Exhibit 3.34
OPERATING AGREEMENT OF
VALENCIA MRI, LLC
This Operating Agreement ("AGREEMENT") is entered into as of December
1, 2000, by and among Comprehensive Diagnostic Imaging, Inc., a Delaware
Corporation ("CDI") and Medical Development Services, LLC, a California limited
liability company ("MDS").
EXPLANATORY STATEMENT
The parties have agreed to organize a limited liability company in
accordance with the terms, and subject to the conditions, set forth in this
Agreement.
NOW, THEREFORE, the parties agree as follows:
ARTICLE 1
DEFINED TERMS
The following capitalized terms shall have the respective meanings
specified in this Article 1. Capitalized terms not defined in this Agreement
shall have the meanings specified in the Act.
1.1 "ACT" means the California Limited Liability Company Act, as
amended from time to time.
1.2 "AFFILIATE" means (a) a Person directly or indirectly
controlling, controlled by, or under common control with another Person; (b) a
Person owning or controlling ten percent (10%) or more of the outstanding voting
securities or beneficial interests of another Person; (c) an officer, director,
partner or member of the immediate family of an officer, director or partner, of
another Person; and/or (d) any affiliate of any such Person.
1.3 "AGREEMENT" means this Operating Agreement, as amended from
time to time including each exhibit hereto.
1.4 "ASSIGNEE" means the Person who has acquired an Economic
Interest in the Company but is not a Member.
1.5 "CAPITAL ACCOUNT" means the account to be maintained by the
Company for each Interest Holder in accordance with the following provisions:
1.5.1 An Interest Holder's Capital Account shall be
credited with the amount of money and the fair market value of any property
contributed to the Company (net of liabilities secured by such property that the
Company either assumes or to which such property is subject) the amount of any
Company unsecured liabilities assumed by the Interest Holder, and the Interest
Holder's distributive share of Profit and any item in the nature of income or
gain
specially allocated to the Interest Holder pursuant to the provisions of section
4.3 (other than section 4.3.3); and
1.5.2 An Interest Holder's Capital Account shall be debited
with the amount of money and the fair market value of any Company property
distributed to the Interest Holder (net of liabilities secured by such
distributed property that the Interest Holder either assumes or to which such
property is subject), less the amount of any unsecured liabilities of the
Interest Holder assumed by the Company, and the Interest Holder's distributive
share of Loss and any item in the nature of expenses or losses specially
allocated to the Interest Holder pursuant to the provisions of section 4.3
(other than section 4.3.3).
1.5.3 If any interest is transferred pursuant to the terms
of this Agreement, the transferee shall succeed to the Capital Account of the
transferor to the extent the Capital Account is attributable to the transferred
interest. If the book value of Company property is adjusted pursuant to section
4.3.3, the Capital Account of each Interest Holder shall be adjusted to reflect
the aggregate adjustment in the same manner as if the Company had recognized
gain or loss equal to the amount of such aggregate adjustment. It is intended
that the Capital Accounts of all Interest Holders shall be maintained in
compliance with the provisions of Regulation Section 1.704-1(b), and all
provisions of this Agreement relating to the maintenance of Capital Accounts
shall be interpreted and applied in a manner consistent with that Regulation.
1.6 "CASH FLOW" means all cash derived from operations of the
Company (including interest received on reserves), without reduction for any
non-cash charges, but less cash used to pay current operating expenses and to
pay or establish reasonable reserves for future expenses, debt payments, capital
improvements and replacements as determined by the Management Committee. Cash
Flow shall not include Capital Proceeds but shall be increased by the reduction
of any reserve previously established.
1.7 "CODE" means the Internal Revenue Code of 1986, as amended, or
any corresponding provision of any succeeding revenue law.
1.8 "COMPANY" means the limited liability company formed in
accordance with this Agreement.
1.9 "CONTRIBUTION" means any money, property or services rendered,
or a promissory note or other binding obligation to contribute money or
property, or to render services as permitted in this title, which a Member
contributes to the Company as capital in that Member's capacity as a Member
pursuant to an agreement between the Members, including an agreement as to
value.
1.10 "ECONOMIC INTEREST" means a person's right to share in the
income, gains, losses, deductions, credit or similar items of, and to receive
distributions from, the Company, but does not include any other rights of a
Member including, without limitation, the right to vote or to participate in
management, or any right to information concerning the business and affairs of
the Company.
1.11 "MANAGEMENT COMMITTEE" means the Persons designated as such in
Article 5.
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1.12 "INTEREST HOLDER" means any Person who holds an Economic
Interest, whether as a Member or as an Assignee of a Member.
1.13 "MEMBER" means any person who executes a counterpart of this
Agreement as a Member and any Person who subsequently is admitted as a Member of
the Company.
1.14 "MEMBERSHIP INTEREST" means a Member's rights in the Company,
collectively, including the Member's Economic Interest, any right to vote or
participate in management, and any right to information concerning the business
and affairs of the Company.
1.15 "MEMBER NON-RECOURSE DEBT" shall mean any "partner
non-recourse liability" or "partner non-recourse debt" under Regulations Section
1.704-2(b)(4). Subject to the foregoing, it shall mean any Company liability to
the extent the liability is non-recourse for purposes of Regulations Section
1.1001-2, and a Member (or related Person within the meaning of Regulations
Section 1.752-4(b)) bears the Economic Risk of Loss under Regulations Section
1.752-2 because, for example, the Member or related Person is the creditor or a
guarantor.
1.16 "MEMBER NON-RECOURSE DEDUCTIONS" shall mean Company
deductions, losses and Code Section 705(a)(2)(B) expenditures, as the case may
be (as computed for "book" purposes), that are treated as deductions, losses and
expenditures attributable to Member Non-recourse Debt under Regulations Section
1.704-2(i)(2).
1.17 "NEGATIVE CAPITAL ACCOUNT" means a Capital Account with a
balance of less than zero.
1.18 "PERCENTAGE" means, as to a Member, the percentage set forth
after the Member's name on Exhibit A, as amended from time to time, and as to an
Interest Holder who is not a Member, the Percentage or part of the Percentage
that corresponds to the portion of a Member's Economic Interest that the
Interest Holder has Acquired, to the extent the Interest Holder has succeeded to
that Member's interest.
1.19 "PERSON" means and includes an individual, corporation,
partnership, association, limited liability company, trust, estate or other
entity.
1.20 "POSITIVE CAPITAL ACCOUNT" means a Capital Account with a
balance greater than zero.
1.21 "PROFIT" and "LOSS" means, for each taxable year of the
Company (or other period for which Profit or Loss must be computed), the
Company's taxable income or loss determined in accordance with IRC Section
703(a), with the following adjustments:
1.21.1 All items of income, gain, loss, deduction or credit
required to be stated separately pursuant to IRC Section 703(a)(1) shall be
included in computing taxable income or loss;
1.21.2 Any tax-exempt income of the Company, not otherwise
taken into account in computing Profit or Loss, shall be included in computing
taxable income or loss;
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1.21.3 Any expenditures of the Company described in IRC
Section 705(a)(2)(B) (or treated as such pursuant to Regulation Section
1.704-1(b)(2)(iv)(i)) and not otherwise taken into account in computing Profit
or Loss, shall be subtracted from taxable income or loss;
1.21.4 Gain or loss resulting from any taxable disposition
of Company property shall be computed by reference to the book value as adjusted
under Regulation Section 1.704-1(b) ("ADJUSTED BOOK VALUE") of the property
disposed of, notwithstanding the fact that the adjusted book value differs from
the adjusted basis of the property for federal income tax purposes;
1.21.5 In lieu of the depreciation, amortization or cost
recovery deductions allowable in computing taxable income or loss, there shall
be taken into account the depreciation computed based upon the adjusted book
value of the asset; and
1.21.6 Notwithstanding any other provision of this
definition, any items which are specially allocated pursuant to section 4.3
shall not be taken into account in computing Profit or Loss.
1.22 "REGULATION" means the income tax regulations, including any
temporary regulations, from time to time promulgated under the Code.
1.23 "SECRETARY OF STATE" means the Secretary of State of the State
of California.
1.24 "SUPERMAJORITY INTEREST" means Membership Interests equal to
seventy-five percent (75%) or more of all outstanding Membership Interests.
