EXHIBIT 10.23
(FORM OF ARL OPERATING AGREEMENT)
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
AMERICAN REIMBURSEMENT, LLC
This Amended and Restated Limited Liability Company Agreement (this
"Agreement") of American Reimbursement, LLC, a Delaware limited liability
company (the "Company"), dated as of June 27, 2002, is entered into by and
between Med Diversified, Inc. and Xxxxxxx X. Xxxxxxxx & Associates, LLC, a
Massachusetts limited liability company (the "Independent Member" and, together
with Med, the "Members").
RECITALS
WHEREAS, the Members have formed a limited liability company under and
pursuant to the Delaware Limited Liability Company Act for the purposes set
forth in this Agreement by causing a Certificate of Formation of the Company to
be filed with the office of the Secretary of State of the State of Delaware on
March 27, 2002, and by entering into an Limited Liability Company Agreement,
dated as of March 29, 2002 (the "Original Limited Liability Company Agreement");
WHEREAS, the Members now desire to amend and restate the Original
Limited Liability Company Agreement in order to effectuate certain changes to
such document.
NOW, THEREFORE, in consideration of the agreements and obligations set
forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, agree to amend and restate the Original Limited Liability
Company Agreement for the Company in accordance with the Delaware Limited
Liability Company Act and subject to the terms and provisions set forth in this
Agreement.
AGREEMENT
ARTICLE ONE
DEFINITIONS
Section 1.01 DEFINITIONS. As used in this Agreement, the following
terms shall have the following meanings:
"ACT" means the Delaware Limited Liability Company Act (6 DEL. C.
Section 18-101, ET SEQ.), as amended from time to time.
"AFFILIATE" of any Person means any other Person that (i) directly or
indirectly controls, is controlled by or is under common control with such
Person (excluding any trustee under, or any committee with responsibility for
administering, any employee benefit plan) or (ii) is an officer or director of
such Person. For purposes of the foregoing definition, a Person shall be deemed
to
1
be "controlled by" another Person if such other Person possesses, directly or
indirectly, the power (i) to vote five percent (5%) or more of the securities
(on a fully diluted basis) having ordinary voting power for the election of
directors, members or managing partners of such Person or (ii) to direct or
cause the direction of the management and policies of such Person, whether by
contract or otherwise.
"ADMINISTRATIVE SERVICES AGREEMENT" means that certain administrative
services agreement by and between the Company and National Premier Financial
Enterprises, dated as of March 29, 2002.
"AGREEMENT" means this Amended and Restated Limited Liability Company
Agreement of the Company, as it may be further amended, restated or supplemented
from time to time.
"AMENDED DEBENTURES" means those certain Amended Debentures, dated as of
June 28, 2002, issued by Med in favor of PIBL.
"AMENDMENT AGREEMENT" means that certain Amendment Agreement, dated as
of June 28, 2002, by and among Med, PIBL, TEGCO Investments, LLC, a Delaware
limited liability company, and each of the Med Subsidiaries (as defined in the
Amendment Agreement) that are a party thereto, pursuant to which the Amended
Debentures are issued.
"CAPITAL ACCOUNTS" shall have the meaning set forth in Section 7.01.
"CAPITAL CONTRIBUTIONS" means the amount of all cash (whether in the
form of money, a note payable upon demand or a combination thereof) or the
agreed upon value of other property or services contributed by the Members to
the Company.
"CERTIFICATE" means the Certificate of Formation of the Company,
including any restatements or amendments, filed with the Delaware Secretary of
State.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COLLATERAL" shall have the meaning set forth in Section 3.01(b).
"CONTROL MANAGER" means the Manager appointed by the Independent Member
in accordance with Section 5.01(a)(1).
"COVERED PERSON" shall have the meaning set forth in Section 8.03.
"DELAWARE SECRETARY OF STATE" means the Secretary of State of the State
of Delaware.
"FISCAL YEAR" means the fiscal year of the holder of the Majority
Interest.
"GOVERNMENTAL AUTHORITY" means any nation or government, any state or
other political subdivision thereof, and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of, or pertaining
to, government.
"INDEPENDENT MEMBER" shall have the meaning set forth in Section 5.08.
2
"INDEPENDENT PERSON" means a Person who is not (i) a director, officer
or employee of any Affiliate of any Member (other than any limited or special
purpose corporation or limited liability company similar to the Company); (ii) a
Person related to any officer or director of any Affiliate of any Member; (iii)
a direct or indirect holder of more than ten percent (10%) of any voting
securities of any Affiliate of any Member; or (iv) a Person related to a direct
or indirect holder of more than ten percent (10%) of any voting securities of
any Affiliate of any Member.
"MAJORITY DEBENTURE HOLDER" means PIBL, in its capacity as the entity
designated to serve as representative of the majority of holders of the Amended
Debentures.
"MAJORITY DEBENTURE HOLDER MANAGER" means the Manager appointed by the
Majority Debenture Holder in accordance with Section 5.01(a)(2).
"MAJORITY INTEREST" means the interest in the Company held by Members
holding more than fifty percent (50%) of the Membership Percentages.
"MANAGERS" means the Control Manager, the Med Manager and the Majority
Debenture Holder Manager and such other Person(s) that may be designated from
time to time by the relevant Member(s) as managers of the Company to perform
such functions for the Company as may be determined from time to time by the
Members. A Manager shall be deemed to be a "manager" of the Company within the
meaning of Section 18-101 of the Act.
