Joint Venture Agreement of Jefferson MRI - TME Diagnostic Partners II Ltd. and TME Inc.
JOINT VENTURE AGREEMENT
OF
JEFFERSON MRI JOINT VENTURE
This Joint Venture Agreement is entered into effective as of the
29th day of December, 1989 by and between TME Diagnostic Partners II, Ltd., a
Texas limited partnership (hereinafter referred to as "TMEDP II"), and TME,
Inc., a Delaware corporation (hereinafter referred to as "TME"), as venture
partners.
ARTICLE I
FORMATION OF THE PARTNERSHIP
1.1 FORMATION. Subject to the provisions hereof, the Venturers
hereby associate themselves in the operation of the Venture as a general
partnership pursuant to the provisions of the Texas Act. The Venturers have
entered into this Agreement in order to set forth the rights and obligations of
the Venturers and certain matters related thereto. Except as expressly provided
herein to the contrary, the rights and obligations of the Venturers and the
administration, dissolution, and termination of the Venture shall be governed by
the Texas Act.
1.2 NAME. The name of the Venture shall be, and the business of
the Venture shall be conducted under the name of "Jefferson MRI." The Venturer's
business may be conducted under any other name or names deemed advisable by the
Managing Venturer.
1.3 PRINCIPAL OFFICE. The principal office of the Venture shall be
located at 333 North Belt, Suite 500, Houston, Texas 77060, or such other place
as the Managing Venturer may, from time to time, designate. The Venture may
maintain offices at such other place or places as the Managing Venturer deems
advisable.
1.4 TERM. The Venture shall continue in existence until December
31, 2040 or until the earlier dissolution of the Venture pursuant to the
provisions of Article IX hereof.
1.5 NATURE OF VENTURE INTEREST. The Venture Interest of any
Venturer shall be personal property for all purposes.
ARTICLE II
DEFINITIONS
The following definitions shall for all purposes, unless otherwise
clearly indicated to the contrary, apply to the terms used in this Agreement.
"Affiliate" means any Person that directly or indirectly controls,
is controlled by, or is under common control with the person in question. As
used in the definition of "Affiliate," the term "control" means the possession,
directly or indirectly, of the power to direct or cause the
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direction of the management and policies of a Person, whether through ownership
of voting securities, by contract or otherwise.
"Agreement" means this Joint Venture Agreement, as it may be amended
or supplemented from time to time.
"Allocation Regulations" means Treas. Reg. Section 1.704-1(b) et
seq. as such regulations may be amended and in effect from time to time (whether
in temporary or final form) and any corresponding provisions of succeeding
regulations.
"Capital Account" means the capital account maintained for a
Venturer pursuant to Section 4.2 hereof.
"Capital Contribution" means the amount of cash or Net Agreed Value
of property that a Venturer contributes to the Venture pursuant hereto.
"Code" means the Internal Revenue Code of 1986, as amended and in
effect from time to time and any successor to such statute.
"Distributable Funds" means the funds provided from Venture
operations, interest on Venture cash and short-term investments, and proceeds of
the sale of any Venture interest or other assets, without deduction for non-cash
expenses (such as depreciation and amortization or imputed interest), but after
deducting cash funds used to pay all other expenses, debt payments, and to
establish or to restore any replacement and working capital reserves deemed
necessary or appropriate.
"Event of Dissolution" has the meaning set forth in Section 9.1
hereof.
"Liquidator" has the meaning specified in Section 9.3 hereof.
"Majority in Interest" shall mean the owners of more than 50% of the
Percentage Interests of all Venturers.
"Manager" means TME.
"Managing Venturer" means TMEDP II.
"Memorandum" means that certain Confidential Offering Memorandum of
TMEDP II dated September 1, 1989 offering $15,000,000 in limited partnership
interests, as amended or supplemented.
"MRI Center" means the magnetic resonance imager ("MRI") and the
special modular metal container and other major diagnostic imaging equipment
presently or hereafter owned or leased and operated by the Venture in the State
of Pennsylvania, together with all appliances, parts, instruments,
appurtenances, accessories, and all substitutions, renewals or replacements of,
and all additions, improvements and accessions to, any and all thereof.
