Exhibit 10.5
JOINT VENTURE AGREEMENT
BETWEEN
NUWAY MEDICAL, INC.
AND
XXXXXX XXXXXXX,
DOING BUSINESS AS
RASHEED AND ASSOCIATES,
WITH REGARD TO THE FORMATION OF
NUWAY SPORTS MEDICINE VENTURES LLC,
A CALIFORNIA LIMITED LIABILITY COMPANY
DECEMBER 1, 2002
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NUWAY SPORTS MEDICINE VENTURES LLC
TABLE OF CONTENTS
PAGE
ARTICLE I FORMATION OF LIMITED LIABILITY COMPANY..................................................................2
1.1 Formation and Effective Date of Agreement.......................................................2
1.2 Name and Principal Place of Business............................................................2
1.3 Agent for Service of Process....................................................................2
1.4 Agreement.......................................................................................2
1.5 Business........................................................................................2
1.6 Definitions.....................................................................................2
1.7 Term............................................................................................3
ARTICLE II MEMBERSHIP.............................................................................................3
2.1 Members.........................................................................................3
2.2 Representations and Warranties..................................................................3
2.3 Additional Members..............................................................................4
2.4 Resignation or Withdrawal of a Member...........................................................4
ARTICLE III CONTRIBUTIONS TO CAPITAL; ISSUANCE OF SHARES..........................................................4
3.1 LLC Shares......................................................................................4
3.2 Contributions...................................................................................4
3.3 Issuance of Shares; Percentage Ownership of Members.............................................4
3.4 Record of Capital Account.......................................................................5
ARTICLE IV RESPONSIBILITIES OF THE JOINT VENTURERS................................................................5
4.1 Responsibilities of NuWay.......................................................................5
4.2 Responsibilities of KA NuWay....................................................................5
4.3 Joint Responsibilities..........................................................................5
ARTICLE V MANAGEMENT..............................................................................................5
5.1 Management by Managers..........................................................................5
5.2 Authority of Managers...........................................................................5
5.3 Approval Generally Required.....................................................................6
5.4 Unanimous Approval Required.....................................................................6
5.5 Meetings........................................................................................7
5.6 Action without Meeting..........................................................................7
5.7 Tax Matters Partner.............................................................................7
5.8 Telephonic Participation........................................................................7
5.9 Compensation of Managers........................................................................7
ARTICLE VI OFFICERS...............................................................................................7
6.1 Officers........................................................................................7
6.2 Election of Officers............................................................................7
6.3 Compensation of Officers........................................................................7
6.4 Duties of President.............................................................................8
6.5 Duties of Chief Financial Officer...............................................................8
6.6 Duties of Secretary.............................................................................8
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ARTICLE VII action by Members.....................................................................................8
7.1 Meetings of Members.............................................................................8
7.2 Calling Meetings................................................................................8
7.3 Quorum..........................................................................................9
7.4 Voting Rights...................................................................................9
7.5 Action without Meeting..........................................................................9
7.6 Telephonic Participation........................................................................9
ARTICLE VIII NOTICES..............................................................................................9
8.1 Notices.........................................................................................9
8.2 Waiver of Notice...............................................................................10
ARTICLE IX ACCOUNTING AND RECORDS................................................................................10
9.1 Financial and Tax Reporting....................................................................10
9.2 Books and Records..............................................................................10
9.3 Tax Returns....................................................................................10
ARTICLE X ALLOCATIONS............................................................................................10
10.1 Allocation of Net Income or Net Loss...........................................................10
10.2 Time of Allocations............................................................................11
10.3 Special Tax Provisions.........................................................................11
ARTICLE XI DISTRIBUTIONS.........................................................................................12
11.1 Distribution Shares............................................................................12
11.2 Tax Distributions..............................................................................12
11.3 Quarterly Profit Distributions.................................................................12
11.4 Distributions in Kind..........................................................................12
11.5 Restriction on Distributions and Withdrawals...................................................12
ARTICLE XII TRANSFER OF MEMBERSHIP...............................................................................13
12.1 Right of First Refusal.........................................................................13
12.2 Transfer.......................................................................................13
12.3 Transfer Void..................................................................................14
12.4 Admission of Transferee........................................................................14
ARTICLE XIII TERMINATION.........................................................................................14
13.1 Termination....................................................................................14
13.2 Effect of Bankruptcy, Death, etc...............................................................14
13.3 Winding Up and Certificate of Cancellation.....................................................14
13.4 Distribution of Property.......................................................................14
ARTICLE XIV DEFINITIONS..........................................................................................15
14.1 Definitions....................................................................................15
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ARTICLE XV MISCELLANEOUS.........................................................................................16
15.1 Amendment......................................................................................16
15.2 Power of Attorney..............................................................................16
15.3 Legends........................................................................................17
15.4 Withholding Taxes..............................................................................17
15.5 Further Assurances.............................................................................17
15.6 Binding Effect.................................................................................17
15.7 Governing Law..................................................................................17
15.8 Choice of Forum................................................................................17
15.9 Attorneys' Fees................................................................................17
15.10 Notices........................................................................................18
15.11 Severability...................................................................................18
15.12 Counterparts...................................................................................18
15.13 Entire Agreement...............................................................................18
15.14 No Third Party Beneficiary.....................................................................19
15.15 Preparation of Agreement.......................................................................19
15.16 Acknowledgement of Risk........................................................................19
15.17 Public Disclosure of Information...............................................................19
EXHIBIT A ARTICLES OF ORGANIZATION
EXHIBIT B CONSULTING AGREEMENT
EXHIBIT C BUSINESS PLAN
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NuWay sports medicine ventures llc
JOINT VENTURE AGREEMENT
THIS JOINT VENTURE AGREEMENT is made as of the date mentioned
above, by and between, Xxxxxx Xxxxxxx, doing business as Rasheed and Associates
("KA"), and NUWAY MEDICAL, INC., ("Nuway") a Delaware corporation, as members of
NuWay Sports Medicine Ventures LLC, a California limited liability company (the
"JV" or the "LLC").
RECITALS
A........KA has been a development stage business for
approximately eighteen months and has developed key contacts, a business plan
attached hereto and incorporated by reference, key vendor relationships and
numerous prospective customers who have expressed a willingness to enter into
contractual arrangements with the newly formed Joint Venture.
B........Nuway is a healthcare company in the medical products
and devices business, the main focus is bringing real world solutions to
healthcare providers. The company prides itself on its technological innovations
and applications. The company also acquires healthcare services companies to
take advantage of economies of scale and vertical market opportunities. It is a
public company traded under the symbol: NMED.
