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Filing # 82757323 E-Filed 01/02/2019 04:22:01 PM
EXHIBIT 1
THIRD AMENDED AND RESTATED OPERATING AGREEMENT
DATED JUNE 1, 2013
IN SUPPORT OF DEFENDANTS’ ANSWER TO SECOND AMENDED COMPLAINT
Genicon LLC
Third Amendcd and Restated
OPERATING AGREEMENT
OF GE1vICON LLC
A Florida Limited Liability Company
June 1, 2013
Table of Contents
1.FORMATION................. ..................................................................................................... ........4
2.DEFINITIONS. .................................................................,.................................. .............. 4
3.NAMB, OFFICE OF COMPANY AND REGISTERED AGENT......................... 8
3.1 Name......... ... ... ........ .... .... . .....~ .. ............. ...,............. S
_ 3.2 PnnctpTOffice...................:.......................................... 8
3.3 Registered Agent............................................................... 8
4,BUSiNESS AND PURPOSE OF COMPANY............................................... 8
S.MLMBEItSHIP CLASSIFICATIONS......................................................... 8
S.1 ~ Class A Membership Unit................................................... 8
5.2 Class B Membarstup Unit................................................... 8
5,3 Members Holding Multiple Classas. . . . . . . . . . .. . . . .. . . . .. . . . ... .. . . ... .. . . 8
6. MEMBERS, INTERESTS AND CAPITAL.................................................. 8
6,1 Members Tntetests and Capital Contribution. .. . . .. . . . . . . . . . . . .. .. . . .. 8
6.2 Mambers' Accounts............................. .... ...................................................9
6.3 Additional Members.......................................................... 9
6.4 Additional Capital,. .. . . . ., . „ .. . ., .. , „ . .. .. . ... .. . . .. . .. ... .. .. 9
6.5 No Third-Party Beneficiaries................................................ 9
7. ALLOCATIONS OF PROFITS AND LOSSES.............................................. 9
7.1 Classes Entitled to Net Profits and Net Losses.. .. .. . „ .. .. .. .. .. .. .. . .. . 9
7.2 Allocations of profits.......................:................................. 9
7.3 Allocations of Losses. ............................................................................ ........9
8. DIS'IR7BUTIONS ..................................................................................................... ... ..... 9
8.1 Annual Distribution........................................................... 9
8,2 Mid-Year Transfers.......................... ...............................................................9
9. MANAGEMENT...................................:............................................. 9
9.1 Board of Managers. 9
9.2 Voting to Approve Certain Actions. . . . . . .... . . .... . ....... ... . . .. . 9
9.3 ~lactionandRemovalofManagers. ..............................................................10
9.~ Meetings and Notice........................................................... 10
9.5 Quorum......................................................................... 11
9.6 Business Plan................................................................... 11
9.7 Relegation of Powers. . . . . .. . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . .. . . 11
9.8 Written Consents. .. . .. . . .. ... . .. . .. . .. . .. . .. . .. . .. .. .. .. .. . .. . . .. . .. . .. .. 11
9.9 Officers............. ..............................................................................................11
9.10 No Authority of Member(s).... ........................................................................ 12
9.11 Records, Reports, and Audit................................................ 12
9,12 Reimbursements and Compensation................ .............................................. 14
9.13 Resignations. .................................................................................................. 15
9.14 Electronic Communications...... . .. ... . . . . ......... . . .. .. . . .. . . 14
9.15 No Implied Duties............................................................ 20
9.16 Interested Transactions...................................................... 21
9.17 Managers Have No Exclusive Duty to Company....................... Z1
9.18 Indemnity of the Managers and Officers. . .. . .. .. .. .. .. . . .. . .. ... .. . . .. . ... 21
9.19 Salaries........................................................................... 22
10. MEETINGS OFMEMBERS................................................................... 22
10.1 Meetings ......................................................................... 22
10.2 Place of Meetings. .......................................................................................... 22
103 Notice of Meetings. ........................................................................................ 22
10.4 Meeting of All Members.................................................. ............................... 23
10.5 Record Date.............:................................................... ................................... 23 .
10.6 Quorum.......... .................................................................................................23
l0.7 Manner of Acting............................................................... 23
10.8 Proxies........................................................................... 23
10.9 Action by Members without a Meeting.................................... 24
10.10 Waiver ofNotice............................................................... 24
_____--- . __ 10,11 -----duper-Majorityin-Interest-Vote-Required..,. ,-...:.-, ,-, ... ._,.,. ., 24 _
10.12 Forty Percent in Interest for Sale............................................ 24
11. ACCOUNTS, BOOI{S, RECORDS, ACCOUNTING, REPORTS AND. TAX
MAT'I'ERS......................................................................................... 25
11.1 Bank Accounts................................................................. 25
11.2 Maintenance of Books.... ..... .. .. . . . . .. . .... . ... .. . .... .. . .. . . . ..25
11.3 Method of Accounting.. ...... . ...... . . . .... . .. . ........ . .. . ... . ..25
11.4 Annual Reports... . . . . . .. . . . . . . . .. . ... . . . . . . . . . . . . ..... .. . . . . . ..25
11.5 IZelease of Information. . . . .... ... . . ... . .... . . . . ... . ..... . . . .... . . 25
11.6 Tax Returns.. . .......... . .. .. .... . ... .. ..... . . . ... . . . .... . . ... . ..25
11.7 IRS Proceedings...... ... . . . . . . .. . . . .. ....... . . . ..... . . ... . . ... . . . . 25
1I.8 Selection of Accountant...................................................... 26
12 ASSIGNABILITY OF MEMBERSHIP INTERESTS........................................... 26
12.1 Disposition, Pledge or Encumbrance of Interests. . .. .... . . . . . . .... . 26
12.2 Right of First Refusal.. ....................................................................................26
123 Tag-Along _ _ Rights..........................:................................... 26
12.4 I?rag-Along Rights............................................................ 27
12.5 Election to Purchase Member Interests................................... 27
12.6 Appraisal Rights in Event of Squeeze Out . . .... . ... . .. ....... ..... . .27
12.7 Fair Market Value............................................................ 27
12.8 Certificate Legends........................................................ ... 28
12.9 Additional Provisions on Transfer of Interests........................... 29
12.10 Substituted Members ......................... ............................................................29
12.11 Excluded Transfers 30
12.12 Company's Obligation in the Event of Death or Disability of
Member......................................................................... 30
13 DISSOLLT'TION AND WINDING-UP......................................................... 30 ~
13.1 Events Causing Dissolution and Winding-Up........................... 30
13.2 Winding-Up..................................................................... 31
14 MISCELLANEOUS PROVISIONS........ .................................................................................... 31
14.1 Governing Law. . ............ .. ........ . . . . . . .. ...... . . . .. . ... . . 31 _
14.2 Captions.... . .......... . ... . .......... . .. . .. . ...... . .. . . ..... . . 31
14.3 Construcrion................................................................... 31
14.4 Survival of Representations and Warranties............................. 32
14.5 Severability.................................................................... 32
14.6 Successors.... ..................................................................................................32
14.7 Execution and Counterparts................................................. 32
14.8 Thud-Party Beneficiary.................................................. .... 32
14.9 Investment Representatioa.................................................. 32
14.10 Entire Agreement............................................................... 32
15 NOTICES, CONSENTS AND WRITING REQUIREMENT............................... 33
Third AMENDED AND RESTATED OPERATING AGREEMENT OF GENIC ON LLC
This AMENDED AND RESTATED OPERATING AGREEMENT OF
GENICON, LLC (hereinafter "Agreement"), is entered into as of the 1st day of June 2013 by and
between the persons identified in Exhibit A, entitled "GENICON, LLC, MEMBERSHIP
INTERESTS", attached hereto and incorporated by reference. This Agreement amends and restates
the Second Amended and Restated Operating Agreement of Genicon, LLC, dated March 28, 2013, to
correct the membership as set forth in Exhibit A.. This Agreement shall govern the business affairs of
Genicon, LLC, each of the Members agree upon the following terms and conditions, which shall
apply to such other persons who become additional or substituted Members and are subsequently
included in E~chibit A.
1. FORMATION.
The Company was formed under the name GErTICON, LLC, upon the filing of the Articles of
Organization with the Secretary of Florida on November 20, 2012.
2. DEFIl~ITIONS.
The following terms used in this Agreement shall (unless otherwise e~ressly provided herein or
unless the context otherwise requires) have the following respective meanings: The Florida
Limited Liability Company Act as set forth in Chapter 608, Florida Statutes, as it maybe amended
or superseded from time to time.
