AMENDED AND RESTATED OPERATING AGREEMENT OF. Personal Connected Health Alliance, LLC. An Illinois Limited Liability Company

Transcription

1 AMENDED AND RESTATED OPERATING AGREEMENT OF Personal Connected Health Alliance, LLC An Illinois Limited Liability Company

2 Amended and Restated Operating Agreement of Personal Connected Health Alliance, LLC A Illinois Limited Liability Company (Manager Managed) ARTICLE 1 DEFINITIONS The following terms used in this Amended and Restated Operating Agreement shall have the following meanings (unless otherwise expressly provided herein): Act shall mean the Illinois Limited Liability Company Act, as amended Adopter Participant shall mean all those Special Participants who so qualify in accordance with the provisions of Section 10 and Section 11. Affiliate or Affiliates shall mean an entity that directly or indirectly controls another entity via beneficial ownership of more than fifty percent (50%) of the voting power or equity in another entity ( Control ), or is Controlled by another entity, or is under common Control with another entity, so long as such Control exists. Articles of Organization shall mean the Articles of Organization of the Company, as filed with the Secretary of State of Illinois, as the same may be amended from time to time. Assignee shall mean the owner of an Economic Interest only who is not a Member. Board of Managers means the body initially designated as such pursuant to Section 6.1, and thereafter constituted in accordance with the terms of this Operating Agreement. Code means the Internal Revenue Code of 1986, as amended, or any successor statute. Company shall refer to Personal Connected Health Alliance, LLC. Contribution shall have the meaning given in Article 14 of this Operating Agreement. Contribution Percentage shall have the meaning set forth in Section Contributor shall mean all Participants in the Company who so qualify in accordance with the provisions of Section Design Guideline shall have the meaning given in Article 14 of this Operating Agreement. Developing Market Participant shall mean all Participants in the Company who so qualify in accordance with the provisions of Section Page 2

3 Draft Design Guideline shall have the meaning given in Article 14 of this Operating Agreement. Distributable Cash means all cash, revenues and funds received by the Company, less the sum of the following to the extent paid or set aside by the Company: (i) all principal and interest payments on indebtedness of the Company and all other sums paid to lenders; (ii) all cash expenditures incurred incident to the normal operation of the Company s business; and (iii) such reserves as the Board of Managers deems reasonably necessary to the proper operation of the Company s business, which shall include any reserve requirements or new business opportunity pool funding requirements imposed on the Company by the Members. Economic Interest shall mean a Member s or Assignee s share of one or more of the Company s Net Profits, Net Losses and distributions of the Company s assets pursuant to this Operating Agreement and the Act, but shall not include any right to participate in the management or affairs of the Company, including, the right to vote on, consent to or otherwise participate in any decision of the Members. Economic Interest Owner means an owner of any Economic Interest. Governmental Entity Participant shall mean all those Special Participants who so qualify in accordance with the provisions of Section 10 and Section 11. Liquidity Event means the sale of all or substantially all of the Company s assets, a public offering of the Company s securities, a sale of a controlling interest in the Company or any transaction, however characterized, having like effect. Majority Interest shall mean one or more interests of Members in net profits as set forth in Section 16.1, which taken together exceed fifty percent (50%) of the aggregate of all such interests in net profits held by Members only and not Assignees. Majority Vote or Majority Approval or Affirmative Vote means, with respect to decisions required to be made of Members, an affirmative vote of the holders of a majority of the designated Membership Interests is required to approve the relevant action. Manager means a Person initially designated as a member of the Board of Managers by this Operating Agreement pursuant to Section 6.1, or thereafter elected to such position in accordance with the terms of this Operating Agreement. Member shall mean each of the parties who executes a counterpart of this Operating Agreement as a Member, including each of the parties who may hereafter become Members. If a Person is a Member immediately prior to the purchase or other acquisition by such Person of a Membership Interest or an Economic Interest, such Person shall have all the rights of a Member with respect to such purchased or otherwise acquired Membership Interest or Economic Interest, as the case may be. The Members shall be those Persons identified as such on the attached Exhibit Page 3

