OPERATING AGREEMENT OF IMAGING ON CALL, LLC
AMENDED
AND RESTATED
OF
IMAGING
ON CALL, LLC
AMENDED AND RESTATED OPERATING
AGREEMENT, dated as of November 15, 2006, for Imaging on Call, LLC, a New York
limited liability company (the “Company”) by and among CareCore National, LLC a
New York limited liability company (the “CareCore Member”) and those individuals
and entities set forth on Schedule
A attached hereto and made a part hereof, each of whom, together with the
CareCore Member, shall be individually referred to as a “Member” and
collectively as “Members.”
The
Members desire to enter into an agreement with respect to the management and
operation of the Company and their respective rights and obligations with
respect thereto.
In
consideration of the premises and the mutual covenants and agreements contained
herein, and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties hereto agree as
follows:
ARTICLE
1
DEFINED
TERMS
Section
1.1 Definitions. When used in this Agreement,
the following capitalized terms shall have the meanings ascribed to them
below.
“Act” means the New York
Limited Liability Company Law, as the same
may be amended from time to time.
“Agreement” means this
Operating Agreement, as the same may be amended or modified from time to
time.
“Articles of Organization” means the
Articles of Organization of the Company filed January 29, 2002 with the New York
State Secretary of State and any and all amendments thereto and restatements
thereof filed on behalf of the Company from time to time with the State of New
York pursuant to the Act. A copy of the Articles of Organization are attached
hereto as Exhibit
A.
“Bankruptcy” The bankruptcy of a Member or the
Company shall be deemed to occur at the earliest of the time when (i) such
Member or the Company files a petition in bankruptcy; (ii) such Member or the
Company voluntarily takes advantage of any bankruptcy or insolvency law; (iii)
such Member or the Company files any petition or application for the appointment
of a receiver or trustee; or (iv) a petition or answer is filed proposing the
adjudication of such Member or the Company as a bankrupt or seeking the
appointment of a receiver or trustee for the Company or Member, and such Member
or the Company either consents to the filing thereof, or such petition or
answerer is not discharged or denied prior to the expiration of 60 days from the
date of such filing.
“Capital Account” means, with respect to
any Member, the account maintained for such Member in accordance with the
provisions of Article 5 hereof.
“Capital Contribution” means, with respect to
any Member, the aggregate amount of capital contributed by such member to the
Company as determined in accordance with Section 5.1.
“Code” means the Internal
Revenue Code of 1986, as amended from
time to time, and the regulations promulgated thereunder or any corresponding
federal tax statute enacted after the date of this Agreement. A reference to a
specific section (§) of the Code refers not only to such specific section but
also to any corresponding provision of any federal tax statute enacted after the
date of this Agreement, as such specific section or corresponding provision is
in effect on the date of application of the
provisions of this Agreement containing such reference.
“Majority in Interest” means Members owing
greater than 50% of the aggregate Percentage
interests.
“Management Committee” Management Committee
shall have the meaning ascribed to it in Section 3.1.
“Manager” A member of the
Management Committee.
“Members” shall have the meaning
ascribed to it in the introductory paragraph of this agreement. For purposes of
this Agreement, “Members” shall include the successor or successors in interest of the respective
Members, by operation of law or otherwise.
“Outside Manager” A non-Member Manager
selected to bring significant additional medical or business expertise to the
Management Committee.
“Percentage Interest” at any time means, for
each Member holding Units, the number of Units owned by such Member at such time
divided by the aggregate number of outstanding Units at such time, expressed as
a fraction.
“Person” means any individual,
corporation, association, partnership, joint venture, trust, estate, limited
liability company, or other legal entity or organization.
“Tax Matters Member” shall be such Person as
shall be designated pursuant to Section 10.1.
“Transfer” shall mean any pledge,
assignment, sale, gift, transfer, hypothecation, disposition, encumbrance or
other alienation of any Percentage Interest (or any portion thereof), whether
voluntary involuntary or by operation of law.
2
“Units” means the units issued
by the Company, as provided herein and shall also include any equity security
issued in respect of or in exchange for such units, whether by way of dividend,
split, recapitalization, merger, roll-up transaction, consolidation or
reorganization.