~liate-or-Affiliated-Person-. --- - - ----
(i) Any Person that, directly or indirectly, through one or more intermediaries,
controls or is controlled by or under common Control with the specified Person;
(ii) Any Person that is an officer, director, employee, shareholder, or member o~
partner in, or trustee of, or serves in a similar capacity with respect to, the specified Person or of which
the specified Person is an officer, partner or trustee, or with respect to which the specified Person
serves in a similar capacity;
(iii} Any Person that, directly or indirectly, is the beneficial owner often percent
(10%) or more of any class of equity securities of, or otherwise has a substantial beneficial
interest in, the specified Person or of which the specified Person is directly or indirectly the
owner of ten percent (10%) or more of any class of equity securities or in which the specified Person
has a substantial beneficial interest
(iv) Any relative or spouse of the specified Person;
Agreement.
This Operating Agreement, as originally executed and as amended from time to time.
Annual Meeting.
The annual meeting of the Members holding Class A Membership Units of the Company.
Bankruptcy.
The entry of an order for relief with respect to a Member in proceedings under the United States
Bankruptcy Code, as amended or superseded from time to time.
Business Plan.
The operating and capital budgets described in Section 9.2.
Buy-Out Even
(i) The filing of an application by a Member fot, or its consent to, the appointment of
a trustee, receiver, or custodian of its assets;
(ii) The making by a Member of a general assignment- for the benefit of creditors;
(ui) The entry of an order, judgment or decree by any court of competent jurisdiction
appointing a trustee, receiver or custodian of the assets of a Member unless the proceedings and the
person appointed aze dismissed within ninety (90) days;
(iv) The failure by a Member generally to pay its debts as the debts become due
within the meaning of Section 303(h)(1) of the United Staxes Bankruptcy Code, or a Member's
admission in writing of its inability to pay its debts as they become due;
(v) A Member's Interest's becoming subject to the enforcement of any rights of a
creditor of a Member, whether arising out of an attempted charge upon that Member's Interest by judicial
process or otherwise, if that Member fails to effectuate the release of those enforcement rights, whether
by legal process, bonding, or otherwise, within ninety (90) days after actual nonce of that creditor's
action;
(vi) The BanlQuptcy of a Member;
(vii) The death, disability, or adjudication of incompetency of a Member; or
(viii) The election of a Member to dispose of all or any part of an Interest.
Capital. Account
A capital account maintained in accordance with the rules contained in Treas. Reg.
§ 1.704-1 (b )(2) together with applicable rules under the Chapter 704 of the Internal Revenue Code
as ameflded from time to time.
Capital Contribution.
Any contribution to the capital of the Company in cash or property bya Member whenever made
which is authorized by the Act.
Class A Membership Unit.
A Membership Unit of the Company that has been designated as a Class A Membership
Unit.
Mass-B-Membership Unit. -- ------
A Membership Unit of the Company that has been designated as a Class B Membership
Unit.
CompanX_
T'he limited liability company organized and existing under this Agreement, to wit:
Genicon, LLC.
Control.
Tl~e possession by any Person or related group of Persons, directly or indirectly, of the power to direct
or cause the direction of the management and policies of a Person, whether through ownership of
voting securities or partnership or limited liability company interests, by contract or otherwise.
Debt Service.
The total of all payments, including principal and interest, due with respect to any loans to the
Company or to which the property or assets of the Company are subject.
Disposition.
The sale, assignment, transfer, ~exchar~ge, or other disposition of all or any part of an Interest, in any
manner, whether voluntarily or involuntarily, or by operation of law or otherwise.
Economic Interest.
A Member's share of one or more of the Company's Net Profits, Net Losses and distribution of the
Company assets pursuant to this Operating Agreement and the Act, but shall not include the right to
vote on, consent to or otherwise participate in any decision of the Company.
Fiscal Year.
The accounting period of the Company.
First Refusal Offer.
The offer to purchase Membership Interests of and made by the Offering Member to all Members and
the Company as a result of the receipt of a Third Party Offer by the Offering Member.
Initial Capital Contribution.
T'he initial contribution to the capital of the Company made by a Member pursuant to this Agreement.
Initial Board of Managers
The persons, or anyone of the persons, comprising the Board of Manager as a result of execution of this
Third Amended and Restated Operating Agreement, to wit: Gary W. Haberland, John A. Famella, Jr,
and Gregory A. Zittel.
Invested Capital of the Member
The total amount of money, property or services and the agreed upon fair market value of said property or
services contributed to the Company by a Member or its predecessor in interest on the date of
contribution.
Majority inInterest and Super Majority in Interest
A Majority in Interest shall mean, with respect to all or a specified class of the Members, such of those
Members as hold more than fifty percent (50%) of the total Interests then held by all ar the specified
class of Members.
A Super Majority in Interest shall mean, with respect to all or a specified class of the Members, such
of those Members as hold more than seventy-five percent (75%) of the total Interests then held by all
or the specified class of Members.
Members.
The Persons so identified in Exhibit A and any person that becomes an additional or substituted
Member pursuant to this agreement.
Membership Interest.
The ownership interest, expressed as a number of Units as set forth in E~ibit A of a Member in the
Company (and of all of the Members of the Company) at any particular time including the right of the
Member to any and all benefits to which the Member is entitled and obligations to which such
Member is subjectunder th~greement.
Net Cash from Operations.
For any Fiscal Year, the excess of Operating Revenues over the sum of (1) Operating E~enses of the
Company paid in cash during the year, (2) Debt Service, and (3) any reasonable reserves as determined
by the Members, for Operating Expenses, for the repair, replacement or preservation during the current
or subsequent years of any Company asset, for Debt Service or for wonting capital, business
development needs, contingencies and unanticipated obligations.
Net Proceeds from Financing.
Net cash realized by the Company from borrowing by the Company or refinancing of indebtedness of the
Company, reduced by (1) all expenses related to the borrowing or refinancing, (2) the amount applied at
the sole discretion of the Members, toward the payment of any indebtedness of the Company, and (3)
reasonable reserves, as determined by the Members in the reasonable exercise of its discretion, to satisfy
other obligations of the Company or anticipated capital expendihues.
Net Proceeds from Sale.
Net cash realized by the Company from the sale, exchange, condemnation, or other _ _ disposition of all or a __
apportion of the capital assets of the Company or from policies of ins~uance for damage to, or
deshuction of, or defects of title to, capital assets (but if insurance proceeds are applied, or are to be
applied, to repairing or replacing the assets damaged or destroyed or curing defects of tifle, only to the
extent those proceeds exceed the actual or estimates costs thereofl, reduced by (1) all expenses related to
the transacting (2) the amount applied at the sale discretion of the 1Vlembers toward the payment of any
indebtedness of the Company and (3) reasonable reserves, as detemuned by the Members in the
reasonable exercise of its discretion, to satisfy other obligations of the Company or anticipated capital
expenditures.
Operarin~penses.
All costs and expenses of ownership and operation of the Company including, but not limited to, costs of
operation, tomes, insurance premiums, utility costs, charges for cleaning and cleaning supplies, costs of
repairs and maintenance, costs and fees associated with management, payroll costs, costs for general,
administrative and overhead, audit and appraisal expenses, leasing fees, any other expenses incurred in
the ordinary course of operating the Company aad reserves for operating expenses and capital
expenditures as determined by the Members.
Operating Revenues.
All cash revenue from the operation of the Company (excluding refundable deposits or unearned rent),
interest income received during the year, and reserves set-aside in prior years and no longer deemed
necessary for the Company's business, in the reasonable.discretion of the Members.
Person.
Any individual, corporation, par~ership, limited liability company, joint venture, association, trust, firm
or unincorporated organization, any government or any agency, authority or political subdivision thereof,
or any other entity.
Prime Rate.
The prime rate (or base rate) reported in the "Money Rates" column or section of The Wall Street
Journal as being the base rate on corporate loans at larger U.S. Money Center banks on the first date on
which The Wall Street Journal is published in each month.
In the event The Wall Street Journal ceases publication of the Prune Rate, then the "Prime Rate" shall
mean the "prime rate" or "base rate" announced by the bank with which the Company has its principal
banking relationship (whether or not such rate has actually been charged by that bank) or as otherwise
designated by the Members. In the event that the bank discontinues the practice of announcing that rate,
"Prime Rate" shall mean the highest rate charged by that bank on shortterm, unsecured loans to its
most credit worthylarge corporate borrowers, unlessotherwise designafed-bythe1Vlembers.
Removal for Cause.
Removal for Cause shall~include removal for (i) intentional nonperformance of the duties of a Manager of
the Boazd, determined by the affirmative vote of a Super Majority in Interest of Members holding Class
~A Membership Units; (ii) willful dishonesty, fraud or misconduct with respect to the affairs of the
Company, which in the discretion of the Board of Managers materially and adversely affects the
Company and said removal is supported by the affirmative vote of a Super Majority in Interest of
Members holding Class A Membership Units; (ui) a conviction of, or plea of nolo contender to, a felony
or other crime involving moral turpitude; or (iv) the commission of any act which is materially
detrimental to the best interests of the Company, determined by the affurnative vote of a Super Majority
in Interest of Members holding Class A Membership Units.