4 Membership Interest or Interest shall mean the interest of a Member in the Company including such Member s Economic Interest and such other rights and privileges that the Member may enjoy by virtue of being a Member. Necessary Claims shall have the meaning given in Article 14 of this Operating Agreement. Originating Promoters shall mean entities whose Originating Promoters Participation Agreements were executed and received by the Continua Health Alliance, an Oregon nonprofit corporation ( Continua Alliance ), prior to, or contemporaneous with the organizational meeting of the Continua Alliance, and who have continuously thereafter maintained their Originating Promoters Participation Agreements in good standing, including after the date of assignment of such agreement to the Company by Continua Alliance. Except as set forth in Section 6.1 or where specifically called out as Originating Promoters, all references to Promoters shall include Originating Promoters, including but not limited to Section An Originating Promoter s rights under this participation level shall forever terminate upon their failure to renew or otherwise maintain their participation in the Company at the Originating Promoter participation level. Operating Agreement shall mean this agreement as originally executed and as amended from time to time. Participant shall mean a general reference to all Originating Promoters, Promoters and Contributors who have so qualified for such classifications pursuant to the provision of this Operating Agreement. For the avoidance of doubt, Participants are not Members, as such term is defined in the Act. Participation Agreement shall mean the applicable Originating Promoter Participation Agreement, Promoter Participation Agreement, Contributor Participation Agreement, Governmental Entity Participation Agreement, Supporting Participation Agreement, Provider Group Participation Agreement, Research and Education Entity Participation Agreement, Adopter Participation Agreement, Developing Markets Participation Agreement, PCHA Participation Agreement and/or University Participation Agreement approved by the Board of Managers of the Corporation and applicable to the Participant in context of each use of that term herein. PCHA Participant shall mean all those Special Participants who so qualify in accordance with the provisions of Section 10 and Section 11. Person shall mean any individual or entity, or such individual s or entity s heirs, executors, administrators, legal representatives, successors, and assigns where the context requires. Profit Percentage shall have the meaning set forth in Section Profits and Losses shall mean, for each fiscal year or other period, an amount equal to the Company s taxable income or loss for such year or period, determined in accordance with Code Section 703(a) (for this purpose, all items of income, gain, loss or deduction required to be stated Page 4

5 separately pursuant to Code Section 703(a)(1) shall be included in taxable income or loss). Promoter shall mean all Participants of the Company who so qualify in accordance with the provisions of Section 10 and Section 11. Provider Group Participant shall mean all those Special Participants who so qualify in accordance with the provisions of Section 10 and Section 11. Regulations means the regulations promulgated under the Code. Research and Education Entity Participant shall mean all those Special Participants who so qualify in accordance with the provisions of Section 10 and Section 11. Secretary of State means the Illinois Secretary of State. Special Participant shall mean Governmental Entity Participants, Supporting Participants, Provider Group Participants, Research and Education Entity Participants, Adopter Participants, Developing Markets Participants, PCHA Participants and University Participants who so qualify for such classification pursuant to the provisions of this Operating Agreement. Except as otherwise provided for in charter for such participant classes set forth in Section 11, all Special Participants shall have the general rights and obligations of all other Participants. Supporting Participant shall mean all those Special Participants who so qualify in accordance with the provisions of Section 10 and Section 11. Tax Distribution means a distribution to each Member in an amount equal to the highest combined federal, state and local income tax rate applicable to any Member on the Company s taxable income for the calendar year at issue. Transfer means to assign, sell, pledge, encumber or otherwise dispose of all or any part of an interest in the Company, either voluntarily or involuntarily, by operation of law or otherwise. University Participant shall mean all those Special Participants who so qualify in accordance with the provisions of Section 10 and Section 11. ARTICLE 2 FORMATION OF COMPANY 2.1 Formation. On February 20, 2014, the Member organized the Company as an Illinois Limited Liability Company by executing and delivering articles of organization to the Secretary of State in accordance with and pursuant to the Act. 2.2 Name. The name of the Company is Personal Connected Health Alliance, LLC. 2.3 Principal Place of Business. The principal place of business of the Company within the State of Illinois shall be at 33 West Monroe, Suite 1700, Chicago, IL The Company may Page 5

6 locate its places of business and registered office at any other place or places as the Board of Managers may from time to time deem advisable within or without the State of Illinois. 2.4 Registered Office and Registered Agent. The Company s registered office shall be at the office of its registered agent at 33 West Monroe, Suite 1700, Chicago, IL 60603, and the name of its registered agent at such address shall be Racquel R. Orenick. The registered office and registered agent may be changed from time to time by filing the address of the new registered office and/or the name of the new registered agent with the Secretary of State pursuant to the Act. 2.5 Existence. The existence of the Company shall be perpetual, unless the Company is earlier dissolved in accordance with either the provisions of the Act or this Operating Agreement. ARTICLE 3 BUSINESS OF THE COMPANY 3.1 Specific Objectives and Purposes. The purpose of the Company shall be to establish an eco-system of interoperable personal connected health systems and services through rapid, broad and open industry adoption of existing and new standards and specifications for the interchange of personal health and wellness information between patients, vendors, doctors, and other organizations involved in the healthcare industry. In furtherance of these efforts, the Company and its Participants shall seek to solicit the participation and comments of all interested parties on a fair, equitable and open basis. As part of these efforts, the Company may interface with other groups or bodies developing standards and specifications related to the connected health platform. The Company will be responsible for driving improvements or changes into existing standards bodies where needed for interoperability of personal connected health devices. The Company acknowledges that global standards are needed to define interoperability requirements among personal connected health devices so that consumers can combine devices and services and create a full interoperable personal connected health system. The Company further acknowledges that standards have the potential to enable innovation and grow the ecosystem in order to make personal connected health systems a reality. The Company shall also engage in the development of subject matter expertise, public policy positions, education, events and other such activities in furtherance of the global adoption of such standards and personal connected health. 3.2 Compliance with Antitrust Laws The Member and each of the Participants of the Company is committed to fostering competition in the development of new products and services, and the Design Guidelines proposed to be developed are intended to promote such competition. Each Participant further acknowledges that it may compete with the others in various lines of business and that it is therefore imperative that they and their representatives act in a manner which does not violate any applicable state, federal or international antitrust laws or regulations. Page 6