"MANDATORY DEBENTURE PREPAYMENT" means any mandatory prepayment of the
Amended Debentures that is described in the Amendment Agreement.
"MED" means Med Diversified, Inc., a Nevada corporation, and its
permitted successors and assigns.
"MED MANAGER" means the Manager appointed by Med in accordance with
Section 5.01(a)(3).
"MEMBERS" are the Persons designated as Members of the Company in
EXHIBIT A attached hereto. Any reference to a Member shall, unless the context
clearly requires otherwise, include a reference to its predecessors and
permitted successors in interest.
"MEMBERSHIP PERCENTAGES" means the Members' respective limited liability
company interests in the Company as set forth in EXHIBIT A.
"PERSON" means an individual or any corporation, limited liability
company, association, partnership, joint venture, estate, trust or other legal
entity, including any Governmental Authority.
"PIBL" means Private Investment Bank Limited, Nassau, Bahamas.
"PROFITS" and "LOSSES" mean the Company's taxable income or loss for
each Fiscal Year (or other period) determined in accordance with the accounting
methods followed by the Company for federal income tax purposes, except that any
income of the Company that is
3
exempt from federal income tax and not otherwise taken into account in computing
Profits and Losses shall be added to such taxable income or loss.
"RECEIVABLES" shall have the meaning set forth in Section 3.01(a).
"RECEIVABLES PURCHASE AGREEMENTS" means those Receivables Purchase
Agreements, each dated as of March 29, 2002, by and between the Company and each
of the Sellers, respectively.
"SELLERS" means and includes (i) Chartwell Diversified Services, Inc., a
Delaware corporation; (ii) Home Medical of America, Inc., a Delaware
corporation; (iii) Infusion Management Systems, Inc., a Texas corporation; (iv)
Millenium Health Group, Inc., a Delaware corporation; and (v) Tender Loving Care
Health Care Services, Inc., a Delaware corporation.
"SELLERS' OVERRIDE" shall have the meaning ascribed thereto in Section 1
of the Amendment Agreement.
"SERVICING COSTS" shall have the meaning ascribed thereto in the
Administrative Services Agreement.
Section 1.02 OTHER DEFINITIONAL PROVISIONS.
(a) For all purposes of this Agreement, except as otherwise
expressly provided or unless the context otherwise requires, (i) terms used
herein include, as appropriate, all genders and the plural as well as the
singular, (ii) references to words such as "herein", "hereof' and the like shall
refer to this Agreement as a whole and not to any particular part, article or
section within this Agreement, (iii) references to a section such as "Section
1.01" and the like shall refer to the applicable section of this Agreement, (iv)
the term "include" and all variations thereof shall mean "include without
limitation" and (v) the term "or" shall include "and/or".
(b) As used in this Agreement and in any certificate or
other document made or delivered pursuant hereto or thereto, accounting terms
not defined in this Agreement or in any such certificate or other document, and
accounting terms partly defined in this Agreement or in any such certificate or
other document to the extent not defined, shall have the respective meanings
given to them under generally accepted accounting principles in effect from time
to time. To the extent that the definitions of accounting terms in this
Agreement or in any such certificate or other document are inconsistent with the
meanings of such terms under such generally accepted accounting principles, the
definitions contained in this Agreement or in any such certificate or other
document shall control.
ARTICLE TWO
ORGANIZATION OF COMPANY
Section 2.01 CONTINUATION. The Members agree to continue the Company
as a Delaware limited liability company pursuant to the provisions of the
Delaware Act. In connection therewith, the Control Manager or such other person
designated by the Control
4
Manager is hereby authorized to execute, acknowledge and/or verify such other
documents and/or instruments as may be necessary and/or appropriate in order to
continue the existence of the Company in accordance with the provisions of the
Delaware Act and any other jurisdiction in which the Company conducts its
business operations. The Members agree that the rights, duties and liabilities
of the Members and the Managers shall be as provided in the Act, except as
otherwise provided in this Agreement.
Section 2.02 NAME AND OFFICE. The name of the Company shall be
American Reimbursement, LLC, and its office shall be located at 000 Xxxxxxxxxx
Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxxxxxxx 00000 or such other place as the
Members may determine from time to time.
Section 2.03 DURATION. The term of the Company shall commence on the
date the Certificate is filed in the office of the Delaware Secretary of State
and shall continue until March 31, 2032, unless the Company is dissolved before
such date in accordance with the provisions of this Agreement. The existence of
the Company as a separate legal entity shall continue until cancellation of the
Certificate in the manner required by the Act.
Section 2.04 REGISTERED OFFICE AND REGISTERED AGENT. The Company's
initial registered office shall be at the office of its registered agent at
Corporation Trust Center, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000 and the
name of its initial registered agent at such address shall be The Corporation
Trust Company. The registered office and registered agent may be changed from
time to time in accordance with the Act. If the registered agent shall ever
resign, the Company shall promptly appoint a successor.
