Exhibit 3.64
COMPREHENSIVE OPEN MRI -
CARMICHAEL/FOLSOM, LLC
LIMITED LIABILITY COMPANY AGREEMENT
This Limited Liability Company Operating Agreement (the "OPERATING AGREEMENT")
of Comprehensive OPEN MRI - Carmichael/Folsom, LLC ("COMPANY") is entered into
as of January 4, 2003, by and between Comprehensive Medical Imaging, Inc., a
Delaware corporation ("CMI") and Comprehensive Medical Imaging Centers, Inc., a
Delaware corporation ("CMIC") (collectively the "MEMBERS").
WHEREAS, the Company has been formed as a limited liability company
pursuant to the Beverly-Killea Limited Liability Company Act of California (the
"ACT"), by filing a Certificate of Formation (the "Certificate") with the office
of the Secretary of State of the State of California; and
WHEREAS, the Members desire to enter into this Operating Agreement to
provide for the management of the business of the Company, the allocation of
profits and losses, cash flow and other proceeds of the Company between the
Members, and the respective rights, obligations and interests of the Members.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE 1.
DEFINED TERMS
Definitions. Unless the context otherwise requires, the terms defined in this
Article 1 shall, for the purposes of this Operating Agreement, have the meanings
herein specified.
"Act" means the Beverly-Killea Limited Liability Company Act of
California, as amended from time to time.
"Adjusted Capital Account Deficit" shall mean, with respect to any Member,
the deficit balance, if any, in such Member's Capital Account as of the end of
the relevant Fiscal Year, after giving effect to the following adjustments:
(i) Credit to such Capital Account any amounts which such Member is
obligated to restore pursuant to any provision of this Operating Agreement or is
deemed to be obligated to restore pursuant to the next to the last sentence of
Treasury Regulation Sections 1.704-2(g)(1) and 1.704-2(i)(5), after taking into
account any changes during such year in LLC Minimum Gain and Member Nonrecourse
Debt Minimum Gain; and
(ii) Debit to such Capital Account the items described in Section
1.704-1(b)(2)(ii)(d)(4), (5) and (6) of the Treasury Regulations.
"Affiliate" means with respect to a specified Person, any Person that
directly or indirectly controls, is controlled by, or is under common control
with the specified Person. As used in this
definition, the term "control" means the possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of a
Person, whether through ownership of voting securities, by contract or
otherwise.
"Capital Account" means, with respect to any Member, the account
maintained for such Member in accordance with the provisions of Section 4.3
hereof.
"Capital Contribution" means, with respect to any Member, the aggregate
amount of money and the initial Gross Asset Value of any property (other than
money) contributed to the Company pursuant to Section 4.1.
"Certificate" means the Certificate of Formation and any and all
amendments thereto and restatements thereof filed on behalf of the Company with
the office of the Secretary of State of the State of California pursuant to the
Act.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, or any corresponding federal tax statute enacted after the date of this
Operating Agreement.
"Depreciation" means, for each Fiscal Year of the Company, an amount equal
to the depreciation, amortization, or other cost recovery deduction allowable
with respect to an asset for such Fiscal Year, except that if the Gross Asset
Value of an asset differs from its adjusted basis for federal income tax
purposes at the beginning of such Fiscal Year, Depreciation shall be an amount
which bears the same ratio to such beginning Gross Asset Value as the federal
income tax depreciation, amortization, or other cost recovery deduction for such
Fiscal Year bears to such beginning adjusted tax basis; provided, however, that
if the adjusted basis for federal income tax purposes of an asset at the
beginning of such Fiscal Year is zero, Depreciation shall be determined with
reference to such beginning Gross Asset Value using any reasonable method
selected by the Managing Member.
"Fiscal Year" means for accounting and tax purposes the period beginning
on July 1 and ending on June 30 of each year, except for the short taxable years
in the years of the Company's formation and termination and as otherwise
required by the Code, and unless the Managing Member shall elect another fiscal
year for the Company which is a permissible taxable year under the Code.
"Gross Asset Value" means, with respect to any asset, the asset's adjusted
basis for federal income tax purposes, except as follows:
(a) The initial Gross Asset Value of any asset contributed by a Member
to the Company shall be the gross fair market value of such asset, as reasonably
determined by the Managing Member;
(b) The Gross Asset Values of all of the Company's assets shall be
adjusted to equal their respective gross fair market values, as reasonably
determined by the Managing Member, as of the following times: (i) the
acquisition of an additional Membership Interest by any new or existing Member
in exchange for more than a de minimis Capital Contribution; (ii) the
distribution by the Company to a Member of more than a de minimis amount of
property as
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consideration for a Membership Interest; and (iii) the liquidation of the
Company within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g);
(c) The Gross Asset Value of any Company asset distributed to any Member
shall be adjusted to equal the gross fair market value of such asset on the date
of distribution, as reasonably determined by the Managing Member; and
(d) The Gross Asset Values of the Company's assets shall be increased
(or decreased) to reflect any adjustments to the adjusted basis of such assets
pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent
that such adjustments are taken into account in determining Capital Accounts
pursuant to Regulations Section 1.704-1(b)(2)(iv)(m) and paragraph (f) of the
definition of Net Profits and Net Losses or Section 5.2(h) hereof; provided,
however, that Gross Asset Values shall not be adjusted pursuant to this
paragraph (d) to the extent the Managing Member determines that an adjustment
pursuant to paragraph (b) above is necessary or appropriate in connection with a
transaction that would otherwise result in an adjustment pursuant to this
paragraph (d).
(e) If the Gross Asset Value of an asset has been determined or adjusted
pursuant to paragraph (a), (b) or (d) hereof, such Gross Asset Value shall
thereafter be adjusted by the Depreciation taken into account with respect to
such asset for purposes of computing Net Profits and Net Losses.
