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Orange County Medical Imaging LLC Agreement 11-01-2001

FIRST AMENDED AND RESTATED OPERATING AGREEMENT OF

ORANGE COUNTY REGIONAL PET CENTER -- IRVINE, LLC

 

This First Amended and Restated Operating Agreement ("AGREEMENT") is

entered into as of November 1, 2001, by and among Comprehensive Medical Imaging

Centers, Inc., a Delaware Corporation ("CMIC"), Medical Development Services,

LLC, a California limited liability company ("MDS"), and eImaging, LLC, a

California limited liability company ("EIMAGING").

 

RECITALS

 

WHEREAS, CMIC and MDS have organized a limited liability company under

the name Orange County Regional PET Center - Irvine, LLC ("COMPANY") and

executed an operating agreement dated December 1, 2000 ("ORIGINAL OPERATING

AGREEMENT");

 

WHEREAS, subsequent to the organization of the Company, eImaging

acquired a ten percent (10%) Economic Interest in the Company;

 

WHEREAS, at the time Company was organized, CMIC was known as

Comprehensive Diagnostic Imaging, Inc., a Delaware corporation and subsequently

changed its name to Comprehensive Medical Imaging Centers, Inc., a Delaware

corporation; and

 

WHEREAS, the parties desire to modify certain terms of the Original

Operating Agreement and restate the operating agreement as so modified in its

entirety.

 

NOW, THEREFORE, the parties agree as follows:

 

ARTICLE 1

 

DEFINED TERMS

 

The following capitalized terms shall have the respective meanings

specified in this Article 1. Capitalized terms not defined in this Agreement

shall have the meanings specified in the Act.

 

1.1 "ACT" means the California Limited Liability Company Act, as

amended from time to time.

 

1.2 "AFFILIATE" means (a) a Person directly or indirectly

controlling, controlled by, or under common control with another Person; (b) a

Person owning or controlling ten percent (10%) or more of the outstanding voting

securities or beneficial interests of another Person; (c) an officer, director,

partner or member of the immediate family of an officer, director or partner of

another Person; and/or (d) any affiliate of any such Person.

 

1.3 "AGREEMENT" means this Operating Agreement, as amended from

time to time, including each exhibit hereto.

 

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1.4 "ASSIGNEE" means the Person who has acquired an Economic

Interest in the Company but is not a Member.

 

1.5 "CAPITAL ACCOUNT" means the account to be maintained by the

Company for each Interest Holder in accordance with the following provisions:

 

1.5.1 An Interest Holder's Capital Account shall be

credited with the amount of money and the fair market value of any property

contributed to the Company (net of liabilities secured by such property that the

Company either assumes or to which such property is subject) the amount of any

Company unsecured liabilities assumed by the Interest Holder, and the Interest

Holder's distributive share of Profit and any item in the nature of income or

gain specially allocated to the Interest Holder pursuant to the provisions of

section 4.3 (other than section 4.3.3); and

 

1.5.2 An Interest Holder's Capital Account shall be debited

with the amount of money and the fair market value of any Company property

distributed to the Interest Holder (net of liabilities secured by such

distributed property that the Interest Holder either assumes or to which such

property is subject), less the amount of any unsecured liabilities of the

Interest Holder assumed by the Company, and the Interest Holder's distributive

share of Loss and any item in the nature of expenses or losses specially

allocated to the Interest Holder pursuant to the provisions of section 4.3

(other than section 4.3.3).

 

1.5.3 If any interest is transferred pursuant to the terms

of this Agreement, the transferee shall succeed to the Capital Account of the

transferor to the extent the Capital Account is attributable to the transferred

interest. If the book value of Company property is adjusted pursuant to section

4.3.3, the Capital Account of each Interest Holder shall be adjusted to reflect

the aggregate adjustment in the same manner as if the Company had recognized

gain or loss equal to the amount of such aggregate adjustment. It is intended

that the Capital Accounts of all Interest Holders shall be maintained in

compliance with the provisions of Regulation Section 1.704-1(b), and all

provisions of this Agreement relating to the maintenance of Capital Accounts

shall be interpreted and applied in a manner consistent with that Regulation.

 

1.6 "CASH FLOW" means all cash derived from operations of the

Company (including interest received on reserves), without reduction for any

non-cash charges, but less cash used to pay current operating expenses and to

pay or establish reasonable reserves for future expenses, debt payments, capital

improvements and replacements as determined by the Management Committee. Cash

Flow shall not include Capital Proceeds but shall be increased by the reduction

of any reserve previously established.

 

1.7 "CODE" means the Internal Revenue Code of 1986, as amended, or

any corresponding provision of any succeeding revenue law.

 

1.8 "COMPANY" means the limited liability company formed in

accordance with this Agreement.

 

1.9 "CONTRIBUTION" means any money, property or services rendered,

or a promissory note or other binding obligation to contribute money or

property, or to render services as permitted in this title, which a Member

contributes to the Company as capital in that Member's

 

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capacity as a Member pursuant to an agreement between the Members, including an

agreement as to value.

 

1.10 "ECONOMIC INTEREST" means a person's right to share in the

income, gains, losses, deductions, credit or similar items of, and to receive

distributions from, the Company, but does not include any other rights of a

Member including, without limitation, the right to vote or to participate in

management, or any right to information concerning the business and affairs of

the Company.

 

1.11 "MANAGEMENT COMMITTEE" means the Persons designated as such in

Article 5.

 

1.12 "INTEREST HOLDER" means any Person who holds an Economic

Interest, whether as a Member or as an Assignee of a Member.

 

1.13 "MEMBER" means any person who executes a counterpart of this

Agreement as a Member and any Person who subsequently is admitted as a Member of

the Company.

 

1.14 "MEMBERSHIP INTEREST" means a Member's rights in the Company,

collectively, including the Member's Economic Interest, any right to vote or

participate in management, and any right to information concerning the business

and affairs of the Company.

 

1.15 "MEMBER NON-RECOURSE DEBT" shall mean any "partner

non-recourse liability" or "partner non-recourse debt" under Regulations Section

1.704-2(b)(4). Subject to the foregoing, it shall mean any Company liability to

the extent the liability is non-recourse for purposes of Regulations Section

1.1001-2, and a Member (or related Person within the meaning of Regulations

Section 1.752-4(b)) bears the Economic Risk of Loss under Regulations Section

1.752-2 because, for example, the Member or related Person is the creditor or a

guarantor.

 

1.16 "MEMBER NON-RECOURSE DEDUCTIONS" shall mean Company

deductions, losses Code Section 705(a)(2)(B) expenditures, as the case may be

(as computed for "book" purposes), that are treated as deductions, losses and

expenditures attributable to Member Non-recourse Debt under Regulations Section

1.704-2(i)(2).

 

1.17 "NEGATIVE CAPITAL ACCOUNT" means a Capital Account with a

balance of less than zero.

 

1.18 "PERCENTAGE" means, as to a Member, the percentage set forth

after the Member's name on Exhibit A, as amended from time to time, and as to an

Interest Holder who is not a Member, the Percentage or part of the Percentage

that corresponds to the portion of a Member's Economic Interest that the

Interest Holder has Acquired, to the extent the Interest Holder has succeeded to

that Member's interest.

 

1.19 "PERSON" means and includes an individual, corporation,

partnership, association, limited liability company, trust, estate or other

entity.

 

1.20 "POSITIVE CAPITAL ACCOUNT" means a Capital Account with a

balance greater than zero.