ARTICLE THREE
PURPOSES
Section 3.01 PURPOSES. The purposes for which the Company is formed
are:
(a) to acquire, own, hold, service, sell, assign, pledge,
finance, refinance and otherwise deal with from time to time (i)
accounts receivable, including any right to payment from a Person,
whether constituting an account, chattel paper, instrument or general
intangible, arising out of or relating to medical products, supplies or
services or related products, supplies or services; (ii) interests in
any of the foregoing; and (iii) any proceeds or other monies due under
any of the foregoing, any related fees and charges, security interests
in the foregoing or other property securing payment thereof and related
agreements, instruments, documents and rights (collectively, the
"Receivables");
(b) to acquire, own, hold, service, sell, assign, pledge,
finance, refinance and otherwise deal with Receivables, any collateral
securing the Receivables, related insurance policies, related agreements
with affiliates, agreements with originators or servicers of Receivables
and any proceeds or further rights associated therewith (collectively,
the "Collateral");
(c) to hold, and to enjoy all of the rights and privileges
as a holder or beneficial owner of any Collateral or other property;
5
(d) to negotiate, authorize, execute, deliver or assume or
perform the obligations under any agreement, instrument or document
relating to the activities set forth in subsections (a) through (c)
above, including but not limited to any indenture, reimbursement
agreement, credit support agreement, receivables purchase agreement,
promissory note, security agreement, assignment, indemnification
agreement, placement agreement or underwriting agreement; and
(e) to engage in any activity and to exercise any powers
permitted to limited liability companies under the laws of the State of
Delaware that are related or incidental to the foregoing and necessary,
convenient or advisable to accomplish the foregoing.
Section 3.02 POWER AND AUTHORITY. The Company shall have the power
and authority to take any and all actions necessary, appropriate, proper,
advisable, incidental or convenient to accomplish or for the furtherance of the
purposes set forth in Section 3.01.
Section 3.03 LIMITATIONS ON POWERS. Notwithstanding any other
provision of this Agreement and any provision of law, the Company shall not do
any of the following:
(a) engage in any business or activity other than as set
forth in this Agreement;
(b) without the unanimous affirmative vote of the Members,
(i) dissolve or liquidate, in whole or in part, or institute proceedings
to be adjudicated bankrupt or insolvent, (ii) consent to the institution
of bankruptcy or insolvency proceedings against it, (iii) file a
petition seeking or consent for reorganization or relief under any
applicable federal or state law relating to bankruptcy, (iv) consent to
the appointment of a receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or a substantial
part of its property, (v) make any assignment for the benefit of
creditors, (vi) admit in writing its inability to pay its debts
generally as they become due; (vii) institute or join in any institution
of any bankruptcy, insolvency, liquidation, reorganization or
arrangement proceedings or other proceedings under any federal or state
law, against any entity in which the Company holds an ownership
interest; or (viii) take any limited liability company action in
furtherance of the actions set forth in clauses (i) through (vii) above;
(c) without the unanimous affirmative vote of the Members,
take or cause to be taken any of the actions referred to in clauses (i)
through (vii) of subparagraph (b) above with respect to any entity of
which the Company is a partner or member.
(d) without the unanimous affirmative vote of the Members,
merge or consolidate with any other corporation, company or entity or
sell all or substantially all of its assets or acquire all or
substantially all of the assets or capital stock or other ownership
interest of any other corporation, company or entity.
Section 3.04 COMPANY OPPORTUNITY. No Member need afford the Company
or any other Member the opportunity of investing or otherwise participating in
any other enterprise, regardless of whether such enterprises, but for this
sentence, would be deemed an opportunity of the Company. Nothing in this
Agreement shall prohibit any Member from engaging in any other
6
business activity, whether or not competitive with, similar to, or within the
scope of the activities conducted by or on behalf of the Company.
ARTICLE FOUR
CAPITAL CONTRIBUTIONS; BORROWINGS
Section 4.01 ADMISSION AND INITIAL CONTRIBUTIONS OF MEMBERS.
(a) Each of Med and the Independent Member are admitted as a
Member of the Company at the time such entity (i) executes this Agreement or a
counterpart signature page to this Agreement and (ii) is listed as a Member on
EXHIBIT A attached hereto.
(b) The Members have made, or commenced to make, the Capital
Contributions set forth next to their names in EXHIBIT A subsequent to the
formation of the Company. No interest shall accrue on any Capital Contribution
made to the Company.
Section 4.02 ADDITIONAL CAPITAL CONTRIBUTIONS. The Members shall not
be obligated to make additional Capital Contributions except upon the consent of
all Members.
Section 4.03 WITHDRAWALS. No Member shall be entitled to be repaid
any portion of its Capital Account or withdraw from the Company without the
consent of all Members or as otherwise provided in this Agreement.
Section 4.04 BORROWINGS. The Company may borrow sums to be used for
any of the business purposes described in Section 3.01; PROVIDED, HOWEVER, that
any such borrowing shall require the prior approval of all the Managers and
shall not be prohibited by this Agreement, any applicable law, regulation or
agreement. Any Member may advance such sums to the Company as approved in
writing by the Control Manager. Any amounts borrowed from a Member shall not
constitute a contribution to the capital of the Company but shall constitute a
debt of the Company that shall be repaid before any distributions to the
Members.
Section 4.05 ADDITIONAL MEMBERS. No additional Members shall be
admitted to the Company without the unanimous consent of the Members and each of
the Managers.
ARTICLE FIVE
MANAGEMENT
Section 5.01 POWERS OF THE MANAGERS; RELATIONS BETWEEN THE MEMBERS.