"LLC Minimum Gain" has the meaning set forth in Sections 1.704-2(b)(2) and
1.704-2(d) of the Treasury Regulations.
"Member" means CMI, CMIC and any Person admitted as an additional Member
or a substitute Member pursuant to the provisions of this Operating Agreement.
"Member Nonrecourse Debt Minimum Gain" means an amount, with respect to
each Member Nonrecourse Debt, equal, to the Company Minimum Gain that would
result if such Member Nonrecourse Debt were treated as Nonrecourse Debt,
determined in accordance with Section 1.704-2(c)(i) of the Treasury Regulations.
"Member Nonrecourse Debt" has the meaning set forth in Section
1.704-2(b)(4) of the Treasury Regulations.
"Member Nonrecourse Deductions" has the meaning set forth in Section
1.704-2(i)(2) of the Treasury Regulations.
"Members" shall mean the Members and any other Person who acquires a
Membership Interest and is admitted to the Company as a Member.
"Membership Interest" as of any date, shall mean, with respect to any
Member, the ownership interest of such Member in the Company as of such date,
including all of its rights and obligations under the Act and this Operating
Agreement.
"Net Profits" and "Net Losses" means, for each Fiscal Year of the Company,
an amount equal to the Company's taxable income or loss for such Fiscal Year,
determined in accordance
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with Code Section 703(a) (and, for this purpose, all items of income, gain,
loss, or deduction required to be stated separately pursuant to Code Section
703(a)(1) shall be included in taxable income or loss), with the following
adjustments:
(a) Any income of the Company that is exempt from federal income tax and
not otherwise taken into account in computing Net Profits or Net Losses pursuant
to this paragraph shall be added to such taxable income or loss;
(b) Any expenditures of the Company described in Code Section
705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures pursuant to
Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account
in computing Net Profits or Net Losses pursuant to this paragraph, shall be
subtracted from such taxable income or loss;
(c) In the event the Gross Asset Value of any Company asset is adjusted,
the amount of such adjustment shall be taken into account as gain or loss from
the disposition of such asset for purposes of computing Net Profits or Net
Losses;
(d) Gain or loss resulting from any disposition of property with respect
to which gain or loss is recognized for federal income tax purposes shall be
computed by reference to the Gross Asset Value of the property disposed of,
notwithstanding that the adjusted tax basis of such property differs from its
Gross Asset Value;
(e) In lieu of the depreciation, amortization, and other cost recovery
deductions taken into account in computing such taxable income or loss, there
shall be taken into account Depreciation for such Fiscal Year or other period,
computed in accordance with the definition of Depreciation above;
(f) To the extent an adjustment to the adjusted tax basis of any Company
asset pursuant to Code Section 734(b) or Code Section 743(b) is required
pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(4) to be taken into account
in determining the Capital Accounts as a result of a distribution other than in
liquidation of an Membership Interest, the amount of such adjustment shall be
treated as an item of gain (if the adjustment increases the basis of the asset)
or loss (if the adjustment decreases the basis of the asset) from the
disposition of the asset and shall be taken into account for purposes of
computing Net Profits or Net Losses; and
(g) Any items that are specially allocated pursuant to Section 5.2
hereof shall not be taken into account in computing Net Profits or Net Losses.
The amounts of the items of the Company's income, gain, loss, or deduction
available to be specially allocated pursuant to Section 5.2 hereof shall be
determined by applying rules analogous to those set forth above.
"Nonrecourse Debt" has the meaning given to the term "nonrecourse
liability" by Treasury Regulations Section 1.704-2(b)(3).
"Nonrecourse Deductions" has the meaning set forth in Treasury Regulations
Section 1.704-2(c).
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"Percentage Interests" means the Member's Interest in the Company, stated
as a percentage, determined by dividing the number of Units held by the Member
by the total number of issued and outstanding Units held by all Members.
"Person" includes any individual, corporation, association, partnership
(general or limited), joint venture, trust, estate, limited liability company,
or other legal entity or organization.
"Treasury Regulations" means the income tax regulations, including
temporary regulations, promulgated under the Code, as such regulations may be
amended from time to time (including corresponding provisions of succeeding
regulations).
"Unanimous Vote" means the written approval of or the affirmative vote of
all of the Members.
"Unit" means Membership Interests in the Company's Net Profits, Net Losses
and distributions, as set forth in this Operating Agreement. The Company shall
be authorized to issue one thousand (1,000) Units.
ARTICLE 2.
FORMATION AND TERM
2.1 Formation. The Company has been formed as a limited liability
company pursuant to the Act by the filing of the Certificate required by the Act
with the Secretary of State of California. The rights and liabilities of the
Members shall be determined pursuant to the Act and this Operating Agreement. To
the extent that the rights or obligations of any Member are different by reason
of any provision of this Operating Agreement than they would be in the absence
of such provision, this Operating Agreement shall, to the extent permitted by
the Act, control.
2.2 Name. The name of the limited liability company is "Comprehensive
OPEN MRI - Carmichael/Folsom, LLC."
2.3 Term. The term of the Company commenced on the date the Certificate
was filed in the office of the Secretary of State of the State of California and
shall continue in perpetuity, unless dissolved before such date in accordance
with the provisions of this Operating Agreement.
2.4 Registered Agent and Office. The Company's registered agent and
office in California shall be Corporation Service Company which will do business
in California as CSC -Lawyers Incorporating Service, 2730 Gateway Oaks Drive,
Suite 100, Sacramento 95833. At any time, the Managing Member may designate
another registered agent and/or registered office.
2.5 Principal Place of Business. The principal place of business of the
Company shall be at 6464 Canoga Avenue, Woodland Hills, California 91304 or such
other place as the Managing Member may select.