“Withdrawal” shall have the meaning
ascribed to it in Section 8.1(b)
ARTICLE
2
FORMATION;
ISSUANCE OF UNITS; TERM AND PURPOSE
Section 2.1
Name. The name of the Company
formed hereby and by the filing of the Articles of Organization is Imaging on
Call, LLC. The business of the Company may be conducted, upon compliance with
all applicable laws, under any other name designated by the Management
Committee.
Section 2.2
Formation
(a) The
Members hereby agree to associate themselves as a New York limited liability
company under and pursuant to the provisions of the Act and agree that the
rights, duties and liabilities of the Members shall be as provided in the Act,
except as otherwise provided herein.
(b) The
name of each Member, the Capital Contribution of each Member, the Units owned by
each Member and the Percentage Interest of each Member are set forth on Schedule A attached
hereto. The Management Committee shall revise Schedule A from time to time as necessary
to accurately reflect the information therein, including, without limitation,
transfers of Units. Any amendment or revision to Schedule
A made in accordance with this Agreement shall not be deemed an amendment
to this Agreement. Any reference in this Agreement to Schedule A shall be deemed to be a
reference to Schedule A as amended and in effect from
time to time.
Section 2.3
Units. The Company shall be
authorized to issue 100 Units. Additional Units may not be issued without the
approval of the Management Committee.
Section 2.4
Term. The term of the Company
shall commence on the date of the filing of the Articles of Organization with
the State of New York and shall continue until dissolved by operation of law or in
accordance with the provisions of this Agreement.
Section 2.5
Principal Place
of Business. The principal place of business of the
Company shall be as determined by the Management Committee. At any time, the
Management Committee may change the location of the Company’s principal place of
business.
Section 2.6
Qualification in Other Jurisdictions. The Management Committee
shall cause the Company to be qualified, formed or registered under assumed or
fictitious name statutes or similar laws in any jurisdiction in which such
qualification, formation or registration is required or
desirable.
3
Section 2.7
Purpose. The purpose of the
Company shall be to arrange for the provision of a broad range of teleradiology
services to providers of radiology services, including hospitals and radiology
practices, which services shall include “after hours” teleradiology services.
The Company may also engage in other lines of business, which such lines of
business may include radiology locum tenens coverage for radiology practices and
the provision of radiology services to the United States Armed Services and
Veterans’ Administration health care facilities and such other lines of business
as deemed appropriate by the Management Committee.
ARTICLE
3
MANAGEMENT
Management of the Company.
Subject
to the limitations set forth elsewhere in this Agreement, the authority to
establish the overall business policy and direction of the Company shall be
vested in a management committee (the “Management Committee”), initially
consisting of up to seven [different number?] persons who are Members (or equity
holders of Members), or non-Member “Outside Managers”, each a “Manager” Each
Manager shall be selected by a Majority in Interest of the Members and each
shall serve for a term of twenty-four (24) months. A Majority in Interest of the
Members may elect to provide for staggered terms in order that all terms shall
not expire on the same date. Upon any vacancy prior to the expiration of the
twenty-four (24) month term of any Manager, the remaining Managers shall
promptly appoint a replacement to serve in such Manager’s stead for the
remainder of such term. The initial Management Committee shall be selected by
the CareCore Member and shall serve until the first meeting of the Members. The
Management Committee shall meet as necessary, but not less frequently than
semi-annually, or at any time upon the request of a majority of the Management
Committee upon at least five (5) business days notice to the other members of
the Management Committee. Such meetings shall take place at the principal place
of business of the Company or by telephone conference. A Manager may be present
in person or by teleconference. A quorum for meetings of the Management
Committee shall consist of three Managers. A majority vote of the Managers
present at a meeting at which there is a quorum present is required to conduct
business of the Company except for those matters which are subject to approval
by the Members in accordance with Section 6.1 hereof.
ARTICLE
4
OFFICERS
Section 4.1
General. The Management Committee may appoint
officers of the Company, including a President, Chief Executive Officer, Chief
Operating Officer, Secretary and Treasurer and such other additional officers as
the Management Committee may designate. Notwithstanding the foregoing, each
officer of the Company shall be a
Manager.
4
Section 4.2
Term of Office; Removal and Vacancy. Each officer shall hold
office until his or her resignation or removal. Any officer or agent shall be
subject to removal with or without cause at any time by the Management
Committee. Vacancies in any office, whether
occurring by death, resignation, removal or otherwise, may be filled at the
discretion of the Management Committee.
