Document:

Exhibit 10.40

 

AGREEMENT

 

PREAMBLE

 

This Agreement is entered into as of this 1st day of
December 2003, by and between PARAGON SYSTEMS INC., (“PSI”) hereinafter
referred to as “Employer” and United Union of Security Guards (“UUSG”)
hereinafter referred to as the “Union”. The Agreement is effective 1
December 2003 and continues through 1 December 2006.  Employee benefits that are in full force and
effect are set forth in Appendix I to this Agreement.

 

ARTICLE 1 – SCOPE OF AGREEMENT

 

Section 1

 

The Employer recognizes and acknowledges that the Union is the sole and
exclusive bargaining representative for all its security guard employees
employed at the National Computer Center (“NCC”) and Security West Complex
(“SWC”) facilities of the Social Security Administration.

 

Section 2 – Exclusions

 

This Agreement does not cover the following employees and management
staff:

 

a.                                       Officers
and Directors of the Employer.

 

b.                                      All clerical,
Lieutenants, Sergeants, exclusive of those Sergeants working in the Emergency
Command Control Center (“ECC”) and Security West Control Center (SWCC),
supervisory employees, and the Project Manager.

 

c.                                       All
other supervisors, managerial employees, and non-guard employees.

 

Section 3 – Probationary Employees

 

All employees newly hired, or rehired after termination of their
seniority, shall be classified as probationary employees for a period of ninety
(90) calendar days from the date of

 

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hire. During their probationary period employees may be subject to
discipline or discharge at the discretion of the Employer, without regard to
the provisions of Articles 7 and 8 of this Agreement. This period may only be
extended an additional ninety (90) days by mutual agreement of the Union and
the Employer. All other provisions of this Agreement are applicable to
probationary employees.

 

Section 4 – Emergency and Security West Control Center Employees

 

Employer shall post job openings for the Emergency and Security West
Control Center (“ECCC/SWCC”) to the general public and the bargaining unit
employees. The Employer retains the exclusive right and authority to select
employees for work in the ECCC and SWCC, as those workers must have training
the Physical Security System (“PSS”). These employees shall be considered part
of the bargaining unit but their rates of pay shall be separately specified in
the Appendix I as distinct from the rates of pay for the other bargaining unit
employees. Any employee selected from the bargaining unit for the ECCC and SWCC
will have a ninety (90) day probation period provided they have maintained
their security guard licenses.

 

ARTICLE 2 – UNION SECURITY AND CHECK-OFF

 

All employees have the right to become and remain members of the Union
or not to do so. As a condition of continued employment, employees must, on or
before the 31st day of employment with the Employer, either:

 

a.               join the Union and remit to the Union on
a monthly basis Union Dues as duly established by the Union, or

 

b.              remit to the Union on a monthly basis a
representation fee equal to eighty percent (80%) of the dues, which reflects
the Union’s demonstrated costs of bargaining and servicing of this contract.

 

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If any employee shall fail to remit such dues or fees when due as
provided herein, the Employer shall discharge such employee upon the Union’s
written request and representation of such failure to remit dues or fees and
proof that employee has been put on notice of arrears. The Union will hold the
Employer harmless for the discharge of any employee who has been discharged
pursuant to the Union’s request.

 

The Employer agrees to deduct such initiation fees and uniform fees
from covered employees’ wages as required by the Union, provided such
deductions are authorized, in writing, by the Employees and such copies of
authorizations are provided to the Employer. Union dues or representation fees
shall be based upon all payrolls during a month. The Employer shall make such
deductions on a bi-weekly basis and shall remit the amount deducted and a
supporting remittance report to the Union by the fifteenth (15th) of
the month following the month in which such deductions occur, together with a
report listing the amount deducted by Employee.

 

The Union accepts full responsibility for the authenticity for each
authorization submitted by it to the Employer, and any authorization that is
incomplete or in error shall be disregarded by the Employer, and shall be
returned to the Union for correction. The Union agrees that, upon receipt of
proper proof, it will refund the Employees any deduction erroneously or
illegally withheld from an employee’s earnings by the Employer that has been
transmitted to the Union by the Employer. The Union further agrees that it
shall indemnify and save the Employer harmless against any and all claims,
demands, suits or any other form of liability that may arise out of, or by
reason of, any action taken or not taken by the Employer for the purpose of
complying with any provisions of this Article in reliance on any list or
notice furnished by the Union.

 

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No deduction of union dues will be made from the wages of any employee
who has executed an authorization and who has been transferred to a job not covered
by this Agreement, or who is not in pay status. Upon return to work within a
classification covered by this Agreement, deductions from future wages shall be
automatically resumed, provided it is in accordance with the other appropriate
provisions of this Agreement and of the National Labor Relations Act, as
amended.

 

Collections of any back union dues owed at the time of starting
deductions for any employee, and collections of union dues missed because the
Employee’s earnings were not sufficient to cover payment of dues for a
particular pay period, will be the responsibility of the Union, and will not be
the subject of payroll deductions.

 

Deduction of the union dues shall be made in a flat sum provided there
is a balance in the paycheck sufficient to cover the amount after all other
deductions authorized by the Employee, or required by law, have been satisfied.

 

ARTICLE 3 – NONDISCRIMINATION

 

The Employer and Union agree that there shall be no discrimination by
the Employer or the Union against employees because of race, color, creed,
religion, national origin, sex, age, marital status, non job-related physical
or mental handicap, or because of their involvement in or refraining from
participating in Union activities except as required by Article II of this
Agreement.

 

ARTICLE 4 – MANAGEMENT RIGHTS

 

Subject only to such limitations as may be specifically imposed by this
Agreement, the Union recognizes that the management of the business and
direction of the working force is vested exclusively in the Employer, including
but not limited to, the

 

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right to schedule work, to determine whether a position is to be
filled by full-time or part-time employees, to assign work and working hours to
employees, to decide the work amount and location at its facilities, to
determine the type of services performed, to establish reasonable quality and
performance standards, and the most efficient means of providing service, to
require from every employee compliance with normal operating procedures to
formulate and enforce appropriate and reasonable employer rules and
regulations, including the drug and alcohol policy set out in Article 29
of this Agreement now in effect or hereafter enacted if not covered by the provisions
of this Agreement, to hire, suspend, promote, demote, transfer, discharge or
discipline for cause, or relieve employees from duty because of lack of work or
for other legitimate reasons, to maintain discipline and efficiency of
employees, to judge skill, ability, and physical fitness, to create, eliminate,
or consolidate job classifications to control and regulate the use of all
equipment and other property of the Employer and to subcontract work which
would otherwise be performed by the Employees subject to this Agreement at the
convenience of the Government. The above mentioned rights reserved to
management are not intended to deny or limit the Employer in other managerial
rights which are not covered by this Agreement and which it previously
exercised.

 

ARTICLE 5 – EMPLOYEE CLASSIFICATIONS

 

Section 1

 

An employee shall be classified as “full-time” as soon as the Employer,
in its opinion reasonably exercised, determines that the non-probationary
employee is reasonably expected to work one thousand seven hundred eighty
(1,780) hours or more during a twelve (12) month period.

 

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Section 2

 

An employee shall be classified as “part-time”, if the Employer, in its
opinion reasonably exercised, determines that the non-probationary employee is
not reasonably expected to work one thousand seven hundred eighty (1,780) hours
or more hours during a twelve (12) month period.

 

Section 3

 

When an employee has not established his/her classification pursuant to
Sections 1 and 2 above, then that employee who regularly works seventy-two (72)
hours or more in any pay period shall be classified as a full-time
employee.  An employee who regularly
works less than seventy-two (72) hours per pay period shall be classified as a
part-time employee.  “Regularly works” is
defined as working seventy-two (72) or more hours in at least seven (7) of the
bi-weekly pay periods in a six (6) month period.

 

In any event, an employee who is scheduled to work less than an average
of sixteen (16) hours per week in any thirty (30) day period shall receive
written notice from the Employer, and shall have ten (10) days from the mailing
of that notice to contact the Employer to agree to a schedule that would
increase hours to sixteen (16) or more hours a week or shall be
terminated.  The failure of an employee
to increase his/her hours worked to sixteen (16) or more hours per week may, in
the Employer’s discretion, result in the Employee’s termination.  Employer shall mail or fax to the Union a
copy of any Employer notice referred to in this paragraph.

 

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ARTICLE 6 – WORK WEEK AND HOURS OF WORK

 

Section 1

 

The workweek shall be from 0001 hours Monday until 2400 hours
Sunday.  Wages shall be paid bi-weekly on
Friday in the second week following the end of the pay-period.  Should the Employer, during the term of this
Agreement, need to amend the start of the work week, the Employer shall meet
with the Union to review such a change.