7 3.2.2 Accordingly, each Participant hereby assumes responsibility to provide appropriate legal counsel to its representatives acting under this Operating Agreement regarding the importance of limiting the scope of their discussions to the topics that relate to the purposes of the Company, whether or not such discussions take place during formal meetings, informal gatherings, or otherwise. Each Participant further acknowledges that they and all other Participants are free to develop competing technologies and standards and to license its intellectual property rights including, but not limited to, patent rights to third parties, including without limitation, to enable competing technologies and standards Each Participant further agrees to comply with the antitrust guidelines or such other guidelines as the Board of Managers may adopt from time to time to assure compliance with applicable antitrust laws and regulations. ARTICLE 4 NAMES AND ADDRESSES OF MEMBERS The names and addresses of the Members are set forth on Exhibit 16.1 hereto. 4.1 The Member. The Member shall be Healthcare Information and Management Systems Society. ARTICLE 5 MEMBERSHIP INTERESTS 5.1 Membership Interests. There shall be one class of Membership Interests in the Company. Each Membership Interest shall, together with all other Membership Interests of a Member, represent such Member s interest in (A) the capital of the Company as set forth on Exhibit 16.1, (B) the profits, losses and allocations of the Company from and after the date of the issuance of such Membership Interest, including any increase in the value of the Company s assets and business from and after the date of issuance of such Membership Interest, and (C) distributions (including in-kind distributions) made by the Company, all as more specifically set forth in this Operating Agreement. 5.2 Rights and Duties of Members. The holders of Membership Interests shall have the rights and duties set forth in Article 7, together with the following approval rights: Approval Rights. The Company shall not be entitled to perform any of the following acts without the unanimous consent of the Members: amend this Operating Agreement or the Articles of Organization in such a way that could adversely affect the rights, preferences or privileges of the Membership Interests; or effectuate the issuance of additional Membership Interests; or approve the merger or consolidation of the Company with any other Page 7

8 company, or the sale or other disposition of all or substantially all of the assets of the Company, or any other sale or disposition assets that would have the effect of materially reducing the Company s net asset value except as provided in Section 6.3.9; or approve the dissolution of the Company, the liquidation of its assets or the permanent cessation of the Company s business operations; or acquire stock, assets or other property for consideration having a value equal to or greater than 50% of the retained earnings of the Company at the time of the acquisition; or borrow in any transaction or series of transactions from any Person, including banks and other lending institutions, and in connection therewith, to encumber and grant security interests in the assets of the Company to secure repayment of the borrowed sums; or approve the classes or types of investments that the Company may make and the parameters under which such approved investments may be made; or Managers; or remove any Manager appointed by the Member or the ex officio subject to Section 6.3.9, change the maximum or minimum number of Managers of the Company. ARTICLE 6 MANAGEMENT OF COMPANY 6.1 Board of Managers. A Board of Managers, consisting of not less than five (5) and not more than twenty (20) individuals, shall manage the business and affairs of Company Selection of Board of Managers. The initial Board of Managers shall be composed of those individuals set forth on Exhibit and with an initial term as noted in Exhibit Thereafter, each Manager shall hold office until his successor shall have been elected and qualified unless he resigns or is removed or replaced in accordance with the Act or this Operating Agreement Composition of the Board of Managers. The Board of Managers shall be comprised of: no more than fifteen (15) elected, voting Managers comprised of representatives of the Originating Promoters and Promoters pursuant to the selection procedures defined in Section 6.1.3; plus up to five (5) voting Managers appointed by the Member; plus the President/CEO of the Member and the Executive Vice President of the Company serving as non-voting ex officio Members. Managers need not be Members of the Company but shall be natural persons. Except for such Managers appointed by the Member from time to time and the ex officio Managers, all Managers must be employees of an Originating Promoter or a Promoter and the Originating Page 8

