Preview
IN THE CIRCUIT COURT OF THE
~ FIFTEENTH JUDICIAL CIRCUIT IN
AND pe BEACH COUNTY,
FLORIDA
4.002138 ¥XK NB
CASE 50 2008 C
TERESA-MARIA CORTINAS, M.D., P.A.
Plaintiff,
Jury Trial Demanded
VANCED IMAGING A, IATES, LLC,
IDTOWN IMAGING, LL BERT D.-BURKE,
-D., P.L.. AND ROBERT D. BURKE,
Defendants. . \
ny
Plaintiff, TERESA MARIA CORTINAS, M.D., P.A. (“TCPA”) files this Complaint
against Defendants, ADVANCED IMAGING ASSOCIATES, LLC (“AIA”), MIDTOWN
IMAGING, LLC (“Midtown”), ROBERT D. BURKE, M.D., P.L. (‘RBPL”), and ROBERT D.
Ge
BURKE (“Burke”), and states as follows:
‘ INTRODUCTION
1. This is a business litigation action brought by Dr. Teresa M. Cortinas
(“Cortinas”), through her professional corporation TCPA, to recover for the following:
a. unpaid compensation against AIA, her former radiology practice group;
b. conversion against Midtown for wrongful taking custody of, and refusal to
turn over, TCPA’s December 2007 compensation check; and
c. breach of fiduciary duty and unjust enrichment against Burke and RBPL
for unjustly benefiting themselves to the detriment of TCPA.
v\The Parties
2. TCPA is a Florida professional corporation with its principal place of business in
Palm Beach County, Florida. TCPA was an equity member of AIA from 2004 through 2007.
TCPA’s sole shareholder is Cortinas.
3. AIA is a Florida limited liability company with its principal place of business in
Palm Beach County, Florida. In 2007, AIA had four 25% equity members of AIA. They were as
follows: RBPL (25%); Bradley M. Cohen, M.D., P.A. (“BCPA”) (25%); TCPA (25%), and
Walter E. Wojcicki, M.D., PH.D., P.A. (“WWPA”) (25%).
4, Burke is the managing member of AIA and is the president and co-managing
member of Midtown. Burke also owns a substantial ownership interest in Midtown.
5. RBPL is Burke’s professional limited liability company with its principal place of
business in Palm Beach County, Florida. Burke is the sole member of RBPL.
6. Midtown is a Florida limited liability company with its principal place of business
in Palm Beach County, Florida. Burke is the president of Midtown and he is the co-managing
member and co-owner with Palm Beach Capital Partners (“PBCP”). Midtown provides
radiology imaging services to medical patients, and has an exclusive arrangement with AIA
whereby AIA’s radiologists perform all professional reading services for Midtown’s patients (the
“Radiology Services”).
JURISDICTION AND VENUE
7. This matter has an amount in controversy that exceeds $15,000 exclusive of
attorneys’ fees, costs, and interest. Jurisdiction and venue are proper in Palm Beach County
because the acts giving rise to TCPA’s causes of action arose in Palm Beach County.GENERAL ALLEGATIONS
8. In 2002, Cortinas joined AIA’s practice as an associate radiologist and, in 2004,
became an equity member. In 2004, Cortinas’ professional corporation, TCPA, and Burke’s
professional limited liability company, RBPL, were each 50% equity members in AIA. TCPA
and RBPL later became 25% equity members when BCPA and WWPA each joined AIA as 25%
equity members.
9. From 2004 through the present, AIA has served as the exclusive provider of the
Radiology Services for Midtown, which is also co-managed and co-owned by Burke.
10. During these years, AIA’s practice was bustling and profitable for AIA’s
physicians. But Burke had an abusive, self-aggrandizing, and sexist management style that made
AIA a difficult and alienating place to work for both Cortinas and many of AIA’s physicians and
staff. In fact in 2004, two equity members, Dr. Randy Sag and Dr. David Feldman, left AIA’s
practice because of Burke’s abusive management style and his refusal to demand that Midtown
compensate AIA at fair market value for the Radiology Services.
11. By 2005, the amount of Radiology Services required to be performed by AIA for
Midtown had become so substantial that Burke and Cortinas hired two additional associate
radiologists, Dr. Bradley C. Cohen (“Cohen”) and Dr. Walter E. Wojcicki (“Wojcicki”) to join
AIA.
12. In 2006, while Cortinas and Burke, through their professional corporations, were
still 50% equity members in AIA, Burke took four months of paid vacation from AIA. During
that same year, Cortinas likewise took four months vacation — three of which were used for her
maternity leave. But AIA, at Burke’s direction, only paid Cortinas for three months and refused
to pay her for the fourth month. Around that time, Burke expressed to Cortinas that he was
3angry that she had taken maternity leave from the practice.
13. By April 2007, Burke and Cortinas had invited Cohen and Wojcicki to participate
as equity members of AIA, and agreed to revise AIA’s ownership structure so that all four equity
members owned a 25% interest.
14, In April 2007, Burke, Cortinas, Cohen, and Wojcicki, through their respective
professional corporations, executed the Restated Operating Agreement (“ROA”), which provided
a 25% interest to each physician and made the ROA retroactive to January 1, 2007. The ROA is
attached as Exhibit 1.
15. As part of the plan for AIA’s revised ownership structure, Cortinas, Wojcicki and
Cohen also communicated to Burke their dissatisfaction with AIA’s compensation for the
Radiology Services, which was well below fair market value. AIA had been getting paid 14% of
Midtown’s net collected revenues, while fair market value for the Radiology Services is
estimated at between 16.6% and 22.6%.
16. It was in Burke’s self-interest as the president, co-manager and co-owner of
Midtown to pay AIA as little as possible for the Radiology Services. The less that AIA was paid,
the more Dr. Burke earned from Midtown, i.e., any profits earned by AIA were split between
AIA’s four members, while the profits earned by Midtown were only split between Burke and
PBCP. As such, Burke’s role as manager and a principal owner in both AIA and Midtown
presented a conflict of interest that influenced Burke’s management decisions to the detriment of
his AIA co-members.
17. By March 2007, tensions within AIA had risen to the level of a near mutiny by
Burke’s co-members against him. The co-members’ intense dissatisfaction with Burke was the
result of, among other things, the below fair market value compensation that Midtown was
4paying AJA for the Radiology Services, and Burke’s abusive, self-aggrandizing, and sexist
management style.
18. When Burke’s co-members communicated their dissatisfaction to Burke in March
2007, Burke wrote an e-mail on March 25, 2007 to his co-members indicating that he was
withdrawing from all management responsibilities from AIA and planning to minimize his
reading duties going forward. A copy of Burke’s March 25, 2007 e-mail is attached as Exhibit 2.
19. On the heels of Burke’s purported withdrawal, on March 27, 2007, Cortinas,
Wojcicki, and Cohen were successful in compelling a “sit down” with Midtown to increase
AIA’s compensation. Richard Schlanger and Nathan Ward of PBCP (Midtown’s majority
member), and Kevin Johnson (“Johnson”), Midtown’s Chief Financial Officer, attended the
meeting.
20. At this meeting, the AIA members demanded fair market value compensation for
the Radiology Services provided to Midtown. The compensation figures were memorialized in a
chart (the “Chart”) prepared by Midtown and agreed to by AIA, which is attached as Exhibit 3.
21. | The Chart projected Midtown’s 2007 revenues as $28,163,963 and created a
compensation floor of 14% of Midtown’s net collected revenues, plus some additional outside
fees, as compensation for AIA’s Radiology Services. Pursuant to the Chart, AIA’s projected
2007 revenues were $4,302,955, and Midtown agreed to pay AIA a minimum monthly payment
of $366,667 for the remainder of 2007.
22. Pursuant to the Chart, Midtown also agreed that at the end of 2007, Midtown
would review what “actually came through [Midtown] and apply the above formula paying any
overage that may have occurred.” (Emphasis added). As such, the parties agreed that the
$366,667 would serve as the minimum compensation to be paid to AIA and any “overage” that
5Midtown received would be distributed to AIA at year end.
23. Between the spring and late summer of 2007, Midtown continued to pay AIA in
accordance with the agreement set forth in the Chart, i.¢., $366,667 monthly.
24. But by September 2007, Burke had continued his involvement in AIA’s
management notwithstanding his March 2007 announcement that he would be withdrawing from
his management duties. As such, the working conditions at AIA continued to worsen, which led
to the ongoing resignations of AIA’s physicians and made the working environment intolerable
for Cortinas and Wojcicki.
25. On September 11, 2007, Cortinas provided written notice to AIA that she was
resigning from AIA effective as of December 31, 2007. On October 19, 2007, Wojcicki also
resigned effective as of January 18, 2008.
26. In response to Cortinas’ and Wojcicki’s notices of resignation, Midtown paid AIA
only $300,000 for November and December 2007, creating a two month shortfall of the monies
due to AIA of $66,667 per month.
27. In addition, AIA, Midtown, and Burke, then jointly decided that AIA was not
going to pay Cortinas (through TCPA) her December 2007 compensation, which is calculated to
be $52,480, and which was paid to every member of AIA except for Cortinas. In fact, when
Cortinas was communicating with her colleague, Cohen, about the status of her December check,
Cohen informed her that he had turned over custody of the check to Johnson at Midtown.
28. Midtown, acting through Johnson, and AIA then manufactured a variety of
inconsistent explanations as to why Midtown and AJA were refusing to turn over possession of
her December compensation check. These explanations were as follows:
a. First, Johnson said that the increased compensation set forth in the Chart
6was intended only to be a reward to Cortinas if she stayed with AIA. Therefore, she was
not entitled to the check;
b. Second, Johnson said that Cortinas had not complied with her duties as an
AIA member because she had not provided proof that she had purchased “tail” coverage
and that “continuous coverage” was insufficient;
c. Third, Johnson said that Cortinas was not entitled to her December check
unless she signed a general release; and
d. Fourth, Johnson said that the locum tenens (temporary doctors) expenses
were unexpectedly high for the fourth quarter of 2007 and, therefore, there was no money
to pay TCPA, notwithstanding that Burke, Cohen, and Wojcicki all were paid their
December compensation.
As such, it became evident to Cortinas that Midtown, AIA and Burke would manufacture
whatever reasons it could muster to justify why Cortinas was not entitled to her December
compensation.
29. TCPA also is entitled to compensation from AIA pursuant to Section 5.6 of the
ROA. That section provides TCPA is entitled to its share of “any technical revenues paid to and
received by [AIA] or any Member on behalf of Company.” This means that TCPA is entitled to
its share of any technical revenues received by AJA, Burke or RBPL.
30. As a result of the various breaches and wrongful conduct committed by AIA,
Midtown, RBPL and Burke, as set forth in the causes of action below, TCPA has suffered
damages.
31. Any necessary condition precedent has been performed.CAUSES OF ACTION
Count I
Breach of Contract Against AIA
32. | TCPA realleges paragraphs | through 31.
33. | TCPA had a contract with AIA to pay certain compensation to TCPA in 2007, the
terms of which were memorialized in the Chart.