(a) Except as otherwise provided elsewhere in this Agreement
or otherwise required by the Act, the Company shall be managed the following
three (3) Managers:
(1) There shall, at all times during the existence of
the Company, be a Manager (the "Control Manager") appointed in writing by the
Independent Member. In order for the resignation, withdrawal or other
replacement of the Control Manager to become effective, the Independent Member
must appoint a replacement or successor Control Manager in a writing
7
provided to all of the Members and the other Managers. The Control Manager must
be an Independent Person; PROVIDED that the Control Manager may be related to
the Independent Member.
(2) There shall, at all times during the existence of
the Company, be a Manager (the "Majority Debenture Holder Manager") appointed in
writing by the Majority Debenture Holder. In order for the resignation,
withdrawal or other replacement of the Majority Debenture Holder Manager to
become effective, the Majority Debenture Holder must appoint a replacement or
successor Majority Debenture Holder Manager in a writing provided to all of the
Members and the other Managers.
(3) There shall, at all times during the existence of
the Company, be a Manager (the "Med Manager") appointed in writing by the Med.
In order for the resignation, withdrawal or other replacement of the Med Manager
to become effective, Med must appoint a replacement or successor Med Manager in
a writing provided to all of the Members and the other Managers.
(b) Subject to the other provisions of this Article Five and
Article Six, each Manager, or any party expressly authorized by a Manager for
any specific task(s), shall have the authority, on behalf of the Company, to do
all things that are necessary or appropriate for the accomplishment of the
purposes of the Company, including, but not limited to, (i) acquiring and
selling, assigning and transferring Receivables and other Collateral; (ii)
disbursing Company funds for any permitted Company purposes; (iii) investing and
reinvesting Company funds; (iv) executing contracts and other agreements and
instruments on behalf of the Company; (v) employing attorneys, accountants,
Managers or other agents, which may include Affiliates of the Company; (vi)
paying any and all Company obligations; (vii) performing all ministerial acts
and duties relating to the payment of all indebtedness, taxes and assessments
due, or to become due, with regard to any property of the Company; (viii)
purchasing and maintaining insurance on behalf of the Company against any
liability, expense or claim asserted against or incurred by, or on behalf of,
the Company or its assets; (ix) transacting the Company's business under an
assumed name or name other than its name as set forth in the Certificate; (x)
appointing any Member or other Person as agent for service of process on the
Company as required by the law of any jurisdiction in which the Company
transacts business; (xi) commencing, prosecuting or defending any proceeding in
the Company's name; and (xii) doing such other acts as may facilitate the
Company's exercise of its powers; PROVIDED, HOWEVER, that all such acts shall
fall within the purposes of the Company as set forth in Section 3.01; provided
further, that the Control Manager must provide prior written approval of (i) any
acquisition or disposition of assets (other than actions taken in the ordinary
course of business in connection with collections on any Receivables or other
Collateral); (ii) the entry into, or approval of, any material modification of
any of the Receivables Purchase Agreements between the Company and any of the
Sellers or any material obligations or agreements related thereto (iii) any
decision that could reasonably be viewed to result in a material failure to make
timely and full payment of any Mandatory Debenture Prepayment to PIBL; and (iv)
the determination of the Servicing Costs and Sellers' Override that is to be
paid out of the Lockbox Account.
(c) Notwithstanding anything in this Agreement to the
contrary, the Company shall at all times have at least one (1) Independent
Member, and no action of the type described
8
in Article Six shall occur without the consent of each Independent Member. The
appointment of a replacement or successor to Xxxxxxx X. Xxxxxxxx & Associates,
LLC, in its capacity as Independent Member, must be approved in writing by the
Majority Debenture Holder before such appointment will become effective.
(d) Each Member irrevocably appoints the other Members as
its attorney-in-fact on its behalf and in its stead to execute and swear to any
amendment to the Certificate and file any writing, and to give any notice that
may be required by any rule or law and that may be necessary or appropriate in
order to effect any action by or on behalf of the Company or the Members taken
as provided in this Agreement or that may be necessary or appropriate to correct
any errors or omissions. This power of attorney is coupled with an interest and
shall not be revoked by the act of any Member. This power of attorney shall
survive and not be affected by an assignment by any Member of its limited
liability company interest in the Company; PROVIDED, HOWEVER, that, where a
Member's entire limited liability company interest is assigned to an assignee
who becomes a substitute Member in its stead, such power shall survive for the
sole purpose of enabling such Member to effect such substitution. Each Member
shall provide seven (7) days' prior written notice of actions to be taken as
attorney-in-fact on behalf of another Member and the acting Member shall be
authorized to take such actions unless the other Member objects in writing
during such notice period.
(e) A copy of the Certificate or amendments to the
Certificate will be provided to each Member upon written request to the Company.
(f) Subject to the other provisions of this Article and
Article Six, the Members shall have full power to act for and to bind the
Company to the extent provided by Delaware law. Every contract, note, mortgage,
lease, deed or other instrument or agreement executed by any Member shall be
conclusive evidence that at the time of execution, the Company was then in
existence, that this Agreement had not theretofore been terminated or amended in
any manner and that the execution and delivery of such instrument was duly
authorized by the Members. A Manager may bind the Company only to the extent
authorized by the Members.
