Corporation Law of the State of Delaware.  Subject to the provisions of the Certificate of Incorporation and these By-Laws, the Board of Directors may prescribe such additional rules and regulations as it may deem appropriate relating to the issue, transfer and registration of shares of the Corporation.  [Section 151(f).]

Section 5.05.  Record Date.  In order to determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, the Board of Directors may fix, in advance, a record date, which record date shall not precede the date on which the resolution fixing the record date is adopted by the Board of Directors, and which shall not be more than sixty nor less than ten days before the date of such meeting.  A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting, provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.

In order that the Corporation may determine the stockholders entitled to consent to corporate action in  writing without a meeting, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which date shall not be more than ten days after the date upon which the resolution fixing the record date is adopted by the Board of Directors.  If no record date has been fixed by the Board of Directors, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the board of directors is required by law, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation by delivery to its registered office in the State of Delaware, its principal place of business, or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded.  Delivery made to the Corporation’s registered office shall be by hand or by certified or registered mail, return receipt requested.  If no record date has been fixed by the Board of Directors and prior action by the Board of Directors is required by law, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be at the close of business on the day on which the Board of Directors adopts the resolution taking such prior action.

In order that the Corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights of the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than sixty days prior to such action.  If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto.  [Section 213.]

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Section 5.06.  Registered Stockholders.  Prior to due surrender of a certificate for registration of transfer, the Corporation may treat the registered owner as the person exclusively entitled to receive dividends and other distributions, to vote, to receive notice and otherwise to exercise all the rights and powers of the owner of the shares represented by such certificate, and the Corporation shall not be bound to recognize any equitable or legal claim to or interest in such shares on the part of any other person, whether or not the Corporation shall have notice of such claim or interests.  Whenever any transfer of shares shall be made for collateral security, and not absolutely, it shall be so expressed in the entry of the transfer if, when the certificates are presented to the Corporation for transfer or uncertificated shares are requested to be transferred, both the transferor and transferee request the Corporation to do so.  [Section 159.]

Section 5.07.  Transfer Agent and Registrar.  The Board of Directors may appoint one or more transfer agents and one or more registrars, and may require all certificates representing shares to bear the signature of any such transfer agents or registrars.

ARTICLE VI

INDEMNIFICATION

Section 6.01.  Nature of Indemnity.  The Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he or she is or was or has agreed to become a director or officer of the Corporation, or is or was serving or has agreed to serve at the request of the Corporation as a director or officer, of another corporation, partnership, joint venture, trust or other enterprise, or by reason of any action alleged to have been taken or omitted in such capacity, and may indemnify any person who was or is a party or is threatened to be made a party to such an action, suit or proceeding by reason of the fact that he or she is or was or has agreed to become an employee or agent of the Corporation, or is or was serving or has agreed to serve at the request of the Corporation as an employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her or on his or her behalf in connection with such action, suit or proceeding and any appeal therefrom, if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding had no reasonable cause to believe his or her conduct was unlawful; except that in the case of an action or suit by or in the right of the Corporation to procure a judgment in its favor (1) such indemnification shall be limited to expenses (including attorneys’ fees) actually and reasonably incurred by such person in the defense or settlement of such action or suit, and (2) no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the Delaware Court of Chancery or the court in which such action or suit was brought shall determine upon application that,

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despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Delaware Court of Chancery or such other court shall deem proper.

The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he or she reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his or her conduct was unlawful.

Section 6.02.  Successful Defense.  To the extent that a present or former director, officer, employee or agent of the Corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in Section 6.01 of these By-Laws or in defense of any claim, issue or matter therein, he or she shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by him or her in connection therewith.

Section 6.03.  Determination That Indemnification Is Proper.  Any indemnification of a present or former director or officer of the Corporation under Section 6.01 of these By-Laws (unless ordered by a court) shall be made by the Corporation only upon a determination that indemnification of such person is proper in the circumstances because such person has met the applicable standard of conduct set forth in Section 6.01 of these By-Laws.  Any indemnification of a present or former employee or agent of the Corporation under Section 6.01 of these By-Laws (unless ordered by a court) may be made by the Corporation upon a determination that indemnification of the employee or agent is proper in the circumstances because he or she has met the applicable standard of conduct set forth in Section 6.01 of these By-Laws.  Any such determination shall be made, with respect to a person who is a director or officer at the time of such determination (1) by a majority vote of the Directors who are not parties to such action, suit or proceeding, even though less than a quorum, or (2) by a committee of such directors designated by majority vote of such directors, even though less than a quorum, or (3) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion, or (4) by the stockholders.

Section 6.04.  Advance Payment of Expenses.  Expenses (including attorneys’ fees) incurred by a present director or officer in defending any civil, criminal, administrative or investigative action, suit or proceeding shall be paid by the Corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of the director or officer to repay such amount if it shall ultimately be determined that he or she is not entitled to be indemnified by the Corporation as authorized in this Article.  Such expenses (including attorneys’ fees) incurred by former directors and officers or other employees and agents may be so paid upon such terms and conditions, if any, as the Corporation deems appropriate.  The Corporation, or in respect of a present director or officer the Board of Directors, may authorize the Corporation’s counsel to represent such present or former director, officer,

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employee or agent in any action, suit or proceeding, whether or not the Corporation is a party to such action, suit or proceeding.

Section 6.05.  Procedure for Indemnification of Directors and Officers.  Any indemnification of a director, officer, employee or agent of the Corporation under Sections 6.01 and 6.02 of these By-Laws, or advance of costs, charges and expenses to such person under Section 6.04 of these By-Laws, shall be made promptly, and in any event within thirty days, upon the written request of such person.  If a determination by the Corporation that such person is entitled to indemnification pursuant to this Article is required, and the Corporation fails to respond within sixty days to a written request for indemnity, the Corporation shall be deemed to have approved such request.  If the Corporation denies a written request for indemnity or advancement of expenses, in whole or in part, or if payment in full pursuant to such request is not made within thirty days, the right to indemnification or advances as granted by this Article shall be enforceable by such person in any court of competent jurisdiction.  Such person’s costs and expenses incurred in connection with successfully establishing his or her right to indemnification, in whole or in part, in any such action shall also be indemnified by the Corporation.  It shall be a defense to any such action (other than an action brought to enforce a claim for the advance of costs, charges and expenses under Section 6.04 of these By-Laws where the required undertaking, if any, has been received by or tendered to the Corporation) that the claimant has not met the standard of conduct set forth in Section 6.01 of these By-Laws, but the burden of proving such defense shall be on the Corporation.  Neither the failure of the Corporation (including its Board of Directors or any committee thereof, its independent legal counsel, and its stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he or she has met the applicable standard of conduct set forth in Section 6.01 of these By-Laws, nor the fact that there has been an actual determination by the Corporation (including its Board of Directors or any committee thereof, its independent legal counsel, and its stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct.

Section 6.06.  Survival; Preservation of Other Rights.  The foregoing indemnification provisions shall be deemed to be a contract between the Corporation and each director, officer, employee and agent who serves in any such capacity at any time while these provisions as well as the relevant provisions of the Delaware Corporation Law are in effect and any repeal or modification thereof shall not affect any right or obligation then existing with respect to any state of facts then or previously existing or any action, suit or proceeding previously or thereafter brought or threatened based in whole or in part upon any such state of facts.  Such a “contract right” may not be modified retroactively without the consent of such director, officer, employee or agent.

The indemnification provided by this Article VI shall not be deemed exclusive of any other rights to which those indemnified may be entitled under any by-law, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his or her official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, officer,

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employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person.

Section 6.07.  Insurance.  The Corporation may purchase and maintain insurance on behalf of any person who is or was or has agreed to become a director or officer of the Corporation, or is or was serving at the request of the Corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him or her and incurred by him or her or on his or her behalf in any such capacity, or arising out of his or her status as such, whether or not the Corporation would have the power to indemnify him or her against such liability under the provisions of this Article, provided that such insurance is available on acceptable terms, which determination shall be made by a vote of a majority of the entire Board of Directors.

Section 6.08.  Severability.  If this Article or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Corporation shall nevertheless indemnify each director or officer and may indemnify each employee or agent of the Corporation as to costs, charges and expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement with respect to any action, suit or proceeding, whether civil, criminal, administrative or investigative, including an action by or in the right of the Corporation, to the fullest extent permitted by any applicable portion of this Article that shall not have been invalidated and to the fullest extent permitted by applicable law.

ARTICLE VII

OFFICES

Section 7.01.  Registered Office.  The registered office of the Corporation in the State of Delaware shall be located at Corporation Trust Center, 1209 Orange Street in the City of Wilmington, County of New Castle.

Section 7.02. Other Offices.  The Corporation may maintain offices or places of business at such other locations within or without the State of Delaware as the Board of Directors may from time to time determine or as the business of the Corporation may require.

ARTICLE VIII

GENERAL PROVISIONS

Section 8.01.  Dividends.  Subject to any applicable provisions of law and the Certificate of Incorporation, dividends upon the shares of the Corporation may be declared by the Board of Directors at any regular or special meeting of the Board of Directors and any such dividend may be paid in cash, property, or shares of the Corporation’s Capital Stock.

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A member of the Board of Directors, or a member of any Committee designated by the Board of Directors shall be fully protected in relying in good faith upon the records of the Corporation and upon such information, opinions, reports or statements presented to the Corporation by any of its officers or employees, or Committees of the Board of Directors, or by any other person as to matters the Director reasonably believes are within such other person’s professional or expert competence and who has been selected with reasonable care by or on behalf of the Corporation, as to the value and amount of the assets, liabilities and/or net profits of the Corporation, or any other facts pertinent to the existence and amount of surplus or other funds from which dividends might properly be declared and paid.  [Sections 172, 173.]

Section 8.02.  Reserves.  There may be set aside out of any funds of the Corporation available for dividends such sum or sums as the Board of Directors from time to time, in its absolute discretion, thinks proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the Corporation or for such other purpose as the Board of Directors shall think conducive to the interest of the Corporation, and the Board of Directors may similarly modify or abolish any such reserve.  [Section 171.]

Section 8.03.  Execution of Instruments.  The President, any Vice President, the Secretary or the Treasurer may enter into any contract or execute and deliver any instrument in the name and on behalf of the Corporation.  The Board of Directors or the President may authorize any other officer or agent to enter into any contract or execute and deliver any instrument in the name and on behalf of the Corporation.  Any such authorization may be general or limited to specific contracts or instruments.

Section 8.04.  Corporate Indebtedness.  No loan shall be contracted on behalf of the Corporation, and no evidence of indebtedness shall be issued in its name, unless authorized by the Board of Directors or the President.  Such authorization may be general or confined to specific instances.  Loans so authorized may be effected at any time for the Corporation from any bank, trust company or other institution, or from any firm, corporation or individual.  All bonds, debentures, notes and other obligations or evidences of indebtedness of the Corporation issued for such loans shall be made, executed and delivered as the Board of Directors or the President shall authorize.  When so authorized by the Board of Directors or the President, any part of or all the properties, including contract rights, assets, business or good will of the Corporation, whether then owned or thereafter acquired, may be mortgaged, pledged, hypothecated or conveyed or assigned in trust as security for the payment of such bonds, debentures, notes and other obligations or evidences of indebtedness of the Corporation, and of the interest thereon, by instruments executed and delivered in the name of the Corporation.

Section 8.05.  Deposits.  Any funds of the Corporation may be deposited from time to time in such banks, trust companies or other depositaries as may be determined by the Board of Directors or the President, or by such officers or agents as may be authorized by the Board of Directors or the President to make such determination.

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Section 8.06.  Checks.  All checks or demands for money and notes of the Corporation shall be signed by such officer or officers or such agent or agents of the Corporation, and in such manner, as the Board of Directors or the President from time to time may determine.

Section 8.07.  Sale, Transfer, etc. of Securities.  To the extent authorized by the Board of Directors or by the President, any Vice President, the Secretary or the Treasurer or any other officers designated by the Board of Directors or the President may sell, transfer, endorse, and assign any shares of stock, bonds or other securities owned by or held in the name of the Corporation, and may make, execute and deliver in the name of the Corporation, under its corporate seal, any instruments that may be appropriate to effect any such sale, transfer, endorsement or assignment.

Section 8.08.  Fiscal Year.  The fiscal year of the Corporation shall commence on the first day of January of each year (except for the Corporation’s first fiscal year which shall commence on the date of incorporation) and shall terminate in each case on December 31.

Section 8.09.  Seal.  The seal of the Corporation shall be circular in form and shall contain the name of the Corporation, the year of its incorporation and the words “Corporate Seal” and “Delaware”.  The form of such seal shall be subject to alteration by the Board of Directors.  The seal may be used by causing it or a facsimile thereof to be impressed, affixed or reproduced, or may be used in any other lawful manner.

Section 8.10.  Books and Records; Inspection.  Except to the extent otherwise required by law, the books and records of the Corporation shall be kept at such place or places within or without the State of Delaware as may be determined from time to time by the Board of Directors.

ARTICLE IX

AMENDMENT OF BY-LAWS

Section 9.01.  Amendment.  Subject to the provisions of the Certificate of Incorporation, these By-Laws may be amended, altered or repealed

(a)  by resolution adopted by a majority of the Board of Directors at any special or regular meeting of the Board if, in the case of such special meeting only, notice of such amendment, alteration or repeal is contained in the notice or waiver of notice of such meeting; or

(b)  at any regular or special meeting of the stockholders if, in the case of such special meeting only, notice of such amendment, alteration or repeal is contained in the notice or waiver of notice of such meeting.  [Section 109(a).]

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ARTICLE X

CONSTRUCTION

Section 10.01.  Construction.  In the event of any conflict between the provisions of these By-Laws as in effect from time to time and the provisions of the Certificate of Incorporation of the Corporation as in effect from time to time, the provisions of such Certificate of Incorporation shall be controlling.

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EQUINOX HOLDINGS, INC.

AMENDED AND RESTATED

BY-LAWS

As amended and restated as of December 15, 2000

EQUINOX HOLDINGS, INC.

AMENDED AND RESTATED

BY-LAWS

TABLE OF CONTENTS

SECTION

EX-3.2.2

Exhibit 3.2.2

BY-LAWS

of

Equinox-92nd Street Incorporated

ARTICLE I

OFFICES

1.1Office:  The office of EQUINOX-92nd Street, INC. (the “Corporation”) shall be established and maintained at:

895 Broadway

New York, NY 10003

1.2Other Offices:  The Corporation may have other offices, either within or without this State, at such place or places as the Board of Directors may from time to time appoint or the business of the Corporation may require.

ARTICLE II

SHAREHOLDERS

2.1Place of Shareholders’ Meetings.  All meetings of the shareholders of the Corporation shall be held at such place or places, within or without the State of New York, as may be fixed by the Board of Directors from time to time or as shall be specified in the respective notices thereof.

2.2Date and Hour of Annual Meetings of Shareholders.  An annual meeting of shareholders shall be held each year on the second Tuesday in the fifth month following the completion of the Corporation’s fiscal year, unless said date is a legal holiday, in which case the meeting shall be held on the next business day thereafter which is not a legal holiday.

2.3Purposes of Annual Meetings.  At each annual meeting, the shareholders shall elect the members of the Board of Directors for the succeeding year. At any such annual meeting any further proper business may be transacted.

2.4Special Meetings of Shareholders.  Special meetings of the shareholders or of any class or series thereof entitled to vote may be called by the President or by the Board of Directors, or at the request in writing by shareholders of record owning a majority of the issued and outstanding shares of common stock of the Corporation.

2.5Notice of Meetings of Shareholders. (a)  Except as otherwise expressly required or permitted by law, not less than ten days nor more than fifty days before the date of every shareholders’ meeting the Secretary shall give to each shareholder of record entitled to vote at such meeting, written notice, served personally, by mail or by telegram, stating the place, date and hour of the meeting and, in the case of a special meeting, the purpose or

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purposes for which the meeting is called. Such notice, if mailed, shall be deemed to be given when deposited in the United States mail, postage prepaid, directed to the shareholder at his address for notices to such shareholder as it appears on the records of the Corporation.

(b)If, at any shareholders’ meeting, action is proposed to be taken which would, if taken, entitle shareholders to receive payment for their shares pursuant to Section 623 of the New York Business Corporation Law, the notice of such meeting shall include a statement to that purpose and to that effect and shall be accompanied by a copy of Section 623 of the New York Business Corporation Law or an outline of its material terms.

(c)Notice of any meeting need not be given to any person who may become a shareholder of record, after the mailing of such notice and prior to the meeting, or to any shareholder who attends such meeting, in person or by proxy, or to any shareholder who, in person or by proxy, submits a signed waiver of notice either before or after such meeting.

2.6Quorum of Shareholders.  (a) Unless otherwise provided by the Certificate of Incorporation or by law, at any meeting of the shareholders, the presence in person or by proxy of holders of a majority of the shares entitled to vote thereat shall constitute a quorum.  The withdrawal of any

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shareholder after the commencement of a meeting shall have no effect on the existence of a quorum, after a quorum has been established at such meeting.

(b)At any meeting of the shareholders at which a quorum shall be present, holders of a majority of the shares present in person or by proxy may adjourn the meeting from time to time without notice other than announcement at the meeting.  In the absence of a quorum, the officer presiding thereat shall have power to adjourn the meeting from time to time until a quorum shall be present.  Notice of any adjourned meeting, other than announcement at the meeting, shall not be required to be given, except as provided in paragraph (d) below and except where expressly required by law.

(c)At any adjourned session at which a quorum shall be present, any business may be transacted which might have been transacted at the meeting originally called but only those shareholders entitled to vote at the meeting as originally noticed shall be entitled to vote at any adjournment or adjournments thereof, unless a new record data is fixed by the Board of Directors.

(d)If after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each shareholder of record entitled to vote at the meeting.

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2.7Chairman and Secretary of Meeting.  The President, or, in his/her absence, a Vice President shall preside at meetings of the shareholders.  The Secretary shall act as secretary of the meeting or, in his/her absence, an Assistant Secretary, shall act, or if neither is present, then the presiding officer may appoint a person to act as secretary of the meeting.

2.8Voting by Shareholders.  Except as may be otherwise provided by the Certificate of Incorporation or these by-laws, at every meeting of the shareholders each shareholder shall be entitled to one vote for each share of stock standing in his name on the books of the Corporation on the record date for the meeting.  All elections and questions other than election of directors shall be decided by a majority of the votes cast at a meeting of the shareholders by the holders of shares present in person or represented by proxy and entitled to vote at the meeting.  At any election of directors, directors shall be elected by a plurality of the votes cast at a meeting of shareholders by the holders of shares present in person or represented by proxy entitled to vote in the election.

2.9Proxies.  Any shareholder entitled to vote at any meeting of shareholders may vote either in person or by proxy.  Every proxy shall be in writing, subscribed by the shareholder or his duly authorized attorney-in-fact.  No

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proxy shall be valid after the expiration of eleven months from the date of its execution, unless the person executing it shall have specified therein the length of time it is to continue in force.

2.10Inspectors.  The election of directors and any other vote by ballot at any meeting of the shareholders shall be supervised by at least two inspectors if requested by a shareholder present in person or represented by proxy and entitled to vote at such meeting.  Such inspectors may be appointed by the presiding officer before or at the meeting; or if one or both inspectors so appointed shall refuse to serve or shall not be present, such appointment shall be made by the officer presiding at the meeting.

2.11List of Shareholders.  A list of shareholders as of the record date, certified by the corporate officer responsible for its preparation or by a transfer agent, shall be produced at any meeting of shareholders upon the request thereat or prior thereto of any shareholder.  If the right to vote at any meeting is challenged, the inspectors of election, or person presiding thereat, shall require such list of shareholders to be produced as evidence of the right of the persons challenged to vote at such meeting, and all persons who appear from such list to be shareholders entitled to vote thereat may vote at such meeting.

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2.12Procedure at Shareholders’ Meetings.  Except as otherwise provided by these by-laws or any resolutions adopted by the shareholders or Board of Directors, the order of business and all other matters of procedure at every meeting of shareholders shall be determined by the presiding officer.  Not less than 15 minutes following the presentation of any resolution to any meeting of shareholders, the presiding officer may announce that further discussion on such resolution shall be limited to not more than three persons who favor and not more than three persons who oppose such resolution, each of whom shall be designated by the presiding officer and shall thereupon be entitled to speak thereon for not more than five minutes.  After such persons, or such a lesser number thereof as shall advise the presiding officer of their desire so to speak, shall have spoken on such resolution, the presiding officer may direct a vote on such resolution without further discussion thereon at the meeting.

2.13Action By Consent Without Meeting.  Unless otherwise provided by the Certificate of Incorporation, any action required to be taken at any annual or special meeting of shareholders, or any action which may be taken at any annual or special meeting, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed

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by the holders of all outstanding shares entitled to vote thereon.

ARTICLE III

DIRECTORS

3.1Powers of Directors. The property, business and affairs of the Corporation shall be managed by its Board of Directors which may exercise all the powers of the Corporation except such as are by the law of the State of New York or the Certificate of Incorporation or these by-laws required to be exercised or done by the shareholders.

3.2Number, Method of Election, Terms of Office of Directors. The number of directors constituting the entire board shall be fixed from time to time by the Board of Directors and shall not be less than three, except that where all the shares of a Corporation are owned beneficially and of record by less than three shareholders, the number of directors may be less than three but not less than the number of shareholders. Each Director shall hold office until the next annual meeting of shareholders and until his successor is elected and qualified, provided, however, that a director may resign at any time. Directors need not be shareholders.

3.3Vacancies on Board of Directors; Removal.  (a) Any director may resign his office at any time by delivering his resignation in writing to the President or the

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Secretary. It will take effect at the time specified therein or, if no time is specified, it will be effective at the time of its receipt by the Corporation. The acceptance of a resignation shall not be necessary to make it effective, unless expressly so provided in the resignation.

(b)Any vacancy, or newly created directorship resulting from any increase in the authorized number of directors, may be filled by a majority of the directors then in office, though less than a quorum, or by a sole remaining director, and any director so chosen shall hold office until the next annual election of directors by the shareholders and until his successor is duly elected and qualified or until his earlier resignation or removal.

(c)Any director may be removed with or without cause at any time by the affirmative vote of shareholders holding of record in the aggregate at least a majority of the votes cast at a meeting of the shareholders by the holders of shares present in person or represented by proxy entitled to vote at a special meeting of the shareholders called for that purpose.

3.4Meetings of the Board of Directors. (a) The Board of Directors may hold their meetings, both regular and special, either within or without the State of New York.

(b)Regular meetings of the Board of Directors may be held at such time and place as shall from

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time to time be determined by resolution of the Board of Directors. No notice of such regular meetings shall be required. If the date designated for any regular meeting be a legal holiday, then the meeting shall be held on the next day which is not a legal holiday.

(c)The first meeting of each newly elected Board of Directors shall be held immediately following the annual meeting of the shareholders for the election of officers and the transaction of such other business as may come before it. If such meeting is held at the place of the shareholders’ meeting, no notice thereof shall be required.

(d)Special meetings of the Board of Directors shall be held whenever called by direction of the President or at the written request of any director.

(e)The Secretary shall give notice to each director of any special meeting of the Board of Directors by mailing the same at least three days before the meeting or by telegraphing, telexing, or delivering the same not later than the day before the meeting. Such notice need not include a statement of the business to be transacted at, or the purpose of, any such meeting. Any and all business may be transacted at any meeting of the Board of Directors. No notice of any adjourned meeting need be given. No notice to or waiver by any director shall be required with respect to any meeting at which the director is present.

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3.5Quorum and Action. Unless provided otherwise by law or the Certificate of Incorporation, a majority of the whole board shall constitute a quorum for the transaction of business; but if there shall be less than a quorum at any meeting of the Board, a majority of those present may adjourn the meeting from time to time. The vote of a majority of the directors present at any meeting at which a quorum is present shall be necessary to constitute the act of the Board of Directors.

3.6Presiding Officer and Secretary of Meeting. The President, or, in his/her absence, a Vice President, or, in their absence, a member of the Board of Directors selected by the members present, shall preside at meetings of the Board. The Secretary shall act as secretary of the meeting, but in his/her absence the presiding officer may appoint a secretary of the meeting.

3.7Action by Consent Without Meeting. Any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting if all members of the Board or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes or proceedings of the Board or committee.

3.8Action by Telephonic Conference. Members of the Board of Directors, or any committee designated by such

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Board, may participate in a meeting of such Board or committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in such a meeting shall constitute presence in person at such meeting.

3.9Committees.   (a)  The Board of Directors may, by resolution or resolutions passed by a majority of the whole board, designate an executive committee and other committees, each committee to consist of three or more directors of the Corporation.  The Board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee.

(b)   Any such committee, to the extent provided in the resolution of the Board of Directors, or in these by-laws, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it; but no such committee shall have authority as to the following matters:

(1)The submission to shareholders of any action that needs shareholders’ approval under this chapter.

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(2)The filling of vacancies in the Board of Directors or in any committee.

(3)The fixing of compensation of the directors for serving on the Board or on any committee.

(4)The amendment or repeal of the by-laws, or the adoption of new by-laws.

(5)The amendment or repeal of any resolution of the Board which by its terms shall not be so amendable or repealable.

3.10Compensation of Directors.  Directors shall receive such reasonable compensation for their service on the Board of Directors or any committees thereof, whether in the form of salary or a fixed fee for attendance at meetings, or both, with expenses, if any, as the Board of Directors may from time to time determine. Nothing herein contained shall be construed to preclude any director from serving in any other capacity and receiving compensation therefor.

ARTICLE IV

OFFICERS

4.1Officers, Title, Elections, Terms.  (a)  The elected officers of the Corporation shall be a President, one or more Vice Presidents, a Treasurer and a Secretary, who shall be elected by the Board of Directors at its annual meeting following the annual meeting of the shareholders, to

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serve at the pleasure of the Board or otherwise as shall be specified by the Board at the time of such election and until their successors are elected and qualify.  The Board of Directors may also elect a Chairman of the Board who shall have such duties as shall be assigned to him by the Board of Directors.  Any two or more offices may be held by the same person, except the offices of President and Secretary.  When all of the issued and outstanding shares of the Corporation are owned by one person, such person may hold all or any combination of offices.

(b)The Board of Directors may elect or appoint at any time, and from time to time, additional officers or agents with such duties as it may deem necessary or desirable.  Such additional officers shall serve at the pleasure of the Board or otherwise as shall be specified by the Board at the time of such election or appointment.

(c)Any vacancy in any office may be filled for the unexpired portion of the term by the Board of Directors.

(d)Any officer may resign his office at anytime.  Such resignation shall be made in writing and shall take effect at the time specified therein or, if no time be specified, at the time of its receipt by the Corporation. The acceptance of a resignation shall not be necessary to

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make it effective, unless expressly so provided in the resignation.

(e)The salaries of all officers of the Corporation shall be fixed by the Board of Directors.

(f)The Board of Directors may require any officer to give security for the faithful performance of his duties.

(g)All other officers shall have such duties and powers as are provided in these by-laws, or as the Board of Directors may determine from time to time, or as may be assigned to then by any superior officer.

4.2           Removal of Elected Officers.  Any elected officer may be removed at any time, either with or without cause, by resolution adopted at any regular or special meeting of the Board of Directors by a majority of the directors then in office.

4.3           Duties.(a)  President.  The President shall be the principal executive officer of the Corporation and, subject to the control of the Board of Directors, shall supervise and control all the business and affairs of the Corporation.  He shall, when present, preside at all meetings of the shareholders and of the Board of Directors.  He shall see that all orders and resolutions of the Board of Directors are carried into effect (unless any such order or resolution shall provide otherwise), and in general shall perform all

15

duties incident to the office of president and such other duties as may be prescribed by the Board of Directors from time to time.

(b)Vice President.  Each Vice President, if any, shall have such powers and perform such duties as the Board of Directors may determine or as may be assigned to him by the President.  In the absence of the President or in the event of his death, or inability or refusal to act, the Vice President (or in the event there be more than one Vice President, the Vice Presidents, in the order designated at the time of their election, or in the absence of any designation, then in the order of their election) shall perform the duties of the President and, when so acting, shall have all the powers and be subject to all the restrictions upon the President.

(c)Treasurer.  The Treasurer shall (1) have charge and custody of and be responsible for all funds and securities of the Corporation:  (2) receive and give receipts for moneys due and payable to the Corporation from any source whatsoever; (3) deposit all such moneys in the name of the Corporation in such banks, trust companies, or other depositaries as shall be selected in accordance with the provisions of Article V of these by-laws; and (4) in general perform all duties incident to the office of treasurer and such other duties as from time to time may be assigned to him by the

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President or by the Board of Directors.  He shall, if required by the Board of Directors, give a bond for the faithful discharge of his duties in such sum and with such surety or sureties as the Board of Directors shall determine.

(d)Secretary.  The Secretary shall (1) keep the minutes of the meetings of the shareholders, the Board of Directors, the Executive Committee (if designated), and all other committees, if any, of which a secretary shall not have been appointed, in one or more books provided for that purpose; (2) see that all notices are duly given in accordance with the provisions of these by-laws and as required by law; (3) be custodian of the corporate records and of the seal of the corporation and see that the seal of the Corporation is affixed to all documents, the execution of which on behalf of the Corporation under its seal, is duly authorized; (4) keep a register of the post office address of each shareholder which shall be furnished to the Secretary by such shareholder; (5) have general charge of stock transfer books of the Corporation; and (6) in general perform all duties incident to the office of secretary and such other duties as from time to time may be assigned to him by the President or by the Board of Directors.

(e)Assistant Secretaries and Assistant Treasurers.  At the request of the Secretary or in his/her absence or disability, one or more Assistant Secretaries

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designated by him/her or by the Board of Directors shall have all the powers of the Secretary for such period as he/she or it may designate or until he/she or it revokes such designation.  At the request of the Treasurer or in his/her absence or disability, one or more Assistant Treasurers designated by him/her or by the Board of Directors shall have all the powers of the Treasurer for such period as he/she or it may designate or until he/she or it revokes such designation.  The Assistant Secretaries and Assistant Treasurers, in general, shall perform such duties as shall be assigned to them by the Secretary or the Treasurer, respectively, or by the President or the Board of Directors.

ARTICLE V

CONTRACTS, LOANS, CHECKS AND DEPOSITS

5.1Contracts.  Except as otherwise provided by law, these by-laws or resolutions of the Board of Directors, any contract, document or other instrument shall be valid and binding on the Corporation only if executed and delivered in its name and on its behalf by either the President or such other persons who have been designated by resolution of the Board of Directors as authorized signatories of contracts, documents and other instruments.

5.2Loans.  No loan shall be contracted on behalf of the Corporation and no evidence of indebtedness shall be

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issued in its name unless authorized by a resolution of the Board of Directors and executed by either the President or such persons who have been designated by resolution of the Board of Directors as authorized signatories of contracts, documents and other instruments, or of those persons who have been designated by resolution of the Board of Directors as authorized signatories for transactions with any bank with which such loan is contracted.  Such authority may be general or confined to specific instances.

5.3Checks, Drafts, etc.  All checks, drafts or other orders for the payment of money, notes, or other evidences of indebtedness issued in the name of the Corporation shall be signed by such person or persons and in such manner as shall from time to time be determined by resolution of the Board of Directors. Each of such persons shall give such bond, if any, as the Board of Directors may require.

5.4Deposits.  All funds of the Corporation not otherwise employed shall be deposited from time to time to the credit of the Corporation in such banks, trust companies, or other depositaries as the Board of Directors may select or as may be designated by any officer or officers of the Corporation.

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ARTICLE VI

SHARES OF STOCK

6.1Certificates of Stock.  (a)  Every holder of shares in the Corporation shall be entitled to have a certificate signed by, or in the name of, the Corporation by the President or a Vice President, and by the Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary, certifying the number of shares owned by him.

(b)If such certificate is countersigned by a transfer agent other than the Corporation or its employee, or by a registrar other than the Corporation or its employee, the signatures of the officers of the Corporation may be facsimiles, and, if permitted by law, any other signature may be a facsimile.

(c)In case any officer who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer before such certificate is issued, it may be issued by the Corporation with the same effect as if he were such officer at the date of issue.

(d)Certificates of stock shall be issued in such form not inconsistent with the Certificate of Incorporation as shall be approved by the Board of Directors.  They shall be numbered and registered in the order in which they are issued.

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(e)All certificates surrendered to the Corporation shall be cancelled with the date of cancellation, and shall be retained by the Secretary, together with the powers of attorney to transfer and the assignments of the shares represented by such certificates, for such period of time as shall be prescribed from time to time by resolution of the Board of Directors.

(f)No certificates representing shares shall be issued until the full amount of consideration therefor has been paid, except as otherwise permitted by law.

6.2Record Ownership.  A record of the name and address of the holder of each certificate, the number of shares represented thereby and the date of issue thereof shall be made on the Corporation’s books.  The Corporation shall be entitled to treat the holder of any share as the holder in fact thereof, and accordingly shall not be bound to recognize any equitable or other claim to or interest in any share on the part of any other person, whether or not it shall have express or other notice thereof, except as required by law.

6.3Transfer of Record Ownership.  Transfers of shares shall be made on the books of the Corporation only by direction of the person named in the certificate or his attorney, lawfully constituted in writing, and only upon the surrender of the certificate therefor and a written

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assignment of the shares evidenced thereby. Whenever any transfer of shares shall be made for collateral security, and not absolutely, it shall be so expressed in the entry of the transfer if, when the certificates are presented to the Corporation for transfer, both the transferor and transferee request the Corporation to do so.

6.4Lost, Stolen or Destroyed Certificates.  Certificates representing shares of the stock of the Corporation shall be issued in place of any certificate alleged to have been lost, stolen or destroyed in such manner and on such terms and conditions as the Board of Directors from time to time may authorize.

6.5Transfer Agent; Registrar; Rules Respecting Certificates.  The Corporation shall maintain at its principal office or at the office of its attorneys an office where shares of the Corporation shall be transferable. The Corporation may also maintain one or more registry offices where such shares shall be registered. The Board of Directors may make such rules and regulations as it may deem expedient concerning the issue, transfer and registration of certificates of stock.

6.6           Fixing Record Date for Determination of Shareholders of Record.  (a) The Board of Directors may fix, in advance, a date as the record date for the purpose of determining the shareholders entitled to notice of or to vote

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at any meeting of shareholders or any adjournment thereof, or to express consent to or dissent from any proposal without a meeting, or for the purpose of determining shareholders entitled to receive payment of any dividend or the allotment of any rights, or for the purpose of any other action. Such date shall not be more than fifty nor less than ten days before the date of such meeting, no more than fifty days prior to any other action.

(b)If no record date is fixed, the record date for the determination of shareholders entitled to notice of or to vote at a meeting of shareholders shall be at the close of business on the day next preceding the day on which notice is given, or, if no notice is given, the day on which the meeting is held. For all other purposes, the record date for determining shareholders shall be at the close of business on the day on which the resolution of the Board relating thereto is adopted.

(c)When a determination of shareholders of record entitled to notice of or to vote at any meeting of shareholders has been made as provided in this section, such determination shall apply to any adjournment thereof, unless the Board of Directors fixes a new record date under this section for the adjourned meeting.

6.7Dividends.  Subject to the provisions of the Certificate of Incorporation, the Board of Directors may, out

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of funds legally available therefor at any regular or special meeting, declare dividends upon the shares of the Corporation as and when the Board deems expedient.  Before declaring any dividend there may be set apart out of any funds of the Corporation available for dividends, such sum or sums as the Board of Directors from time to time in its discretion deems proper for working capital or as a reserve fund to meet contingencies or for equalizing dividends or for such other purposes as the Board of Directors shall deem conducive to the interests of the Corporation.

ARTICLE VII

SECURITIES HELD BY THE CORPORATION

7.1Voting.  Unless the Board of Directors shall otherwise order, the President, any Vice President, the Secretary or the Treasurer shall have full power and authority, on behalf of the Corporation, to attend, act and vote at any meeting of the stockholders of any Corporation in which the Corporation may hold stock, and at such meeting to exercise any or all rights and powers incident to the ownership of such stock, and to execute on behalf of the Corporation a proxy or proxies empowering another or others to act as aforesaid.  The Board of Directors from time to time may confer like powers upon any other person or persons.

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7.2General Authorization to Transfer Securities Held by the Corporation.  (a)  Each of the President, any Vice President and the Treasurer shall be, and each of them hereby is, authorized and empowered to transfer, covert, endorse, sell, assign, sat over and deliver any and all shares of stock, bonds, debentures, notes, subscription warrants, stock purchase warrants, evidences of indebtedness, or other securities now or hereafter standing in the name of or owned by the Corporation, and to make, execute and deliver, under the seal of the Corporation, any and all written instruments of assignment and transfer necessary or proper to effectuate the authority hereby conferred.

(a)Whenever there shall be annexed to any instrument of assignment and transfer executed pursuant to and in accordance with the foregoing paragraph (a), a certificate of the Secretary of the Corporation in office at the date of such certificate setting forth the provisions of this Section 7.2 and stating that they are in full force and effect and setting forth the names of persons who are then officers of the Corporation, then all persons to whom such instrument and annexed certificate shall thereafter come, shall be entitled, without further inquiry or investigation and regardless of the date of such certificate, to assume and to act in reliance upon the assumption that the shares of stock or other securities named in such instrument were

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theretofore duly and properly transferred, endorsed, sold, assigned, set over and delivered by the Corporation, and that with respect to such securities the authority of these provisions of the by-laws and of such officers is still in full force and effect.

ARTICLE VIII

MISCELLANEOUS

8.1Seal.  The seal of the Corporation shall be in such form and shall have such content as the Board of Directors shall from time to time determine.

8.2Notice and Waiver of Notice.   Whenever any notice of the time, place or purpose of any meeting of shareholders, directors or a committee is required to be given under the law of the State of New York, the Certificate of Incorporation or these by-laws, a waiver thereof in writing, signed by the person or persons entitled to such notice, whether before or after the holding thereof, or actual attendance at the meeting in person or, in the case of any shareholder, by his attorney-in-fact, shall be deemed equivalent to the giving of such notice to such persons.

8.3Amendment of By-Laws.  (a)  By Board of Directors.  The by-laws of the Corporation may be altered, amended or repealed or new by-laws may be made or adopted by the Board of Directors at any regular or special meeting of

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the Board; provided that paragraph (c) of Section 3.3 and Section 8.3(a) of these by-laws may be altered, amended or repealed only by action of the shareholders acting pursuant to Section 8.3 (b) hereof.

(b)By Shareholders.  The by-laws of the Corporation may also be altered, amended or repealed or new by-laws may be made or adopted by the vote of a majority in interest of the shareholders represented and entitled to vote upon the election of directors, at any meeting at which a quorum is present.

8.4Indemnity.  The Corporation shall indemnify its directors and officers to the fullest extent allowed by law.

8.5Fiscal Year.  Except as from time to time otherwise determined by the Board of Directors, the fiscal year of the Corporation shall end on December 31.

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Schedule I

In accordance with instruction 2 to Item 601 of Regulation S-K, the by-laws of the following registrants have been omitted because they are substantially identical in all material respects to this exhibit 3.2.2.  This schedule identifies the documents omitted and sets forth the material details in which such documents differ from this exhibit 3.2.2.

Exhibit	Registrant	State of Incorporation	Other Differences
3.2.3	Equinox-85th Street Inc.	NY	None
3.2.4	Equinox Fitness Club Inc.	NY	None
3.2.5	Equinox 63rd Street Inc.	NY	None
3.2.6	Equinox-54th Street, Inc.	NY	None
3.2.7	Equinox-50th Street, Inc.	NY	None
3.2.8	Equinox 44th Street Inc.	NY	None
3.2.9	Equinox-43rd Street Inc.	NY	None
3.2.15	Equinox Wall Street Inc.	NY	None
3.2.16	Equinox White Plains Road, Inc.	NY	None
3.2.19	The Equinox Group, Inc.	NY	None

EX-3.2.10

Exhibit 3.2.10

BY - LAWS

ARTICLE I

OFFICES

Section 1.The registered office shall be c/o Equinox Columbus Centre, Inc. at: 895 Broadway, New York, New York 10003.

Section 2.The corporation may also have offices at such other places both within and without the State of New York as the board of directors may from time to time determine or the business of the corporation may require.

ARTICLE II

MEETING OF STOCKHOLDERS

Section 1.All meetings of the stockholders for the election of director shall be held in the City of Chicago or the City of New York, State of New York, at such place as may be fixed from time to time by the board of directors, or at such other place either within or without the State of New York as shall be designated from time to time by the board of directors as stated in the notice of the meeting.  Meetings of stockholders for any other purpose may be held at such time and place, within or without the State of New York, as shall be stated in the notice of the meeting or in a duly executed waiver of notice thereof.

Section 2.Annual meetings of stockholders, commencing with the year 2002, shall be held on the second Tuesday  in the fifth month following the completion of the Corporation’s fiscal year, and if said date is a legal holiday, then on the next business day following, at 10:00 A.M., or at such other date and time as shall be designated from time to time by the board of directors and stated

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in the notice of the meeting, at which they shall elect by a plurality vote a board of directors, and transact such other business as may properly be brought before the meeting.

Section 3.Written notice of the annual meeting stating the place, date and hour of the meeting shall be given to each stockholder entitled to vote at such meeting not less than ten nor more than fifty days before the date of the meeting.

Section 4.The officer who has charge of the stock ledger of the corporation shall prepare and make, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder.  Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held.  The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present.  If the right to vote at any meeting ins challenged, the inspectors of election, or person presiding thereat, shall require such list of shareholders to be produced as evidence of the right of the persons challenged to vote at such meeting, and all persons who appear from such list to be shareholders entitled to vote thereat may vote at such meeting.

Section 5.The election of directors and any other vote by ballot at any meeting of the shareholders shall be supervised by at least two inspectors if requested by a shareholder present in person or represented by proxy and entitled to vote at such meeting.  Such inspectors may be appointed by the presiding officer before or at the meeting; or if one or both inspectors so appointed

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shall refuse to serve or shall not be present, such appointment shall be made by the officer presiding at the meeting.

Section 6.Special meetings of the stockholders, for any purpose or purposes, unless otherwise prescribed by statute or by the president, shall be called by the president, or at the request in writing of a majority of the board of directors, or at the request in writing of stockholders owning a majority in amount of the entire capital stock of the corporation issued and outstanding and entitled to vote.  Such request shall state the purpose or purposes of the proposed meeting.

Section 7.Written notice of a special meeting stating the place, date and hour of the meeting and the purpose or purposes for which the meeting is called, shall be given not less than ten nor more than sixty days before the date of the meeting, to each stockholder entitled to vote at such meeting.

Section 8.Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice.

Section 9.The holders of a majority of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business except as otherwise provided by statute or by the certificate of incorporation.  If, however, such quorum shall not be present or represented at any meeting of the stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, shall have the power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented.  At such adjourned meeting at which a quorum shall be present or represented any business may be transacted which might have been transacted at the meeting as originally

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noticed.  If the adjournment is for more than thirty days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.

Section 10.When a quorum is present at any meeting the vote of the holders of a majority of the stock having voting power present in person or represented by proxy shall decide any question brought before such meeting, unless the question is one upon which by express provision of the New York Business Corporation Law or of the certificate of incorporation a different vote is required, in which case such express provision shall govern and control the decision of such question.

Section 11.Unless otherwise provided in the certificate of incorporation, each stockholder shall at every meeting of the stockholders be entitled to one vote in person or by proxy for each share of the capital stock having voting power held by such stockholder, but no proxy shall be voted on after eleven (11) months from its date, unless the proxy provides for a longer period.

At all elections of directors of the corporation each stockholder having voting power shall be entitled to exercise the right of cumulative voting as provided in the certificate of incorporation.

Section 12.Unless otherwise provided in the certificate of incorporation, any action required to be taken at any annual or special meeting of stockholders of the corporation, or any action which may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the

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minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted.  Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing.

Section 13.The President, or, in his/her absence, a Vice President, shall preside at meetings of the shareholders.  The Secretary shall act as secretary of the meeting or, in his/her absence, a Assistant Secretary, shall act, or if neither is present, then the presiding officer may appoint a person to act as secretary of the meeting.

Section 14.Except as otherwise provided by these by-laws or any resolutions adopted by the shareholder or Board of Directors, the order of business and all other maters of procedure at every meeting of shareholders shall be determined by the presiding officer.  Not less than 15 minutes following the presentation of any resolution to any meeting of shareholder, the presiding officer may announce that further discussion on such resolution shall be limited to not more than three persons who favor and not more than three persons who oppose such resolution, each of whom shall be designated by the presiding officer and shall thereupon be entitled to speak thereon for not more than five minutes.  After such persons, or such a lesser number thereof as shall advise the presiding officer of their desire so to speak, shall have spoken on such resolution, the presiding officer may direct a vote on such resolution without further discussion thereon at the meeting.

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ARTICLE III

DIRECTORS

Section 1.The number of directors constituting the entire board shall be fixed from time to time by the Board of Directors and shall not be less than three, except that where all the shares of a Corporation are owned beneficially and of record by less than three shareholders, the number of directors may be less than three but not less than the number of shareholders.  The directors shall be elected at the annual meeting of the stockholders, except as provided in Section 2 of this Article, and each director elected shall hold office until his successor is elected and qualified; provided, that a Director may resign as stated herein.  Directors need not be stockholders.

Section 2.Any director may resign his office at any time by delivering his resignation in writing to the President or the Secretary.  It will take effect at the time specified therein or, if no time is specified, it sill be effective at the time of its receipt by the Corporation.  The acceptance of a resignation shall not be necessary to make it effective, unless expressly so provided in the resignation.

Section 3.Vacancies and newly created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, though less than a quorum, or by a sole remaining director, and the directors so chosen shall hold office until the next annual election and until their successors are duly elected and shall qualify, unless sooner displaced.  If there are no directors in office, then an election of directors may be held in the manner provided by the New York Business Corporation Law.   If, at the time of

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filling any vacancy or any newly created directorship, the directors then in office shall constitute less than a majority of the whole board (as constituted immediately prior to any such increase), the Court of Chancery may, upon application of any stockholder or stockholders holding at least ten percent of the total number of the shares at the time outstanding having the right to vote for such directors, summarily order an election to be held to fill any such vacancies or newly created directorship, or to replace the directors chosen by the directors then in office.

Section 4.The business of the corporation shall be managed by or under the direction of its board of directors which may exercise all such powers of the corporation and do all such lawful acts and things as are not by the New York Business Corporation Law or by the certificate of incorporation or by these by-laws directed or required to be exercised or done by the stockholders.

MEETINGS OF THE BOARD OF DIRECTORS

Section 5.The board of directors of the corporation may hold meetings, both regular and special, either within or without the State of New York.

Section 6.The first meeting of each newly elected board of directors shall be held at such time and place as shall be fixed by the vote of the stockholders at the annual meeting and no notice of such meeting shall be necessary to the newly elected directors in order legally to constitute the meeting, provided a quorum shall be present.  In the event of the failure of the stockholders to fix the time or place of such first meeting of the newly elected board of directors, or in the event such meeting is not held at the time and place so fixed by the stockholders, the meeting may be held at such time and place as shall be specified in a notice given as hereinafter

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provided for special meetings of the board of directors, or as shall be specified in a written waiver signed by all of the directors.

Section 7.Regular meetings of the board of directors may be held without notice at such time and at such place as shall from time to time be determined by the board.

Section 8.Special meetings of the board may be called by the president on one day’s notice to each director, either personally or by mail or by telegram or by electronic mail; special meetings shall be called by the president or secretary in like manner and on like notice on the written request of two directors unless the board consists of only one director; in which case special meetings shall be called by the president or secretary in like manner and on like notice on the written request of the sole director.

Section 9.At all meetings of the board a majority of the directors shall constitute a quorum for the transaction of business and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the board of directors, except as may be otherwise specifically provided by the New York Business Corporation Law or by the certificate of incorporation.  If a quorum shall not be present at any meeting of the board of directors the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present.

Section 10.The President, or, in his/her absence, a Vice President, shall preside at meetings of the board of directors.  The Secretary shall act as secretary of the meeting or, in his/her absence, a Assistant Secretary, shall act, or if neither is present, then the presiding officer may appoint a person to act as secretary of the meeting.

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Section 11.Unless otherwise restricted by the certificate of incorporation or these by-laws, any action required or permitted to be taken at any meeting of the board of directors or of any committee thereof may be taken without a meeting, if all members of the board or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the board or committee.

Section 12.Unless otherwise restricted by the certificate of incorporation or these by-laws, members of the board of directors or any committee designated by the board of directors, may participate in a meeting of the board of directors or any committee, by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at the meeting.

COMMITTEES OF DIRECTORS

Section 13.The board of directors may, by resolution passed by a majority of the whole board, designate one or more committees, each committee to consist of three or more of the directors of the corporation.  The board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee.

In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the board of directors to act at the meeting in the place of any such absent or disqualified member.

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Any such committee, to the extent provided in the resolution of the board of directors, shall have and may exercise all the powers and authority of the board of directors in the management of the business and affairs of the corporation, and may authorize the seal of the corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to:

(i) The submission to shareholders of any action that needs shareholders’ approval under this chapter;

(ii)  The filling of vacancies in the board of directors or in any committee;

(iii)  The fixing of compensation of the directors for serving on the board or any committee;

(iv)  The amendment or repeal of the by-laws, or the adoption of new by-laws;

(v)  The amendment or repeal of any resolution of the board which by its terms shall not be so amendable or repealable.

Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the board of directors.

Section 14.Each committee shall keep regular minutes of its meetings and report the same to the board of directors when required.

COMPENSATION OF DIRECTORS

Section 15.Unless otherwise restricted by the certificate of incorporation or these by-laws, the board of directors shall have the authority to fix the compensation of directors.  The directors may be paid their expenses, if any, of attendance at each meeting of the board of directors and may be paid a fixed sum for attendance at each meeting of the board of directors or

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a stated salary as director.  No such payment shall preclude any director from serving the corporation in any other capacity and receiving compensation therefor.  Members of committees may be allowed like compensation for attending committee meetings.

REMOVAL OF DIRECTORS

Section 16.Any director may be removed with or without cause at any time by the affirmative vote of shareholders holding of record in the aggregate at least a majority of the votes cast at a meeting of the shareholders by the holders of shares present in person or represented by proxy entitled to vote at a special meeting of the shareholders called for that purpose.

ARTICLE IV

NOTICES

Section 1.Whenever, under the provisions of New York Business Corporation Law or of the certificate of incorporation or of these by-laws, notice is required to be given to any director or stockholder, it shall not be construed to mean personal notice, but such notice may be given in writing, by mail, addressed to such director or stockholder, at his address as it appears on the records of the corporation, with postage thereon prepaid, and such notice shall be deemed to be given at the time when the same shall be deposited in the United States mail.  Notice to directors may also be given by telegram or electronic mail.

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ARTICLE V

OFFICERS

Section 1.The officers of the corporation shall be chosen by the board of directors and shall be a president, a vice-president, a secretary and a treasurer.  The board of directors may also choose additional vice-presidents, and one or more assistant secretaries and assistant

treasurers.  Any number of offices may be held by the same person, unless the certificate of incorporation or these by-laws otherwise provide; provided, that the offices of President and Secretary shall be held by different persons.  The board of directors may also elect a chairman of the board who shall have such duties as shall be assigned to him by the board of directors.

Section 2.The board of directors at its first meeting after each annual meeting of stockholders shall choose a president, one or more vice-presidents, a secretary and a treasurer.

Section 3.The board of directors may appoint such other officers and agents as it shall deem necessary who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the board.  The board of directors may require any officer to give security for the faithful performance of his duties.

Section 4.The salaries of all officers and agents of the corporation shall be fixed by the board of directors.

Section 5.The officers of the corporation shall hold office until their successors are chosen and qualify.  Any officer elected or appointed by the board of directors may be removed at any time by the affirmative vote of a majority of the board of directors.  Any vacancy occurring in any office of the corporation shall be filled for the unexpired portion of the term by the board of directors.  Any officer may resign his office at any time.  Such resignation shall be made in writing and shall take effect at the time specified therein or, if no time be specified, at the time of

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its receipt by the Corporation.  The acceptance of a resignation shall not be necessary to make it effective, unless expressly so provided in the resignation.

THE PRESIDENT

Section 6.The president shall be the chief executive officer of the corporation, shall preside at all meetings of the stockholders and the board of directors and, subject to the control of the board of directors, shall supervise and control all business and affairs of the Corporation, shall have general and active management of the business of the corporation and shall see that all orders and resolutions of the board of directors are carried into effect.  He shall when present preside at all meetings of the shareholders and the board of directors.

Section 7.He shall execute bonds, mortgages and other contracts requiring a seal, under the seal of the corporation, except where required or permitted by law to be otherwise signed and executed and except where the signing and execution thereof shall be expressly delegated by the board of directors to some other officer or agent of the corporation.

THE VICE-PRESIDENTS

Section 8.Each Vice President, if any, shall have such powers and perform such duties as may be determined by the President and assigned to him by the President.  In the absence of the president or in the event of his inability or refusal to act, the vice-president (or in the event there be more than one vice-president, the vice-presidents in the order designated by the directors, or in the absence of any designation, then in the order of their election) shall perform the duties of the president, and when so acting, shall have all the powers of and be subject to all

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the restrictions upon the president.  The vice-presidents shall perform such other duties and have such other powers as the board of directors may from time to time prescribe.

THE SECRETARY AND ASSISTANT SECRETARY

Section 9.The secretary shall attend all meetings of the board of directors and all meetings of the stockholders and record all proceedings of the meetings of the corporation and of the board of directors in a minute book to be kept for that purpose and shall perform like duties for the committees when required.  The secretary shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the board of directors, and shall perform such other duties as may be prescribed by the board of directors or president, under whose supervision he shall be.  The secretary shall have custody of the seal of the corporation and he, or an assistant secretary, shall have authority to affix the same to any instrument and when so affixed, it may be attested by his signature or by the signature of such assistant secretary.  The board of directors may give general authority to any other officer to affix the seal of the corporation and to attest the affixing by his signature.  The secretary shall keep a register of the post office address of each shareholder which shall be furnished to the secretary by such shareholder and shall have general charge of stock transfer books of the Corporation.

Section 10.The assistant secretary, or if there be more than one, the assistant secretaries in the order determined by the board of directors (or if there be no such determination, then in the order of their election) shall, in the absence of the secretary or in the event of his inability or refusal to act, perform the duties and exercise the powers of the secretary and shall

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perform such other duties and have such other powers as the board of directors may from time to time prescribe.

THE TREASURER AND ASSISTANT TREASURERS

Section 11.The treasurer shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the corporation in such depositories as may be designated by the board of directors.  The treasurer shall have power to receive and give receipts for monies due and payable to the Corporation from any source whatsoever.

Section 12.The treasurer shall disburse the funds of the corporation as may be ordered by the board of directors, taking proper vouchers for such disbursements, and shall render to the president and the board of directors, at its regular meetings, or when the board of directors so requires, an account of all his transactions as treasurer and of the financial condition of the corporation.

Section 13.If required by the board of directors, the treasurer shall give the corporation a bond (which shall be renewed every six years) in such sum and with such surety or sureties as shall be satisfactory to the board of directors for the faithful performance of the duties of his office and for the restoration to the corporation, in case of his death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in his possession or under this control belonging to the corporation.

Section 14.The assistant treasurer, or if there shall be more than one, the assistant treasurers in the order determined by the board of directors (or if there be no such determination,

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then in the order of their election) shall, in the absence of the treasurer or in the event or his inability or refusal to act, perform the duties and exercise the powers of the treasurer and shall perform such other duties and have such other powers as the board of directors may from time to time prescribe.

ARTICLE VI

CERTIFICATES FOR SHARES

Section 1.The shares of the corporation shall be represented by a certificate.  Certificates shall be signed by, or in the name of the corporation by, the chairman or vice-chairman of the board of directors, or the president or a vice-president and the treasurer or an assistant treasurer, or the secretary or an assistant secretary of the corporation.

Upon the face or back of each stock certificate issued to represent any partly paid shares shall be set forth the total amount of the consideration to be paid therefor and the amount paid thereon shall be stated.

If the corporation shall be authorized to issue more than one class of stock or more than one series of any class, the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualification, limitations or restrictions of such preferences and/or rights shall be set forth in full or summarized on the face or back of the certificate which the corporation shall issue to represent such class or series of stock, provided that, except as otherwise provided in applicable provisions of the New York Business Corporation Law, in lieu of the foregoing requirements, there may be set forth on the face or back of the certificate which the corporation shall issue to represent such class or series of stock, a statement that the corporation will furnish without charge to each stockholder who so

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requests the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights.

Section 2.Any or all of the signatures on a certificate may be facsimile.  In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the corporation with the same effect as if he were such officer, transfer agent or registrar at the date of issue.  If such certificate is countersigned by a transfer agent other than the Corporation or its employees, or by a registrar other than the Corporation or its employee, the signatures of the officers of the Corporation may be facsimiles and, if permitted by law, any other signature may be a facsimile.

LOST CERTIFICATES

Section 3.The board of directors may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed.  When authorizing such issuance of a new certificate or certificates, the board of directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate or certificates, or his legal representative, to advertise the same in such manner as it shall require and/or to give the corporation a bond in such sum as it may direct as indemnity against any claim

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that may be made against the corporation with respect to the certificate alleged to have been lost, stolen or destroyed.

TRANSFER OF STOCK

Section 4.Upon surrender to the corporation or the transfer agent of the corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignation or authority to transfer, it shall be the duty of the corporation to issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books.  Whenever any transfer of shares shall be made for collateral security, and not absolutely, it shall be so expressed in the entry of the transfer if, when the certificates are presented to the Corporation for transfer, both the transferor and transferee request the Corporation to do so.  The Corporation shall maintain at its principal office or at the office of its attorneys an office where shares of the Corporation shall be transferable.  The Corporation may also maintain one or  more registry offices where such shares shall be registered.  The board of directors may make such rules and regulations as it may deem expedient concerning the issue, transfer and registration of certificates of stock.

FIXING RECORD DATE

Section 5.In order that the corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in

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respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the board of directors may fix, in advance, a record date, which shall not be more than fifty nor less than ten days before the date of such meeting, nor more than fifty days prior to any other action.  A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the board of directors may fix a new record date for the adjourned meeting.  If no record date is fixed, the record date for the determination of shareholders entitled to notice of or to vote at a meeting of shareholders shall be at the close of business on the day next preceding the day on which notice is given, or, if not notice is given, the day on which the meeting is held.  For all other purposes, the record date for determining shareholders shall be at the close of business on the date on which the resolution of the board relating thereto is adopted.

REGISTERED STOCKHOLDERS

Section 6.The corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and to hold liable for calls and assessments a person registered on its books as the owner of shares, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the New York Business Corporation Law.

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ARTICLE VII

DIVIDENDS

Section 1.Dividends upon the capital stock of the corporation, subject to the provisions of the certificate of incorporation, if any, may be declared out of funds legally available therefor by the board of directors at any regular or special meeting, pursuant to law.  Dividends may be paid in cash, in property, or in shares of the capital stock, subject to the provisions of the certificate of incorporation.

Before payment of any dividend, there may be set aside out of any funds of the corporation available for dividends such sum or sums as the directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the corporation, or for such other purpose as the directors shall think conducive to the interest of the corporation, and the directors may modify or abolish any such reserve in the manner in which it was created.

ARTICLE VIII

MISCELLANEOUS PROVISIONS

Section 1.Annual Statement.  The board of directors shall present at each annual meeting, and at any special meeting of the stockholders when called for by vote of the stockholders, a full and clear statement of the business and condition of the corporation.

Section 2.Checks; contracts; deposits.  All checks or demands for money and notes of the corporation shall be signed by such officer or officers or such other person or persons as the board of directors may from time to time designate.  Unless otherwise provided by law or resolution of the board of directors, any contract, document or other instrument, including contracts or instruments evidencing indebtedness of the Corporation, shall be valid and binding on the Corporation only if executed and delivered in its name and on its behalf by either the

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President or such other persons who have been designated by resolution of the board of directors as authorized signatories of contracts, documents or other instruments.    All funds of the Corporation not otherwise employed shall be deposited from time to time to the credit of the Corporation in such banks, trust companies or other depositaries as the board of directors may select or as may be designated by any officer or officers of the Corporation.

Section 3.Fiscal Year. The fiscal year of the corporation shall be fixed by resolution of the board of directors.

Section 4.Corporate Seal.  The corporate seal shall have inscribed thereon the name of the corporation, the year of its organization and the words “Corporate Seal, New York”.  The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.

Section 5.Indemnification.  The corporation shall indemnify its officers, directors, employees and agents to the fullest extent permitted by law.

ARTICLE IX

AMENDMENTS TO BY-LAWS

Section   1.The by-laws may be altered, amended or repealed or new by-laws may be made or adopted by the board of directors at any regular or special meeting of the board of directors; except that no alteration, amendment  or repeal to Article III or this Article IX may be made with out the consent of the shareholders as set forth in the next sentence.  The by-laws of the Corporation may also be altered, amended or repealed or new by-laws may be made or adopted by the vote of a majority in interest of the shareholders represented and entitled to vote upon election of directors, at any meeting at which a quorum is present.

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EX-3.2.11

Exhibit 3.2.11

BY - LAWS

ARTICLE I

OFFICES

Section 1.The registered office shall be c/o Equinox Greenwich Avenue, Inc. at: 895 Broadway, New York, New York 10003.

Section 2.The corporation may also have offices at such other places both within and without the State of New York as the board of directors may from time to time determine or the business of the corporation may require.

ARTICLE II

MEETING OF STOCKHOLDERS

Section 1.All meetings of the stockholders for the election of directors shall be held in the City of New York, State of New York, at such place as may be fixed from time to time by the board of directors, or at such other place either within or without the State of New York as shall be designated from time to time by the board of directors as stated in the notice of the meeting.  Meetings of stockholders for any other purpose may be held at such time and place, within or without or the State of New York, as shall be stated in the notice of the meeting or in a duly executed waiver of notice thereof.

Section 2.Annual meetings of stockholders shall be held on the second Tuesday in the fifth month following the completion of the Corporation’s fiscal year, and if said date is a legal holiday, then on the next business day following, at 10:00 A.M., or at such other date and time as shall be designated from time to time by the board of directors and stated in the notice of the

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meeting, at which time the stockholders shall elect by a plurality vote a board of directors, and transact such other business as may properly be brought before the meeting.

Section 3.Written notice stating the place, date and hour of the annual meeting shall be given to each stockholder entitled to vote at such meeting not less than ten nor more than fifty days before the date of the meeting.

Section 4.The officer who has charge of the stock ledger of the corporation shall prepare and make, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder.  Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held.  The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present.  If the right to vote at any meeting ins challenged, the inspectors of election, or person presiding thereat, shall require such list of shareholders to be produced as evidence of the right of the persons challenged to vote at such meeting, and all persons who appear from such list to be shareholders entitled to vote thereat may vote at such meeting.

Section 5.The election of directors and any other vote by ballot at any meeting of the shareholders shall be supervised by at least two inspectors if requested by a shareholder present in person or represented by proxy and entitled to vote at such meeting.  Such inspectors may be appointed by the presiding officer before or at the meeting.

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Section 6.Special meetings of the stockholders, unless otherwise prescribed by statute, shall be called by the president, or at the request in writing of a majority of the board of directors, or at the request in writing of stockholders owning a majority in amount of the entire capital stock of the corporation issued and outstanding and entitled to vote.  Such request shall state the purpose or purposes of the proposed meeting.

Section 7.Written notice of a special meeting stating the place, date and hour of the meeting and the purpose or purposes for which the meeting is called, shall be given not less than ten nor more than sixty days before the date of the meeting to each stockholder entitled to vote at such meeting; provided, that if the meeting is called for the purpose of voting on a merger, consolidation, share exchange, dissolution or sale, lease or exchange of substantially all the assets of the Corporation, then not less than 20 days notice shall be given.

Section 8.Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice.

Section 9.The holders of a majority of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business except as otherwise provided by statute or by the certificate of incorporation.  If, however, such quorum shall not be present or represented at any meeting of the stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, shall have the power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented.  At such adjourned meeting at which a quorum shall be present or represented any business may be transacted which might have been transacted at the meeting as originally

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noticed.  If the adjournment is for more than thirty days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.

Section 10.When a quorum is present at any meeting, the vote of the holders of a majority of the stock having voting power present in person or represented by proxy shall decide any question brought before such meeting, unless the question is one upon which the express provisions of the New York Business Corporation Law, the certificate of incorporation require a different vote, in which case such express provision shall govern and control the decision of such question.

Section 11.Unless otherwise provided in the certificate of incorporation, each stockholder shall be entitled to one vote in person or by proxy for each share of the capital stock having voting power held by such stockholder, but no proxy shall be voted on after eleven (11) months from its date, unless the proxy provides for a longer period.

Section 12.Unless otherwise provided in the certificate of incorporation, any action required to be taken at any annual or special meeting of stockholders of the corporation, or any action which may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted.  Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not previously consented in writing.

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Section 13.The President, or, in his/her absence, a Vice President, shall preside at meetings of the shareholders.  The Secretary shall act as secretary of the meeting or, in his/her absence, a Assistant Secretary, shall act, or if neither is present, then the presiding officer may appoint a person to act as secretary of the meeting.

Section 14.Except as otherwise provided by these by-laws or any resolutions adopted by the shareholder or Board of Directors, the order of business and all other maters of procedure at every meeting of shareholders shall be determined by the presiding officer.  Not less than 15 minutes following the presentation of any resolution to any meeting of shareholder, the presiding officer may announce that further discussion on such resolution shall be limited to not more than three persons who favor and not more than three persons who oppose such resolution, each of whom shall be designated by the presiding officer and shall thereupon be entitled to speak thereon for not more than five minutes.  After such persons, or such a lesser number thereof as shall advise the presiding officer of their desire so to speak, shall have spoken on such resolution, the presiding officer may direct a vote on such resolution without further discussion thereon at the meeting.

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ARTICLE III

DIRECTORS

Section 1.The number of directors constituting the entire board shall be fixed from time to time by the Board of Directors and shall not be less than three, except that where all the shares of a Corporation are owned beneficially and of record by less than three shareholders, the number of directors may be less than three but not less than the number of shareholders.  The directors shall be elected at the annual meeting of the stockholders, except as provided in Section 2 of this Article, and each director elected shall hold office until his successor is elected and qualified; provided, that a Director may resign as stated herein.  Directors need not be stockholders.

Section 2.Any director may resign his office at any time by delivering his resignation in writing to the President or the Secretary.  Such resignation will take effect at the time specified therein or, if no time is specified, shall be effective at the time of its receipt by the Corporation.  The acceptance of a resignation shall not be necessary to make it effective, unless expressly so provided in the resignation.

Section 3.Vacancies and newly created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, though less than a quorum, or by a sole remaining director, and the directors so chosen shall hold office until the next annual election and until their successors are duly elected and shall qualify, unless sooner displaced.  If there are no directors in office, then an election of directors may be held in the manner provided by the New York Business Corporation Law.   If, at the time of filling any vacancy or any newly created directorship, the directors then in office shall constitute less than a majority of the whole board (as constituted immediately prior to any such increase), the Court of Chancery may, upon application of any stockholder or stockholders holding at least

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ten percent of the total number of the shares at the time outstanding having the right to vote for such directors, summarily order an election to be held to fill any such vacancies or newly created directorship, or to replace the directors chosen by the directors then in office.

Section 4.The business of the corporation shall be managed by or under the direction of its board of directors which may exercise all such powers of the corporation and do all such lawful acts and things as are not prohibited by the New York Business Corporation Law, the certificate of incorporation or by these by-laws, or are directed or required to be exercised or done by the stockholders.

MEETINGS OF THE BOARD OF DIRECTORS

Section 5.The board of directors of the corporation may hold meetings, both regular and special, either within or without the State of New York.

Section 6.The first meeting of each newly elected board of directors shall be held at such time and place as shall be fixed by the vote of the stockholders at the annual meeting and no notice of such meeting shall be necessary to the newly elected directors in order legally to constitute the meeting, provided a quorum shall be present.  In the event of the failure of the stockholders to fix the time or place of such first meeting of the newly elected board of directors, or in the event such meeting is not held at the time and place so fixed by the stockholders, the meeting may be held at such time and place as shall be specified in a notice given as hereinafter provided for special meetings of the board of directors, or as shall be specified in a written waiver signed by all of the directors.

Section 7.Regular meetings of the board of directors may be held without notice at such time and at such place as shall from time to time be determined by the board of directors.

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Section 8.Special meetings of the board may be called by the president on one day’s notice to each director, either personally or by mail or by telegram or by electronic mail; special meetings shall be called by the president or secretary in like manner and on like notice on the written request of two directors unless the board of directors consists of only one director; in which case special meetings shall be called by the president or secretary in like manner and on like notice on the written request of the sole director.

Section 9.At all meetings of the board of directors a majority of the directors shall constitute a quorum for the transaction of business and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the board of directors, except as may be otherwise specifically provided by the New York Business Corporation Law or by the certificate of incorporation.  If a quorum shall not be present at any meeting of the board of directors the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present.

Section 10.The President, or, in his/her absence, a Vice President, shall preside at meetings of the board of directors.  The Secretary shall act as secretary of the meeting or, in his/her absence, an Assistant Secretary, shall act, or if neither is present, then the presiding officer may appoint a person to act as secretary of the meeting.

Section 11.Unless otherwise restricted by the certificate of incorporation or these by-laws, any action required or permitted to be taken at any meeting of the board of directors or of any committee thereof may be taken without a meeting, if all members of the board of directors or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the board or committee.

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Section 12.Unless otherwise restricted by the certificate of incorporation or these by-laws, members of the board of directors or any committee designated by the board of directors, may participate in a meeting of the board of directors or any committee, by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at the meeting.

COMMITTEES OF DIRECTORS

Section 13.The board of directors may, by resolution passed by a majority of the whole board of directors, designate one or more committees, each committee to consist of three or more of the directors of the corporation.  The board of directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee.

In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the board of directors to act at the meeting in the place of any such absent or disqualified member.

Any such committee, to the extent provided in the resolution of the board of directors, shall have and may exercise all the powers and authority of the board of directors in the management of the business and affairs of the corporation, and may authorize the seal of the corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to:

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(i) The submission to shareholders of any action that needs shareholders’ approval under this chapter;

(ii)  The filling of vacancies in the board of directors or in any committee;

(iii)  The fixing of compensation of the directors for serving on the board or any committee;

(iv)  The amendment or repeal of the by-laws, or the adoption of new by-laws;

(v)  The amendment or repeal of any resolution of the board which by its terms shall not be so amendable or repealable.

Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the board of directors.

Section 14.Each committee shall keep regular minutes of its meetings and report the same to the board of directors when required.

COMPENSATION OF DIRECTORS

Section 15.Unless otherwise restricted by the certificate of incorporation or these by-laws, the board of directors shall have the authority to fix the compensation of directors.  The directors may be paid their expenses, if any, of attendance at each meeting of the board of directors and may be paid a fixed sum for attendance at each meeting of the board of directors or a stated salary as director.  No such payment shall preclude any director from serving the corporation in any other capacity and receiving compensation therefor.  Members of committees may be allowed like compensation for attending committee meetings.

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REMOVAL OF DIRECTORS

Section 16.Any director may be removed with or without cause at any time by the affirmative vote of shareholders holding of record in the aggregate at least a majority of the votes cast at a meeting of the shareholders by the holders of shares present in person or represented by proxy entitled to vote at a special meeting of the shareholders called for that purpose.

ARTICLE IV

NOTICES

Section 1.Whenever, under the provisions of New York Business Corporation Law, the certificate of incorporation or of these by-laws, notice is required to be given to any director or stockholder, it shall not be construed to mean personal notice, but such notice may be given in writing, by mail, addressed to such director or stockholder, at his address as it appears on the records of the corporation, with postage thereon prepaid, and such notice shall be deemed to be given at the time when the same shall be deposited in the United States mail.  Notice to directors may also be given by telephone, telegram, facsimile or electronic mail.

ARTICLE V

OFFICERS

Section 1.The officers of the corporation shall be chosen by the board of directors and shall be a president, a vice-president, a secretary and a treasurer.  The board of directors may also choose additional vice-presidents, and one or more assistant secretaries and assistant treasurers.  Any number of offices may be held by the same person, unless the certificate of incorporation or these by-laws otherwise provide; provided, that the offices of President and Secretary shall be held by different persons.  The board of directors may also elect a chairman of

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the board of directors who shall have such duties as shall be assigned to him by the board of directors.

Section 2.The board of directors at its first meeting after each annual meeting of stockholders shall choose a president, one or more vice-presidents, a secretary and a treasurer.

Section 3.The board of directors may appoint such other officers and agents as it shall deem necessary who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the board.  The board of directors may require any officer to give security for the faithful performance of his duties.

Section 4.The salaries of all officers and agents of the corporation shall be fixed by the board of directors.

Section 5.The officers of the corporation shall hold office until their successors are chosen and qualify.  Any officer elected or appointed by the board of directors may be removed at any time by the affirmative vote of a majority of the board of directors.  Any vacancy occurring in any office of the corporation shall be filled for the unexpired portion of the term by the board of directors.  Any officer may resign his office at any time.  Such resignation shall be made in writing and shall take effect at the time specified therein or, if no time be specified, at the time of its receipt by the Corporation.  The acceptance of a resignation shall not be necessary to make it effective, unless expressly so provided in the resignation.

THE PRESIDENT

Section 6.The president shall be the chief executive officer of the corporation, shall preside at all meetings of the stockholders and the board of directors and, subject to the control of

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the board of directors, shall supervise and control all business and affairs of the Corporation, shall have general and active management of the business of the corporation and shall see that all orders and resolutions of the board of directors are carried into effect.  He shall when present preside at all meetings of the shareholders and the board of directors.

Section 7.He shall execute bonds, mortgages and other contracts requiring a seal, under the seal of the corporation, except where required or permitted by law to be otherwise signed and executed and except where the signing and execution thereof shall be expressly delegated by the board of directors to some other officer or agent of the corporation.

THE VICE-PRESIDENTS

Section 8.Each Vice President, if any, shall have such powers and perform such duties as may be determined by the President and assigned to him by the President.  In the absence of the president or in the event of his inability or refusal to act, the vice-president (or in the event there be more than one vice-president, the vice-presidents in the order designated by the directors, or in the absence of any designation, then in the order of their election) shall perform the duties of the president, and when so acting, shall have all the powers of and be subject to all the restrictions upon the president.  The vice-presidents shall perform such other duties and have such other powers as the board of directors may from time to time prescribe.

THE SECRETARY AND ASSISTANT SECRETARY

Section 9.The secretary shall attend all meetings of the board of directors and all meetings of the stockholders and record all proceedings of the meetings of the corporation and of the board of directors in a minute book to be kept for that purpose and shall perform like duties

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for the committees when required.  The secretary shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the board of directors, and shall perform such other duties as may be prescribed by the board of directors or president, under whose supervision he shall be.  The secretary shall have custody of the seal of the corporation and he, or an assistant secretary, shall have authority to affix the same to any instrument and when so affixed, it may be attested by his signature or by the signature of such assistant secretary.  The board of directors may give general authority to any other officer to affix the seal of the corporation and to attest the affixing by his signature.  The secretary shall keep a register of the post office address of each shareholder which shall be furnished to the secretary by such shareholder and shall have general charge of stock transfer books of the Corporation.

Section 10.The assistant secretary, or if there be more than one, the assistant secretaries in the order determined by the board of directors (or if there be no such determination, then in the order of their election) shall, in the absence of the secretary or in the event of his inability or refusal to act, perform the duties and exercise the powers of the secretary and shall perform such other duties and have such other powers as the board of directors may from time to time prescribe.

THE TREASURER AND ASSISTANT TREASURERS

Section 11.The treasurer shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the corporation in such depositories as may be designated by the board of directors.  The

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treasurer shall have power to receive and give receipts for monies due and payable to the Corporation from any source whatsoever.

Section 12.The treasurer shall disburse the funds of the corporation as may be ordered by the board of directors, taking proper vouchers for such disbursements, and shall render to the president and the board of directors, at its regular meetings, or when the board of directors so requires, an account of all his transactions as treasurer and of the financial condition of the corporation.

Section 13.If required by the board of directors, the treasurer shall give the corporation a bond (which shall be renewed every six years) in such sum and with such surety or sureties as shall be satisfactory to the board of directors for the faithful performance of the duties of his office and for the restoration to the corporation, in case of his death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in his possession or under this control belonging to the corporation.

Section 14.The assistant treasurer, or if there shall be more than one, the assistant treasurers in the order determined by the board of directors (or if there be no such determination, then in the order of their election) shall, in the absence of the treasurer or in the event or his inability or refusal to act, perform the duties and exercise the powers of the treasurer and shall perform such other duties and have such other powers as the board of directors may from time to time prescribe.

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ARTICLE VI

CERTIFICATES FOR SHARES

Section 1.The shares of the corporation shall be represented by a certificate.  Certificates shall be signed by, or in the name of, the corporation by the chairman or vice-chairman of the board of directors, or the president or a vice-president, and the treasurer or an assistant treasurer, or the secretary or an assistant secretary of the corporation.

Upon the face or back of each stock certificate issued to represent any partly paid shares shall be set forth the total amount of the consideration to be paid therefor and the amount paid thereon shall be stated.

If the corporation shall be authorized to issue more than one class of stock or more than one series of any class, the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualification, limitations or restrictions of such preferences and/or rights shall be set forth in full or summarized on the face or back of the certificate which the corporation shall issue to represent such class or series of stock, provided that, except as otherwise provided in applicable provisions of the New York Business Corporation Law, in lieu of the foregoing requirements, there may be set forth on the face or back of the certificate which the corporation shall issue to represent such class or series of stock, a statement that the corporation will furnish without charge to each stockholder who so requests the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights.

Section 2.Any or all of the signatures on a certificate may be by facsimile.  In case of any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before

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such certificate is issued, it may be issued by the corporation with the same effect as if he were such officer, transfer agent or registrar at the date of issue.  If such certificate is countersigned by a transfer agent other than the Corporation or its employees, or by a registrar other than the Corporation or its employee, the signatures of the officers of the Corporation may be facsimiles and, if permitted by law, any other signature may be a facsimile.

LOST CERTIFICATES

Section 3.The board of directors may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed.  When authorizing such issuance of a new certificate or certificates, the board of directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate or certificates, or his legal representative, to advertise the same in such manner as it shall require and/or to give the corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the corporation with respect to the certificate alleged to have been lost, stolen or destroyed.

TRANSFER OF STOCK

Section 4.Upon surrender to the corporation or the transfer agent of the corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignation or authority to transfer, it shall be the duty of the corporation to issue a new

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certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books.  Whenever any transfer of shares shall be made for collateral security, and not absolutely, it shall be so expressed in the entry of the transfer if, when the certificates are presented to the Corporation for transfer, both the transferor and transferee request the Corporation to do so.  The Corporation shall maintain at its principal office or at the office of its attorneys an office where shares of the Corporation shall be transferable.  The Corporation may also maintain one or  more registry offices where such shares shall be registered.  The board of directors may make such rules and regulations as it may deem expedient concerning the issue, transfer and registration of certificates of stock.

FIXING RECORD DATE

Section 5.In order that the corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the board of directors may fix, in advance, a record date, which shall not be more than fifty nor less than ten days before the date of such meeting, nor more than fifty days prior to any other action.  A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the board of directors may fix a new record date for the adjourned meeting.  If no record date is fixed, the record date for the determination of shareholders entitled to notice of or to vote at a meeting of shareholders shall be at the close of business on the day next preceding the day on

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which notice is given, or, if not notice is given, the day on which the meeting is held.  For all other purposes, the record date for determining shareholders shall be at the close of business on the date on which the resolution of the board relating thereto is adopted.

REGISTERED STOCKHOLDERS

Section 6.The corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and to hold liable for calls and assessments a person registered on its books as the owner of shares, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the New York Business Corporation Law.

ARTICLE VII

DIVIDENDS

Section 1.Dividends upon the capital stock of the corporation, subject to the provisions of the certificate of incorporation, if any, may be declared out of funds legally available therefor by the board of directors at any regular or special meeting, pursuant to law.  Dividends may be paid in cash, in property, or in shares of the capital stock, subject to the provisions of the certificate of incorporation.

Before payment of any dividend, there may be set aside out of any funds of the corporation available for dividends such sum or sums as the directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the corporation, or for such other

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purpose as the directors shall think conducive to the interest of the corporation, and the directors may modify or abolish any such reserve in the manner in which it was created.