34. AIA materially breached its contract with TCPA by:
a. failing to pay TCPA its compensation of $52,480 for December 2007;
b. failing to pay TCPA approximately $22,000 per month for November and
December 2007; and
c. failing to pay TCPA for its share of any overages that were owed to AIA
by Midtown.
35. AIA’s breaches have caused damages to TCPA.
WHEREFORE, TCPA requests a judgment that awards damages, costs, and interest
against AIA and any other relief that the Court deems just.
Count II
Breach of Contract Against AIA, Burke and RBPL
36. | TCPA realleges paragraphs | through 31.
37. TCPA entered into the ROA with AIA, Burke and RBPL.
38. Section 5.6 of the ROA provides that TCPA is entitled to its share of “any
technical revenues paid to and received by [AIA] or any Member on behalf of Company.” This
means that TCPA is entitled to its share of any technical revenues received by AIA, Burke and
RBPL.
39. | TCPA has given notice of withdrawal of her membership in AIA and has not
8received its share of any technical revenues received by AIA, Burke, or RBPL.
40. AIA, Burke, and RBPL, therefore, have breached Section 5.6 of the ROA by
failing to pay TCPA.
41. AIA, Burke, and RBPL’s breaches have caused damages to TCPA.
WHEREFORE, TCPA requests a judgment that awards damages, costs, and interest
against AIA and any other relief that the Court deems just.
Count Il
Breach of Contract Against AIA
42. | TCPA realleges paragraphs | through 31.
43. | TCPA entered into an oral contract with AIA whereby Cortinas and Burke in
2006 both, through their professional corporations, were 50% equity members of AIA, were
entitled to the same number of months of paid vacation.
44. In 2006, Burke took four months of paid vacation from AIA.
45. In 2006, Cortinas likewise took four months vacation — three of which were used
for her maternity leave. But AIA, at Burke’s direction, paid Cortinas only for three months and
refused to pay for the fourth month. Burke expressed to Cortinas that he was angry that she had
taken maternity leave.
46. AIA’s failure to provide TCPA its compensation for December 2006 constituted a
breach of the parties’ oral contract.
47. As a result of AIA’s breach, TCPA has suffered damages in the amount of
approximately $60,000.
WHEREFORE, TCPA requests a judgment that awards damages, costs, and interest
against AIA and any other relief that the Court deems just.Count IV
Unjust Enrichment Against AIA
48. | TCPA realleges paragraphs 1 through 31.
49. AIA has unjustly enriched itself to the detriment of TCPA by doing the following:
a. failing to pay TCPA its compensation for December 2007 in the amount of
$52,480;
b. failing to pay TCPA approximately $22,000 per month for November and
December 2007; and
c. refusing to provide TCPA vacation pay for December 2006 in an
approximate amount of $60,000.
50. It would be inequitable for Burke and RBPL to retain the benefit conferred upon
them by TCPA.
St. As a result of AIA’s unjust enrichment, TCPA has suffered damages.
WHEREFORE, TCPA requests a judgment that awards damages, costs, and interest
against AIA and any other relief that the Court deems just.
Count V
Conversion Against Midtown
52. TCPA realleges paragraphs 1 through 31.
53. | TCPA earned compensation from AIA in the amount of $52,480 for December
2007.
54. Johnson, as the agent for Midtown, took custody of and refused to turn over to
TCPA its compensation check for December 2007 (the “Check”).
55. When Cortinas and her husband, Joe Nelson (“Nelson”), each demanded that
10Johnson turn over possession of the Check to Cortinas and/or Nelson, Johnson refused.
56. | Midtown has intentionally and wrongfully exercised dominion over the Check
inconsistent with TCPA’s property rights.
57. Midtown’s conversion of the Check has caused damages to TCPA.
WHEREFORE, TCPA requests a judgment that awards damages, costs, and interest
against Midtown and any other relief that the Court deems just.
Count VI
Breach of Fiduciary Duty Against RBPL and Burke
58. | TCPA realleges paragraphs | through 31.
59. Burke and RBPL owed fiduciary duties to TCPA as the managing member and as
a co-member of AIA. These fiduciary duties included the utmost duty of loyalty to act in the
best interests of TCPA and AIA’s other members.
60. | Burke and RBPL breached the fiduciary duties they owed to TCPA and breached
the ROA by:
a. refusing to provide the December 2007 compensation payment to TCPA;
b. refusing to provide TCPA vacation pay for December 2006, where Burke
paid himself from AIA for four months of vacation pay; and
c. engaging in the following acts that constituted conflicts of interest and
harmed AIA’s members:
qd) paying his AIA co-members 14% of net collected revenues for
professional reading fees, which was substantially less than fair market value;
(2) receiving unearned compensation from AIA after August 2007;
(3) causing Midtown to retain over 80% of outside professionalreading fees instead of sharing such revenues with his AIA co-members;
(4) benefiting himself individually at the expense of his AIA co-
members by, without obtaining the consent of his co-members, requiring the
locum tenens to stay at a hotel that Burke owned at approximately twice the cost
of the other hotel in which they previously had stayed; and
(5) borrowing $80,000 on AIA’s behalf from Midtown without
obtaining the consent of AIA’s members.
61. RBPL and Burke’s breaches of their duties have caused damages to TCPA.
WHEREFORE, TCPA requests a judgment that awards damages, costs, and interest
against Burke and RBPL and any other relief that the Court deems just.
Count VII
Unjust Enrichment Against RBPL and Burke
62. TCPA realleges paragraphs | through 31.
63. Burke and RBPL have unjustly enriched themselves to the detriment of TCPA by
doing the following:
a. refusing to provide the December 2007 compensation payment to TCPA;
b. refusing to provide TCPA vacation pay for December 2006, where Burke
himself was paid for four months of vacation pay; and
c. engaging in the following acts that constituted conflicts of interest and
harmed AIA’s members:
qd) paying his AIA co-members 14% of net collected revenues for the
Radiology Services knowing that 14% was substantially less than fair market
value;(2) receiving unearned compensation from AIA after August 2007;
(3) causing Midtown to retain over 80% of outside professional
reading fees instead of sharing such revenues with his AIA co-members;
(4) benefiting himself individually at the expense of his AIA co-
members by, without obtaining the consent of his co-members, requiring the
locum tenens to stay at a hotel that Burke owned at approximately twice the cost
of the other hotel in which they previously had stayed; and
(5) borrowing $80,000 on AIA’s behalf from Midtown without
obtaining the consent of AIA’s members.
64. It would be inequitable for Burke and RBPL to retain the benefit conferred upon
them by TCPA.
65. As aresult of Burke and RBPL’s unjust enrichment, TCPA has suffered damages.
WHEREFORE, TCPA requests a judgment that awards damages, costs, and interest
against Burke and RBPL and any other relief that the Court deems just.
JuRY DEMAND
TCPA demands a jury trial on all issues that may be decided by jury.
Respectfully submitted,
McCaBE RaBIW, P.A.
Attomeys for Plaintiff
Trump Plaza Office Center
525 S. Flagler Drive, Suite 200
West Palm Beach, FL 33401
Tel: 561-659-7878
Fax: 561-659-7876
———_
Adam T. Rabin
Fla. Bar No. 985635
Ryon M. McCabe
Fla. Bar No. 09075
By:EXHIBIT 1RESTATED OPERATING AGREEMENT OF
ADVANCED IMAGING ASSOCIATES, LLCTABLE OF CONTENTS
ARTICLE I
INTRODUCTION... 21.2000 c eee n tne enes 1
Ll Formation of Limited Liability Company. . 1
1.2 Principal Place of Business. ........6 000 ce cece eee ee eee i
1.3 Term. 1
1.4 Purpose; Powers. . 1
1.5 Filings; Agent for Service of Process. .
1.6 Title to Property. 20.000. c ce enn ee 2
1.7. Payments of Individual Obligations. .. 7 7 2
1.8 Independent Activities; Transactions with Affiliates. ........+.04.000eeeeee 2
19 Definitions. 0.0.0... ete 3
ARTICLE II
MEMBERS; MEMBERSHIP INTERESTS ...... 000000 cece cece eens 5
2.1 Names, Addresses and Initial Capital Contributions of Members. .........-.- 5
2.2 Additional Contributions. 6
23 Member Loans or Services. ..... -6
2.4 Certificates for Membership Interests. -6
2.5. Capital and Capital Accounts. .... . -6
2.6 Admission of Additional Members. ..............0000005 li,
2.7. Limitation on Liability. ©... 00 eee .7
2.8 Authority, 0.000000. c cece iE .7
2.9 | No Member Responsible for Other Member's Commitment fleet lela ladedellede 7
ARTICLE II
MANAGEMENT AND CONTROL OF BUSINESS ......... 0-45
3.1 Managing Member. ...........0.+.-
3.2 Right to Rely on Managing Member. ...... :
3.3. Restrictions on Authority of Managing Member.. .........++++-++++++
ARTICLE IV
ACCOUNTING AND RECORDS. ... 0.0.00 c cece cent n tte nes 11
4.1 Records and Accounting. ........ 0600.0 sees
4.2 Access to Accounting Records and Quarterly Reports.
4.3. Annual and Tax Information. ..........-..-++
44 Accounting Decisions..............++
4.5 Income Tax Elections.ARTICLE V
ALLOCATIONS, DISTRIBUTIONS, AND INTERESTS ........+ +0400 000000 cee 12
5.1 Allocation of Net Income, Net Loss or Capital Gains. ........-......0.-55 12
5.2 Distribution of Available Cash. ... 6.6.0. cece cece teens 12
5.3 Allocation of Income and Loss and Distributions in Respect of Interests
Transferee. 0... cece eee renee 12
13
13
13
5.4 Division of Income and Expense.
5.5 Compensation .........+.++
5.6 Non-Competition and Non-Solicitation ........
5.7 Right of Members to Elect Part Time Status ....... 0+ 00sec cee v eee eevee 15
ARTICLE VI
CHANGES IN MEMBERS/ TRANSFERS ...... 2.0000 +0200 222 e eee ee Tteteteet 16
6.1 Death, Dissolution, Withdrawal or Bankruptcy of Member. ...... 0... 0-455 + 16
6.2 Transfer and Assignment of Members’ Interest. ..... -.. 16
6.3 Further Restrictions on Transfer. ©. 0.006.000 c cece eee 16
6.4 Substitute Members. .........-..4++0++
6.5 Effect of Transfer. .
6.6 Involuntary Transfers. eLaletelededededeledece lore eetce ett 17
6.7 Purchase of Percentage Interests in Event of Termination of Membership. ....18
6.8 Disability... 0.0... eee cent n eee eees 18
ARTICLE V0
DISSOLUTION «0... 0-00 ee eee eee
7 Dissolution of the Company. . .
ARTICLE VIII
INDEMNIFICATION |... 00000 eee eee eee 20
8.1 Indemnification of Managers and Members. ....... 0-0-0200 00 cee eee eee 20
ARTICLE IX
MISCELLANEOUS .... 0.00 0c cnet e nent eee tee 3
9.1 Complete Agreement.
9.2 Governing Law. .
9.3. Binding Effect.
9.4 Terms........
9.5 Headings. 7
9.6 Severability. ....
9.7 Multiple Counterparts. .....
9.8 Additional Documents and Acts.9.9 | No Third Party Beneficiary. ........ 6606 ccc ct eens 24
9.10 References to this Operating Agreement. ... 2.6... c eee tees 24
DAL Notices... 0... 6... eee eee
9.12 Amendments. pele decec ect tt ltt :
9.13 Title to Company Property. ......6. 0000 c cece eee 24
9.14 Reliance on Authority of Person Signing Operating Agreement.
9.15 Consent Provision. 0.00.0 .0 00000 eect eee eens
SIGNATURES . 200.2 t teens 25
EXHIBIT “A”
INITIAL CAPITAL CONTRIBUTIONS ...... 0.60.02 00 e eee eee ee 26
iliRESTATED OPERATING AGREEMENT OF
ADVANCED IMAGING ASSOCIATES, LLC
This RESTATED OPERATING AGREEMENT (‘‘Agreement”) is effective the 1* day of
January, 2007, (the “Effective Date”) by and among ADVANCED IMAGING ASSOCIATES, LLC
and the Members of ADVANCED IMAGING ASSOCIATES, LLC, (the “Company”), a limited
liability company created under the Florida Limited Liability Company Act (the “Act”), on the
following terms and conditions:
ARTICLE I
INTRODUCTION
1.1 Formation of Limited Liability Company. The Members have formed the Limited
Liability Company by filing Articles of Organization (the “Articles”) with the Department of State.
