**Exhibit 3.2.38**

 

**LIMITED LIABILITY COMPANY AGREEMENT**

**OF**

**EQX HOLDINGS, LLC**

(Organized under the Delaware LimitedLiability Company Act)

 

**THIS LIMITED LIABILITY COMPANY AGREEMENT**(this “Agreement”) of EQX Holdings, LLC, a Delaware limited liability company(the “Company”), is made and entered into this 23rd****day of October, 2003, by Equinox Holdings, Inc., aDelaware corporation, as the sole member of the Company (the “Initial Member”).

 

**WHEREAS,** the InitialMember has formed the Company for the purpose of, among other things, owningand operating, either directly or through its wholly-owned subsidiaries,certain fitness clubs currently owned and operated by the Initial Member;

 

**WHEREAS,**the Companyand the Initial Member are parties to that certain Contribution Agreement,dated of even date herewith, pursuant to which the Initial Member contributedall of the issued and outstanding stock of certain of its wholly ownedsubsidiaries to the Company in exchange for the Units (as hereinafter defined)of the Company; and

 

**WHEREAS,** the InitialMember desires to set forth its rights and obligations as a member of theCompany, and to provide for the management of the Company and the conduct ofthe business of the Company;

 

**NOW, THEREFORE,** inconsideration of the premises contained herein, and for other good and valuableconsideration, the receipt and sufficiency of which are hereby acknowledged,the Initial Member hereby agrees as follows:

 

**ARTICLE I**

**DEFINITIONS**

 

1.01.        Definitions.  The following terms used in this Agreementshall have the respective meanings ascribed to such terms in this Section 1.01,unless otherwise expressly provided herein:

 

(a)           “Act” shallmean the Delaware Limited Liability Company Act (Del. Code Ann. Tit. 6,Sections 18-101 et. seq.), and any successor statute, as the same may beamended from time to time;

 

(b)           “CapitalAccount” shall mean the account established and maintained pursuant to Section 3.06;

 

(c)           “CapitalContribution” shall mean, with respect to any Member, the amount of money andthe value of other property contributed to the Company with respect to theInterest held by such Member;

 

(d)           “Certificate ofFormation” shall mean the certificate of formation of EQX Holdings, LLC, asfiled with the Secretary of State of the State of Delaware, as the same may beamended from time to time;

 

(e)           “Code” shall mean theInternal Revenue Code of 1986, as amended;

 

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(f)            “Fiscal Year” shallmean the Company’s taxable year;

 

(g)           “Interest” shall mean aMember’s entire membership interest in the Company, including, withoutlimitation, such Member’s share of the Company’s income, gain, loss anddeductions, and of the Company’s distributions, and all rights and privilegesof membership in the Company as accorded by this Agreement and the Act;

 

(h)           “Manager” shall havethe meaning set forth in Section 18-101(10) of the Act;

 

(i)            “Member” shall meanthe Initial Member and each other Person that is hereafter admitted to theCompany as a Member in accordance with this Agreement;

 

(j)            “MembershipCertificates” shall have the meaning set forth in Section 4.11.

 

(k)           “Ownership Percentage”shall mean, with respect to any Member as of a particular time and from time totime, the ratio, expressed as a percentage, of the number of Units owned bysuch Member to the aggregate number of Units owned by all Members;

 

(l)            “Person” shall meanany individual, partnership, limited liability company, corporation,unincorporated organization or association, trust or other entity;

 

(m)          “Treasury Regulations”shall mean the rules and regulations of the Internal Revenue Servicepromulgated under the Code, as in effect from time to time; and

 

(n)           “Units” shall have themeaning set forth in Section 4.02.

 

**ARTICLE IIGENERAL TERMS**

 

2.01         Formation.  On October 23, 2003, the Initial Membercaused the Company to be organized as a Delaware limited liability company bythe filing of the Certificate of Formation with the Secretary of State of theState of Delaware, in accordance with Section 18-206 of the Act.

 

2.02         Name.  The name of the Company shall be “EQXHoldings, LLC,” and all business of the Company shall be conducted in thatname, or in such other name or names as the Members may hereafter select inaccordance with this Agreement and the Act.

 

2.03         Registered Office.  The address of the registered office of theCompany in the State of Delaware shall be c/o National Registered Agents, Inc.,9 East Loockerman Street, Suite 1B, in the City of Dover, County of Kent,Delaware 19901.  The name of the registeredagent of the Company at such address is National Registered Agents, Inc.  The Company may also have offices at suchother places within or without the State of Delaware as the Member may fromtime to time designate or the business of the Company may require.