ARTICLE VIII

MISCELLANEOUS PROVISIONS

Section 1.Annual Statement.  The board of directors shall present at each annual meeting, and at any special meeting of the stockholders when called for by vote of the stockholders, a full and clear statement of the business and condition of the corporation.

Section 2.Checks; contracts; deposits.  All checks or demands for money and notes of the corporation shall be signed by such officer or officers or such other person or persons as the board of directors may from time to time designate.  Unless otherwise provided by law or resolution of the board of directors, any contract, document or other instrument, including contracts or instruments evidencing indebtedness of the Corporation, shall be valid and binding on the Corporation only if executed and delivered in its name and on its behalf by either the President or such other persons who have been designated by resolution of the board of directors as authorized signatories of contracts, documents or other instruments.    All funds of the Corporation not otherwise employed shall be deposited from time to time to the credit of the Corporation in such banks, trust companies or other depositaries as the board of directors may select or as may be designated by any officer or officers of the Corporation.

Section 3.Fiscal Year. The fiscal year of the corporation shall be fixed by resolution of the board of directors.

Section 4.Corporate Seal.  The corporate seal shall have inscribed thereon the name of the corporation, the year of its organization and the words “Corporate Seal, New York “.  The

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seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.

Section 5.Indemnification.  The corporation shall indemnify its officers, directors, employees and agents to the fullest extent permitted by law.

ARTICLE IX

AMENDMENTS TO BY-LAWS

Section   1.The by-laws may be altered, amended or repealed or new by-laws may be made or adopted by the board of directors at any regular or special meeting of the board of directors; except that no alteration, amendment  or repeal to Article III or this Article IX may be made with out the consent of the shareholders as set forth in the next sentence.  The by-laws of the Corporation may also be altered, amended or repealed or new by-laws may be made or adopted by the affirmative vote of a majority in interest of the shareholders represented and entitled to vote upon election of directors, at any meeting at which a quorum is present.

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EX-3.2.12

Exhibit 3.2.12

BY-LAWS

of

BROADWAY EQUINOX INC.

ARTICLE I - OFFICES

The principal office of the corporation shall be in the City of New York County of New York State of New York.  The corporation may also have offices at such other places within or without the State of New York as the board may from time to time determine or the business of the corporation may require.

ARTICLE II - SHAREHOLDERS

1.PLACE OF MEETINGS.

Meetings of shareholders shall be held at the principal office of the corporation or at such place within or without the State of New York as the board shall authorize.

2.ANNUAL MEETING.

The annual meeting of the shareholders shall be held on the 15th day of May at 10 A.M.  in each year if not a legal holiday, and, if a legal holiday, then on the next business day following at the same hour, when the shareholders shall elect a board and transact such other business as may properly come before the meeting.

3.SPECIAL MEETINGS.

Special meetings of the shareholders may be called by the board or by the president and shall be called by the president or the secretary at the request in writing of a majority of the board or at the request in writing by shareholders owning a majority in amount of the shares issued and outstanding.  Such request shall state the purpose or purposes of the proposed meeting.  Business transacted at a special meeting shall be confined to the purposes stated in the notice.

4.FIXING RECORD DATE.

For the purpose of determining the shareholders entitled to notice of or to vote at any meeting of shareholders or any adjournment thereof, or to express consent to or dissent from any proposal without a meeting, or for the purpose of determining shareholders entitled to receive payment of any dividend or the allotment of any rights, or for the purpose of any other

By-Laws A

action, the board shall fix, in advance, a date as the record date for any such determination of shareholders.  Such date shall not be more than fifty nor less than ten days before the date of such meeting, nor more than fifty days prior to any other action.  If no record date is fixed it shall be determined in accordance with the provisions of law.

5.NOTICE OF MEETINGS OF SHAREHOLDERS.

Written notice of each meeting of shareholders shall state the purpose or purposes for which the meeting is called, the place, date and hour of the meeting and unless it is the annual meeting, shall indicate that it is being issued by or at the direction of the person or persons calling the meeting.  Notice shall be given either personally or by mail to each shareholder entitled to vote at such meeting, not less than ten nor more than fifty days before the date of the meeting.  If action is proposed to be taken that might entitle shareholders to payment for their shares, the notice shall include a statement of that purpose and to that effect.  If mailed, the notice is given when deposited in the United States mail, with postage thereon prepaid, directed to the shareholder at his address as it appears on the record of shareholders, or, if he shall have filed with the secretary a written request that notices to him be mailed to some other address, then directed to him at such other address.

6.WAIVERS.

Notice of meeting need not be given to any shareholder who signs a waiver of notice, in person or by proxy, whether before or after the meeting.  The attendance of any shareholder at a meeting, in person or by proxy, without protesting prior to the conclusion of the meeting the lack of notice of such meeting, shall constitute a waiver of notice by him.

7.QUORUM OF SHAREHOLDERS.

Unless the certificate of incorporation provides otherwise, the holders of a majority of the shares entitled to vote thereat shall constitute a quorum at a meeting of shareholders for the transaction of any business, provided that when a specified item of business is required to be voted on by a class or classes, the holders of a majority of the shares of such class or classes shall constitute a quorum for the transaction of such specified item of business.

When a quorum is once present to organize a meeting, it is not broken by the subsequent withdrawal of any shareholders.

The shareholders present may adjourn the meeting despite the absence of a quorum.

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8.PROXIES.

Every shareholder entitled to vote at a meeting of shareholders or to express consent or dissent without a meeting may authorize another person or persons to act for him by proxy.

Every proxy must be signed by the shareholder or his attorney-in-fact.  No proxy shall be valid after expiration of eleven months from the date thereof unless otherwise provided in the proxy.  Every proxy shall be revocable at the pleasure of the shareholder executing it, except as otherwise provided by law.

9.QUALIFICATION OF VOTERS.

Every shareholder of record shall be entitled at every meeting of shareholders to one vote for every share standing in his name on the record of shareholders, unless otherwise provided in the certificate of incorporation.

10.VOTE OF SHAREHOLDERS.

Except as otherwise required by statute or by the certificate of incorporation;

(a)directors shall be elected by a plurality of the votes cast at a meeting of shareholders by the holders of shares entitled to vote in the election;

(b)all other corporate action shall be authorized by a majority of the votes cast.

11.WRITTEN CONSENT OF SHAREHOLDERS.

Any action that may be taken by vote may be taken without a meeting on written consent, setting forth the action so taken, signed by the holders of all the outstanding shares entitled to vote thereon or signed by such lesser number of holders as may be provided for in the certificate of incorporation.

ARTICLE III - DIRECTORS

1.BOARD OF DIRECTORS.

Subject to any provision in the certificate of incorporation the business of the corporation shall be managed by its board of directors, each of whom shall be at least 18 years of age and need not be shareholders.

2.NUMBER OF DIRECTORS.

The number of directors shall be three.

When all of the shares are owned by less than three shareholders, the number of directors may be less than three but not less than the number of shareholders.

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3.ELECTION AND TERM OF DIRECTORS.

At each annual meeting of shareholders, the shareholders shall elect directors to hold office until the next annual meeting.  Each director shall hold office until the expiration of the term for which he is elected and until his successor has been elected and qualified, or until his prior resignation or removal.

4.NEWLY CREATED DIRECTORSHIPS AND VACANCIES.

Newly created directorships resulting from an increase in the number of directors and vacancies occurring in the board for any reason except the removal of directors without cause may be filled by a vote of a majority of the directors then in office, although less than a quorum exists, unless otherwise provided in the certificate of incorporation.  Vacancies occurring by reason of the removal of directors without cause shall be filled by vote of the shareholders unless otherwise provided in the certificate of incorporation.  A director elected to fill a vacancy caused by resignation, death or removal shall be elected to hold office for the unexpired term of his predecessor.

5.REMOVAL OF DIRECTORS.

Any or all of the directors may be removed for cause by vote of the shareholders or by action of the board.  Directors may be removed without cause only by vote of the shareholders.

6.RESIGNATION.

A director may resign at any time by giving written notice to the board, the president or the secretary of the corporation.  Unless otherwise specified in the notice, the resignation shall take effect upon receipt thereof by the board or such officer, and the acceptance of the resignation shall not be necessary to make it effective.

7.QUORUM OF DIRECTORS.

Unless otherwise provided in the certificate of incorporation, a majority of the entire board shall constitute a quorum for the transaction of business or of any specified item of business.

8.ACTION OF THE BOARD.

Unless otherwise required by law, the vote of a majority of the directors present at the time of the vote, if a quorum is present at such time, shall be the act of the board.  Each director present shall have one vote regardless of the number of shares, if any, which he may hold.

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9.PLACE AND TIME OF BOARD MEETINGS.

The board may hold its meetings at the office of the corporation or at such other places, either within or without the State of New York, as it may from time to time determine.

10.REGULAR ANNUAL MEETING.

A regular annual meeting of the board shall be held immediately following the annual meeting of shareholders at the place of such annual meeting of shareholders.

11.NOTICE OF MEETINGS OF THE BOARD, ADJOURNMENT.

(a)Regular meetings of the board may be held without notice at such time and place as it shall from time to time determine.  Special meetings of the board shall be held upon notice to the directors and may be called by the president upon three days notice to each director either personally or by mail or by wire; special meetings shall be called by the president or by the secretary in a like manner on written request of two directors.  Notice of a meeting need not be given to any director who submits a waiver of notice whether before or after the meeting or who attends the meeting without protesting prior thereto or at its commencement, the lack of notice to him.

(b)A majority of the directors present, whether or not a quorum is present, may adjourn any meeting to another time and place.  Notice of the adjournment shall be given all directors who were absent at the time of the adjournment and, unless such time and place are announced at the meeting, to the other directors.

12.CHAIRMAN.

At all meetings of the board the president, or in his absence, a chairman chosen by the board shall preside.

13.EXECUTIVE AND OTHER COMMITTEES.

The board, by resolution adopted by a majority of the entire board, may designate from among its members an executive committee and other committees, each consisting of three or more directors.  Each such committee shall serve at the pleasure of the board.

14.COMPENSATION.

No compensation shall be paid to directors, as such, for their services, but by resolution of the board a fixed sum and expenses for actual attendance, at each regular or special meeting of the board may be authorized.

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Nothing herein contained shall be construed to preclude any director from serving the corporation in any other capacity and receiving compensation therefor.

ARTICLE IV - OFFICERS

1.OFFICES, ELECTION, TERM.

(a)Unless otherwise provided for in the certificate of incorporation, the board may elect or appoint a president, one or more vice-presidents, a secretary and a treasurer, and such other officers as it may determine, who shall have such duties, powers and functions as hereinafter provided.

(b)All officers shall be elected or appointed to hold office until the meeting of the board following the annual meeting of shareholders.

(c)Each officer shall hold office for the term for which he is elected or appointed and until his successor has been elected or appointed and qualified.

2.REMOVAL, RESIGNATION, SALARY, ETC.

(a)Any officer elected or appointed by the board may be removed by the board with or without cause.

(b)In the event of the death, resignation or removal of an officer, the board in its discretion may elect or appoint a successor to fill the unexpired term.

(c)Any two or more offices may be held by the same person, except the offices of president and secretary.  When all of the issued and outstanding stock of the corporation is owned by one person, such person may hold all or any combination of offices.

(d)The salaries of all officers shall be fixed by the board.

(e)The directors may require any officer to give security for the faithful performance of his duties.

3.PRESIDENT.

The president shall be the chief executive officer of the corporation; he shall preside at all meetings of the shareholders and of the board; he shall have the management of the business of the corporation and shall see that all orders and resolutions of the board are carried into effect.

4.VICE-PRESIDENTS.

During the absence or disability of the president, the vice-president, or if there are more than one, the executive vice-president, shall have all

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the powers and functions of the president.  Each vice-president shall perform such other duties as the board shall prescribe.

5.SECRETARY.

The secretary shall:

(a)attend all meetings of the board and of the shareholders;

(b)record all votes and minutes of all proceedings in a book to be kept for that purpose;

(c)give or cause to be given notice of all meetings of shareholders and of special meetings of the board;

(d)keep in safe custody the seal of the corporation and affix it to any instrument when authorized by the board;

(e)when required, prepare or cause to be prepared and available at each meeting of shareholders a certified list in alphabetical order of the names of shareholders entitled to vote thereat, indicating the number of shares of each respective class held by each;

(f)keep all the documents and records of the corporation as required by law or otherwise in a proper and safe manner.

(g)perform such other duties as may be prescribed by the board.

6.ASSISTANT-SECRETARIES.

During the absence or disability of the secretary, the assistant-secretary, or if there are more than one, the one so designated by the secretary or by the board, shall have all the powers and functions of the secretary.

7.TREASURER.

The treasurer shall:

(a)have the custody of the corporate funds and securities;

(b)keep full and accurate accounts of receipts and disbursements in the corporate books;

(c)deposit all money and other valuables in the name and to the credit of the corporation in such depositories as may be designated by the board;

(d)disburse the funds of the corporation as may be ordered or authorized by the board and preserve proper vouchers for such disbursements;

(e)render to the president and board at the regular meetings of the board, or whenever they require it, an account of all his transactions as

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treasurer and of the financial condition of the corporation;

(f)render a full financial report at the annual meeting of the shareholders if so requested;

(g)be furnished by all corporate officers and agents at his request, with such reports and statements as he may require as to all financial transactions of the corporation;

(h)perform such other duties as are given to him by these by-laws or as from time to time are assigned to him by the board or the president.

8.ASSISTANT-TREASURER.

During the absence or disability of the treasurer, the assistant-treasurer, or if there are more than one, the one so designated by the secretary or by the board, shall have all the powers and functions of the treasurer.

9.SURETIES AND BONDS.

In case the board shall so require, any officer or agent of the corporation shall execute to the corporation a bond in such sum and with such surety or sureties as the board may direct, conditioned upon the faithful performance of his duties to the corporation and including responsibility for negligence and for the accounting for all property, funds or securities of the corporation which may come into his hands.

ARTICLE V - CERTIFICATES FOR SHARES

1.CERTIFICATES.

The shares of the corporation shall be represented by certificates.  They shall be numbered and entered in the books of the corporation as they are issued.  They shall exhibit the holder’s name and the number of shares and shall be signed by the president or a vice-president and the treasurer or the secretary and shall bear the corporate seal.

2.LOST OR DESTROYED CERTIFICATES.

The board may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the corporation, alleged to have been lost or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate to be lost or destroyed.  When authorizing such issue of a new certificate or certificates, the board may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost or destroyed certificate or certificates, or his legal representative, to advertise the same in such manner as it shall

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require and/or give the corporation a bond in such sum and with such surety or sureties as it may direct as indemnity against any claim that may be made against the corporation with respect to the certificate alleged to have been lost or destroyed.

3.TRANSFERS OF SHARES.

(a)Upon surrender to the corporation or the transfer agent of the corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, it shall be the duty of the corporation to issue a new certificate to the person entitled thereto, and cancel the old certificate; every such transfer shall be entered on the transfer book of the corporation which shall be kept at its principal office.  No transfer shall be made within ten days next preceding the annual meeting of shareholders.

(b)The corporation shall be entitled to treat the holder of record of any share as the holder in fact thereof and, accordingly, shall not be bound to recognize any equitable or other claim to or interest in such share on the part of any other person whether or not it shall have express or other notice thereof, except as expressly provided by the laws of New York.

4.CLOSING TRANSFER BOOKS.

The board shall have the power to close the share transfer books of the corporation for a period of not more than ten days during the thirty day period immediately preceding (1) any shareholders’ meeting, or (2) any date upon which shareholders shall be called upon to or have a right to take action without a meeting, or (3) any date fixed for the payment of a dividend or any other form of distribution, and only those shareholders of record at the time the transfer books are closed, shall be recognized as such for the purpose of (1) receiving notice of or voting at such meeting, or (2) allowing them to take appropriate action, or (3) entitling them to receive any dividend or other form of distribution.

ARTICLE VI - DIVIDENDS

Subject to the provisions of the certificate of incorporation and to applicable law, dividends on the outstanding shares of the corporation may be declared in such amounts and at such time or times as the board may determine.  Before payment of any dividend, there may be set aside out of the net profits of the corporation available for dividends such sum or sums as the board from time to time in its absolute discretion deems proper as a reserve fund to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the corporation, or for such other

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purpose as the board shall think conducive to the interests of the corporation, and the board may modify or abolish any such reserve.

ARTICLE VII - CORPORATE SEAL

The seal of the corporation shall be circular in form and bear the name of the corporation, the year of its organization and the words “Corporate Seal, New York.” The seal may be used by causing it to be impressed directly on the instrument or writing to be sealed, or upon adhesive substance affixed thereto.  The seal on the certificates for shares or on any corporate obligation for the payment of money may be a facsimile, engraved or printed.

ARTICLE VIII - EXECUTION OF INSTRUMENTS

All corporate instruments and documents shall be signed or counter-signed, executed, verified or acknowledged by such officer or officers or other person or persons as the board may from time to time designate.

ARTICLE IX - FISCAL YEAR

The fiscal year shall begin the first day of January in each year.

ARTICLE X - REFERENCES TO CERTIFICATE OF INCORPORATION

Reference to the certificate of incorporation in these by-laws shall include all amendments thereto or changes thereof unless specifically excepted.

ARTICLE XI - BY-LAW CHANGES

AMENDMENT, REPEAL, ADOPTION, ELECTION OF DIRECTORS.

(a)Except as otherwise provided in the certificate of incorporation the by-laws may be amended, repealed or adopted by vote of the holders of the shares at the time entitled to vote in the election of any directors.  By-laws may also be amended, repealed or adopted by the board but any by-law adopted by the board may be amended by the shareholders entitled to vote thereon as hereinabove provided.

(b)If any by-law regulating an impending election of directors is adopted, amended or repealed by the board, there shall be set forth in the notice of the next meeting of shareholders for the election of directors the by-law so adopted, amended or repealed, together with a concise statement of the changes made.

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Schedule I

In accordance with instruction 2 to Item 601 of Regulation S-K, the by-laws of the following registrants have been omitted because they are substantially identical in all material respects to this exhibit 3.2.12.  This schedule identifies the documents omitted and sets forth the material details in which such documents differ from this exhibit 3.2.12.

Exhibit	Registrant	State of Incorporation	Other Differences
3.2.20	Energy Wear Inc.	NY	Article II Section.  2: “The annual meeting of the shareholders shall be held on the 15th day of April at 2 P.M.”

EX-3.2.13

Exhibit 3.2.13

BY - LAWS

ARTICLE I

OFFICES

Section 1.The registered office shall be c/o Equinox Tribeca, Inc. at: 895 Broadway, New York, New York 10003.

Section 2.The corporation may also have offices at such other places both within and without the State of New York as the board of directors may from time to time determine or the business of the corporation may require.

ARTICLE II

MEETING OF STOCKHOLDERS

Section 1.All meetings of the stockholders for the election of director shall be held in the City of New York, State of New York, at such place as may be fixed from time to time by the board of directors, or at such other place either within or without the State of New York as shall be designated from time to time by the board of directors as stated in the notice of the meeting.  Meetings of stockholders for any other purpose may be held at such time and place, within or without the State of New York, as shall be stated in the notice of the meeting or in a duly executed waiver of notice thereof.

Section 2.Annual meetings of stockholders, commencing with the year 2002, shall be held on the second Tuesday  in the fifth month following the completion of the Corporation’s fiscal year, and if said date is a legal holiday, then on the next business day following, at 10:00 A.M., or at such other date and time as shall be designated from time to time by the board of directors and stated

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in the notice of the meeting, at which they shall elect by a plurality vote a board of directors, and transact such other business as may properly be brought before the meeting.

Section 3.Written notice of the annual meeting stating the place, date and hour of the meeting shall be given to each stockholder entitled to vote at such meeting not less than ten nor more than fifty days before the date of the meeting.

Section 4.The officer who has charge of the stock ledger of the corporation shall prepare and make, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder.  Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held.  The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present.  If the right to vote at any meeting ins challenged, the inspectors of election, or person presiding thereat, shall require such list of shareholders to be produced as evidence of the right of the persons challenged to vote at such meeting, and all persons who appear from such list to be shareholders entitled to vote thereat may vote at such meeting.

Section 5.The election of directors and any other vote by ballot at any meeting of the shareholders shall be supervised by at least two inspectors if requested by a shareholder present in person or represented by proxy and entitled to vote at such meeting.  Such inspectors may be appointed by the presiding officer before or at the meeting; or if one or both inspectors so appointed

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shall refuse to serve or shall not be present, such appointment shall be made by the officer presiding at the meeting.

Section 6.Special meetings of the stockholders, for any purpose or purposes, unless otherwise prescribed by statute or by the president, shall be called by the president, or at the request in writing of a majority of the board of directors, or at the request in writing of stockholders owning a majority in amount of the entire capital stock of the corporation issued and outstanding and entitled to vote.  Such request shall state the purpose or purposes of the proposed meeting.

Section 7.Written notice of a special meeting stating the place, date and hour of the meeting and the purpose or purposes for which the meeting is called, shall be given not less than ten nor more than sixty days before the date of the meeting, to each stockholder entitled to vote at such meeting.

Section 8.Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice.

Section 9.The holders of a majority of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business except as otherwise provided by statute or by the certificate of incorporation.  If, however, such quorum shall not be present or represented at any meeting of the stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, shall have the power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented.  At such adjourned meeting at which a quorum shall be present or represented any business may be transacted which might have been transacted at the meeting as originally noticed.  If the adjournment is for

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more than thirty days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.

Section 10.When a quorum is present at any meeting the vote of the holders of a majority of the stock having voting power present in person or represented by proxy shall decide any question brought before such meeting, unless the question is one upon which by express provision of the New York Business Corporation Law or of the certificate of incorporation a different vote is required, in which case such express provision shall govern and control the decision of such question.

Section 11.Unless otherwise provided in the certificate of incorporation, each stockholder shall at every meeting of the stockholders be entitled to one vote in person or by proxy for each share of the capital stock having voting power held by such stockholder, but no proxy shall be voted on after eleven (11) months from its date, unless the proxy provides for a longer period.

At all elections of directors of the corporation each stockholder having voting power shall be entitled to exercise the right of cumulative voting as provided in the certificate of incorporation.

Section 12.Unless otherwise provided in the certificate of incorporation, any action required to be taken at any annual or special meeting of stockholders of the corporation, or any action which may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted.  Prompt notice of the taking

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of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing.

Section 13.The President, or, in his/her absence, a Vice President, shall preside at meetings of the shareholders.  The Secretary shall act as secretary of the meeting or, in his/her absence, a Assistant Secretary, shall act, or if neither is present, then the presiding officer may appoint a person to act as secretary of the meeting.

Section 14.Except as otherwise provided by these by-laws or any resolutions adopted by the shareholder or Board of Directors, the order of business and all other maters of procedure at every meeting of shareholders shall be determined by the presiding officer.  Not less than 15 minutes following the presentation of any resolution to any meeting of shareholder, the presiding officer may announce that further discussion on such resolution shall be limited to not more than three persons who favor and not more than three persons who oppose such resolution, each of whom shall be designated by the presiding officer and shall thereupon be entitled to speak thereon for not more than five minutes.  After such persons, or such a lesser number thereof as shall advise the presiding officer of their desire so to speak, shall have spoken on such resolution, the presiding officer may direct a vote on such resolution without further discussion thereon at the meeting.

ARTICLE III

DIRECTORS

Section 1.The number of directors constituting the entire board shall be fixed from time to time by the Board of Directors and shall not be less than three, except that where all the shares of a Corporation are owned beneficially and of record by less than three shareholders, the number of

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directors may be less than three but not less than the number of shareholders.  The directors shall be elected at the annual meeting of the stockholders, except as provided in Section 2 of this Article, and each director elected shall hold office until his successor is elected and qualified; provided, that a Director may resign as stated herein.  Directors need not be stockholders.

Section 2.Any director may resign his office at any time by delivering his resignation in writing to the President or the Secretary.  It will take effect at the time specified therein or, if no time is specified, it sill be effective at the time of its receipt by the Corporation.  The acceptance of a resignation shall not be necessary to make it effective, unless expressly so provided in the resignation.

Section 3.Vacancies and newly created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, though less than a quorum, or by a sole remaining director, and the directors so chosen shall hold office until the next annual election and until their successors are duly elected and shall qualify, unless sooner displaced.  If there are no directors in office, then an election of directors may be held in the manner provided by the New York Business Corporation Law.   If, at the time of filling any vacancy or any newly created directorship, the directors then in office shall constitute less than a majority of the whole board (as constituted immediately prior to any such increase), the Court of Chancery may, upon application of any stockholder or stockholders holding at least ten percent of the total number of the shares at the time outstanding having the right to vote for such directors, summarily order an election to be held to fill any such vacancies or newly created directorship, or to replace the directors chosen by the directors then in office.

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Section 4.The business of the corporation shall be managed by or under the direction of its board of directors which may exercise all such powers of the corporation and do all such lawful acts and things as are not by the New York Business Corporation Law or by the certificate of incorporation or by these by-laws directed or required to be exercised or done by the stockholders.

MEETINGS OF THE BOARD OF DIRECTORS

Section 5.The board of directors of the corporation may hold meetings, both regular and special, either within or without the State of New York.

Section 6.The first meeting of each newly elected board of directors shall be held at such time and place as shall be fixed by the vote of the stockholders at the annual meeting and no notice of such meeting shall be necessary to the newly elected directors in order legally to constitute the meeting, provided a quorum shall be present.  In the event of the failure of the stockholders to fix the time or place of such first meeting of the newly elected board of directors, or in the event such meeting is not held at the time and place so fixed by the stockholders, the meeting may be held at such time and place as shall be specified in a notice given as hereinafter provided for special meetings of the board of directors, or as shall be specified in a written waiver signed by all of the directors.

Section 7.Regular meetings of the board of directors may be held without notice at such time and at such place as shall from time to time be determined by the board.

Section 8.Special meetings of the board may be called by the president on one day’s notice to each director, either personally or by mail or by telegram or by electronic mail; special meetings shall be called by the president or secretary in like manner and on like notice on the written request of two directors unless the board consists of only one director; in which case special

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meetings shall be called by the president or secretary in like manner and on like notice on the written request of the sole director.

Section 9.At all meetings of the board a majority of the directors shall constitute a quorum for the transaction of business and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the board of directors, except as may be otherwise specifically provided by the New York Business Corporation Law or by the certificate of incorporation.  If a quorum shall not be present at any meeting of the board of directors the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present.

Section 10.The President, or, in his/her absence, a Vice President, shall preside at meetings of the board of directors.  The Secretary shall act as secretary of the meeting or, in his/her absence, a Assistant Secretary, shall act, or if neither is present, then the presiding officer may appoint a person to act as secretary of the meeting.

Section 11.Unless otherwise restricted by the certificate of incorporation or these by-laws, any action required or permitted to be taken at any meeting of the board of directors or of any committee thereof may be taken without a meeting, if all members of the board or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the board or committee.

Section 12.Unless otherwise restricted by the certificate of incorporation or these by-laws, members of the board of directors or any committee designated by the board of directors, may participate in a meeting of the board of directors or any committee, by means of conference telephone or similar communications equipment by means of which all persons participating in the

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meeting can hear each other, and such participation in a meeting shall constitute presence in person at the meeting.

COMMITTEES OF DIRECTORS

Section 13.The board of directors may, by resolution passed by a majority of the whole board, designate one or more committees, each committee to consist of three or more of the directors of the corporation.  The board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee.

In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the board of directors to act at the meeting in the place of any such absent or disqualified member.

Any such committee, to the extent provided in the resolution of the board of directors, shall have and may exercise all the powers and authority of the board of directors in the management of the business and affairs of the corporation, and may authorize the seal of the corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to:

(i) The submission to shareholders of any action that needs shareholders’ approval under this chapter;

(ii)  The filling of vacancies in the board of directors or in any committee;

(iii)  The fixing of compensation of the directors for serving on the board or any committee;

(iv)  The amendment or repeal of the by-laws, or the adoption of new by-laws;

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(v)  The amendment or repeal of any resolution of the board which by its terms shall not be so amendable or repealable.

Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the board of directors.

Section 14.Each committee shall keep regular minutes of its meetings and report the same to the board of directors when required.

COMPENSATION OF DIRECTORS

Section 15.Unless otherwise restricted by the certificate of incorporation or these by-laws, the board of directors shall have the authority to fix the compensation of directors.  The directors may be paid their expenses, if any, of attendance at each meeting of the board of directors and may be paid a fixed sum for attendance at each meeting of the board of directors or a stated salary as director.  No such payment shall preclude any director from serving the corporation in any other capacity and receiving compensation therefor.  Members of committees may be allowed like compensation for attending committee meetings.

REMOVAL OF DIRECTORS

Section 16.Any director may be removed with or without cause at any time by the affirmative vote of shareholders holding of record in the aggregate at least a majority of the votes cast at a meeting of the shareholders by the holders of shares present in person or represented by proxy entitled to vote at a special meeting of the shareholders called for that purpose.

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ARTICLE IV

NOTICES

Section 1.Whenever, under the provisions of New York Business Corporation Law or of the certificate of incorporation or of these by-laws, notice is required to be given to any director or stockholder, it shall not be construed to mean personal notice, but such notice may be given in writing, by mail, addressed to such director or stockholder, at his address as it appears on the records of the corporation, with postage thereon prepaid, and such notice shall be deemed to be given at the time when the same shall be deposited in the United States mail.  Notice to directors may also be given by telegram or electronic mail.

ARTICLE V

OFFICERS

Section 1.The officers of the corporation shall be chosen by the board of directors and shall be a president, a vice-president, a secretary and a treasurer.  The board of directors may also choose additional vice-presidents, and one or more assistant secretaries and assistant treasurers.  Any number of offices may be held by the same person, unless the certificate of incorporation or these by-laws otherwise provide; provided, that the offices of President and Secretary shall be held by different persons.  The board of directors may also elect a chairman of the board who shall have such duties as shall be assigned to him by the board of directors.

Section 2.The board of directors at its first meeting after each annual meeting of stockholders shall choose a president, one or more vice-presidents, a secretary and a treasurer.

Section 3.The board of directors may appoint such other officers and agents as it shall deem necessary who shall hold their offices for such terms and shall exercise such powers and

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perform such duties as shall be determined from time to time by the board.  The board of directors may require any officer to give security for the faithful performance of his duties.

Section 4.The salaries of all officers and agents of the corporation shall be fixed by the board of directors.

Section 5.The officers of the corporation shall hold office until their successors are chosen and qualify.  Any officer elected or appointed by the board of directors may be removed at any time by the affirmative vote of a majority of the board of directors.  Any vacancy occurring in any office of the corporation shall be filled for the unexpired portion of the term by the board of directors.  Any officer may resign his office at any time.  Such resignation shall be made in writing and shall take effect at the time specified therein or, if no time be specified, at the time of its receipt by the Corporation.  The acceptance of a resignation shall not be necessary to make it effective, unless expressly so provided in the resignation.

THE PRESIDENT

Section 6.The president shall be the chief executive officer of the corporation, shall preside at all meetings of the stockholders and the board of directors and, subject to the control of the board of directors, shall supervise and control all business and affairs of the Corporation, shall have general and active management of the business of the corporation and shall see that all orders and resolutions of the board of directors are carried into effect.  He shall when present preside at all meetings of the shareholders and the board of directors.

Section 7.He shall execute bonds, mortgages and other contracts requiring a seal, under the seal of the corporation, except where required or permitted by law to be otherwise signed and

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executed and except where the signing and execution thereof shall be expressly delegated by the board of directors to some other officer or agent of the corporation.

THE VICE-PRESIDENTS

Section 8.Each Vice President, if any, shall have such powers and perform such duties as may be determined by the President and assigned to him by the President.  In the absence of the president or in the event of his inability or refusal to act, the vice-president (or in the event there be more than one vice-president, the vice-presidents in the order designated by the directors, or in the absence of any designation, then in the order of their election) shall perform the duties of the president, and when so acting, shall have all the powers of and be subject to all the restrictions upon the president.  The vice-presidents shall perform such other duties and have such other powers as the board of directors may from time to time prescribe.

THE SECRETARY AND ASSISTANT SECRETARIES

Section 9.The secretary shall attend all meetings of the board of directors and all meetings of the stockholders and record all proceedings of the meetings of the corporation and of the board of directors in a minute book to be kept for that purpose and shall perform like duties for the committees when required.  The secretary shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the board of directors, and shall perform such other duties as may be prescribed by the board of directors or president, under whose supervision he shall be.  The secretary shall have custody of the seal of the corporation and he, or an assistant secretary, shall have authority to affix the same to any instrument and when so affixed, it may be attested by his signature or by the signature of such assistant secretary.  The board of directors may give general

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authority to any other officer to affix the seal of the corporation and to attest the affixing by his signature.  The secretary shall keep a register of the post office address of each shareholder which shall be furnished to the secretary by such shareholder and shall have general charge of stock transfer books of the Corporation.

Section 10.The assistant secretary, or if there be more than one, the assistant secretaries in the order determined by the board of directors (or if there be no such determination, then in the order of their election) shall, in the absence of the secretary or in the event of his inability or refusal to act, perform the duties and exercise the powers of the secretary and shall perform such other duties and have such other powers as the board of directors may from time to time prescribe.

THE TREASURER AND ASSISTANT TREASURERS

Section 11.The treasurer shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the corporation in such depositories as may be designated by the board of directors.  The treasurer shall have power to receive and give receipts for monies due and payable to the Corporation from any source whatsoever.

Section 12.The treasurer shall disburse the funds of the corporation as may be ordered by the board of directors, taking proper vouchers for such disbursements, and shall render to the president and the board of directors, at its regular meetings, or when the board of directors so requires, an account of all his transactions as treasurer and of the financial condition of the corporation.

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Section 13.If required by the board of directors, the treasurer shall give the corporation a bond (which shall be renewed every six years) in such sum and with such surety or sureties as shall be satisfactory to the board of directors for the faithful performance of the duties of his office and for the restoration to the corporation, in case of his death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in his possession or under this control belonging to the corporation.

Section 14.The assistant treasurer, or if there shall be more than one, the assistant treasurers in the order determined by the board of directors (or if there be no such determination, then in the order of their election) shall, in the absence of the treasurer or in the event or his inability or refusal to act, perform the duties and exercise the powers of the treasurer and shall perform such other duties and have such other powers as the board of directors may from time to time prescribe.

ARTICLE VI

CERTIFICATES FOR SHARES

Section 1.The shares of the corporation shall be represented by a certificate.  Certificates shall be signed by, or in the name of the corporation by, the chairman or vice-chairman of the board of directors, or the president or a vice-president and the treasurer or an assistant treasurer, or the secretary or an assistant secretary of the corporation.

Upon the face or back of each stock certificate issued to represent any partly paid shares shall be set forth the total amount of the consideration to be paid therefor and the amount paid thereon shall be stated.

If the corporation shall be authorized to issue more than one class of stock or more than one series of any class, the powers, designations, preferences and relative, participating, optional or other

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special rights of each class of stock or series thereof and the qualification, limitations or restrictions of such preferences and/or rights shall be set forth in full or summarized on the face or back of the certificate which the corporation shall issue to represent such class or series of stock, provided that, except as otherwise provided in applicable provisions of the New York Business Corporation Law, in lieu of the foregoing requirements, there may be set forth on the face or back of the certificate which the corporation shall issue to represent such class or series of stock, a statement that the corporation will furnish without charge to each stockholder who so requests the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights.

Section 2.Any or all of the signatures on a certificate may be facsimile.  In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the corporation with the same effect as if he were such officer, transfer agent or registrar at the date of issue.  If such certificate is countersigned by a transfer agent other than the Corporation or its employees, or by a registrar other than the Corporation or its employee, the signatures of the officers of the Corporation may be facsimiles and, if permitted by law, any other signature may be a facsimile.

LOST CERTIFICATES

Section 3.The board of directors may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the corporation alleged to have been

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lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed.  When authorizing such issuance of a new certificate or certificates, the board of directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate or certificates, or his legal representative, to advertise the same in such manner as it shall require and/or to give the corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the corporation with respect to the certificate alleged to have been lost, stolen or destroyed.

TRANSFER OF STOCK

Section 4.Upon surrender to the corporation or the transfer agent of the corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignation or authority to transfer, it shall be the duty of the corporation to issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books.  Whenever any transfer of shares shall be made for collateral security, and not absolutely, it shall be so expressed in the entry of the transfer if, when the certificates are presented to the Corporation for transfer, both the transferor and transferee request the Corporation to do so.  The Corporation shall maintain at its principal office or at the office of its attorneys an office where shares of the Corporation shall be transferable.  The Corporation may also maintain one or  more registry offices where such shares shall be registered.  The board of directors may make such rules and regulations as it may deem expedient concerning the issue, transfer and registration of certificates of stock.

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FIXING RECORD DATE

Section 5.In order that the corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the board of directors may fix, in advance, a record date, which shall not be more than fifty nor less than ten days before the date of such meeting, nor more than fifty days prior to any other action.  A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the board of directors may fix a new record date for the adjourned meeting.  If no record date is fixed, the record date for the determination of shareholders entitled to notice of or to vote at a meeting of shareholders shall be at the close of business on the day next preceding the day on which notice is given, or, if not notice is given, the day on which the meeting is held.  For all other purposes, the record date for determining shareholders shall be at the close of business on the date on which the resolution of the board relating thereto is adopted.

REGISTERED STOCKHOLDERS

Section 6.The corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and to hold liable for calls and assessments a person registered on its books as the owner of shares, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on

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the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the New York Business Corporation Law.

ARTICLE VII

DIVIDENDS

Section 1.Dividends upon the capital stock of the corporation, subject to the provisions of the certificate of incorporation, if any, may be declared out of funds legally available therefor by the board of directors at any regular or special meeting, pursuant to law.  Dividends may be paid in cash, in property, or in shares of the capital stock, subject to the provisions of the certificate of incorporation.

Before payment of any dividend, there may be set aside out of any funds of the corporation available for dividends such sum or sums as the directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the corporation, or for such other purpose as the directors shall think conducive to the interest of the corporation, and the directors may modify or abolish any such reserve in the manner in which it was created.

ARTICLE VIII

MISCELLANEOUS PROVISIONS

Section 1.Annual Statement.  The board of directors shall present at each annual meeting, and at any special meeting of the stockholders when called for by vote of the stockholders, a full and clear statement of the business and condition of the corporation.

Section 2.Checks; contracts; deposits.  All checks or demands for money and notes of the corporation shall be signed by such officer or officers or such other person or persons as the

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board of directors may from time to time designate.  Unless otherwise provided by law or resolution of the board of directors, any contract, document or other instrument, including contracts or instruments evidencing indebtedness of the Corporation, shall be valid and binding on the Corporation only if executed and delivered in its name and on its behalf by either the President or such other persons who have been designated by resolution of the board of directors as authorized signatories of contracts, documents or other instruments.    All funds of the Corporation not otherwise employed shall be deposited from time to time to the credit of the Corporation in such banks, trust companies or other depositaries as the board of directors may select or as may be designated by any officer or officers of the Corporation.

Section 3.Fiscal Year. The fiscal year of the corporation shall be fixed by resolution of the board of directors.

Section 4.Corporate Seal.  The corporate seal shall have inscribed thereon the name of the corporation, the year of its organization and the words “Corporate Seal, New York”.  The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.

Section 5.Indemnification.  The corporation shall indemnify its officers, directors, employees and agents to the fullest extent permitted by law.

ARTICLE IX

AMENDMENTS TO BY-LAWS

Section   1.The by-laws may be altered, amended or repealed or new by-laws may be made or adopted by the board of directors at any regular or special meeting of the board of directors; except that no alteration, amendment  or repeal to Article III or this Article IX may be made with out

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the consent of the shareholders as set forth in the next sentence.  The by-laws of the Corporation may also be altered, amended or repealed or new by-laws may be made or adopted by the vote of a majority in interest of the shareholders represented and entitled to vote upon election of directors, at any meeting at which a quorum is present.

EX-3.2.14

Exhibit 3.2.14

BY - LAWS

ARTICLE I

OFFICES

Section 1.The registered office shall be c/o Equinox Tribeca Office, Inc. at: 895 Broadway, New York, New York 10003.

Section 2.The corporation may also have offices at such other places both within and without the State of New York as the board of directors may from time to time determine or the business of the corporation may require.

ARTICLE II

MEETING OF STOCKHOLDERS

Section 1.All meetings of the stockholders for the election of director shall be held in the City of New York, State of New York, at such place as may be fixed from time to time by the board of directors, or at such other place either within or without the State of New York as shall be designated from time to time by the board of directors as stated in the notice of the meeting.  Meetings of stockholders for any other purpose may be held at such time and place, within or without the State of New York, as shall be stated in the notice of the meeting or in a duly executed waiver of notice thereof.

Section 2.Annual meetings of stockholders, commencing with the year 2002, shall be held on the second Tuesday  in the fifth month following the completion of the Corporation’s fiscal year, and if said date is a legal holiday, then on the next business day following, at 10:00 A.M., or at such other date and time as shall be designated from time to time by the board of directors and stated

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in the notice of the meeting, at which they shall elect by a plurality vote a board of directors, and transact such other business as may properly be brought before the meeting.

Section 3.Written notice of the annual meeting stating the place, date and hour of the meeting shall be given to each stockholder entitled to vote at such meeting not less than ten nor more than fifty days before the date of the meeting.

Section 4.The officer who has charge of the stock ledger of the corporation shall prepare and make, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder.  Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held.  The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present.  If the right to vote at any meeting ins challenged, the inspectors of election, or person presiding thereat, shall require such list of shareholders to be produced as evidence of the right of the persons challenged to vote at such meeting, and all persons who appear from such list to be shareholders entitled to vote thereat may vote at such meeting.

Section 5.The election of directors and any other vote by ballot at any meeting of the shareholders shall be supervised by at least two inspectors if requested by a shareholder present in person or represented by proxy and entitled to vote at such meeting.  Such inspectors may be appointed by the presiding officer before or at the meeting; or if one or both inspectors so appointed

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shall refuse to serve or shall not be present, such appointment shall be made by the officer presiding at the meeting.

Section 6.Special meetings of the stockholders, for any purpose or purposes, unless otherwise prescribed by statute or by the president, shall be called by the president, or at the request in writing of a majority of the board of directors, or at the request in writing of stockholders owning a majority in amount of the entire capital stock of the corporation issued and outstanding and entitled to vote.  Such request shall state the purpose or purposes of the proposed meeting.

Section 7.Written notice of a special meeting stating the place, date and hour of the meeting and the purpose or purposes for which the meeting is called, shall be given not less than ten nor more than sixty days before the date of the meeting, to each stockholder entitled to vote at such meeting.

Section 8.Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice.

Section 9.The holders of a majority of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business except as otherwise provided by statute or by the certificate of incorporation.  If, however, such quorum shall not be present or represented at any meeting of the stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, shall have the power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented.  At such adjourned meeting at which a quorum shall be present or represented any business may be transacted which might have been transacted at the meeting as originally noticed.  If the adjournment is for

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more than thirty days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.

Section 10.When a quorum is present at any meeting the vote of the holders of a majority of the stock having voting power present in person or represented by proxy shall decide any question brought before such meeting, unless the question is one upon which by express provision of the New York Business Corporation Law or of the certificate of incorporation a different vote is required, in which case such express provision shall govern and control the decision of such question.

Section 11.Unless otherwise provided in the certificate of incorporation, each stockholder shall at every meeting of the stockholders be entitled to one vote in person or by proxy for each share of the capital stock having voting power held by such stockholder, but no proxy shall be voted on after eleven (11) months from its date, unless the proxy provides for a longer period.

At all elections of directors of the corporation each stockholder having voting power shall be entitled to exercise the right of cumulative voting as provided in the certificate of incorporation.

Section 12.Unless otherwise provided in the certificate of incorporation, any action required to be taken at any annual or special meeting of stockholders of the corporation, or any action which may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted.  Prompt notice of the taking

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of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing.

Section 13.The President, or, in his/her absence, a Vice President, shall preside at meetings of the shareholders.  The Secretary shall act as secretary of the meeting or, in his/her absence, a Assistant Secretary, shall act, or if neither is present, then the presiding officer may appoint a person to act as secretary of the meeting.

Section 14.Except as otherwise provided by these by-laws or any resolutions adopted by the shareholder or Board of Directors, the order of business and all other maters of procedure at every meeting of shareholders shall be determined by the presiding officer.  Not less than 15 minutes following the presentation of any resolution to any meeting of shareholder, the presiding officer may announce that further discussion on such resolution shall be limited to not more than three persons who favor and not more than three persons who oppose such resolution, each of whom shall be designated by the presiding officer and shall thereupon be entitled to speak thereon for not more than five minutes.  After such persons, or such a lesser number thereof as shall advise the presiding officer of their desire so to speak, shall have spoken on such resolution, the presiding officer may direct a vote on such resolution without further discussion thereon at the meeting.

ARTICLE III

DIRECTORS

Section 1.The number of directors constituting the entire board shall be fixed from time to time by the Board of Directors and shall not be less than three, except that where all the shares of a Corporation are owned beneficially and of record by less than three shareholders, the number of

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directors may be less than three but not less than the number of shareholders.  The directors shall be elected at the annual meeting of the stockholders, except as provided in Section 2 of this Article, and each director elected shall hold office until his successor is elected and qualified; provided, that a Director may resign as stated herein.  Directors need not be stockholders.

Section 2.Any director may resign his office at any time by delivering his resignation in writing to the President or the Secretary.  It will take effect at the time specified therein or, if no time is specified, it sill be effective at the time of its receipt by the Corporation.  The acceptance of a resignation shall not be necessary to make it effective, unless expressly so provided in the resignation.

Section 3.Vacancies and newly created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, though less than a quorum, or by a sole remaining director, and the directors so chosen shall hold office until the next annual election and until their successors are duly elected and shall qualify, unless sooner displaced.  If there are no directors in office, then an election of directors may be held in the manner provided by the New York Business Corporation Law.   If, at the time of filling any vacancy or any newly created directorship, the directors then in office shall constitute less than a majority of the whole board (as constituted immediately prior to any such increase), the Court of Chancery may, upon application of any stockholder or stockholders holding at least ten percent of the total number of the shares at the time outstanding having the right to vote for such directors, summarily order an election to be held to fill any such vacancies or newly created directorship, or to replace the directors chosen by the directors then in office.

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Section 4.The business of the corporation shall be managed by or under the direction of its board of directors which may exercise all such powers of the corporation and do all such lawful acts and things as are not by the New York Business Corporation Law or by the certificate of incorporation or by these by-laws directed or required to be exercised or done by the stockholders.

MEETINGS OF THE BOARD OF DIRECTORS

Section 5.The board of directors of the corporation may hold meetings, both regular and special, either within or without the State of New York.

Section 6.The first meeting of each newly elected board of directors shall be held at such time and place as shall be fixed by the vote of the stockholders at the annual meeting and no notice of such meeting shall be necessary to the newly elected directors in order legally to constitute the meeting, provided a quorum shall be present.  In the event of the failure of the stockholders to fix the time or place of such first meeting of the newly elected board of directors, or in the event such meeting is not held at the time and place so fixed by the stockholders, the meeting may be held at such time and place as shall be specified in a notice given as hereinafter provided for special meetings of the board of directors, or as shall be specified in a written waiver signed by all of the directors.

Section 7.Regular meetings of the board of directors may be held without notice at such time and at such place as shall from time to time be determined by the board.

Section 8.Special meetings of the board may be called by the president on one day’s notice to each director, either personally or by mail or by telegram or by electronic mail; special meetings shall be called by the president or secretary in like manner and on like notice on the written request of two directors unless the board consists of only one director; in which case special

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meetings shall be called by the president or secretary in like manner and on like notice on the written request of the sole director.

Section 9.At all meetings of the board a majority of the directors shall constitute a quorum for the transaction of business and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the board of directors, except as may be otherwise specifically provided by the New York Business Corporation Law or by the certificate of incorporation.  If a quorum shall not be present at any meeting of the board of directors the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present.

Section 10.The President, or, in his/her absence, a Vice President, shall preside at meetings of the board of directors.  The Secretary shall act as secretary of the meeting or, in his/her absence, a Assistant Secretary, shall act, or if neither is present, then the presiding officer may appoint a person to act as secretary of the meeting.

Section 11.Unless otherwise restricted by the certificate of incorporation or these by-laws, any action required or permitted to be taken at any meeting of the board of directors or of any committee thereof may be taken without a meeting, if all members of the board or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the board or committee.

Section 12.Unless otherwise restricted by the certificate of incorporation or these by-laws, members of the board of directors or any committee designated by the board of directors, may participate in a meeting of the board of directors or any committee, by means of conference telephone or similar communications equipment by means of which all persons participating in the

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meeting can hear each other, and such participation in a meeting shall constitute presence in person at the meeting.

COMMITTEES OF DIRECTORS

Section 13.The board of directors may, by resolution passed by a majority of the whole board, designate one or more committees, each committee to consist of three or more of the directors of the corporation.  The board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee.

In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the board of directors to act at the meeting in the place of any such absent or disqualified member.

Any such committee, to the extent provided in the resolution of the board of directors, shall have and may exercise all the powers and authority of the board of directors in the management of the business and affairs of the corporation, and may authorize the seal of the corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to:

(i) The submission to shareholders of any action that needs shareholders’ approval under this chapter;

(ii)  The filling of vacancies in the board of directors or in any committee;

(iii)  The fixing of compensation of the directors for serving on the board or any committee;

(iv)  The amendment or repeal of the by-laws, or the adoption of new by-laws;

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(v)  The amendment or repeal of any resolution of the board which by its terms shall not be so amendable or repealable.

Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the board of directors.

Section 14.Each committee shall keep regular minutes of its meetings and report the same to the board of directors when required.

COMPENSATION OF DIRECTORS

Section 15.Unless otherwise restricted by the certificate of incorporation or these by-laws, the board of directors shall have the authority to fix the compensation of directors.  The directors may be paid their expenses, if any, of attendance at each meeting of the board of directors and may be paid a fixed sum for attendance at each meeting of the board of directors or a stated salary as director.  No such payment shall preclude any director from serving the corporation in any other capacity and receiving compensation therefor.  Members of committees may be allowed like compensation for attending committee meetings.

REMOVAL OF DIRECTORS

Section 16.Any director may be removed with or without cause at any time by the affirmative vote of shareholders holding of record in the aggregate at least a majority of the votes cast at a meeting of the shareholders by the holders of shares present in person or represented by proxy entitled to vote at a special meeting of the shareholders called for that purpose.

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ARTICLE IV

NOTICES

Section 1.Whenever, under the provisions of New York Business Corporation Law or of the certificate of incorporation or of these by-laws, notice is required to be given to any director or stockholder, it shall not be construed to mean personal notice, but such notice may be given in writing, by mail, addressed to such director or stockholder, at his address as it appears on the records of the corporation, with postage thereon prepaid, and such notice shall be deemed to be given at the time when the same shall be deposited in the United States mail.  Notice to directors may also be given by telegram or electronic mail.

ARTICLE V

OFFICERS

Section 1.The officers of the corporation shall be chosen by the board of directors and shall be a president, a vice-president, a secretary and a treasurer.  The board of directors may also choose additional vice-presidents, and one or more assistant secretaries and assistant

treasurers.  Any number of offices may be held by the same person, unless the certificate of incorporation or these by-laws otherwise provide; provided, that the offices of President and Secretary shall be held by different persons.  The board of directors may also elect a chairman of the board who shall have such duties as shall be assigned to him by the board of directors.

Section 2.The board of directors at its first meeting after each annual meeting of stockholders shall choose a president, one or more vice-presidents, a secretary and a treasurer.

Section 3.The board of directors may appoint such other officers and agents as it shall deem necessary who shall hold their offices for such terms and shall exercise such powers and

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perform such duties as shall be determined from time to time by the board.  The board of directors may require any officer to give security for the faithful performance of his duties.

Section 4.The salaries of all officers and agents of the corporation shall be fixed by the board of directors.

Section 5.The officers of the corporation shall hold office until their successors are chosen and qualify.  Any officer elected or appointed by the board of directors may be removed at any time by the affirmative vote of a majority of the board of directors.  Any vacancy occurring in any office of the corporation shall be filled for the unexpired portion of the term by the board of directors.  Any officer may resign his office at any time.  Such resignation shall be made in writing and shall take effect at the time specified therein or, if no time be specified, at the time of its receipt by the Corporation.  The acceptance of a resignation shall not be necessary to make it effective, unless expressly so provided in the resignation.

THE PRESIDENT

Section 6.The president shall be the chief executive officer of the corporation, shall preside at all meetings of the stockholders and the board of directors and, subject to the control of the board of directors, shall supervise and control all business and affairs of the Corporation, shall have general and active management of the business of the corporation and shall see that all orders and resolutions of the board of directors are carried into effect.  He shall when present preside at all meetings of the shareholders and the board of directors.

Section 7.He shall execute bonds, mortgages and other contracts requiring a seal, under the seal of the corporation, except where required or permitted by law to be otherwise signed and

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executed and except where the signing and execution thereof shall be expressly delegated by the board of directors to some other officer or agent of the corporation.

THE VICE-PRESIDENTS

Section 8.Each Vice President, if any, shall have such powers and perform such duties as may be determined by the President and assigned to him by the President.  In the absence of the president or in the event of his inability or refusal to act, the vice-president (or in the event there be more than one vice-president, the vice-presidents in the order designated by the directors, or in the absence of any designation, then in the order of their election) shall perform the duties of the president, and when so acting, shall have all the powers of and be subject to all the restrictions upon the president.  The vice-presidents shall perform such other duties and have such other powers as the board of directors may from time to time prescribe.

THE SECRETARY AND ASSISTANT SECRETARY

Section 9.The secretary shall attend all meetings of the board of directors and all meetings of the stockholders and record all proceedings of the meetings of the corporation and of the board of directors in a minute book to be kept for that purpose and shall perform like duties for the committees when required.  The secretary shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the board of directors, and shall perform such other duties as may be prescribed by the board of directors or president, under whose supervision he shall be.  The secretary shall have custody of the seal of the corporation and he, or an assistant secretary, shall have authority to affix the same to any instrument and when so affixed, it may be attested by his signature or by the signature of such assistant secretary.  The board of directors may give general

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authority to any other officer to affix the seal of the corporation and to attest the affixing by his signature.  The secretary shall keep a register of the post office address of each shareholder which shall be furnished to the secretary by such shareholder and shall have general charge of stock transfer books of the Corporation.

Section 10.The assistant secretary, or if there be more than one, the assistant secretaries in the order determined by the board of directors (or if there be no such determination, then in the order of their election) shall, in the absence of the secretary or in the event of his inability or refusal to act, perform the duties and exercise the powers of the secretary and shall perform such other duties and have such other powers as the board of directors may from time to time prescribe.

THE TREASURER AND ASSISTANT TREASURERS

Section 11.The treasurer shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the corporation in such depositories as may be designated by the board of directors.  The treasurer shall have power to receive and give receipts for monies due and payable to the Corporation from any source whatsoever.

Section 12.The treasurer shall disburse the funds of the corporation as may be ordered by the board of directors, taking proper vouchers for such disbursements, and shall render to the president and the board of directors, at its regular meetings, or when the board of directors so requires, an account of all his transactions as treasurer and of the financial condition of the corporation.

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Section 13.If required by the board of directors, the treasurer shall give the corporation a bond (which shall be renewed every six years) in such sum and with such surety or sureties as shall be satisfactory to the board of directors for the faithful performance of the duties of his office and for the restoration to the corporation, in case of his death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in his possession or under this control belonging to the corporation.

Section 14.The assistant treasurer, or if there shall be more than one, the assistant treasurers in the order determined by the board of directors (or if there be no such determination, then in the order of their election) shall, in the absence of the treasurer or in the event or his inability or refusal to act, perform the duties and exercise the powers of the treasurer and shall perform such other duties and have such other powers as the board of directors may from time to time prescribe.

ARTICLE VI

CERTIFICATES FOR SHARES

Section 1.The shares of the corporation shall be represented by a certificate.  Certificates shall be signed by, or in the name of the corporation by, the chairman or vice-chairman of the board of directors, or the president or a vice-president and the treasurer or an assistant treasurer, or the secretary or an assistant secretary of the corporation.

Upon the face or back of each stock certificate issued to represent any partly paid shares shall be set forth the total amount of the consideration to be paid therefor and the amount paid thereon shall be stated.

If the corporation shall be authorized to issue more than one class of stock or more than one series of any class, the powers, designations, preferences and relative, participating, optional or other

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special rights of each class of stock or series thereof and the qualification, limitations or restrictions of such preferences and/or rights shall be set forth in full or summarized on the face or back of the certificate which the corporation shall issue to represent such class or series of stock, provided that, except as otherwise provided in applicable provisions of the New York Business Corporation Law, in lieu of the foregoing requirements, there may be set forth on the face or back of the certificate which the corporation shall issue to represent such class or series of stock, a statement that the corporation will furnish without charge to each stockholder who so requests the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights.

Section 2.Any or all of the signatures on a certificate may be facsimile.  In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the corporation with the same effect as if he were such officer, transfer agent or registrar at the date of issue.  If such certificate is countersigned by a transfer agent other than the Corporation or its employees, or by a registrar other than the Corporation or its employee, the signatures of the officers of the Corporation may be facsimiles and, if permitted by law, any other signature may be a facsimile.

LOST CERTIFICATES

Section 3.The board of directors may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the corporation alleged to have been

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lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed.  When authorizing such issuance of a new certificate or certificates, the board of directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate or certificates, or his legal representative, to advertise the same in such manner as it shall require and/or to give the corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the corporation with respect to the certificate alleged to have been lost, stolen or destroyed.

TRANSFER OF STOCK

Section 4.Upon surrender to the corporation or the transfer agent of the corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignation or authority to transfer, it shall be the duty of the corporation to issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books.  Whenever any transfer of shares shall be made for collateral security, and not absolutely, it shall be so expressed in the entry of the transfer if, when the certificates are presented to the Corporation for transfer, both the transferor and transferee request the Corporation to do so.  The Corporation shall maintain at its principal office or at the office of its attorneys an office where shares of the Corporation shall be transferable.  The Corporation may also maintain one or  more registry offices where such shares shall be registered.  The board of directors may make such rules and regulations as it may deem expedient concerning the issue, transfer and registration of certificates of stock.

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FIXING RECORD DATE

Section 5.In order that the corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the board of directors may fix, in advance, a record date, which shall not be more than fifty nor less than ten days before the date of such meeting, nor more than fifty days prior to any other action.  A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the board of directors may fix a new record date for the adjourned meeting.  If no record date is fixed, the record date for the determination of shareholders entitled to notice of or to vote at a meeting of shareholders shall be at the close of business on the day next preceding the day on which notice is given, or, if not notice is given, the day on which the meeting is held.  For all other purposes, the record date for determining shareholders shall be at the close of business on the date on which the resolution of the board relating thereto is adopted.

REGISTERED STOCKHOLDERS

Section 6.The corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and to hold liable for calls and assessments a person registered on its books as the owner of shares, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on

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the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the New York Business Corporation Law.

ARTICLE VII

DIVIDENDS

Section 1.Dividends upon the capital stock of the corporation, subject to the provisions of the certificate of incorporation, if any, may be declared out of funds legally available therefor by the board of directors at any regular or special meeting, pursuant to law.  Dividends may be paid in cash, in property, or in shares of the capital stock, subject to the provisions of the certificate of incorporation.

Before payment of any dividend, there may be set aside out of any funds of the corporation available for dividends such sum or sums as the directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the corporation, or for such other purpose as the directors shall think conducive to the interest of the corporation, and the directors may modify or abolish any such reserve in the manner in which it was created.

ARTICLE VIII

MISCELLANEOUS PROVISIONS

Section 1.Annual Statement.  The board of directors shall present at each annual meeting, and at any special meeting of the stockholders when called for by vote of the stockholders, a full and clear statement of the business and condition of the corporation.

Section 2.Checks; contracts; deposits.  All checks or demands for money and notes of the corporation shall be signed by such officer or officers or such other person or persons as the

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board of directors may from time to time designate.  Unless otherwise provided by law or resolution of the board of directors, any contract, document or other instrument, including contracts or instruments evidencing indebtedness of the Corporation, shall be valid and binding on the Corporation only if executed and delivered in its name and on its behalf by either the President or such other persons who have been designated by resolution of the board of directors as authorized signatories of contracts, documents or other instruments.    All funds of the Corporation not otherwise employed shall be deposited from time to time to the credit of the Corporation in such banks, trust companies or other depositaries as the board of directors may select or as may be designated by any officer or officers of the Corporation.

Section 3.Fiscal Year. The fiscal year of the corporation shall be fixed by resolution of the board of directors.

Section 4.Corporate Seal.  The corporate seal shall have inscribed thereon the name of the corporation, the year of its organization and the words “Corporate Seal, New York”.  The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.

Section 5.Indemnification.  The corporation shall indemnify its officers, directors, employees and agents to the fullest extent permitted by law.

ARTICLE IX

AMENDMENTS TO BY-LAWS

Section   1.The by-laws may be altered, amended or repealed or new by-laws may be made or adopted by the board of directors at any regular or special meeting of the board of directors; except that no alteration, amendment  or repeal to Article III or this Article IX may be made with out

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the consent of the shareholders as set forth in the next sentence.  The by-laws of the Corporation may also be altered, amended or repealed or new by-laws may be made or adopted by the vote of a majority in interest of the shareholders represented and entitled to vote upon election of directors, at any meeting at which a quorum is present.

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EX-3.2.17

Exhibit 3.2.17

BY - LAWS

ARTICLE I

OFFICES

Section 1.       The registered office shall be c/o Equinox Woodbury, Inc. at: 895 Broadway, New York, New York 10003.

Section 2.       The corporation may also have offices at such other places both within and without the State of New York as the board of directors may from time to time determine or the business of the corporation may require.

ARTICLE II

MEETING OF STOCKHOLDERS

Section 1.       All meetings of the stockholders for the election of director shall be held in the City of New York, at such place as may be fixed from time to time by the board of directors, or at such other place either within or without the State of New York as shall be designated from time to time by the board of directors as stated in the notice of the meeting.  Meetings of stockholders for any other purpose may be held at such time and place, within or without the State of New York, as shall be stated in the notice of the meeting or in a duly executed waiver of notice thereof.

Section 2.       Annual meetings of stockholders, commencing with the year 2002, shall be held on the second Tuesday in the fifth month following the completion of the Corporation’s fiscal year, and if said date is a legal holiday, then on the next business day following, at 10:00 A.M., or at such other date and time as shall be designated from time to time by the board of directors and stated in the notice of the meeting, at which they shall elect by a plurality vote a board of directors, and transact such other business as may properly be brought before the meeting.

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Section 3.       Written notice of the annual meeting stating the place, date and hour of the meeting shall be given to each stockholder entitled to vote at such meeting not less than ten nor more than fifty days before the date of the meeting.

Section 4.       The officer who has charge of the stock ledger of the corporation shall prepare and make, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder.  Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held.  The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present.  If the right to vote at any meeting ins challenged, the inspectors of election, or person presiding thereat, shall require such list of shareholders to be produced as evidence of the right of the persons challenged to vote at such meeting, and all persons who appear from such list to be shareholders entitled to vote thereat may vote at such meeting.

Section 5.       The election of directors and any other vote by ballot at any meeting of the shareholders shall be supervised by at least two inspectors if requested by a shareholder present in person or represented by proxy and entitled to vote at such meeting.  Such inspectors may be appointed by the presiding officer before or at the meeting; or if one or both inspectors so appointed shall refuse to serve or shall not be present, such appointment shall be made by the officer presiding at the meeting.

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Section 6.       Special meetings of the stockholders, for any purpose or purposes, unless otherwise prescribed by statute or by the president, shall be called by the president, or at the request in writing of a majority of the board of directors, or at the request in writing of stockholders owning a majority in amount of the entire capital stock of the corporation issued and outstanding and entitled to vote.  Such request shall state the purpose or purposes of the proposed meeting.

Section 7.       Written notice of a special meeting stating the place, date and hour of the meeting and the purpose or purposes for which the meeting is called, shall be given not less than ten nor more than sixty days before the date of the meeting, to each stockholder entitled to vote at such meeting.

Section 8.       Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice.

Section 9.       The holders of a majority of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business except as otherwise provided by statute or by the certificate of incorporation.  If, however, such quorum shall not be present or represented at any meeting of the stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, shall have the power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented.  At such adjourned meeting at which a quorum shall be present or represented any business may be transacted which might have been transacted at the meeting as originally noticed.  If the adjournment is for more than thirty days, or if after the adjournment a new record

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date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.

Section 10.     When a quorum is present at any meeting the vote of the holders of a majority of the stock having voting power present in person or represented by proxy shall decide any question brought before such meeting, unless the question is one upon which by express provision of the New York Business Corporation Law or of the certificate of incorporation a different vote is required, in which case such express provision shall govern and control the decision of such question.

Section 11.     Unless otherwise provided in the certificate of incorporation, each stockholder shall at every meeting of the stockholders be entitled to one vote in person or by proxy for each share of the capital stock having voting power held by such stockholder, but no proxy shall be voted on after eleven (11) months from its date, unless the proxy provides for a longer period.

At all elections of directors of the corporation each stockholder having voting power shall be entitled to exercise the right of cumulative voting as provided in the certificate of incorporation.

Section 12.     Unless otherwise provided in the certificate of incorporation, any action required to be taken at any annual or special meeting of stockholders of the corporation, or any action which may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting

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at which all shares entitled to vote thereon were present and voted.  Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing.

Section 13.     The President, or, in his/her absence, a Vice President, shall preside at meetings of the shareholders.  The Secretary shall act as secretary of the meeting or, in his/her absence, a Assistant Secretary, shall act, or if neither is present, then the presiding officer may appoint a person to act as secretary of the meeting.

Section 14.     Except as otherwise provided by these by-laws or any resolutions adopted by the shareholder or Board of Directors, the order of business and all other maters of procedure at every meeting of shareholders shall be determined by the presiding officer.  Not less than 15 minutes following the presentation of any resolution to any meeting of shareholder, the presiding officer may announce that further discussion on such resolution shall be limited to not more than three persons who favor and not more than three persons who oppose such resolution, each of whom shall be designated by the presiding officer and shall thereupon be entitled to speak thereon for not more than five minutes.  After such persons, or such a lesser number thereof as shall advise the presiding officer of their desire so to speak, shall have spoken on such resolution, the presiding officer may direct a vote on such resolution without further discussion thereon at the meeting.

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ARTICLE III

DIRECTORS

Section 1.       The number of directors constituting the entire board shall be fixed from time to time by the Board of Directors and shall not be less than three, except that where all the shares of a Corporation are owned beneficially and of record by less than three shareholders, the number of directors may be less than three but not less than the number of shareholders.  The directors shall be elected at the annual meeting of the stockholders, except as provided in Section 2 of this Article, and each director elected shall hold office until his successor is elected and qualified; provided, that a Director may resign as stated herein.  Directors need not be stockholders.

Section 2.       Any director may resign his office at any time by delivering his resignation in writing to the President or the Secretary.  It will take effect at the time specified therein or, if no time is specified, it sill be effective at the time of its receipt by the Corporation.  The acceptance of a resignation shall not be necessary to make it effective, unless expressly so provided in the resignation.

Section 3.       Vacancies and newly created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, though less than a quorum, or by a sole remaining director, and the directors so chosen shall hold office until the next annual election and until their successors are duly elected and shall qualify, unless sooner displaced.  If there are no directors in office, then an election of directors may be held in the manner provided by the New York Business Corporation Law.  If, at the time of filling any vacancy or any newly created directorship, the directors then in office shall constitute less than a majority of the whole board (as constituted immediately prior to any such increase), the Court of Chancery may, upon application of any stockholder or stockholders holding at least

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ten percent of the total number of the shares at the time outstanding having the right to vote for such directors, summarily order an election to be held to fill any such vacancies or newly created directorship, or to replace the directors chosen by the directors then in office.

Section 4.       The business of the corporation shall be managed by or under the direction of its board of directors which may exercise all such powers of the corporation and do all such lawful acts and things as are not by the New York Business Corporation Law or by the certificate of incorporation or by these by-laws directed or required to be exercised or done by the stockholders.

MEETINGS OF THE BOARD OF DIRECTORS

Section 5.       The board of directors of the corporation may hold meetings, both regular and special, either within or without the State of New York.

Section 6.       The first meeting of each newly elected board of directors shall be held at such time and place as shall be fixed by the vote of the stockholders at the annual meeting and no notice of such meeting shall be necessary to the newly elected directors in order legally to constitute the meeting, provided a quorum shall be present.  In the event of the failure of the stockholders to fix the time or place of such first meeting of the newly elected board of directors, or in the event such meeting is not held at the time and place so fixed by the stockholders, the meeting may be held at such time and place as shall be specified in a notice given as hereinafter provided for special meetings of the board of directors, or as shall be specified in a written waiver signed by all of the directors.

Section 7.       Regular meetings of the board of directors may be held without notice at such time and at such place as shall from time to time be determined by the board.

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Section 8.       Special meetings of the board may be called by the president on one day’s notice to each director, either personally or by mail or by telegram or by electronic mail; special meetings shall be called by the president or secretary in like manner and on like notice on the written request of two directors unless the board consists of only one director; in which case special meetings shall be called by the president or secretary in like manner and on like notice on the written request of the sole director.

Section 9.       At all meetings of the board a majority of the directors shall constitute a quorum for the transaction of business and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the board of directors, except as may be otherwise specifically provided by the New York Business Corporation Law or by the certificate of incorporation.  If a quorum shall not be present at any meeting of the board of directors the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present.

Section 10.     The President, or, in his/her absence, a Vice President, shall preside at meetings of the board of directors.  The Secretary shall act as secretary of the meeting or, in his/her absence, a Assistant Secretary, shall act, or if neither is present, then the presiding officer may appoint a person to act as secretary of the meeting.

Section 11.     Unless otherwise restricted by the certificate of incorporation or these by-laws, any action required or permitted to be taken at any meeting of the board of directors or of any committee thereof may be taken without a meeting, if all members of the board or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the board or committee.

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Section 12.     Unless otherwise restricted by the certificate of incorporation or these by-laws, members of the board of directors or any committee designated by the board of directors, may participate in a meeting of the board of directors or any committee, by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at the meeting.

COMMITTEES OF DIRECTORS

Section 13.     The board of directors may, by resolution passed by a majority of the whole board, designate one or more committees, each committee to consist of three or more of the directors of the corporation.  The board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee.

In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the board of directors to act at the meeting in the place of any such absent or disqualified member.

Any such committee, to the extent provided in the resolution of the board of directors, shall have and may exercise all the powers and authority of the board of directors in the management of the business and affairs of the corporation, and may authorize the seal of the corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to:

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(i) The submission to shareholders of any action that needs shareholders’ approval under this chapter;

(ii)  The filling of vacancies in the board of directors or in any committee;

(iii)  The fixing of compensation of the directors for serving on the board or any committee;

(iv)  The amendment or repeal of the by-laws, or the adoption of new by-laws;

(v)  The amendment or repeal of any resolution of the board which by its terms shall not be so amendable or repealable.

Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the board of directors.

Section 14.     Each committee shall keep regular minutes of its meetings and report the same to the board of directors when required.

COMPENSATION OF DIRECTORS

Section 15.     Unless otherwise restricted by the certificate of incorporation or these by-laws, the board of directors shall have the authority to fix the compensation of directors.  The directors may be paid their expenses, if any, of attendance at each meeting of the board of directors and may be paid a fixed sum for attendance at each meeting of the board of directors or a stated salary as director.  No such payment shall preclude any director from serving the corporation in any other capacity and receiving compensation therefor.  Members of committees may be allowed like compensation for attending committee meetings.

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REMOVAL OF DIRECTORS

Section 16.     Any director may be removed with or without cause at any time by the affirmative vote of shareholders holding of record in the aggregate at least a majority of the votes cast at a meeting of the shareholders by the holders of shares present in person or represented by proxy entitled to vote at a special meeting of the shareholders called for that purpose.

ARTICLE IV

NOTICES

Section 1.       Whenever, under the provisions of New York Business Corporation Law or of the certificate of incorporation or of these by-laws, notice is required to be given to any director or stockholder, it shall not be construed to mean personal notice, but such notice may be given in writing, by mail, addressed to such director or stockholder, at his address as it appears on the records of the corporation, with postage thereon prepaid, and such notice shall be deemed to be given at the time when the same shall be deposited in the United States mail.  Notice to directors may also be given by telegram or electronic mail.

ARTICLE V

OFFICERS

Section 1.       The officers of the corporation shall be chosen by the board of directors and shall be a president, a vice-president, a secretary and a treasurer.  The board of directors may also choose additional vice-presidents, and one or more assistant secretaries and assistant treasurers.  Any number of offices may be held by the same person, unless the certificate of incorporation or these by-laws otherwise provide; provided, that the offices of President

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and Secretary shall be held by different persons.  The board of directors may also elect a chairman of the board who shall have such duties as shall be assigned to him by the board of directors.

Section 2.       The board of directors at its first meeting after each annual meeting of stockholders shall choose a president, one or more vice-presidents, a secretary and a treasurer.

Section 3.       The board of directors may appoint such other officers and agents as it shall deem necessary who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the board.  The board of directors may require any officer to give security for the faithful performance of his duties.

Section 4.       The salaries of all officers and agents of the corporation shall be fixed by the board of directors.

Section 5.       The officers of the corporation shall hold office until their successors are chosen and qualify.  Any officer elected or appointed by the board of directors may be removed at any time by the affirmative vote of a majority of the board of directors.  Any vacancy occurring in any office of the corporation shall be filled for the unexpired portion of the term by the board of directors.  Any officer may resign his office at any time.  Such resignation shall be made in writing and shall take effect at the time specified therein or, if no time be specified, at the time of its receipt by the Corporation.  The acceptance of a resignation shall not be necessary to make it effective, unless expressly so provided in the resignation.

THE PRESIDENT

Section 6.       The president shall be the chief executive officer of the corporation, shall preside at all meetings of the stockholders and the board of directors and, subject to the control of

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the board of directors, shall supervise and control all business and affairs of the Corporation, shall have general and active management of the business of the corporation and shall see that all orders and resolutions of the board of directors are carried into effect.  He shall when present preside at all meetings of the shareholders and the board of directors.

Section 7.       He shall execute bonds, mortgages and other contracts requiring a seal, under the seal of the corporation, except where required or permitted by law to be otherwise signed and executed and except where the signing and execution thereof shall be expressly delegated by the board of directors to some other officer or agent of the corporation.

THE VICE-PRESIDENTS

Section 8.       Each Vice President, if any, shall have such powers and perform such duties as may be determined by the President and assigned to him by the President.  In the absence of the president or in the event of his inability or refusal to act, the vice-president (or in the event there be more than one vice-president, the vice-presidents in the order designated by the directors, or in the absence of any designation, then in the order of their election) shall perform the duties of the president, and when so acting, shall have all the powers of and be subject to all the restrictions upon the president.  The vice-presidents shall perform such other duties and have such other powers as the board of directors may from time to time prescribe.

THE SECRETARY AND ASSISTANT SECRETARY

Section 9.       The secretary shall attend all meetings of the board of directors and all meetings of the stockholders and record all proceedings of the meetings of the corporation and of the board of directors in a minute book to be kept for that purpose and shall perform like duties

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for the committees when required.  The secretary shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the board of directors, and shall perform such other duties as may be prescribed by the board of directors or president, under whose supervision he shall be.  The secretary shall have custody of the seal of the corporation and he, or an assistant secretary, shall have authority to affix the same to any instrument and when so affixed, it may be attested by his signature or by the signature of such assistant secretary.  The board of directors may give general authority to any other officer to affix the seal of the corporation and to attest the affixing by his signature.  The secretary shall keep a register of the post office address of each shareholder which shall be furnished to the secretary by such shareholder and shall have general charge of stock transfer books of the Corporation.

Section 10.     The assistant secretary, or if there be more than one, the assistant secretaries in the order determined by the board of directors (or if there be no such determination, then in the order of their election) shall, in the absence of the secretary or in the event of his inability or refusal to act, perform the duties and exercise the powers of the secretary and shall perform such other duties and have such other powers as the board of directors may from time to time prescribe.

THE TREASURER AND ASSISTANT TREASURERS

Section 11.     The treasurer shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the corporation in such depositories as may be designated by the board of directors.  The

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treasurer shall have power to receive and give receipts for monies due and payable to the Corporation from any source whatsoever.

Section 12.     The treasurer shall disburse the funds of the corporation as may be ordered by the board of directors, taking proper vouchers for such disbursements, and shall render to the president and the board of directors, at its regular meetings, or when the board of directors so requires, an account of all his transactions as treasurer and of the financial condition of the corporation.

Section 13.     If required by the board of directors, the treasurer shall give the corporation a bond (which shall be renewed every six years) in such sum and with such surety or sureties as shall be satisfactory to the board of directors for the faithful performance of the duties of his office and for the restoration to the corporation, in case of his death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in his possession or under this control belonging to the corporation.

Section 14.     The assistant treasurer, or if there shall be more than one, the assistant treasurers in the order determined by the board of directors (or if there be no such determination, then in the order of their election) shall, in the absence of the treasurer or in the event or his inability or refusal to act, perform the duties and exercise the powers of the treasurer and shall perform such other duties and have such other powers as the board of directors may from time to time prescribe.

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ARTICLE VI

CERTIFICATES FOR SHARES

Section 1.       The shares of the corporation shall be represented by a certificate.  Certificates shall be signed by, or in the name of the corporation by, the chairman or vice-chairman of the board of directors, or the president or a vice-president and the treasurer or an assistant treasurer, or the secretary or an assistant secretary of the corporation.

Upon the face or back of each stock certificate issued to represent any partly paid shares shall be set forth the total amount of the consideration to be paid therefor and the amount paid thereon shall be stated.

If the corporation shall be authorized to issue more than one class of stock or more than one series of any class, the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualification, limitations or restrictions of such preferences and/or rights shall be set forth in full or summarized on the face or back of the certificate which the corporation shall issue to represent such class or series of stock, provided that, except as otherwise provided in applicable provisions of the New York Business Corporation Law, in lieu of the foregoing requirements, there may be set forth on the face or back of the certificate which the corporation shall issue to represent such class or series of stock, a statement that the corporation will furnish without charge to each stockholder who so requests the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights.

Section 2.       Any or all of the signatures on a certificate may be facsimile.  In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such

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certificate is issued, it may be issued by the corporation with the same effect as if he were such officer, transfer agent or registrar at the date of issue.  If such certificate is countersigned by a transfer agent other than the Corporation or its employees, or by a registrar other than the Corporation or its employee, the signatures of the officers of the Corporation may be facsimiles and, if permitted by law, any other signature may be a facsimile.

LOST CERTIFICATES

Section 3.       The board of directors may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed.  When authorizing such issuance of a new certificate or certificates, the board of directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate or certificates, or his legal representative, to advertise the same in such manner as it shall require and/or to give the corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the corporation with respect to the certificate alleged to have been lost, stolen or destroyed.

TRANSFER OF STOCK

Section 4.       Upon surrender to the corporation or the transfer agent of the corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignation or authority to transfer, it shall be the duty of the corporation to issue a new

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certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books.  Whenever any transfer of shares shall be made for collateral security, and not absolutely, it shall be so expressed in the entry of the transfer if, when the certificates are presented to the Corporation for transfer, both the transferor and transferee request the Corporation to do so.  The Corporation shall maintain at its principal office or at the office of its attorneys an office where shares of the Corporation shall be transferable.  The Corporation may also maintain one or more registry offices where such shares shall be registered.  The board of directors may make such rules and regulations as it may deem expedient concerning the issue, transfer and registration of certificates of stock.

FIXING RECORD DATE

Section 5.       In order that the corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the board of directors may fix, in advance, a record date, which shall not be more than fifty nor less than ten days before the date of such meeting, nor more than fifty days prior to any other action.  A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the board of directors may fix a new record date for the adjourned meeting.  If no record date is fixed, the record date for the determination of shareholders entitled to notice of or to vote at a

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meeting of shareholders shall be at the close of business on the day next preceding the day on which notice is given, or, if not notice is given, the day on which the meeting is held.  For all other purposes, the record date for determining shareholders shall be at the close of business on the date on which the resolution of the board relating thereto is adopted.

REGISTERED STOCKHOLDERS

Section 6.       The corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and to hold liable for calls and assessments a person registered on its books as the owner of shares, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the New York Business Corporation Law.