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"Net Agreed Value" means in the case of any property contributed by
or distributed to a Venturer in the Venture, the fair market value of such
property at the time of such contribution (which shall be equal to the Agreed
Value as set forth in the TMEDP II partnership agreement) or distribution (as
determined by the Venturers or the Liquidator at the time of distribution using
such reasonable method of valuation as they may adopt) reduced by any
indebtedness either assumed by such Venturer upon such distribution or to which
such property is subject at the time of contribution or distribution.
"Percentage Interest" means as to TMEDP II, and as to TME,
respectively, those percentages referenced in Exhibit A attached hereto which
percentages are based upon the relative cash contributions of the Venture
Partners.
"Person" means an individual, partnership, limited partnership,
foreign limited partnership, trust, estate, corporation, custodian, trustee,
executor, administrator, nominee or entity in its own or a representative
capacity.
"Reserves" means such cash reserves as the Managing Venturer
determines are reasonably necessary for the Venture's business.
"Selling Agreement" means that certain Best Efforts Selling
Agreement dated as of September 1, 1989 among TME, First TME Partners, Inc., and
Rotan Mosle, Inc.
"Texas Act" means the Texas Uniform Partnership Act, TEX. REV. CIV.
STAT. ANN. art. 6123b, as it may be amended from time to time.
"Venture" means the general partnership or joint venture established
by this Agreement.
"Venture Interest" means the entire ownership interest of a Venturer
in the Venture, including the right of such Venturer to any and all benefits to
which such Venturer may be entitled to as provided in this Agreement together
with the obligations of such Venturer to comply with all of the terms and
conditions of this Agreement.
"Venturers" means TMEDP II and/or TME, as the case may be.
"Winding-Up" means the period during which the affairs of the
Venture are terminated and the liquidation and sale of the assets of the Venture
is accomplished, such process commencing when the Venture is dissolved for any
reason and the business of the Venture is not continued as provided in Section
9.2.
ARTICLE III
PURPOSE
The purpose and business of the Venture shall be to engage in any
business or activity as permitted by the Texas Act including, but not limited
to, the acquisition, development, construction, leasing, operation, and
disposition of the MRI Center.
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ARTICLE IV
CAPITAL CONTRIBUTIONS; CAPITAL ACCOUNTS
4.1 CAPITAL CONTRIBUTIONS. The initial capital contributed by each
Venturer to the Venture shall be the amount or property set forth opposite the
name of each Venturer, respectively, on Exhibit A attached hereto. Upon payment
or assignment by each Venturer to the Venture of the capital contribution set
forth on Exhibit A, no additional contributions of cash or other property shall
be required from such Venturer except as set forth in Section 9.2.
4.2 CAPITAL ACCOUNTS. The Venture shall maintain for each Venturer
a separate Capital Account. Such Capital Account shall be increased by (i) the
Capital Contributions made by such Venturer and (ii) all items of Venture income
and gain computed in accordance with this Section 4.2 hereof and allocated to
such Venturer pursuant to Section 5.1 hereof. Such Capital Account shall be
decreased by (x) the cash amount or Net Agreed Value of all distributions of
cash or property made to such Venturer and (y) all items of Venture deduction
and loss computed in accordance with this Section 4.2 hereof and allocated to
such Venturer pursuant to Section 5.1 hereof. For purposes of computing the
amount of any item of income, gain, deduction or loss to be reflected in the
Venturers' Capital Accounts, the determination, recognition and classification
of any such item shall be the same as its determination, recognition and
classification for federal income tax purposes (including any method of
depreciation, cost recovery or amortization used for this purpose) subject to
such adjustments or other methodologies as may be permitted or required by the
Allocation Regulations as interpreted and applied in the discretion of the
Managing Venturer. To the extent not otherwise specified in this Section 4.2,
the Capital Accounts of the Venturers shall be maintained in accordance with and
as provided in the Allocation Regulations as interpreted and applied in the
discretion of the Managing Venturer.
