or? MAINE sup-nun nu. 
CUMBERLAND. u. No. (Iv-2017452

EMILE CLA VET.
Plaintiff
V.

KEVIN DEAN and
CECILE DEAN,

Defendants

and

BLUE WATER MARINA LLC and
COVERED MARINA LLC,



Parties in Interth
Kevin Dean. being duly sworn, do hereby state as follows:

1. My name is Kevin Dean and I reside at 209 Sandbar Road in Windham, Maine. I
am over the age of 21 and make this af?davit based upon my own personal knowledge,

information, and belief, and to the extent based on belief, I believe my statements to be true.

Historical Relationship of The Parties

2. Emile Clavet and I. have been business partners for over 30 years, having formed
and managed dozens of entities together, including Blue Water Marina. LLC, a Maine Limited
Liability Company. and Covered Marina, LLC, a Texas Limited Liability Company (hereinafter

?the Marina Companies?). We are both highly sophisticated and educated investors.

3. Over the years, our joint ventures have involved investments in various

enterprises located in Maine and Texas. as well as other states. Most of those activities have
involved the creation of limited liability companies, with Mr. Clavet and me being the two
managing members. In each such LLC, Mr. Clavet and I had equal rights and responsibilities.
Each of the LLCs we formed have involved the adoption of an operating agreement. Each
operating business with employees has a manager or executive director that is reSponsible for

day to day operations.

4. Mr. Clavet and I currently own and actively operate roughly ?fteen companies.
Those companies include the following:
Diamond PrOperties, Inc. (Auburn, Maine)
Health Af?liates Maine, LLC (Auburn, Maine)
Funding Resources, Inc. (Auburn, Maine)
Provider Financial (Auburn, Maine)
Af?liate Funding, Inc. (Auburn, Maine)
Homewood Park 003 (Old Orchard Beach, Maine)
Homewood Park Developers, LLC (Old Orchard Beach, Maine)
Homewood Park, LLC. (Old Orchard Beach, Maine)
Colonial Ridge, LLC (Auburn, Maine)
Colonial Ridge Planned Unit Development Association, Inc. (Auburn. Maine)
Island Park Estates, LLC (Corpus Christi. Texas)
Timbers Development Group, LLC (Auburn, Maine)
Tripp Holding Company (Auburn, Maine)

Blue Hill Storage, LLC. (Blue Hill, Maine)

Provider Laboratories (Auburn and Lewiston, Maine)

Provider Oil and Gas (San Antonio. Texas)
Whitestone Insurance (Auburn, Maine and Nevis)
Bluestone Insurance (Auburn, Maine and Nevis)

5. The Operating agreement for each of the businesses owned by me and Mr. Clavet,
gives each of us signi?cant autonomy with respect to decision-making. We have shared
responsibilities with respect to each LLC and each of us has operated these businesses quite
autonomously. Our base of business operations has been an of?ce located in Auburn, Maine.
Mr. Clavet and I occupied adjacent of?ces and would regularly confer with each other when
each of us considered it necessary to do so. However, it was always our practice to give great
discretion and autonomy to each other with respect to decision-making.

The Strategic Separation of Our Business Relationship

6. In or about early 2015, Mr. Clavet and I began discussing the sale of all of our
jointly owned businesses, including our three hotel companies, Marina Companies, electricity
companies, and healthcare companies. The impetus behind the sale of our joint interests really
began as a result of Mr. Clavet building a new home in Harpswell, Maine and moving away from

the Auburn/lxwiston area where our business of?ce is located. In addition to moving, Mr.
Clavet became more involved in outside investment projects on his own, and with others. This
relocation and Mr. Clavet?s outside projects left me running all operations from Maine to Texas
with little to no help from Mr. Clavet. At that time, Mr. Clavet and I began working with our
professional advisors to develop and execute appropriate tax strategies to sell all of our jointly

owned businesses.

7. As part of that strategy. beginning in 2015. Mr. Clavet and I began selling some

of our assets and closing several companies. In particular. negotiations for the sales of our
ongoing Operational hotels began around March of 2015 and continued through November of
2015. The sale of these hotels encompassed a great deal of detail. due diligence. face to face
meetings. site visits, phone discussions. written and verbal negotiation. Once this was completed.
a proposal from the purchaser was prepared. This was followed by additional negotiations and
lastly a draft and execution of a lease with purchase option. Legal and accounting advisors were
involved during the six months of negotiations to minimize the tax consequences of a sale. The
manner of the hotel sales were typical for the sale of a going concern. Due diligence followed by
sale only when due diligence is satisfactory.
8. In or about April of 2016, I told Mr. Clavet that I was not interested in operating
companies together with him moving forward. To that end, Mr. Clavet and I discussed:
The sale of our counseling agency Health Af?liates of Maine to the executive director and
Chief Operating Of?cer; I offered to sell my interests to Mr. Clavet for one million dollars and a
release from the personal guarantees on the $2,500,000 Line of Credit. In the alternative. we
could sell the entire company for two million dollars to the Executive Director and Chief
Operating Of?cer. We spent the next six months working on this joint sale and tax strategy. In
November of 2016, we decided to use a pro?t sharing arrangement of 25% to the executive
management instead of an outright sale.
The 51.400300 line of credit for the marinas expired in May of 2016. I informed Emile of
this. I signed a 90 day extension personally in order to complete our transaction or provide the
additional fees and personal guarantees. Renewal for the Marina Companies needed to be

completed by August 7. 2016; This line of credit was established in 2014 and had been

personally guaranteed solely by my personal assets for two years. We discussed moving this line

of credit to different assets in Island Park Estates and providing the additional personal
guarantees necessary. Moving the line of credit was a priority. Because of the inability to obtain
hurricane insurance on ?oating docks over the water Mr. Clavet and I had been using our related
party insurance companies (Bluestone Insurance and Whitestone Insurance) to provide coverage.
Unfortunately, Mr. Clavet and I had no signi?cant cash reserves in these companies necessary to
pay any claim against the policy. In the event of a loss similar to Hurricane Harvey in 2017, the
Marina Companies would be left with the entire debt, no insurance proceeds, and no way to
rebuild. The banks recourse for repayment would then be to pursue my assets only. Mr. Clavet
refused to be on the line of credit. It is my belief that Mr. Clavet did not want his personal assets
encumbered by this debt so that he could maintain his purchasing and ?nancing power for other
personal investments.
The sale of the Marina Companies to me through an asset trade or purchase agreement. Mr.
Clavet wanted to focus on the Homewood Park subdivision in Old Orchard Beach, Maine and
other investments closer to Maine and leave me to run and operate the Marina located in Texas.
We discussed values and strategies to minimize taxes on the transaction. I told Mr. Clavet at this
time that I would sell my share of the Marina Companies for $1,500,000 if he wanted to
purchase them.

9. Contemporaneously, in May of 2016, Mr. Clavet and I had meetings with our
accountant, regarding the tax consequences and strategy of the Health Af?liates sale. These
negotiations and discussions lasted over eight months and the deal ultimately fell through due to
the fact that Mr. Clavet was most interested in the cash flow and ability to get cash from the

transaction when it closed. The potential purchasers of the Health Af?liates Maine needed seller

?nancing so the sale fell through, and a pro?t sharing arrangement was ?nally agreed to between

the parties.
10. In 2015, the power companies had losses of over $14,000,000 and were in
trouble. I spent 18 months negotiating with four separate companies to purchase the assets of
these companies. These attempts to sell included countless emails, meetings, ?nancial
information, site visits, usage information etc. All prospective purchasers had written intent to
purchase the companies subject to due diligence. All fell through when the numbers were
disclosed, and due diligence was completed. In the spring of 2016, with few remaining options, I
began to negotiate with Spark Energy on a way for them to acquire the companies. but pay Mr.
Clavet and I based on the successful renewal of all customers at a pro?table rate. No renewals
would mean no earn out or payments to me and Mr. Clavet. On August 1St of 2016, the sale of
the power companies was completed. As part of the incentive for the sale of the powers
companies, an earn out of $5,000,000 - $7,000,000 was tied to renewals and retention of
customers, for the period of September 2016 through April 2017. The earn out became the top
operational priority for me. I assumed that an incentive to earn between $5,000,000 - $7,000,000
would have been incentive enough to focus Mr. Clavet with me on maximizing our renewals and
earn out. However, Mr. Clavet essentially disappeared after the closing on the power companies,
and left me to administer and manage the cam out. Mr. Clavet never helped during the eighteen
month sale of the power companies and never returned to the of?ce for any management of the
operational entities after the sale of the power company. From August of 2016 through May of
2017, I renewed all customers and achieved an earn out for Mr. Clavet and I of $5,500,000. Had

Mr. Clavet participated and helped during this process, it is my belief that the amount earned

would have been over $6,000,000. During this time, Mr. Clavet was working on his personal

investments instead of the existing operating companies that were jointly owned.
11. With the pending renewal of the line of credit on the assets of the Marina

Companies. Mr. Clavet and I had another discussion about him selling his interest to me, or
listing the marinas for sale with a broker. In fact, we discussed, in detail, the possibility of listing
the properties for sale at a price of $3,000,000 to $3,500,000 as the highest amount we believed
we could get. In the past, we had several prospective buyers of the Marina prOperties, however,
they always fell through after the due diligence was completed. Mr. Clavet and I concluded that
the historical ?nancial performance and losses every year simply did not support a favorable

arms length sale based on income of the business.