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2.6 Qualification in Other Jurisdictions. The Managing Member shall
cause the Company to be qualified, formed or registered under assumed or
fictitious name statutes or similar laws in any jurisdiction in which the
Company transacts business. The Managing Member, as an authorized person, within
the meaning of the Act, shall execute, deliver and file any certificates (and
any amendments and/or restatements thereof) necessary for the Company to qualify
to do business in a jurisdiction in which the Company may wish to conduct
business.
ARTICLE 3.
PURPOSE AND POWERS OF THE COMPANY
3.1 Purpose. The Company has been formed for the purpose of engaging in
any lawful act or activity for which a limited liability company may be
organized under California law. The Company may do and perform everything which
may be necessary, advisable, suitable or proper for the carrying out of its
purpose and any such business and perform any and all acts in connection with
accomplishing any of the purposes set forth in this Section.
3.2 Powers of the Company.
The Company acting through the Managing Member shall have the power and
authority to take any and all actions necessary, appropriate, proper, advisable,
incidental or convenient to or for the furtherance of the purpose set forth in
Section 3.1, hereof including, but not limited to, the power:
(i) to conduct its business, carry on its operations and have and
exercise the powers granted to a limited liability company by the Act in any
state, territory, district or possession of the United States, that may be
necessary, convenient or incidental to the accomplishment of the purpose of the
Company;
(ii) to acquire by purchase, lease, contribution of property or
otherwise, own, hold, operate, maintain, finance, improve, lease, sell, convey,
mortgage, transfer, demolish or dispose of any real or personal property that
may be necessary, convenient or incidental to the accomplishment of the purpose
of the Company;
(iii) to enter into, perform and carry out contracts of any kind,
including, without limitation, contracts with the Managing Member, any Member,
or any Affiliate thereof, or any agent of the Company necessary to, in
connection with, convenient to, or incidental to the accomplishment of the
purpose of the Company;
(iv) to purchase, tale, receive, subscribe for or otherwise
acquire, own, hold, vote, use, employ, sell, mortgage, lend, pledge, or
otherwise dispose of, and otherwise use and deal in and with, shares or other
interests in or obligations of domestic or foreign corporations, associations,
general or limited partnerships, trusts, limited liability companies, or
individuals or direct or indirect obligations of the United States or of any
government, state, territory, governmental district or municipality or of any
instrumentality of any of them;
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(v) to lend money for its proper purpose, to invest and reinvest
its funds, to make and hold real and personal property for the payment of funds
so loaned or invested;
(vi) to sue and be sued, complain and defend, and participate in
administrative or other proceedings, in its name;
(vii) to indemnify any Person in accordance with the Act;
(viii) to cease its activities and cancel its Certificate;
(ix) to negotiate, enter into, renegotiate, extend, renew,
terminate, modify, amend, waive, execute, acknowledge or take any other action
with respect to any lease, contract or security agreement in respect of any
assets of the Company;
(x) to borrow money and issue evidences of indebtedness, and to
secure the same by a mortgage, pledge or other lien on the assets of the
Company;
(xi) to pay, collect, compromise, litigate, arbitrate or otherwise
adjust or settle any and all other claims or demands of or against the Company
or to hold such proceeds against the payment of contingent liabilities; and
(xii) to make, execute, acknowledge and file any and all documents
or instruments necessary, convenient, or incidental to the accomplishment of the
purpose of the Company.
ARTICLE 4.
CAPITAL CONTRIBUTIONS, UNITS,
CAPITAL ACCOUNTS AND ADVANCES
4.1 Capital Contributions
(a) Each Member has made a Capital Contribution to the Company in
exchange for an interest in the Company. Each Member's interest in the Company
shall be represented by Units. The number of Units held by each Member shall be
as set forth on EXHIBIT A.
(b) No Member shall be required to make any additional capital
contributions to the Company.
4.2 Status of Capital Contributions.
(a) No Member shall be entitled to interest on any Capital
Contributions to the Company.
(b) No Member shall have the right to distributions or the return
of any portion of its Capital Contributions, if any, or capital account balance
except (i) for distributions
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in accordance with Article 6 and (ii) upon dissolution of the Company in
accordance with Article 15. The entitlement to any such return at such time
shall be limited to the amount specifically set forth in this Operating
Agreement, and no Member shall be entitled to any payment on account of goodwill
of the Company.
4.3 Capital Account.
(a) The Company shall maintain a separate Capital Account for each
Member in accordance with this Section 4.3 and in accordance with the rules of
Treasury Regulation Section 1.704-1(b)(2)(iv).
(b) Each Member's Capital Account shall have an initial balance
equal to the amount specified in Section 4.1. The following adjustments shall be
made:
(i) to each Member's Capital Account there shall be credited
such Member's Capital Contributions, such Member's distributive share of Net
Profits and any items in the nature of income or gain that are specially
allocated pursuant to Section 5.2, and the amount of any liabilities of the
Company assumed by such Member or which are secured by any property distributed
to such Member.
(ii) to each Member's Capital Account there shall be debited
the amount of cash, such Member's distributive share of Net Losses and any items
in the nature of deduction or loss that are specially allocated pursuant to
Section 5.2, and the amount of any liabilities of such Member assumed by the
Company or which are secured by any property contributed by such Member to the
Company.
(c) In the event all or a portion of a Membership Interest in the
Company is transferred in accordance with the terms of this Operating Agreement,
the transferee shall succeed to the Capital Account of the transferor to the
extent it relates to the transferred Interest.
(d) Where appropriate in determining the amount of any liability
for purposes of this Operating Agreement, there shall be taken into account Code
Section 752(c) and any other applicable provisions of the Code and Regulations.