1.25 "TRANSFER" means, when used as a noun, any sale,
hypothecation, pledge, assignment, attachment or other transfer, and, when used
as a verb, to sell hypothecate, pledge, assign or otherwise transfer.
1.26 "VOLUNTARY WITHDRAWAL" means a Member's disassociation from
the Company by means other than a Transfer.
ARTICLE 2
FORMATION AND NAME; OFFICE; PURPOSE; TERM
2.1 ORGANIZATION. The parties hereby organize a limited liability
company pursuant to the Act and the provisions of this Agreement. The Company
shall cause Amended Articles of Organization to be prepared, executed and filed
with the Secretary of State.
2.2 NAME OF THE COMPANY. The name of the Company shall be Valencia
MRI, LLC.
2.3 PURPOSE. The Company is organized solely to own and operate a
medical diagnostic imaging center and other lawful activities, and to do any and
all things necessary, convenient or incidental to that purpose.
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2.4 TERM. The Company shall continue in existence until June 30,
2025, unless sooner dissolved as provided by this Agreement or the Act.
2.5 PRINCIPAL PLACE OF BUSINESS. The Company's Principal Place of
Business shall be located at ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ or at any other place within the State of California which the
Members agree.
2.6 RESIDENT AGENT. The name and address of the Company's resident
agent in the State of California is ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
2.7 MEMBERS. The name, present mailing address and Percentage of
each Member are set forth on Exhibit A.
ARTICLE 3
MEMBERS; CAPITAL; CAPITAL ACCOUNTS
3.1 INITIAL CONTRIBUTIONS. Upon the execution of this Agreement,
the Members shall contribute to the Company cash in the amounts respectively set
forth on Exhibit A.
3.2 NO ADDITIONAL CONTRIBUTIONS. No Member shall be required to
contribute any additional capital to the Company, and no Member shall have
personal liability for any obligation of the Company except as expressly
provided by law.
3.3 NO INTEREST ON CONTRIBUTIONS. Neither Members nor Interest
Holders shall be paid interest with respect to Contributions.
3.4 RETURN OF CONTRIBUTIONS. Except as otherwise provided in this
Agreement, no Member nor Interest Holder shall have the right to receive the
return of any Contribution or withdraw from the Company, except upon the
dissolution of the Company.
3.5 FORM OF RETURN OF CAPITAL. If a Member or an Interest Holder
is entitled to receive the return of a Contribution, the Company may distribute
in lieu of money, notes or other property having a value equal to the amount of
money distributable to such Person.
3.6 CAPITAL ACCOUNTS. A separate Capital Account shall be
maintained for each Member and Interest Holder.
3.7 LOANS AND OTHER BUSINESS TRANSACTIONS. Any Member may, at any
time, make or cause a loan to be made to the Company in any amount and on those
terms upon which the Company and the Member agree. Members may also transact
other business with the Company and, in doing so, they shall have the same
rights and be subject to the same obligations arising out of any such business
transaction as would be enjoyed by and imposed upon any Person, not a Member,
engaged in a similar business transaction with the Company.
3.8 OTHER BUSINESS INTERESTS. Each Member acknowledges and agrees
that the Members and their respective partners, members, officers, directors,
shareholders, employees,
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associates, agents and Affiliates are engaged in other business activities apart
from the Company and possess interests in other business activities including,
among others, those which may compete with the Company or for the Member's time
and attention. Each Member agrees that: (i) the Members and their respective
partners, members, officers, directors, shareholders, employees, associates,
agents or Affiliates may engage or invest in any business and activity, and
neither the Company nor the other Members shall have the right in or to such
other activities or to the income or proceeds derived therefrom; (ii) no Member
nor its partners, members, officers, directors, shareholders, employees,
associates, agents or Affiliates shall be obligated to present any business or
investment opportunity to the Company or the other Members except as otherwise
provided herein or in a separate agreement; (iii) each Member shall have the
right to hold any business or investment opportunity for its own account or to
recommend such opportunity to Persons other than the Company or the other
Members; and (iv) each Member hereby waives any and all rights and claims which
it might otherwise have against the Company and the Members and their respective
partners, members, officers, directors, shareholders, employees, associates,
agents and Affiliates as a result of any such activities.
3.9 NON-COMPETITION. During the period commencing on the date of
this Agreement and ending two (2) years after a Member ceases to be a Member as
provided in or permitted under this Agreement, no Member or Economic Interest
owner shall have any ownership interest (of record or beneficial) in or have any
interest as an employee, salesman, consultant, officer or director in, or
otherwise aid or assist in any manner, any firm, corporation, partnership,
proprietorship or other business that engages in, a business which is similar to
that engaged in by the Company within a twenty-five (25) mile radius of any of
the Company's operation locations. Notwithstanding the forgoing, CDI may
continue to own, manage and operate its existing medical imaging facilities and
any other medical imaging facilities hereafter developed or acquired.
ARTICLE 4
PROFIT, LOSS AND DISTRIBUTION
4.1 ALLOCATION OF PROFIT OR LOSS. After giving effect to the
special allocations set forth in section 4.3, for any taxable year of the
Company, Profit and Loss shall be allocated to the Interest Holders in
proportion to their Percentages.
4.2 CASH FLOW. Cash Flow of the Company shall be distributed to
the Interest Holders in proportion to their Percentages no later than
twenty-five (25) days after the end of the month.
4.3 REGULATORY ALLOCATIONS.
4.3.1 CONTRIBUTED PROPERTY AND BOOK-UPS. In accordance with
IRC Section 704(c) and the Regulations thereunder, including Regulation Section
1.704-1(b)(2)(iv)(d)(3), income, gain, loss and deduction with respect to any
property contributed (or deemed contributed) to the Company shall, solely for
tax purposes, be allocated among the Interest Holders so as to take account of
any variation between the adjusted basis of the property to the Company for
federal income tax purposes and its fair market value at the date of
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Contribution (or deemed Contribution). If the adjusted book value of any Company
asset is adjusted under Regulation Section 1.704-1(b)(2)(iv)(f), subsequent
allocations of income, gain, loss and deduction with respect to the asset shall
take account any variation between the adjusted basis of the asset for federal
income tax purposes and its adjusted book value in the manner required under IRC
Section 704(c) and the Regulations thereunder. The parties hereto agree to use
the traditional method with curative allocations, as described in Regulation
Section 1.704-3(c), for making IRC Section 704(c) allocations.
4.3.2 IRC SECTION 754 ADJUSTMENT. To the extent an
adjustment to the tax basis of any Company asset pursuant to IRC Section 734(b)
or IRC Section 743(b) is required, pursuant to Regulation Section
1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts,
the amount of the adjustment to the Capital Accounts shall be treated as an item
of gain (if the adjustment increases the basis of the asset) or loss (if the
adjustment decreases basis), and the gain or loss shall be specially allocated
to the Interest Holders in a manner consistent with the manner in which their
Capital Accounts are required to be adjusted pursuant to that Section of the
Regulations.
4.3.3 GUARANTEED PAYMENTS. To the extent any compensation
paid to any Interest Holder by the Company, including any fees payable to any
Interest Holder pursuant to Section 5.3 hereof, is determined by the Internal
Revenue Service not to be a guaranteed payment under IRC Section 707(c) or is
not paid to the Interest Holder other than in the Person's capacity as a partner
(Interest Holder) within the meaning of IRC Section 707(a), the Interest Holder
shall be specially allocated gross income of the Company in an amount equal to
the amount of that compensation, and the Interest Holder's Capital Account shall
be adjusted to reflect the payment of that compensation.
4.3.4 WITHHOLDING. All amounts required to be withheld
pursuant to IRC Section 1446 or any other provision of federal, state or local
tax law shall be treated as amounts actually distributed to the affected
Interest Holders for all purposes under this Agreement.