12. Historically, once a potential buyer learned that the Marinas were uninsurable, in
need of major capital repairs, and had limited income, they declined to consummate a purchase.
In several instances, we prepared ?nancials and supplied these to prospective partners and
purchasers. The ?due diligence" process gave the potential buyer the right to investigate the
Marina operation, review its ?nancial performance, and ?nancial documents and decline to go
forward with a purchase contract, if the buyer was not satis?ed with the ?nancial condition of
the Marinas. During the period from approximately 2011 to 2015. 1 estimate we were contacted
by 3 potential buyers for the Marinas. In each instance, after conducting due diligence, the
prospective buyer backed out and elected not to go forward with a purchase. Prior to 2012. Mr.

Clavet and I had received a letter of intent and interest from a wealthy businessman in the oil

business that resulted in no sale when the site visits. due diligence, and actual ?nancial numbers

were provided.

13. In addition. we had offered the Marina to the abutter. Billionaire Red McCombs.
in 2012 with no success. Again in 2013, we offered to sell a piece of the Marina to Palmilla

Beach which was owned by the same Billionaire, and again there was no interest. In 2015. we
also reached out to an employee of Bobby Patton, who had purchased property near the Marina,
to inquire as to his interest in purchasing the Marina and were told that Bobby Patton was not
interested.

14. Based upon our inability to sell the Marinas, we began detailed discussions about

one of us buying out the other's interest in the Marina Companies. Mr. Clavet and I discussed a
trade of assets, including trading house lots in the Homewood Park subdivision located in Old
Orchard Beach, Maine in exchange for the interest in the Marina Companies. However, Mr.
Clavet expressed that he would want me to pay for Phase I roads of $1,500,000, and help with
marketing and selling the lots. Mr. Clavet said he really wanted cash or cash ?ow only.

15. In August of 2016, Mr. Clavet and I discussed in detail the many problems and
issues surrounding the Marina, and its ongoing operations. We discussed the following issues
relating to the Marina Companies, and the Operation of the Marina:

a. Whether we should list the Marina for sale with a broker;

b. The realization that the highest amount we could likely sell to a third-party was in the

$3 to $3.5 million range;

c. Our history of failed sales attempts;

d. Our inability to raise rental rates at the Marina because of adverse market conditions;

e. The outstanding taxes owed in the amount of $140,000;

f. Current accounts payable of $65,000;

3. Current general liabilities of over $200,000; 

h. The fact that the Marina was over 30 years old and the entire docking system was

beyond its useful life, and in need of total replacement;

i. The fact that the prior year?s operating performance would impact the ability for a
bank to fund a replacement loan;

j. The outstanding bank line of credit had an outstanding balance of $320,000, which
was coming due and up for renewal on August 7, 2016. There were costs, guarantees,
and appraisals necessary to renew the line of credit; I had been the sole guarantor on
the $1,400,000 line of credit since 2014. Mr. Clavet told me that he wanted to avoid
being personally responsible for the line of credit debt.

k. The inability to insure the Marina is because it is located over water. Our insurance
was only obtained through a related party insurance company owned by Mr. Clavet
and I. This company held no assets with which to pay any large claims for natural
disaster. In the event of a natural disaster like hurricane Harvey in 2017 there would
be no insurance proceeds to rebuild or repay the debt to the bank. It was my assets
and not Mr. Clavet?s assets that would be impacted.

l. The desirability of continuing to employ the current manager, who was a relative of

mine.

16. During late August and early September 2016, after I had completed the sale of
the power companies, Mr. Clavet and I began serious discussions about the possibility of one of
us buying out the other's interest in the Marina. During these negotiations, we again discussed
the possibility of swapping some Texas assets for some Maine assets. Mr. Clavet and I discussed
many possible ways we could structure my purchase of his interest in the Marina Companies,

including: the timing; how to structure the purchase price; ?nancing; security; tax strategies and

cash payments. These details were speci?cally discussed and negotiated. However, Mr. Clavet

was most interested in a cash option and not necessarily in swapping interests in other
investments. Finally, I again offered to sell my interest in the Marina Companies to Mr. Clavet
for half of its total value of $2.5 million, or to buy out his interest in the Marina Companies for
the same amount. Mr. Clavet ultimately said I should buy him out for half of the agreed Upon
?gure of $2.5 million, net of expenses. In addition, he wanted me to commit to one half of the
road construction costs for the Homewood subdivision. This would allow him to pursue other
investment interests in Maine.
17. In furtherance of these negotiations, Mr. Clavet and I had multiple discussions
with tax advisors during the ?rst two weeks of September regarding a swap of assets.
18. On or about September 16, 2016, I told Mr. Clavet the line of credit was now over
30 days expired and needed to be renewed and guaranteed personally. I explained at that time
that if he did not want to go through the renewal process and guarantee the debt for the line of
credit, then 1 suggested we make a trade or I would give him cash for his interests. We agreed on
cash at closing and payment in full by pledging the Spark (power companies) energy proceeds of
mine and my additional security of the Homewood Park LLC stock.
19. Mr. Clavet and I speci?cally agreed to a $2.5 million value and a payment to
him of $950,000 less (1/2 of debt of $320k: $160,000) 2 $790,000. Mr. Clavet requested, and I
agreed, that the effective sale date would be January 1, 2016. so Mr. Clavet could avoid 2016
income tax liabilities for the Marina Operations in 2016. Mr. Clavet also requested and I agreed,
to an additional cash payment of $300,000 to once again avoid taxes for Mr. Clavet. Our
business attorney, Shawn Bell, Mr. Clavet and I, discussed on a conference call that there was

roughly $325,000 in cash less $150,000 in outstanding property tax liability and also outstanding

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accounts Payable of around $50,000. leaving roughly $125,000 available to pay off $320,000 in

debt, at the bank. Attorney Bell, Mr. Clavet and I ultimately decided on this call that an
appropriate effective date of January 1, 2016, and the assumption of the income tax liabilities
and assumption of the inter-company tax obligations by me, would address the need to Split up

any excess cash assets. Mr. Clavet and I decided that this would be additional consideration for

the sale of his interests.

20. In addition to the above contingencies, Mr. Clavet speci?cally negotiated the cash

payment, in the amount of $300,000.00 which was not recorded on the settlement statement at

Mr. Clavet?s request. Mr. Clavet reported the $790,000 on his tax return, and not the entire

$1,090,000 he was to receive.

21. On September 2" 2016, attorney Shawn Bell began working on the transfer
documents for the sale of Mr. Clavet?s membership interests on the agreed terms to me.
September 26, 2016 was the closing date on the purchase and sale of Mr. Clavet?s interests in the
Marina Companies, with the effective date of the purchase and sale being January 1, 2016, for
the reasons stated above.

22. On September 26, 2016, I paid $200,000 at closing and the remaining balance of
$590,000 one month later, and thereafter, began making cash payments to Mr. Clavet as

verbally agreed.

23. In late October of 2016, I transferred the Marina Companies? membership
interests to my wife, Cecile Dean on the advice of an attorney handling our estate planning. Mr.
Clavet and routinely and for a decade or more, have been placing assets and homes in our

wives names to minimize the taxes to our estate in the event of our death. There was no other

reason than estate planning for this transfer of membership interests.

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My ?ubsegugnt Sale Qf the Marina
24. On August 31. 2016, I was contacted by a broker. Keith Donnelly (hereinafter

?Broker"), who asked if I was interested in selling the Marina. The Broker said he had a buyer
who needed to identify several assets as possible replacements for a recent sale. He said there
were only a few days left to identify replacements if they were to qualify for a 1031 transaction.
I told the Broker the Marina was really not for sale and that I was focused on other things. I said
that if I did consider a sale it would need to include a management contract moving forward for
my sister. The Broker said he did not think this would be a problem. 1 said I would think about
it.