 

2.04         Term.  The duration of the Company shall beperpetual, unless otherwise dissolved in accordance with Article 10 ofthis Agreement and the Act.

 

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2.05.        Business Purpose.  The Company is organized to engage in anylawful act or activity for which a limited liability company may be formedunder the Act and the applicable laws of any jurisdiction in which the Companyengages in business.

 

2.06         Foreign Qualifications.  Any authorized person of the Company shallexecute, deliver and file any certificates (and any amendments and/or restatementsthereof) necessary for the Company to qualify to do business in anyjurisdiction in which the business activities of the Company require it to beso qualified.

 

2.07         Taxation.  The Company shall not be, and the InitialMember and the Board shall not permit the Company to elect to be, treated as anassociation taxable as a corporation for federal, state or local income taxpurposes, including, without limitation, by electing to treat the Company as anassociation taxable as a corporation under Treasury Regulations Section301.7701 3(a) or any corresponding provision of state or local law.

 

2.08         Certain RatifiedActions.  Without in any way limitingthe generality of the foregoing, or anything else contained in this Agreementor in any other document, Brian S. Werfel, Esq., is hereby designated asan authorized person, within the meaning of the Act, and the execution andfiling of the Certificate of Formation of the Company with the Secretary ofState of the State of Delaware were and hereby are authorized, ratified andconfirmed.

 

**ARTICLE III**

**MANAGEMENT OF THE COMPANY**

 

3.01.        ManagementBy the Board of Directors.  Thebusiness and affairs of the Company shall be managed by or under the directionof a Board of Directors (the “Board”), consisting of at least three naturalpersons designated as directors  (the“Directors”) as provided below.  TheBoard shall have discretion to manage and control the business and affairs ofthe Company, to make decisions affecting the business and affairs of theCompany, and to take actions as it deems necessary or appropriate to accomplishthe purposes of the Company and to exercise all of the power and authority thatlimited liability companies may take under the Act, provided, however, thatthere shall be reserved to the Initial Member those powers that, under theDelaware General Corporation Law, are reserved to the stockholders of acorporation organized under laws of the State of Delaware.

 

3.02.        Electionof Directors; Qualifications; Term. The Directors shall be chosen by the Initial Member.  The Company shall have not less than threenor more than seven directors, with the actual number of directors to be set byresolution of the Directors then in office. The number of directors shall initially be set at three directors.  Directors need not be residents of the Stateof Delaware.  Each Director shall holdoffice for the full term for which such Director is elected, which term shallbe specified in the vote or resolution of the Initial Member and until theirsuccessor has been duly elected and qualified, or until their earlier death,resignation, or removal in accordance with this Agreement.  Each Director is hereby designated as a“manager” (within the meaning of the Act) of the Company.

 

3.03.        Committeesof Directors.  The Board may, byresolution passed by unanimous consent of the Directors, designate one or morecommittees.  Such resolution shallspecify the duties and quorum requirements of such committees, each suchcommittee to consist of one or more of the Directors.  The Board may designate one or more Directorsas alternate members of any committee, who may replace any absent ordisqualified member at any meeting of the committee.  In the absence or disqualification of amember of a committee, the member or members thereof

 

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present at any meeting and not disqualified from voting, whether or notsuch members constitute a quorum, may unanimously appoint another member of theBoard to act at the meeting in the place of any such absent or disqualifiedmember.  Any such committee, to theextent provided in the resolution of the Board, shall have and may exercise allthe powers and authority of the Board in the management of the business andaffairs of the Company.  Such committeeor committees shall have such name or names as may be determined from time totime by resolution adopted by the Board. Each committee shall keep regular minutes of its meetings and report thesame to the Board when required.

 

3.04.        Removal of Directors.  So long as the Initial Member is the soleMember of the Company, the Initial Member may remove any Director of theCompany, with or without cause, at any time in its sole discretion, and shallbe entitled to appoint a successor director to fill any vacancy so created.

 

3.05.        Designation of InitialDirectors.  The initial Directors ofthe Company shall be as follows:

 

Harvey Spevak

Adam Saltzman

Edward D. Yun

 

3.06         Meetingsof the Directors.  Regular meetingsof the Board may be held on such dates and at such times as shall be determinedby the Board, with notice of the establishment of such regular meeting schedulebeing given to each Director that was not present at the meeting at which suchmeeting schedule was adopted.  Specialmeetings of the Board may be called by any Director by notice, specifying thedate, place and time of such meeting, delivered to each other Director at least24 hours prior to such meeting.  Neitherthe business to be transacted at, nor the purpose of, such special meeting needbe specified in the notice thereof.  Unlessotherwise expressly provided for by this Agreement, at any meeting of theBoard, a majority of the Directors shall constitute a quorum for thetransaction of business, and an act of a majority of the Directors who arepresent at such a meeting at which a quorum is present shall be the act of theBoard.  Any action required or permittedto be taken at a meeting of the Board may be taken without a meeting, andwithout prior notice, if a consent in writing, setting forth the actions sotaken, is signed by all of the Directors then in office.  Directors may participate in and holdmeetings of the Board by means of conference telephone or similarcommunications equipment by means of which all persons participating in themeeting can hear each other, and participation in such a meeting shallconstitute presence in person at such meeting.