 

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1.21 "PROFIT" and "LOSS" means, for each taxable year of the

Company (or other period for which Profit or Loss must be computed), the

Company's taxable income or loss determined in accordance with IRC Section

703(a), with the following adjustments:

 

1.21.1 All items of income, gain, loss, deduction or credit

required to be stated separately pursuant to IRC Section 703(a)(1) shall be

included in computing taxable income or loss;

 

1.21.2 Any tax-exempt income of the Company, not otherwise

taken into account in computing Profit or Loss, shall be included in computing

taxable income or loss;

 

1.21.3 Any expenditures of the Company described in IRC

Section 705(a)(2)(B) (or treated as such pursuant to Regulation Section

1.704-1(b)(2)(iv)(i)), and not otherwise taken into account in computing Profit

or Loss, shall be subtracted from taxable income or loss;

 

1.21.4 Gain or loss resulting from any taxable disposition

of Company property shall be computed by reference to the book value as adjusted

under Regulation Section 1.704-1(b) ("ADJUSTED BOOK VALUE") of the property

disposed of, notwithstanding the fact that the adjusted book value differs from

the adjusted basis of the property for federal income tax purposes;

 

1.21.5 In lieu of the depreciation, amortization or cost

recovery deductions allowable in computing taxable income or loss, there shall

be taken into account the depreciation computed based upon the adjusted book

value of the asset; and

 

1.21.6 Notwithstanding any other provision of this

definition, any items which are specially allocated pursuant to section 4.3

shall not be taken into account in computing Profit or Loss.

 

1.22 "REGULATION" means the income tax regulations, including any

temporary regulations, from time to time promulgated under the Code.

 

1.23 "SECRETARY OF STATE" means the Secretary of State of the State

of California.

 

1.24 "SUPERMAJORITY INTEREST" means Membership Interests equal to

seventy-five percent (75%) or more of all outstanding Membership Interests.

 

1.25 "TRANSFER" means, when used as a noun, any sale,

hypothecation, pledge, assignment, attachment or other transfer, and, when used

as a verb, to sell hypothecate, pledge, assign or otherwise transfer.

 

1.26 "VOLUNTARY WITHDRAWAL" means a Member's disassociation from

the Company by means other than a Transfer.

 

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ARTICLE 2

 

FORMATION AND NAME; OFFICE; PURPOSE; TERM

 

2.1 ORGANIZATION. The parties hereby organize a limited liability

company pursuant to the Act and the provisions of this Agreement. The Company

shall cause Amended Articles of Organization to be prepared, executed and filed

with the Secretary of State.

 

2.2 NAME OF THE COMPANY. The name of the Company shall be Orange

County Regional PET Center-- Irvine, LLC.

 

2.3 PURPOSE. The Company is organized solely to own and operate a

medical diagnostic imaging center and other lawful activities, and to do any and

all things necessary, convenient or incidental to that purpose.

 

2.4 TERM. The Company shall continue in existence until June 30,

2025, unless sooner dissolved as provided by this Agreement or the Act.

 

2.5 PRINCIPAL PLACE OF BUSINESS. The Company's Principal Place of

Business shall be located at 16300 Sand Canyon Avenue, Suite 103, Irvine,

California or at any other place within the State of California which the

Members agree.

 

2.6 RESIDENT AGENT. The name and address of the Company's resident

agent in the State of California is Wayne K. Baldwin, 3396 Willow Lane, Suite

101, Westlake Village, California 91361.

 

2.7 MEMBERS. The name, present mailing address and Percentage of

each Member are set forth on Exhibit A.

 

ARTICLE 3

 

MEMBERS; CAPITAL; CAPITAL ACCOUNTS

 

3.1 INITIAL CONTRIBUTIONS. Upon the execution of this Agreement,

the Members shall contribute to the Company cash in the amounts respectively set

forth on Exhibit A.

 

3.2 NO ADDITIONAL CONTRIBUTIONS. No Member shall be required to

contribute any additional capital to the Company, and no Member shall have

personal liability for any obligation of the Company except as expressly

provided by law.

 

3.3 NO INTEREST ON CONTRIBUTIONS. Neither Members nor Interest

Holders shall be paid interest with respect to Contributions.

 

3.4 RETURN OF CONTRIBUTIONS. Except as otherwise provided in this

Agreement, no Member nor Interest Holder shall have the right to receive the

return of any Contribution or withdraw from the Company, except upon the

dissolution of the Company.

 

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3.5 FORM OF RETURN OF CAPITAL. If a Member or an Interest Holder

is entitled to receive the return of a Contribution, the Company may distribute,

in lieu of money, notes or other property having a value equal to the amount of

money distributable to such Person.

 

3.6 CAPITAL ACCOUNTS. A separate Capital Account shall be

maintained for each Member and Interest Holder.

 

3.7 LOANS AND OTHER BUSINESS TRANSACTIONS. Any Member may, at any

time, make or cause a loan to be made to the Company in any amount and on those

terms upon which the Company and the Member agree. Members may also transact

other business with the Company and, in doing so, they shall have the same

rights and be subject to the same obligations arising out of any such business

transaction as would be enjoyed by and imposed upon any Person, not a Member,

engaged in a similar business transaction with the Company.

 

3.8 OTHER BUSINESS INTERESTS. Each Member acknowledges and agrees

that the Members and their respective partners, members, officers, directors,

shareholders, employees, associates, agents and Affiliates are engaged in other

business activities apart from the Company and possess interests in other

business activities including, among others, those which may compete with the

Company or for the Member's time and attention. Each Member agrees that: (i) the

Members and their respective partners, members, officers, directors,

shareholders, employees, associates, agents or Affiliates may engage or invest

in any business and activity, and neither the Company nor the other Members

shall have the right in or to such other activities or to the income or proceeds

derived therefrom; (ii) no Member nor its partners, members, officers,

directors, shareholders, employees, associates, agents or Affiliates shall be

obligated to present any business or investment opportunity to the Company or

the other Members except as otherwise provided herein or in a separate

agreement; (iii) each Member shall have the right to hold any business or

investment opportunity for its own account or to recommend such opportunity to

Persons other than the Company or the other Members; and (iv) each Member hereby

waives any and all rights and claims which it might otherwise have against the

Company and the Members and their respective partners, members, officers,

directors, shareholders, employees, associates, agents and Affiliates as a

result of any such activities.

 

3.9 NON-COMPETITION. During the period commencing on the date of

this Agreement and ending two (2) years after a Member ceases to be a Member as

provided in or permitted under this Agreement, no Member or Economic Interest

owner shall have any ownership interest (of record or beneficial) in or have any

interest as an employee, salesman, consultant, officer or director in, or

otherwise aid or assist in any manner, any firm, corporation, partnership,

proprietorship or other business that engages in, a business which is similar to

that engaged in by the Company within a twenty-five (25) mile radius of any of

the Company's operation locations.

 

ARTICLE 4

 

PROFIT, LOSS AND DISTRIBUTION

 

4.1 ALLOCATION OF PROFIT OR LOSS. After giving effect to the

special allocations set forth in section 4.3, for any taxable year of the

Company, Profit and Loss shall be allocated to the Interest Holders in

proportion to their Percentages.

 

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4.2 CASH FLOW. Cash Flow of the Company shall be distributed to

the Interest Holders in proportion to their Percentages no later than

twenty-five (25) days after the end of the month.

 

4.3 REGULATORY ALLOCATIONS.

 

4.3.1 CONTRIBUTED PROPERTY AND BOOK-UPS. In accordance with

IRC Section 704(c) and the Regulations thereunder, including Regulation Section

1.704-1(b)(2)(iv)(d)(3), income, gain, loss and deduction with respect to any

property contributed (or deemed contributed) to the Company shall, solely for

tax purposes, be allocated among the Interest Holders so as to take account of

any variation between the adjusted basis of the property to the Company for

federal income tax purposes and its fair market value at the date of

Contribution (or deemed Contribution). If the adjusted book value of any Company

asset is adjusted under Regulation Section 1.704-1(b)(2)(iv)(f), subsequent

allocations of income, gain, loss and deduction with respect to the asset shall

take account any variation between the adjusted basis of the asset for federal

income tax purposes and its adjusted book value in the manner required under IRC

Section 704(c) and the Regulations thereunder. The parties hereto agree to use

the traditional method with curative allocations, as described in Regulation

Section 1.704-3(c), for making IRC Section 704(c) allocations.

 

4.3.2 IRC SECTION 754 ADJUSTMENT. To the extent an

adjustment to the tax basis of any Company asset pursuant to IRC Section 734(b)

or IRC Section 743(b) is required, pursuant to Regulation Section

1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts,

the amount of the adjustment to the Capital Accounts shall be treated as an item

of gain (if the adjustment increases the basis of the asset) or loss (if the

adjustment decreases basis), and the gain or loss shall be specially allocated

to the Interest Holders in a manner consistent with the manner in which their

Capital Accounts are required to be adjusted pursuant to that section of the

Regulations.