25. After this August 31, 2016 contact, I told Mr. Clavet that a Broker said he had a
client that wanted to identify the Marina as a replacement property in a 1031 exchange
transaction. We discussed the likelihood of this closing based on what we already knew about the
?nancials. Mr. Clavet told me it sounded like a waste of time.

26. The Broker had requested a description of the Marina mommy. and on
September 9, 2016. I sent the Broker a deed from our purchase and a basic description. I gave
him a sale price of $8.5 million, knowing that the property would not justify that price .
Thereafter. the Broker said that it was too complicated for a normal real estate contract and he

would get an attorney to prepare it. On September 13. 2016. the Broker contacted me and asked
me to talk with the potential buyer's attorney about preparing a purchase and sale agreement.

27. I was later contacted by an attorney for the buyer, Carey Locke, who advised that
he would draft a purchase and sale agreement with a basic description, price, and standard due
diligence items. and that due diligence would be conducted after contract was signed. The

Broker called me on or about September 16, 2016 and said his client would consider an offer

12

of $7.5 million. I responded that if he could get his client to $7.9 million to cover his commission
I would consider a sale, but only if a management contract for my sister was part of the

transaction.

28. On September 22, 2016, the Broker called me and said that his buyer had signed
and that he would be sending me a purchase and sale agreement to buy the Marina for $7.9
million, but wanted 90 days to perform due diligence. He said the potential deal was
complicated and he would need this much time to determine the Marina?s worth and
pro?tability. The agreement called for a $500 option, so if after conducting the due diligence, the
buyer decided not to go forward, he would forfeit $500. I did not consider this expression of
interest to be serious in light of the minimal $500 at risk, and the fact that no due diligence had
been performed that would allow a buyer to assess the value and condition of the Marinas.

29. I believed that when a SOphisticated and prudent investor received the historical
?nancial information he/she would quickly realize that the Marinas were simply not worth the
asking price. It was my hope that there would be an opportunity to develOp and improve the
Marina together through a joint venture or other arrangement moving forward. This relationship
would be worth establishing even if the Marina sale failed.

30. On September 30, 2016, I signed the purchase and sale agreement. I assumed
from my past experience, that after the due diligence, any interest in buying the Marinas would
go the same way many similar proposals for the purchase of the Marinas had gone. Once the
earlier prospects had seen performance numbers, their interest had simply gone away.

31. On October 3, 2016, I received a ?rst request for due diligence information from

the Broker.

l3

32. From October 2016 through February 2017, I received additional requests for due

diligence information about the Marina and supplied that information to the buyer. During this
time, I never believed there was any likelihood of the Marinas selling after the buyer completed
its due diligence.

33. In January of 2017, four months after the initial contract, the buyer asked for an
extension for additional due diligence and assessment of fuel leaks as well as a $250,000
reduction in sales price. I was also told at this time that there would be no management contract
offered to my sister moving forward. I told the potential purchaser that there would be no
extension and also no reduction in sales price. I would simply keep the Marinas and have my
sister continue with the management. .

34. The purchaser decided to move forward, and on February 5, 2017, the sale of the
Marinas was completed.

35. Prior to my purchase of Mr. Clavet?s interests in the Marina Companies, I had
advised him of the Broker?s contact with me. Those discussions with Mr. Clavet occurred
between August 31?t and September He and I talked about the history of other brokers
contacting us and initiating discussions about selling the Marina and presenting us with purchase
and sale agreements subject to due diligence over the last decade and the fact that none of those
expressions of interest had resulted in a sale. We discussed the fact that two thirds of properties

identi?ed as 1031 replacement assets never close. In fact, many pwperties identi?ed never
receive any real due diligence performed. We had used this same 1031 strategy ourselves to lock
up a property. We would then use performance numbers and information gained during due

diligence to negotiate a real sales price once we had the sellers and brokers fully engaged.

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36. Mr. Clavet offered to sell his interests in the Marina Companies and I offered to

buy his interests. A mutually negotiated price and structure was determined. Mr. Clavet was
aware of all potential opportunities for the Marinas. Mr. Clavet and I are both sophisticated
investors and quali?ed to assess value and likelihood of transactions happening. Mr. Clavet
wanted guaranteed cash to pursue his own Opportunities. Mr. Clavet did not want to be
reSponsible for the $1,400,000 line of credit. Mr. Clavet has been paid as agreed, and is now
demanding payment for which he is not entitled. It is my belief that Mr. Clavet would not be
coming to me now offering to pay for the millions of dollars in repair or repay the outstanding
debt necessary after hurricane Harvey destroyed the uninsured Marinas. He is also not entitled to
additional payment after he avoided the risk and made an informed decision.
Emile Clavet?s Scheme to Usugp Joint Business Opportunities for His Personal Gain
37. Among the business entities that Mr. Clavet and I owned and operated together

were the following:

a. Provider Laboratory Services, LLC, maintains management of?ces in
Auburn. Maine and a physical laboratory in Lewiston, Maine. Mr. Clavet and I were approached
by Grace Street Services in 2014 to start a testing lab wherein Mr. Clavet and I, and the
principals of Grace Street Services, would each own one third of the newly formed Provider
Laboratory Services, LLC. Provider Laboratory Services LLC would perform urine testing
services speci?cally for Grace Street Services. Grace Street Services is an intensive outpatient
program for the treatment of Opoid addiction using suboxone as a prescribed medication. This
prescription requires urine testing in order for clients to remain on the medication.

b. In 2017. Provider Laboratories had become pro?table and was generating

positive cash ?ows of approximately $180,000/year. In October of 2017, without my knowledge

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our partner and part owner of Grace Street. Tom Vurgason, asked for a loan to Grace Street of

$15,000. On November 21" of 2017, a request was made directly to me for a similar loan. The
request said that Mr. Clavet had already been contacted. I declined to support this request until I
had additional information regarding the problems Grace Street was experiencing. Upon further
investigation, I found out that in fact on the same day Provider Laboratories, our jointly owned
company, was being asked for a loan to support Grace Street, Mr. Clavet had bought Grace
Street without my knowledge. The referrals from Grace Street to support operations have now
declined by over 50%. I was never approached about this possible acquisition of the company
that supplied all of the business to the laboratory. Prior to the purchase of Grace Street without
my knowledge Mr. Clavet approached our Director of Operations for Health Af?liates about
managing Grace Street billing services. Once again Mr. Clavet was utilizing our mutual
companies and knowledge for his own gain without knowledge or consent from me.

o. The Getchell Agency, LLC is a mental health agency located in Bangor,
Maine that provides 24 hour per day, 7 days per week in~home care to over 60 clients with
mental health disabilities.

d. Af?liate Funding, Inc. is a ?nance and medical billing company formed
by Mr. Clavet and I in 2004, and located in Auburn, Maine.

e. Health Af?liates Maine, LLC is a mental health counseling agency created
by me and Mr. Clavet in 2004. The agency has several hundred independent counselors and ?fty
case managers that provide counseling and support to clients throughout the state. Of?ces are
located in Auburn, Farmington, Portland, Ellsworth, Bangor, and Augusta. The medical billing

and ?nancial advances to these counselors are administered from the Auburn, Maine of?ce.

16

f. Diamond Properties, Inc. was formed in the late 1990?s by Mr. Clavet and

I for the purpose of investing in and developing real estate.
g. Timbers Development Group, LLC was also formed by Mr. Clavet and I
in the late 1990?s for the purpose of acquiring and developing real estate.

38. Mr. Clavet and I co-owned each of these entities, agreed to share business
opportunities with each other, worked as equal partners, and jointly pursued and managed these
ventures with the agreed-upon goal of jointly bene?tting each of these entities, and each other.

39. The Getchell Agency was one of two clients that Af?liate Funding had for over a
decade and represented over $400,000 per year of revenue for Af?liate Funding.

40. In 2015, The Getchell Agency began having ?nancial dif?culty and Af?liate
Funding, through the efforts of myself and Mr. Clavet, began exploring ways for Af?liate
Funding to purchase the Getchell Agency. However, we were not able to come to terms with the

agency owner, and the agency ?led for bankruptcy protection in 2015.

41. Af?liate Funding was a secured creditor in the Getchell Agency?s bankruptcy
proceeding and was paid the amounts owed it for ?nancing in late 2015.

42. In the summer of 2016, Mr. Clavet and I again began developing a plan to
purchase the assets and operations of the Getchell Agency from the bankruptcy court trustee.