 

Section 2

 

The hours of work of employees shall be scheduled by the Employer at
least two (2) weeks in advance except in circumstances beyond the Employer’s
control.  Whenever possible, where the
agency contract requirements permit, the Employer at its management discretion
shall schedule employees for eight (8) hour shifts.

 

Section 3

 

Employees working shifts of six (6) to eight (8) consecutive hours
shall receive a thirty (30) minute paid break during their shift.  Employees who work shifts of ten (10) to
thirteen (13) or more hours shall receive two (2) thirty (30) minute paid break
periods during their shift.  In addition,
employees shall be provided with breaks for emergency purposes as reasonably
required.

 

Section 4

 

Overtime pay is to be paid at a rate of one and one-half (1 1⁄2) times
basic hourly straight time rate. 
Overtime shall be paid to employees for work performed in excess of
forty (40) hours in a pay week.  A
workday shall be defined as from 0001 hours until 2400 hours.  There will not be any pyramiding of hours
worked.  Paid vacation or holiday time
shall not be counted as hours worked in the calculation of overtime.  The

 

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opportunity to work overtime shall be provided consistent with the
Employer’s business needs and circumstances and must be authorized in advance
by the Employer.  In the event that the
Employer has advance knowledge of twenty-four (24) hours or more that overtime
will be required, such work will be offered consistent with seniority whenever
possible.  When the Employer has an
unanticipated emergency circumstance to provide coverage, the Employer shall
have the right to require an employee who normally performs the work to remain
on duty until relieved and/or to require an available employee to provide such
coverage, as conditions warrant.

 

Section 5

 

An employee called in outside his regular work schedule shall be
guaranteed a minimum of two (2) consecutive hours of work or pay in lieu
thereof.

 

Section 6

 

Nothing in this Article shall be construed as a guarantee of work,
work opportunities, or hours except as otherwise expressly provided.

 

ARTICLE 7 – DISCIPLINE

 

The Employer has the right to determine the level and degree of
discipline.  Disciplinary action shall
not be taken without just cause.  The Employer
agrees to follow the disciplinary provisions that are fully incorporated by
reference as Appendix II into this Agreement. 
Under normal circumstances, corrective progressive disciplinary action
is taken following a thorough review of the incident, such as oral
counseling/warning, written warning/reprimand, suspension and eventual
discharge, if an employee failed to respond to previous disciplinary
actions.  Likewise, the Employer shall
have the right to

 

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immediately discharge any employee for certain serious infractions set
forth in the Appendix II.

 

ARTICLE 8 – GRIEVANCE & ARBITRATION
PROCEDURE

 

Any grievance or dispute that may arise following the effective date of
this Agreement concerning the application, meaning or interpretation of this
Agreement, limited thereto, shall be settled in the following manner:

 

Step 1:  The Employee and/or his
or her Union representative shall present the grievance or dispute orally to
the Employer’s Shift Supervisor or Assistant Project Manager within five (5)
business days of its occurrence or when the Employee knew, or by reasonable
diligence should have known, of its occurrence. 
The Shift Supervisor or Assistant Project Manager shall orally respond
to the grievance within five (5) business days.

 

Step 2:  If the grievance is not
settled at Step 1, the Employee and/or his or her Union representative may
meet, within five (5) business days of the date on which the Shift Supervisor
or Assistant Project Manager responded or should have responded, with the
Employer’s Project Manager.  The
Employer’s Project Manager shall respond to the grievance within five (5)
business days.

 

Step 3:  If the grievance is not
settled at Step 2, the Union shall within five (5) business days of receipt of
the Project Manager’s response in Step 2, or the date when the Project
Manager’s response was due, present the grievance in writing to the Employer’s
Vice President or his designee.  The
Employer’s Vice President or his designee shall respond in writing to the
grievance within five (5) business days. 
Grievances affecting a class or classes of employees may be initiated by
the Union at Step 3.  The Employer

 

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shall have the right to involve senior management in the grievance
process at an earlier state, in its discretion.

 

Step 4:  If the grievance is not
settled at Step 3, the Union may, within seven (7) days after the receipt of
the Employer Officer’s response in Step 3, proceed to binding arbitration.  Notice that arbitration is desired shall be
served upon the Employer within seven (7) days after the union receives the
Employer’s Step 3 answer.  If the Parties
are unable to agree on a arbitrator within ten (10) days of the date of service,
they shall choose an Arbitrator from a panel provided by the Federal Mediation
and Conciliation Service by alternatively striking the names on the list.  The Employer shall have the first strike.

 

The Arbitrator shall conduct a hearing on the grievance.  The Arbitrator shall render a decision within
thirty (30) days of the close of the hearing or receipt of briefs.  Any back pay award shall be reduced by any
sums received as unemployment compensation or from interim employment.

 

The Arbitrator shall have no authority to alter, amend, or add to the
Agreement.  All of the time limits
contained in this Article may be extended by mutual agreement in writing.

 

All fees and expenses of the Arbitrator shall be borne equally by both
parties, except where one of the Parties to the Agreement requests a
postponement of a previously scheduled arbitration hearing which results in a
postponement charge.  The postponing
Party shall pay such charge.

 

An employee shall be permitted to have a Union representative at each step
of the grievance procedure.

 

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The President of the Union or his/her designee shall have access to all
relevant personnel records necessary for the Union’s administration of the
grievance and arbitration procedure subject to this Agreement.

 

ARTICLE 9 – NO STRIKE AND NO LOCKOUT

 

The Employer agrees not to cause, permit, or engage in any lockout of
its employees during the term of this Agreement.  The Union agrees that neither it nor the
Employees it represents covered by this Agreement will, during the term of this
Agreement, cause, permit, or take part in any strike, including sympathy
strike, picketing, or work action.  It
shall be a violation of this Agreement, and it shall be cause for discharge or
suspension in the event an employee refuses to enter upon any property involved
in a labor dispute involving other employee organizations or refuses to go
through or work behind any picket lines involving other employee organizations
at the Employer’s place or places of business. 
The Union and the Employer agree to take all steps possible to ensure
that Government property is properly secured and protected in the event of
labor disputes involving other employee organizations at the SSA facilities.

 

ARTICLE 10 – BULLETIN BOARDS

 

The Union may request from SSA permission for it to furnish bulletin
boards for the exclusive use of the Union at the SSA facilities set forth in
Section 1 of this Agreement.  There
shall be no posting of literature on these bulletin boards except by the
authority of officially designated representatives of the Union.

 

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ARTICLE 11 – STEWARDS

 

Section 1

 

The Union shall designate no more than one (1) Steward per shift and
one (1) alternate Steward per shift.  The
Union shall notify the Employer of the Selection of Stewards within ten (10)
days of such selections.  Stewards shall
not interfere with the management of the business or direct the work of any
employee.  Stewards will be limited, in
the aggregate, to a maximum of two (2) hours per pay period of Employer’s paid
time to conduct their on-site duties concerning the investigatory interviews of
employees which may result in discipline and grievances arising there from,
said time is to be coordinated with the shift supervisor.  Stewards shall keep a log of time expended on
matters of Union representation and related business.  The Employer may examine such log in the
event a request for compensation under this Section is questioned.

 

Section 2

 

Stewards have no authority to call or direct strikes or authorize other
economic action against the Employer. 
The authority of Stewards shall be limited to the investigation and
representation of grievances in accordance with the provisions of this
Agreement and the transmission of such messages and information, which shall
originate with and are authorized by the Union or its officers.

 

Section 3

 

In the absence or unavailability of the Steward designated as
representing employees on a specific shift or in a specific location, any other
union designated Steward may represent union employees.  In the absence of an alternate and none is
available to assist a union member with a grievance procedure, then any union
representative may assist that union member in such proceedings.

 

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ARTICLE 12 – COURT APPEARANCES

 

Court or administrative appearances necessitated by job-related
occurrences or incidents shall be compensated for fully at the rates specified
in this Agreement.  The employee must
present documentation verifying the required court appearance to ensure they
are paid for such appearances.  However
other court, administrative or grievance procedure and/or arbitration
appearances that are not job related shall not be paid by the Employer.

 

ARTICLE 13 – JURY DUTY

 

The Employer agrees to pay employees called for jury duty their normal
full regular pay for a period up to fifteen (15) work days, less any fees or
sums received from the Court, when an employee has met the following
conditions:

 

a.                                       The Employee
must notify the Employer within seventy-two (72) hours after he or she receives
a jury duty questionnaire or notice that he or she is subject to a jury duty
call.