 

 

3.07         Compensation ofDirectors.  Unless otherwiserestricted by the Certificate of Formation or this Agreement, the Board shallhave the authority to fix the compensation of directors.  The Directors shall be entitled to bereimbursed for costs and expenses incurred in the course of their servicehereunder.

 

 

3.08         Specific Authorization.  Notwithstanding any other provision of thisAgreement to the contrary, the Initial Member hereby authorizes the Company,and any Director or officer of the Company acting on behalf of the Company, toexecute and deliver, and to perform its obligations under:

 

(i)            The PledgeAgreement to be entered into by the Company, as pledgor, and Merrill LynchCapital, a division of Merrill Lynch Business Financing Services, Inc., asagent;

 

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(ii)           TheContribution Agreement to be entered into by and between the Company andEquinox Holdings, Inc.;

 

**ARTICLE IV**

**MEMBERS**

 

4.01         Member’s Interests.  The Initial Member of the Company shall beEquinox Holdings, Inc., a Delaware corporation, which shall initially own100% of the Interests of the Company.

 

4.02.        Units and OwnershipPercentages.  A Member’s Interest inthe Company, including, without limitation, such Member’s share of the Company’sincome, gain, loss, deductions and cash distributions, shall be represented bythe “Units” held by such Member.  Setforth below are  (i) the initialnumber of Units issued to each Member and (ii) the initial Ownership Percentageheld by each Member.  This Section shallbe revised by the Board from time to time to reflect any changes effectedpursuant to this Agreement in the number of Units issued to Members or theOwnership Percentages of the Members.

 
| **Member**                     | ** ** | **Units** | ** ** | **Ownership Percentage** | ** ** |
|--------------------------------|------------|-----------|------------|--------------------------|------------|
|                           |       |      |       |                     |       |
| Equinox Holdings, Inc.    |       | 100       |       | 100                      | %          |
| 895 Broadway                   |       |      |       |                     |       |
| New York, New York 10003       |       |      |       |                     |       |
| Attn: Harvey Spevak, President |       |      |       |                     |       |

 

4.03.        Membership Certificates.  Each Member shall be entitled to acertificate evidencing its Interest in the Company (the “MembershipCertificate”), a form of which is attached hereto as Annex A.  Membership Certificates shall be in such formas shall be approved by the Board, and may bear the seal of the Company or afacsimile thereof.  Membership Certificatesshall be consecutively numbered, signed by one or more officers of the Company(which signatures may be by facsimile), and shall state the following on theface thereof: (i) that the Company is a limited liability company formed underthe Act, (ii) that the Membership Certificate evidences the Member’s Interestin the Company, and (iii) the name of the Member.  In case the officer of the Company who hassigned or whose facsimile signature has been place on such certificate shallhave ceased to be an officer of the Company before such certificate is issued,it may be issued by the Company with the same effect as if such person were anofficer of the Company at the time of its issue.  In addition, all Membership Certificatesshall have affixed thereto the following legend:

 

“THE INTEREST EVIDENCED BY THIS CERTIFICATE HAS NOT BEEN REGISTEREDUNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIESLAWS, AND MAY NOT BE TRANSFERRED, SOLD, PLEDGED, HYPOTHECATED OR OTHERWISEDISPOSED OF UNLESS (I)(A) SUCH DISPOSITION IS PURSUANT TO AN EFFECTIVEREGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED, (B) THEHOLDER OF THIS CERTIFICATE HAS DELIVERED TO THE COMPANY AN OPINION OF COUNSELTO THE EFFECT THAT SUCH DISPOSITION IS EXEMPT FROM THE PROVISIONS OF SECTION 5 OF SUCH ACT, WHICH OPINION AND COUNSEL MUST BE REASONABLY SATISFACTORY TO THECOMPANY, OR (C) SUCH HOLDER HAS OBTAINED A NO-ACTION LETTER FROM THE

 

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SECURITIES AND EXCHANGE COMMISSION WITH RESPECT TO SUCH DISPOSITION,REASONABLY SATISFACTORY TO COUNSEL FOR THE COMPANY, AND (II) SUCH DISPOSITIONIS PURSUANT TO, OR UNDER AN EXEMPTION FROM, REGISTRATION UNDER ANY APPLICABLESTATE SECURITIES LAWS.”