ARTICLE
5
CAPITAL
CONTRIBUTIONS AND CAPITAL ACCOUNTS
Section 5.1
Capital Contributions. The Members and their
respective Capital Contributions and Percentage Interests are set forth on Schedule A as it may
be amended from time to reflect then current Interests. Each Member’s Percentage
Interest shall be effective upon the payment in full of such Member’s Capital
Contribution.
Section 5.2
Employee Unit Issuances. The Members agree and
acknowledge that the Company shall be authorized, without the requirement of
further action on the part of the Members or the Management Committee, to issue
up to three (3) Units (the “Employee Units”)
to up to three (3) individuals who shall become employed by the Company or by
Imaging on Call P.C. a New York professional corporation. The Members further
agree and acknowledge that upon issuance of such Employee Units, each Member’s
Percentage Interest shall be diluted on a pro-rata basis in accordance with such
Member’s Percentage Interest immediately prior to the grant of the Employee Units.
Section
5.3
Profits Interest Plan.
The
Management Committee may adopt a “Profits Interest” plan as a component of
incentive compensation for senior management. Managers and selected non-Members
who make a significant contribution to the Company. Such Profits Interests shall
be issued as additional Units or fractional Units and the holders of such Units
shall have all of the rights and obligations of Members, except as they may be
limited by the terms and conditions of the Profits Interest Agreement executed
by the LLC and the recipient. The terms and conditions of said Profits Interest
Agreement are incorporated by reference herein.
Section 5.4
Additional Capital Contributions.
In the
event, pursuant to Section 6.1, hereof, a Majority in Interest determines that
additional capital is required by the Company, the Members shall be required to
make such additional Capital Contributions up to an aggregate amount of ten
thousand dollars ($10,000) per Unit (“Mandated Additional Capital”) in
accordance with the Members’ respective Percentage Interests in the LLC.
Contributions of Mandatory Additional Capital shall be due and payable on such
date or dates as may be set forth in a written notice given by the Management
(but in no event sooner than ten (10) business days after the giving of any such
notice). In the event any Member elects not to make a contribution equal to its
pro-rata share (as determined in accordance with such Member’s respective
Percentage Interest) of such Mandated Additional Capital within ten (10)
business days of the date such Mandated Additional Capital has been requested,
then the remaining Members shall be given the opportunity to contribute such
amounts. The Percentage Interests of all Members shall be
adjusted to reflect all such contributions such that each member’s Percentage
Interest shall be equal to the ratio expressed as a percentage, that such
Member’s total Capital Contributions bears to the aggregate Capital
Contributions of all Members
5
Section 5.5
Return of Capital Contributions.
(a)
Except as otherwise expressly provided herein, no Member shall have the
right to demand, withdraw, reduce or receive a return of all or any portion of
any Capital Contribution and except as otherwise expressly provided herein, no
Member shall have the right to demand or receive property other than cash in
return for such Member’s Capital Contribution.
(b) Except
as otherwise expressly provided herein, no Member shall have priority over any
other Member with respect to the return of such Member’s Capital
Contribution.
Section 5.6
Allocation of Profits and Losses. Except as otherwise set
forth herein, all allocations of profits and losses shall be determined in
accordance with each Member’s respective Percentage Interest as of the last day
of each fiscal quarter within such taxable year, in accordance with the
accounting method used by the Company for federal income tax
purposes.
Section 5.7
Distribution in Kind. In the event any
distributable proceeds consist of items other than cause, each Member shall be
entitled to such proceeds on a pro rata basis in accordance with such
Member’s Percentage Interest.
ARTICLE
6
MEMBERS
Section 6.1
Powers of Members. Except as otherwise
required by applicable law, the Members shall have
the power to exercise any and all rights or powers granted to the Members
pursuant to the express terms of this Agreement. The vote of a Majority in
Interest shall be required for:
(i)
the sale of all or substantially all of the Company’s assets;
(ii)
entering into any agreement to merge, consolidate or otherwise restructure
or sell the Company;
(iii) the
creation of one or more additional classes of Units of the
Company;
(iv) the
requirement of additional Capital Contributions.
(v) any
amendment to this Agreement or the Company’s Articles
of Organization or other organizational documents; or
(vi) the
voluntary dissolution of the Company.