 

b.                                      The Employee must
provide the Employer with reasonable notice of the scheduled jury date by
providing Employer with forty-eight (48) hours notice of the date the Employee
is to appear.

 

No compensation shall be paid by the Employer for jury duty of
Saturdays, Sundays, and holidays, unless such Saturday, Sunday or holiday was
the Employee’s normally scheduled workday.

 

ARTICLE 14 – LEAVES OF ABSENCE

 

Section 1 Maternity and Sick Leave

 

All provisions of this Article shall be applied in a manner
consistent with the Family and Medical Leave Act of 1993.  Eligible non-probationary employees will be

 

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granted up to twelve (12) weeks of unpaid leave for their serious
illness, for the birth or adoption of a child or the care of a seriously ill
child, spouse, or parent.  To be
eligible, the Employee must have been employed for one (1) year and have worked
a minimum of one thousand, two hundred fifty (1,250) hours in the preceding
twelve (12) months.

 

Whenever an employee who is pregnant or otherwise sick cannot perform
his/her duty safely or efficiently, the Employee shall take a leave of
absence.  An employee who takes such
maternity or sick leave may elect to utilize as much paid sick leave as he/she
has accrued.  During such leave of
absence, the Employee shall retain his/her existing seniority and shall
continue to accrue seniority.  Maternity
and sick leave shall not exceed three (3) months following delivery or onset of
illness or injury.

 

Section 2 – Extended Maternity and Sick Leave

 

If an employee who is ill (or returning from maternity leave) and
unable to work and has exhausted his or her accrued days of maternity and sick
leave, the Employee may request and may, at the Employer’s discretion, be
granted extended sick leave without pay of up to one (1) year.  During an extended maternity and sick leave,
the Employee shall not continue to accrue benefits or seniority, although
seniority attained prior to the granting of extended maternity and sick leave
shall be retained.

 

Section 3 – Personal Leave Without Pay

 

An employee may request personal leave without pay for any personal
purpose for a period of up to six (6) months. 
It is within the Employer’s sole discretion whether such request, which
must be in writing and state the reason for and length of the desired leave,
will be granted.  Neither seniority nor
benefits shall accrue during such personal leave.  During an employee’s leave of absence, the
Employee shall keep the Employee

 

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reasonably aware of his tentative return date.  Upon giving five (5) working days notice of
intent to return to work, an employee shall be scheduled to report to his
former job or en equivalent job within five (5) working days of the Employer’s
receipt of such written notice.  If no
job is available on the Employee’s former shift or at their former site, he or
she may be put on any shift at any site, but will be returned to his/her former
shift or site as soon as an opening becomes available, consistent with the
Employer’s scheduling needs.

 

An employee on leave of absence for personal reasons who accepts other
employment during such leave may be considered as having resigned.

 

Section 4 – Bereavement Leave

 

In the event of the death of a member of a non-probationary unit
employee’s immediate family, the Employee will not lose any wages which he or
she would otherwise have earned during the three (3) consecutive days, one of
which must be the day of the funeral, for the period from date of death through
the day following burial, and will receive benefits for this or her time lost
as specified in the Appendix I.  The
disbursement of three (3) days of bereavement leave will be at a rate of four
(4) hours per day for part-time employees and eight (8) hours per day for
full-time employees losing a husband, wife, child, foster child, parent, foster
parent (i.e. an adult who reared the Employee), grandparent, brother or
sister.  For a non-probationary unit
employee losing a father-in-law or mother-in-law, the Employee may take three
(3) consecutive days of leave without pay. 
Appropriate documentation of death and family relationship shall be
required for all bereavement leave and shall consist of either a death
certificate or funeral service program.

 

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Section 5 – Military Service

 

Employees enlisting or entering the military service of the United
States pursuant to the provisions of the Uniform Services Employment and
Reemployment Rights Act and amendments thereto shall be granted all rights and
privileges provided by the Act.

 

ARTICLE 15 – WEAPONS

 

The Employer agrees to implement a regular maintenance program for all
Employer-owned weapons. Pursuant to this program, all weapons shall be checked
and cleaned periodically. Employees have the obligation to ensure that their
weapons are at all times in proper working order. If an employee has knowledge
that his weapon is not in proper condition, the Employee shall immediately
report this to his or her supervisor for repair and/or replacement.

 

ARTICLE 16 – SENIORITY

 

Section 1 – Seniority Lists

 

The Employer shall maintain separate seniority lists for all regular
full-time and part-time employees employed by the Employer at the two
facilities. The Employer shall furnish the Union with copies of such lists at
least once every six (6) months.

 

Section 2 – Scheduled Overtime

 

Opportunity to work overtime shall be provided consistent with the
Employer’s business needs and circumstances and must be authorized in advance
by the Employer. In the event that the Employer has advance knowledge of
twenty-four (24) hours or more that overtime will be required, such work will
be offered consistent with seniority whenever possible, to those regularly
scheduled employees who have not been scheduled for forty (40) or more hours in
the particular work week. If there are no such employees

 

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or if the pool of such employees is exhausted because of previously
made overtime assignments, overtime shall be offered, consistent with seniority
whenever reasonably possible, to other regularly scheduled employees. Part-time
employees shall provide Employer with a list of days and times during which
they are available and willing to work should overtime become available
pursuant to this provision. The Employer shall refer to this list when
scheduling overtime hours consistent with this provision. However, if an
employee refuses to work hours offered on two (2) separate occasions, he/she
shall be removed from the list, and the Employer shall no longer be obligated
to call said employee in the event that overtime hours become available in the
future. Notwithstanding the foregoing, should an employee refuse to accept
hours offered because of an emergency situation, said occurrence shall not be
deemed a refusal that counts toward their removal from the list. In no event
shall the Employer offer overtime to employees who have not been scheduled to
work forty (40) hours in the particular work week, but whose acceptance of said
overtime would then give them more than forty (40) or more hours in the
particular work week.

 

When the Employer has an unanticipated emergency need to provide
coverage, the Employer shall have the right to require an employee who normally
performs the work to remain on duty until relieved and/or to require an
available employee to provide such coverage, as conditions warrant. Should a
dispute arise among the Employer, Employee and/or Union regarding the existence
of an emergency situation or the availability of relief, the Employee shall
continue working as directed by the Employer. Management will make a reasonable
effort to enable a person to be relieved.

 

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Section 3 – Permanent Position Openings

 

As permanent positions open, notice shall be posted. Employees shall
have seven (7) days within which to bid. A position is defined as a position on
a particular shift identified as full-time only. First preference shall be
given to the most senior qualified bidder. The successful bidder’s prior
position may then be bid. The Employer without challenge, if any, shall then
assign the following opening(s).

 

Section 4 – Promotions

 

In the event that a higher-level job becomes available, first
preference for such job shall be given to the most qualified employee currently
employed at the SSA facilities with the most skill and ability. Qualifications
shall be determined at the Employer’s reasonable discretion and will be based
upon seniority, skill and ability, with all three factors being given the same
weight. For the purposes of this section, a qualified employee is an employee
who possesses work experience relevant to the higher level position, who has
demonstrated the ability to lead and effectively interact with fellow
employees, who has a good attendance and employment record, and who has the
requisite permits and security clearances required for the job.

 

If the Employer determines that an employee who has been promoted
within ninety (90) days of his or her promotion fails to satisfactory fulfill
the requirements for the position to which the Employee was promoted, such an
employee shall be demoted to his or her original or similar position in the
bargaining unit at the Employee’s prior site or other site, and shall receive
the appropriate rate of compensation for such lower position. Time spent, as a
supervisor shall not count toward a unit employee’s seniority.

 

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Section 5 – Reduction in Work Force

 

In the event that the work force at the SSA facilities shall be reduced
for any reason, the Employees with the least seniority shall be laid off first.
Employees shall bid upon shift reassignments. Full-time employees may bid to
return to a part-time shift and be transferred to a full-time position when one
becomes available, consistent with the Employer’s scheduling needs and the
provisions of this Agreement. A full-time employee may decline recall to a
part-time position and remain on the recall list. A full-time employee who
declines recall to a full-time position may be terminated if they do not return
within three (3) days.

 

Section 6 – Layoff and Recall

 

As jobs become available at the SSA facilities, employees shall be
recalled in order of their seniority at the facility, where qualified.
Probationary employees who have been laid off have no recall privileges.

 

In the event of a layoff, seniority does not continue to accrue. An
employee shall retain the seniority, which he or she possessed at the time of
the layoff except as provided below.

 

In the event the Employee fails to respond within five (5) business
days of the Employer sending a notice of recall by Priority Mail, unless there
was a documented emergency which reasonably prevented the Employee from
properly notifying the Employer, the Employee waives his chance to return from
layoff and retain seniority.