 

4.3.3 GUARANTEED PAYMENTS. To the extent any compensation

paid to any Interest Holder by the Company, including any fees payable to any

Interest Holder pursuant to section 5.3 hereof, is determined by the Internal

Revenue Service not to be a guaranteed payment under IRC Section 707(c) or is

not paid to the Interest Holder other than in the Person's capacity as a partner

(Interest Holder) within the meaning of IRC Section 707(a), the Interest Holder

shall be specially allocated gross income of the Company in an amount equal to

the amount of that compensation, and the Interest Holder's Capital Account shall

be adjusted to reflect the payment of that compensation.

 

4.3.4 WITHHOLDING. All amounts required to be withheld

pursuant to IRC Section 1446 or any other provision of federal, state or local

tax law shall be treated as amounts actually distributed to the affected

Interest Holders for all purposes under this Agreement.

 

4.3.5 MINIMUM GAIN CHARGEBACK. In the event that there is a

net decrease in the Company Minimum Gain (as defined herein) during any fiscal

year, the minimum gain chargeback described in Sections 1.704-2(f) and (g) of

the Regulations shall apply. The amount of Company Minimum Gain is determined by

computing with respect to each non-recourse liability of the Company, the amount

of gain, if any, that would be realized by the Company if it

 

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disposed of the company property subject to such liability in full satisfaction

thereof and by then aggregating the amounts so computed. If Company property

subject to one or more non-recourse liabilities of the Company at a book value

that differs from the adjusted tax basis of such property, the book value of

such property, rather than the adjusted tax basis, shall be subtracted from the

outstanding principal balance of the non-recourse liability in determining the

amount of minimum gain.

 

4.3.6 MEMBER MINIMUM GAIN CHARGEBACK. If during any fiscal

year there is a net decrease in Member Non-recourse Debt minimum gain, any

Member with a share of that Member Non-recourse Debt minimum gain (determined

under Section 1.704-2(i)(5) of the Regulations) as of the beginning of the year

must be allocated items of income and gain for the year (and, if necessary, for

succeeding years) equal to that Member's share of the net decrease in

the Member Non-recourse Debt minimum gain in accordance with Regulations Section

1.704-2(i).

 

4.3.7 QUALIFIED INCOME OFFSET. Any Member who unexpectedly

receives an adjustment, allocation or distribution described in subparagraphs

(4), (5) or (6) of Section 1.704-1(b)(2)(ii)(d) of the Regulations, which

adjustment, allocation or distribution creates or increases a deficit balance in

that Member's Capital Account, shall be allocated items of "book" income and

gain in an amount and manner sufficient to eliminate the deficit balance in that

Member's Capital Account so created or increased as quickly as possible.

 

4.3.8 INCOME TAX PROVISIONS. The Interest Holders are aware

of the income tax consequences of this Article 4 and agree to be bound by these

provisions in reporting their shares of Profit, Losses and other items for

federal and state income tax purposes.

 

4.4 LIQUIDATION AND DISSOLUTION.

 

4.4.1 Upon liquidation of the Company, the Company shall

continue solely for the purposes of winding up its affairs in an orderly manner,

liquidating its assets, and satisfying the claims of its creditors and Members

and no Member shall take any action that is inconsistent with, or not necessary

or appropriate for, winding up the Company business and affairs. The Management

Committee shall be responsible for overseeing the winding up and dissolution of

the Company, shall take full account of the Company's liabilities and Property,

shall cause the Property to be liquidated as promptly as is consistent with

obtaining the fair value thereof, and shall cause the proceeds therefrom, to the

extent sufficient therefor, to be applied and distributed in the following

order:

 

4.4.2 First, to the payment and discharge of all of the

Company's debts and liabilities to creditors.

 

4.4.3 After payment described in section 4.4.2, the Members

shall be entitled to distribution of any assets or capital they contributed to

the Company.

 

4.4.4 The balance, if any, shall be allocated to the

Members in accordance with the Percentages.

 

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4.4.5 Except as otherwise specifically provided in this

Agreement, each Member shall look solely to the assets of the Company for the

return of such Member's positive Capital Account balance and shall have no

recourse for its Contribution and/or share of Net Profits (upon dissolution or

otherwise) against the Managers or any other Member for indemnification,

contribution or reimbursement, except as otherwise provided herein.

 

4.4.6 Except as otherwise provided herein, no Interest

Holder shall be obligated to restore a Negative Capital Account.

 

4.5 GENERAL.

 

4.5.1 Except as otherwise provided in this Agreement, the

timing and amount of all distributions shall be determined by the Management

Committee.

 

4.5.2 If any assets of the Company are distributed in kind

to the Interest Holders, those assets shall be valued on the basis of their fair

market value, and any Interest Holder entitled to any interest in those assets

shall receive that interest as a tenant-in-common with all other Interest

Holders so entitled. Unless the Members otherwise agree, the fair market value

of the assets shall be determined by an independent appraiser who shall be

selected by the Management Committee. The Profit or Loss for each unsold asset

shall be determined as if the asset had been sold at its fair market value, and

the Profit or Loss shall be allocated as provided in section 4.2 and shall be

properly credited or charged to the Capital Accounts of the Interest Holders

prior to the distribution of the assets in liquidation pursuant to section 4.4.

 

4.5.3 All Profit and Loss shall be allocated and all

distributions shall be made to the Persons shown on the records of the Company

to have been Interest Holders as of the last day of the taxable year for which

the allocation or distribution is to be made. Notwithstanding the foregoing,

unless the Company's taxable year is separated into segments, if there is a

Transfer or an Involuntary Withdrawal during the taxable year, the Profit and

Loss shall be allocated between the original Interest Holder and the successor

on the basis of the number of days each was an Interest Holder during the

taxable year; provided, however, the Company's taxable year shall be segregated

into two (2) or more segments in order to account for Profit, Loss or proceeds

attributable to any extraordinary non-recurring items of the Company.

 

4.5.4 The Management Committee is hereby authorized, upon

the advice of the Company's tax counsel, to amend this Article 4 to comply with

the Code and the Regulations promulgated under IRC Section 704(b); provided,

however, that no amendment shall materially affect distributions to an Interest

Holder without the Interest Holder's prior written consent.

 

ARTICLE 5

 

MANAGEMENT: RIGHTS, POWERS AND DUTIES

 

5.1 MANAGEMENT.

 

5.1.1 MANAGEMENT COMMITTEE. The Company shall be managed by

a Management Committee. CMIC and MDS shall each designate a member to serve on

the Management Committee. CMIC initially appoints David Ward to the Management

Committee

 

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and MDS initially appoints Wayne K. Baldwin to the Management Committee. The

right of CMIC or MDS, respectively, to appoint a member of the Management

Committee shall terminate when the respective Membership Interest of either of

them terminates. Any successor to the terminated interest of either CMIC or MDS

shall have the right to appoint a member of the Management Committee. CMIC's

representative on the Management Committee shall act as chairman ("CHAIRMAN").

 

5.1.2 MANAGEMENT COMMITTEE ACTIONS. The Chairman may call

Management Committee meetings upon seven (7) days written notice. The members of

the Management Committee may agree to waive notice of any meeting. The unanimous

vote of the Management Committee is required before the Chairman may take any

action with respect to the items listed in sections 5.1.3.1 through 5.1.3.4,

5.1.3.6 through 5.1.3.9 and 5.1.3.11 below.