The Company’s business is conducted under the name ADVANCED IMAGING ASSOCIATES,
LLC until such time as all the Members designate otherwise and file amendments to the Articles in
accordance with applicable law.
1.2 Principal Place of Business. The principal place of business of the Company shall
initially be at 2529 Burns Road, Palm Beach Gardens, Florida 33410. The Members may agree to
change the principal place of business of the Company to any other place within or without the State
of Florida. The registered office of the Company in the State of Florida is located at 2529 Burns
Road, Palm Beach Gardens, Florida 33410.
1.3. Term. The term of the Company commenced as of the date the Articles were filed in
the office of the Secretary of State of the State of Florida in accordance with the Act and shall
continue until the winding up and liquidation of the Company and its business is completed
following a Dissolution Event, as provided in Section 7 hereof.
1.4 Purpose; Powers. The Company has the power to do any and all acts necessary,
appropriate, proper, advisable, incidental or convenient to or in furtherance of the business of the
Company. The business of the Company is to employ and provide radiology services to contracted
facilities in the State of Florida.
1.5 Filings; Agent for Service of Process.
(a) The Members shall take any and all actions reasonably necessary to perfect and
maintain the status of the Company as a limited liability company under the laws of the State of
Florida, including the preparation and filing of such amendments to the Articles and such other
assumed name certificates, documents, instruments and publications as may be required by law,
including, without limitation, action to reflect:
(i) achange in the Company name;
1(ii) a correction of false or erroneous statements in the Articles or the desire
of the Members to make a change in any statement therein in order that it shall accurately represent
the agreement among the Members; or
(iii) a change in the time for dissolution of the Company as stated in the
Articles and in this Agreement.
(b) The Members shall execute and cause to be filed original or amended documents
and shall take any and all other actions as may be reasonably necessary to perfect and maintain the
status of the Company as a limited liability company or similar type of entity under the laws of any
other jurisdictions in which the Company engages in business.
(c) The registered agent for service of process on the Company in the State of
Florida shall be Michael S. Singer, Esq. or any successor as appointed by the Members in accordance
with the Act.
(d) Upon the dissolution and completion of the winding up and liquidation of the
Company in accordance with Section 7 hereof, the Members shall promptly execute and cause to be
filed Articles of Dissolution in accordance with the Act and the laws of any other jurisdictions in
which the Members deem such filing necessary or advisable.
1.6 Title to Property. All property owned by the Company shall be owned by the Company
as an entity and no Member shall have any ownership interest in such property in its individual
name, and each Member’s interest in the Company shall be personal property for all purposes. At
all times after the Effective Date, the Company shall hold title to all of its property in the name of
the Company and not in the name of any Member.
1.7 Payments of Individual Obligations. The Company's credit and assets shall be used
solely for the benefit of the Company, and no asset of the Company shall be Transferred or
encumbered for, or in payment of, any individual obligation of any Member.
1.8 Independent Activities; Transactions with Affiliates.
Insofar as permitted by applicable law neither this Agreement nor any activity undertaken
pursuant hereto shall prevent any Member and/or his Affiliates from engaging in whatever activities
they choose, whether the same are competitive with the Company or otherwise, however, except for
relationships and activities that already exist as of the date of execution of this Agreement, no
Member may do any act (including providing radiology services of any sort) within or related to the
purpose of the Company (except for the benefit of the Company) set forth in Section 1.4 above
without the written consent of the Managing Member of the Company. Additionally, no Member
may commit any act in contravention of any of the agreements by or amongst Midtown Imaging,
LLC, Neuro-Imaging, LLC and/or Company.1.9 Definitions. As used herein, the following words and phrases have the following
meanings.
(a) “Act” means the Florida Limited Liability Company Act, as amended from
time to time.
(b) “Additional Capital Contributions” means, with respect to each Member, the
Capital Contributions made by such Member pursuant to Section 2.2 hereof.
(c) “Additional Member” means any person or Entity admitted as a Member
pursuant to Section 2.8 of this Operating Agreement.
(d) “Adjusted Capital Account Deficit” means, with respect to any Member, the
deficit balance, if any, in such Member's Capital Account as of the end of the relevant Allocation
Year, after giving effect to the following adjustments:
(i). Credit to such Capital Account any amounts which such Member is
deemed to be obligated to restore pursuant to the penultimate sentences in Sections 1.704-2(g)(1)
and 1.704-2(i)(5) of the Regulations; and
(ii) Debit to such Capital Account the items described in Sections 1.704-
1(b)(2)(ii)(a)(4), 1.704-1(0)(2)Gi)(A@)(5) and 1.704-1(b)(2)(ii)(a)(6) of the Regulations.
The foregoing definition of Adjusted Capital Account Deficit is intended to comply with the
provisions of Section 1.704-1(b)(2)(ii)(d) of the Regulations and shall be interpreted consistently
therewith.
(e) “Affiliate” means any individual, partnership, corporation, limited liability
company, trust, or other Entity or association, directly or indirectly, through one or more
intermediaries, controlling, controlled by, or under common control with a Member. The term
“control,” as used in the immediately preceding sentence, means, with respect to a corporation the
right to exercise, directly or indirectly, more than 50 percent of the voting rights attributable to the
controlled corporation, and, with respect to any individual , partnership, trust, other Entity or
association, the possession, directly or indirectly, of the power to direct or cause the direction of the
management or policies of the controlled Entity.
® “Available Cash” of the Company means all cash funds of the Company on
hand from time to time (other than cash funds obtained as contributions to the capital of the
Company by the Members and cash funds obtained from loans to the Company) after (i) payment
of all operating expenses of the Company as of such time, (ii) provision for payment of all
outstanding and unpaid current obligations of the Company as of such time, and (iii) provision for
a working capital reserve in accordance with Section 5.2 below.(g) “Bankruptcy” means, and a Member shall be deemed a “Bankrupt Member”
on (i) the entry of a decree or order for relief against the member by a court of competent jurisdiction
in any involuntary case brought against the Member under any bankruptcy, insolvency, or other
similar law (collectively, “Debtor Relief Laws”) generally affecting the rights of creditors and relief
of debtors now or hereafter in effect, (ii) the appointment of a receiver, liquidator, assignee,
custodian, trustee, sequestrator or other similar agent under applicable Debtor Relief laws for the
Member or for any substantial part of its assets or property, (iii) the ordering of the winding up or
liquidation of the Member’s affairs, (iv) the filing of a petition in any such involuntary bankruptcy
case that remains undismissed or suspended pursuant to Section 305 of the Federal Bankruptcy Code
(or any corresponding provision of any future United States bankruptcy law), (v) the commencement
by the Member of a voluntary case under any applicable Debtor Relief Law now or hereafter in
effect, (vi) the consent by the Member of a voluntary case under any applicable Debtor Relief law
now or hereafter in effect, (vi) the consent by the Member to the entry of an order for relief in an
involuntary case under any such law or to the appointment of or the taking of possession by a
receiver, liquidator, assignee, trustee, custodian; sequestrator or other similar agent under any
applicable Debtor Relief Laws for the Member or for any substantial part of its assets or property,
or (vii) the making by a Member of any general assignment for the benefit of its creditors.
(h) “Capital Account” means the individual accounts established and maintained
pursuant to Section 2.5(b) of this Operating Agreement.
(i) “Capital Contribution” means the total value of cash and agreed fair market
value of property contributed and agreed to be contributed to the Company by each Member, as
shown in Exhibit A, as the same may be amended from time to time. Any reference in this Operating
Agreement to the Capital Contribution of a then Member includes a Capital Contribution previously
made by any prior Member for the interest of such then Member, reduced by any distribution to such
Member in return of “Capital Contribution” as contemplated herein. Additional Capital
Contributions may be made only by a Member with its, his or her consent and with the consent of
the remaining Members.
G) “Code” means the Internal Revenue Code of 1986, as amended. All
references herein to sections of the Code include any corresponding provision or provisions of
succeeding law.
(k) | “Company” refers to ADVANCED IMAGING ASSOCIATES, LLC.
qa “Entity” means any association, corporation, general partnership, limited
partnership, limited liability company, joint stock association, joint venture, firm, trust, business
trust, cooperative, and foreign associations of like structure.
(m) “Founding Members” shall mean Robert D. Burke, M.D. and Teresa Cortinas,
M.D.(n) “Managing Member” shall mean the Member elected by the Company to serve
as Managing Member. The initial Managing Member of the Company shall be Robert D. Burke,
M.D. who shall, subject to §3.1 of this Agreement, serve for an initial term of two (2) years.
(0) “Member” means any Person (i) who is referred to as such on Exhibit “A” to
this Agreement, or who has become a substituted Member pursuant to the terms of this Agreement
and (ii) who has not ceased to be a Member. If a Member is an entity, such Member shall be that
entity acting through its principal (i.e. General Partner, Managing Member, President, etc.). All
rights and obligations of any Member shall also be binding upon its principal.
(p) “Operating Agreement” means this Operating Agreement, as originally
executed and as amended form time to time, and the terms “hereof,” “hereby,” and “hereunder,”
when used with reference to this Operating Agreement, refer to this Operating Agreement as a
whole, unless the context otherwise requires.
(q) “Percentage Interest” in the Company means the entire ownership interest of
a Member in the Company at any particular time, including the right of such Member to any and all
benefits to which a Member may be entitled as provided in this Operating Agreement and under the
Act, together with the obligations of such Member to comply with all of the terms and provisions
of this Operating Agreement. The Percentage Interests of each Member are set forth opposite the
name of such Member under the column “Percentage Interest” in Exhibit A, as such percentage may
be adjusted from time to time.
(r) “Principal Office” means the office of the Agent as shown in the Articles, or
such other address as may be established pursuant to Section 2.1 (b) hereof.