Section 5.02 LIMITATIONS ON POWERS OF MEMBERS. Notwithstanding any
other provision of this Agreement, no act shall be taken, sum expended, decision
made, obligation incurred or power exercised by any Member on behalf of the
Company, without prior written notice to all Members outlining the proposed
action followed by the written consent of the Control Manager with respect to:
(i) any mortgage, grant of security interest, pledge or encumbrance of any asset
of the Company; (ii) any merger of the Company with another entity; (iii) a
transaction involving an actual or potential conflict of interest between a
Member and the Company; (iv) any material change in the character of the
business and affairs of the Company; or (v) any act that would contravene in a
material respect any provision of this Agreement or the Act.
Section 5.03 SELF DEALING. Any Member and any Affiliate thereof may
deal with the Company, directly or indirectly, as vendor, purchaser, employee,
agent or otherwise. No contract or other act of the Company shall be voidable or
affected in any manner by the fact that a Member or an Affiliate thereof is
directly or indirectly interested in such contract or other act apart from its
interest as a Member, nor shall any Member or an Affiliate thereof be
accountable
9
to the Company or the other Members in respect of any profits directly or
indirectly realized by reason of such contract or other act, and such interested
Member shall be eligible to vote or take any other action as a Member in respect
of such contract or other act as it would be entitled were it or its Affiliate
not interested therein. Notwithstanding the foregoing, (i) any direct or
indirect interest of a Member or an Affiliate thereof in any contract or other
act, other than its interest as a Member, shall be disclosed to all other
Members, (ii) such contract or other act shall be approved by a Majority
Interest unless the same is specifically authorized herein, and (iii) the
Members shall not receive or hold any property of the Company as collateral
security in respect of any claim against the Company.
Section 5.04 STANDARD OF CARE; LIABILITY. Each Member and its
respective directors, officers, stockholders and Affiliates shall discharge its
duties in good faith, with the care an ordinarily prudent person in a like
position would exercise under similar circumstances, and in a manner he
reasonably believes to be in the best interests of the Company as required by
this Agreement or the Act. A Member shall not be liable for monetary damages to
the Company for any breach of any such duties except for receipt of a financial
benefit to which the Member is not entitled, voting for or assenting to a
distribution to Members in violation of this Agreement or the Act, or a knowing
violation of the law.
Section 5.05 COMPENSATION. The Company shall reimburse each Member
for any reasonable out-of-pocket expenses incurred on behalf of the Company. In
addition, any Member may receive reasonable compensation for any services
rendered to the Company approved by a Majority Interest.
Section 5.06 VOTING; MEETINGS OF MEMBERS. All Members shall be
entitled to vote on any matter submitted to a vote of the Members. Unless a
greater vote is required by the Act or this Agreement, the affirmative vote of a
Majority Interest shall be required. Although it is the express intent of the
Members that there shall not be any required (or regularly scheduled) meetings
of the Company, meetings may be called upon the written request of the Control
Manager. Meetings of Members for the transaction of such business as may
properly come before the Members may be held at such place, on such date and at
such time as a Majority Interest shall determine. The Company shall deliver or
mail written notice stating the date, time, place and purposes of any meeting to
each Member entitled to vote at the meeting. Such notice shall be given not less
than ten (10) nor more than sixty (60) days before the date of the meeting.
Section 5.07 CONSENT. Any action required or permitted to be taken at
a regular or special meeting of the Members may be taken without a meeting, if
the Members unanimously consent, in writing, to take the proposed action. Every
written consent shall bear the date of consent in lieu of meeting and the
signature of each Member who signs the consent.
Section 5.08 INDEPENDENT MEMBER. The Company shall at all times have
at least one Member (each, an "Independent Member") that shall be an Independent
Person.
Section 5.09 OBLIGATIONS OF MANAGERS. Except as otherwise provided by
the Act:
(a) 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
10
Company, and no Manager shall be obligated personally for any such debt,
obligation, or liability of the Company solely by reason of being a
Manager of the Company;
(b) no Manager shall be required to make any Capital
Contribution in the form of cash to the Company; and
(c) no Manager shall be (i) entitled to receive any Profits
or (ii) liable for any Losses of the Company.
ARTICLE SIX
POWER TO INSTITUTE BANKRUPTCY OR INSOLVENCY PROCEEDINGS
Section 6.01 UNANIMOUS VOTE REQUIRED. Notwithstanding any other
provision of this Agreement and any provision of law that otherwise so empowers
the Company, the Company shall not, without (i) the prior written consent of the
Control Manager and (ii) the affirmative vote of one hundred percent (100%) of
the Members of the Company, including all Independent Members, institute
proceedings to be adjudicated a bankrupt or insolvent, or consent to the
institution of bankruptcy or insolvency proceedings against it, or file a
petition seeking, or consent to, reorganization or relief under any applicable
federal or state law relating to bankruptcy, or consent to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator or other similar official
of the Company or a substantial part of its property, or make any assignment for
the benefit of creditors, or admit in writing its inability to pay its debts
generally as they become due, or take any limited liability company action in
furtherance of any such action.
Section 6.02 VOTING ON BANKRUPTCY OR INSOLVENCY. All Members,
including each Independent Member, shall be entitled to vote on any proposal of
the type described in Section 6.01. The affirmative vote of one hundred percent
(100%) of the Members, including each Independent Member, entitled to vote on
such a proposal shall be required for such a proposal to be adopted.