Removal for Cause will not, however, include any action or circumstances constituting Cause, as defined
above, if such person which would be subject to Removal for Cause cures such actions or circumstances
wit}vn thirty (30) days of receipt of written notice from the Company setting forth the actions or
circumstances constituting Cause _ _ _
Reverse Split Transaction.
A reduction in the number of the Company's outstanding units that increases the par value of its units
or its earnings per unit, but the market value of the total number of units remains the same.
Sale Transaction
The transfer by a Member and/or any of its Transferees, in one transaction or a series of transactions
(other than a public offering under the Securities Act), of all or any portion of its or their Membership
Interests to one or more Persons other than an Affiliate and, as a result of which, such Person or group of
Persons would own a maj ority of outstanding Membership Interests in the Company.
Selling Member.
A Member who is engaging in a Sale Transaction.
Squeeze-Out Member.
A Member who is left with less than one Membership Unit as a result of a Reverse Split Transaction.
Successor in interest.
The person that succeeds to an interest upon the death, adjudication of incompetency, dissolution or
Bankruptcy of a Member (including the debtor in possession where applicable).
Third Party.
A person or entity that is not a Member nor an Affiliate of a Member.
Third Party Offer.
A bonaftde written offer by any Third Party dealing at arm's length to purchase any of the Membership
Interests of a Member.
United States Bankruptcy Code.
Title 11 of the Unites States Code, as amended from time to time.
3. NAME. OFFICE OF COMPANY AND REGISTERED AGENT.
3.1 Name
The name of the Company is Genicon, LLC. The business of the Company may be conducted
under such trade or fictitious names as the Board of Managers may determine in accordance
with applicable law.
3.2 Principal Office.
The principal office of the Company, at which the records required to be maintained by the Act are
kept, shall be at the location provided for in the initial Articles of Organization, or such other place as
the Board of Managers may determine. The Company shall give notice to the Members of any
change of the principal office.
3:3 RegisteredAgent.
The Company's registered agent and office process shall be as set forth in the initial Articles of
Organization, or, as the Board of Managers may hereafter designate.
4. BUSINESS AND PURPOSE OF THE COMPANY.
The business and purpose of the Company pursuant to this Agreement shall be any lawful business
that may be engaged in by a limited liability company organized under the Act, as such business
activities may be determined by the Board of Managers from time to time. The Company shall have
the authority to do all things necessary or convenient to accomplish its purposes and operate its
business and to engage in any and all business activities related or incidental thereto.
5. MEMBERSHIP CLASSIFICATIONS
5.1 Class A Membership Unit.
The units of membership of the Company which may be issued by the Company and designated as
Class A which shall have tl~e exclusive entitlement to vote on Company matters as outlined in this
Agreement. The Class A Units can never be sold for more than what. the owners have paid for them.
5.2 Class B Membership Unit
The units of membership of the Company which may be issued by the Company and designated as
Class B which shall be entitled to the Economic Interests of the Company. Class B Units shall be
designated non-voting Units and shall have no rights to vote on any matter.
5.3 Members Holding Multiple Classes
Members inay hold Class A and Class B Membership Units.
6. MEMBERS, INTEREST AND CAPITAL.
6.1 Members, Interests and Capital Contributions.
The names, Interests and Capital Contribution of the Members, to be made simultaneously with the
execution of this Agreement are set forth in Exhibit A. Thereafter, as names of the Member,
Interests and Capital contributions may change, from time to time, the names, Interests and Capital
Contributions of Members will be hereafter set forth in E~ibit A, as amended and/or restated, and
attached hereto by the Company upon the admission of additional or substitute Members or the
withdrawal of Members as provided in this Agreement.
6.2 Members' Accounts.
The Company shall maintain in its records a separate Capital Account and shall furnish each Member
with a statement of his or her Capital Account and of the Net Profit or Net Loss allocable to each
Member as of the end of each fiscal year. The Capital Account of each Member shall be equal to his
or her Initial Capital Contribution (a) plus (i) any additional Capital Contributions and (ii) any items
of income and gain allocated to such Member by the Company from Company income and gains;
and (b) less (i) the distributions made to such Member by the Company from Company assets, and
(u) the items of loss and deduction allocated to such Member by the Company from Company losses
and deductions. The Capital Accounts shall not bear interest.
No Member has the right to the return or distribution of his or her Capital Account except to the
extent speciftcally provided in this Agreement. No Member is liable, either before or upon
termination of the Company to the Company for any negarive balance in any account except to the
extent that such a negative balance arose as a result of a Member's failure to make an Initial Capital
Contribution for that Member's interest or receipt of a distribution in excess of the amount rightfully
due such Member under this Agreement.
6.3 Additional Members.
Except as provided in Section 12 of the Agreement or in accordance with a written policy and/or
procedure adopted by the Board of Managers and as approved by a Majority in Interest of the
Members, no person maybe hereafter admitted as a Member of the Company Such person shall be -_
admitted only as provided in such written policy andlor procedure. The amount of the Capital
Contribution and the terms ofpayment thereof to be made by such persons) who shall become
additional Members shall be contained in such written policy/or procedure as is adopted by the
Company from time to time.
6.4 Additional Capital.
Except with the unanimous consent of the Members, no Member shall be required to lend any money
or property or make any additional Capital Contributions after he or she shall become a Member.
In the event additional capital is raised directly by the Company, FARNEI,LA GErTICON
HOLDINGS LLC, and Gary Haberland's ownership in the Company will not be dilutedby such capital
raise (investment in the Company) unless they provide a written consent approving such dilution. Tlvs
non dilution provision does not apply to any other Unit holders.
6.5 No Third PartyBeneficiaries.
The foregoing provisions of this Section are not intended to be for the benefit of any creditor or
other person to which any debts, liabilities or obligations are owed by (or that otherwise has any
claim against) the Company or any of the Members; and no creditor or other person shall obtain
any right under any of the foregoing provisions or shall by reason of any of the foregoing
provisions make any claim in respect of any debt, liability or obligation (or otherwise) against the
Company or any of the Members.
7. ALLOCATIONS OF PROFITS AND LOSSES
7.1 Classes Entitled to Net Profits and Net Losses.
Only Members holding Class B Membership Units shall be entitled to an allocation of Net Profits
or Net Losses, as the case maybe.
7.2 Allocations of Profits.
The Net Profits of the Company shall be allocated among the Members holding Class B Membership
Units, as of the end of the Fiscal Year, in proportion to their Class B Membership Interests and shall
be allocated first and proportionally to those Members holding Class B Membership Units who, in
previous fiscal years, were allocated Net Losses in accordance with Section 73.
73 Allocations of Losses.
The Net Losses of the Company shall be allocated among the Members holding Class B Membership
Units, as of the end of the Fiscal Year, in proportion to their Class B Membership Interests.
8. Distributions.
81Annual Distribution.
At least annually, the Board of Managers, by majority vote as outlined in Section 9.2
shall recommend to the Members holding Class A Membership Units the amount and manner of
distributions to be made to the Members holding Class B Membership Units, after ensuring an adequate
reserve for business operations will be retained by the Company. The Board of Managers shall make
such a recommendation of distribution in amounts necessary to enable the Members holding Class B
Membership Interests to pay income taxes and make estimated income tax payments to satisfy their
liabilities under federal and state law which arise solely from their status as Members of a limited
liability company because of their ownership of Class B Membership Units. The Board of Managers,
in its discretion, may make additional recommendations for distributions as it deems advisable andpro
rata to the Members holding Class B Membership Units. Such recommendations hereunder must be
approved by the affirmative vote of a Super Majority in Interest of those Members holding Class A
Membership Units prior to any distributions being made by the Compaay.
8.2 Mid- Year Transfers.
In the case of all or part of any Interest that has been transferred during the Fiscal Year, unless
otherwise agreed by the parties:
-- --(a)Net-Cask fromOperationsshall be distributed to the holder of theMembers holdingClass
B Membership Units on the date of distribution.
(b) Net Proceeds from Sale or Financing allocable to the Interest (or portion of an Interest) shall
be distributed to the holder of the Interest on the date of distribution.
.,
9. MANAGEMENT
9.1 Board of Managers. The management and the control of the Company will be vested exclusively
in a Board of Managers, which shall initially be composed of the following three (3) individuals:
John A. Farnella, Gary Haberland, and Gregory A. Zittel. Except where expressly provided to the
contrary in this Agreement or by law, the Board of Managers will exercise any and all powers that
the Members would otherwise exercise. The Board of Managers may bind and otherwise act as an
agent of the Company in relation to third parties and outside affairs.