4.3.5 MINIMUM GAIN CHARGEBACK. In the event that there is a
net decrease in the Company Minimum Gain (as defined herein) during any fiscal
year, the minimum gain chargeback described in Sections 1.704-2(f) and (g) of
the Regulations shall apply. The amount of Company Minimum Gain is determined by
computing with respect to each non-recourse liability of the Company, the amount
of gain, if any, that would be realized by the Company if it disposed of the
company property subject to such liability in full satisfaction thereof and by
then aggregating the amounts so computed. If Company property subject to one or
more non-recourse liabilities of the Company at a book value that differs from
the adjusted tax basis of such property, the book value of such property, rather
than the adjusted tax basis, shall be subtracted from the outstanding principal
balance of the non-recourse liability in determining the amount of minimum gain.
4.3.6 MEMBER MINIMUM GAIN CHARGEBACK. If during any fiscal
year there is a net decrease in Member Non-recourse Debt minimum gain, any
Member with a share of that Member Non-recourse Debt minimum gain (determined
under Section 1.704-2(i)(5) of the Regulations) as of the beginning of the year
must be allocated items of income and gain for the year (and, if necessary, for
succeeding years) equal to that Member's share of the net decrease in
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the Member Non-recourse Debt minimum gain in accordance with Regulations Section
1.704-2(i).
4.3.7 QUALIFIED INCOME OFFSET. Any Member who unexpectedly
receives an adjustment, allocation or distribution described in subparagraphs
(4), (5) or (6) of Section 1.704-1(b)(2)(ii)(d) of the Regulations, which
adjustment, allocation or distribution creates or increases a deficit balance in
that Member's Capital Account, shall be allocated items of "book" income and
gain in an amount and manner sufficient to eliminate the deficit balance in that
Member's Capital Account so created or increased as quickly as possible.
4.3.8 INCOME TAX PROVISIONS. The Interest Holders are aware
of the income tax consequences of this Article 4 and agree to be bound by these
provisions in reporting their shares of Profit, Losses and other items for
federal and state income tax purposes.
4.4 LIQUIDATION AND DISSOLUTION.
4.4.1 Upon liquidation of the Company, the Company shall
continue solely for the purposes of winding up its affairs in an orderly manner,
liquidating its assets, and satisfying the claims of its creditors and Members
and no Member shall take any action that is inconsistent with, or not necessary
or appropriate for, winding up the Company business and affairs. The Management
Committee shall be responsible for overseeing the winding up and dissolution of
the Company, shall take full account of the Company's liabilities and Property,
shall cause the Property to be liquidated as promptly as is consistent with
obtaining the fair value thereof, and shall cause the proceeds therefrom, to the
extent sufficient therefor, to be applied and distributed in the following
order:
4.4.2 First, to the payment and discharge of all of the
Company's debts and liabilities to creditors;
4.4.3 After payment described in section 4.4.2, the Members
shall be entitled to distribution of any assets or capital they contributed to
the Company.
4.4.4 The balance, if any, shall be allocated to the
Members in accordance with the Percentages.
4.4.5 Except as otherwise specifically provided in this
Agreement, each Member shall look solely to the assets of the Company for the
return of such Member's positive Capital Account balance and shall have no
recourse for its Contribution and/or share of Net Profits (upon dissolution or
otherwise) against the Managers or any other Member for indemnification,
contribution or reimbursement except as otherwise provided herein.
4.4.6 Except as otherwise provided herein, no Interest
Holder shall be obligated to restore a Negative Capital Account.
4.5 GENERAL.
4.5.1 Except as otherwise provided in this Agreement, the
timing and amount of all distributions shall be determined by the Management
Committee.
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4.5.2 If any assets of the Company are distributed in kind
to the Interest Holders, those assets shall be valued on the basis of their fair
market value, and any Interest Holder entitled to any interest in those assets
shall receive that interest as a tenant-in-common with all other Interest
Holders so entitled. Unless the Members otherwise agree, the fair market value
of the assets shall be determined by an independent appraiser who shall be
selected by the Management Committee. The Profit or Loss for each unsold asset
shall be determined as if the asset had been sold at its fair market value, and
the Profit or Loss shall be allocated as provided in section 4.2 and shall be
properly credited or charged to the Capital Accounts of the Interest Holders
prior to the distribution of the assets in liquidation pursuant to section 4.4.
4.5.3 All Profit and Loss shall be allocated and all
distributions shall be made to the Persons shown on the records of the Company
to have been Interest Holders as of the last day of the taxable year for which
the allocation or distribution is to be made. Notwithstanding the foregoing,
unless the Company's taxable year is separated into segments, if there is a
Transfer or an Involuntary Withdrawal during the taxable year, the Profit and
Loss shall be allocated between the original Interest Holder and the successor
on the basis of the number of days each was an Interest Holder during the
taxable year; provided, however, the Company's taxable year shall be segregated
into two (2) or more segments in order to account for Profit, Loss or proceeds
attributable to any extraordinary non-recurring items of the Company.
4.5.4 The Management Committee is hereby authorized, upon
the advice of the Company's tax counsel, to amend this Article 4 to comply with
the Code and the Regulations promulgated under IRC Section 704(b); provided,
however, that no amendment shall materially affect distributions to an Interest
Holder without the Interest Holder's prior written consent.
ARTICLE 5
MANAGEMENT: RIGHTS, POWERS AND DUTIES
5.1 MANAGEMENT.
5.1.1 MANAGEMENT COMMITTEE. The Company shall be managed by
a Management Committee. CDI and MDS shall each designate a member to serve on
the Management Committee. CDI initially appoints ▇▇▇▇▇ ▇▇▇▇ to the Management
Committee and MDS initially appoints ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ to the Management
Committee. The right of CDI or MDS, respectively, to appoint a member of the
Management Committee shall terminate when the respective Membership Interest of
either of them terminates. Any successor to the terminated interest of either
CDI or MDS shall have the right to appoint a member of the Management Committee.
CDI's representative on the Management Committee shall act as chairman
("CHAIRMAN").
5.1.2 MANAGEMENT COMMITTEE ACTIONS. The Chairman may call
Management Committee meetings upon seven (7) days written notice. The members of
the Management Committee may agree to waive notice of any meeting. The unanimous
vote of the Management Committee is required before the Chairman may take any
action with respect to the items listed in sections 5.1.3.1 through 5.1.3.4,
5.1.3.6 through 5.1.3.9 and 5.1.3.11 below.
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5.1.3 GENERAL POWERS. Subject to section 5.7, the
Management Committee shall have full, exclusive and complete discretion, power
and authority, subject in all cases to the other provisions of this Agreement
and the requirements of applicable law, to manage, control, administer and
operate the business and affairs of the Company for the purposes herein stated,
and to make all decisions affecting such business and affairs, including,
without limitation, the power to:
5.1.3.1 Acquire by purchase, lease or otherwise, any
real or personal property, tangible or intangible;
5.1.3.2 Construct, operate, maintain, finance and
improve, and to own, sell, convey, assign, mortgage or lease any real estate and
any personal property;
5.1.3.3 Sell, dispose, trade or exchange Company
assets in the ordinary course of the Company's business;
5.1.3.4 Enter into agreements and contracts and to
give receipts, releases and discharges;
5.1.3.5 Purchase liability and other insurance to
protect the Company's properties and business;
5.1.3.6 Borrow money for and on behalf of the
Company, and, in connection therewith, execute and deliver instruments
authorizing the confession of judgment against the Company;
5.1.3.7 Execute or modify leases with respect to any
part or all of the assets of the Company;
5.1.3.8 Prepay, in whole or in part, refinance,
amend, modify or extend any mortgages or deeds of trust which may affect any
asset of the Company and in connection therewith to execute for and on behalf of
the Company any extensions, renewals or modifications of such mortgages or deeds
of trust;
5.1.3.9 Execute any and all other instruments and
documents which may be necessary or in the opinion of the Management Committee
desirable to carry out the intent and purpose of this Agreement, including, but
not limited to, documents whose operation and effect extend beyond the term of
the Company;
5.1.3.10 Make any and all expenditures up to Two
Hundred Thousand Dollars ($200,000) which the Management Committee, in its sole
discretion, deems necessary or appropriate in connection with the management of
the affairs of the Company and the carrying out of its obligations and
responsibilities under this Agreement, including, without limitation,
expenditures for legal, accounting and other related expenses incurred in
connection with the organization, financing and operation of the Company;
5.1.3.11 Enter into any kind of activity necessary
to, in connection with, or incidental to, the accomplishment of the purposes of
the Company;
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5.1.3.12 Invest and reinvest Company reserves in
short-term instruments or money market funds; and
5.1.3.13 Appoint officers to conduct the business of
the Company, including, but not limited to, a Chief Operations Officer, Chief
Financial Officer, Secretary and other officer as the Management Committee
determines may be advisable or necessary. The Management Committee hereby
appoints ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ as Chief Financial Officer, ▇▇▇▇▇ ▇▇▇▇▇▇▇ as Secretary
and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ as Chief Operating Officer as the initial officers of
the Company. All officers shall be employees of the Members, and officers shall
not be entitled to compensation from the Company.