C. .....KA in its search to pursue its business plan is
bringing Nuway into the project by agreeing to enter into a joint venture
agreement with Nuway. The intent of the parties is to work together to profit
from the newly formed Joint Venture.
D........As a part of this new joint venture between KA and
Nuway, Nuway is agreeing to guaranty for KA, the payment of cash or freely
traded shares of stock in Nuway pursuant to a Consulting Agreement, by and
between Nuway and KA, which is attached hereto and incorporated by reference and
in exchange for each parties ongoing contribution to the success of the joint
venture as described herein.
E........In furtherance of these objectives, KA and Nuway
agrees to form a California limited liability company named Nuway Sports
Medicine Ventures, hereinafter referred to as the ("JV"), which among other
products will include a system referred to as NuWay Medicals Player Record
Library System, which the JV will trademark as appropriate, and each party shall
contribute it's intellectual property and any and all related assets to in
exchange for it's ownership of the newly formed JV, which shall be allocated 49%
to KA and 51% to Nuway. This Joint Venture Agreement shall serve as the
Operating Agreement required by California Corporation's code section 17050(a).
NOW THEREFORE, in addition to the representations and
agreements contained above, for good and valuable consideration do the parties
hereto agree as follows:
ARTICLE I
FORMATION OF LIMITED LIABILITY COMPANY
1.1 FORMATION AND EFFECTIVE DATE OF AGREEMENT. The Members have formed the LLC
pursuant to the Xxxxxxx-Xxxxxx Limited Liability Company Act (the "ACT") on
December 1, 2002 by causing Articles of Organization conforming to the
requirements of the Act attached hereto as EXHIBIT A to be filed with the office
of the Secretary of State of the State of California.
1.2 NAME AND PRINCIPAL PLACE OF BUSINESS. Unless and until amended in accordance
with this Agreement and the Act, the name of the LLC will be "NuWay sports
medicine ventures llc." The principal place of business of the LLC in California
shall initially be 00000 Xxxxx Xxxxxx Xxxxx, Xxxxx 000, Xxxxxx Xxxxx, 00000, or
in such other place or places as the Managers from time to time unanimously
determine.
1.3 AGENT FOR SERVICE OF PROCESS. Until such time as the Managers have appointed
a different person to act in the State of California as the agent of the LLC for
service of process, the LLC's agent for service of process in the State of
California shall be as set forth in the Articles of Organization.
1.4 AGREEMENT. For and in consideration of the mutual covenants herein contained
and for other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the Members executing this Agreement hereby agree
to the terms and conditions of this Agreement, as it may from time to time be
amended. It is the express intention of the parties hereto that this Agreement
shall be the sole statement of agreement among them with respect to this joint
venture, and, except to the extent a provision of this Agreement expressly
incorporates federal income tax rules by reference to sections of the Code or
Treasury Regulations or is expressly prohibited or ineffective under the Act,
the Agreement shall govern even when inconsistent with or different from the
provisions of the Act or any other law or rule. It is the express intention of
the parties hereto that this Agreement fulfill the requirement of corporations
code section 17050(a). To the extent any provision of the Agreement is
prohibited or ineffective under the Act, the Agreement shall be considered
amended to the smallest degree possible in order to make the agreement effective
under the Act. In the event the Act is subsequently amended or interpreted in
such a way to make valid any provision of the Agreement that was formerly
invalid, such provision shall be considered to be a part of this Agreement from
and after the date of such interpretation or amendment.
1.5 BUSINESS. The purpose of the LLC is to engage in any lawful act or activity
for which an LLC may be organized under the Act, provided that the LLC shall not
engage in the practice of any profession requiring a license under the laws of
the State of California without first obtaining such license. The joint venture
contemplated by the parties for the formation of the LLC involves the
development, production, marketing and distribution of a medical device produce
to be used by professional and amateur sports organizations, as more fully
described in the business plan attached as Exhibit "C".
1.6 DEFINITIONS. Terms not otherwise defined in this Agreement shall have the
meanings set forth in Article XIV.
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1.7 TERM. The term of the LLC shall begin upon the filing of the Articles of
Organization and shall continue until November 30, 2102 unless its existence is
sooner terminated pursuant to Articles XII or XIII of this Agreement.
ARTICLE II
MEMBERSHIP
2.1 MEMBERS. The Members of the LLC are NuWay and KA, each of whom is admitted
to the LLC as a Member as of the date this Agreement becomes effective.
2.2 REPRESENTATIONS AND WARRANTIES. Each Member hereby represents and warrants
to the LLC and each other Member as follows:
(a) AUTHORIZATION. If the Member is an organization, that it is duly organized,
validly existing, and in good standing under the law of its state of
organization and that it has full power and authority to execute and enter into
this Agreement and to perform its obligations hereunder and that all actions
necessary for the due authorization, execution, delivery and performance by that
Member of this Agreement have been duly taken.
(b) COMPLIANCE WITH OTHER INSTRUMENTS. The Member's authorization, execution,
delivery, and performance of this Agreement do not conflict with any other
agreement or arrangement to which such Member is a party or by which it or he is
bound.
(c) PURCHASE ENTIRELY FOR OWN ACCOUNT. The Member is acquiring his interest in
the LLC for the Member's own account for investment purposes only and not with a
view to or for the resale, distribution, subdivision or fractionalization
thereof and has no contract, understanding, undertaking, agreement or
arrangement of any kind with any Person to sell, transfer or pledge to any
Person his interest or any part thereof nor does such Member have any plans to
enter into any such agreement.
(d) INVESTMENT EXPERIENCE. By reason of their business or financial experience,
the Members have the capacity to protect their own interests in connection with
the transactions contemplated hereunder, are able to bear the risks of an
investment in the LLC, and at the present time could afford a complete loss of
such investment.
(e) DISCLOSURE OF INFORMATION. The Member is aware of the LLC's business affairs
and financial condition and has acquired sufficient information about the LLC to
reach an informed and knowledgeable decision to acquire an interest in the LLC.
(f) FEDERAL AND STATE SECURITIES LAWS. Assuming federal and state securities
laws apply to the interests described herein, the Member acknowledges that the
interests have not been registered under the Securities Act of 1933 or any state
securities laws, inasmuch as they are being acquired in a transaction not
involving a public offering, and, under such laws, may not be resold or
transferred by the Member without appropriate registration or the availability
of an exemption from such requirements. In this connection, the Member
represents that it is familiar with SEC Rule 144, as presently in effect, and
understands the resale limitations imposed thereby and by the Securities Act of
1933.
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2.3 ADDITIONAL MEMBERS. Additional Persons may be issued Shares of the LLC and
admitted to the LLC as Members at whatever times and upon such terms and
conditions as the Managers may unanimously determine. The admission of
additional Members shall be effected by amendment of this Agreement by the
unanimous consent of all Members.