(e) The foregoing provisions and the other provisions of this
Operating Agreement relating to the maintenance of Capital Accounts are intended
to comply with Regulations Section 1.704-1(b), and shall be interpreted and
applied in a manner consistent with such Regulations. In the event the Managing
Member determines that it is prudent to modify the manner in which the Capital
Accounts or any debits or credits thereto (including, without limitation, debits
or credits relating to liabilities that are secured by contributed or
distributed property or that are assumed by the Company or any Member) are
computed in order to comply with such Regulations, the Managing Member may make
such modification, provided that it is not likely to have a material effect on
the amounts distributable to any Member pursuant to Article 15 hereof upon the
dissolution of the Company. The Managing Member also shall (i) make any
adjustments that are necessary or appropriate to maintain equality between the
Capital Accounts of the Members and the amount of the Company's capital
reflected on the Company's balance sheet, as computed for book purposes, in
accordance with Section 1.704-1(b)(2)(iv)(q) of the Regulations, and (ii) make
any appropriate modifications in the event unanticipated events
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might otherwise cause this Operating Agreement not to comply with Regulations
Section 1.704-1(b).
ARTICLE 5.
ALLOCATIONS
5.1 Allocations of Net Profits and Net Losses.
(a) The Net Profits of the Company for each Fiscal Year, as
determined by the Managing Member in accordance with the provisions hereof,
shall be allocated between the Members participating in the Company as follows:
(i) first, to the extent that the aggregate Net Losses
previously allocated to the Members pursuant to Sections 5.1(b) and 5.1(c)
exceed the aggregate Net Profits previously allocated to such Members pursuant
to this Section 5.1(a), the amount of such excess shall be allocated to such
Members in the reverse order of priority in which such Net Losses were
previously allocated (to the extent not theretofore charged back hereunder); and
(ii) thereafter, any remaining Net Profits shall be allocated
between the Members pro rata in accordance with their Percentage Interests in
the Company.
(b) The Net Losses of the Company for each Fiscal Year, as
determined by the Managing Member in accordance with the provisions hereof,
shall be allocated between the Members participating in the Company pro rata in
accordance with their Percentage Interests in the Company.
(c) Net Losses allocated pursuant to Section 5.1(b) shall not
exceed the maximum amount of Net Losses that can be so allocated without causing
any Member to have an, or to increase an existing, Adjusted Capital Account
Deficit at the end of any Fiscal Year. In the event some but not all of the
Members would have Adjusted Capital Account Deficits as a consequence of an
allocation of Net Losses pursuant to Section 5.1(b) hereof, the limitation set
forth in this paragraph shall be applied on a Member-by-Member basis so as to
allocate the maximum permissible Net Losses to each Member under Section
1.704-1(b)(2)(ii)(d) of the Regulations. All Losses in excess of the limitation
set forth in this paragraph shall be allocated to and between the Members, pro
rata, in accordance with their respective Percentage Interests.
(d) The Managing Member shall apply the allocation provisions of
this Section 5.1 in a manner consistent with Treasury Regulation Section 1.704-1
and, where necessary, shall have the right to modify the allocation provisions
in its reasonable discretion to comply with such Treasury Regulation.
5.2 Special Allocations
(a) If there is a net decrease in Company Minimum Gain for a
Fiscal Year, then there shall be allocated to each Member items of income and
gain for that year equal to that Member's share of the net decrease in Company
Minimum Gain (within the meaning of Regulation Section 1.704-2(g)(2)), subject
to the exceptions set forth in Regulations Section 1.704-2(f)(2),
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(3), and (5). If during a Fiscal Year there is a net decrease in Member
Nonrecourse Debt Minimum Gain, then, in addition to the amounts, if any,
allocated pursuant to the preceding paragraph, any Member with a share of that
Member Nonrecourse Debt Minimum Gain (determined in accordance with Regulations
Section 1.704-2(i)(5)) as of the beginning of the Fiscal Year shall, subject to
the exceptions in Regulation Section 1.704-2(i)(4), 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 the Member Nonrecourse Debt Minimum Gain.
The foregoing is intended to be a "minimum gain chargeback" provision as
described in Regulation Section 1.704-2(f) and shall be interpreted and applied
in all respects in accordance with that regulation. Additionally, the foregoing
is intended to be the "chargeback of Member nonrecourse debt minimum gain"
required by Regulation Section 1.704-2(i)(4) and shall be interpreted and
applied in all respects in accordance with that Regulation.
(b) In the event any Member unexpectedly receives any adjustments,
allocations or distributions described in Treasury Regulation Section
1.704-1(b)(2)(ii)(d)(4), (5) or (6), items of the Company's income and gain
shall be specially allocated to such Member in an amount and manner sufficient
to eliminate the deficit in such Member's Capital Account (as determined in
accordance with Treasury Regulation Section 1.704-1(b)(2)(ii)(d)) created by
such adjustments, allocations or distributions as promptly as possible; provided
that an allocation pursuant to this paragraph shall be made only to the extent
that a Member Would have a deficit Capital Account balance (as determined as
provided in the prior clause), in excess of such sum after all other allocations
provided for in this Article 5 have been tentatively made as if this paragraph
were not in the Operating Agreement. This paragraph is intended to qualify with
the "qualified income offset" requirement in the Treasury Regulations.
(c) If any Member has a deficit in its Capital Account, such
Member shall be specially allocated items of income and gain in the amount of
such deficit as rapidly as possible, provided that an allocation pursuant to
this paragraph shall be made if and only to the extent that such Member would
have a deficit to its Capital Account after all other allocations provided for
in this Operating Agreement have been tentatively made as if this paragraph were
not in this Operating Agreement.
(d) Any Nonrecourse Deductions for any Fiscal Year or other period
shall be allocated between the Members in accordance with their Percentage
Interests.
(e) Any Member Nonrecourse Deductions for any Fiscal Year or other
period shall be specially allocated to the Member who bears (or is deemed to
bear) the economic risk of loss with respect to the Member Nonrecourse Debt to
which such Member Nonrecourse Deductions are attributable in accordance with
Regulations Section 1.704-2(i)(2).