 

Section 7 – Loss of Seniority

 

In the event the Employer loses its contract to provide services at any
one or all of the SSA facilities, the Employer will have no obligation with
regard to this Section after termination of its contract. Expect as is
provided below, an employee who is laid off for

 

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reasons other than the Employer’s loss of contract to provide services
at the SSA facilities, will retain his/her seniority for thirty (30) days.

 

An employee’s seniority with the Employer shall be broken after thirty
(30) days if the Employee:

 

a.                                       voluntarily
quits

 

b.                                      retires,

 

c.                                       is
discharged for cause,

 

d.                                      is absent from
work for three (3) consecutive working days without notifying the Employer of
the reason for his absence before the close of the three (3) day period, unless
there was an emergency which prevented the Employee from properly notifying the
Employer,

 

e.                                       fails to return
to work from layoff within five (5) working days after the mailing of the
Employer’s notice of recall, unless there was an emergency which prevented the
Employee from properly notifying the Employer of employee’s inability to report
as directed,

 

f.                                         fails to
return from a scheduled vacation period or leave of absence after two (2) or
more consecutive working days without having given proper notice to the
Employer, unless there was a documented emergency that prevented the Employee
from properly notifying the Employer of Employee’s inability to report as
directed.

 

In the event that an employee is laid off for reasons other than the
Employer’s loss of contract, the Employer shall, within thirty (3) days of the
layoff, determine if the

 

20

 

Employee is reasonably qualified for work at another job site, and if
so, offer the Employee the opportunity for a transfer to another union site.

 

An employee’s seniority shall not be broken by a layoff due to an
employee’s efforts at re-qualification pursuant to Article 18.

 

A laid off employee who is recalled shall be sent notice of recall by
certified mail. If such employee does not respond within five (5) business days
of the Employer’s sending such certified mail, or the Employee refuses such
offer, the Employee will be deemed to have voluntarily quit, even if the notice
is returned as undeliverable. An employee who has voluntarily quit or otherwise
been terminated has no right to recall.

 

Section 8 – Shift and Post Reassignments

 

In the event the Employer determines it is necessary to rotate
employees among posts, every reasonable effort shall be made to assign
employees during the same shift in which they previously worked except as required
for cross training. Assignments are to be made in an unbiased manner and in
accordance with seniority to the extent possible.

 

ARTICLE 17 – VOLUNTARY QUITS

 

An employee shall be deemed to have voluntarily quit employment with
the Employer if:

 

a.                                       the Employee
accepts full-time employment with another company at the same time during which
he or she is employed by the Employer, and chronically fails to report for duty
as scheduled by the Employer, while simultaneously remaining an employee of
another company.

 

21

 

b.                                      the Employee
fails to report for work within forty-eight (48) hours of the beginning of his
scheduled shift after the expiration of a leave of absence without a telephone
call or other explanation, unless there was a documented emergency, which
reasonably prevented the Employee from properly notifying the Employer

 

c.                                       the Employee
fails to report for work for two (2) consecutive days without telephoning or
otherwise notifying the Employer, unless there was a documented emergency,
which reasonable prevented the Employee from properly notifying the Employer.

 

ARTICLE 18 – TRAINING AND ANNUAL
QUALIFICATION

 

Section 1a

 

Employer agrees to pay for up to four (4)
hours of classroom instruction at the Employee’s regular hourly rate of pay on
the safe handling of a firearm prior to employee’s annual firearms proficiency
test.

 

Section 1b

 

Commencing 1 January 2004 through the
duration of this Agreement, the Employer agrees to pay employees for annual weapons
qualification on a firing range for up to five (5) hours at the Employee’s
normal hourly rate of pay.

 

Section 2

 

The Employer shall schedule employees
for annual qualification at least ninety (90) days prior to the expiration of
their weapons permit.  Management shall
take [ILLEGIBLE] to all posts at least thirty (30) days in advance of range
appointments and range may fall on an employee’s day off but will be mandatory.
The Employer shall afford employees the

 

22

 

opportunity to have at least two (2) practice
sessions prior to any formal re-qualification test.  The employee shall be given at least three
(3) opportunities to qualify, at least one (1) of which must be prior to the
expiration of his or her SSA annual qualification. If the Employee is unable to
re-qualify prior to the expiration of his or her SSA annual qualification, the
Employee shall be laid off without pay. Such employee shall be reinstated if
re-qualifying occurs within thirty (30) days of layoff. An employee laid off
pursuant to this provision shall not accrue seniority or fringe benefits during
his or her period of layoff. If the person does not re-qualify during this
suspension period of thirty (30) days, such action will be considered as a
voluntary quit.  If re-qualification
documentation is not effectuated until after an employee’s release from
employment, that employee may reapply for employment.

 

Section 3

 

Employer shall provide Employee with ninety
(90) days notice of the expiration of his government required physical
examination certification.  The Employer
shall pay for the cost of the physical examination certification.  If an employee does not appear for or obtain
his or her government required physical examination prior to the time by which
it must be obtained, the Employee shall be suspended as in Section 2
above.  If the Employee does not
satisfactorily pass his or her physical within the ninety (90) day period of
time, the Employee shall be considered as having voluntarily quit, unless there
are extenuating medical circumstances and an employee produces medical
documentation.

 

Section 4

 

Employer shall pay at the Employee’s regular
hourly rate of pay for the complete number of hours required for CPR training,
and for the complete number of hours required for combined First Aid and CPR
training. If an employee does not successfully complete and pass his or her

 

23

 

government-required first aid and/or CPR
examination prior to the time by which such examination must be taken and
passed, the Employee shall be suspended as in Section 2 above.  If, however, after thirty (30) days following
the date on which the Employee was required by the government to have passed
such examination or examinations, the Employee has not taken and passed same,
and employee shall be regarded as having voluntarily quit.

 

Section 5

 

The Employer shall provide employees, at
least one hundred (100) days prior to expiration of their Maryland State Clearance Card and handgun permit, such
forms as are required by the State of Maryland for the renewal of such
permit(s).  Employees are expected to
return such forms completed together with any necessary photographs and
fingerprint specimens within ten (10) days thereafter. The Employer shall
promptly submit the completed forms, photographs, and fingerprint to the
appropriate state agency.  If the
employee does not submit to the Employer the completed forms, photographs and
fingerprint specimens within the aforementioned ten (10) day period, and as a
result of the employee’s delay the employee’s permit lapses, the employee may
be suspended without pay until the permit is received. Not withstanding the
foregoing, if the employee fails to provide the completed forms, photographs,
and fingerprint specimens within thirty (30) days of his/her receipt of the
forms from the Employer, the employee shall be deemed to have quit voluntarily.

 

Notwithstanding the foregoing, if the
Employee fails to provide the completed forms, photographs, and fingerprint
specimens within thirty (30) days of his or her receipt of the forms from the
Employer, the Employee shall be deemed to have quit voluntarily, unless
[ILLEGIBLE] presents written documentation verifying extenuating circumstances.

 

24

 

In the event the Employer does not timely
submit completed forms, photographs, and fingerprint specimens to the
appropriate state agency and the Employee’s permit lapses because of such
delay, the Employee may be suspended with pay until a permit is issued.

 

ARTICLE 19 – UNIFORMS

 

Section 1

 

The Employer shall provide at no cost to all
new employees those items listed in the Employer’s Social Security
Administration guard service contract. 
Upon termination of employment, the issued clothing and equipment shall
be cleaned and returned to the Employer in serviceable condition, meaning
clean, pressed, having no rips or tears, and having all buttons.

 

The [ILLEGIBLE] agrees to pay [ILLEGIBLE]
employee for uniform maintenance and replacement as stipulated in the Appendix
1.  Employees may purchase replacement
items from the Employee at cost.  Such
articles shall be paid for by deductions from the Employees’ pay, as long as
they provide written authorization to the Employer to make such deductions.

 

The Employer shall replace any parts of the
uniform that are damaged in the line of duty, provided the damage has been
reported to the Shift Supervisor within the shift period when the incident
occurred.

 

Section 2

 

Employees shall wear plain black leather,
corofan shoes or chukka boots, having no stitching, patterns, buckles, bows,
straps, stripes, webbing, and logos, and having no open toes or heels, or heels
higher than one and one half (1 1⁄2) inches. 
These shoes or chukka boots must be capable of a [ILLEGIBLE] wear boots,
at the discretion of the supervisor and based on inclement weather conditions.

 

25

 

Section 3

 

Upon termination of employment, the issued
clothing and equipment shall be cleaned and returned to the Employer in
serviceable condition.  The Union agrees
that all employees, at the time of hire, shall give written authorization
allowing the Employer to deduct from the Employee’s final paycheck the cost of
all unreturned issued clothing and equipment, or the cost of [ILLEGIBLE]
clothing not returned [ILLEGIBLE] condition.