9 Promoter or Promoter must have status as an Originating Promoter or Promoter of the Company for no less than six (6) consecutive months immediately prior to the appointment Election and Appointment. For a period of not less than six (6) years, all Originating Promoters shall be entitled to appoint one (1) natural person to the Board of Managers. Thereafter, Originating Promoters shall be subject to the election and appointment procedures set forth as follows in the Section The elected seats shall be filled by election from among individual representatives of the Promoters. Promoters, wishing to have a representative nominated for an Elected Seat must provide written notice of the same to the Board of Managers sixty (60) days prior to the scheduled date for the upcoming Annual Meeting of the Board of Managers. No Promoter may have more than one (1) employee or representative elected to the Board of Managers at any given time. For purposes of this Operating Agreement, a Promoter and its Affiliates shall be deemed as one (1) Promoter. Voting for the Elected Seats shall be by electronic ballot completed and received according to election procedures as established by the Board of Managers. Each voting Manager may cast one (1) vote per candidate, and may vote for as many candidates as the number of open Elected Seats. The candidates receiving the highest number of votes shall be elected, up to the number of Elected Seats. In the event of a tie between two (2) or more individuals seeking election to the Board, the existing members of the Board of Managers who are not otherwise tied for re-election to the Board of Managers shall, via majority vote, break any and all ties in the election of the new Board of Managers. Each Promoter may also appoint an alternate representative of its manager to serve on the board of managers on a temporary basis should its appointed manager become unavailable. Even if an appointed manager is present, such manager s alternate representative may also attend meetings of the board of managers, but in a nonvoting capacity Terms. Except for the initial terms of individuals serving on the initial Board of Managers as described in Section above, the term of each Manager other than the ex officio Managers shall be two (2) years, or until that manager s replacement is elected. Managers shall be eligible for one additional, consecutive two (2) year term unless the number of Promoters does not permit the replacement of a Promoter representative from another Promoter. In such case, the Manager shall be entitled to additional terms until such time as the number of Promoters permits another Promoter to serve on the Board. Should a Promoter with a representative on the Board of Managers terminate its participation as a Promoter, such representative s term on the Board off Managers shall terminate immediately Vacancy. In the event the individual serving on the Board of Managers resigns or is removed by the Promoter as its representative, the Promoter may replace such manager with another employee by providing the Company with written notice. Except as otherwise herein provided, any Manager whose employment terminates for any reason with the Promoter it represents, shall be conclusively deemed to resign from the Board of Managers. A Manager appointed to fill a vacancy on the Board of Managers shall hold office until the end of the term of the individual being replaced or until his or her death, resignation or removal from office If the Promoter who has the right under this Section to appoint a replacement manager fails to appoint such manager within the time prescribed, or if the vacancy has occurred because the Promoter employing the manager has terminated its participation as a Page 9

10 Promoter in the Company, the vacancy shall not be filled until the next regularly scheduled election of managers In the event that two (2) or more Promoters are merged or acquired by another Promoter, the resulting or acquiring Promoter shall designate which of the managers is to remain on the Board and the other manager will be removed from the Board immediately upon the closing of the acquisition or merger. The vacancy created by the merger or acquisition shall not be filled until the next regularly scheduled election of managers. 6.2 Management; Meetings of the Board of Managers Authority to Act. The Board of Managers is charged with the responsibility and vested with the exclusive authority to manage the Company s business except in those cases in which the approval of any Member or class of Members is expressly required by this Operating Agreement or by the Act or as otherwise provided in this Agreement. A Member who takes any unauthorized action purportedly on behalf of the Company shall indemnify and hold the Company harmless from any costs or damages incurred by the Company as a result thereof. In furtherance of its authority, the Board of Managers is authorized and empowered to perform any and all acts customary or incident to the management of the Company s business. An affirmative vote of a majority in number of all Managers shall be required to approve such action Regular Meetings. The Board of Managers shall hold not less than two (2) regularly scheduled meetings each year, which meetings shall be called and held pursuant to notice given by the Chairperson of the Board at times and places reasonably convenient for the Managers. Each such notice shall state the purpose(s) of the meeting in reasonable detail and shall be given to each Manager not less than thirty (30) days prior to the date of such meeting unless notice is waived by each Manager. The primary means for the provision of notice shall be via electronic mail to the manager at the electronic mail address as it appears on the records of the Company, provided that the manager to be contacted shall acknowledge personal receipt of the electronic message by a return electronic message or telephone call within three (3) business days of the first notification. If notification is provided by mail (including the U.S. Postal Service, express courier services and the like), such notice shall be deemed to be delivered when deposited in the mail addressed to the manager at his or her address as it appears on the records of the Company, with postage prepaid. Personal notification may also include notification by telephone, facsimile, or other electronic means; provided, however, such notification shall be subject to any and all acknowledgment requirements as may be set forth in the Act Special Meetings. Special meetings of the Board may be called and given notice by the Chairperson of the Board, the Executive Vice President or twenty percent (20%) of the Managers currently in office Waiver of Notice. A Manager may at any time waive any notice required by the Act, the Articles of Organization or Operating Agreement. Except as provided in this Section 6.2.4, the waiver must be in writing, must be signed by the Manager entitled to the notice, must Page 10