5.1.4 LIMITATION ON AUTHORITY OF MEMBERS.
5.1.4.1 No Member is an agent of the Company solely
by virtue of being a Member, and no Member has authority to act for the Company
solely by virtue of being a Member.
5.1.4.2 This section 5.1 supersedes any authority
granted to the Members pursuant to Section 17157 of the Act. Any Member who
takes any action or binds the Company in violation of this section 5.1 shall be
solely responsible for any loss and expense incurred by the Company as a result
of the unauthorized action and shall indemnify and hold the Company harmless
with respect to the loss or expense.
5.1.5 CDI and MDS will provide the Company with management
and support services, including, but not limited to, personnel recruiting,
marketing support, vendor relations and other administrative support at a fee
equal to three percent (3%) of net collected revenue (cash receipts less
refunds, credits and other valid offsets to revenue) of the Company payable
equally to CDI and to MDS monthly on or before the twentieth (20th) day of each
month based upon the net collected revenue for the prior month.
5.2 MEETINGS OF AND VOTING BY MEMBERS.
5.2.1 A meeting of the Members may be called at any time by
the Management Committee or by those Members holding at least a majority in
interest of the Members. Meetings of Members shall be held at the Company's
principal place of business or at any other place in Ventura or Los Angeles
County, California, designated by the Person or Persons calling the meeting. Not
less than ten (10) nor more than sixty (60) days before each meeting, the Person
or Persons calling the meeting shall give written notice of the meeting to each
Member entitled to vote at the meeting. The notice shall state the time, place
and purpose of the meeting. Notwithstanding the foregoing provisions, each
Member who is entitled to notice may waive notice, either before or after the
meeting, by executing a waiver of such notice, or by appearing at and
participating, in person or by proxy in the meeting. Unless this Agreement
provides otherwise, at a meeting of Members, the presence in person or by proxy
of Members holding Percentages which aggregate to not less than fifty-one
percent (51%) constitutes a quorum. A Member may vote either in person or by
written proxy signed by the Member or by the Member's duly authorized
Attorney-in-Fact.
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5.2.2 Except as otherwise provided in this Agreement, the
affirmative vote of Members holding a majority of the aggregate Percentages
present at the meeting in person and by proxy shall be required to approve any
matter coming before the Members.
5.2.3 In lieu of holding a meeting, the Members may take
action by written consents specifying the action to be taken, which consents
must be executed and delivered to the Company by Members whose combined voting
power constitutes not less than majority of the aggregate Percentages of all
Members. Any such approved action shall be effective immediately. The Company
shall give prompt notice to all Members of any action approved by Members by
less than unanimous consent.
5.3 PERSONAL SERVICES.
5.3.1 No Member shall be required to perform services for
the Company solely by virtue of being a Member. Unless approved by the
Management Committee, no Member shall perform services for the Company or be
entitled to compensation for services performed for the Company.
5.3.2 Unless approved by Members holding majority of the
aggregate Percentages then held by Members, the Management Committee shall not
be entitled to compensation for services performed for the Company. However,
upon substantiation of the amount and purpose thereof, the Management Committee
shall be entitled to reimbursement for expenses reasonably incurred, and
advances reasonably made, in furtherance of the business of the Company.
5.4 DUTIES OF PARTIES.
5.4.1 Members of the Management Committee shall devote such
time to the business and affairs of the Company as is necessary to carry out the
Management Committee's duties set forth in this Agreement.
5.4.2 Except as otherwise expressly provided in section
5.4.3, nothing in this Agreement shall be deemed to restrict in any way the
rights of any Member, or of any Affiliate of any Member, to conduct any other
business or activity whatsoever, and no Member shall be accountable to the
Company or to any other Member with respect to that business or activity even if
the business or activity competes with the Company's business. The organization
of the Company shall be without prejudice to the Members' respective rights (or
the rights of their respective Affiliates) to maintain, expand or diversify such
other interests and activities and to receive and enjoy profits or compensation
therefrom. Each Member waives any rights the Member might otherwise have to
share or participate in such other interests or activities of any other Member
or the Member's Affiliates.
5.4.3 The only fiduciary duties any Member owes to the
Company and the other Members are the duty of loyalty and the duty of care set
forth in sections 5.4.3.1 and 5.4.3.2.
5.4.3.1 A Member's duty of loyalty to the Company
and the other Members is limited to the following:
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5.4.3.1.1 To account to the Company and hold
as trustee for it any property, profit or benefit derived by the Member in the
conduct or winding up of the Company's business or derived from a use by the
Member of Company property, including the appropriation of a Company
opportunity, without the consent of the other Members;
5.4.3.1.2 To refrain from dealing with the
Company in the conduct or winding up of the Company business as or on behalf of
a party having an interest adverse to the Company without the consent of the
other Members; and
5.4.3.1.3 To refrain from competing with the
Company in the conduct of the Company business before the dissolution of the
Company and as otherwise set forth in this Agreement without the consent of the
other Members.
5.4.3.2 A Member's duty of care to the Company and
the other Members in the conduct and winding up of the Company business is
limited to refraining from engaging in grossly negligent or reckless conduct,
intentional misconduct or a knowing violation of law.
5.5 INDEMNIFICATION OF EACH MANAGEMENT COMMITTEE MEMBER.
5.5.1 Each member of the Management Committee shall not be
liable, responsible or accountable, in damages or otherwise, to any Member or to
the Company for any act performed by such Person within the scope of the
authority conferred on the Management Committee by this Agreement, and within
the standard of care specified in section 5.5.2.
5.5.2 The Company shall indemnify each member of the
Management Committee for any act performed by such member within the scope of
the authority conferred on the Management Committee by this Agreement, unless
such act constitutes grossly negligent or reckless conduct, intentional
misconduct or a knowing violation of law.
5.6 POWER OF ATTORNEY.
5.6.1 GRANT OF POWER. Each Member constitutes and appoints
the Chairman of the Management Committee as the Member's true and lawful
Attorney-in-Fact ("ATTORNEY-IN-FACT"), and in the Member's name, place and
stead, to make, execute, sign, acknowledge and file:
5.6.1.1 One or more Articles of Organization;
5.6.1.2 All documents (including amendments to
Articles of Organization) which the Attorney-in-Fact deems appropriate to
reflect any amendment, change or modification of this Agreement;
5.6.1.3 Any and all other certificates or other
instruments required to be filed by the Company under the laws of the State of
California or of any other state or jurisdiction, including, without limitation,
any certificate or other instruments necessary in order for the Company to
continue to qualify as a limited liability company under the laws of the State
of California;
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5.6.1.4 One or more fictitious trade name
certificates; and
5.6.1.5 All documents which may be required to
dissolve and terminate the Company and to cancel its Articles of Organization.
5.6.2 IRREVOCABILITY. The foregoing power of attorney is
irrevocable and is coupled with an interest, and, to the extent permitted by
applicable law, shall survive the death or disability of a Member. It also shall
survive the Transfer of a Membership Interest, except that if the Assignee is
admitted as a Member, this power of attorney shall survive the delivery of the
assignment for the sole purpose of enabling the Attorney-in-Fact to execute,
acknowledge and file any documents needed to effectuate the substitution. Each
Member shall be bound by any representations made by the Attorney-in-Fact acting
in good faith pursuant to this power of attorney, and each Member hereby waives
any and all defenses which may be available to contest, negate or disaffirm the
action of the Attorney-in-Fact taken in good faith under this power of attorney.