ARTICLE VII

DIVIDENDS

Section 1.       Dividends upon the capital stock of the corporation, subject to the provisions of the certificate of incorporation, if any, may be declared out of funds legally available therefor by the board of directors at any regular or special meeting, pursuant to law.  Dividends may be paid in cash, in property, or in shares of the capital stock, subject to the provisions of the certificate of incorporation.

Before payment of any dividend, there may be set aside out of any funds of the corporation available for dividends such sum or sums as the directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing

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dividends, or for repairing or maintaining any property of the corporation, or for such other purpose as the directors shall think conducive to the interest of the corporation, and the directors may modify or abolish any such reserve in the manner in which it was created.

ARTICLE VIII

MISCELLANEOUS PROVISIONS

Section 1.       Annual Statement.  The board of directors shall present at each annual meeting, and at any special meeting of the stockholders when called for by vote of the stockholders, a full and clear statement of the business and condition of the corporation.

Section 2.       Checks; contracts; deposits.  All checks or demands for money and notes of the corporation shall be signed by such officer or officers or such other person or persons as the board of directors may from time to time designate.  Unless otherwise provided by law or resolution of the board of directors, any contract, document or other instrument, including contracts or instruments evidencing indebtedness of the Corporation, shall be valid and binding on the Corporation only if executed and delivered in its name and on its behalf by either the President or such other persons who have been designated by resolution of the board of directors as authorized signatories of contracts, documents or other instruments.  All funds of the Corporation not otherwise employed shall be deposited from time to time to the credit of the Corporation in such banks, trust companies or other depositaries as the board of directors may select or as may be designated by any officer or officers of the Corporation.

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Section 3.       Fiscal Year. The fiscal year of the corporation shall be fixed by resolution of the board of directors.

Section 4.       Corporate Seal.  The corporate seal shall have inscribed thereon the name of the corporation, the year of its organization and the words “Corporate Seal, New York”.  The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.

Section 5.       Indemnification.  The corporation shall indemnify its officers, directors, employees and agents to the fullest extent permitted by law.

ARTICLE IX

AMENDMENTS TO BY-LAWS

Section 1.       The by-laws may be altered, amended or repealed or new by-laws may be made or adopted by the board of directors at any regular or special meeting of the board of directors; except that no alteration, amendment or repeal to Article III or this Article IX may be made with out the consent of the shareholders as set forth in the next sentence.  The by-laws of the Corporation may also be altered, amended or repealed or new by-laws may be made or adopted by the vote of a majority in interest of the shareholders represented and entitled to vote upon election of directors, at any meeting at which a quorum is present.

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EX-3.2.18

Exhibit 3.2.18

BY - LAWS

ARTICLE I

OFFICES

Section 1.       The registered office shall be c/o Equinox Greenvale, Inc. at: 895 Broadway, New York, New York 10003.

Section 2.       The corporation may also have offices at such other places both within and without the State of New York as the board of directors may from time to time determine or the business of the corporation may require.

ARTICLE II

MEETING OF STOCKHOLDERS

Section 1.       All meetings of the stockholders for the election of director shall be held in the City of New York, at such place as may be fixed from time to time by the board of directors, or at such other place either within or without the State of New York as shall be designated from time to time by the board of directors as stated in the notice of the meeting.  Meetings of stockholders for any other purpose may be held at such time and place, within or without the State of New York, as shall be stated in the notice of the meeting or in a duly executed waiver of notice thereof.

Section 2.       Annual meetings of stockholders, commencing with the year 2002, shall be held on the second Tuesday in the fifth month following the completion of the Corporation’s fiscal year, and if said date is a legal holiday, then on the next business day following, at 10:00 A.M., or at such other date and time as shall be designated from time to time by the board of directors and stated in the notice of the meeting, at which they shall elect by a plurality vote a board of directors, and transact such other business as may properly be brought before the meeting.

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Section 3.       Written notice of the annual meeting stating the place, date and hour of the meeting shall be given to each stockholder entitled to vote at such meeting not less than ten nor more than fifty days before the date of the meeting.

Section 4.       The officer who has charge of the stock ledger of the corporation shall prepare and make, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder.  Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held.  The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present.  If the right to vote at any meeting ins challenged, the inspectors of election, or person presiding thereat, shall require such list of shareholders to be produced as evidence of the right of the persons challenged to vote at such meeting, and all persons who appear from such list to be shareholders entitled to vote thereat may vote at such meeting.

Section 5.       The election of directors and any other vote by ballot at any meeting of the shareholders shall be supervised by at least two inspectors if requested by a shareholder present in person or represented by proxy and entitled to vote at such meeting.  Such inspectors may be appointed by the presiding officer before or at the meeting; or if one or both inspectors so appointed shall refuse to serve or shall not be present, such appointment shall be made by the officer presiding at the meeting.

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Section 6.       Special meetings of the stockholders, for any purpose or purposes, unless otherwise prescribed by statute or by the president, shall be called by the president, or at the request in writing of a majority of the board of directors, or at the request in writing of stockholders owning a majority in amount of the entire capital stock of the corporation issued and outstanding and entitled to vote.  Such request shall state the purpose or purposes of the proposed meeting.

Section 7.       Written notice of a special meeting stating the place, date and hour of the meeting and the purpose or purposes for which the meeting is called, shall be given not less than ten nor more than sixty days before the date of the meeting, to each stockholder entitled to vote at such meeting.

Section 8.       Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice.

Section 9.       The holders of a majority of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business except as otherwise provided by statute or by the certificate of incorporation.  If, however, such quorum shall not be present or represented at any meeting of the stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, shall have the power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented.  At such adjourned meeting at which a quorum shall be present or represented any business may be transacted which might have been transacted at the meeting as originally noticed.  If the adjournment is for more than thirty days, or if after the adjournment a new record

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date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.

Section 10.     When a quorum is present at any meeting the vote of the holders of a majority of the stock having voting power present in person or represented by proxy shall decide any question brought before such meeting, unless the question is one upon which by express provision of the New York Business Corporation Law or of the certificate of incorporation a different vote is required, in which case such express provision shall govern and control the decision of such question.

Section 11.     Unless otherwise provided in the certificate of incorporation, each stockholder shall at every meeting of the stockholders be entitled to one vote in person or by proxy for each share of the capital stock having voting power held by such stockholder, but no proxy shall be voted on after eleven (11) months from its date, unless the proxy provides for a longer period.

At all elections of directors of the corporation each stockholder having voting power shall be entitled to exercise the right of cumulative voting as provided in the certificate of incorporation.

Section 12.     Unless otherwise provided in the certificate of incorporation, any action required to be taken at any annual or special meeting of stockholders of the corporation, or any action which may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting

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at which all shares entitled to vote thereon were present and voted.  Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing.

Section 13.     The President, or, in his/her absence, a Vice President, shall preside at meetings of the shareholders.  The Secretary shall act as secretary of the meeting or, in his/her absence, a Assistant Secretary, shall act, or if neither is present, then the presiding officer may appoint a person to act as secretary of the meeting.

Section 14.     Except as otherwise provided by these by-laws or any resolutions adopted by the shareholder or Board of Directors, the order of business and all other maters of procedure at every meeting of shareholders shall be determined by the presiding officer.  Not less than 15 minutes following the presentation of any resolution to any meeting of shareholder, the presiding officer may announce that further discussion on such resolution shall be limited to not more than three persons who favor and not more than three persons who oppose such resolution, each of whom shall be designated by the presiding officer and shall thereupon be entitled to speak thereon for not more than five minutes.  After such persons, or such a lesser number thereof as shall advise the presiding officer of their desire so to speak, shall have spoken on such resolution, the presiding officer may direct a vote on such resolution without further discussion thereon at the meeting.

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ARTICLE III

DIRECTORS

Section 1.       The number of directors constituting the entire board shall be fixed from time to time by the Board of Directors and shall not be less than three, except that where all the shares of a Corporation are owned beneficially and of record by less than three shareholders, the number of directors may be less than three but not less than the number of shareholders.  The directors shall be elected at the annual meeting of the stockholders, except as provided in Section 2 of this Article, and each director elected shall hold office until his successor is elected and qualified; provided, that a Director may resign as stated herein.  Directors need not be stockholders.

Section 2.       Any director may resign his office at any time by delivering his resignation in writing to the President or the Secretary.  It will take effect at the time specified therein or, if no time is specified, it sill be effective at the time of its receipt by the Corporation.  The acceptance of a resignation shall not be necessary to make it effective, unless expressly so provided in the resignation.

Section 3.       Vacancies and newly created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, though less than a quorum, or by a sole remaining director, and the directors so chosen shall hold office until the next annual election and until their successors are duly elected and shall qualify, unless sooner displaced.  If there are no directors in office, then an election of directors may be held in the manner provided by the New York Business Corporation Law.  If, at the time of filling any vacancy or any newly created directorship, the directors then in office shall constitute less than a majority of the whole board (as constituted immediately prior to any such increase), the Court of Chancery may, upon application of any stockholder or stockholders holding at least

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ten percent of the total number of the shares at the time outstanding having the right to vote for such directors, summarily order an election to be held to fill any such vacancies or newly created directorship, or to replace the directors chosen by the directors then in office.

Section 4.       The business of the corporation shall be managed by or under the direction of its board of directors which may exercise all such powers of the corporation and do all such lawful acts and things as are not by the New York Business Corporation Law or by the certificate of incorporation or by these by-laws directed or required to be exercised or done by the stockholders.

MEETINGS OF THE BOARD OF DIRECTORS

Section 5.       The board of directors of the corporation may hold meetings, both regular and special, either within or without the State of New York.

Section 6.       The first meeting of each newly elected board of directors shall be held at such time and place as shall be fixed by the vote of the stockholders at the annual meeting and no notice of such meeting shall be necessary to the newly elected directors in order legally to constitute the meeting, provided a quorum shall be present.  In the event of the failure of the stockholders to fix the time or place of such first meeting of the newly elected board of directors, or in the event such meeting is not held at the time and place so fixed by the stockholders, the meeting may be held at such time and place as shall be specified in a notice given as hereinafter provided for special meetings of the board of directors, or as shall be specified in a written waiver signed by all of the directors.

Section 7.       Regular meetings of the board of directors may be held without notice at such time and at such place as shall from time to time be determined by the board.

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Section 8.       Special meetings of the board may be called by the president on one day’s notice to each director, either personally or by mail or by telegram or by electronic mail; special meetings shall be called by the president or secretary in like manner and on like notice on the written request of two directors unless the board consists of only one director; in which case special meetings shall be called by the president or secretary in like manner and on like notice on the written request of the sole director.

Section 9.       At all meetings of the board a majority of the directors shall constitute a quorum for the transaction of business and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the board of directors, except as may be otherwise specifically provided by the New York Business Corporation Law or by the certificate of incorporation.  If a quorum shall not be present at any meeting of the board of directors the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present.

Section 10.     The President, or, in his/her absence, a Vice President, shall preside at meetings of the board of directors.  The Secretary shall act as secretary of the meeting or, in his/her absence, a Assistant Secretary, shall act, or if neither is present, then the presiding officer may appoint a person to act as secretary of the meeting.

Section 11.     Unless otherwise restricted by the certificate of incorporation or these by-laws, any action required or permitted to be taken at any meeting of the board of directors or of any committee thereof may be taken without a meeting, if all members of the board or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the board or committee.

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Section 12.     Unless otherwise restricted by the certificate of incorporation or these by-laws, members of the board of directors or any committee designated by the board of directors, may participate in a meeting of the board of directors or any committee, by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at the meeting.

COMMITTEES OF DIRECTORS

Section 13.     The board of directors may, by resolution passed by a majority of the whole board, designate one or more committees, each committee to consist of three or more of the directors of the corporation.  The board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee.

In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the board of directors to act at the meeting in the place of any such absent or disqualified member.

Any such committee, to the extent provided in the resolution of the board of directors, shall have and may exercise all the powers and authority of the board of directors in the management of the business and affairs of the corporation, and may authorize the seal of the corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to:

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(i) The submission to shareholders of any action that needs shareholders’ approval under this chapter;

(ii)  The filling of vacancies in the board of directors or in any committee;

(iii)  The fixing of compensation of the directors for serving on the board or any committee;

(iv)  The amendment or repeal of the by-laws, or the adoption of new by-laws;

(v)  The amendment or repeal of any resolution of the board which by its terms shall not be so amendable or repealable.

Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the board of directors.

Section 14.     Each committee shall keep regular minutes of its meetings and report the same to the board of directors when required.

COMPENSATION OF DIRECTORS

Section 15.     Unless otherwise restricted by the certificate of incorporation or these by-laws, the board of directors shall have the authority to fix the compensation of directors.  The directors may be paid their expenses, if any, of attendance at each meeting of the board of directors and may be paid a fixed sum for attendance at each meeting of the board of directors or a stated salary as director.  No such payment shall preclude any director from serving the corporation in any other capacity and receiving compensation therefor.  Members of committees may be allowed like compensation for attending committee meetings.

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REMOVAL OF DIRECTORS

Section 16.     Any director may be removed with or without cause at any time by the affirmative vote of shareholders holding of record in the aggregate at least a majority of the votes cast at a meeting of the shareholders by the holders of shares present in person or represented by proxy entitled to vote at a special meeting of the shareholders called for that purpose.

ARTICLE IV

NOTICES

Section 1.       Whenever, under the provisions of New York Business Corporation Law or of the certificate of incorporation or of these by-laws, notice is required to be given to any director or stockholder, it shall not be construed to mean personal notice, but such notice may be given in writing, by mail, addressed to such director or stockholder, at his address as it appears on the records of the corporation, with postage thereon prepaid, and such notice shall be deemed to be given at the time when the same shall be deposited in the United States mail.  Notice to directors may also be given by telegram or electronic mail.

ARTICLE V

OFFICERS

Section 1.       The officers of the corporation shall be chosen by the board of directors and shall be a president, a vice-president, a secretary and a treasurer.  The board of directors may also choose additional vice-presidents, and one or more assistant secretaries and assistant treasurers.  Any number of offices may be held by the same person, unless the certificate of incorporation or these by-laws otherwise provide; provided, that the offices of President and

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Secretary shall be held by different persons.  The board of directors may also elect a chairman of the board who shall have such duties as shall be assigned to him by the board of directors.

Section 2.       The board of directors at its first meeting after each annual meeting of stockholders shall choose a president, one or more vice-presidents, a secretary and a treasurer.

Section 3.       The board of directors may appoint such other officers and agents as it shall deem necessary who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the board.  The board of directors may require any officer to give security for the faithful performance of his duties.

Section 4.       The salaries of all officers and agents of the corporation shall be fixed by the board of directors.

Section 5.       The officers of the corporation shall hold office until their successors are chosen and qualify.  Any officer elected or appointed by the board of directors may be removed at any time by the affirmative vote of a majority of the board of directors.  Any vacancy occurring in any office of the corporation shall be filled for the unexpired portion of the term by the board of directors.  Any officer may resign his office at any time.  Such resignation shall be made in writing and shall take effect at the time specified therein or, if no time be specified, at the time of its receipt by the Corporation.  The acceptance of a resignation shall not be necessary to make it effective, unless expressly so provided in the resignation.

THE PRESIDENT

Section 6.       The president shall be the chief executive officer of the corporation, shall preside at all meetings of the stockholders and the board of directors and, subject to the control of

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the board of directors, shall supervise and control all business and affairs of the Corporation, shall have general and active management of the business of the corporation and shall see that all orders and resolutions of the board of directors are carried into effect.  He shall when present preside at all meetings of the shareholders and the board of directors.

Section 7.       He shall execute bonds, mortgages and other contracts requiring a seal, under the seal of the corporation, except where required or permitted by law to be otherwise signed and executed and except where the signing and execution thereof shall be expressly delegated by the board of directors to some other officer or agent of the corporation.

THE VICE-PRESIDENTS

Section 8.       Each Vice President, if any, shall have such powers and perform such duties as may be determined by the President and assigned to him by the President.  In the absence of the president or in the event of his inability or refusal to act, the vice-president (or in the event there be more than one vice-president, the vice-presidents in the order designated by the directors, or in the absence of any designation, then in the order of their election) shall perform the duties of the president, and when so acting, shall have all the powers of and be subject to all the restrictions upon the president.  The vice-presidents shall perform such other duties and have such other powers as the board of directors may from time to time prescribe.

THE SECRETARY AND ASSISTANT SECRETARY

Section 9.       The secretary shall attend all meetings of the board of directors and all meetings of the stockholders and record all proceedings of the meetings of the corporation and of the board of directors in a minute book to be kept for that purpose and shall perform like duties

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for the committees when required.  The secretary shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the board of directors, and shall perform such other duties as may be prescribed by the board of directors or president, under whose supervision he shall be.  The secretary shall have custody of the seal of the corporation and he, or an assistant secretary, shall have authority to affix the same to any instrument and when so affixed, it may be attested by his signature or by the signature of such assistant secretary.  The board of directors may give general authority to any other officer to affix the seal of the corporation and to attest the affixing by his signature.  The secretary shall keep a register of the post office address of each shareholder which shall be furnished to the secretary by such shareholder and shall have general charge of stock transfer books of the Corporation.

Section 10.     The assistant secretary, or if there be more than one, the assistant secretaries in the order determined by the board of directors (or if there be no such determination, then in the order of their election) shall, in the absence of the secretary or in the event of his inability or refusal to act, perform the duties and exercise the powers of the secretary and shall perform such other duties and have such other powers as the board of directors may from time to time prescribe.

THE TREASURER AND ASSISTANT TREASURERS

Section 11.     The treasurer shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the corporation in such depositories as may be designated by the board of directors.  The

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treasurer shall have power to receive and give receipts for monies due and payable to the Corporation from any source whatsoever.

Section 12.     The treasurer shall disburse the funds of the corporation as may be ordered by the board of directors, taking proper vouchers for such disbursements, and shall render to the president and the board of directors, at its regular meetings, or when the board of directors so requires, an account of all his transactions as treasurer and of the financial condition of the corporation.

Section 13.     If required by the board of directors, the treasurer shall give the corporation a bond (which shall be renewed every six years) in such sum and with such surety or sureties as shall be satisfactory to the board of directors for the faithful performance of the duties of his office and for the restoration to the corporation, in case of his death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in his possession or under this control belonging to the corporation.

Section 14.     The assistant treasurer, or if there shall be more than one, the assistant treasurers in the order determined by the board of directors (or if there be no such determination, then in the order of their election) shall, in the absence of the treasurer or in the event or his inability or refusal to act, perform the duties and exercise the powers of the treasurer and shall perform such other duties and have such other powers as the board of directors may from time to time prescribe.

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ARTICLE VI

CERTIFICATES FOR SHARES

Section 1.       The shares of the corporation shall be represented by a certificate.  Certificates shall be signed by, or in the name of the corporation by, the chairman or vice-chairman of the board of directors, or the president or a vice-president and the treasurer or an assistant treasurer, or the secretary or an assistant secretary of the corporation.

Upon the face or back of each stock certificate issued to represent any partly paid shares shall be set forth the total amount of the consideration to be paid therefor and the amount paid thereon shall be stated.

If the corporation shall be authorized to issue more than one class of stock or more than one series of any class, the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualification, limitations or restrictions of such preferences and/or rights shall be set forth in full or summarized on the face or back of the certificate which the corporation shall issue to represent such class or series of stock, provided that, except as otherwise provided in applicable provisions of the New York Business Corporation Law, in lieu of the foregoing requirements, there may be set forth on the face or back of the certificate which the corporation shall issue to represent such class or series of stock, a statement that the corporation will furnish without charge to each stockholder who so requests the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights.

Section 2.       Any or all of the signatures on a certificate may be facsimile.  In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such

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certificate is issued, it may be issued by the corporation with the same effect as if he were such officer, transfer agent or registrar at the date of issue.  If such certificate is countersigned by a transfer agent other than the Corporation or its employees, or by a registrar other than the Corporation or its employee, the signatures of the officers of the Corporation may be facsimiles and, if permitted by law, any other signature may be a facsimile.

LOST CERTIFICATES

Section 3.       The board of directors may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed.  When authorizing such issuance of a new certificate or certificates, the board of directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate or certificates, or his legal representative, to advertise the same in such manner as it shall require and/or to give the corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the corporation with respect to the certificate alleged to have been lost, stolen or destroyed.

TRANSFER OF STOCK

Section 4.       Upon surrender to the corporation or the transfer agent of the corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignation or authority to transfer, it shall be the duty of the corporation to issue a new

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certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books.  Whenever any transfer of shares shall be made for collateral security, and not absolutely, it shall be so expressed in the entry of the transfer if, when the certificates are presented to the Corporation for transfer, both the transferor and transferee request the Corporation to do so.  The Corporation shall maintain at its principal office or at the office of its attorneys an office where shares of the Corporation shall be transferable.  The Corporation may also maintain one or more registry offices where such shares shall be registered.  The board of directors may make such rules and regulations as it may deem expedient concerning the issue, transfer and registration of certificates of stock.

FIXING RECORD DATE

Section 5.       In order that the corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the board of directors may fix, in advance, a record date, which shall not be more than fifty nor less than ten days before the date of such meeting, nor more than fifty days prior to any other action.  A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the board of directors may fix a new record date for the adjourned meeting.  If no record date is fixed, the record date for the determination of shareholders entitled to notice of or to vote at a

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meeting of shareholders shall be at the close of business on the day next preceding the day on which notice is given, or, if not notice is given, the day on which the meeting is held.  For all other purposes, the record date for determining shareholders shall be at the close of business on the date on which the resolution of the board relating thereto is adopted.

REGISTERED STOCKHOLDERS

Section 6.       The corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and to hold liable for calls and assessments a person registered on its books as the owner of shares, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the New York Business Corporation Law.

ARTICLE VII

DIVIDENDS

Section 1.       Dividends upon the capital stock of the corporation, subject to the provisions of the certificate of incorporation, if any, may be declared out of funds legally available therefor by the board of directors at any regular or special meeting, pursuant to law.  Dividends may be paid in cash, in property, or in shares of the capital stock, subject to the provisions of the certificate of incorporation.

Before payment of any dividend, there may be set aside out of any funds of the corporation available for dividends such sum or sums as the directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing

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dividends, or for repairing or maintaining any property of the corporation, or for such other purpose as the directors shall think conducive to the interest of the corporation, and the directors may modify or abolish any such reserve in the manner in which it was created.

ARTICLE VIII

MISCELLANEOUS PROVISIONS

Section 1.       Annual Statement.  The board of directors shall present at each annual meeting, and at any special meeting of the stockholders when called for by vote of the stockholders, a full and clear statement of the business and condition of the corporation.

Section 2.       Checks; contracts; deposits.  All checks or demands for money and notes of the corporation shall be signed by such officer or officers or such other person or persons as the board of directors may from time to time designate.  Unless otherwise provided by law or resolution of the board of directors, any contract, document or other instrument, including contracts or instruments evidencing indebtedness of the Corporation, shall be valid and binding on the Corporation only if executed and delivered in its name and on its behalf by either the President or such other persons who have been designated by resolution of the board of directors as authorized signatories of contracts, documents or other instruments.  All funds of the Corporation not otherwise employed shall be deposited from time to time to the credit of the Corporation in such banks, trust companies or other depositaries as the board of directors may select or as may be designated by any officer or officers of the Corporation.

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Section 3.       Fiscal Year. The fiscal year of the corporation shall be fixed by resolution of the board of directors.

Section 4.       Corporate Seal.  The corporate seal shall have inscribed thereon the name of the corporation, the year of its organization and the words “Corporate Seal, New York”.  The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.

Section 5.       Indemnification.  The corporation shall indemnify its officers, directors, employees and agents to the fullest extent permitted by law.

ARTICLE IX

AMENDMENTS TO BY-LAWS

Section 1.       The by-laws may be altered, amended or repealed or new by-laws may be made or adopted by the board of directors at any regular or special meeting of the board of directors; except that no alteration, amendment or repeal to Article III or this Article IX may be made with out the consent of the shareholders as set forth in the next sentence.  The by-laws of the Corporation may also be altered, amended or repealed or new by-laws may be made or adopted by the vote of a majority in interest of the shareholders represented and entitled to vote upon election of directors, at any meeting at which a quorum is present.

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EX-3.2.21

Exhibit 3.2.21

BY - LAWS

ARTICLE I

OFFICES

Section 1.       The registered office shall be c/o Equinox Darien, Inc. at: 895 Broadway, New York, New York 10003.

Section 2.       The corporation may also have offices at such other places both within and without the State of Connecticut as the board of directors may from time to time determine or the business of the corporation may require.

ARTICLE II

MEETING OF STOCKHOLDERS

Section 1.       All meetings of the stockholders for the election of director shall be held in the City of New York, at such place as may be fixed from time to time by the board of directors, or at such other place either within or without the State of Connecticut as shall be designated from time to time by the board of directors as stated in the notice of the meeting.  Meetings of stockholders for any other purpose may be held at such time and place, within or without the State of Connecticut, as shall be stated in the notice of the meeting or in a duly executed waiver of notice thereof.

Section 2.       Annual meetings of stockholders, commencing with the year 2002, shall be held on the second Tuesday in the fifth month following the completion of the Corporation’s fiscal year, and if said date is a legal holiday, then on the next business day following, at 10:00 A.M., or at such other date and time as shall be designated from time to time by the board of directors and stated in the notice of the meeting, at which they shall elect by a plurality vote a board of directors, and transact such other business as may properly be brought before the meeting.

Section 3.       Written notice of the annual meeting stating the place, date and hour of the meeting shall be given to each stockholder entitled to vote at such meeting not less than ten nor more than fifty days before the date of the meeting.  No change in the time or place for a meeting for the election of directors shall be made within twenty (20) days preceding the day on which the election is the be held.  Written notice of any change shall be given to each shareholder at least twenty (20) days before the election is held, either in person or by letter mailed to the shareholder at the address last shown on the books of the Corporation.

Section 4.       The officer who has charge of the stock ledger of the corporation shall prepare and make, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder.  Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held.  The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present.  If the right to vote at any meeting ins challenged, the inspectors of election, or person presiding thereat, shall require such list of shareholders to be produced as evidence of the right of the persons challenged to vote at such meeting, and all persons who appear from such list to be shareholders entitled to vote thereat may vote at such meeting.

Section 5.       The election of directors and any other vote by ballot at any meeting of the shareholders shall be supervised by at least two inspectors if requested by a shareholder present in

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person or represented by proxy and entitled to vote at such meeting.  Such inspectors may be appointed by the presiding officer before or at the meeting; or if one or both inspectors so appointed shall refuse to serve or shall not be present, such appointment shall be made by the officer presiding at the meeting.

Section 6.       Special meetings of the stockholders, for any purpose or purposes, unless otherwise prescribed by statute or by the president, shall be called by the president, or at the request in writing of a majority of the board of directors, or at the request in writing of stockholders owning a majority in amount of the entire capital stock of the corporation issued and outstanding and entitled to vote.  Such request shall state the purpose or purposes of the proposed meeting.

Section 7.       Written notice of a special meeting stating the place, date and hour of the meeting and the purpose or purposes for which the meeting is called, shall be given not less than ten nor more than sixty days before the date of the meeting, to each stockholder entitled to vote at such meeting.

Section 8.       Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice.

Section 9.       The holders of a majority of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business except as otherwise provided by statute or by the certificate of incorporation.  If, however, such quorum shall not be present or represented at any meeting of the stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, shall have the power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or

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represented.  At such adjourned meeting at which a quorum shall be present or represented any business may be transacted which might have been transacted at the meeting as originally noticed.  If the adjournment is for more than thirty days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.

Section 10.     When a quorum is present at any meeting the vote of the holders of a majority of the stock having voting power present in person or represented by proxy shall decide any question brought before such meeting, unless the question is one upon which by express provision of the laws of the State of Connecticut or of the certificate of incorporation a different vote is required, in which case such express provision shall govern and control the decision of such question.

Section 11.     Unless otherwise provided in the certificate of incorporation, each stockholder shall at every meeting of the stockholders be entitled to one vote in person or by proxy for each share of the capital stock having voting power held by such stockholder, but no proxy shall be voted on after eleven (11) months from its date, unless the proxy provides for a longer period.

At all elections of directors of the corporation each stockholder having voting power shall be entitled to exercise the right of cumulative voting as provided in the certificate of incorporation.

Section 12.     Unless otherwise provided in the certificate of incorporation, any action required to be taken at any annual or special meeting of stockholders of the corporation, or any action which may be taken at any annual or special meeting of such stockholders, may be taken

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without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted.  Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing.

Section 13.     The President, or, in his/her absence, a Vice President, shall preside at meetings of the shareholders.  The Secretary shall act as secretary of the meeting or, in his/her absence, a Assistant Secretary, shall act, or if neither is present, then the presiding officer may appoint a person to act as secretary of the meeting.

Section 14.     Except as otherwise provided by these by-laws or any resolutions adopted by the shareholder or Board of Directors, the order of business and all other maters of procedure at every meeting of shareholders shall be determined by the presiding officer.  Not less than 15 minutes following the presentation of any resolution to any meeting of shareholder, the presiding officer may announce that further discussion on such resolution shall be limited to not more than three persons who favor and not more than three persons who oppose such resolution, each of whom shall be designated by the presiding officer and shall thereupon be entitled to speak thereon for not more than five minutes.  After such persons, or such a lesser number thereof as shall advise the presiding officer of their desire so to speak, shall have spoken on such resolution, the presiding officer may direct a vote on such resolution without further discussion thereon at the meeting.

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ARTICLE III

DIRECTORS

Section 1.       The number of directors constituting the entire board shall be fixed from time to time by the Board of Directors and shall not be less than three, except that where all the shares of a Corporation are owned beneficially and of record by less than three shareholders, the number of directors may be less than three but not less than the number of shareholders.  The directors shall be elected at the annual meeting of the stockholders, except as provided in Section 2 of this Article, and each director elected shall hold office until his successor is elected and qualified; provided, that a Director may resign as stated herein.  Directors need not be stockholders.

Section 2.       Any director may resign his office at any time by delivering his resignation in writing to the President or the Secretary.  It will take effect at the time specified therein or, if no time is specified, it sill be effective at the time of its receipt by the Corporation.  The acceptance of a resignation shall not be necessary to make it effective, unless expressly so provided in the resignation.

Section 3.       Vacancies and newly created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, though less than a quorum, or by a sole remaining director, and the directors so chosen shall hold office until the next annual election and until their successors are duly elected and shall qualify, unless sooner displaced.  If there are no directors in office, then an election of directors may be held in the manner provided by the applicable laws of the State of Connecticut.  If, at the time of

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filling any vacancy or any newly created directorship, the directors then in office shall constitute less than a majority of the whole board (as constituted immediately prior to any such increase), the Court of Chancery may, upon application of any stockholder or stockholders holding at least ten percent of the total number of the shares at the time outstanding having the right to vote for such directors, summarily order an election to be held to fill any such vacancies or newly created directorship, or to replace the directors chosen by the directors then in office.

Section 4.       The business of the corporation shall be managed by or under the direction of its board of directors which may exercise all such powers of the corporation and do all such lawful acts and things as are not by the laws of the State of Connecticut or by the certificate of incorporation or by these by-laws directed or required to be exercised or done by the stockholders.

MEETINGS OF THE BOARD OF DIRECTORS

Section 5.       The board of directors of the corporation may hold meetings, both regular and special, either within or without the State of Connecticut.

Section 6.       The first meeting of each newly elected board of directors shall be held at such time and place as shall be fixed by the vote of the stockholders at the annual meeting and no notice of such meeting shall be necessary to the newly elected directors in order legally to constitute the meeting, provided a quorum shall be present.  In the event of the failure of the stockholders to fix the time or place of such first meeting of the newly elected board of directors, or in the event such meeting is not held at the time and place so fixed by the stockholders, the meeting may be held at such time and place as shall be specified in a notice given as hereinafter

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provided for special meetings of the board of directors, or as shall be specified in a written waiver signed by all of the directors.

Section 7.       Regular meetings of the board of directors may be held without notice at such time and at such place as shall from time to time be determined by the board.

Section 8.       Special meetings of the board may be called by the president on one day’s notice to each director, either personally or by mail or by telegram or by electronic mail; special meetings shall be called by the president or secretary in like manner and on like notice on the written request of two directors unless the board consists of only one director; in which case special meetings shall be called by the president or secretary in like manner and on like notice on the written request of the sole director.

Section 9.       At all meetings of the board a majority of the directors shall constitute a quorum for the transaction of business and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the board of directors, except as may be otherwise specifically provided by the laws of the State of Connecticut or by the certificate of incorporation.  If a quorum shall not be present at any meeting of the board of directors the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present.

Section 10.     The President, or, in his/her absence, a Vice President, shall preside at meetings of the board of directors.  The Secretary shall act as secretary of the meeting or, in his/her absence, a Assistant Secretary, shall act, or if neither is present, then the presiding officer may appoint a person to act as secretary of the meeting.

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Section 11.     Unless otherwise restricted by the certificate of incorporation or these by-laws, any action required or permitted to be taken at any meeting of the board of directors or of any committee thereof may be taken without a meeting, if all members of the board or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the board or committee.

Section 12.     Unless otherwise restricted by the certificate of incorporation or these by-laws, members of the board of directors or any committee designated by the board of directors, may participate in a meeting of the board of directors or any committee, by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at the meeting.

COMMITTEES OF DIRECTORS

Section 13.     The board of directors may, by resolution passed by a majority of the whole board, designate one or more committees, each committee to consist of three or more of the directors of the corporation.  The board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee.

In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the board of directors to act at the meeting in the place of any such absent or disqualified member.

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Any such committee, to the extent provided in the resolution of the board of directors, shall have and may exercise all the powers and authority of the board of directors in the management of the business and affairs of the corporation, and may authorize the seal of the corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to:

(i) The submission to shareholders of any action that needs shareholders’ approval under this chapter;

(ii)  The filling of vacancies in the board of directors or in any committee;

(iii)  The fixing of compensation of the directors for serving on the board or any committee;

(iv)  The amendment or repeal of the by-laws, or the adoption of new by-laws;

(v)  The amendment or repeal of any resolution of the board which by its terms shall not be so amendable or repealable.

Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the board of directors.

Section 14.     Each committee shall keep regular minutes of its meetings and report the same to the board of directors when required.

COMPENSATION OF DIRECTORS

Section 15.     Unless otherwise restricted by the certificate of incorporation or these by-laws, the board of directors shall have the authority to fix the compensation of directors.  The directors may be paid their expenses, if any, of attendance at each meeting of the board of directors and may be paid a fixed sum for attendance at each meeting of the board of directors or

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a stated salary as director.  No such payment shall preclude any director from serving the corporation in any other capacity and receiving compensation therefor.  Members of committees may be allowed like compensation for attending committee meetings.

REMOVAL OF DIRECTORS

Section 16.     Any director may be removed with or without cause at any time by the affirmative vote of shareholders holding of record in the aggregate at least a majority of the votes cast at a meeting of the shareholders by the holders of shares present in person or represented by proxy entitled to vote at a special meeting of the shareholders called for that purpose.

ARTICLE IV

NOTICES

Section 1.       Whenever, under the provisions of applicable laws of the State of Connecticut or of the certificate of incorporation or of these by-laws, notice is required to be given to any director or stockholder, it shall not be construed to mean personal notice, but such notice may be given in writing, by mail, addressed to such director or stockholder, at his address as it appears on the records of the corporation, with postage thereon prepaid, and such notice shall be deemed to be given at the time when the same shall be deposited in the United States mail.  Notice to directors may also be given by telegram or electronic mail.

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ARTICLE V

OFFICERS

Section 1.       The officers of the corporation shall be chosen by the board of directors and shall be a president, a vice-president, a secretary and a treasurer.  The board of directors may also choose additional vice-presidents, and one or more assistant secretaries and assistant treasurers.  Any number of offices may be held by the same person, unless the certificate of incorporation or these by-laws otherwise provide; provided, that the offices of President and Secretary shall be held by different persons.  The board of directors may also elect a chairman of the board who shall have such duties as shall be assigned to him by the board of directors.

Section 2.       The board of directors at its first meeting after each annual meeting of stockholders shall choose a president, one or more vice-presidents, a secretary and a treasurer.

Section 3.       The board of directors may appoint such other officers and agents as it shall deem necessary who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the board.  The board of directors may require any officer to give security for the faithful performance of his duties.

Section 4.       The salaries of all officers and agents of the corporation shall be fixed by the board of directors.

Section 5.       The officers of the corporation shall hold office until their successors are chosen and qualify.  Any officer elected or appointed by the board of directors may be removed at any time by the affirmative vote of a majority of the board of directors.  Any vacancy occurring in any office of the corporation shall be filled for the unexpired portion of the term by the board of directors.  Any officer may resign his office at any time.  Such resignation shall be made in writing and shall take effect at the time specified therein or, if no time be specified, at the time of

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its receipt by the Corporation.  The acceptance of a resignation shall not be necessary to make it effective, unless expressly so provided in the resignation.

THE PRESIDENT

Section 6.       The president shall be the chief executive officer of the corporation, shall preside at all meetings of the stockholders and the board of directors and, subject to the control of the board of directors, shall supervise and control all business and affairs of the Corporation, shall have general and active management of the business of the corporation and shall see that all orders and resolutions of the board of directors are carried into effect.  He shall when present preside at all meetings of the shareholders and the board of directors.

Section 7.       He shall execute bonds, mortgages and other contracts requiring a seal, under the seal of the corporation, except where required or permitted by law to be otherwise signed and executed and except where the signing and execution thereof shall be expressly delegated by the board of directors to some other officer or agent of the corporation.

THE VICE-PRESIDENTS

Section 8.       Each Vice President, if any, shall have such powers and perform such duties as may be determined by the President and assigned to him by the President.  In the absence of the president or in the event of his inability or refusal to act, the vice-president (or in the event there be more than one vice-president, the vice-presidents in the order designated by the directors, or in the absence of any designation, then in the order of their election) shall perform the duties of the president, and when so acting, shall have all the powers of and be subject to all

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the restrictions upon the president.  The vice-presidents shall perform such other duties and have such other powers as the board of directors may from time to time prescribe.

THE SECRETARY AND ASSISTANT SECRETARY

Section 9.       The secretary shall attend all meetings of the board of directors and all meetings of the stockholders and record all proceedings of the meetings of the corporation and of the board of directors in a minute book to be kept for that purpose and shall perform like duties for the committees when required.  The secretary shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the board of directors, and shall perform such other duties as may be prescribed by the board of directors or president, under whose supervision he shall be.  The secretary shall have custody of the seal of the corporation and he, or an assistant secretary, shall have authority to affix the same to any instrument and when so affixed, it may be attested by his signature or by the signature of such assistant secretary.  The board of directors may give general authority to any other officer to affix the seal of the corporation and to attest the affixing by his signature.  The secretary shall keep a register of the post office address of each shareholder which shall be furnished to the secretary by such shareholder and shall have general charge of stock transfer books of the Corporation.

Section 10.     The assistant secretary, or if there be more than one, the assistant secretaries in the order determined by the board of directors (or if there be no such determination, then in the order of their election) shall, in the absence of the secretary or in the event of his inability or refusal to act, perform the duties and exercise the powers of the secretary and shall

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perform such other duties and have such other powers as the board of directors may from time to time prescribe.

THE TREASURER AND ASSISTANT TREASURERS

Section 11.     The treasurer shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the corporation in such depositories as may be designated by the board of directors.  The treasurer shall have power to receive and give receipts for monies due and payable to the Corporation from any source whatsoever.

Section 12.     The treasurer shall disburse the funds of the corporation as may be ordered by the board of directors, taking proper vouchers for such disbursements, and shall render to the president and the board of directors, at its regular meetings, or when the board of directors so requires, an account of all his transactions as treasurer and of the financial condition of the corporation.

Section 13.     If required by the board of directors, the treasurer shall give the corporation a bond (which shall be renewed every six years) in such sum and with such surety or sureties as shall be satisfactory to the board of directors for the faithful performance of the duties of his office and for the restoration to the corporation, in case of his death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in his possession or under this control belonging to the corporation.

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Section 14.     The assistant treasurer, or if there shall be more than one, the assistant treasurers in the order determined by the board of directors (or if there be no such determination, then in the order of their election) shall, in the absence of the treasurer or in the event or his inability or refusal to act, perform the duties and exercise the powers of the treasurer and shall perform such other duties and have such other powers as the board of directors may from time to time prescribe.

ARTICLE VI

CERTIFICATES FOR SHARES

Section 1.       The shares of the corporation shall be represented by a certificate.  Certificates shall be signed by, or in the name of the corporation by, the chairman or vice-chairman of the board of directors, or the president or a vice-president and the treasurer or an assistant treasurer, or the secretary or an assistant secretary of the corporation.

Upon the face or back of each stock certificate issued to represent any partly paid shares shall be set forth the total amount of the consideration to be paid therefor and the amount paid thereon shall be stated.

If the corporation shall be authorized to issue more than one class of stock or more than one series of any class, the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualification, limitations or restrictions of such preferences and/or rights shall be set forth in full or summarized on the face or back of the certificate which the corporation shall issue to represent such class or series of stock, provided that, except as otherwise provided in applicable provisions of the laws of the State of Connecticut, in lieu of the foregoing requirements, there may be set forth on the face or

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back of the certificate which the corporation shall issue to represent such class or series of stock, a statement that the corporation will furnish without charge to each stockholder who so requests the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights.

Section 2.       Any or all of the signatures on a certificate may be facsimile.  In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the corporation with the same effect as if he were such officer, transfer agent or registrar at the date of issue.  If such certificate is countersigned by a transfer agent other than the Corporation or its employees, or by a registrar other than the Corporation or its employee, the signatures of the officers of the Corporation may be facsimiles and, if permitted by law, any other signature may be a facsimile.

LOST CERTIFICATES

Section 3.       The board of directors may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed.  When authorizing such issuance of a new certificate or certificates, the board of directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate or certificates, or his legal representative, to advertise the same in such manner as it shall require

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and/or to give the corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the corporation with respect to the certificate alleged to have been lost, stolen or destroyed.

TRANSFER OF STOCK

Section 4.       Upon surrender to the corporation or the transfer agent of the corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignation or authority to transfer, it shall be the duty of the corporation to issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books.  Whenever any transfer of shares shall be made for collateral security, and not absolutely, it shall be so expressed in the entry of the transfer if, when the certificates are presented to the Corporation for transfer, both the transferor and transferee request the Corporation to do so.  The Corporation shall maintain at its principal office or at the office of its attorneys an office where shares of the Corporation shall be transferable.  The Corporation may also maintain one or more registry offices where such shares shall be registered.  The board of directors may make such rules and regulations as it may deem expedient concerning the issue, transfer and registration of certificates of stock.

FIXING RECORD DATE

Section 5.       In order that the corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or to express consent to corporate action in writing without a meeting, or entitled to receive payment of any

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dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the board of directors may fix, in advance, a record date, which shall not be more than fifty nor less than ten days before the date of such meeting, nor more than fifty days prior to any other action.  A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the board of directors may fix a new record date for the adjourned meeting.  If no record date is fixed, the record date for the determination of shareholders entitled to notice of or to vote at a meeting of shareholders shall be at the close of business on the day next preceding the day on which notice is given, or, if not notice is given, the day on which the meeting is held.  For all other purposes, the record date for determining shareholders shall be at the close of business on the date on which the resolution of the board relating thereto is adopted.

REGISTERED STOCKHOLDERS

Section 6.       The corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and to hold liable for calls and assessments a person registered on its books as the owner of shares, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of the State of Connecticut.

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ARTICLE VII

DIVIDENDS

Section 1.       Dividends upon the capital stock of the corporation, subject to the provisions of the certificate of incorporation, if any, may be declared out of funds legally available therefor by the board of directors at any regular or special meeting, pursuant to law.  Dividends may be paid in cash, in property, or in shares of the capital stock, subject to the provisions of the certificate of incorporation.

Before payment of any dividend, there may be set aside out of any funds of the corporation available for dividends such sum or sums as the directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the corporation, or for such other purpose as the directors shall think conducive to the interest of the corporation, and the directors may modify or abolish any such reserve in the manner in which it was created.

ARTICLE VIII

MISCELLANEOUS PROVISIONS

Section 1.       Annual Statement.  The board of directors shall present at each annual meeting, and at any special meeting of the stockholders when called for by vote of the stockholders, a full and clear statement of the business and condition of the corporation.

Section 2.       Checks; contracts; deposits.  All checks or demands for money and notes of the corporation shall be signed by such officer or officers or such other person or persons as the board of directors may from time to time designate.  Unless otherwise provided by law or resolution of the board of directors, any contract, document or other instrument, including contracts or instruments evidencing indebtedness of the Corporation, shall be valid and binding on the Corporation only if executed and delivered in its name and on its behalf by either the

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President or such other persons who have been designated by resolution of the board of directors as authorized signatories of contracts, documents or other instruments.  All funds of the Corporation not otherwise employed shall be deposited from time to time to the credit of the Corporation in such banks, trust companies or other depositaries as the board of directors may select or as may be designated by any officer or officers of the Corporation.

Section 3.       Fiscal Year. The fiscal year of the corporation shall be fixed by resolution of the board of directors.

Section 4.       Corporate Seal.  The corporate seal shall have inscribed thereon the name of the corporation, the year of its organization and the words “Corporate Seal, Connecticut”.  The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.

Section 5.       Indemnification.  The corporation shall indemnify its officers, directors, employees and agents to the fullest extent permitted by law.

ARTICLE IX

AMENDMENTS TO BY-LAWS

Section 1.       The by-laws may be altered, amended or repealed or new by-laws may be made or adopted by the board of directors at any regular or special meeting of the board of directors; except that no alteration, amendment or repeal to Article III or this Article IX may be made with out the consent of the shareholders as set forth in the next sentence.  The by-laws of the Corporation may also be altered, amended or repealed or new by-laws may be made or adopted by the vote of a majority in interest of the shareholders represented and entitled to vote upon election of directors, at any meeting at which a quorum is present.

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EX-3.2.22

Exhibit 3.2.22

BY - LAWS

ARTICLE I

OFFICES

Section 1.The registered office shall be c/o Equinox Lincoln Park, Inc. at: 895 Broadway, New York, New York 10003.

Section 2.The corporation may also have offices at such other places both within and without the State of Illinois as the board of directors may from time to time determine or the business of the corporation may require.

ARTICLE II

MEETING OF STOCKHOLDERS

Section 1.All meetings of the stockholders for the election of director shall be held in the City of Chicago or the City of New York, State of New York, at such place as may be fixed from time to time by the board of directors, or at such other place either within or without the State of Illinois or the State of New York as shall be designated from time to time by the board of directors as stated in the notice of the meeting.  Meetings of stockholders for any other purpose may be held at such time and place, within or without the State of Illinois or the State of New York, as shall be stated in the notice of the meeting or in a duly executed waiver of notice thereof.

Section 2.Annual meetings of stockholders, commencing with the year 2002, shall be held on the second Tuesday in the fifth month following the completion of the Corporation’s fiscal year, and if said date is a legal holiday, then on the next business day following, at 10:00 A.M., or at such other date and time as shall be designated from time to time by the board of directors and stated

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in the notice of the meeting, at which they shall elect by a plurality vote a board of directors, and transact such other business as may properly be brought before the meeting.

Section 3.Written notice of the annual meeting stating the place, date and hour of the meeting shall be given to each stockholder entitled to vote at such meeting not less than ten nor more than fifty days before the date of the meeting.

Section 4.The officer who has charge of the stock ledger of the corporation shall prepare and make, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder.  Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held.  The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present.  If the right to vote at any meeting ins challenged, the inspectors of election, or person presiding thereat, shall require such list of shareholders to be produced as evidence of the right of the persons challenged to vote at such meeting, and all persons who appear from such list to be shareholders entitled to vote thereat may vote at such meeting.

Section 5.The election of directors and any other vote by ballot at any meeting of the shareholders shall be supervised by at least two inspectors if requested by a shareholder present in person or represented by proxy and entitled to vote at such meeting.  Such inspectors may be appointed by the presiding officer before or at the meeting; or if one or both inspectors so appointed

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shall refuse to serve or shall not be present, such appointment shall be made by the officer presiding at the meeting.

Section 6.Special meetings of the stockholders, for any purpose or purposes, unless otherwise prescribed by statute or by the president, shall be called by the president, or at the request in writing of a majority of the board of directors, or at the request in writing of stockholders owning a majority in amount of the entire capital stock of the corporation issued and outstanding and entitled to vote.  Such request shall state the purpose or purposes of the proposed meeting.

Section 7.Written notice of a special meeting stating the place, date and hour of the meeting and the purpose or purposes for which the meeting is called, shall be given not less than ten nor more than sixty days before the date of the meeting, to each stockholder entitled to vote at such meeting; provided, that if the meeting is called for the purpose of voting on merger, consolidation, share exchange, dissolution or sale, lease or exchange of substantially all the assets of the Corporation, then not less than 20 days notice shall be given.

Section 8.Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice.

Section 9.The holders of a majority of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business except as otherwise provided by statute or by the certificate of incorporation.  If, however, such quorum shall not be present or represented at any meeting of the stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, shall have the power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or

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represented.  At such adjourned meeting at which a quorum shall be present or represented any business may be transacted which might have been transacted at the meeting as originally noticed.  If the adjournment is for more than thirty days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.

Section 10.When a quorum is present at any meeting the vote of the holders of a majority of the stock having voting power present in person or represented by proxy shall decide any question brought before such meeting, unless the question is one upon which by express provision of the Illinois Business Corporation Act or of the certificate of incorporation a different vote is required, in which case such express provision shall govern and control the decision of such question.

Section 11.Unless otherwise provided in the certificate of incorporation, each stockholder shall at every meeting of the stockholders be entitled to one vote in person or by proxy for each share of the capital stock having voting power held by such stockholder, but no proxy shall be voted on after eleven (11) months from its date, unless the proxy provides for a longer period.

At all elections of directors of the corporation each stockholder having voting power shall be entitled to exercise the right of cumulative voting as provided in the certificate of incorporation.

Section 12.Unless otherwise provided in the certificate of incorporation, any action required to be taken at any annual or special meeting of stockholders of the corporation, or any action which may be taken at any annual or special meeting of such stockholders, may be taken

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without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted.  Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing.

Section 13.The President, or, in his/her absence, a Vice President, shall preside at meetings of the shareholders.  The Secretary shall act as secretary of the meeting or, in his/her absence, a Assistant Secretary, shall act, or if neither is present, then the presiding officer may appoint a person to act as secretary of the meeting.

Section 14.Except as otherwise provided by these by-laws or any resolutions adopted by the shareholder or Board of Directors, the order of business and all other maters of procedure at every meeting of shareholders shall be determined by the presiding officer.  Not less than 15 minutes following the presentation of any resolution to any meeting of shareholder, the presiding officer may announce that further discussion on such resolution shall be limited to not more than three persons who favor and not more than three persons who oppose such resolution, each of whom shall be designated by the presiding officer and shall thereupon be entitled to speak thereon for not more than five minutes.  After such persons, or such a lesser number thereof as shall advise the presiding officer of their desire so to speak, shall have spoken on such resolution, the presiding officer may direct a vote on such resolution without further discussion thereon at the meeting.

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ARTICLE III

DIRECTORS

Section 1.The number of directors constituting the entire board shall be fixed from time to time by the Board of Directors and shall not be less than three, except that where all the shares of a Corporation are owned beneficially and of record by less than three shareholders, the number of directors may be less than three but not less than the number of shareholders.  The directors shall be elected at the annual meeting of the stockholders, except as provided in Section 2 of this Article, and each director elected shall hold office until his successor is elected and qualified; provided, that a Director may resign as stated herein.  Directors need not be stockholders.

Section 2.Any director may resign his office at any time by delivering his resignation in writing to the President or the Secretary.  It will take effect at the time specified therein or, if no time is specified, it sill be effective at the time of its receipt by the Corporation.  The acceptance of a resignation shall not be necessary to make it effective, unless expressly so provided in the resignation.

Section 3.Vacancies and newly created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, though less than a quorum, or by a sole remaining director, and the directors so chosen shall hold office until the next annual election and until their successors are duly elected and shall qualify,

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unless sooner displaced.  If there are no directors in office, then an election of directors may be held in the manner provided by the Illinois Corporation Act.   If, at the time of filling any vacancy or any newly created directorship, the directors then in office shall constitute less than a majority of the whole board (as constituted immediately prior to any such increase), the Court of Chancery may, upon application of any stockholder or stockholders holding at least ten percent of the total number of the shares at the time outstanding having the right to vote for such directors, summarily order an election to be held to fill any such vacancies or newly created directorship, or to replace the directors chosen by the directors then in office.

Section 4.The business of the corporation shall be managed by or under the direction of its board of directors which may exercise all such powers of the corporation and do all such lawful acts and things as are not by the Illinois Business Corporation Act or by the certificate of incorporation or by these by-laws directed or required to be exercised or done by the stockholders.

MEETINGS OF THE BOARD OF DIRECTORS

Section 5.The board of directors of the corporation may hold meetings, both regular and special, either within or without the State of Illinois or the State of New York.

Section 6.The first meeting of each newly elected board of directors shall be held at such time and place as shall be fixed by the vote of the stockholders at the annual meeting and no notice of such meeting shall be necessary to the newly elected directors in order legally to constitute the meeting, provided a quorum shall be present.  In the event of the failure of the stockholders to fix the time or place of such first meeting of the newly elected board of directors, or in the event such meeting is not held at the time and place so fixed by the stockholders, the

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meeting may be held at such time and place as shall be specified in a notice given as hereinafter provided for special meetings of the board of directors, or as shall be specified in a written waiver signed by all of the directors.

Section 7.Regular meetings of the board of directors may be held without notice at such time and at such place as shall from time to time be determined by the board.

Section 8.Special meetings of the board may be called by the president on one day’s notice to each director, either personally or by mail or by telegram or by electronic mail; special meetings shall be called by the president or secretary in like manner and on like notice on the written request of two directors unless the board consists of only one director; in which case special meetings shall be called by the president or secretary in like manner and on like notice on the written request of the sole director.

Section 9.At all meetings of the board a majority of the directors shall constitute a quorum for the transaction of business and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the board of directors, except as may be otherwise specifically provided by the Illinois Business Corporation Act or by the certificate of incorporation.  If a quorum shall not be present at any meeting of the board of directors the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present.

Section 10.The President, or, in his/her absence, a Vice President, shall preside at meetings of the board of directors.  The Secretary shall act as secretary of the meeting or, in his/her absence, a Assistant Secretary, shall act, or if neither is present, then the presiding officer may appoint a person to act as secretary of the meeting.

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Section 11.Unless otherwise restricted by the certificate of incorporation or these by-laws, any action required or permitted to be taken at any meeting of the board of directors or of any committee thereof may be taken without a meeting, if all members of the board or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the board or committee.

Section 12.Unless otherwise restricted by the certificate of incorporation or these by-laws, members of the board of directors or any committee designated by the board of directors, may participate in a meeting of the board of directors or any committee, by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at the meeting.

COMMITTEES OF DIRECTORS

Section 13.The board of directors may, by resolution passed by a majority of the whole board, designate one or more committees, each committee to consist of three or more of the directors of the corporation.  The board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee.

In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the board of directors to act at the meeting in the place of any such absent or disqualified member.

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Any such committee, to the extent provided in the resolution of the board of directors, shall have and may exercise all the powers and authority of the board of directors in the management of the business and affairs of the corporation, and may authorize the seal of the corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to:

(i)  The submission to shareholders of any action that needs shareholders’ approval under this chapter;

(ii)  The filling of vacancies in the board of directors or in any committee;

(iii)  The fixing of compensation of the directors for serving on the board or any committee;

(iv)  The amendment or repeal of the by-laws, or the adoption of new by-laws;

(v)  The amendment or repeal of any resolution of the board which by its terms shall not be so amendable or repealable.

Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the board of directors.

Section 14.Each committee shall keep regular minutes of its meetings and report the same to the board of directors when required.

COMPENSATION OF DIRECTORS

Section 15.Unless otherwise restricted by the certificate of incorporation or these by-laws, the board of directors shall have the authority to fix the compensation of directors.  The directors may be paid their expenses, if any, of attendance at each meeting of the board of directors and may be paid a fixed sum for attendance at each meeting of the board of directors or

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a stated salary as director.  No such payment shall preclude any director from serving the corporation in any other capacity and receiving compensation therefor.  Members of committees may be allowed like compensation for attending committee meetings.

REMOVAL OF DIRECTORS

Section 16.Any director may be removed with or without cause at any time by the affirmative vote of shareholders holding of record in the aggregate at least a majority of the votes cast at a meeting of the shareholders by the holders of shares present in person or represented by proxy entitled to vote at a special meeting of the shareholders called for that purpose.

ARTICLE IV

NOTICES

Section 1.Whenever, under the provisions of Illinois Business Corporation Act or of the certificate of incorporation or of these by-laws, notice is required to be given to any director or stockholder, it shall not be construed to mean personal notice, but such notice may be given in writing, by mail, addressed to such director or stockholder, at his address as it appears on the records of the corporation, with postage thereon prepaid, and such notice shall be deemed to be given at the time when the same shall be deposited in the United States mail.  Notice to directors may also be given by telegram or electronic mail.

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ARTICLE V

OFFICERS

Section 1.The officers of the corporation shall be chosen by the board of directors and shall be a president, a vice-president, a secretary and a treasurer.  The board of directors may also choose additional vice-presidents, and one or more assistant secretaries and assistant treasurers.  Any number of offices may be held by the same person, unless the certificate of incorporation or these by-laws otherwise provide.  The board of directors may also elect a chairman of the board who shall have such duties as shall be assigned to him by the board of directors.

Section 2.The board of directors at its first meeting after each annual meeting of stockholders shall choose a president, one or more vice-presidents, a secretary and a treasurer.

Section 3.The board of directors may appoint such other officers and agents as it shall deem necessary who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the board.  The board of directors may require any officer to give security for the faithful performance of his duties.

Section 4.The salaries of all officers and agents of the corporation shall be fixed by the board of directors.

Section 5.The officers of the corporation shall hold office until their successors are chosen and qualify.  Any officer elected or appointed by the board of directors may be removed at any time by the affirmative vote of a majority of the board of directors.  Any vacancy occurring in any office of the corporation shall be filled for the unexpired portion of the term by the board of directors.  Any officer may resign his office at any time.  Such resignation shall be made in writing and shall take effect at the time specified therein or, if no time be specified, at the time of

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its receipt by the Corporation.  The acceptance of a resignation shall not be necessary to make it effective, unless expressly so provided in the resignation.

THE PRESIDENT

Section 6.The president shall be the chief executive officer of the corporation, shall preside at all meetings of the stockholders and the board of directors and, subject to the control of the board of directors, shall supervise and control all business and affairs of the Corporation, shall have general and active management of the business of the corporation and shall see that all orders and resolutions of the board of directors are carried into effect.  He shall when present preside at all meetings of the shareholders and the board of directors.

Section 7.He shall execute bonds, mortgages and other contracts requiring a seal, under the seal of the corporation, except where required or permitted by law to be otherwise signed and executed and except where the signing and execution thereof shall be expressly delegated by the board of directors to some other officer or agent of the corporation.

THE VICE-PRESIDENTS

Section 8.Each Vice President, if any, shall have such powers and perform such duties as may be determined by the President and assigned to him by the President.  In the absence of the president or in the event of his inability or refusal to act, the vice-president (or in the event there be more than one vice-president, the vice-presidents in the order designated by the directors, or in the absence of any designation, then in the order of their election) shall perform the duties of the president, and when so acting, shall have all the powers of and be subject to all

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the restrictions upon the president.  The vice-presidents shall perform such other duties and have such other powers as the board of directors may from time to time prescribe.

THE SECRETARY AND ASSISTANT SECRETARY

Section 9.The secretary shall attend all meetings of the board of directors and all meetings of the stockholders and record all proceedings of the meetings of the corporation and of the board of directors in a minute book to be kept for that purpose and shall perform like duties for the committees when required.  The secretary shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the board of directors, and shall perform such other duties as may be prescribed by the board of directors or president, under whose supervision he shall be.  The secretary shall have custody of the seal of the corporation and he, or an assistant secretary, shall have authority to affix the same to any instrument and when so affixed, it may be attested by his signature or by the signature of such assistant secretary.  The board of directors may give general authority to any other officer to affix the seal of the corporation and to attest the affixing by his signature.  The secretary shall keep a register of the post office address of each shareholder which shall be furnished to the secretary by such shareholder and shall have general charge of stock transfer books of the Corporation.

Section 10.The assistant secretary, or if there be more than one, the assistant secretaries in the order determined by the board of directors (or if there be no such determination, then in the order of their election) shall, in the absence of the secretary or in the event of his inability or refusal to act, perform the duties and exercise the powers of the secretary and shall

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perform such other duties and have such other powers as the board of directors may from time to time prescribe.

THE TREASURER AND ASSISTANT TREASURERS

Section 11.The treasurer shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the corporation in such depositories as may be designated by the board of directors.  The treasurer shall have power to receive and give receipts for monies due and payable to the Corporation from any source whatsoever.

Section 12.The treasurer shall disburse the funds of the corporation as may be ordered by the board of directors, taking proper vouchers for such disbursements, and shall render to the president and the board of directors, at its regular meetings, or when the board of directors so requires, an account of all his transactions as treasurer and of the financial condition of the corporation.

Section 13.If required by the board of directors, the treasurer shall give the corporation a bond (which shall be renewed every six years) in such sum and with such surety or sureties as shall be satisfactory to the board of directors for the faithful performance of the duties of his office and for the restoration to the corporation, in case of his death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in his possession or under this control belonging to the corporation.

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Section 14.The assistant treasurer, or if there shall be more than one, the assistant treasurers in the order determined by the board of directors (or if there be no such determination, then in the order of their election) shall, in the absence of the treasurer or in the event or his inability or refusal to act, perform the duties and exercise the powers of the treasurer and shall perform such other duties and have such other powers as the board of directors may from time to time prescribe.

ARTICLE VI

CERTIFICATES FOR SHARES

Section 1.The shares of the corporation shall be represented by a certificate.  Certificates shall be signed by, or in the name of the corporation by, the chairman or vice-chairman of the board of directors, or the president or a vice-president and the treasurer or an assistant treasurer, or the secretary or an assistant secretary of the corporation.

Upon the face or back of each stock certificate issued to represent any partly paid shares shall be set forth the total amount of the consideration to be paid therefor and the amount paid thereon shall be stated.

If the corporation shall be authorized to issue more than one class of stock or more than one series of any class, the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualification, limitations or restrictions of such preferences and/or rights shall be set forth in full or summarized on the face or back of the certificate which the corporation shall issue to represent such class or series of stock, provided that, except as otherwise provided in applicable provisions of the New York Business Corporation Law, in lieu of the foregoing requirements, there may be set forth on the

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face or back of the certificate which the corporation shall issue to represent such class or series of stock, a statement that the corporation will furnish without charge to each stockholder who so requests the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights.

Section 2.Any or all of the signatures on a certificate may be facsimile.  In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the corporation with the same effect as if he were such officer, transfer agent or registrar at the date of issue.  If such certificate is countersigned by a transfer agent other than the Corporation or its employees, or by a registrar other than the Corporation or its employee, the signatures of the officers of the Corporation may be facsimiles and, if permitted by law, any other signature may be a facsimile.

LOST CERTIFICATES

Section 3.The board of directors may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed.  When authorizing such issuance of a new certificate or certificates, the board of directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate or certificates, or his legal representative, to advertise the same in such manner as it shall require

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and/or to give the corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the corporation with respect to the certificate alleged to have been lost, stolen or destroyed.

TRANSFER OF STOCK

Section 4.Upon surrender to the corporation or the transfer agent of the corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignation or authority to transfer, it shall be the duty of the corporation to issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books.  Whenever any transfer of shares shall be made for collateral security, and not absolutely, it shall be so expressed in the entry of the transfer if, when the certificates are presented to the Corporation for transfer, both the transferor and transferee request the Corporation to do so.  The Corporation shall maintain at its principal office or at the office of its attorneys an office where shares of the Corporation shall be transferable.  The Corporation may also maintain one or more registry offices where such shares shall be registered.  The board of directors may make such rules and regulations as it may deem expedient concerning the issue, transfer and registration of certificates of stock.

FIXING RECORD DATE

Section 5.In order that the corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or to express consent to corporate action in writing without a meeting, or entitled to receive payment of any

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dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the board of directors may fix, in advance, a record date, which shall not be more than fifty nor less than ten days before the date of such meeting, nor more than fifty days prior to any other action.  A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the board of directors may fix a new record date for the adjourned meeting.  If no record date is fixed, the record date for the determination of shareholders entitled to notice of or to vote at a meeting of shareholders shall be at the close of business on the day next preceding the day on which notice is given, or, if not notice is given, the day on which the meeting is held.  For all other purposes, the record date for determining shareholders shall be at the close of business on the date on which the resolution of the board relating thereto is adopted.

REGISTERED STOCKHOLDERS

Section 6.The corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and to hold liable for calls and assessments a person registered on its books as the owner of shares, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the Illinois Business Corporation Act.

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ARTICLE VII

DIVIDENDS

Section 1.Dividends upon the capital stock of the corporation, subject to the provisions of the certificate of incorporation, if any, may be declared out of funds legally available therefor by the board of directors at any regular or special meeting, pursuant to law.  Dividends may be paid in cash, in property, or in shares of the capital stock, subject to the provisions of the certificate of incorporation.

Before payment of any dividend, there may be set aside out of any funds of the corporation available for dividends such sum or sums as the directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the corporation, or for such other purpose as the directors shall think conducive to the interest of the corporation, and the directors may modify or abolish any such reserve in the manner in which it was created.

ARTICLE VIII

MISCELLANEOUS PROVISIONS

Section 1.Annual Statement.  The board of directors shall present at each annual meeting, and at any special meeting of the stockholders when called for by vote of the stockholders, a full and clear statement of the business and condition of the corporation.

Section 2.Checks; contracts; deposits.  All checks or demands for money and notes of the corporation shall be signed by such officer or officers or such other person or persons as the board of directors may from time to time designate.  Unless otherwise provided by law or resolution of the board of directors, any contract, document or other instrument, including contracts or instruments evidencing indebtedness of the Corporation, shall be valid and binding on the Corporation only if executed and delivered in its name and on its behalf by either the

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President or such other persons who have been designated by resolution of the board of directors as authorized signatories of contracts, documents or other instruments.  All funds of the Corporation not otherwise employed shall be deposited from time to time to the credit of the Corporation in such banks, trust companies or other depositaries as the board of directors may select or as may be designated by any officer or officers of the Corporation.

Section 3.Fiscal Year. The fiscal year of the corporation shall be fixed by resolution of the board of directors.

Section 4.Corporate Seal.  The corporate seal shall have inscribed thereon the name of the corporation, the year of its organization and the words “Corporate Seal, Illinois “.  The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.

Section 5.Indemnification.  The corporation shall indemnify its officers, directors, employees and agents to the fullest extent permitted by law.

ARTICLE IX

AMENDMENTS TO BY-LAWS

Section 1.The by-laws may be altered, amended or repealed or new by-laws may be made or adopted by the board of directors at any regular or special meeting of the board of directors; except that no alteration, amendment or repeal to Article III or this Article IX may be made with out the consent of the shareholders as set forth in the next sentence.  The by-laws of the Corporation may also be altered, amended or repealed or new by-laws may be made or adopted by the vote of a majority in interest of the shareholders represented and entitled to vote upon election of directors, at any meeting at which a quorum is present.

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EX-3.2.23

Exhibit 3.2.23

BY - LAWS

ARTICLE I

OFFICES

Section 1.The registered office shall be c/o Equinox Highland Park, Inc. at: 895 Broadway, New York, New York 10003.

Section 2.The corporation may also have offices at such other places both within and without the State of Illinois as the board of directors may from time to time determine or the business of the corporation may require.

ARTICLE II

MEETING OF STOCKHOLDERS

Section 1.All meetings of the stockholders for the election of directors shall be held in the City of Chicago or the City of New York, State of New York, at such place as may be fixed from time to time by the board of directors, or at such other place either within or without the State of Illinois or the State of New York as shall be designated from time to time by the board of directors as stated in the notice of the meeting.  Meetings of stockholders for any other purpose may be held at such time and place, within or without the State of Illinois or the State of New York, as shall be stated in the notice of the meeting or in a duly executed waiver of notice thereof.

Section 2.Annual meetings of stockholders shall be held on the second Tuesday in the fifth month following the completion of the Corporation’s fiscal year, and if said date is a legal holiday, then on the next business day following, at 10:00 A.M., or at such other date and time as shall be designated from time to time by the board of directors and stated in the notice of the

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meeting, at which time the stockholders shall elect by a plurality vote a board of directors, and transact such other business as may properly be brought before the meeting.

Section 3.Written notice stating the place, date and hour of the annual meeting shall be given to each stockholder entitled to vote at such meeting not less than ten nor more than fifty days before the date of the meeting.

Section 4.The officer who has charge of the stock ledger of the corporation shall prepare and make, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder.  Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held.  The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present.  If the right to vote at any meeting ins challenged, the inspectors of election, or person presiding thereat, shall require such list of shareholders to be produced as evidence of the right of the persons challenged to vote at such meeting, and all persons who appear from such list to be shareholders entitled to vote thereat may vote at such meeting.

Section 5.The election of directors and any other vote by ballot at any meeting of the shareholders shall be supervised by at least two inspectors if requested by a shareholder present in person or represented by proxy and entitled to vote at such meeting.  Such inspectors may be appointed by the presiding officer before or at the meeting.

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Section 6.Special meetings of the stockholders, unless otherwise prescribed by statute, shall be called by the president, or at the request in writing of a majority of the board of directors, or at the request in writing of stockholders owning a majority in amount of the entire capital stock of the corporation issued and outstanding and entitled to vote.  Such request shall state the purpose or purposes of the proposed meeting.

Section 7.Written notice of a special meeting stating the place, date and hour of the meeting and the purpose or purposes for which the meeting is called, shall be given not less than ten nor more than sixty days before the date of the meeting to each stockholder entitled to vote at such meeting; provided, that if the meeting is called for the purpose of voting on a merger, consolidation, share exchange, dissolution or sale, lease or exchange of substantially all the assets of the Corporation, then not less than 20 days notice shall be given.

Section 8.Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice.

Section 9.The holders of a majority of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business except as otherwise provided by statute or by the certificate of incorporation.  If, however, such quorum shall not be present or represented at any meeting of the stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, shall have the power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented.  At such adjourned meeting at which a quorum shall be present or represented any business may be transacted which might have been transacted at the meeting as originally

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noticed.  If the adjournment is for more than thirty days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.

Section 10.When a quorum is present at any meeting, the vote of the holders of a majority of the stock having voting power present in person or represented by proxy shall decide any question brought before such meeting, unless the question is one upon which the express provisions of the Illinois Business Corporation Act, the certificate of incorporation require a different vote, in which case such express provision shall govern and control the decision of such question.

Section 11.Unless otherwise provided in the certificate of incorporation, each stockholder shall be entitled to one vote in person or by proxy for each share of the capital stock having voting power held by such stockholder, but no proxy shall be voted on after eleven (11) months from its date, unless the proxy provides for a longer period.

Section 12.Unless otherwise provided in the certificate of incorporation, any action required to be taken at any annual or special meeting of stockholders of the corporation, or any action which may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted.  Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not previously consented in writing.

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Section 13.The President, or, in his/her absence, a Vice President, shall preside at meetings of the shareholders.  The Secretary shall act as secretary of the meeting or, in his/her absence, a Assistant Secretary, shall act, or if neither is present, then the presiding officer may appoint a person to act as secretary of the meeting.

Section 14.Except as otherwise provided by these by-laws or any resolutions adopted by the shareholder or Board of Directors, the order of business and all other maters of procedure at every meeting of shareholders shall be determined by the presiding officer.  Not less than 15 minutes following the presentation of any resolution to any meeting of shareholder, the presiding officer may announce that further discussion on such resolution shall be limited to not more than three persons who favor and not more than three persons who oppose such resolution, each of whom shall be designated by the presiding officer and shall thereupon be entitled to speak thereon for not more than five minutes.  After such persons, or such a lesser number thereof as shall advise the presiding officer of their desire so to speak, shall have spoken on such resolution, the presiding officer may direct a vote on such resolution without further discussion thereon at the meeting.

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ARTICLE III

DIRECTORS

Section 1.The number of directors constituting the entire board shall be fixed from time to time by the Board of Directors and shall not be less than three, except that where all the shares of a Corporation are owned beneficially and of record by less than three shareholders, the number of directors may be less than three but not less than the number of shareholders.  The directors shall be elected at the annual meeting of the stockholders, except as provided in Section 2 of this Article, and each director elected shall hold office until his successor is elected and qualified; provided, that a Director may resign as stated herein.  Directors need not be stockholders.

Section 2.Any director may resign his office at any time by delivering his resignation in writing to the President or the Secretary.  Such resignation will take effect at the time specified therein or, if no time is specified, shall be effective at the time of its receipt by the Corporation.  The acceptance of a resignation shall not be necessary to make it effective, unless expressly so provided in the resignation.

Section 3.Vacancies and newly created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, though less than a quorum, or by a sole remaining director, and the directors so chosen shall hold office until the next annual election and until their successors are duly elected and shall qualify, unless sooner displaced.  If there are no directors in office, then an election of directors may be held in the manner provided by the Illinois Business Corporation Act.  If, at the time of filling any vacancy or any newly created directorship, the directors then in office shall constitute less than a majority of the whole board (as constituted immediately prior to any such increase), the Court of Chancery may, upon application of any stockholder or stockholders holding at least ten

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percent of the total number of the shares at the time outstanding having the right to vote for such directors, summarily order an election to be held to fill any such vacancies or newly created directorship, or to replace the directors chosen by the directors then in office.

Section 4.The business of the corporation shall be managed by or under the direction of its board of directors which may exercise all such powers of the corporation and do all such lawful acts and things as are not prohibited by the Illinois Business Corporation Act, the certificate of incorporation or by these by-laws, or are directed or required to be exercised or done by the stockholders.

MEETINGS OF THE BOARD OF DIRECTORS

Section 5.The board of directors of the corporation may hold meetings, both regular and special, either within or without the State of Illinois or the State of New York.

Section 6.The first meeting of each newly elected board of directors shall be held at such time and place as shall be fixed by the vote of the stockholders at the annual meeting and no notice of such meeting shall be necessary to the newly elected directors in order legally to constitute the meeting, provided a quorum shall be present.  In the event of the failure of the stockholders to fix the time or place of such first meeting of the newly elected board of directors, or in the event such meeting is not held at the time and place so fixed by the stockholders, the meeting may be held at such time and place as shall be specified in a notice given as hereinafter provided for special meetings of the board of directors, or as shall be specified in a written waiver signed by all of the directors.

Section 7.Regular meetings of the board of directors may be held without notice at such time and at such place as shall from time to time be determined by the board of directors.

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Section 8.Special meetings of the board may be called by the president on one day’s notice to each director, either personally or by mail or by telegram or by electronic mail; special meetings shall be called by the president or secretary in like manner and on like notice on the written request of two directors unless the board of directors consists of only one director; in which case special meetings shall be called by the president or secretary in like manner and on like notice on the written request of the sole director.

Section 9.At all meetings of the board of directors a majority of the directors shall constitute a quorum for the transaction of business and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the board of directors, except as may be otherwise specifically provided by the Illinois Business Corporation Act or by the certificate of incorporation.  If a quorum shall not be present at any meeting of the board of directors the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present.

Section 10.The President, or, in his/her absence, a Vice President, shall preside at meetings of the board of directors.  The Secretary shall act as secretary of the meeting or, in his/her absence, an Assistant Secretary, shall act, or if neither is present, then the presiding officer may appoint a person to act as secretary of the meeting.

Section 11.Unless otherwise restricted by the certificate of incorporation or these by-laws, any action required or permitted to be taken at any meeting of the board of directors or of any committee thereof may be taken without a meeting, if all members of the board of directors or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the board or committee.

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Section 12.Unless otherwise restricted by the certificate of incorporation or these by-laws, members of the board of directors or any committee designated by the board of directors, may participate in a meeting of the board of directors or any committee, by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at the meeting.

COMMITTEES OF DIRECTORS

Section 13.The board of directors may, by resolution passed by a majority of the whole board of directors, designate one or more committees, each committee to consist of three or more of the directors of the corporation.  The board of directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee.

In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the board of directors to act at the meeting in the place of any such absent or disqualified member.

Any such committee, to the extent provided in the resolution of the board of directors, shall have and may exercise all the powers and authority of the board of directors in the management of the business and affairs of the corporation, and may authorize the seal of the corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to:

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(i) The submission to shareholders of any action that needs shareholders’ approval under this chapter;

(ii)  The filling of vacancies in the board of directors or in any committee;

(iii)  The fixing of compensation of the directors for serving on the board or any committee;

(iv)  The amendment or repeal of the by-laws, or the adoption of new by-laws;

(v)  The amendment or repeal of any resolution of the board which by its terms shall not be so amendable or repealable.

Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the board of directors.

Section 14.Each committee shall keep regular minutes of its meetings and report the same to the board of directors when required.

COMPENSATION OF DIRECTORS

Section 15.Unless otherwise restricted by the certificate of incorporation or these by-laws, the board of directors shall have the authority to fix the compensation of directors.  The directors may be paid their expenses, if any, of attendance at each meeting of the board of directors and may be paid a fixed sum for attendance at each meeting of the board of directors or a stated salary as director.  No such payment shall preclude any director from serving the corporation in any other capacity and receiving compensation therefor.  Members of committees may be allowed like compensation for attending committee meetings.

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REMOVAL OF DIRECTORS

Section 16.Any director may be removed with or without cause at any time by the affirmative vote of shareholders holding of record in the aggregate at least a majority of the votes cast at a meeting of the shareholders by the holders of shares present in person or represented by proxy entitled to vote at a special meeting of the shareholders called for that purpose.

ARTICLE IV

NOTICES

Section 1.Whenever, under the provisions of Illinois Business Corporation Act, the certificate of incorporation or of these by-laws, notice is required to be given to any director or stockholder, it shall not be construed to mean personal notice, but such notice may be given in writing, by mail, addressed to such director or stockholder, at his address as it appears on the records of the corporation, with postage thereon prepaid, and such notice shall be deemed to be given at the time when the same shall be deposited in the United States mail.  Notice to directors may also be given by telephone, telegram, facsimile or electronic mail.

ARTICLE V

OFFICERS

Section 1.The officers of the corporation shall be chosen by the board of directors and shall be a president, a vice-president, a secretary and a treasurer.  The board of directors may also choose additional vice-presidents, and one or more assistant secretaries and assistant treasurers.  Any number of offices may be held by the same person, unless the certificate of incorporation or these by-laws otherwise provide; provided, that the offices of President and Secretary shall be held by different persons.  The board of directors may also elect a chairman of

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the board of directors who shall have such duties as shall be assigned to him by the board of directors.

Section 2.The board of directors at its first meeting after each annual meeting of stockholders shall choose a president, one or more vice-presidents, a secretary and a treasurer.

Section 3.The board of directors may appoint such other officers and agents as it shall deem necessary who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the board.  The board of directors may require any officer to give security for the faithful performance of his duties.

Section 4.The salaries of all officers and agents of the corporation shall be fixed by the board of directors.

Section 5.The officers of the corporation shall hold office until their successors are chosen and qualify.  Any officer elected or appointed by the board of directors may be removed at any time by the affirmative vote of a majority of the board of directors.  Any vacancy occurring in any office of the corporation shall be filled for the unexpired portion of the term by the board of directors.  Any officer may resign his office at any time.  Such resignation shall be made in writing and shall take effect at the time specified therein or, if no time be specified, at the time of its receipt by the Corporation.  The acceptance of a resignation shall not be necessary to make it effective, unless expressly so provided in the resignation.

THE PRESIDENT

Section 6.The president shall be the chief executive officer of the corporation, shall preside at all meetings of the stockholders and the board of directors and, subject to the control of

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the board of directors, shall supervise and control all business and affairs of the Corporation, shall have general and active management of the business of the corporation and shall see that all orders and resolutions of the board of directors are carried into effect.  He shall when present preside at all meetings of the shareholders and the board of directors.

Section 7.He shall execute bonds, mortgages and other contracts requiring a seal, under the seal of the corporation, except where required or permitted by law to be otherwise signed and executed and except where the signing and execution thereof shall be expressly delegated by the board of directors to some other officer or agent of the corporation.