4.3 INTEREST. No interest shall be paid by the Venture on Capital
Contributions or on balances in the Venturers' Capital Accounts.
4.4 NO WITHDRAWAL. A Venturer shall not be entitled to withdraw
any part of his Capital Contribution or his Capital Account or to receive any
distribution from the Venture, except as provided in Sections 5.3 and 9.2(c)
hereof.
ARTICLE V
ALLOCATIONS AND DISTRIBUTIONS
5.1 ALLOCATIONS FOR CAPITAL ACCOUNT PURPOSES.
(a) General Rule. After giving effect to the special allocations
set forth in Section 5.1(b), items of Venture income, gain, loss and deduction
(computed as provided in Section 4.2) for any taxable year (or portion thereof)
shall be allocated to the Venturers in accordance with their respective
Percentage Interests.
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(b) Required Allocations. Prior to making any allocations provided
above, the Managing Venturer may make such allocations of items of income, gain,
loss and deduction as the Managing Venturer, in its sole discretion, deems
necessary to comply with the provisions of the Allocation Regulations. In the
event any such allocations are made, the Managing Venturer shall make such
further allocations as it deems necessary such that, to the extent possible, the
net amount of allocations pursuant to Section 5.1(a) and (b) would be equal to
the amount that would have been allocated to each Venturer if the required
allocations had not been made.
5.2 ALLOCATIONS FOR TAX PURPOSES. For federal income tax purposes,
except as otherwise required by Section 704(c) of the Code or Treasury
Regulations Section 1.704-1(b)(2), each item of income, gain, loss, deduction
and credit of the Venture shall be allocated among the Venturers in the same
manner as its corresponding item of "book" income, gain, loss, deduction or
credit has been allocated pursuant to Section 5.1 hereof.
5.3 DISTRIBUTIONS. The Managing Venturer shall cause the Venture
to make distributions of Distributable Funds, if any, within forty-five days
following the end of each fiscal quarter. Distributable Funds will be
distributed to the Venturers in accordance with their respective Percentage
Interests. All distributions of Distributable Funds will be subject to the
payment of Venture expenses and the maintenance of reasonable and necessary
reserves as determined by the Managing Venturer.
ARTICLE VI
MANAGEMENT OF THE VENTURE
6.1 MANAGER. The provisions of this Article VI shall constitute
the "management agreement" in respect of the MRI Center between TME and the
Joint Venture referenced in Section A of the Selling Agreement. The Manager
shall conduct, direct and exercise full control over all activities of the
Venture and shall manage the acquisition and operation of the MRI Center on a
day-to-day basis. In addition to the powers now or hereafter granted a venture
partner of a general partnership under applicable law or which are granted to
the Manager under any other provision of this Agreement, the Manager shall
(subject to the limitations expressed in Section 6.2 hereof) have full power and
authority to do all things deemed necessary or desirable by it to conduct the
business of the Venture, including, without limitation:
(i) the making of any expenditures, the borrowing of money, the
guaranteeing of indebtedness and other liabilities, the
issuance of evidences of indebtedness and the incurring of any
obligations it deems necessary for the conduct of the
activities of the Venture;
(ii) the acquisition, disposition, mortgage, pledge, encumbrance,
hypothecation or exchange of any or all of the assets of the
Venture;
(iii) the use of the assets of the Venture (including, without
limitation, cash on hand) for any Venture purpose and on any
terms it deems appropriate, including, without limitation, the
financings of the conduct of the activities
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and other operations of the Venture, the repayment of
obligations of the Venture and the purchase of other assets
for the Venture;
(iv) the negotiation and execution on any terms deemed desirable in
its discretion and the performance of any contracts,
conveyances or other instruments that it considers useful or
necessary to the conduct of the Venture's operation or the
implementation of its powers under this Agreement;
(v) the selection and dismissal of employees and outside
attorneys, accountants, consultants and contractors and the
determination of their compensation and other terms of
employment or hiring;
(vi) the maintenance of such insurance for the benefit of the
Venture and the Venturers as it deems necessary; and
(vii) the control of any matters affecting the rights and
obligations of the Venture, including the conduct of
litigation, the incurring of legal expenses and the settlement
of claims and litigation.