 

5.1.3 GENERAL POWERS. Subject to Article 5.7, the

Management Committee shall have full, exclusive and complete discretion, power

and authority, subject in all cases to the other provisions of this Agreement

and. the requirements of applicable law, to manage, control, administer and

operate the business and affairs of the Company for the purposes herein stated,

and to make all decisions affecting such business and affairs, including,

without limitation, the power to:

 

5.1.3.1 Acquire by purchase, lease, or otherwise,

any real or personal property, tangible or intangible;

 

5.1.3.2 Construct, operate, maintain, finance and

improve, and to own, sell, convey, assign, mortgage or lease any real estate and

any personal property;

 

5.1.3.3 Sell, dispose, trade or exchange Company

assets in the ordinary course of the Company's business;

 

5.1.3.4 Enter into agreements and contracts and to

give receipts, releases and discharges;

 

5.1.3.5 Purchase liability and other insurance to

protect the Company's properties and business;

 

5.1.3.6 Borrow money for and on behalf of the

Company, and, in connection therewith, execute and deliver instruments

authorizing the confession of judgment against the Company;

 

5.1.3.7 Execute or modify leases with respect to any

part or all of the assets of the Company;

 

5.1.3.8 Prepay, in whole or in part, refinance,

amend, modify or extend any mortgages or deeds of trust which may affect any

asset of the Company and in connection therewith to execute for and on behalf of

the Company any extensions, renewals or modifications of such mortgages or deeds

of trust;

 

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5.1.3.9 Execute any and all other instruments and

documents which may be necessary or in the opinion of the Management Committee

desirable to carry out the intent and purpose of this Agreement, including, but

not limited to, documents whose operation and effect extend beyond the term of

the Company;

 

5.1.3.10 Make any and all expenditures up to Two

Hundred Thousand Dollars ($200,000) which the Management Committee, in its sole

discretion, deems necessary or appropriate in connection with the management of

the affairs of the Company and the carrying out of its obligations and

responsibilities under this Agreement, including, without limitation,

expenditures for legal, accounting and other related expenses incurred in

connection with the organization, financing and operation of the Company;

 

5.1.3.11 Enter into any kind of activity necessary

to, in connection with, or incidental to, the accomplishment of the purposes of

the Company;

 

5.1.3.12 Invest and reinvest Company reserves in

short-term instruments or money market funds; and

 

5.1.3.13 Appoint officers to conduct the business of

the Company, including, but not limited to, a Chief Operations Officer, Chief

Financial Officer, Secretary and other officer as the Management Committee

determines may be advisable or necessary. The Management Committee hereby

appoints Rochelle Martel as Chief Financial Officer, Wayne Baldwin as Secretary

and Roberta Hicks as Chief Operating Officer as the initial officers of the

Company. All officers shall be employees of the Members, and officers shall not

be entitled to compensation from the Company.

 

5.1.4 LIMITATION ON AUTHORITY OF MEMBERS.

 

5.1.4.1 No Member is an agent of the Company solely

by virtue of being a Member, and no Member has authority to act for the Company

solely by virtue of being a Member.

 

5.1.4.2 This section 5.1 supersedes any authority

granted to the Members pursuant to Section 17157 of the Act. Any Member who

takes any action or binds the Company in violation of this section 5.1 shall be

solely responsible for any loss and expense incurred by the Company as a result

of the unauthorized action and shall indemnify and hold the Company harmless

with respect to the loss or expense.

 

5.1.5 MANAGEMENT FEE. CMIC and MDS will provide the Company

with management and support services, including, but not limited to, management,

human resources support (excluding cost of benefits), marketing support, vendor

relations, services related to purchasing of materials and supplies, and other

administrative support ("MANAGEMENT SERVICES") at a management fee ("MANAGEMENT

FEE") equal to three percent (3%) of net collected revenue (cash receipts less

refunds, credits and other valid offsets to revenue) of the Company payable

equally to CMIC and to MDS monthly on or before the twentieth (20th) day of each

month based upon the net collected revenue for the prior month. The Management

Fee under this section shall be the sole compensation from Company to either

CMIC or MDS for Management Services.

 

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5.2 MEETINGS OF AND VOTING BY MEMBERS.

 

5.2.1 A meeting of the Members may be called at any time by

the Management Committee or by those Members holding at least a majority in

interest of the Members. Meetings of Members shall be held at the Company's

principal place of business or at any other place in Ventura or Los Angeles

County, California, designated by the Person or Persons calling the meeting. Not

less than ten (10) nor more than sixty (60) days before each meeting, the Person

or Persons calling the meeting shall give written notice of the meeting to each

Member entitled to vote at the meeting. The notice shall state the time, place

and purpose of the meeting. Notwithstanding the foregoing provisions, each

Member who is entitled to notice may waive notice, either before or after the

meeting, by executing a waiver of such notice, or by appearing at and

participating, in person or by proxy in the meeting. Unless this Agreement

provides otherwise, at a meeting of Members, the presence in person or by proxy

of Members holding Percentages which aggregate to not less than fifty-one

percent (51%) constitutes a quorum. A Member may vote either in person or by

written proxy signed by the Member or by the Member's duly authorized

Attorney-in-Fact.

 

5.2.2 Except as otherwise provided in this Agreement, the

affirmative vote of Members holding a majority of the aggregate Percentages

present at the meeting in person and by proxy shall be required to approve any

matter coming before the Members.

 

5.2.3 In lieu of holding a meeting, the Members may take

action by written consents specifying the action to be taken, which consents

must be executed and delivered to the Company by Members whose combined voting

power constitutes not less than majority of the aggregate Percentages of all

Members. Any such approved action shall be effective immediately. The Company

shall give prompt notice to all Members of any action approved by Members by

less than unanimous consent.

 

5.3 PERSONAL SERVICES.

 

5.3.1 No Member shall be required to perform services for

the Company solely by virtue of being a Member. Unless approved by the

Management Committee, no Member shall perform services for the Company or be

entitled to compensation for services performed for the Company.

 

5.3.2 Unless approved by Members holding majority of the

aggregate Percentages then held by Members, the Management Committee shall not

be entitled to compensation for services performed for the Company. However,

upon substantiation of the amount and purpose thereof, the Management Committee

shall be entitled to reimbursement for expenses reasonably incurred, and

advances reasonably made, in furtherance of the business of the Company.

 

5.4 DUTIES OF PARTIES.

 

5.4.1 Members of the Management Committee shall devote such

time to the business and affairs of the Company as is necessary to carry out the

Management Committee's duties set forth in this Agreement.

 

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5.4.2 Except as otherwise expressly provided in section

5.4.3, nothing in this Agreement shall be deemed to restrict in any way the

rights of any Member, or of any Affiliate of any Member, to conduct any other

business or activity whatsoever, and no Member shall be accountable to the

Company or to any other Member with respect to that business or activity even if

the business or activity competes with the Company's business. The organization

of the Company shall be without prejudice to the Members' respective rights (or

the rights of their respective Affiliates) to maintain, expand or diversify such

other interests and activities and to receive and enjoy profits or compensation

therefrom. Each Member waives any rights the Member might otherwise have to

share or participate in such other interests or activities of any other Member

or the Member's Affiliates.

 

5.4.3 The only fiduciary duties any Member owes to the

Company and the other Members are the duty of loyalty and the duty of care set

forth in subdivisions 5.4.3.1 and 5.4.3.2.

 

5.4.3.1 A Member's duty of loyalty to the Company

and the other Members is limited to the following:

 

5.4.3.1.1 To account to the Company and hold

as trustee for it any property, profit or benefit derived by the Member in the

conduct or winding up of the Company's business or derived from a use by the

Member of Company property, including the appropriation of a Company

opportunity, without the consent of the other Members;

 

5.4.3.1.2 To refrain from dealing with the

Company in the conduct or winding up of the Company business as or on behalf of

a party having an interest adverse to the Company without the consent of the

other Members; and

 

5.4.3.1.3 To refrain from competing with the

Company in the conduct of the Company business before the dissolution of the

Company and as otherwise set forth in this Agreement without the consent of the

other Members.

 

5.4.3.2 A Member's duty of care to the Company and

the other Members in the conduct and winding up of the Company business is

limited to refraining from engaging in grossly negligent or reckless conduct,

intentional misconduct or a knowing violation of law.

 

5.5 INDEMNIFICATION OF EACH MANAGEMENT COMMITTEE MEMBER.

 

5.5.1 Each member of the Management Committee shall not be

liable, responsible or accountable, in damages or otherwise, to any Member or to

the Company for any act performed by such Person within the scope of the

authority conferred on the Management Committee by this Agreement, and within

the standard of care specified in section 5.5.2.