2.4 RESIGNATION OR WITHDRAWAL OF A MEMBER. Subject to the provisions for
transfer contained in Article XI, no Member shall have the right to resign or
withdraw from membership in the LLC or withdraw his interest in the capital,
except as may be approved unanimously by the Members.
ARTICLE III
CONTRIBUTIONS TO CAPITAL; ISSUANCE OF SHARES
3.1 LLC SHARES. Ownership of the LLC shall be divided into and represented by
shares of the LLC (the "Shares"). The total number of Shares which the LLC is
authorized to issue is one thousand (1,000). Additional Shares may from time to
time be authorized, and the Shares may from time to time be divided into classes
and series, as unanimously agreed upon by the Members and as evidenced by
amendment of this Agreement.
3.2 CONTRIBUTIONS. Contemporaneously with or forthwith after the execution of
this Agreement, each Member shall contribute assets to the capital of the LLC as
set forth below. No Member shall be required to make any additional
contributions to the capital of the LLC, except as may be unanimously agreed
upon by the Members.
(a)......NuWay shall contribute its resources and project
management abilities, and its access to capital to fund the growth of the JV;
(b) KA shall contribute business and strategic plans, and marketing, sales, and
customer services to the LLC, as more particularly described in a consulting
agreement substantially in the form attached hereto as EXHIBIT B, to be executed
by and between NuWay and KA;
3.3 ISSUANCE OF SHARES; PERCENTAGE OWNERSHIP OF MEMBERS. In exchange for the
initial contributions to capital by the Members pursuant to this Section, the
LLC shall issue the following shares:
(a) NuWay shall be issued 510 Shares (making its percentage ownership of the LLC
51%),
(b) KA shall be issued 490 Shares (making his percentage ownership of the LLC
49%),
Certificates shall not be issued for the Shares, unless deemed
necessary and appropriate by the Managers or Members. Unless certificates are
issued, ownership of the Shares shall be evidenced by the allocation of Shares
to each Member in this Agreement.
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3.4 RECORD OF CAPITAL ACCOUNT. The Managers shall keep a record which shall be
maintained with the books and records of the LLC of the Capital Contributions
and Capital Account of each Member, and, if certificates for Shares are issued a
ledger of Share issuances and transfers.
ARTICLE IV
RESPONSIBILITIES OF THE JOINT VENTURERS
4.1 RESPONSIBILITIES OF NUWAY. In addition to its contribution as stated herein,
Nuway shall be responsible for the project management duties relating to newly
acquired customers, vendor selection support and management and all financial
and corporate management duties of the JV, including those described on Exhibit
"C".
4.2 RESPONSIBILITIES OF KA NUWAY. In addition to its contribution as stated
herein, KA shall be responsible for all marketing, sales, and customer service
functions of the JV, as more fully described in Exhibit "B", attached hereto and
incorporated by reference.
4.3 JOINT RESPONSIBILITIES. In addition to the other obligations and
responsibilities outlined herein, NuWay and KA shall develop quarterly operating
budgets and shall be obligated to remain within those operating budgets. To the
extent either party exceeds the amount allocated to said party in the jointly
developed budgets, and in the absence of any other agreement, the party
exceeding the amount allocated to it in the budget shall be obligated to
contribute cash to cover the overage incurred by the JV, which shall be
allocated to capital contribution, and shall not be repayable by the JV to the
party making the contribution.
ARTICLE V
MANAGEMENT
5.1 MANAGEMENT BY MANAGERS. The LLC shall be managed and controlled by Managers
(the "BOARD OF MANAGERS") who need not be Members of the LLC. Four Managers are
authorized by this Agreement, two of whom may be appointed by NuWay, in NuWay's
sole and absolute discretion, and two of whom may be appointed by KA, in KA's
sole and absolute discretion. Two individuals are hereby appointed to the Board
of Managers at this time: Xxxxxx Xxxxxxx, appointed by NuWay, and Xxxxxx
Xxxxxxx, appointed by KA.
The persons serving as Managers may be removed or replaced at
any time, and the number of Managers authorized may be amended, with the
unanimous approval of the Members. Each time a Manager withdraws, is removed or
otherwise ceases to be a Manager, or there is a vacancy on the Board of Managers
for any other reason, the remaining Managers shall promptly notify the Members,
who shall elect a new Manager to fill such vacancy. If the Members cannot
unanimously agree on a Manager to fill a vacancy, the spot on the Board of
Managers shall remain vacant until the Members can unanimously agree on a new
Manager.
5.2 AUTHORITY OF MANAGERS. The business of the LLC shall be managed by and under
the direction of the Board of Managers, who may exercise all such powers of the
LLC and do all such lawful acts and things as are not by statute or by the
Articles of Organization or by this Agreement directed or required to be
exercised or done by the Members. It is intended that the powers and authority
of the Board of Managers shall be substantially the same as the powers and
authority of directors of a corporation formed under the laws of the State of
California.
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5.3 APPROVAL GENERALLY REQUIRED. Unless the Act or this Agreement requires a
greater number, all actions of the Managers shall require the approval of a
majority of the Board of Managers.
5.4 UNANIMOUS APPROVAL REQUIRED. In addition to other provisions of this
Agreement that require the unanimous vote of all Managers to take action on
behalf of the LLC, the following actions cannot be taken by the Managers on
behalf of the LLC without the unanimous consent of all Managers:
(a) Any amendments to this Agreement or the Articles of Organization of the LLC.
(b) (i) a liquidation, dissolution or other reorganization of the LLC, (ii) the
acquisition of the LLC by another entity by means of any transaction or series
of related transactions (including, without limitation, any reorganization,
merger or consolidation), or (iii) the sale of ten percent (10%) or more of the
assets of the LLC in a single transaction or series of related transactions (all
such transactions described in these clauses (ii) and (iii), a "COMPANY SALE").
(c) The acquisition by the LLC of another entity by means of any transaction or
series of related transactions (including, without limitation, any
reorganization, merger or consolidation), or the purchase of assets of another
entity in a transaction or series of transactions whose value is greater than
ten percent (10%) of the value of the assets of the LLC measured immediately
prior to any such asset purchase (all transactions in this paragraph (c), a
"COMPANY ACQUISITION").
(d) The issuance of any debt or equity securities of the LLC, the incurrence of
any debt by the LLC, or the making or repayment by the LLC of any loans,
advances or guarantees.
(e) The establishment of the LLC's annual operating budgets and any material
changes to those budgets.