43. Then, without my consent, Mr. Clavet personally recruited the Executive Director
and Director of Operations from our jointly owned counseling agency, Health Af?liates Maine,
to help develop a plan to present to the bankruptcy trustee for the purchase and management of
the Getchell Agency. Upon information and belief, this plan was the same plan Mr. Clavet and I
had developed, except Mr. Clavet was now pursuing the acquisition for his own personal gain,

and not for our joint bene?t as had previously been agreed. In addition, I believe that Mr. Clavet

l7

is presenting this plan to the bankruptcy trustee under the false pretense that I am a silent, but
knowledgeable and willing participant in such negotiations and plans. On information and
belief, Mr. Clavet intends to divert Af?liate Funding revenues and established client
relationships to an entity which Mr. Clavet personally owns, and without my participation. Mr.
Clavet intends to take such action through the use of con?dential and proprietary information
received in the course of our joint business pursuits.

44. Mr. Clavet participated in a similar scheme to divert client relationships and
revenue away from our joint business interests when he created a billing company to compete
directly with Af?liate Funding, our mutually owned billing and ?nance company. Without my
knowledge, Mr. Clavet formed Agency Billing, LLC in 2006, and approached our largest client
Possibilities Counseling, LLC suggesting that his new company could in fact perform some of
the billing to the insurance carriers. Possibilities Counseling Agency was a mental health
counseling agency that, at the time, was the largest client of Af?liate Funding. Revenues from
Possibilities Counseling Agency exceeded $800,000 per year in income to our company.
Af?liate Funding provided medical billing services and ?nancing for the agency.

45. Without my knowledge or consent, Mr. Clavet and his new company Agency
Billing, LLC began to perform billing services for Possibilities Counseling. Agency Billing was
in direct competition with our jointly owned company, Af?liate Funding. In fact, Mr. Clavet and
I Speci?cally formed Af?liate Funding for the purpose of providing the billing and ?nancing to

Possibilities Counseling Agency.

46. Mr. Clavet?s, Agency Billing, LLC diverted clients and revenue away from

Af?liate Funding in an amount that exceeded $350,000.00.

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47. Stephen Fernald is a business broker who has been regularly retained by me and

Mr. Clavet for many years to seek out business opportunities for us jointly and for the business

entities we co-owned and operated.

48. Without my knowledge or consent, Mr. Clavet advised Mr. Femald to refer all
attractive business opportunities to him personally, and not to me and Mr. Clavet, jointly.

49. Following Mr. Clavet?s instructions, Mr. Femald referred several attractive
business opportunities solely to Mr. Clavet. Those opportunities included a business in Ellsworth
Maine known as U?Store It, a storage facility. Based upon that referral, and without informing
me, Mr. Clavet formed a company known as Coastal Equities, LLC with his wife Jane Clavet,
and purchased this asset.

50. On information and belief, pursuant to Mr. Clavet?s instructions, Mr. Femald also
referred other attractive business opportunities solely to Mr. Clavet, including, the purchase of
two mobile home parks located in Unity and Corinna, Maine. Following the sale of Mr. Clavet?s
interests in the Marina Companies in 2016, Mr. Clavet closed on the purchase of these mobile
home parks for $1.4 million. This asset is now being sold for $2,700,000.

51. In a similar scheme, in 2014, Mr. Clavet brought a map of a parcel of land in
Harpswell, Maine, to our of?ce and advised me that he found a parcel of land that was suitable
for the development companies to put a subdivision in, but it had some title issues that needed to
be cleared up. Based upon this conversation, I believed that Mr. Clavet was utilizing our jointly
owned development companies to develop and sell the lots in the Charity Hills Subdivision in

Harpswell, Maine.

52. However, without my knowledge, Mr. Clavet formed a company with his wife

and father in law, known as Quohog Bay, LLC, that acquired the property, ?xed the title issues,

19

built the subdivision. and sold the lots at several hundred thousand dollars per lot. The project

was clearly within the scope of the development companies owned jointly by me and Mr. Clavet,
and Mr. Clavet presented the project to me with the understanding that the jointly owned
development companies would acquire, develop and sell the lots.

Dated . this 22 day of January. 2018.

 

 

 

I
Kevm Dean

STATE OF TEXAS

COUNTY OF Ski-?090 ss.

Personally appeared the above-named Kevin Dean and acknowledged that the above
Af?davit signed by him is true and correct.

Before me,

Notary Public
My Commission Expires:

  

  

ANDREA FORD

Notify ID 4' 126590946
My Commission Expires
July 15. 2020

 
     
 

20

?aih

LIMITED LIABILITY COMPANY AGREEMENT
OF

PROVIDER LABORATORY SERVICES, LLC

This Agreement made effective the izjxday of June, 2015 by and between Emile L.
Clavct with a mailing address do PO. Box 1 150, Auburn, Maine 0421 1, Kevin B. Dean also with a
mailing address do PO. Box 1150, Auburn, Maine 04211, Thomas 0. Vurgason, Jr. with a
mailing address at 87 Governor?s Point Road, Harpswell, Maine 04079, and Martin J. O?Brien with
a mailing address at 18 White Street, Lewiston, Maine 04240 (hereinafter individually referred to as
a ?Member? and collectively referred to as the ?Members"),

S:

Whereas, the Members desire to form the Limited Liability Company (the ?Company?)
pursuant to the provisions of the Maine Limited Liability Company Act, 31 MR.S.A. Section 1501,
at seq. (the and

Whereas, the Members intend to engage in the business of Operating a laboratory and
providing laboratory services, together with any and all business and activities associated therewith;
and

Whereas, the Members intend to establish a written Limited Liability Company Agreement,
for which it is the purpose of this Agreement to provide.

Now, Therefore, the Members do hereby agree as follows:

ARTICLE I
FORMATION, NANIE, PURPOSE, LOCATION, REGISTERED OFFICE

1. Formation. The Members hereby form a Limited Liability Company pursuant to the

Act on the terms and conditions stated herein to take effect upon ?ling and acceptance of the

 

Company?s Certi?cate of Formation with the Secretary of State of the State of Maine (?Secretary of
State?).
2. Name. The name of the Company shall be Provider Laboratory Services, LLC.
3. Purpose. The principal purpose of the Company is to engage in the activities of
operating a laboratory and providing laboratory services, together with any and all business and

activities associated therewith in the State of Maine.

4. Place of Business. The principal of?ce of the Company shall be located at 306
Rodman Road, Auburn, Maine, or at such other or additional locations as may be determined by the

Members from time to time.

5. Registered Of?ce and Registered Agent. The address of the Company?s initial
registered o?ice shall be 810 Lisbon Street, PO. Box 1776, Lewiston, Maine 042242-1776. The
initial Registered Agent shall be Shawn K. Bell. The registered of?ce and registered agent may be
changed from time to time as the Members deem advisable by ?ling notice of such changes with the
Secretary of State in accordance with the Act.

ARTICLE II
ACCOUNTING AND RECORDS

1. Records to be Kept at Principal Place of Business. The Company shall keep at its
principal place of business the following:

A current list and .1 past list, with the full names and last known
mailing addresses, of each Member in alphabetical order;

A cepy of the Certi?cate of Formation and all amendments thereto,
together with executed copies of Powers of Attorney pursuant to which Articles or
Certi?cates have been executed;

(0) Copies of the Company?s federal, state, and local income tax returns
and ?nancial statements, if any, for the Six (6) most recent years or, if the returns and
statements were not prepared, copies of the information and statements provided to

2

 

the Members to enable them to prepare their federal, state, and local tax returns for
that pcnod;

A copy of the Limited Liability Company Agreement; and

A copy of the Company?s Statement of Authority on ?le with the
Secretary of State, if any.

2. Access to and Con?dentiality of Information. On not less than Ten (10) days?
notice made in a record received by the Company, a Member may inspect and copy during regular
business hours, at a reasonable location speci?ed by the Company, any record maintained by the
Company, to the extent the information is material to the Member?s rights and duties under this
Agreement or the Act. Such information may include, but not be limited to:

True and full information regarding the status of the business and
?nancial condition of the Company;

a?er becoming available, a copy of the Company's federal,
state and local income tax returns for the Six (6) most recent years;

A current list of the name and last known business, residence, and mailing
address of each Member and holders of Transferable Interests;

A copy of this Agreement, the Certi?cate of Formation, and/or the
Statement of Authority, and all amendments thereto, together with executed copies of
any written powers of attorney pursuant to which this Agreement, the Certificate of
Formation, the Statement of Authority, and all amendments thereto have been
executed; and

True and full information regarding the amount of cash and a
description and statement of the agreed value of any other preperty and services
contributed by each Member, if any, and which each Member has agreed to
contribute in the future, and the date on which he, she, or it became a Member.

Demand by a Member for information must be in writing and must state the purpose of the

demand.

 

 

Unless otherwise speci?cally provided herein to the contrary, request and receipt of
information from the Company by a Member or dissociated Member shall be governed by the
provisions of 31 M.R.S.A. Section 1558.