THE VICE-PRESIDENTS

Section 8.Each Vice President, if any, shall have such powers and perform such duties as may be determined by the President and assigned to him by the President.  In the absence of the president or in the event of his inability or refusal to act, the vice-president (or in the event there be more than one vice-president, the vice-presidents in the order designated by the directors, or in the absence of any designation, then in the order of their election) shall perform the duties of the president, and when so acting, shall have all the powers of and be subject to all the restrictions upon the president.  The vice-presidents shall perform such other duties and have such other powers as the board of directors may from time to time prescribe.

THE SECRETARY AND ASSISTANT SECRETARY

Section 9.The secretary shall attend all meetings of the board of directors and all meetings of the stockholders and record all proceedings of the meetings of the corporation and of the board of directors in a minute book to be kept for that purpose and shall perform like duties

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for the committees when required.  The secretary shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the board of directors, and shall perform such other duties as may be prescribed by the board of directors or president, under whose supervision he shall be.  The secretary shall have custody of the seal of the corporation and he, or an assistant secretary, shall have authority to affix the same to any instrument and when so affixed, it may be attested by his signature or by the signature of such assistant secretary.  The board of directors may give general authority to any other officer to affix the seal of the corporation and to attest the affixing by his signature.  The secretary shall keep a register of the post office address of each shareholder which shall be furnished to the secretary by such shareholder and shall have general charge of stock transfer books of the Corporation.

Section 10.The assistant secretary, or if there be more than one, the assistant secretaries in the order determined by the board of directors (or if there be no such determination, then in the order of their election) shall, in the absence of the secretary or in the event of his inability or refusal to act, perform the duties and exercise the powers of the secretary and shall perform such other duties and have such other powers as the board of directors may from time to time prescribe.

THE TREASURER AND ASSISTANT TREASURERS

Section 11.The treasurer shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the corporation in such depositories as may be designated by the board of directors.  The

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treasurer shall have power to receive and give receipts for monies due and payable to the Corporation from any source whatsoever.

Section 12.The treasurer shall disburse the funds of the corporation as may be ordered by the board of directors, taking proper vouchers for such disbursements, and shall render to the president and the board of directors, at its regular meetings, or when the board of directors so requires, an account of all his transactions as treasurer and of the financial condition of the corporation.

Section 13.If required by the board of directors, the treasurer shall give the corporation a bond (which shall be renewed every six years) in such sum and with such surety or sureties as shall be satisfactory to the board of directors for the faithful performance of the duties of his office and for the restoration to the corporation, in case of his death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in his possession or under this control belonging to the corporation.

Section 14.The assistant treasurer, or if there shall be more than one, the assistant treasurers in the order determined by the board of directors (or if there be no such determination, then in the order of their election) shall, in the absence of the treasurer or in the event or his inability or refusal to act, perform the duties and exercise the powers of the treasurer and shall perform such other duties and have such other powers as the board of directors may from time to time prescribe.

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ARTICLE VI

CERTIFICATES FOR SHARES

Section 1.The shares of the corporation shall be represented by a certificate.  Certificates shall be signed by, or in the name of, the corporation by the chairman or vice-chairman of the board of directors, or the president or a vice-president, and the treasurer or an assistant treasurer, or the secretary or an assistant secretary of the corporation.

Upon the face or back of each stock certificate issued to represent any partly paid shares shall be set forth the total amount of the consideration to be paid therefor and the amount paid thereon shall be stated.

If the corporation shall be authorized to issue more than one class of stock or more than one series of any class, the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualification, limitations or restrictions of such preferences and/or rights shall be set forth in full or summarized on the face or back of the certificate which the corporation shall issue to represent such class or series of stock, provided that, except as otherwise provided in applicable provisions of the New York Business Corporation Law, in lieu of the foregoing requirements, there may be set forth on the face or back of the certificate which the corporation shall issue to represent such class or series of stock, a statement that the corporation will furnish without charge to each stockholder who so requests the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights.

Section 2.Any or all of the signatures on a certificate may be by facsimile.  In case of any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before

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such certificate is issued, it may be issued by the corporation with the same effect as if he were such officer, transfer agent or registrar at the date of issue.  If such certificate is countersigned by a transfer agent other than the Corporation or its employees, or by a registrar other than the Corporation or its employee, the signatures of the officers of the Corporation may be facsimiles and, if permitted by law, any other signature may be a facsimile.

LOST CERTIFICATES

Section 3.The board of directors may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed.  When authorizing such issuance of a new certificate or certificates, the board of directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate or certificates, or his legal representative, to advertise the same in such manner as it shall require and/or to give the corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the corporation with respect to the certificate alleged to have been lost, stolen or destroyed.

TRANSFER OF STOCK

Section 4.Upon surrender to the corporation or the transfer agent of the corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignation or authority to transfer, it shall be the duty of the corporation to issue a new

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certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books.  Whenever any transfer of shares shall be made for collateral security, and not absolutely, it shall be so expressed in the entry of the transfer if, when the certificates are presented to the Corporation for transfer, both the transferor and transferee request the Corporation to do so.  The Corporation shall maintain at its principal office or at the office of its attorneys an office where shares of the Corporation shall be transferable.  The Corporation may also maintain one or more registry offices where such shares shall be registered.  The board of directors may make such rules and regulations as it may deem expedient concerning the issue, transfer and registration of certificates of stock.

FIXING RECORD DATE

Section 5.In order that the corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the board of directors may fix, in advance, a record date, which shall not be more than fifty nor less than ten days before the date of such meeting, nor more than fifty days prior to any other action.  A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the board of directors may fix a new record date for the adjourned meeting.  If no record date is fixed, the record date for the determination of shareholders entitled to notice of or to vote at a meeting of shareholders shall be at the close of business on the day next preceding the day on

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which notice is given, or, if not notice is given, the day on which the meeting is held.  For all other purposes, the record date for determining shareholders shall be at the close of business on the date on which the resolution of the board relating thereto is adopted.

REGISTERED STOCKHOLDERS

Section 6.The corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and to hold liable for calls and assessments a person registered on its books as the owner of shares, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the Illinois Business Corporation Act.

ARTICLE VII

DIVIDENDS

Section 1.Dividends upon the capital stock of the corporation, subject to the provisions of the certificate of incorporation, if any, may be declared out of funds legally available therefor by the board of directors at any regular or special meeting, pursuant to law.  Dividends may be paid in cash, in property, or in shares of the capital stock, subject to the provisions of the certificate of incorporation.

Before payment of any dividend, there may be set aside out of any funds of the corporation available for dividends such sum or sums as the directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the corporation, or for such other

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purpose as the directors shall think conducive to the interest of the corporation, and the directors may modify or abolish any such reserve in the manner in which it was created.

ARTICLE VIII

MISCELLANEOUS PROVISIONS

Section 1.Annual Statement.  The board of directors shall present at each annual meeting, and at any special meeting of the stockholders when called for by vote of the stockholders, a full and clear statement of the business and condition of the corporation.

Section 2.Checks; contracts; deposits.  All checks or demands for money and notes of the corporation shall be signed by such officer or officers or such other person or persons as the board of directors may from time to time designate.  Unless otherwise provided by law or resolution of the board of directors, any contract, document or other instrument, including contracts or instruments evidencing indebtedness of the Corporation, shall be valid and binding on the Corporation only if executed and delivered in its name and on its behalf by either the President or such other persons who have been designated by resolution of the board of directors as authorized signatories of contracts, documents or other instruments.  All funds of the Corporation not otherwise employed shall be deposited from time to time to the credit of the Corporation in such banks, trust companies or other depositaries as the board of directors may select or as may be designated by any officer or officers of the Corporation.

Section 3.Fiscal Year. The fiscal year of the corporation shall be fixed by resolution of the board of directors.

Section 4.Corporate Seal.  The corporate seal shall have inscribed thereon the name of the corporation, the year of its organization and the words “Corporate Seal, Illinois “.  The seal

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may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.

Section 5.Indemnification.  The corporation shall indemnify its officers, directors, employees and agents to the fullest extent permitted by law.

ARTICLE IX

AMENDMENTS TO BY-LAWS

Section 1.The by-laws may be altered, amended or repealed or new by-laws may be made or adopted by the board of directors at any regular or special meeting of the board of directors; except that no alteration, amendment or repeal to Article III or this Article IX may be made with out the consent of the shareholders as set forth in the next sentence.  The by-laws of the Corporation may also be altered, amended or repealed or new by-laws may be made or adopted by the affirmative vote of a majority in interest of the shareholders represented and entitled to vote upon election of directors, at any meeting at which a quorum is present.

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EX-3.2.24

Exhibit 3.2.24

BY - LAWS

ARTICLE I

OFFICES

Section 1.The registered office shall be c/o Equinox Gold Coast, Inc. at: 895 Broadway, New York, New York 10003.

Section 2.The corporation may also have offices at such other places both within and without the State of Illinois as the board of directors may from time to time determine or the business of the corporation may require.

ARTICLE II

MEETING OF STOCKHOLDERS

Section 1.All meetings of the stockholders for the election of director shall be held in the City of Chicago or the City of New York, State of New York, at such place as may be fixed from time to time by the board of directors, or at such other place either within or without the State of Illinois or the State of New York as shall be designated from time to time by the board of directors as stated in the notice of the meeting.  Meetings of stockholders for any other purpose may be held at such time and place, within or without the State of Illinois or the State of New York, as shall be stated in the notice of the meeting or in a duly executed waiver of notice thereof.

Section 2.Annual meetings of stockholders, commencing with the year 2002, shall be held on the second Tuesday in the fifth month following the completion of the Corporation’s fiscal year, and if said date is a legal holiday, then on the next business day following, at 10:00 A.M., or at such other date and time as shall be designated from time to time by the board of directors and stated

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in the notice of the meeting, at which they shall elect by a plurality vote a board of directors, and transact such other business as may properly be brought before the meeting.

Section 3.Written notice of the annual meeting stating the place, date and hour of the meeting shall be given to each stockholder entitled to vote at such meeting not less than ten nor more than fifty days before the date of the meeting.

Section 4.The officer who has charge of the stock ledger of the corporation shall prepare and make, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder.  Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held.  The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present.  If the right to vote at any meeting ins challenged, the inspectors of election, or person presiding thereat, shall require such list of shareholders to be produced as evidence of the right of the persons challenged to vote at such meeting, and all persons who appear from such list to be shareholders entitled to vote thereat may vote at such meeting.

Section 5.The election of directors and any other vote by ballot at any meeting of the shareholders shall be supervised by at least two inspectors if requested by a shareholder present in person or represented by proxy and entitled to vote at such meeting.  Such inspectors may be appointed by the presiding officer before or at the meeting; or if one or both inspectors so appointed

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shall refuse to serve or shall not be present, such appointment shall be made by the officer presiding at the meeting.

Section 6.Special meetings of the stockholders, for any purpose or purposes, unless otherwise prescribed by statute or by the president, shall be called by the president, or at the request in writing of a majority of the board of directors, or at the request in writing of stockholders owning a majority in amount of the entire capital stock of the corporation issued and outstanding and entitled to vote.  Such request shall state the purpose or purposes of the proposed meeting.

Section 7.Written notice of a special meeting stating the place, date and hour of the meeting and the purpose or purposes for which the meeting is called, shall be given not less than ten nor more than sixty days before the date of the meeting, to each stockholder entitled to vote at such meeting; provided, that if the meeting is called for the purpose of voting on merger, consolidation, share exchange, dissolution or sale, lease or exchange of substantially all the assets of the Corporation, then not less than 20 days notice shall be given.

Section 8.Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice.

Section 9.The holders of a majority of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business except as otherwise provided by statute or by the certificate of incorporation.  If, however, such quorum shall not be present or represented at any meeting of the stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, shall have the power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or

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represented.  At such adjourned meeting at which a quorum shall be present or represented any business may be transacted which might have been transacted at the meeting as originally noticed.  If the adjournment is for more than thirty days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.

Section 10.When a quorum is present at any meeting the vote of the holders of a majority of the stock having voting power present in person or represented by proxy shall decide any question brought before such meeting, unless the question is one upon which by express provision of the Illinois Business Corporation Act or of the certificate of incorporation a different vote is required, in which case such express provision shall govern and control the decision of such question.

Section 11.Unless otherwise provided in the certificate of incorporation, each stockholder shall at every meeting of the stockholders be entitled to one vote in person or by proxy for each share of the capital stock having voting power held by such stockholder, but no proxy shall be voted on after eleven (11) months from its date, unless the proxy provides for a longer period.

At all elections of directors of the corporation each stockholder having voting power shall be entitled to exercise the right of cumulative voting as provided in the certificate of incorporation.

Section 12.Unless otherwise provided in the certificate of incorporation, any action required to be taken at any annual or special meeting of stockholders of the corporation, or any action which may be taken at any annual or special meeting of such stockholders, may be taken

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without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted.  Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing.

Section 13.The President, or, in his/her absence, a Vice President, shall preside at meetings of the shareholders.  The Secretary shall act as secretary of the meeting or, in his/her absence, a Assistant Secretary, shall act, or if neither is present, then the presiding officer may appoint a person to act as secretary of the meeting.

Section 14.Except as otherwise provided by these by-laws or any resolutions adopted by the shareholder or Board of Directors, the order of business and all other maters of procedure at every meeting of shareholders shall be determined by the presiding officer.  Not less than 15 minutes following the presentation of any resolution to any meeting of shareholder, the presiding officer may announce that further discussion on such resolution shall be limited to not more than three persons who favor and not more than three persons who oppose such resolution, each of whom shall be designated by the presiding officer and shall thereupon be entitled to speak thereon for not more than five minutes.  After such persons, or such a lesser number thereof as shall advise the presiding officer of their desire so to speak, shall have spoken on such resolution, the presiding officer may direct a vote on such resolution without further discussion thereon at the meeting.

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ARTICLE III

DIRECTORS

Section 1.The number of directors constituting the entire board shall be fixed from time to time by the Board of Directors and shall not be less than three, except that where all the shares of a Corporation are owned beneficially and of record by less than three shareholders, the number of directors may be less than three but not less than the number of shareholders.  The directors shall be elected at the annual meeting of the stockholders, except as provided in Section 2 of this Article, and each director elected shall hold office until his successor is elected and qualified; provided, that a Director may resign as stated herein.  Directors need not be stockholders.

Section 2.Any director may resign his office at any time by delivering his resignation in writing to the President or the Secretary.  It will take effect at the time specified therein or, if no time is specified, it sill be effective at the time of its receipt by the Corporation.  The acceptance of a resignation shall not be necessary to make it effective, unless expressly so provided in the resignation.

Section 3.Vacancies and newly created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, though less than a quorum, or by a sole remaining director, and the directors so chosen shall hold office until the next annual election and until their successors are duly elected and shall qualify,

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unless sooner displaced.  If there are no directors in office, then an election of directors may be held in the manner provided by the Illinois Corporation Act.  If, at the time of filling any vacancy or any newly created directorship, the directors then in office shall constitute less than a majority of the whole board (as constituted immediately prior to any such increase), the Court of Chancery may, upon application of any stockholder or stockholders holding at least ten percent of the total number of the shares at the time outstanding having the right to vote for such directors, summarily order an election to be held to fill any such vacancies or newly created directorship, or to replace the directors chosen by the directors then in office.

Section 4.The business of the corporation shall be managed by or under the direction of its board of directors which may exercise all such powers of the corporation and do all such lawful acts and things as are not by the Illinois Business Corporation Act or by the certificate of incorporation or by these by-laws directed or required to be exercised or done by the stockholders.

MEETINGS OF THE BOARD OF DIRECTORS

Section 5.The board of directors of the corporation may hold meetings, both regular and special, either within or without the State of Illinois or the State of New York.

Section 6.The first meeting of each newly elected board of directors shall be held at such time and place as shall be fixed by the vote of the stockholders at the annual meeting and no notice of such meeting shall be necessary to the newly elected directors in order legally to constitute the meeting, provided a quorum shall be present.  In the event of the failure of the stockholders to fix the time or place of such first meeting of the newly elected board of directors, or in the event such meeting is not held at the time and place so fixed by the stockholders, the

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meeting may be held at such time and place as shall be specified in a notice given as hereinafter provided for special meetings of the board of directors, or as shall be specified in a written waiver signed by all of the directors.

Section 7.Regular meetings of the board of directors may be held without notice at such time and at such place as shall from time to time be determined by the board.

Section 8.Special meetings of the board may be called by the president on one day’s notice to each director, either personally or by mail or by telegram or by electronic mail; special meetings shall be called by the president or secretary in like manner and on like notice on the written request of two directors unless the board consists of only one director; in which case special meetings shall be called by the president or secretary in like manner and on like notice on the written request of the sole director.

Section 9.At all meetings of the board a majority of the directors shall constitute a quorum for the transaction of business and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the board of directors, except as may be otherwise specifically provided by the Illinois Business Corporation Act or by the certificate of incorporation.  If a quorum shall not be present at any meeting of the board of directors the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present.

Section 10.The President, or, in his/her absence, a Vice President, shall preside at meetings of the board of directors.  The Secretary shall act as secretary of the meeting or, in his/her absence, a Assistant Secretary, shall act, or if neither is present, then the presiding officer may appoint a person to act as secretary of the meeting.

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Section 11.Unless otherwise restricted by the certificate of incorporation or these by-laws, any action required or permitted to be taken at any meeting of the board of directors or of any committee thereof may be taken without a meeting, if all members of the board or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the board or committee.

Section 12.Unless otherwise restricted by the certificate of incorporation or these by-laws, members of the board of directors or any committee designated by the board of directors, may participate in a meeting of the board of directors or any committee, by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at the meeting.

COMMITTEES OF DIRECTORS

Section 13.The board of directors may, by resolution passed by a majority of the whole board, designate one or more committees, each committee to consist of three or more of the directors of the corporation.  The board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee.

In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the board of directors to act at the meeting in the place of any such absent or disqualified member.

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Any such committee, to the extent provided in the resolution of the board of directors, shall have and may exercise all the powers and authority of the board of directors in the management of the business and affairs of the corporation, and may authorize the seal of the corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to:

(i) The submission to shareholders of any action that needs shareholders’ approval under this chapter;

(ii)  The filling of vacancies in the board of directors or in any committee;

(iii)  The fixing of compensation of the directors for serving on the board or any committee;

(iv)  The amendment or repeal of the by-laws, or the adoption of new by-laws;

(v)  The amendment or repeal of any resolution of the board which by its terms shall not be so amendable or repealable.

Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the board of directors.

Section 14.Each committee shall keep regular minutes of its meetings and report the same to the board of directors when required.

COMPENSATION OF DIRECTORS

Section 15.             Unless otherwise restricted by the certificate of incorporation or these by-laws, the board of directors shall have the authority to fix the compensation of directors.  The directors may be paid their expenses, if any, of attendance at each meeting of the board of directors and may be paid a fixed sum for attendance at each meeting of the board of directors or

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a stated salary as director.  No such payment shall preclude any director from serving the corporation in any other capacity and receiving compensation therefor.  Members of committees may be allowed like compensation for attending committee meetings.

REMOVAL OF DIRECTORS

Section 16.Any director may be removed with or without cause at any time by the affirmative vote of shareholders holding of record in the aggregate at least a majority of the votes cast at a meeting of the shareholders by the holders of shares present in person or represented by proxy entitled to vote at a special meeting of the shareholders called for that purpose.

ARTICLE IV

NOTICES

Section 1.Whenever, under the provisions of Illinois Business Corporation Act or of the certificate of incorporation or of these by-laws, notice is required to be given to any director or stockholder, it shall not be construed to mean personal notice, but such notice may be given in writing, by mail, addressed to such director or stockholder, at his address as it appears on the records of the corporation, with postage thereon prepaid, and such notice shall be deemed to be given at the time when the same shall be deposited in the United States mail.  Notice to directors may also be given by telegram or electronic mail.

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ARTICLE V

OFFICERS

Section 1.The officers of the corporation shall be chosen by the board of directors and shall be a president, a vice-president, a secretary and a treasurer.  The board of directors may also choose additional vice-presidents, and one or more assistant secretaries and assistant treasurers.  Any number of offices may be held by the same person, unless the certificate of incorporation or these by-laws otherwise provide; provided, that the offices of President and Secretary shall be held by different persons.  The board of directors may also elect a chairman of the board who shall have such duties as shall be assigned to him by the board of directors.

Section 2.The board of directors at its first meeting after each annual meeting of stockholders shall choose a president, one or more vice-presidents, a secretary and a treasurer.

Section 3.The board of directors may appoint such other officers and agents as it shall deem necessary who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the board.  The board of directors may require any officer to give security for the faithful performance of his duties.

Section 4.The salaries of all officers and agents of the corporation shall be fixed by the board of directors.

Section 5.The officers of the corporation shall hold office until their successors are chosen and qualify.  Any officer elected or appointed by the board of directors may be removed at any time by the affirmative vote of a majority of the board of directors.  Any vacancy occurring in any office of the corporation shall be filled for the unexpired portion of the term by the board of directors.  Any officer may resign his office at any time.  Such resignation shall be made in writing and shall take effect at the time specified therein or, if no time be specified, at the time of

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its receipt by the Corporation.  The acceptance of a resignation shall not be necessary to make it effective, unless expressly so provided in the resignation.

THE PRESIDENT

Section 6.The president shall be the chief executive officer of the corporation, shall preside at all meetings of the stockholders and the board of directors and, subject to the control of the board of directors, shall supervise and control all business and affairs of the Corporation, shall have general and active management of the business of the corporation and shall see that all orders and resolutions of the board of directors are carried into effect.  He shall when present preside at all meetings of the shareholders and the board of directors.

Section 7.He shall execute bonds, mortgages and other contracts requiring a seal, under the seal of the corporation, except where required or permitted by law to be otherwise signed and executed and except where the signing and execution thereof shall be expressly delegated by the board of directors to some other officer or agent of the corporation.

THE VICE-PRESIDENTS

Section 8.Each Vice President, if any, shall have such powers and perform such duties as may be determined by the President and assigned to him by the President.  In the absence of the president or in the event of his inability or refusal to act, the vice-president (or in the event there be more than one vice-president, the vice-presidents in the order designated by the directors, or in the absence of any designation, then in the order of their election) shall perform the duties of the president, and when so acting, shall have all the powers of and be subject to all

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the restrictions upon the president.  The vice-presidents shall perform such other duties and have such other powers as the board of directors may from time to time prescribe.

THE SECRETARY AND ASSISTANT SECRETARY

Section 9.The secretary shall attend all meetings of the board of directors and all meetings of the stockholders and record all proceedings of the meetings of the corporation and of the board of directors in a minute book to be kept for that purpose and shall perform like duties for the committees when required.  The secretary shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the board of directors, and shall perform such other duties as may be prescribed by the board of directors or president, under whose supervision he shall be.  The secretary shall have custody of the seal of the corporation and he, or an assistant secretary, shall have authority to affix the same to any instrument and when so affixed, it may be attested by his signature or by the signature of such assistant secretary.  The board of directors may give general authority to any other officer to affix the seal of the corporation and to attest the affixing by his signature.  The secretary shall keep a register of the post office address of each shareholder which shall be furnished to the secretary by such shareholder and shall have general charge of stock transfer books of the Corporation.

Section 10.The assistant secretary, or if there be more than one, the assistant secretaries in the order determined by the board of directors (or if there be no such determination, then in the order of their election) shall, in the absence of the secretary or in the event of his inability or refusal to act, perform the duties and exercise the powers of the secretary and shall

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perform such other duties and have such other powers as the board of directors may from time to time prescribe.

THE TREASURER AND ASSISTANT TREASURERS

Section 11.The treasurer shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the corporation in such depositories as may be designated by the board of directors.  The treasurer shall have power to receive and give receipts for monies due and payable to the Corporation from any source whatsoever.

Section 12.The treasurer shall disburse the funds of the corporation as may be ordered by the board of directors, taking proper vouchers for such disbursements, and shall render to the president and the board of directors, at its regular meetings, or when the board of directors so requires, an account of all his transactions as treasurer and of the financial condition of the corporation.

Section 13.If required by the board of directors, the treasurer shall give the corporation a bond (which shall be renewed every six years) in such sum and with such surety or sureties as shall be satisfactory to the board of directors for the faithful performance of the duties of his office and for the restoration to the corporation, in case of his death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in his possession or under this control belonging to the corporation.

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Section 14.The assistant treasurer, or if there shall be more than one, the assistant treasurers in the order determined by the board of directors (or if there be no such determination, then in the order of their election) shall, in the absence of the treasurer or in the event or his inability or refusal to act, perform the duties and exercise the powers of the treasurer and shall perform such other duties and have such other powers as the board of directors may from time to time prescribe.

ARTICLE VI

CERTIFICATES FOR SHARES

Section 1.The shares of the corporation shall be represented by a certificate.  Certificates shall be signed by, or in the name of the corporation by, the chairman or vice-chairman of the board of directors, or the president or a vice-president and the treasurer or an assistant treasurer, or the secretary or an assistant secretary of the corporation.

Upon the face or back of each stock certificate issued to represent any partly paid shares shall be set forth the total amount of the consideration to be paid therefor and the amount paid thereon shall be stated.

If the corporation shall be authorized to issue more than one class of stock or more than one series of any class, the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualification, limitations or restrictions of such preferences and/or rights shall be set forth in full or summarized on the face or back of the certificate which the corporation shall issue to represent such class or series of stock, provided that, except as otherwise provided in applicable provisions of the New York Business Corporation Law, in lieu of the foregoing requirements, there may be set forth on the

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face or back of the certificate which the corporation shall issue to represent such class or series of stock, a statement that the corporation will furnish without charge to each stockholder who so requests the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights.

Section 2.Any or all of the signatures on a certificate may be facsimile.  In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the corporation with the same effect as if he were such officer, transfer agent or registrar at the date of issue.  If such certificate is countersigned by a transfer agent other than the Corporation or its employees, or by a registrar other than the Corporation or its employee, the signatures of the officers of the Corporation may be facsimiles and, if permitted by law, any other signature may be a facsimile.

LOST CERTIFICATES

Section 3.The board of directors may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed.  When authorizing such issuance of a new certificate or certificates, the board of directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate or certificates, or his legal representative, to advertise the same in such manner as it shall require

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and/or to give the corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the corporation with respect to the certificate alleged to have been lost, stolen or destroyed.

TRANSFER OF STOCK

Section 4.Upon surrender to the corporation or the transfer agent of the corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignation or authority to transfer, it shall be the duty of the corporation to issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books.  Whenever any transfer of shares shall be made for collateral security, and not absolutely, it shall be so expressed in the entry of the transfer if, when the certificates are presented to the Corporation for transfer, both the transferor and transferee request the Corporation to do so.  The Corporation shall maintain at its principal office or at the office of its attorneys an office where shares of the Corporation shall be transferable.  The Corporation may also maintain one or more registry offices where such shares shall be registered.  The board of directors may make such rules and regulations as it may deem expedient concerning the issue, transfer and registration of certificates of stock.

FIXING RECORD DATE

Section 5.In order that the corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or to express consent to corporate action in writing without a meeting, or entitled to receive payment of any

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dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the board of directors may fix, in advance, a record date, which shall not be more than fifty nor less than ten days before the date of such meeting, nor more than fifty days prior to any other action.  A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the board of directors may fix a new record date for the adjourned meeting.  If no record date is fixed, the record date for the determination of shareholders entitled to notice of or to vote at a meeting of shareholders shall be at the close of business on the day next preceding the day on which notice is given, or, if not notice is given, the day on which the meeting is held.  For all other purposes, the record date for determining shareholders shall be at the close of business on the date on which the resolution of the board relating thereto is adopted.

REGISTERED STOCKHOLDERS

Section 6.The corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and to hold liable for calls and assessments a person registered on its books as the owner of shares, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the Illinois Business Corporation Act.

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ARTICLE VII

DIVIDENDS

Section 1.Dividends upon the capital stock of the corporation, subject to the provisions of the certificate of incorporation, if any, may be declared out of funds legally available therefor by the board of directors at any regular or special meeting, pursuant to law.  Dividends may be paid in cash, in property, or in shares of the capital stock, subject to the provisions of the certificate of incorporation.

Before payment of any dividend, there may be set aside out of any funds of the corporation available for dividends such sum or sums as the directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the corporation, or for such other purpose as the directors shall think conducive to the interest of the corporation, and the directors may modify or abolish any such reserve in the manner in which it was created.

ARTICLE VIII

MISCELLANEOUS PROVISIONS

Section 1.Annual Statement.  The board of directors shall present at each annual meeting, and at any special meeting of the stockholders when called for by vote of the stockholders, a full and clear statement of the business and condition of the corporation.

Section 2.Checks; contracts; deposits.  All checks or demands for money and notes of the corporation shall be signed by such officer or officers or such other person or persons as the board of directors may from time to time designate.  Unless otherwise provided by law or resolution of the board of directors, any contract, document or other instrument, including contracts or instruments evidencing indebtedness of the Corporation, shall be valid and binding on the Corporation only if executed and delivered in its name and on its behalf by either the

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President or such other persons who have been designated by resolution of the board of directors as authorized signatories of contracts, documents or other instruments.  All funds of the Corporation not otherwise employed shall be deposited from time to time to the credit of the Corporation in such banks, trust companies or other depositaries as the board of directors may select or as may be designated by any officer or officers of the Corporation.

Section 3.Fiscal Year. The fiscal year of the corporation shall be fixed by resolution of the board of directors.

Section 4.Corporate Seal.  The corporate seal shall have inscribed thereon the name of the corporation, the year of its organization and the words “Corporate Seal, Illinois “.  The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.

Section 5.Indemnification.  The corporation shall indemnify its officers, directors, employees and agents to the fullest extent permitted by law.

ARTICLE IX

AMENDMENTS TO BY-LAWS

Section 1.The by-laws may be altered, amended or repealed or new by-laws may be made or adopted by the board of directors at any regular or special meeting of the board of directors; except that no alteration, amendment or repeal to Article III or this Article IX may be made with out the consent of the shareholders as set forth in the next sentence.  The by-laws of the Corporation may also be altered, amended or repealed or new by-laws may be made or adopted by the vote of a majority in interest of the shareholders represented and entitled to vote upon election of directors, at any meeting at which a quorum is present.

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EX-3.2.25

Exhibit 3.2.25

BY - LAWS

ARTICLE I

OFFICES

Section 1.The registered office shall be c/o Equinox West Hollywood, Inc. at: 895 Broadway, New York, New York 10003.

Section 2.The corporation may also have offices at such other places both within and without the State of California as the board of directors may from time to time determine or the business of the corporation may require.

ARTICLE II

MEETING OF STOCKHOLDERS

Section 1.All meetings of the stockholders for the election of director shall be held in the City of New York, at such place as may be fixed from time to time by the board of directors, or at such other place either within or without the State of California as shall be designated from time to time by the board of directors as stated in the notice of the meeting.  Meetings of stockholders for any other purpose may be held at such time and place, within or without the State of California, as shall be stated in the notice of the meeting or in a duly executed waiver of notice thereof.

Section 2.               Annual meetings of stockholders, commencing with the year 2002, shall be held on the second Tuesday in the fifth month following the completion of the Corporation’s fiscal year, and if said date is a legal holiday, then on the next business day following, at 10:00 A.M., or at such other date and time as shall be designated from time to time by the board of directors and stated in the notice of the meeting, at which they shall elect by a plurality vote a board of directors, and transact such other business as may properly be brought before the meeting.

Section 3.Written notice of the annual meeting stating the place, date and hour of the meeting shall be given to each stockholder entitled to vote at such meeting not less than ten nor more than fifty days before the date of the meeting.

Section 4.The officer who has charge of the stock ledger of the corporation shall prepare and make, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder.  Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held.  The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present.  If the right to vote at any meeting ins challenged, the inspectors of election, or person presiding thereat, shall require such list of shareholders to be produced as evidence of the right of the persons challenged to vote at such meeting, and all persons who appear from such list to be shareholders entitled to vote thereat may vote at such meeting.

Section 5.The election of directors and any other vote by ballot at any meeting of the shareholders shall be supervised by at least two inspectors if requested by a shareholder present in person or represented by proxy and entitled to vote at such meeting.  Such inspectors may be appointed by the presiding officer before or at the meeting; or if one or both inspectors so appointed shall refuse to serve or shall not be present, such appointment shall be made by the officer presiding at the meeting.

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Section 6.Special meetings of the stockholders, for any purpose or purposes, unless otherwise prescribed by statute or by the president, shall be called by the president, or at the request in writing of a majority of the board of directors, or at the request in writing of stockholders owning a majority in amount of the entire capital stock of the corporation issued and outstanding and entitled to vote.  Such request shall state the purpose or purposes of the proposed meeting.

Section 7.Written notice of a special meeting stating the place, date and hour of the meeting and the purpose or purposes for which the meeting is called, shall be given not less than ten nor more than sixty days before the date of the meeting, to each stockholder entitled to vote at such meeting.

Section 8.Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice.

Section 9.The holders of a majority of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business except as otherwise provided by statute or by the certificate of incorporation.  If, however, such quorum shall not be present or represented at any meeting of the stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, shall have the power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented.  At such adjourned meeting at which a quorum shall be present or represented any business may be transacted which might have been transacted at the meeting as originally noticed.  If the adjournment is for more than thirty days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.

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Section 10.When a quorum is present at any meeting the vote of the holders of a majority of the stock having voting power present in person or represented by proxy shall decide any question brought before such meeting, unless the question is one upon which by express provision of the California General Corporation Law or of the certificate of incorporation a different vote is required, in which case such express provision shall govern and control the decision of such question.

Section 11.Unless otherwise provided in the certificate of incorporation, each stockholder shall at every meeting of the stockholders be entitled to one vote in person or by proxy for each share of the capital stock having voting power held by such stockholder, but no proxy shall be voted on after eleven (11) months from its date, unless the proxy provides for a longer period.

At all elections of directors of the corporation each stockholder having voting power shall be entitled to exercise the right of cumulative voting as provided in the certificate of incorporation.

Section 12.Unless otherwise provided in the certificate of incorporation, any action required to be taken at any annual or special meeting of stockholders of the corporation, or any action which may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted.  Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing.

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Section 13.The President, or, in his/her absence, a Vice President, shall preside at meetings of the shareholders.  The Secretary shall act as secretary of the meeting or, in his/her absence, a Assistant Secretary, shall act, or if neither is present, then the presiding officer may appoint a person to act as secretary of the meeting.

Section 14.Except as otherwise provided by these by-laws or any resolutions adopted by the shareholder or Board of Directors, the order of business and all other maters of procedure at every meeting of shareholders shall be determined by the presiding officer.  Not less than 15 minutes following the presentation of any resolution to any meeting of shareholder, the presiding officer may announce that further discussion on such resolution shall be limited to not more than three persons who favor and not more than three persons who oppose such resolution, each of whom shall be designated by the presiding officer and shall thereupon be entitled to speak thereon for not more than five minutes.  After such persons, or such a lesser number thereof as shall advise the presiding officer of their desire so to speak, shall have spoken on such resolution, the presiding officer may direct a vote on such resolution without further discussion thereon at the meeting.

ARTICLE III

DIRECTORS

Section 1.The number of directors constituting the entire board shall be fixed from time to time by the Board of Directors and shall not be less than three, except that where all the shares of a Corporation are owned beneficially and of record by less than three shareholders, the number of directors may be less than three but not less than the number of shareholders.  The directors shall be elected at the annual meeting of the stockholders, except as provided in Section 2

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of this Article, and each director elected shall hold office until his successor is elected and qualified; provided, that a Director may resign as stated herein.  Directors need not be stockholders.

Section 2.Any director may resign his office at any time by delivering his resignation in writing to the President or the Secretary.  It will take effect at the time specified therein or, if no time is specified, it sill be effective at the time of its receipt by the Corporation.  The acceptance of a resignation shall not be necessary to make it effective, unless expressly so provided in the resignation.

Section 3.Vacancies and newly created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, though less than a quorum, or by a sole remaining director, and the directors so chosen shall hold office until the next annual election and until their successors are duly elected and shall qualify, unless sooner displaced.  If there are no directors in office, then an election of directors may be held in the manner provided by the California General Corporation Law.  If, at the time of filling any vacancy or any newly created directorship, the directors then in office shall constitute less than a majority of the whole board (as constituted immediately prior to any such increase), the Court of Chancery may, upon application of any stockholder or stockholders holding at least ten percent of the total number of the shares at the time outstanding having the right to vote for such directors, summarily order an election to be held to fill any such vacancies or newly created directorship, or to replace the directors chosen by the directors then in office.

Section 4.The business of the corporation shall be managed by or under the direction of its board of directors which may exercise all such powers of the corporation and do all such lawful acts and things as are not by the California General Corporation Law or by the certificate

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of incorporation or by these by-laws directed or required to be exercised or done by the stockholders.

MEETINGS OF THE BOARD OF DIRECTORS

Section 5.The board of directors of the corporation may hold meetings, both regular and special, either within or without the State of California.

Section 6.The first meeting of each newly elected board of directors shall be held at such time and place as shall be fixed by the vote of the stockholders at the annual meeting and no notice of such meeting shall be necessary to the newly elected directors in order legally to constitute the meeting, provided a quorum shall be present.  In the event of the failure of the stockholders to fix the time or place of such first meeting of the newly elected board of directors, or in the event such meeting is not held at the time and place so fixed by the stockholders, the meeting may be held at such time and place as shall be specified in a notice given as hereinafter provided for special meetings of the board of directors, or as shall be specified in a written waiver signed by all of the directors.

Section 7.Regular meetings of the board of directors may be held without notice at such time and at such place as shall from time to time be determined by the board.

Section 8.Special meetings of the board may be called by the president on one day’s notice to each director, either personally or by mail or by telegram or by electronic mail; special meetings shall be called by the president or secretary in like manner and on like notice on the written request of two directors unless the board consists of only one director; in which case special meetings shall be called by the president or secretary in like manner and on like notice on the written request of the sole director.

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Section 9.At all meetings of the board a majority of the directors shall constitute a quorum for the transaction of business and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the board of directors, except as may be otherwise specifically provided by the California General Corporation Law or by the certificate of incorporation.  If a quorum shall not be present at any meeting of the board of directors the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present.

Section 10.The President, or, in his/her absence, a Vice President, shall preside at meetings of the board of directors.  The Secretary shall act as secretary of the meeting or, in his/her absence, a Assistant Secretary, shall act, or if neither is present, then the presiding officer may appoint a person to act as secretary of the meeting.

Section 11.Unless otherwise restricted by the certificate of incorporation or these by-laws, any action required or permitted to be taken at any meeting of the board of directors or of any committee thereof may be taken without a meeting, if all members of the board or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the board or committee.

Section 12.Unless otherwise restricted by the certificate of incorporation or these by-laws, members of the board of directors or any committee designated by the board of directors, may participate in a meeting of the board of directors or any committee, by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at the meeting.

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COMMITTEES OF DIRECTORS

Section 13.The board of directors may, by resolution passed by a majority of the whole board, designate one or more committees, each committee to consist of three or more of the directors of the corporation.  The board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee.

In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the board of directors to act at the meeting in the place of any such absent or disqualified member.

Any such committee, to the extent provided in the resolution of the board of directors, shall have and may exercise all the powers and authority of the board of directors in the management of the business and affairs of the corporation, and may authorize the seal of the corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to:

(i) The submission to shareholders of any action that needs shareholders’ approval under this chapter;

(ii)  The filling of vacancies in the board of directors or in any committee;

(iii)  The fixing of compensation of the directors for serving on the board or any committee;

(iv)  The amendment or repeal of the by-laws, or the adoption of new by-laws;

(v)  The amendment or repeal of any resolution of the board which by its terms shall not be so amendable or repealable.

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Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the board of directors.

Section 14.Each committee shall keep regular minutes of its meetings and report the same to the board of directors when required.

COMPENSATION OF DIRECTORS

Section 15.Unless otherwise restricted by the certificate of incorporation or these by-laws, the board of directors shall have the authority to fix the compensation of directors.  The directors may be paid their expenses, if any, of attendance at each meeting of the board of directors and may be paid a fixed sum for attendance at each meeting of the board of directors or a stated salary as director.  No such payment shall preclude any director from serving the corporation in any other capacity and receiving compensation therefor.  Members of committees may be allowed like compensation for attending committee meetings.

REMOVAL OF DIRECTORS

Section 16.Any director may be removed with or without cause at any time by the affirmative vote of shareholders holding of record in the aggregate at least a majority of the votes cast at a meeting of the shareholders by the holders of shares present in person or represented by proxy entitled to vote at a special meeting of the shareholders called for that purpose.

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ARTICLE IV

NOTICES

Section 1.Whenever, under the provisions of California Business Corporation Law or of the certificate of incorporation or of these by-laws, notice is required to be given to any director or stockholder, it shall not be construed to mean personal notice, but such notice may be given in writing, by mail, addressed to such director or stockholder, at his address as it appears on the records of the corporation, with postage thereon prepaid, and such notice shall be deemed to be given at the time when the same shall be deposited in the United States mail.  Notice to directors may also be given by telegram or electronic mail.

ARTICLE V

OFFICERS

Section 1.The officers of the corporation shall be chosen by the board of directors and shall be a president, a vice-president, a secretary and a treasurer.  The board of directors may also choose additional vice-presidents, and one or more assistant secretaries and assistant treasurers.  Any number of offices may be held by the same person, unless the certificate of incorporation or these by-laws otherwise provide; provided, that the offices of President and Secretary shall be held by different persons.  The board of directors may also elect a chairman of the board who shall have such duties as shall be assigned to him by the board of directors.

Section 2.The board of directors at its first meeting after each annual meeting of stockholders shall choose a president, one or more vice-presidents, a secretary and a treasurer.

Section 3.               The board of directors may appoint such other officers and agents as it shall deem necessary who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the board.  The board of directors may require any officer to give security for the faithful performance of his duties.

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Section 4.The salaries of all officers and agents of the corporation shall be fixed by the board of directors.

Section 5.The officers of the corporation shall hold office until their successors are chosen and qualify.  Any officer elected or appointed by the board of directors may be removed at any time by the affirmative vote of a majority of the board of directors.  Any vacancy occurring in any office of the corporation shall be filled for the unexpired portion of the term by the board of directors.  Any officer may resign his office at any time.  Such resignation shall be made in writing and shall take effect at the time specified therein or, if no time be specified, at the time of its receipt by the Corporation.  The acceptance of a resignation shall not be necessary to make it effective, unless expressly so provided in the resignation.

THE PRESIDENT

Section 6.The president shall be the chief executive officer of the corporation, shall preside at all meetings of the stockholders and the board of directors and, subject to the control of the board of directors, shall supervise and control all business and affairs of the Corporation, shall have general and active management of the business of the corporation and shall see that all orders and resolutions of the board of directors are carried into effect.  He shall when present preside at all meetings of the shareholders and the board of directors.

Section 7.He shall execute bonds, mortgages and other contracts requiring a seal, under the seal of the corporation, except where required or permitted by law to be otherwise signed and executed and except where the signing and execution thereof shall be expressly delegated by the board of directors to some other officer or agent of the corporation.

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THE VICE-PRESIDENTS

Section 8.Each Vice President, if any, shall have such powers and perform such duties as may be determined by the President and assigned to him by the President.  In the absence of the president or in the event of his inability or refusal to act, the vice-president (or in the event there be more than one vice-president, the vice-presidents in the order designated by the directors, or in the absence of any designation, then in the order of their election) shall perform the duties of the president, and when so acting, shall have all the powers of and be subject to all the restrictions upon the president.  The vice-presidents shall perform such other duties and have such other powers as the board of directors may from time to time prescribe.

THE SECRETARY AND ASSISTANT SECRETARY

Section 9.The secretary shall attend all meetings of the board of directors and all meetings of the stockholders and record all proceedings of the meetings of the corporation and of the board of directors in a minute book to be kept for that purpose and shall perform like duties for the committees when required.  The secretary shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the board of directors, and shall perform such other duties as may be prescribed by the board of directors or president, under whose supervision he shall be.  The secretary shall have custody of the seal of the corporation and he, or an assistant secretary, shall have authority to affix the same to any instrument and when so affixed, it may be attested by his signature or by the signature of such assistant secretary.  The board of directors may give general authority to any other officer to affix the seal of the corporation and to attest the affixing by his signature.  The secretary shall keep a register of the post office address of each shareholder which shall be furnished to the secretary by such shareholder and shall have general charge of stock transfer books of the Corporation.

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Section 10.The assistant secretary, or if there be more than one, the assistant secretaries in the order determined by the board of directors (or if there be no such determination, then in the order of their election) shall, in the absence of the secretary or in the event of his inability or refusal to act, perform the duties and exercise the powers of the secretary and shall perform such other duties and have such other powers as the board of directors may from time to time prescribe.

THE TREASURER AND ASSISTANT TREASURERS

Section 11.The treasurer shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the corporation in such depositories as may be designated by the board of directors.  The treasurer shall have power to receive and give receipts for monies due and payable to the Corporation from any source whatsoever.

Section 12.The treasurer shall disburse the funds of the corporation as may be ordered by the board of directors, taking proper vouchers for such disbursements, and shall render to the president and the board of directors, at its regular meetings, or when the board of directors so requires, an account of all his transactions as treasurer and of the financial condition of the corporation.

Section 13.If required by the board of directors, the treasurer shall give the corporation a bond (which shall be renewed every six years) in such sum and with such surety or sureties as shall be satisfactory to the board of directors for the faithful performance of the duties of his office and for the restoration to the corporation, in case of his death, resignation, retirement

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or removal from office, of all books, papers, vouchers, money and other property of whatever kind in his possession or under this control belonging to the corporation.

Section 14.The assistant treasurer, or if there shall be more than one, the assistant treasurers in the order determined by the board of directors (or if there be no such determination, then in the order of their election) shall, in the absence of the treasurer or in the event or his inability or refusal to act, perform the duties and exercise the powers of the treasurer and shall perform such other duties and have such other powers as the board of directors may from time to time prescribe.

ARTICLE VI

CERTIFICATES FOR SHARES

Section 1.The shares of the corporation shall be represented by a certificate.  Certificates shall be signed by, or in the name of the corporation by, the chairman or vice-chairman of the board of directors, or the president or a vice-president and the treasurer or an assistant treasurer, or the secretary or an assistant secretary of the corporation.

Upon the face or back of each stock certificate issued to represent any partly paid shares shall be set forth the total amount of the consideration to be paid therefor and the amount paid thereon shall be stated.

If the corporation shall be authorized to issue more than one class of stock or more than one series of any class, the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualification, limitations or restrictions of such preferences and/or rights shall be set forth in full or summarized on the face or back of the certificate which the corporation shall issue to represent such class or series of stock, provided that, except as otherwise provided in applicable provisions of the California

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General Corporation Law, in lieu of the foregoing requirements, there may be set forth on the face or back of the certificate which the corporation shall issue to represent such class or series of stock, a statement that the corporation will furnish without charge to each stockholder who so requests the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights.

Section 2.Any or all of the signatures on a certificate may be facsimile.  In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the corporation with the same effect as if he were such officer, transfer agent or registrar at the date of issue.  If such certificate is countersigned by a transfer agent other than the Corporation or its employees, or by a registrar other than the Corporation or its employee, the signatures of the officers of the Corporation may be facsimiles and, if permitted by law, any other signature may be a facsimile.

LOST CERTIFICATES

Section 3.The board of directors may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed.  When authorizing such issuance of a new certificate or certificates, the board of directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate or

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certificates, or his legal representative, to advertise the same in such manner as it shall require and/or to give the corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the corporation with respect to the certificate alleged to have been lost, stolen or destroyed.

TRANSFER OF STOCK

Section 4.Upon surrender to the corporation or the transfer agent of the corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignation or authority to transfer, it shall be the duty of the corporation to issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books.  Whenever any transfer of shares shall be made for collateral security, and not absolutely, it shall be so expressed in the entry of the transfer if, when the certificates are presented to the Corporation for transfer, both the transferor and transferee request the Corporation to do so.  The Corporation shall maintain at its principal office or at the office of its attorneys an office where shares of the Corporation shall be transferable.  The Corporation may also maintain one or more registry offices where such shares shall be registered.  The board of directors may make such rules and regulations as it may deem expedient concerning the issue, transfer and registration of certificates of stock.

FIXING RECORD DATE

Section 5.In order that the corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or to express

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consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the board of directors may fix, in advance, a record date, which shall not be more than fifty nor less than ten days before the date of such meeting, nor more than fifty days prior to any other action.  A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the board of directors may fix a new record date for the adjourned meeting.  If no record date is fixed, the record date for the determination of shareholders entitled to notice of or to vote at a meeting of shareholders shall be at the close of business on the day next preceding the day on which notice is given, or, if not notice is given, the day on which the meeting is held.  For all other purposes, the record date for determining shareholders shall be at the close of business on the date on which the resolution of the board relating thereto is adopted.

REGISTERED STOCKHOLDERS

Section 6.The corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and to hold liable for calls and assessments a person registered on its books as the owner of shares, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the California General Corporation Law.

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ARTICLE VII

DIVIDENDS

Section 1.Dividends upon the capital stock of the corporation, subject to the provisions of the certificate of incorporation, if any, may be declared out of funds legally available therefor by the board of directors at any regular or special meeting, pursuant to law.  Dividends may be paid in cash, in property, or in shares of the capital stock, subject to the provisions of the certificate of incorporation.

Before payment of any dividend, there may be set aside out of any funds of the corporation available for dividends such sum or sums as the directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the corporation, or for such other purpose as the directors shall think conducive to the interest of the corporation, and the directors may modify or abolish any such reserve in the manner in which it was created.

ARTICLE VIII

MISCELLANEOUS PROVISIONS

Section 1.Annual Statement.  The board of directors shall present at each annual meeting, and at any special meeting of the stockholders when called for by vote of the stockholders, a full and clear statement of the business and condition of the corporation.

Section 2.Checks; contracts; deposits.  All checks or demands for money and notes of the corporation shall be signed by such officer or officers or such other person or persons as the board of directors may from time to time designate.  Unless otherwise provided by law or resolution of the board of directors, any contract, document or other instrument, including contracts or instruments evidencing indebtedness of the Corporation, shall be valid and binding

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on the Corporation only if executed and delivered in its name and on its behalf by either the President or such other persons who have been designated by resolution of the board of directors as authorized signatories of contracts, documents or other instruments.  All funds of the Corporation not otherwise employed shall be deposited from time to time to the credit of the Corporation in such banks, trust companies or other depositaries as the board of directors may select or as may be designated by any officer or officers of the Corporation.

Section 3.Fiscal Year. The fiscal year of the corporation shall be fixed by resolution of the board of directors.

Section 4.Corporate Seal.  The corporate seal shall have inscribed thereon the name of the corporation, the year of its organization and the words “Corporate Seal, California”.  The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.

Section 5.Indemnification.  The corporation shall indemnify its officers, directors, employees and agents to the fullest extent permitted by law.

ARTICLE IX

AMENDMENTS TO BY-LAWS

Section 1.The by-laws may be altered, amended or repealed or new by-laws may be made or adopted by the board of directors at any regular or special meeting of the board of directors; except that no alteration, amendment or repeal to Article III or this Article IX may be made with out the consent of the shareholders as set forth in the next sentence.  The by-laws of the Corporation may also be altered, amended or repealed or new by-laws may be made or

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adopted by the vote of a majority in interest of the shareholders represented and entitled to vote upon election of directors, at any meeting at which a quorum is present.

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EX-3.2.26

Exhibit 3.2.26

BY - LAWS

ARTICLE I

OFFICES

Section 1.The registered office shall be c/o Equinox Pasadena Fitness, Inc. at: 895 Broadway, New York, New York 10003.

Section 2.The corporation may also have offices at such other places both within and without the State of California as the board of directors may from time to time determine or the business of the corporation may require.

ARTICLE II

MEETING OF STOCKHOLDERS

Section 1.All meetings of the stockholders for the election of director shall be held in the City of New York, at such place as may be fixed from time to time by the board of directors, or at such other place either within or without the State of California as shall be designated from time to time by the board of directors as stated in the notice of the meeting.  Meetings of stockholders for any other purpose may be held at such time and place, within or without the State of California, as shall be stated in the notice of the meeting or in a duly executed waiver of notice thereof.

Section 2.Annual meetings of stockholders, commencing with the year 2002, shall be held on the second Tuesday in the fifth month following the completion of the Corporation’s fiscal year, and if said date is a legal holiday, then on the next business day following, at 10:00 A.M., or at such other date and time as shall be designated from time to time by the board of directors and stated in the notice of the meeting, at which they shall elect by a plurality vote a board of directors, and transact such other business as may properly be brought before the meeting.

Section 3.Written notice of the annual meeting stating the place, date and hour of the meeting shall be given to each stockholder entitled to vote at such meeting not less than ten nor more than fifty days before the date of the meeting.

Section 4.The officer who has charge of the stock ledger of the corporation shall prepare and make, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder.  Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held.  The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present.  If the right to vote at any meeting ins challenged, the inspectors of election, or person presiding thereat, shall require such list of shareholders to be produced as evidence of the right of the persons challenged to vote at such meeting, and all persons who appear from such list to be shareholders entitled to vote thereat may vote at such meeting.

Section 5.The election of directors and any other vote by ballot at any meeting of the shareholders shall be supervised by at least two inspectors if requested by a shareholder present in person or represented by proxy and entitled to vote at such meeting.  Such inspectors may be appointed by the presiding officer before or at the meeting; or if one or both inspectors so appointed shall refuse to serve or shall not be present, such appointment shall be made by the officer presiding at the meeting.

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Section 6.Special meetings of the stockholders, for any purpose or purposes, unless otherwise prescribed by statute or by the president, shall be called by the president, or at the request in writing of a majority of the board of directors, or at the request in writing of stockholders owning a majority in amount of the entire capital stock of the corporation issued and outstanding and entitled to vote.  Such request shall state the purpose or purposes of the proposed meeting.

Section 7.Written notice of a special meeting stating the place, date and hour of the meeting and the purpose or purposes for which the meeting is called, shall be given not less than ten nor more than sixty days before the date of the meeting, to each stockholder entitled to vote at such meeting.

Section 8.Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice.

Section 9.The holders of a majority of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business except as otherwise provided by statute or by the certificate of incorporation.  If, however, such quorum shall not be present or represented at any meeting of the stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, shall have the power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented.  At such adjourned meeting at which a quorum shall be present or represented any business may be transacted which might have been transacted at the meeting as originally noticed.  If the adjournment is for more than thirty days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.

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Section 10.When a quorum is present at any meeting the vote of the holders of a majority of the stock having voting power present in person or represented by proxy shall decide any question brought before such meeting, unless the question is one upon which by express provision of the California General Corporation Law or of the certificate of incorporation a different vote is required, in which case such express provision shall govern and control the decision of such question.

Section 11.Unless otherwise provided in the certificate of incorporation, each stockholder shall at every meeting of the stockholders be entitled to one vote in person or by proxy for each share of the capital stock having voting power held by such stockholder, but no proxy shall be voted on after eleven (11) months from its date, unless the proxy provides for a longer period.

At all elections of directors of the corporation each stockholder having voting power shall be entitled to exercise the right of cumulative voting as provided in the certificate of incorporation.

Section 12.             Unless otherwise provided in the certificate of incorporation, any action required to be taken at any annual or special meeting of stockholders of the corporation, or any action which may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted.  Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing.

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Section 13.The President, or, in his/her absence, a Vice President, shall preside at meetings of the shareholders.  The Secretary shall act as secretary of the meeting or, in his/her absence, a Assistant Secretary, shall act, or if neither is present, then the presiding officer may appoint a person to act as secretary of the meeting.

Section 14.Except as otherwise provided by these by-laws or any resolutions adopted by the shareholder or Board of Directors, the order of business and all other maters of procedure at every meeting of shareholders shall be determined by the presiding officer.  Not less than 15 minutes following the presentation of any resolution to any meeting of shareholder, the presiding officer may announce that further discussion on such resolution shall be limited to not more than three persons who favor and not more than three persons who oppose such resolution, each of whom shall be designated by the presiding officer and shall thereupon be entitled to speak thereon for not more than five minutes.  After such persons, or such a lesser number thereof as shall advise the presiding officer of their desire so to speak, shall have spoken on such resolution, the presiding officer may direct a vote on such resolution without further discussion thereon at the meeting.

ARTICLE III

DIRECTORS

Section 1.The number of directors constituting the entire board shall be fixed from time to time by the Board of Directors and shall not be less than three, except that where all the shares of a Corporation are owned beneficially and of record by less than three shareholders, the number of directors may be less than three but not less than the number of shareholders.  The directors shall be elected at the annual meeting of the stockholders, except as provided in Section 2

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of this Article, and each director elected shall hold office until his successor is elected and qualified; provided, that a Director may resign as stated herein.  Directors need not be stockholders.

Section 2.Any director may resign his office at any time by delivering his resignation in writing to the President or the Secretary.  It will take effect at the time specified therein or, if no time is specified, it sill be effective at the time of its receipt by the Corporation.  The acceptance of a resignation shall not be necessary to make it effective, unless expressly so provided in the resignation.

Section 3.Vacancies and newly created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, though less than a quorum, or by a sole remaining director, and the directors so chosen shall hold office until the next annual election and until their successors are duly elected and shall qualify, unless sooner displaced.  If there are no directors in office, then an election of directors may be held in the manner provided by the California General Corporation Law.  If, at the time of filling any vacancy or any newly created directorship, the directors then in office shall constitute less than a majority of the whole board (as constituted immediately prior to any such increase), the Court of Chancery may, upon application of any stockholder or stockholders holding at least ten percent of the total number of the shares at the time outstanding having the right to vote for such directors, summarily order an election to be held to fill any such vacancies or newly created directorship, or to replace the directors chosen by the directors then in office.

Section 4.The business of the corporation shall be managed by or under the direction of its board of directors which may exercise all such powers of the corporation and do all such lawful acts and things as are not by the California General Corporation Law or by the certificate

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of incorporation or by these by-laws directed or required to be exercised or done by the stockholders.

MEETINGS OF THE BOARD OF DIRECTORS

Section 5.The board of directors of the corporation may hold meetings, both regular and special, either within or without the State of California.

Section 6.The first meeting of each newly elected board of directors shall be held at such time and place as shall be fixed by the vote of the stockholders at the annual meeting and no notice of such meeting shall be necessary to the newly elected directors in order legally to constitute the meeting, provided a quorum shall be present.  In the event of the failure of the stockholders to fix the time or place of such first meeting of the newly elected board of directors, or in the event such meeting is not held at the time and place so fixed by the stockholders, the meeting may be held at such time and place as shall be specified in a notice given as hereinafter provided for special meetings of the board of directors, or as shall be specified in a written waiver signed by all of the directors.

Section 7.Regular meetings of the board of directors may be held without notice at such time and at such place as shall from time to time be determined by the board.

Section 8.Special meetings of the board may be called by the president on one day’s notice to each director, either personally or by mail or by telegram or by electronic mail; special meetings shall be called by the president or secretary in like manner and on like notice on the written request of two directors unless the board consists of only one director; in which case special meetings shall be called by the president or secretary in like manner and on like notice on the written request of the sole director.

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Section 9.At all meetings of the board a majority of the directors shall constitute a quorum for the transaction of business and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the board of directors, except as may be otherwise specifically provided by the California General Corporation Law or by the certificate of incorporation.  If a quorum shall not be present at any meeting of the board of directors the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present.

Section 10.The President, or, in his/her absence, a Vice President, shall preside at meetings of the board of directors.  The Secretary shall act as secretary of the meeting or, in his/her absence, a Assistant Secretary, shall act, or if neither is present, then the presiding officer may appoint a person to act as secretary of the meeting.

Section 11.Unless otherwise restricted by the certificate of incorporation or these by-laws, any action required or permitted to be taken at any meeting of the board of directors or of any committee thereof may be taken without a meeting, if all members of the board or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the board or committee.

Section 12.Unless otherwise restricted by the certificate of incorporation or these by-laws, members of the board of directors or any committee designated by the board of directors, may participate in a meeting of the board of directors or any committee, by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at the meeting.

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COMMITTEES OF DIRECTORS

Section 13.The board of directors may, by resolution passed by a majority of the whole board, designate one or more committees, each committee to consist of three or more of the directors of the corporation.  The board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee.

In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the board of directors to act at the meeting in the place of any such absent or disqualified member.

Any such committee, to the extent provided in the resolution of the board of directors, shall have and may exercise all the powers and authority of the board of directors in the management of the business and affairs of the corporation, and may authorize the seal of the corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to:

(i) The submission to shareholders of any action that needs shareholders’ approval under this chapter;

(ii)  The filling of vacancies in the board of directors or in any committee;

(iii)  The fixing of compensation of the directors for serving on the board or any committee;

(iv)  The amendment or repeal of the by-laws, or the adoption of new by-laws;

(v)  The amendment or repeal of any resolution of the board which by its terms shall not be so amendable or repealable.

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Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the board of directors.

Section 14.Each committee shall keep regular minutes of its meetings and report the same to the board of directors when required.

COMPENSATION OF DIRECTORS

Section 15.Unless otherwise restricted by the certificate of incorporation or these by-laws, the board of directors shall have the authority to fix the compensation of directors.  The directors may be paid their expenses, if any, of attendance at each meeting of the board of directors and may be paid a fixed sum for attendance at each meeting of the board of directors or a stated salary as director.  No such payment shall preclude any director from serving the corporation in any other capacity and receiving compensation therefor.  Members of committees may be allowed like compensation for attending committee meetings.

REMOVAL OF DIRECTORS

Section 16.Any director may be removed with or without cause at any time by the affirmative vote of shareholders holding of record in the aggregate at least a majority of the votes cast at a meeting of the shareholders by the holders of shares present in person or represented by proxy entitled to vote at a special meeting of the shareholders called for that purpose.

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ARTICLE IV

NOTICES

Section 1.Whenever, under the provisions of California Business Corporation Law or of the certificate of incorporation or of these by-laws, notice is required to be given to any director or stockholder, it shall not be construed to mean personal notice, but such notice may be given in writing, by mail, addressed to such director or stockholder, at his address as it appears on the records of the corporation, with postage thereon prepaid, and such notice shall be deemed to be given at the time when the same shall be deposited in the United States mail.  Notice to directors may also be given by telegram or electronic mail.

ARTICLE V

OFFICERS

Section 1.The officers of the corporation shall be chosen by the board of directors and shall be a president, a vice-president, a secretary and a treasurer.  The board of directors may also choose additional vice-presidents, and one or more assistant secretaries and assistant treasurers.  Any number of offices may be held by the same person, unless the certificate of incorporation or these by-laws otherwise provide; provided, that the offices of President and Secretary shall be held by different persons.  The board of directors may also elect a chairman of the board who shall have such duties as shall be assigned to him by the board of directors.

Section 2.The board of directors at its first meeting after each annual meeting of stockholders shall choose a president, one or more vice-presidents, a secretary and a treasurer.

Section 3.The board of directors may appoint such other officers and agents as it shall deem necessary who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the board.  The board of directors may require any officer to give security for the faithful performance of his duties.

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Section 4.The salaries of all officers and agents of the corporation shall be fixed by the board of directors.

Section 5.The officers of the corporation shall hold office until their successors are chosen and qualify.  Any officer elected or appointed by the board of directors may be removed at any time by the affirmative vote of a majority of the board of directors.  Any vacancy occurring in any office of the corporation shall be filled for the unexpired portion of the term by the board of directors.  Any officer may resign his office at any time.  Such resignation shall be made in writing and shall take effect at the time specified therein or, if no time be specified, at the time of its receipt by the Corporation.  The acceptance of a resignation shall not be necessary to make it effective, unless expressly so provided in the resignation.

THE PRESIDENT

Section 6.The president shall be the chief executive officer of the corporation, shall preside at all meetings of the stockholders and the board of directors and, subject to the control of the board of directors, shall supervise and control all business and affairs of the Corporation, shall have general and active management of the business of the corporation and shall see that all orders and resolutions of the board of directors are carried into effect.  He shall when present preside at all meetings of the shareholders and the board of directors.

Section 7.He shall execute bonds, mortgages and other contracts requiring a seal, under the seal of the corporation, except where required or permitted by law to be otherwise signed and executed and except where the signing and execution thereof shall be expressly delegated by the board of directors to some other officer or agent of the corporation.

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THE VICE-PRESIDENTS

Section 8.Each Vice President, if any, shall have such powers and perform such duties as may be determined by the President and assigned to him by the President.  In the absence of the president or in the event of his inability or refusal to act, the vice-president (or in the event there be more than one vice-president, the vice-presidents in the order designated by the directors, or in the absence of any designation, then in the order of their election) shall perform the duties of the president, and when so acting, shall have all the powers of and be subject to all the restrictions upon the president.  The vice-presidents shall perform such other duties and have such other powers as the board of directors may from time to time prescribe.

THE SECRETARY AND ASSISTANT SECRETARIES

Section 9.The secretary shall attend all meetings of the board of directors and all meetings of the stockholders and record all proceedings of the meetings of the corporation and of the board of directors in a minute book to be kept for that purpose and shall perform like duties for the committees when required.  The secretary shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the board of directors, and shall perform such other duties as may be prescribed by the board of directors or president, under whose supervision he shall be.  The secretary shall have custody of the seal of the corporation and he, or an assistant secretary, shall have authority to affix the same to any instrument and when so affixed, it may be attested by his signature or by the signature of such assistant secretary.  The board of directors may give general authority to any other officer to affix the seal of the corporation and to attest the affixing by his signature.  The secretary shall keep a register of the post office address of each shareholder which shall be furnished to the secretary by such shareholder and shall have general charge of stock transfer books of the Corporation.

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Section 10.The assistant secretary, or if there be more than one, the assistant secretaries in the order determined by the board of directors (or if there be no such determination, then in the order of their election) shall, in the absence of the secretary or in the event of his inability or refusal to act, perform the duties and exercise the powers of the secretary and shall perform such other duties and have such other powers as the board of directors may from time to time prescribe.

THE TREASURER AND ASSISTANT TREASURERS

Section 11.The treasurer shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the corporation in such depositories as may be designated by the board of directors.  The treasurer shall have power to receive and give receipts for monies due and payable to the Corporation from any source whatsoever.

Section 12.The treasurer shall disburse the funds of the corporation as may be ordered by the board of directors, taking proper vouchers for such disbursements, and shall render to the president and the board of directors, at its regular meetings, or when the board of directors so requires, an account of all his transactions as treasurer and of the financial condition of the corporation.

Section 13.If required by the board of directors, the treasurer shall give the corporation a bond (which shall be renewed every six years) in such sum and with such surety or sureties as shall be satisfactory to the board of directors for the faithful performance of the duties of his office and for the restoration to the corporation, in case of his death, resignation, retirement

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or removal from office, of all books, papers, vouchers, money and other property of whatever kind in his possession or under this control belonging to the corporation.

Section 14.The assistant treasurer, or if there shall be more than one, the assistant treasurers in the order determined by the board of directors (or if there be no such determination, then in the order of their election) shall, in the absence of the treasurer or in the event or his inability or refusal to act, perform the duties and exercise the powers of the treasurer and shall perform such other duties and have such other powers as the board of directors may from time to time prescribe.

ARTICLE VI

CERTIFICATES FOR SHARES

Section 1.The shares of the corporation shall be represented by a certificate.  Certificates shall be signed by, or in the name of the corporation by, the chairman or vice-chairman of the board of directors, or the president or a vice-president and the treasurer or an assistant treasurer, or the secretary or an assistant secretary of the corporation.

Upon the face or back of each stock certificate issued to represent any partly paid shares shall be set forth the total amount of the consideration to be paid therefor and the amount paid thereon shall be stated.

If the corporation shall be authorized to issue more than one class of stock or more than one series of any class, the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualification, limitations or restrictions of such preferences and/or rights shall be set forth in full or summarized on the face or back of the certificate which the corporation shall issue to represent such class or series of stock, provided that, except as otherwise provided in applicable provisions of the California

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General Corporation Law, in lieu of the foregoing requirements, there may be set forth on the face or back of the certificate which the corporation shall issue to represent such class or series of stock, a statement that the corporation will furnish without charge to each stockholder who so requests the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights.

Section 2.Any or all of the signatures on a certificate may be facsimile.  In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the corporation with the same effect as if he were such officer, transfer agent or registrar at the date of issue.  If such certificate is countersigned by a transfer agent other than the Corporation or its employees, or by a registrar other than the Corporation or its employee, the signatures of the officers of the Corporation may be facsimiles and, if permitted by law, any other signature may be a facsimile.

LOST CERTIFICATES

Section 3.The board of directors may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed.  When authorizing such issuance of a new certificate or certificates, the board of directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate or

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certificates, or his legal representative, to advertise the same in such manner as it shall require and/or to give the corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the corporation with respect to the certificate alleged to have been lost, stolen or destroyed.

TRANSFER OF STOCK

Section 4.Upon surrender to the corporation or the transfer agent of the corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignation or authority to transfer, it shall be the duty of the corporation to issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books.  Whenever any transfer of shares shall be made for collateral security, and not absolutely, it shall be so expressed in the entry of the transfer if, when the certificates are presented to the Corporation for transfer, both the transferor and transferee request the Corporation to do so.  The Corporation shall maintain at its principal office or at the office of its attorneys an office where shares of the Corporation shall be transferable.  The Corporation may also maintain one or more registry offices where such shares shall be registered.  The board of directors may make such rules and regulations as it may deem expedient concerning the issue, transfer and registration of certificates of stock.

FIXING RECORD DATE

Section 5.In order that the corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or to express

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consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the board of directors may fix, in advance, a record date, which shall not be more than fifty nor less than ten days before the date of such meeting, nor more than fifty days prior to any other action.  A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the board of directors may fix a new record date for the adjourned meeting.  If no record date is fixed, the record date for the determination of shareholders entitled to notice of or to vote at a meeting of shareholders shall be at the close of business on the day next preceding the day on which notice is given, or, if not notice is given, the day on which the meeting is held.  For all other purposes, the record date for determining shareholders shall be at the close of business on the date on which the resolution of the board relating thereto is adopted.

REGISTERED STOCKHOLDERS

Section 6.The corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and to hold liable for calls and assessments a person registered on its books as the owner of shares, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the California General Corporation Law.

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ARTICLE VII

DIVIDENDS

Section 1.Dividends upon the capital stock of the corporation, subject to the provisions of the certificate of incorporation, if any, may be declared out of funds legally available therefor by the board of directors at any regular or special meeting, pursuant to law.  Dividends may be paid in cash, in property, or in shares of the capital stock, subject to the provisions of the certificate of incorporation.

Before payment of any dividend, there may be set aside out of any funds of the corporation available for dividends such sum or sums as the directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the corporation, or for such other purpose as the directors shall think conducive to the interest of the corporation, and the directors may modify or abolish any such reserve in the manner in which it was created.

ARTICLE VIII

MISCELLANEOUS PROVISIONS

Section 1.Annual Statement.  The board of directors shall present at each annual meeting, and at any special meeting of the stockholders when called for by vote of the stockholders, a full and clear statement of the business and condition of the corporation.

Section 2.Checks; contracts; deposits.  All checks or demands for money and notes of the corporation shall be signed by such officer or officers or such other person or persons as the board of directors may from time to time designate.  Unless otherwise provided by law or resolution of the board of directors, any contract, document or other instrument, including contracts or instruments evidencing indebtedness of the Corporation, shall be valid and binding

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on the Corporation only if executed and delivered in its name and on its behalf by either the President or such other persons who have been designated by resolution of the board of directors as authorized signatories of contracts, documents or other instruments.  All funds of the Corporation not otherwise employed shall be deposited from time to time to the credit of the Corporation in such banks, trust companies or other depositaries as the board of directors may select or as may be designated by any officer or officers of the Corporation.

Section 3.Fiscal Year. The fiscal year of the corporation shall be fixed by resolution of the board of directors.

Section 4.Corporate Seal.  The corporate seal shall have inscribed thereon the name of the corporation, the year of its organization and the words “Corporate Seal, California”.  The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.

Section 5.Indemnification.  The corporation shall indemnify its officers, directors, employees and agents to the fullest extent permitted by law.

ARTICLE IX

AMENDMENTS TO BY-LAWS

Section 1.The by-laws may be altered, amended or repealed or new by-laws may be made or adopted by the board of directors at any regular or special meeting of the board of directors; except that no alteration, amendment or repeal to Article III or this Article IX may be made with out the consent of the shareholders as set forth in the next sentence.  The by-laws of the Corporation may also be altered, amended or repealed or new by-laws may be made or

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adopted by the vote of a majority in interest of the shareholders represented and entitled to vote upon election of directors, at any meeting at which a quorum is present.

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EX-3.2.27

Exhibit 3.2.27

BY - LAWS

ARTICLE I

OFFICES

Section 1.The registered office shall be c/o Equinox Pine Street, Inc. at: 895 Broadway, New York, New York 10003.

Section 2.The corporation may also have offices at such other places both within and without the State of California as the board of directors may from time to time determine or the business of the corporation may require.

ARTICLE II

MEETING OF STOCKHOLDERS

Section 1.All meetings of the stockholders for the election of director shall be held in the City of New York, at such place as may be fixed from time to time by the board of directors, or at such other place either within or without the State of California as shall be designated from time to time by the board of directors as stated in the notice of the meeting.  Meetings of stockholders for any other purpose may be held at such time and place, within or without the State of California, as shall be stated in the notice of the meeting or in a duly executed waiver of notice thereof.

Section 2.Annual meetings of stockholders, commencing with the year 2004, shall be held on the second Tuesday in the fifth month following the completion of the Corporation’s fiscal year, and if said date is a legal holiday, then on the next business day following, at 10:00 A.M., or at such other date and time as shall be designated from time to time by the board of directors and stated in the notice of the meeting, at which they shall elect by a plurality vote a board of directors, and transact such other business as may properly be brought before the meeting.

Section 3.Written notice of the annual meeting stating the place, date and hour of the meeting shall be given to each stockholder entitled to vote at such meeting not less than ten nor more than fifty days before the date of the meeting.

Section 4.The officer who has charge of the stock ledger of the corporation shall prepare and make, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder.  Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held.  The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present.  If the right to vote at any meeting ins challenged, the inspectors of election, or person presiding thereat, shall require such list of shareholders to be produced as evidence of the right of the persons challenged to vote at such meeting, and all persons who appear from such list to be shareholders entitled to vote thereat may vote at such meeting.

Section 5.The election of directors and any other vote by ballot at any meeting of the shareholders shall be supervised by at least two inspectors if requested by a shareholder present in person or represented by proxy and entitled to vote at such meeting.  Such inspectors may be appointed by the presiding officer before or at the meeting; or if one or both inspectors so appointed shall refuse to serve or shall not be present, such appointment shall be made by the officer presiding at the meeting.

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Section 6.Special meetings of the stockholders, for any purpose or purposes, unless otherwise prescribed by statute or by the president, shall be called by the president, or at the request in writing of a majority of the board of directors, or at the request in writing of stockholders owning a majority in amount of the entire capital stock of the corporation issued and outstanding and entitled to vote.  Such request shall state the purpose or purposes of the proposed meeting.

Section 7.Written notice of a special meeting stating the place, date and hour of the meeting and the purpose or purposes for which the meeting is called, shall be given not less than ten nor more than sixty days before the date of the meeting, to each stockholder entitled to vote at such meeting.

Section 8.Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice.

Section 9.The holders of a majority of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business except as otherwise provided by statute or by the certificate of incorporation.  If, however, such quorum shall not be present or represented at any meeting of the stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, shall have the power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented.  At such adjourned meeting at which a quorum shall be present or represented any business may be transacted which might have been transacted at the meeting as originally noticed.  If the adjournment is for more than thirty days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.

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Section 10.When a quorum is present at any meeting the vote of the holders of a majority of the stock having voting power present in person or represented by proxy shall decide any question brought before such meeting, unless the question is one upon which by express provision of the California General Corporation Law or of the certificate of incorporation a different vote is required, in which case such express provision shall govern and control the decision of such question.

Section 11.Unless otherwise provided in the certificate of incorporation, each stockholder shall at every meeting of the stockholders be entitled to one vote in person or by proxy for each share of the capital stock having voting power held by such stockholder, but no proxy shall be voted on after eleven (11) months from its date, unless the proxy provides for a longer period.

At all elections of directors of the corporation each stockholder having voting power shall be entitled to exercise the right of cumulative voting as provided in the certificate of incorporation.

Section 12.Unless otherwise provided in the certificate of incorporation, any action required to be taken at any annual or special meeting of stockholders of the corporation, or any action which may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted.  Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing.

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Section 13.The President, or, in his/her absence, a Vice President, shall preside at meetings of the shareholders.  The Secretary shall act as secretary of the meeting or, in his/her absence, a Assistant Secretary, shall act, or if neither is present, then the presiding officer may appoint a person to act as secretary of the meeting.

Section 14.Except as otherwise provided by these by-laws or any resolutions adopted by the shareholder or Board of Directors, the order of business and all other maters of procedure at every meeting of shareholders shall be determined by the presiding officer.  Not less than 15 minutes following the presentation of any resolution to any meeting of shareholder, the presiding officer may announce that further discussion on such resolution shall be limited to not more than three persons who favor and not more than three persons who oppose such resolution, each of whom shall be designated by the presiding officer and shall thereupon be entitled to speak thereon for not more than five minutes.  After such persons, or such a lesser number thereof as shall advise the presiding officer of their desire so to speak, shall have spoken on such resolution, the presiding officer may direct a vote on such resolution without further discussion thereon at the meeting.

ARTICLE III

DIRECTORS

Section 1.The number of directors constituting the entire board shall be fixed from time to time by the Board of Directors and shall not be less than three, except that where all the shares of a Corporation are owned beneficially and of record by less than three shareholders, the number of directors may be less than three but not less than the number of shareholders.  The directors shall be elected at the annual meeting of the stockholders, except as provided in Section 2

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of this Article, and each director elected shall hold office until his successor is elected and qualified; provided, that a Director may resign as stated herein.  Directors need not be stockholders.

Section 2.Any director may resign his office at any time by delivering his resignation in writing to the President or the Secretary.  It will take effect at the time specified therein or, if no time is specified, it sill be effective at the time of its receipt by the Corporation.  The acceptance of a resignation shall not be necessary to make it effective, unless expressly so provided in the resignation.

Section 3.Vacancies and newly created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, though less than a quorum, or by a sole remaining director, and the directors so chosen shall hold office until the next annual election and until their successors are duly elected and shall qualify, unless sooner displaced.  If there are no directors in office, then an election of directors may be held in the manner provided by the California General Corporation Law.  If, at the time of filling any vacancy or any newly created directorship, the directors then in office shall constitute less than a majority of the whole board (as constituted immediately prior to any such increase), the Court of Chancery may, upon application of any stockholder or stockholders holding at least ten percent of the total number of the shares at the time outstanding having the right to vote for such directors, summarily order an election to be held to fill any such vacancies or newly created directorship, or to replace the directors chosen by the directors then in office.

Section 4.The business of the corporation shall be managed by or under the direction of its board of directors which may exercise all such powers of the corporation and do all such lawful acts and things as are not by the California General Corporation Law or by the certificate

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of incorporation or by these by-laws directed or required to be exercised or done by the stockholders.

MEETINGS OF THE BOARD OF DIRECTORS

Section 5.The board of directors of the corporation may hold meetings, both regular and special, either within or without the State of California.

Section 6.The first meeting of each newly elected board of directors shall be held at such time and place as shall be fixed by the vote of the stockholders at the annual meeting and no notice of such meeting shall be necessary to the newly elected directors in order legally to constitute the meeting, provided a quorum shall be present.  In the event of the failure of the stockholders to fix the time or place of such first meeting of the newly elected board of directors, or in the event such meeting is not held at the time and place so fixed by the stockholders, the meeting may be held at such time and place as shall be specified in a notice given as hereinafter provided for special meetings of the board of directors, or as shall be specified in a written waiver signed by all of the directors.

Section 7.Regular meetings of the board of directors may be held without notice at such time and at such place as shall from time to time be determined by the board.

Section 8.Special meetings of the board may be called by the president on one day’s notice to each director, either personally or by mail or by telegram or by electronic mail; special meetings shall be called by the president or secretary in like manner and on like notice on the written request of two directors unless the board consists of only one director; in which case special meetings shall be called by the president or secretary in like manner and on like notice on the written request of the sole director.

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Section 9.At all meetings of the board a majority of the directors shall constitute a quorum for the transaction of business and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the board of directors, except as may be otherwise specifically provided by the California General Corporation Law or by the certificate of incorporation.  If a quorum shall not be present at any meeting of the board of directors the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present.