(f) In accordance with Code Section 704(c) and the Regulations
thereunder, income, gain, loss and deduction with respect to any property
contributed to the capital of the Company shall, solely for tax purposes, be
allocated among the Members so as to take into account any variation between the
adjusted basis of such property to the Company for federal income tax purposes
and its initial Gross Asset Value. In the event the Gross Asset Value of any
asset of the Company is adjusted pursuant to the provisions of the definition of
Gross Asset Value, subsequent allocations of income, gain, loss and deduction
with respect to such asset shall
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take into account any variation between the adjusted basis of such asset for
federal income tax purposes and its Gross Asset Value in the same manner as
under Code Section 704(c) and the Regulations thereunder. Any elections or other
decisions relating to such allocations shall be made by the Managing Member in
any manner that reasonably reflects the purpose and intention of this Operating
Agreement. Allocations pursuant to this paragraph are solely for purposes of
federal, state and local taxes and shall not affect, or in any way, be taken
into account in computing any Member's Capital Account or share of Net Profits,
Net Losses, or other items, or distributions pursuant to any provisions of this
Operating Agreement.
(g) To the extent an adjustment to the adjusted tax basis of any
asset of the Company pursuant to Code Section 734(b) or Code Section 743(b) is
required, pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(2) or
1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining Capital
Accounts as the result of a distribution to a Member in complete liquidation of
such Member's interest in the Company, the amount of such adjustment to 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 such basis) and such
gain or loss shall be specially allocated to and between the Members in
accordance with their Membership Interests in the Company in the event
Regulations Section 1.704-1(b)(2)(iv)(m)(2) applies, or to the Member to whom
such distribution was made in the event Regulations Section
1.704-1(b)(2)(iv)(m)(4) applies.
(h) Any special allocations made under this Article 5 shall be
taken into account by the Managing Member in computing subsequent allocations of
Net Profit and Net Loss pursuant to this Section 5.1, so that the net amount of
any items allocated to each Member shall, to the extent possible, be equal to
the net amount that would have been allocated to each Member if such special
allocations had not occurred.
5.3 Tax Withholding.
To the extent the Managing Member reasonably determines that the Company
is required by the Code (Including Code Sections 1441, 144.2, 1445, and 1446) or
pursuant to any provision of any state or local tax law to withhold or to make
tax payments on behalf of or with respect to any Member, the Managing Member may
withhold such amounts and make such tax payments as so required. All tax
payments made on behalf of a Member shall, at the option of the Managing Member,
(i) be promptly paid to the Company by the Member on whose behalf such payments
were made, or (ii) be repaid by reducing the amount of current or future
distributions which would otherwise have been made to such Member, or if such
distributions are not sufficient for that purpose, by so reducing the proceeds
of liquidation otherwise payable to such Member. Whenever the Managing Member
selects option (ii) pursuant to the preceding sentence for repayment of a tax
payment by the Company, for all other purposes of this Operating Agreement, such
Member shall be treated as having received all distributions unreduced by the
amount of such tax payment.
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ARTICLE 6.
DISTRIBUTIONS
6.1 Distributions.
(a) Distributions prior to dissolution shall be made in accordance
with this Section 6.1(a), subject to the provisions of Sections 6.1(b). The
Managing Member may in its sole discretion make cash distributions to the
Members in accordance with their Percentage Interests, after provision for
sufficient working capital consistent with good fiscal operating policy.
(b) No distribution shall be made if:
(i) such distribution would violate any contract or
agreement to which the Company is then a party, or any law, rule, regulation,
order or directive of any governmental authority then applicable to the Company;
(ii) the Managing Member determines in its sole discretion
that any amount otherwise distributable should be retained by the Company to pay
or to establish a reserve for the payment of, any liability or obligation of the
Company, whether liquidated, fixed, contingent, or otherwise; or
(iii) to the extent that the Managing Member determines in its
sole discretion that the cash available to the Company is insufficient to permit
such distribution.
ARTICLE 7.
REIMBURSEMENT OF MEMBERS
AND PARTITION
7.1 Reimbursements. The Company shall reimburse the Members for all
ordinary and necessary out-of-pocket expenses incurred by the Members on behalf
of the Company. Such reimbursement shall be treated as an expense of the
Company, but shall not be deemed to constitute a distributive share of Net
Profits or a distribution or return of capital to any Member.
7.2 Partition. Each Member waives, until termination of the Company, any
and all rights that it may have to maintain an action for partition of the
Company's property.
ARTICLE 8.
MANAGEMENT
8.1 Management. The Company shall be managed by the Managing Member.
CMIC is hereby appointed by the Members to serve as the Managing Member:
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8.2 Authority of Managing Member.
(a) Permitted Acts. The Managing Member shall have the exclusive
authority to manage the operations and affairs of the Company, subject in all
cases to the provisions of this Operating Agreement and the requirements of
applicable law. Without limiting the generality of the foregoing, and subject to
the limitations of this Operating Agreement, the Managing Member, when acting on
behalf of the Company, is hereby authorized:
(i) to acquire, sell, transfer, exchange, lease or dispose
of property, or any portion thereof, from or to any person as the Managing
Member may determine; provided that such action is taken in the ordinary course
of the Company's Business;
(ii) to purchase liability and other insurance to protect the
property and business of the Company;
(iii) to hold and own any real and personal properties of the
Company in the name of the Company;
(iv) to invest any funds of the Company temporarily (by way
of example but not limitation) in time deposits, short-term governmental
obligations, commercial paper or other investments;
(v) to execute on behalf of the Company all instruments and
documents, including, without limitation, checks, drafts, notes and other
negotiable instruments, mortgages or deeds of trust, security agreements,
financing statements, documents providing for the acquisition, mortgage or
disposition of property of the Company, assignments, bills of sale, leases,
partnership agreements, and any other instruments or documents necessary or
appropriate, in the opinion of the Managing Member, to the business of the
Company;
(vi) to employ accountants, legal counsel, managing agents or
other experts to perform services for the Company and to compensate them from
the Company's funds;
(vii) to retain and compensate employees and agents generally,
and to define their duties;
(viii) to pay reimbursement from the Company of all expenses
of the Company reasonably incurred on behalf of the Company; and
(ix) to do and perform all other acts as may be necessary or
appropriate to the conduct of the business of the Company.
