- 22 -
percent to HJI until recoupment and thereafter 35 percent.
Distributions were to be made to the joint venturers in the same
proportion as profits and losses were to be shared.
Under the option and joint venture agreement, HJI was given
sole and exclusive authority over all of the business and affairs
of the joint venture. The joint venture was to have no employees
at any time. Rather, all personnel required to conduct the
business of the joint venture were to be furnished by HJI and
would be the employees solely of HJI. The joint venture,
however, was to pay HJI monthly for the direct cost of all
personnel employed in the business of the joint venture plus a
personnel administrative fee of 15 percent of such cost. In
addition, as compensation for its services in managing the joint
venture, HJI was to receive a general administrative fee in a sum
equal to $150 for each acre of land devoted to the farming
operations of the joint venture, plus cost of living increases.
Under the option and joint venture agreement, HJI was given
the right and option any time on or after January 1, 1997, to
purchase for their fair market value all rights and interest of
JDP in the joint venture. The option and joint venture provided
further that upon dissolution for any reason other than by such
purchase:
the affairs of the Joint Venture shall be liquidated
forthwith. The assets of the Joint Venture shall first
be used to pay or provide for all debts of the Joint
Venture, including all accrued and unpaid operating
expenses. If the assets are not sufficient to pay
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