 

ARTICLE 20 – SUCCESSORS

 

The Employer shall give notice of the
existence of this Agreement to any purchaser, transferee, lessee, assignee,
etc., of the operation covered by this Agreement or any part thereof.  Such notice shall be in writing with a copy
to the Union at the time the seller, transferee, or lessee executes a contract
or transaction has herein described.

 

ARTICLE 21 – SUBCONTRACTING

 

For the purposes of preserving work and job
opportunities for the Employees covered by this Agreement, the Employer agrees
to provide the Union with at least seven (7) days notice prior to
subcontracting, or transferring to non-bargaining unit employees, any of the
work or services of the kind, nature or type presently or hereafter performed
or provided by the Employer.  Supervisory
personnel may, without prior practice, be temporarily assigned to cover unit work
in an emergency situation.  In no event
shall such temporary assignment(s) exceed thirty (30) days in any year.

 

ARTICLE 22 – HOLIDAYS

 

Section 1

 

The holidays granted to employees prior to
the effective date of this Agreement shall remain in full force and effect
through and including December 31, 2003. 
From

 

26

 

1 January 2004, the Employer shall grant
to all employees the following holidays off with pay (or pay in lieu thereof,
if normally scheduled to work that week day). 
Holiday benefits shall be paid as specified in the Appendix I, as fully
incorporated herein, provided that the employee shall work his or her regularly
scheduled workday prior to the holiday and after the holiday:

 

	
  [ILLEGIBLE]

  	
   

  	
  [ILLEGIBLE]

  
	
  Martin
  Luther King’s Birthday

  	
   

  	
  Veteran’s
  Day

  
	
  Presidents’
  Day

  	
   

  	
  Thanksgiving
  Day

  
	
  Memorial Day

  	
   

  	
  Christmas
  Day

  
	
  Independence
  Day

  	
   

  	
  Employee’s
  Birthday

  
	
  Labor Day

  	
   

  	
   

  

 

The Employer reserves the right to limit the number of employees who
take their birthday holiday on the same date. 
A birthday holiday may be scheduled up to seven (7) days prior to or
after the birthday.  Holiday pay will not
be granted to employees when a holiday falls within a period of leave or
absence and or layoff.

 

Section 2

 

An employee who is required to work on a holiday
shall receive holiday pay in addition to his or her regular wages as specified
in the Appendix I.  Holiday pay will not
be granted to employees when a holiday falls within a period of leave of
absence and or period of layoff, or if the employee fails to work the last
scheduled work day prior to the holiday or the first scheduled work day after a
holiday, or if the employee fails to report to work on the holiday if he/she is
[ILLEGIBLE]

 

Section 3

 

In the event an employee who is normally
scheduled to work a ten (10) to twelve (12) [ILLEGIBLE] that they would have
been scheduled to work had that day not been a holiday.

 

27

 

ARTICLE 23 – BUILDING CLOSURES

 

In the event the Government declares a Code Red Building Closure,
employees working on posts other than 24-hour posts shall not be required to
man such posts unless the Government declares a building emergency. Those
employees working on posts other than 24-hour posts who are allowed to go home
shall be paid for the hours they would have [ILLEGIBLE] Government not declared
a Code Red Building Closure.

 

ARTICLE 24 – VACATION

 

Section 1

 

Employees covered by this Agreement shall receive vacation benefits as
specified in the Appendix I herein fully incorporated by reference.

 

Section 2

 

Vacations may be scheduled any time during the year with the Employer
providing the Employee gives the Employer a minimum of thirty (30) days notice.
Employees shall select their vacation period in order of their seniority where
reasonably possible and at a time mutually convenient to the Employee and
Employer. No more than five percent (5%) of the work force may be on vacation
at any time. Earned vacation will be paid in the pay period during which the
vacation time is used, and included in the employee’s regular paycheck. All
vacation benefits will be paid at the hourly rate in effect at the time of the
employee’s most recent anniversary date. Vacation time must be taken within one
(1) year following its accrual.

 

Section 3

 

Accrued fraction shall be based upon [ILLEGIBLE] without break in
service with the Employer or its predecessor(s) at the buildings listed in
Article I to this Agreement. During the first four years of employment,
employee shall earn two (2)

 

28

 

weeks of paid vacation leave. During the fifth to the fourteenth years
of employment, employee shall earn three (3) years of paid vacation leave.
After the fifteenth year of employment, employee shall earn four (4) weeks of
paid vacation leave. All vacation benefits shall be paid at the time of the
employee’s anniversary date.

 

ARTICLE 25 – SICK LEAVE

 

Section 1

 

New employees begin accruing sick leave on the first day of employment
but cannot begin to utilize sick leave until they have accrued ninety (90) days
of employment with the company.

 

Section 2

 

Employees shall receive sick leave benefits as specified in the
Appendix I, which is fully incorporated herein into this Agreement. The earning
and accrual of sick leave is based upon sick leave earned by the employee,
without break in service, for the Employer.

 

Section 3

 

Employee benefits in effect prior to the effective date of this
Agreement shall remain in full force and effect through and including 31
December 2003. From 1 January 2004, through the duration of this
Agreement, covered employees may not accumulate more that one hundred four
(104) hours of sick leave. Sick leave shall commence and be paid on the third
day of absence from work. Employees on sick leave for one day do not need to
provide the company with a note. Employees who are out for two or more days
must provide the Employer with a [ILLEGIBLE] sick leave from the first day of
absence form work, providing they have not exhausted their accrued sick leave.

 

29

 

Section 4

 

An employee will be paid sick leave benefits for the hours the employee
is regularly scheduled to work in a given day; however, for any given day,
authorized sick leave will not be paid for less than four (4) or more than
eight (8) hours.

 

Section 5

 

For any year to which an employee does not use any of his or her
accrued [ILLEGIBLE] he/she may choose to be compensated at the rate of 70% of
his/her regular rate of pay.

 

Section 6

 

Employees will not be compensated for any unused sick leave at the time
of termination of their employment.

 

ARTICLE 26 – HEALTH AND WELFARE

 

Section 1

 

Employee benefits in effect on the effective date of this Agreement
shall remain in full force and effect through and including 31
December 2003. The Employer agrees to the following policy regarding the
payment of Health and Welfare benefits:

 

a.               Within thirty (30) days of the effective
date of this Agreement or within thirty (30) days of an employee’s date of
hire, whichever is later, each employee shall elect in writing one of four
options which are to become effective commencing on 1 January 2004: (i)
participation in the Employer’s benefit plan, which may include any combination
of medical and dental insurance, short term and long term disability insurance,
and life insurance; or (ii) participation in the Union’s Security Welfare
Health and Welfare Benefits [ILLEGIBLE] to the contribution levels set forth in
Appendix II, Article 6 of this Agreement, or (iv) elect additional
Employer contributions to the Security Workers Severance and

 

30

 

Retirement Fund in amount equal to the contribution levels set forth
Appendix II, Article 6. In the event no option is selected, the employee
shall receive as additional wages an amount equal to the required
contributions.

 

b.              An employee’s election or termination of
his/her right to participate in the Employer’s benefit plan after the initial
thirty (30) day period shall be governed by applicable plan documents.

 

c.               Consistent with the election of each
employee, the Employer shall contribute the amounts set forth in Appendix II,
Article 6, to the chosen health and welfare plan(s) or benefits plans, or
pay said amounts to the employee in his or her paycheck in accordance with
Section 1a.

 

d.              In the event cash amounts are to be paid
to an employee consistent with this Agreement, the Employer shall pay those
amounts in each bi-weekly payroll as long as the employee accrues wages. In the
event of termination of employment, the Employer’s obligation herein shall not
extend beyond the pay period in which the employee’s last day of work occurs.

 

e.               The parties understand and agree that,
not withstanding the date(s) on which the Employer makes contributions on
behalf of specific employees, eligibility for benefits under any of the
selected plans referred to herein is determined in accordance with the
respective plan rules.

 

Section 2

 

[ILLEGIBLE] Fund

 

31

 

a.                                       The Employer
agrees to provide the Security Workers Health and Welfare Fund with monthly
remittance reports containing such information, in such manner, and on such
forms as may be required by the Trustees of the Funds.

 

b.                                      Contribution and
remittance reports shall be delivered to the Security Workers Health and
Welfare Fund on or before the 15th day of each month for the
preceding month.