3. Form of Records. The Company may maintain its records in other than a written
form if the form is capable of conversion into written form within a reasonable time.

ARTICLE 
NAMES AND ADDRESSES 0F MEMBER

The names and addresses of the Members are as re?ected on Exhibit attached hereto and
by this reference made a part hereof as if set forth fully herein. Exhibit shall be amended ?om
time to time to re?ect the withdrawal, dissociation, or admission of Members and any changes in
Transferable Interests held by a Member arising from the transfer of a Transferable Interest to or by
such Member. The Company may issue Membership Certi?cates to the Members re?ecting their

reSpecti ve interests.

ARTICLE IV
RIGHTS AND DUTIES OF NIEMBER

1. Liability of Members. No Member shall be liable for the liabilities of the Company
unless the Member personally guarantees the Company?s obligations, or unless the Member is found
not to have acted honestly or in the reasonable belief that the Member?s action was in or not opposed
to the best interests of the Company or its Members. A Member not involved in the management of
the Company does not have a ?duciary duty to the Company, or to any other Member, or to any other
person that is a party to or is otherwise bound by this Agreement, solely by reason ?of being a
Member. A Member shall not be considered to be involved in the management of the Company as a

result of the following:

Having the right to vote or elect those persons that will manage the
business of the Company; or

4

 Having the power to vote on, approve, or veto certain material
transactions or actions involving the Company, including a sale, merger, conversion,
or dissolution of the Company, the amendment of this Agreement or its Certi?cate of
Formation, the issuance of additional interests or admission of new Members, the
of indebtedness, or granting of lien, the acquisition of another business or
any portion of another business, however effected, the timing and amount of
distributions or the undertaking of any other action outside the ordinary course of the
Company?s activities. The actions and transactions described in this paragraph are
not intended to be exclusive and no inference may be made from the a
particular action or transaction from the list of actions and transactions in this
paragraph-

The failure of the Company to observe any formalities or requirements relating to the
exercise of its powers or management of its business or affairs under this Agreement or the Act shall
not be grounds for imposing personal liability on the Members for liabilities of the Company.

2. Representation: and Warranties. Each Member, and in the case of an organization,
the person(s) executing this Agreement on behalf of the organization, hereby represents and warrants
to the Company and each other Member that: if that Member is a organization, that it is duly

organized, validly existing, and in good standing under the laws of its state of organization and that it
has full organizational power to execute and agree to this Agreement and to perform its obligations
hereunder; that the Member is acquiring his, her, or its interest in the Company for the Member's
own account as an investment and without an intent to distribute the interest; the Member
acknowledges that the interests have not been registered under the Securities Act of 1933 or any state
securities laws, and may not be resold or transferred by the Member Without appropriate registration
or the availability of an exemption ?'om such requirements.
3. Conflicts of lntemt
A Member shall be entitled to enter into transactions that may be
considered to be competitive with, or constitute a business opportunity that may be
bene?cial to, the Company, it being expressly understood that some of the Members

may enter into transactions that are similar to the transactions into which the
Company may enter. Notwithstanding the foregoing, each Member shall account to

5

 

the Company and hold as trustee for it any property, pro?t, or bene?t derived by the
Member, without the unanimous consent of the Members, as hereinafter de?ned,
from a use or appropriation by the Member of Company property including
information developed exclusively for the Company and Opportunities expressly
offered to the Company.

A Member does not Violate a duty or obligation to the Company
merely because the Members conduct furthers the Member?s own interest. A
Member may lend money to and transact other business with the Company. The
rights and obligations of a Member who lends money to or transacts business with
the Company are the same as those of a person who is not a Member, subject to other
applicable law. No transaction with the Company shall be voidable solely because a
Member has a direct or indirect interest in the transaction if either the transaction is
fair to the Company, Or a majority of the Members, knowing the material facts of the
transaction and the Member's interest, authorize, approve, or ratify the transaction.

ARTICLE 
MEETINGS OF MEMBER

l. Transferable Interests in the Company/Voting. Unless otherwise provided herein
to the contrary, those Members owning a Transferable Interest shall have the right to participate in
management of the Company. The Members shall have the Transferable Interests in the Company
speci?ed in Exhibit (the ?Transferable Interests?). Unless otherwise expressly provided herein,
all actions and decisions of the Company shall be by a vote. of a majority of the Members. The
?majority of the Members? means Members owning more than ?fty percent of the then
Transferable Interests in the Company owned by the Members.

Notwithstanding anything elsewhere set forth herein, the following actions shall require a
vote of not less than Seventy-Five Percent of the Members in order to be e??ective:

Entering into contacts or incurring liabilities on behalf of the
Company in excess of Twenty-Five Thousand and 00/100 Dollars 

Obtaining ?nancing from ?nancial institutions, re?nancing existing
obligations of the Company, and securing any of its obligations by mortgage or
pledge of any property or income in excess of Twenty~Five Thousand and 00/100
Dollars per annum;

The lending of money by the Company;
6

 

. Causing the Company to voluntarily petition for relief under any
applicable bankruptcy or insolvency laws;

Dissolving the Company;
Amending this Limited Liability Company Agreement;
(3) Selling all or substantially all of the assets of the Company;

Engaging in any business other than the business for which the
Company was originally formed; and

Admitting a new member to the Company.
2. Meetings. Meetings of the Members for any purpose may be called by any
Membeds) holding at least Seventeen Percent of the Transferable Interests of the Company.
3. Place of Meetings. The Members may designate any place, either within or outside
the State of Maine, as the place of meeting for any meeting of the Members. If no designation is
made, the place of meeting shall be the principal executive of?ce of the Company in the State of
Maine.
4. Notice of Meetings. Written notice stating the place, day and hour of the meeting
and the purpose or purposes for which the meeting is called shall be delivered not less than three (3)
nor more than sixty (60) days before the date of the meeting, either personally or by United States
mail, or overnight delivery by a nationally recognized overnight delivery service, by or at the
direction of the Members calling the meeting, to each Member entitled to vote at such meeting. If
mailed, such notice shall be deemed to be delivered two (2) calendar days a?er being deposited in
the United States mail, addressed to the Member at his, her, or its address as it appears on the books
of the Company, with postage thereon prepaid. lfmailed by overnight mail, such notice shall be
deemed to be delivered on the next business day after being deposited with the overnight delivery

carrier.

5. Meetlng of all Member. If all of the Members entitled to vote shall meet at any time

and place and consent to the holding of a meeting at such time and place, such meeting shall be valid
without call or notice, and at such meeting lawful action may be taken.

6. Record Date. For the purpose of determining Members entitled to notice of or to

vote at any meeting of Members or any adjournment thereof, or Members entitled to receive payment
of any distribution, or in order to make a determination of Members for any other purpose, the date
on which notice of the meeting is mailed or the date on which the resolution declaring such
distribution is adopted, as the case may be, shall be the record date for such determination of
Members. When a determination of Members at any meeting of Members has been made as
provided in this Section, such determination shall apply to any adjournment thereof.

7. Quorum. A majority of the Members, represented in person or by proxy, shall
constitute a quorum at any meeting of Members; Provided, However, that if a vote requires the
consent of all Members pursuant to 31 M.R.S.A. ?1556 (3), or pursuant to this Agreement, then a
quorum shall consist of all Members, represented in person or by proxy. In the absence of a quorum
at any such meeting, a majority of the Members of the Company so represented at such meeting may
adjourn the meeting from time to time for a period not to exceed sixty (60) days without further
notice. However, if the adjom'nment is for more than sixty (60) days, or if after the adjournment a
new record date is ?xed for the adjourned meeting, a notice of the adjourned meeting shall be given
to each Member of record entitled to vote at the meeting. At such adjourned meeting at which a
quorum shall be present or represented, any business may be transacted which might have been
transacted at the meeting as originally noticed. The Member present at a duly organized meeting
may continue to transact business until adjournment, notwithstanding the withdrawal during such

meeting of that number of interests of the Company whose absence would cause less than a quorum.

8

 

Notwithstanding anything elsewhere set forth herein, if a Member fails or refuses to attend any Two
(2) consecutive meetings of the Members duly called, that Member shall be deemed to have given his
proxy to such Member as the majority of the other Members shall determine, and no ?rrther action or
writing need be obtained for purposes of accomplishing that proxy.