9.2 Votin~p~rove Certain Actions. Except as otherwise specified in this Agreement all actions
required to be taken by the Board of Managers and all of its decisions concerning the management of
the Company's business will be made by the affirmative vote of a majority of all Managers at a
meeting at which a quorum is presentin accordance-with Section 9.5 hereof. Such decisions -shall
include, without limitation:
(a) Approving the annual operating and capital budgets of the Company;
(b)Borrowing money or otherwise committing the Company's credit for the Company
activities and voluntary prepayments or debt e~ctensions;
(c) Electing officers of the Company or removing officers of the Company;
(d) Exercising the Company's option to purchase Membership Interests;
(e) Selling, leasing, exchanging, or otherwise disposing of all or substantially all the Company's
assets (with or without goodwill);
(fl Approving, adopting and enforcing the rules, regulations, policies and procedures of the
Company;
(g) Recommending the dissolution, liquidation, and/or termination of the Company;
(h) Hiring, entering iato, amending or terminating the employment of, or contracting with, any
Officer or any Person related to an Officer
(i) Selecting or changing the name under which the Company is operated or the location of the
business owned and operated by the Company;
(j) Making credentialing decisions on behalf of the Company, as applicable;
(k)Approving any salary or other compensation payable to any officer.
(m)Leasing, purchasing, or selling real properly interests;
(n)Filing of a voluntary petition for relief by the Company under any provision of the United States
Bankruptcy Code or any similar or other law relating to bankruptcy, insolvency, reorganization, or
other sunilar relief; or
(o)Approving the filing of any lawsuits, or settlement of any litigation, to which the Company is a
Pa~3'•
93 Election and Removal of Managers.
(a) Election and Removal of Managers. The Managers shall be elected by vote of a Super Majority in
Interest of those Members holding Class A Membership Units and will serve until resignation or
until removed by vote of a Majority in Interest of those Members holding Class A Membership
Units. The immediately preceding sentence shall not apply to any person comprising the Initial
Board of Managers. The Initial Board of Managers shall serve until resignation or Removal for
Cause Upon resignation or removal of a Manager, the Vice-President shall automatically and
contemporaneously therewith, become ari Interim Manager and shall serve with full power of the
Managers until such time as a successor Manager is elected by a vote of a Majority in Interest.
(b) Change in Number of Managers. The number of Managers may be increased ar decreased upon
-__ _ __ __ - -- -- -
the approval of a Super Majority in Interest of those Members holding Class A Membership Units;
however, no decrease- in the number of Managers will have the effect of shortening the terna of any
incumbent Manager. In no event, shall the number of Managers be reduced to a nwnber which would
result in John A. Farnella, M.D., comprising more than fifty percent (50%) of the total number of
Managers without the written conserrt of John A. Famella, M.D.
(c) Term of Office. The Managers) will serve until such Manager's successor has been elected,
unless any such Manager is sooner removed in the manner specified in Section 93(a) of this
Agreement or until his or her death or resignation.
9.4 Meetings and Notice.
T'he Board of Managers will meet at least quarterly and at such other times and such places as the
Board of Managers will determine. All Board of Managers meetings will be held upon at least three
(3) calendar days' prior written notice. The notice must state the meeting date, place, and hour. The
notice must be delivered to each Manager, either personally, by mail, by facsimile, or by electronic
mail. If -all Managers execute a waiver of notice of meeting time and place, no meeting notice will be
required. The meeting will be held at the time and place specified in the waiver of notice. Attendance
of Managers at any meeting will constitute a waiver of notice of the meeting, except where the
Managers attend a meeting solely to object that the meeting is not lawfully called or convened. Any
three (3) Managers may call a special meeting with three (3) calendar days' prior notice to all Managers
by facsimile or delivery of written notice. The business to be transacted at, or the purpose of, any
special meeting must be specified in the notice. The Board of Managers will cause written minutes to
be prepared of all actions taken by the Board of Managers.
9.5 uorum.
At all meetings of the Board of Managers, at least three (3) of the Managers must be present in person
or by electronic communication in accordance with Section 9.14 to constitute a quorum for transacting
business, unless a greater number is specifically required herein, by the Act. When a quorum is present
at a meeting, the act by at least a majoriTy of all 1Vlanagers will be the Managers' act unless the act of a
greater number is required by the Act, or this Agreement. If a quorum is not present at any Manager
meeting, the Managers present at the meeting may adjourn the meeting, without notice, other than
announcement at the meeting, until a quorum is present.
9.6 Business Plan.
(a) Unless otherwise waived by written consent of the majority of Managers on or before MarchIStb
of each year, the President or CEO shall, on or before the December 31S` of that fiscal year, cause to
be prepared a proposed Business Plan consisting of an annual operating budget and a capital budget
for the company for the new fiscal year and submit such Business Plan to the Board of Managers for
approval by a Majority of Managers. The operating budget shall include a profit and loss statement, a
cash flow statement and a balance sheet for the next fiscal year, as of year-end, based on the
operating and capital budgets. The capital budget shall specify and quantify capital expenditures,
including capital leases. The submission of the Business Plan shall be accompanied by a statement
describing the strategic plans for the Company for the next fiscal year.
(b )The Board of Managers shall consider the adoption of the Business Plan at a meeting called for
that purpose and may modify or adjust the Business Plari or any aspect thereof in such manner as it
deems appropriate. The Business shall be tamed on in accordance with the Business Plan as adopted
by the Board.
9.7 Delegation of Powers.
The Board of Managers and/or any officer may delegate its or his powers to any Person.
Any Person or entity receiving such delegation or desigiation must obtain any relevant approvals
required by this Agreement: The fu11Boa d of Managers will be kept informed on a timelybasis of all
actions of any Person with delegated powers. The Board of Managers may remove any delegated
powers at any time, unless otherwise provided in this Agreement,
9.8 Written Consents.
The Board of Managers may act without a meeting, without prior notice, and without a vote, if a
consent or consents in writing setting forth the action so taken is signed by the Managers having not
fewer than the minimum number of votes that would be necessary to take the action at a meeting at
which all Managers entitled to vote on the action were present and voted. Prompt notice of the
taking of any action by the Board of Managers by less than unanimous consent of the Managers and
without a meeting will be given to those Managers who did not consent in writing to the action.
9.9 Officers.
Upon a vote of a majority of all of the Managers, tt~e Board of Managers may elect a President, Vice-
President, Secretary, and Treasurer of the Company as well as such other officers and assistant officers
as the Board of Managers may deem desirable.
(a) Comuensation of Officers. No salary or compensation may be paid to an officer without
approval of the Managers in accordance with Section 92.
(b) Term and Vacancies. Unless otherwise agreed in writing by the Company, the Officers of the
Company will hold office for a term of one {1) year and until their successors are elected or
appointed and qualified, unless the officer is sooner removed in the manner specified in Section
9.9(c) below or by death, resignation or, disqualification because of loss of Manager status. Any
vacancy occurring in any office maybe filed by the Board of Managers upon a vote of a majority of
all of the Managers. There is no limit to the number of consecutive terms that an officer may serve.
(c) Removal of Officers. Officers may be removed at any time upon the vote of a majority of all of
the Managers. Election or appointment of an officer will not of itself create. contract rights.
(d)Resi~nation of Officers. Any officer may resign at any time by giving written notice to any
Manager, or to the President, or to the Secretary of the Company. Any such resignation will take
effect at the date of the receipt of such notice or at any later specified time and, unless otherwise
specified, the acceptance of such resignation will not be necessary to make it effective.
(e) Duties of the Officers. The officers shall have the following duties:
(i) Duties of President or CEO. The President or CEO will have the following powers
and duties:
1. act in the capacity of the chief executive officer of the Company;
2. subject to the power of the Board of Managers, have general and active management and control
of the affairs of the Company, including but not limited to approval and purchase of capital
expenditures, purchase and leasing of equipment;
3. ensure that all decisions of the Board of Managers are put into effect;
4. preside at all meetings of the Members;
5. preside at all meetings of the Board of Managers;
6. call regular and special meetings of the Members and Board of
Managers in accardance with law and this Operating Agreement;
7. sign any Unit certificates for the Company; and
8, perform other duties that may be prescribed from time to time by the Board
of Managers.
(ii) Duties of Vice President. The Vice-President, if any, will perform the duties of the President or
CEO in the absence or disability of the President or CEO. Additionally, the Vice President will
perform other duties that the Board of Managers may from time to time prescribe or that the
President or CEO may from time to time delegate.
iii) Duties ofSecretarv. TheSecretarywili-have-the followingduties: - - ------ --- --
1. attend all meetings of the Board of Managers and prepares minutes for
each meeting;
2. attend all meetings of the Members and prepare minutes for each meeting;
3. attend meetings of the standing committees, when required, and prepare
minutes for each meeting;
4. ensure that all original minutes are kept in the Company's corporate
records;
5. ensure that appropriate notice is given of all meetings of the Members and
special meetings of tt~e Board of Managers;
6. sign any Unit certificates for the Company; and
7.