8.3 Officers.
(a) From time to time, the Managing Member may elect persons as
officers of the Company, including, but not limited to, a president, a
secretary, a treasurer, a chief financial officer and such vice presidents,
assistant secretaries and assistant treasurers as the Managing Member may deem
desirable. Any individual may hold any number of offices. The officers
13
shall exercise such powers and perform such duties as specified in this
Agreement and as shall be determined from time to time by the Managing Member.
(b) Subject to the rights, if any, of an officer under a contract
of employment, any officer may be removed, either with or without cause, by the
Managing Member at any time. Any officer may resign at any time by giving
written notice to the Company. Any resignation shall take effect at the date of
the receipt of that notice or at any later time specified in that notice; and,
unless otherwise specified in that notice, the acceptance of the resignation
shall not be necessary to make it effective. Any resignation is without
prejudice to the rights, if any, of the Company under any contract to which the
officer is a party. A vacancy in any office because of death, resignation,
removal, disqualification or any other cause shall be filled by the Managing
Member.
(c) The president shall be the chief executive officer of the
Company, and shall, subject to the control of the Managing Member, have general
and active management of the business of the Company and shall see that all
orders and resolutions of the Managing Member are carried into effect. The
president shall have the general powers and duties of management usually vested
in the office of president of a corporation, and shall have such other powers
and duties as may be prescribed by the Managing Member or this Agreement. The
president shall execute bonds, mortgages and other contracts requiring a seal,
under the seal of the Company, except where required or permitted by law to be
otherwise signed and executed, and except where the signing and execution
thereof shall be expressly delegated by the Managing Member to some other
officer or agent of the Company.
(d) The secretary shall attend all meetings of the Members and
shall record all the proceedings of the meeting in a book to be kept for that
purpose and shall perform like duties for the standing committees when required.
The secretary shall give or cause to be given, notice of all meetings of the
Members and shall perform such other duties as may be prescribed by the Managing
Member. The secretary shall have custody of the seal, if any, of the Company and
the secretary shall have authority to affix the same to any instrument requiring
it, and when so affixed, it may be attested by his or her signature. The
secretary shall keep, or cause to be kept at the principal executive office or
at the office of the Company's transfer agent or registrar, as determined by the
Managing Member, all documents described in Section 11.1 and such other
documents as may be required under the Act. The secretary shall perform such
other duties and have such other authority as may be prescribed elsewhere in
this Agreement or from time to time as determined by the Managing Member. The
secretary shall have the general duties, powers and responsibilities of a
secretary of a corporation.
(e) The chief financial officer shall keep and maintain, or cause
to be kept and maintained, adequate and correct books and records of accounts of
the properties and business transactions of the Company, including accounts of
its assets, liabilities, receipts, disbursements, gains, losses, Capital
Accounts and Units. The chief financial officer shall have the custody of the
funds and securities of the Company, and shall keep full and accurate accounts
of receipts and disbursements in books belonging to the Company, and shall
deposit all moneys and other valuable effects in the name and to the credit of
the Company in such depositories as may be designated by the Managing Member.
The chief financial officer shall disburse the funds of the Company as may be
ordered by the Managing Member. The chief financial officer shall perform
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such other duties and shall have such other responsibility and authority as may
be prescribed elsewhere in this Agreement or from time to time as determined by
the Managing Member. The chief financial officer shall have the general duties,
powers and responsibilities of a chief financial officer of a corporation, and
shall be the chief financial and accounting officer of the Company.
ARTICLE 9.
INDEMNIFICATION
9.1 Indemnification of the Officers and the Managing Member. The Company
shall indemnify to the full extent permitted by law its officers and the
Managing Member, and the affiliates, heirs, legatees, executors and
administrators of the Managing Member ("INDEMNIFIED PARTY"), for any action,
suit or proceeding, whether civil, criminal, administrative or investigative,
made or threatened to be made against by reason of the fact that such person is
or was an officer or Managing Member of the Company; provided that no
indemnification or reimbursement shall be made to or on behalf of any such
Indemnified Party if the acts or omissions of the officer or Managing Member
resulted from the gross negligence, bad faith, fraud or criminal act of the
officer or Managing Member. Expenses, including attorneys' fees, incurred by any
such Indemnified Party in defending any such action, suit or proceeding shall be
reimbursed to the Company promptly upon receipt of notice from the Company to
repay such expenses if it shall ultimately be determined that such Indemnified
Party is not entitled to be indemnified by the Company. In case any such action,
suit or proceeding shall be brought against any such Indemnified Party, such
Indemnified Party shall notify the Company of the commencement thereof, and the
Company shall be entitled to participate therein and, to the extent that it
shall wish, to assume the defense thereof.
9.2 Nonexclusive. The indemnification and reimbursement of expenses
provided by this Article 9 shall not be deemed exclusive of any other rights to
which those seeking indemnification or reimbursement of expenses may be entitled
under any other instrument or by reason of any other action or otherwise.
ARTICLE 10.
AMENDMENTS AND MEETINGS
10.1 Amendments. Any amendment to this Operating Agreement shall be
adopted and be effective as an amendment hereto if it receives the Unanimous
Vote of the Members, provided that such amendment be in writing and executed by
all Members voting thereto.