Section 10.The President, or, in his/her absence, a Vice President, shall preside at meetings of the board of directors.  The Secretary shall act as secretary of the meeting or, in his/her absence, a Assistant Secretary, shall act, or if neither is present, then the presiding officer may appoint a person to act as secretary of the meeting.

Section 11.Unless otherwise restricted by the certificate of incorporation or these by-laws, any action required or permitted to be taken at any meeting of the board of directors or of any committee thereof may be taken without a meeting, if all members of the board or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the board or committee.

Section 12.Unless otherwise restricted by the certificate of incorporation or these by-laws, members of the board of directors or any committee designated by the board of directors, may participate in a meeting of the board of directors or any committee, by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at the meeting.

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COMMITTEES OF DIRECTORS

Section 13.The board of directors may, by resolution passed by a majority of the whole board, designate one or more committees, each committee to consist of three or more of the directors of the corporation.  The board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee.

In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the board of directors to act at the meeting in the place of any such absent or disqualified member.

Any such committee, to the extent provided in the resolution of the board of directors, shall have and may exercise all the powers and authority of the board of directors in the management of the business and affairs of the corporation, and may authorize the seal of the corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to:

(i) The submission to shareholders of any action that needs shareholders’ approval under this chapter;

(ii)  The filling of vacancies in the board of directors or in any committee;

(iii)  The fixing of compensation of the directors for serving on the board or any committee;

(iv)  The amendment or repeal of the by-laws, or the adoption of new by-laws;

(v)  The amendment or repeal of any resolution of the board which by its terms shall not be so amendable or repealable.

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Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the board of directors.

Section 14.Each committee shall keep regular minutes of its meetings and report the same to the board of directors when required.

COMPENSATION OF DIRECTORS

Section 15.Unless otherwise restricted by the certificate of incorporation or these by-laws, the board of directors shall have the authority to fix the compensation of directors.  The directors may be paid their expenses, if any, of attendance at each meeting of the board of directors and may be paid a fixed sum for attendance at each meeting of the board of directors or a stated salary as director.  No such payment shall preclude any director from serving the corporation in any other capacity and receiving compensation therefor.  Members of committees may be allowed like compensation for attending committee meetings.

REMOVAL OF DIRECTORS

Section 16.Any director may be removed with or without cause at any time by the affirmative vote of shareholders holding of record in the aggregate at least a majority of the votes cast at a meeting of the shareholders by the holders of shares present in person or represented by proxy entitled to vote at a special meeting of the shareholders called for that purpose.

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ARTICLE IV

NOTICES

Section 1.Whenever, under the provisions of California Business Corporation Law or of the certificate of incorporation or of these by-laws, notice is required to be given to any director or stockholder, it shall not be construed to mean personal notice, but such notice may be given in writing, by mail, addressed to such director or stockholder, at his address as it appears on the records of the corporation, with postage thereon prepaid, and such notice shall be deemed to be given at the time when the same shall be deposited in the United States mail.  Notice to directors may also be given by telegram or electronic mail.

ARTICLE V

OFFICERS

Section 1.The officers of the corporation shall be chosen by the board of directors and shall be a president, a vice-president, a secretary and a treasurer.  The board of directors may also choose additional vice-presidents, and one or more assistant secretaries and assistant treasurers.  Any number of offices may be held by the same person, unless the certificate of incorporation or these by-laws otherwise provide; provided, that the offices of President and Secretary shall be held by different persons.  The board of directors may also elect a chairman of the board who shall have such duties as shall be assigned to him by the board of directors.

Section 2.The board of directors at its first meeting after each annual meeting of stockholders shall choose a president, one or more vice-presidents, a secretary and a treasurer.

Section 3.The board of directors may appoint such other officers and agents as it shall deem necessary who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the board.  The board of directors may require any officer to give security for the faithful performance of his duties.

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Section 4.The salaries of all officers and agents of the corporation shall be fixed by the board of directors.

Section 5.The officers of the corporation shall hold office until their successors are chosen and qualify.  Any officer elected or appointed by the board of directors may be removed at any time by the affirmative vote of a majority of the board of directors.  Any vacancy occurring in any office of the corporation shall be filled for the unexpired portion of the term by the board of directors.  Any officer may resign his office at any time.  Such resignation shall be made in writing and shall take effect at the time specified therein or, if no time be specified, at the time of its receipt by the Corporation.  The acceptance of a resignation shall not be necessary to make it effective, unless expressly so provided in the resignation.

THE PRESIDENT

Section 6.The president shall be the chief executive officer of the corporation, shall preside at all meetings of the stockholders and the board of directors and, subject to the control of the board of directors, shall supervise and control all business and affairs of the Corporation, shall have general and active management of the business of the corporation and shall see that all orders and resolutions of the board of directors are carried into effect.  He shall when present preside at all meetings of the shareholders and the board of directors.

Section 7.He shall execute bonds, mortgages and other contracts requiring a seal, under the seal of the corporation, except where required or permitted by law to be otherwise signed and executed and except where the signing and execution thereof shall be expressly delegated by the board of directors to some other officer or agent of the corporation.

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THE VICE-PRESIDENTS

Section 8.Each Vice President, if any, shall have such powers and perform such duties as may be determined by the President and assigned to him by the President.  In the absence of the president or in the event of his inability or refusal to act, the vice-president (or in the event there be more than one vice-president, the vice-presidents in the order designated by the directors, or in the absence of any designation, then in the order of their election) shall perform the duties of the president, and when so acting, shall have all the powers of and be subject to all the restrictions upon the president.  The vice-presidents shall perform such other duties and have such other powers as the board of directors may from time to time prescribe.

THE SECRETARY AND ASSISTANT SECRETARY

Section 9.The secretary shall attend all meetings of the board of directors and all meetings of the stockholders and record all proceedings of the meetings of the corporation and of the board of directors in a minute book to be kept for that purpose and shall perform like duties for the committees when required.  The secretary shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the board of directors, and shall perform such other duties as may be prescribed by the board of directors or president, under whose supervision he shall be.  The secretary shall have custody of the seal of the corporation and he, or an assistant secretary, shall have authority to affix the same to any instrument and when so affixed, it may be attested by his signature or by the signature of such assistant secretary.  The board of directors may give general authority to any other officer to affix the seal of the corporation and to attest the affixing by his signature.  The secretary shall keep a register of the post office address of each shareholder which shall be furnished to the secretary by such shareholder and shall have general charge of stock transfer books of the Corporation.

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Section 10.The assistant secretary, or if there be more than one, the assistant secretaries in the order determined by the board of directors (or if there be no such determination, then in the order of their election) shall, in the absence of the secretary or in the event of his inability or refusal to act, perform the duties and exercise the powers of the secretary and shall perform such other duties and have such other powers as the board of directors may from time to time prescribe.

THE TREASURER AND ASSISTANT TREASURERS

Section 11.The treasurer shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the corporation in such depositories as may be designated by the board of directors.  The treasurer shall have power to receive and give receipts for monies due and payable to the Corporation from any source whatsoever.

Section 12.The treasurer shall disburse the funds of the corporation as may be ordered by the board of directors, taking proper vouchers for such disbursements, and shall render to the president and the board of directors, at its regular meetings, or when the board of directors so requires, an account of all his transactions as treasurer and of the financial condition of the corporation.

Section 13.If required by the board of directors, the treasurer shall give the corporation a bond (which shall be renewed every six years) in such sum and with such surety or sureties as shall be satisfactory to the board of directors for the faithful performance of the duties of his office and for the restoration to the corporation, in case of his death, resignation, retirement

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or removal from office, of all books, papers, vouchers, money and other property of whatever kind in his possession or under this control belonging to the corporation.

Section 14.The assistant treasurer, or if there shall be more than one, the assistant treasurers in the order determined by the board of directors (or if there be no such determination, then in the order of their election) shall, in the absence of the treasurer or in the event or his inability or refusal to act, perform the duties and exercise the powers of the treasurer and shall perform such other duties and have such other powers as the board of directors may from time to time prescribe.

ARTICLE VI

CERTIFICATES FOR SHARES

Section 1.The shares of the corporation shall be represented by a certificate.  Certificates shall be signed by, or in the name of the corporation by, the chairman or vice-chairman of the board of directors, or the president or a vice-president and the treasurer or an assistant treasurer, or the secretary or an assistant secretary of the corporation.

Upon the face or back of each stock certificate issued to represent any partly paid shares shall be set forth the total amount of the consideration to be paid therefor and the amount paid thereon shall be stated.

If the corporation shall be authorized to issue more than one class of stock or more than one series of any class, the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualification, limitations or restrictions of such preferences and/or rights shall be set forth in full or summarized on the face or back of the certificate which the corporation shall issue to represent such class or series of stock, provided that, except as otherwise provided in applicable provisions of the California

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General Corporation Law, in lieu of the foregoing requirements, there may be set forth on the face or back of the certificate which the corporation shall issue to represent such class or series of stock, a statement that the corporation will furnish without charge to each stockholder who so requests the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights.

Section 2.Any or all of the signatures on a certificate may be facsimile.  In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the corporation with the same effect as if he were such officer, transfer agent or registrar at the date of issue.  If such certificate is countersigned by a transfer agent other than the Corporation or its employees, or by a registrar other than the Corporation or its employee, the signatures of the officers of the Corporation may be facsimiles and, if permitted by law, any other signature may be a facsimile.

LOST CERTIFICATES

Section 3.The board of directors may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed.  When authorizing such issuance of a new certificate or certificates, the board of directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate or

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certificates, or his legal representative, to advertise the same in such manner as it shall require and/or to give the corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the corporation with respect to the certificate alleged to have been lost, stolen or destroyed.

TRANSFER OF STOCK

Section 4.Upon surrender to the corporation or the transfer agent of the corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignation or authority to transfer, it shall be the duty of the corporation to issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books.  Whenever any transfer of shares shall be made for collateral security, and not absolutely, it shall be so expressed in the entry of the transfer if, when the certificates are presented to the Corporation for transfer, both the transferor and transferee request the Corporation to do so.  The Corporation shall maintain at its principal office or at the office of its attorneys an office where shares of the Corporation shall be transferable.  The Corporation may also maintain one or more registry offices where such shares shall be registered.  The board of directors may make such rules and regulations as it may deem expedient concerning the issue, transfer and registration of certificates of stock.

FIXING RECORD DATE

Section 5.In order that the corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or to express

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consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the board of directors may fix, in advance, a record date, which shall not be more than fifty nor less than ten days before the date of such meeting, nor more than fifty days prior to any other action.  A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the board of directors may fix a new record date for the adjourned meeting.  If no record date is fixed, the record date for the determination of shareholders entitled to notice of or to vote at a meeting of shareholders shall be at the close of business on the day next preceding the day on which notice is given, or, if not notice is given, the day on which the meeting is held.  For all other purposes, the record date for determining shareholders shall be at the close of business on the date on which the resolution of the board relating thereto is adopted.

REGISTERED STOCKHOLDERS

Section 6.The corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and to hold liable for calls and assessments a person registered on its books as the owner of shares, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the California General Corporation Law.

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ARTICLE VII

DIVIDENDS

Section 1.Dividends upon the capital stock of the corporation, subject to the provisions of the certificate of incorporation, if any, may be declared out of funds legally available therefor by the board of directors at any regular or special meeting, pursuant to law.  Dividends may be paid in cash, in property, or in shares of the capital stock, subject to the provisions of the certificate of incorporation.

Before payment of any dividend, there may be set aside out of any funds of the corporation available for dividends such sum or sums as the directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the corporation, or for such other purpose as the directors shall think conducive to the interest of the corporation, and the directors may modify or abolish any such reserve in the manner in which it was created.

ARTICLE VIII

MISCELLANEOUS PROVISIONS

Section 1.Annual Statement.  The board of directors shall present at each annual meeting, and at any special meeting of the stockholders when called for by vote of the stockholders, a full and clear statement of the business and condition of the corporation.

Section 2.Checks; contracts; deposits.  All checks or demands for money and notes of the corporation shall be signed by such officer or officers or such other person or persons as the board of directors may from time to time designate.  Unless otherwise provided by law or resolution of the board of directors, any contract, document or other instrument, including contracts or instruments evidencing indebtedness of the Corporation, shall be valid and binding

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on the Corporation only if executed and delivered in its name and on its behalf by either the President or such other persons who have been designated by resolution of the board of directors as authorized signatories of contracts, documents or other instruments.  All funds of the Corporation not otherwise employed shall be deposited from time to time to the credit of the Corporation in such banks, trust companies or other depositaries as the board of directors may select or as may be designated by any officer or officers of the Corporation.

Section 3.Fiscal Year. The fiscal year of the corporation shall be fixed by resolution of the board of directors.

Section 4.Corporate Seal.  The corporate seal shall have inscribed thereon the name of the corporation, the year of its organization and the words “Corporate Seal, California”.  The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.

Section 5.Indemnification.  The corporation shall indemnify its officers, directors, employees and agents to the fullest extent permitted by law.

ARTICLE IX

AMENDMENTS TO BY-LAWS

Section 1.The by-laws may be altered, amended or repealed or new by-laws may be made or adopted by the board of directors at any regular or special meeting of the board of directors; except that no alteration, amendment or repeal to Article III or this Article IX may be made with out the consent of the shareholders as set forth in the next sentence.  The by-laws of the Corporation may also be altered, amended or repealed or new by-laws may be made or

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adopted by the vote of a majority in interest of the shareholders represented and entitled to vote upon election of directors, at any meeting at which a quorum is present.

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EX-3.2.28

Exhibit 3.2.28

BY - LAWS

ARTICLE I

OFFICES

Section 1.The registered office shall be c/o Equinox Mamaroneck, Inc. at: 895 Broadway, New York, New York 10003.

Section 2.The corporation may also have offices at such other places both within and without the State of New York as the board of directors may from time to time determine or the business of the corporation may require.

ARTICLE II

MEETING OF STOCKHOLDERS

Section 1.All meetings of the stockholders for the election of director shall be held in the City of New York, at such place as may be fixed from time to time by the board of directors, or at such other place either within or without the State of California as shall be designated from time to time by the board of directors as stated in the notice of the meeting.  Meetings of stockholders for any other purpose may be held at such time and place, within or without the State of California, as shall be stated in the notice of the meeting or in a duly executed waiver of notice thereof.

Section 2.Annual meetings of stockholders, commencing with the year 2004, shall be held on the second Tuesday in the fifth month following the completion of the Corporation’s fiscal year, and if said date is a legal holiday, then on the next business day following, at 10:00 A.M., or at such other date and time as shall be designated from time to time by the board of directors and stated in the notice of the meeting, at which they shall elect by a plurality vote a board of directors, and transact such other business as may properly be brought before the meeting.

Section 3.Written notice of the annual meeting stating the place, date and hour of the meeting shall be given to each stockholder entitled to vote at such meeting not less than ten nor more than fifty days before the date of the meeting.

Section 4.The officer who has charge of the stock ledger of the corporation shall prepare and make, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder.  Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held.  The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present.  If the right to vote at any meeting ins challenged, the inspectors of election, or person presiding thereat, shall require such list of shareholders to be produced as evidence of the right of the persons challenged to vote at such meeting, and all persons who appear from such list to be shareholders entitled to vote thereat may vote at such meeting.

Section 5.The election of directors and any other vote by ballot at any meeting of the shareholders shall be supervised by at least two inspectors if requested by a shareholder present in person or represented by proxy and entitled to vote at such meeting.  Such inspectors may be appointed by the presiding officer before or at the meeting; or if one or both inspectors so appointed shall refuse to serve or shall not be present, such appointment shall be made by the officer presiding at the meeting.

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Section 6.Special meetings of the stockholders, for any purpose or purposes, unless otherwise prescribed by statute or by the president, shall be called by the president, or at the request in writing of a majority of the board of directors, or at the request in writing of stockholders owning a majority in amount of the entire capital stock of the corporation issued and outstanding and entitled to vote.  Such request shall state the purpose or purposes of the proposed meeting.

Section 7.Written notice of a special meeting stating the place, date and hour of the meeting and the purpose or purposes for which the meeting is called, shall be given not less than ten nor more than sixty days before the date of the meeting, to each stockholder entitled to vote at such meeting.

Section 8.Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice.

Section 9.The holders of a majority of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business except as otherwise provided by statute or by the certificate of incorporation.  If, however, such quorum shall not be present or represented at any meeting of the stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, shall have the power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented.  At such adjourned meeting at which a quorum shall be present or represented any business may be transacted which might have been transacted at the meeting as originally noticed.  If the adjournment is for more than thirty days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.

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Section 10.When a quorum is present at any meeting the vote of the holders of a majority of the stock having voting power present in person or represented by proxy shall decide any question brought before such meeting, unless the question is one upon which by express provision of the California General Corporation Law or of the certificate of incorporation a different vote is required, in which case such express provision shall govern and control the decision of such question.

Section 11.Unless otherwise provided in the certificate of incorporation, each stockholder shall at every meeting of the stockholders be entitled to one vote in person or by proxy for each share of the capital stock having voting power held by such stockholder, but no proxy shall be voted on after eleven (11) months from its date, unless the proxy provides for a longer period.

At all elections of directors of the corporation each stockholder having voting power shall be entitled to exercise the right of cumulative voting as provided in the certificate of incorporation.

Section 12.Unless otherwise provided in the certificate of incorporation, any action required to be taken at any annual or special meeting of stockholders of the corporation, or any action which may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted.  Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing.

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Section 13.The President, or, in his/her absence, a Vice President, shall preside at meetings of the shareholders.  The Secretary shall act as secretary of the meeting or, in his/her absence, a Assistant Secretary, shall act, or if neither is present, then the presiding officer may appoint a person to act as secretary of the meeting.

Section 14.Except as otherwise provided by these by-laws or any resolutions adopted by the shareholder or Board of Directors, the order of business and all other maters of procedure at every meeting of shareholders shall be determined by the presiding officer.  Not less than 15 minutes following the presentation of any resolution to any meeting of shareholder, the presiding officer may announce that further discussion on such resolution shall be limited to not more than three persons who favor and not more than three persons who oppose such resolution, each of whom shall be designated by the presiding officer and shall thereupon be entitled to speak thereon for not more than five minutes.  After such persons, or such a lesser number thereof as shall advise the presiding officer of their desire so to speak, shall have spoken on such resolution, the presiding officer may direct a vote on such resolution without further discussion thereon at the meeting.

ARTICLE III

DIRECTORS

Section 1.The number of directors constituting the entire board shall be fixed from time to time by the Board of Directors and shall not be less than three, except that where all the shares of a Corporation are owned beneficially and of record by less than three shareholders, the number of directors may be less than three but not less than the number of shareholders.  The directors shall be elected at the annual meeting of the stockholders, except as provided in Section 2

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of this Article, and each director elected shall hold office until his successor is elected and qualified; provided, that a Director may resign as stated herein.  Directors need not be stockholders.

Section 2.Any director may resign his office at any time by delivering his resignation in writing to the President or the Secretary.  It will take effect at the time specified therein or, if no time is specified, it sill be effective at the time of its receipt by the Corporation.  The acceptance of a resignation shall not be necessary to make it effective, unless expressly so provided in the resignation.

Section 3.Vacancies and newly created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, though less than a quorum, or by a sole remaining director, and the directors so chosen shall hold office until the next annual election and until their successors are duly elected and shall qualify, unless sooner displaced.  If there are no directors in office, then an election of directors may be held in the manner provided by the California General Corporation Law.  If, at the time of filling any vacancy or any newly created directorship, the directors then in office shall constitute less than a majority of the whole board (as constituted immediately prior to any such increase), the Court of Chancery may, upon application of any stockholder or stockholders holding at least ten percent of the total number of the shares at the time outstanding having the right to vote for such directors, summarily order an election to be held to fill any such vacancies or newly created directorship, or to replace the directors chosen by the directors then in office.

Section 4.The business of the corporation shall be managed by or under the direction of its board of directors which may exercise all such powers of the corporation and do all such lawful acts and things as are not by the California General Corporation Law or by the certificate

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of incorporation or by these by-laws directed or required to be exercised or done by the stockholders.

MEETINGS OF THE BOARD OF DIRECTORS

Section 5.The board of directors of the corporation may hold meetings, both regular and special, either within or without the State of California.

Section 6.The first meeting of each newly elected board of directors shall be held at such time and place as shall be fixed by the vote of the stockholders at the annual meeting and no notice of such meeting shall be necessary to the newly elected directors in order legally to constitute the meeting, provided a quorum shall be present.  In the event of the failure of the stockholders to fix the time or place of such first meeting of the newly elected board of directors, or in the event such meeting is not held at the time and place so fixed by the stockholders, the meeting may be held at such time and place as shall be specified in a notice given as hereinafter provided for special meetings of the board of directors, or as shall be specified in a written waiver signed by all of the directors.

Section 7.Regular meetings of the board of directors may be held without notice at such time and at such place as shall from time to time be determined by the board.

Section 8.Special meetings of the board may be called by the president on one day’s notice to each director, either personally or by mail or by telegram or by electronic mail; special meetings shall be called by the president or secretary in like manner and on like notice on the written request of two directors unless the board consists of only one director; in which case special meetings shall be called by the president or secretary in like manner and on like notice on the written request of the sole director.

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Section 9.At all meetings of the board a majority of the directors shall constitute a quorum for the transaction of business and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the board of directors, except as may be otherwise specifically provided by the California General Corporation Law or by the certificate of incorporation.  If a quorum shall not be present at any meeting of the board of directors the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present.

Section 10.The President, or, in his/her absence, a Vice President, shall preside at meetings of the board of directors.  The Secretary shall act as secretary of the meeting or, in his/her absence, a Assistant Secretary, shall act, or if neither is present, then the presiding officer may appoint a person to act as secretary of the meeting.

Section 11.Unless otherwise restricted by the certificate of incorporation or these by-laws, any action required or permitted to be taken at any meeting of the board of directors or of any committee thereof may be taken without a meeting, if all members of the board or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the board or committee.

Section 12.Unless otherwise restricted by the certificate of incorporation or these by-laws, members of the board of directors or any committee designated by the board of directors, may participate in a meeting of the board of directors or any committee, by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at the meeting.

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COMMITTEES OF DIRECTORS

Section 13.The board of directors may, by resolution passed by a majority of the whole board, designate one or more committees, each committee to consist of three or more of the directors of the corporation.  The board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee.

In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the board of directors to act at the meeting in the place of any such absent or disqualified member.

Any such committee, to the extent provided in the resolution of the board of directors, shall have and may exercise all the powers and authority of the board of directors in the management of the business and affairs of the corporation, and may authorize the seal of the corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to:

(i) The submission to shareholders of any action that needs shareholders’ approval under this chapter;

(ii)  The filling of vacancies in the board of directors or in any committee;

(iii)  The fixing of compensation of the directors for serving on the board or any committee;

(iv)  The amendment or repeal of the by-laws, or the adoption of new by-laws;

(v)  The amendment or repeal of any resolution of the board which by its terms shall not be so amendable or repealable.

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Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the board of directors.

Section 14.Each committee shall keep regular minutes of its meetings and report the same to the board of directors when required.

COMPENSATION OF DIRECTORS

Section 15.Unless otherwise restricted by the certificate of incorporation or these by-laws, the board of directors shall have the authority to fix the compensation of directors.  The directors may be paid their expenses, if any, of attendance at each meeting of the board of directors and may be paid a fixed sum for attendance at each meeting of the board of directors or a stated salary as director.  No such payment shall preclude any director from serving the corporation in any other capacity and receiving compensation therefor.  Members of committees may be allowed like compensation for attending committee meetings.

REMOVAL OF DIRECTORS

Section 16.Any director may be removed with or without cause at any time by the affirmative vote of shareholders holding of record in the aggregate at least a majority of the votes cast at a meeting of the shareholders by the holders of shares present in person or represented by proxy entitled to vote at a special meeting of the shareholders called for that purpose.

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ARTICLE IV

NOTICES

Section 1.Whenever, under the provisions of California Business Corporation Law or of the certificate of incorporation or of these by-laws, notice is required to be given to any director or stockholder, it shall not be construed to mean personal notice, but such notice may be given in writing, by mail, addressed to such director or stockholder, at his address as it appears on the records of the corporation, with postage thereon prepaid, and such notice shall be deemed to be given at the time when the same shall be deposited in the United States mail.  Notice to directors may also be given by telegram or electronic mail.

ARTICLE V

OFFICERS

Section 1.The officers of the corporation shall be chosen by the board of directors and shall be a president, a vice-president, a secretary and a treasurer.  The board of directors may also choose additional vice-presidents, and one or more assistant secretaries and assistant treasurers.  Any number of offices may be held by the same person, unless the certificate of incorporation or these by-laws otherwise provide; provided, that the offices of President and Secretary shall be held by different persons.  The board of directors may also elect a chairman of the board who shall have such duties as shall be assigned to him by the board of directors.

Section 2.The board of directors at its first meeting after each annual meeting of stockholders shall choose a president, one or more vice-presidents, a secretary and a treasurer.

Section 3.The board of directors may appoint such other officers and agents as it shall deem necessary who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the board.  The board of directors may require any officer to give security for the faithful performance of his duties.

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Section 4.The salaries of all officers and agents of the corporation shall be fixed by the board of directors.

Section 5.The officers of the corporation shall hold office until their successors are chosen and qualify.  Any officer elected or appointed by the board of directors may be removed at any time by the affirmative vote of a majority of the board of directors.  Any vacancy occurring in any office of the corporation shall be filled for the unexpired portion of the term by the board of directors.  Any officer may resign his office at any time.  Such resignation shall be made in writing and shall take effect at the time specified therein or, if no time be specified, at the time of its receipt by the Corporation.  The acceptance of a resignation shall not be necessary to make it effective, unless expressly so provided in the resignation.

THE PRESIDENT

Section 6.The president shall be the chief executive officer of the corporation, shall preside at all meetings of the stockholders and the board of directors and, subject to the control of the board of directors, shall supervise and control all business and affairs of the Corporation, shall have general and active management of the business of the corporation and shall see that all orders and resolutions of the board of directors are carried into effect.  He shall when present preside at all meetings of the shareholders and the board of directors.

Section 7.He shall execute bonds, mortgages and other contracts requiring a seal, under the seal of the corporation, except where required or permitted by law to be otherwise signed and executed and except where the signing and execution thereof shall be expressly delegated by the board of directors to some other officer or agent of the corporation.

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THE VICE-PRESIDENTS

Section 8.Each Vice President, if any, shall have such powers and perform such duties as may be determined by the President and assigned to him by the President.  In the absence of the president or in the event of his inability or refusal to act, the vice-president (or in the event there be more than one vice-president, the vice-presidents in the order designated by the directors, or in the absence of any designation, then in the order of their election) shall perform the duties of the president, and when so acting, shall have all the powers of and be subject to all the restrictions upon the president.  The vice-presidents shall perform such other duties and have such other powers as the board of directors may from time to time prescribe.

THE SECRETARY AND ASSISTANT SECRETARY

Section 9.The secretary shall attend all meetings of the board of directors and all meetings of the stockholders and record all proceedings of the meetings of the corporation and of the board of directors in a minute book to be kept for that purpose and shall perform like duties for the committees when required.  The secretary shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the board of directors, and shall perform such other duties as may be prescribed by the board of directors or president, under whose supervision he shall be.  The secretary shall have custody of the seal of the corporation and he, or an assistant secretary, shall have authority to affix the same to any instrument and when so affixed, it may be attested by his signature or by the signature of such assistant secretary.  The board of directors may give general authority to any other officer to affix the seal of the corporation and to attest the affixing by his signature.  The secretary shall keep a register of the post office address of each shareholder which shall be furnished to the secretary by such shareholder and shall have general charge of stock transfer books of the Corporation.

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Section 10.The assistant secretary, or if there be more than one, the assistant secretaries in the order determined by the board of directors (or if there be no such determination, then in the order of their election) shall, in the absence of the secretary or in the event of his inability or refusal to act, perform the duties and exercise the powers of the secretary and shall perform such other duties and have such other powers as the board of directors may from time to time prescribe.

THE TREASURER AND ASSISTANT TREASURERS

Section 11.The treasurer shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the corporation in such depositories as may be designated by the board of directors.  The treasurer shall have power to receive and give receipts for monies due and payable to the Corporation from any source whatsoever.

Section 12.The treasurer shall disburse the funds of the corporation as may be ordered by the board of directors, taking proper vouchers for such disbursements, and shall render to the president and the board of directors, at its regular meetings, or when the board of directors so requires, an account of all his transactions as treasurer and of the financial condition of the corporation.

Section 13.If required by the board of directors, the treasurer shall give the corporation a bond (which shall be renewed every six years) in such sum and with such surety or sureties as shall be satisfactory to the board of directors for the faithful performance of the duties of his office and for the restoration to the corporation, in case of his death, resignation, retirement

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or removal from office, of all books, papers, vouchers, money and other property of whatever kind in his possession or under this control belonging to the corporation.

Section 14.The assistant treasurer, or if there shall be more than one, the assistant treasurers in the order determined by the board of directors (or if there be no such determination, then in the order of their election) shall, in the absence of the treasurer or in the event or his inability or refusal to act, perform the duties and exercise the powers of the treasurer and shall perform such other duties and have such other powers as the board of directors may from time to time prescribe.

ARTICLE VI

CERTIFICATES FOR SHARES

Section 1.The shares of the corporation shall be represented by a certificate.  Certificates shall be signed by, or in the name of the corporation by, the chairman or vice-chairman of the board of directors, or the president or a vice-president and the treasurer or an assistant treasurer, or the secretary or an assistant secretary of the corporation.

Upon the face or back of each stock certificate issued to represent any partly paid shares shall be set forth the total amount of the consideration to be paid therefor and the amount paid thereon shall be stated.

If the corporation shall be authorized to issue more than one class of stock or more than one series of any class, the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualification, limitations or restrictions of such preferences and/or rights shall be set forth in full or summarized on the face or back of the certificate which the corporation shall issue to represent such class or series of stock, provided that, except as otherwise provided in applicable provisions of the California

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General Corporation Law, in lieu of the foregoing requirements, there may be set forth on the face or back of the certificate which the corporation shall issue to represent such class or series of stock, a statement that the corporation will furnish without charge to each stockholder who so requests the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights.

Section 2.Any or all of the signatures on a certificate may be facsimile.  In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the corporation with the same effect as if he were such officer, transfer agent or registrar at the date of issue.  If such certificate is countersigned by a transfer agent other than the Corporation or its employees, or by a registrar other than the Corporation or its employee, the signatures of the officers of the Corporation may be facsimiles and, if permitted by law, any other signature may be a facsimile.

LOST CERTIFICATES

Section 3.The board of directors may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed.  When authorizing such issuance of a new certificate or certificates, the board of directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate or

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certificates, or his legal representative, to advertise the same in such manner as it shall require and/or to give the corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the corporation with respect to the certificate alleged to have been lost, stolen or destroyed.

TRANSFER OF STOCK

Section 4.Upon surrender to the corporation or the transfer agent of the corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignation or authority to transfer, it shall be the duty of the corporation to issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books.  Whenever any transfer of shares shall be made for collateral security, and not absolutely, it shall be so expressed in the entry of the transfer if, when the certificates are presented to the Corporation for transfer, both the transferor and transferee request the Corporation to do so.  The Corporation shall maintain at its principal office or at the office of its attorneys an office where shares of the Corporation shall be transferable.  The Corporation may also maintain one or more registry offices where such shares shall be registered.  The board of directors may make such rules and regulations as it may deem expedient concerning the issue, transfer and registration of certificates of stock.

FIXING RECORD DATE

Section 5.In order that the corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or to express

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consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the board of directors may fix, in advance, a record date, which shall not be more than fifty nor less than ten days before the date of such meeting, nor more than fifty days prior to any other action.  A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the board of directors may fix a new record date for the adjourned meeting.  If no record date is fixed, the record date for the determination of shareholders entitled to notice of or to vote at a meeting of shareholders shall be at the close of business on the day next preceding the day on which notice is given, or, if not notice is given, the day on which the meeting is held.  For all other purposes, the record date for determining shareholders shall be at the close of business on the date on which the resolution of the board relating thereto is adopted.

REGISTERED STOCKHOLDERS

Section 6.The corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and to hold liable for calls and assessments a person registered on its books as the owner of shares, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the California General Corporation Law.

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ARTICLE VII

DIVIDENDS

Section 1.Dividends upon the capital stock of the corporation, subject to the provisions of the certificate of incorporation, if any, may be declared out of funds legally available therefor by the board of directors at any regular or special meeting, pursuant to law.  Dividends may be paid in cash, in property, or in shares of the capital stock, subject to the provisions of the certificate of incorporation.

Before payment of any dividend, there may be set aside out of any funds of the corporation available for dividends such sum or sums as the directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the corporation, or for such other purpose as the directors shall think conducive to the interest of the corporation, and the directors may modify or abolish any such reserve in the manner in which it was created.

ARTICLE VIII

MISCELLANEOUS PROVISIONS

Section 1.Annual Statement.  The board of directors shall present at each annual meeting, and at any special meeting of the stockholders when called for by vote of the stockholders, a full and clear statement of the business and condition of the corporation.

Section 2.Checks; contracts; deposits.  All checks or demands for money and notes of the corporation shall be signed by such officer or officers or such other person or persons as the board of directors may from time to time designate.  Unless otherwise provided by law or resolution of the board of directors, any contract, document or other instrument, including contracts or instruments evidencing indebtedness of the Corporation, shall be valid and binding

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on the Corporation only if executed and delivered in its name and on its behalf by either the President or such other persons who have been designated by resolution of the board of directors as authorized signatories of contracts, documents or other instruments.  All funds of the Corporation not otherwise employed shall be deposited from time to time to the credit of the Corporation in such banks, trust companies or other depositaries as the board of directors may select or as may be designated by any officer or officers of the Corporation.

Section 3.Fiscal Year. The fiscal year of the corporation shall be fixed by resolution of the board of directors.

Section 4.Corporate Seal.  The corporate seal shall have inscribed thereon the name of the corporation, the year of its organization and the words “Corporate Seal, California”.  The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.

Section 5.Indemnification.  The corporation shall indemnify its officers, directors, employees and agents to the fullest extent permitted by law.

ARTICLE IX

AMENDMENTS TO BY-LAWS

Section 1.The by-laws may be altered, amended or repealed or new by-laws may be made or adopted by the board of directors at any regular or special meeting of the board of directors; except that no alteration, amendment or repeal to Article III or this Article IX may be made with out the consent of the shareholders as set forth in the next sentence.  The by-laws of the Corporation may also be altered, amended or repealed or new by-laws may be made or

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adopted by the vote of a majority in interest of the shareholders represented and entitled to vote upon election of directors, at any meeting at which a quorum is present.

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EX-3.2.29

Exhibit 3.2.29

BY - LAWS

ARTICLE I

OFFICES

Section 1.               The registered office shall be c/o Equinox Fitness Santa Monica, Inc. at: 895 Broadway, New York, New York 10003.

Section 2.               The corporation may also have offices at such other places both within and without the State of California as the board of directors may from time to time determine or the business of the corporation may require.

ARTICLE II

MEETING OF STOCKHOLDERS

Section 1.               All meetings of the stockholders for the election of director shall be held in the City of New York, at such place as may be fixed from time to time by the board of directors, or at such other place either within or without the State of California as shall be designated from time to time by the board of directors as stated in the notice of the meeting.  Meetings of stockholders for any other purpose may be held at such time and place, within or without the State of California, as shall be stated in the notice of the meeting or in a duly executed waiver of notice thereof.

Section 2.               Annual meetings of stockholders, commencing with the year 2004, shall be held on the second Tuesday in the fifth month following the completion of the Corporation’s fiscal year, and if said date is a legal holiday, then on the next business day following, at 10:00 A.M., or at such other date and time as shall be designated from time to time by the board of directors and stated in the notice of the meeting, at which they shall elect by a plurality vote a board of directors, and transact such other business as may properly be brought before the meeting.

Section 3.               Written notice of the annual meeting stating the place, date and hour of the meeting shall be given to each stockholder entitled to vote at such meeting not less than ten nor more than fifty days before the date of the meeting.

Section 4.               The officer who has charge of the stock ledger of the corporation shall prepare and make, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder.  Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held.  The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present.  If the right to vote at any meeting ins challenged, the inspectors of election, or person presiding thereat, shall require such list of shareholders to be produced as evidence of the right of the persons challenged to vote at such meeting, and all persons who appear from such list to be shareholders entitled to vote thereat may vote at such meeting.

Section 5.               The election of directors and any other vote by ballot at any meeting of the shareholders shall be supervised by at least two inspectors if requested by a shareholder present in person or represented by proxy and entitled to vote at such meeting.  Such inspectors may be appointed by the presiding officer before or at the meeting; or if one or both inspectors so appointed shall refuse to serve or shall not be present, such appointment shall be made by the officer presiding at the meeting.

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Section 6.               Special meetings of the stockholders, for any purpose or purposes, unless otherwise prescribed by statute or by the president, shall be called by the president, or at the request in writing of a majority of the board of directors, or at the request in writing of stockholders owning a majority in amount of the entire capital stock of the corporation issued and outstanding and entitled to vote.  Such request shall state the purpose or purposes of the proposed meeting.

Section 7.               Written notice of a special meeting stating the place, date and hour of the meeting and the purpose or purposes for which the meeting is called, shall be given not less than ten nor more than sixty days before the date of the meeting, to each stockholder entitled to vote at such meeting.

Section 8.               Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice.

Section 9.               The holders of a majority of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business except as otherwise provided by statute or by the certificate of incorporation.  If, however, such quorum shall not be present or represented at any meeting of the stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, shall have the power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented.  At such adjourned meeting at which a quorum shall be present or represented any business may be transacted which might have been transacted at the meeting as originally noticed.  If the adjournment is for more than thirty days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.

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Section 10.             When a quorum is present at any meeting the vote of the holders of a majority of the stock having voting power present in person or represented by proxy shall decide any question brought before such meeting, unless the question is one upon which by express provision of the California General Corporation Law or of the certificate of incorporation a different vote is required, in which case such express provision shall govern and control the decision of such question.

Section 11.             Unless otherwise provided in the certificate of incorporation, each stockholder shall at every meeting of the stockholders be entitled to one vote in person or by proxy for each share of the capital stock having voting power held by such stockholder, but no proxy shall be voted on after eleven (11) months from its date, unless the proxy provides for a longer period.

At all elections of directors of the corporation each stockholder having voting power shall be entitled to exercise the right of cumulative voting as provided in the certificate of incorporation.

Section 12.             Unless otherwise provided in the certificate of incorporation, any action required to be taken at any annual or special meeting of stockholders of the corporation, or any action which may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted.  Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing.

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Section 13.             The President, or, in his/her absence, a Vice President, shall preside at meetings of the shareholders.  The Secretary shall act as secretary of the meeting or, in his/her absence, a Assistant Secretary, shall act, or if neither is present, then the presiding officer may appoint a person to act as secretary of the meeting.

Section 14.             Except as otherwise provided by these by-laws or any resolutions adopted by the shareholder or Board of Directors, the order of business and all other maters of procedure at every meeting of shareholders shall be determined by the presiding officer.  Not less than 15 minutes following the presentation of any resolution to any meeting of shareholder, the presiding officer may announce that further discussion on such resolution shall be limited to not more than three persons who favor and not more than three persons who oppose such resolution, each of whom shall be designated by the presiding officer and shall thereupon be entitled to speak thereon for not more than five minutes.  After such persons, or such a lesser number thereof as shall advise the presiding officer of their desire so to speak, shall have spoken on such resolution, the presiding officer may direct a vote on such resolution without further discussion thereon at the meeting.

ARTICLE III

DIRECTORS

Section 1.               The number of directors constituting the entire board shall be fixed from time to time by the Board of Directors and shall not be less than three, except that where all the shares of a Corporation are owned beneficially and of record by less than three shareholders, the number of directors may be less than three but not less than the number of shareholders.  The directors shall be elected at the annual meeting of the stockholders, except as provided in Section 2

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of this Article, and each director elected shall hold office until his successor is elected and qualified; provided, that a Director may resign as stated herein.  Directors need not be stockholders.

Section 2.               Any director may resign his office at any time by delivering his resignation in writing to the President or the Secretary.  It will take effect at the time specified therein or, if no time is specified, it sill be effective at the time of its receipt by the Corporation.  The acceptance of a resignation shall not be necessary to make it effective, unless expressly so provided in the resignation.

Section 3.               Vacancies and newly created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, though less than a quorum, or by a sole remaining director, and the directors so chosen shall hold office until the next annual election and until their successors are duly elected and shall qualify, unless sooner displaced.  If there are no directors in office, then an election of directors may be held in the manner provided by the California General Corporation Law.  If, at the time of filling any vacancy or any newly created directorship, the directors then in office shall constitute less than a majority of the whole board (as constituted immediately prior to any such increase), the Court of Chancery may, upon application of any stockholder or stockholders holding at least ten percent of the total number of the shares at the time outstanding having the right to vote for such directors, summarily order an election to be held to fill any such vacancies or newly created directorship, or to replace the directors chosen by the directors then in office.

Section 4.               The business of the corporation shall be managed by or under the direction of its board of directors which may exercise all such powers of the corporation and do all such lawful acts and things as are not by the California General Corporation Law or by the certificate

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of incorporation or by these by-laws directed or required to be exercised or done by the stockholders.

MEETINGS OF THE BOARD OF DIRECTORS

Section 5.               The board of directors of the corporation may hold meetings, both regular and special, either within or without the State of California.

Section 6.               The first meeting of each newly elected board of directors shall be held at such time and place as shall be fixed by the vote of the stockholders at the annual meeting and no notice of such meeting shall be necessary to the newly elected directors in order legally to constitute the meeting, provided a quorum shall be present.  In the event of the failure of the stockholders to fix the time or place of such first meeting of the newly elected board of directors, or in the event such meeting is not held at the time and place so fixed by the stockholders, the meeting may be held at such time and place as shall be specified in a notice given as hereinafter provided for special meetings of the board of directors, or as shall be specified in a written waiver signed by all of the directors.

Section 7.               Regular meetings of the board of directors may be held without notice at such time and at such place as shall from time to time be determined by the board.

Section 8.               Special meetings of the board may be called by the president on one day’s notice to each director, either personally or by mail or by telegram or by electronic mail; special meetings shall be called by the president or secretary in like manner and on like notice on the written request of two directors unless the board consists of only one director; in which case special meetings shall be called by the president or secretary in like manner and on like notice on the written request of the sole director.

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Section 9.               At all meetings of the board a majority of the directors shall constitute a quorum for the transaction of business and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the board of directors, except as may be otherwise specifically provided by the California General Corporation Law or by the certificate of incorporation.  If a quorum shall not be present at any meeting of the board of directors the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present.

Section 10.             The President, or, in his/her absence, a Vice President, shall preside at meetings of the board of directors.  The Secretary shall act as secretary of the meeting or, in his/her absence, a Assistant Secretary, shall act, or if neither is present, then the presiding officer may appoint a person to act as secretary of the meeting.

Section 11.             Unless otherwise restricted by the certificate of incorporation or these by-laws, any action required or permitted to be taken at any meeting of the board of directors or of any committee thereof may be taken without a meeting, if all members of the board or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the board or committee.

Section 12.             Unless otherwise restricted by the certificate of incorporation or these by-laws, members of the board of directors or any committee designated by the board of directors, may participate in a meeting of the board of directors or any committee, by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at the meeting.

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COMMITTEES OF DIRECTORS

Section 13.             The board of directors may, by resolution passed by a majority of the whole board, designate one or more committees, each committee to consist of three or more of the directors of the corporation.  The board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee.

In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the board of directors to act at the meeting in the place of any such absent or disqualified member.

Any such committee, to the extent provided in the resolution of the board of directors, shall have and may exercise all the powers and authority of the board of directors in the management of the business and affairs of the corporation, and may authorize the seal of the corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to:

(i) The submission to shareholders of any action that needs shareholders’ approval under this chapter;

(ii)  The filling of vacancies in the board of directors or in any committee;

(iii)  The fixing of compensation of the directors for serving on the board or any committee;

(iv)  The amendment or repeal of the by-laws, or the adoption of new by-laws;

(v)  The amendment or repeal of any resolution of the board which by its terms shall not be so amendable or repealable.

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Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the board of directors.

Section 14.             Each committee shall keep regular minutes of its meetings and report the same to the board of directors when required.

COMPENSATION OF DIRECTORS

Section 15.             Unless otherwise restricted by the certificate of incorporation or these by-laws, the board of directors shall have the authority to fix the compensation of directors.  The directors may be paid their expenses, if any, of attendance at each meeting of the board of directors and may be paid a fixed sum for attendance at each meeting of the board of directors or a stated salary as director.  No such payment shall preclude any director from serving the corporation in any other capacity and receiving compensation therefor.  Members of committees may be allowed like compensation for attending committee meetings.

REMOVAL OF DIRECTORS

Section 16.             Any director may be removed with or without cause at any time by the affirmative vote of shareholders holding of record in the aggregate at least a majority of the votes cast at a meeting of the shareholders by the holders of shares present in person or represented by proxy entitled to vote at a special meeting of the shareholders called for that purpose.

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ARTICLE IV

NOTICES

Section 1.               Whenever, under the provisions of California Business Corporation Law or of the certificate of incorporation or of these by-laws, notice is required to be given to any director or stockholder, it shall not be construed to mean personal notice, but such notice may be given in writing, by mail, addressed to such director or stockholder, at his address as it appears on the records of the corporation, with postage thereon prepaid, and such notice shall be deemed to be given at the time when the same shall be deposited in the United States mail.  Notice to directors may also be given by telegram or electronic mail.

ARTICLE V

OFFICERS

Section 1.               The officers of the corporation shall be chosen by the board of directors and shall be a president, a vice-president, a secretary and a treasurer.  The board of directors may also choose additional vice-presidents, and one or more assistant secretaries and assistant treasurers.  Any number of offices may be held by the same person, unless the certificate of incorporation or these by-laws otherwise provide; provided, that the offices of President and Secretary shall be held by different persons.  The board of directors may also elect a chairman of the board who shall have such duties as shall be assigned to him by the board of directors.

Section 2.               The board of directors at its first meeting after each annual meeting of stockholders shall choose a president, one or more vice-presidents, a secretary and a treasurer.

Section 3.               The board of directors may appoint such other officers and agents as it shall deem necessary who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the board.  The board of directors may require any officer to give security for the faithful performance of his duties.

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Section 4.               The salaries of all officers and agents of the corporation shall be fixed by the board of directors.

Section 5.               The officers of the corporation shall hold office until their successors are chosen and qualify.  Any officer elected or appointed by the board of directors may be removed at any time by the affirmative vote of a majority of the board of directors.  Any vacancy occurring in any office of the corporation shall be filled for the unexpired portion of the term by the board of directors.  Any officer may resign his office at any time.  Such resignation shall be made in writing and shall take effect at the time specified therein or, if no time be specified, at the time of its receipt by the Corporation.  The acceptance of a resignation shall not be necessary to make it effective, unless expressly so provided in the resignation.

THE PRESIDENT

Section 6.               The president shall be the chief executive officer of the corporation, shall preside at all meetings of the stockholders and the board of directors and, subject to the control of the board of directors, shall supervise and control all business and affairs of the Corporation, shall have general and active management of the business of the corporation and shall see that all orders and resolutions of the board of directors are carried into effect.  He shall when present preside at all meetings of the shareholders and the board of directors.

Section 7.               He shall execute bonds, mortgages and other contracts requiring a seal, under the seal of the corporation, except where required or permitted by law to be otherwise signed and executed and except where the signing and execution thereof shall be expressly delegated by the board of directors to some other officer or agent of the corporation.

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THE VICE-PRESIDENTS

Section 8.               Each Vice President, if any, shall have such powers and perform such duties as may be determined by the President and assigned to him by the President.  In the absence of the president or in the event of his inability or refusal to act, the vice-president (or in the event there be more than one vice-president, the vice-presidents in the order designated by the directors, or in the absence of any designation, then in the order of their election) shall perform the duties of the president, and when so acting, shall have all the powers of and be subject to all the restrictions upon the president.  The vice-presidents shall perform such other duties and have such other powers as the board of directors may from time to time prescribe.

THE SECRETARY AND ASSISTANT SECRETARY

Section 9.               The secretary shall attend all meetings of the board of directors and all meetings of the stockholders and record all proceedings of the meetings of the corporation and of the board of directors in a minute book to be kept for that purpose and shall perform like duties for the committees when required.  The secretary shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the board of directors, and shall perform such other duties as may be prescribed by the board of directors or president, under whose supervision he shall be.  The secretary shall have custody of the seal of the corporation and he, or an assistant secretary, shall have authority to affix the same to any instrument and when so affixed, it may be attested by his signature or by the signature of such assistant secretary.  The board of directors may give general authority to any other officer to affix the seal of the corporation and to attest the affixing by his signature.  The secretary shall keep a register of the post office address of each shareholder which shall be furnished to the secretary by such shareholder and shall have general charge of stock transfer books of the Corporation.

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Section 10.             The assistant secretary, or if there be more than one, the assistant secretaries in the order determined by the board of directors (or if there be no such determination, then in the order of their election) shall, in the absence of the secretary or in the event of his inability or refusal to act, perform the duties and exercise the powers of the secretary and shall perform such other duties and have such other powers as the board of directors may from time to time prescribe.

THE TREASURER AND ASSISTANT TREASURERS

Section 11.             The treasurer shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the corporation in such depositories as may be designated by the board of directors.  The treasurer shall have power to receive and give receipts for monies due and payable to the Corporation from any source whatsoever.

Section 12.             The treasurer shall disburse the funds of the corporation as may be ordered by the board of directors, taking proper vouchers for such disbursements, and shall render to the president and the board of directors, at its regular meetings, or when the board of directors so requires, an account of all his transactions as treasurer and of the financial condition of the corporation.

Section 13.             If required by the board of directors, the treasurer shall give the corporation a bond (which shall be renewed every six years) in such sum and with such surety or sureties as shall be satisfactory to the board of directors for the faithful performance of the duties of his office and for the restoration to the corporation, in case of his death, resignation, retirement

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or removal from office, of all books, papers, vouchers, money and other property of whatever kind in his possession or under this control belonging to the corporation.

Section 14.             The assistant treasurer, or if there shall be more than one, the assistant treasurers in the order determined by the board of directors (or if there be no such determination, then in the order of their election) shall, in the absence of the treasurer or in the event or his inability or refusal to act, perform the duties and exercise the powers of the treasurer and shall perform such other duties and have such other powers as the board of directors may from time to time prescribe.

ARTICLE VI

CERTIFICATES FOR SHARES

Section 1.               The shares of the corporation shall be represented by a certificate.  Certificates shall be signed by, or in the name of the corporation by, the chairman or vice-chairman of the board of directors, or the president or a vice-president and the treasurer or an assistant treasurer, or the secretary or an assistant secretary of the corporation.

Upon the face or back of each stock certificate issued to represent any partly paid shares shall be set forth the total amount of the consideration to be paid therefor and the amount paid thereon shall be stated.

If the corporation shall be authorized to issue more than one class of stock or more than one series of any class, the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualification, limitations or restrictions of such preferences and/or rights shall be set forth in full or summarized on the face or back of the certificate which the corporation shall issue to represent such class or series of stock, provided that, except as otherwise provided in applicable provisions of the California

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General Corporation Law, in lieu of the foregoing requirements, there may be set forth on the face or back of the certificate which the corporation shall issue to represent such class or series of stock, a statement that the corporation will furnish without charge to each stockholder who so requests the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights.

Section 2.               Any or all of the signatures on a certificate may be facsimile.  In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the corporation with the same effect as if he were such officer, transfer agent or registrar at the date of issue.  If such certificate is countersigned by a transfer agent other than the Corporation or its employees, or by a registrar other than the Corporation or its employee, the signatures of the officers of the Corporation may be facsimiles and, if permitted by law, any other signature may be a facsimile.

LOST CERTIFICATES

Section 3.               The board of directors may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed.  When authorizing such issuance of a new certificate or certificates, the board of directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate or

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certificates, or his legal representative, to advertise the same in such manner as it shall require and/or to give the corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the corporation with respect to the certificate alleged to have been lost, stolen or destroyed.

TRANSFER OF STOCK

Section 4.               Upon surrender to the corporation or the transfer agent of the corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignation or authority to transfer, it shall be the duty of the corporation to issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books.  Whenever any transfer of shares shall be made for collateral security, and not absolutely, it shall be so expressed in the entry of the transfer if, when the certificates are presented to the Corporation for transfer, both the transferor and transferee request the Corporation to do so.  The Corporation shall maintain at its principal office or at the office of its attorneys an office where shares of the Corporation shall be transferable.  The Corporation may also maintain one or more registry offices where such shares shall be registered.  The board of directors may make such rules and regulations as it may deem expedient concerning the issue, transfer and registration of certificates of stock.

FIXING RECORD DATE

Section 5.               In order that the corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or to express

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consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the board of directors may fix, in advance, a record date, which shall not be more than fifty nor less than ten days before the date of such meeting, nor more than fifty days prior to any other action.  A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the board of directors may fix a new record date for the adjourned meeting.  If no record date is fixed, the record date for the determination of shareholders entitled to notice of or to vote at a meeting of shareholders shall be at the close of business on the day next preceding the day on which notice is given, or, if not notice is given, the day on which the meeting is held.  For all other purposes, the record date for determining shareholders shall be at the close of business on the date on which the resolution of the board relating thereto is adopted.

REGISTERED STOCKHOLDERS

Section 6.               The corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and to hold liable for calls and assessments a person registered on its books as the owner of shares, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the California General Corporation Law.

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ARTICLE VII

DIVIDENDS

Section 1.               Dividends upon the capital stock of the corporation, subject to the provisions of the certificate of incorporation, if any, may be declared out of funds legally available therefor by the board of directors at any regular or special meeting, pursuant to law.  Dividends may be paid in cash, in property, or in shares of the capital stock, subject to the provisions of the certificate of incorporation.

Before payment of any dividend, there may be set aside out of any funds of the corporation available for dividends such sum or sums as the directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the corporation, or for such other purpose as the directors shall think conducive to the interest of the corporation, and the directors may modify or abolish any such reserve in the manner in which it was created.

ARTICLE VIII

MISCELLANEOUS PROVISIONS

Section 1.               Annual Statement.  The board of directors shall present at each annual meeting, and at any special meeting of the stockholders when called for by vote of the stockholders, a full and clear statement of the business and condition of the corporation.

Section 2.               Checks; contracts; deposits.  All checks or demands for money and notes of the corporation shall be signed by such officer or officers or such other person or persons as the board of directors may from time to time designate.  Unless otherwise provided by law or resolution of the board of directors, any contract, document or other instrument, including contracts or instruments evidencing indebtedness of the Corporation, shall be valid and binding

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on the Corporation only if executed and delivered in its name and on its behalf by either the President or such other persons who have been designated by resolution of the board of directors as authorized signatories of contracts, documents or other instruments.    All funds of the Corporation not otherwise employed shall be deposited from time to time to the credit of the Corporation in such banks, trust companies or other depositaries as the board of directors may select or as may be designated by any officer or officers of the Corporation.

Section 3.               Fiscal Year. The fiscal year of the corporation shall be fixed by resolution of the board of directors.

Section 4.               Corporate Seal.  The corporate seal shall have inscribed thereon the name of the corporation, the year of its organization and the words “Corporate Seal, California”.  The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.

Section 5.               Indemnification.  The corporation shall indemnify its officers, directors, employees and agents to the fullest extent permitted by law.

ARTICLE IX

AMENDMENTS TO BY-LAWS

Section 1.               The by-laws may be altered, amended or repealed or new by-laws may be made or adopted by the board of directors at any regular or special meeting of the board of directors; except that no alteration, amendment or repeal to Article III or this Article IX may be made with out the consent of the shareholders as set forth in the next sentence.  The by-laws of the Corporation may also be altered, amended or repealed or new by-laws may be made or

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adopted by the vote of a majority in interest of the shareholders represented and entitled to vote upon election of directors, at any meeting at which a quorum is present.

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EX-4.1

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

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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.

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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;

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(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:

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(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

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(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,

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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

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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.

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“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

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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

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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;

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(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.

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“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

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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.

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“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

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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;

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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

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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

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(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;

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(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;

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(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.

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“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

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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.

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“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.

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“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

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(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;

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“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,

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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.

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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

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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.

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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.

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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

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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

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(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

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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

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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.

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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

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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

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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.

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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

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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 lotor 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.

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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;

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(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

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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

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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

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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;

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(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

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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

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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

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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

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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

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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

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(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

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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.

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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:

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(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

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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

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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.

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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

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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.

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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.

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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.

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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

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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.

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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,

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(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;

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(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.

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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.

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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.

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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:

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(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.

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(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

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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.

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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.

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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.

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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.

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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.

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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

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(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

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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

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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,

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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)

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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.

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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

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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.

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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

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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.

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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.

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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

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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

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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

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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.

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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]

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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.

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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.

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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:

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(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

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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

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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

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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

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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.

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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:

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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

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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:

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This is one of the Notes referred to
in the within-mentioned Indenture:
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By:
	Name:
	Title:

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(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,

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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

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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

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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

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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

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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:

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Equinox Holdings, Inc.

895 Broadway, 3rd Floor

New York, New York 10003

Attention: Chief Financial Officer

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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

EX-4.5

Exhibit 4.5

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

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

EQUINOX HOLDINGS, INC.

Common Stock Purchase Warrant

No.	New York, New York
PPN 29477# AA 4	December 15, 2000

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

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

1.EXERCISE OR CONVERSION OF WARRANT

1.1Manner of Exercise or Conversion; Payment.

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

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

(i)the difference between:

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

2

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

minus

(b)the Exercise Price

divided by

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

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

(i)the difference between:

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

minus

(b)the Exercise Price

divided by

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

3

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

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

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

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

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

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

2.ADJUSTMENT OF COMMON STOCK ISSUABLE UPON EXERCISE.

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

4

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

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

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

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

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

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

2.2Adjustment of Warrant Price.

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

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

5

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

by

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

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

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

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

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

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

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

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

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

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

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

3.CONSOLIDATION, MERGER, ETC.

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

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

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

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

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

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

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

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

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

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

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

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

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

7.NOTICES OF CORPORATE ACTION.  In the event of

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

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

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

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

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

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

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

9.REDEMPTION AND CANCELLATION OF WARRANTS.

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

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

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

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

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

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

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

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

10.RESTRICTIONS ON TRANSFER.

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

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

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

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

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

13.OWNERSHIP, TRANSFER AND SUBSTITUTION OF WARRANTS.

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

13.2Office; Transfer and Exchange of Warrants.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

22

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

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

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

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

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EQUINOX HOLDINGS, INC.
By:
	Name:	Adam Saltzman
	Title:	Vice President

[SIGNATURE PAGE TO WARRANT]

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FORM OF SUBSCRIPTION

[To be executed only upon exercise of Warrant]

To  EQUINOX HOLDINGS, INC.

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

Dated:
	(Signature must conform in all respects to name of holder as specified on the face of Warrant)
	(Street Address)
	(City)	(State)	(Zip Code)

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

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FORM OF CONVERSION NOTICE

[To be executed only upon exercise of Warrant]

To EQUINOX HOLDINGS, INC.

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

Dated:
	(Signature must conform in all respects to name of holder as specified on the face of Warrant)
	(Street Address)
	(City)	(State)	(Zip Code)

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

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FORM OF EXCHANGE NOTICE

[To be executed only upon exercise of Warrant]

To EQUINOX HOLDINGS, INC.

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

Dated:
	(Signature must conform in all respects to name of holder as specified on the face of Warrant)
	(Street Address)
	(City)	(State)	(Zip Code)
Signed in the presence of:

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

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FORM OF ASSIGNMENT

[To be executed only upon transfer of Warrant]

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

Dated:
		(Signature must conform in all respects to name  of holder as specified on the face of Warrant)
		(Street Address)
		(City)	(State)	(Zip Code)
Signed in the presence of:
Acknowledged and accepted:
EQUINOX HOLDINGS, INC.
By:
	Name:
	Title:

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

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EX-10.1

Exhibit 10.1

MASTER SERVICES AGREEMENT

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

W I T N E S S E T H :

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

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

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

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

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

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

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

Section 1.        Engagement

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

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

Section 2.        Services

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

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

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

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

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

Section 3.        Termination

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

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

2

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

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

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

(e)  Date of Termination.  As used in this Agreement, the term “Date of Termination” shall mean the later of (A) the date of termination specified in the Notice of Termination, (B) the date any applicable correction period ends and (C) the expiration of any required notice period; provided that in the case of a termination of this Agreement by Holdings without Cause, or by Executive or Development without Good Reason such date is at least 90 days after the date on which Notice of Termination is given as contemplated by Section 7(e).

(f)  Payments Upon Certain Terminations.

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

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

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

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

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

Section 4.        Restrictive Covenants

(a)  Unauthorized Disclosure.  From the date hereof and until the expiration of the five-year period following any termination of this Agreement, without the prior written consent of the Board of Directors (the “Holdings Board”) or its authorized representative, except to the extent required by an order of a court having jurisdiction or under subpoena from an appropriate government agency, in which event, Development and Executive shall use their reasonable best efforts to consult with Holdings prior to responding to any such order or subpoena, and except as required in the performance of the services contemplated herein, Executive and Development, its employees, officers, directors and Affiliates shall not disclose any confidential or proprietary trade secrets, customer lists, drawings, designs, information regarding product development, marketing plans, sales plans, manufacturing plans, management organization information (including but not limited to data and other information relating to members of the Holdings Board, Holdings or any of its Affiliates or to the management of Holdings or any of its Affiliates), operating policies or manuals, business plans, financial records, packaging design or other financial, commercial, business or technical information (a) relating to Holdings or any of its Affiliates or (b) that Holdings or any of its Affiliates may receive belonging to suppliers, vendors, customers or others who do business with Holdings or any of its Affiliates (collectively, “Confidential Information”) to any third person or otherwise use such Confidential Information (other than in connection with this Agreement or the Construction Contracts) unless such Confidential Information has been

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

(b)  Non-Disparagement.  During the period commencing on the date hereof and ending eighteen months after the Date of Termination (the “Restriction Period”), Executive, Development and its other employees will not directly or indirectly (i) engage in any conduct or make any statement, whether in commercial or noncommercial speech, disparaging or criticizing in any way Holdings or any of its Affiliates, or any products or services offered by any of these, or (ii) engage in any other conduct or make any other statement, in each case, which could be reasonably expected to impair the goodwill of Holdings or any of its Affiliate, the reputation of Holdings’ products or the marketing of Holdings’ products except to the extent required by law and then only after consultation with Holdings to the extent possible, or in connection with any dispute between (I) Executive or Development, and (II) Holdings or any of its Affiliates.

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

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

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

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

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

(a)  Executive and Development acknowledge and agree that the covenants, obligations and agreements of Executive and Development contained in Section 4 relate to special, unique and extraordinary matters and that a violation of any of the terms of such covenants, obligations or agreements will cause Holdings irreparable injury for which adequate remedies are not available at law.  Therefore, Executive and Development agree that Holdings shall be entitled to an injunction, restraining order or such other equitable relief (without the requirement to post bond) as a court of competent jurisdiction may deem necessary or appropriate to restrain Executive and Development from committing any violation of such covenants, obligations or agreements.  These injunctive remedies are cumulative and in addition to any other rights and remedies Holdings may have.  Executive and Development further acknowledge and agree that their entering into this Agreement was a material inducement to Holdings to enter into the Construction Contracts.

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

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

Section 6.        Representations, Warranties and Covenants of Holdings

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

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

Section 7.        Representations, Warranties and Covenants of Development

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

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

Section 8.        Entire Agreement

This Agreement and the agreements referenced to in the recitals hereto constitute the entire agreement among the Parties with respect to the subject matter hereof.  All prior correspondence and proposals (including but not limited to summaries of proposed terms) and all prior promises, representations, understandings, arrangements and agreements relating to such subject matter are merged herein and superseded hereby.

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Section 9.        Independent Contractor Status

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

Section 10.Miscellaneous

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

(b)  Governing Law, etc.

(i)  This Agreement shall be governed in all respects, including as to validity, interpretation and effect, by the internal laws of the State of New York without giving effect to the conflict of laws rules thereof to the extent that the application of the law of another jurisdiction would be required thereby.  Each of the Parties hereby irrevocably submits to the jurisdiction of the courts of the State of New York and the federal courts of the United States of America located in the County of New York solely in respect of the interpretation and enforcement of the provisions of this Agreement and of the documents referred to in this Agreement, and in respect of the transactions contemplated hereby and thereby.  Each of the Parties hereby waives and agrees not to assert, as a defense in any action, suit or proceeding for the interpretation and enforcement hereof, or any such document or in respect of any such transaction, that such action, suit or proceeding may not be brought or is not maintainable in such courts or that the venue thereof may not be appropriate or that this Agreement or any such document may not be enforced in or by such courts.  Each of the Parties hereby consents to and grants any such court jurisdiction over the person of such parties and over the subject matter of any such dispute and agree that the mailing of process or other papers in connection with any such action or proceeding in the manner provided in Section 12(f) or in such other manner as may be permitted by law, shall be valid and sufficient service thereof.

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(ii)  Each of the Parties acknowledges and agrees that any controversy which may arise under this Agreement is likely to involve complicated and difficult issues, and therefore each of the Parties hereby irrevocably and unconditionally waives any right such party may have to a trial by jury in respect or any litigation directly or indirectly arising out of or relating to this Agreement, or the breach, termination or validity of this Agreement, or the transactions contemplated by this Agreement.  Each of the Parties certifies and acknowledges that (i) no representative, agent or attorney of any other Party has represented, expressly or otherwise, that such other Party would not, in the event of litigation, seek to enforce the foregoing waiver, (ii) each such Party understands and has considered the implications of this waiver, (iii) each such Party makes this waiver voluntarily, and (iv) each such Party has been induced to enter into this agreement by, among other things, the mutual waivers and certifications in this Section 12(b).

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

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

(e)  Notices.  Any notice or other communication required or permitted to be delivered under this Agreement shall be (i) in writing, (ii) delivered personally, by courier service or by certified or registered mail, first-class postage prepaid and return

9

receipt requested, (iii) deemed to have been received on the date of delivery or, if so mailed, on the third business day after the mailing thereof, and (iv) addressed as follows (or to such other address as the party entitled to notice shall hereafter designate in accordance with the terms hereof):

(A) If to Holdings, to it at:
	Equinox Holdings, Inc.
	895 Broadway
	New York, NY 10003
	Tel:  (212) 677-0180
	Fax:  (212) 777-9510
	Attention:  Harvey J. Spevak
(B) if to Executive, to him at his residential address currently on file with Development;
(C) if to Development, to it at:
	Eclipse Development Corporation
	895 Broadway
	New York, new York 10003
	Tel: 212-674-8000
	Attention: Paul Boardman

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

	North Castle Partners, L.L.C.
	60 Arch Street, Suite 1A
	Greenwich, CT 06830
	Tel:  (203) 618-1700
	Fax:  (203) 618-1860
	Attention:  Adam Saltzman
and to:
	Debevoise & Plimpton
	875 Third Avenue
	New York, New York 10022
	Tel: (212) 909-6000
	Fax: (212) 909-6836
	Attention:  Franci J. Blassberg, Esq.

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and to:
	J.W. Childs Equity Partners II, L.P.
	c/o J.W. Childs Associates L.P.
	One Federal Street
	Boston, Massachusetts  02110
	Attention:  Glenn A. Hopkins
and to:
	Kaye, Scholer, Fierman, Hays and Handler LLP
	425 Park Avenue
	New York, New York  10022
	Attention:  Stephen C. Koval, Esq.

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

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

(h)  Certain Definitions.

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

“Control”:  with respect to any Person, means the possession, directly or indirectly, severally or jointly, of the power to direct or cause the direction of the management policies of such Person, whether through the ownership of voting securities, by contract or credit arrangement, as trustee or executor, or otherwise.

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

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

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

EQUINOX HOLDINGS, INC.
By:	/s/ H. Spevak
	Name: H. Spevak
	Title: CEO
ECLIPSE DEVELOPMENT CORPORATION:
By:	/s/ Paul B. Boardman
	Name: Paul B. Boardman
	Title: Managing Director
EXECUTIVE:
/s/ Paul B. Boardman
Paul Boardman

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EX-10.3

Exhibit 10.3

EXECUTION COPY

EQUINOX HOLDINGS, INC.

REGISTRATION RIGHTS AGREEMENT

Dated as of December 15, 2000

Table of Contents

(Not Part of Agreement)

			Page
1.	Background.		1
2.	Definitions		2
3.	Registration.		6
3.1	Registration on Request.		6
	(a)	Requests	6
	(b)	Obligation to Effect Registration	7
	(c)	Registration Statement Form	8
	(d)	Expenses	8
	(e)	Inclusion of Other Securities	9
	(f)	Effective Registration Statement	9
	(g)	Pro Rata Allocation	9
3.2	Piggyback Registration		10
3.3	Sub-Debt S-3 Registrations		12
3.4	Registration Procedures		12
3.5	Underwritten Offerings		17
	(a)	Underwritten Offerings Exclusive	17
	(b)	Underwriting Agreement	17
	(c)	Selection of Underwriters	18
	(d)	Incidental Underwritten Offerings	18
	(e)	Hold Back Agreements	19
3.6	Preparation; Reasonable Investigation		19
3.7	Other Registrations		20
3.8	Indemnification.		20
	(a)	Indemnification by the Company	20
	(b)	Indemnification by the Sellers	21
	(c)	Notices of Claims, etc	22
	(d)	Other Indemnification	23
	(e)	Other Remedies	23
	(f)	Officers and Directors	24
4.	Miscellaneous.		24
4.1	Rule 144; Legended Securities; etc.		24
4.2	Amendments and Waivers		25
4.3	Nominees for Beneficial Owners		25
4.4	Successors, Assigns and Transferees		25
4.5	Notices		25
4.6	No Inconsistent Agreements		27
4.7	Remedies; Attorneys’ Fees		27
4.8	Stock Splits, etc		28

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Table of Contents

(Not Part of Agreement)

(Continued)

		Page
4.9	Severability	28
4.10	Headings	28
4.11	Counterparts	28
4.12	Governing Law	28
4.13	No Third Party Beneficiaries	28
4.14	Consent to Jurisdiction	28
4.15	Waiver of Jury Trial	29
4.16	Action by Co-Investment Fund	29

ii

REGISTRATION RIGHTS AGREEMENT

REGISTRATION RIGHTS AGREEMENT (the “Agreement”), dated as of December 15, 2000, among Equinox Holdings, Inc., a Delaware corporation (the “Company”), NCP-EH, L.P., a Delaware limited partnership (“NCP”), NCP Co-Investment Fund, L.P., a Delaware limited partnership (the “NCP Co-Fund” and, together with NCP, “NCP-EH”), Albion Alliance Mezzanine Fund, L.P., a Delaware limited partnership (“Albion I”), Albion Alliance Mezzanine Fund II, L.P., a Delaware limited partnership (“Albion II”), Deutsche Bank Securities Inc. (“DB”), Exeter Capital Partners IV, L.P. (“Exeter Capital”), Exeter Equity Partners, L.P. (“Exeter Equity”), Bill and Melinda Gates Foundation (“Gates”), Arrow Investment Partners (“Arrow”) and together with DB, Exeter Capital, Exeter Equity, Gates, Arrow, Albion I and Albion II and each of their respective successors and permitted assigns, solely in their capacity of holders of Warrants or Warrant Shares, the “Sub-Debt Warrantholders”), and the individuals set forth on the signature page hereto (collectively, the “Individual Stockholders”).  Capitalized terms used in this Agreement have the meanings indicated in Section 2.

1.  Background.

(a)  The Company is a party to a Merger and Stock Purchase Agreement, dated as of October 16, 2000 and as amended on December 14, 2000 (the “Recapitalization Agreement”), with NCP-EH, NCP-EH Recapitalization Corp., a Delaware corporation, and the other parties thereto, pursuant to which, NCP-EH shall purchase shares of Common Stock.  In order to induce NCP-EH to enter into the Recapitalization Agreement, the Company has agreed to provide the registration rights set forth in this Agreement for the benefit of NCP-EH, each Individual Stockholder and each Holder.  The execution and delivery of this Agreement is a condition to NCP-EH’s obligations pursuant to the Recapitalization Agreement.

(b)  Pursuant to the Senior Subordinated Note and Warrant Purchase Agreement, dated as of December 15, 2000 (the “Senior Subordinated Loan Agreement”), between the Company and each of the Sub-Debt Warrantholders, the Company has issued to the Sub-Debt Warrantholders warrants (the “Warrants”) to purchase an aggregate of 783,020 shares of Common Stock (as such number may be adjusted pursuant to the terms thereof).  In order to induce the Sub-Debt Warrantholders to enter into the Senior Subordinated Loan Agreement, the Company has agreed to provide the registration rights set forth in this Agreement for the benefit of the Sub-Debt Warrantholders.

(c)  The Company may in the future issue or sell (either directly or pursuant to options or other rights) additional shares of Common Stock to (i) certain stockholders of businesses acquired by the Company or one of its Subsidiaries, (ii) certain directors, executive officers and key employees of the Company or one of its Subsidiaries, and (iii) certain other purchasers, in each case pursuant to stock subscription, merger,

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acquisition or purchase agreements or stock option or rights agreements, plans or arrangements, the terms of which are not inconsistent with the terms of this Agreement or any Stockholders Agreement (collectively, the “Stock Subscription Agreements”).

(d)  This Agreement shall become effective, with respect to any securities  issued pursuant to any Stock Subscription Agreement that provides that such securities shall constitute Registrable Securities, upon the issuance or sale of such securities pursuant to such Stock Subscription Agreement, it being understood that, with respect to Registrable Securities to be issued in the future, any such Stock Subscription Agreement will provide that the securities issued or sold thereunder are entitled to the rights and subject to the obligations created hereunder, provided that such issuance or sale shall have been consented to in writing by the Board of Directors of the Company (the “Board”) and the Board shall have determined that such Securities shall be Registrable Securities.

2.  Definitions.  For purposes of this Agreement, the following terms have the following respective meanings:

Affiliate: with respect to any Person, any other Person directly or indirectly Controlling, Controlled by or under common Control with such first Person.  “Control” means the power to direct or cause the direction of management or policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise.  Any director, member of management or other employee of the Company or any of its Subsidiaries who would not otherwise be an Affiliate of NCP-EH shall not be deemed to be an Affiliate of NCP-EH and no Sub-Debt Warrantholder shall be deemed to be an Affiliate of the Company.

Agreement:  as defined in the first paragraph of this Agreement.

Board: as defined in Section 1(d).

Business Day:  a day other than a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required to close.

Common Stock:  the common stock, par value $.01 per share, of the Company outstanding immediately after the consummation of the transactions contemplated by the Recapitalization Agreement or issued thereafter.

Company:  as defined in the first paragraph of this Agreement.

DTC:  the Depository Trust Company.

Escrowed Shares:  as defined in the Recapitalization Agreement.

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Exchange Act:  the Securities Exchange Act of 1934, as amended, or any successor federal statute, and the rules and regulations thereunder which shall be in effect at the time.  Any reference to a particular section thereof shall include a reference to the corresponding section, if any, of any such successor federal statute, and the rules and regulations thereunder.

Holder:  any holder of Registrable Securities from time to time.

Individual Stockholders:  as defined in the first paragraph of this Agreement.

NASD:  the National Association of Securities Dealers, Inc.

NCP-EH:  as defined in the first paragraph of this Agreement.

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

Prospectus:  the prospectus included in any Registration Statement (including, without limitation, a prospectus that discloses information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by such Registration Statement and all other amendments and supplements to the prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such prospectus.

Public Offering:  as defined in the Stockholders Agreement.

Recapitalization Agreement:  as defined in Section 1(a).

Registrable Securities:  (a) (i) shares of Common Stock, other than the Escrowed Shares, issued by the Company pursuant to the Recapitalization Agreement to NCP-EH, NCP Co-Fund, the Individual Stockholders, or any of their Affiliates, (ii) shares of Common Stock issuable pursuant to any Stock Subscription Agreement (including upon exercise of options or warrants) that provides that such Common Stock shall constitute Registrable Securities, except for any such Common Stock issued pursuant to an effective registration statement under the Securities Act on Form S-8, Form S-4, Form S-1 or any successor form to any thereof (unless such Common Stock is held by a Stockholder who is an affiliate (within the meaning of Rule 144) of the Company), and (iii) shares of Common Stock issued or issuable upon exercise of the Warrants; and (b) any securities issued or issuable with respect to any shares of Common Stock referred to in the foregoing clauses (x) upon any conversion or exchange thereof, (y) by way of stock dividend or other distribution, stock split or reverse stock split or (z) in connection with a combination of shares, recapitalization, merger, consolidation, exchange offer or other

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reorganization. As to any particular Registrable Securities, once issued such securities shall cease to be Registrable Securities when (A) a Registration Statement with respect to the sale of such securities shall have become effective under the Securities Act and such securities shall have been disposed of in accordance with such Registration Statement, unless such securities are acquired and held by a Stockholder who is an affiliate (within the meaning of Rule 144), (B) such securities shall have been distributed to the public in reliance upon Rule 144, (C) such securities have been held, or deemed, by virtue of tacking holding periods as contemplated by Rule 144, to be held for a period of two years by a Person who obtained such securities pursuant to any Stock Subscription Agreement or the Recapitalization Agreement and who has not been an affiliate (within the meaning of Rule 144) of the Company within the three months preceding any proposed disposition of such securities, (D) subject to the provisions of Section 4.1(b)(ii), such securities shall have been otherwise transferred, new certificates for such securities not bearing a legend restricting further transfer shall have been delivered by the Company and subsequent disposition of such securities shall not require registration or qualification of such securities under the Securities Act, (E) such securities shall have been acquired by the Company, or (F) with respect to any such securities acquired by a Stockholder pursuant to the exemption from the registration requirements of the Securities Act contained in Rule 701 (or any successor provision) thereunder, at any time 90 days following the date the Company registers a class of equity securities under Section 12 of the Exchange Act.

Registration Expenses:  all fees and expenses incident to the performance of or compliance with the provisions of this Agreement, whether or not any registration statement is filed or becomes effective, including, without limitation, all (i) registration and filing fees (including, without limitation, (A) fees with respect to filings required to be made with the NASD in connection with an underwritten offering and (B) fees and expenses of compliance with state securities or blue sky laws (including, without limitation, fees and disbursements of counsel for the underwriter or underwriters in connection with blue sky qualifications of the Registrable Securities and determination of the eligibility of the Registrable Securities for investment under the laws of such jurisdictions as provided in Section 3.4(e)), (ii) printing expenses (including, without limitation, expenses of printing certificates for Registrable Securities in a form eligible for deposit with DTC and of printing prospectuses), (iii) fees and disbursements of all independent certified public accountants referred to in Section 3.4(f) (including, without limitation, the reasonable expenses of any special audit and “comfort” letters required by or incident to such performance), (iv) the fees and expenses of any “qualified independent underwriter” or other independent appraiser participating in an offering pursuant to Rule 2720 of the NASD Rules of Conduct, (v) liability insurance under the Securities Act or any other securities laws, if the Company desires such insurance, (vi) fees and expenses of all attorneys, advisers, appraisers and other persons retained by the Company or any Subsidiary of the Company, (vii) internal expenses of the Company and its Subsidiaries (including, without limitation, all salaries and expenses of officers and employees of the Company and its Subsidiaries performing legal or accounting duties),

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(viii) the expense of any annual audit, (ix) the expenses relating to printing, word processing and distributing all registration statements, underwriting agreements, securities sales agreements and any other documents necessary in order to comply with this Agreement and (x) the reasonable out-of-pocket expenses of the Holders of the Registrable Securities being registered in such registration incurred in connection therewith including, without limitation, the reasonable fees and disbursements of not more than one counsel (together with appropriate local counsel) chosen by the holders of a majority of Registrable Securities included in such registration, provided, however, in the event that representation of the Sub-Debt Warrantholders and the other holders of Registrable Securities by the same counsel would in the opinion of such counsel be inappropriate under applicable standards of professional conduct, the reasonable expenses of separate counsel for the Sub-Debt Warrantholders shall be paid by the Company in a registration pursuant to Section 3.1.  Registration Expenses shall not include any underwriting discounts or commissions or any transfer taxes payable in respect of the sale of Registrable Securities by the Holders thereof.