11 specify the meeting for which notice is waived and must be filed with the minutes or the corporate records. A Manager s attendance at or participation in a meeting waives any required notice to the Manager of the meeting unless the manager, at the beginning of the meeting, or promptly upon the manager s arrival, objects to holding the meeting or transacting business at the meeting and does not thereafter vote for or assent to any action taken at the meeting Quorum. Fifty percent (50%) plus one (1) of the voting Managers shall constitute a quorum for any vote. In matters of conflict of interest in which a Manager is the subject, such Manager shall not be allowed to vote. In the absence of a continued quorum at any meeting of the Board of Managers already in progress, a majority of the managers present may adjourn the meeting Action of the Board. Except as otherwise provided by law, the Articles of Organization, or this Operating Agreement, the act of a majority of those Managers present in person at a meeting at which a quorum is present, shall be the action of the Board. A manager is considered present regardless of whether the manager votes or abstains from voting Action Without a Meeting. Any action of the Board which may be taken at a meeting of the Managers may be taken without a meeting if consent in writing, setting forth the action so taken, shall be signed by all of the Managers entitled to vote with respect to the subject thereof. Electronic signatures shall be acceptable. Consent may be executed in one or more counterparts, all of which together will constitute one unanimous consent of the Board. The Executive Vice President shall file the consent with the minutes of the meetings of the Board. Such consent shall have the same force and effect as an unanimous vote and may be stated as such in any articles or documents filed with the State of Illinois, as required by law Conduct of Meetings. Meetings shall be governed by such procedures as may be approved from time to time by the Board of Managers, insofar as such rules are not inconsistent with or in conflict with the Articles of Organization, this Operating Agreement, or with the Act. Where practical, Robert s Rules of Order shall be used as a guide in the conduct of meetings. 6.3 Certain Powers of the Board of Managers. Without limiting the generality of Section 6.2 and in addition to any other powers not specifically reserved to the Members or requiring Member consent pursuant to this Agreement, the Board of Managers shall have power and authority on behalf of the Company including the following: to acquire property from any Person as the Board of Managers may determine. The fact that a Manager or a Member is directly or indirectly affiliated or connected with any such Person shall not prohibit the Board of Managers from dealing with that Person; to purchase liability and other insurance to protect the Company s property and business; Page 11

12 6.3.3 to hold and own any Company real and/or personal properties in the name of the Company; to sell or otherwise dispose of the assets of the Company, subject to the terms and restrictions of this Operating Agreement, so long as such disposition is not in violation of or a cause of a default under any other agreement to which the Company may be bound; to contract, employ or otherwise retain professional services individuals to perform services for the Company and to compensate them from Company funds; to enter into any and all other agreements on behalf of the Company with any other Person for any purpose, in such forms as the Board of Managers may approve; to declare and pay out distributions to Members, including without limitation as provided in Article 17 hereof; to approve or reject via not less than three-quarters vote of all Originating Promoter Managers and Promoter Managers (collectively Continua Managers ) any amendments to this Operating Agreement or the Articles of Organization that would change any material rights or obligations of the Participants hereunder, reduce the numbers Continua Managers, or remove any Continua Manager; and if performance metrics fall below a predetermined standard as established by the Board of Managers ((e.g., number of corporate participants leaving for dissatisfaction or Guidelines no longer maintained on regular schedule) for a sustained period (e.g., one year)), the Board of Managers has the authority to transfer all intellectual property originally merged from the Continua Alliance into PCHA along with any enhancements to that intellectual property and membership since the merger, to any federally recognized non-profit corporation of choosing by the Continua Managers. This shall include the European Continua entity which shall be otherwise maintained and thereby permitting PCHA to benefit from European grant activities as did the Continua Alliance pre-merger. Unless authorized to do so by this Operating Agreement or by the Board of Managers of the Company, no attorney-in-fact, employee or other agent of the Company shall have any power or authority to bind the Company in any way, to pledge its credit or to render it liable pecuniarily for any purpose. No individual who is not also a Manager shall have any power or authority, nor take any action, to bind the Company unless such individual has been authorized by the Board of Managers to act as an agent of the Company in accordance with the previous sentence. 6.4 Officers. The officers of the Company shall be a Chairperson, a Vice Chairperson, and an Executive Vice President. The Company may also have such other officers with such titles as may be determined from time to time by the Board, which positions may or may not be held by the same person. Election or appointment of a person as an officer or agent of the Company shall not itself create contract rights in such person. The Company shall indemnify or advance expenses to any officer or agent elected or appointed by the Members in accordance with the Act or pursuant to or in accordance with any other law, provision of the Articles, or other agreement Page 12

13 or vote or consent of the Board or the Managers Election and Term of Office. Other than the Executive Vice President who serves by benefit of holding this position, officers shall be elected by a majority vote of the Board of Managers at the annual meeting of the Board. Each officer shall serve a term of one year and may be reelected for successive terms Vacancies. Any vacancy caused by the death, resignation, or disqualification, of an officer shall be filled by the Board of Managers Chairperson. The Chairperson shall be elected from the Board of Managers by an affirmative vote of a majority of the Board of Managers for a one (1) year term. The Chairperson shall preside at all meetings of the Board and perform other duties prescribed by the Board Vice Chairperson. The Vice Chairperson shall be elected from the Board of Managers by an affirmative vote of a majority of the Board of Managers for a one (1) year term. The Vice Chairperson, in the absence of the Chairperson, or in the event of the Chairperson s inability or refusal to act, shall preside at meetings of the Board and perform other duties prescribed by the Board Executive Vice President. The Executive Vice President shall be selected by the Member for a term to be determined in the Member s sole discretion. The Executive Vice President shall serve as the chief executive officer of the Company and shall be vested with the authority to perform such usual undertakings as are necessary to manage the day-to-day needs of the Company, including, but not limited to: scheduling and setting up meetings; facilitating communication between Participants, including providing timely notices of meetings; acting as the liaison to other consortia or associations with which the Company may choose to associate as instructed by the Board of Managers; providing Participants with timely minutes, summaries and other reports with respect to the activities of the Company; receiving and processing Participation Agreements, and executing them on behalf of the Company; engaging third parties to undertake the activities of the Company, provided that the Executive Vice President enters into appropriate contracts protective of the Company, and ensures compliance with terms and conditions of this Agreement including confidentiality obligations; and supervise and control the affairs of the Company. Except as otherwise expressly provided by law, by the Articles of Organization, or by this Operating Agreement, the Executive Vice President shall, in the name of the Company, execute such deeds, mortgages, bonds, contracts, checks, or other instruments which may from time to time be authorized by the Board. 6.5 Liability for Certain Acts. Each Manager shall exercise his powers and discharge his duties in good faith with a view to the interests of the Company and its Members with that degree of diligence, care and skill that ordinarily prudent persons would exercise under similar circumstances in like positions. A Manager who so performs the duties as Manager shall not have any liability by reason of being or having been a Manager of the Company. No Manager guarantees, in any way, the return of the Members Capital Contributions or a profit for the Members from the operations of the Company. Page 13