ARTICLE SEVEN
CAPITAL ACCOUNTS; PROFITS AND LOSSES; DISTRIBUTIONS
Section 7.01 CAPITAL ACCOUNTS. A capital account shall be maintained
for each Member (each, a "Capital Account"), to which contributions and Profits
shall be credited and against which distributions and Losses shall be charged.
Capital Accounts shall be maintained in accordance with the accounting
principles of Code Section 704 and the Treasury Regulations thereunder.
Section 7.02 ALLOCATION OF PROFITS AND LOSSES.
The Profits and Losses of the Company shall be determined as of the end
of each Fiscal Year of the Company and shall be allocated among the Members;
PROVIDED, HOWEVER, that Independent Member will have no interest in the Profits
and Losses of the Company.
11
Section 7.03 DISTRIBUTIONS.
(a) The Company shall distribute to the Members such sums as
a Majority Interest determines to be available for distribution and not required
to provide for current or anticipated Company needs. All distributions shall be
made to the Members.
(b) No distributions shall be declared and paid unless,
after the distribution is made, the Company would be able to pay its debts as
they become due in the usual course of business and the assets of the Company
are in excess of the sum of (i) the Company's liabilities, plus (ii) the amount
that would be needed to satisfy the preferential rights of other Members upon
dissolution that are superior to the rights of the Members receiving the
distribution.
(c) The Company shall not be required to make a distribution
to a Member on account of its interest in the Company if such distribution would
violate Section 18-607 of the Act or other applicable law.
ARTICLE EIGHT
EXCULPATION OF LIABILITY; INDEMNIFICATION
Section 8.01 EXCULPATION OF LIABILITY. 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 of the Company.
Section 8.02 INDEMNIFICATION. The Company hereby agrees to indemnify
each Member, Manager, employee or agent of the Company, and each director,
officer, employee or Affiliate of a Member, who was or is a party or is
threatened to be made a party to a threatened, pending or completed action, suit
or proceeding, whether civil, criminal, administrative or investigative, and
whether formal or informal (other than an action by or in the right of the
Company) by reason of the fact that such Person is or was a Member, employee or
agent of the Company against expenses (including reasonable attorneys' fees),
judgments, penalties, fines and amounts paid in settlement actually and
reasonably incurred by such Person in connection with the action, suit or
proceeding.
Section 8.03 FIDUCIARY DUTY. To the extent that, at law or in equity,
a Member, director, officer, employee or Affiliate of a Member, or a Manager
(each, a "Covered Person") has duties (including fiduciary duties) and
liabilities relating thereto to the Company or to any other Covered Person, a
Covered Person acting under this Agreement shall not be liable to the Company or
to any Member for its good faith reliance on the provisions of this Agreement.
The provisions of this Agreement, to the extent that they restrict the duties
and liabilities of a Covered Person otherwise existing at law or in equity, are
agreed by the Members to replace such other duties and liabilities of such
Covered Person.
12
ARTICLE NINE
TERM OF COMPANY
Section 9.01 COMMENCEMENT. The term of the Company shall commence
upon the filing of the Certificate with the Delaware Secretary of State. The
bankruptcy of a Member or the occurrence of any other event under Section 18-304
of the Act shall not cause a Member to cease to be a Member of the Company and
upon the occurrence of such an event, the business of the Company shall continue
without dissolution.
Section 9.02 DISSOLUTION. The Company shall be dissolved and its
affairs wound up upon the occurrence of any of the following events: (i) the
sale or other disposition of substantially all of the assets of the Company;
(ii) the written consent thereto of all of the Members; (iii) the retirement,
expulsion or dissolution of a Member; PROVIDED, HOWEVER, that the Company shall
not dissolve and be wound up if within ninety (90) days after such event, all
remaining Members agree in writing to continue the business of the Company and
to admit one or more Members as necessary or desired; or (iv) the entry of a
decree of judicial dissolution pursuant to Section 18-802 of the Act.
ARTICLE TEN
APPLICATION OF ASSETS
Section 10.01 APPLICATION OF ASSETS. Upon dissolution of the Company,
the Company shall cease carrying on its business and affairs and shall commence
winding up of the Company's business and affairs and complete the winding up as
soon as practicable. The Company's affairs shall be concluded by a Member or
Members selected in writing by a Majority Interest. Except when the Company has
rated obligations outstanding, the assets of the Company may be liquidated or
distributed in kind, as determined by a Majority Interest, and the same shall
first be applied to-the payment of, or to a reasonable reserve for the payment
of, the Company's liabilities (including such provision for contingent,
conditional or unmatured liabilities as a Majority Interest shall deem
appropriate) and then to Members (other than Independent Member). If the Company
has rated obligations outstanding, the Company will not liquidate any assets
that are subject to a security interest in favor of the holders of such rated
obligations without the consent of such holders. If the assets of the Company
shall not be sufficient to pay all of the liabilities of the Company, to the
fullest extent permitted by the Act, no assets of the Company may be sold or
disposed of without the written consent of all of the holders of outstanding
securities issued by any trust formed in respect of a transaction to which the
Company is a party. To the extent that Company assets cannot either be sold
without undue loss or readily divided for distribution in kind to the Members,
then the Company may, as determined by a Majority Interest, convey those assets
to a trust or other suitable holding entity established for the benefit of the
Members in order to permit the assets to be sold without undue loss and the
proceeds thereof distributed to the Members at a future date. The legal form of
the holding entity, the identity of the trustee or other fiduciary and the terms
of its governing instrument shall be determined by a Majority Interest.