 

c.                                       Employees who do
not elect to participate in the Security Workers Health and Welfare Plan may
thereafter elect to participate in it only once each subsequent year during the
thirty (30) day period, the open enrollment period, that begins on the first of
the month in which this Agreement was executed.

 

d.                                      An employee may
terminate his/her participation in the Security Worker’s Health and Welfare
Plan during the open enrollment period only, as specified above. However, an
employee who voluntarily terminates such participation may not again
participate in the plan for a minimum of twelve (12) months.

 

Section 3

 

a.               With respect to the Employer’s benefit
plan, which may include any combination of medical and dental insurance, short
term and long term disability insurance, and life insurance, the Employer
retains the exclusive right to select the insurance companies providing those
benefits. An employee may sign up for the benefits after working for the
Employer within thirty (30) days, on the first day on the month following the
[ILLEGIBLE] plan provider. The Employer reserves the right to amend the time
period in which an

 

32

 

employee may join its benefits plan to comply with the contractual
requirements of any future contracted benefit/insurance provider.

 

b.              With respect to an employee terminating
participation in the Employer’s benefit plan, an employee may terminate his
participation in the plan by the last day of the month in which he/she is
employed and [ILLEGIBLE] remains in effect until the last day of the month, or
as specified by any future benefit plan provider, and in accordance with any
COBRA requirements. The Employer reserves the right to amend the time period in
which an employee may terminate his/her participation in the Employer’s benefit
plan to comply with the contractual requirements of any future contacted
insurance/benefit provider.

 

c.               In the event that the Employer provides
health insurance coverage at or less than the contribution levels listed in the
Appendix I, the employees shall be afforded the opportunity to receive the
variance in such insurance cost as additional wages.

 

d.              Upon reasonable request, the Employer
agrees to provide the Union with information regarding the benefit plan offered
to the employees.

 

Section 4

 

An employee who chooses not to participate in either the Employer’s benefit
plan or the Union’s Health and Welfare Plan may arrange for those contributions
that would have been deposited into those benefit plans to be deposited into
the Union’s Severance and Retirement Fund.

 

Section 5

 

The Employer agrees that for each hour of wages paid to each employee
per his or her selection of one of the four options listed in Section 1(a)
covered by this Agreement, the

 

33

 

Employer will contribute toward the employee’s chosen health and
welfare/benefit plan or cash amounts specified per hour worked, up to a maximum
of eighty (80) hours per two (2) week pay period. See Appendix I for the
effective employer contributions.

 

With respect to the Employer’s obligation to the Security Worker’s
Health and Welfare Fund or the Security Workers Severance and Retirement Fund,
the Employer agrees to be bound by the rules and regulation of those plans, the
Agreement and Declaration of Trust that governs each fund, and any collection
policies validly adopted by the Funds’ Trustees.

 

ARTICLE 27 – PENSION FUND

 

Section 1

 

Effective 1 December 2003, through the duration of this Agreement,
the Employer agrees to become and remain a participating employer in the
Security Workers Severance and Retirement Fund (hereinafter “Severance and
Retirement Fund”) for the duration of this Agreement. The Employer agrees that
for each hour of work worked by each employee covered by this Agreement, it
will contribute to the Severance and Retirement Fund an amount specified in the
Appendix I, Article 7 up to a maximum of eighty (80) hours per two (2)
week pay period.

 

Section 2

 

The Employer agrees to provide the Severance and Retirement Fund with
monthly remittance reports containing such information, in such manner, and on
such forms as may be required by the Trustees of the Fund. Contributions and
remittance reports shall be delivered to [ILLEGIBLE] Fund [ILLEGIBLE] before
the 15th day [ILLEGIBLE] month.

 

34

 

Section 3

 

The Employer agrees to be bound by the provisions of the Agreement and
Declaration of Trust establishing the Severance and Retirement Fund (“Trust
Agreement”) as it may be from time to time amended. The Employer further agrees
to be bound by the terms of the Severance and Retirement Fund and by all
resolutions and rules adopted by the Trustees pursuant to the powers delegated
to them by the Trust Agreement.

 

ARTICLE 28 – WAGES

 

From January 1, 2002, through the duration of this Agreement, the
Employer agrees to pay employees at the rates set forth in the Appendix I as
fully incorporated by reference herein.

 

ARTICLE 29 – DRUG AND ALCOHOL POLICY

 

The parties recognize that in the security business, the use of
controlled substances or alcohol that cause intoxication or impairment
on-the-job poses risks to the Employer, the affected employee and his
co-workers and the public. An employee cannot perform his or her work
adequately if he or she is under the influence of illegal drugs or alcohol; and
an employee under the influence of drugs or alcohol also presents a danger to
himself or herself and to others. Unlawful use of drugs and the abuse of
alcohol when not on duty raises serious questions concerning the competency to
perform security work and is ground for revocation of Employee’s firearms
permit. It is the Employer’s policy to maintain a drug-free work place. The
Employer and the Union agree to the Drug and Alcohol policy to maintain a
drug-free work place.  The Employer and
the Union agree to the Drug and Alcohol policy attached hereto as Appendix III
to this Agreement, and fully incorporated by reference into this Agreement.

 

35

 

ARTICLE 30 – MISCELLEANEOUS

 

Section 1

 

The Employer shall not lower any standards of wages or conditions of
employment explicitly provided for in this Agreement without the written
consent of the Union.

 

Section 2

 

The Employer, for reasons of business necessity, may utilize officers
who work as [ILLEGIBLE] employees are asked to temporarily fill supervisor
positions they will receive the rate of pay attributable to the position. This
provision in not applicable to the ECCC or SWCC console operator positions
described in Article 1, Section 4 of this Agreement.

 

ARTICLE 31 – SEPARABILITY AND SAVINGS
CLAUSE

 

If any Article or Section of this Agreement, or any Riders,
Attachments, or Appendices thereto should be held invalid by operation of law
or by any tribunal of competent jurisdiction, or if compliance with or
enforcement of any Article or Section should be restrained by such
tribunal pending a final determination as to its validity, the remainder of
this Agreement and of any Rider thereto, or the application of such
Article or Section to persons or circumstances other than those as to
which it has been held invalid or as to which compliance with or enforcement of
has been restrained, shall not be affected thereby. In the event that any
Article or Section or Appendix is held invalid or enforcement of or
compliance with has been restrained as above set forth, the Employer and the
Union agree to enter into immediate collective bargaining negotiations upon the
request of either party, for the purpose of arriving at a mutually satisfactory
replacement for such Article or Section or Appendix during the period
of invalidity or restraint. If the Parties do [ILLEGIBLE] economic recourse in
support of its demands notwithstanding any provisions of this Agreement to the
contrary.

 

36

 

ARTICLE 32 – DURATION OF AGREEMENT

 

Except as otherwise provided in this Article this Agreement shall
be in full [ILLEGIBLE] and effect from 1 December 2003 and shall remain in
effect until (and including) 1 December 2006. With respect to wages and
fringe benefits (including health and welfare and pension [ILLEGIBLE] of the
Agreement shall take effect as specified in the attached Appendix I, which is
fully incorporated by reference herein.

 

IN WITNESS WHEREOF, the parties hereto have set their hands and seals
to this Agreement this 1st day of December 2003.

 

 

	
  UNITED UNION OF SECURITY GUARDS

  	
  PARAGON SYSTEMS, INC.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  BY:

  	
  /s/ [ILLEGIBLE]

  	
   

  	
  BY: 

  	
  /s/ [ILLEGIBLE]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TITLE:  

  	
  President

  	
   

  	
  TITLE:

  	
  PRESIDENT

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  DATE:

  	
  1 December 2003

  	
   

  	
  DATE:

  	
  1 DECEMBER 2003

  	
   

  

 

 

APPENDIX I

 

ARTICLE 1
– BEREAVEMENT

 

Commencing from 1 December 2003 through
the duration of this Agreement, the disbursement of three (3) days Bereavement
Leave will be at the rate of four (4) hours per day for part-time employees and
eight (8) hours per day for full-time employees.

 

ARTICLE 2
– UNIFORMS

 

Effective February 1, 2004, the uniform
allowance the Employer agrees to pay each employee shall be $.37 per hour
worked up to a maximum of eighty (80) hour per two (2) week pay period for each
employee covered by this Agreement for uniform maintenance and replacement.
Effective February 1, 2005, the uniform allowance the Employer agrees to
pay each employee shall be $.39 per hour worked up to a maximum of eighty (80)
hours per two (2) week pay period. Effective February 1, 2006, the uniform
allowance the Employer agrees to pay each employee shall be $.41 per hour
worked up to a maximum of eighty (80) hours per two (2) week pay period.