Registration Statement:  any registration statement of the Company that covers any of the Registrable Securities pursuant to the provisions of this Agreement, and all amendments and supplements to any such registration statement, including post-effective amendments, in each case including the Prospectus, all exhibits and all material incorporated by reference or deemed to be incorporated by reference in such registration statement.

Rule 144:  Rule 144 (or any successor provision) under the Securities Act.

Rule 144A:  Rule 144A (or any successor provision) under the Securities Act.

Rule 145:  Rule 145 (or any successor provision) under the Securities Act.

Securities Act:  the Securities Act of 1933, as amended, or any successor federal statute, and the rules and regulations thereunder which shall be in effect at the time.  Any reference to a particular section thereof shall include a reference to the corresponding section, if any, of any such successor federal statute, and the rules and regulations thereunder.

SEC:  the Securities and Exchange Commission or any other federal agency at the time administering the Securities Act or the Exchange Act.

Special Registration:  the registration of shares of equity securities and/or options or other rights in respect thereof to be offered solely to directors, members of management, employees, consultants or sales agents, distributors or similar representatives of the Company or its direct or indirect Subsidiaries, solely on Form S-8 or any successor form.

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Stock Subscription Agreements:  as defined in Section 1(c).

Stockholders Agreement:  the Stockholders Agreement, dated as of December 15, 2000, among the Company, NCP, the Sub-Debt Warrantholders and the other parties named therein, as such agreement may be amended, supplemented or modified from time to time.

Subsidiary:  with respect to any Person, any corporation or Person, a majority of the outstanding voting stock or other equity interests of which is owned, directly or indirectly, by that Person.

“underwritten registration” or “underwritten offering” means a registration in which securities of the Company (including Registrable Securities) are sold to an underwriter for reoffering to the public.

Warrant Shares:  shares of Common Stock issued and outstanding upon exercise of a Warrant.

Warrants:  as defined in Section 1(b).

Any reference  in this Agreement to a statute shall be to such statute, as amended from time to time, and to the rules and regulations promulgated thereunder.

3.  Registration.

3.1  Registration on Request.

(a)  Requests.  Subject to the provisions of Section 3.7, at any time or from time to time after the date hereof, NCP-EH shall have the right to make written requests that the Company effect one or more registrations under the Securities Act of all or part of the Registrable Securities of NCP-EH.  Subject to the provisions of Section 3.7, at any time after the initial Public Offering, the Sub-Debt Warrantholders holding at least a majority of the Warrants or Warrant Shares then outstanding shall have the right, on two occasions,  to make a written request that the Company effect a registration (each, a “Sub-Debt Registration”) under the Securities Act of part or all of the Registrable Securities held by all Sub-Debt Warrantholders; provided, however, that unless the Sub-Debt Warrantholders requesting registration are able to include in such registration at least 60% of the Registrable Securities requested by them to be included in such registration, such Sub-Debt Warrantholders shall be entitled to require an additional registration pursuant to this Section 3.1.  If so requested by any Sub-Debt Warrantholder in connection with a registration under this paragraph, the Company shall take such steps as are required to register the Sub-Debt Warrantholders’ Registrable Securities for sale on a delayed or continuous basis under Rule 415, and also take such steps as are required to keep any registration effective until all of the Registrable Securities registered thereunder

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are sold.  Notwithstanding the foregoing, the Company shall have no obligation to keep any Sub-Debt Registration pursuant to this Section 3.1 effective more than one hundred eighty (180) days after the initial date of effectiveness of such registration.  Any requests for registration made pursuant to this Section 3.1 shall specify the intended method of disposition thereof, including whether the registration requested is for an underwritten offering.

(b)  Obligation to Effect Registration.  Within 20 days after receipt by the Company of any request for registration pursuant to Section 3.1(a), the Company shall promptly give written notice of such requested registration to all Holders, and thereupon will use its reasonable best efforts to effect the registration under the Securities Act of:

(i)  the Registrable Securities which the Company has been so requested to register pursuant to Section 3.1(a), and

(ii)  all other Registrable Securities which the Company has been requested to register by the Holders thereof by written request given to the Company within 20 days after the Company has given such written notice (which request shall specify the intended method of disposition of such Registrable Securities),

all to the extent required to permit the disposition (in accordance with the intended methods thereof as aforesaid) of the Registrable Securities so to be registered.  Notwithstanding the preceding sentence:

(x)  the Company shall not be required to effect a registration requested pursuant to Section 3.1 (other than a Sub-Debt Registration) if the aggregate number of Registrable Securities referred to in clauses (i) and (ii) of this Section 3.1(b) included in such registration shall be less than 20% of the Registrable Securities at the time outstanding;

(y)  if the Board determines in its good faith judgment, after consultation with a firm of nationally recognized underwriters, that there will be an adverse effect on a then contemplated public offering of the Common Stock that is expected to become effective within 180 days of the date of such determination, the holder or holders making a request pursuant to Section 3.1(a) shall be given notice of such fact and shall be deemed to have withdrawn such request and such registration shall not be deemed to have been effected or requested pursuant to this Section 3.1; and

(z)  the Company shall be entitled to postpone for a reasonable period of time not to exceed 180 days from the date a request pursuant to Section 3.1(a) is received, the filing of any registration statement otherwise required to be prepared

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and filed by it pursuant to this Section 3.1, if the Board of Directors of the Company (i) in good faith determines at such time that such registration and offering would materially adversely affect or interfere with any proposed or pending financing, acquisition, corporate reorganization or other material transaction or the conduct or outcome of any material litigation involving the Company and any of its subsidiaries, and (ii) as promptly as practicable gives Holders written notice of such postponement, setting forth the duration of and reasons for such postponement; provided, however, that the Company shall not effect such a postponement more than once in any 360-day period.  If the Company shall so postpone the filing of a registration statement, the holders or holders making the request pursuant to Section 3.1(a) shall within 10 days after receipt of the notice of postponement advise the Company in writing whether or not it has determined to withdraw its request for registration.  Failure by such holder or holders to timely notify the Company of its determination shall for all purposes be treated as a withdrawal of its request for registration.  In the event of a withdrawal, such request for registration shall not be deemed exercised for purposes of determining whether such holder or holders still have the right to make a request for registration pursuant to this Section 3.1.  In the event that the holder or holders making the request under Section 3.1(a) have not withdrawn their request for registration, the Company shall use its reasonable best efforts to achieve such effectiveness promptly following such 180-day period if the request for registration pursuant to this Section 3.1 was made prior to the expiration of such 180-day period.

(c)  Registration Statement Form.  Each registration requested pursuant to this Section 3.1 shall be effected by the filing of a registration statement on Form S-1, Form S-2 or Form S-3 (or any other form which includes substantially the same information as would be required to be included in a registration statement on such forms as presently constituted), unless the use of a different form is (i) required by law or (ii) permitted by law and agreed to in writing by Holders of at least a majority of the shares of Registrable Securities as to which registration has been requested pursuant to this Section 3.1.  At any time after the Company has issued and sold any shares of its capital stock registered under an effective registration statement under the Securities Act, or after the Company shall have registered any class of equity securities pursuant to Section 12 of the Exchange Act, it will use its reasonable best efforts to qualify for registration on Form S-2 or Form S-3 (or any other comparable form hereinafter adopted).

(d)  Expenses.  The Company will pay all Registration Expenses in connection with the first four registrations which are effected by NCP-EH as requested pursuant to Section 3.1(a) and for up to two registrations which are effected by the Sub-Debt Warrantholders pursuant to Section 3.1(a) and any registration which is effected by the Sub-Debt Warrantholders under Section 3.3.  The Registration Expenses in connection with each other registration, if any, requested under this Section 3.1 shall be apportioned

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among the Holders whose Registrable Securities are then being registered, on the basis of the respective amounts of Registrable Securities then being registered by them or on their behalf.  However, in the case of all registrations requested under Section 3.1(a), the Company shall pay all amounts in respect of (i) any allocation of salaries of personnel of the Company and its Subsidiaries or other general overhead expenses of the Company and its Subsidiaries or other expenses for the preparation of financial statements or other data normally prepared by the Company and its Subsidiaries in the ordinary course of its business, (ii) the expenses of any officers’ and directors’ liability insurance, (iii) the expenses and fees for listing the securities to be registered on each exchange on which similar securities issued by the Company are then listed or, if no such securities are then listed on an exchange selected by the Company and (iv) all fees associated with filings required to be made with the NASD (including, if applicable, the fees and expenses of any “qualified independent underwriter” and its counsel as may be required by the rules and regulations of the NASD).  Notwithstanding the provisions of this Section 3.1(d) or of Section 3.2, each seller of Registrable Securities shall pay all Registration Expenses to the extent required to be paid by such seller under applicable law; provided, however that nothing in this Section 3.1(d) shall require a Sub-Debt Warrantholder to pay Registration Expenses in connection with a Sub-Debt Registration.

(e)  Inclusion of Other Securities.  The Company shall not register securities (other than Registrable Securities) for sale for the account of any Person other than the Company in any registration requested pursuant to Section 3.1(a) unless permitted to do so by the written consent of Holders holding at least a majority of the shares of Registrable Securities proposed to be sold in such registration.

(f)  Effective Registration Statement.  A registration requested pursuant to Section 3.1(a) shall not be deemed to have been effected unless it is declared effective by the SEC and remains effective for the period specified in Section 3.4(b).  Notwithstanding the preceding sentence, a registration requested pursuant to Section 3.1(a) that does not become effective after the Company has filed a Registration Statement with respect thereto by reason of the refusal to proceed of the Holder or Holders of the Registrable Securities requesting registration shall be deemed to have been effected by the Company at the request of such Holder or Holders.

(g)  Pro Rata Allocation.  If the managing underwriters or, in an offering which is not underwritten, a nationally recognized investment banker, determines that the number of securities to be sold in any such offering should be limited due to market conditions or otherwise, Holders of Registrable Securities proposing to sell their securities in such registration shall share pro rata in the number of securities being offered (as determined by the Holders holding a majority of the Registrable Securities for which registration is being requested in consultation with the managing underwriters or investment banker, as the case may be) and registered for their account, such sharing to be based on the number of Registrable Securities as to which registration was requested by such Holders.

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3.2  Piggyback Registration.  If the Company at any time proposes to register any of its equity securities (as defined in the Exchange Act) under the Securities Act (other than pursuant to Section 3.1 or pursuant to a Special Registration), whether or not for sale for its own account, and the registration form to be used may be used for the registration of Registrable Securities, it shall each such time give prompt written notice to all Holders of its intention to do so and, upon the written request of any Holder given to the Company within 30 days after the Company has given any such notice (which request shall specify the Registrable Securities intended to be disposed of by such Holder and the intended method of disposition thereof), the Company will use its reasonable best efforts to effect the registration under the Securities Act of all Registrable Securities which the Company has been so requested to register by the Holders thereof, to the extent required to permit the disposition (in accordance with the intended methods thereof as aforesaid) of the Registrable Securities so to be registered, provided that:

(a)  if such registration shall be in connection with the initial public offering of Common Stock, the Company shall not include any Registrable Securities in such proposed registration if the Board shall have determined, after consultation with the managing underwriters for such offering, that it is not in the best interests of the Company to include any Registrable Securities in such registration, provided that, if the Board makes such a determination, the Company shall not include in such registration any securities not being sold for the account of the Company;

(b)  if, at any time after giving written notice of its intention to register any securities and prior to the effective date of the Registration Statement filed in connection with such registration, the Company shall determine for any reason not to register such securities, the Company may, at its election, give written notice of such determination to each Holder that was previously notified of such registration and, thereupon, shall not register any Registrable Securities in connection with such registration (but shall nevertheless pay the Registration Expenses in connection therewith), without prejudice, however, to the rights of any Holders to request that a registration be effected under Section 3.1; and

(c)  if the Company shall be advised in writing by the managing underwriters (or, in connection with an offering which is not underwritten, by a nationally recognized investment banker) that in their or its opinion the number of securities requested to be included in such registration (whether by the Company, pursuant to this Section 3.2 or pursuant to any other rights granted by the Company to a holder or holders of its securities to request or demand such registration or inclusion of any such securities in any such registration) exceeds the number of such securities which can be sold in such offering

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(i)  the Company shall include in such registration the number (if any) of Registrable Securities so requested to be included which in the opinion of such underwriters or investment banker, as the case may be, can be sold and subject to subclause (ii) below, shall not include in such registration any securities (other than securities being sold by the Company, which shall have priority in being included in such registration) so requested to be included other than Registrable Securities unless all Registrable Securities requested to be so included are included therein, and

(ii)  if in the opinion of such underwriters or investment banker, as the case may be, some but not all of the Registrable Securities may be so included, all holders of Registrable Securities requested to be included therein shall share pro rata in the number of shares of Registrable Securities included in such public offering on the basis of the number of Registrable Securities requested to be included therein by such holders, provided that, in the case of a registration initially requested or demanded by a holder or holders of securities other than Registrable Securities, the Holders of the Registrable Securities requested to be included therein and the holders of such other securities shall share pro rata (based on the number of shares if the requested or demanded registration is to cover only Common Stock and, if not, based on the proposed offering price of the total number of securities included in such public offering requested to be included therein),

and the Company shall so provide in any registration agreement hereinafter entered into with respect to any of its securities; and

(d)  if prior to the effective date of the registration statement filed in connection with such registration, the Company is informed by the managing underwriter (or, in connection with an offering which is not underwritten, by an investment banker) that the price at which such securities are to be sold is a price below that price which the requesting Holders shall have indicated to be acceptable, the Company shall promptly notify the requesting Holders of such fact, and each such requesting Holder shall have the right to withdraw its request to have its Registrable Securities included in such registration statement.

The Company will pay all Registration Expenses in connection with each registration of Registrable Securities requested pursuant to this Section 3.2.  No registration effected under this Section 3.2 shall relieve the Company from its obligation to effect registrations upon request under Section 3.1.  The Company shall not be obligated to cause any registration that includes Registrable Securities pursuant to this Section 3.2 to be underwritten.

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3.3  Sub-Debt S-3 Registrations.  If the Company becomes eligible to use Form S-3 under the Securities Act or a comparable successor form, (a) the Company shall use its reasonable best efforts to continue to qualify at all times for registration of its capital stock on Form S-3 or any successor form, and (b) Sub-Debt Warrantholders holding Registrable Securities anticipated to have an aggregate sale price (net of underwriting discounts and commissions, if any) in excess of $10,000,000 shall have the right on one (1) or more occasions (not to exceed two (2) occasions in any consecutive twelve (12) month period), to request and have effected the registration of their Registrable Securities on Form S-3 or such successor form (such requests shall be in writing and shall state the number of Registrable Securities to be disposed of and the intended method of disposition of such Registrable Securities by the Sub-Debt Warrantholder(s)).  The Company will use its reasonable best efforts to effect promptly the registration of all Registrable Securities on Form S-3 or such successor form to the extent requested by such Sub-Debt Warrantholder(s).  If so requested by such Sub-Debt Warrantholder(s) in connection with a registration under this Section 3.3, the Company shall take such steps as are required to register such Sub-Debt Warrantholder’s Registrable Securities for sale on a delayed or continuous basis under Rule 415, and to keep such registration effective until all of such Sub-Debt Warrantholder’s Registrable Securities registered thereunder are sold.  Notwithstanding the foregoing, the Company shall have no obligation to keep any registration effective more than one hundred eighty (180) days after the initial date of effectiveness of such registration.  The Company may postpone the filing of any registration statement required hereunder for a reasonable period of time, not to exceed one hundred eighty (180) days during any twelve (12) month period, (i) if the Company determines in good faith that such filing would require the disclosure of a material transaction or other matter and the Company determines reasonably and in good faith that such disclosure would have a material adverse effect on the Company or otherwise would not be in the best interest of the Company or (ii) any of the reasons contemplated in Section 3.1(b)(z).  The Company shall not be required to cause a registration statement requested pursuant to this Section 3.3 to become effective prior to ninety (90) days following the effective date of a registration statement pursuant to Section 3.1 or Section 3.2, if the request for registration has been received by the Company subsequent to the giving of written notice by the Company, made in good faith, to the Sub-Debt Warrantholders to the effect that the Company is commencing to prepare a Company-initiated registration statement (other than a registration effected solely to implement an employee benefit plan or a transaction to which Rule 145 or any other similar rule of the Commission under the Securities Act is applicable); provided, however, that the Company shall use its reasonable best efforts to achieve such effectiveness promptly following such 90-day period if the request pursuant to this Section 3.3 has been made prior to the expiration of such 90-day period.

3.4  Registration Procedures.  If and whenever the Company is required to use its reasonable best efforts to effect the registration of any Registrable Securities under the Securities Act as provided in Sections 3.1, 3.2 and 3.3, the Company shall:

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(a)  subject to clauses (x) and (y) of Section 3.1(b), prepare and file with the SEC, as soon as practicable, a Registration Statement with respect to such securities, make all required filings with the NASD and use its reasonable best efforts to cause such Registration Statement to become effective as soon as practicable;

(b)  prepare and file with the SEC such amendments and supplements to such Registration Statement and the Prospectus used in connection therewith and such other documents as may be necessary to keep such Registration Statement effective and to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such Registration Statement until such time as all of such securities have been disposed of in accordance with the intended methods of disposition by the seller or sellers thereof set forth in such Registration Statement, but in no event for a period of more than six months after such Registration Statement becomes effective;

(c)  at least five Business Days before filing with the SEC, furnish to counsel (if any) selected by the Holders of a majority of the shares of Registrable Securities covered by such registration statement and to counsel for the underwriters in any underwritten offering copies of all documents proposed to be filed with the SEC in connection with such registration, which documents will be subject to the review of such counsel;

(d)  furnish to each seller of Registrable Securities, without charge, such number of conformed copies of such Registration Statement and of each such amendment and supplement thereto (in each case, including all exhibits and documents required to be filed therewith (other than those filed on a confidential basis), except that the Company shall not be obligated to furnish any seller of securities with more than two copies of such exhibits and documents), such number of copies of the Prospectus included in such Registration Statement (including each preliminary prospectus and any summary prospectus) in conformity with the requirements of the Securities Act, and such other documents, as such seller may reasonably request in order to facilitate the disposition of the securities owned by such seller;

(e)  use its reasonable best efforts (x) to register or qualify the securities covered by such Registration Statement under such other securities or blue sky laws of such jurisdictions as each seller shall request, (y) to keep such registration or qualification in effect for so long as such Registration Statement remains in effect and (z) to do any and all other acts and things which may be necessary or advisable to enable such seller to consummate the disposition in such jurisdictions of the securities owned by such seller, except that the Company shall not for any such purpose be required to qualify generally to do business as a foreign

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corporation in any jurisdiction wherein it is not so qualified, subject itself to taxation in any jurisdiction wherein it is not so subject, or take any action which would subject it to general service of process in any jurisdiction wherein it is not so subject;

(f)  in connection with an underwritten public offering only, use its reasonable best efforts to furnish to each seller of Registrable Securities a signed counterpart, addressed to the sellers, copies of:

(i)  an opinion of counsel for the Company experienced in securities law matters, dated the effective date of the Registration Statement, and

(ii)  a “comfort” letter signed by the independent public accountants who have issued an audit report on the Company’s financial statements included in the Registration Statement,

each covering substantially the same matters with respect to the Registration Statement (and the Prospectus included therein) and, in the case of such accountants’ letter, with respect to events subsequent to the date of such financial statements, as are customarily covered in opinions of issuer’s counsel and in accountants’ letters delivered to the underwriters in underwritten public offerings of securities;

(g)  (i) notify each Holder of Registrable Securities subject to such Registration Statement if such Registration Statement, at the time it or any amendment thereto became effective, (x) contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading upon discovery by the Company of such material misstatement or omission or (y) upon discovery by the Company of the occurrence of any event as a result of which the Company believes that (1) there would be such a material misstatement or omission or (2) the Registration Statement would no longer be in compliance in all material respects with the applicable rules and regulations of the SEC, and, as promptly as practicable, prepare and file with the SEC a post-effective amendment to such Registration Statement and use its reasonable best efforts to cause such post-effective amendment to become effective such that such Registration Statement, as so amended, shall not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading or otherwise fail to be in compliance in all material respects with all applicable rules and regulations of the SEC, and (ii) notify each Holder of Registrable Securities subject to such Registration Statement, at any time when a Prospectus relating thereto is required to be

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delivered under the Securities Act, if the Prospectus included in such Registration Statement, as then in effect, (1) includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading or (2) or otherwise fail to be in compliance in all material respects with all applicable rules and regulations of the SEC upon discovery by the Company of such material misstatement or omission or upon discovery by the Company of the happening of any event as a result of which the Company believes there would be a material misstatement or omission or upon discovery of an event as a result of which the Prospectus would no longer be in compliance in all material respects with applicable rules and regulations of the SEC, and, as promptly as is practicable, prepare and furnish to such Holder a reasonable number of copies of a supplement to or an amendment of such Prospectus as may be necessary so that, as thereafter delivered to purchasers of such securities, such Prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading or otherwise fail to be in compliance in all material respects with all applicable rules and regulations of the SEC;

(h)  otherwise use its reasonable best efforts to comply with all applicable rules and regulations of the SEC, and make available to its security holders, as soon as reasonably practicable, an earnings statement of the Company complying with the provisions of Section 11(a) of the Securities Act and Rule 158 under the Securities Act;

(i)  notify each Holder of any Registrable Securities covered by such Registration Statement (i) when such Registration Statement, or any post-effective amendment to such Registration Statement, shall have become effective, or any amendment of or supplement to the Prospectus used in connection therewith shall have been filed, (ii) of any request by the SEC to amend such Registration Statement or to amend or supplement such Prospectus or for additional information, (iii) of the issuance by the SEC of any stop order suspending the effectiveness of such Registration Statement or of any order preventing or suspending the use of any preliminary prospectus or the initiation or threatening of any proceedings for any of such purposes, (iv) of the suspension of the qualification of such securities for offering or sale in any jurisdiction, or of the institution of any proceedings for any of such purposes and (v) if at any time when a Prospectus is to be required by the Securities Act to be delivered in connection with the sale of the Registrable Securities, the representations and warranties of the Company contained in any agreement (including the underwriting agreement contemplated in Section 3.5(b) below), to the knowledge of the Company, cease to be true and correct in any material respect;

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(j)  use its reasonable best efforts (i) (A) to list such securities on any securities exchange on which the Common Stock is then listed or, if no Common Stock is then listed, on an exchange selected by the Company, if such listing is then permitted under the rules of such exchange or (B) if such listing is not practicable or the Board determines that quotation as a NASDAQ National Market System security is preferable, to secure designation of such securities as a NASDAQ “national market system security” within the meaning of Rule 11Aa2-1 under the Exchange Act and (ii) to provide and cause to be maintained a transfer agent and registrar for such Registrable Securities not later than the effective date of such registration statement; and

(k)  use its reasonable best efforts to obtain the lifting of any stop order that might be issued suspending the effectiveness of such Registration Statement or any order preventing or suspending the use of any preliminary prospectus, provided that if the Company is unable to obtain the lifting of any such stop order in connection with a registration pursuant to Section 3.1(a) or Section 3.3, the request for registration shall not be deemed exercised for purposes of determining whether such registration has been effected for purposes of Section 3.1(a) or (d) or Section 3.3.

The Company may require each Holder of any Registrable Securities as to which any registration is being effected to furnish to the Company such information regarding such Holder and the distribution of such securities as the Company may from time to time reasonably request in writing and as shall be required by law in connection therewith.  Each such Holder agrees to furnish promptly to the Company all information required to be disclosed in order to make the information previously furnished to the Company by such Holder not materially misleading.

The Company agrees not to file or make any amendment to any Registration Statement with respect to any Registrable Securities, or any amendment of or supplement to the Prospectus used in connection therewith, which refers to any seller of any securities covered thereby by name, or otherwise identifies such seller as the holder of any securities of the Company, without the consent of such seller, such consent not to be unreasonably withheld, except that no such consent shall be required for any disclosure that is required by law.

By the acquisition of Registrable Securities, each Holder shall be deemed to have agreed that upon receipt of any notice from the Company pursuant to Section 3.4(g), such Holder will promptly discontinue such Holder’s disposition of Registrable Securities pursuant to the Registration Statement covering such Registrable Securities until such Holder shall have received, in the case of clause (i) of Section 3.4(g), notice from the Company that such Registration Statement has been amended, as contemplated by Section 3.4(g); or, in the case of clause (ii) of Section 3.4(g), copies of the supplemented

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or amended Prospectus contemplated by Section 3.4(g).  If so directed by the Company, each Holder will deliver to the Company (at the Company’s expense) all copies, other than permanent file copies, in such Holder’s possession of the Prospectus covering such Registrable Securities at the time of receipt of such notice.  In the event that the Company shall give any such notice, the period mentioned in Section 3.4(b) shall be extended by the number of days during the period from and including the date of the giving of such notice to and including the date when each seller of any Registrable Securities covered by such Registration Statement shall have received the copies of the supplemented or amended Prospectus contemplated by Section 3.4(g).

Although shares of Common Stock issuable upon the exercise of options and Warrants are included in the definition of Registrable Securities, the Company shall, in respect of any such Registrable Securities requested to be registered pursuant hereto, be required to include in any registration statement only shares of Common Stock issuable upon exercise of such options and Warrants and only if the Company has received assurances, reasonably satisfactory to it, that such options and Warrants will be exercised promptly after such registration statement has become effective or the sale to an underwriter has been consummated so that only Common Stock shall be distributed to the public under such registration statement.

3.5  Underwritten Offerings.  The provisions of this Section 3.5 do not establish additional registration rights but instead set forth procedures applicable, in addition to those set forth in Sections 3.1 through 3.4, to any registration that is an underwritten offering.

(a)  Underwritten Offerings Exclusive.  Whenever a registration requested pursuant to Section 3.1 or 3.3 is for an underwritten offering, only securities that are to be distributed by the underwriters may be included in the registration.

(b)  Underwriting Agreement.  If requested by the underwriters for any underwritten offering by Holders pursuant to a registration requested under Section 3.1 or 3.3, the Company shall enter into an underwriting agreement with such underwriters for such offering, such agreement to be reasonably satisfactory in substance and form to the Holders of a majority of the shares of Registrable Securities to be covered by such registration and to the underwriters and to contain such representations and warranties by the Company and such other terms and provisions as are customarily contained in agreements of this type, including, but not limited to, indemnities to the effect and to the extent provided in Section 3.8, provisions for the delivery of officers’ certificates, opinions of counsel and accountants’ “comfort” letters and hold-back arrangements.  The Holders of Registrable Securities to be distributed by such underwriters shall be parties to such underwriting agreement and may, at their option, require that any or all of the representations and warranties by, and the agreements on the part of, the Company to and for the benefit of such underwriters be made to and for the benefit of such Holders and

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that any or all of the conditions precedent to the obligations of such underwriters under such underwriting agreement shall also be conditions precedent to the obligations of such Holders.  If any condition to the obligations under such underwriting agreement are not met or waived, and such failure to be met or waived is not attributable to the fault of the  Holders requesting registration pursuant to Section 3.1(a) or Section 3.3, such request for registration shall not be deemed exercised for purposes of determining whether such registration has been effected for purposes of Section 3.1(a) or (d) or Section 3.3.  Notwithstanding anything in this Agreement to the contrary, no such Holder shall be required by the Company to make any representations or warranties to, or agreements with, or provide indemnities for the benefit of the Company or the underwriters other than as set forth in Sections 3.5(e) and 3.8(b), and representations, warranties or agreements regarding such Holder and such Holder’s intended method of distribution and any other representations required by applicable law.

(c)  Selection of Underwriters.  Whenever a registration requested pursuant to Section 3.1(a) or Section 3.3 is for an underwritten offering, the Company shall have the right to select one or more underwriters to administer the offering at least one of which shall be an underwriter of nationally recognized standing satisfactory to the Holders of a majority of shares of Registrable Securities to be included in such registration.  If the Company at any time proposes to register any of its securities under the Securities Act for sale for its own account and such securities are to be distributed by or through one or more underwriters, the Company shall have the right to select one or more underwriters to administer the offering at least one of which shall be an underwriter of nationally recognized standing.  In all cases in this Section 3.5(c), at least one of the underwriters chosen by the Holders or the Company shall be an underwriter of nationally recognized standing.

(d)  Incidental Underwritten Offerings.  Subject to the provisions of the proviso to the first sentence of Section 3.2, if the Company at any time proposes to register any of its equity securities under the Securities Act (other than pursuant to Sections 3.1 or 3.3 or pursuant to a Special Registration), whether or not for its own account, and such securities are to be distributed by or through one or more underwriters, the Company will give prompt written notice to all Holders of its intention to do so and, if requested by any Holder, will use its reasonable best efforts to arrange for such underwriters to include the Registrable Securities to be offered and sold by such holder among those to be distributed by such underwriters.  The Holders of Registrable Securities to be distributed by such underwriters shall be parties to the underwriting agreement between the Company and such underwriters and may, at their option, require that any or all of the representations and warranties by, and the other agreements on the part of, the Company to and for the benefit of such underwriters shall also be made to and for the benefit of such Holders and that any or all of the conditions precedent to the obligations of the underwriters under such underwriting agreement shall also be conditions precedent to the obligations of such Holders.  Notwithstanding anything in this Agreement to the contrary, no such Holder

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shall be required by the Company to make any representations or warranties to, or agreements with, the Company or the underwriters other than as set forth in Sections 3.5(e) and 3.8(b), representations, warranties or agreements regarding such Holder and such Holder’s intended method of distribution and any other representations required by applicable law.

(e)  Hold Back Agreements.  If and whenever the Company proposes to register any of its equity securities under the Securities Act, whether or not for its own account (other than pursuant to a Special Registration), or is required to use its reasonable best efforts to effect the registration of any Registrable Securities under the Securities Act pursuant to Section 3.1, 3.2 or 3.3, each Holder, if required by the managing underwriter in an underwritten offering, agrees by acquisition of such Registrable Securities not to effect (other than pursuant to such registration) any public sale or distribution, including, but not limited to, any sale pursuant to Rule 144 or Rule 144A, of any Registrable Securities, any other equity securities of the Company or any securities convertible into or exchangeable or exercisable for any equity securities of the Company during the 20 days prior to, and for 180 days (or such lesser number of days that the managing underwriter may require of any such Holder) after, the effective date of such registration, to the extent timely notified in writing by the Company or the managing underwriter, and the Company agrees to cause each holder of any equity security, or of any security convertible into or exchangeable or exercisable for any equity security, of the Company purchased from the Company at any time other than in a public offering to enter into a similar agreement with the Company.  The Company further agrees not to effect (other than pursuant to such registration or pursuant to a Special Registration) any public sale or distribution, or to file any Registration Statement (other than such registration or a Special Registration) covering any, of its equity securities, or any securities convertible into or exchangeable or exercisable for such securities, during the 20 days prior to, and for 180 days (or such lesser number of days that the managing underwriter may require) after, the effective date of such registration if required by the managing underwriter.

3.6  Preparation; Reasonable Investigation.  In connection with the preparation and filing of each Registration Statement registering Registrable Securities under the Securities Act, the Company shall give the Holders of such Registrable Securities to be registered and their underwriters, if any, and their respective counsel and accountants, the opportunity to participate in the preparation of such Registration Statement, each Prospectus included therein or filed with the SEC, and each amendment thereof or supplement thereto, and following the execution of a confidentiality agreement with the Company, shall give each of them such access to all pertinent financial, corporate and other documents and properties of the Company and its Subsidiaries, and such opportunities to discuss the business of the Company with its officers, directors, employees and the independent public accountants who have issued audit reports on its financial statements as shall be necessary, in the opinion of such Holders’ and such

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underwriters’ respective counsel, to conduct a reasonable investigation within the meaning of the Securities Act.

3.7  Other Registrations.  Notwithstanding any other provision of this Agreement to the contrary, if and whenever the Company is required to use its reasonable best efforts to effect the registration of any Registrable Securities under the Securities Act pursuant to Section 3.1, 3.2 or 3.3, and if such registration shall not have been withdrawn or abandoned, the Company shall not be obligated to and shall not file any Registration Statement with respect to any of its securities (including Registrable Securities) under the Securities Act (other than a Special Registration or a registration statement under the Securities Act on Form S-4), whether of its own accord or at the request or demand of any holder or holders of such securities, until a period of 180 days shall have elapsed from the effective date of its most recent prior effective registration, and the Company shall so provide in any registration rights agreement with respect to any of its equity securities.

3.8  Indemnification.

(a)  Indemnification by the Company.  In the event of any registration of any Registrable Securities under the Securities Act pursuant to Section 3.1, 3.2 or 3.3, the Company shall indemnify and hold harmless each seller of such securities, its directors, officers, partners (including partners of partners and stockholders and members of any such partners), managers or members or employees or agents of any of them, each other person who participates as an underwriter, broker or dealer in the offering or sale of such securities and each other person, if any, who controls such seller or any such participating person within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act (each a “Company Indemnified Party” and collectively, the “Company Indemnified Parties”), against any and all losses, claims, damages or liabilities, joint or several, to which any Company Indemnified Party may become subject under the Securities Act or otherwise (including, without limitation, the reasonable fees of legal counsel incurred in connection with any claim for indemnity hereunder), insofar as such losses, claims, damages or liabilities (or actions or proceedings in respect thereof) arise out of or are based upon (i) any untrue statement or alleged untrue statement of a material fact contained in any Registration Statement under which such securities were registered under the Securities Act, any Prospectus or preliminary prospectus included therein, or any amendment or supplement thereto, or (ii) any omission or alleged omission to state a material fact required to be stated in any such Registration Statement, Prospectus, preliminary prospectus, amendment or supplement or necessary to make the statements therein not misleading; and the Company shall reimburse each Company Indemnified Party for any legal or any other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, liability, action or proceeding as such expenses are incurred; provided that the Company shall not be liable in any such case to the extent that any such loss, claim, damage, liability or expense arises out of or is based

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upon an untrue statement or omission made in any such Registration Statement, Prospectus, preliminary prospectus, amendment or supplement in reliance upon and in conformity with written information furnished to the Company by such seller or participating person expressly for use in the preparation thereof and provided, further, that the Company shall not be liable in any such case to the extent that any such loss, claim, damage, liability or expense arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission in the Prospectus, if such untrue statement or alleged untrue statement or omission or alleged omission is completely corrected in an amendment or supplement to the Prospectus and the seller of Registrable Securities thereafter fails to deliver such Prospectus as so amended or supplemented prior to or concurrently with the sale of Registrable Securities to the person asserting such loss, claim, damage, liability or expense after the Company had furnished such seller within a reasonable period of time prior to such sale with a sufficient number of copies of the same or if the seller received notice from the Company within a reasonable period of time prior to such sale of the existence of such untrue statement or alleged untrue statement or omission or alleged omission and the seller continued to dispose of Registrable Securities prior to the time of the receipt of either (A) an amended or supplemented prospectus which completely corrected such untrue statement or omission or (B) a notice from the Company that the use of the existing Prospectus may be resumed.  Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of any Company Indemnified Party shall survive the transfer of such securities by such seller.

(b)  Indemnification by the Sellers.  In the event of any registration of any Registrable Securities under the Securities Act pursuant to Section 3.1, 3.2 or 3.3, each of the prospective sellers of such securities, severally and not jointly, will indemnify and hold harmless the Company, each director of the Company, each officer of the Company who shall sign such Registration Statement, and each other person, if any, who controls the Company or any such participating person within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, against any and all losses, claims, damages or liabilities, joint or several, to which the Company or any such director, officer, employee, participating person or controlling person may become subject under the Securities Act or otherwise (including, without limitation, the reasonable fees of legal counsel incurred in connection with any claim for indemnity hereunder), insofar as such losses, claims, damages or liabilities (or actions or proceedings in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact with respect to such seller contained in any Registration Statement under which such securities were registered under the Securities Act, any Prospectus or preliminary prospectus included therein, or any amendment or supplement thereto, or any omission or alleged omission to state a material fact with respect to such seller required to be stated in any such Registration Statement, Prospectus, preliminary prospectus, amendment or supplement or necessary to make the statements therein not misleading if such statement or omission was made in reliance upon and in conformity with written information furnished to the Company by such seller expressly for use in the preparation of any such

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Registration Statement, Prospectus, preliminary prospectus, amendment or supplement.  In no event, however, shall the liability of any seller of Registrable Securities for indemnification in its capacity as such exceed the lesser of (i) that proportion of the total of such losses, claims, damages or liabilities indemnified against that is equal to the proportion of the total securities sold under such registration statement which is being sold by such seller of Registrable Securities or (ii) the net proceeds received by such seller from its sale of Registrable Securities under such registration statement.  Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such seller or any such director, officer, employee, participating person or controlling person and shall survive the transfer of such securities by such seller.

(c)  Notices of Claims, etc.  Promptly after receipt by an indemnified party of notice of the commencement of any action or proceeding involving a claim referred to in the preceding paragraphs of this Section 3.8, such indemnified party shall, if a claim in respect thereof is to be made against an indemnifying party hereunder, give written notice to the latter of the commencement of such action, provided that the failure of any indemnified party to give notice as provided therein shall not relieve the indemnifying party of its obligations under the preceding paragraphs of this Section 3.8 unless and to the extent that the failure to provide prompt written notice shall cause actual prejudice to the indemnifying party.  In case any such action is brought against an indemnified party and it notifies the indemnifying party of the commencement thereof, the indemnifying party shall have the right to retain counsel reasonably satisfactory to such indemnified party to defend against such proceeding and shall pay the reasonable fees and disbursements of such counsel related to such proceeding.  In case any such action is brought against an indemnified party, the indemnifying party will be entitled to participate therein and to assume the defense thereof, jointly with any other indemnifying party similarly notified to the extent that it may wish, with counsel reasonably satisfactory to such indemnified party, and after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party will not be liable to such indemnified party for any legal or other expenses subsequently incurred by the latter in connection with the defense thereof, provided that if such indemnified party and the indemnifying party reasonably determine, based upon advice of their respective independent counsel, that a conflict of interest may exist between the indemnified party and the indemnifying party with respect to such action and that it is advisable for such indemnified party to be represented by separate counsel, such indemnified party may retain other counsel, reasonably satisfactory to the indemnifying party, to represent such indemnified party, and the indemnifying party shall pay all reasonable fees and expenses of such counsel.  Notwithstanding the foregoing, the indemnified party shall be entitled to participate in (but not direct) the defense of such action with counsel of its own choice and at its own expense, and the parties agree to cooperate fully with one another in connection with the defense and/or settlement thereof; provided, however, that subject to the next sentence, any decision to settle any such claim or litigation shall be at the indemnifying party’s sole discretion.  No indemnifying party,

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in the defense of any such claim or litigation, shall, except with the consent of such indemnified party, which consent shall not be unreasonably withheld, consent to entry of any judgment or enter into any settlement which (i) does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect to such claim or litigation or (ii) includes any admission of wrongdoing on the part of the indemnified party or any material restriction on the indemnified party or its officers or directors.

(d)  Other Indemnification.  Indemnification similar to that specified in the preceding paragraphs of this Section 3.8 (with appropriate modifications) shall be given by the Company and each seller of Registrable Securities with respect to any required registration or other qualification of such Registrable Securities under any federal or state law or regulation of governmental authority other than the Securities Act.

(e)  Other Remedies.  If for any reason the foregoing indemnity under Section 3.8(a) or (b) is unavailable, or is insufficient to hold harmless an indemnified party, other than by reason of the exceptions provided therein, then the indemnifying party and the indemnified party under Section 3.8(a) or (b) shall contribute to the amount paid or payable by the indemnified party as a result of such losses, claims, damages, liabilities or expenses (i) in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and the indemnified party on the other or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, or provides a lesser sum to the indemnified party than the amount hereinafter calculated, in such proportion as is appropriate to reflect not only the relative fault of the indemnifying party on the one hand and the indemnified party on the other but also the relative benefits received by the indemnifying party and the indemnified party from the offering of Registrable Securities (taking into account the portion of the proceeds of the offering realized by each such party) as well as any other relevant equitable considerations.  The relative benefits received by the Company, the sellers and the underwriters shall be deemed to be in the same respective proportions that the net proceeds from the offering (before deducting expenses) received by the Company and the sellers and the underwriting discount received by the underwriters, in each case as set forth in the table on the cover page of the applicable prospectus, bear to the aggregate public offering price of the Registrable Shares.  The relative fault of the Company, the sellers and the underwriters shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company, the sellers or the underwriters and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.  No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.  Any party’s obligation to contribute pursuant to this Section 3.8(e) is several (in proportion to the relative value of their Registrable Securities covered by a

23

registration statement) and not joint with the obligations of any other party.  No party shall be liable for contribution under this Section 3.8(e) except to the extent and under such circumstances as such party would have been liable to indemnify under this Section 3.8 if such indemnification were enforceable under applicable law.  Notwithstanding anything in this Section 3.8(e) to the contrary, no indemnifying party (other than the Company) shall be required pursuant to this Section 3.8(e) to contribute any amount in excess of the amount by which the net proceeds received by such indemnifying party from the sale of Registrable Securities in the offering to which the losses, claims, damages or liabilities of the indemnified parties relate exceeds the amount of any damages which such indemnifying party has otherwise been required to pay by reason of such untrue statement omission.

(f)  Officers and Directors.  As used in this Section 3.8, the terms “officers” and “directors” shall include the partners of Holders which are partnerships and the members of Holders which are limited liability companies.

4.  Miscellaneous.

4.1  Rule 144; Legended Securities; etc.

(a)  If the Company shall have filed a registration statement pursuant to Section 12 of the Exchange Act or a registration statement pursuant to the Securities Act relating to any class of equity securities (other than a registration statement pursuant to a Special Registration), the Company shall file the reports required to be filed by it under the Securities Act and the Exchange Act and the rules and regulations adopted by the SEC thereunder (or, if the Company is not required to file such reports, it will, upon the request of any Holder of Registrable Securities, make publicly available such information as necessary to permit sales pursuant to Rule 144 or Rule 145), and shall take such further action as any Holder may reasonably request, all to the extent required from time to time to enable such Holder to sell shares of Registrable Securities without registration under the Securities Act within the limitation of the exemptions provided by Rule 144 or Rule 145.  Upon the request of any Holder, the Company shall deliver to such Holder a written statement as to whether it has complied with such requirements.

(b)  The Company shall issue new certificates for Registrable Securities without a legend restricting further transfer if (i) such securities have been sold to the public pursuant to an effective Registration Statement under the Securities Act (other than on Form S-8 if the Holder of such Registrable Securities is an affiliate of the Company) or Rule 144, or (ii) (x) such issuance is otherwise permitted under the Securities Act, (y) the Holder of such shares has delivered to the Company an opinion of counsel, which opinion and counsel shall be reasonably satisfactory to the Company, to such effect and (z) the Holder of such shares expressly requests the issuance of such certificates in writing.

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4.2  Amendments and Waivers.  This Agreement may be amended, modified or supplemented, and the Company may take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company shall have obtained the written consent to such amendment, action or omission to act, of NCP-EH and the Holder or Holders of at least a majority of the Registrable Securities provided, however, that this Agreement may not be amended, modified or supplemented in a manner that discriminates against any class of Registrable Securities without the written consent of a majority of such class and the last sentence of Sections 3.5(b) and (d) shall not be amended, modified or supplemented without the written consent of each class of Registrable Securities affected thereby.  Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof with respect to a matter that relates exclusively to the rights of Holders whose securities are being sold pursuant to a Registration Statement and that does not directly or indirectly affect, impair, limit or compromise the rights of other Holders may be given by Holders of at least a majority of the Registrable Securities being sold by such Holders pursuant to such Registration Statement; provided, however, that the provisions of this sentence may not be amended, modified or supplemented except in accordance with the provisions of the immediately preceding sentence.  No amendment, modification or discharge of this Agreement, and no waiver hereunder, shall be valid or binding unless set forth in writing.  Any such waiver shall constitute a waiver only with respect to the specific matter described in such writing and shall in no way impair the rights of the party or parties granting such waiver in any other respect or at any other time.

4.3  Nominees for Beneficial Owners.  In the event that any Registrable Securities are held by a nominee for the beneficial owner thereof, the beneficial owner thereof may, at its election and unless notice is otherwise given to the Company by the record owner, be treated as the holder of such Registrable Securities for purposes of any request or other action by any Holder or Holders pursuant to this Agreement or any determination of any number or percentage of shares of Registrable Securities held by any Holder or Holders contemplated by this Agreement.  If the beneficial owner of any Registrable Securities so elects, the Company may require assurances reasonably satisfactory to it of such owner’s beneficial ownership of such Registrable Securities.

4.4  Successors, Assigns and Transferees.  This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns and transferees.

4.5  Notices.  All notices and other communications in connection with this Agreement shall be in writing.  Any notice or other communication in connection herewith shall be deemed duly given to any party (a) two Business Days after it is sent by express, registered or certified mail, return receipt requested, postage prepaid, (b) one Business Day after it is sent by overnight courier, (c) when delivered by hand, if personally delivered or (d) when receipt is acknowledged by the addressee, if telecopied.

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Notices shall be addressed, if to any Holder, to the address of such Holder in the record books of the Company, and if to the Company to the following address:

Equinox Holdings, Inc.
895 Broadway
New York, NY  10003
Telephone:	(212) 254-0437
Facsimile:	(212) 777-9510
Attention:	Chief Executive Officer
with a copy to:
Debevoise & Plimpton
875 Third Avenue
New York, NY  10022
Telephone:	(212) 909-6000
Facsimile:	(212) 909-6836
Attention:	Franci J. Blassberg, Esq.

or at such other address or addresses as the Company may have designated in writing to each Holder of Registrable Securities at the time outstanding.  Copies of any notice or other communication given under the Agreement shall also be given to:

North Castle Partners, L.L.C.
60 Arch Street, First Floor
Greenwich, CT  06830
Telephone:	(203) 618-1700
Facsimile:	(203) 618-1860
Attention:	Peter J. Shabecoff
Albion Alliance LLC
1345 Avenue of the Americas – 37th Floor
New York, NY  10105
Facsimile:	(212) 969-6659
Attention:	Andrew H. Steuerman
J.W. Childs Associates, L.P.
One Federal Street
Boston, MA  02110
Telephone:	(617) 753-1100
Facsimile:	(617) 753-1101
Attention:	Glenn A. Hopkins

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with copies to:

Debevoise & Plimpton
875 Third Avenue
New York, NY  10022
Telephone:	(212) 909-6000
Facsimile:	(212) 909-6836
Attention:	Franci J. Blassberg, Esq.
Kaye, Scholer, Fierman, Hays & Handler, LLP
425 Park Avenue
New York, New York 10022
Telephone:	(212) 836-8000
Facsimile:	(212) 836-8689
Attention:	Stephen C. Koval, Esq.
Goodwin Procter & Hoar LLP
Exchange Place
53 State Street
Boston, MA  02109
Facsimile:	(617) 523-1231
Attention:	Kevin M. Dennis, Esq.

Any party may give any notice or other communication in connection herewith using any other means (including, but not limited to, messenger service, telex or ordinary mail), but no such notice or other communication shall be deemed to have been duly given unless and until it is actually received by the individual for whom it is intended.

4.6  No Inconsistent Agreements.  The Company shall not hereafter enter into any agreement, or amend any existing agreement, with respect to its securities if such agreement would be inconsistent with the rights granted to the Holders by this Agreement.

4.7  Remedies; Attorneys’ Fees.  Each Holder in addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, shall be entitled to specific performance of its rights under this Agreement.  The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of any provision of this Agreement and hereby agrees to waive the defense in any action for specific performance that a remedy at law would be adequate.  As between the parties to this Agreement, in any action or proceeding brought to enforce any provision of this Agreement, or where any provision hereof is validly asserted as a defense, the successful party shall be entitled to recover

27

reasonable attorney’s fees in addition to its costs and expenses and any other available remedy.

4.8  Stock Splits, etc.  Each party hereto or beneficiary hereof agrees that it will vote to effect a stock split (forward or reverse, as the case may be) with respect to any Registrable Securities in connection with any registration of such Registrable Securities hereunder, or otherwise, if the managing underwriter shall advise the Company in writing (or, in connection with an offering that is not underwritten, if an investment banker shall advise the Company in writing) that in their or its opinion such a stock split would facilitate or increase the likelihood of success of the offering.  Each party hereto agrees that any number of shares of Common Stock referred to in this Agreement shall be equitably adjusted to reflect any stock split, stock dividend, stock combination, recapitalization or similar transaction.

4.9  Severability.  If any clause, provision or section of this Agreement shall be invalid, illegal or unenforceable, the invalidity, illegality or unenforceability of such clause, provision or section shall not affect the enforceability or validity of any of the remaining clauses, provisions or sections hereof to the extent permitted by applicable law.  The invalidity of any one or more phrases, sentences, clauses, Sections or subsections of this Agreement shall not affect the remaining portions of this Agreement.

4.10  Headings.  The headings contained in this Agreement are for purposes of convenience only and shall not affect the meaning or interpretation of this Agreement.

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

4.12  Governing Law.  This Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without giving effect to its principles or rules of conflict of laws that would require the application of the laws of any other jurisdiction.

4.13  No Third Party Beneficiaries.  Except as provided in Sections 3.8 and 4.4, nothing in this Agreement shall confer any rights upon any person or entity other than the parties hereto, each such party’s respective successors and permitted assigns.

4.14  Consent to Jurisdiction.  Each party irrevocably submits to the personal exclusive jurisdiction of the United States District Court for the Southern District of New York for the purposes of any suit, action or other proceeding arising out of this Agreement or any transaction contemplated hereby (and, to the extent permitted under applicable rules of procedure, agrees not to commence any action, suit or proceeding relating hereto except in such court).  Each party further agrees that service of any

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process, summons, notice or document hand delivered or sent by registered mail to such party’s respective address set forth in Section 4.5 will be effective service of process for any action, suit or proceeding in New York with respect to any matters to which it has submitted to jurisdiction as set forth in the immediately preceding sentence.  Each party irrevocably and unconditionally waives any objection to the laying of venue of any action, suit or proceeding arising out of this Agreement or the transactions contemplated hereby in the United States District Court for the Southern District of New York, and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in such court that any such action, suit or proceeding brought in such court has been brought in an inconvenient forum.

4.15  Waiver of Jury Trial.  EACH PARTY HERETO AND EACH PERSON CLAIMING THE BENEFITS OF ANY PROVISION HEREOF HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

4.16  Action by Co-Investment Fund.  The Co-Investment Fund will not take any action under this Agreement unless such action is consistent with the actions of NCP and will act in concert with NCP with respect to all actions taken by NCP hereunder, including, without limitation, approving amendments to this Agreement.

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IN WITNESS WHEREOF, each of the undersigned has executed this Agreement or caused this Agreement to be executed on its behalf as of the date first written above.

EQUINOX HOLDINGS, INC.
By:	/s/  Adam Saltzman
	Name: Adam Saltzman
	Title: Vice President
NCP-EH, L.P.
By:	NCP-EH GP, L.L.C.,
	its General Partner
	By:	/s/  Adam Saltzman
		Name: Adam Saltzman
		Title: Executive Vice President

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ALBION ALLIANCE MEZZANINE FUND, L.P.
By:  Albion Alliance LLC, its General Partner
By:	/s/  Andrew H. Steuerman
	Name:  Andrew H. Steuerman
	Title:  Senior Vice President
ALBION ALLIANCE MEZZANINE FUND, II, L.P.
By:  AA MEZZ II GP, LLC, its General Partner
By:  Albion Alliance LLC, its Sole Member
By:	/s/  Andrew H. Steuerman
	Name:  Andrew H. Steuerman
	Title:  Senior Vice President

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DEUTSCHE BANK SECURITIES INC.
By:	/s/  Edwin E. Roland, Jr.
	Name: Edwin E. Roland, Jr.
	Title:  Director
By:	/s/ David J. Flannery
	Name:  David J. Flannery
	Title:  Managing Director

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EXETER CAPITAL PARTNERS IV, L.P.
By:	Exeter IV Advisors, L.P., its
	General Partner
By:	Exeter IV Advisors, Inc., its
	General Partner
By:	/s/  Authorized Signatory
	Name:
	Title:
EXETER EQUITY PARTNERS, L.P.
By:	Exeter Equity Advisors, L.P., its
	General Partner
By:	Exeter Equity Advisors, Inc., its
	General Partner
By:	/s/  Authorized Signatory
	Name:
	Title:

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BILL AND MELINDA GATES FOUNDATION
By:	/s/  Robert Sydow
	Name:	Robert Sydow
	Title:	Authorized Agent
ARROW INVESTMENT PARTNERS
By:	/s/  Robert Sydow
	Name:	Robert Sydow
	Title:	Authorized Agent

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DONATO ERRICO, JR.

/s/  Donato Errico, Jr.

VITO ERRICO

/s/  Vito Errico

LAVINIA ERRICO (JR.)

/s/  Lavinia Errico Jr.

DONATO ERRICO, SR.

/s/  Donato Errico, Sr.

LAVINIA ERRICO (SR.)

/s/  Lavinia Errico Sr.

HARVEY SPEVAK

/s/  Harvey Spevak

RAKESH AHUJA

/s/  Rakesh Ahuja

TERRI BIALSKY

/s/  Terri Bialsky

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FRANCES ERRICO

/s/  Frances Errico

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/s/ Paul Boardman

Paul Boardman

/s/ Catherine Cassidy

Catherine Cassidy

/s/ Matthew Colello

Matthew Colello

/s/ Robert Condon

Robert Condon

/s/ Rocco Greco

Rocco Greco

/s/ Ken Fleischer

Ken Fleischer

/s/ Judy Taylor

Judy Taylor

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EX-10.4

Exhibit 10.4

CONSULTING AGREEMENT

This CONSULTING AGREEMENT, dated as of December 15, 2000 (the “Agreement”), by and between Equinox Holdings, Inc., a Delaware corporation (the “Company”), North Castle Partners, L.L.C., a Delaware limited liability company (“North Castle”), and J.W. Childs Associates, L.P., a Delaware limited partnership (“JWC Associates”) and J.W. Childs Advisors II, L.P., a Delaware limited partnership (“JWC Advisors” and, together with JWC Associates, “Childs”).

W I T N E S S E T H:

WHEREAS, the Company, NCP-EH, L.P., a Delaware limited partnership, (“NCP-EH”) and NCP-EH Recapitalization Corp., a Delaware corporation (the “MergerCo”), have entered into an Amended and Restated Stock Purchase Agreement and Plan of Merger, dated as of October 16, 2000 and amended as of December 14, 2000 (the “Recapitalization Agreement”), pursuant to which (i) NCP-EH will purchase (the “Stock Purchase”) up to 7,043,213 shares of common stock, par value $.01 per share, of the Company (the “Common Stock”) and (ii) MergerCo shall merge with and into the Company (the “Merger” and, collectively with the Stock Purchase, the “Transactions”), and

WHEREAS, immediately following the Transactions, NCP-EH will be the largest stockholder of the Company and NCP Co-Investment Fund, L.P. (the “Co-Investment Fund”) will be a stockholder of the Company;

WHEREAS, one of the two general partners of NCP-EH is NCP-EH GP, L.L.C. (“NCP-EH GP”), the sole member of NCP-EH GP is North Castle Partners II, L.P. (the “North Castle Fund”), the North Castle Fund is managed by North Castle, the general partner of the North Castle Fund is NCP-GP II, L.P. (“NCP-GP II”), the general partner of NCP-GP II is North Castle GP II, L.L.C. (“NCP-GP LLC”) and the general partner of the Co-Investment Fund is NCP Co-Investment GP, LLC (“Co-Investment GP”);

WHEREAS, one of the two general partners of NCP-EH is JWC-EH, LLC (“JWC GP”), the sole member of JWC GP is J.W. Childs Equity Partners II, L.P. (the “JWC Fund”), the general partner of the JWC Fund is JWC Advisors and the JWC Fund is managed by JWC Associates;

WHEREAS, in order to finance the Transactions, the Company has entered into (i) the Credit Agreement, dated as of December 15, 2000, among Company, the various lenders from time to time party thereto and Bankers Trust Company, as Administrative Agent, and (ii) the Senior Subordinated Note and Warrant Purchase Agreement, dated as of December 15, 2000, among the Company, various purchasers named therein, Albion Alliance Mezzanine Fund LP, Albion Alliance Mezzanine Fund II LP, Deutsche Bank

Securities Inc., Exeter Capital Partners IV, L.P., Exeter Equity Partners, L.P., Bill and Melinda Gates Foundation and Arrow Investment Partners (each as amended from time to time, collectively, the “Financing”);

WHEREAS, North Castle and Childs have performed financial, management advisory and other services (the “Transaction Services”) for the Company and MergerCo in connection with the Transactions, including but not limited to services in connection with (i) the preparation, negotiation, execution and delivery of the Recapitalization Agreement and the other agreements, instruments and documents contemplated by the Recapitalization Agreement, (ii) the retention of various financial and other advisors and consultants in connection with the Merger and the Stock Purchase, (iii) the preparation, negotiation, execution and delivery of the commitment, fee and engagement letters, and credit agreements, guarantees, mortgages, pledge agreements and other security agreements, and other agreements, instruments and documents, relating to the Financing, (iv) the preparation and circulation of materials in connection with the Financing and (v) the structuring, implementation and consummation of the foregoing Transactions;

WHEREAS, the Company and its affiliates from time to time in the future (a)  may offer and sell or cause to be offered and sold equity or debt securities (such offerings, collectively, the “Subsequent Offerings”), including without limitation (i) offerings of shares of common stock and/or options to purchase such shares to employees, directors, managers and consultants of and to the Company (“Management Offerings”), and (ii) offerings of debt securities to refinance any indebtedness of the Company and its affiliates or for other corporate purposes, and (b) may repurchase, redeem or otherwise acquire securities of the Company and its affiliates (any such repurchase or redemption being referred to herein as a “Redemption”);

WHEREAS, the Company desires to receive financial and managerial advisory services from North Castle and Childs, and North Castle and Childs desire to provide such services to the Company;

WHEREAS, the parties hereto recognize that claims might be made against and liabilities incurred by North Castle, NCP-EH, NCP-EH GP, the North Castle Fund, the Co-Investment Fund, NCP-GP II, NCP-GP LLC, Co-Investment GP, JWC Advisors, JWC Associates, JWC Fund and JWC GP or related persons or affiliates, under applicable securities laws or otherwise, in connection with the Transactions, the Financing or any Securities Offerings, or relating to other actions or omissions of or by the Company, or relating to the provision by North Castle of services to the Company and its affiliates, and the parties hereto accordingly wish to provide for North Castle, NCP-EH, NCP-EH GP, the North Castle Fund, the Co-Investment Fund, NCP-GP II, NCP-GP LLC, Co-Investment GP, JWC Advisors, JWC Associates, JWC Fund and JWC GP and related persons and affiliates to be indemnified in respect of any such claims and liabilities;

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WHEREAS, the parties hereto recognize that claims might be made against and liabilities incurred by directors and officers of the Company and its subsidiaries in connection with their acting in such capacity, and accordingly wish to provide for such directors and officers to be indemnified to the fullest extent permitted by law in respect of such claims and liabilities; and

NOW, THEREFORE, in consideration of the premises and the respective agreements hereinafter set forth and the mutual benefits to be derived herefrom, the parties hereto hereby agree as follows:

1.Definitions.

“Agreement” shall have the meaning as set forth in the preamble.

“Recapitalization Agreement” shall have the meaning as set forth in the recitals.

“Childs” shall have the meaning as set forth in the preamble.

“Claim” means, with respect to any Indemnitee, any claim against such Indemnitee involving any Obligation with respect to which such Indemnitee may be entitled to be defended and indemnified by the Company under this Agreement.

“Company” shall have the meaning as set forth in the preamble.

“Indemnitee” means each of North Castle, NCP-EH, NCP-EH GP, the North Castle Fund, the Co-Investment Fund, NCP-GP II, NCP-GP LLC, Co-Investment GP, JWC Associates, JWC Advisors, JWC GP and JWC Fund, their respective successors and assigns, and each of their respective directors, officers, partners, members, managers, employees, agents, advisors, representatives and controlling persons (within the meaning of the Securities Act of 1933, as amended (the “Securities Act”)).

“Financing” shall have the meaning as set forth in the recitals.

“Management Offerings” shall have the meaning as set forth in the recitals.

“Merger” shall have the meaning as set forth in the recitals.

“NCP-EH” shall have the meaning as set forth in the recitals.

“NCP-EH GP” shall have the meaning as set forth in the recitals.

“NCP-GP II” shall have the meaning as set forth in the recitals.

“NCP-GP LLC” shall have the meaning as set forth in the recitals.

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“North Castle” shall have the meaning as set forth in the preamble.

“North Castle Fund” shall have the meaning as set forth in the recitals.

“Obligations” means, collectively, any and all claims, obligations, liabilities, causes of actions, actions, suits, proceedings, investigations, judgments, decrees, losses, damages, fees, costs and expenses (including without limitation interest, penalties and reasonable fees and disbursements of attorneys, accountants, investment bankers and other professional advisors), in each case whether incurred, arising or existing with respect to third parties or otherwise at any time or from time to time.

“Person” means any individual, partnership, joint venture, corporation, limited liability company, trust, unincorporated organization or other entity.

“Related Document” means any agreement, certificate, instrument or other document to which the Company or any subsidiary thereof may be a party or by which it or any of its properties or assets may be bound or affected from time to time relating in any way to the Transactions, the Financing, any Securities Offering or any of the transactions contemplated thereby.

“Redemption” shall have the meaning as set forth in the recitals.

“Securities Offerings” means any Redemption, any Management Offering and any other Subsequent Offering, in each case as approved by the Board of Directors of the Company.

“Subsequent Offerings” shall have the meaning as set forth in the recitals.

“Subsidiary or Subsidiaries”  means each corporation or other Person in which a Person owns or controls, directly or indirectly, capital stock or other equity interests representing more than 50% of the outstanding voting stock or other equity interests.

“Stock Purchase” shall have the meaning as set forth in the recitals.

“Transactions” shall have the meaning as set forth in the recitals.

“Transaction Services” shall have the meaning as set forth in the recitals.

2.Engagement.  The Company hereby engages North Castle and Childs as consultants, and North Castle and Childs hereby agree to provide financial and managerial advisory services to the Company, all on the terms and subject to the conditions set forth below.

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3.Services, etc.

(a)North Castle and Childs hereby agree during the term of this Agreement to assist, advise and consult with the Board of Directors and management of the Company in such manner and on such business, management and financial matters, and provide such other financial and other advisory services (collectively, the “Continuing Services”), as may be reasonably requested from time to time by the Board of Directors of the Company, including but not limited to assistance, advice or consultation in:

(i)establishing and maintaining banking, legal and other business relationships for the Company;

(ii)developing and implementing corporate and business strategy and planning for the Company, including plans and programs for improving operating, marketing and financial performance, budgeting of future corporate investments, acquisition and divestiture strategies, and reorganizational programs;

(iii)arranging future debt and equity financings and refinancings; and

(iv)providing professional employees to serve as directors or officers of the Company.

(b)The Company will furnish North Castle and Childs with such information as North Castle and Childs reasonably believe appropriate to their engagement hereunder (all such information so furnished being referred to herein as the “Information”).  The Company recognizes and confirms that (i) North Castle and Childs will use and rely primarily on the Information and on information available from generally recognized public sources in performing the services to be performed hereunder and (ii) North Castle and Childs do not assume responsibility for the accuracy or completeness of the Information and such other information.

4.Compensation; Expenses.

(a)The Company agrees to pay to North Castle and Childs (i) concurrent with the execution of this Agreement, as compensation for the Transaction Services, a fee of $2,700,000 in the aggregate, two-thirds of which shall be delivered to North Castle and the balance to Childs and (ii) upon the closing date of each acquisition (by merger, asset acquisition or otherwise) by the Company or any of its Subsidiaries subsequent to the Transactions (a “Subsequent Acquisition”), for services in connection with any such Subsequent Acquisition, a fee of 1% of the aggregate Transaction Value (as defined below) of each such Subsequent Acquisition.

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(b)The Company agrees to pay North Castle and Childs a fee of $200,000 in the aggregate, one-half of which shall be delivered to North Castle and the balance to Childs (50% of such balance to be paid to JWC Advisors and 50% of such balance to be paid to JWC Associates) in the event that any Escrowed Shares (as defined in the Recapitalization Agreement) are distributed in accordance with Section 2.11(i) of the Recapitalization Agreement.

(c)The Company agrees to pay to North Castle and Childs, as compensation for the Continuing Services rendered and to be rendered by North Castle and Childs Associates hereunder, an annual fee (the “Continuing Services Fee”), equal to $800,000 in the aggregate payable semi-annually in advance (not to exceed $400,000 for each semi-annual period) on the date hereof and on each January 31 and July 31 thereafter during the term of this Agreement, commencing on July 31, 2001, provided that the amount payable on the date hereof shall be pro rated through July 31, 2001 and shall be $500,000.  Such Continuing Service Fee shall be delivered to North Castle and Childs on a pro rata basis in accordance with the Percentage Interests of the Investor associated with North Castle or Childs (as defined in the Amended and Restated Limited Partnership Agreement of NCP-EH, L.P. dated as of December 15, 2000) (with respect to Childs’ portion of the Continuing Services Fee, the first $240,000 ($120,000 on a semi-annual basis) of such portion shall be paid to JWC Associates and the remaining amount (on a semi-annual basis) shall be paid to JWC Advisors).  Such Continuing Services Fee may be increased but may not be decreased without the prior written consent of North Castle and Childs.  If any employee of North Castle or Childs shall be elected to serve on the Board of Directors or as an officer of the Company (a “Designated Director”), in consideration of the Continuing Services Fee being paid to North Castle or Childs, North Castle and Childs shall cause such Designated Director to waive any and all fees and other compensation (including stock options) to which such director or officer would otherwise be entitled as a director or officer for any period for which the Continuing Services Fee or any installment thereof is paid and for which such Designated Director continues to be employed by North Castle or Childs.

(d)The Company agrees to reimburse North Castle and Childs for such travel and other reasonable out-of-pocket expenses (“Expenses”) incurred by North Castle and Childs and their respective employees, agents and advisors in the course or on account of the rendering of Continuing Services, including but not limited to any reasonable fees and expenses of legal, accounting, consulting or other professional advisors to North Castle and Childs engaged in connection with the Continuing Services and any reasonable expenses incurred by any Designated Director in connection with the performance of his duties as a director or officer of the Company or any Subsidiary thereof.  North Castle and Childs may submit monthly expense statements, which shall be payable within thirty days from the date of such submission.

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(e)“Transaction Value” means the total consideration paid in any Subsequent Acquisition (and not subsequently returned) in any combination of (without duplication) cash, notes, stock or other property, including deferred payments, and the face value of any indebtedness (including any deferred purchase price or capital lease obligation) assumed, issued or exchanged in connection therewith.

5.Term, etc.

(a)This Agreement shall be in effect until, and shall terminate upon, the earlier of (i) the tenth anniversary of the date hereof and (ii) an authorization by the board of directors of the Company to terminate this Agreement.  The provisions of this Agreement shall survive any termination of this Agreement, except for the provisions of Sections 2, 3 and 4.

(b)Upon any consolidation, reorganization, merger, recapitalization of the Company or any conveyance, transfer or lease of all or substantially all of the assets of the Company, the successor corporation formed by such consolidation or into which the Company is merged or to which such conveyance, transfer or lease is made shall, if NCP-EH or its designee shall own at least one-third of the outstanding voting capital stock of such successor entity, succeed to, and be substituted for, the Company under this Agreement with the same effect as if such successor entity had been a party hereto.  Any other consolidation, merger or conveyance, transfer or lease or all or substantially all of the assets of the Company shall have the effect of terminating this Agreement to the same effect as set forth in the second sentence of Section 5(a).

6.Independent Contractor Status.  The parties agree that North Castle and Childs shall perform services hereunder as an independent contractor, retaining control over and responsibility for its own operations and personnel.  Neither North Castle nor Childs nor any of their respective employees or agents shall, solely by virtue of this Agreement or the arrangements hereunder, be considered employees or agents of the Company nor shall any of them have authority to contract in the name of or bind the Company, except (a) to the extent that any professional employee of North Castle or Childs may be serving as a director or officer of the Company pursuant to Section 3(a)(iv) hereof or (b) as expressly agreed to in writing by the Company.

7.Indemnification.  The Company agrees to indemnify, defend and hold harmless each Indemnitee:

(a)from and against any and all Obligations, whether incurred with respect to third parties or otherwise, in any way resulting from, arising out of or in connection with, based upon or relating to (i) the Securities Act, the Securities Exchange Act of 1934, as amended, or any other applicable securities or other laws, in connection with any Securities Offering, any Related Document or any of the transactions contemplated

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thereby, (ii) any other action or failure to act of the Company and its subsidiaries or any of its predecessors, whether such action or failure has occurred or is yet to occur or (iii) except to the extent that any such Obligation is found in a final judgment by a court of competent jurisdiction to have resulted from the gross negligence or intentional misconduct of North Castle and Childs, the performance by North Castle and Childs of management consulting, monitoring, financial advisory or other services for the Company (whether performed prior to the date hereof, hereafter, pursuant hereto or otherwise); and

(b)to the fullest extent permitted by applicable law, from and against any and all Obligations in any way resulting from, arising out of or in connection with, based upon or relating to (i) the fact that such Indemnitee is or was a shareholder, director or officer of the Company or is or was serving at the request of the Company as a director, officer, employee or agent of or advisor or consultant to another corporation, partnership, joint venture, trust or other enterprise, or (ii) any breach or alleged breach by such Indemnitee of his or her fiduciary duty as a shareholder, director or officer of the Company;

in each case including but not limited to any and all fees, costs and expenses (including without limitation reasonable fees and disbursements of attorneys) incurred by or on behalf of any Indemnitee in asserting, exercising or enforcing any of its rights, powers, privileges or remedies in respect of this Agreement.

8.Contribution.

(a)If for any reason the indemnity provided for in Section 7 is unavailable or is insufficient to hold harmless any Indemnitee from any of the Obligations covered by such indemnity, then the Company shall contribute to the amount paid or payable by such Indemnitee as a result of such Obligation in such proportion as is appropriate to reflect (i) the relative fault of the Company, on the one hand, and such Indemnitee, on the other, in connection with the state of facts giving rise to such Obligation, (ii) if such Obligation results from, arises out of, is based upon or relates to the Transactions, the Financing or any Securities Offering, the relative benefits received by the Company, on the one hand, and such Indemnitee, on the other, from the Transactions, the Financing or Securities Offering, and (iii) if required by applicable law, any other relevant equitable considerations.

(b)For purposes of Section 8(a), the relative fault of the Company, on the one hand, and of the Indemnitee, on the other, shall be determined by reference to, among other things, their respective relative intent, knowledge, access to information and opportunity to correct the state of facts giving rise to such Obligation.  For purposes of Section 8(a), the relative benefits received by the Company, on the one hand, and the Indemnitee, on the other, shall be determined by weighing the direct monetary proceeds

8

to the Company, on the one hand, and such Indemnitee, on the other, from the Transactions, the Financing or Securities Offering.

(c)The parties hereto acknowledge and agree that it would not be just and equitable if contributions pursuant to Section 8(a) were determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to in such Section.  The Company shall not be liable under Section 8(a) for contribution to the amount paid or payable by any Indemnitee except to the extent and under such circumstances that the Company would have been liable to indemnify, defend and hold harmless such Indemnitee under Section 7, if such indemnity were enforceable under applicable law.  No Indemnitee shall be entitled to contribution from the Company with respect to any Obligation in the event that such Indemnitee is finally determined to be guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) in connection with such Obligation and the Company is not guilty of such fraudulent misrepresentation.

9.Indemnification Procedures.

(a)Whenever any Indemnitee shall have actual knowledge of the reasonable likelihood of the assertion of a Claim, North Castle and Childs (acting on their own behalf or, if requested in writing by any such Indemnitee other than itself, on behalf of such Indemnitee) or such Indemnitee shall notify the Company in writing of the Claim (the “Notice of Claim”) with reasonable promptness after such Indemnitee has such knowledge relating to such Claim and has notified North Castle and Childs thereof.  The Notice of Claim shall specify all material facts known to North Castle and Childs (or if given by such Indemnitee, such Indemnitee) that may give rise to such Claim and the monetary amount or an estimate of the monetary amount of the Obligation involved if North Castle and Childs (or if given by such Indemnitee, such Indemnitee) has knowledge of such amount or a reasonable basis for making such an estimate.  The failure of North Castle and Childs or such Indemnitee to give such Notice of Claim shall not relieve the Company of its indemnification obligations under this Agreement unless such omission results in a failure of actual notice to the Company and then only to the extent that the Company is prejudiced as a result of the failure to give such Notice of Claim.  The Company shall, at its expense, undertake the defense of such Claim with attorneys of its own choosing reasonably satisfactory both to North Castle and Childs and to any Indemnitee that, in the exercise of such Indemnitee’s good faith judgment, reasonably determines that the Claim presents no actual or potential conflict of interest with North Castle and Childs.  North Castle and Childs may participate in such defense with counsel of North Castle’s and Childs’ choosing at the expense of the Company.  If in the exercise of their good faith judgment any one or more other Indemnitee reasonably determines that the Claim presents no actual or potential conflict of interest with North Castle and Childs, such Indemnitee or Indemnitees may participate in the defense of the Claim with one counsel for all such Indemnitees, at the choosing of such Indemnitees and

9

at the expense of the Company.  In the event that the Company does not undertake the defense of the Claim within a reasonable time after North Castle and Childs have given the Notice of Claim, or in the event that North Castle and Childs shall in good faith determine that the defense of any claim by the Company is inadequate or may conflict with the interests of any Indemnitee, North Castle and Childs may, at the expense of the Company and after giving notice to the Company of such action, undertake the defense of the Claim and compromise or settle the Claim, all for the account of and at the risk of the Company.  In the defense of any Claim, the Company shall not, except with the consent of North Castle and Childs (or, in the case of any entry of any judgment or settlement that is binding on any other Indemnitee, such other Indemnitee), consent to entry of any judgment or enter into any settlement that includes any injunctive or other non-monetary relief, or that does not include as an unconditional term thereof the giving by the person or persons asserting such Claim to such Indemnitee of a release from all liability with respect to such Claim.  In each case, North Castle and Childs and each other Indemnitee seeking indemnification hereunder will cooperate with the Company, so long as the Company is conducting the defense of the Claim, in the preparation for and the prosecution of the defense of such Claim, including making available evidence within the control of North Castle and Childs or such Indemnitee, as the case may be, and persons needed as witnesses who are employed by North Castle and Childs or such Indemnitee, as the case may be, in each case as reasonably needed for such defense and at cost, which cost, to the extent reasonably incurred, shall be paid by the Company.

(b)The Company hereby agrees to advance costs and expenses, including reasonable attorney’s fees, incurred by North Castle and Childs (acting on their own behalf or, if requested by any such Indemnitee other than themselves, on behalf of such Indemnitee) or any Indemnitee in defending any Claim in advance of the final disposition of such Claim upon receipt of an undertaking by or on behalf of North Castle and Childs or such Indemnitee to repay amounts so advanced if it shall ultimately be determined that North Castle and Childs or such Indemnitee is not entitled to be indemnified by the Company as authorized by this Agreement.

(c)Each Indemnitee shall notify the Company in writing of the amount of any Claim actually paid by such Indemnitee (the “Notice of Payment”).  The amount of any Claim actually paid by an Indemnitee shall bear simple interest at the rate equal to the Banker’s Trust prime rate as of the date of such payment plus 2% per annum, from the date the Company receives the Notice of Payment to the date on which the Company shall repay the amount of such Claim plus interest thereon to such Indemnitee.

10.Certain Covenants.  The Company agrees to perform its obligations under this Agreement.  The rights of each Indemnitee to be indemnified under any other agreement, document, certificate or instrument or applicable law are independent of and in addition to any rights of such Indemnitee to be indemnified under this Agreement.  The rights of each Indemnitee and the obligations of the Company hereunder shall remain in

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full force and effect regardless of any investigation made by or on behalf of such Indemnitee.  The Company shall implement and maintain in full force and effect any and all corporate articles or charter and by-law provisions that may be necessary or appropriate to enable it to carry out its obligations hereunder to the fullest extent permitted by applicable law, including without limitation a provision of its articles or certificate of incorporation eliminating liability of a director for breach of fiduciary duty to the fullest extent permitted by applicable law, as it may be amended from time to time.

11.Third-Party Beneficiaries.  All Indemnitees not signatories to this Agreement are intended third-party beneficiaries of this Agreement.

12.Severability.  If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions hereof shall not in any way be affected or impaired thereby.

13.Notices. All notices, requests, demands, waivers and other communications required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been duly given if (a) delivered personally, (b) mailed, certified or registered mail with postage prepaid, (c) sent by next-day or overnight mail or delivery or (d) sent by fax, with a copy sent by (a), (b), or (c) above, or telegram, as follows:

If to the Company, to:
Equinox Holdings, Inc.
895 Broadway
New York, NY 10003
Telephone: (212) 677-0180
Fax:	(212) 777-9510
Attention: President
If to North Castle or any other Indemnitee that is an affiliate of North Castle, to:
North Castle Partners, L.L.C.
60 Arch Street
Greenwich, CT  06830
Telephone: (203) 862-3200
Fax:	(203) 618-1860
Attention:  Peter J. Shabecoff
with a copy to:
Debevoise & Plimpton
875 Third Avenue

11

New York, New York  10022

Telephone: (212) 909-6000

Facsimile:  (212) 909-6836

Attention:  Franci J. Blassberg, Esq.

If to Childs or any Indemnitee that is an affiliate of Childs, to:

J.W. Childs Associates, L.P.

One Federal Street

Boston, MA 02110

Telephone: (617) 753-1100

Facsimile:  (617) 753-1101

Attention:  Glenn A. Hopkins

with a copy to:

Kaye, Scholer, Fierman, Hays & Handler, LLP

425 Park Avenue

New York, New York 10022

Telephone: (212) 836-8000

Facsimile:  (212) 836-8689

Attention:  Stephen C. Koval, Esq.

or, in each case, at such other address as may be specified in writing to the other parties hereto.

All such notices, requests, demands, waivers and other communications shall be deemed to have been received (w) if by personal delivery on the day after such delivery, (x) if by certified or registered mail, on the seventh business day after the mailing thereof, (y) if by next-day or overnight mail or delivery, on the day delivered, (z) if by telecopy, on the next day following the day on which such telecopy was sent, provided that a copy is also sent by certified or registered mail.

14.Entire Agreement.  This Agreement (a) contains the complete and entire understanding and agreement of North Castle, Childs and the Company with respect to the subject matter hereof and (b) supersedes all prior and contemporaneous understandings, conditions and agreements, oral or written, express or implied, in respect of the subject matter hereof, including but not limited to in respect of the engagement of North Castle and Childs in connection with the subject matter hereof.  There are no representations or warranties of North Castle and Childs in connection with this Agreement or the services to be provided hereunder, except as expressly made and contained in this Agreement.

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15.Headings.  The headings contained in this Agreement are for purposes of convenience only and shall not affect the meaning or interpretation of this Agreement.

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

17.Binding Effect; Assignment.  This Agreement shall be binding upon and inure to the benefit of the parties to this Agreement and their respective successors and permitted assigns and to each Indemnitee and their respective successors, heirs and permitted assigns, provided that, neither North Castle, nor Childs nor the Company may assign any of its rights or obligations under this Agreement without the express written consent of the other parties hereto.  Subject to Sections 11 and 21, this Agreement is not intended to confer any right or remedy upon any person other than the parties to this Agreement, each Indemnitee and their respective successors and permitted assigns.

18.Governing Law.  This Agreement shall be governed in all respects including as to validity, interpretations and effects by the laws of the State of New York, without giving effect to its principles or rules of conflict of laws to the extent such principles or rules would require or permit the application of the laws of another jurisdiction.  Each of the Company, Childs and North Castle hereby irrevocably submit to the jurisdiction of the courts of the State of New York and the Federal courts of the United States of America, in each case located in the State, City and County of New York, solely in respect of the interpretation and enforcement of the provisions of this Agreement, and hereby waive, and agree not to assert, as a defense in any action, suit or proceeding for the interpretation or enforcement hereof, that it is not subject thereto or that such action, suit or proceeding may not be brought or is not maintainable in such courts or that the venue thereof may not be appropriate or that this Agreement may not be enforced in or by such courts, and the parties hereto irrevocably agree that all claims with respect to such action or proceeding shall be heard and determined in such a New York State or Federal court.  The Company, Childs and North Castle hereby consent to and grant any such court jurisdiction over the person of such parties and over the subject matter of any such dispute and agree that mailing of process or other papers in connection with any such action or proceeding in the manner provided in Section 13, or in such other manner as may be permitted by law, shall be valid and sufficient service thereof.