 

5.5.2 The Company shall indemnify each member of the

Management Committee for any act performed by such member within the scope of

the authority conferred on the Management Committee by this Agreement, unless

such act constitutes grossly negligent or reckless conduct, intentional

misconduct or a knowing violation of law.

 

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5.6 POWER OF ATTORNEY.

 

5.6.1 GRANT OF POWER. Each Member constitutes and appoints

the Chairman of the Management Committee as the Member's true and lawful

Attorney-in-Fact ("ATTORNEY-IN-FACT"), and in the Member's name, place and

stead, to make, execute, sign, acknowledge and file:

 

5.6.1.1 One or more Articles of Organization;

 

5.6.1.2 All documents (including amendments to

Articles of Organization) which the Attorney-in-Fact deems appropriate to

reflect any amendment, change or modification of this Agreement;

 

5.6.1.3 Any and all other certificates or other

instruments required to be filed by the Company under the laws of the State of

California or of any other state or jurisdiction, including, without limitation,

any certificate or other instruments necessary in order for the Company to

continue to qualify as a limited liability company under the laws of the State

of California;

 

5.6.1.4 One or more fictitious trade name

certificates; and

 

5.6.1.5 All documents which may be required to

dissolve and terminate the Company and to cancel its Articles of Organization.

 

5.6.2 IRREVOCABILITY. The foregoing power of attorney is

irrevocable and is coupled with an interest, and, to the extent permitted by

applicable law, shall survive the death or disability of a Member. It also shall

survive the Transfer of a Membership Interest, except that if the Assignee is

admitted as a Member, this power of attorney shall survive the delivery of the

assignment for the sole purpose of enabling the Attorney-in-Fact to execute,

acknowledge and file any documents needed to effectuate the substitution. Each

Member shall be bound by any representations made by the Attorney-in-Fact acting

in good faith pursuant to this power of attorney, and each Member hereby waives

any and all defenses which may be available to contest, negate or disaffirm the

action of the Attorney-in-Fact taken in good faith under this power of attorney.

 

5.7 MANAGEMENT COMMITTEE. Neither the Chairman of the Management

Committee nor the Management Committee shall have authority hereunder to cause

the Company to engage in the following transactions without first obtaining the

affirmative vote or written consent of the Members holding a Supermajority

Interest:

 

5.7.1 The sale, exchange or other disposition of all, or

substantially all, of the Company's assets occurring as part of a single

transaction or plan, or in a series of transactions, except in the orderly

liquidation and winding up of the business of the Company upon its duly

authorized dissolution and except as provided in the Purchase Agreement;

 

5.7.2 The merger of the Company with another limited

liability company, limited partnership, corporation, general partnership or

other entity; provided that in no event shall a Member be required to become a

general partner in a merger with a partnership without

 

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such Member's express written consent or unless the agreement of merger provides

each Member with the dissenter's rights described in the Act;

 

5.7.3 The acquisition of any business or the assets of any

business, the cost of which acquisition shall exceed Two Hundred Thousand

Dollars ($200,000);

 

5.7.4 The undertaking of a public offering of securities of

the Company;

 

5.7.5 The establishment of different classes of Members;

 

5.7.6 An alteration of the primary purpose of the Company

as set forth in section 2.3;

 

5.7.7 Any act which would make it impossible to carry on

the ordinary business of the Company;

 

5.7.8 Any distribution to the Members except for

distributions of Cash Flow approved by the Management Committee for the purposes

set forth in, and in accordance with, section 4.2;

 

5.7.9 Any other act which under the terms of this Agreement

requires the vote, approval or consent of Members holding a Supermajority

Interest; and

 

5.7.10 Any other transaction described in this Agreement as

requiring the vote, consent or approval of the Members shall require the consent

of a majority interest (or such greater Percentage Interests described therein)

of the Members.

 

5.8 STAFF/PERSONNEL. CMIC shall provide all non-physician

personnel necessary to staff any medical imaging center ("STAFF") Company

operates pursuant to this Agreement under lease arrangements with Company. Staff

shall be offered compensation and benefits consistent with those offered within

the medical imaging industry. All decisions concern the number of Staff and

compensation rates shall be determined by the Management Committee. CMIC shall

provide Staff at CMIC's actual cost without mark up or profit.

 

5.9 BILLING, COLLECTION AND ACCOUNTING. CMIC will provide, at

CMIC's sole expense, all Company's billing, collection and accounting services

for medical imaging procedures performed by Company. CMIC may subcontract for

such services with a subcontractor acceptable to the Management Committee.

Company shall reimburse CMIC two and one half percent (2.5%) of Company's net

collected revenues for such billing, collection and accounting services. Net

collected revenues shall mean total actual collections from global (professional

and technical component) and radiopharmaceutical billings for services Company

provides to patients less refunds, credits or overpayments if any.

 

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ARTICLE 6

 

TRANSFER OF INTERESTS AND WITHDRAWALS OF MEMBERS

 

6.1 TRANSFERS. Except as provided herein, no Member may Transfer

all, or any portion of, or any interest or rights in, the Membership Interest

owned by the Member. Each Member hereby acknowledges the reasonableness of this

prohibition in view of the purposes of the Company and the relationship of the

Members. The attempted Transfer of any portion or all of a Membership Interest

in violation of the prohibition contained in this section 6.1 shall be deemed

invalid, null and void, and of no force or effect, except any Transfer mandated

by operation of law and then only to the extent necessary to give effect to such

Transfer by operation of law.

 

6.1.1 A Member may Transfer all or any portion of or any

interest or rights in the Member's Economic Interest if each of the following

conditions ("CONDITIONS OF TRANSFER") is satisfied:

 

6.1.1.1 The Transfer may be accomplished without

registration, or similar process, under federal and state securities laws;

 

6.1.1.2 The transferee delivers to the Company a

written agreement to be bound by the terms of Article 6 of this Agreement;

 

6.1.1.3 The Transfer will not result in the

termination of the Company pursuant to IRC Section 708;

 

6.1.1.4 The Transfer will not result in the Company

being subject to the Investment Company Act of 1940, as amended;

 

6.1.1.5 The transferor or the transferee delivers

the following information to the Company: (a) the transferee's taxpayer

identification number; and (b) the transferee's initial tax basis in the

transferred Membership Interest; and

 

6.1.1.6 The transferor complies with the provisions

set forth in section 6.2.

 

6.1.2 If the Conditions of Transfer are satisfied, the

Member may Transfer all or any portion of the Member's Economic Interest. The

Transfer of an Economic Interest pursuant to this section 6.1 shall not result

in the Transfer of any of the transferor's other Membership rights. The

transferee of the Economic Interest shall have no right to: (a) become a Member;

(b) exercise any Membership rights other than those specifically pertaining to

the ownership of an Economic Interest; or (c) act as an agent of the Company.

 

6.2 RIGHT OF FIRST REFUSAL.

 

6.2.1 If a Member ("TRANSFEROR") receives a bona fide

written offer (except an offer pursuant to section 6.4) which the Member desires

to accept ("TRANSFEREE OFFER") from any other Person, including another Member

("TRANSFEREE") to purchase all or any portion of or

 

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any interest or rights in the Transferor's Economic Interest ("TRANSFEROR

INTEREST") then, prior to any Transfer of the Transferor's Interest, the

Transferor shall give the Company written notice ("TRANSFER NOTICE") containing

each of the following:

 

6.2.1.1 The Transferee's identify;

 

6.2.1.2 A true and complete copy of the Transferee

Offer;

 

6.2.1.3 The Transferor's offer ("OFFER") to sell the

Transferor Interest to the Company for consideration equal to that contained in

the Transferee Offer or, if the consideration specified in the Transferee Offer

is not specified as cash, then for consideration in U.S. Dollars equal in value

to the consideration specified in the Transferee Offer ("TRANSFER PURCHASE

PRICE");

 

6.2.1.4 The Offer shall be and remain irrevocable

for a period ("OFFER PERIOD") ending at 11:59 p.m. local time at the Company's

principal office, on the sixtieth (60th) day following the date the Transfer

Notice is given to the Company. At any time during the Offer Period, the Company

may accept the Offer by giving written notice to the Transferor of its

acceptance ("OFFEREE NOTICE"). The Transferor shall not be deemed a Member for

the purpose of the vote on whether the Company shall accept the Offer. If the

Company accepts the Offer, the Offeree Notice shall fix a closing date

("TRANSFER CLOSING DATE") for the purchase, which shall not be earlier than ten

(10) or more than sixty (60) days after the expiration of the Offer Period;