6
Section 6.2
Meetings.
(a) An
annual meeting of the Members shall be held on such date and at such time and
place as the Management Committee shall determine. At such annual meeting, the
Members shall transact such business as may properly be brought before the
meeting.
(b) Regular
meetings of the Members shall be held at times and places as to be determined by
the Management Committee. Special meetings of the Members may be called by the
Management Committee or by a vote of not less than 25% of the Members. Meetings
shall be held at the Company’s principal place of business or at such other
place as designated by the Management Committee or a Majority in Interest.
Members may participate in any meeting by means of conference telephone or
similar communications equipment through which all persons participating in the
meeting can hear each other and such participation shall constitute presence in
person at the meeting.
(c) Written
notice (which need not state the purpose or purposes for which the meeting is
called) of each meeting of the Members, stating the place, date and hour of the
meeting, shall be given to each Member entitled to vote at the meeting not less
than ten (10) days nor more than sixty (60) days prior to the scheduled date of
the meeting. When a meeting is adjourned to another time or place. It shall not
be necessary to give any notice of the adjourned meeting if the time and place
to which the meeting is adjourned are announced at the meeting at which the
adjournment is taken, and at the adjourned meeting any business may be
transacted that might have been transacted at the original meeting.
(d) A
Majority in Interest shall constitute a quorum at a meeting of Members for the
transaction of any business.
ARTICLE
7
RESTRICTION
ON TRANSFER
Section 7.1 Restriction on Transfer.
(a)
Except as provided in Section 7.1(b) below, no Member shall sell, assign,
mortgage, hypothecate, pledge or encumber such Member’s Units in the LLC
(other than to a spouse, a child or an affiliate) without the prior written
consent of the Members holding a majority of the Units, in accordance with the
terms hereof, which may be withheld in the sole discretion of the Members. Any
attempt at assignment in violation of this Section shall be null and void and of
no effect upon the LLC. The LLC shall not issue any Units in the LLC to any
other party unless (i) such issuance is approved in accordance with the terms of
this Agreement, and (ii) such party expressly agrees to be bound by the terms of
this Agreement.
(b)
The death or total disability of a Member shall be a “Trigger
Event.”
If a Trigger Event occurs, the LLC shall have sixty (60) days within which to
make an offer to purchase the Units of the deceased or disabled Member. The
Member, or in the case of a Member’s death or mental disability, the Member’s
legal representative, shall have one hundred and eighty (180) days from the date
of the LLC’s offer within which to accept or reject such offer. If the LLC’s
offer is rejected, the Member, or the Member’s legal representative, as the case
may be, may: (1) elect to retain the Units, (2) negotiate with the LLC to obtain
terms different than the LLC’s offer for all or a portion of the Units or,
(3) offer to sell all or a portion of said Member’s Units to any party, except
that such Member, or the Member’s representative may not sell to a party that is
a competitor of the LLC, which shall be defined for the purposes of this sub
paragraph as a party engaged in the same or a similar business as the LLC at the
time of the proposed sale.
7
Section 7.2 Obligations of Transferor.
A Transfer pursuant to this Section shall not relieve the transferor from any
obligations and liabilities which may have arisen prior to the date of such
Transfer had such Transfer not occurred. In the event that a Member’s Units are
subject to attachment by a creditor or are assigned or held for the benefit of
any creditor, the interest obtained by such creditor or assignee shall be only
that of a lienholder, and in no event shall any such creditor or assignee have
any rights as a Member.
Section
7.3 Right of First Refusal.
(a)
Grant of Right of First Refusal.
Subject to and upon the terms and conditions of this Section 7.3, each Member
who obtains the written consent of the other Members pursuant to Section 7.1(a)
above, (the “Selling Member”) hereby grants the Company, a right of first
refusal (the “Right of First Refusal”), at any time prior to the expiration of
the term of this Agreement, to purchase the Units of the Selling Member, as such
Selling Member is willing to sell (which can only be all of the Units of the
Selling Member).
(b) Procedure for Exercising Right of First
Refusal.
In the
event that, during the term of this Agreement, a third party makes a bona fide
offer (the “Offer”) to purchase all of the Selling Member’s Units, the Selling
Member shall notify the Company, in writing (the “Notice of Offer”), that there
is a bona fide purchaser for Units, setting forth in such Notice of Offer the
identity of the purchaser, the price at which the purchaser proposes to purchase
such Interest and any other material terms and conditions of the
Offer.