13
Section 10.02 TERMINATION. The Company shall terminate when all 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 and the Certificate shall
have been cancelled in the manner required by the Act.
Section 10.03 CLAIMS OF THE MEMBERS. The 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 not have recourse against the Company or any other Member.
ARTICLE ELEVEN
RESTRICTION ON TRANSFERS OF INTERESTS
Section 11.01 RESTRICTION ON TRANSFERS OF INTERESTS. No Member may
assign, pledge or otherwise transfer its interest in the Company in whole or
part. Any attempt by a Member to transfer its interest shall be null and void.
ARTICLE TWELVE
INVESTMENT REPRESENTATION
Section 12.01 INVESTMENT REPRESENTATION. The Members represent to each
other and to the Company that they are acquiring their respective interests in
the Company for their own accounts, and without a view to selling or pledging
them.
ARTICLE THIRTEEN
MISCELLANEOUS PROVISIONS
Section 13.01 LIMITATIONS ON AMENDMENT. The Company shall not, without
the prior written consent of each nationally recognized rating agency that has
rated any securities issued and outstanding pursuant to any pooling and
servicing agreement, indenture, trust agreement or other similar agreement
entered into by the Company or any Affiliate of the Company, amend, alter,
change or repeal Article Three, Section 5.08, Article Six or this Section 13.01.
Subject to the foregoing limitation, the Company reserves the right to amend,
alter, change or repeal any provision contained in this Agreement in the manner
now or hereafter prescribed by statute or applicable law, and all rights
conferred upon Members herein are granted subject to this reservation.
Section 13.02 BOOKS OF ACCOUNT: REPORTS.
(a) The Company shall keep true and complete books of
account and records of all Company transactions. The books of account and
records shall be kept at the principal office of the Company. The Company shall
maintain at such office (i) a list of names and addresses of all Members; (ii) a
copy of the Certificate; (iii) copies of the Company's federal, state and local
income tax returns and reports for the three (3) most recent years; (iv) copies
of
14
this Agreement; and (v) copies of the financial statements of the Company for
the three (3) most recent years. Such Company records shall be available to any
Member or its designated representative during ordinary business hours at the
reasonable request and expense of such Member.
(b) The Company will use its best efforts to furnish, or
cause to be furnished, to Members the following items on the date indicated: (i)
annually by June 30, (A) an annual report consisting of an income statement for
the prior year and a balance sheet as of the year ended, and (B) Member
information tax returns (Schedule K-1), and (ii) as required, such other
information concerning the Company and the Property of the Company as may be
appropriate in order to make full and fair disclosure to the Members of the
current financial and operating conditions of the Company.
Section 13.03 BANK ACCOUNTS AND INVESTMENT OF FUNDS. All funds of the
Company shall be deposited in its name in such checking accounts, savings
accounts, time deposits or certificates of deposit or shall be invested in such
other manner, as shall be designated by a Majority Interest from time to time.
Withdrawals shall be made upon such signature or signatures as a Majority
Interest may designate.
Section 13.04 ACCOUNTING DECISIONS. All decisions as to accounting
matters, except as specifically provided to the contrary herein, shall be made
by a Majority Interest in accordance with generally accepted accounting
principles consistently applied. Such decisions shall be acceptable to the
accountants retained by the Company, and a Majority Interest may rely upon the
advice of the accountants as to whether such decisions are in accordance with
generally accepted accounting principles.
Section 13.05 PARTNERSHIP INTENDED SOLELY FOR TAX PURPOSES. The
Members have formed the Company as a Delaware limited liability company under
the Act and do not intend to form a general or limited partnership under
Delaware, Massachusetts or any other state law. The Members do not intend to be
partners to one another or to any third party. The Members intend the Company to
be classified and treated as a partnership solely for federal and state income
taxation purposes. Each Member agrees to act consistently with the foregoing
provisions of this Section 13.05 for all purposes, including, without
limitation, for purposes of reporting the transactions contemplated herein to
the United States Internal Revenue Service and all state and local taxing
authorities. A Majority Interest may rely upon the advice of the accountants
retained by the Company as to the availability and effect of all such elections
for tax purposes.
Section 13.06 ENTIRE AGREEMENT. This Agreement constitutes the entire
Agreement between the parties and may be modified only as provided herein. No
representations or oral or implied agreements have been made by any party hereto
or its agent, and no party to this Agreement has relied upon any representation
or agreement not set forth herein. This Agreement supersedes any and all other
agreements, either oral or written, among the Company and its Members.
Section 13.07 NOTICES. Except as provided below, all communications
and notices provided for hereunder shall be in writing (including telecopy or
electronic facsimile transmission or similar writing) and shall be given to the
other party at its address or telecopy
15
numbers set forth on Exhibit A hereto, or at such other address or telecopy
number as such party may hereafter specify for the purposes of notice to the
other party hereto. Each such notice or other communication shall be effective
(i) if given by telecopy, upon receipt thereof, (ii) if given by mail, three (3)
business days after the time such communication is deposited in the mails with
first-class postage prepaid or (iii) if given by any other means, when received
at the address specified in this Section 13.07.