(s) “Regulations” means the Income Tax Regulations, including Temporary
Regulations, promulgated under the Code, as such Regulations are amended from time to time
(t) “Substitute Member” means any person or Entity who or which is admitted
into Membership on the written consent of the Members pursuant to section 6.4.
ARTICLE II
MEMBERS; MEMBERSHIP INTERESTS
21 Names, Addresses and Initial Capital Contributions of Members. Members, their
respective addresses, their initial Capital Contributions to the Company, and their respective
Percentage Interest in the Company are set forth on Exhibit A, attached and made a part of this
Operating Agreement. Each Member has previously made the initial capital contribution to the
Company set forth opposite such Member’s name as reflected in Exhibit A.2.2 Additional Contributions. Subsequent contributions must be in such amounts and
may be in any type of property as is decided by the Members. All Members are required to make
additional Capital Contribution in such amounts and at such time as determined by the Members of
the Company.
2.3 Member Loans or Services. Services rendered by any Member to the Company may
not be considered to be contribution to the capital of the Company. Members may make loans to the
Company, evidenced by a promissory note, bearing interest at the “Wal] Street Journal Prime Rate
Interest”, such loans having the priority for repayment as set forth under this Agreement.
24 Certificates for Membership Interests. A Member’s Interest in the Company may be
represented by a Certificate of Membership. The exact contents of a Certificate of Membership is
determined by the Members.
2.5 Capital and Capital Accounts.
(a) The initial Capital Contribution of each Member is as set forth on Exhibit A.
No interest shall be’payable on any Capital Contribution.
(b) Anindividual capital account (the “Capital Account”) must be established and
maintained on behalf of each Member, including any additional or substituted Member who shall
hereafter receive an Interest in the Company. The Capital Account of each member consists of (i)
the amount of cash the Member has contributed to the Company, plus (ii) the agreed fair market
value of any property the Member has contributed to the Company, less any liabilities assumed by
the Company or to which such property is subject, plus (iii) the amount of profits or income
(including tax-exempt income) allocated to such Member, less (iv) the amount of losses and
deductions allocated to such Member, less (v) the amount of all cash distributed to such member,
less (vi) the fair market value of any property distributed to such Member, net of any liability
assumed by such member or to which such property is subject, less (vii) such Member’s share of any
other expenditures which are not deductible by the Company for federal income tax purposes or
which are not allowable as additions to the basis of Company property, and (viii) subject to such
other adjustments as may be required under the Code. The Capital Account of a Member is not
affected by any adjustments to basis made pursuant to Section 743 of the Code but must be adjusted
with respect to adjustments to basis made pursuant to Section 734 of the Code.
(c) No Member has the right to withdraw its, his or her Capital Contribution or
to demand and receive property of the Company or any distribution in return for its, his or her
Capital Contribution, except as may be specifically provided in this Operating Agreement or required
by law. No Member may receive out of Company property any part of its, his or her or its Capital
Contribution until (i) all liabilities of the Company, except liabilities to Members on account of their
loans have been paid or sufficient Company property remains to pay them, and (ii) the Members
consent, unless the return of the Contribution to Capital is rightfully demanded as provided in the
Act.(d) Subject to the provisions of subsection (c) of this Section, a Member may
rightfully demand the retum of its Capital Contribution (i) on the dissolution of the Company, or (ii)
as may otherwise be provided under this Agreement or the Act. A Member may demand and receive
only cash in return for the Member’s Capital Contribution.
2.6 Admission of Additional Members. (i) The Members may admit to the Company
additional Member(s) to participate in the profits, losses, available cash flow, and ownership of the
assets of the Company on such terms and conditions as aré determined by the Company, (ii)
admission of any such Additional Member(s) shall require the written consent of the Company, and
(iii) any Additional Members are allocated gain, loss, income or expense by the method provided
in this Operating Agreement, and if no method is specified, then as may be permitted by Section
706(d) of the Code.
2.7 Limitation on Liability. No member is liable under a judgment, decree or order of
the court, or in any other manner, for a debt, obligation or liability of the Company, except as
provided by law. No Member is required to, but may as provided herein, loan any funds to the
Company. Except as may be expressly provided otherwise herein, no Member is required to make
any contribution to the Company by reason of any negative balance in his capital account, nor does
any negative balance in a Member’s capital account create any liability on the part of the Member
to the Company or any third party.
2.8 Authority. Each member, acting alone, has the authority to act for, or to undertake
or assume, any obligation, debt, duty or responsibility on behalf of the Company, subject to §3.2 of
this Agreement.
2.9 | No Member Responsible for Other Member's Commitment. In the event that a
Member (or a Member’s shareholders, partners, members, owners, or Affiliates) has incurred any
indebtedness or obligation prior to the Effective Date hereof that relates to or otherwise affects the
Company, neither the Company nor any other Member has any liability or responsibility with respect
to such indebtedness or obligation unless such indebtedness or obligation is assumed by the
Company pursuant to a written instrument signed by the Company, Furthermore, neither the
Company nor any Memberis responsible or liable for any indebtedness or obligation that is hereafter
incurred by any other Members (or a Member’s shareholder, partners, members, owners, or
Affiliates). In the event that a Member (or a Members’ shareholders, partners, members, owners,
or Affiliates (collectively, the “liable Member”), whether prior to or after the date hereof, incurs (or
has incurred) any debt or obligation that neither the Company nor any of the other Members is to
have any responsibility for, the liable Member must indemnify and hold harmless the Company and
the other Members from any liability or obligation they may incur.ARTICLE IL
MANAGEMENT AND CONTROL OF BUSINESS
3.1 Managing Member. ROBERT D. BURKE, M.D. shall serve as the initial Managing
Member of the Company for a period of two (2) years. This initial term shall automatically renew
at the end of such two (2) year period unless the Members, by majority vote, elect a new Managing
Member. The Managing Member shall be under a fiduciary duty to conduct the affairs of the
Company at arms length and in the best interests of the Company and of the Members. Subject to
the limitations and restrictions set forth in this Agreement, the Managing Member shall manage the
Business of the Company and shall have all of the rights and powers which may be possessed by a
Member under the Act including, without limitation, the right and power to:
3.1.1 Execute (subject to ratification of seventy-five percent (75%) of the Members
of the-Company as set forth in Section §3.3 below, or if applicable, with the consent of all of the
Founding Members) any and al] agreements, contracts, documents, certifications, and instruments
necessary or convenient in connection with the management, maintenance, and operation of the
Business, or in connection with managing the affairs of the Company, including executing
amendments to the Agreement and the Certificate, in accordance with the terms of the Agreement,
both as Managing Member and, if required, as attorney-in-fact for the Members pursuant to any
power of attorney granted by the Members to the Managing Member.
3.1.2 Contract on behalf of the Company with third parties and Affiliates of the
Managing Member for the employment and services of employees and/or independent contractors
and delegate to such persons the duty to manage or supervise any of the assets or operations of the
Company;
3.1.3 Engage in any kind of activity and perform and carry out contracts of any kind
(including contracts of insurance covering risks to the Business and Managing Member liability)
necessary or incidental to, or in connection with, the accomplishment of the Business purposes of
the Company, as may be lawfully carried on or performed by a Company under the laws of each state
in which the Company is then formed or qualified;
3.1.4. Make any and all elections for federal, state, and local tax purposes including,
without limitation, any election, if permitted by applicable law: (i) to adjust the basis of the Business
pursuant to Code Sections 754, 734(b), and 743(b), or comparable provisions of state or local law,
in connection with transfers of interests in the Company and Company distributions; (ii) to extend
the statute of limitations for assessment of tax deficiencies against the Members with respect to
adjustments to the Company's federal, state, or local tax returns; and (iii) to the extent provided in
Code Sections 6221 through 623 1, to represent the Company and Members before taxing authorities
or courts of competent jurisdiction in tax matters affecting the Company and Members in their
capacity as Members, and to file any tax returns and execute any agreements or other documents
relating to or affecting such tax matters, including agreements or other documents that bind theMembers with respect to such tax matters or otherwise affect the rights of the Company and
Members. The Managing Member is specifically authorized to act as the “Tax Matters Member”
under the Code and in any similar capacity under state or local law;
3.1.5 Cause the Company to carry such insurance as is customary in the business
in which the Company is engaged and in the places in which it is so engaged.
3.1.6 Take, or refrain from taking, all actions, not expressly proscribed or limited
by this Agreement, as may be necessary or appropriate to accomplish the purposes of the Company;
and
3.1.7 Institute, prosecute, defend, settle, compromise, and dismiss lawsuits or other
judicial or administrative proceedings brought on or in behalf of, or against, the Company or the
Members in connection with activities arising out of, connected with, or incidental to this
Agreement, and to engage counsel or others in connection therewith.
3.2 Right to Rely on Managing Member.
3.2.1 Any Person dealing with the Company may rely (without duty of further
inquiry) upon a certificate signed by the Managing Member as to:
(a) The identity of the Managing Member or any Member;
(b) The existence or nonexistence of any fact or facts which constitute a condition
precedent to acts by the Managing Member or which are in any other manner germane to the affairs
of the Company;
(c) The Persons who are authorized to execute and deliver any instrument or
document of the Company; or
(d) Any act or failure to act by the Company or any other matter whatsoever
involving the Company or any Member.