8. perform other duties that maybe prescribed by the Board of Managers or the
President.
(iv) Duties_of Treasurer..The Treasurer will_have the following powers and_duties:
1. have custody of the Company's funds and securities;
2. keep full and accurate accounts and records of receipts, disbursements, and other
transactions in books belonging to the Company;
3. deposit all funds and other valuable effects of the Company in depositories
designated by the Board of Managers;
4, disburse funds of the Company upon receipt of proper vouchers, as may be
Preview
Filing # 82757323 E-Filed 01/02/2019 04:22:01 PM EXHIBIT 1 THIRD AMENDED AND RESTATED OPERATING AGREEMENT DATED JUNE 1, 2013 IN SUPPORT OF DEFENDANTS’ ANSWER TO SECOND AMENDED COMPLAINT Genicon LLC Third Amendcd and Restated OPERATING AGREEMENT OF GE1vICON LLC A Florida Limited Liability Company June 1, 2013 Table of Contents 1.FORMATION................. ..................................................................................................... ........4 2.DEFINITIONS. .................................................................,.................................. .............. 4 3.NAMB, OFFICE OF COMPANY AND REGISTERED AGENT......................... 8 3.1 Name......... ... ... ........ .... .... . .....~ .. ............. ...,............. S _ 3.2 PnnctpTOffice...................:.......................................... 8 3.3 Registered Agent............................................................... 8 4,BUSiNESS AND PURPOSE OF COMPANY............................................... 8 S.MLMBEItSHIP CLASSIFICATIONS......................................................... 8 S.1 ~ Class A Membership Unit................................................... 8 5.2 Class B Membarstup Unit................................................... 8 5,3 Members Holding Multiple Classas. . . . . . . . . . .. . . . .. . . . .. . . . ... .. . . ... .. . . 8 6. MEMBERS, INTERESTS AND CAPITAL.................................................. 8 6,1 Members Tntetests and Capital Contribution. .. . . .. . . . . . . . . . . . .. .. . . .. 8 6.2 Mambers' Accounts............................. .... ...................................................9 6.3 Additional Members.......................................................... 9 6.4 Additional Capital,. .. . . . ., . „ .. . ., .. , „ . .. .. . ... .. . . .. . .. ... .. .. 9 6.5 No Third-Party Beneficiaries................................................ 9 7. ALLOCATIONS OF PROFITS AND LOSSES.............................................. 9 7.1 Classes Entitled to Net Profits and Net Losses.. .. .. . „ .. .. .. .. .. .. .. . .. . 9 7.2 Allocations of profits.......................:................................. 9 7.3 Allocations of Losses. ............................................................................ ........9 8. DIS'IR7BUTIONS ..................................................................................................... ... ..... 9 8.1 Annual Distribution........................................................... 9 8,2 Mid-Year Transfers.......................... ...............................................................9 9. MANAGEMENT...................................:............................................. 9 9.1 Board of Managers. 9 9.2 Voting to Approve Certain Actions. . . . . . .... . . .... . ....... ... . . .. . 9 9.3 ~lactionandRemovalofManagers. ..............................................................10 9.~ Meetings and Notice........................................................... 10 9.5 Quorum......................................................................... 11 9.6 Business Plan................................................................... 11 9.7 Relegation of Powers. . . . . .. . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . .. . . 11 9.8 Written Consents. .. . .. . . .. ... . .. . .. . .. . .. . .. . .. . .. .. .. .. .. . .. . . .. . .. . .. .. 11 9.9 Officers............. ..............................................................................................11 9.10 No Authority of Member(s).... ........................................................................ 12 9.11 Records, Reports, and Audit................................................ 12 9,12 Reimbursements and Compensation................ .............................................. 14 9.13 Resignations. .................................................................................................. 15 9.14 Electronic Communications...... . .. ... . . . . ......... . . .. .. . . .. . . 14 9.15 No Implied Duties............................................................ 20 9.16 Interested Transactions...................................................... 21 9.17 Managers Have No Exclusive Duty to Company....................... Z1 9.18 Indemnity of the Managers and Officers. . .. . .. .. .. .. .. . . .. . .. ... .. . . .. . ... 21 9.19 Salaries........................................................................... 22 10. MEETINGS OFMEMBERS................................................................... 22 10.1 Meetings ......................................................................... 22 10.2 Place of Meetings. .......................................................................................... 22 103 Notice of Meetings. ........................................................................................ 22 10.4 Meeting of All Members.................................................. ............................... 23 10.5 Record Date.............:................................................... ................................... 23 . 10.6 Quorum.......... .................................................................................................23 l0.7 Manner of Acting............................................................... 23 10.8 Proxies........................................................................... 23 10.9 Action by Members without a Meeting.................................... 24 10.10 Waiver ofNotice............................................................... 24 _____--- . __ 10,11 -----duper-Majorityin-Interest-Vote-Required..,. ,-...:.-, ,-, ... ._,.,. ., 24 _ 10.12 Forty Percent in Interest for Sale............................................ 24 11. ACCOUNTS, BOOI{S, RECORDS, ACCOUNTING, REPORTS AND. TAX MAT'I'ERS......................................................................................... 25 11.1 Bank Accounts................................................................. 25 11.2 Maintenance of Books.... ..... .. .. . . . . .. . .... . ... .. . .... .. . .. . . . ..25 11.3 Method of Accounting.. ...... . ...... . . . .... . .. . ........ . .. . ... . ..25 11.4 Annual Reports... . . . . . .. . . . . . . . .. . ... . . . . . . . . . . . . ..... .. . . . . . ..25 11.5 IZelease of Information. . . . .... ... . . ... . .... . . . . ... . ..... . . . .... . . 25 11.6 Tax Returns.. . .......... . .. .. .... . ... .. ..... . . . ... . . . .... . . ... . ..25 11.7 IRS Proceedings...... ... . . . . . . .. . . . .. ....... . . . ..... . . ... . . ... . . . . 25 1I.8 Selection of Accountant...................................................... 26 12 ASSIGNABILITY OF MEMBERSHIP INTERESTS........................................... 26 12.1 Disposition, Pledge or Encumbrance of Interests. . .. .... . . . . . . .... . 26 12.2 Right of First Refusal.. ....................................................................................26 123 Tag-Along _ _ Rights..........................:................................... 26 12.4 I?rag-Along Rights............................................................ 27 12.5 Election to Purchase Member Interests................................... 27 12.6 Appraisal Rights in Event of Squeeze Out . . .... . ... . .. ....... ..... . .27 12.7 Fair Market Value............................................................ 27 12.8 Certificate Legends........................................................ ... 28 12.9 Additional Provisions on Transfer of Interests........................... 29 12.10 Substituted Members ......................... ............................................................29 12.11 Excluded Transfers 30 12.12 Company's Obligation in the Event of Death or Disability of Member......................................................................... 30 13 DISSOLLT'TION AND WINDING-UP......................................................... 30 ~ 13.1 Events Causing Dissolution and Winding-Up........................... 30 13.2 Winding-Up..................................................................... 31 14 MISCELLANEOUS PROVISIONS........ .................................................................................... 31 14.1 Governing Law. . ............ .. ........ . . . . . . .. ...... . . . .. . ... . . 31 _ 14.2 Captions.... . .......... . ... . .......... . .. . .. . ...... . .. . . ..... . . 31 14.3 Construcrion................................................................... 31 14.4 Survival of Representations and Warranties............................. 32 14.5 Severability.................................................................... 32 14.6 Successors.... ..................................................................................................32 14.7 Execution and Counterparts................................................. 32 14.8 Thud-Party Beneficiary.................................................. .... 32 14.9 Investment Representatioa.................................................. 32 14.10 Entire Agreement............................................................... 32 15 NOTICES, CONSENTS AND WRITING REQUIREMENT............................... 33 Third AMENDED AND RESTATED OPERATING AGREEMENT OF GENIC ON LLC This AMENDED AND RESTATED OPERATING AGREEMENT OF GENICON, LLC (hereinafter "Agreement"), is entered into as of the 1st day of June 2013 by and between the persons identified in Exhibit A, entitled "GENICON, LLC, MEMBERSHIP INTERESTS", attached hereto and incorporated by reference. This Agreement amends and restates the Second Amended and Restated Operating Agreement of Genicon, LLC, dated March 28, 2013, to correct the membership as set forth in Exhibit A.. This Agreement shall govern the business affairs of Genicon, LLC, each of the Members agree upon the following terms and conditions, which shall apply to such other persons who become additional or substituted Members and are subsequently included in E~chibit A. 1. FORMATION. The Company was formed under the name GErTICON, LLC, upon the filing of the Articles of Organization with the Secretary of Florida on November 20, 2012. 