Section 13.08 CONSENT OF MEMBERS. Various provisions of this Agreement
require or permit the consent, agreement, approval or disapproval, written or
otherwise, of the Members or some specified proportion thereof. In any such
case, the Company may give all Members written notice that any Member who does
not indicate its disapproval by written notice to the Company within a specified
period of time (not less than thirty (30) days after mailing of the notice)
shall be deemed to have given its consent or approval to the action or event or
to have made the agreement referred to in the notice. In such event, any Member
who does not indicate its disapproval by written notice to the Company within
the time specified shall be deemed to have given its written consent, approval,
disapproval or agreement.
Section 13.09 FURTHER EXECUTION. Upon request of the Company from time
to time, the Members shall execute and swear to or acknowledge any amended
Certificate and any other writing that may be required by any rule or law or
that may be appropriate to the effecting of any action by or on behalf of the
Company or the Members that has been taken in accordance with the provisions of
this Agreement.
Section 13.10 BINDING EFFECT. This Agreement shall be binding upon and
shall inure to the benefit of the parties, their successors and permitted
assigns. None of the provisions of this Agreement shall be construed as for the
benefit of or as enforceable by any creditor of the Company or the Members or
any other Person not a party to this Agreement.
Section 13.11 SEVERABILITY. If any one or more of the covenants,
agreements, provisions or terms of this Agreement shall be for any reason
whatsoever held invalid, then such covenants, agreements, provisions or terms
shall be deemed severable from the remaining covenants, agreements, provisions
or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of any security or
the rights of the holders thereof.
Section 13.12 CAPTIONS, HEADINGS AND TITLES. All captions, headings
and title used in this Agreement are for convenience only, do not form a
substantive part of this Agreement and shall not restrict or enlarge any
substantive provisions of this Agreement.
Section 13.13 COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original and all of which
shall constitute one instrument. The Company shall have custody of the
counterparts executed in the aggregate by all Members.
16
Section 13.14 DELAWARE LAW TO CONTROL. This Agreement shall be
governed by, and all questions with respect to the construction of this
Agreement and the rights and liabilities of the parties hereto shall be
determined in accordance with, the internal laws of the State of Delaware,
without regard to any otherwise applicable principles of conflicts of laws.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS.]
17
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed by their respective officers as of the day and year first above
written.
MED DIVERSIFIED, INC., as a Member
By:
---------------------------
Name:
Title:
XXXXXXX X. XXXXXXXX & ASSOCIATES, LLC,
as Independent Member
By:
---------------------------
Name:
Title:
18
EXHIBIT A
Capital Membership
Member's Name and Address Contributions Percentages
------------------------- ------------------- -----------
Med Diversified, Inc.
000 Xxxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxxxxxx 00000 $1,000 99%
======
Xxxxxxx X. Xxxxxxxx Associates LLC
00 Xxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000 Services as 1%
Independent Member
Total 100%
===
[DRAFT OF 6/24/02]
================================================================================
AMERICAN REIMBURSEMENT, LLC
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
Between
MED DIVERSIFIED, INC.,
And
XXXXXXX X. XXXXXXXX & ASSOCIATES, LLC
as Members
Dated as of June 27, 2002
================================================================================
THE SECURITIES REPRESENTED BY THIS AMENDED AND RESTATED
LIMITED
LIABILITY COMPANY AGREEMENT HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND
EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, 15 U.S.C. Section 15b ET
SEQ., AS AMENDED (THE "FEDERAL ACT"), IN RELIANCE UPON ONE (1) OR MORE
EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE FEDERAL ACT. IN ADDITION,
THE ISSUANCE OF THE SECURITIES REPRESENTED BY THIS AMENDED AND RESTATED
LIMITED
LIABILITY COMPANY AGREEMENT HAVE NOT BEEN QUALIFIED UNDER THE DELAWARE
SECURITIES ACT, THE CALIFORNIA CORPORATE SECURITIES LAW OF 1968 OR ANY OTHER
STATE SECURITIES LAWS (COLLECTIVELY, THE "STATE ACTS"), IN RELIANCE UPON ONE (1)
OR MORE EXEMPTIONS FROM THE REGISTRATION PROVISIONS OF THE STATE ACTS. IT IS
UNLAWFUL TO CONSUMMATE A SALE OR OTHER TRANSFER OF THE SECURITIES REPRESENTED BY
THIS AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT OR ANY INTEREST
THEREIN TO, OR TO RECEIVE ANY CONSIDERATION THEREFOR FROM, ANY PERSON OR ENTITY
WITHOUT THE OPINION OF COUNSEL FOR THE COMPANY THAT THE PROPOSED SALE OR OTHER
TRANSFER OF THE SECURITIES DO NOT AFFECT THE AVAILABILITY TO THE COMPANY OF SUCH
EXEMPTIONS FROM REGISTRATION AND QUALIFICATION, AND THAT SUCH PROPOSED SALE OR
OTHER TRANSFER IS IN COMPLIANCE WITH ALL APPLICABLE STATE AND FEDERAL SECURITIES
LAWS. THE TRANSFER OF THE SECURITIES REPRESENTED BY THIS AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT ARE FURTHER RESTRICTED UNDER THE TERMS OF
THIS AGREEMENT.