3.2.2 The signature of the Managing Member shall be necessary and sufficient to
enter into any Agreement on behalf of the Company or take any other act related to the affairs of the
Company. All of the Members agree that a copy of this Agreement may be shown to the appropriate
parties in order to confirm the same, and further agree that the signature of the Managing Member
shall be sufficient to execute any “statement of Company” or other documents necessary to effectuate
this or any other provision of this Agreement. All of the Members do hereby appoint the Managing
Member as their attorney-in-fact for the execution of any or all of the documents described in this
Section 3.2.2.3.3 Restrictions on Authority of Managing Member. The Managing Member shall act
without restriction by the other Members in conducting the affairs of the Company. However,
Managing Member agrees that Managing Member shall not have the authority to, and covenants and
agrees that Managing Member shall not, do any of the following acts without the consent of
Members owning Seventy-Five Percent (75%) of the total Percentage Interests, as well as the
unanimous consent of the Founding Members; or simply with the unanimous consent of the
Founding Members:
3.3.1 Cause or permit the Company to engage in any activity that is not consistent
with the Business of the Company as set forth in Section | .4, above or to terminate the Business;
3.3.2 Terminate the Company or this Agreement;
3.3.3 Authorize the issuance of additional Percentage Interests to the Members;
3.3.4 Knowingly do any act in contravention of this Agreement;
3.3.5 Knowingly do any act which would make it impossible to carry on the ordinary
business of the Company, except as otherwise provided in this Agreement;
3.3.6 Possess the Business, or assign rights in the Business, for other than a
Company purpose;
3.3.7 Knowingly perform any act that would subject any Member to liability as a
Managing Member in any jurisdiction;
3.3.8 Sell or otherwise dispose of at one time all or substantially all of the assets
of the Business;
3.3.9 Cause the Company to voluntarily take any action that would cause a
Bankruptcy of the Company;
3.3.10 Hiring, firing or amending the employment agreement or status of any
physician employee (including Members who are not-Founding Members) of the Company;
3.3.11 Any decision set forth in this Agreement which requires the consent stated
herein, including, but not limited to, allowing any Member to change their working status to “part-
time” under Article 6.1 hereunder;
3.3.12 Indemnifying any Member, including the Managing Member under Article
8 below; or
3.3.13 Entering into any obligation on behalf of the Company in excess of Five
Thousand Dollars ($5,000.00).ARTICLE IV
ACCOUNTING AND RECORDS
4] Records and Accounting. The books and records of the Company must be kept, and
the financial position and the results of its operations r
Preview
IN THE CIRCUIT COURT OF THE ~ FIFTEENTH JUDICIAL CIRCUIT IN AND pe BEACH COUNTY, FLORIDA 4.002138 ¥XK NB CASE 50 2008 C TERESA-MARIA CORTINAS, M.D., P.A. Plaintiff, Jury Trial Demanded VANCED IMAGING A, IATES, LLC, IDTOWN IMAGING, LL BERT D.-BURKE, -D., P.L.. AND ROBERT D. BURKE, Defendants. . \ ny Plaintiff, TERESA MARIA CORTINAS, M.D., P.A. (“TCPA”) files this Complaint against Defendants, ADVANCED IMAGING ASSOCIATES, LLC (“AIA”), MIDTOWN IMAGING, LLC (“Midtown”), ROBERT D. BURKE, M.D., P.L. (‘RBPL”), and ROBERT D. Ge BURKE (“Burke”), and states as follows: ‘ INTRODUCTION 1. This is a business litigation action brought by Dr. Teresa M. Cortinas (“Cortinas”), through her professional corporation TCPA, to recover for the following: a. unpaid compensation against AIA, her former radiology practice group; b. conversion against Midtown for wrongful taking custody of, and refusal to turn over, TCPA’s December 2007 compensation check; and c. breach of fiduciary duty and unjust enrichment against Burke and RBPL for unjustly benefiting themselves to the detriment of TCPA. v\The Parties 2. TCPA is a Florida professional corporation with its principal place of business in Palm Beach County, Florida. TCPA was an equity member of AIA from 2004 through 2007. TCPA’s sole shareholder is Cortinas. 3. AIA is a Florida limited liability company with its principal place of business in Palm Beach County, Florida. In 2007, AIA had four 25% equity members of AIA. They were as follows: RBPL (25%); Bradley M. Cohen, M.D., P.A. (“BCPA”) (25%); TCPA (25%), and Walter E. Wojcicki, M.D., PH.D., P.A. (“WWPA”) (25%). 4, Burke is the managing member of AIA and is the president and co-managing member of Midtown. Burke also owns a substantial ownership interest in Midtown. 5. RBPL is Burke’s professional limited liability company with its principal place of business in Palm Beach County, Florida. Burke is the sole member of RBPL. 6. Midtown is a Florida limited liability company with its principal place of business in Palm Beach County, Florida. Burke is the president of Midtown and he is the co-managing member and co-owner with Palm Beach Capital Partners (“PBCP”). Midtown provides radiology imaging services to medical patients, and has an exclusive arrangement with AIA whereby AIA’s radiologists perform all professional reading services for Midtown’s patients (the “Radiology Services”). JURISDICTION AND VENUE 7. This matter has an amount in controversy that exceeds $15,000 exclusive of attorneys’ fees, costs, and interest. Jurisdiction and venue are proper in Palm Beach County because the acts giving rise to TCPA’s causes of action arose in Palm Beach County.GENERAL ALLEGATIONS 8. In 2002, Cortinas joined AIA’s practice as an associate radiologist and, in 2004, became an equity member. In 2004, Cortinas’ professional corporation, TCPA, and Burke’s professional limited liability company, RBPL, were each 50% equity members in AIA. TCPA and RBPL later became 25% equity members when BCPA and WWPA each joined AIA as 25% equity members. 9. From 2004 through the present, AIA has served as the exclusive provider of the Radiology Services for Midtown, which is also co-managed and co-owned by Burke. 10. During these years, AIA’s practice was bustling and profitable for AIA’s physicians. But Burke had an abusive, self-aggrandizing, and sexist management style that made AIA a difficult and alienating place to work for both Cortinas and many of AIA’s physicians and staff. In fact in 2004, two equity members, Dr. Randy Sag and Dr. David Feldman, left AIA’s practice because of Burke’s abusive management style and his refusal to demand that Midtown compensate AIA at fair market value for the Radiology Services. 11. By 2005, the amount of Radiology Services required to be performed by AIA for Midtown had become so substantial that Burke and Cortinas hired two additional associate radiologists, Dr. Bradley C. Cohen (“Cohen”) and Dr. Walter E. Wojcicki (“Wojcicki”) to join AIA. 12. In 2006, while Cortinas and Burke, through their professional corporations, were still 50% equity members in AIA, Burke took four months of paid vacation from AIA. During that same year, Cortinas likewise took four months vacation — three of which were used for her maternity leave. But AIA, at Burke’s direction, only paid Cortinas for three months and refused to pay her for the fourth month. Around that time, Burke expressed to Cortinas that he was 3angry that she had taken maternity leave from the practice. 13. By April 2007, Burke and Cortinas had invited Cohen and Wojcicki to participate as equity members of AIA, and agreed to revise AIA’s ownership structure so that all four equity members owned a 25% interest. 14, In April 2007, Burke, Cortinas, Cohen, and Wojcicki, through their respective professional corporations, executed the Restated Operating Agreement (“ROA”), which provided a 25% interest to each physician and made the ROA retroactive to January 1, 2007. The ROA is attached as Exhibit 1. 15. As part of the plan for AIA’s revised ownership structure, Cortinas, Wojcicki and Cohen also communicated to Burke their dissatisfaction with AIA’s compensation for the Radiology Services, which was well below fair market value. AIA had been getting paid 14% of Midtown’s net collected revenues, while fair market value for the Radiology Services is estimated at between 16.6% and 22.6%. 16. It was in Burke’s self-interest as the president, co-manager and co-owner of Midtown to pay AIA as little as possible for the Radiology Services. The less that AIA was paid, the more Dr. Burke earned from Midtown, i.e., any profits earned by AIA were split between AIA’s four members, while the profits earned by Midtown were only split between Burke and PBCP. As such, Burke’s role as manager and a principal owner in both AIA and Midtown presented a conflict of interest that influenced Burke’s management decisions to the detriment of his AIA co-members. 17. By March 2007, tensions within AIA had risen to the level of a near mutiny by Burke’s co-members against him. The co-members’ intense dissatisfaction with Burke was the result of, among other things, the below fair market value compensation that Midtown was 4paying AJA for the Radiology Services, and Burke’s abusive, self-aggrandizing, and sexist management style. 18. When Burke’s co-members communicated their dissatisfaction to Burke in March 2007, Burke wrote an e-mail on March 25, 2007 to his co-members indicating that he was withdrawing from all management responsibilities from AIA and planning to minimize his reading duties going forward. A copy of Burke’s March 25, 2007 e-mail is attached as Exhibit 2. 19. On the heels of Burke’s purported withdrawal, on March 27, 2007, Cortinas, Wojcicki, and Cohen were successful in compelling a “sit down” with Midtown to increase AIA’s compensation. Richard Schlanger and Nathan Ward of PBCP (Midtown’s majority member), and Kevin Johnson (“Johnson”), Midtown’s Chief Financial Officer, attended the meeting. 20. At this meeting, the AIA members demanded fair market value compensation for the Radiology Services provided to Midtown. The compensation figures were memorialized in a chart (the “Chart”) prepared by Midtown and agreed to by AIA, which is attached as Exhibit 3. 21. | The Chart projected Midtown’s 2007 revenues as $28,163,963 and created a compensation floor of 14% of Midtown’s net collected revenues, plus some additional outside fees, as compensation for AIA’s Radiology Services. Pursuant to the Chart, AIA’s projected 2007 revenues were $4,302,955, and Midtown agreed to pay AIA a minimum monthly payment of $366,667 for the remainder of 2007. 22. Pursuant to the Chart, Midtown also agreed that at the end of 2007, Midtown would review what “actually came through [Midtown] and apply the above formula paying any overage that may have occurred.” (Emphasis added). As such, the parties agreed that the $366,667 would serve as the minimum compensation to be paid to AIA and any “overage” that 5Midtown received would be distributed to AIA at year end. 23. Between the spring and late summer of 2007, Midtown continued to pay AIA in accordance with the agreement set forth in the Chart, i.¢., $366,667 monthly. 24. But by September 2007, Burke had continued his involvement in AIA’s management notwithstanding his March 2007 announcement that he would be withdrawing from his management duties. As such, the working conditions at AIA continued to worsen, which led to the ongoing resignations of AIA’s physicians and made the working environment intolerable for Cortinas and Wojcicki. 25. On September 11, 2007, Cortinas provided written notice to AIA that she was resigning from AIA effective as of December 31, 2007. On October 19, 2007, Wojcicki also resigned effective as of January 18, 2008. 26. In response to Cortinas’ and Wojcicki’s notices of resignation, Midtown paid AIA only $300,000 for November and December 2007, creating a two month shortfall of the monies due to AIA of $66,667 per month. 27. In addition, AIA, Midtown, and Burke, then jointly decided that AIA was not going to pay Cortinas (through TCPA) her December 2007 compensation, which is calculated to be $52,480, and which was paid to every member of AIA except for Cortinas. In fact, when Cortinas was communicating with her colleague, Cohen, about the status of her December check, Cohen informed her that he had turned over custody of the check to Johnson at Midtown. 28. Midtown, acting through Johnson, and AIA then manufactured a variety of inconsistent explanations as to why Midtown and AJA were refusing to turn over possession of her December compensation check. These explanations were as follows: a. First, Johnson said that the increased compensation set forth in the Chart 6was intended only to be a reward to Cortinas if she stayed with AIA. Therefore, she was not entitled to the check; b. Second, Johnson said that Cortinas had not complied with her duties as an AIA member because she had not provided proof that she had purchased “tail” coverage and that “continuous coverage” was insufficient; c. Third, Johnson said that Cortinas was not entitled to her December check unless she signed a general release; and d. Fourth, Johnson said that the locum tenens (temporary doctors) expenses were unexpectedly high for the fourth quarter of 2007 and, therefore, there was no money to pay TCPA, notwithstanding that Burke, Cohen, and Wojcicki all were paid their December compensation. As such, it became evident to Cortinas that Midtown, AIA and Burke would manufacture whatever reasons it could muster to justify why Cortinas was not entitled to her December compensation. 