2. DEFIl~ITIONS. The following terms used in this Agreement shall (unless otherwise e~ressly provided herein or unless the context otherwise requires) have the following respective meanings: The Florida Limited Liability Company Act as set forth in Chapter 608, Florida Statutes, as it maybe amended or superseded from time to time. ~liate-or-Affiliated-Person-. --- - - ---- (i) Any Person that, directly or indirectly, through one or more intermediaries, controls or is controlled by or under common Control with the specified Person; (ii) Any Person that is an officer, director, employee, shareholder, or member o~ partner in, or trustee of, or serves in a similar capacity with respect to, the specified Person or of which the specified Person is an officer, partner or trustee, or with respect to which the specified Person serves in a similar capacity; (iii} Any Person that, directly or indirectly, is the beneficial owner often percent (10%) or more of any class of equity securities of, or otherwise has a substantial beneficial interest in, the specified Person or of which the specified Person is directly or indirectly the owner of ten percent (10%) or more of any class of equity securities or in which the specified Person has a substantial beneficial interest (iv) Any relative or spouse of the specified Person; Agreement. This Operating Agreement, as originally executed and as amended from time to time. Annual Meeting. The annual meeting of the Members holding Class A Membership Units of the Company. Bankruptcy. The entry of an order for relief with respect to a Member in proceedings under the United States Bankruptcy Code, as amended or superseded from time to time. Business Plan. The operating and capital budgets described in Section 9.2. Buy-Out Even (i) The filing of an application by a Member fot, or its consent to, the appointment of a trustee, receiver, or custodian of its assets; (ii) The making by a Member of a general assignment- for the benefit of creditors; (ui) The entry of an order, judgment or decree by any court of competent jurisdiction appointing a trustee, receiver or custodian of the assets of a Member unless the proceedings and the person appointed aze dismissed within ninety (90) days; (iv) The failure by a Member generally to pay its debts as the debts become due within the meaning of Section 303(h)(1) of the United Staxes Bankruptcy Code, or a Member's admission in writing of its inability to pay its debts as they become due; (v) A Member's Interest's becoming subject to the enforcement of any rights of a creditor of a Member, whether arising out of an attempted charge upon that Member's Interest by judicial process or otherwise, if that Member fails to effectuate the release of those enforcement rights, whether by legal process, bonding, or otherwise, within ninety (90) days after actual nonce of that creditor's action; (vi) The BanlQuptcy of a Member; (vii) The death, disability, or adjudication of incompetency of a Member; or (viii) The election of a Member to dispose of all or any part of an Interest. Capital. Account A capital account maintained in accordance with the rules contained in Treas. Reg. § 1.704-1 (b )(2) together with applicable rules under the Chapter 704 of the Internal Revenue Code as ameflded from time to time. Capital Contribution. Any contribution to the capital of the Company in cash or property bya Member whenever made which is authorized by the Act. Class A Membership Unit. A Membership Unit of the Company that has been designated as a Class A Membership Unit. Mass-B-Membership Unit. -- ------ A Membership Unit of the Company that has been designated as a Class B Membership Unit. CompanX_ T'he limited liability company organized and existing under this Agreement, to wit: Genicon, LLC. Control. Tl~e possession by any Person or related group of Persons, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities or partnership or limited liability company interests, by contract or otherwise. Debt Service. The total of all payments, including principal and interest, due with respect to any loans to the Company or to which the property or assets of the Company are subject. Disposition. The sale, assignment, transfer, ~exchar~ge, or other disposition of all or any part of an Interest, in any manner, whether voluntarily or involuntarily, or by operation of law or otherwise. Economic Interest. A Member's share of one or more of the Company's Net Profits, Net Losses and distribution of the Company assets pursuant to this Operating Agreement and the Act, but shall not include the right to vote on, consent to or otherwise participate in any decision of the Company. Fiscal Year. The accounting period of the Company. First Refusal Offer. The offer to purchase Membership Interests of and made by the Offering Member to all Members and the Company as a result of the receipt of a Third Party Offer by the Offering Member. Initial Capital Contribution. T'he initial contribution to the capital of the Company made by a Member pursuant to this Agreement. Initial Board of Managers The persons, or anyone of the persons, comprising the Board of Manager as a result of execution of this Third Amended and Restated Operating Agreement, to wit: Gary W. Haberland, John A. Famella, Jr, and Gregory A. Zittel. Invested Capital of the Member The total amount of money, property or services and the agreed upon fair market value of said property or services contributed to the Company by a Member or its predecessor in interest on the date of contribution. Majority inInterest and Super Majority in Interest A Majority in Interest shall mean, with respect to all or a specified class of the Members, such of those Members as hold more than fifty percent (50%) of the total Interests then held by all ar the specified class of Members. A Super Majority in Interest shall mean, with respect to all or a specified class of the Members, such of those Members as hold more than seventy-five percent (75%) of the total Interests then held by all or the specified class of Members. Members. The Persons so identified in Exhibit A and any person that becomes an additional or substituted Member pursuant to this agreement. Membership Interest. The ownership interest, expressed as a number of Units as set forth in E~ibit A of a Member in the Company (and of all of the Members of the Company) at any particular time including the right of the Member to any and all benefits to which the Member is entitled and obligations to which such Member is subjectunder th~greement. Net Cash from Operations. For any Fiscal Year, the excess of Operating Revenues over the sum of (1) Operating E~enses of the Company paid in cash during the year, (2) Debt Service, and (3) any reasonable reserves as determined by the Members, for Operating Expenses, for the repair, replacement or preservation during the current or subsequent years of any Company asset, for Debt Service or for wonting capital, business development needs, contingencies and unanticipated obligations. Net Proceeds from Financing. Net cash realized by the Company from borrowing by the Company or refinancing of indebtedness of the Company, reduced by (1) all expenses related to the borrowing or refinancing, (2) the amount applied at the sole discretion of the Members, toward the payment of any indebtedness of the Company, and (3) reasonable reserves, as determined by the Members in the reasonable exercise of its discretion, to satisfy other obligations of the Company or anticipated capital expendihues. Net Proceeds from Sale. Net cash realized by the Company from the sale, exchange, condemnation, or other _ _ disposition of all or a __ apportion of the capital assets of the Company or from policies of ins~uance for damage to, or deshuction of, or defects of title to, capital assets (but if insurance proceeds are applied, or are to be applied, to repairing or replacing the assets damaged or destroyed or curing defects of tifle, only to the extent those proceeds exceed the actual or estimates costs thereofl, reduced by (1) all expenses related to the transacting (2) the amount applied at the sale discretion of the 1Vlembers toward the payment of any indebtedness of the Company and (3) reasonable reserves, as detemuned by the Members in the reasonable exercise of its discretion, to satisfy other obligations of the Company or anticipated capital expenditures. Operarin~penses. All costs and expenses of ownership and operation of the Company including, but not limited to, costs of operation, tomes, insurance premiums, utility costs, charges for cleaning and cleaning supplies, costs of repairs and maintenance, costs and fees associated with management, payroll costs, costs for general, administrative and overhead, audit and appraisal expenses, leasing fees, any other expenses incurred in the ordinary course of operating the Company aad reserves for operating expenses and capital expenditures as determined by the Members. Operating Revenues. All cash revenue from the operation of the Company (excluding refundable deposits or unearned rent), interest income received during the year, and reserves set-aside in prior years and no longer deemed necessary for the Company's business, in the reasonable.discretion of the Members. Person. Any individual, corporation, par~ership, limited liability company, joint venture, association, trust, firm or unincorporated organization, any government or any agency, authority or political subdivision thereof, or any other entity. Prime Rate. The prime rate (or base rate) reported in the "Money Rates" column or section of The Wall Street Journal as being the base rate on corporate loans at larger U.S. Money Center banks on the first date on which The Wall Street Journal is published in each month. In the event The Wall Street Journal ceases publication of the Prune Rate, then the "Prime Rate" shall mean the "prime rate" or "base rate" announced by the bank with which the Company has its principal banking relationship (whether or not such rate has actually been charged by that bank) or as otherwise designated by the Members. In the event that the bank discontinues the practice of announcing that rate, "Prime Rate" shall mean the highest rate charged by that bank on shortterm, unsecured loans to its most credit worthylarge corporate borrowers, unlessotherwise designafed-bythe1Vlembers. Removal for Cause. Removal for Cause shall~include removal for (i) intentional nonperformance of the duties of a Manager of the Boazd, determined by the affirmative vote of a Super Majority in Interest of Members holding Class ~A Membership Units; (ii) willful dishonesty, fraud or misconduct with respect to the affairs of the Company, which in the discretion of the Board of Managers materially and adversely affects the Company and said removal is supported by the affirmative vote of a Super Majority in Interest of Members holding Class A Membership Units; (ui) a conviction of, or plea of nolo contender to, a felony or other crime involving moral turpitude; or (iv) the commission of any act which is materially detrimental to the best interests of the Company, determined by the affurnative vote of a Super Majority in Interest of Members holding