Joint Venture Agreement of Woodbridge MRI - TME Partners III Ltd. and TME Inc.
JOINT VENTURE AGREEMENT
OF
WOODBRIDGE MRI, JOINT VENTURE
THIS JOINT VENTURE AGREEMENT is entered into effective as of the 5th day
of May, 1992 by and between TME Partners III, Ltd., a Texas limited partnership
(hereinafter referred to as "TME III"), 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 "Woodbridge 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 Sam Houston Parkway East, 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, 2031
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
direction of the management and policies of a Person, whether through
ownership of voting securities, by contract or otherwise.
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"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 by the
General Partner on behalf of the Partnership.
"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 TME III.
"MEMORANDUM" means that certain Confidential Offering Memorandum of
TME III dated March 20, 1991 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 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.
"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 TME III
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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 TME III, 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 Amended and Restated Sales
Agency Agreement dated as of May 8, 1991, among TME, First TME Partners,
Inc., PaineWebber Incorporated, and PaineWebber Diagnostic, Inc., and that
certain Sales Agency Agreement dated as of May 8, 1991, among TME, First
TME Partners, Inc., and The Chase Manhattan Bank, N.A.
"TEXAS ACT" means the Texas Uniform Partnership Act, TEX. REV. CIV.
STAT. ANN. art. 6132b, 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 TME III 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.
(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
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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 11 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 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
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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 TME III (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 TME III participates
through joint ventures 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 TME III 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 TME III is not so required
to 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 radiologists.
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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. Such books of account shall be maintained in
accordance with the accrual method of accounting. 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 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.
7.4 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 $25,000. Venture funds shall not
at any time be commingled with those of any other person or entity (including
any other Venture).
7.5 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.
7.6 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).
7.7 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
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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.
7.8 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.
7.9 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 the Venture, without the prior
approval of the other Venturer, provided TME shall be entitled to pledge its
Venture Interest to secure indebtedness of TME or indebtedness for which TME is
a guarantor. No transferee or assignee of an interest in the Venture may,
without the consent of the other Venturer, which consent may be given or
withheld within the sole discretion of the Venturer, become a Venturer. 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.
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.
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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 its 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 its
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 its 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 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
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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 Venturers.
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 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.
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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
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.
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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 Competition. TME agrees not to acquire an interest in or otherwise
participate in (or to the extent within its control allow any Affiliate to
acquire an interest in or otherwise participate in) management of any medical
diagnostic imaging center within a 15 mile radius of the Center without the
prior written consent of the Special Limited Partner, provided, however, that
this covenant specifically excludes existing diagnostic imaging centers in which
TME or a TME Affiliate may currently have an ownership interest or otherwise
manage.
11.10 Legal Action and Fees. In the event of any controversy, claim of
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.
11.11 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.
11.12 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.
11.13 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."
12
<PAGE>
11.14 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.
11.15 Construction. None of the provisions of this Agreement shall be for
the benefit of or enforceable by any creditor of the Venture.
11.16 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.
11.17 Amendments. This Agreement may be amended only upon the consent of
all of the Venturers.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
effective for all purposes as of the date herein above written.
TME PARTNERS III, LTD.
By: First TME Partners, Inc.
General Partner
/s/ Cherrill Farnsworth
-------------------------------------
Cherrill Farnsworth
President and Chief Executive Officer
TME, INC.
/s/ Cherrill Farnsworth
-------------------------------------
Cherrill Farnsworth
President and Chief Executive Officer
13
<PAGE>
EXHIBIT "A"
WOODBRIDGE MRI, JOINT VENTURE
<CAPTION>
Venturer's Name and Address Capital Contribution Percentage Interest
--------------------------- -------------------- -------------------
TME Partners III, Ltd. $1,472,500 95%
c/o First TME Partners, Inc.
333 North Sam Houston
Parkway East, Suite 500
Houston, Texas 77060
TME, Inc. $ 77,500 5%
333 North Sam Houston
Parkway East, Suite 500
Houston, Texas 77060
----------
Total $1,550,000
<PAGE>
First Amendment to Joint Venture Agreement
of
Woodbridge, MRI, Joint Venture
This FIRST AMENDMENT TO JOINT VENTURE AGREEMENT ("Amendment") is entered
into effective as of the 15th day of May, 1992, by and between TME Partners III,
Ltd. ("TMEIII") and TME, Inc. ("TME"), as venture partners.
RECITALS
A. On May 5, 1992, TME III and TME associated themselves in the operation
of a general partnership pursuant to the provisions of the Texas Uniform
Partnership Act.
B. The initial joint venture agreement by and between TMEIII and TME
states that the name of the Venture shall be Woodbridge, MRI.
NOW THEREFORE, in consideration of the promises and covenants herein
contained and for other good and valuable consideration the parties agree as set
forth herein.
I. Article I. Formation of the Partnership is revised to read as follows:
1.2 NAME. The name of the Venture shall be, and the business of the
Venture shall be conducted under the name of "MRI of Woodbridge." The
Venture's business may be conducted under any other name or names deemed
advisable by the Managing Venturer.
IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment
on May 15th, 1992, effective for all purposes as of May 5, 1992.
TME PARTNERS III, LTD. TME, INC.
Managing Venturer
By: First TME Partners, Inc.
General Partner /s/ Cherrill Farnsworth
-----------------------------------
Cherrill Farnsworth
President
/s/ Stephen W. Jackson
---------------------------------
Stephen W. Jackson
Executive Vice President -Finance
2