EXHIBIT 3.34
AMENDED AND RESTATED
OPERATING AGREEMENT
OF
HEALTHCARE COMPLIANCE, L.L.C.
This AMENDED AND RESTATED OPERATING AGREEMENT (the "Agreement") is made
and entered into as of this 31st day of August, 1998, by an among each person
set forth on Exhibit A hereto, as Members of Healthcare Compliance, L.L.C., a
District of Columbia limited liability company.
R E C I T A L S
A. The original Members caused to be filed on April 29, 1997 Articles of
Organization (the "Articles") for Healthcare Compliance, L.L.C. (the "Company"),
a limited liability company organized under the laws of the District of
Columbia, with the Superintendent of Corporations of the District of Columbia,
to engage in services related to legal compliance in the healthcare industry.
B. The original Members adopted and approved an operating agreement dated
as of August 1, 1997 (the "Operating Agreement") for the Company under the
District of Columbia Limited Liability Company Act (the "Act").
C. The original Members sold 100% of the Membership Interests in the
Company to the Members immediately prior to the execution of this Amended and
Restated Operating Agreement.
D. The new Members wish to amend and restate the Operating Agreement upon
the terms and conditions set forth herein.
NOW, THEREFORE, the Members hereby set forth the Amended and Restated
Operating Agreement for the Company upon the terms and subject to the conditions
of this Agreement.
ARTICLE 1
FORMATION
1.1 Formation. On April 29, 1997, the Company was formed upon the filing
with the Superintendent of Corporations of the District of Columbia of the
Articles of Organization of the Company. The Members shall immediately, and from
time to time hereafter as may be required by law, execute all amendments to the
Articles of Organization, and do all filings, recordings, and other acts as may
be appropriate to comply with the operation of the Company under the Act.
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ARTICLE 2
INTENT
2.1 Intent. It is the intent of the Members that the Company shall always
be operated in a manner consistent with its treatment as a "partnership" for
federal and state tax purposes. No Member shall take any action inconsistent
with the express intent of the parties hereto.
ARTICLE 3
NAME
3.1 Name. The name of the Company shall be "Healthcare Compliance, L.L.C."
ARTICLE 4
PLACE OF BUSINESS
4.1 Place of Business. The principal place of business of the Company
shall be the District of Columbia or such other place as the Members shall
determine from time to time.
ARTICLE 5
PURPOSE
5.1 Purpose. The object and purpose of the Company and the general nature
of the business it proposes to transact shall include all transactions of any or
all lawful business for which limited liability companies may be formed under
the laws of the District of Columbia. The character of the business which the
Company initially intends to conduct is to engage in the business of providing
services related to the compliance of persons in the healthcare industry with
federal, state and local laws and regulations.
ARTICLE 6
TERM
6.1 Term. This Company commenced upon the filing of its Articles of
Organization with the Superintendent of Corporations of the District of Columbia
on April 29, 1997 and shall continue until April 30, 2027 (the "Dissolution
Date"), unless dissolved earlier as provided for in this Agreement.
ARTICLE 7
MEMBERS
7.1 Members. The name and address of each of the Members of this Company
are set forth on Exhibit A hereto.
ARTICLE 8
REGISTERED AGENT AND REGISTERED OFFICE
8.1 Registered Agent and Registered Office. The name and business address
of the initial registered agent and registered office for the Company is
National Registered Agents, Inc.,
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▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇, or such other
person or persons as the Members shall appoint from time to time.
ARTICLE 9
CAPITAL CONTRIBUTIONS AND MEMBERSHIP INTERESTS
9.1 Initial Capital Contribution. Each Member shall be credited with
having made an initial capital contribution to the Company in the amount set
forth opposite such Member's name on Exhibit A hereto.