 

4.04.        Interest as SecurityUnder Uniform Commercial Code.  TheCompany irrevocably elects to have all Interests in the Company be deemedsecurities governed by Article 8 of the Uniform Commercial Code in effectin the State of Delaware.  EachMembership Certificate evidencing an Interest in the Company shall have affixedthereto the following legend:

 

“This Certificate evidences a membership interest in EQX Holdings, LLC,and shall be a security for the purposes of Article 8 of the UniformCommercial Code in effect in the State of Delaware.”

 

No change to this provision shall be effective until all outstandingMembership Certificates have been surrendered for cancellation, and any newMembership Certificates issued thereafter shall not bear the foregoing legend.

 

4.05.        Admission of AdditionalMembers.  One or more Persons may beadmitted as additional Members of the Company with the consent of the InitialMember.  Prior to the admission of anyadditional Members, this Agreement shall be amended to the extent necessary ordesirable to reflect the admission to the Company of such additional Member,and to reflect the fact that the Company will then have more than one Member.

 

4.04.        Capital Contributions.  Following admission to the Company and thepayment in full of a Member’s initial Capital Contribution, no Member shall beobligated to make any additional contribution to the Company’s capital, whetherupon a liquidation of the Company or otherwise. Without limiting the generality of the foregoing, no Member shall haveany obligation to restore any deficit balance in such Member’s Capital Account,and any such deficit balance shall not be considered a debt owed to the Companyor to any Person for any purpose whatsoever. Nothing herein shall be construed to prohibit any Member, at its sole option,from making any additional Capital Contribution to the Company when authorizedby the Board in order to fund all or any part of the Company’s CapitalRequirements.

 

4.05.        No Interest on CapitalContributions.  Members shall not bepaid interest on their Capital Contributions.

 

4.06.        Property Rights.  All assets and property owned by the Company,whether real or personal, tangible or intangible, shall be deemed to be ownedby the Company as an entity, and no Member, solely by reason of being a Memberof the Company, shall have any right, title, or interest in any of the propertyor assets of the Company.

 

4.07.        Return of CapitalContributions.  Except as otherwiseprovided in this Agreement, no Member shall have the right to receive thereturn of any Capital Contribution.  Ifany Member is entitled to receive a return of a Capital Contribution, theCompany may distribute cash, notes, property, or any combination thereof to theMember in return of the Capital Contribution. The Company shall not be required to make any distributions to any Memberin any form other than cash.

 

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4.08.        Capital Accounts.  A separate Capital Account shall bemaintained for each Member.  CapitalAccounts shall be maintained in accordance with Treasury Regulation Section 1.704-1(b)(2)(iv).

 

4.08.        Liability of Members.  No Member shall be liable for the debts,liabilities, contracts or other obligations of the Company, except to theextent of any unpaid Capital Contributions such Member has agreed to make tothe Company and such Member’s share of the assets (including undistributedrevenues) of the Company; and in all events, a Member shall be liable andobligated to make payments of its Capital Contribution only as and when suchpayments are due in accordance with the terms of this Agreement.  No Member shall be required to make any loansto the Company.  The Company shallindemnify and hold harmless a Member in the event a Member becomes liable,notwithstanding the previous sentence, for any debt, liability, contract orother obligation of the Company, other than for unpaid Capital Contributions.

 

4.09.        Authority of Members.  The liability of Members shall be limited asprovided for under the Act and the other applicable laws of the State ofDelaware.  Members that are not alsoindividuals serving as Board shall take no part whatsoever in the control,management, direction or operation of the Company’s affairs and shall have nopower to bind the Company.  Unlessexpressly authorized by this Agreement or the Act, no Member, solely by reasonof being a Member of the Company, shall have the right, power or authority toact for or on behalf of the Company, to bind the Company to any action, or toincur any expenditures on behalf of the Company.

 

**ARTICLE V**

**TRANSFER OF INTERESTS; WITHDRAWAL**

 

5.01.        Transfer of Membership.  Membership in the Company is transferableonly with unanimous written consent of the all of the Members.  If such unanimous written consent is notobtained or if a transfer is effected other than in accordance with this Section 5.01,the transferee shall be entitled to receive only the share of profits or othercompensation by way of income and the return of contributions to which thetransferor Member otherwise would be entitled.