(f) The payment of any salaries, fees, bonuses, benefits or other forms of
remuneration to directors, officers, employees or consultants to the LLC in
excess of amounts specifically set forth in employment agreements approved by
the unanimous vote of the Managers or in the operating budget approved by the
unanimous vote of the Managers.
(g) The authorization or payment of any dividends or other LLC distributions or
the cancellation, redemption or repurchase of any Shares of the LLC.
(h) Any material change in the business of the LLC, in the name of the LLC, or
the engagement in any business activity other than the LLC's current business.
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(i) The creation of any subsidiary of the LLC, or, after creating a subsidiary
with the unanimous approval of the Managers, the taking of any of the foregoing
actions in this Section 4.4 with respect to such subsidiary.
5.5 MEETINGS. The Managers of the LLC may hold meetings, both regular and
special, either within or outside the State of California. The meetings may be
held at such time and place as shall be specified in a notice given as
hereinafter provided at least two (2) days in advance of such meeting, or as
shall be specified in a written waiver signed by all of the Managers. Regular
meetings of the Managers may be held without notice at such time and at such
place as shall from time to time be determined by the Managers.
5.6 ACTION WITHOUT MEETING. Any action required or permitted to be taken by the
Managers may be taken without a meeting, if all Managers consent thereto in
writing, and the writing or writings are filed with the books and records of the
LLC.
5.7 TAX MATTERS PARTNER. The Members hereby authorize the Managers to designate
from time to time one of the Managers to act as the tax matters partner pursuant
to Code Section 6231(a)(7).
5.8 TELEPHONIC PARTICIPATION. Any Manager shall have the right to attend any
properly called and convened meeting by means of telephonic communications which
permit each person attending the meeting, in person or by telephone, to hear and
speak to each other person so present.
5.9 COMPENSATION OF MANAGERS. Unless otherwise unanimously approved by the
Members, the Managers shall not be entitled to any compensation for services or
activities undertaken in their capacity as a Manager of the LLC, but each
non-employee Manager shall be entitled to be reimbursed in full for any costs or
expenses reasonably incurred in performing the functions of a Manager hereunder.
ARTICLE VI
OFFICERS
6.1 OFFICERS. The officers of the LLC shall include a President, a Chief
Financial Officer and a Secretary to be appointed by the unanimous vote of the
Managers. The Managers acting by unanimous vote of the may create other offices
and elect persons to hold such other offices as they deem appropriate. Any
number of offices may be held by the same person. The duties of any officers
other than the President shall be established from time to time by the acting by
unanimous vote of the Managers or by the President acting under authority
granted by the Managers acting by unanimous vote.
6.2 ELECTION OF OFFICERS. Each officer shall hold office for such terms and
shall exercise such powers and perform such duties as shall be determined from
time to time by the Managers.
6.3 COMPENSATION OF OFFICERS. Subject to any applicable employment agreement,
the salaries of all officers and agents of the LLC shall be reasonably fixed by
the unanimous vote of the Managers or by the President acting under authority
granted by the Managers voting unanimously.
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6.4 DUTIES OF PRESIDENT. The President shall be the chief executive officer of
the LLC and, unless the Managers acting by unanimous vote determine otherwise,
shall preside at all meetings of the Members. He shall have general and active
management of the day-to-day business and affairs of the LLC, which may include
serving as a member of the management of any subsidiary of the LLC, and shall
see that all orders and resolutions of the Managers are carried into effect.
6.5 DUTIES OF CHIEF FINANCIAL OFFICER. The Chief Financial Officer shall be the
chief accounting officer of the LLC and shall be responsible for maintaining all
financial records of the LLC, and for preparing financial statements of the LLC
(with the assistance of outside independent auditors, as prescribed by the
Managers).
6.6 DUTIES OF SECRETARY. The Secretary shall attend all meetings of the Members
and record all the proceedings of the meetings of the Members in a book to be
kept for that purpose. He shall give, or cause to be given, notice of all
meetings of the Members and special meetings of the Members, and shall perform
such other duties as may be prescribed by the Managers acting by unanimous vote.
ARTICLE VII
action by Members
7.1 MEETINGS OF MEMBERS. All meetings of the Members shall be held at such place
as may be fixed from time to time by the Managers and stated in the notice of
the meeting. Meetings of Members for any purpose may be held at such time and
place as shall be stated in the notice of the meeting or in a duly executed
waiver of notice thereof. The Members are not required to meet annually or at
any other regular interval, but only when necessary to approve matters that
require Member approval hereunder or when a meeting is otherwise called as
provided herein.
7.2 CALLING MEETINGS.
(a) Meetings of the Members, for any purpose or purposes, may be called by the
Managers and shall be called by the President at the request in writing of any
Manager, or at the request in writing of any Member, provided that such Managers
or Members shall have stated with specificity the purpose or purposes of the
proposed special meeting.
(b) Written notice of a meeting stating the place, date and hour of the meeting
and the purpose or purposes for which the meeting is called, shall be given not
less than ten (10) nor more than sixty (60) days before the date of the meeting,
to each Member entitled to vote at such meeting.
(c) Business transacted at any meeting of Members shall be limited to the
purposes stated in the notice.
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7.3 QUORUM.
(a) No less than a majority of the holders of all of the Shares issued and
outstanding and entitled to vote thereat, present in person or represented by
proxy, shall constitute a quorum at a meeting of the Members for the transaction
of business, except as otherwise provided by statute. If such quorum shall not
be present or represented at any meeting of the Members, the Members entitled to
vote thereat, present in person or represented by proxy, shall adjourn the
meeting until a quorum shall be present or represented. If the adjournment is
for more than thirty (30) days or if after the adjournment a new record date is
fixed for the adjourned meeting, a notice of the adjourned meeting shall be
given to each Member entitled to vote at the meeting.
(b) When a quorum is present at any meeting, only the vote of the holders of all
of the Shares present in person or by proxy shall decide any question brought
before such meeting.
7.4 VOTING RIGHTS.
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(a) Each Member shall be entitled to one (1) vote in person or by proxy for each
Share at every meeting of the Members. No proxy shall be voted after six (6)
months from its date unless the proxy expressly provides for a longer period.
Notwithstanding the above, neither the assigning Member nor the Transferee of
Shares which have been assigned shall have any right to a vote or votes with
respect to any assigned Shares. A Member who has assigned some, but not all, of
his Shares of the LLC shall be treated as a Member and entitled to a vote on all
matters to the extent of his retained Shares of the LLC.
(b) In addition to the voting rights of the Members hereunder and under the Act,
Members holding all of the outstanding Shares shall be required to approve at a
meeting or pursuant to Section 7.5 hereof (i) any amendment to this Agreement,
or (ii) any Company Sale or Company Acquisition.