29. TCPA also is entitled to compensation from AIA pursuant to Section 5.6 of the ROA. That section provides TCPA is entitled to its share of “any technical revenues paid to and received by [AIA] or any Member on behalf of Company.” This means that TCPA is entitled to its share of any technical revenues received by AJA, Burke or RBPL. 30. As a result of the various breaches and wrongful conduct committed by AIA, Midtown, RBPL and Burke, as set forth in the causes of action below, TCPA has suffered damages. 31. Any necessary condition precedent has been performed.CAUSES OF ACTION Count I Breach of Contract Against AIA 32. | TCPA realleges paragraphs | through 31. 33. | TCPA had a contract with AIA to pay certain compensation to TCPA in 2007, the terms of which were memorialized in the Chart. 34. AIA materially breached its contract with TCPA by: a. failing to pay TCPA its compensation of $52,480 for December 2007; b. failing to pay TCPA approximately $22,000 per month for November and December 2007; and c. failing to pay TCPA for its share of any overages that were owed to AIA by Midtown. 35. AIA’s breaches have caused damages to TCPA. WHEREFORE, TCPA requests a judgment that awards damages, costs, and interest against AIA and any other relief that the Court deems just. Count II Breach of Contract Against AIA, Burke and RBPL 36. | TCPA realleges paragraphs | through 31. 37. TCPA entered into the ROA with AIA, Burke and RBPL. 38. Section 5.6 of the ROA provides that TCPA is entitled to its share of “any technical revenues paid to and received by [AIA] or any Member on behalf of Company.” This means that TCPA is entitled to its share of any technical revenues received by AIA, Burke and RBPL. 39. | TCPA has given notice of withdrawal of her membership in AIA and has not 8received its share of any technical revenues received by AIA, Burke, or RBPL. 40. AIA, Burke, and RBPL, therefore, have breached Section 5.6 of the ROA by failing to pay TCPA. 41. AIA, Burke, and RBPL’s breaches have caused damages to TCPA. WHEREFORE, TCPA requests a judgment that awards damages, costs, and interest against AIA and any other relief that the Court deems just. Count Il Breach of Contract Against AIA 42. | TCPA realleges paragraphs | through 31. 43. | TCPA entered into an oral contract with AIA whereby Cortinas and Burke in 2006 both, through their professional corporations, were 50% equity members of AIA, were entitled to the same number of months of paid vacation. 44. In 2006, Burke took four months of paid vacation from AIA. 45. In 2006, Cortinas likewise took four months vacation — three of which were used for her maternity leave. But AIA, at Burke’s direction, paid Cortinas only for three months and refused to pay for the fourth month. Burke expressed to Cortinas that he was angry that she had taken maternity leave. 46. AIA’s failure to provide TCPA its compensation for December 2006 constituted a breach of the parties’ oral contract. 47. As a result of AIA’s breach, TCPA has suffered damages in the amount of approximately $60,000. WHEREFORE, TCPA requests a judgment that awards damages, costs, and interest against AIA and any other relief that the Court deems just.Count IV Unjust Enrichment Against AIA 48. | TCPA realleges paragraphs 1 through 31. 49. AIA has unjustly enriched itself to the detriment of TCPA by doing the following: a. failing to pay TCPA its compensation for December 2007 in the amount of $52,480; b. failing to pay TCPA approximately $22,000 per month for November and December 2007; and c. refusing to provide TCPA vacation pay for December 2006 in an approximate amount of $60,000. 50. It would be inequitable for Burke and RBPL to retain the benefit conferred upon them by TCPA. St. As a result of AIA’s unjust enrichment, TCPA has suffered damages. WHEREFORE, TCPA requests a judgment that awards damages, costs, and interest against AIA and any other relief that the Court deems just. Count V Conversion Against Midtown 52. TCPA realleges paragraphs 1 through 31. 53. | TCPA earned compensation from AIA in the amount of $52,480 for December 2007. 54. Johnson, as the agent for Midtown, took custody of and refused to turn over to TCPA its compensation check for December 2007 (the “Check”). 55. When Cortinas and her husband, Joe Nelson (“Nelson”), each demanded that 10Johnson turn over possession of the Check to Cortinas and/or Nelson, Johnson refused. 56. | Midtown has intentionally and wrongfully exercised dominion over the Check inconsistent with TCPA’s property rights. 57. Midtown’s conversion of the Check has caused damages to TCPA. WHEREFORE, TCPA requests a judgment that awards damages, costs, and interest against Midtown and any other relief that the Court deems just. Count VI Breach of Fiduciary Duty Against RBPL and Burke 58. | TCPA realleges paragraphs | through 31. 59. Burke and RBPL owed fiduciary duties to TCPA as the managing member and as a co-member of AIA. These fiduciary duties included the utmost duty of loyalty to act in the best interests of TCPA and AIA’s other members. 60. | Burke and RBPL breached the fiduciary duties they owed to TCPA and breached the ROA by: a. refusing to provide the December 2007 compensation payment to TCPA; b. refusing to provide TCPA vacation pay for December 2006, where Burke paid himself from AIA for four months of vacation pay; and c. engaging in the following acts that constituted conflicts of interest and harmed AIA’s members: qd) paying his AIA co-members 14% of net collected revenues for professional reading fees, which was substantially less than fair market value; (2) receiving unearned compensation from AIA after August 2007; (3) causing Midtown to retain over 80% of outside professionalreading fees instead of sharing such revenues with his AIA co-members; (4) benefiting himself individually at the expense of his AIA co- members by, without obtaining the consent of his co-members, requiring the locum tenens to stay at a hotel that Burke owned at approximately twice the cost of the other hotel in which they previously had stayed; and (5) borrowing $80,000 on AIA’s behalf from Midtown without obtaining the consent of AIA’s members. 61. RBPL and Burke’s breaches of their duties have caused damages to TCPA. WHEREFORE, TCPA requests a judgment that awards damages, costs, and interest against Burke and RBPL and any other relief that the Court deems just. Count VII Unjust Enrichment Against RBPL and Burke 62. TCPA realleges paragraphs | through 31. 63. Burke and RBPL have unjustly enriched themselves to the detriment of TCPA by doing the following: a. refusing to provide the December 2007 compensation payment to TCPA; b. refusing to provide TCPA vacation pay for December 2006, where Burke himself was paid for four months of vacation pay; and c. engaging in the following acts that constituted conflicts of interest and harmed AIA’s members: qd) paying his AIA co-members 14% of net collected revenues for the Radiology Services knowing that 14% was substantially less than fair market value;(2) receiving unearned compensation from AIA after August 2007; (3) causing Midtown to retain over 80% of outside professional reading fees instead of sharing such revenues with his AIA co-members; (4) benefiting himself individually at the expense of his AIA co- members by, without obtaining the consent of his co-members, requiring the locum tenens to stay at a hotel that Burke owned at approximately twice the cost of the other hotel in which they previously had stayed; and (5) borrowing $80,000 on AIA’s behalf from Midtown without obtaining the consent of AIA’s members. 64. It would be inequitable for Burke and RBPL to retain the benefit conferred upon them by TCPA. 65. As aresult of Burke and RBPL’s unjust enrichment, TCPA has suffered damages. WHEREFORE, TCPA requests a judgment that awards damages, costs, and interest against Burke and RBPL and any other relief that the Court deems just. JuRY DEMAND TCPA demands a jury trial on all issues that may be decided by jury. Respectfully submitted, McCaBE RaBIW, P.A. Attomeys for Plaintiff Trump Plaza Office Center 525 S. Flagler Drive, Suite 200 West Palm Beach, FL 33401 Tel: 561-659-7878 Fax: 561-659-7876 ———_ Adam T. Rabin Fla. Bar No. 985635 Ryon M. McCabe Fla. Bar No. 09075 By:EXHIBIT 1RESTATED OPERATING AGREEMENT OF ADVANCED IMAGING ASSOCIATES, LLCTABLE OF CONTENTS ARTICLE I INTRODUCTION... 21.2000 c eee n tne enes 1 Ll Formation of Limited Liability Company. . 1 1.2 Principal Place of Business. ........6 000 ce cece eee ee eee i 1.3 Term. 1 1.4 Purpose; Powers. . 1 1.5 Filings; Agent for Service of Process. . 1.6 Title to Property. 20.000. c ce enn ee 2 1.7. Payments of Individual Obligations. .. 7 7 2 1.8 Independent Activities; Transactions with Affiliates. ........+.04.000eeeeee 2 19 Definitions. 0.0.0... ete 3 ARTICLE II MEMBERS; MEMBERSHIP INTERESTS ...... 000000 cece cece eens 5 2.1 Names, Addresses and Initial Capital Contributions of Members. .........-.- 5 2.2 Additional Contributions. 6 23 Member Loans or Services. ..... -6 2.4 Certificates for Membership Interests. -6 2.5. Capital and Capital Accounts. .... . -6 2.6 Admission of Additional Members. ..............0000005 li, 2.7. Limitation on Liability. ©... 00 eee .7 2.8 Authority, 0.000000. c cece iE .7 2.9 | No Member Responsible for Other Member's Commitment fleet lela ladedellede 7 ARTICLE II MANAGEMENT AND CONTROL OF BUSINESS ......... 0-45 3.1 Managing Member. ...........0.+.- 3.2 Right to Rely on Managing Member. ...... : 3.3. Restrictions on Authority of Managing Member.. .........++++-++++++ ARTICLE IV ACCOUNTING AND RECORDS. ... 0.0.00 c cece cent n tte nes 11 4.1 Records and Accounting. ........ 0600.0 sees 4.2 Access to Accounting Records and Quarterly Reports. 4.3. Annual and Tax Information. ..........-..-++ 44 Accounting Decisions..............++ 4.5 Income Tax Elections.ARTICLE V ALLOCATIONS, DISTRIBUTIONS, AND INTERESTS ........+ +0400 000000 cee 12 5.1 Allocation of Net Income, Net Loss or Capital Gains. ........-......0.-55 12 5.2 Distribution of Available Cash. ... 6.6.0. cece cece teens 12 5.3 Allocation of Income and Loss and Distributions in Respect of Interests Transferee. 0... cece eee renee 12 13 13 13 5.4 Division of Income and Expense. 5.5 Compensation .........+.++ 5.6 Non-Competition and Non-Solicitation ........ 5.7 Right of Members to Elect Part Time Status ....... 0+ 00sec cee v eee eevee 15 ARTICLE VI CHANGES IN MEMBERS/ TRANSFERS ...... 2.0000 +0200 222 e eee ee Tteteteet 16 6.1 Death, Dissolution, Withdrawal or Bankruptcy of Member. ...... 0... 0-455 + 16 6.2 Transfer and Assignment of Members’ Interest. ..... -.. 16 6.3 Further Restrictions on Transfer. ©. 0.006.000 c cece eee 16 6.4 Substitute Members. .........-..4++0++ 6.5 Effect of Transfer. . 6.6 Involuntary Transfers. eLaletelededededeledece lore eetce ett 17 6.7 Purchase of Percentage Interests in Event of Termination of Membership. ....18 6.8 Disability... 0.0... eee cent n eee eees 18 ARTICLE V0 DISSOLUTION «0... 0-00 ee eee eee 7 Dissolution of the Company. . . ARTICLE VIII INDEMNIFICATION |... 00000 eee eee eee 20 8.1 Indemnification of Managers and Members. ....... 0-0-0200 00 cee eee eee 20 ARTICLE IX MISCELLANEOUS .... 0.00 0c cnet e nent eee tee 3 9.1 Complete Agreement. 9.2 Governing Law. . 9.3. Binding Effect. 9.4 Terms........ 9.5 Headings. 7 9.6 Severability. .... 9.7 Multiple Counterparts. ..... 9.8 Additional Documents and Acts.9.9 | No Third Party Beneficiary. ........ 6606 ccc ct eens 24 9.10 References to this Operating Agreement. ... 2.6... c eee tees 24 DAL Notices... 0... 6... eee eee 9.12 Amendments. pele decec ect tt ltt : 9.13 Title to Company Property. ......6. 0000 c cece eee 24 9.14 Reliance on Authority of Person Signing Operating Agreement. 9.15 Consent Provision. 0.00.0 .0 00000 eect eee eens SIGNATURES . 200.2 t teens 25 EXHIBIT “A” INITIAL CAPITAL CONTRIBUTIONS ...... 0.60.02 00 e eee eee ee 26 iliRESTATED OPERATING AGREEMENT OF ADVANCED IMAGING ASSOCIATES, LLC This RESTATED OPERATING AGREEMENT (‘‘Agreement”) is effective the 1* day of January, 2007, (the “Effective Date”) by and among ADVANCED IMAGING ASSOCIATES, LLC and the Members of ADVANCED IMAGING ASSOCIATES, LLC, (the “Company”), a limited liability company created under the Florida Limited Liability Company Act (the “Act”), on the following terms and conditions: ARTICLE I INTRODUCTION 1.1 Formation of Limited Liability Company. The Members have formed the Limited Liability Company by filing Articles of Organization (the “Articles”) with the Department of State. The Company’s business is conducted under the name ADVANCED IMAGING ASSOCIATES, LLC until such time as all the Members designate otherwise and file amendments to the Articles in accordance with applicable law. 1.2 Principal Place of Business. The principal place of business of the Company shall initially be at 2529 Burns Road, Palm Beach Gardens, Florida 33410. The Members may agree to change the principal place of business of the Company to any other place within or without the State of Florida. The registered office of the Company in the State of Florida is located at 2529 Burns Road, Palm Beach Gardens, Florida 33410. 