Class A Membership Units. Removal for Cause will not, however, include any action or circumstances constituting Cause, as defined above, if such person which would be subject to Removal for Cause cures such actions or circumstances wit}vn thirty (30) days of receipt of written notice from the Company setting forth the actions or circumstances constituting Cause _ _ _ Reverse Split Transaction. A reduction in the number of the Company's outstanding units that increases the par value of its units or its earnings per unit, but the market value of the total number of units remains the same. Sale Transaction The transfer by a Member and/or any of its Transferees, in one transaction or a series of transactions (other than a public offering under the Securities Act), of all or any portion of its or their Membership Interests to one or more Persons other than an Affiliate and, as a result of which, such Person or group of Persons would own a maj ority of outstanding Membership Interests in the Company. Selling Member. A Member who is engaging in a Sale Transaction. Squeeze-Out Member. A Member who is left with less than one Membership Unit as a result of a Reverse Split Transaction. Successor in interest. The person that succeeds to an interest upon the death, adjudication of incompetency, dissolution or Bankruptcy of a Member (including the debtor in possession where applicable). Third Party. A person or entity that is not a Member nor an Affiliate of a Member. Third Party Offer. A bonaftde written offer by any Third Party dealing at arm's length to purchase any of the Membership Interests of a Member. United States Bankruptcy Code. Title 11 of the Unites States Code, as amended from time to time. 3. NAME. OFFICE OF COMPANY AND REGISTERED AGENT. 3.1 Name The name of the Company is Genicon, LLC. The business of the Company may be conducted under such trade or fictitious names as the Board of Managers may determine in accordance with applicable law. 3.2 Principal Office. The principal office of the Company, at which the records required to be maintained by the Act are kept, shall be at the location provided for in the initial Articles of Organization, or such other place as the Board of Managers may determine. The Company shall give notice to the Members of any change of the principal office. 3:3 RegisteredAgent. The Company's registered agent and office process shall be as set forth in the initial Articles of Organization, or, as the Board of Managers may hereafter designate. 4. BUSINESS AND PURPOSE OF THE COMPANY. The business and purpose of the Company pursuant to this Agreement shall be any lawful business that may be engaged in by a limited liability company organized under the Act, as such business activities may be determined by the Board of Managers from time to time. The Company shall have the authority to do all things necessary or convenient to accomplish its purposes and operate its business and to engage in any and all business activities related or incidental thereto. 5. MEMBERSHIP CLASSIFICATIONS 5.1 Class A Membership Unit. The units of membership of the Company which may be issued by the Company and designated as Class A which shall have tl~e exclusive entitlement to vote on Company matters as outlined in this Agreement. The Class A Units can never be sold for more than what. the owners have paid for them. 5.2 Class B Membership Unit The units of membership of the Company which may be issued by the Company and designated as Class B which shall be entitled to the Economic Interests of the Company. Class B Units shall be designated non-voting Units and shall have no rights to vote on any matter. 5.3 Members Holding Multiple Classes Members inay hold Class A and Class B Membership Units. 6. MEMBERS, INTEREST AND CAPITAL. 6.1 Members, Interests and Capital Contributions. The names, Interests and Capital Contribution of the Members, to be made simultaneously with the execution of this Agreement are set forth in Exhibit A. Thereafter, as names of the Member, Interests and Capital contributions may change, from time to time, the names, Interests and Capital Contributions of Members will be hereafter set forth in E~ibit A, as amended and/or restated, and attached hereto by the Company upon the admission of additional or substitute Members or the withdrawal of Members as provided in this Agreement. 6.2 Members' Accounts. The Company shall maintain in its records a separate Capital Account and shall furnish each Member with a statement of his or her Capital Account and of the Net Profit or Net Loss allocable to each Member as of the end of each fiscal year. The Capital Account of each Member shall be equal to his or her Initial Capital Contribution (a) plus (i) any additional Capital Contributions and (ii) any items of income and gain allocated to such Member by the Company from Company income and gains; and (b) less (i) the distributions made to such Member by the Company from Company assets, and (u) the items of loss and deduction allocated to such Member by the Company from Company losses and deductions. The Capital Accounts shall not bear interest. No Member has the right to the return or distribution of his or her Capital Account except to the extent speciftcally provided in this Agreement. No Member is liable, either before or upon termination of the Company to the Company for any negarive balance in any account except to the extent that such a negative balance arose as a result of a Member's failure to make an Initial Capital Contribution for that Member's interest or receipt of a distribution in excess of the amount rightfully due such Member under this Agreement. 6.3 Additional Members. Except as provided in Section 12 of the Agreement or in accordance with a written policy and/or procedure adopted by the Board of Managers and as approved by a Majority in Interest of the Members, no person maybe hereafter admitted as a Member of the Company Such person shall be -_ admitted only as provided in such written policy andlor procedure. The amount of the Capital Contribution and the terms ofpayment thereof to be made by such persons) who shall become additional Members shall be contained in such written policy/or procedure as is adopted by the Company from time to time. 6.4 Additional Capital. Except with the unanimous consent of the Members, no Member shall be required to lend any money or property or make any additional Capital Contributions after he or she shall become a Member. In the event additional capital is raised directly by the Company, FARNEI,LA GErTICON HOLDINGS LLC, and Gary Haberland's ownership in the Company will not be dilutedby such capital raise (investment in the Company) unless they provide a written consent approving such dilution. Tlvs non dilution provision does not apply to any other Unit holders. 6.5 No Third PartyBeneficiaries. The foregoing provisions of this Section are not intended to be for the benefit of any creditor or other person to which any debts, liabilities or obligations are owed by (or that otherwise has any claim against) the Company or any of the Members; and no creditor or other person shall obtain any right under any of the foregoing provisions or shall by reason of any of the foregoing provisions make any claim in respect of any debt, liability or obligation (or otherwise) against the Company or any of the Members. 7. ALLOCATIONS OF PROFITS AND LOSSES 7.1 Classes Entitled to Net Profits and Net Losses. Only Members holding Class B Membership Units shall be entitled to an allocation of Net Profits or Net Losses, as the case maybe. 7.2 Allocations of Profits. The Net Profits of the Company shall be allocated among the Members holding Class B Membership Units, as of the end of the Fiscal Year, in proportion to their Class B Membership Interests and shall be allocated first and proportionally to those Members holding Class B Membership Units who, in previous fiscal years, were allocated Net Losses in accordance with Section 73. 73 Allocations of Losses. The Net Losses of the Company shall be allocated among the Members holding Class B Membership Units, as of the end of the Fiscal Year, in proportion to their Class B Membership Interests. 8. Distributions. 81Annual Distribution. At least annually, the Board of Managers, by majority vote as outlined in Section 9.2 shall recommend to the Members holding Class A Membership Units the amount and manner of distributions to be made to the Members holding Class B Membership Units, after ensuring an adequate reserve for business operations will be retained by the Company. The Board of Managers shall make such a recommendation of distribution in amounts necessary to enable the Members holding Class B Membership Interests to pay income taxes and make estimated income tax payments to satisfy their liabilities under federal and state law which arise solely from their status as Members of a limited liability company because of their ownership of Class B Membership Units. The Board of Managers, in its discretion, may make additional recommendations for distributions as it deems advisable andpro rata to the Members holding Class B Membership Units. Such recommendations hereunder must be approved by the affirmative vote of a Super Majority in Interest of those Members holding Class A Membership Units prior to any distributions being made by the Compaay. 8.2 Mid- Year Transfers. In the case of all or part of any Interest that has been transferred during the Fiscal Year, unless otherwise agreed by the parties: -- --(a)Net-Cask fromOperationsshall be distributed to the holder of theMembers holdingClass B Membership Units on the date of distribution. (b) Net Proceeds from Sale or Financing allocable to the Interest (or portion of an Interest) shall be distributed to the holder of the Interest on the date of distribution. ., 9. MANAGEMENT 9.1 Board of Managers. The management and the control of the Company will be vested exclusively in a Board of Managers, which shall initially be composed of the following three (3) individuals: John A. Farnella, Gary Haberland, and Gregory A. Zittel. Except where expressly provided to the contrary in this Agreement or by law, the Board of Managers will exercise any and all powers that the Members would otherwise exercise. The Board of Managers may bind and otherwise act as an agent of the Company in relation to third parties and outside affairs. 