5.7 MANAGEMENT COMMITTEE. Neither the Chairman of the Management
Committee nor the Management Committee shall have authority hereunder to cause
the Company to engage in the following transactions without first obtaining the
affirmative vote or written consent of the Members holding a Supermajority
Interest:
5.7.1 The sale, exchange or other disposition of all, or
substantially all, of the Company's assets occurring as part of a single
transaction or plan, or in a series of transactions, except in the orderly
liquidation and winding up of the business of the Company upon its duly
authorized dissolution and except as provided in the Purchase Agreement;
5.7.2 The merger of the Company with another limited
liability company, limited partnership, corporation, general partnership or
other entity; provided that in no event shall a Member be required to become a
general partner in a merger with a partnership without such Member's express
written consent or unless the agreement of merger provides each Member with the
dissenter's rights described in the Act;
5.7.3 The acquisition of any business or the assets of any
business, the cost of which acquisition shall exceed Two Hundred Thousand
Dollars ($200,000);
5.7.4 The undertaking of a public offering of securities of
the Company;
5.7.5 The establishment of different classes of Members;
5.7.6 An alteration of the primary purpose of the Company
as set forth in section 2.3;
5.7.7 Any act which would make it impossible to carry on
the ordinary business of the Company;
5.7.8 Any distribution to the Members except for
distributions of Cash Flow approved by the Management Committee for the purposes
set forth in, and in accordance with, section 4.2;
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5.7.9 Any other act which under the terms of this Agreement
requires the vote, approval or consent of Members holding a Supermajority
Interest; and
5.7.10 Any other transaction described in this Agreement as
requiring the vote, consent or approval of the Members shall require the consent
of a majority interest (or such greater Percentage Interests described therein)
of the Members.
5.8 STAFF/PERSONNEL. CDI shall provide all non-physician personnel
necessary to staff any medical imaging center ("STAFF") Company operates
pursuant to this Agreement under a lease with Company. Staff shall be offered
compensation and benefits consistent with those offered within the medical
imaging industry. All decisions concern the number of Staff and compensation
rates shall be determined by the Management Committee.
ARTICLE 6
TRANSFER OF INTERESTS AND WITHDRAWALS OF MEMBERS
6.1 TRANSFERS. Except as provided herein, no Member may Transfer
all, or any portion of, or any interest or rights in, the Membership Interest
owned by the Member. Each Member hereby acknowledges the reasonableness of this
prohibition in view of the purposes of the Company and the relationship of the
Members. The attempted Transfer of any portion or all of a Membership Interest
in violation of the prohibition contained in this section 6.1 shall be deemed
invalid, null and void, and of no force or effect, except any Transfer mandated
by operation of law and then only to the extent necessary to give effect to such
Transfer by operation of law.
6.1.1 A Member may Transfer all or any portion of or any
interest or rights in the Member's Economic Interest if each of the following
conditions ("CONDITIONS OF TRANSFER") is satisfied:
6.1.1.1 The Transfer may be accomplished without
registration, or similar process, under federal and state securities laws;
6.1.1.2 The transferee delivers to the Company a
written agreement to be bound by the terms of Article 6 of this Agreement;
6.1.1.3 The Transfer will not result in the
termination of the Company pursuant to IRC Section 708;
6.1.1.4 The Transfer will not result in the Company
being subject to the Investment Company Act of 1940, as amended;
6.1.1.5 The transferor or the transferee delivers
the following information to the Company: (a) the transferee's taxpayer
identification number; and (b) the transferee's initial tax basis in the
transferred Membership Interest; and
6.1.1.6 The transferor complies with the provisions
set forth in section 6.2.
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6.1.2 If the Conditions of Transfer are satisfied, the
Member may Transfer all or any portion of the Member's Economic Interest. The
Transfer of an Economic Interest pursuant to this section 6.1 shall not result
in the Transfer of any of the transferor's other Membership rights. The
transferee of the Economic Interest shall have no right to: (a) become a Member;
(b) exercise any Membership rights other than those specifically pertaining to
the ownership of an Economic Interest; or (c) act as an agent of the Company.
6.2 RIGHT OF FIRST REFUSAL.
6.2.1 If a Member ("TRANSFEROR") receives a bona fide
written offer (except an offer pursuant to section 6.4) which the Member desires
to accept ("TRANSFEREE OFFER") from any other Person, including another Member
("TRANSFEREE") to purchase all or any portion of or any interest or rights in
the Transferor's Economic Interest ("TRANSFEROR INTEREST") then, prior to any
Transfer of the Transferor's Interest, the Transferor shall give the Company
written notice ("TRANSFER NOTICE") containing each of the following:
6.2.1.1 The Transferee's identity;
6.2.1.2 A true and complete copy of the Transferee
Offer; and
6.2.1.3 The Transferor's offer ("OFFER") to sell the
Transferor Interest to the Company for consideration equal to that contained in
the Transferee Offer or, if the consideration specified in the Transferee Offer
is not specified as cash, then for consideration in U.S. Dollars equal in value
to the consideration specified in the Transferee Offer ("TRANSFER PURCHASE
PRICE").
6.2.1.4 The Offer shall be and remain irrevocable
for a period ("OFFER PERIOD") ending at 11:59 p.m. local time at the Company's
principal office, on the sixtieth (60th) day following the date the Transfer
Notice is given to the Company. At any time during the Offer Period, the Company
may accept the Offer by giving written notice to the Transferor of its
acceptance ("OFFEREE NOTICE"). The Transferor shall not be deemed a Member for
the purpose of the vote on whether the Company shall accept the Offer. If the
Company accepts the Offer, the Offeree Notice shall fix a closing date
("TRANSFER CLOSING DATE") for the purchase, which shall not be earlier than ten
(10) or more than sixty (60) days after the expiration of the Offer Period.
6.2.1.5 If the Company accepts the Offer, the
Transfer Purchase Price shall be paid on the Transfer Closing Date unless the
Company elects prior to or on the Transfer Closing Date to pay the Transfer
Purchase Price in installments pursuant to the provisions of section 6.5 of this
Agreement.
6.2.1.6 If the Company does not accept the Offer in
its entirety within thirty (30) days after the Offer Date, the Company shall
give immediate notice to that effect ("REMAINING MEMBERS NOTICE") to each
Member, other than the Transferor ("REMAINING MEMBERS"). Such notice to the
Remaining Members shall include a copy of the Transfer Notice and inform the
Remaining Members of their right to purchase all, or a portion, of the
Transferor Interest for a pro rata portion of the Transfer Purchase Price.
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6.2.1.7 The Remaining Members Notice shall be and
remain irrevocable for the remainder of the Offer Period. At any time during
such period, a Remaining Member may accept the offer by notifying the Transferor
in writing that the Remaining Member intends to purchase all, but not less than
all, of the Transferor Interest. If two (2) or more Remaining Members desire to
accept the Offer, then, in the absence of an agreement between or among them,
each such Remaining Member shall purchase the Transferor Interest in the
proportion that such Member's respective Percentage bears to the total
Percentages of all of the Remaining Members who desire to accept the Offer,
adjusted to reflect the portion, if any, of the Transferor Interest to be
purchased by the Company.
6.2.1.8 If the Company and/or the Remaining Members
(collectively, the "PURCHASERS") have accepted the Offer prior to the end of the
Offer Period, any Purchaser may give written notice to that effect to the
Transferor specifying a closing date ("TRANSFER CLOSING DATE") for the purchase
which shall be no earlier than ten (10) nor later than sixty (60) days after the
expiration of the Offer Period.
6.2.1.9 On the Transfer Closing Date the Purchasers
shall pay the Transfer Purchase Price unless the Purchasers elect prior to or on
the Transfer Closing Date to pay the Transfer Purchase Price in installments
pursuant to the provisions of section 6.5 of this Agreement.
6.2.1.10 If neither the Company nor any Remaining
Member accepts the Offer (within the time and in the manner specified in this
section), then the Transferor shall be free for a period ("PERMITTED TRANSFER
PERIOD") of thirty (30) days after the expiration of the Offer Period to
Transfer the Transferor Interest to the Transferee, for the same or greater
price and on the same terms and conditions as set forth in the Transfer Notice.
The Transfer shall be subject, however, to the Conditions of Transfer (other
than section 6.1.1.6). If the Transferor does not Transfer the Transferor's
Interest within the Permitted Transfer Period, the Transferor's right to
Transfer the Transferor Interest pursuant to this section shall cease and
terminate.