9.2 Additional Contributions. No Member shall be required to make any
additional capital contribution to the Company. A Member may make such
additional capital contributions as may be approved from time to time by the
Members holding of a majority of the Membership Interests. "Membership Interest"
means a Member's interest in the Company, which when expressed as a percentage
of all Membership Interests in the Company shall be equal to such Member's
Membership Percentage (as defined below). "Membership Percentage" means the
percentage interest of a Member as shown on Exhibit A, as it may be amended from
time to time.
9.3 Capital Account; Withdrawal or Reduction of Members' Capital
Contributions. A separate capital account (the "Capital Account") shall be
maintained for each Member. No Member shall have the right to withdraw any
capital from his Capital Account.
9.4 Interest and Preferential Rights. No interest shall accrue on any
capital contributions and no Member shall have any preferential rights with
respect to distributions or upon dissolution of the Company.
9.5 Membership Interests and Amendments to Exhibit A. Each Member shall be
credited with the Membership Interest (expressed as a percentage of all
Membership Interests) shown on Exhibit A with respect to capital contributions
and Membership Interests shall be appropriately amended to reflect changes to
such amounts as a result of any additional capital contributions by Members, any
withdrawals or reductions in Capital Contributions, any changes in the
membership of the Company or assignments of Membership Interests. Exhibit A
shall also be amended from time to time to reflect any changes in the addresses
of Members.
9.6 Membership Interest Certificates. Each Member's Membership Interest in
the Company shall be evidenced by a certificate in the form of Exhibit B
attached hereto (a "Certificate"), and shall constitute a security governed by
Chapter 8 of the District of Columbia Uniform Commercial Code-Investment
Securities (DC Code 1981 `28:8-101, et. seq.).
ARTICLE 10
ALLOCATIONS OF NET PROFITS AND NET LOSS
10.1 Definitions. When used in this Agreement, the following terms shall
have the meanings set forth below:
"Company Minimum Gain" shall have the meaning ascribed to the term
"Partnership Minimum Gain" in the Treasury Regulations Section 1.704-2(d).
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"Net Profits" and "Net Loss" shall mean the income, gain, loss,
deductions, and credits of the Company in the aggregate or separately stated, as
appropriate, determined in accordance with the method of accounting at the close
of each fiscal year employed on the Company's information tax return filed for
federal income tax purpose.
"Treasury Regulations" shall mean the final or temporary regulations
that have been issued by the U.S. Department of Treasury pursuant to its
authority under the Internal Revenue Code, and any successor regulations.
10.2 Allocations of Net Profits and Net Loss.
(1) Net Loss. Net Loss shall be allocated to the Members in the
Membership Percentages set forth on Exhibit A. Notwithstanding the previous
sentence, allocations to a Member shall be made only to the extent that such
allocations will not create a deficit Capital Account balance for that Member in
excess of any amount, if any, equal to such Member's share of Company Minimum
Gain that would be realized on a foreclosure of the Company's property. Any Net
Loss not allocated to a Member because of the foregoing provision shall be
allocated to the other Members (to the extent the other Members are not limited
in respect of the allocation of losses under this Section 10.2. Any Net Loss
reallocated under this Section 10.2(a) shall be taken into account in computing
subsequent allocations of Net Profits pursuant to this Article 10, so that the
net amount of any item so allocated and the Net Profits allocated to each Member
pursuant to this Article 10, to the extent possible, shall be equal to the net
amount that would have been allocated to each such Member pursuant to this
Article 10 if no reallocation of Net Loss had occurred under this Section
10.2(a).
(2) Net Profits. Net Profits shall be allocated to the Members in
the Membership Percentages set forth on Exhibit A.
ARTICLE 11
MANAGEMENT BY MEMBERS
11.1 Management by Members. The Company shall be a "member-managed"
limited liability company as such term is defined in the Act. The business and
affairs of the Company shall be managed by the Members. All powers of the
Company as a limited liability company under the Act shall be exercised by or
under the direction of the Members.