10.2 Meetings of the Members.
(a) Meetings of the Members shall not be required, but may be
called upon the written request of any Member. The call shall state the location
of the meeting and the nature of the business to be transacted. Notice of any
such meeting shall be given to all Members not less than seven (7) business days
nor more than thirty (30) days prior to the date of such meeting. Members may
vote in person or by proxy at such meeting. Whenever a vote, consent or approval
of Members is permitted or required under this Operating Agreement, such vote,
15
consent or approval may be given at a meeting of Members. Except as otherwise
expressly provided in this Operating Agreement, the Unanimous Vote of the
Members shall be required to constitute an act of the Members.
(b) Each Member may authorize any Person to act for it by proxy on
all matters in which a Member is entitled to participate, including waiving
notice of any meeting, or voting or participating at a meeting. Every proxy must
be signed by the Member or its attorney-in-fact. No proxy shall be valid after
the expiration of eleven (11) months from the date thereof unless otherwise
provided in the proxy. Every proxy shall be revocable at the pleasure of the
Member executing it.
(c) Each meeting of Members shall be conducted by the Member
requesting such meeting or by such other Person that the Member requesting such
meeting may designate.
ARTICLE 11.
BOOKS AND RECORDS
11.1 Books, Records and Financial Statements. At all times during the
continuance of the Company, the Company shall maintain, at its principal place
of business, unaudited separate books of account for the Company that shall show
a true and accurate record of all costs and expenses incurred, all charges made,
all credits made and received and all income derived in connection with the
operation of the Company's business in accordance with generally accepted
accounting principles consistently applied, and, to the extent inconsistent
therewith, in accordance with this Operating Agreement. Such books of account,
together with a certified copy of this Operating Agreement and of the
Certificate, shall at all times be maintained at the principal place of business
of the Company and shall be open to inspection and examination at reasonable
times by each Member and its duly authorized representative for any purpose
reasonably related to such Member's interest in the Company. Any Member shall
have the right to have a private audit of the Company's books and records
conducted at reasonable times and after reasonable advance notice to the Company
for any purpose reasonably related to such Member's interest in the Company, but
any such private audit shall be at the expense of the Member desiring it, and it
shall not be paid for out of the Company funds.
11.2 Accounting Method. For both financial and tax reporting purposes and
for purposes of determining Net Profits and Losses, the books and records of the
Company shall be kept on the cash method of accounting applied in a consistent
manner.
ARTICLE 12.
LIABILITY AND EXCULPATION
12.1 Liability.
(a) Except as otherwise provided by the Act, the debts,
obligations and of the 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.
16
(b) Except as otherwise expressly required by law, a Member, in
its capacity as such, shall have no liability in excess of (i) the amount of its
Capital Contributions, (ii) its share of any assets and undistributed profits of
the Company, (iii) its obligation to make other payments expressly provided for
in this Operating Agreement, and (iv) the amount of any distributions wrongfully
distributed to it.
12.2 Exculpation.
(a) The Managing Member shall not be liable to the Company or any
Member for any loss, damage or claim incurred by reason of any act or omission
performed or omitted by the Managing Member in good faith on behalf of the
Company and in a manner reasonably believed to be within the scope of authority
conferred on the Managing Member by this Operating Agreement, except for any
loss, damage or claim incurred by reason of the Managing Member's gross
negligence or willful misconduct.
(b) The Managing Member shall be fully protected in relying in
good faith upon the records of the Company and upon such information, opinions,
reports or statements presented to the Company by any Person as to matters the
Managing Member reasonably believes are within the Person's professional or
expert competence and who has been selected with reasonable care by or on behalf
of the Company, including information, opinions, reports or statements as to the
value and amount of the assets, liabilities, Net Profits, Net Losses or any
other facts pertinent to the existence and amount of assets from which
distributions to Members might properly be paid.
ARTICLE 13.
TRANSFER OF INTERESTS, ADMISSION AS A MEMBER
13.1 Transfer of Interests. A Member of the Company may freely sell,
exchange, transfer, assign, pledge or otherwise dispose of all or any part of
any of such Member's Membership Interest to any third party, without the consent
of any Member or the Managing Member, provided that the assignee does not
thereby become or have a right to become a Member.
13.2 Admission as a Member. An assignee may not become a Member unless
all of the following conditions are first satisfied:
(a) A duly executed and acknowledged written instrument of
assignment is filed with the Company, specifying the Units being assigned and
setting forth the intention of the assignor that the assignee succeed to the
assignor's interest as a substitute Member;
(b) The assignor and assignee shall execute and acknowledge any
other instruments that the Managing Member deems necessary or desirable for
substitution, including the written acceptance and adoption by the assignee of
the provisions of this Operating Agreement;
(c) Receipt of the written consent by Unanimous Vote of the
Members, other than the Member assigning the membership interest;
17
(d) Payment of a transfer fee to the Company, sufficient to cover
all reasonable expenses connected with the substitution; and
13.3 Effective Date of Assignment. The Company shall, from the effective
date of an assignment, thereafter pay all further distributions with respect to
the Membership Interest (or part thereof) so assigned, to the assignee of such
interest, or part thereof. As between any Member and its assignee, the Net
Profits and Net Losses for the Fiscal Year of the Company in which such
assignment occurs shall be apportioned for federal income tax purposes in
accordance with any convention permitted under Section 706(d) of the Code and
selected by the Managing Member.
ARTICLE 14.
WITHDRAWAL
14.1 Withdrawal. Except as otherwise specifically provided in this
Operating Agreement, (i) a Member may not withdraw from the Company or make any
withdrawal of any Capital Contribution prior to the Company's termination and
(ii) no event affecting a Member (including death, bankruptcy or incompetency)
shall affect its obligations under this Operating Agreement or affect the
Company.
ARTICLE 15.
DISSOLUTION, LIQUIDATION AND TERMINATION
15.1 No Dissolution. The Company shall not be dissolved by the admission
of substitute or additional Members in accordance with the terms of this
Operating Agreement.