6.2 LIMITATIONS ON THE AUTHORITY OF THE MANAGER. Notwithstanding
the powers given to the Manager pursuant to Section 6.1 above, the Manager shall
not:
(i) Without the prior consent of the Venturers and the consent of
a majority in interest of the limited partners of TMEDP II (as
defined in the Memorandum) other than the Special Limited
Partner, cause the Venture to sell all or substantially all of
its assets;
(ii) Without the prior consent of the Venturers, cause the Venture
to incur any indebtedness except as permitted in Section 6.3
below.
6.3 INDEBTEDNESS. The Manager shall not cause the Venture to incur
any indebtedness other than (i) interim financing in an aggregate amount not
exceeding the unpaid balance of the "Investor Notes" (as defined in the
Memorandum), in the aggregate, which shall be due and payable upon payment of
the Investor Notes; (ii) trade indebtedness incurred in the ordinary course of
business; (iii) financing for the purpose of funding the total project cost
associated with the MRI Center, subject to the restrictions set forth in this
Section 6.3; (iv) indebtedness for the purpose of providing working capital
reserves of no more than $500,000 for the Venture; or (v) indebtedness for the
purpose of purchasing additional equipment for the MRI Center. The Manager
hereby acknowledges that the initial four centers in which TMEDP II participates
through joint venture may each have fixed term debt not to exceed fifty percent
(50%) of the total project costs of such center. If after the first twenty-four
months of operation such centers are not achieving on a cumulative basis at
least sixty-five percent (65%) of forecasted operating income (as set forth in
the "Financial Forecasts") the Special Limited Partner will have the right to
cause the general partner of TMEDP II to reduce this leverage with respect to
specified centers by supplying the equity installments from Investor Notes to
the payment of such debt. If the general partner of TMEDP II is not so required
to
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reduce the indebtedness on any of the initial centers, then all subsequent
centers may be leveraged.
6.4 MANAGEMENT FEE. The Manager will receive a monthly management
fee equal to the greater of $5,000 or 6% of monthly gross revenues collected by
the Venture, payable on the last day of the calendar month. Gross revenues
collected shall include both the technical fee and professional fee associated
with scans, notwithstanding that such fees may be billed and collected
separately by the MRI Center and radiologist.
ARTICLE VII
BOOKS AND RECORDS
7.1 BOOKS AND RECORDS. The Venturers shall cause to be kept, at
the principal place of business of the Venture, full and proper ledgers and
other books of account of all receipts and disbursements and other financial
activities of the Venture. Reports to the Venturers shall include the following:
7.2 QUARTERLY REPORTS. The Managing Venturer shall cause to be
prepared and delivered to the Special Limited Partner within 45 days after the
close of each calendar quarter, an unaudited balance sheet, income statement and
statement of net cash flow, for the Venture, all in reasonable detail, as of the
last day of each such calendar quarter and for the calendar year to date
prepared on an income tax basis (accrual and in accordance with applicable
Treasury Regulations), and certified by the chief financial officer of the
Managing Venturer on behalf of the Venture to be true and correct to the best of
his knowledge and belief; an unaudited report summarizing the fees and other
remuneration paid by the Venture for such calendar quarter to any Venturer or
any Affiliate of any Venturer; an unaudited statement showing all cash
distributions (including Distributable Funds) and each Venturer's share of such
distributions.
7.3 ANNUAL REPORTS. The books of the Venture shall be, audited and
certified annually at the expense of the Venture by any firm of independent
public accountants of nationally recognized standing as approved by the
Venturers.
7.4 NOTICE OF CLAIMS. The Managing Venturer shall notify the
Special Limited Partner promptly of any material claim or litigation (of which
the Managing Venturer has actual knowledge) pending against the Managing
Venturer, the MRI Center or the Venture and of any intention (of which the
Managing Venturer has actual knowledge) by any insurance carrier to cancel or
fail to renew the Venture's, or MRI Center's insurance coverage.