The
Company shall have ten (10) days after the receipt of the Notice of Offer to
notify the Selling Member, in writing, as to whether or not it intends to
exercise its Right of First Refusal and thus to purchase the Selling Member’s
Units on the same terms and subject to the same conditions as contained in the
Offer.
In the
event the Company notifies the Selling Member that it intends to exercise its
Right of First Refusal in accordance herewith (the “Exercise Notice”), the
closing of the sale of the subject Units shall occur on a date that is mutually
agreed upon by the parties, which date shall be within twenty (20) days after
the date of the Exercise Notice.
8
In the
event the Company notifies the Selling Member that it does not intend to
exerecise the Right of First Refusal, or if
the Company fails to respond to a properly delivered Notice of Offer within ten
(10) days of receipt of such Notice of Offer (either case being referred to as a
“Refusal Notice”), the Right of First Refusal with respect to that Offer shall
be then given to the remaining Members, which Remaining Members shall have the
same Right of First Refusal as the Company, (which Right of First Refusal shall
include the same notice periods as were provided to the Company) pro-rata in
accordance with their respective Percentage Interests, to purchase the Selling
Member’s Units (although if one or more remaining Member does not elect to
participate, the other remaining Members may purchase such non-participating
Member’s portion, again pro-rata with their respective Percentage
Interests).
In the
event Remaining Members provide the Selling Member with a Refusal Notice, the
Right of First Refusal shall be deemed to have expired and the Selling Member
shall be free to sell the subject Interest to the bona fide offered upon the
same terms and conditions as contained in the Notice of Offer. If any terms are
changed from those contained in the Notice of Offer, or if the sale to the bona
fide offered does not take place within sixty (60) days after the Refusal
Notice, the Selling Member shall be required to resubmit its Notice of Offer,
beginning the process contained herein anew.
Section 7.4
Rights and Responsibilities of Transferee. Upon a transfer of an Interest
pursuant to this Article 7, the transferee, or the
transferee’s legal representative if appropriate, shall have all of the rights
and responsibilities of a Member.
ARTICLE
8
DISPOSITION
OF INTERESTS UPON WITHDRAWAL
Section 8.1
Defined Terms. As used in this Section,
the following capitalized
terms shall have the following meanings:
(a)
“Withdrawal Event” shall mean with respect to any
Member. (A) the Bankruptcy of such Member, (B) any Transfer or purported
Transfer of such Member’s Units in contravention of Section 7.1 hereof: (C) such Member is unable to
perform or materially breaches its obligations under this Agreement and such
nonperformance or breach continues for 30 days after the giving of written
notice by the Company specifying the nature and extent of such nonperformance or
breach; provided, however, such nonperformance or breach shall not be deemed to
be a Withdrawal Event although such nonperformance or breach is not cured within
30 days, if such nonperformance or breach is capable of being cured within a
reasonable period of time thereafter and such Member has commenced the cure
within the 30 day period and diligently and in good faith continues to cure such
nonperformance or breach until completion; or (C) such Member provides notice to
the Company that such Member desires to withdraw from the Company.
(b)
“Withdrawal” of a Member
shall mean a Withdrawal Event with respect to such
Member.
9
Section 8.2
Disposition.
(a)
If a Member Withdraws from the Company, then such Member(s) (the
“Withdrawing Member”),
or the legal representative of the Withdrawing Member shall offer to sell all of
such Withdrawing Members Units to the other Members pro rata in accordance
with such other Members’ Percentage Interests and such other Members shall have
the option to purchase the Withdrawing Member’s Units. In the event that the
non-Withdrawing Members do not purchase all of the Units of the Withdrawing
Member the Company shall subject to its right to dissolve in Section 8.2(d)
below, be obligated to purchase all of the remaining Units of the Withdrawing
Member. The purchase of a Withdrawing Member’s Units shall occur at a closing to
be held pursuant to Section 8.3 hereof. Any option of the non-Withdrawing
Members to purchase the Withdrawing Member’s Units must be exercised within
thirty (30) days of any Member being offered the Units of a Withdrawing
Member.