6.2.1.11 Any Transfer by the Transferor after the
last day of the Permitted Transfer Period or without strict compliance with the
terms, provisions and conditions of this section and the other terms, provisions
and conditions of this Agreement, shall be null and void and of no force or
effect.
6.3 WITHDRAWAL OF A MEMBER. No Member shall have the right or
power to Voluntarily Withdraw from the Company.
6.4 CDI PURCHASE OPTION. CDI shall have the option to purchase the
Membership Interests of MDS on the following terms and conditions:
6.4.1 MDS hereby grants to CDI an option to purchase MDS's
Membership Interest ("OPTION") at a price equal to four times EBITDA multiplied
by MDS's Percentage at any time after the twenty-four (24) but before
forty-eight (48) months following the first medical imaging procedure performed
by Company. For purposes hereof, EBITDA shall be based upon the greater of (i)
the most recent one (1) year period, or (ii) the most recent three (3) month
period annualized; provided, however, that the minimum price to be paid by CMI
for such MDS
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Originated Project shall be the greater of (y) assumption of all existing
Company obligations as of closing plus invested capital attributable to the
Membership Interest being purchased plus Seventy Thousand Dollars ($75,000), or
(z) assumption of all existing Company obligations as of closing plus Three
Hundred Seventy-five Thousand Dollars ($375,000).
6.4.2 For purposes of this Agreement, EBITDA shall be
defined as (i) the net earnings (or loss) after taxes for such period taken as a
single accounting period, plus (ii) depreciation, depletion and amortization
expense for such period, plus (iii) federal, state and local income (or
equivalent) taxes paid or accrued for such period, plus (iv) total interest
expense for such period (including amortization of capitalized indebtedness
issuance costs) whether paid or accrued, including all commissions, discounts
and other fees and charges owed with respect to letters of credit, plus (v)
extraordinary, unusual or non-recurring losses and non-cash charges for any
disposition of businesses or early extinguishment of indebtedness for such
period, minus (vi) any cash payments with respect to any non-cash charges and
expenses related to the disposition of businesses or early extinguishment of
indebtedness previously taken into account for such period, minus (vii) debt, in
each case determined in accordance with generally accepted accounting principles
and in the case of clauses (ii) through (vii), to the extent included in the
determination of net earnings (or loss) for such period. Any amounts paid to
MDS, CDI or Comprehensive Medical Imaging solely for management services (as
opposed to accounting and billing services), including but not limited to the
three percent (3%) management fee described in section 5.1.5 above, shall be
added back to net earnings for the purposes of calculating EBITDA hereunder.
6.4.3 CDI shall pay MDS Fifty Thousand Dollars ($50,000)
("OPTION CONSIDERATION") as consideration for the purchase option described
above payable twenty-four (24) months from date the Company performs its first
medical imaging procedure. The Option Consideration shall be in addition to the
purchase price calculated in accordance with the terms hereof. Payment of the
Option Consideration must be made before CDI shall have the right to exercise
the Option. The Option shall not lapse if CDI fails to pay the Option
Consideration unless MDS gives CDI written notice of default of the Option which
remains uncured for a period of sixty (60) days.
6.5 MDS PERMITTED TRANSFER. MDS shall have the right to Transfer a
portion of its Membership Interest not to exceed ten percent (10%) of all
Membership Interests in the aggregate to a physician or physician group under
contract with Company to provide professional medical interpretative services at
a medical imaging facility Company operates. Any such Transferee shall be bound
by the purchase option described in section 6.4 above, and MDS shall provide
such Transferee with a copy of this Agreement prior to consummating such
Transfer.
ARTICLE 7
DISSOLUTION, LIQUIDATION AND TERMINATION OF THE COMPANY
7.1 EVENTS OF DISSOLUTION. The Company shall be dissolved upon the
happening of the first to occur of an event specified in Section 17350 of the
Act or any of the following events:
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7.1.1 On the date fixed for its termination in section 2.4;
or
7.1.2 Upon the vote of a Supermajority Interest of the
aggregate Percentages of the Members.
7.2 PROCEDURE FOR WINDING UP AND DISSOLUTION. If the Company is
dissolved, the Management Committee shall wind up its affairs. On winding up of
the Company, the assets of the Company shall be distributed, first to creditors
of the Company, including Interest Holders who are creditors, in satisfaction of
the liabilities of the Company, and then, to the Interest Holders in accordance
with section 4.4 of this Agreement.
7.3 FILING OF CERTIFICATE OF CANCELLATION. Upon completion of the
affairs of the Company, the Management Committee shall promptly file the
Certificate of Cancellation of Articles of Organization with the Secretary of
State. If there is no Management Committee, then the Certificate of Cancellation
shall be filed by the remaining Members; if there are no remaining Members, the
Certificate shall be filed by the last Person to be a Member; if there is
neither a Management Committee, remaining Members, nor a Person who last was a
Member, the Certificate shall be filed by the legal or personal representatives
of the Person who last was a Member.
ARTICLE 8
BOOKS, RECORDS, ACCOUNTING AND TAX ELECTIONS
8.1 BANK ACCOUNTS. All funds of the Company shall be deposited in
a bank account or accounts opened in the Company's name. The Management
Committee shall determine the financial institution or institutions at which the
accounts will be opened and maintained, the types of accounts, and the Persons
who will have authority with respect to the accounts and the funds therein.
8.2 BOOKS AND RECORDS.
8.2.1 The Management Committee shall keep or cause to be
kept complete and accurate books, records and financial statements of the
Company and supporting documentation of transactions with respect to the conduct
of the Company's business. The books, records and financial statements of the
Company shall be maintained on the accrual basis of accounting in accordance
with generally accepted accounting principles. Such books, records, financial
statements and documents shall include, but not be limited to, the following:
8.2.1.1 A current list of the full name and last
known business or residence address of each Member and Interest Holder, in
alphabetical order, with the Contribution and the share in profits and losses of
each Member and Interest Holder specified in such list;
8.2.1.2 A current list of the full name and business
or residence address of each Manager;
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8.2.1.3 The Articles of Organization, including all
amendments; and any powers of attorney under which the Articles of Organization
or amendments were executed;
8.2.1.4 Federal, state and local income tax or
information returns and reports, if any, for the six (6) most recent taxable
years;
8.2.1.5 This Agreement and any amendments thereto;
and any powers of attorney under which this Agreement or amendments were
executed;
8.2.1.6 Financial statements for the six (6) most
recent years;
8.2.1.7 Internal books and records for the current
and three (3) most recent years; and
8.2.1.8 A true copy of relevant records indicating
the amount, cost and value of all property which the Company owns, claims,
possesses or controls.
8.2.2 Such books, records and financial statements of the
Company and supporting documentation shall be kept, maintained and available at
the Company's office within the State of California.
8.3 RIGHT TO INSPECT BOOKS AND RECORDS; RECEIVE INFORMATION.
8.3.1 Upon the reasonable request of a Member for a purpose
reasonably related to the interest of that Member of the Company, the Management
Committee shall promptly deliver to the requesting Member at the expense of the
Company a copy of this Agreement, as well as the information required to be
maintained by the Company under sections 8.1.1.1, 8.2.1.2 and 8.2.1.4.
8.3.2 Each Member and Manager has the right upon reasonable
request, and for purposes reasonably related to the interest of that Member or
Manager of the Company, to do the following:
8.3.2.1 To inspect and copy during normal business
hours any of the records required to be maintained by the Company under section
8.2.1 of this Agreement; and
8.3.2.2 To obtain from the Company promptly after
becoming available, a copy of the Company's federal, state and local income tax
or information returns for each year.
8.3.3 If a Manager has executed an amendment to the
Articles of Organization or this Agreement pursuant to a power of attorney from
the Members, such Manager must promptly furnish to the Members a copy of such
amendment.
8.3.4 The Management Committee shall send or shall cause to
be sent to each Member or Interest Holder within ninety (90) days after the end
of each fiscal year of the Company: (a) such information as is necessary to
complete federal and state income tax or
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information returns; and (b) if the Company has thirty-five (35) or fewer
Members, a copy of the Company's federal, state and local income tax or
information returns for the fiscal year.