7.5 BANK ACCOUNTS. All funds of the Venture shall be deposited in
the name of the Venture in such bank account or accounts as are selected from
time to time by the Manager, under such terms and conditions (including such
signatories) as the Manager shall approve; provided, any such bank selected
shall be required to have deposits of at least $100,000,000. Venture funds shall
not at any time be commingled with those of any other person or entity except
with the prior approval of the Venturers.
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7.6 PREPARATION OF TAX RETURNS. The Venturers shall arrange for
the preparation and timely filing of all returns of Venture income, gains,
deductions and losses necessary for federal and state income tax purposes. A
copy of the Venture's federal income tax return will be furnished to each
Venturer at the Venture's expense. The classification, realization and
recognition of income, gain, losses and deductions and other items shall be on
either the cash or accrual method of accounting for federal income tax purposes
as the Managing Venturer shall determine.
7.7 TAX ELECTIONS. Except as otherwise specifically provided
herein, the Venturers shall determine whether to make any available election
(including elections provided for in Section 168 of the Code).
7.8 TAX CONTROVERSIES. The Managing Venturer is designated as the
"tax matters partner" (as defined in Section 6231 of the Code), and is
authorized and required to represent the Venture (at the Venture's expense) in
connection with all examinations of the Venture's affairs by tax authorities,
including resulting administrative and judicial proceedings, and to expend
Venture funds for professional services and costs associated therewith.
7.9 TAXATION AS A PARTNERSHIP. No election shall be made by the
Venture, or any Venturer, for the Venture to be excluded from the application of
any of the provisions of Subchapter K, Chapter 1 of Subtitle A of the Code or
from any similar provisions of any state tax laws.
7.10 FISCAL YEAR. The fiscal year of the Venture shall end on
December 31 of each year.
ARTICLE VIII
TRANSFERS OF INTERESTS
No Venturer may sell, assign, transfer, mortgage, encumber or
otherwise hypothecate all or any part of its interest in any Venture, without
the prior approval of the other Venturers, provided TME shall be entitled to
pledge its Venture Interest to secure indebtedness of TME or indebtedness for
which TME is a guarantor. No transfer of a Venture interest which is in
violation of this Article shall be valid or effective, and the Venture shall not
recognize the same for the purposes of making payment of profits, income, return
of capital or other distributions with respect to such Venture Interest, or part
thereof. The Venture may enforce the provisions of this Article either directly
or indirectly or through its agents by entering an appropriate stop-transfer
order on its books or otherwise refusing to register or transfer or permit the
registration or transfer on its books of any proposed transfers not in
accordance with this Article.
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ARTICLE IX
DISSOLUTION, LIQUIDATION AND TERMINATION OF VENTURE
9.1 DISSOLUTION. The Venture shall be dissolved upon the
occurrence of any one of the following events (each such event referred to as an
"Event of Dissolution"):
(a) the expiration of its term as provided in Section 1.4, unless
prior to the expiration of the term the Venturers agree in writing to extend the
term;
(b) the sale by the Venture of all or substantially all of its
assets;
(c) the dissolution or bankruptcy of a Venturer;
(d) an entry of a decree of judicial dissolution of the Venture
pursuant to the provisions of the Texas Act; or
(e) any other event that causes a dissolution of a general
partnership pursuant to the Texas Act.
For purposes of this Section 9.1, bankruptcy of a Venturer shall be
deemed to have occurred when (u) it commences a voluntary proceeding seeking
liquidation, reorganization or other relief under any bankruptcy, insolvency or
other similar law now or hereafter in effect, (v) it executes and delivers a
general assignment for the benefit of it creditors, (w) it files an answer or
other pleading admitting or failing to contest the material allegations of a
petition filed against it in any proceeding of the nature described in clause
(u), (x) it seeks, consents to or acquiesces in the appointment of a trustee,
receiver or liquidator for it or for all or any substantial part of it
properties, (y) any involuntary proceeding of the nature described in clause (u)
has not been dismissed 120 days after the commencement thereof or (z) the
appointment without it consent or acquiescence of a trustee, receiver or
liquidator for it or for all or any substantial portion of it properties has not
been vacated or stayed within 90 days of such appointment or is not vacated
within 90 days after the expiration of any such stay.