11.2 Actions Requiring the Approval of Members Holding a Majority of the
Membership Interests. Unless authorized by Members holding at least a majority
of the Membership Interests, no single Member or group of Members shall have the
authority in the name or on behalf of the Company to:
11.2.1 sell, lease, exchange or otherwise dispose of any of the
assets of the Company or enter into any agreement to do the same, except for
sales of assets in the ordinary course of business in an amount less than 1% of
the Company's net assets (as shown on the Company's balance sheet as of the end
of its most recently completed fiscal quarter) in any single transaction or
series of related transactions;
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11.2.2 purchase, lease or otherwise acquire any assets, or enter
into any agreement to do the same, except for acquisitions of assets in
the ordinary course of business in an amount less than 1% of the Company's
net assets (as shown on the Company's balance sheet as of the end of its
most recently completed fiscal quarter) in any single transaction or
series of related transactions;
11.2.3 borrow money or incur indebtedness or other liabilities in
excess of 1% of the Company's net assets (as shown on the Company's
balance sheet as of the end of its most recently completed fiscal quarter)
in any single transaction or series of related transactions; or
11.2.4 enter into or agree to enter into any other transaction
outside of the ordinary course of business of the Company.
11.3 Compensation and Reimbursement. No Member shall have any right to
compensation for any services performed on behalf of the Company except as
determined from time to time by Members holding at least a majority of the
Membership Interests. Notwithstanding the foregoing, a Member shall have
the right to be reimbursed by the Company for any out-of-pocket expenses
incurred by such Member in connection with any services performed by the
Member on behalf of the Company.
ARTICLE 12
MANAGERS
12.1 Appointment of Managers. The Members may appoint a Chief Manager and
a Secretary by the affirmative vote of the Members holding a majority of the
Membership Interests to serve as the Managers of the Company. The initial Chief
Manager shall be ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and the initial Secretary shall be ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇. The same person cannot hold simultaneously the positions of Chief
Manager and Secretary. Other Managers and Assistant Secretaries may be appointed
from time to time by the Chief Manager.
12.2 Term. The Manager shall serve for an indefinite term at the pleasure
of the Members, in the case of the Chief Manager, or the Chief Manager, in the
case of other Managers. A Manager may be removed from office at any time with or
without cause (a) on a vote of the Members holding at least a majority of the
Membership Interests, in the case of the Chief Manager, or (b) by the Chief
Manager, in the case of the other Managers.
12.3 Duties.
12.3.1 Chief Manager/Manager. The Chief Manager shall run the
day-to-day business of the Company, see that all orders and resolutions of
the Members are carried into effect and shall perform such other duties as
the Members may from time to time prescribe. The other Managers shall
assist the Chief Manager in his duties.
12.3.2 Secretary. The Secretary shall attend all meetings of the
Members and shall be responsible for recording the minutes thereof. The
Secretary shall have the responsibility of authenticating records of the
Company and receiving notices required to
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be sent to the Secretary and shall perform such other duties as the
Members may from time to time prescribe.
12.4 Limitation on Liability. A Manager shall not be liable for any action
taken as a Manager, or any failure to take action as a Manager, except to the
extent that such Manager did not discharge his duties in good faith in a manner
he reasonably believed to be in the best interests of the Company, provided this
limit of liability shall not apply to wilful misconduct.
12.5 Resignation. Any Manager of the Company may resign at any time by
giving written notice to the Members. The resignation of any Manager shall take
effect upon receipt of notice thereof or at such later time as shall be
specified in such notice; and unless otherwise specified therein, the acceptance
of such resignation shall not be necessary to make it effective. The resignation
of a Manager who is also a Member shall not affect the rights of such Manager as
a Member and shall not in itself constitute the withdrawal, retirement or
expulsion of such Member.
12.6 Removal. A Manager may be removed at any time or from time to time,
with or without cause, (a) by the affirmative vote of Members holding a majority
of the Membership Interests in the case of the Chief Manager, or (b) by the
Chief Manager, in the case of the other Managers. The removal of a Manager who
is also a Member shall not affect the rights of such Manager as a Member and
shall not in itself constitute the withdrawal, retirement or expulsion of such
Member.