19.Waiver of Jury Trial.  EACH PARTY HERETO ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY THAT MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR THE BREACH,

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TERMINATION OR VALIDITY OF THIS AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.  EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (B) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) IT MAKES THIS WAIVER VOLUNTARILY, AND (D) IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED IN THIS SECTION 19.

20.Amendment; Waivers.  No amendment, modification, supplement or discharge of this Agreement, and no waiver hereunder, shall be valid or binding unless set forth in writing and duly executed by the party against whom enforcement of the amendment, modification, supplement, discharge or waiver is sought (and in the case of the Company, approved by resolution of the Board of Directors of the Company).  Any such waiver shall constitute a waiver only with respect to the specific matter described in such writing and shall in no way impair the rights of the party or Indemnitee granting such waiver in any other respect or at any other time.  Neither the waiver by any of the parties hereto or any Indemnitee of a breach of or a default under any of the provisions of this Agreement, nor the failure by any party hereto or any Indemnitee on one or more occasions, to enforce any of the provisions of this Agreement or to exercise any right, powers or privilege hereunder, shall be construed as a waiver of any other breach or default of a similar nature, or as a waiver of any of such provisions, rights, power or privileges hereunder.  The rights and remedies herein provided are cumulative and are not exclusive of any rights or remedies that any party or Indemnitee may otherwise have at law or in equity or otherwise.

21.Subordination to Financings.  Each of North Castle and Childs hereby covenants and agrees, for itself and its successors and assigns, (i) that all obligations and liabilities of the Company under this Agreement (the “Junior Obligations”) shall be subordinated and junior in right of payment to the prior payment in full in cash of all obligations, indebtedness and liabilities of the Company in respect of the Financing (including any interest accruing subsequent to the filing of a petition of bankruptcy at the rate provided for in the respective documentation with respect to the Financing, whether or not such interest is an allowed claim under applicable law) (all such obligations, indebtedness and liabilities, including all such post-petition interest, shall be referred to as the “Senior Obligations”), and (ii) that this subordination is for the benefit of, and shall be enforceable directly by, the holders of the Senior Obligations and that each such holder shall be deemed to have acquired such Senior Obligations in reliance upon the covenants and provisions contained in this Section.  Upon any payment or distribution of assets of the Company of any kind or character, whether in cash, property or securities, to creditors upon any total or partial liquidation, dissolution, winding-up, reorganization,

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assignment for the benefit of creditors or marshaling of assets of the Company or in any bankruptcy, reorganization, insolvency, receivership or other similar proceeding relating to the Company or its property, whether voluntary or involuntary, all Senior Obligations shall first be paid in full in cash before any payment or distribution of any kind or character is made on account of any Junior Obligations.  In addition, to the extent that any payment by the Company under this Agreement is prohibited at such time pursuant to the terms of any Financing, the Company shall not be required to make such payment (and may defer same) until such time as such payment is permitted to be made pursuant to the terms of the Financing.  In the event that, notwithstanding the foregoing, any payment shall be received by North Castle, Childs at a time when such payment is prohibited by this Section, such payment shall be held in trust for the benefit of, and shall be paid over or delivered to, the holders of the Senior Obligations (pro rata to such holders on the basis of the respective amount of Senior Obligations held by such holders), as their respective interests my appear (taking into account any intercreditor or subordination arrangements with respect thereto).  The provisions of this Section may not be amended, modified or waived in any respect without the consent of the holders of the Senior Obligations.

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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date first above written.

EQUINOX HOLDINGS, INC.
By:	/s/  Adam Saltzman
	Name:  Adam Saltzman
	Title:  Vice President
NORTH CASTLE PARTNERS, L.L.C.
By:	/s/  Benjamin James
	Name:  Benjamin James
	Title:  Managing Director
J.W. CHILDS ADVISORS II, L.P.
By:	/s/  Glenn Hopkins
	Name:  Glenn Hopkins
	Title:
J.W. CHILDS ASSOCIATES, L.P.
By:	/s/  Glenn Hopkins
	Name:  Glenn Hopkins
	Title:

16

EX-10.5

Exhibit 10.5

EQUINOX HOLDINGS, INC.

STOCKHOLDERS AGREEMENT

Dated as of December 15, 2000

TABLE OF CONTENTS

ARTICLE I	GOVERNANCE AND MANAGEMENT OF THE COMPANY
Section 1.1.	Board of Directors.
Section 1.2.	Governance.
Section 1.3.	Expenses
Section 1.4.	Chairperson
Section 1.5.	Committees of the Board.
Section 1.6.	Non-Voting Observers.
ARTICLE II	TRANSFER RESTRICTIONS AND RIGHTS
Section 2.1.	Restrictions on Transfer.
Section 2.2.	Subsequent Dispositions
Section 2.3.	Rights of First Offer and First Refusal.
Section 2.4.	Tag-Along Rights
Section 2.5.	Drag-Along Rights.
Section 2.6.	Certain Rights
Section 2.7.	Certain Remedies
Section 2.8.	Assignment of the Purchaser’s Rights
Section 2.9.	Certain Purchase and Sale Rights.
Section 2.10.	Purchase of Rollover Options and Rollover Exercise Shares.
ARTICLE III	DEFINITIONS
Section 3.1.	Certain Terms
Section 3.2.	Construction
ARTICLE IV	MISCELLANEOUS
Section 4.1.	Termination
Section 4.2.	Post-Closing Termination
Section 4.3.	Effect of Termination
Section 4.4.	Notices
Section 4.5.	Governing Law, etc.
Section 4.6.	Binding Effect
Section 4.7.	Assignment
Section 4.8.	No Third Party Beneficiaries
Section 4.9.	Amendment; Waivers, Etc
Section 4.10.	Entire Agreement
Section 4.11.	Severability
Section 4.12.	Headings
Section 4.13.	Counterparts

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Section 4.14.	Subsequent Stockholders
Section 4.15.	Release.
Section 4.16.	Action by Co-Investment Fund
Section 4.17.	Actions by Preferred Stockholders

ii

STOCKHOLDERS AGREEMENT

STOCKHOLDERS AGREEMENT, dated as of December 15, 2000, among Equinox Holdings, Inc., a Delaware corporation (the “Company”), NCP-EH, L.P., a Delaware limited partnership (“NCP-EH”), NCP Co-Investment Fund, L.P., a Delaware limited partnership (the “Co-Investment Fund”, and together with NCP-EH, the “Purchaser”); each of the stockholders listed on Schedule I hereto (each, a “Rollover Stockholder” and collectively, the “Rollover Stockholders”); each of the rollover optionholders listed on Schedule II hereto (each, a “Rollover Optionholder” and collectively, the “Rollover Optionholders”); Albion Alliance Mezzanine Fund, L.P., a Delaware limited partnership (“Albion I”), Albion Alliance Mezzanine Fund II, L.P., a Delaware limited partnership (“Albion II”), Deutsche Bank Securities Inc. (“DB”), Exeter Capital Partners IV, L.P. (“Exeter Capital”), Exeter Equity Partners, L.P. (“Exeter Equity”), Bill and Melinda Gates Foundation (“Gates”), Arrow Investment Partners (“Arrow”, and together with DB, Exeter Capital, Exeter Equity, Gates, Albion I and Albion II and each of their respective successors and permitted assigns, solely in their capacity as holders of Warrants or Warrant Shares, the “Sub-Debt Warrantholders”); and each other person who is, or becomes, a party to this Agreement pursuant to Section 4.14 hereof (collectively, with the Purchaser, the Sub-Debt Warrantholders, the Rollover Stockholders and the Rollover Optionholders, the “Stockholders”); North Castle Partners II, L.P., a Delaware limited partnership (“NCP Partnership”), Friends of North Castle Fund, L.P., a Delaware limited partnership (“Friends”).  Capitalized terms used in this Agreement have the meanings indicated in Article III.

W I T N E S S E T H:

WHEREAS, pursuant to the Amended and Restated Stock Purchase Agreement and Plan of Merger, dated as of October 16, 2000, as amended on December 14, 2000 (the “Recapitalization Agreement”), among the Company, NCP-EH Recapitalization Corp., a Delaware corporation, NCP-EH, and the Rollover Stockholders, the NCP-EH has agreed to purchase shares of Common Stock of the Company;

WHEREAS, this Agreement is a condition precedent to the obligations of NCP-EH under the Recapitalization Agreement;

WHEREAS, NCP-EH has assigned to the Co-Investment Fund 1.17% of, among other things, NCP-EH’s right to acquire Purchased Shares (as defined in the Recapitalization Agreement);

WHEREAS, as of the date hereof and after giving effect to transactions contemplated by the Recapitalization Agreement, the Rollover Stockholders and the Purchaser own all of the issued and outstanding capital stock of the Company;

WHEREAS, each Rollover Stockholder acknowledges that the Purchaser’s investment in the Company is based in substantial part on the commitment of such Rollover Stockholder to the Company and accordingly agrees to grant to the Company and the Purchaser certain rights to purchase a portion of such Rollover Stockholder’s shares of Common Stock under certain circumstances;

WHEREAS, pursuant to the Senior Subordinated Note and Warrant Purchase Agreement, dated as of December 15, 2000 (the “Senior Subordinated Loan Agreement”), between the Company and the Sub-Debt Warrantholders, the Company has issued to the Sub-Debt Warrantholders warrants (the “Warrants”) to purchase an aggregate of 783,020 shares of Common Stock (as such number may be adjusted pursuant to the terms thereof);

WHEREAS, pursuant to the Recapitalization Agreement, each Rollover Option converted into options to purchase shares of Common Stock of the Company (as constituted after giving effect to the transactions contemplated by the Recapitalization Agreement), and each Rollover Optionholder hereby acknowledges that the Purchaser’s investment in the Company is based in substantial part on the commitment of such Rollover Optionholder to the Company and accordingly agrees to grant to the Company and the Purchaser certain rights to purchase all or any portion of such Rollover Optionholder’s options or shares acquired on exercise of such options under certain circumstances;

WHEREAS, the Rollover Stockholders, Rollover Optionholders, the Purchaser and the Sub-Debt Warrantholders wish to set forth certain understandings and agreements regarding the capitalization and management of the Company and their respective ownership of Covered Securities of the Company;

NOW, THEREFORE, in consideration of the mutual promises, covenants, representations and warranties made herein and of the mutual benefits to be derived herefrom, the parties hereto agree as follows:

ARTICLE I
GOVERNANCE AND MANAGEMENT OF THE COMPANY

Section 1.1.Board of Directors.

(a)The Board of Directors will initially consist of eight members:  (i) seven individuals, including one Management Director, nominated by the Purchaser, and (ii) so long as the Rollover Stockholders collectively own five percent (5%) of the Available Common Stock, Donato Errico.  Subject to the provisions of this Agreement, each Stockholder entitled to vote shall take all necessary actions to effect the provisions of this Section 1.1(a).

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(b)Any director nominated pursuant to Section 1.1(a) may be removed at any time, with or without cause, by the party that nominated such director (but only by such party), and each Stockholder entitled to vote thereon shall take all such actions as may be required to effect such removal, including voting its shares for such removal.  At any time a vacancy shall be created on the Board as a result of the death, disability, retirement, resignation or removal, with or without cause, of a director nominated pursuant to Section 1.1(a), then the party that nominated such director shall have the right to nominate a replacement for such director, and each Stockholder entitled to vote thereon shall take all necessary actions to elect such replacement.

Section 1.2.Governance.

(a)Except as required by applicable Law, all actions requiring the approval of the Board of Directors shall be approved by a majority of the directors present at any duly convened Board of Directors meeting or by unanimous written consent of the directors without a meeting, in each case in accordance with the provisions of the Delaware General Corporation Law and the By-Laws of the Company.

(b)A quorum for meetings of the Board of Directors shall consist of a majority of the then existing number of Directors.

(c)The following actions shall be approved and taken only upon the affirmative vote of at least six directors of the Company:

(i)any amendment to (i) the Certificate of Incorporation or By-Laws of the Company or any Subsidiary, (ii) any stockholders agreement to which the Company is a party, or (iii) any registration rights agreement pertaining to any securities of the Company or any Subsidiary;

(ii)establishment or modification of the business plans and budgets for the Company and its Subsidiaries, including proposed capital expenditures, and the making of any expenditures or the incurring of any other financial obligations in excess of $500,000 in the aggregate in any one fiscal year;

(iii)opening by the Company or any Subsidiary of any new facility that is not contemplated in any business plan or budget approved by the Company’s Board of Directors in the manner contemplated by this Section 1.2;

(iv)appointment or removal of the Chief Executive Officer, Chief Operating Officer or Chief Financial Officer of the Company and execution by the Company of any employment agreements or amendments thereto with any such officers or any other action otherwise setting the level of compensation for such individuals;

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(v)adoption of any stock option, bonus or other compensation or benefit plan;

(vi)issuance, sale, grant, repurchase or redemption by the Company or any Subsidiary of any equity securities of the Company or any Subsidiary, or of any options, warrants or other rights to acquire equity securities or securities convertible into, or exchangeable for such equity securities, other than the issuance and sale of $1,000,000 of the Company’s 10% Cumulative Preferred Stock to the NCP Partnership and certain of its Affiliates;

(vii)incurrence of any indebtedness for borrowed money (including financing leases or similar sale/leaseback transactions) or guaranteeing of any obligation of others by the Company or any Subsidiary in an amount in excess of $5 million;

(viii)any merger, consolidation or business combination involving the Company or any Subsidiary (other than mergers of wholly-owned Subsidiaries);

(ix)any sale or other disposition of all or substantially all of the assets of the Company or any Subsidiary; or of assets of the Company and/or any Subsidiary in a transaction or series of related transactions involving more than $1 million;

(x)the determination to pursue a public debt or equity offering or a private placement of debt or equity securities under Rule 144A of the Securities Act of 1933 or otherwise;

(xi)selection of underwriters and placement agents for any public or private offering of the Company’s securities;

(xii)any purchase or other acquisition of assets, or any transaction, contract or arrangement pursuant to which the Company or any Subsidiary may become obligated for, or any series of transactions related to any of the foregoing, involving amounts in excess of $100,000;

(xiii)entry into or commitment with respect to any joint venture or equity investment by the Company or any Subsidiary in any entity (other than in any wholly-owned Subsidiary of the Company);

(xiv)appointment or removal of the auditor or principal legal counsel of the Company, provided, that Ernst & Young LLP and Debevoise & Plimpton shall serve as the initially appointed auditor and principal legal counsel, respectively;

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(xv)declaration or payment of dividends or distributions by the Company or any Subsidiary (other than dividends or distributions paid by any direct or indirect wholly-owned Subsidiary of the Company to its immediate parent company);

(xvi)liquidation, dissolution, recapitalization or reorganization of the Company or any Subsidiary, the adoption of a plan with respect to any of the foregoing or voluntary election by the Company or any Subsidiary to commence bankruptcy or insolvency proceedings under applicable laws;

(xvii)any change in any fiscal year, taxable year, accounting policies or method of tax accounting of the Company or any Subsidiary;

(xviii)settlement or commencement of any litigation involving an amount in excess of $100,000;

(xix)any agreement or transaction between the Company and any Affiliates, including, without limitation, Bell Development Corporation, Eclipse Development, Inc., Childs, NCP and NCP Partnership and any Affiliates of Childs, NCP or the NCP Partnership, including any of the portfolio companies held or managed by such entities, other than the Consulting Agreement between the Company, NCP and Childs dated as of the date hereof, but including any termination of such Consulting Agreement.

(xx)any material change in the Company’s or any Subsidiary’s principal line of business;

(xxi)commitment by the Company or any Subsidiary to take any of the actions described under sub-paragraphs (i) through (xx) above;

(xxii)any change in the number of directors constituting the Board of Directors; and

(xxiii)creation and membership of any committees in addition to the Audit and Compensation Committee.

Section 1.3.Expenses.  The Company will cause each non-employee director of the Board of Directors to be reimbursed for all reasonable out-of-pocket costs and expenses incurred by him or her in connection with serving as a director.  In consideration of the fees to be paid to NCP and Childs pursuant to the Consulting Agreement, NCP and Childs shall cause any of their respective employees who shall be elected to serve on the Board of Directors to waive any fees (but not out-of-pocket costs and expenses) to which such person would otherwise be entitled as a director for so long as such person is an employee of NCP or Childs.  Any Rollover Stockholder who shall be

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elected to serve on the Board of Directors shall waive any fees (but not out-of-pocket costs and expenses) to which he or she would otherwise be entitled as a director.

Section 1.4.Chairperson.  The Chairperson of the Board of Directors shall be selected by the directors from one of the Purchaser’s nominees.

Section 1.5.Committees of the Board.

(a)Committees.  The By-Laws of the Company shall provide for a Compensation Committee and an Audit Committee.  Each Committee shall consist of two Directors.

(b)Composition.  The members of the Compensation Committee and the Audit Committee shall be nominated from the Purchaser’s nominees.  Subject to the provisions of this Agreement, each Stockholder shall instruct the directors it has nominated to vote to take all necessary actions to effect the provisions of this Section 1.5(b).

(c)Powers.  The Compensation Committee and the Audit Committee shall have such powers and responsibilities as the Board may from time to time authorize.  Copies of the minutes of the meetings of the Compensation Committee and the Audit Committee will be presented to the Board of Directors at the next regularly scheduled meeting of the Board of Directors following each such committee meeting.

Section 1.6.Non-Voting Observers.

(a)In the event any of the Subordinated Notes are outstanding, or Albion holds at least 20% of the Warrants or Warrant Shares that it was originally issued (all calculated on an as exercised basis, giving effect to any stock splits, stock combinations and the like, but excluding the effects of any involuntary transfers, including those required by the drag-along rights of another party, or any adjustments to the number of Warrants or Warrant Shares made in connection with a merger or reorganization) and an initial Public Offering has not been consummated, the Company shall permit one representative (the “Representative”) of Albion to attend as an observer all meetings of its Board of Directors, provided that in the case of telephonic meetings conducted in accordance with the Company’s by-laws and applicable law, the Representative shall be given the opportunity to participate in such telephonic meetings (the “Board Visitation Right”).

(b)The Company shall give written notice of every meeting of its Board of Directors to the Representative at the same time and in the same manner as notice is given to the directors of the Company.  The Representative shall be entitled to receive all written materials and other information given to the directors of the Company in connection with such meetings or otherwise at the same time such materials and

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information are given to the directors.  If requested by the Board of Directors, the Representative shall enter into a confidentiality agreement with respect to any materials received and discussions participated in by such Representative on such terms as may be reasonably requested by the Board of Directors.  The Company shall bear the reasonable costs of the Representative incurred in connection with attendance of or participation in such meetings.

ARTICLE II
TRANSFER RESTRICTIONS AND RIGHTS

Section 2.1.Restrictions on Transfer.

(a)Until the first to occur of an initial Public Offering and the second anniversary of the Closing Date, no Stockholder other than the Purchaser or a Sub-Debt Warrantholder may sell, transfer, pledge, encumber or otherwise dispose of any Covered Security to any Person except as follows:

(i)to any Family Member of such Stockholder, provided that such Family Member (A) becomes a party to this Agreement and (B) delivers to the Company and the Purchaser (1) written evidence, reasonably satisfactory to the Company, or if reasonably requested by the Company, an opinion of counsel, which opinion and counsel shall be reasonably satisfactory to the Company and the Purchaser, in each case to the effect that the transfer is not a Prohibited Transfer, and (2) a certificate of the transferor and the transferee, to the effect that the transferee is a Family Member of the transferor;

(ii)to the Company, the Purchaser or any Affiliate or designee of the Purchaser (pursuant to Section 2.3 or otherwise);

(iii)pursuant to Section 2.2, Section 2.4, Section 2.5 or Section 2.9;

(iv)pursuant to Sections 3.1, 3.2 and 3.3 of the Registration Rights Agreement;

(v)in the case of any Stockholder of the Company holding shares of Common Stock on the date hereof, with the consent of the Company, (A) not to be unreasonably withheld in the event the proposed transferee engages in any business conducted at the time of the transfer by NCP Partnership or Childs, and otherwise, (B) not to be withheld unless (x) the proposed transferee engages in any business conducted at the time of the transfer by the Company or its Subsidiaries or by any of the operating companies then owned or controlled, directly or indirectly, by NCP Partnership or Childs or any of their respective Affiliates, or (y) ownership of Common Stock by the proposed transferee could in

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the reasonable judgment of the Purchaser based on past commercial relationships of the proposed transferee (which will be set forth in writing and delivered to the transferring Stockholders), unreasonably interfere with the conduct of the business of the Company or have an adverse effect on the Purchaser’s investment in the Company; or

(b)Until the first to occur of an initial Public Offering and the second anniversary of the Closing Date, no Sub-Debt Warrantholder may sell, transfer, pledge, encumber or otherwise dispose of any Covered Security to any Person, except for any transfer (x) by a Sub-Debt Warrantholder to the Company, the Purchaser or any Affiliate of the Purchaser or of such Sub-Debt Warrantholder, (y) of Warrants by a Sub-Debt Warrantholder in connection with a transfer of indebtedness issued by the Company to such Sub-Debt Warrantholder pursuant to the Senior Subordinated Loan Agreement, or (z) pursuant to Section 2.2, 2.4 or 2.5 of this Agreement or pursuant to Section 3.1, 3.2 or 3.3 of the Registration Rights Agreement.

(c)The Purchaser and, from and after the second anniversary of the Closing Date but before an initial Public Offering, any other Stockholder, may sell, transfer, pledge, encumber or otherwise dispose of any Covered Securities to any Person, provided that such transfer is in compliance with (i) in the case of any Stockholder (other than the Purchaser or any of their respective Affiliates that are parties to this Agreement and other than any Sub-Debt Warrantholder that is transferring Warrants in connection with a transfer of indebtedness issued by the Company to such Sub-Debt Warrantholder pursuant to the Senior Subordinated Loan Agreement), the right of first offer or first refusal provided in Section 2.3, and (ii) in the case of the  Purchaser, Section 2.4 (if applicable).

(d)Notwithstanding any provision in this Agreement to the contrary, any sale, transfer, pledge, encumbrance or other disposition (collectively, a “transfer”) of a Covered Security permitted under Sections 2.1(a), (b) and (c) and 2.2 of this Agreement shall be void and of no effect unless (i) it is in compliance with applicable Law and the terms of such securities and (ii)  in each such case the transferee (x) becomes a party to this Agreement and (y) delivers written evidence, reasonably satisfactory to the Company or, if reasonably requested by the Company an opinion of counsel to the Company and the Purchaser, which opinion and counsel shall be reasonably satisfactory to the Company and the Purchaser, in each case to the effect that the transfer is not a Prohibited Transfer, and (iii) in the case of a transfer by any Stockholder other than the Purchaser, that such sale, transfer, pledge, encumbrance or other disposition would not cause the Rollover Stockholders to hold, in the aggregate, an amount of Available Common Stock that is less than the Recapitalization Threshold.

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(e)Each Stockholder shall give the Company and the Purchaser at least 15 days prior notice of any proposed Permitted Transfer and prompt notice of any completed transfer of any Covered Security.

(f)Notwithstanding the foregoing provisions of this Section 2.1, no Stockholder may sell, transfer, pledge, encumber or otherwise dispose of any Escrowed Shares.

(g)Notwithstanding the foregoing provisions of Section 2.1, no Rollover Optionholder or Subsequent Management Stockholder may sell, transfer, pledge, assign or otherwise alienate or hypothecate, other than by will or by the laws of descent and distribution, any Rollover Options or Exercise Shares; provided that a Rollover Optionholder or Subsequent Management Stockholder who is an Employee may transfer Rollover Options or Exercise Shares (x) pursuant to Section 2.10 and (y) for no consideration to a Permitted Transferee so long as such Permitted Transferee (A) becomes a party to this Agreement and any other agreement between the Rollover Optionholder or Subsequent Management Stockholder, as the case may be, and the Company, and (B) delivers to the Company and the Purchaser (1) written evidence, reasonably satisfactory to the Company, or if reasonably requested by the Company, an opinion of counsel, which opinion and counsel shall be reasonably satisfactory to the Company and the Purchaser, in each case to the effect that the transfer is not a Prohibited Transfer, and (2) a certificate of the transferor and the transferee, to the effect that the transferee is a Permitted Transferee of the transferor.  Each Rollover Optionholder or Subsequent Management Stockholder, as the case may be, shall give the Company and the Purchaser at least 30 days prior written notice of any proposed transfer and prompt written notice of any completed transfer of any Rollover Option or Exercise Shares, in each case pursuant to this Section 2.1(g).  Notwithstanding the foregoing provisions of this Section 2.1(g), in the event that an Exit Event (as defined in the Recapitalization Agreement) has been consummated, the provisions of this Section 2.1(g) shall terminate and cease to have further effect.

Section 2.2.Subsequent Dispositions.  Following an initial Public Offering, any Stockholder may sell, transfer, pledge, encumber or otherwise dispose of Covered Securities (except for the Escrowed Shares) to any Person, provided that such sale, transfer, pledge, encumbrance or other disposition shall comply with the requirements of Section 2.1(d) and, provided further that, except with respect to a transfer of the type described in Section 2.1(a)(i), 2.1(a)(ii) or 2.1(a)(iv), the transferor must deliver to the Company and the Purchaser an opinion of counsel, which opinion and counsel shall be reasonably satisfactory to the Company and the Purchaser, to the effect that such transfer is not required to be registered under the Securities Act.

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Section 2.3.Rights of First Offer and First Refusal.

(a)Right of First Offer.  Prior to the earlier of an initial Public Offering and the second anniversary of the Closing Date, if a Stockholder other than the Purchaser (a “Selling Holder”) desires to make a Permitted Transfer pursuant to Section 2.1(a)(v) of all or any part of the Covered Securities (except for the Escrowed Shares) owned by such Selling Holder, such Selling Holder shall give notice (the “Notice of Offer”) in writing to the Board of Directors and to the Purchaser (i) designating the number of Covered Securities that such Selling Holder proposes to sell (the “Offered Shares”), and (ii) specifying the price (the “Offer Price”) and terms (the “Offer Terms”) upon which such Selling Holder desires to sell the same.  During the 15 Business Day period following receipt of such notice by the Company and the Purchaser (the “Refusal Period”), such Selling Holder shall not be permitted to sell the Offered Shares.  During the first seven Business Days of the Refusal Period, the Company shall have the right to purchase from the Selling Holder at the Offer Price and on the Offer Terms all, but not less than all, of the Offered Shares.  If the Company shall not have exercised such right after seven Business Days, the Purchaser or any Affiliate or designee of the Purchaser, including any pooled investment vehicle organized by the managing member of the NCP Partnership or Childs or any of their respective Affiliates, shall have the same right of first offer for the remainder of the Refusal Period.  The rights provided hereunder shall be exercised by written notice to the Selling Holder and the Company or the Purchaser, as the case may be, given at any time during the Refusal Period.  If such right is exercised, the Company, the Purchaser (or its Affiliate or designee) or Childs (or their respective Affiliates), as the case may be, shall deliver to the Selling Holder payment of the Offer Price in accordance with the Offer Terms, against delivery of appropriately endorsed certificates or other instruments representing the Offered Shares, provided that the Company, the Purchaser and Childs (and their respective Affiliates) shall not be required to consummate such purchase fewer than 30 Business Days from the date of acceptance of the offer.  If the Company, the Purchaser and Childs (and their respective Affiliates) fail to exercise their right of first offer for the Offered Shares during the Refusal Period or fail to consummate the purchase in accordance with the foregoing sentence, the Selling Holder shall have the right to sell the Offered Shares at a price and on terms no less favorable to the Selling Holder than the Offer Price and the Offer Terms, respectively, in accordance with the terms of Section 2.1(a)(v) for a period of 60 days following the end of the Refusal Period, at which point the Selling Holder must give a new Notice of Offer.

(b)Right of First Refusal.  Subject to Section 2.1(c), following the second anniversary of the Closing Date, provided that an initial Public Offering shall not have occurred,  if a Selling Holder desires to make a Permitted Transfer pursuant to Section 2.1(c) following an offer (which offer must be in writing, be irrevocable by its terms for at least 15 Business Days and be a bona fide offer) from any prospective purchaser to purchase all or any part of the Covered Securities (except for the Escrowed Shares) owned by such Selling Holder, such Selling Holder shall give a Notice of Offer

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in writing to the Board of Directors and to the Purchaser (i) designating the number of Offered Shares, (ii) specifying the Offer Price and the Offer Terms, and (iii) naming the prospective purchaser thereof (the “Potential Purchaser”).  Such Selling Holder shall not be permitted to accept such offer, but may submit a new Notice of Offer in respect of any revised offer in accordance with and subject to this Section 2.3(b).  During the first seven Business Days of the Refusal Period, the Company shall have the right to purchase from the Selling Holder at the Offer Price and on the Offer Terms all, but not less than all, of the Offered Shares.  If the Company shall not have exercised such right after seven Business Days, the Purchaser or any Affiliate or designee of the Purchaser, including any pooled investment vehicle organized by the managing member of the NCP Partnership or Childs or any of their respective Affiliates shall have the same right of first refusal for the remainder of the Refusal Period.  The rights provided hereunder shall be exercised by written notice to the Selling Holder and the Company or the Purchaser, as the case may be, given at any time during the Refusal Period.  If such right is exercised, the Company, the Purchaser or Childs (or any of their respective Affiliates), as the case may be, shall deliver to the Selling Holder payment of the Offer Price in accordance with the Offer Terms, against delivery of appropriately endorsed certificates or other instruments representing the Offered Shares, provided that the Company, the Purchaser and Childs (and their respective Affiliates) shall not be required to consummate such purchase fewer than 30 Business Days from the date of acceptance of the offer.  If the Company, the Purchaser and Childs (and their respective Affiliates or designees) fail to exercise their right of first refusal for the Offered Shares during the Refusal Period or fail to consummate the purchase in accordance with the foregoing sentence, the Selling Holder may sell to the Potential Purchaser the Offered Shares at the Offer Price and on the Offer Terms in accordance with the terms of Sections 2.1(c), for a period of 60 days following the end of the Refusal Period, at which point the Selling Holder must give a new Notice of Offer.

Section 2.4.Tag-Along Rights.  If the Purchaser desires to make a Permitted Transfer pursuant to Section 2.1(c) prior to a Public Offering, which transfer is (i) individually or in the aggregate, taken together with all prior Permitted Transfers made by the Purchaser, in excess of 10% of the maximum amount of Covered Securities ever owned in the aggregate by the Purchaser and its Affiliates (the “Tag-Along Minimum”), and (ii) to a Person other than an Affiliate of the NCP Partnership or Childs (other than the Company or any of its Subsidiaries) following an offer (which offer must be in writing, be irrevocable by its terms for at least 15 Business Days and be a bona fide offer) from any prospective purchaser to purchase all or any part of the Covered Securities owned by the Purchaser, the Purchaser shall give a Notice of Offer in writing to the Board of Directors and the other Stockholders (i) designating the number of Offered Shares, (ii) naming the Potential Purchaser and (iii) specifying the Offer Price and Offer Terms.  During the 15 Business Day period following receipt of such notice by the Company and the other Stockholders, the other Stockholders shall have the right (a “Tag-Along Right”), exercised by delivery of a written notice to the Purchaser and the

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Company, to participate in such sale to the Potential Purchaser (which right to participate in such sale, in the case of any Warrants held by any Sub-Debt Warrantholders, shall be for the sale of the Warrants Shares issuable upon exercise of such Warrants, which, at the request of the Purchaser, shall be exercised immediately prior to the consummation of such Permitted Transfer), at the Offer Price and on the Offer Terms on a pro rata basis determined by multiplying the number of Offered Shares by the quotient obtained by dividing (A) the number of Covered Securities (excluding Surviving Corporation Stock Options and Escrow Shares) then held by each Stockholder so electing to sell (each such Person, an “Accepting Stockholder”) by (B) the aggregate number of Covered Securities (excluding Surviving Corporation Stock Options and Escrowed Shares) then held by all of the Accepting Stockholders and the Purchaser.  If the Tag-Along Right shall not have been exercised prior to the expiration of the 15-Business Day period, then at any time during the 90 days following the expiration of the 15-Business Day period, subject to extension for not more than an additional 60 days to the extent reasonably required to comply with applicable Laws in connection with such sale, the Purchaser may sell the Offered Shares to the Potential Purchaser at the Offer Price and on the Offer Terms.  Upon receipt of a Notice of Offer, the Company will provide the Purchaser with a current list of holders of Covered Securities and their addresses.

Section 2.5.Drag-Along Rights.

(a)Drag-Along Notice.  If the Purchaser intends to effect a sale (a “Drag-Along Sale”) of all or substantially all of its shares of Common Stock to a non-Affiliate third party (a “Drag-Along Buyer”) prior to an initial Public Offering and elects to exercise its rights under this Section 2.5, the Purchaser shall deliver written notice (a “Drag-Along Notice”) to the Company and the other Stockholders, which notice shall (i) (w) state that the Purchaser wishes to exercise its rights under this Section 2.5 with respect to such transfer, (x) state the name and address of the Drag-Along Buyer, (y) state the per share amount and form of consideration the Purchaser proposes to receive for its shares of Common Stock and (z) be accompanied by copies of drafts of purchase and sale documentation setting forth the terms and conditions of payment of such consideration and all other material terms and conditions of such transfer (the “Drag-Along Purchase Agreement”), (ii) contain an offer (the “Drag-Along Offer”) by the Drag-Along Buyer to purchase from the other Stockholders a percentage of their Covered Securities (excluding Surviving Corporation Stock Options and Escrowed Shares) (which right to participate in such sale, in the case of any Warrants held by any Sub-Debt Warrantholders, shall be for the sale of Warrant Shares issuable upon exercise of such Warrants, which, at the request of the Purchaser, shall be exercised immediately prior to the time such Warrant Shares are to be delivered to the Purchaser pursuant to Section 2.5(b)), equal to the percentage of the shares of Common Stock owned by the Purchaser that are to be sold to the Drag-Along Buyer (such percentage, the “Applicable Percentage”), on and subject to the same terms and conditions and (iii) state the anticipated time and place of the closing of such transfer (a “Drag-Along Closing”), which (subject to such terms and conditions) shall

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occur not fewer than 15 days nor more than 90 days after the date such Drag-Along Notice is delivered, provided that if such Drag-Along Closing shall not occur prior to the expiration of such 90-day period, the Purchaser shall be entitled to deliver another Drag-Along Notice with respect to such Drag-Along Offer.  Upon request of the Purchaser, the Company shall provide the Purchaser with a current list of the names and addresses of the other Stockholders.

(b)Conditions to Drag-Along.  Upon delivery of a Drag-Along Notice, each of the other Stockholders shall transfer the Applicable Percentage of its Covered Securities (excluding Surviving Corporation Stock Options and Escrowed Shares) pursuant to the Drag-Along Offer, as such offer may be modified from time to time, provided that the Purchaser transfers the Covered Securities (excluding Surviving Corporation Stock Options and Escrowed Shares) to the Drag-Along Buyer at the Drag-Along Closing and that held by the Purchaser and the other Stockholders are sold to the Drag-Along Buyer on and subject to the same terms and conditions.  Within five Business Days prior to the closing contemplated by the Drag-Along Notice, each of the other Stockholders shall (i) deliver to the Purchaser certificates representing such Stockholder’s Covered Securities (including Warrant Shares, as applicable), duly endorsed for transfer or accompanied by duly executed stock powers, (ii) execute and deliver a purchase and sale agreement substantially in the form of the Drag-Along Purchase Agreement (provided that such Stockholder shall be required only to make representations, warranties, covenants and indemnities as to itself and to the title of the Covered Securities and shall be liable severally, and not jointly, for any liability thereunder) and otherwise in accordance with the terms of this Section 2.5, and (iii) waive any appraisal, dissenter’s or similar rights that such Stockholder may have in connection with such transaction, and to take such actions as the Purchaser may reasonably deem necessary or appropriate to effect the sale and transfer of the Covered Securities (including Warrant Shares, as applicable) to the Drag-Along Buyer, upon receipt of the purchase price therefor set forth in the Drag-Along Notice at the Drag-Along Closing, free and clear of all Liens, options and voting agreements of whatever nature, together with all other documents delivered with such Notice and required to be executed in connection with the sale thereof pursuant to the Drag-Along Offer.  The Purchaser shall hold such shares and other documents in trust for such other Stockholder for release against payment to such Stockholder of such Stockholder’s net proceeds in accordance with the contemplated transaction.  If, within 10 days after delivery to the Purchaser, the Purchaser has not completed the sale of the shares of Common Stock to the Drag-Along Buyer and another Drag-Along Notice with respect to such Drag-Along Offer has not been sent to the other Stockholders, the Purchaser shall return to each other Stockholder all certificates representing the shares and all other documents that such other Stockholder delivered in connection with such sale; provided that, if, within 10 days after delivery to the other Stockholders of any such subsequent Drag-Along Notice with respect to such Drag-Along Offer, the Purchaser has not completed the sale of the shares of Common Stock to the Drag-Along Buyer, the Purchaser shall return to

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each other Stockholder all certificates representing the shares and all other documents that such other Stockholder delivered in connection with such sale.  Promptly after the Drag-Along Closing, the Purchaser shall furnish such other evidence of the completion and time of completion of such sale and the terms thereof as may reasonably be requested by any of the other Stockholders.

Section 2.6.Certain Rights

(a)Right to Participate.  Prior to an initial Public Offering, the Company agrees that it will not sell or issue: (a) any shares of capital stock of the Company, (b) securities convertible into or exercisable or exchangeable for capital stock of the Company or (c) options, warrants or rights carrying any rights to purchase capital stock of the Company, unless the Company first submits a written notice to each Sub-Debt Warrantholder identifying the terms of the proposed sale (including price, number or aggregate principal amount of securities and all other material terms), and offers to each Sub-Debt Warrantholder the opportunity to purchase its Pro Rata Allotment (as hereinafter redefined) of the securities on terms and conditions, including price, not less favorable than those on which the Company proposes to sell such securities to a third party or parties.  The Company’s offer pursuant to this Section 2.6(a) shall remain open and irrevocable for a period of thirty (30) days following receipt by the Sub-Debt Warrantholders of such written notice.

(b)Investor Acceptance.  Each Sub-Debt Warrantholder may elect to purchase the securities so offered by giving written notice thereof to the Company within such 30-day period, including in such written notice the maximum number of shares of capital stock or other securities of the Company that such Sub-Debt Warrantholder wishes to purchase, including the number of such shares it would purchase if one or more other Sub-Debt Warrantholders do not elect to purchase their respective Pro Rata Allotments.

(c)Calculation of Pro Rata Allotment.  For purposes of this Section, “Pro Rata Allotment” of such securities shall be based on the ratio which the aggregate number of Warrant Shares and Common Stock issuable upon exercise of the then outstanding Warrants, in each case owned by such Sub-Debt Warrantholders bears to all of the issued and outstanding Covered Securities as of the date of such written offer.

(d)Sale to Third Party.  Any securities so offered that are not purchased by the Sub-Debt Warrantholders pursuant to the offer set forth in Section 2.6(a) above, may be sold by the Company, but only on terms and conditions not more favorable than those set forth in the notice to such Sub-Debt Warrantholders, at any time within ninety (90) calendar days following the termination of the above-referenced 30-day period.

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(e)Exceptions to Pre-emptive Rights.  Notwithstanding the foregoing, the right to purchase granted under this Section 2.6 shall be inapplicable with respect to: (i) the issuance or sale of shares of Common Stock (as appropriately adjusted for any stock split, combination, reorganization, recapitalization, reclassification, stock distribution, stock dividend or similar event) issued or issuable in connection with, or upon the exercise of, options or other awards granted or to be granted to employees, officers or directors of the Company pursuant to the Plan, including shares of Common stock issued in replacement of shares of such Common Stock, to the extent permitted under the Plan; (ii) securities issued as a result of any stock split, stock dividend, reclassification or reorganization or similar event with respect to Shares; (iii) the issuance or sale of any securities contemplated in Section 2.6(a) (A) to any seller that is not an Affiliate of the Company in consideration for the acquisition of another business enterprise or the assets of another business enterprise in the fitness, health or spa industry, (B) in connection with the sale of any investment by a strategic investor, or (C) the sale of any units or other hybrid securities to any purchaser that is not an Affiliate of the Company in exchange for aggregate consideration of at least equal to their fair market value and (iv) the issuance or sale of shares of Common Stock upon conversion of any convertible securities of the Company or the exercise of options not issued in violation of Section 2.6.

(f)Assignment of Rights.  Each Sub-Debt Warrantholder shall have the right to assign and transfer such Sub-Debt Warrantholder’s right to accept any particular offer under Section 2.6 hereof (separate and apart from its Covered Securities) to any private investment vehicle formed after the date such Sub-Debt Warrantholder was formed that is under common control with, and has a similar investment purpose as, such Sub-Debt Warrantholder, and any such transferee shall be deemed within the definition of a “Sub-Debt Warrantholder” for purposes of this Section 2.6 and shall become a party to this Agreement by executing Schedule III hereto.

Section 2.7.Certain Remedies.  Each Stockholder acknowledges that the other Stockholders and the Company would be irreparably damaged in the event of a breach or a threatened breach by such Stockholder of any of its obligations under this Article II and each Stockholder agrees that, in the event of a breach or a threatened breach by such  Stockholder of any such obligation, the other Stockholders and the Company shall, in addition to any other rights and remedies available to it in respect of such breach, be entitled to an injunction from a court of competent jurisdiction (without any requirement to post bond) granting it specific performance by such Stockholder of its obligations under this Article II.  In the event that any Stockholder or the Company shall file suit to enforce the covenants contained in this Article II (or obtain any other remedy in respect of any breach thereof), the prevailing party in the suit shall be entitled to recover, in addition to all other damages to which it may be entitled, the costs incurred by such party in conducting the suit, including reasonable attorney’s fees and expenses.

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Section 2.8.Assignment of the Purchaser’s Rights.  The Purchaser may at its option designate any Affiliate of the Purchaser to exercise any of its rights under this Article II, provided that no such assignment shall relieve the Purchaser of any of its obligations hereunder.

Section 2.9.Certain Purchase and Sale Rights.

(a)Immediately after the distribution of any Escrowed Shares pursuant to Section 2.11(i) of the Recapitalization Agreement, the Purchaser shall purchase from the Rollover Stockholders, and the Rollover Stockholders shall sell to the Purchaser, the Released Shares owned by the Stockholders at a per share price equal to the Value Per Share.

(b)The closing of the purchase and sale of the Released Shares shall take place immediately after the distribution of Escrowed Shares pursuant to the determination of the Final 2000 Adjusted EBITDA.  At such closing, each Rollover Stockholder shall deliver to the Purchaser, in exchange for the payment in immediately available funds by the Purchaser of the purchase price in respect of each Released Share owned by such Rollover Stockholder, the certificate or certificates representing the Released Shares free and clear of all liens.

(c)“Released Shares” means the maximum number of Escrowed Shares distributed to the Rollover Stockholders after the distribution of Escrowed Shares pursuant to the Final 2000 Adjusted EBITDA according to Section 2.11(i) of the Recapitalization Agreement that can be purchased without causing the Rollover Stockholders to hold, in the aggregate, an amount of Available Common Stock that is less than the Recapitalization Threshold.

Section 2.10.Purchase of Rollover Options and Rollover Exercise Shares.

(a)If a Rollover Optionholder’s active employment with the Company or any Subsidiary thereof that employs the Rollover Optionholder is, or has been, terminated for any reason or, in the case of Paul Boardman, his employment with Eclipse Development Corporation (“Eclipse”) is terminated or the Company’s business relationship with Eclipse is terminated, in each case, for any reason, the Company shall have the option to purchase all or any portion of the Rollover Options or the Rollover Exercise Shares then held by the Rollover Optionholder (or, in the case of his or her death, his or her estate) and shall have 90 days from the date of such termination (such 90-day period, the “First Option Period”) during which to give notice in writing to the Rollover Optionholder (or his estate) of its election to exercise or not to exercise such option, in whole or in part.  The Company hereby undertakes to use reasonable efforts to act as promptly as practicable following such termination to make such election.  If the

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Company fails to give notice that it intends to exercise such option within the First Option Period or the Company gives notice that it does not intend to exercise such option or that it intends to exercise such option with respect to only a portion of the Rollover Options or the Rollover Exercise Shares, as the case may be, then NCP-EH shall have the right to purchase any or all of the Rollover Options or the Rollover Exercise Shares, as the case may be, then held by the Rollover Optionholder (or his or her estate) that will not be purchased by the Company, and shall have until the expiration of the earlier of (x) 90 days following the end of the First Option Period or (y) 90 days from the date of receipt by NCP-EH of written notice from the Company indicating whether it will exercise its option to purchase any of the Rollover Options or the Rollover Exercise Shares, as the case may be (such 90-day period being hereinafter referred to as the “Second Option Period”), to give notice in writing to the Rollover Optionholder (or his or her estate) of NCP-EH’s exercise of its option, in whole or in part.  If the options of the Company and NCP-EH to purchase the Rollover Options or the Rollover Exercise Shares, as the case may be, pursuant to this Section 2.10(a) are not exercised with respect to all of the Rollover Options or the Rollover Exercise Shares, as the case may be, as provided herein (other than as a result of Section 2.10(e) hereof), the Rollover Optionholder (or his or her estate) shall be entitled to retain the Rollover Options or the Rollover Exercise Shares, as the case may be, as to which the right is not exercised, subject to (as applicable) all of the provisions of this Agreement, the Equinox Holdings, Inc. 1998 Stock Option Plan (the “Old Option Plan”) (except clauses (ii) and (iii) of Section 7(b) thereof) and any other agreement between the Rollover Optionholder and the Company with respect to the Rollover Options or the Rollover Exercise Shares, as the case may be (except for the provisions relating to termination of employment therein), which shall be of no force and effect for this purpose.  All purchases pursuant to this Section 2.10(a) by the Company shall be for a purchase price and in the manner prescribed by Section 2.10(d) hereof.

(b)Notice of Termination.  The Company or the Subsidiary thereof that employs the Rollover Optionholder (excluding, for purposes of this Section 2.10(b), Paul Boardman) shall give written notice of any termination of the Rollover Optionholder’s active employment with each of the Company and any Subsidiary thereof that employs the Rollover Optionholder to NCP-EH, except that if such termination (if other than as a result of death) is by the Rollover Optionholder, the Rollover Optionholder shall give written notice of such termination to the Company and the Company shall give written notice of such termination to NCP-EH.  In the event that the Company’s relationship with Eclipse is terminated for any reason, the Company shall give written notice to NCP-EH.

(c)Exit Event.  In the event that an initial Public Offering has been consummated, the Company and NCP-EH shall not have any rights to purchase the Rollover Options pursuant to this Section 2.10 and this Section 2.10 shall not apply in connection with an initial Public Offering.

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(d)Determination of the Purchase Price; Manner of Payment.

(i)Purchase Price.  For the purposes of any purchase of the Rollover Options pursuant to Section 2.10(a), and subject to Section 2.10(e), the purchase price per share of Common Stock covered by the Rollover Options to be paid to the Rollover Optionholder (or his or her estate) for each share covered by the Rollover Options (the “Purchase Price”) shall be equal to the excess, if any, of (w) fair market value (the “Fair Market Value”) of such share of Common Stock as of the effective date of the termination, that gives rise to the right of the Company to repurchase such Rollover Options (such date of termination, the “Determination Date”), over (x) the exercise price per share of Common Stock covered by the Rollover Options; provided that if the Rollover Optionholder’s employment is terminated by the Company or any Subsidiary thereof for Cause or in the case of Paul Boardman, his employment with Eclipse is terminated for Cause or the Company terminates its business relationship with Eclipse for Cause, the Purchase Price for each such share covered by the Rollover Options shall be equal to the excess, if any, of (y) the lesser of (A) the Fair Market Value of such share of Common Stock as of the Determination Date, and (B) the Value Per Share, over (z) the exercise price per share of Common Stock covered by the Rollover Options.  For the purposes of any purchase of the Rollover Exercise Shares pursuant to Section 2.10(a), and subject to Section 2.10(e), the Purchase Price per share of Common Stock to be paid to the Rollover Optionholder (or his or her estate) for each Rollover Exercise Share (the “Purchase Price”) shall equal the Fair Market Value of such Rollover Exercise Share as of the Determination Date; provided that if the Rollover Optionholder’s employment or such business relationship is terminated by the Company or any Subsidiary thereof for Cause, or, in the case of Paul Boardman, his employment with Eclipse is terminated for Cause or the Company terminates its business relationship with Eclipse for Cause, the Purchase Price for such Rollover Exercise Share shall equal the lesser of (A) the Fair Market Value of such Rollover Exercise Share as of the effective date of termination of Purchaser’s employment and (B) the Value Per Share.  Whenever determination of the Fair Market Value of a share of Common Stock is required by this Section 2.10, such Fair Market Value shall be such amount as is determined in good faith by the Board.  In making a determination of Fair Market Value, the Board shall give due consideration to such factors as it deems appropriate, including, without limitation, the earnings and certain other financial and operating information of the Company and its Subsidiaries in recent periods, the potential value of the Company and its Subsidiaries as a whole, the future prospects of the Company and its Subsidiaries and the industries in which they compete, the history and management of the Company and its Subsidiaries, the general condition of the securities markets, the fair market value of securities of companies engaged in businesses similar to those of the Company and its Subsidiaries.  The determination of Fair Market Value will not give effect to any

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restrictions on transfer of the Common Stock or the fact that such Common Stock would represent a minority interest in the Company.  The Fair Market Value as determined in good faith by the Board and in the absence of fraud shall be binding and conclusive upon all parties hereto.

(ii)Closing of Purchase; Payment of Purchase Price.  Subject to Section 2.10(e), the closing of a purchase pursuant to Section 2.10(a) shall take place at the principal office of the Company on the tenth business day following the receipt by the Rollover Optionholder (or his or her estate) of the notice of the Company and/or NCP-EH of its exercise of its option to purchase any of the Rollover Options or the Rollover Exercise Shares, as the case may be, pursuant to Section 2.10(a).  At the closing, (x) the Company and/or NCP-EH, as the case may be, shall pay to the Rollover Optionholder (or his or her estate) an amount equal to the Purchase Price and (y) the Rollover Optionholder (or his or her estate) shall deliver to the Company such certificates or other instruments representing the Rollover Options or the Rollover Exercise Shares, as the case may be, so purchased, appropriately endorsed by the Rollover Optionholder (or his or her estate), as the Company may reasonably require.

(e)Certain Restrictions on Purchases of Rollover Options.

(i)Financing Agreements, etc.  Notwithstanding any other provision of this Section 2.10, the Company shall not be obligated or permitted to pay the purchase price for any Rollover Options or Rollover Exercise Shares, as the case may be, that the Company may elect to purchase from the Rollover Optionholder pursuant to Section 2.10(a) if (x) the payment of such purchase price would result in a violation of the terms or provisions of, or a default or an event of default under, any financing or security agreement or document entered into by the Company or any of its Subsidiaries on the date hereof, any refunding thereof, or in connection with the operations of the Company or the Subsidiaries from time to time (such agreements and documents, as each may be amended, modified or supplemented from time to time, are referred to herein as the “Financing Agreements”), in each case as the same may be amended, modified or supplemented from time to time, (y) the payment of such purchase price would violate any of the terms or provisions of the Certificate of Incorporation of the Company or (z) the Company has no funds legally available therefor under the General Corporation Law of the State of Delaware.

(ii)Delay of Purchase.  In the event that the payment of the purchase price for any Rollover Options or the Rollover Exercise Shares, as the case may be, by the Company otherwise permitted under Section 2.10(a) is prevented solely by the terms of Section 2.10(e)(i), (x) the payment of such purchase price will be postponed and will be made without the application of further conditions or

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impediments (other than as set forth in Section 2.10(a) hereof or in this Section 2.10(e)) at the first opportunity thereafter when the Company has funds legally available therefor and when the payment of such purchase price will not result in any default, event of default or violation under any of the Financing Agreements or in a violation of any term or provision of the Certificate of Incorporation of the Company and (y) the Rollover Optionholder’s right to receive payment of such purchase price shall rank against other similar rights with respect to shares of Common Stock or options in respect thereof according to priority in time of the effective date of the event giving rise to any such right, provided that any such right as to which a common date determines priority shall be of equal priority and shall share pro rata in any purchase payments made pursuant to clause (x) above.

(iii)Purchase Price Adjustment.  In the event that a repurchase of Rollover Options or Rollover Exercise Shares, as the case may be, from the Rollover Optionholder is delayed pursuant to this Section 2.10(e), the purchase price per share of Common Stock covered by the Rollover Options or Rollover Exercise Shares, as the case may be, when the repurchase of such Rollover Options or Rollover Exercise Shares, as the case may be, eventually takes place as contemplated by Section 2.10(e)(ii) shall equal the sum of (x) the Purchase Price determined in accordance with Section 2.10(d) hereof at the time that the repurchase of such Rollover Options or Rollover Exercise Shares, as the case may be, would have occurred but for the operation of this Section 2.10(e), plus (y) an amount equal to interest on such Purchase Price for the period from the date on which the completion of the repurchase would have taken place but for the operation of this Section 2.10(e) to the date on which such repurchase actually takes place (the “Delay Period”) at a rate equal to the average annual cost to the Company of its and its Subsidiaries bank indebtedness obligations outstanding during the Delay Period or, if there are no such obligations outstanding, one percentage point greater than the average prime rate charged during such period by a nationally recognized bank designated by the Company.

ARTICLE III
DEFINITIONS

Section 3.1.Certain Terms.  Whenever used in this Agreement (including in the Schedules), the following terms shall have the respective meanings given to them below or in the Sections indicated below:

Accepting Stockholder:  as defined in Section 2.4.

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Affiliate:  of a Person means a Person that directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, the first Person, and with respect to a natural person shall include any child, stepchild, grandchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law, and shall include adoptive relationships.  “Control” (including the terms “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management policies of a Person, whether through the ownership of voting securities, by contract or credit arrangement, as trustee or executor, or otherwise.

Agreement:  this Stockholders Agreement, including the Schedules hereto.

Ancillary Agreement:  as defined in the Recapitalization Agreement.

Applicable Percentage:  as defined in Section 2.5(a).

Available Common Stock:  the Common Stock outstanding immediately after the Closing (excluding the Escrowed Shares), outstanding Common Stock released from Escrow, Common Stock outstanding upon the exercise of any Rollover Option and  Common Stock issued or issuable upon exercise of the Warrants.

Board of Directors:  the board of directors of the Company.

Business Day:  a day other than a Saturday, Sunday or other day on which commercial banks in The City of New York are authorized or required to close.

Cause:  as defined in the Old Option Plan or option agreement evidencing the grant of Rollover Options, provided that in the event that the Rollover Optionholder is employed under an effective employment agreement (whether with the Company or Eclipse) on the date such Rollover Optionholder’s employment thereunder is terminated and such employment agreement contains a different definition of Cause, the definition of Cause contained in such employment agreement shall be substituted for the definition set forth above for purposes of this Agreement, provided further that, in the event of a termination of the Company’s business relationship with Eclipse if there is an effective separation agreement between the Company and Eclipse on the date such relationship is terminated, the definition of “Cause” contained in such separation agreement shall be substituted for the definition set forth above for purposes of this Agreement.

Certificate of Designation:  the Certificate of Designation of the 10% Cumulative Preferred Stock of the Company, dated December 15, 2000.

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Childs:  J.W. Childs Equity Partners II, L.P., a Delaware limited partnership.

Closing:  the closing of the merger of NCP-EH Recapitalization Corp. with and into the Company and the issuance by the Company to the Purchaser of newly issued shares of the Company, as set forth in the Merger and Recapitalization Agreement.

Closing Date:  the date the Closing occurs.

Collaborative Group:  as defined in the speech, a transcript of which is attached hereto as Annex I, as such term may be redefined or modified by subsequent pronouncements by the SEC or its staff.

Common Stock:  the common stock, par value $.01 per share, of the Company.

Company:  as defined in the introduction of this Agreement.

Consulting Agreement:  the Consulting Agreement, dated as of the date hereof, among the Company, J.W. Childs Associates, L.P., J.W. Childs Advisors, L.P., and NCP in connection with the Closing under the Recapitalization Agreement.

Covered Security:  all of the shares of Common Stock, preferred stock or other equity interest in the Company, and any other security, option, warrant or other right that does or may allow the holder thereof to receive Common Stock or preferred stock or other equity interest, owned from time to time by any of the Stockholders.

Delay Period:as defined in Section 2.10(e)(iii).

Determination Date:  as defined in Section 2.10(d)(i).

Dividend Payment Date: as defined in the Certificate of Designation.

Drag-Along Buyer:  as defined in Section 2.5(a).

Drag-Along Closing:  as defined in Section 2.5(a).

Drag-Along Notice:  as defined in Section 2.5(a).

Drag-Along Offer:  as defined in Section 2.5(a).

Drag-Along Purchase Agreement:  as defined in Section 2.5(a).

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Drag-Along Sale:  as defined in Section 2.5(a).

Eclipse:  as defined in Section 2.10(a).

Employee:  any officer or other key employee of, or consultant (who is a natural person) to the Company or any Subsidiary.

Escrowed Shares:  as defined in the Recapitalization Agreement, provided that once such shares are released from escrow in accordance with the terms of the Stock Escrow Agreement, such shares shall no longer be “Escrowed Shares” for purposes of this Agreement.

Exchange Act:  the Securities Exchange Act of 1934, as amended.

Exercise Shares:  Common Stock received upon exercise of any options granted pursuant to the Plan.

Exit Event:  as defined in the Recapitalization Agreement.

Fair Market Value:  as defined in Section 2.10(d)(i).

Family Member:  with respect to any Stockholder, (i) a spouse or any lineal ancestor or descendant, (ii) a brother or sister, (iii) a trust or trusts of which such family members are the sole beneficiaries or charitable remainder trusts in which such family members have an interest, (iv) a partnership or limited liability company in which such family members are the only partners or members, as the case may be, or (v) any Person (other than a natural person) Controlled by such Stockholder.

Financing Agreements:  as defined in Section 2.10(e)(i).

First Option Period:  as defined in Section 2.10(a).

Governmental Approvals:  any consent, approval, authorization, waiver, permit, concession, franchise, agreement, license, exemption or order of declaration or filing with or report or notice to any Governmental Authority.

Governmental Authority:  any nation or government, any state or other political subdivision thereof, any entity, authority or body exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, any court, tribunal or arbitrator, and any self-regulatory organization.

Law:  all applicable provisions of all (a) constitutions, treaties, statutes, laws (including the common law), codes, rules, regulations, ordinances or orders

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of any Governmental Authority, (b) Governmental Approvals and (c) orders, decisions, injunctions, judgments, awards and decrees of or agreements with any governmental authority.

Lien:  any mortgage, pledge, hypothecation, right of others, claim, security interest, encumbrance, lease, sublease, license, occupancy agreement, adverse claim or interest, easement, covenant, encroachment, burden, title defect, title retention agreement, voting trust agreement, interest, equity, option, lien, right of first refusal, charge or other restrictions or limitations of any nature whatsoever, including but not limited to such as may arise under any contracts.

Liquidation Preference:  as defined in the Certificate of Designation.

Management Director:  an executive officer or other employee of the Company, nominated to the Board by the Purchaser.

NCP:  North Castle Partners, L.L.C.

NCP Partnership:  North Castle Partners II, L.P.

Notice of Offer:  as defined in Section 2.3(a).

Offer Price:  as defined in Section 2.3(a).

Offer Terms:  as defined in Section 2.3(a).

Offered Securities:  as defined in Section 2.6.

Offered Shares:  as defined in Section 2.3(a).

Old Option Plan:  as defined in Section 2.10(a).

Permitted Transfer:  with respect to any Stockholder other than the Purchaser, a Sub-Debt Warrantholder, a Rollover Optionholder or Subsequent Management Stockholder, any transaction permitted pursuant to Section 2.1(a), (c) and (d); with respect to Purchaser, any transaction permitted pursuant to Section 2.1(c) and (d); with respect to a Rollover Optionholder or Subsequent Management Stockholder, any transaction permitted pursuant to Section 2.1(g); and with respect to a Sub-Debt Warrantholder, any transaction permitted pursuant to Section 2.1(b), (c) and (d).

Permitted Transferee:  with respect to any Rollover Optionholder or Subsequent Management Stockholder, a child, grandchild, parent, grandparent, spouse, sibling, a trust in which such persons have more than fifty percent of the

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beneficial interest, a foundation in which such persons (or the Rollover Optionholder or Subsequent Management Stockholder, as the case may be) control the management of assets, and any other entity in which such persons (or the Rollover Optionholder or Subsequent Management Stockholder, as the case may be) own more than fifty percent of the voting interests.

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

Plan:  means the Equinox Holdings, Inc. 2000 Stock Incentive Plan.

Potential Purchaser:  as defined in Section 2.3(b).

Preferred Stock:  as defined in the Certificate of Designation.

Preferred Stockholders:  the holders, from time to time, of the Company’s 10% Cumulative Preferred Stock, par value $0.01 per share.

Prohibited Transfer:  any transfer of a Covered Security to a Person which (a) may not be effected without registering the securities involved under the Securities Act of 1933, as amended, (b) would result in the assets of the Company constituting Plan Assets as such term is defined in the Department of Labor regulations promulgated under ERISA, (c) would cause the Company to be, be controlled by or under common control with an “investment company” for purposes of the Investment Company Act of 1940, as amended, (d) would require any securities of the Company to be registered under the Securities and Exchange Act of 1934, as amended or (e) is in violation of this Agreement.

Public Offering:  any underwritten sale of Common Stock to the public pursuant to an effective registration statement under the Securities Act where following such sale the Common Stock is registered under Section 12(b) of the Exchange Act.

Purchase Price:  as defined in Section 2.10(d)(i).

Purchaser:  as defined in the introduction to this Agreement.

Recapitalization Agreement:  as defined in the recitals to this Agreement.

Recapitalization Threshold:  7% of the Available Common Stock, provided that such percentage shall be calculated using a fraction, the numerator of which shall be the aggregate number of shares of Available Common Stock held by the Rollover Stockholders and persons outside the Collaborative Group

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and, provided further that if Ernst & Young (or such other accounting firm of national standing as may be designated by the Purchaser from time to time) advises the Purchaser in good faith, based on changes in law, regulation or pronouncements of the Securities and Exchange Commission or its staff or the American Institute of Certified Public Accountants after the date hereof, that such percentage (i) may be lowered without jeopardizing the applicability of recapitalization accounting to the transactions contemplated by the Recapitalization Agreement or (ii) should be raised to avoid jeopardizing the applicability of recapitalization accounting to the transactions contemplated by the Recapitalization Agreement, such lower or higher percentage as determined by Ernst & Young or such other accountant.

Refusal Period:  as defined in Section 2.3(a).

Representatives:  as to any Person, its accountants, counsel, consultants, officers, directors, employees, agents and other advisors and representatives.

Rollover Exercise Shares:  shares of Common Stock acquired on exercise of Rollover Options.

Rollover Optionholder:  as defined in the introduction to this Agreement.

Rollover Options:  the Surviving Corporation Stock Options issued pursuant to the Recapitalization Agreement.

Rollover Stockholder:  as defined in the introduction of this Agreement.

Second Option Period:  as defined in Section 2.10(a).

Securities Act:  the Securities Act of 1933, as amended.

Selling Holder:  as defined in Section 2.3(a).

Senior Subordinated Loan Agreement:  as defined in the introduction to this Agreement.

Stockholder:  as defined in the introduction to this Agreement.

Stockholders’ Representative:  as defined in the Recapitalization Agreement.

Sub-Debt Purchase Agreement:

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Sub-Debt Warrantholders:  as defined in the introduction to this Agreement.

Subordinated Debt:

Subsequent Management Stockholder:  each Person who is, or becomes, a party to this Agreement pursuant to Section 4.14 hereof upon exercise of any option granted to such Person pursuant to the Plan.

Subsidiaries:  each corporation or other Person in which a Person owns or controls, directly or indirectly, capital stock or other equity interests representing more than 50% of the outstanding voting stock or other equity interests.

Surviving Corporation Stock Option:  as defined in the Recapitalization Agreement.

Tag-Along Right:  as defined in Section 2.4.

Value Per Share:  as defined in the Recapitalization Agreement.

Warrant Shares:  shares of Common Stock issued and outstanding upon exercise of a Warrant.

Warrants:  as defined in the introduction of this Agreement.

Section 3.2.Construction.  Any reference in this Agreement to a statute shall be to such statute, as amended from time to time, and to the rules and regulations promulgated thereunder.

ARTICLE IV
MISCELLANEOUS

Section 4.1.Termination.  This Agreement may be terminated at any time prior to the Closing Date if the Recapitalization Agreement is terminated pursuant to Article VIII thereof.

Section 4.2.Post-Closing Termination.  Articles I and II and Section 4.14 of this Agreement, except for Sections 2.1(d) and 2.2 hereof, shall terminate on an initial Public Offering.

Section 4.3.Effect of Termination.  In the event of the termination of this Agreement or certain provisions hereof, as the case may be, pursuant to the provisions of Section 4.1 or 4.2, this Agreement or such provisions, as the case may be,

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shall have no further effect, without any further liability to any Person in respect hereof or of the transactions contemplated hereby on the part of any party hereto, or any of its directors, officers, Representatives, stockholders or Affiliates, except for any liability resulting from such party’s breach of this Agreement.

Section 4.4.Notices.  All notices, requests, demands, waivers and other communications required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been duly given if (a) delivered personally, (b) mailed, certified or registered mail with postage prepaid, (c) sent by next-day or overnight mail or delivery or (d) sent by telecopy or telegram, as follows:

(a)	if to the Purchaser:
	NCP-EH, L.P.
	c/o North Castle Partners, L.L.C.
	60 Arch Street
	Greenwich, Connecticut  06830
	Fax:  (203) 618-1860
	Telephone:  (203) 862-3200
	Attention:  Peter J. Shabecoff
	and
	c/o J.W. Childs Associates, L.P.
	One Federal Street
	Boston, MA  02110
	Telephone:  (617) 753-1100
	Attention:  Glenn A. Hopkins
	with a copy to:
	Debevoise & Plimpton
	875 Third Avenue
	New York, New York  10022
	Fax:  (212) 909-6836
	Telephone:  (212) 909-6000
	Attention:  Franci J. Blassberg, Esq.

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	and
	Kaye, Scholer, Fierman, Hays & Handler, LLP
	425 Park Avenue
	New York, New York  10022
	Fax:  (212) 836-8689
	Telephone:  (212) 836-8000
	Attention:  Stephen C. Koval, Esq.
(b)	if to the Company:
	Equinox Holdings, Inc.
	895 Broadway
	New York, NY  10003
	Telephone:  (212) 254-0437
	Attention:  Chief Executive Officer
	with a copy to the Purchaser at the address listed above; and
(c)	if to the Rollover Stockholders or the Rollover Optionholders, as set forth in Schedule I or II, respectively
	with a copy to:
	Cleary, Gottlieb, Steen & Hamilton
	One Liberty Plaza
	New York, NY  10006
	Telephone:  (212) 225-2000
	Attention:  Paul J. Shim, Esq.
(d)	if to the Sub-Debt Warrantholders:
	Albion Alliance LLC
	1345 Avenue of the Americas, 37th Floor
	New York, NY  10105
	Fax:  (212) 969-6659
	Attention:  Andrew H. Steuerman

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with a copy to:

Goodwin, Procter & Hoar LLP

Exchange Place

53 State Street

Boston, MA  02109

Fax:  (617) 523-1231

Attention:  Kevin M. Dennis, Esq.

or, in each case, at such other address as may be specified in writing to the other parties hereto.

All such notices, requests, demands, waivers and other communications shall be deemed to have been received (w) if by personal delivery on the day after such delivery, (x) if by certified or registered mail, on the seventh business day after the mailing thereof, (y) if by next-day or overnight mail or delivery, on the day delivered, (z) if by telecopy or telegram, on the next day following the day on which such telecopy or telegram was sent, provided that a copy is also sent by certified or registered mail.

Section 4.5.Governing Law, etc.

(a)This Agreement shall be governed in all respects, including as to validity, interpretation and effect, by the internal laws of the state of New York, without giving effect to the conflict of laws rules thereof to the extent that any such rules would require or permit the application of the laws of any other jurisdiction, except to the extent that the corporate law of the State of incorporation of the Company specifically and mandatorily applies.  Each party hereto hereby irrevocably submits to the jurisdiction of the courts of the State of New York and the Federal courts of the United States of America located in the State, City and County of New York solely in respect of the interpretation and enforcement of the provisions of this Agreement and of the documents referred to in this Agreement, and in respect of the transactions contemplated hereby and thereby.  Each party hereto irrevocably agrees that all claims in respect of the interpretation and enforcement of the provisions of this Agreement and of the documents referred to in this Agreement, and in respect of the transactions contemplated hereby and thereby, or with respect to any such action or proceeding, shall be heard and determined in such a New York State or Federal court, and that such jurisdiction of such courts with respect thereto shall be exclusive, except solely to the extent that all such courts shall lawfully decline to exercise such jurisdiction.  Each party hereto hereby waives, and agree not to assert, as a defense in any action, suit or proceeding for the interpretation or enforcement hereof or of any such document or in respect of any such transaction, that it is not subject to such jurisdiction.  Each party hereto hereby waives, and agrees not to assert, to the maximum extent permitted by law, as a defense in any action, suit or proceeding for the interpretation or enforcement hereof or of any such document or in

30

respect of any such transaction, that such action, suit or proceeding may not be brought or is not maintainable in such courts or that the venue thereof may not be appropriate or that this Agreement or any such document may not be enforced in or by such courts.  Each party hereto hereby consents to and grants any such court jurisdiction over the person of such party and over the subject matter of any such dispute and agrees that mailing of process or other papers in connection with any such action or proceeding in the manner provided in Section 4.4 or in such other manner as may be permitted by law, shall be valid and sufficient service thereof.

(b)Each party acknowledges and agrees that any controversy which may arise under this Agreement is likely to involve complicated and difficult issues, and therefore each such party hereby irrevocably and unconditionally waives any right such party may have to a trial by jury in respect of any litigation directly or indirectly arising out of or relating to this Agreement, or the breach, termination or validity of this Agreement, or the transactions contemplated by this Agreement.  Each party certifies and acknowledges that (a) no Representative of any other party has represented, expressly or otherwise, that such other party would not, in the event of litigation, seek to enforce the foregoing waiver, (b) each such party understands and has considered the implications of this waiver, (c) each such party makes this waiver voluntarily, and (d) each such party has been induced to enter into this Agreement by, among other things, the mutual waivers and certifications in this Section 4.5(b).

Section 4.6.Binding Effect.  This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, successors and permitted assigns.

Section 4.7.Assignment.  Except as provided in Section 2.6(f), this Agreement shall not be assignable or otherwise transferable by any party hereto without the prior written consent of the other parties hereto, and any purported assignment or other transfer without such consent shall be void and unenforceable; provided that the Purchaser may assign this Agreement or any of its rights and obligations hereunder (including, without limitation, its rights under Articles I and II) to any Affiliate of the Purchaser or any other Person, or to any lender to the Purchaser, or any Subsidiary or Affiliate thereof as security for obligations to such lender, provided further, that no assignment to any such lender shall in any way affect the Purchaser’s or any such assignee’s obligations or liabilities under this Agreement.

Section 4.8.No Third Party Beneficiaries.  Nothing in this Agreement shall confer any rights upon any person or entity other than the parties hereto and their respective heirs, successors and permitted assigns.

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Section 4.9.Amendment; Waivers, Etc.  No amendment, modification or discharge of this Agreement, and no waiver hereunder, shall be valid or binding unless set forth in writing and duly executed, by the holder or holders of a majority of the Available Common Stock, provided, however, that this Agreement may not be amended, modified or supplemented in a manner that discriminates against any group of Stockholders without the written consent of a majority of such group determined by number of shares.  Any such waiver shall constitute a waiver only with respect to the specific matter described in such writing and shall in no way impair the rights of the party granting such waiver in any other respect or at any other time.  Neither the waiver by any of the parties hereto of a breach of or a default under any of the provisions of this Agreement, nor the failure by any of the parties, on one or more occasions, to enforce any of the provisions of this Agreement or to exercise any right or privilege hereunder, shall be construed as a waiver of any other breach or default of a similar nature, or as a waiver of any of such provisions, rights or privileges hereunder.  The rights and remedies herein provided are cumulative and none is exclusive of any other, or of any rights or remedies that any party may otherwise have at law or in equity.

Section 4.10.Entire Agreement.  This Agreement constitutes the entire agreement and supersedes all prior agreements and understandings, both written and oral, between the parties with respect to the subject matter hereof.

Section 4.11.Severability.  If any provision, including any phrase, sentence, clause, section or subsection, of this Agreement is invalid, inoperative or unenforceable for any reason, such circumstances shall not have the effect of rendering such provision in question invalid, inoperative or unenforceable in any other case or circumstance, or of rendering any other provision herein contained invalid, inoperative, or unenforceable to any extent whatsoever.

Section 4.12.Headings.  The headings contained in this Agreement are for purposes of convenience only and shall not affect the meaning or interpretation of this Agreement.

Section 4.13.Counterparts.  This Agreement may be executed in several counterparts, each of which shall be deemed an original and all of which shall together constitute one and the same instrument.

Section 4.14.Subsequent Stockholders.  Each of the parties hereto agrees that any Person who after the date of this Agreement acquires any shares of Common Stock, preferred stock or other equity interest in the Company, and any other security, option, warrant or other right that does or may allow the holder thereof to receive Common Stock or preferred stock or other equity interest (or any interest therein) shall become a party to this Agreement by executing Schedule III hereto.  The Company shall maintain a register of all parties to this Agreement which shall be available for review by

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any party hereto.  As contemplated by Section 2.1(d), any transfer of Covered Securities (or any interest therein) to a transferee required hereby to become a party to this Agreement shall be of no effect and shall be void ab initio unless such transferee becomes a party to this Agreement as provided in the first sentence of this Section 4.14.

Section 4.15.Release.

(a)Each of the undersigned Stockholders hereby releases, remises, acquits and discharges the Company and its Affiliates, and their respective officers, directors, shareholders, agents, employees, consultants, independent contractors, attorneys, advisors, successors and assigns, jointly and severally, from any and all claims, known or unknown, and however denominated, which such Stockholder, its successors or assigns has or may have against any such releasees and any and all liability such releasees may have to such Stockholder, in each case based on any or all facts, events or circumstances existing prior to the Closing Date, arising from any disclosure of information on or prior to the Closing Date or any failure to disclose information on or prior to the Closing Date to any of the Stockholders with respect to the business, operations, assets, financial condition, prospects, properties or results of operations of the Company or any of the Subsidiaries or any information relating to the transactions contemplated by the Recapitalization Agreement, including, without limitation, the terms thereof or any tax consequences to any Stockholder or any other person arising therefrom.  This release is for any relief, no matter how denominated, including, but not limited to injunctive relief, compensatory damages, punitive damages or rescissory damages.  Each of the undersigned Stockholders further agrees that he, she or it will not file or permit to be filed, either individually or as a group, or on his, her or its behalf, any such claim.  This release shall not apply to the obligations set forth in this Agreement, the Senior Subordinated Loan Agreement, the Recapitalization Agreement and the Ancillary Agreements.  Notwithstanding the foregoing, nothing in this Section shall affect the obligations of the Company and its subsidiaries to Affiliates of the Rollover Stockholders pursuant to lease agreements and guaranties in effect on the date hereof.

(b)Each of the Company and the Purchaser hereby releases, remises, acquits and discharges the undersigned Stockholders from any and all claims, known or unknown and however denominated, which it, its successors or assigns have or may have against any such Stockholders and any and all liability such Stockholders may have to it arising on or prior to the Closing Date, provided that this release shall not apply to any such liabilities (x) arising out of this Agreement or the Recapitalization Agreement (including, without limitation, under the indemnification provisions of the Recapitalization Agreement) or any Ancillary Agreement, or (y) arising as a result of fraud, and provided further, that this release shall not apply to any liabilities to the Purchaser to the extent that such liabilities arose because the release contained in Section 4.15(a) was determined by a court or arbitrator of competent jurisdiction to be unenforceable or otherwise invalid.  This release is for any relief, no matter how

33

denominated, including, but not limited to injunctive relief, compensatory damages or punitive damages.  Each of the Company and the Purchaser further agrees that it will not file or permit to be filed, any such claim.

Section 4.16.Action by Co-Investment Fund.  The Co-Investment Fund will not take any action under this Agreement unless such action is consistent with the actions of NCP-EH, and the Co-Investment Fund will act in concert with respect to all actions taken by NCP-EH hereunder, including, without limitation, approving amendments to this Agreement.

Section 4.17.Actions by Preferred Stockholders.

(a)The Preferred Stockholders (solely in their capacity as Preferred Stockholders) hereby agree to vote their shares of Preferred Stock, to the extent they are entitled or permitted to vote under the laws of the State of Delaware or otherwise, in favor of any Exit Event or Drag-Along Sale, provided that the Preferred Stockholders receive on or prior to the date of consummation of such Exit Event or Drag-Along Sale (whether or not as part of such Exit Event or Drag-Along Sale) an amount in cash per share of Preferred Stock at least equal to the Liquidation Preference per share provided therefor in the Certificate of Designation (including an amount in cash equal to a prorated dividend for the period from the Dividend Payment Date immediately prior to the date of payment to the Preferred Stockholders to such date of payment).

(b)Notwithstanding any rights contained in the Certificate of Designation for the Preferred Stock to the contrary, the Preferred Stockholders (solely in their capacity as Preferred Stockholders) shall not vote their shares of Preferred Stock against (i) any amendment to the Certificate of Incorporation to the extent such amendment would authorize any class of Parity or Senior Securities (as defined in the Certificate of Designation), or (ii) the issuance by the Company of any Parity or Senior Securities, provided in each case that the Board has approved such amendment or issuance in accordance with the terms of this Agreement.

[The remainder of this page intentionally blank]

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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date first above written.

NCP-EH, L.P.
By:	NCP-EH GP, L.L.C.,
	its General Partner
	By:	/s/  Adam Saltzman
		Name:  Adam Saltzman
		Title:  Executive Vice President
NCP CO-INVESTMENT FUND, L.P.
By:	NCP Co-Investment GP, L.L.C.,
	its General Partner
	By:	/s/  Peter J. Shabecoff
		Name:  Peter J. Shabecoff
		Title:  Managing Director
EQUINOX HOLDINGS, INC.
By:	/s/  Adam Saltzman
	Name:  Adam Saltzman
	Title:  Vice President

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ALBION ALLIANCE MEZZANINE FUND, L.P.
By:	Albion Alliance LLC,
	its General Partner
By:	/s/  Andrew H. Steuerman
	Name:  Andrew H. Steuerman
	Title:  Senior Vice President
ALBION ALLIANCE MEZZANINE FUND II, L.P.
By:	AA MEZZ II GP, LLC,
	its General Partner
By:	Albion Alliance LLC,
	its Sole Member
By:		/s/  Andrew H. Steuerman
		Name:  Andrew H. Steuerman
		Title:  Senior Vice President

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DEUTSCHE BANK SECURITIES INC.
By:	/s/  Edwin E. Roland, Jr.
	Name:  Edwin E. Roland, Jr.
	Title:  Director
By:	/s/  David J. Flannery
	Name:  David J. Flannery
	Title:  Managing Director

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EXETER CAPITAL PARTNERS IV, L.P.
By:	Exeter IV Advisors, L.P., its
	General Partner
By:	Exeter IV Advisors, Inc., its
	General Partner
By:	/s/  Authorized Signatory
	Name:
	Title:
EXETER EQUITY PARTNERS, L.P.
By:	Exeter Equity Advisors, L.P., its
	General Partner
By:	Exeter Equity Advisors, Inc., its
	General Partner
By:	/s/  Authorized Signatory
	Name:
	Title:

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BILL AND MELINDA GATES FOUNDATION
By:	/s/  Robert Sydow
	Name:	Robert Sydow
	Title:	Authorized Agent
ARROW INVESTMENT PARTNERS
By:	/s/  Robert Sydow
	Name:	Robert Sydow
	Title:	Authorized Agent

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DONATO ERRICO, JR.

/s/  Donato Errico, Jr.

VITO ERRICO

/s/  Vito Errico

LAVINIA ERRICO (JR.)

/s/  Lavinia Errico

DONATO ERRICO, SR.