9.2 Votin~p~rove Certain Actions. Except as otherwise specified in this Agreement all actions required to be taken by the Board of Managers and all of its decisions concerning the management of the Company's business will be made by the affirmative vote of a majority of all Managers at a meeting at which a quorum is presentin accordance-with Section 9.5 hereof. Such decisions -shall include, without limitation: (a) Approving the annual operating and capital budgets of the Company; (b)Borrowing money or otherwise committing the Company's credit for the Company activities and voluntary prepayments or debt e~ctensions; (c) Electing officers of the Company or removing officers of the Company; (d) Exercising the Company's option to purchase Membership Interests; (e) Selling, leasing, exchanging, or otherwise disposing of all or substantially all the Company's assets (with or without goodwill); (fl Approving, adopting and enforcing the rules, regulations, policies and procedures of the Company; (g) Recommending the dissolution, liquidation, and/or termination of the Company; (h) Hiring, entering iato, amending or terminating the employment of, or contracting with, any Officer or any Person related to an Officer (i) Selecting or changing the name under which the Company is operated or the location of the business owned and operated by the Company; (j) Making credentialing decisions on behalf of the Company, as applicable; (k)Approving any salary or other compensation payable to any officer. (m)Leasing, purchasing, or selling real properly interests; (n)Filing of a voluntary petition for relief by the Company under any provision of the United States Bankruptcy Code or any similar or other law relating to bankruptcy, insolvency, reorganization, or other sunilar relief; or (o)Approving the filing of any lawsuits, or settlement of any litigation, to which the Company is a Pa~3'• 93 Election and Removal of Managers. (a) Election and Removal of Managers. The Managers shall be elected by vote of a Super Majority in Interest of those Members holding Class A Membership Units and will serve until resignation or until removed by vote of a Majority in Interest of those Members holding Class A Membership Units. The immediately preceding sentence shall not apply to any person comprising the Initial Board of Managers. The Initial Board of Managers shall serve until resignation or Removal for Cause Upon resignation or removal of a Manager, the Vice-President shall automatically and contemporaneously therewith, become ari Interim Manager and shall serve with full power of the Managers until such time as a successor Manager is elected by a vote of a Majority in Interest. (b) Change in Number of Managers. The number of Managers may be increased ar decreased upon -__ _ __ __ - -- -- - the approval of a Super Majority in Interest of those Members holding Class A Membership Units; however, no decrease- in the number of Managers will have the effect of shortening the terna of any incumbent Manager. In no event, shall the number of Managers be reduced to a nwnber which would result in John A. Farnella, M.D., comprising more than fifty percent (50%) of the total number of Managers without the written conserrt of John A. Famella, M.D. (c) Term of Office. The Managers) will serve until such Manager's successor has been elected, unless any such Manager is sooner removed in the manner specified in Section 93(a) of this Agreement or until his or her death or resignation. 9.4 Meetings and Notice. T'he Board of Managers will meet at least quarterly and at such other times and such places as the Board of Managers will determine. All Board of Managers meetings will be held upon at least three (3) calendar days' prior written notice. The notice must state the meeting date, place, and hour. The notice must be delivered to each Manager, either personally, by mail, by facsimile, or by electronic mail. If -all Managers execute a waiver of notice of meeting time and place, no meeting notice will be required. The meeting will be held at the time and place specified in the waiver of notice. Attendance of Managers at any meeting will constitute a waiver of notice of the meeting, except where the Managers attend a meeting solely to object that the meeting is not lawfully called or convened. Any three (3) Managers may call a special meeting with three (3) calendar days' prior notice to all Managers by facsimile or delivery of written notice. The business to be transacted at, or the purpose of, any special meeting must be specified in the notice. The Board of Managers will cause written minutes to be prepared of all actions taken by the Board of Managers. 9.5 uorum. At all meetings of the Board of Managers, at least three (3) of the Managers must be present in person or by electronic communication in accordance with Section 9.14 to constitute a quorum for transacting business, unless a greater number is specifically required herein, by the Act. When a quorum is present at a meeting, the act by at least a majoriTy of all 1Vlanagers will be the Managers' act unless the act of a greater number is required by the Act, or this Agreement. If a quorum is not present at any Manager meeting, the Managers present at the meeting may adjourn the meeting, without notice, other than announcement at the meeting, until a quorum is present. 9.6 Business Plan. (a) Unless otherwise waived by written consent of the majority of Managers on or before MarchIStb of each year, the President or CEO shall, on or before the December 31S` of that fiscal year, cause to be prepared a proposed Business Plan consisting of an annual operating budget and a capital budget for the company for the new fiscal year and submit such Business Plan to the Board of Managers for approval by a Majority of Managers. The operating budget shall include a profit and loss statement, a cash flow statement and a balance sheet for the next fiscal year, as of year-end, based on the operating and capital budgets. The capital budget shall specify and quantify capital expenditures, including capital leases. The submission of the Business Plan shall be accompanied by a statement describing the strategic plans for the Company for the next fiscal year. (b )The Board of Managers shall consider the adoption of the Business Plan at a meeting called for that purpose and may modify or adjust the Business Plari or any aspect thereof in such manner as it deems appropriate. The Business shall be tamed on in accordance with the Business Plan as adopted by the Board. 9.7 Delegation of Powers. The Board of Managers and/or any officer may delegate its or his powers to any Person. Any Person or entity receiving such delegation or desigiation must obtain any relevant approvals required by this Agreement: The fu11Boa d of Managers will be kept informed on a timelybasis of all actions of any Person with delegated powers. The Board of Managers may remove any delegated powers at any time, unless otherwise provided in this Agreement, 9.8 Written Consents. The Board of Managers may act without a meeting, without prior notice, and without a vote, if a consent or consents in writing setting forth the action so taken is signed by the Managers having not fewer than the minimum number of votes that would be necessary to take the action at a meeting at which all Managers entitled to vote on the action were present and voted. Prompt notice of the taking of any action by the Board of Managers by less than unanimous consent of the Managers and without a meeting will be given to those Managers who did not consent in writing to the action. 9.9 Officers. Upon a vote of a majority of all of the Managers, tt~e Board of Managers may elect a President, Vice- President, Secretary, and Treasurer of the Company as well as such other officers and assistant officers as the Board of Managers may deem desirable. (a) Comuensation of Officers. No salary or compensation may be paid to an officer without approval of the Managers in accordance with Section 92. (b) Term and Vacancies. Unless otherwise agreed in writing by the Company, the Officers of the Company will hold office for a term of one {1) year and until their successors are elected or appointed and qualified, unless the officer is sooner removed in the manner specified in Section 9.9(c) below or by death, resignation or, disqualification because of loss of Manager status. Any vacancy occurring in any office maybe filed by the Board of Managers upon a vote of a majority of all of the Managers. There is no limit to the number of consecutive terms that an officer may serve. (c) Removal of Officers. Officers may be removed at any time upon the vote of a majority of all of the Managers. Election or appointment of an officer will not of itself create. contract rights. (d)Resi~nation of Officers. Any officer may resign at any time by giving written notice to any Manager, or to the President, or to the Secretary of the Company. Any such resignation will take effect at the date of the receipt of such notice or at any later specified time and, unless otherwise specified, the acceptance of such resignation will not be necessary to make it effective. (e) Duties of the Officers. The officers shall have the following duties: (i) Duties of President or CEO. The President or CEO will have the following powers and duties: 1. act in the capacity of the chief executive officer of the Company; 2. subject to the power of the Board of Managers, have general and active management and control of the affairs of the Company, including but not limited to approval and purchase of capital expenditures, purchase and leasing of equipment; 3. ensure that all decisions of the Board of Managers are put into effect; 4. preside at all meetings of the Members; 5. preside at all meetings of the Board of Managers; 6. call regular and special meetings of the Members and Board of Managers in accardance with law and this Operating Agreement; 7. sign any Unit certificates for the Company; and 8, perform other duties that may be prescribed from time to time by the Board of Managers. (ii) Duties of Vice President. The Vice-President, if any, will perform the duties of the President or CEO in the absence or disability of the President or CEO. Additionally, the Vice President will perform other duties that the Board of Managers may from time to time prescribe or that the President or CEO may from time to time delegate. iii) Duties ofSecretarv. TheSecretarywili-have-the followingduties: - - ------ --- -- 1. attend all meetings of the Board of Managers and prepares minutes for each meeting; 2. attend all meetings of the Members and prepare minutes for each meeting; 3. attend meetings of the standing committees, when required, and prepare minutes for each meeting; 4. ensure that all original minutes are kept in the Company's corporate records; 5. ensure that appropriate notice is given of all meetings of the Members and special meetings of tt~e Board of Managers; 6. sign any Unit certificates for the Company; and 7. 8. perform other duties that maybe prescribed by the Board of Managers or the President. (iv) Duties_of Treasurer..The Treasurer will_have the following powers and_duties: 1. have custody of the Company's funds and securities; 2. keep full and accurate accounts and records of receipts, disbursements, and other transactions in books belonging to the Company; 3. deposit all funds and other valuable effects of the Company in depositories designated by the Board of Managers; 4, disburse funds of the Company upon receipt of proper vouchers, as may be