 

6.2.1.5 If the Company accepts the Offer, the

Transfer Purchase Price shall be paid on the Transfer Closing Date unless the

Company elects prior to or on the Transfer Closing Date to pay the Transfer

Purchase Price in installments pursuant to the provisions of section 6.5 of this

Agreement;

 

6.2.1.6 If the Company does not accept the Offer in

its entirety within thirty (30) days after the Offer Date, the Company shall

give immediate notice to that effect ("REMAINING MEMBERS NOTICE") to each

Member, other than the Transferor ("REMAINING MEMBERS"). Such notice to the

Remaining Members shall include a copy of the Transfer Notice and inform the

Remaining Members of their right to purchase all, or a portion, of the

Transferor Interest for a pro rata portion of the Transfer Purchase Price;

 

6.2.1.7 The Remaining Members Notice shall be and

remain irrevocable for the remainder of the Offer Period. At any time during

such period, a Remaining Member may accept the offer by notifying the Transferor

in writing that the Remaining Member intends to purchase all, but not less than

all, of the Transferor Interest. If two (2) or more Remaining Members desire to

accept the Offer, then, in the absence of an agreement between or among them,

each such Remaining Member shall purchase the Transferor Interest in the

proportion that such Member's respective Percentage bears to the total

Percentages of all of the Remaining Members who desire to accept the Offer,

adjusted to reflect the portion, if any, of the Transferor Interest to be

purchased by the Company;

 

6.2.1.8 If the Company and/or the Remaining Members

(collectively, the "PURCHASERS") have accepted the Offer prior to the end of the

Offer Period, any Purchaser

 

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may give written notice to that effect to the Transferor specifying a closing

date ("TRANSFER CLOSING DATE") for the purchase which shall be no earlier than

ten (10) nor later than sixty (60) days after the expiration of the Offer

Period;

 

6.2.1.9 On the Transfer Closing Date the Purchasers

shall pay the Transfer Purchase Price unless the Purchasers elect prior to or on

the Transfer Closing Date to pay the Transfer Purchase Price in installments

pursuant to the provisions of section 6.5 of this Agreement;

 

6.2.1.10 If neither the Company nor any Remaining

Member accepts the Offer (within the time and in the manner specified in this

section), then the Transferor shall be free for a period ("PERMITTED TRANSFER

PERIOD") of thirty (30) days after the expiration of the Offer Period to

Transfer the Transferor Interest to the Transferee, for the same or greater

price and on the same terms and conditions as set forth in the Transfer Notice.

The Transfer shall be subject, however, to the Conditions of Transfer (other

than section 6.1.1.6). If the Transferor does not Transfer the Transferor's

Interest within the Permitted Transfer Period, the Transferor's right to

Transfer the Transferor Interest pursuant to this section shall cease and

terminate; and

 

6.2.1.11 Any Transfer by the Transferor after the

last day of the Permitted Transfer Period or without strict compliance with the

terms, provisions and conditions of this section and the other terms, provisions

and conditions of this Agreement, shall be null and void and of no force or

effect.

 

6.3 WITHDRAWAL OF A MEMBER. No Member shall have the right or

power to Voluntarily Withdraw from the Company.

 

6.4 CMIC PURCHASE OPTION. CMIC shall have the option to purchase

the Membership Interests of MDS on the following terms and conditions:

 

6.4.1 MDS hereby grants to CMIC an option to purchase MDS's

Membership Interest ("OPTION") at a price equal to four (4) times EBITDA

multiplied by MDS's Percentage at any time after eighteen (18) but before

forty-eight (48) months following the first medical imaging procedure performed

by Company. For purposes hereof, EBITDA shall be based upon the greater of (i)

the most recent one (1) year period, or (ii) the most recent three (3) month

period annualized; provided, however, that the minimum price to be paid by CMI

for such MDS Originated Project shall be the greater of (y) assumption of all

existing Company obligations as of closing plus invested capital attributable to

the Membership Interest being purchased plus Seventy-five Thousand Dollars

($75,000), or (z) assumption of all existing Company obligations as of closing

plus Three Hundred Seventy-five Thousand Dollars ($375,000).

 

6.4.2 For purposes of this Agreement, EBITDA shall be

defined as (i) the net earnings (or loss) after taxes for such period taken as a

single accounting period, plus (ii) depreciation, depletion and amortization

expense for such period, plus (iii) federal, state and local income (or

equivalent) taxes paid or accrued for such period, plus (iv) total interest

expense for such period (including amortization of capitalized indebtedness

issuance costs) whether paid or accrued, including all commissions, discounts

and other fees and charges owed with respect to letters of credit, plus (v)

extraordinary, unusual or non-recurring losses and non-cash charges for

 

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any disposition of businesses or early extinguishment of indebted for such

period, minus (vi) any cash payments with respect to any non-cash charges and

expenses related to the disposition of businesses or early extinguishment of

indebtedness previously taken into account for such period, minus (vii) debt, in

each case determined in accordance with generally accepted accounting principles

and in the case of clauses (ii) through (vii), to the extent included in the

determination of net earnings (or loss) for such period. Any amounts paid to

MDS, CMIC or Comprehensive Medical Imaging solely for management services (as

opposed to accounting and billing services), including, but not limited to, the

three percent (3%) management fee described in section 5.1.5 above, shall be

added back to net earnings for the purposes of calculating EBITDA hereunder.

 

6.4.3 CMIC shall pay MDS Fifty Thousand Dollars ($50,000)

("OPTION CONSIDERATION") as consideration for the purchase option described

above payable twenty-four (24) months from date the Company performs its first

medical imaging procedure. The Option Consideration shall be in addition to the

purchase price calculated in accordance with the terms hereof. Payment of the

Option Consideration must be made before CMIC shall have the right to exercise

the Option. The Option shall not lapse if CMIC fails to pay the Option

Consideration unless MDS gives CMIC written notice of default of the Option

which remains uncured for a period of sixty (60) days.

 

6.5 MDS PERMITTED TRANSFER. MDS shall have the right to Transfer a

portion of its Membership Interest not to exceed ten percent (10%) of all

Membership Interests in the aggregate to a physician or physician group under

contract with Company to provide professional medical interpretative services at

a medical imaging facility Company operates.

 

ARTICLE 7

 

DISSOLUTION, LIQUIDATION AND TERMINATION OF THE COMPANY

 

7.1 EVENTS OF DISSOLUTION. The Company shall be dissolved upon the

happening of the first to occur of an event specified in Section 17350 of the

Act or any of the following events:

 

7.1.1 On the date fixed for its termination in section 2.4;

or

 

7.1.2 Upon the vote of a Supermajority Interest of the

aggregate Percentages of the Members.

 

7.2 PROCEDURE FOR WINDING UP AND DISSOLUTION. If the Company is

dissolved, the Management Committee shall wind up its affairs. On winding up of

the Company, the assets of the Company shall be distributed, first to creditors

of the Company, including Interest Holders who are creditors, in satisfaction of

the liabilities of the Company, and then, to the Interest Holders in accordance

with section 4.4 of this Agreement.

 

7.3 FILING OF CERTIFICATE OF CANCELLATION. Upon completion of the

affairs of the Company, the Management Committee shall promptly file the

Certificate of Cancellation of Articles of Organization with the Secretary of

State. If there is no Management Committee, then the Certificate of Cancellation

shall be filed by the remaining Members; if there are no remaining Members, the

Certificate shall be filed by the last Person to be a Member; if there is

neither a

 

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Management Committee, remaining Members, nor a Person who last was a

Member, the Certificate shall be filed by the legal or personal representatives

of the Person who last was a Member.

 

ARTICLE 8

 

BOOKS, RECORDS, ACCOUNTING AND TAX ELECTIONS

 

8.1 BANK ACCOUNTS. All funds of the Company shall be deposited in

a bank account or accounts opened in the Company's name. The Management

Committee shall determine the financial institution or institutions at which the

accounts will be opened and maintained, the types of accounts, and the Persons

who will have authority with respect to the accounts and the funds therein.