8.3.5 Unless otherwise expressly provided in this
Agreement, the inspecting or requesting Member or Manager, as the case may be,
shall reimburse the Company for all reasonable costs and expenses incurred by
the Company in connection with such inspection and copying of the Company's
books and records and the production and delivery of any other books or records.
8.4 ANNUAL ACCOUNTING PERIOD. The annual accounting period of the
Company shall be its taxable year. The Company's taxable year shall be selected
by the Management Committee, subject to the requirements and limitations of the
Code.
8.5 TAX MATTERS PARTNER. CDI shall be the Tax Matters Partner for
purposes of IRC Section 6231(a)(7), and shall have all the authority granted by
the Code to the Tax Matters Partner, provided that CDI shall not have the
authority without first obtaining the consent of the Management Committee to do
any of the following:
8.5.1 Enter into a settlement with the Internal Revenue
Service that purports to bind the Members.
8.5.2 File a petition as contemplated in IRC Section
6226(a) or IRC Section 6228.
8.5.3 Intervene in any action as contemplated in IRC
Section 6226(b)(5).
8.5.4 File any request contemplated in IRC Section 6227(b).
8.5.5 Enter into an agreement extending the period of
limitations as contemplated in IRC Section 6229(b)(1)(B).
8.6 TAX ELECTIONS. CDI shall have the authority to make all
Company elections permitted under the Code, including, without limitation,
elections of methods of depreciation and elections under IRC Section 754. The
decision to make or not make an election shall be at the Management Committee's
sole and absolute discretion.
8.7 TITLE TO COMPANY PROPERTY. All real and personal property
acquired by the Company shall be acquired and held by the Company in the
Company's name.
ARTICLE 9
GENERAL PROVISIONS
9.1 ASSURANCES. Each Member shall execute all certificates and
other documents and shall do all such filing, recording, publishing and other
acts as the Management Committee deems appropriate to comply with the
requirements of law for the formation and operation of the Company and to comply
with any laws, rules and regulations relating to the acquisition, operation or
holding of the property of the Company.
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9.2 NOTIFICATIONS. Any notice, demand, consent, election, offer,
approval, request or other communication (collectively, a "NOTICE") required or
permitted under this Agreement must be in writing and either delivered
personally or sent by certified or registered mail, postage prepaid, return
receipt requested. Any notice to be given hereunder by the Company shall be
given by the Management Committee. A notice must be addressed to an Interest
Holder at the Interest Holder's last known address on the records of the
Company. A notice to the Company must be addressed to the Company's principal
office. A notice delivered personally will be deemed given only when
acknowledged in writing by the Person to whom it is delivered. A notice that is
sent by mail will be deemed given three (3) business days after it is mailed.
Any party may designate, by notice to all of the others, substitute addresses or
addressees for notices; and, thereafter, notices are to be directed to those
substitute addresses or addressees.
9.3 SPECIFIC PERFORMANCE. The parties recognize that irreparable
injury will result from a breach of any provision of this Agreement and that
money damages will be inadequate to fully remedy the injury. Accordingly, in the
event of a breach or threatened breach of one or more of the provisions of this
Agreement, any party who may be injured (in addition to any other remedies which
may be available to that party) shall be entitled to one or more preliminary or
permanent orders (a) restraining and enjoining any act which would constitute a
breach or (b) compelling the performance of any obligation which, if not
performed, would constitute a breach.
9.4 COMPLETE AGREEMENT. This Agreement constitutes the complete
and exclusive statement of the agreement among the Members. It supersedes all
prior written and oral statements, including any prior representation,
statement, condition or warranty. Except as expressly provided otherwise herein,
this Agreement may not be amended without the written consent of all of the
Members.
9.5 APPLICABLE LAW. All questions concerning the construction,
validity and interpretation of this Agreement and the performance of the
obligations imposed by this Agreement shall be governed by the internal law, not
the law of conflicts, of the State of California.
9.6 ARTICLE AND SECTION TITLES. The headings herein are inserted
as a matter of convenience only and do not define, limit or describe the scope
of this Agreement or the intent of the provisions hereof.
9.7 BINDING PROVISIONS. This Agreement is binding upon, and to the
limited extent specifically provided herein, inures to the benefit of, the
parties hereto and their respective heirs, executors, administrators, personal
and legal representatives, successors and assigns.
9.8 JURISDICTION AND VENUE. Any suit involving any dispute or
matter arising under this Agreement may only be brought in the appropriate
United States District Court in California or any California State Court having
jurisdiction over the subject matter of the dispute or matter. All Members
hereby consent to the exercise of personal jurisdiction by any such court with
respect to any such proceeding.
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9.9 TERMS. Common nouns and pronouns shall be deemed to refer to
the masculine, feminine, neuter, singular and plural, as the identity of the
Person may in the context require.
9.10 SEPARABILITY OF PROVISIONS. Each provision of this Agreement
shall be considered separable; and if, for any reason, any provision or
provisions herein are determined to be invalid and contrary to any existing or
future law, such invalidity shall not impair the operation of or affect those
portions of this Agreement which are valid.
9.11 COUNTERPARTS. This Agreement may be executed simultaneously in
two or more counterparts, each of which shall be deemed an original and all of
which, when taken together, constitute one and the same document. The signature
of any party to any counterpart shall be deemed a signature to, and may be
appended to, any other counterpart.
9.12 ESTOPPEL CERTIFICATE. Each Member shall, within ten (10) days
after written request by the Management Committee, deliver to the requesting
Person a certificate stating, to the Member's knowledge, that: (a) this
Agreement is in full force and effect; (b) this Agreement has not been modified
except by any instrument or instruments identified in the certificate; and (c)
there is no default hereunder by the requesting Person, or if there is a
default, the nature and extent thereof. If the certificate is not received
within the ten (10) day period, the Chairman of the Management Committee shall
execute and deliver the certificate on behalf of the requested Member, without
qualification, pursuant to the power of attorney granted in section 5.6.
IN WITNESS WHEREOF, the parties have executed, or caused this Agreement
to be executed, under seal, as of the date set forth herein above.
MEMBERS:
Comprehensive Diagnostic Imaging, Inc.,
a Delaware Corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
---------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇, President/CEO
Medical Development Services, LLC,
a California limited liability company
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President/CEO
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EXHIBIT A
TO
OPERATING AGREEMENT FOR
VALENCIA MRI, LLC
NAMES AND ADDRESSES OF MEMBERS
Comprehensive Diagnostic Imaging, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Medical Development Services, LLC
dba MD Services
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
INITIAL CAPITAL CONTRIBUTIONS AND PERCENTAGES:
INITIAL CAPITAL PERCENTAGES (AS DEFINED IN
MEMBER CONTRIBUTION SECTION 1.16)
------ ------------ -------------
Comprehensive Diagnostic Imaging, Inc. $229,643 50%
Medical Development Services, LLC $ 79,643 50%
AMENDMENT TO OPERATING AGREEMENT OF
VALENCIA MRI, LLC
This Amendment to the Operating Agreement of Valencia MRI, LLC dated
December 1, 2000 ("OPERATING AGREEMENT") is made and entered into as of May 15,
2001, by and between Comprehensive Diagnostic Imaging, Inc., a Delaware
corporation ("CDI"), and Medical Development Services, LLC, a California limited
liability company ("MDS").
Effective May 5, 2001, MDS assigned a ten percent (10%) economic
interest in Valencia MRI, LLC to ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, M.D. and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, M.D.
The parties hereto now desire to amend the Operating Agreement as
follows:
The attached Amended Exhibit A hereby replaces the original Exhibit A
to the Operating Agreement.
MEMBERS:
Comprehensive Diagnostic Imaging, Inc.,
a Delaware Corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇, President/CEO
Medical Development Services, LLC,
a California limited liability company
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President/CEO
AMENDED EXHIBIT A
TO
OPERATING AGREEMENT FOR
VALENCIA MRI, LLC
NAMES AND ADDRESSES OF MEMBERS
Comprehensive Diagnostic Imaging, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Medical Development Services, LLC
dba MD Services
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
INITIAL CAPITAL CONTRIBUTIONS AND PERCENTAGES:
INITIAL CAPITAL PERCENTAGES (AS DEFINED IN
MEMBER CONTRIBUTION SECTION 1.16)
------ ------------ -------------
Comprehensive Diagnostic Imaging, Inc. $229,643 50%
Medical Development Services, LLC $ 79,643 50%
Effective May 5, 2001, MDS assigned a ten percent (10%) economic interest in
Valencia MRI, LLC to ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, M.D., ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇.