1.3. Term. The term of the Company commenced as of the date the Articles were filed in the office of the Secretary of State of the State of Florida in accordance with the Act and shall continue until the winding up and liquidation of the Company and its business is completed following a Dissolution Event, as provided in Section 7 hereof. 1.4 Purpose; Powers. The Company has the power to do any and all acts necessary, appropriate, proper, advisable, incidental or convenient to or in furtherance of the business of the Company. The business of the Company is to employ and provide radiology services to contracted facilities in the State of Florida. 1.5 Filings; Agent for Service of Process. (a) The Members shall take any and all actions reasonably necessary to perfect and maintain the status of the Company as a limited liability company under the laws of the State of Florida, including the preparation and filing of such amendments to the Articles and such other assumed name certificates, documents, instruments and publications as may be required by law, including, without limitation, action to reflect: (i) achange in the Company name; 1(ii) a correction of false or erroneous statements in the Articles or the desire of the Members to make a change in any statement therein in order that it shall accurately represent the agreement among the Members; or (iii) a change in the time for dissolution of the Company as stated in the Articles and in this Agreement. (b) The Members shall execute and cause to be filed original or amended documents and shall take any and all other actions as may be reasonably necessary to perfect and maintain the status of the Company as a limited liability company or similar type of entity under the laws of any other jurisdictions in which the Company engages in business. (c) The registered agent for service of process on the Company in the State of Florida shall be Michael S. Singer, Esq. or any successor as appointed by the Members in accordance with the Act. (d) Upon the dissolution and completion of the winding up and liquidation of the Company in accordance with Section 7 hereof, the Members shall promptly execute and cause to be filed Articles of Dissolution in accordance with the Act and the laws of any other jurisdictions in which the Members deem such filing necessary or advisable. 1.6 Title to Property. All property owned by the Company shall be owned by the Company as an entity and no Member shall have any ownership interest in such property in its individual name, and each Member’s interest in the Company shall be personal property for all purposes. At all times after the Effective Date, the Company shall hold title to all of its property in the name of the Company and not in the name of any Member. 1.7 Payments of Individual Obligations. The Company's credit and assets shall be used solely for the benefit of the Company, and no asset of the Company shall be Transferred or encumbered for, or in payment of, any individual obligation of any Member. 1.8 Independent Activities; Transactions with Affiliates. Insofar as permitted by applicable law neither this Agreement nor any activity undertaken pursuant hereto shall prevent any Member and/or his Affiliates from engaging in whatever activities they choose, whether the same are competitive with the Company or otherwise, however, except for relationships and activities that already exist as of the date of execution of this Agreement, no Member may do any act (including providing radiology services of any sort) within or related to the purpose of the Company (except for the benefit of the Company) set forth in Section 1.4 above without the written consent of the Managing Member of the Company. Additionally, no Member may commit any act in contravention of any of the agreements by or amongst Midtown Imaging, LLC, Neuro-Imaging, LLC and/or Company.1.9 Definitions. As used herein, the following words and phrases have the following meanings. (a) “Act” means the Florida Limited Liability Company Act, as amended from time to time. (b) “Additional Capital Contributions” means, with respect to each Member, the Capital Contributions made by such Member pursuant to Section 2.2 hereof. (c) “Additional Member” means any person or Entity admitted as a Member pursuant to Section 2.8 of this Operating Agreement. (d) “Adjusted Capital Account Deficit” means, with respect to any Member, the deficit balance, if any, in such Member's Capital Account as of the end of the relevant Allocation Year, after giving effect to the following adjustments: (i). Credit to such Capital Account any amounts which such Member is deemed to be obligated to restore pursuant to the penultimate sentences in Sections 1.704-2(g)(1) and 1.704-2(i)(5) of the Regulations; and (ii) Debit to such Capital Account the items described in Sections 1.704- 1(b)(2)(ii)(a)(4), 1.704-1(0)(2)Gi)(A@)(5) and 1.704-1(b)(2)(ii)(a)(6) of the Regulations. The foregoing definition of Adjusted Capital Account Deficit is intended to comply with the provisions of Section 1.704-1(b)(2)(ii)(d) of the Regulations and shall be interpreted consistently therewith. (e) “Affiliate” means any individual, partnership, corporation, limited liability company, trust, or other Entity or association, directly or indirectly, through one or more intermediaries, controlling, controlled by, or under common control with a Member. The term “control,” as used in the immediately preceding sentence, means, with respect to a corporation the right to exercise, directly or indirectly, more than 50 percent of the voting rights attributable to the controlled corporation, and, with respect to any individual , partnership, trust, other Entity or association, the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of the controlled Entity. ® “Available Cash” of the Company means all cash funds of the Company on hand from time to time (other than cash funds obtained as contributions to the capital of the Company by the Members and cash funds obtained from loans to the Company) after (i) payment of all operating expenses of the Company as of such time, (ii) provision for payment of all outstanding and unpaid current obligations of the Company as of such time, and (iii) provision for a working capital reserve in accordance with Section 5.2 below.(g) “Bankruptcy” means, and a Member shall be deemed a “Bankrupt Member” on (i) the entry of a decree or order for relief against the member by a court of competent jurisdiction in any involuntary case brought against the Member under any bankruptcy, insolvency, or other similar law (collectively, “Debtor Relief Laws”) generally affecting the rights of creditors and relief of debtors now or hereafter in effect, (ii) the appointment of a receiver, liquidator, assignee, custodian, trustee, sequestrator or other similar agent under applicable Debtor Relief laws for the Member or for any substantial part of its assets or property, (iii) the ordering of the winding up or liquidation of the Member’s affairs, (iv) the filing of a petition in any such involuntary bankruptcy case that remains undismissed or suspended pursuant to Section 305 of the Federal Bankruptcy Code (or any corresponding provision of any future United States bankruptcy law), (v) the commencement by the Member of a voluntary case under any applicable Debtor Relief Law now or hereafter in effect, (vi) the consent by the Member of a voluntary case under any applicable Debtor Relief law now or hereafter in effect, (vi) the consent by the Member to the entry of an order for relief in an involuntary case under any such law or to the appointment of or the taking of possession by a receiver, liquidator, assignee, trustee, custodian; sequestrator or other similar agent under any applicable Debtor Relief Laws for the Member or for any substantial part of its assets or property, or (vii) the making by a Member of any general assignment for the benefit of its creditors. (h) “Capital Account” means the individual accounts established and maintained pursuant to Section 2.5(b) of this Operating Agreement. (i) “Capital Contribution” means the total value of cash and agreed fair market value of property contributed and agreed to be contributed to the Company by each Member, as shown in Exhibit A, as the same may be amended from time to time. Any reference in this Operating Agreement to the Capital Contribution of a then Member includes a Capital Contribution previously made by any prior Member for the interest of such then Member, reduced by any distribution to such Member in return of “Capital Contribution” as contemplated herein. Additional Capital Contributions may be made only by a Member with its, his or her consent and with the consent of the remaining Members. G) “Code” means the Internal Revenue Code of 1986, as amended. All references herein to sections of the Code include any corresponding provision or provisions of succeeding law. (k) | “Company” refers to ADVANCED IMAGING ASSOCIATES, LLC. qa “Entity” means any association, corporation, general partnership, limited partnership, limited liability company, joint stock association, joint venture, firm, trust, business trust, cooperative, and foreign associations of like structure. (m) “Founding Members” shall mean Robert D. Burke, M.D. and Teresa Cortinas, M.D.(n) “Managing Member” shall mean the Member elected by the Company to serve as Managing Member. The initial Managing Member of the Company shall be Robert D. Burke, M.D. who shall, subject to §3.1 of this Agreement, serve for an initial term of two (2) years. (0) “Member” means any Person (i) who is referred to as such on Exhibit “A” to this Agreement, or who has become a substituted Member pursuant to the terms of this Agreement and (ii) who has not ceased to be a Member. If a Member is an entity, such Member shall be that entity acting through its principal (i.e. General Partner, Managing Member, President, etc.). All rights and obligations of any Member shall also be binding upon its principal. (p) “Operating Agreement” means this Operating Agreement, as originally executed and as amended form time to time, and the terms “hereof,” “hereby,” and “hereunder,” when used with reference to this Operating Agreement, refer to this Operating Agreement as a whole, unless the context otherwise requires. (q) “Percentage Interest” in the Company means the entire ownership interest of a Member in the Company at any particular time, including the right of such Member to any and all benefits to which a Member may be entitled as provided in this Operating Agreement and under the Act, together with the obligations of such Member to comply with all of the terms and provisions of this Operating Agreement. The Percentage Interests of each Member are set forth opposite the name of such Member under the column “Percentage Interest” in Exhibit A, as such percentage may be adjusted from time to time. (r) “Principal Office” means the office of the Agent as shown in the Articles, or such other address as may be established pursuant to Section 2.1 (b) hereof. (s) “Regulations” means the Income Tax Regulations, including Temporary Regulations, promulgated under the Code, as such Regulations are amended from time to time (t) “Substitute Member” means any person or Entity who or which is admitted into Membership on the written consent of the Members pursuant to section 6.4. ARTICLE II MEMBERS; MEMBERSHIP INTERESTS 21 Names, Addresses and Initial Capital Contributions of Members. Members, their respective addresses, their initial Capital Contributions to the Company, and their respective Percentage Interest in the Company are set forth on Exhibit A, attached and made a part of this Operating Agreement. Each Member has previously made the initial capital contribution to the Company set forth opposite such Member’s name as reflected in Exhibit A.2.2 Additional Contributions. Subsequent contributions must be in such amounts and may be in any type of property as is decided by the Members. All Members are required to make additional Capital Contribution in such amounts and at such time as determined by the Members of the Company. 2.3 Member Loans or Services. Services rendered by any Member to the Company may not be considered to be contribution to the capital of the Company. Members may make loans to the Company, evidenced by a promissory note, bearing interest at the “Wal] Street Journal Prime Rate Interest”, such loans having the priority for repayment as set forth under this Agreement. 