 

5.02.        Withdrawal of Member.  A Member may not withdraw from the Companywithout the prior written consent of the remaining Members, and the terms of aMember’s withdrawal shall be determined by a written agreement between theremaining Members and the withdrawing Member. Notwithstanding the foregoing, the Initial Member may not withdraw fromthe Company.

 

**ARTICLE VI**

**MEETINGS OF THE MEMBERS**

 

6.01         Meetings of Members.  An annual meeting of the Members for thetransaction of such business as may properly come before such meeting shall beheld on such date and at such time as the Board shall specify in the notice ofthe meeting, which notice shall be delivered to each Member at least 20 daysprior to the date of such meeting. Special meetings of the Members may be called by the Board or by one ormore Members owning, in the aggregate, not less than 33 and 1/3% of theOwnership Percentages.  Any such meetingshall be held on such date and at such time as the Person calling such meetingshall specify in the notice of the meeting, which notice

 

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shall be delivered to eachMember not less than ten (10) days prior to the date of such meeting.  Only business within the purpose or purposesdescribed in the notice of such meeting may be conducted at such meeting.  Unless otherwise provided for in thisAgreement, at any meeting of the Members, Members holding among them at least amajority of the Ownership Percentages, represented in person or by proxy, shallconstitute a quorum for the transaction of business, and an act of a majorityshall be the act of the Members.  Anyaction required or permitted to be taken at a meeting of the Members may betaken without a meeting, and without prior notice, if a consent in writing,setting forth the actions so taken, is signed by Members having not less thanthe minimum number of votes that would be necessary to authorize or take suchaction at a meeting at which all members entitled to vote thereon were presentand voted.  Members may participate inand hold meetings of the Members by means of conference telephone or similarcommunications equipment by means of which all persons participating in themeeting can hear each other, and participation in such a meeting shallconstitute presence in person at such meeting.

 

**ARTICLE VII**

**PROFIT, LOSS AND DISTRIBUTIONS**

 

7.01.        Allocation of Profit orLoss.  All items of Company income,gain, loss, and deduction as determined for book purposes shall be allocatedamong the Members, and shall be credited or debited to their respective CapitalAccounts, in accordance with Treasury Regulations Section 1.704-1(b)(2)(iv),so as to ensure, to the maximum extent possible, that:

 

(a)           suchallocations satisfy the alternate economic effect test of Treasury Regulations Section 1.704-1(b)(2)(ii)(d) (byallocating items that can have economic effect in such a manner that thebalance of each Member’s Capital Account at the end of any taxable year(increased by such Member’s “share of partnership minimum gain” and “share ofpartner nonrecourse debt minimum gain” as defined in Treasury Regulations 1.704-2)would be positive in the amount of cash that such Member would receive, if (i) theCompany sold all of its property for an amount of cash equal to the book value(as determined pursuant to Treasury Regulations Sections 1.704-1(b)(2)(iv))of such property (reduced, but not below zero, by the amount of nonrecoursedebt or partner nonrecourse debt to which such property is subject) and (ii) allof the cash of the Company remaining after payment of all liabilities (otherthan nonrecourse liabilities and partner nonrecourse debt) of the Company weredistributed in liquidation immediately following the end of such taxable yearpursuant to Section 10.02 herein; and

 

(b)           all allocationsof items that cannot have economic effect (including credits and nonrecoursedeductions) are allocated to Members in accordance with their respectiveOwnership Percentages.

 

7.02.        Distributions.  Except as otherwise provided in Section 10.02hereof in the case of the dissolution and liquidation of the Company, allavailable cash (after making proper allocations for the payment of the Company’sexpenses, liabilities, commitments and contingencies) authorized fordistribution pursuant to Section 7.03(a) shall be distributed to theMembers in proportion to the balances of their respective Capital Accounts.

 

7.03.        General Provisions RegardingDistributions.  Except asotherwise provided for in this Agreement, the timing and amount of alldistributions shall be determined by the Board. With respect to any distributions declared by the Board, the followingadditional provisions shall apply:

 

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(a)           If any assetsof the Company shall be distributed in kind to the Members, such assets shallbe valued on the basis of their fair market value on the date of distribution,as determined by the Board.  The gain orloss for each such asset shall be determined as if such asset were sold forcash at its fair market value, and the gain or loss thereon shall be allocatedas provided by this Article VII, and shall be credited or debited to theCapital Account of the Member receiving such distribution prior to thedistribution of the assets.

 

(b)           All items ofCompany income, gain, loss and deduction shall be allocated, and alldistributions shall be made, to the Persons shown on the records of the Companyto have been Members as of the last day of the taxable year for which theallocation or distribution is to be made. Notwithstanding the foregoing, if any Units of the Company shall betransferred during a taxable year, distributions shall be made to the holdersof the Units on the effect date of the distribution and items of Companyincome, gain, loss and deduction for such period shall be allocated among theoriginal Members and the successor on a daily, monthly or other basis asdetermined by the holders of a majority of the Ownership Percentages using anypermissible method under Section 706 of the Code and the TreasuryRegulations promulgated thereunder.