/s/  Donato Errico

LAVINIA ERRICO (SR.)

/s/  Lavinia Errico

HARVEY SPEVAK

/s/  Harvey Spevak

RAKESH AHUJA

/s/  Rakesh Ahuja

TERRI BIALSKY

/s/  Terri Bialsky

FRANCES ERRICO

/s/  Frances Errico

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Acknowledged, accepted and agreed,
solely with respect to Section 4.17 hereof
NORTH CASTLE PARTNERS II, L.P.
	By:	NCP G.P. II, L.P., its general partner
		By:	North Castle G.P. II, L.L.C.,
				its general partner
				By:	/s/  Benjamin James
				Name:  Benjamin James
				Title:    Member
Acknowledged, accepted and agreed,
solely with respect to Section 4.17 hereof
FRIENDS OF NORTHCASTLE FUND, L.P.
	By:	NCP CO-INVESTMENT FUND GP, L.L.C.
		its general partner
		By:		/s/  Peter J. Shabecoff
		Name:  Peter J. Shabecoff
		Title:    Managing Director

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Schedule I to the
Stockholders Agreement

ROLLOVER STOCKHOLDERS
AND THEIR NOTICE ADDRESSES

Name	Address
Donato Errico, Jr.	111 West 67th Street, Apt. 29E  New York, NY 10023
Vito Errico	520 East 82nd Street  New York, NY 10021
Lavinia Errico (Jr.)	1385 York Avenue  New York, NY 10021
Donato Errico, Sr.	301 Beech Street  Hackensack, NJ 07601
Lavinia Errico (Sr.)	301 Beech Street  Hackensack, NJ 07601
Harvey Spevak	315 West 102nd Street, Apt. 4A  New York, NY 10025
Rakesh Ahuja	61-45 98th Street, Apt. 10G  Rego Park, NY 11374
Terri Bialsky	420 East 79th Street, Apt. 8D  New York, NY 10021
Frances Errico	127 West 79th Street, Apt. 6D  New York, NY 10024

Schedule II to the
Stockholders Agreement

ROLLOVER OPTIONHOLDERS
AND THEIR NOTICE ADDRESSES

Name	Address
Paul Boardman	106 Park Avenue  Bronxville, NY
Catherine Cassidy
Harvey Spevak	315 W. 102nd st. Apt. 4A  New York, NY 10025
Ken Fleischer	557 General Knox Road  King of Prussia, PA 19406

Schedule III to the
Stockholders Agreement

SUBSEQUENT STOCKHOLDERS

	Notice Address:
Name:
	with a copy to:
	Notice Address:
Name:
	Notice Address:
Name:
	Notice Address:
Name:

FIRST AMENDMENT TO STOCKHOLDERS AGREEMENT

FIRST AMENDMENT TO STOCKHOLDERS AGREEMENT, dated as of February 21, 2003 (this “Amendment”), among Equinox Holdings, Inc., a Delaware corporation (the “Company”) Equinox Holdings, L.P. (f/n/a NCP-EH, L.P.) (“Equinox LP”) and NCP Co-Investment Fund, L.P. (“NCP Co-Investment LP”).  Unless otherwise defined herein, capitalized terms used herein shall have the meanings attributed to them in the Stockholders Agreement.

W I T N E S S E T H:

WHEREAS, the Company, the Stockholders, NCP Partnership and Friends are parties to that certain Stockholders Agreement, dated December 15, 2000 (the “Stockholders Agreement”);

WHEREAS, the Company, Equinox LP and NCP Co-Investment LP desire that the Stockholders Agreement be amended as set forth herein;

WHEREAS, pursuant to Section 4.9 thereof, the Stockholders Agreement may be amended upon written consent of holders of a majority of the Available Common Stock; and

WHEREAS, the Board of Directors of the Company has increased the number of members of the Board of Directors from eight (8) to ten (10).

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

A.Amendments to Subsection 1.1(a).  Subsection 1.1(a) of the Stockholders Agreement is hereby amended by deleting such section in its entirety and substituting in place thereof the following:

“The Board of Directors will consist of ten members:  (i) nine individuals, including one Management Director, nominated by the Purchaser, and (ii) so long as the Rollover Stockholders collectively own five percent (5%) of the Available Common Stock, Donato Errico.  Subject to the provisions of this Agreement, each Stockholder entitled to vote shall take all necessary actions to effect the provisions of this Section 1.1(a).”

B.Consent to Agreement.  The Company, Equinox LP and NCP Co-Investment LP hereby consent in writing to this Amendment.  The Company, Equinox LP and NCP Co-Investment LP hereby represent and warrant to the Sub-Debt

Warrantholders, Rollover Stockholders and the Rollover Optionholders that such written consent is sufficient to satisfy the requirements of Section 4.9 of the Stockholders Agreement.

C.Applicable Law and Jurisdiction.  This Amendment has been executed and delivered in New York, New York, and the rights and obligations of the parties hereto shall be governed by, and shall be construed and enforced in accordance with, the laws of the State of New York.

D.Counterparts.  This Amendment may be executed by the parties hereto in any number of separate counterparts and all of said counterparts taken together shall be deemed to constitute one and the same instrument.

E.Continuing Effect.  Except as expressly amended hereby, the Stockholders Agreement as amended by this Amendment shall continue to be and shall remain in full force and effect in accordance with its terms.  This Amendment shall not constitute an amendment or waiver of any provision of the Stockholders Agreement not expressly referred to herein.  Any reference to the “Stockholders Agreement” in the Limited Partnership Agreement of Equinox Holdings, L.P. (f/k/a NCP-EH, L.P), as amended or supplemented, or any related documents shall be deemed to be a reference to the Stockholders Agreement as amended by this Amendment.

[END OF TEXT]

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their respective officers thereunto duly authorized, as of the date first above written.

EQUINOX HOLDING, L.P.
By:	NCP-EH GP, L.L.C.,
	its General Partner
		By:	/s/  Adam Saltzman
			Name:  Adam Saltzman
			Title:  Executive Vice President
By:		JWC-EH, LLC,
		its General Partner
		By:	/s/  Marc Tricoli
			Name:  Marc Tricoli
			Title:  Vice President
NCP CO-INVESTMENT FUND, L.P.
By:		NCP Co-Investment GP, L.L.C.,
		its General Partner
		By:	/s/  Peter J. Shabecoff
			Name:  Peter J. Shabecoff
			Title:  Managing Director

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EQUINOX HOLDINGS, INC.
By:	/s/  Adam Saltzman
	Name:  Adam Saltzman
	Title:  Vice President

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EX-10.6

Exhibit 10.6

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT is entered into as of this 15^th day of December, 2000, by and between Equinox Holdings, Inc., a Delaware corporation (the “Company”) and Harvey Spevak (“Executive”).

W I T N E S S E T H :

WHEREAS, Executive has served as the President and Chief Executive Officer of the Company pursuant to an Employment Agreement dated as of December 11, 1998, as amended February 1, 2000, and has been subject to the terms and conditions of a Non-Disclosure and Non-Competition Agreement, dated as of December 11, 1998 (collectively, the “Prior Employment Agreements”);

WHEREAS, NCP-EH, L.P., a Delaware limited partnership, NCP-EH Recapitalization Corp., a Delaware corporation, the Company and certain stockholders of the Company have entered into Stock Purchase Agreement and Agreement and Plan of Merger, dated as of October 16, 2000, as amended (the “Recapitalization Agreement”);

WHEREAS, the Company desires that following the “Closing Date” (as defined in the Recapitalization Agreement), Executive continue his employment with the Company, and Executive desires to continue such employment, upon the terms set forth in this Agreement.

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

Section 1.Agreement to Employ; No Conflicts

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

information he may have obtained in connection with employment with any prior employer (other than the Company prior to the Closing Date).

Section 2.Term; Position and Responsibilities

(a)  Term of Employment.  Unless Executive’s employment shall sooner terminate pursuant to Section 7, the Company shall employ Executive for a term commencing on the Closing Date (the “Commencement Date”) and ending on the third anniversary thereof (the “Initial Term”).  Effective upon the expiration of the Initial Term and of each Additional Term (as defined below), Executive’s employment hereunder shall be deemed to be automatically extended, upon the same terms and conditions, for an additional period of one year (each, an “Additional Term”), in each such case, commencing upon the expiration of the Initial Term or the then current Additional Term, as the case may be, unless, at least 60 days prior to the expiration of the Initial Term or such Additional Term, either party hereto shall have notified the other party hereto in writing that such extension shall not take effect.  The period during which Executive is employed pursuant to this Agreement, including any extension thereof in accordance with the preceding sentence, shall be referred to as the “Employment Period.”

(b)  Position and Responsibilities.  During the Employment Period, the Company will use its reasonable best efforts to cause Executive to be appointed or elected to the Board of Directors of the Company (the “Board”) which efforts shall include without limitation nominating Executive to the Board, and Executive shall serve as Chief Executive Officer of the Company and shall have such duties and responsibilities as are customarily assigned to individuals serving in such positions and such other duties consistent with Executive’s titles and positions of Chief Executive Officer and as a director as the Board shall specify from time to time.  Executive shall devote all of his skill, knowledge and working time to the conscientious performance of the duties and responsibilities of such positions, except for vacation time as set forth in Section 6(c), absence for sickness or similar disability, and time spent in connection with his personal affairs or performing services for any charitable, religious or community organizations, so long as such time spent does not materially interfere with the performance of Executive’s duties hereunder.

Section 3.Base Salary

As compensation for the services to be performed by Executive during the Employment Period, the Company shall pay Executive a base salary at an annualized rate of $300,000, payable in installments on the Company’s regular payroll dates (but no less frequently than monthly).  The Board shall review Executive’s base salary annually during the period of his employment hereunder and, in its sole discretion, may increase

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(but not decrease) such base salary from time to time.  The annual base salary payable to Executive under this Section 3, as the same may be increased from time to time, shall hereinafter be referred to as the “Base Salary.”

Section 4.Bonus Arrangements

(a)  Cash Bonus.  During the Employment Period, Executive shall have an annual cash incentive bonus opportunity (as described in the following sentence) (the “Incentive Bonus”), which shall be payable (as described in the following sentence) if the Company achieves the performance objectives (based on the Company’s adjusted EBITDA) established from time to time by the Board or a committee thereof for the applicable period (the “Bonus Targets”).  If the Company’s performance for the applicable period (a) is less than 85% of the Bonus Targets, Executive shall not receive any payments pursuant to this Section 4(a); (b) equals 85% of the Bonus Targets, Executive shall be paid an Incentive Bonus equal to $25,000; (c) exceeds 85% but is less than or equal to 100% of the Bonus Targets, Executive shall be paid $25,000 plus $10,000 for each one percent (1%) of the Bonus targets achieved in excess of 85%, subject to a maximum Incentive Bonus payable pursuant to this clause (c) of $175,000 for performance equal to 100% of the Bonus Targets; or (d) exceeds 100% of the Bonus Targets, Executive shall be paid $25,000 for each one percent (1%) of the Bonus Targets achieved in excess of 100%.  The Incentive Bonus calculated pursuant to this Section 4 (a) shall be paid to Executive as soon as reasonably practicable but in no event later than April 10^th after the year for which such Incentive Bonus is due.

(b)  Options.  Executive shall be granted options to purchase shares of common stock, par value, $.01 per share, of the Company (the “Common Stock”) that represent not less than 3.5% of the fully diluted shares of Common Stock outstanding (calculated in accordance with Section 4.1 of the Plan (as defined below) (the “Options”) as of the Commencement Date.  The Options shall be issued pursuant to, and in accordance with, the Equinox Holdings, Inc. 2000 Stock Incentive Plan (the “Plan”), which will be evidenced by one or more stock option agreements to be entered into by Executive and the Company, pursuant to the Plan.  The Options shall vest in accordance with the Plan, subject to Executive’s continued employment with the Company through the applicable vesting date.

Section 5.Employee Benefits

During the Employment Period, Executive shall be entitled to participate in all  profit sharing, life, medical, dental, disability and other welfare benefit plans maintained by the Company which are made available to senior executives of the Company.

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Section 6.Perquisites and Expenses

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

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

(c)  Vacation.  During the Employment Period, Executive shall be entitled to four weeks of paid vacation on an annualized basis, without carryover accumulation.

Section 7.Termination of Employment

(a)  Termination Due to Death or Disability.  In the event that Executive’s employment hereunder terminates due to his death or is terminated by the Company due to Executive’s Disability (as defined below), no termination benefits shall be payable to or in respect of Executive except as provided in Section 7(f)(ii).  For purposes of this Agreement, “Disability” shall mean a physical or mental disability that prevents or is reasonably expected to prevent the performance by Executive of his duties hereunder for a continuous period of 90 days or longer or for 180 days or more in any 12-month period.  The determination of Executive’s Disability shall (i) be made by an independent physician who is reasonably acceptable to the Company and Executive (or his representative), (ii) be final and binding on the parties hereto and (iii) be made taking into account such competent medical evidence as shall be presented to such independent physician by Executive and/or the Company or by any physician or group of physicians or other competent medical experts employed by Executive and/or the Company to advise such independent physician.

(b)  Termination by the Company for Cause.  Executive may be terminated for Cause (as defined below) by the Company, provided that if the basis for the Company’s so terminating Executive is described by clauses (i) or (iv) of the definition of Cause, below, Executive shall have been given prior written notice of any proposed termination of his employment for Cause, which notice specifies in reasonable detail the circumstances claimed to provide the basis for such termination, and Executive shall not have corrected such circumstances, in a manner reasonably satisfactory to the Board,

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within 20 days of receipt of such written notice. “Cause” shall mean (i) the willful failure of Executive substantially to perform the duties specified in Section 2(b) (other than any such failure due to Executive’s physical or mental illness), (ii) Executive’s engaging in willful and serious misconduct that has caused or is reasonably expected to result in material injury to the Company or any of its Affiliates, (iii) Executive’s conviction of, or entering a plea of guilty or nolo contendere to, a crime that constitutes a felony, or (iv) the willful and material breach by Executive of any of his obligations hereunder or under any other written agreement or written covenant with the Company or any of its Affiliates.

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

(d)  Termination by Executive.  Except in the case of a termination for Good Reason (as defined below), Executive may terminate his employment for any other reason upon 60 days prior written notice delivered to the Company.  A termination of employment by Executive for “Good Reason” shall mean a termination by Executive of his employment with the Company, by written notice to the Company specifying in reasonable detail the circumstances claimed to provide the basis for such termination, within 60 days following the occurrence (or, in the case of clause (i) of this definition of Good Reason, 60 days following the last occurrence), without Executive’s consent, of any of the following events and the failure of the Company to correct the circumstances set forth in Executive’s notice of termination within 20 days of receipt of such notice: (i) the assignment to Executive of duties and responsibilities which, in the aggregate during the twelve month period prior to the date notice is given by Executive to the Company specifying the basis for such termination, are significantly different from, and that result in a substantial diminution of, the duties and responsibilities that he has or is to assume on the Commencement Date pursuant to Section 2(b), (ii) the failure of the Company to obtain the assumption of this Agreement by any Successor to the Company as contemplated by Section 13(a), (iii) a reduction in the rate of Executive’s Base Salary or Incentive Bonus, (iv) a material breach of this Agreement by the Company; (v) the Company requiring Executive to be based anywhere other than the New York metropolitan area, except for travel reasonably required by the Company; or (vi) if the Company gives written notice to Executive pursuant to Section 2(a) that it does not desire to renew this Agreement upon expiration of the then current term.  Executive agrees that a corporate reorganization by the Company and/or its Affiliates pursuant to which the Company ceases to exist shall not constitute Good Reason hereunder so long as there is no substantial diminution or significant change in the nature of Executive’s duties or responsibilities as described in Section 2(b).

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

(f)  Payments Upon Certain Terminations.

(i)  In the event of a termination of Executive’s employment by Company Without Cause or a termination by Executive of his employment for Good Reason in either such case during the Employment Period (any such termination, a “Qualifying Termination”), Company shall pay to Executive (or, following his death, to Executive’s beneficiaries): (x) his full Base Salary through the Date of Termination, (y) his Incentive Bonus for the Company’s fiscal year ending prior to the Date of Termination if, on or prior to the Date of Termination, Executive has not been paid such Incentive Bonus for such prior fiscal year plus a pro rata bonus calculated in accordance with clause (z) of Section 7(f)(ii) hereof, payable in accordance with the provisions of such clause, provided that the conditions of such clause have been satisfied, and (z) as liquidated damages in respect of claims based on provisions of this Agreement, and provided Executive executes and delivers a general release of all claims in form and substance reasonably satisfactory to the Company and Executive, his Base Salary for 18 months, which shall be payable in installments on Company’s regular payroll dates (the “Severance Period”).

If Executive’s employment shall terminate and he is entitled to receive continued payments of his Base Salary under clause (z) of this Section 7(f)(i), the Company shall continue to provide to Executive during the Severance Period the life, medical, dental, accidental death and dismemberment and prescription drug benefits, if any, referred to in Section 5 (the “Continued Benefits”).

(ii)  If Executive’s employment shall terminate due to his death or Disability or if the Company shall terminate Executive’s employment for Cause or Executive shall terminate his employment without Good Reason in any such case during the Employment Period, the Company shall pay Executive (or, in the event of his death, his beneficiaries), (x) his full Base Salary through the Date of Termination, plus, if Executive’s employment shall terminate due to his death or Disability, or Executive shall terminate his employment without Good Reason in any such case during the Employment Period, (y) his Incentive Bonus for the Company’s fiscal year ending prior to the Date of Termination if, on or prior to the Date of Termination, Executive has not been paid such

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Incentive Bonus for such prior fiscal year, plus, if Executive’s employment shall terminate due to his death or Disability in either case during the Employment Period, (z) if the Company and Executive have achieved the performance objectives (pro rated on the basis of the fraction described in clause (2) of this Section 7(f)(ii)(z)) established under the Company’s annual incentive compensation plan for the fiscal year that includes the Date of Termination, an amount, payable in one lump sum as soon as reasonably practicable but in no event later than April 10^th after the year for which such Incentive Bonus is due, equal to the product of (1) the amount of incentive compensation that would have been payable to Executive for such fiscal year under the annual incentive compensation plan had he remained employed for the entire fiscal year, multiplied by (2) a fraction, the numerator of which is equal to the number of days in such fiscal year that precede the Date of Termination and the denominator of which is equal to 365.

(iii)  Executive shall be entitled to receive all amounts payable and benefits accrued under any otherwise applicable plan, policy, program or practice of the Company (including, but not limited to, its vacation policies) in which Executive was a participant during his employment with Company in accordance with the terms thereof; provided that Executive shall not be entitled to receive any payments or benefits under any such plan, policy, program or practice providing any severance, bonus or incentive compensation (excluding any payments or benefits in respect of options granted under the Equinox Holdings, Inc. 1998 Stock Option Plan or the Equinox Holdings, Inc. 2000 Stock Incentive Plan) and the provisions of this Section 7(f) shall supersede the provisions of any such plan, policy, program or practice.

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

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

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

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

Section 8.Restrictive Covenants

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

(b)  Non-Disparagement.  During the period commencing on the date hereof and ending eighteen months after the termination of Executive’s employment with the Company (the “Restriction Period”), Executive will not directly or indirectly (i) engage in any conduct or make any statement, whether in commercial or noncommercial speech, disparaging or criticizing in any way the Company, any Subsidiary, North Castle Partners, L.L.C. (“North Castle”), J.W. Childs & Associates, L.P. (“Childs”), any Affiliate of any of these, or any products or services offered by any of these, or (ii) engage in any other conduct or make any other statement, in each case, which could be reasonably expected to impair the goodwill of the Company, any Subsidiary, North Castle, Childs, or any Affiliate of any of these, the reputation of Company products or the marketing of Company products except to the extent required by law and then only after consultation with North Castle and Childs to the extent possible, or in connection with any dispute between Executive and any of the foregoing entities.  During the Restriction Period, the Company, any Subsidiary, North Castle, Childs and any Affiliate of any of these will not directly or indirectly (i) engage in any conduct or make any statement, whether in commercial or non-commercial speech, disparaging or criticizing in any way

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Executive, or (ii) engage in any other conduct or make any other statement, in each case, which could reasonably be expected to impair the business reputation of Executive except to the extent provided by law and then only after consultation with Executive to the extent possible, in connection with any dispute between the Company, any Subsidiary, North Castle, Childs or any Affiliate of these, and Executive, or in connection with any conduct or statement which is reasonably required to manage the Company and is internal to or amongst the Company, any Subsidiary, North Castle, Childs, any Affiliate of any of these, or any other Person which holds an ownership interest in any of the foregoing.

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

(d)  Non-Solicitation of Employees.  During the Restriction Period, Executive shall not, directly or indirectly, for his own account or for the account of any other Person in any jurisdiction in which the Company or any of its Affiliates has commenced or has made plans to commence operations at the time of Executive’s employment, (i) solicit for employment, employ or otherwise interfere with the relationship of the Company or any of its Affiliates with any natural person throughout the world who, during the six-month period prior to such solicitation, employment, or interference, is or was employed by or otherwise engaged to perform services for the Company or any of its Immediate Affiliates or an Affiliate of the Company to whom Executive was introduced to by virtue of his relationship with the Company or any of its Immediate Affiliates other than any such solicitation or employment on behalf of the Company or any of its Affiliates during Executive’s employment with the Company, or (ii) induce any employee of the Company or any of its Affiliates who is a member of management to engage in any activity which Executive is prohibited from engaging in under any of paragraphs of this Section 8 or to terminate his or her employment with the Company.

(e)  Non-Solicitation of Customers.  During the Restriction Period, Executive shall not, directly or indirectly, for his own account or for the account of any other Person, in any jurisdiction in which the Company or any of its Affiliates has commenced or made plans to commence operations, solicit or otherwise attempt to establish any

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business relationship of a nature that is competitive with the business or relationship of the Company or any of its Affiliates with any Person throughout the world which, during the six-month period prior to any such solicitation is or was a customer, client or distributor of the Company or any of its Immediate Affiliates or an Affiliate of the Company to whom Executive was introduced to by virtue of his relationship with the Company or any of its Immediate Affiliates, other than any such solicitation on behalf of the Company or any of its Affiliates during Executive’s employment with the Company.

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

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

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

(b)  Executive acknowledges and agrees that Executive has had and will have a prominent role in the management of the business, and the development of the goodwill, of the Company and its Affiliates and will establish and develop relations and contacts with the principal customers and suppliers of the Company and its Affiliates in the United States of America and the rest of the world, all of which constitute valuable goodwill of, and could be used by Executive to compete unfairly with, the Company and its Affiliates and that (i) in the course of his employment with the Company, Executive will obtain confidential and proprietary information and trade secrets concerning the business and operations of the Company and its Affiliates in the United States of America and the rest of the world that could be used to compete unfairly with the Company and its Affiliates; (ii) the covenants and restrictions contained in Section 8 are intended to protect the legitimate interests of the Company and its Affiliates in their respective

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goodwill, trade secrets and other confidential and proprietary information; and (iii) Executive desires to be bound by such covenants and restrictions.

Section 10.Assumption of Agreement

The Company shall require any Successor thereto, by written agreement in form and substance reasonably satisfactory to Executive, to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place.  Failure of the Company to obtain such agreement prior to the effectiveness of any such succession shall be a breach of this Agreement and shall entitle Executive to terminate his employment with the Company for Good Reason as described in Section 7(d), provided that for purposes of implementing the foregoing, the date on which any such succession becomes effective shall be deemed the Date of Termination.

Section 11.Entire Agreement

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

Section 12.Indemnification

The Company hereby agrees that it shall indemnify and hold harmless Executive to the fullest extent permitted by law from and against any and all liabilities, costs, claims and expenses, including all costs and expenses incurred in defense of litigation (including attorneys’ fees), arising out of the employment of Executive hereunder, except to the extent that any such liabilities, costs, claims and expenses is found in a final judgment by a court of competent jurisdiction to have resulted from, arising out of or based upon the gross negligence or willful misconduct of Executive.  Costs and expenses incurred by Executive in defense of such litigation (including attorneys’ fees) shall be paid by Company in advance of the final disposition of such litigation upon receipt by Company of (a) a written request for payment, (b) appropriate documentation evidencing the incurrence, amount and nature of the costs and expenses for which payment is being sought, and (c) an undertaking adequate under applicable law made by or on behalf of Executive to repay the amounts so paid if it shall ultimately be determined that Executive is not entitled to be indemnified by the Company under this Agreement, including but not limited to as a result of such exception.  The Company and Executive will consult in

11

good faith with respect to the conduct of any such litigation, and Executive’s counsel shall be selected with the consent of the Company.  The Company shall maintain an appropriate level of director’s and officer’s liability insurance during the Employment Period and during the Restricted Period.

Section 13.Miscellaneous

(a)  Binding Effect; Assignment.  This Agreement shall be binding on and inure to the benefit of the Company, and its respective Successors and permitted assigns.  This Agreement shall also be binding on and inure to the benefit of Executive and his heirs, executors, administrators and legal representatives.  This Agreement shall not be assignable by any party hereto without the prior written consent of the other parties hereto, except as provided pursuant to this Section 13(a).  The Company may effect such an assignment without prior written approval of Executive upon the transfer of all or substantially all of its business and/or assets (by whatever means), provided that the Successor to the Company shall expressly assume and agree to perform this Agreement in accordance with the provisions of Section 10.

(b)  Governing Law, etc.

(i)  This agreement shall be governed in all respects, including as to validity, interpretation and effect, by the internal laws of the State of New York without giving effect to the conflict of laws rules thereof to the extent that the application of the law of another jurisdiction would be required thereby.  Each party hereby irrevocably submits to the jurisdiction of the courts of the State of New York and the federal courts of the United States of America located in the County of New York solely in respect of the interpretation and enforcement of the provisions of this Agreement and of the documents referred to in this Agreement, and in respect of the transactions contemplated hereby and thereby.  Each party hereby waives and agrees not to assert, as a defense in any action, suit or proceeding for the interpretation and enforcement hereof, or any such document or in respect of any such transaction, that such action, suit or proceeding may not be brought or is not maintainable in such courts or that the venue thereof may not be appropriate or that this Agreement or any such document may not be enforced in or by such courts.  Each party hereby consents to and grants any such court jurisdiction over the person of such parties and over the subject matter of any such dispute and agree that the mailing of process or other papers in connection with any such action or proceeding in the manner provided in Section 13(g) or in such other manner as may be permitted by law, shall be valid and sufficient service thereof.

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

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

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

(e)  Condition Precedent.  This Agreement shall be of no force and effect if the Closing pursuant to the Recapitalization Agreement does not occur and shall automatically expire if the Recapitalization Agreement is terminated.

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

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

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

(A)	If to the Company, to it at:
	Equinox Holdings, Inc.
	c/o North Castle Partners, L.L.C.
	60 Arch Street, Suite 1A
	Greenwich, CT 06830
	Tel:  (203) 618-1700
	Fax:  (203) 618-1860
	Attention:  Chairman of the Board of Directors
(B)	if to Executive, to him at his residential address as currently on file with the Company, with a copy to
	Cleary, Gottlieb, Steen & Hamilton
	One Liberty Plaza
	New York, New York 10006
	Attention:  Paul Shim, Esq.

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

	North Castle Partners, L.L.C.
	60 Arch Street, Suite 1A
	Greenwich, CT 06830
	Tel:  (203) 618-1700
	Fax:  (203) 618-1860
	Attention:  Adam Saltzman
and to:

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	Debevoise & Plimpton
	875 Third Avenue
	New York, New York 10022
	Tel: (212) 909-6000
	Fax: (212) 909-6836
	Attention:  Franci J. Blassberg, Esq.
and to:
	J.W. Childs Equity Partners II, L.P.
	c/o J.W. Childs Associates L.P.
	One Federal Street
	Boston, Massachusetts  02110
	Attention:  Glenn A. Hopkins
and to:
	Kaye, Scholer, Fierman, Hays and Handler LLP
	425 Park Avenue
	New York, New York  10022
	Attention:  Stephen C. Koval, Esq.

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

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

(k)  Certain Definitions.

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

“Code”:  the Internal Revenue Code of 1986, as amended.

“Control”:  with respect to any Person, means the possession, directly or indirectly, severally or jointly, of the power to direct or cause the direction of the

15

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

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

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

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

“Successor”:  of a Person means a Person that succeeds to the first Person’s assets and liabilities by merger, liquidation, dissolution or otherwise by operation of law, or a Person to which all or substantially all the assets and/or business of the first Person are transferred.

[the remainder of this page has been intentionally left blank.]

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

EQUINOX HOLDINGS, INC.
By:	/s/  Adam Saltzman
	Name:  Adam Saltzman
	Title:  Vice President
EXECUTIVE:
/s/  Harvey Spevak
Harvey Spevak

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EX-23.1

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Exhibit 23.1

Consent and Report of Independent Registered Public Accounting Firm

The Board of Directors
Equinox Holdings, Inc.

The audits referred to in our report dated June 16, 2004, included the related financial statement schedules as of December 31, 2003 and 2002, and for each of the years in the three-year period ended December 31, 2003, included in Amendment No. 1 to the registration statement on Form S-4 (Registration No. 333-112531) dated July 14, 2004. These financial statement schedules are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statement schedules based on our audits. In our opinion, such financial statement schedules, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly in all material respects the information set forth therein.

We consent to the use of our reports included herein and to the reference to our firm under the heading "Experts" in Amendment No. 1 to the registration statement on Form S-4 (Registration No. 333-112531) dated July 14, 2004.

KPMG LLP

/s/ KPMG LLP

New York, New York
July 12, 2004

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Exhibit 23.1

Consent and Report of Independent Registered Public Accounting Firm

EX-23.3

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Exhibit 23.3

Letter of Consent

        Bouchez Kent hereby consents to the reference to the results of our focus-group study in the Registration Statement of Equinox Holdings, Inc. (No. 333-112531) relating to the private offering of 9% senior notes due 2009 and the prospectus included as a part of that Registration Statement, including all amendments thereto.

        Bouchez Kent's consent to the filing of this Consent in Equinox Holdings, Inc.'s Registration Statement shall not be deemed to be an admission that Bouchez Kent is an expert within the meaning of Rule 436 under the Securities Act of 1933, as amended.

Yours very truly,

Bouchez Kent

/s/  BOUCHEZ KENT

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Letter of Consent

EX-99.1

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Exhibit 99.1

LETTER OF TRANSMITTAL
OF

EQUINOX HOLDINGS, INC.

OFFER TO EXCHANGE ANY AND ALL OUTSTANDING 9% SENIOR NOTES DUE 2009 ISSUED ON DECEMBER 16, 2003 FOR AN EQUAL PRINCIPAL AMOUNT OF ITS 9% SENIOR NOTES DUE 2009 WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, PURSUANT TO THE PROSPECTUS DATED             , 2004

THE EXCHANGE OFFER WILL EXPIRE AT .5:00 P.M., NEW YORK CITY TIME, ON                        , 2004 UNLESS THE EXCHANGE OFFER IS EXTENDED (THE "EXPIRATION DATE"). TENDERS MAY BE WITHDRAWN PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE. IF THE EXPIRATION DATE HAS BEEN EXTENDED, TENDERS PURSUANT TO THE EXCHANGE OFFER AS OF THE PREVIOUSLY SCHEDULED EXPIRATION DATE MAY NOT BE WITHDRAWN AFTER THE DATE OF THE PREVIOUSLY SCHEDULED EXPIRATION DATE.

The Exchange Agent for the Exchange Offer is:

U.S. Bank National Association

By Mail, Hand Delivery or Overnight Courier:
U.S. Bank National
Association
Corporate Trust Services
60 Livingston Avenue
St. Paul, Minnesota 55107
Attention: Specialized Finance For Information, Call:
(800) 934-6802


By Facsimile Transmission:
(Eligible Institutions only. See Instruction 4.)
(651) 495-8158To Confirm Facsimile Transmissions:
(Eligible Institutions only. See Instruction 4.)
(800) 934-6802

DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS, OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TO A NUMBER, OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED. YOU MUST SIGN THIS LETTER OF TRANSMITTAL IN THE APPROPRIATE SPACE PROVIDED THEREFOR, WITH SIGNATURE GUARANTEE IF REQUIRED, AND COMPLETE THE SUBSTITUTE FORM W-9 SET FORTH BELOW. SEE INSTRUCTION 8.

DESCRIPTION OF OLD NOTES (See Instructions 2 and 3.)

Name(s) and address(es) of Registered Owner(s) (Please fill in, if blank, exactly as name(s) appear(s) on Old Note(s))	Notes Tendered (Attach additional list if necessary)
	Certificate Number(s)(*)	Aggregate Principal Amount of Old Notes(*)	Principal Amount Tendered(**)
Total:
(*)    Need not be completed if Old Notes are being transferred by book-entry transfer.
(**)  Unless otherwise indicated, it will be assumed that ALL Old Notes described above are being tendered. See Instruction 3.

        The undersigned acknowledges that he, she or it has received and reviewed this Letter of Transmittal (the "Letter") and the Prospectus, dated                         , 2004 (the "Prospectus"), of Equinox Holdings, Inc. (the "Company"), relating to its offer to exchange up to $160,000,000 aggregate principal amount of its 9% Senior Notes Due 2009 (the "New Notes"), which have been registered under the Securities Act of 1933, as amended (the "Securities Act"), for a like principal amount of its issued and outstanding 9% Senior Notes due 2009 (the "Old Notes") from the registered holders thereof (each, a "Holder" and together, the "Holders"). The Prospectus and this Letter together constitute the Company's offer to exchange (the "Exchange Offer") its Old Notes for a like principal amount of its New Notes from the Holders.

        For each Old Note accepted for exchange, the Holder of such Old Note will receive a New Note having a principal amount equal to that of the surrendered Old Note. The New Notes will accrue interest from the last interest payment date on which interest was paid on the Old Notes. Accordingly, registered Holders of New Notes on the relevant record date for the first interest payment date following the consummation of the Exchange Offer will receive interest accruing from the last interest payment date on which interest was paid. Old Notes accepted for exchange will cease to accrue interest from and after the date of consummation of the Exchange Offer. Holders of Old Notes whose Old Notes are accepted for exchange will not receive any payment in respect of accrued interest on such Old Notes otherwise payable on any interest payment date the record date for which occurs on or after consummation of the Exchange Offer.

        This Letter is to be completed by a Holder of Old Notes either if certificates are to be forwarded herewith or if a tender of certificates for Old Notes, if available, is to be made by book-entry transfer to the account maintained by the Exchange Agent at The Depository Trust Company ("DTC") (the "Book-Entry Transfer Facility") pursuant to the procedures set forth in "The Exchange Offer—Book-Entry Transfer" section of the Prospectus. Holders of Old Notes whose certificates are not immediately available or who are unable to deliver their certificates or confirmation of the book-entry tender of their Old Notes into the Exchange Agent's account at the Book-Entry Transfer Facility (a "Book-Entry Confirmation") and all other documents required by this Letter to the Exchange Agent on or prior to the Expiration Date, must tender their Old Notes according to the guaranteed delivery procedures set forth in "The Exchange Offer—Guaranteed Delivery Procedures" section of the Prospectus. See Instruction 1. DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.

MUTILATED, LOST, STOLEN OR DESTROYED NOTES

o
CHECK HERE IF ANY OF THE CERTIFICATES REPRESENTING NOTES THAT YOU OWN HAVE BEEN MUTILATED, LOST, STOLEN OR DESTROYED AND SEE INSTRUCTION 9.

BOOK-ENTRY TRANSFER

o	CHECK HERE IF TENDERED NOTES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO AN ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH THE BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING (ONLY PARTICIPANTS IN THE BOOK-ENTRY TRANSFER FACILITY MAY DELIVER NOTES BY BOOK-ENTRY TRANSFER):
	Name of Tendering Institution

Account Number

Transaction Code Number

2

GUARANTEED DELIVERY

o	CHECK HERE IF TENDERED NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE THE FOLLOWING. (PLEASE ENCLOSE A PHOTOCOPY OF SUCH NOTICE OF GUARANTEED DELIVERY):
	Name(s) of Registered Holder(s)

Window Ticket Number (if any)

Date of Execution of Notice of Guaranteed Delivery

Name of Institution that Guaranteed Delivery

If delivered by book-entry transfer:

Account Number at Book-Entry Transfer Facility

Transaction Code Number

o	CHECK HERE IF YOU ARE A BROKER-DEALER ENTITLED, PURSUANT TO THE TERMS OF THE REGISTRATION RIGHTS AGREEMENT REFERRED TO IN THE PROSPECTUS, TO RECEIVE, AND WISH TO RECEIVE, 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO WITHIN 90 DAYS AFTER THE EXPIRATION DATE.
	Name

Address

        If the undersigned is not a broker-dealer, the undersigned represents that it is not engaged in, and does not intend to engage in, a distribution of New Notes. If the undersigned is a broker-dealer that will receive New Notes for its own account in exchange for Old Notes that were acquired as a result of market-making activities or other trading activities, it acknowledges and represents that it will deliver a prospectus meeting the requirements of the Securities Act, in connection with any resale of such New Notes; however, by so acknowledging and representing and by delivering such a prospectus the undersigned will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. If the undersigned is a broker-dealer that will receive New Notes, it represents that the Old Notes to be exchanged for the New Notes were acquired as a result of market-making activities or other trading activities. In addition, such broker-dealer represents that it is not acting on behalf of any person who could not truthfully make the foregoing representations.

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NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.

LADIES AND GENTLEMEN:

        Upon the terms and subject to the conditions of the Exchange Offer, the undersigned hereby tenders to the Company the aggregate principal amount of Old Notes described above. Subject to, and effective upon, the acceptance for exchange of the Old Notes tendered hereby, the undersigned hereby sells, assigns and transfers to, or upon the order of, the Company all right, title and interest in and to such Old Notes as are being tendered hereby and any and all Notes or other securities issued, paid or distributed or issuable, payable or distributable in respect of such Notes on or after            , 2004.

        The undersigned hereby irrevocably constitutes and appoints the Exchange Agent as the undersigned's true and lawful agent, attorney-in-fact and proxy with respect to Old Notes tendered hereby, with full power of substitution (such power of attorney being deemed to be an irrevocable power coupled with an interest), among other things, to cause the Old Notes to be assigned, transferred and exchanged.

        The undersigned hereby represents and warrants (a) that the undersigned has full power and authority to tender, sell, assign and transfer the Old Notes, (b) that when such Old Notes are accepted for exchange, the Company will acquire good and unencumbered title to such notes, free and clear of all liens, restrictions, charges and encumbrances and not subject to any adverse claim and such Old Notes will not have been transferred to the Company in violation of any contractual or other restriction on the transfer thereof, (c) that any New Notes acquired in exchange for Old Notes tendered hereby will have been acquired in the ordinary course of business of the person receiving such New Notes, whether or not such person is the undersigned, (d) that neither the Holder of such Old Notes nor any such other person is participating in, intends to participate in, or has an arrangement or understanding with any person to participate in the distribution (within the meaning of the Securities Act) of Old Notes or New Notes, (e) that neither the Holder of such Old Notes nor any such other person is an "affiliate," as defined in Rule 405 under the Securities Act, of the Company and (f) that neither the Holder of such Old Notes nor such other person is acting on behalf of any person who could not truthfully make the foregoing representations and warranties.

        The undersigned acknowledges that this Exchange Offer is being made in reliance on interpretations by the staff of the Securities and Exchange Commission (the "SEC"), as set forth in no-action letters issued to third parties, that the New Notes issued pursuant to the Exchange Offer in exchange for the Old Notes may be offered for resale, resold and otherwise transferred by Holders thereof (other than any such Holder that is a broker-dealer or an "affiliate" of the Company within the meaning of Rule 405 of the Securities Act), without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that such New Notes are acquired in the ordinary course of such Holder's business, at the time of commencement of the Exchange Offer such Holder has no arrangement or understanding with any person to participate in a distribution of such New Notes, and such Holder is not engaged in, and does not intend to engage in, a distribution of such New Notes. However, the SEC has not considered the Exchange Offer in the context of a no-action letter and there can be no assurance that the staff of the SEC would make a similar determination with respect to the Exchange Offer as in other circumstances. If the undersigned is not a broker-dealer, the undersigned represents that it is not engaged in, and does not intend to engage in a distribution of New Notes and has no arrangement or understanding to participate in a distribution of New Notes. If the undersigned is a broker-dealer that will receive New Notes for its own account in exchange for Old Notes, it represents that the Old Notes to be exchanged for the New Notes were acquired by it as a result of market-making activities or other trading activities and acknowledges that it will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of such New Notes; however, by so acknowledging and by delivering a prospectus meeting the requirements of the

4

Securities Act, the undersigned will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act.

        The SEC has taken the position that such broker-dealers may fulfill their prospectus delivery requirements with respect to the New Notes (other than a resale of New Notes received in exchange for an unsold allotment from the original sale of the Old Notes) with the Prospectus. The Prospectus, as it may be amended or supplemented from time to time, may be used by certain broker-dealers (as specified in the Registration Rights Agreement referenced in the Prospectus) ("Participating Broker-Dealers") for a period of time, starting on the Expiration Date and ending on the close of business 90 days after the Expiration Date in connection with the sale or transfer of such New Notes. The Company has agreed that, for such period of time, it will make the Prospectus (as it may be amended or supplemented) available to such a broker-dealer which elects to exchange Old Notes, acquired for its own account as a result of market making or other trading activities, for New Notes pursuant to the Exchange Offer for use in connection with any resale of such New Notes. By accepting the Exchange Offer, each broker-dealer that receives New Notes pursuant to the Exchange Offer acknowledges and agrees to notify the Company prior to using the Prospectus in connection with the sale or transfer of New Notes and agrees that, upon receipt of notice from the Company of the happening of any event which makes any statement in the Prospectus untrue in any material respect or which requires the making of any changes in the Prospectus in order to make the statements therein (in light of the circumstances under which they were made) not misleading, such broker-dealer will suspend use of the Prospectus until (i) the Company has amended or supplemented the Prospectus to correct such misstatement or omission and (ii) either the Company has furnished copies of the amended or supplemented Prospectus to such broker-dealer or, if the Company has not otherwise agreed to furnish such copies and declines to do so after such broker-dealer so requests, such broker-dealer has obtained a copy of such amended or supplemented Prospectus as filed with the SEC. Except as described above, the Prospectus may not be used for or in connection with an offer to resell, a resale or any other retransfer of New Notes. A broker dealer that would receive New Notes for its own account for its Old Notes, where such Old Notes were not acquired as a result of market-making activities or other trading activities, will not be able to participate in the Exchange Offer.

        The undersigned will, upon request, execute and deliver any additional documents deemed by the Company to be necessary or desirable to complete the sale, assignment and transfer of the Old Notes tendered hereby.

        All authority conferred or agreed to be conferred in this Letter and every obligation of the undersigned hereunder shall be binding upon the successors, assigns, heirs, executors, administrators, trustees in bankruptcy and legal representatives of the undersigned and shall not be affected by, and shall survive, the death or incapacity of the undersigned.

        Tenders of Old Notes made pursuant to the Exchange Offer are irrevocable, except that Old Notes tendered pursuant to the Exchange Offer may be withdrawn at any time prior to the Expiration Date (or such later date as may apply if the Exchange Offer is extended). See information described in "The Exchange Offer—Withdrawal of Tenders" section of the Prospectus.

        The undersigned understands that tender of Old Notes pursuant to any of the procedures described in the "Procedures for Tendering" section of the Prospectus and in the instructions hereto will constitute a binding agreement between the undersigned and the Company upon the terms and subject to the conditions set forth in the Prospectus, including the undersigned's representation that the undersigned owns the Old Notes being tendered. The undersigned recognizes that, under certain circumstances set forth in the Prospectus, the Company may not be required to accept for exchange any of the Notes tendered hereby.

5

        Unless otherwise indicated herein in the box entitled "Special Issuance Instructions" below, please deliver the New Notes (and, if applicable, substitute certificates representing Old Notes for any Old Notes not exchanged) in the name of the undersigned or, in the case of a book-entry delivery of Old Notes, please credit the account indicated above maintained at the Book-Entry Transfer Facility. Similarly, unless otherwise indicated under the box entitled "Special Delivery Instructions" below, please send the New Notes (and, if applicable, substitute certificates representing Old Notes for any Old Notes not exchanged) to the undersigned at the address shown above in the box entitled "Description of Old Notes."

THE UNDERSIGNED, BY COMPLETING THE BOX ENTITLED "DESCRIPTION OF OLD NOTES" ABOVE AND SIGNING THIS LETTER, WILL BE DEEMED TO HAVE TENDERED THE OLD NOTES AS SET FORTH IN SUCH BOX ABOVE.

PLEASE SIGN HERE
(TO BE COMPLETED BY ALL TENDERING HOLDERS)

SIGNATURE(S) OF OWNER

Area Code and Telephone Number

Dated:

, 2004

If a Holder is tendering an Old Note, this Letter must be signed by the registered Holder(s) exactly as the name(s) appear(s) on the certificate(s) for the Old Note or by any person(s) authorized to become registered Holder(s) by endorsements and documents transmitted herewith. If signature is by a trustee, executor, administrator, guardian, officer or other person acting in a fiduciary or representative capacity, please set forth full title. See Instruction 4.

Name(s): (Please Type or Print)

Capacity (full time):

Address:

(Zip Code)

Area Code and Telephone Number:

Tax Identification or Social Security Number:

6

GUARANTEE OF SIGNATURE(S)
(IF REQUIRED BY INSTRUCTION 4)

SIGNATURE(S) GUARANTEED BY

AN ELIGIBLE INSTITUTION: (AUTHORIZED SIGNATURE)

Name: (Please Type or Print)

Capacity (full time):

Name of Firm:

Address:

(Zip Code)

Area Code and Telephone Number:

Dated:	, 2004
(PLEASE COMPLETE ACCOMPANYING IRS FORM W-9 HEREIN. SEE INSTRUCTION 8.)

7

SPECIAL ISSUANCE INSTRUCTIONS
(See Instructions 4, 5 and 6)

            To be completed ONLY if certificates for Old Notes not exchanged and/or New Notes are to be issued in the name of and sent to someone other than the person or persons whose signature(s) appear(s) on this Letter above, or if Old Notes delivered by book-entry transfer which are not accepted for exchange are to be returned by credit to an account maintained at the Book-Entry Transfer Facility other than the account indicated above.

Issue: New Notes and/or Old Notes to:

Name(s):	(Please type or print)
	(Please type or print)
Address:
	(Zip Code)

	(Tax Identification or Social Security No.) (See Substitute Form W-9 Included Herein)
o	Credit unexchanged Old Notes delivered by book-entry transfer to the Book-Entry Facility account set forth below:
(Book-Entry Transfer Facility Account Number, if applicable)

SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 4, 5 and 6)

            To be completed ONLY if certificates for Old Notes not exchanged and/or New Notes are to be sent to someone other than the person or persons whose signature(s) appear(s) on this Letter above or to such person or persons at an address other than shown in the box entitled "Description of Old Notes" on this Letter above.

Mail: New Notes and/or Old Notes to:

Name(s):	(Please type or print)
	(Please type or print)
Address:
	(Zip Code)

(Tax Identification or Social Security No.)
(See Substitute Form W-9 Included Herein)

IMPORTANT: UNLESS GUARANTEED DELIVERY PROCEDURES ARE COMPLIED WITH, THIS LETTER OR A FACSIMILE HEREOF (TOGETHER WITH THE CERTFICATES FOR OLD NOTES OR A BOOK-ENTRY CONFIRMATION AND ALL OTHER REQUIRED DOCUMENTS) MUST BE RECEIVED BY THE EXCHANGE AGENT PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE.

8

INSTRUCTIONS

        FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER TO EXCHANGE ANY AND ALL OUTSTANDING 9% SENIOR NOTES DUE 2009 ISSUED ON DECEMBER 16, 2003 OF EQUINOX HOLDINGS, INC. FOR 9% SENIOR NOTES DUE 2009 OF EQUINOX HOLDINGS, INC., WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, PURSUANT TO THE PROSPECTUS DATED                         , 2004

1.     Delivery of this Letter and Notes; Guaranteed Delivery Procedures.

        This Letter is to be completed by Holders of Old Notes either if certificates are to be forwarded herewith or if tenders are to be made pursuant to the procedures for tender by book-entry transfer set forth in "The Exchange Offer—Procedures for Tendering" section of the Prospectus and an Agent's Message is not delivered. Certificates for all physically tendered Old Notes, or Book-Entry Confirmation (as defined below), as the case may be, as well as a properly completed and duly executed Letter (or manually signed facsimile hereof) and any other documents required by this Letter, must be received by the Exchange Agent at the address set forth herein on or prior to the Expiration Date, or the tendering Holder must comply with the guaranteed delivery procedures set forth below. Old Notes tendered hereby must be in denominations of principal amount of $1,000 and any integral multiple thereof. Tenders by book-entry transfer may also be made by delivering an Agent's Message in lieu of this Letter. "Agent's Message" means a message transmitted by the Book-Entry Transfer Facility to, and received by, the Exchange Agent and forming a part of a Book-Entry Confirmation (as defined below), which message states that the Book-Entry Transfer Facility has received an express acknowledgment from the participant in the Book-Entry Transfer Facility tendering the Old Notes which are the subject of the Book-Entry Confirmation that such participant has received and agrees to be bound by the Letter and that the Company may enforce the Letter against such participant. "Book-entry confirmation" means a timely confirmation of book-entry transfer of Notes into the Exchange Agent's account at the Book-Entry Transfer Facility.

        Holders whose certificates are not immediately available or who cannot deliver their certificates and all other required documents to the Exchange Agent prior to 5:00 P.M., New York City time, on the Expiration Date or who cannot complete the procedure for book-entry transfer prior to 5:00 P.M., New York City time, on the Expiration Date may tender their Old Notes by properly completing and duly executing a Notice of Guaranteed Delivery pursuant to the guaranteed delivery procedures set forth in "The Exchange Offer—Guaranteed Delivery Procedures" section of the Prospectus. Pursuant to such procedures: (i) such tender must be made by or through an Eligible Institution (as defined below); (ii) prior to 5:00 P.M., New York City time, on the Expiration Date, the Exchange Agent must receive from such Eligible Institution a properly completed and duly executed Letter (or a facsimile thereof) and Notice of Guaranteed Delivery, substantially in the form provided by the Company (by facsimile transmission, mail or hand delivery), setting forth the name and address of the Holder of Old Notes and the amount of Old Notes tendered, stating that the tender is being made thereby and guaranteeing that within three New York Stock Exchange ("NYSE") trading days after the date of execution of the Notice of Guaranteed Delivery, the certificates for all physically-tendered Old Notes, in proper form for transfer, or a Book-Entry Confirmation, as the case may be, and any other documents required by this Letter will be deposited by the Eligible Institution with the Exchange Agent, and (iii) the certificates for all physically-tendered Old Notes, in proper form for transfer, or a Book-Entry Confirmation, as the case may be, and all other documents required by this Letter, are received by the Exchange Agent within three NYSE trading days after the date of execution of the Notice of Guaranteed Delivery.

        THE METHOD OF DELIVERY OF THIS LETTER, THE OLD NOTES AND ALL OTHER REQUIRED DOCUMENTS IS AT THE ELECTION AND RISK OF THE TENDERING HOLDERS, BUT THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY

9

RECEIVED OR CONFIRMED BY THE EXCHANGE AGENT. IF OLD NOTES ARE SENT BY MAIL, IT IS RECOMMENDED THAT THE MAILING BE BY REGISTERED OR CERTIFIED MAIL, PROPERLY INSURED, WITH RETURN RECEIPT REQUESTED, MADE SUFFICIENTLY IN ADVANCE OF THE EXPIRATION DATE TO PERMIT DELIVERY TO THE EXCHANGE AGENT PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE.

        THE COMPANY WILL NOT ACCEPT ANY ALTERNATIVE, CONDITIONAL OR CONTINGENT TENDERS. EACH TENDERING HOLDER, BY EXECUTION OF A LETTER OF TRANSMITTAL (OR FACSIMILE THEREOF OR AGENT'S MESSAGE IN LIEU THEREOF), WAIVES ANY RIGHT TO RECEIVE ANY NOTICE OF THE ACCEPTANCE OF SUCH TENDER.

2.     Inadequate Space.

        If the space provided in the box captioned "Description of Notes Tendered" above is inadequate, the certificate number(s) and/or the principal amount of Notes and any other required information should be listed on a separate signed schedule and such schedule should be attached to this Letter.

3.     Partial Tenders (Not Applicable to Noteholders Who Tender by Book-Entry Transfer).

        If fewer than all of the Old Notes evidenced by a submitted certificate are to be tendered, the tendering Holder(s) should fill in the aggregate principal amount of Old Notes to be tendered in the box entitled "Description of Old Notes—Principal Amount of Notes Tendered." A reissued certificate representing the balance of nontendered Old Notes will be sent to such tendering Holder(s), unless otherwise provided in the appropriate box on this Letter, promptly after the Expiration Date. ALL OF THE OLD NOTES DELIVERED TO THE EXCHANGE AGENT WILL BE DEEMED TO HAVE BEEN TENDERED UNLESS OTHERWISE INDICATED.

4.     Signatures on this Letter; Bond Powers and Endorsements.

        If this Letter is signed by the registered Holder(s) of the Notes tendered hereby, the signature(s) must correspond exactly with the name(s) as written on the face of the certificate(s) without any change whatsoever.

        If any of the Old Notes tendered hereby are owned of record by two or more joint owners, all such owners must sign this Letter.

        If any of the Old Notes are registered in different name(s) on several certificates, it will be necessary to complete, sign and submit as many separate Letters (or facsimiles thereof or Agent's Messages in lieu thereof) as there are different registrations of certificates.

        If this Letter is signed by the registered Holder(s) of the Old Notes specified herein and tendered hereby, no endorsements of certificates or separate bond powers are required. If, however, the New Notes are to be issued, or any untendered Old Notes are to be reissued, to a person other than the registered Holder, then endorsements of any certificates transmitted hereby or separate bond powers are required. Signatures on such certificate(s) must be guaranteed by an Eligible Institution (as defined below).

        If this Letter is signed by a person other than the registered Holder(s) of any certificate(s) specified herein, such certificate(s) must be endorsed or accompanied by appropriate bond powers, in either case signed exactly as the name or names of the registered Holder(s) appear(s) on the certificate(s) and the signatures on such certificate(s) must be guaranteed by an Eligible Institution.

        If this Letter or any certificates or bond powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative

10

capacity, such persons should so indicate when signing and must submit proper evidence satisfactory to the Company of such persons' authority to so act, unless such submission is waived by the Company.

        ENDORSEMENTS ON CERTIFICATES FOR OLD NOTES OR SIGNATURES ON BOND POWERS REQUIRED BY THIS INSTRUCTION 4 MUST BE GUARANTEED BY A FIRM WHICH IS A BANK, BROKER, DEALER, CREDIT UNION, SAVINGS ASSOCIATION OR OTHER ENTITY WHICH IS A MEMBER IN GOOD STANDING OF A RECOGNIZED MEDALLION PROGRAM APPROVED BY THE SECURITITES TRANSFER ASSOCIATION INC., INCLUDING THE SECURITIES TRANSFER AGENTS MEDALLION PROGRAM (STAMP), THE STOCK EXCHANGE MEDALLION PROGRAM (SEMP) AND THE NEW YORK STOCK EXCHANGE MEDALLION SIGNATURE PROGRAM (MSP), OR ANY OTHER "ELIGIBLE GUARANTOR INSTITUTION" (AS DEFINED IN RULE 17AD-15 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED) (EACH OF THE FOREGOING, AN "ELIGIBLE INSTITUTION").

        SIGNATURES ON THIS LETTER NEED NOT BE GUARANTEED BY AN ELIGIBLE INSTITUTION, PROVIDED THE OLD NOTES ARE TENDERED: (I) BY A REGISTERED HOLDER OF OLD NOTES (WHICH TERM, FOR PURPOSES OF THE EXCHANGE OFFER, INCLUDES ANY PARTICIPANT IN THE BOOK-ENTRY TRANSFER FACILITY SYSTEM WHOSE NAME APPEARS ON A SECURITY POSITION LISTING AS THE HOLDER OF SUCH OLD NOTES) WHO HAS NOT COMPLETED THE BOX ENTITLED "SPECIAL ISSUANCE INSTRUCTIONS" OR "SPECIAL DELIVERY INSTRUCTIONS" IN THIS LETTER, OR (II) FOR THE ACCOUNT OF AN ELIGIBLE INSTITUTION.

5.     Special Issuance and Delivery Instructions.

        Tendering Holders of Old Notes should indicate in the applicable box the name and address to which New Notes issued pursuant to the Exchange Offer and/or substitute certificates evidencing Old Notes not exchanged are to be issued or sent, if different from the name or address of the person signing this Letter. In the case of issuance in a different name, the employer identification or social security number of the person named must also be indicated. Holders tendering Old Notes by book-entry transfer may request that Old Notes not exchanged be credited to such account maintained at the Book-Entry Transfer Facility as such Holder may designate herein. If no such instructions are given, such Old Notes not exchanged will be returned to the name and address of the person signing this Letter.

6.     Transfer Taxes.

        Except as otherwise provided in this Instruction 6, the Company will pay any transfer taxes with respect to the transfer of Old Notes to it or its order pursuant to the Exchange Offer. If, however, New Notes or substitute Old Notes not exchanged are to be delivered to or registered or issued in the name of, any person other than the registered Holder(s) of the Old Notes tendered hereby, or if tendered Old Notes are registered in the name of any person other than the person(s) signing this Letter, or if a transfer tax is imposed for any reason other than the transfer of Old Notes to the Company or its order pursuant to the Exchange Offer, the amount of any such transfer taxes (whether imposed on the registered Holder(s) or any other person) payable on account of the transfer to such person will be payable by the Holder(s) tendering hereby. If satisfactory evidence of payment of such taxes or exemption therefrom is not submitted herewith, the amount of such transfer taxes will be billed directly to such tendering Holder(s).

11

7.     Waiver of Conditions.

        The Company reserves the absolute right to waive satisfaction of any or all conditions enumerated in the Prospectus.

8.     Taxpayer Identification Number; Backup Withholding; Substitute Form W-9.

        Under U.S. federal income tax law, a Holder whose tendered Notes are accepted for payment pursuant to the Exchange Offer may be subject to backup withholding at a rate of 28%. To prevent backup withholding on any payment made to a tendering Holder pursuant to the Exchange Offer, such Holder is required to notify the Exchange Agent of such Holder's current taxpayer identification number ("TIN") by completing the enclosed Substitute Form W-9, certifying that the TIN provided on that form is correct (or that such Holder is awaiting a TIN), and that (i) the tendering Holder has not been notified by the Internal Revenue Service that such Holder is subject to backup withholding as a result of failure to report all interest or dividends or (ii) after being so notified, the Internal Revenue Service has notified such Holder that such Holder is no longer subject to backup withholding. If the Exchange Agent is not provided with the correct TIN, such Holder may be subject to a $50 penalty imposed by the Internal Revenue Service and payments that are made to such Holder with respect to Notes tendered pursuant to the Exchange Offer may be subject to backup withholding (see below).

        Each tendering Holder is required to give the Exchange Agent the TIN (e.g., Social Security number or employer identification number) of the record Holder of the Notes. If the Notes are registered in more than one name or are not registered in the name of the actual owner, consult the enclosed "Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9" for additional guidance on which number to report. A tendering Holder who does not have a TIN may check the box in Part 3 of the Substitute Form W-9 if such tendering Holder has applied for a number or intends to apply for a TIN in the near future. If the box in Part 3 is checked, the tendering Holder must also complete the "Certificate of Awaiting Taxpayer Identification Number" below in order to avoid backup withholding. If the box is checked, payments made will be subject to backup withholding unless the tendering Holder has furnished the Exchange Agent with his or her TIN by the time payment is made. A tendering Holder who checks the box in Part 3 in lieu of furnishing such Holder's TIN should furnish the Exchange Agent with such Holder's TIN as soon as it is received.

        Certain Holders of Old Notes (including, among others, all corporations and certain foreign individuals) are not subject to these backup withholding requirements. To avoid possible erroneous backup withholding, a tendering Holder who is exempt from backup withholding should complete the Substitute Form W-9 by providing his or her correct TIN, signing and dating the form, and writing exempt on the face of the form. A tendering Holder who is a foreign individual or a foreign entity should also submit to the Exchange Agent a certification of foreign status on the appropriate IRS form (which the Exchange Agent will provide upon request), signed under penalty of perjury, attesting to the Holder's exempt status. Tendering Holders are urged to consult their own tax advisors to determine whether they are exempt from these backup withholding and reporting requirements.

        If backup withholding applies, the Exchange Agent is required to withhold 28% of any payments to be made to the Holder under the New Notes. Backup withholding is not an additional tax. Rather, the tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld. If withholding results in an overpayment of taxes, a refund may be obtained by filing a tax return with the Internal Revenue Service. The Exchange Agent cannot refund amounts withheld by reason of backup withholding.

9.     Mutilated, Lost, Destroyed or Stolen Certificates.

        Any Holder whose certificate(s) representing Old Notes have been mutilated, lost, destroyed or stolen should promptly notify the Exchange Agent at the address included herein or at (800) 934-6802

12

for further instructions. This Letter and related documents cannot be processed until the procedures for replacing mutilated, lost, destroyed or stolen certificate(s) have been followed.

10.   Withdrawal Rights.

        Except as otherwise provided herein, tenders of Old Notes may be withdrawn at any time prior to 5:00 p.m., New York City time, on the Expiration Date. For a withdrawal to be effective, a written, telegraphic, telex or facsimile transmission notice of withdrawal must be timely received by the Exchange Agent at the address set forth above prior to 5:00 p.m., New York City time, the Expiration Date. Any such notice of withdrawal must (i) specify the name of the person who tendered the Old Notes to be withdrawn, (ii) identify the Old Notes to be withdrawn, including the aggregate principal amount of such Old Notes or, in the case of Notes transferred by book-entry transfer, specify the number of the account at the Book-Entry Transfer Facility from which the Old Notes were tendered and specify the name and number of the account at the Book-Entry Transfer Facility to be credited with the withdrawn Old Notes and otherwise comply with the procedures of such facility; (iii) contain a statement that such Holder is withdrawing its election to have such Old Notes exchanged; (iv) be signed by the holder in the same manner as the original signature on the letter of transmittal by which such Old Notes were tendered, including any required signature guarantees, or be accompanied by documents of transfer to have the trustee with respect to the Old Notes register the transfer of such Old Notes in the name of the person withdrawing the tender, and; (v) specify the name in which such Old Notes are registered, if different from that of the person who tendered the Old Notes.

        All questions as to the validity, form and eligibility (including time of receipt) of such notices will be determined by the Company, whose determination shall be final and binding on all parties.

        Any Old Notes so withdrawn will be deemed not to have been validly tendered for exchange for purposes of the Exchange Offer and no New Notes will be issued with respect thereto unless the Old Notes so withdrawn are validly retendered. Properly withdrawn Old Notes may be retendered by following the procedures described above at any time on or prior to 5:00 p.m., New York City time, on the Expiration Date with respect to such Old Notes.

        Any Old Notes that have been tendered for exchange but which are not exchanged for any reason will be returned to the tendering Holder thereof without cost to such Holder (or, in the case of Old Notes tendered by book-entry transfer into the Exchange Agent's account at the Book-Entry Transfer Facility pursuant to the book-entry transfer procedures set forth in "The Exchange Offer—Book-Entry Transfer" section of the Prospectus, such Old Notes will be credited to an account maintained with the Book-Entry Transfer Facility for the Old Notes) as soon as practicable after withdrawal, rejection of tender or termination of the Exchange Offer.

11.   Requests For Assistance and Additional Copies.

        Questions and requests for assistance regarding this Letter, as well as requests for additional copies of the Prospectus, this Letter, Notices of Guaranteed Delivery and other related documents may be directed to the Exchange Agent at its address and telephone number set forth on the front of this Letter.

        IMPORTANT: THIS LETTER OF TRANSMITTAL (OR FACSIMILE THEREOF) AND ALL OTHER REQUIRED DOCUMENTS MUST BE RECEIVED BY THE EXCHANGE AGENT ON OR PRIOR TO THE EXPIRATION DATE.

13

TO BE COMPLETED BY ALL TENDERING NOTEHOLDERS
(See Instruction 9)

Payor's Name: U.S. Bank National Association
SUBSTITUTE FORM W-9 Department of the Treasury Internal Revenue Service Payer's Request for Taxpayer Identification Number ("TIN") and Certification	Name: Address: Check appropriate box: Individual    o                                Corporation     o Partnership    o                               Other (specify)     o
Part 1—Please provide your TIN on the line at right and certify by signing and dating below.		Social Security Number OR Employer Identification Number
Part 2—Certification—Under penalties of perjury, I certify that:
(1)    The number shown on this form is my correct Taxpayer Identification Number (or I am waiting for a number to be issued to me) and
(2)    I am not subject to backup withholding because: (a) I am exempt from backup withholding; or (b) I have not been notified by the Internal Revenue Service (the "IRS") that I am subject to backup withholding as a result of a failure to report all interest on dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding and
(3)    I am a U.S. person (including a U.S. resident alien).

NAME
	(Please Print)

ADDRESS
	(Include Zip Code)

SIGNATURE

DATE

Certification Instructions—You must cross out Item (2) above if you have been notified by the IRS that you are currently subject to backup withholding because of under-reporting interest on dividends on your tax return. However, if after being notified by the IRS that you were subject to backup withholding you received another notification from the IRS stating that you are no longer subject to backup withholding, do not cross out such item (2).

Part 3—Awaiting TIN o

YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE
BOX IN PART 3 OF SUBSTITUTE FORM W-9

CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER

        I certify under penalties of perjury that a taxpayer identification number has not been issued to me, and either (a) I have mailed or delivered an application to receive a taxpayer identification number to the appropriate Internal Revenue Service Center or Social Security Administration Office or (b) I intend to mail or deliver an application in the near future. I understand that, if I do not provide a taxpayer identification number by the time of payment, all reportable payments made to me will be subject to backup withholding but that such amounts will be refunded to me if I then provide a Taxpayer Identification Number within sixty (60) days.

Date 

NOTE:    FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 28% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE EXCHANGE OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.

14

        Questions and requests for assistance may be directed to the Exchange Agent at its address and telephone number set forth below. Additional copies of the Prospectus, this Letter or other related Exchange Offer materials may be obtained from the Exchange Agent or from brokers, dealers, commercial banks or trust companies.

The Exchange Agent for the Offer is:
U.S. Bank National Association

By Mail, Hand Delivery or Overnight Courier:
U.S. Bank National Association
Corporate Trust Services
60 Livingston Avenue
St. Paul, Minnesota 55107
Attention: Specialized Finance By Facsimile Transmission:
(Eligible Institutions only)
(651) 495-8158

To Confirm Facsimile Transmissions:
(800) 934-6802

The Exchange Agent for the Offer is:
[LOGO Of U.S. Bank National Association]
Call: (800) 934-6802

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QuickLinks

LETTER OF TRANSMITTAL OF
MUTILATED, LOST, STOLEN OR DESTROYED NOTES
BOOK-ENTRY TRANSFER
GUARANTEED DELIVERY
NOTE: SIGNATURES MUST BE PROVIDED BELOW. PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
INSTRUCTIONS

EX-99.2

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 99.2

NOTICE OF GUARANTEED DELIVERY
FOR

EQUINOX HOLDINGS, INC.

9% SENIOR NOTES DUE 2009

(Not to be used for signature guarantees)

THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME ON                        , 2004, UNLESS EXTENDED.

        This Notice of Guaranteed Delivery or one substantially equivalent hereto must be used to accept the Exchange Offer made by Equinox Holdings, Inc., a Delaware corporation (the "Company") pursuant to the Prospectus, dated            , 2004 (the "Prospectus") if certificates for outstanding 9% Senior Notes due 2009 (the "Old Notes" and the certificates representing such Old Notes, the "Certificates") are not immediately available or time will not permit the Certificates and all required documents to reach U.S. Bank National Association, as exchange agent (the "Exchange Agent") prior to 5:00 P.M., New York City time, on the Expiration Date (as defined in the Prospectus) or if the procedures for delivery by book-entry transfer, as set forth in the Prospectus, cannot be completed on a timely basis. This Notice of Guaranteed Delivery may be delivered by hand or transmitted by facsimile transmission or mailed to the Exchange Agent. See "The Exchange Offer—Guaranteed Delivery Procedures" section of the Prospectus.

        In addition, in order to utilize the guaranteed delivery procedure to tender Old Notes pursuant to the Exchange Offer, a completed, signed and dated Letter of Transmittal (or facsimile thereof) relating to the tender for exchange of Old Notes (the "Letter of Transmittal") must also be received by the Exchange Agent prior to 5:00 P.M., New York City time, on the Expiration Date. Any Old Notes tendered pursuant to the Exchange Offer may be withdrawn at any time before the Expiration Date. If the Exchange Offer is extended, tenders pursuant to the Exchange Offer as of the previously scheduled Expiration Date may not be withdrawn after the date of the previously scheduled Expiration Date.

The Exchange Agent for the Exchange Offer is:

U.S. Bank National Association

By Mail, Hand Delivery or Overnight Courier:
U.S. Bank National Association
Corporate Trust Services
60 Livingston Avenue
St. Paul, Minnesota 55107
Attention: Specialized Finance By Facsimile Transmission:
(Eligible Institutions* only)
(651) 495-8158

To Confirm Facsimile Transmissions:
(Eligible Institutions* only)
(800) 934-6802

* as defined in the Letter of Transmittal.

DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS, OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER, OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.

THIS NOTICE OF GUARANTEED DELIVERY IS NOT TO BE USED TO GUARANTEE SIGNATURES. IF A SIGNATURE ON A LETTER OF TRANSMITTAL IS REQUIRED TO BE GUARANTEED BY AN ELIGIBLE INSTITUTION (AS DEFINED IN THE LETTER OF TRANSMITTAL) UNDER THE INSTRUCTIONS THERETO, SUCH SIGNATURE GUARANTEE MUST APPEAR IN THE APPLICABLE SPACE PROVIDED IN THE SIGNATURE BOX ON THE LETTER OF TRANSMITTAL.

THE GUARANTEE BELOW MUST BE COMPLETED.

Ladies and Gentlemen:

        The undersigned hereby tenders to the Company, in accordance with the terms and subject to the conditions set forth in the Company's Prospectus dated            , 2004 (the "Prospectus"), and in the related Letter of Transmittal (which, together with the Prospectus as each may be amended or supplemented from time to time, collectively constitute the "Exchange Offer"), receipt of which is hereby acknowledged, the principal amount of Old Notes set forth below, pursuant to the guaranteed delivery procedures described in "The Exchange Offer—Guaranteed Delivery Procedures" section of the Prospectus.

Certificate Numbers of Old Notes (If Available):

OR

Account Number at Book-Entry Transfer Facility:

Aggregate Principal Amount Represented:

Name(s) of Record Holder(s):
	(Please type or print)

Address(es):

Daytime Area Code and Tel. No.:

Signature(s):

Dated:

Check if Old Notes will be tendered by book-entry transfer [            ]:

2

GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)

        The undersigned, a bank, broker, dealer, credit union, savings association or other entity which is a member in good standing of a recognized Medallion Program approved by the Securities Transfer Association Inc., including the Securities Transfer Agents Medallion Program (STAMP), the Stock Exchange Medallion Program (SEMP) and the New York Stock Exchange Medallion Signature Program (MSP), or any other "eligible guarantor institution" as defined in Rule 17Ad-15 under the Securities Exchange Act of 1934 ("Exchange Act"), hereby guarantees that the Certificates representing the principal amount of Old Notes tendered hereby in proper form for transfer, or timely confirmation of the book-entry transfer of such Old Notes into the Exchange Agent's account at the Depository Trust Company ("DTC") pursuant to the procedures set forth in "The Exchange Offer—Guaranteed Delivery Procedures" section of the Prospectus, together with any required signature guarantee and any other documents required by the Letter of Transmittal, will be received by the Exchange Agent at the address set forth above, no later than three New York Stock Exchange trading days after the date of execution of this Notice of Guaranteed Delivery.

        The eligible guarantor institution that completes this form must communicate the guarantee to the Exchange Agent and must deliver the Letter of Transmittal and Certificates to the Exchange Agent within the time period indicated herein. Failure to do so may result in financial loss to such eligible guarantor institution.

Name of Firm:

AUTHORIZED SIGNATURE

Name:

(Please Print or Type)

Title:

Address:
	Zip Code

Area Code and Tel No.:

Dated:

NOTE: DO NOT SEND CERTIFICATES FOR OLD NOTES WITH THIS NOTICE. CERTIFICATES FOR OLD NOTES SHOULD BE SENT ONLY WITH A COPY OF YOUR PREVIOUSLY EXECUTED LETTER OF TRANSMITTAL.

3

INSTRUCTIONS FOR NOTICE OF GUARANTEED DELIVERY

        1.    Delivery Of This Notice Of Guaranteed Delivery.    A properly completed and duly executed copy of this Notice of Guaranteed Delivery and any other documents required by this Notice of Guaranteed Delivery must be received by the Exchange Agent at its address set forth herein prior to 5:00 p.m., New York City time, on the Expiration Date. The method of delivery of this Notice of Guaranteed Delivery and any other required documents to the Exchange Agent is at the election and risk of the Holder(s) (as defined in the Letter of Transmittal) and the delivery will be deemed made only when actually received by the Exchange Agent. If delivery is by mail, it is recommended that the mailing be by registered or certified mail, properly insured, with return receipt requested, made sufficiently in advance of the Expiration Date to permit delivery to the Exchange Agent prior to 5:00 p.m., New York City time, on the Expiration Date. For a description of the guaranteed delivery procedure, see Instruction 1 of the Letter of Transmittal.

        2.    Signatures Of This Notice Of Guaranteed Delivery.    If this Notice of Guaranteed Delivery is signed by the registered Holder(s) of the Old Notes referred to herein, the signature(s) must correspond with the name(s) as written on the face of the Old Notes without any change whatsoever. If this Notice of Guaranteed Delivery is signed by a participant of the Book-Entry Transfer Facility whose name appears on a security position listing as the owner of Old Notes, the signature must correspond with the name shown on the security position listing as the owner of the Old Notes.

        If this Notice of Guaranteed Delivery is signed by a person other than the registered Holder(s) of any Old Notes listed or a participant of the Book-Entry Transfer Facility, this Notice of Guaranteed Delivery must be accompanied by appropriate bond powers, signed as the name(s) of the registered Holder(s) appear(s) on the Old Notes or signed as the name of the participant shown on the Book-Entry Facility's security position listing.

        If this Notice of Guaranteed Delivery is signed by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation, or other person acting in a fiduciary or representative capacity, such person should so indicate when signing.

        3.    Requests For Assistance Or Additional Copies.    Questions and requests for assistance and requests for additional copies of the Prospectus may be directed to the Exchange Agent at the address specified in the Prospectus. Holders may also contact their broker, dealer, commercial bank, trust company, or other nominee for assistance concerning the Exchange Offer.

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NOTICE OF GUARANTEED DELIVERY FOR
U.S. Bank National Association
GUARANTEE (NOT TO BE USED FOR SIGNATURE GUARANTEE)
INSTRUCTIONS FOR NOTICE OF GUARANTEED DELIVERY

EX-99.3

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Exhibit 99.3

EQUINOX HOLDINGS, INC.
OFFER TO EXCHANGE
ANY AND ALL OUTSTANDING
9% SENIOR NOTES DUE 2009 ISSUED ON DECEMBER 16, 2003
FOR 9% SENIOR NOTES DUE 2009 WHICH HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933

To Our Clients:

        Enclosed for your consideration is a Prospectus, dated            , 2004 (the "Prospectus"), and the related Letter of Transmittal (the "Letter of Transmittal"), relating to the offer (the "Exchange Offer") of Equinox Holdings, Inc. (the "Company") to exchange its 9% Senior Notes due 2009, which have been registered under the Securities Act of 1933, as amended (the "New Notes"), for its outstanding 9% Senior Notes due 2009 (the "Old Notes") issued on December 16, 2003, upon the terms and subject to the conditions described in the Prospectus and the Letter of Transmittal. The Exchange Offer is being made in order to satisfy certain obligations of the Company contained in the Registration Rights Agreement dated as of December 16, 2003, by and among the Company and the guarantors and the initial purchasers referred to therein.

        This material is being forwarded to you as the beneficial owner of the Old Notes held by us for your account but not registered in your name. A tender of such Old Notes may only be made by us as the holder of record and pursuant to your instructions.

        Accordingly, we request instructions as to whether you wish us to tender on your behalf the Old Notes held by us for your account, pursuant to the terms and conditions set forth in the enclosed Prospectus and Letter of Transmittal.

        Your instructions should be forwarded to us as promptly as possible in order to permit us to tender the Old Notes on your behalf in accordance with the provisions of the Exchange Offer. The Exchange Offer will expire at 5:00 p.m., New York City time, on            , 2004, unless extended by the Company (the "Expiration Date"). Any Old Notes tendered pursuant to the Exchange Offer may be withdrawn at any time before the Expiration Date. Where the Expiration Date has been extended, tenders pursuant to the Exchange Offer as of the previously scheduled Expiration Date may not be withdrawn after the date of the previously scheduled Expiration Date.

        Your attention is directed to the following:

        1.     The Exchange Offer is for any and all Old Notes.

        2.     The Exchange Offer is subject to certain conditions set forth in the Prospectus in the section captioned "The Exchange Offer—Conditions."

        3.     Any transfer taxes incident to the transfer of Old Notes from the holder to the Company will be paid by the Company, except as otherwise provided in the Instructions in the Letter of Transmittal.

        4.     The Exchange Offer expires at 5:00 p.m., New York City time, on            , 2004, unless extended by the Company.

        If you wish to have us tender your Old Notes, please so instruct us by completing, executing and returning to us the instruction form on the back of this letter. The Letter of Transmittal is furnished to you for information only and may not be used directly by you to tender Old Notes.

INSTRUCTIONS WITH RESPECT TO
THE EXCHANGE OFFER

        The undersigned acknowledge(s) receipt of your letter and the enclosed material referred to therein relating to the Exchange Offer made by Equinox Holdings, Inc. with respect to its Old Notes.

        This will instruct you to tender the Old Notes held by you for the account of the undersigned, upon and subject to the terms and conditions set forth in the Prospectus and the related Letter of Transmittal.

        The aggregate principal amount of Old Notes held by you for the account of the undersigned is (fill in amounts, as applicable):

        $                        of 9% Senior Notes due 2009.

        With respect to the Exchange Offer, the undersigned hereby instructs you (check appropriate box):

o

To TENDER $                        of Old Notes held by you for the account of the undersigned (insert principal amount of Old Notes to be tendered (if any)):



o

NOT to TENDER any Old Notes held by you for the account of the undersigned.

        If the undersigned instructs you to tender Old Notes held by you for the account of the undersigned, it is understood that you are authorized to make, on behalf of the undersigned (and the undersigned, by its signature below, hereby makes to you), the representations and warranties contained in the Letter of Transmittal that are to be made with respect to the undersigned as a beneficial owner, including but not limited to the representations that (i) the New Notes acquired pursuant to the Exchange Offer are being acquired in the ordinary course of business of the person receiving such New Notes, whether or not such person is the undersigned, (ii) neither the undersigned nor any such other person is participating in, intends to participate in or has an arrangement or understanding with any person to participate in the distribution (within the meaning of the Securities Act) of Old Notes or New Notes, (iii) neither the undersigned nor any such other person is an "affiliate," as defined in Rule 405 under the Securities Act, of the Company, and (iv) neither the undersigned nor any such other person is acting on behalf of any person who could not truthfully make the foregoing representations and warranties. If the undersigned is a broker-dealer that will receive New Notes for its own account in exchange for Old Notes, it represents that the Old Notes to be exchanged for the New Notes were acquired by it as a result of market-making activities or other trading activities and acknowledges that it will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of such New Notes; however, by so acknowledging and by delivering a prospectus meeting the requirements of the Securities Act, the undersigned will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act.

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SIGN HERE

Dated:                         , 2004

Signature(s):    

Print name(s) here:    

Print Address(es):    

Area Code and Telephone Number(s):    

Tax Identification or Social Security Number(s):    

        None of the Old Notes held by us for your account will be tendered unless we receive written instructions from you to do so. Unless a specific contrary instruction is given in the space provided, your signature(s) hereon shall constitute an instruction to us to tender all the Old Notes held by us for your account.

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INSTRUCTIONS WITH RESPECT TO THE EXCHANGE OFFER
SIGN HERE