8. Manner of Acting. If a quonrm is present, the affirmative vote of a majOrity of the
Members represented in person or by proxy at the meeting shall constitute the act of the Members,
unless the vote of a greater or lesser proportion or number is otherwise required by the Act, by the
Certi?cate of Formation, or by this Agreement. Unless otherwise expressly provided herein or
required under applicable law, Members who have an interest (economic or otherwise) in the
outcome of any particular matter coming before the Members for a vote or consent shall not be
disquali?ed from voting on such matter. Meetings may be held in person, by telephonic means, or a
combination of the two, provided that attendance by telephonic means must insure that all persons
participating can hear and be heard as if personally present.

9. Proxies. Subject to the provisions of Section 7 above, at all 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. Subject to the provisions of Section 7 above, such proxy shall be ?led with the
Company before or at the time of the meeting. No proxy shall be valid a?er eleven (1 1) months
from the date of its execution or from the date of deemed execution as provided in Section 7 above,
unless otherwise provided in the proxy.

10. Action by Member without a Meeting. Action required or permitted to be taken at
a meeting of Members may be taken without a meeting if the action is evidenced by one or more
written consents describing the action taken, signed by each Member entitled to vote and delivered to

the Company for inclusion in the minutes or for ?ling with the Company records. Action taken

 

under this Section is et?feetive when all Members entitled to vote have signed the consent, unless the
consent speci ?es a different effective date. The record date for determining Members entitled to take

action without a meeting shall be the date the ?rst Member signs a written consent.
1. Waiver of Notice. When any notice is required to be given to any Member. a waiver

thereof in writing signed by the person entitled to such notice, whether before, at, or after the time

stated therein, shall be equivalent to the giving of such notice.

ARTICLE VI
MANAGEMENT AND ADMINISTRATIVE POLICIES

1. Authority; Reliance by Third Parties; Management Committee.

Management. Subject to the provisions of this Agreement, the
Members owning Transferable Interests shall have the authority to manage the
business of the Company. Unless otherwise provided herein, such authority shall
include, without limitation, the authority to purchase, sell, mortgage, lease, and
otherwise dispose of property, both real and personal, to hire employees, to contract
with third parties for services and to borrow money and otherwise pledge the credit of
the Company. Unless otherwise provided to the contrary in any Statement of
Authority of the Company, the signature of any one Member alone shall be
su?icient to bind the Company and every document executed by Members shall be
conclusive evidence in favor of every person relying in good faith thereon or
claiming thereunder that at the time of delivery thereof (1) this Company was in
existence; (ii) this Agreement had not been amended in any manner so as to restrict
such authority and the execution and delivery of such documents were duly
authorized under this Article.

Notwithstanding the foregoing provisions, the Company may ?le a Statement
of Authority stating the authority of, or limitations on the authority of, a speci?c
person or persons to enter into transactions on behalf of, or otherwise act for or bind,
the Company, and with reSpect to any provision that exists in or with respect to the
Company, may state the authority, or limitations on the authority, of all persons
holding the position to enter into transactions on behalf of, or otherwise act for or
bind, the Company.

Management Delegation. Notwithstanding anything elsewhere set
forth herein, the Members may delegate certain rights, duties, and responsibilities
relating to the Company to a Member(s). These delegations may be amended anytime
upon a vote of a majority of the Members. Such delegation shall not relieve the
Members of their responsibility for managing the business of the Company or affect
their ability to bind the Company in dealings with third parties. Until a contrary vote

10

 

by majority ol?the Members, the Members hereby appoint Martin J. O?Brien to
manage the day-to?day actixities of the Company, subject at all times to the
pronsrons of this Agreement. The parties hereto agree that for the ?rst Tuclve (12)
months from the date of this Agreement. Mr. O?Brien shall receive no compensation

for his seniccs hereunder. Thereafter, compensation shall be as determined by the
Members by majority vom.

2. Fiduciary Duty; Devotion of Time; Compensation. Each Member shall exercise
his, her, oritspowersanddischargehis her, oritsduticsingood faithwithavicwtotheinterectsof
the Company and its Members with that degree ofdiligcnee. care and skill that ordinarily prudent
persons would exercise under similar in like positions. Bad: Memba' shall devote so


reimbursed by the Company, forall reasonable omofpocketexpmsesacmally inumed byhim,hn,
oritandpaidtothh-dpanies 

3. Exculpation and Indemni?cation.

Exculpation. The doing of any act or the fajitaMember. me c??ect ofvdu'ch maycause or result in loss ordarnage tothe Company or
its property, shall not subject such Member to any personal liability to the Company,
tmloss the Member has violated the provisions of Section 2 above.

Indemni?cation. The Company shall indemnify the Members and
make advances for expenses to the maximum extent permitted under the Act. The
Company shall indemnify its employees and other agents to the fullest extent
permitted by law, provided that such indemni?cation in any given situation is ?rst
approved by the Members. The right to indemni?cation under this Section shall be
fully vested with respect to any matter cum-ring while this Section um inc??oct. No
amendment of this Section shall have any retroactive e??ect except as to enhance such
right for the bene?t of the indemnitee. Any indemnity under this Section 3 shall be
provided out of and to the extent of Company assets only and no Member shall have
any personal liability on account thereof.

4. Bank Accounts; Records; Reports.

Deposits/Withdrawals. All funds of the Company shall be deposited
in its name in such checking account or other bank accounts as shall be designated by

 

the Members. Withdrawals shall be on such si na -
tures as 
Members from time to time. may ctermmed by the

Records. The Members shall keep or cause to be kept true and full
books of account, in which shall be recorded the transactions of the Company all of
which shall at all limes be maintained at the principal office of the Company, or at
such other of?ce as shall be designated for such purpose by the Members, and shall

be open for inspection and examination of the Members or their representatives at
any reasonable time.

5. Fiscal Year. The ?scal year of the Company shall end in the month of December.

6. Accounting Method. For tax and ?nancial accounting purposes, the Company shall

adopt the cash method of accounting.

7. Of?cers. The Members may, by majority vote of the Members, elect a President,
Vice-President, Treasurer, and such other of?cers as the Members deem just and appropriate, but
nothing herein shall require the Members to appoint any such of?cers. The President, Vice-President,

and Treasurer, if appointed, shall have the following duties, unless otherwise modi?ed or amended

by vote of a majority of the Members:

(3) President. The President shall be the Chief Executive Officer of the
Company. He shall preside at all meetings of the Members, and shall in general
supervise and control all of the business and affairs of the Company. The President
shall have general superintendence and direction of all of the other of?cers of the
Company, and shall perform such other duties as are expressly imposed upon the
of?cer by statute, or as may be imposed by vote of the Members or as are usually
performed by the Chief Executive Officer of the Company. The President, in
addition to any other o?icer authorized by the Members, may sign any deeds,
mortgages, bonds, or other instruments binding the Company.

Vice-President. The Vice-President, if any, or if there shall be more
than one, the Vice-Presidents, in the order determined by the Members, shall, in the
absence of or in the case of the disability of the President, perform the duties and
exercise the powers of the President and shall perform such other duties and have
such other powers as the Shareholders may from time to time prescribe. If the
Members shall appoint or elect an Executive Vice-President, it shall be presumed that
he is the Vice-President determined by the Members to act in case of the absence or
disability of the President.

12

 

. . Treasurer. The Treasurer shall have custody of the Company funds
and securities. and shall keep full and accurate accounts of receipts and
disbursements 1n books belonging to the Company and shall deposit all monies and
other yaluable effects in the name of, and to the credit of, the Company, and such
deposrtories as may be designated by the Members.

The Treasurer shall disburse the funds of the Company as may be ordered by
the Members, taking proper vouchers for such disbursements. and shall render to the
Members at the regular mcc?ng of the Members, whenever they may require it, an
account of all his transactionsas Treasurer and of the ?nancial condition of the
Company.

The Treasurer shall perform all of the duties incident to the of?ce of

Treasurer and such other duties as item time to time may be assigned to him by the
Members.

He or she shall give the Company a Bond, if required by the Members, in a

sum, and with one (1) or more sureties satisfactory to the Members, for the faithful

performance of the duties of his or her of?ce, and for the restoration to the

Company, in case of his or her death, resignation, retirement or removal ?-om of?ce

of all the books, papers, vouchers, money and other property of whatever kind in his

or her possession or under his or her control belonging to the Company.

8. Exclusion. Notwithstanding anything elsewhere set forth herein, no Member who
does not own a Transferable Interest shall be entitled to vote on any matters brought before the
Members hereunder, unless this Agreement or the Act Speci?cally requires the consent of all
Members.

ARTICLE VII
CAPITAL ACCOUNTS

1. Members? Capital Contributions. Each Member shall contribute as his, her, or its
capital contribution the amounts set opposite his or her name in Exhibit Each Member shall be
required to make additional capital contributions if at any time or times the Members should
determine by unanimous vote of the Members that further capital is required by the Company. Any
additional capital required shall be contributed by the owners of Transferable Interests in the same
proportion as the Transferable Interest at issue bears to all Transferable Interests.