(b) In
the event a Member Withdraws from the Company at any time following the
execution of this Agreement, then the purchase price for such Withdrawing
Member’s Interest (the “Withdrawal Purchase Price”) shall be an amount equal to
the capital account of the Withdrawing Member at the time of the Withdrawal. The
Withdrawal Purchase Price will be payable in thirty-six (36) equal monthly
payments without interest.
(c) If
a Member or such Member’s legal representative, fails to sell such Member’s
Units to the remaining Members or the Company as provided in this Article, then
such Units shall be deemed to have been sold to the Company, in accordance with
this Article, and all of the remaining provisions of this Agreement shall
continue to apply.
(d)
In the event that
the net assets of Company are insufficient to permit the Company to make a
required redemption of a Withdrawing Member’s Units, the Company and the
non-Withdrawing Members shall take all possible steps to increase the net assets
of the Company in order to permit the Company to fulfill its obligations
hereunder, including, but not limited to, contributing such additional sums to
the Company as are necessary for such purpose, provided, however,
notwithstanding the foregoing or anything else to the contrary contained herein,
the non-Withdrawing Members may elect in writing, in lieu of redeeming the
Withdrawing Member’s Units (whether or not the Company has sufficient net assets
to do so), that the Company be dissolved and liquidated, in which event none of
the Withdrawing Member’s Units will be redeemed.
Section
8.3
Closing
Following Withdrawal.
(a) The
purchase of a Withdrawing Member’s Units shall be managed by the Management
Committee and shall occur at a closing to be held at the office of the Company
(the “Closing”) within ninety (90) days of the effective date of the Member’s
Withdrawal, which date shall be the date written notice of Withdrawal is
delivered to the Company or the non-Withdrawing Members.
(b) At
the Closing:
(i) the
Withdrawing Member (or the legal representative of the Withdrawing Member, as
the case may be) shall deliver: (A) such Member’s (and its designee’s)
resignation as a Manager, director and/or employee of the Company, and (B) if
certificates are issued therefor, the Units endorsed for transfer to the
purchasing Member or the Company as the case may be, together with such
other documents, instruments, certificates and affidavits as
may
10
ARTICLE
10
TAX
MATTERS
Section 10.1
Tax Matters Member.
(a) The
CareCore Member
shall be the “Tax Matters Member”
of the Company for purposes of §6231(a)(7) of the Code, who shall have the power
to manage and control, on behalf of the
Company, any administrative proceeding at the Company level with the Internal
Revenue Service relating to the determination of any item of Company income,
gain, loss, deduction or credit for federal income tax purposes.
(b) The
Tax Matters Member
shall, within 10 days of the receipt of any notice from the Internal
Revenue Service in any administrative proceeding at the Company level relating
to the determination of any
Company item of income, gain, loss, deduction or
credit, mail a copy of such notice to each Member. The Tax Matters Member shall be
reimbursed by the Company for costs and expenses incurred by it in the performance of such function.
Section 10.2
Right to Make Section 754 Election. The Management Committee may, in its
sole discretion, make or revoke, on behalf of the Company, an election in
accordance with §754 of the Code, so as to
adjust the basis of
Company property in the case of a distribution of property within the meaning of
§734 of the Code, and in
the case of a transfer of a Company interest
within the meaning of §743 of the Code. Each Member shall, upon request of the
Management Committee, supply the information necessary to give effect to such an
election.
Section 10.3
Taxation as Partnership. The Company shall be treated
as a partnership for federal income tax purposes.
Section 10.4
Tax Withholding. Any Member and any
assignee thereof, prior to any occasion on which any payment is to be made to
such Member or assignee thereof which may be subject to the withholding
requirements applicable under the Code or any other tax statute and any
regulations promulgated pursuant or with respect thereto, shall furnish to the
Company upon
request the taxpayer identification number of the Member or assignee to which
such payment is to be made and any other information reasonably requested by the
Company and shall provide to the Company satisfactory evidence pursuant to the
Code or any other tax statute or such regulations that no tax withholding
requirements are applicable with respect to such payment or that such payment is
subject to a reduced rate of withholding. The Company may withhold such amounts
from any such payment as shall he required by the Code or any other statute or
such regulations to preclude the imposition of, and each Member hereby
indemnifies and agrees to defend and hold the other Members and the Company
harmless from and against, any loss, expense (including, without limitation,
reasonable attorneys’ fees), penalty on other liability on the part of the
Company or the other Members by virtue of failure to effect such withholding,
and shall provide to the Members, as required by law, all returns and reports
required with respect thereto. Any amount required to be withheld shall be
treated as a deemed distribution to the affected Member and shall be
deducted from any contemporaneous or future actual distributions to such Member
until the amount so deducted equals the amount withheld.