12.7 Compensation and Reimbursement. No Manager shall have any right to
compensation for services performed on behalf of the Company except as
determined from time to time by Members holding at least a majority of the
Membership Interests. Notwithstanding the foregoing, a Manager shall have the
right to be reimbursed by the Company for any out-of-pocket expenses incurred by
such Manager in connection with any services performed by such member on behalf
of the Company.
ARTICLE 13
BANK ACCOUNTS
13.1 Bank Accounts. The Chief Manager may from time to time open bank
accounts in the name of the Company.
ARTICLE 14
RIGHTS AND OBLIGATIONS OF MEMBERS
14.1 Rights and Obligations of Members. Each Member's liability for debts
and obligations of the Company shall be limited as set forth in Section 29-1314
of the Act and in other applicable law.
ARTICLE 15
MEETINGS OF MEMBERS, WAIVER OF NOTICE, CONSENT IN LIEU
15.1 Meetings of Members, Waiver of Notice, Consent in Lieu. No meetings
of the Members are required. Meetings of the Members may be called at any time
by a Member or the
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Secretary. The meeting shall take place at a location either in or out of the
District of Columbia. When any notice is required to be given to any Member, a
waiver thereof in writing signed by the person entitled to such notice, whether
before, at, or after the time stated therein, shall be equivalent to the giving
of such notice. Action required or permitted to be taken at a meeting of Members
may be taken without a meeting if the action is evidenced by one or more written
consents describing the action taken, signed by Members who own Membership
Interests with voting power equal to the voting power that would be required to
take the same action at a meeting of the Members at which all Members are
present and delivered to the Secretary for inclusion in the minutes or for
filing with the Company records. Action taken by consent in lieu of a meeting is
effective on the date on which the last required Member has signed the consent,
unless the consent specifies a different effective date.
ARTICLE 16
DISSOLUTION
16.1 Term. The Company shall be dissolved upon expiration of its term
ending on April 30, 2027 or earlier in the manner set forth in the Act.
16.2 Winding Up Affairs on Dissolution. Upon dissolution of the Company,
the Managers or other persons required or permitted by law to carry out the
winding up of the affairs of the Company shall promptly notify all Members of
such dissolution; shall wind up the affairs of the Company; shall prepare and
file all instruments or documents required by law to be filed to reflect the
dissolution of the Company; and, after collecting the debts and obligations owed
to the Company and after paying or providing for the payment of all liabilities
and obligations of the Company, shall distribute the assets of the Company in
accordance with Section 16.3.
16.3 Distributions Upon Liquidation. Upon liquidation of the Company,
assets remaining after payment of all Company debts and obligations shall be
distributed in proportion to the positive Capital Account balances of all
Members, after allocation of Net Profits or Net Loss for the year of the
liquidation. The Members shall not be obligated to contribute cash or any other
asset to the Company to make up deficits in the Capital Account balances of
Members either during the term of the Company or upon liquidation.
ARTICLE 17
RESTRICTIONS ON TRANSFERABILITY
17.1 Restrictions on Transferability. Under the Act a Member's Membership
Interest contains governance rights and financial rights. No Member shall have
any right to sell, transfer, or assign a Membership Interest in the Company (or
either the financial or governance rights contained therein) without written
consent and approval by Members holding more than 50% of the Membership
Interests. The purchaser, transferee, or assignee of such an interest in the
Company shall not become a Member except as provided for in Article 18 of this
Agreement.
ARTICLE 18
ADDITIONAL MEMBERS
18.1 Additional Members. After the formation of the Company, any person
acceptable to Members holding more than 50% of the Membership Interests may
become a Member of the
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Company for such consideration as the Members holding more than 50% of the
Membership Interests shall determine. Any additional Member must acknowledge in
writing all of the terms and provisions of this Agreement or of any other
operating agreement of the Company and must agree to be bound thereby.