7.5 ACTION WITHOUT MEETING. Any action permitted or required to be taken at any
meeting of Members of the LLC may be taken without a meeting, without prior
notice and without a vote, if a consent in writing, setting forth the action so
taken, shall be signed by Members holding all of the outstanding Shares of the
LLC.
7.6 TELEPHONIC PARTICIPATION. Any Member shall have the right to attend any
properly called and convened meeting by means of telephonic communications which
permit each person attending the meeting, in person or by telephone, to hear and
speak to each other person so present.
ARTICLE VIII
NOTICES
8.1 NOTICES. Whenever under the provisions of the Act, the Articles of
Organization or this Agreement, notice is required to be given to any Member, it
shall not be construed to mean personal notice, but such notice may be given in
writing, by mail, addressed to such Member at his or its address as it appears
on the records of the LLC with postage thereon prepaid, and such notice shall be
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deemed to be given two (2) days after the same shall be deposited in the United
States mail. Notice to Members may also be given by telegram or facsimile. The
address of the Members on the records of the LLC shall be as set forth beneath
the signature of the Members on the signature page hereof, until changed by any
Member on the records of the LLC by proper notice.
8.2 WAIVER OF NOTICE. Whenever any notice is required to be given under the
provisions of the Act, the Articles of Organization or this Agreement, a waiver
thereof in writing, signed by the person or persons entitled to said notice,
whether before or after the time stated therein, shall be deemed equivalent
thereto.
ARTICLE IX
ACCOUNTING AND RECORDS
9.1 FINANCIAL AND TAX REPORTING. The LLC shall prepare its financial statements
in accordance with generally accepted accounting principles as from time to time
in effect and shall prepare its income tax information returns using such
methods of accounting and tax year as the Managers deem necessary or appropriate
under the Code and Treasury Regulations. At the end of each fiscal quarter
(March 31, June 30, September 30 and December 31), the Managers shall cause to
be prepared a detailed accounting of the income and expenses of the LLC in
accordance with general accepted accounting principles, with the year end
accounting being prepared by independent auditors selected by the Board of
Managers.
9.2 BOOKS AND RECORDS. Proper and complete books of account and records of the
business of the LLC (including those books and records identified in Section
17058 of the Act) shall be kept under the supervision of the Managers at the
LLC's principal office and at such other place as designated by the Managers.
9.3 TAX RETURNS. The Managers shall timely file a Federal income tax information
return and transmit to each Member a schedule showing such Member's distributive
Share of the LLC's income, deductions and credits, and all other information
necessary for such Members timely to file their Federal income tax returns. The
Managers similarly shall file, and provide information to the Members regarding,
all appropriate state and local income tax returns.
ARTICLE X
ALLOCATIONS
10.1 ALLOCATION OF NET INCOME OR NET LOSS.
(a) Nonrecourse Deductions and all Minimum Gain shall be allocated to the
Members in proportion to their ownership of Shares.
(b) After giving effect to the allocations set forth in paragraph (a) hereof,
Net Income or Net Loss, or items of income, gain, loss or deduction included in
the determination of Net Income or Net Loss, for each Accounting Period, shall
be allocated to the Members as follows:
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(i) Net Income or, to the extent necessary, items of income or gain, for the
Accounting Period shall be allocated to Members in an amount equal to the
excess, if any, of (a) the sum of such Member's Capital Account as of the last
day of the Accounting Period plus any distributions made by the LLC to such
Member during the Accounting Period, over (b) the sum of such Member's Capital
Account as of the beginning of the Accounting Period plus any Capital
Contributions made during the Accounting Period; and
(ii) Net Loss, or to the extent necessary items of loss or deduction, for the
Accounting Period shall be allocated to Members in an amount equal to the
excess, if any, of (a) the sum of such Member's Capital Account as of the
beginning of the Accounting Period plus any Capital Contributions made during
the Accounting Period, over (b) the sum of such Member's Capital Account as of
the last day of the Accounting Period plus any distributions made by the LLC to
such Member during the Accounting Period.
(c) The income, gain, loss or deduction allocated to a Member shall include each
item which is included in the determination of Net Income or Net Loss under this
Agreement, and in the event that it is necessary to allocate items of income,
gain, loss or deduction to any Member under this Section 10.1, the allocations
shall be made in such a fashion as to cause the Members to have the same
percentage allocation of all items of income or gain, or of all loss or
deduction.
10.2 TIME OF ALLOCATIONS. The Net Income or Net Loss of the LLC for each
Accounting Period shall be allocated to the Members at the end of the Accounting
Period in accordance with the provisions of Section 9.1 above.
10.3 SPECIAL TAX PROVISIONS.
(a) PARTNERSHIP TAX TREATMENT. The Members expect and intend that the LLC shall
be treated as a partnership for all federal income tax purposes and each Member
and the Managers agree that they (i) will elect to be taxed as a partnership
under applicable Treasury Regulations; and (ii) will not on any federal, state,
local or other tax return take a position, and shall not otherwise assert a
position, inconsistent with such expectation and intent.
(b) TAX ALLOCATIONS. Except as otherwise provided in this Article VII, items of
income, gain, loss or deduction recognized for income tax purposes shall be
allocated in the same manner that the corresponding items entering into the
calculation of Net Income and Net Loss are allocated pursuant to this Agreement.
(c) SECTION 704(C) ADJUSTMENTS. In accordance with Code Section 704(c) and the
Treasury Regulations thereunder, items of income, gain, loss and deduction with
respect to an asset, if any, contributed to the capital of the LLC shall, solely
for tax purposes, be allocated between the Members so as to take account of any
variation between the adjusted basis of such property to the LLC for federal
income tax purposes and its value upon contribution to the LLC.
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(d) SECTION 754 ELECTION. A Section 754 election may be made for the LLC at the
sole discretion of the Managers. In the event of an adjustment to the adjusted
tax basis of any LLC asset under Code Section 734(b) or Code Section 743(b)
pursuant to a Section 754 election by the LLC, subsequent allocations of tax
items shall reflect such adjustment consistent with the Treasury Regulations
promulgated under Sections 704, 734 and 743 of the Code.
(e) ALLOCATIONS UPON TRANSFERS OF LLC INTERESTS. If, during an Accounting
Period, a Member (the "TRANSFERRING MEMBER") transfers Shares to another person,
items of Net Income and Net Loss, together with corresponding tax items, that
otherwise would have been allocated to the Transferring Member with regard to
such Accounting Period shall be allocated between the Transferring Member and
the substitute Member in accordance with their respective Shares during the
Accounting Period using any method permitted by Section 706 of the Code and
selected by the Managers.