14 6.6 Manager(s) and Participants Have No Exclusive Duty to Company. No Manager shall be required to serve on the Board of Managers of the Company as his sole and exclusive function and he may have other business interests and may engage in other activities in addition to those relating to the Company. Neither the Company nor the Member shall have any right, by virtue of this Operating Agreement, to share or participate in such other investments or activities of the Manager and/or Member or to the income or proceeds derived therefrom. Neither the Manager nor the Member shall incur any liability to the Company or to the Member as a result of engaging in any other business or venture, except as any be otherwise provided in any noncompetition or similar agreement executed by any such Manager or the Member. 6.7 Bank Accounts. The Board of Managers may from time to time open bank accounts in the name of the Company, and the Board of Managers shall designate the authorized signatories thereon. 6.8 Indemnity of the Managers, Employees, and Other Agents. The Company shall indemnify the Managers and make advances for expenses to the maximum extent permitted under the Act. The Company shall indemnify its employees and other agents who are not Managers to the fullest extent permitted by law, provided that such indemnification in any given situation is first approved by Members owning a Majority Interest. The right to indemnification under this Section shall be fully vested with respect to any matter occurring while this Section was in effect. No amendment of this Section shall have any retroactive effect except as to enhance such right for the benefit of the indemnitee. 6.9 Resignation. Any Manager of the Company may resign at any time by giving written notice to the Board of Managers of the Company. The resignation of any Manager shall take effect upon receipt of notice thereof or at such later time as shall be specified in such notice; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. The resignation of a Manager who is also a Participant shall not affect the Manager s rights as a Participant and shall not constitute a withdrawal of a Participant Compensation. Managers shall serve without compensation by the Company. Nothing herein contained shall be construed to preclude any Manager from serving the Company in any other capacity as an officer, agent, employee, or otherwise, and receiving compensation therefore so long as such compensation is approved by a majority of Disinterested Managers. As used herein, the term Disinterested Managers shall mean managers not seeking compensation for such services, or whose Participant organization is not seeking compensation for such services Right to Rely on Manager(s). To the extent not inconsistent with any provision of the Act, any Person dealing with the Company may rely (without duty of further inquiry) upon a certificate signed by any Manager as to: the identity of any Manager; the existence or nonexistence of any fact or facts which constitute a condition precedent to acts by any Manager or the Board of Managers or which are in any other manner Page 14

15 germane to the affairs of the Company; the Persons who are authorized to execute and deliver any instrument or document of the Company; or any act or failure to act by the Company or any other matter whatsoever involving the Company. ARTICLE 7 RIGHTS AND DUTIES OF THE MEMBER 7.1 Limitation of Liability. Each Member s liability shall be limited as set forth in this Operating Agreement, the Act and other applicable law. 7.2 Company Debt Liability. A Member will not be personally liable for any debts or losses of the Company beyond his or her respective Capital Contribution and any obligation of the Member under Section 16.1 or 16.2 to make Capital Contributions. 7.3 List of Members. Upon written request of any Member, the Board of Managers shall provide a list showing the names, addresses, Membership Interests, and Economic Interests of all Members and Economic Interest Owners. 7.4 Company Books. The Board of Managers shall maintain and preserve, during the term of the Company, and for five (5) years thereafter, all accounts, books, and other relevant Company documents. Upon reasonable request and for a proper purpose, each Member and Economic Interest Owner shall have the right, during ordinary business hours, to inspect and copy such Company documents at the requesting Member s and Economic Interest Owner s expense. 7.5 Priority and Return of Capital. No Member or Economic Interest Owner shall have priority over any other Member or Economic Interest Owner, either as to the return of Capital Contributions or as to Net Profits, Net Losses or distributions; provided that this Section 7.5 shall not apply to loans (as distinguished from Capital Contributions) which a Member has made to the Company. 7.6 Transferability of Interest. Subject to the restrictions and conditions set forth in Article 8 and applicable securities laws, any Member s interest in the Company shall be freely transferable. Each transferee will acquire only the rights of an Assignee, and will not become a Member unless admitted pursuant to Section 8.2. Notwithstanding the foregoing, no transferee who acquires any interest in the Company as a result of an involuntary transfer shall become a Member. Any transferee who acquires an interest as a result of an involuntary transfer shall have only the rights of an Assignee. ARTICLE 8 TRANSFER OF MEMBERSHIP INTERESTS Page 15