11
ARTICLE
11
LIABILITY,
EXCULPATION AND INDEMNIFICATION
Section
11.1
Liability.
(a) Except
as otherwise provided by the Act, the debts, obligations and liabilities of the
Company, whether arising in contract, tort or otherwise, shall be solely the
debts, obligations and liabilities of the Company, and no Member shall be
obligated personally for any such debt, obligation or liability of the Company
solely by reason of being a Member.
(b) Except
as otherwise expressly required by law, no Member shall have any liability in
excess of (i) the amount of said Member’s Percentage Interest, (ii) said
Member’s share of any assets and undistributed profits of the Company, (iii)
said Member’s obligation to make other payments expressly provided for in this
Agreement, and (iv) the amount of any distributions wrongfully distributed to
said Member.
Section
11.2
Indemnification
(a) Each
and every person who serves as a Member, Manager, officer, or other committee
member of the Company, and each and every person who at the request of the
Company serves as a director, manager or officer of another Company,
partnership, joint venture trust, or other enterprise shall be indemnified by
the Company to the fullest extent permitted by and in accordance with the
provisions of the laws of the State of New York. Each and every person not
described in the foregoing sentence who is now or hereafter becomes an employee
or agent of the Company, or who, at the request of the Company, is or hereafter
shall become an employee or agent of another Company, partnership, joint
venture, trust, or other enterprise may be indemnified by the Company to
the fullest extent permitted by, and in accordance with the provisions of, said
law. The determination of whether to extend such indemnification, and the extent
of such indemnification, to be made by the Management Committee in each
individual case. The determination as to whether a Member, Manager, officer,
employee, or agent has met the requirements for indemnification shall be made in
accordance with said law. The foregoing indemnification shall not be deemed
exclusive of any other rights to which those seeking indemnification may be
entitled under any applicable law, agreement, or otherwise.
(b)
The Company and each Member hereby agree to indemnify and hold a Withdrawing
Member harmless from any losses, claims, or expenses relating to acts or
omissions occurring subsequent to the effective date of the closing of his/her
Withdrawal.
(c)
In the event any governmental agency disallows one or more specific items of
Company expense, and such specific item (or items) inured primarily to the
benefit of one of the Members of the Company rather than all of the Members,
then the Member to whom such benefit(s) inured shall indemnify and hold the
non-benefiting Members and the Company harmless from any losses or expenses
which directly relate to the disallowance of such specific items of corporate
expense. If more than one Member is deemed to have benefited from such corporate
expense, the benefiting Members shall, as between themselves, share
responsibility for such indemnification obligation on a pro rata basis based
upon the respective benefits received. If the percentage of respective benefits
received cannot be reasonably determined, the benefiting Members shall share
responsibility in accordance with their respective Percentage
interests.
12
ARTICLE
12
DISSOLUTION,
LIQUIDATION AND TERMINATION
Section 12.1
Dissolution. The Bankruptcy, death,
dissolution, expulsion, incapacity or Withdrawal of any Member, or the
occurrence of any
other event under the Act that terminates the continued membership of any Member
in the Company, shall not cause a dissolution of the Company.
Section 12.2
Notice of Dissolution. Upon the dissolution of the
Company,
the Management Committee shall promptly notify the Members of such dissolution
and no further business shall be conducted by the Company except the completion of any
incomplete transaction and the taking of such action as shall be necessary for the
winding up of the affairs of the Company and the distribution of its
assets.
Section 12.3
Liquidation. Upon dissolution of the
Company, the
Management
Committee, as liquidating trustee, shall immediately commence to wind up the
Company’s affairs: provided, however, that a reasonable time shall be allowed
for the orderly liquidation of the assets of the Company and the satisfaction
of liabilities to creditors so as to enable the Members to minimize the
normal losses attendant upon a liquidation The Members shall continue to
share profits and losses during liquidation in the same proportions as set forth
in Article 5 hereof, as before liquidation. The proceeds of liquidation shall be
distributed, as realized, in the manner provided in Section 12.5
below.