 

8.2 BOOKS AND RECORDS.

 

8.2.1 The Management Committee shall keep or cause to be

kept complete and accurate books, records and financial statements of the

Company and supporting documentation of transactions with respect to the conduct

of the Company's business. The books, records and financial statements of the

Company shall be maintained on the accrual basis of accounting in accordance

with generally accepted accounting principles. Such books, records, financial

statements and documents shall include, but not be limited to, the following:

 

8.2.1.1 A current list of the full name and last

known business or residence address of each Member and Interest Holder, in

alphabetical order, with the Contribution and the share in profits and losses of

each Member and Interest Holder specified in such list;

 

8.2.1.2 A current list of the full name and business

or residence address of each Manager;

 

8.2.1.3 The Articles of Organization, including all

amendments; and any powers of attorney under which the Articles of Organization

or amendments were executed;

 

8.2.1.4 Federal, state and local income tax or

information returns and reports, if any, for the six (6) most recent taxable

years;

 

8.2.1.5 This Agreement and any amendments thereto;

and any powers of attorney under which this Agreement or amendments were

executed;

 

8.2.1.6 Financial statements for the six (6) most

recent years;

 

8.2.1.7 Internal books and records for the current

and three (3) most recent years; and

 

8.2.1.8 A true copy of relevant records indicating

the amount, cost and value of all property which the Company owns, claims,

possesses or controls.

 

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8.2.2 Such books, records and financial statements of the

Company and supporting documentation shall be kept, maintained and available at

the Company's office within the State of California.

 

8.3 RIGHT TO INSPECT BOOKS AND RECORDS; RECEIVE INFORMATION.

 

8.3.1 Upon the reasonable request of a Member for a purpose

reasonably related to the interest of that Member of the Company, the Management

Committee shall promptly deliver to the requesting Member at the expense of the

Company a copy of this Agreement, as well as the information required to be

maintained by the Company under sections 8.1.1.1, 8.2.1.2 and 8.2.1.4.

 

8.3.2 Each Member and Manager has the right upon reasonable

request, and for purposes reasonably related to the interest of that Member or

Manager of the Company, to do the following:

 

8.3.2.1 To inspect and copy during normal business

hours any of the records required to be maintained by the Company under section

8.2.1 of this Agreement; and

 

8.3.2.2 To obtain from the Company promptly after

becoming available, a copy of the Company's federal, state and local income tax

or information returns for each year.

 

8.3.3 If a Manager has executed an amendment to the

Articles of Organization or this Agreement pursuant to a power of attorney from

the Members, such Manager must promptly furnish to the Members a copy of such

amendment.

 

8.3.4 The Management Committee shall send or shall cause to

be sent to each Member or Interest Holder within ninety (90) days after the end

of each fiscal year of the Company: (a) such information as is necessary to

complete federal and state income tax or information returns; and (b) if the

Company has thirty-five (35) or fewer Members, a copy of the Company's federal,

state and local income tax or information returns for the fiscal year.

 

8.3.5 Unless otherwise expressly provided in this

Agreement, the inspecting or requesting Member or Manager as the case may be,

shall reimburse the Company for all reasonable costs and expenses incurred by

the Company in connection with such inspection and copying of the Company's

books and records and the production and delivery of any other books or records.

 

8.4 ANNUAL ACCOUNTING PERIOD. The annual accounting period of the

Company shall be its taxable year. The Company's taxable year shall be selected

by the Management Committee, subject to the requirements and limitations of the

Code.

 

8.5 TAX MATTERS PARTNER. CMIC shall be the Tax Matters Partner for

purposes of IRC Section 6231(a)(7), and shall have all the authority granted by

the Code to the Tax Matters Partner, provided that CMIC shall not have the

authority without first obtaining the consent of the Management Committee to do

any of the following:

 

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8.5.1 Enter into a settlement agreement with the Internal

Revenue Service that purports to bind the Members.

 

8.5.2 File a petition as contemplated in IRC Section

6226(a) or IRC Section 6228.

 

8.5.3 Intervene in any action as contemplated in IRC

Section 6226(b)(5).

 

8.5.4 File any request contemplated in IRC Section 6227(b).

 

8.5.5 Enter into an agreement extending the period of

limitations as contemplated in IRC Section 6229(b)(1)(B).

 

8.6 TAX ELECTIONS. CMIC shall have the authority to make all

Company elections permitted under the Code, including, without limitation,

elections of methods of depreciation and elections under IRC Section 754. The

decision to make or not make an election shall be at the Management Committee's

sole and absolute discretion.

 

8.7 TITLE TO COMPANY PROPERTY. All real and personal property

acquired by the Company shall be acquired and held by the Company in the

Company's name.

 

ARTICLE 9

 

GENERAL PROVISIONS

 

9.1 ASSURANCES. Each Member shall execute all certificates and

other documents and shall do all such filing, recording, publishing and other

acts as the Management Committee deems appropriate to comply with the

requirements of law for the formation and operation of the Company and to comply

with any laws, rules and regulations relating to the acquisition, operation, or

holding of the property of the Company.

 

9.2 NOTIFICATIONS. Any notice, demand, consent, election, offer,

approval, request or other communication (collectively a "NOTICE") required or

permitted under this Agreement must be in writing and either delivered

personally or sent by certified or registered mail, postage prepaid, return

receipt requested. Any notice to be given hereunder by the Company shall be

given by the Management Committee. A notice must be addressed to an Interest

Holder at the Interest Holder's last known address on the records of the

Company. A notice to the Company must be addressed to the Company's principal

office. A notice delivered personally will be deemed given only when

acknowledged in writing by the Person to whom it is delivered. A notice that is

sent by mail will be deemed given three (3) business days after it is mailed.

Any party may designate, by notice to all of the others, substitute addresses or

addressees for notices; and, thereafter, notices are to be directed to those

substitute addresses or addressees.

 

9.3 SPECIFIC PERFORMANCE. The parties recognize that irreparable

injury will result from a breach of any provision of this Agreement and that

money damages will be inadequate to fully remedy the injury. Accordingly, in the

event of a breach or threatened breach of one or more of the provisions of this

Agreement, any party who may be injured (in addition to any other remedies which

may be available to that party) shall be entitled to one or more preliminary or

 

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permanent orders: (a) restraining and enjoining any act which would constitute a

breach; or (b) compelling the performance of any obligation which, if not

performed, would constitute a breach.

 

9.4 COMPLETE AGREEMENT. This Agreement constitutes the complete

and exclusive statement of the agreement among the Members. It supersedes all

prior written and oral statements, including any prior representation,

statement, condition or warranty. Except as expressly provided otherwise herein,

this Agreement may not be amended without the written consent of all of the

Members.

 

9.5 APPLICABLE LAW. All questions concerning the construction,

validity and interpretation of this Agreement and the performance of the

obligations imposed by this Agreement shall be governed by the internal law, not

the law of conflicts, of the State of California.

 

9.6 ARTICLE AND SECTION TITLES. The headings herein are inserted

as a matter of convenience only and do not define, limit or describe the scope

of this Agreement or the intent of the provisions hereof.

 

9.7 BINDING PROVISIONS. This Agreement is binding upon, and to the

limited extent specifically provided herein, inures to the benefit of, the

parties hereto and their respective heirs, executors, administrators, personal

and legal representatives, successors and assigns.

 

9.8 JURISDICTION AND VENUE. Any suit involving any dispute or

matter arising under this Agreement may only be brought in the appropriate

United States District Court in California or any California State Court having

jurisdiction over the subject matter of the dispute or matter. All Members

hereby consent to the exercise of personal jurisdiction by any such court with

respect to any such proceeding.

 

9.9 TERMS. Common nouns and pronouns shall be deemed to refer to

the masculine, feminine, neuter, singular and plural, as the identity of the

Person may in the context require.

 

9.10 SEPARABILITY OF PROVISIONS. Each provision of this Agreement

shall be considered separable; and if, for any reason, any provision or

provisions herein are determined to be invalid and contrary to any existing or

future law, such invalidity shall not impair the operation of or affect those

portions of this Agreement which are valid.