 

(c)           Notwithstandinganything to the contrary contained herein, the Company, and the Initial Memberon behalf of the Company, shall not make a distribution to the Initial Memberon account of the interest of the Initial Member in the Company if suchdistribution would violate §18 607 of the Act or any other applicable law.

 

**ARTICLE VIII**

**OFFICERS**

 

8.01.        General.  The officers of the Company shall bedesignated by the Board, and shall consist of a President, a Treasurer, aSecretary, and such other officers as the Board may determine to be in the bestinterests of the Company.  In addition,the Board may elect one or more Vice-Presidents, Assistant Treasurers orAssistant Secretaries.  Unless prohibitedby the Act, two or more officers may be held by the same person; provided,however, that the officers of President and Secretary may not be held by thesame person.  Directors may also serve asofficers of the Company.

 

8.02.        Election; Term; Removal.  The Boardshall elect a President, a Treasurer, a Secretary, andsuch other officers as the Board may deem appropriate atthe first meeting of the Board following the annualmeeting of the Members.  The Boardmay determine the compensation, if any, of the officers of the Company.  Each officers shall hold his or herrespective office for a period of one year, and until his or her successor hasbeen duly elected and qualified.  Anyofficer elected or appointed by the Board maybe removed, with or without cause, at any time by the affirmative vote of amajority of the Directors, and the Boardshall have right to appoint a successor to fill any vacancy so created.

 

8.03.        Initial Officers.  The following persons shall be the initialofficers of the Company, and shall hold the office or offices appearing next totheir names:

 
| Harvey Spevak | President |
|---------------|-----------|
| Scott Rosen   | Treasurer |
| Mark Tricolli | Secretary |

 

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8.04.        President.  The President shall be the chief executiveofficer of the Company, shall have authority and responsibility for theday-to-day management of the Company, including, without limitation, oversightover the officers and employees of the Company, and shall be responsible forensuring that the acts and resolutions of the Board are carried intoeffect.  Subject to the prior approval ofthe Board, the President shall execute all contracts, mortgages, conveyancesand other legal instruments in the name of and on behalf of the Company;provided that the foregoing shall not act to preclude the Board from delegatingsuch powers to some other officer, agent or attorney-in-fact of the Company.

 

8.05.        The Vice-President.  The Vice-President, if any, or if there bemore than one, the senior Vice-President as determined by the Board, shall inthe absence or disability of the President, exercise the powers and perform theduties of the President, and each Vice-President shall exercise such otherpowers and perform such other duties as shall be prescribed by the Board.

 

8.06.        The Treasurer.  The Treasurer shall have custody of allfunds, securities and evidences of indebtedness of the Company; shall receiveand give receipts and acquittances for moneys paid in on account of theCompany, and shall pay out of the funds on hand all bills, payrolls, and otherjust debts of the Company, of whatever nature, upon maturity; shall enterregularly in books to be kept by him for that purpose, full and accurateaccounts of all moneys received and paid out by the Treasurer on account of theCompany, and shall perform all other duties incident to the office of Treasurerand as may be prescribed by the Board.

 

8.07.        Secretary.  The Secretary shall attend all meetings ofthe Board and the Members, and shall record all votes and the minutes of suchproceedings in a book to be kept for that purpose, and shall perform likeduties for any other committees of the Board when so required.  The Secretary shall give, or cause to begiven, notice of all meetings of the Members and notice of all special meetingsof the Board, and shall perform such other duties as may be prescribed by theBoard or the President.

 

**ARTICLE IX**

**RECORDS; FINANCIAL REPORTS**

 

9.01.        Records.  The Board shall cause the Company to keep atits principal place of business the following:

 

(a)           acurrent list of the full name and last known address of each Member;

 

(b)           a copy of theCertificate of Formation and all amendments thereto;

 

(c)           a copy of thisAgreement and all amendments thereto; and

 

(d)           copies of all actionstaken at a meeting or by written consent of the Board and the Members withrespect to which records are required to be maintained by the Company pursuantto this Agreement.

 

9.02.        Accounting Policies.  The books and records of the Company shall bekept on such method of accounting as the Board shall deem appropriate.  The financial statements of the Company shallbe prepared in accordance with generally accepted accounting principlesconsistently applied, and shall be appropriate and adequate for the Company’sbusiness and for carrying out all provision of this Agreement.