 

ARTICLE 3
– HOLIDAYS

 

This holiday benefits schedule shall
become effective commencing on 1 December 2003 through the duration of
this Agreement. Holiday pay will be disbursed a maximum of two (2) weeks after
the holiday(s) occurs. It will be paid in accordance with the following
schedule, which is based on the total number of hours the Employee worker
during the pay period in which each holiday occurred.

 

	
  [ILLEGIBLE]

  	
   

  	
  Authorized Holiday Pay Hours

  	
   

  
	
  71-80

  	
   

  	
  8

  	
   

  
	
  61-70

  	
   

  	
  7

  	
   

  
	
  [ILLEGIBLE]

  	
   

  	
  [ILLEGIBLE]

  	
   

  
	
  41-50

  	
   

  	
  5

  	
   

  
	
  31-40

  	
   

  	
  4

  	
   

  

 

38

 

If a holiday is scheduled on the day a person works a ten (10) to
twelve (12) hour day then that person shall be compensated for the full amount
of time they would have worked had the day not been declared a holiday.

 

ARTICLE 4
– VACATION

 

Accrual of vacation is based upon years of
service, without break in service, on the government contract with the Employer
or his predecessor(s) at the buildings listed in Article 1 of this
Agreement. During the first four (4) years of employment, employee shall earn
two (2) weeks of paid vacation leave. During the fifth (5) of the fourteenth
(14) years of employment, employee shall earn three (3) weeks of paid vacation
leave. After the fifteenth (15) year of employment employee shall earn four (4)
weeks of paid vacation leave. All vacation benefits will be paid at the time of
the Employee’s most recent anniversary date.

 

ARTICLE 5
– SICK LEAVE

 

The sick leave benefit of this Agreement
shall become effective commencing on 1 December 2003 through the duration
of this Agreement. Consistent with Section 1 of Article 25 of this
Agreement, employees shall not accumulate more than one hundred four (104)
hours of sick leave. An employee will be paid sick leave benefits for the hours
the Employee is regularly scheduled to work in a given day.  However, for any given day, authorized sick
leave will not be paid for less than four (4) or more than eight (8) hours. For
any year in which an employee does not use any of his or her accrued leave,
he/she may choose to be <Illegible>

 

39

 

ARTICLE 6
– HEALTH AND WELFARE

 

The health and welfare benefit plans selected
by the Employees shall become effective commending on 1 December 2003
through the duration of this Agreement. Effective February 1, 2004, the
Employer agrees to contribute on behalf of each employee covered by this
Agreement an amount of the selected health and welfare benefits equal to $3.00
per hour worked up to a maximum of eighty (80) hours per two (2) week pay
period. Effective February 1, 2005, the Employer agrees to contribute on
behalf of each employee covered by this Agreement an amount of the selected
health and welfare benefits equal to $3.05 per hour worked, up to a maximum of
eighty (80) hours per two (2) week pay period. Effective February 1, 2006,
the Employer agrees to contribute on behalf of each employee covered by this
Agreement an amount of the selected health and welfare benefits equal to $3.10
per hour worked, up to a maximum of eighty (80) hours per two (2) week pay period.

 

ARTICLE 7
– PENSION FUND

 

The defined contribution pension fund benefit
provided for by this Agreement shall become effective commencing on 1
December 2003 through the duration of this Agreement. Effective 1
February 2004 consistent with Article 27 of this Agreement, the
Employer agrees to contribute on behalf of each employee into the Security
Workers Severance and Retirement Fund pension contributions in an amount equal
to $.72 per hour worked, up to a maximum of eighty (80) hours per two (2) week pay
period, for each employee covered by this Agreement. Effective 1
February 2005, Employer agrees to contribute on behalf of each employee
into the Security Workers Severance and Retirement Fund pension contributions
in an [ILLEGIBLE] week pay period, for each employee covered by this Agreement.
Effective February 1, 2006, the Employer agrees to contribute on behalf of
each employee into the Security Workers Severance

 

40

 

and Retirement Fund pension contributions in an amount equal to $.78
per hour worked up to a maximum of eighty (80) hours per two (2) week pay
period, for each employee covered by this Agreement.

 

ARTICLE 8
– WAGES

 

The wages of this Agreement shall become
effective commencing on 1 February 2004 through the duration of this
Agreement

 

The Employer agrees to pay security guard
employees, exclusive of those guards working in the ECCC, the following rates:

 

Effective February 1, 2004, wages shall
be paid at the rate of $16.00 per hour.

 

Effective February 1, 2005, wages shall
be paid at the rate of $16.56 per hour.

 

Effective February 1, 2006, wages shall
be paid at the rate of $17.14 per hour.

 

The Employer agrees to pay ECCC security guard employees the following
rates:

 

Effective February 1, 2004, wages shall
be paid at the rate of $16.68 per hour.

 

Effective February 1, 2005, wages shall
be paid at the rate of $17.26 per hour.

 

Effective February 1, 2006, wages shall
be paid at the rate of $17.86 per hour.

 

 

IN WITNESS WHEREOF, the parties hereto have
set their hands and seals to this Agreement, this 1st day of
December 2003.

 

 

	
  UNITED UNION OF SECURITY GUARDS

  	
  PARAGON SYSTEMS INC.

  
	
   

  	
   

  
	
  BY:

  	
  /s/ [ILLEGIBLE]

  	
   

  	
  BY:

  	
  /s/ [ILLEGIBLE]

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TITLE:

  	
  President

  	
   

  	
  TITLE:

  	
  PRESIDENT

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  DATE:

  	
  December 1, 2003

  	
   

  	
  DATE:

  	
  1 DECEMBER 2003

  

 

 

DISCIPLINE POLICY

 

Paragon Systems, Inc. supervisors and administrators will have the
authority to recommend disciplinary action on employees for just cause. All
incidents will be fully investigated, documented, and evaluated by the Project
Manager before disciplinary action is taken.

 

Under normal circumstances, corrective progressive disciplinary action
is taken following a managerial review of the incident at the level deemed
appropriate by the management staff of Paragon Systems. The review may
recommend LOC, LOW, Suspension, or Dismissal, as appropriate to the offense.
Paragon Systems shall be the sole judge and hold the discretion to determine
the level of discipline. However, in no case shall disciplinary action be taken
without just cause. Under normal circumstances, corrective, progressive
disciplinary action will be taken following the Paragon Systems review of the
incident, if warranted.

 

Project Manager will have the authority to impose less punishment than
is promulgated in this policy, but not more. Discipline shall be administered
in the following manner:

 

1.               Written Reprimand or Suspensions will be put into effect on first offense, whenever
misconduct or behavior is not of a serious nature. Suspension time may vary
depending on seriousness of the offense.

 

2.               Dismissal
will be effected in those cases when deemed by management to be extreme and
serious in nature.

 

All non-serious offenses will be removed from
the employees local personnel file and forwarded to the Corporate office after
the expiration of six (6) months from the occurrence of that offense.

 

Records of all other disciplinary action
shall be retained commencing from the effective date of this Agreement forward.

 

No employee will be dismissed on the basis of race, color, religion,
sex, or national origin. Employees who are dismissed will not be eligible
for re-employment with Paragon Systems, Inc.

 

Any conference between a supervisor and officer or during questioning
connected to an investigation that may lead to a disciplinary action must at
the request of the officer, be conducted in the presence of a union
representative.

 

 

Discipline shall be applied in the following
manner in reference to attendance:

 

	
  OFFENSE:

  	
   

  	
  1st

  	
   

  	
  2nd

  	
   

  	
  3rd

  	
   

  	
  4th

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.
  Unexcused lateness:

  	
   

  	
  LOC

  	
   

  	
  LOW

  	
   

  	
  S
  (1 day)

  	
   

  	
  D

  

 

Examples
of an excusable lateness are identified as: treatment by a doctor, treatment at
a hospital, vehicle accident or breakdown, death or illness in family, which
must be confirmed with written documentation. 
An employee shall provide the project manager or his/her designee with
documentation of such emergencies within three days of the incident.

 

When discipline is justified disciplinary action must be implemented
within five (5) working days of
the offense.

 

 

	
  OFFENSE:

  	
   

  	
  1st

  	
   

  	
  2nd

  	
   

  	
  3rd

  	
   

  	
  4th

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.
  Unexcused absence:

  	
   

  	
  LOC

  	
   

  	
  LOW

  	
   

  	
  S
  (1 day)

  	
   

  	
  D

  

 

Examples of an excusable absence are identified as: treatment by a
doctor, treatment at a hospital, vehicle accident or breakdown, death or
illness in family, which must be confirmed with written documentation. An
employee shall provide the project manager or his/her designee with
documentation of such emergencies within three days of the incident.