 

9.11 COUNTERPARTS. This Agreement may be executed simultaneously in

two or more counterparts, each of which shall be deemed an original and all of

which, when taken together, constitute one and the same document. The signature

of any party to any counterpart shall be deemed a signature to, and may be

appended to, any other counterpart.

 

9.12 ESTOPPEL CERTIFICATE. Each Member shall, within ten (10) days

after written request by the Management Committee, deliver to the requesting

Person a certificate stating, to the Member's knowledge, that: (a) this

Agreement is in full force and effect; (b) this Agreement has not been modified

except by any instrument or instruments identified in the certificate; and (c)

there is no default hereunder by the requesting Person, or if there is a

default, the nature and extent thereof. If the certificate is not received

within the ten (10) day period, the Chairman of

 

23

<PAGE>

 

the Management Committee shall execute and deliver the certificate on behalf of

the requested Member, without qualification, pursuant to the power of attorney

granted in section 5.6.

 

24

<PAGE>

 

IN WITNESS WHEREOF, the parties have executed, or caused this Agreement

to be executed, under seal, as of the date set forth herein above.

 

MEMBERS:

 

Comprehensive Diagnostic Imaging, Inc.,

a Delaware Corporation

 

By: /s/ David L. Ward

---------------------------------------

David L. Ward, President/CEO

 

Medical Development Services, LLC,

a California limited liability company

 

By: /s/ Steven E. Krieger

--------------------------------------

Steven E. Krieger, President/CEO

 

25

<PAGE>

 

EXHIBIT A

TO

OPERATING AGREEMENT OF

ORANGE COUNTY REGIONAL PET CENTER - IRVINE, LLC

 

NAMES AND ADDRESSES OF MEMBERS

 

Comprehensive Medical Imaging Centers, Inc.

6464 Canoga Avenue

Woodland Hills, CA 91367

 

Medical Development Services, LLC

dba MD Services

3396 Willow Lane, Suite 101

Westlake Village, CA 91361

 

INITIAL CAPITAL CONTRIBUTIONS AND PERCENTAGES:

 

 

 

INITIAL CAPITAL PERCENTAGES (AS DEFINED IN

MEMBER CONTRIBUTION SECTION 1.16)

------ ------------ -------------

Comprehensive Medical Imaging Centers, Inc. $238,312.50 50%

Medical Development Services, LLC $ 88,312.50 50%

 

 

MDS has assigned a ten percent (10%) economic interest in Orange County Regional

PET Center - Irvine, LLC to eImaging, LLC, 1450 N. Tustin Avenue, Suite 132,

Santa Ana, CA 92705, tax ID number 33-0897292.

 

<PAGE>

 

AMENDMENT NUMBER ONE TO

FIRST AMENDED AND RESTATED OPERATING AGREEMENT OF

ORANGE COUNTY REGIONAL PET CENTER - IRVINE, LLC

 

This Amendment Number One to First Amended and Restated Operating

Agreement of Orange County Regional Pet Center - Irvine, LLC (this "AMENDMENT")

is made effective as of March 28, 2003, and is entered into by and among

Comprehensive Medical Imaging Centers, Inc., a Delaware corporation ("CMIC") and

Medical Development Services, LLC, a California limited liability company

("MDS"), in their capacities as members of Orange County Regional Pet Center -

Irvine, LLC, a California limited liability company (the "COMPANY"). For

purposes of this Amendment, CMIC and MDS will be collectively referred to herein

as the "MEMBERS." This Amendment amends the Company's First Amended and Restated

Operating Agreement, entered into by and among the Members and dated as of

November 1, 2001 (the "OPERATING AGREEMENT"). Capitalized terms used in the

Amendment and not otherwise defined have the meanings ascribed in the Operating

Agreement.

 

RECITALS

 

A. MDS and CMIC are entering into a Membership Interest Purchase Agreement

(the "PURCHASE AGREEMENT"), dated as of March 28, 2003, pursuant to which CMIC

will purchase from MDS all membership interests in the Company held by MDS.

 

B. In order to consummate the Purchase Agreement, the parties have agreed

to amend the Operating Agreement.

 

Accordingly, the parties to this Amendment hereby agree as follows:

 

1. AMENDMENT: TRANSFERS. Section 6.1 of the Operating Agreement

is hereby amended deleted in its entirety.

 

2. AMENDMENT: RIGHT OF FIRST REFUSAL. Section 6.2 of the

Operating Agreement is hereby deleted in its entirety.

 

3. EFFECTIVE DATE. This Amendment shall be effective as of the

first date written above.

 

4. FULL FORCE AND EFFECT. Except as amended by this Amendment,

the Operating Agreement shall remain in full force and effect; provided, however

that wherever the terms and conditions of this Amendment and the terms and

conditions of the Operating Agreement conflict, the terms and conditions of this

Amendment shall be deemed to supersede the conflicting terms of the Operating

Agreement.

 

<PAGE>

 

IN WITNESS WHEREOF, each of the parties has caused this Amendment to be

duly executed as of the date first written above.

 

COMPREHENSIVE MEDICAL IMAGING CENTERS, INC.

 

By: /s/ Mark N. Delevie

---------------------------------------

Name: Mark N. Delevie

Title: Assistant Secretary

 

MEDICAL DEVELOPMENT SERVICES, LLC

 

By: /s/ Steven E. Krieger

---------------------------------------

Name: Steven E. Krieger

Title: President/CEO

 

28

<PAGE>

 

AMENDMENT NUMBER TWO TO

FIRST AMENDED AND RESTATED OPERATING AGREEMENT OF

ORANGE COUNTY REGIONAL PET CENTER - IRVINE, LLC

 

This Amendment Number Two to First Amended and Restated Operating

Agreement of Orange County Regional Pet Center - Irvine, LLC (this "AMENDMENT")

is made effective as of April 2, 2003, and is entered into by Comprehensive

Medical Imaging Centers, Inc., a Delaware corporation ("CMIC"), in its capacity

as a member of Orange County Regional Pet Center - Irvine, LLC, a California

limited liability company (the "COMPANY"). This Amendment amends the Company's

First Amended and Restated Operating Agreement, entered into by and among the

Members and dated as of November 1, 2001, as amended on March 28, 2003 (the

"OPERATING AGREEMENT"). Capitalized terms used in the Amendment and not

otherwise defined have the meanings ascribed in the Operating Agreement.

 

RECITALS

 

A. Medical Development Services, LLC, a California limited liability

company ("MDS") and CMIC entered into a Membership Interest Purchase Agreement,

dated as of March 28, 2003, pursuant to which CMIC purchased from MDS all

membership interests in the Company held by MDS.

 

B. CMIC and Insight Health Corp., a Delaware corporation ("INSIGHT"), have

entered into an Asset Purchase Agreement, dated as of January 6, 2003, and

amended on February 21, 2003 and March 30, 2003 (the "PURCHASE AGREEMENT"),

pursuant to which Insight will purchase from CMIC all membership interests in

the Company held by CMIC.

 

C. In order to consummate the Purchase Agreement, CMIC has agreed to amend

the Operating Agreement.

 

Accordingly, CMIC hereby agrees as follows:

 

1. AMENDMENT: MANAGEMENT FEE. Section 5.1.5 of the Operating

Agreement is hereby amended deleted in its entirety.

 

2. EFFECTIVE DATE. This Amendment shall be effective as of the

first date written above.

 

3. FULL FORCE AND EFFECT. Except as amended by this Amendment,

the Operating Agreement shall remain in full force and effect; provided, however

that wherever the terms and conditions of this Amendment and the terms and

conditions of the Operating Agreement conflict, the terms and conditions of this

Amendment shall be deemed to supersede the conflicting terms of the Operating

Agreement.

 

<PAGE>

 

IN WITNESS WHEREOF, CMIC has caused this Amendment to be duly executed

as of the date first written above.

 

COMPREHENSIVE MEDICAL IMAGING CENTERS, INC.

 

By: /s/ Mark N. Delevie

---------------------------------------

Name: Mark N. Delevie

Title: Assistant Secretary

 

2