18.2 Registrations, Registration of Transfers and Exchanges. The Company
shall maintain all records for the exchange and registration of the Certificates
including all forms of transfer for the Certificates and shall:
(a) Keep at its principal place of business a register (the "Register")
in such form as it may determine, in which, subject to such
reasonable regulations as it may prescribe, it shall provide for the
registration of the Certificates and of transfers thereof;
(b) Ensure that all Certificates presented for transfer shall be duly
endorsed for transfer or be accompanied by a written instrument of
transfer; and
(c) Ensure that each Certificate shall bear an original issue date.
The Company shall comply with Section 17.1 with respect to the transfers of
Certificates. Notwithstanding anything contained herein to the contrary, the
Company shall not be required to ascertain whether any transfer or exchange of
Certificates complies with the registration provisions or exemptions from the
Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as
amended, applicable state securities law or the Investment Company Act of 1945,
as amended; provided that, if a Certificate is specifically required to be
delivered to the Company by a purchaser or transferee of a Certificate, the
Company shall be under a duty to examine the same to determine whether it
conforms to the requirements of this Agreement and shall promptly notify the
party delivering the same if such Certificate does not so conform.
18.3 Persons Deemed Owners. Prior to due presentment of a Certificate for
registration or transfer, the Company, or any agent or manager of the Company,
may treat the person in whose name such Certificate is registered as the owner
of the Certificate for the purpose of receiving distributions pursuant to this
Agreement and for all other purposes whatsoever, and the Company shall not be
affected by notice to the contrary.
18.4 Mutilated, Lost, Stolen or Destroyed Certificates. If (i) any
mutilated Certificate is surrendered to the Company, or (ii) the Company
receives evidence to its satisfaction of the destruction, loss or theft of any
Certificate, together with indemnity or security sufficient to hold it harmless,
the Company shall execute, and upon its written request the Company shall
authenticate and deliver, in exchange for any such mutilated Certificate or in
lieu of any such destroyed, lost or stolen Certificate, a new Certificate of
like tenor and principal amount, bearing a number not contemporaneously
outstanding. Upon the issuance of any new Certificate under this Section, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses in connection therewith. The provisions of this Section are exclusive
and shall preclude (to the extent permissible under applicable law) all other
rights and remedies with respect to the replacement or payment of mutilated,
destroyed, lost or stolen Certificates.
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ARTICLE 19
DISTRIBUTIONS
19.1 Distributions. Prior to any termination of the Company and at least
annually if Net Profits have been generated by the Company, Members holding at
least 50% of the Membership Interests shall determine funds available for
distribution. Distributions shall be made according to each Member's Percentage
Interest in the Company as of the date of distribution. No distribution shall be
declared and paid unless, after the distribution is made, the assets of the
Company are in excess of all liabilities of the Company, except liabilities to
Members on the account of their capital contributions.
ARTICLE 20
TRANSACTING BUSINESS WITH THE COMPANY
20.1 Transacting Business With the Company. A Member or Manager may
transact business with the Company and, subject to other applicable law, has the
same rights and obligations with respect thereto as a person who is not a Member
or Manager.
ARTICLE 21
FISCAL YEAR
21.1 Fiscal Year. The fiscal year of the Company shall end on June 30 of
each year.
ARTICLE 22
LOANS
22.1 Loans. Any Member or Affiliate of a Member may make a loan or loans
to the Company on such terms as may be approved by Members holding in excess of
50% of the Membership Interests.
ARTICLE 23
APPLICABLE LAW
23.1 Applicable Law. This Agreement and its application and interpretation
shall be governed by the laws of the District of Columbia.
ARTICLE 24
AMENDMENTS
24.1 Amendments. This Agreement may not be amended except by the agreement
of Members holding in excess of 50% of the Membership Interests.