16 8.1 Transfer. Unless and until any transferee of a Membership Interest hereunder (whether by voluntary or involuntary transfer) is admitted as a Member, such transferee (i) has only the right to receive, in accordance with the transfer, allocations and/or distributions to which the transferor would otherwise be entitled and (ii) is not entitled to participate in the management or conduct of the Company s business, or have access to records or other information concerning the Company s business. 8.2 Condition Precedent to Admission of Substitute Member. No person to whom an Interest is transferred (including by death or incapacity) shall become a new Member in place of the transferring Member until the transferee agrees in writing to assume all of the obligations and undertakings of the transferring Member under this Operating Agreement. ARTICLE 9 MEETINGS AND ACTS OF THE MEMBER 9.1 Meetings. The Member may meet at such times and places, either in person or by telephone or other method of communication permitting the participation of the Member who choose to participate, and either within or outside the State of Illinois, as may be determined by the Board of Managers, any individual Manager, or by the Member. The Member shall have no obligation to conduct annual meetings or to keep minutes thereof. 9.2 Manner of Acting. The vote, consent or agreement of Members holding a Majority Interest shall be the act of the Members, unless the vote, consent or agreement of a greater or lesser proportion or number is otherwise required by the Act or by this Operating Agreement. 9.3 Proxies. At any meetings of Members, a Member may vote in person or by proxy executed in writing by the Member or by a duly authorized attorney-in-fact. Such proxy shall be filed with the Company before or at the time of the meeting. No proxy shall be valid after eleven months from the date of its execution, unless otherwise provided in the proxy. ARTICLE 10 PARTICIPANTS 10.1 Determination and Rights of Participants. The Company shall have such classes of participation ( Participation Classifications ) as defined by the Board of Managers, including the initial classifications set forth in the definition of Participants, above. No Participant shall hold more than one (1) right of participation in the Company. For purposes of this Section a Participant and its Affiliates shall be deemed one (1) Participant. Except as expressly provided in or authorized by the applicable Participation Agreements, the Articles of Organization, this Operating Agreement, or the Act or law, all Participants shall have the rights, privileges, restrictions and conditions established by resolution of the Board of Managers. Among the benefits generally to be afforded to the Participants are the right to attend meetings of the Participants of the Company, access to Design Guidelines (Special Participants shall not be entitled to access Draft Design Guidelines) and market requirements documents as may be approved by the Board of Managers, and access to the general Participant portions of the Company s web site. Page 16

17 10.2 Qualifications for Participation. Any for-profit organization, nonprofit organization, or other enterprise supportive of this Company s purposes and not otherwise prohibited by treaty, law or regulation from abiding by the terms of Operating Agreement and who pays the then current annual dues applicable to its Participation Classification may become a Participant of the Company. Additionally, each Participant hereby agrees to not send representatives to any Work Group, if eligible, of the Company for the purpose of obstructing the purpose of the Company or the progress or purpose of that Work Group Establishment of Participation. Participation shall become effective when a completed formal application has been accepted by the Company and the designated dues payment has been received Participation Fees. The annual participation fees payable to the Company by each class of Participants shall be established and may be changed from time to time by resolution of the Board of Managers. Annual participation fees shall be due and payable as specified in the Participation Agreement. If any Participant is delinquent in the payment of participation fees, such Participant s rights shall be deemed suspended upon written notice from the Company until all delinquent participation fees are paid Nonliability of Participants. No Participant of this Company, as such, shall be individually liable for the debts, liabilities, or obligations of the Company Nontransferability of Participations. All rights of participation cease upon the Participant s dissolution. No Participation Agreement may be assigned without the prior written consent of the Company, and any purported assignment without such written approval shall be null and void Termination of Participation. The participation of a Participant shall terminate upon the occurrence of any of the following events: Upon a failure to initiate or renew participation by paying dues on or before their due date, such termination to be effective thirty (30) days after a written notification of delinquency is given personally or mailed to such Participant by the Company. A Participant may avoid such termination by paying the amount of delinquent dues within thirty (30) days from the Participant s receipt of the written notification of delinquency Upon fifteen (15) days written notice from the Participant to the Board of Managers indicating the Participant s desire to terminate its participation in the Company; provided, however, that all obligations of the Participant to the Company incurred prior to the date of termination shall survive such termination in accordance with the terms and conditions of Section Upon unanimous vote of all disinterested elected Managers when such Managers determine, after affording the Participant in question the right to be heard on the issue, that the Participant has violated the policies, procedures and duties of participation contained in Page 17