 

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9.03.        Member’s Audit andInspection Rights.  Each Member shallhave the right to examine and audit the accounts and financial records of theCompany, and to inspect and make copies of all books, records, documents andmaterials as such Member may deem appropriate. Such right to inspection shall occur only during regular business hours,and shall be at the requesting Member’s sole cost and expense.

 

**ARTICLE X**

**DISSOLUTION; LIQUIDATION; WINDING UP ANDTERMINATION**

 

10.01.      Dissolution.  The Company shall be dissolved upon theearliest to occur of any of the following: (a) the sale, transfer or other disposition of all the assets of theCompany, (b) the effective date of the written decision of the Initial Memberto dissolve the Company or (c) the entry of a decree of judicial dissolutionunder § 18 802 of the Act.  Upondissolution of the Company, the Board or a liquidating trustee, if one isappointed, shall wind up the affairs of the Company and, in their, his or hersole and absolute discretion, shall liquidate the assets of the Company.  The Board or such liquidating trustee, as thecase may be, shall, in their, his or her sole and absolute discretion, determinethe time, manner and terms of any sale or other disposition of the Company’sinvestments, properties and assets for the purpose of obtaining, in their, hisor her opinion, fair value for such assets.

 

10.02.      Application of Proceeds.  The proceeds from liquidation shall beapplied in the following order:

 

(a)           first, to third partycreditors, in the order of priority as provided by the Act;

 

(b)           second, to a reserveaccount in such amount as the Board or liquidating trustee, as the case may be,deems reasonably necessary for any contingent or unforeseen liabilities orobligations of the Company.  Such reserveaccount may be paid to a bank, to be held in escrow for the purpose of payingany such contingent or unforeseen liabilities or obligations as they become dueand payable, and, at the expiration of such period as the Board or liquidatingtrustee, as the case may be, may deem advisable, the amount in such reserveaccount shall be distributed to the Members in the manner set forth in thebalance of this Section 10.02; and

 

(c)           third, after takinginto account the allocations of items of Company income, gain, loss ordeduction pursuant to Section 7.01, if any, and distributions of cash orproperty pursuant to Section 7.02, if any, to the Members, in accordancewith the balances of their respective Capital Accounts.

 

10.03.      Certificate ofCancellation.  When the Board orliquidating trustee, as the case may be, has fully complied with the foregoingliquidation plan, the Board or liquidating trustee, as the case may be, shallexecute and cause to be filed an appropriate Certificate of Cancellation underthe Act.

 

**ARTICLE XI**

**NOTICES**

 

11.01.      Notices.  All notices, requests, demands, and othercommunications under this Agreement shall be in writing or provided byelectronic transmission and shall be deemed to have been duly given to a party (i) onthe date of receipt if delivered personally or deliver by electronictransmission, (ii) on the fifth day after mailing if mailed to the partyto whom notice is to be given, by first class mail, registered or certifiedmail, postage prepaid, or (iii) on the weekday

 

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when deliver is guaranteed if sent by overnight delivery by FederalExpress or other national recognized air courier, expenses prepaid, in eachsuch case to the address of such party as set forth on the records of theCompany, or as otherwise set forth herein.

 

**ARTICLE XIIINDEMNIFICATION**

 

12.01.      Indemnification.  The Company shall indemnify and hold harmlessits Members, Directors, officers, employees, agents and others as fully as, andto the same extent a corporation may indemnify its directors, officers,employees and agents under the Delaware General Corporation Law, as now ineffect or hereafter amended.  The Companyshall have the power to purchase and maintain liability insurance coverage for suchperson as, and to the fullest extent, permitted by the Act, as presently ineffect and as may be hereafter amended.

 

12.02.      Indemnification NotExclusive.  The rights ofindemnification and reimbursement provided for in Section 12.01 shall notbe deemed exclusive of any other rights to which such Member, Director,officer, employee or agent may be entitled under the Certificate of Formation,any agreement or vote of the Members, as a matter of law, or otherwise.

 

**ARTICLE XIII**

**MISCELLANEOUS**

 

13.01.      Fiscal Year.  The fiscal year of the Company shall end on December 31stof each calendar year.

 

13.02.      Seal.  The Board is authorized to adopt and have aseal, and said seal may be used by causing it or a facsimile thereof to beimpressed or affixed or in any other manner reproduced.  Any officer of the Company shall have theauthority to affix the seal of the Company to any document.

 

13.03.      Binding Effect.  This Agreement shall be binding upon andshall inure to the benefit of all parties hereto, and their respectivesuccessors and permitted assigns.