ARTICLE XI
DISTRIBUTIONS
11.1 DISTRIBUTION SHARES. 1. All distributions by the LLC to Members shall be
made to the Members in proportion to their ownership of Shares and the
respective rights of any classes and series of Shares that may from time to time
be created as permitted in this Agreement.
11.2 TAX DISTRIBUTIONS. In order to permit Members to pay taxes on their
allocable share of the taxable income of the LLC, the Managers shall, except as
prohibited by Section 10.5, cause the LLC to distribute, as soon as practicable
after the end of each year, an amount equal to the excess, if any, of (a) the
product of (i) the taxable income of the LLC for the just-ended Fiscal Year
multiplied by (ii) 45%, over (b) any Section 10.3 distributions made during the
just-ended Fiscal Year. The percentage referred to in clause (a)(ii) above shall
be increased (or decreased) from time to time by the increase (or decrease) in
the maximum rate of tax imposed on individual taxpayers under the Code.
11.3 QUARTERLY PROFIT DISTRIBUTIONS. On the last business day of each quarter,
the LLC shall distribute to the Members fifty percent (50%) of all cash on hand
in excess of the LLC's anticipated expenses for the following quarter, based on
the operating budgets agreed upon by the unanimous agreement of the Managers.
Notwithstanding the foregoing distribution requirements, at any time upon the
unanimous agreement of the Managers, the Managers may elect not to make
distributions required by this Section 10.3 in order to accumulate funds for
working capital purposes or otherwise.
11.4 DISTRIBUTIONS IN KIND. All distributions shall be made in cash or cash
equivalents unless the Managers voting unanimously shall have approved a
distribution of assets in kind.
11.5 RESTRICTION ON DISTRIBUTIONS AND WITHDRAWALS.
(a) RECOUPING INVESTMENTS. All investments by either KA or Nuway, whether
directly into the JV or on behalf of the JV, from the date of this agreement
forward shall be recouped by the investing party prior to any calculation of
profit, which shall include direct costs incurred by Nuway and Nuway's payment
of consulting fees to KA pursuant to the Consulting Agreement attached as
Exhibit "B".
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(b) REPAYMENT OF COSTS. The JV shall repay to its members any direct costs
incurred by said party prior to making profit distributions, or as otherwise
agreed to by the parties.
(c) NO DISTRIBUTIONS ABOVE FAIR VALUE. The LLC shall not make any distribution
to the Members unless immediately after giving effect to the distribution, all
liabilities of the LLC, other than liabilities to Members on account of their
interest in the LLC and liabilities as to which recourse of creditors is limited
to specified property of the LLC, do not exceed the fair value of the LLC
assets, provided that the fair value of any property that is subject to a
liability as to which recourse of creditors is so limited shall be included in
the LLC assets only to the extent that the fair value of the property exceeds
such liability.
(d) LIABILITY FOR IMPROPER DISTRIBUTIONS. NO MEMBER SHALL BE LIABLE TO THE LLC
FOR THE AMOUNT OF A DISTRIBUTION RECEIVED PROVIDED THAT, AT THE TIME OF THE
DISTRIBUTION, SUCH MEMBER DID NOT KNOW THAT THE DISTRIBUTION WAS IN VIOLATION OF
SECTION 10.5(A). A MEMBER WHICH RECEIVES A DISTRIBUTION IN VIOLATION OF SECTION
10.5(A), AND WHICH KNEW AT THE TIME OF THE DISTRIBUTION THAT THE DISTRIBUTION
VIOLATED SUCH CONDITION, SHALL BE LIABLE TO THE LLC FOR THE AMOUNT OF THE
DISTRIBUTION.
ARTICLE XII
TRANSFER OF MEMBERSHIP
12.1 RIGHT OF FIRST REFUSAL. Each member desiring to sell its interest in the JV
shall be obligated to give the other members a unilateral right of first refusal
to acquire the selling member's interest in the JV. If the selling member is an
original member of the JV, then the other original member shall have the right
of first refusal. If the selling member is a member other than an original
member of the LLC, then each member has the right of first refusal, subject to
the terms herein. The non-selling members have 90 days from receipt of written
notice by the selling member in which to consummate the sale, or the right to
purchase said member's interest shall be forfeited, leaving the selling party
free to sell it's ownership interest to a third party at market price. In the
event of a tender of an offer to buy, by one party to the other, the receiving
party shall be entitled to match the offer tendered and acquire the interests of
the other, so long as it is consummated within 60 days of notice of intent to
buy.
12.2 TRANSFER. Subject to the provisions of the Right of First Refusal, any
Member may sell, encumber, mortgage, assign or otherwise transfer any portion of
his Shares only if (i) the non-transferring Member(s) in their sole discretion
unanimously agree to the transfer, (ii) the Transferee shall have agreed in
writing to assume all of the obligations of the assignor with respect to the
Shares assigned (including the obligations imposed hereunder as a condition to
any transfer), and (iii) the non-transferring Members shall have concluded
(which conclusion may be based upon an opinion of counsel satisfactory to them)
that such assignment or disposition would not (A) result in a violation of the
Securities Act of 1933 as amended, or any other applicable statute of any
jurisdiction; (B) result in a termination of the LLC for Federal or state income
tax purposes or result in the LLC being taxed as a corporation for Federal or
state income tax purposes; or (C) result in a violation of any law, rule or
regulation by the transferring Member, the Transferee, the LLC or the other
Members.
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12.3 TRANSFER VOID. Any purported transfer, sale, encumbrance, mortgage,
assignment, or disposition of Shares in contravention of this Article XI shall
be void and of no effect to, on or against the LLC, any Member, any creditor of
the LLC or any claimant against the LLC.
12.4 ADMISSION OF TRANSFEREE. Each Person to whom any Shares have been
transferred in accordance with the terms of this Agreement or by operation of
law shall immediately be admitted as a Member of the LLC with respect to such
Shares. The transferee Member shall have all the rights and powers and will be
subject to all the restrictions and liabilities of the Member who transferred
the Shares. The admission of a transferee Member shall not release any Member
who previously assigned the Shares from liability to the LLC that may have
existed prior to such substitution.
ARTICLE XIII
TERMINATION
13.1 TERMINATION. The LLC shall be dissolved, its assets disposed of and its
affairs wound up upon the first to occur of the following:
(a) the expiration of its stated term;
(b) the unanimous vote of the Members;
(c) the consummation of a Buyout pursuant to Article XIII;
(d) the entry of a decree of judicial dissolution under the Act.
13.2 EFFECT OF BANKRUPTCY, DEATH, ETC. The death, bankruptcy, retirement,
resignation, expulsion or dissolution of a Member shall not cause the
dissolution of the LLC provided that immediately following any such event there
are at least two Members, or, if there are not two Members at such time, a
second Member is admitted within ninety (90) days of such event.