18 this Operating Agreement and in the Participant s Participation Agreement Upon a Participant s dissolution In the event that two (2) or more Participant organizations are merged or a Participant organization is acquired by another Participant organization, the resulting entity shall have only one (1) participation and one (1) vote. The former voting Participant may, however, upon written notice to the Board, be permitted to continue attendance at meetings on a nonvoting basis and be provided with notices thereof. All rights of a Participant in the Company shall cease on termination of participation as herein provided. A Participant terminated from the Company shall not receive any refund of participation fee already paid for the current participation period. ARTICLE 11 PARTICIPATION CLASSIFICATIONS 11.1 Promoters. The Company shall have Promoters. Admission as a Promoter shall be open to any party. All Promoters must execute a Participation Agreement and pay the fees called for thereon for Promoters. Once accepted, all Promoters shall be entitled to all rights and bound to the obligations generally afforded and imposed upon all Participants Benefits. Among other benefits specifically afforded to Promoters who remain in good standing are: the right to be listed (with a hyperlink to the Promoter s web site) as a Promoter on the Continua and PCHA-branded web sites; the right to access any and all portions of the Continua-branded web site and any electronic transmissions there from via reflector. This right includes access to the discussion groups limited to Promoters, and the Continua division s mailing lists (subject to any privacy policy that the Company may adopt); the right to access Participant-only confidential information, including but not limited to Draft Design Guidelines and internal working documents of Continua division; subject to the then-current Work Group Procedures that will govern the actions of Work Groups of the Continua division and PCHA, the right to participate in, chair, and vote on activities of such Work Groups; the right to attend and participate in compliance workshops conducted by Continua division and, upon successful product certification by the Company, to generally advertise the same. This right may include the right to place links to the Promoter s product information on the Continua-branded web site; Page 18

19 the right to technical support with regard to then-supported Design Guidelines of Continua division when and if such services are provided by the Company; the right to receive support documentation and materials concerning the Continua Design Guidelines; subject to such procedures as may be adopted by the Board of Managers, the right to review Draft Design Guidelines; the right to submit proposed revisions and addendum proposals for the Continua Design Guidelines; the right to nominate a Promoter representative to stand for election to an Elected Seat on the Board of Managers of the Continua Council and PCHA Managers;, subject to agreement to pay the associated higher fee (as periodically defined by the board of managers) at least during the period of actually being represented on the board of managers (the participant has Board promoter status during this period) the preferential right of first refusal (prior to Contributors) to actively participate in the Company s marketing and promotional activities at trade shows and other industry events; and the right to be listed as a Promoter in Company materials Contributors. The Company shall have Contributors. Admission as a Contributor shall be open to any party. All Contributors must execute a Participation Agreement and pay the fees called for thereon for Contributors. Once accepted, all Contributors shall be entitled to all rights and bound to the obligations generally afforded and imposed upon all Participants Benefits. Among other benefits specifically afforded to Contributors who remain in good standing are: The right to be listed as a Participant on the Continua and PCHAbranded web sites; The right to access any and all portions of the Continua-branded web site and any electronic transmissions therefrom via reflector. This right includes access to the Participant-only discussion groups and the Continua division s mailing lists (subject to any privacy policy that the Company may adopt); The right to access Participant-only confidential information, including but not limited to Draft Design Guidelines and internal working documents of the Work Groups on which the Participant serves; Subject to the then-current Work Procedures that will govern the actions of Work Groups of the Continua division, the right to participate, in a non-voting Page 19

20 capacity, in the activities of such Work Groups; The right to attend and participate in compliance workshops conducted by the Continua division and, upon successful product certification by the Company, to generally advertise the same; The right to technical support with regard to then-supported Design Guidelines of Continua when and if such services are provided by the Company; The right to receive support documentation and materials concerning the Continua Design Guidelines; and Subject to such procedures as may be adopted by the Board of Managers, the right to review and comment on Draft Design Guidelines of Continua prior to their adoption by the Company Governmental Entity Participant. The Company shall have Governmental Entity Participants. Admission as a Governmental Entity Participant shall be limited to National, State/Province, Regional and City governmental entities. All Governmental Entity Participants must execute a Governmental Entity Participation Agreement and pay the fees called for therein, if any. Once accepted, all Governmental Entity Participants shall be entitled to all rights and bound to the obligations generally afforded and imposed upon all Participants except for the right to participate in, or attend, meetings of the Technical Work Group, or any subcommittee thereof. Additionally, Governmental Entity Participants shall not be permitted to participate in Draft Design Guideline or Design Guideline review per Section 16, nor shall Governmental Entity Participants be entitled to any certification or compliance testing offered by the Company on such Design Guidelines. Governmental Entity Participants shall not therefore be bound by any of the duties or obligations of Section 14 of this Operating Agreement, nor shall Applicant be entitled to the benefits of Section 14 of this Operating Agreement Benefits. Among other benefits specifically afforded to Governmental Entity Participants who remain in good standing are: The right to be listed as a Participant on the Continua and PCHAbranded web sites; The right to access certain portions of the Continua-branded web site and any electronic transmissions therefrom via reflector; The right to access Participant-only confidential information, but not including Draft Design Guidelines and internal working documents of the Technical Work Group or any subgroup thereof; Subject to the restriction on participation in the Technical Work Group and the then-current Work Procedures that will govern the actions of Work Groups of the Continua division, the right to participate, in a non-voting capacity, in the activities of all other Page 20