9.2 WINDING-UP. Upon dissolution of the Venture, the Managing
Venturer shall serve as the Liquidator; provided if dissolution is caused by the
dissolution or bankruptcy of the Managing Venturer, the Liquidator shall be
selected by the other Venturer. The Liquidator shall not be entitled to receive
any compensation for its services except as otherwise permitted hereunder. Upon
dissolution, removal or resignation of the Liquidator, a successor and
substitute Liquidator (who shall have and succeed to all rights, powers and
duties of the original Liquidator) shall, within 30 days thereafter, be selected
by the Venturers, or, if there be none, by a court of competent jurisdiction.
The right to appoint a successor or substitute Liquidator in the manner provided
herein shall be recurring and continuing for so long as the functions and
services of the Liquidator are authorized to continue under the provisions
hereof, and every reference herein to the Liquidator will be deemed to refer
also to any such successor or substitute Liquidator appointed in the manner
herein provided. Except as expressly provided in this Article IX, the Liquidator
appointed in the manner provided herein shall have and may exercise, without
further authorization or consent of any of the parties hereto, (i) those powers
granted to the Liquidator under the Texas Act and (ii) all of the powers
conferred upon the Venturers under
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the terms of this Agreement (but subject to all of the applicable limitations,
contractual and otherwise, upon the exercise of such powers) to the extent
necessary or desirable in the good faith judgment of the Liquidator to carry out
the duties and functions of the Liquidator hereunder for and during such period
of time as shall be reasonably required in the good faith judgment of the
Liquidator to complete the winding up and liquidation of the Venture as provided
for herein. Subject to Section 9.3, the Liquidator shall as soon as commercially
reasonable liquidate the assets of the Venture, and apply and distribute the
proceeds of such liquidation in the following order of priority, unless
otherwise required by mandatory provisions of applicable law:
(a) the payment to, or establishment of reserves with respect to,
creditors of the Venture, other than the Venturers, in order of priority
provided by law; provided, however, that the Liquidator may place in escrow a
reserve of cash or other assets of the Venture for contingent liabilities in any
amount determined by the Liquidator to be appropriate for such purposes;
(b) then, to the Venturers which are creditors of the Venture; and
(c) finally, to all Venturers in proportion to their respective
Capital Accounts after taking into account adjustments to such Capital Accounts
to reflect the allocations made pursuant to Section 5.1 hereof; provided, that
each Venturer shall contribute to the Venture cash in an amount sufficient to
restore to zero any negative balance in its Capital Account by the end of the
taxable year of liquidation or 90 days after liquidation, whichever is later.
9.3 NO DISTRIBUTION IN KIND. Notwithstanding the provisions of
Section 9.2 which require the liquidation of the assets of the Venture, but
subject to the order of priorities set forth therein, if on dissolution of the
Venture the Liquidator determines that an immediate sale of part or all of the
Venture's assets would be impractical or would cause undue loss to the
Venturers, the Liquidator may, in its absolute discretion, defer for a
reasonable time the liquidation of any assets except those necessary to satisfy
liabilities of the Venture (other than those to Venturers) but shall not, under
any circumstances, make any distributions in kind of property (other than cash
or cash equivalents) to the Venturers unless agreed to in writing by all
Ventures.
9.4 RETURN OF CAPITAL. Except as set forth above in Section 9.2,
no Venturer shall be personally liable for the return of the Capital
Contributions of any other Venturer, or any portion thereof, it being expressly
understood, that any such return shall be made solely from Venture assets.
9.5 WAIVER OF PARTITION. Each Venturer hereby waives any rights to
partition of the Venture property.