13.3 WINDING UP AND CERTIFICATE OF CANCELLATION. The winding up of the LLC shall
be completed when all debts, liabilities and obligations of the LLC have been
paid and discharged or reasonably adequate provision therefor has been made, and
all of the remaining property and assets of the LLC have been distributed to the
Members. Upon the completion of winding up of the LLC, a Certificate of
Cancellation shall be filed with the California Secretary of State.
13.4 DISTRIBUTION OF PROPERTY. Upon dissolution and winding up of the LLC, the
affairs of the LLC shall be wound up and the LLC liquidated by the Members. The
assets of the LLC shall be applied to repay creditors of the LLC in the order of
priority provided by law. Except as provided in Section 13.6(b), the remaining
balance of assets of the LLC after satisfaction of the obligations to creditors
shall be distributed to the Members in proportion to the relative percentage of
Shares owned by each at the time of the distribution.
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ARTICLE XIV
DEFINITIONS
14.1 DEFINITIONS. The following terms shall have the meanings set forth
for purposes of this Agreement:
(a) "ACCOUNTING PERIOD" shall mean for each Fiscal Year the period beginning on
the 1st of January and ending on the 31st of December; provided however, that
the first Accounting Period shall commence on the date of formation of the LLC
and shall end on December 31, 2002; and provided, further, that a new Accounting
Period shall commence on any date on which a new Member is admitted to the LLC
or a Member ceases to be a Member for any reason.
(b) "AGREEMENT" shall mean this Joint Venture Agreement as the same shall be
amended from time to time.
(c) "CAPITAL ACCOUNT" means with respect to each Member the amount, as of the
date on which the determination is made, which would be distributed to such
Member under this Agreement, if on such date, all property of the LLC were sold
for an amount equal to its book value and the LLC immediately liquidated.
(d) "CAPITAL CONTRIBUTION" of a Member shall mean that amount of capital
actually contributed by the Member to the LLC pursuant to Article III or Section
2.4 hereof.
(e) "CODE" shall mean the Internal Revenue Code of 1986, as amended.
(f) "EBITDA" means earnings before income tax, depreciation and amortization, as
calculated in accordance with generally accepted accounting principles.
(g) "FISCAL YEAR" shall mean the period from January 1 to December 31 of each
year, or as otherwise required by law.
(h) "MANAGERS" shall mean the natural persons responsible for management of the
LLC.
(i) "MEMBERS" shall mean all Members, including substitute Members and
new-original-issuance Members.
(j) "MINIMUM GAIN" has the meaning set forth in Sections 1.704-2(b)(2) and
1.704-2(d) of the Treasury Regulations.
(k) "NET INCOME OR NET LOSS" shall mean for any Accounting Period the amount
computed as of the last day thereof of the net income or loss computed under
generally accepted accounting principles.
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(l) "NONRECOURSE DEDUCTIONS" has the meaning set forth in Section 1.704-2(b)(1)
of the Treasury Regulations.
(m) "OFFICERS" shall mean those natural persons, appointed from time to time by
the Managers, who have the same rights, powers, privileges, duties, obligations,
liabilities, restrictions and immunities, as near as may be, as the respective
officers of the Deemed Corporation.
(n) "PERSON" shall mean a natural person, partnership (whether general or
limited and whether domestic or foreign), limited liability company, trust,
estate, association, corporation, custodian, nominee or any other individual or
entity in its own or representative capacity.
(o) "TRANSFEREE" means any person to whom Shares are transferred or assigned in
compliance with ARTICLE XII.
(p) "TREASURY REGULATIONS" means regulations issued pursuant to the Code.
ARTICLE XV
MISCELLANEOUS
15.1 AMENDMENT. (a) The Managers shall have the duty and authority to amend the
Articles of Organization or this Agreement as and to the extent necessary to
reflect any and all changes or corrections necessary or appropriate as a result
of any action taken by the Members in accordance with the terms of this
Agreement.
15.2 POWER OF ATTORNEY. By signing this Agreement, each Member irrevocably
designates and appoints the Managers, or any of them, as his true and lawful
attorney, in his name, place and xxxxx, to make, execute, sign and file such
instruments, documents or certificates which may from time to time be required
by the laws of the United States of America and the State of California and any
political subdivision thereof or any other state or political subdivision in
which the LLC shall do business to carry out the purposes of this Agreement,
except where such action requires the express approval of the Members hereunder.
Such attorney is not hereby granted any authority on behalf of the undersigned
Members to amend this Agreement except that as attorney for each of the
undersigned Members, the Managers, or any of them, shall have the authority to
amend this Agreement and the LLC's Articles of Organization to the extent as may
be required to give effect to the transactions below following any necessary
approvals or consents of the Members or Managers, as the case may be:
(a) Extensions of the term of the LLC;
(b) Admissions of additional Members;
(c) Transfer of a Member's Shares;
(d) Withdrawals or distributions; and
(e) Contributions of additional capital.
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The Managers shall provide to the Members copies of all
documents executed pursuant to the power of attorney contained in this Section
15.2.
15.3 LEGENDS. If any certificates are issued evidencing a Member's interest in
the LLC, each certificate shall bear a legend to the effect that the Shares have
not been registered under the Securities Act of 1933, as amended, and are
subject to the restrictions on transferability and sale set forth in this
Agreement and under the Act.
15.4 WITHHOLDING TAXES. In the event that the LLC is obligated to withhold and
pay any taxes with respect to any Member, any tax required to be withheld may be
withheld from any distribution otherwise payable to such Member, or in lieu
thereof upon remittance to the appropriate tax authority may be charged to that
Member's Capital Account as if the amount of such tax had been distributed to
such Member.
15.5 FURTHER ASSURANCES. The parties agree to execute and deliver any further
instruments or documents and perform any additional acts which are or may become
necessary to effectuate and carry on the LLC created by this Agreement.
15.6 BINDING EFFECT. Subject to the restrictions on transfer set forth in
ARTICLE XII, this Agreement shall be binding on and inure to the benefit of the
Members and their respective transferees, successors, assigns and legal
representatives.
15.7 GOVERNING LAW. This Agreement shall be governed by and construed under the
laws of the State of California as applied to agreements among California
residents entered into and to be performed entirely within California.
15.8 CHOICE OF FORUM. The parties agree that any dispute regarding the
interpretation or validity of, or otherwise arising out of this Agreement, shall
be subject to the exclusive jurisdiction of the California State Courts in and
for Orange County, California or, in the event of federal jurisdiction, the
United States District Court for the Southern District of California sitting in
Orange County, California, and each party hereby agrees to submit to the
personal and exclusive jurisdiction and venue of such courts and not to seek the
transfer of any case or proceeding out of such courts.