 

13.04.      Third Party Beneficiaries.  Except as expressly contemplated by Article XIIhereof, nothing in this Agreement shall construed or interpreted to provide anyrights upon any person or entity other than the parties hereto, and theirrespective successors and permitted assigns.

 

13.05.      Severability.  The invalidity or unenforceability of anyparticular provision of this Agreement shall not affect the validity orenforceability of any other provision hereof, and this Agreement shall beconstrued in all respects as if such invalid or unenforceable provision wasomitted herefrom.

 

13.06.      Entire Agreement.  This Agreement constitutes the entireagreement among the parties hereto relating to the subject matter hereof, andsupersedes all prior or contemporaneous agreements, understandings,negotiations and discussions, whether oral or written, of the parties heretowith respect to the subject matter hereof.

 

13.07.      Subject Headings.  The headings used in this Agreement are forreference and convenience only, and are not intended to constitute substantiveprovisions hereof, and shall be disregarded in their entirety in theconstruction or interpretation of this Agreement.

 

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13.08.      Amendments and Waivers.  This Agreement may be amended, modified orsupplemented, or may be rescinded, terminated or replaced in its entirety, onlyby the affirmative vote of Members holding a majority of the OwnershipPercentages entitled to vote at a regular meeting or properly noticed specialmeeting of the Members.  No waiver of anyof the provisions of this Agreement shall be deemed to constitute or shallconstitute a waiver of any other provision hereof (whether or not similar), norshall such waiver constitute a continuing waiver of such provision unlessotherwise expressly provided in such waiver.

 

13.06.      Governing Law.  This Agreement shall be governed by andconstrued in accordance with the internal laws of the State of Delaware,without regard to the conflict of laws principles thereof.

 

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IN WITNESS WHEREOF, the sole Member, intending to be legally boundhereby, has executed and adopted this Limited Liability Company Agreement as ofthe date first written above.

 
|   | EQUINOX HOLDINGS, INC.: |
|--------|-------------------------|
|   |                    |
|   |                    |
|   | By:                     | /s/ |
|   |                    | Name: |
|   |                    | Title: |

 

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**ANNEX A**

 

### **EQXHOLDINGS, LLC**

### ** **

### **CERTIFICATEOF MEMBERSHIP INTEREST**

### ** **

The undersigned herebycertifies that Equinox Holdings, Inc. is the holder of ONE HUNDRED (100)Units of membership interests in EQX Holdings, LLC, a Delaware limitedliability company (the “Company”) formed in accordance with the DelawareLimited Liability Company Act (Del. Code Ann. Tit. 6, Sections 18-101 et.seq.).

 

All capitalized terms used herein but not otherwise defined shall havethe meanings ascribed to them in the Limited Liability Company Agreement of EQXHoldings, LLC, dated as of October 23, 2003.

 

The Membership Interest represented by thisMembership Certificate shall be transferable on the books of the Company by theholder hereof in person or by power of attorney only upon the due surrender ofthis Membership Certificate properly endorsed.

 

**THE INTEREST EVIDENCED BYTHIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, ASAMENDED, OR APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE TRANSFERRED,SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS (I)(A) SUCHDISPOSITION IS PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THESECURITIES ACT OF 1933, AS AMENDED, (B) THE HOLDER OF THIS CERTIFICATE HASDELIVERED TO THE COMPANY AN OPINION OF COUNSEL TO THE EFFECT THAT SUCHDISPOSITION IS EXEMPT FROM THE PROVISIONS OF SECTION  5 OF SUCH ACT, WHICHOPINION AND COUNSEL MUST BE REASONABLY SATISFACTORY TO THE COMPANY, OR (C) SUCHHOLDER HAS OBTAINED A NO-ACTION LETTER FROM THE SECURITIES AND EXCHANGECOMMISSION WITH RESPECT TO SUCH DISPOSITION, REASONABLY SATISFACTORY TO COUNSELFOR THE COMPANY, AND (II) SUCH DISPOSITION IS PURSUANT TO, OR UNDER ANEXEMPTION FROM, REGISTRATION UNDER ANY APPLICABLE STATE SECURITIES LAWS.**

** **

This Certificate evidences a membership interest in EQX Holdings, LLC,and shall be a security for the purposes of Article 8 of the UniformCommercial Code in effect in the State of Delaware.

 

**IN WITNESS WHEREOF**, the undersigned, a duly authorized officerof the Company, has caused this Membership Certificate to be duly executed,signed and delivered as of the 23rd day of October, 2003.

 

 
|   | EQX HOLDINGS, LLC |
|--------|-------------------|
|   |              |
|   |              |
|   | By:               |   |
|   |              | Name: |
|   |              | Title: |

 

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