ARTICLE X
INDEMNIFICATION
10.1 INDEMNITY. The Venturers, along with their respective
officers, directors, employees, and agents (including, without limitation, the
Manager) shall be indemnified and
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held harmless by the Venture from and against any and all claims, demands,
liabilities, costs, damages, expenses and causes of action of any nature
whatsoever arising out of or incidental to any act performed or omitted to be
performed by any of the Indemnities in connection with the business of the
Venture; provided, however, that, such act or omission was taken in good faith,
was reasonably believed by the respective Indemnitee to be in the best interest
of the Venture and within the scope of authority granted to such Indemnitee
under this Agreement, and did not constitute fraud, bad faith, willful
misconduct or gross negligence on behalf of such Indemnitee; and, provided,
further, that an indemnity under this Section shall be paid solely out of and to
the extent of Venture assets and shall not be a personal obligation of any
Venturer. All judgments against the Venture and the Indemnitees, or any of them,
wherein such Indemnitee (or Indemnitees) is entitled to indemnification, must
first be satisfied from Venture assets before the Indemnitees shall be
responsible for these obligations. The indemnification provided herein shall be
applicable whether or not negligence of the Indemnitee is alleged or proven.
10.2 SURVIVAL OF INDEMNITY. The benefits and burdens of this
Section, as to any Indemnitee, shall survive the withdrawal of a Venturer from
the Venture (whether by sale or other transfer of such Venturer's Venture
Interest or otherwise) with respect to acts or omissions prior to such
withdrawal.
ARTICLE XI
MISCELLANEOUS
11.1 NOTICES. Any and all notices, demands, consents, approvals,
requests or other communications that any of the parties to this Agreement may
desire or be required to give hereunder (collectively, "Notices") shall be in
writing and shall be either (i) given by U.S. registered or certified mail,
return receipt requested, with postage prepaid (except in the event of a postal
disruption, by strike or otherwise, in the United States) or (ii) sent by telex
or by personal delivery by a reputable courier service for next day delivery,
addressed, if to the Venture, to the address of its principal office, and if to
a Venturer, to the address set forth under such Venturer's name on Exhibit A
attached hereto.
Any Venturer may designate another addressee (and/or change its
address) for Notices hereunder by a Notice given pursuant to this Section. A
Notice sent in compliance with the provisions of this Section shall be deemed
delivered when actually received by party or parties to this Agreement to whom
sent. However, the time period in which a response to any Notice must be given
shall commence to run from the date of receipt by the addressee thereof or the
date of the return receipt of the Notice. Rejection or other refusal to accept
or the inability to deliver because of a changed address or addressee of which
no Notice was given as provided in this Section shall be deemed to be receipt of
the Notice sent.
11.2 DISCHARGE OF OBLIGATIONS. Each of the Venturers agree that
they will discharge their proper share (as provided elsewhere in this Agreement)
of all obligations and liabilities of the Venture, and will hold all other
parties hereto harmless from all claims and losses arising out of their failure
to do so. It is recognized by the Venturers that the business of the Venture
involves substantial risks and hazards; and it is agreed by all parties that
such risks
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and hazards, and all costs hereunder, will be borne by the Venturers in
proportion to the Percentage Interests hereunder. Notwithstanding any other
provisions hereof, (a) each Venturer shall be severally liable for its aforesaid
pro rata portion of all Venture liabilities without limitation as to amount, and
agrees to pay and discharge same and (b) the Managing Venturer shall never be
held liable or responsible to the Venturers for, nor shall the obligations of
the Venturer hereunder to share in liabilities be diminished by, any acts done
or omitted to be done in good faith in the performance of any of the provisions
of this Agreement, or for the negligence, or other fault of the agents,
independent contractors or employees of the Managing Venturer, it being the
purpose and intention of this provision that all liabilities of the Venture
shall be borne by the Venturers in proportion to the Percentage Interests.
11.3 ENTIRE AGREEMENT. This Agreement, including any exhibits
attached hereto, constitutes the entire agreement between the parties hereto
pertaining to the subject matter hereof, fully supersedes any and all prior
agreements or understandings between the parties hereto pertaining to the
subject matter hereof.
11.4 SECTION HEADINGS. The section headings used in this Agreement
are intended solely for convenience of reference and shall not in any manner
amplify, limit, modify or otherwise be used in the interpretation of any of the
provisions hereof.
11.5 GENDER. As used in this Agreement, the masculine, feminine or
neuter gender, and the singular or plural number, shall be deemed to include the
others whenever the context so indicates or requires.