15.2 Events Causing Dissolution. The Company shall be dissolved and its
affairs shall be wound up upon the occurrence of any of the following events:
(a) the Unanimous Vote of all Members; or
(b) the sale or liquidation of all or substantially all of the
assets of the Company.
15.3 Notice of Dissolution. Upon the dissolution of the Company, the
Managing Member shall act as the Liquidating Trustee and shall promptly notify
the Members of such dissolution.
15.4 Liquidation. Upon the dissolution of the Company, the 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 liquidation.
The Members shall continue to share Net Profits and Net Losses during
liquidation in the same proportions, as specified in Article 5 hereof, as before
liquidation. Each Member shall be furnished with a statement prepared by the
Company's accountants that shall
18
set forth the assets and liabilities of the Company as of the date of
dissolution. The proceeds of liquidation shall be distributed, as realized, in
the following order and priority:
(a) to the creditors of the Company, including Members who are
creditors, to the extent otherwise permitted by law, in satisfaction of the
liabilities of the Company (whether by payment or the making of reasonable
provision for payment thereof); and
(b) to the Members, the remaining proceeds of liquidation in
accordance with their Capital Account balances, after giving effect to all
contributions, distributions and allocations for all periods.
15.5 Termination. The Company shall terminate when all of the assets of
the Company, after payment of or due provision for all debts, liabilities and
obligations of the Company, shall have been distributed to the Members in the
manner provided for in this Article 15 and the Certificate shall have been
canceled in the manner required by the Act.
15.6 Claims of the Members. The Members and assignees 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 assignees shall have no recourse
against the Company or any other Member.
ARTICLE 16.
MISCELLANEOUS
16.1 Notices. All notices provided for in this Operating Agreement shall
be in writing, duly signed by the party giving such notice, and shall be
delivered, telecopied or mailed by registered or certified mail, as follows:
(a) if given to the Company, to the Company's principal place of
business;
(b) if given to any Member, at the address such Member may
hereafter designate by written notice to the Company from time to time.
16.2 Waiver. No failure by any party to insist upon the strict
performance of any covenant, duty, agreement or condition of this Operating
Agreement or to exercise any right or remedy consequent upon a breach thereof
shall constitute a waiver of any such breach or any other covenant, duty,
agreement or condition.
16.3 Power of Attorney.
(a) Each Member does hereby constitute and appoint the Managing
Member as its true and lawful representative and attorney-in-fact, in its name,
place and stead to make, execute, sign and file (i) any amendment to this
Agreement which complies with the provisions of this Agreement, and (ii) all
such other instruments, documents and certificates which, in the opinion of
legal counsel to the Company, may from time to time be required by the laws of
the United States of America, the State of California or any other jurisdiction,
or any political
19
subdivision or agency thereof, or which such legal counsel may deem necessary or
appropriate to effectuate, implement and continue the valid and subsisting
existence and business of the Company as a limited liability company.
(b) The power of attorney granted hereby is coupled with an
interest and shall (i) survive and not be affected by the subsequent death,
disability or bankruptcy of the Member granting the same or the transfer of all
or any portion of such Member's interest in the Company, and (ii) extend to such
Member's successors, assigns and legal representatives.
16.4 No Decree of Dissolution. To the fullest extent permitted by
applicable law, each Member covenants that, except with the consent of the
Managing Member, it will not apply for a decree of dissolution or seek the
appointment by a court of a liquidator for the Company.
16.5 Cumulative Remedies. The rights and remedies provided by this
Operating 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.
16.6 Severability. The invalidity or unenforceability of any, particular
provision of this Operating Agreement shall not affect the other provisions
hereof, and this Operating Agreement shall be construed in all respects as if
such invalid or unenforceable provision were omitted.
16.7 Governing Law. This Operating Agreement and the rights of the
parties hereunder shall be interpreted in accordance with the laws of the State
of California and all rights and remedies shall be governed by such laws without
regard to principles of conflict of laws.
16.8 Successors and Assigns. This Operating Agreement shall be binding
and inure to the benefit of the Members and their legal representatives,
successors and permitted assigns, but except with respect to the right of the
Indemnified Parties hereunder, it shall not be for the benefit of, or
enforceable by, any third parties.
16.9 Entire Agreement. This Operating Agreement constitutes the entire
agreement among the parties with respect to the subject matter hereof and
supersedes any prior agreement or understanding with respect to the subject
matter hereof.
16.10 Counterparts; Headings. This Operating Agreement may be executed in
any number of counterparts, each of which when so executed shall be deemed to be
an original and all of which taken together shall constitute one and the same
agreement. Facsimile copies of signatures shall be deemed an original thereof.
The section headings in this Operating Agreement are for convenience only.
16.11 Additional Documents. Each Member, upon the request of the Managing
Member, agrees to perform all further acts and execute, acknowledge and deliver
all documents which may be reasonably necessary, appropriate or desirable to
carry out the provisions of this Operating Agreement, including but not limited
to acknowledging before a notary public any signature heretofore or hereafter
made by a Member.
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IN WITNESS WHEREOF, the parties hereto have caused this Operating Agreement to
be duly executed and delivered effective as of the date first above written.
MEMBERS
Comprehensive Medical Imaging, Inc.
By: /s/ Paul S. Williams
----------------------------------
Paul S. Williams
Executive Vice President,
Chief Legal Officer and Secretary
Comprehensive Medical Imaging Centers, Inc.
By: /s/ Paul S. Williams
----------------------------------
Paul S. Williams
Executive Vice President,
Chief Legal Officer and Secretary
21
EXHIBIT A
MEMBERSHIP
MEMBER ADDRESS UNITS INTEREST
------ ------- ----- ----------
Comprehensive Medical 6464 Canoga Ave.
Imaging, Inc. Woodland Hills, CA 91376 500 50%
Comprehensive Medical 6464 Canoga Ave.
Imaging Centers, Inc. Woodland Hills, CA 91376 500 50%