Section 12.4
Final Accounting. Upon dissolution of the
Company, the accountants then retained by the Company shall
prepare a statement setting forth the assets and liabilities of the Company as
of the date of dissolution, and such statement shall be furnished to all
Members.
Section 12.5
Liquidation Allocations and Distributions. In the final fiscal year
of the Company, profits and losses shall be credited
or charged to the Capital Accounts of the Members in accordance with the
provisions of Article 5. Thereupon, all the assets of the
Company, or the proceeds
therefrom, shall be
distributed or used as follows in the following
order of
priority:
(i) for
the payment of the debts and liabilities of the Company and the
expenses of liquidation;
(ii) for
making reasonable provisions for the payment of contingent
liabilities or obligations of the Company,
which provisions may include the setting up of any
reserve which the Management Committee may deem reasonably necessary for such
purpose.
Said reserves shall be held by the Management Committee for the purpose of
disbursing such reserves in payment of any of the aforementioned contingencies,
and as the Management Committee
shall deem advisable, to distribute the balance thereafter remaining in the
manner hereinafter
provided; and
13
(iii)
to the Members in accordance with the positive balances in their respective
Capital Accounts. No Member shall be obligated to restore any deficit in its
Capital Account and such deficit shall not be considered a liability for any
purpose whatsoever
Section 12.6
Termination. The Company shall
terminate when all of the assets of the Company have been distributed in the
manner provided for in this Article 12, and the Articles of Organization shall
have been canceled in the manner required by the Act.
Section 12.7
Claims of Members. Members and former
Members shall look solely to the Company’s assets for the return of their Capital
Contributions, and if the assets of the Company remaining after payment of or
due provision for all debts, liabilities and obligations of the Company are
insufficient to return such Capital Contributions, the Members and former Members shall
have no recourse against the Company or any other
Member.
ARTICLE
13
MISCELLANEOUS
Section 13.1
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 property of the Company.
Section 13.2
Notices. All notices, requests,
demands and other communications required or permitted to be given hereunder
shall be in writing and shall be deemed duly given if delivered by hand, by
facsimile or by
overnight courier service or if mailed by registered or certified mail, return
receipt requested, to a party at its address
set forth on Schedule
A or to such other address as may be designated by written notice
complying as to delivery with this
Section 13.
Section 13.3
Failure to Pursue Remedies. The failure of any party to
seek redress for violation of, or to insist upon the strict performance of, any
provision of this Agreement shall not prevent a subsequent act which would have
originally constituted a violation from having the effect of any original
violation.
Section 13.4
Cumulative 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 its 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.
Section 13.5
Binding Effect. This Agreement shall be
binding upon and inure to the benefit of the parties and, to the extent
permitted by this Agreement, their successors, legal representatives and
assigns. No party may assign any of its rights under this Agreement or delegate
any of its obligations under this Agreement except as expressly set form in this
Agreement.
14
Section 13.6
Interpretation. Throughout this Agreement, nouns,
pronouns and verbs shall be construed
as masculine, feminine, neuter, singular or plural, whichever shall be
applicable. All references herein to “Articles,” “Sections” and paragraphs shall
refer to corresponding provisions of this Agreement.
Section 13.7
Severability. In the event any provision of
this Agreement or the application of any provision of this Agreement to any
Person or circumstance is held to be legally invalid, inoperative or
unenforceable, then the remainder of this Agreement shall not be affected unless
the invalid provision substantially impairs the benefit of the remaining
portions of this Agreement to the other parties hereto.
Section 13.8
Counterparts. This Agreement may be executed in any
number of counterparts with the same effect as if all parties hereto had signed
the same document. All counterparts shall be construed together and shall
constitute one instrument.
Section 13.9
Integration. This Agreement
constitutes the entire agreement among the parties hereto pertaining to the
subject matter hereof and supersedes all prior agreements and
understandings pertaining thereto.
Section 13.10
Governing Law. This Agreement and the
rights of the parties hereunder shall be interpreted in
accordance with the laws of the State of New York, and all rights and remedies
shall be governed by such laws without regard to principles of conflict of
laws.
Section 13.11
Amendments. This Agreement may not
be amended except by a writing executed by all of the Members.
IN WITNESS WHEREOF, the parties hereto have
executed this Agreement as of this _____ day of November,
2006.
15