11.6 PARTIES IN INTEREST. Except as expressly provided to the
contrary herein, this Agreement shall be binding upon each successor to and
assign of the parties and inure to the benefit of each permitted successor to
and assign of the parties.
11.7 FURTHER ASSURANCES. Each of the parties hereto does hereby
covenant and agree on behalf of itself, its successors and its assigns, without
further consideration, to prepare, execute, acknowledge, file, record, publish
and deliver such other instruments, documents and statements, and to take such
other action, as may be required by law or necessary to effectively carry out
the purposes of this Agreement.
11.8 COUNTERPARTS. This Agreement may be executed in several
counterparts and all such executed counterparts shall constitute a single
agreement, binding on all of the parties hereto, their successors and their
assigns, notwithstanding that all of the parties hereto are not signatories to
the original or to the same counterpart.
11.9 LEGAL ACTION AND FEES. In the event of any controversy, claim
or dispute between the parties hereto arising out of or relating to this
Agreement, the prevailing party in one or more claims shall be entitled to
recover from the nonprevailing party in such claims its reasonable expenses,
including attorneys' fees, in respect of the claims on which it prevailed.
11.10 SEVERABILITY. Any provisions of this Agreement which may be
prohibited by law or otherwise held invalid shall be ineffective only to the
extent of such prohibition or invalidity and shall not invalidate or otherwise
render ineffective the remaining provisions of this Agreement.
12
<PAGE>
11.11 GOVERNING LAW. This Agreement, including its existence,
validity, construction and operating effect, and the rights of each of the
parties hereto, shall be governed by and construed in accordance with the laws
of the State of Texas.
11.12 REFERENCES AND INCLUSIONS. All Exhibits annexed or attached
hereto are expressly made a part of this Agreement. All references herein to
numbered Articles or Sections and to lettered Exhibits are references to the
Articles and Sections of this Agreement and the Exhibits annexed to and made a
part of this Agreement, unless expressly otherwise designated herein. The terms
"include", "including" and similar terms shall be construed as if followed by
the phrase "without being limited to."
11.13 EXTENSION NOT A WAIVER. No delay or omission in the exercise
of any power, remedy or right herein provided or otherwise available to a
Venturer or the Venture shall impair or affect the right of such Venturer or the
Venture thereafter to exercise the same. Any extension of time or other
indulgence granted to a Venturer hereunder shall not otherwise alter or affect
any power, remedy or right of any other Venturer or of the Venture, or the
obligations of the Venturer to whom such extension or indulgence is granted.
11.14 CONSTRUCTION. None of the provisions of this Agreement shall
be for the benefit of or enforceable by any creditor of the Venture.
11.15 CONSENTS. Any consent or approval to any act or matter
required under this Agreement must be in writing and shall apply only with
respect to the particular act or matter to which such consent or approval is
given, and shall not relieve any Venturer from the obligation, to obtain the
consent or approval, as applicable, wherever required under this Agreement to
any other act or matter.
11.16 AMENDMENTS. This Agreement may be amended only upon the
consent of all of the Venturers.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement effective for all purposes as of the date herein above written.
TME DIAGNOSTIC PARTNERS II, LTD.
By: First TME Partners, Inc.,
its general partner
/s/ Cherrill Farnsworth
--------------------------------------
Cherrill Farnsworth, President
TME, INC.
/s/ Cherrill Farnsworth
--------------------------------------
Cherrill Farnsworth, President
<PAGE>
EXHIBIT "A"
JEFFERSON MRI, JOINT VENTURE
<CAPTION>
VENTURER'S NAME & ADDRESS CAPITAL CONTRIBUTION PERCENTAGE INTEREST
------------------------- -------------------- -------------------
TME Diagnostic Partners II, Ltd. $ 2,100,908.85 95%
c/o First TME Partners, Inc.
333 North Sam Houston Parkway East
Suite 500
Houston, Texas 77060
TME, Inc. $ 110,574.15 5%
333 North Sam Houston Parkway East
Suite 500
Houston, Texas 77060
-------------------- ---
$ 2,211,483.00 100%