24 Certificates for Membership Interests. A Member’s Interest in the Company may be represented by a Certificate of Membership. The exact contents of a Certificate of Membership is determined by the Members. 2.5 Capital and Capital Accounts. (a) The initial Capital Contribution of each Member is as set forth on Exhibit A. No interest shall be’payable on any Capital Contribution. (b) Anindividual capital account (the “Capital Account”) must be established and maintained on behalf of each Member, including any additional or substituted Member who shall hereafter receive an Interest in the Company. The Capital Account of each member consists of (i) the amount of cash the Member has contributed to the Company, plus (ii) the agreed fair market value of any property the Member has contributed to the Company, less any liabilities assumed by the Company or to which such property is subject, plus (iii) the amount of profits or income (including tax-exempt income) allocated to such Member, less (iv) the amount of losses and deductions allocated to such Member, less (v) the amount of all cash distributed to such member, less (vi) the fair market value of any property distributed to such Member, net of any liability assumed by such member or to which such property is subject, less (vii) such Member’s share of any other expenditures which are not deductible by the Company for federal income tax purposes or which are not allowable as additions to the basis of Company property, and (viii) subject to such other adjustments as may be required under the Code. The Capital Account of a Member is not affected by any adjustments to basis made pursuant to Section 743 of the Code but must be adjusted with respect to adjustments to basis made pursuant to Section 734 of the Code. (c) No Member has the right to withdraw its, his or her Capital Contribution or to demand and receive property of the Company or any distribution in return for its, his or her Capital Contribution, except as may be specifically provided in this Operating Agreement or required by law. No Member may receive out of Company property any part of its, his or her or its Capital Contribution until (i) all liabilities of the Company, except liabilities to Members on account of their loans have been paid or sufficient Company property remains to pay them, and (ii) the Members consent, unless the return of the Contribution to Capital is rightfully demanded as provided in the Act.(d) Subject to the provisions of subsection (c) of this Section, a Member may rightfully demand the retum of its Capital Contribution (i) on the dissolution of the Company, or (ii) as may otherwise be provided under this Agreement or the Act. A Member may demand and receive only cash in return for the Member’s Capital Contribution. 2.6 Admission of Additional Members. (i) The Members may admit to the Company additional Member(s) to participate in the profits, losses, available cash flow, and ownership of the assets of the Company on such terms and conditions as aré determined by the Company, (ii) admission of any such Additional Member(s) shall require the written consent of the Company, and (iii) any Additional Members are allocated gain, loss, income or expense by the method provided in this Operating Agreement, and if no method is specified, then as may be permitted by Section 706(d) of the Code. 2.7 Limitation on Liability. No member is liable under a judgment, decree or order of the court, or in any other manner, for a debt, obligation or liability of the Company, except as provided by law. No Member is required to, but may as provided herein, loan any funds to the Company. Except as may be expressly provided otherwise herein, no Member is required to make any contribution to the Company by reason of any negative balance in his capital account, nor does any negative balance in a Member’s capital account create any liability on the part of the Member to the Company or any third party. 2.8 Authority. Each member, acting alone, has the authority to act for, or to undertake or assume, any obligation, debt, duty or responsibility on behalf of the Company, subject to §3.2 of this Agreement. 2.9 | No Member Responsible for Other Member's Commitment. In the event that a Member (or a Member’s shareholders, partners, members, owners, or Affiliates) has incurred any indebtedness or obligation prior to the Effective Date hereof that relates to or otherwise affects the Company, neither the Company nor any other Member has any liability or responsibility with respect to such indebtedness or obligation unless such indebtedness or obligation is assumed by the Company pursuant to a written instrument signed by the Company, Furthermore, neither the Company nor any Memberis responsible or liable for any indebtedness or obligation that is hereafter incurred by any other Members (or a Member’s shareholder, partners, members, owners, or Affiliates). In the event that a Member (or a Members’ shareholders, partners, members, owners, or Affiliates (collectively, the “liable Member”), whether prior to or after the date hereof, incurs (or has incurred) any debt or obligation that neither the Company nor any of the other Members is to have any responsibility for, the liable Member must indemnify and hold harmless the Company and the other Members from any liability or obligation they may incur.ARTICLE IL MANAGEMENT AND CONTROL OF BUSINESS 3.1 Managing Member. ROBERT D. BURKE, M.D. shall serve as the initial Managing Member of the Company for a period of two (2) years. This initial term shall automatically renew at the end of such two (2) year period unless the Members, by majority vote, elect a new Managing Member. The Managing Member shall be under a fiduciary duty to conduct the affairs of the Company at arms length and in the best interests of the Company and of the Members. Subject to the limitations and restrictions set forth in this Agreement, the Managing Member shall manage the Business of the Company and shall have all of the rights and powers which may be possessed by a Member under the Act including, without limitation, the right and power to: 3.1.1 Execute (subject to ratification of seventy-five percent (75%) of the Members of the-Company as set forth in Section §3.3 below, or if applicable, with the consent of all of the Founding Members) any and al] agreements, contracts, documents, certifications, and instruments necessary or convenient in connection with the management, maintenance, and operation of the Business, or in connection with managing the affairs of the Company, including executing amendments to the Agreement and the Certificate, in accordance with the terms of the Agreement, both as Managing Member and, if required, as attorney-in-fact for the Members pursuant to any power of attorney granted by the Members to the Managing Member. 3.1.2 Contract on behalf of the Company with third parties and Affiliates of the Managing Member for the employment and services of employees and/or independent contractors and delegate to such persons the duty to manage or supervise any of the assets or operations of the Company; 3.1.3 Engage in any kind of activity and perform and carry out contracts of any kind (including contracts of insurance covering risks to the Business and Managing Member liability) necessary or incidental to, or in connection with, the accomplishment of the Business purposes of the Company, as may be lawfully carried on or performed by a Company under the laws of each state in which the Company is then formed or qualified; 3.1.4. Make any and all elections for federal, state, and local tax purposes including, without limitation, any election, if permitted by applicable law: (i) to adjust the basis of the Business pursuant to Code Sections 754, 734(b), and 743(b), or comparable provisions of state or local law, in connection with transfers of interests in the Company and Company distributions; (ii) to extend the statute of limitations for assessment of tax deficiencies against the Members with respect to adjustments to the Company's federal, state, or local tax returns; and (iii) to the extent provided in Code Sections 6221 through 623 1, to represent the Company and Members before taxing authorities or courts of competent jurisdiction in tax matters affecting the Company and Members in their capacity as Members, and to file any tax returns and execute any agreements or other documents relating to or affecting such tax matters, including agreements or other documents that bind theMembers with respect to such tax matters or otherwise affect the rights of the Company and Members. The Managing Member is specifically authorized to act as the “Tax Matters Member” under the Code and in any similar capacity under state or local law; 3.1.5 Cause the Company to carry such insurance as is customary in the business in which the Company is engaged and in the places in which it is so engaged. 3.1.6 Take, or refrain from taking, all actions, not expressly proscribed or limited by this Agreement, as may be necessary or appropriate to accomplish the purposes of the Company; and 3.1.7 Institute, prosecute, defend, settle, compromise, and dismiss lawsuits or other judicial or administrative proceedings brought on or in behalf of, or against, the Company or the Members in connection with activities arising out of, connected with, or incidental to this Agreement, and to engage counsel or others in connection therewith. 3.2 Right to Rely on Managing Member. 3.2.1 Any Person dealing with the Company may rely (without duty of further inquiry) upon a certificate signed by the Managing Member as to: (a) The identity of the Managing Member or any Member; (b) The existence or nonexistence of any fact or facts which constitute a condition precedent to acts by the Managing Member or which are in any other manner germane to the affairs of the Company; (c) The Persons who are authorized to execute and deliver any instrument or document of the Company; or (d) Any act or failure to act by the Company or any other matter whatsoever involving the Company or any Member. 3.2.2 The signature of the Managing Member shall be necessary and sufficient to enter into any Agreement on behalf of the Company or take any other act related to the affairs of the Company. All of the Members agree that a copy of this Agreement may be shown to the appropriate parties in order to confirm the same, and further agree that the signature of the Managing Member shall be sufficient to execute any “statement of Company” or other documents necessary to effectuate this or any other provision of this Agreement. All of the Members do hereby appoint the Managing Member as their attorney-in-fact for the execution of any or all of the documents described in this Section 3.2.2.3.3 Restrictions on Authority of Managing Member. The Managing Member shall act without restriction by the other Members in conducting the affairs of the Company. However, Managing Member agrees that Managing Member shall not have the authority to, and covenants and agrees that Managing Member shall not, do any of the following acts without the consent of Members owning Seventy-Five Percent (75%) of the total Percentage Interests, as well as the unanimous consent of the Founding Members; or simply with the unanimous consent of the Founding Members: 3.3.1 Cause or permit the Company to engage in any activity that is not consistent with the Business of the Company as set forth in Section | .4, above or to terminate the Business; 3.3.2 Terminate the Company or this Agreement; 3.3.3 Authorize the issuance of additional Percentage Interests to the Members; 3.3.4 Knowingly do any act in contravention of this Agreement; 3.3.5 Knowingly do any act which would make it impossible to carry on the ordinary business of the Company, except as otherwise provided in this Agreement; 3.3.6 Possess the Business, or assign rights in the Business, for other than a Company purpose; 3.3.7 Knowingly perform any act that would subject any Member to liability as a Managing Member in any jurisdiction; 3.3.8 Sell or otherwise dispose of at one time all or substantially all of the assets of the Business; 3.3.9 Cause the Company to voluntarily take any action that would cause a Bankruptcy of the Company; 3.3.10 Hiring, firing or amending the employment agreement or status of any physician employee (including Members who are not-Founding Members) of the Company; 3.3.11 Any decision set forth in this Agreement which requires the consent stated herein, including, but not limited to, allowing any Member to change their working status to “part- time” under Article 6.1 hereunder; 3.3.12 Indemnifying any Member, including the Managing Member under Article 8 below; or 3.3.13 Entering into any obligation on behalf of the Company in excess of Five Thousand Dollars ($5,000.00).ARTICLE IV ACCOUNTING AND RECORDS 4] Records and Accounting. The books and records of the Company must be kept, and the financial position and the results of its operations r