AMENDMENT TO OPERATING AGREEMENT OF
VALENCIA MRI, LLC
THIS AMENDMENT to the Operating Agreement of Valencia MRI, LLC dated
December 1, 2000 ("OPERATING AGREEMENT") is made and entered into as of June 1,
2001, by and between Comprehensive Medical Imaging Centers, Inc., a Delaware
corporation ("CMIC"), and Medical Development Services, LLC, a California
limited liability company ("MDS").
The parties hereto desire to amend the Operating Agreement as follows:
1. Effective May 14, 2001, Comprehensive Diagnostic Imaging,
Inc., a Delaware corporation, changed its name to Comprehensive Medical Imaging
Centers, Inc., a Delaware corporation.
2. Any and all references to Comprehensive Diagnostic Imaging,
Inc., a Delaware corporation, in the Operating Agreement shall be replaced with
Comprehensive Medical Imaging Centers, Inc., a Delaware corporation.
3. Effective May, 2001, Comprehensive Medical Imaging Centers,
Inc. has moved is principal place of business to ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇. The attached Exhibit A has been revised to reflect this address
change and hereby replaces the existing Exhibit A to the Operating Agreement.
MEMBERS:
Comprehensive Medical Imaging
Centers, Inc., a Delaware Corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇, President/CEO
Medical Development Services, LLC,
a California limited liability company
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President/CEO
AMENDED EXHIBIT A
TO
OPERATING AGREEMENT FOR
VALENCIA MRI, LLC
NAMES AND ADDRESSES OF MEMBERS
Comprehensive Medical Imaging Centers, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Medical Development Services, LLC
dba MD Services
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
INITIAL CAPITAL CONTRIBUTIONS AND PERCENTAGES:
INITIAL CAPITAL PERCENTAGES (AS DEFINED IN
MEMBER CONTRIBUTION SECTION 1.16)
------ ------------ -------------
Comprehensive Medical Imaging $229,643 50%
Centers, Inc.
Medical Development Services, LLC $ 79,643 50%
Effective May 5, 2001, MDS assigned a ten percent (10%) economic interest in
Valencia MRI, LLC to ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, M.D., ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇.
AMENDMENT TO OPERATING AGREEMENT OF
VALENCIA. MRI, LLC
THIS AMENDMENT to the Operating Agreement of Valencia MRI, LLC dated
December 1, 2000 ("OPERATING AGREEMENT") is made and entered into as of June 1,
2001, by and between Comprehensive Medical Imaging Centers, Inc., a Delaware
corporation ("CMIC"), and Medical Development Services, a California limited
liability company ("MDS")
The parties hereto desire to attend the Operating Agreement as follows:
1. Effective May 14, 2001, Comprehensive Diagnostic Imaging,
Inc., a Delaware corporation, changed its name to Comprehensive Medical Imaging
Centers, Inc., a Delaware corporation.
2. Any and all references to Comprehensive Diagnostic Imaging,
Inc., a Delaware corporation, in the Operating Agreement shall be replaced with
Comprehensive Medical Imaging Centers, Inc., a Delaware corporation.
MEMBERS:
Comprehensive Medical Imaging
Centers, Inc., a Delaware Corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇, President/CEO
Medical Development Services, LLC,
a California limited liability company
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President/CEO
AMENDMENT TO
OPERATING AGREEMENT OF
VALENCIA MRI, LLC
This Amendment to the Operating Agreement of Valencia MRI, LLC (this
"AMENDMENT") is made effective as of March 28, 2003, and is entered into by and
among Comprehensive Medical Imaging Centers, Inc., a Delaware corporation
("CMIC") and Medical Development Services, LLC, a California limited liability
company ("MDS"), in their capacities as members of Valencia MRI, LLC, a
California limited liability company (the "COMPANY"). For purposes of this
Amendment, CMIC and MDS will be collectively referred to herein as the
"MEMBERS." This Amendment amends the Company's Operating Agreement, entered into
by and among the Members and dated as of December 1, 2000, as amended on June 1,
2001 (the "OPERATING AGREEMENT"). Capitalized terms used in the Amendment and
not otherwise defined have the meanings ascribed in the Operating Agreement.
RECITALS
A. MDS and CMIC are entering into a Membership Interest Purchase Agreement
(the "PURCHASE AGREEMENT"), dated as of March 28, 2003, pursuant to which CMIC
will purchase from MDS all membership interests in the Company held by MDS.
B. In order to consummate the Purchase Agreement, the parties have agreed
to amend the Operating Agreement.
Accordingly, the parties to this Amendment hereby agree as follows:
1. AMENDMENT: TRANSFERS. Section 6.1 of the Operating Agreement
is hereby amended deleted in its entirety.
2. AMENDMENT: RIGHT OF FIRST REFUSAL. Section 6.2 of the
Operating Agreement is hereby deleted in its entirety.
3. EFFECTIVE DATE. This Amendment shall be effective as of the
first date written above.
4. FULL FORCE AND EFFECT. Except as amended by this Amendment,
the Operating Agreement shall remain in full force and effect; provided, however
that wherever the terms and conditions of this Amendment and the terms and
conditions of the Operating Agreement conflict, the terms and conditions of this
Amendment shall be deemed to supersede the conflicting terms of the Operating
Agreement.
IN WITNESS WHEREOF, each of the parties has caused this Amendment to be
duly executed as of the date first written above.
COMPREHENSIVE MEDICAL IMAGING CENTERS, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Assistant Secretary
MEDICAL DEVELOPMENT SERVICES, LLC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President/CEO
2
AMENDMENT TO
OPERATING AGREEMENT OF
VALENCIA MRI, LLC
This Amendment to the Operating Agreement of Valencia MRI, LLC (this
"AMENDMENT") is made effective as of April 2, 2003, and is entered into by
Comprehensive Medical Imaging Centers, Inc., a Delaware corporation ("CMIC"), in
its capacity as a member of Valencia MRI, LLC, a California limited liability
company (the "COMPANY"). This Amendment amends the Company's Operating
Agreement, entered into by and among the Members and dated as of December 1,
2000, as amended on June 1, 2001, and March 28, 2003 (the "OPERATING
AGREEMENT"). Capitalized terms used in the Amendment and not otherwise defined
have the meanings ascribed in the Operating Agreement.
RECITALS
A. Medical Development Services, LLC, a California limited liability
company ("MDS") and CMIC entered into a Membership Interest Purchase Agreement,
dated as of March 28, 2003, pursuant to which CMIC purchased from MDS all
membership interests in the Company held by MDS.
B. CMIC and Insight Health Corp., a Delaware corporation ("INSIGHT"), have
entered into an Asset Purchase Agreement, dated as of January 6, 2003, and
amended on February 21, 2003 and March 30, 2003 (the "PURCHASE AGREEMENT"),
pursuant to which Insight will purchase from CMIC all membership interests in
the Company held by CMIC.
C. In order to consummate the Purchase Agreement, CMIC has agreed to amend
the Operating Agreement.
Accordingly, CMIC hereby agrees as follows:
1. AMENDMENT: MANAGEMENT FEE. Section 5.1.5 of the Operating
Agreement is hereby amended deleted in its entirety.
2. EFFECTIVE DATE. This Amendment shall be effective as of the
first date written above.
3. FULL FORCE AND EFFECT. Except as amended by this Amendment,
the Operating Agreement shall remain in full force and effect; provided, however
that wherever the terms and conditions of this Amendment and the terms and
conditions of the Operating Agreement conflict, the terms and conditions of this
Amendment shall be deemed to supersede the conflicting terms of the Operating
Agreement.
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IN WITNESS WHEREOF, CMIC has caused this Amendment to be duly executed
as of the date first written above.
COMPREHENSIVE MEDICAL IMAGING CENTERS, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Assistant Secretary
4