15.9 ATTORNEYS' FEES. If a party to this Agreement shall bring any action, suit,
counterclaim, appeal, arbitration, or mediation for any relief against any other
party or parties, declaratory or otherwise, to enforce the terms hereof or to
declare rights hereunder (collectively, an "ACTION"), the losing party or
parties shall pay to the prevailing party or parties a reasonable sum for
attorneys' fees and costs incurred in bringing and prosecuting such Action
and/or enforcing any judgment, order, ruling, or award (collectively, a
"DECISION") granted therein, all of which shall be deemed to have accrued on the
commencement of such Action and shall be paid whether or not such Action is
prosecuted to a Decision. Any Decision entered in such Action shall contain a
specific provision providing for the recovery of attorneys' fees and costs
incurred in enforcing such Decision. The court or arbitrator may fix the amount
of reasonable attorneys' fees and costs on the request of either party. For the
purposes of this paragraph, attorneys' fees shall include, without limitation,
fees incurred in the following: (1) postjudgment motions and collection actions;
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(2) contempt proceedings; (3) garnishment, levy, and debtor and third party
examinations; (4) discovery; and (5) bankruptcy litigation. "PREVAILING PARTY"
within the meaning of this paragraph includes, without limitation, a party who
agrees to dismiss an Action on the other party's payment of the sums allegedly
due or performance of the covenants allegedly breached, or who obtains
substantially the relief sought by it.
15.10 NOTICES. All notices, requests, demands, and other communications under
this Agreement shall be in writing and shall be deemed to have been duly given
(i) on the date of service if served personally on the party to whom notice is
to be given, (ii) on the second day after date of service if by private
airborne/overnight delivery service or (iii) on the fifth day after mailing if
mailed to the party to whom notice is to be given, by first class mail,
registered or certified, postage prepaid, and properly addressed as follows:
To Nuway Nuway Medical, Inc.
00000 Xxxxx Xxxxxx Xxxxx 000
Xxxxxx Xxxxx, XX. 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
xxx.xxxxxxxxxxxx.xxx
Email: Xxxxxxxxxxxx@xxx.xxx
To KA Attention:
Xxxxxx Xxxxxxx, doing business as
Rasheed & Associates
Address: _______________________
------------------------------
(000) 000-0000 off
(000) 000-0000 cell
xxx.xxxxxxxxxxxxxxxxx.xxx
A party may change his/her or its address for purposes of this
paragraph by giving written notice of the new address to each of the other
parties in the manner set forth above.
15.11 SEVERABILITY. All provisions contained herein are severable and in the
event that any of them shall be held to be to any extent invalid or otherwise
unenforceable by any court of competent jurisdiction, such provision shall be
construed as if it were written so as to effectuate to the greatest possible
extent the parties' expressed intent; and in every case the remainder of this
Agreement shall not be affected thereby and shall remain valid and enforceable,
as if such affected provision were not contained herein.
15.12 COUNTERPARTS. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same single instrument.
15.13 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement among
the parties with respect to the subject matter hereof and completely supersedes
all prior or contemporaneous agreements, understandings, arrangements,
commitments, negotiations and discussions of the parties, whether oral or
written (all of which shall have no substantive significance or evidentiary
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effect). Each party acknowledges, represents and warrants that he has not relied
on any representation, agreement, understanding, arrangement or commitment which
has not been expressly set forth in this Agreement. Each party acknowledges,
represents and warrants that this Agreement is fully integrated and not in need
of parol evidence in order to reflect the intentions of the parties. The parties
specifically intend that the literal words of this Agreement shall, alone,
conclusively determine all questions concerning the parties' intent.
15.14 NO THIRD PARTY BENEFICIARY. Nothing in this Agreement, whether expressed
or implied, is intended to create any third party beneficiary obligations and
the parties hereto specifically declare that no person or entity, other than as
set forth in this Agreement, shall have any rights hereunder or any right of
enforcement hereunder.
15.15 PREPARATION OF AGREEMENT. It is acknowledged by each party that such party
either had separate and independent advice of counsel or the opportunity to
avail itself or himself of same. In light of these facts it is acknowledged that
no party shall be construed to be solely responsible for the drafting hereof,
and therefore any ambiguity shall not be construed against any party as the
alleged draftsman of this Agreement.
15.16 ACKNOWLEDGEMENT OF RISK. The parties understand that when agreements are
secured with customers, as contemplated in the business plan attached hereto,
the time, personnel limitations and relative sophistication and practical
limitations of technology may come to bear on the time and cost of execution,
which could lead to failure of the JV. Nuway has agreed to enter into the role
as Project Manager, which shall necessitate the use of outside consultants and
experts by the JV to properly execute for newly acquired customers of the JV. KA
has represented it has the relationships, key contacts and ability to close
prospective contracts, and both parties acknowledge the interrelationships of
operations to sales which requires that both parties perform competently and
communicate continually. In the event KA is unable to close contracts in
accordance with the minimum performance as contemplated herein, the JV could
fail.
(a) Limited Expertise. Nuway has shown general competency in the business
matters and overview of the applicable technology associated with the Venture,
but has made no representation as to it's status as any sort of expert or final
source of technical expertise, but rather is being added to the JV in exchange
for it's commitment to perform as a project manager to assist in finding,
securing, and buying the technology, software, services, hardware and the like
to execute newly acquired contracts on behalf of the JV. KA has shown an overall
grasp of the business opportunity and the selling process associated with the
closing of customer accounts and expects to meet the minimum performance as
contemplated herein.
15.17 PUBLIC DISCLOSURE OF INFORMATION. NuWay shall have the sole authority,
without limitation, to draft and disseminate any public announcements with
regards to the JV.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have executed this
Joint Venture Agreement as of the day and year first above written.
NUWAY MEDICAL, INC., a Delaware corporation
By: /S/
--------------------------
XXXXXX XXXXXXX, President
Address: 00000 Xxxxx Xxxxxx Xxxxx
Xxxxx 000
Xxxxxx Xxxxx, XX 00000
Facsimile: (000) 000-0000
Xxxxxx Xxxxxxx, doing business as
Rasheed & Associates
By: /S/
--------------------------
XXXXXX XXXXXXX
Address:
Facsimile:
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EXHIBIT A
ARTICLES OF ORGANIZATION
(attached)
1
EXHIBIT B
FORM CONSULTING AGREEMENT
(attached)
2
EXHIBIT C
BUSINESS PLAN
(attached)
3