2. Maintenance of Capital Accounts. The Company shall establish and maintain

Capital Accounts for each Member and Transferee. Each Members or Transferee?s Capital Account
13

 

shall be increased by (l the amount of any money actually contributed by the Member/Transferee to

the capital of the Company, (2) the fair market value of any property contributed, as determined by

the Company and the contributing Member/1? ransferee at arm's length at the time of contribution (net
of liabilities assumed by the Company or subject to which the Company takes such Property, within
the meaning of Section 752 of the Code), and (3) the share of Net Pro?ts and
of any separately allocated items of income or gain (including any gain and income from unrealized
income with respect to accounts receivable allocated to the Member/Transferee to re?ect the
difference between the book value and tax basis of assets contributed by the Member/Transferee).
Each Capital Account shall be decreased by 1) the amount of any money
distributed to the Member/1? ransferee by the Company, (2) the fair market value of any Property
distributed to the Member/'1' ransferee, as determined by the Company and the contributing
Member/Transferee at arm's length at the time of contribution (net of liabilities of the Company
assumed by the Member/Transferee or subject to which the Member/Transferee takes such Property
within the meaning of Section 752 of the Code), and (3) the share of Net
Losses and of any separately allocated items of deduction or loss (including any loss or deduction
allocated to the Member/1? ransferee to re?ect the difference between the book value and tax basis of
assets connibuted by the Member/Transferee).

3. Change in Law. Notwithstanding anything to the contrary herein, it is the intention
of the Company that it be classi?ed as a partnership for federal income tax purposes and that it
conform to the requirements of the Code with respect to the validity of the allocations of items of
income, gain, loss, and tax credits. In the event of a change in the Code or Treasury Regulations, the

Members hereby agree to consult with tax counsel to detennine whether an amendment to this

14

Agreement is required and, if it is, to adopt such amendment in order to be classi?ed as a partnership
for Federal Income Tax purposes.

4. Interest on Capital; Loans by or to Members. No interest or other compensation
shall be allowed to any Member or Transferee with respect to his, her, or its Capital Account, except
his, her, or its share of the pro?ts, losses, and distributions of the Company as hereinafter provided.
The Company shall not make loans to, or borrow from, any Member or Transferee without the
consent of a mq?ority of the Members.

5. Withdrawal of Capital. Except as may be speci?cally provided in this Agreement,
no Member/Transform shall have the right to withdraw from the Company all or any pan of his, her,
or its capital contribution nor shall he or she have any right to demand and receive property or cash
from the Company in return for his, her, or its capital contribution.

6. Liability of Members for Repayment of Capital. No Member/Transferee shall
have any personal liability for the repayment of any capital contribution of any other
Member/Transform.

7. Compliance with Section 704(b) of the Code. The provisions of this Article VII as
they relate to the establishment or maintenance of Capital Accounts are intended, and shall be
construed, and, if necessary, modi?ed to cause the allocations of pro?ts, losses, income, gain and
credit pursuant to Article to have substantial economic effect under the Regulations
promulgated under Section 704(b) of the Code, in light of the distributions made pursuant to Articles
Di and XII and the capital contributions made pursuant to this Article VII. Notwithstanding
anything herein to the contrary, this Agreement shall not be construed as creating a de?cit restoration
obligation or otherwise personally obligate any Member or Transferee to make a capital contribution

in excess of the initial contribution

15

ARTICLE 
PROFITS, LOSSES AND CASH DISTRIBUTIONS

1. Company Pro?ts, Losses and Cash Distributions. All pro?ts, losses and
distributions of cash or other property from the Company to the Members or Transferees shall be
allocated or distributed in accordance with each Member?s or Transferee?s Transferable Interest as

. set forth on Exhibit provided that upon the dissolution of the Company all distributions of cash
shall be made in accordance with Article XII. Distributions from the Company to the Members shall
be made at such times as a majority of the Members determine, after taking into account reserves for
operating the Company. Notwithstanding anything elsewhere set forth herein, any debts due by the
Company to any Member shall be repaid, in full or in part, as a majority of the Members deem
appropriate, prior to making any distributions to the Members; Provided, However, in all events that
the State and Federal income tax liabilities of the Members resulting from the operation of the
business of the Company shall be distributed by the Company to the Members prior to April 15 of
each calendar year.

2. Priority and Timing. Subject to the provisions of Article Section 1 above, no
Member or Transferee shall have priority over any other Member or Transferee with regard to
allocations of pro?ts or losses or distributions from the Company and all allocations shall be made in
the same percentage as the Transferable Interests appear in Exhibit All distributions of
Company funds to the Members or Transferees shall be made at such times as the Members may
determine. Notwithstanding anyth'mg elsewhere set forth herein, if Martin J. O?Brien fails or refuses
to provide management of day-to-day operations of the Company for a period of Twelve (12) months
?oor the date of commencement of the business operations of the Company with no compensation,
then any distribution to which he would otherwise be entitled shall be reallocated among the

Remaining Members. Provided that Thomas O. Vurgason, Jr. shall not be considered a Remaining
16


Timur-30. Fm.

demh?mmd?nm.huymbm0-

Members, provided that Martin J. O?Brien 




ARTICLE IX
LIQUIDATION OF TRANSFERABLE INTEREST

I. 
occurrence of death, adjudication of W. or bakery, 5mm
termination, orvolumaryorinvolumavy withdrawal 

?Withdrawal Event"). 


2. Uquidationofanociatchenber. Fo?ouiagmcdissodmofam,hl


dissociating Member?s 

3. Valuation of Company Interest. In the even of. paths: or liquidaion ofzhc


Member, or his, her, or its legal representative, shall annually age: upon tb: value of 1h:
17

dissociating Member?s Transferable Interest. If the parties are not able to mutually agree upon the
value of the dissociating Member?s Transferable Interest within Ninety (90) days alter the event
causing dissociation, the value of such Transferable Interest shall be determined as follows: The
remaining Members as a group and the dissociating Member, or his, her, or its legal representative,
shall each appoint an appraiser and the two appraisers, in turn, shall jointly appoint a third appraiser.
The fair market value of the underlying assets of the Company shall be determined by the agreement
of any Two (2) of the Three (3) appraisers. All appraisers shall be quali?ed and disinterested. The
dissociating Member, or his, her, or its legal representative, and the remaining Members as a group
shall each pay the cost of the appraiser selected by them, and the cost of the third appraiser shall be
borne equally between the dissociating Member or his, her, or its legal representative, and the
remaining Members as a group. The determination of the fair market value of the dissociating
Member?s Transferable Interest shall be conclusive and binding upon all the parties.

4. Payments; Hold Harmless. Unless otherwise provided herein to the contrary, or
unless otherwise agreed upon by the Remaining Members and the dissociating Member, each
purchasing Member shall pay to the dissociating Member, or his, her, or its legal representative, the
value of the dissociating Member?s Transferable Interests being purchased by the Remaining
Member, and said payments shall be made by the Remaining Member delivering to such dissociating
Member a Promissory Note(s) in an amount equal to the unpaid value of the dissociating Member?s
Transferable Interest being purchased by the Remaining Member. Such Promissory Note(s) shall
provide for equal payments over a period of Sixty (60) months from the date of delivery and
shall bear interest at the then Midterm Applicable Federal Rate per annum. Additionally, the
purchasing Member shall indemnify and hold the dissociating Member, or his, her, or its legal

representatives, harmless from any and all liabilities of the Company guaranteed by the dissociating

l8

Member. The Promissory Note(s) shall provide for acceleration of all unpaid balances in the event
of a default in the payment of any installment which is not cured after Thirty (30) days written notice
or in the event of a sale of a controlling Transferable Interest in the Company, as the case may be, or
the sale of all of the Company?s assets. Each Note shall be secured by a pledge of the Transferable
Interests sold to the Remaining Member. Each Remaining purchasing Member giving a Note shall
have the right to prepay part or all of the Note without penalty prior to expiration of the term of the
Note. Notwithstanding anything elsewhere set forth herein, if the withdrawing Member or
dissociating Member has signed a personal guaranty for Company obligations, the Company shall
make all good faith efforts to have the withdrawing or dissociating Member?s guaranty released by
the Bank as part of the acquisition of the withdrawing or dissociating Member?s Transferreble

Interest

ARTICLE 
RESTRICTIONS ON TRANSFER OF TRANSFERABLE INTERESTS

1. Sale or Other Transfer of Interests. Except as otherwise provided below, no
Member may assign, sell, pledge, encumber, or otherwise dispose of all or any portion of his, her, or
its Transferable Interest except: To the Remaining Members proportionately, or to others
with the consent of all of the Member?s Transferable Interests in the Company.