ARTICLE 25
CONSTRUCTION
25.1 Construction. Whenever the singular number is used in this Agreement
and when required by the context, the same shall include the plural, and the
masculine gender shall include the feminine and neuter genders and vice versa;
and the word "person" or "party" shall include a
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corporation, firm, partnership, proprietorship, or other form of association.
The headings of this Agreement are inserted for convenience only and are in no
way intended to describe, interpret, define, or limit the scope, extent, or
intent of this Agreement or any provision hereof.
ARTICLE 26
RIGHTS AND REMEDIES
26.1 Rights and Remedies. The rights and remedies provided by this
Agreement are cumulative, and the use of any one right or remedy by any party
shall not preclude or waive the right to use any or all other remedies. Said
rights and remedies are given in addition to any other rights the parties may
have by law, statute, ordinance, or otherwise.
ARTICLE 27
SEVERABILITY
27.1 Severability. If any provision of this Agreement or the application
thereof to any person or circumstance shall be invalid, illegal, or
unenforceable to any extent, the remainder of this Agreement and the application
thereof shall not be affected and shall be enforceable to the fullest extent
permitted by law.
ARTICLE 28
COUNTERPARTS
28.1 Counterparts. This Agreement may be executed in counterparts, all of
which shall be deemed to be one and the same instrument.
IN WITNESS WHEREOF, the parties have entered into this Agreement as of the
day and year first written above.
MEMBERS:
VANGUARD HEALTH FINANCIAL COMPANY, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Executive Vice President
VANGUARD HEALTH MANAGEMENT INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Executive Vice President
EXHIBIT A
Member's Name and Address Capital Contribution Membership Percentages
------------------------- -------------------- ----------------------
Vanguard Health Financial Company, Inc. $1,000 20%
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Vanguard Health Management, Inc. $4,000 80%
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
TOTAL: $5,000 100%
====== ===
EXHIBIT B
Form of Certificate
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS AND NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE
AMENDED AND RESTATED OPERATING AGREEMENT OF HEALTHCARE COMPLIANCE, L.L.C., THE
SECURITIES ACT, AND APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES.
CERTIFICATE FOR LIMITED LIABILITY COMPANY
MEMBERSHIP INTERESTS OF HEALTHCARE COMPLIANCE, L.L.C.
Certificate Number__________ Membership Interest - _____%
Healthcare Compliance, L.L.C., a District of Columbia limited liability
company (the "Company"), hereby certifies that ______________________________
(the "Holder") is the registered owner of ___% of the Membership Interests in
the Company (the "Certificate"). This Certificate shall constitute a security
governed by Chapter 8 of the District of Columbia Uniform Commercial
Code-Investment Securities (DC Code 1981 `28:8-101, et seq.) The rights, powers,
preferences, restrictions and limitations of the Membership Interests are set
forth in, and this Certificate and the Membership Interests hereby represented
are issued and shall in all respects be subject to the terms and provisions of,
the Amended and Restated Operating Agreement of the Company, dated as of August
31, 1998, as the same may be amended from time to time (the "Company
Agreement"). Capitalized terms used herein and not otherwise defined have the
meaning ascribed to them in the Company Agreement. THIS CERTIFICATE IS
TRANSFERABLE ONLY IN ACCORDANCE WITH THE TERMS OF THE COMPANY AGREEMENT, WHICH
IMPOSES CERTAIN LIMITATIONS AND RESTRICTIONS ON TRANSFERS OF MEMBERSHIP
INTERESTS. By acceptance of this Certificate, and as a condition to being
entitled to any rights and/or benefits with respect to the Membership Interests
evidenced hereby, a registered Holder hereof (including any registered
transferee hereof) is deemed to have agreed, to comply with and be bound by all
terms and conditions of the Company Agreement. The Company will furnish a copy
of such Company Agreement to each Member without charge upon written request to
the Company at is principal place of business or registered office, as the case
may be.
Date:_______________, 199___ HEALTHCARE COMPLIANCE, L.L.C.
By:______________________________