2. Limitation on Transfer. No Transferable Interest or Membership Interest shall be
sold or otherwise transferred: if such disposition, alone or when combined with other
transactions, would result in a termination of the Company within the meaning of Section 708 of the
Internal Revenue Code if the Company is then being taxed as a partnership; and (ii) unless and until
the Company receives from any assignee the information and agreements that the Members may
reasonably require, including, but not limited to, any Taxpayer Identi?cation Number and any

agreement that may be required by any taxing jurisdiction.
19

ARTICLE XI


l. Dissolution. The Company shall be dissolved, and its affairs wound up, upon the
?rst to occur of the following events:

The written agreement of the holders of all of the Member?s
Transferable Interests in the Company;

The sale or other disposition of all or substantially all of the assets of
the Company or the permanent cessation of the Company?s business operations; or

The dissociation of a Member or any other event causing dissociation
under the Act, unless the business of the Company is continued by the consent of a
majority of the remaining Members within Ninety (90) days after the dissociation.

ARTICLE XII
DISSOLUTION AND WINDING UP

I. Effect of Dissolution. In the event of dissolution, a Certi?cate of Cancellation shall
be ?led with the Secretary of State in accordance with the Act. Upon such ?ling, the Company
continues its existence as a limited liability company but may not carry on any activity except such as
is appropriate to wind up and liquidate the activities and affairs of the Company.

2. Winding Up; Liquidation and Distribution of Assets.

Winding Up. Upon dissolution, the Members shall immediately
proceed to wind up the affairs of the Company in accordance with the requirements
of the Act and other applicable law. In furtherance of the winding up of the
Company, the Members shall:

Sell or otherwise liquidate all of the Company's assets as
as practicable (except to the extent the Members may elect
to distribute any assets to themselves in kind);

(ii) Discharge or make reasonable provision for all liabilities
of the Company, including liabilities to Members who are also
creditors, other than liabilities to Members for distributions and the
return of capital, and establish such reserves as may be reasonably
necessary to provide for contingent liabilities of the Company (for the
purposes of determining the capital accounts of the Members, the

20

amounts of such reserves shall be deemed to be an expense of the
Company);

Distribute the remaining assets of the Company in the
following order of priority:

(1) To each Member or Transferee, with
respect to the cumulative amount of all accrued but
unpaid distributions resulting from operations during
the year of dissolution for which the Company is
liable to the Member, the amount of such liability;

(2) To each Member or Transferee, with
respect to his, her, or its unretumed capital
contribution, an amount equal to the positive balance
(if any) in his, her, or its capital account (as
determined a?cr taking into account all capital
account adjustments for the Company's taxable year
during which the liquidation occurs), if any, or, if the
assets available to be distributed hereunder are
insuf?cient to cover the aggregate of all Members? or
Transferees? positive balances, a proportionate
amount based upon the relative positive balances of
the Members; and

(3) To each Member or Transferee, with
respect to his, her, or its Transferable Interest, a
proportionate share of the remaining assets equal to
his, her, or its Transferable Interest.

Accounting. The Members may, by majority vote, cause an
accounting to be made by the Company?s independent accountants of the accounts of
the Company and of the Company's assets, liabilities and operations from the date of
the last previous accounting until the date of dissolution.

Value of Assets. If any assets of the Company are distributed in kind,
the net fair market value of such asset as of the date of dissolution shall be
determined by independent appraisal or by agreement of the Members/1? ransferees,
entitled to vote on Company matters. Such assets shall be deemed to have been sold
to the Members or Transferees in proportion to their Transferable Interests as of the
date of dissolution for their fair market value, and the capital accounts of the
Members or Transferees shall be adjusted to re?ect such deemed sale.

Negative Capital Account. Notwithstanding anything to the contrary
in this Agreement, upon a liquidation, if any Member or Transferee has a de?cit
capital account (after giving effect to all contributions, distributions, allocations and

21

other Capital Account adjustments for all taxable years, including the year during

which such liquidation occurs), such Member or Transferee shall have no obligation

to make any capital contribution, and the negative balance of such Member's or

'1 ransferec?s capital account shall not be considered a debt owed by such Member or

Transferec to the Company or to any other person for any purpose whatsoever.

3. Return of Capital Contribution. Except as provided by law or as expressly
provided in this Agreement, upon dissolution, each Member or Transferee shall look solely to the
assets of the Company for the return of his, her, or its capital contribution, to the extent that the
Member is entitled to any such distribution. If the Company property remaining a?er the payment or
discharge of the debts and liabilities of the Company is insuf?cient to return the capital contribution

of a Member or Transferee, such Member shall have no recourse against any other Member.

ARTICLE 
AMENDMENT

This Agreement may be amended in accordance with the provisions of Article V, Section I
above.

ARTICLE XIV
MISCELLANEOUS

1. No Partnership Intended for Nontax Purposes. lhe Members have formed the
Company under the Act, and expressly do not intend hereby to form a partnership under either the
Maine Uniform Partnership Act or the Maine Revised Uniform Limited Partnership Act.

2. Rights of Creditors and Third Parties under Company Agreement. The
Agreement is entered into among the Members for the exclusive bene?t of the Members, and their
heirs, successors, personal representatives, and transferees. The Company Agreement is expressly
not intended for the bene?t of any creditor of the Company or any other person. Except and only to

the extent provided by applicable statute, no such creditor or third party shall have any rights under

22

this Agreement or any agreement between the Company and any Member or ranst with reSpect

to any Capital Contribution or otherwise.

3. Notices. All notices, demands and other communications hereunder shall be in
writing and shall be deemed to have been duly given on the date delivered in person to the party to
whom notice is to be given, or on the ?rst business day after mailing if mailed to the last known
address of the party to whom notice is to be given by registered or certi?ed mail, postage paid, return
receipt requested.

4. Entire Agreement. This Agreement represents the entire agreement between the
parties with respect to the Company and there are no agreements, understandings, warranties or
representations between the parties with respect to the Company, except as set forth herein.

5. Binding Effect. This Agreement will inure to the bene?t of and bind the respective
heirs, personal representatives, successors, and assigns of the parties hereto.

6. Counterparts. This Agreement may be executed in any number of counterparts, each
of which when so executed and delivered shall be deemed an original, but all of which together shall
constitute one in the same instrument.

7. Construction. As used in this Agreement, the singular shall include the plural, the
plural the singular, and the use of one gender shall be deemed applicable to all genders. Captions are
inserted only as a matter of convenience and shall in no way limit, de?ne, or extend the scope of this
Agreement.

8. Applicable Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of Maine.

9. Severability. If any provision of this Agreement is determined to be invalid or

unenforceable, it shall not affect the validity or enforceability of the remaining provisions thereof.

23

10. Gender and Tense. For all purposes of this Agreement, the singular shall include

the plural, the masculine shall include the feminine, and vice versa.

1 . De?nitions. Any term in this Agreement not speci?cally defmed in this Agreement
shall have the de?nition provided to such term in the Act. For all purposes of this Agreement a
?Transferee? means a person to whom all or any part of the Transferable Interest has been
transferred, whether or not the transferor is a Member.

In Witness Whereof, the parties have executed this Agreement as of the day and year ?rst
above written.

Witness:

 

 

km B. Dean? 

 

I?m ?astVurgason

?9,653

Martin J. O?Brien

24

Name

Emile L. Clavct

Kevin B. Dean

Thomas O. Vurgason. Jr.

Martin J. O?Brien

Certi?cate No.

 

EXHIBIT A

 

MEMBERSHIP
Membership Transferable
Interest Interest
33% 33%
33% 33%
17% 17%
17% 17%
Additional Members

25

Contribution

Name

Emile L. Clavet

Kevin B. Dean

Thomas 0. Vurgason, Jr.

Deborah O?Brien

EXHIBIT A (REVISED March 12, 2017)

Certi?cate No.

 

MEMBERS HIP

Membership

 

Transferable

 

Interest Interest
3317% 17%

Additional Members

25

Ca ital Contribution

CONSENT TO LIMITED LIABILITY COMPANY AGREEMENT

The undersigned, Deborah Brien, having received Seventeen Percent of the
Membership Interests of Provider Laboratory Services, LLC effective March 12, 2017, does
hereby consent to, and agree to be bound by, the provisions of the Limited Liability Company
Agreement of Provider Laboratory Services, LLC, a copy of which is attached hereto.

In Witness Whereof, the undersigned has hereunto set her hand effective this day of
March, 2017.

Witness:

 

0&9 WW wag?;

Deborah O?Brien