 

2

 

Minor violations
will be considered as employee actions, which momentarily disrupt the
operation.

 

The infractions must be of the same type and
kind to effect the next level of adverse action.

 

Examples of these are as follow:

 

	
   

  	
   

  	
  1st

  	
   

  	
  2nd

  	
   

  	
  3rd

  	
   

  	
  4th

  
	
  3.               Offense (non-serious)

  	
   

  	
  LOC

  	
   

  	
  LOW

  	
   

  	
  S (1 day)

  	
   

  	
  D

  

 

a.               Failure to turn in all SSA forms, whenever
required.

 

b.              Conducting unauthorized business while on
duty.

 

c.               Unauthorized use of company or government
telephones, fax machine, or other office equipment.

 

d.              Creating or contributing to unsanitary
conditions.

 

e.               Posting or removal of notices, signs or
writing in any form on company bulletin boards, without permission.

 

F.              Incomplete uniform

 

g.              Calling off from duty with less than four (4)
hours notice unless a valid emergency existed and documentation to that effect
is provided.

 

h.              Reading unauthorized materials while on post.

 

i.                  Sitting during peak hours.

 

3

 

j.                  Playing games while on duty, to include
electronic and non-electronic, cards, board games, etc.

 

k.               Eating or drinking beverages (non-alcohol) on
post.

 

l.                  Possessing visual or audible unauthorized
equipment while on duty. i.e., pagers, cell phones,
earplugs/earphones/headsets, pocket talk, radios, televisions, laptop computers
etc.

 

m.            Failure to maintain proper grooming standards
and/or properly maintain assigned uniform and equipment pursuant to SSA/GSA
Guidelines.  Management will take
reasonable steps to retain a person on site unless their uniform is badly soiled,
torn, or has excessive odor.

 

n.              Lateness in returning from an
assigned/approved break period except in instances of documented emergency.

 

o.              Failure to respond to and/or use proper
communication protocol while using assigned radio and/or SSA telephones.

 

p.              Being discourteous to a Supervisor or
employees of the government

 

q.              Failure to notify Control Center during
security checks (to include when calling out of service/back in service).

 

r.                 Assuming the responsibility of two posts
without authorization.

 

t.                 Making a change to the schedule without
the prior approval from Supervisor.

 

u.              Failure to use proper chain of command.

 

v.              Smoking while on duty, and/or smoking in an
unauthorized area.

 

4

 

Moderate violations  are
considered to be those employee actions, which impair or disrupt the orderly
performance of work by the individual or a group of employees.

 

The infractions must be of the same type and kind to affect the next
level of adverse action.

 

	
   

  	
   

  	
  1st

  	
   

  	
  2nd

  	
   

  	
  3rd

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.     Offenses

  	
   

  	
  S (1 day)

  	
   

  	
  S (3 days)

  	
   

  	
  D

  

 

a.               No Call No Show.

Note: Employees’ will be given (1) hour from start of his/her shift to call
or to report for work.

 

b.              Using obscene language or engaging in lewd
behavior.

 

c.               Failure to correct and/or sign in/out of SSA
4072 (which causes a deduction to PSI).

 

d.              Disregarding or refusing to obey orders,
directives, instructions from a competent supervisor or SSA official, as long
as those task, commands, or directives are not unethical, immoral, or illegal.

 

e.               Inattentive to duty, when sleeping is not
found.

 

f.                 Negligent or careless acts, which results in
personal injury or damage to company, Government, or personal property.

 

g.              Causing dissension among other employees in a
manner interfering with the client’s operations and interfering with other
employees’ compliance with post orders, and shift assignments.

 

h.              Unauthorized use of
company vehicles and/or equipment.

 

5

 

Major violations  are
considered to be employee actions, which directly endanger the health and
safety of any employee or significantly disrupt the orderly performance of
work.

 

	
  5.             OFFENSE:

  	
   

  	
  D

  

 

Not withstanding the foregoing, an employee shall be
subject to immediate discharge for proven offenses. Examples are as follows:

 

a.               Willful falsification of company, government,
or employee records.

 

b.              Theft of company, government, or personal
property.

 

c.               Abandoning post without just cause.

 

d.              Possessing, distributing, consuming, or being
under the influence of alcohol, illegal drugs, or controlled substances while
on duty.

 

e.               Possession on the job site of a private
firearm or other weapon not issued by the employer pursuant to the contract in
violation of 18 U.S.C. 930.

 

f.                 Making willful false statements on an
application for employment, a gun permit, or a security clearance.

 

g.              Refusal to submit to drug or alcohol testing
as provided.

 

h.              Willful or careless destruction of property.

 

i.                  Sleeping on post and/or sleeping while in possession
of company handgun.

 

j.                  Accepting graft, gifts or gratuities as a
favor for a service while on duty.

 

k.               Not reporting for work after 2 days without
notifying Paragon Systems, Inc.

 

l.                  Willfully concealment, removal, mutilation or
destruction of government documents or records.

 

m.            Gross insubordination

 

n.              Willfully given unauthorized access to an
agency automated Information system.

 

o.              Unauthorized access to areas not required for
the performance of the contract.

 

q.              Misuse of, unauthorized transfers, or display
of weapon.

 

6

 

When an employee is hired by Paragon Systems the previous offense
record shall be deleted from the individual’s record unless there is some
offense considered egregious and unacceptable to the management of Paragon
Systems.  However, as a rule, the average
employee may expect to start work at Paragon Systems with a “clean state”.  It is the individual’s responsibility to keep
that slate clean for the duration of the tenure with Paragon Systems. Any and
all offenses recorded by Paragon Systems shall remain on record at Paragon
Systems, both with the Human Resources Office. These records will be maintained
for a period after the end of the individual’s tenure that is determined by the
Government or by Paragon Systems’ Management. They are under no circumstances
scheduled for destruction an appropriate time is established by Paragon Systems
and/or the Government.

 

Any
conference between an employee and Employer representative that may lead to a
disciplinary action, must, at the request of the affected employee, be
conducted in the presence of an authorized union representative.

 

NOTE: The Company will identify
inefficiency as follows: 

Neglect of duty, unexcused absence
and tardiness, breach of the company and Government’s SOP, Security Procedures,
refusal to perform work assigned to them without an acceptable excuse.  Managers will have the discretionary
authority and power to determine final disposition of inefficiency. These offenses
are not all inclusive.

 

It is each employee’s responsibility to be knowledgeable of and review daily
all Memorandums and Security Procedures and Policies

 

	
  LEGEND:

  	
   

  	
  LOC

  	
   

  	
  Letter
  of Counseling

  
	
   

  	
   

  	
  LOW

  	
   

  	
  Letter
  of Warning

  
	
   

  	
   

  	
  S

  	
   

  	
  Suspension

  
	
   

  	
   

  	
  D

  	
   

  	
  Dismissal

  

 

 

	
  /s/ Charles Keathley

  	
   

  
	
  Charles Keathley, President

  

 

7Exhibit
10.41

 

JOINT VENTURE

 

LIMITED LIABILITY COMPANY AGREEMENT

 

FOR

 

ARMY FLEET SUPPORT, LLC

 

 

TABLE OF CONTENTS

 

	
  ARTICLE 1 FORMATION

  	
   

  
	
  ARTICLE 2 DEFINITIONS

  	
   

  
	
  ARTICLE 3 NATURE OF BUSINESS

  	
   

  
	
  ARTICLE 4 ACCOUNTING AND RECORDS

  	
   

  
	
  ARTICLE 5 NAMES OF MEMBERS

  	
   

  
	
  ARTICLE 6 RIGHTS AND DUTIES OF MEMBERS

  	
   

  
	
  ARTICLE 7 MANAGEMENT COMMITTEE

  	
   

  
	
  ARTICLE 8 GENERAL MANAGER

  	
   

  
	
  ARTICLE 9 CONTRIBUTIONS AND CAPITAL ACCOUNTS

  	
   

  
	
  ARTICLE 10 ALLOCATIONS AND DISTRIBUTIONS

  	
   

  
	
  ARTICLE 11 TAXES

  	
   

  
	
  ARTICLE 12 DISPOSITION OF MEMBERSHIP INTERESTS

  	
   

  
	
  ARTICLE 13 ADMISSION OF ASSIGNEES AND ADDITIONAL MEMBERS

  	
   

  
	
  ARTICLE 14 DISSOLUTION AND WINDING UP

  	
   

  
	
  ARTICLE 15 AMENDMENT

  	
   

  
	
  ARTICLE 16 LIABILITY OF MEMBERS, MANAGEMENT COMMITTEE AND
  GENERAL MANAGER; INDEMNIFICATION

  	
   

  
	
  ARTICLE 17 INTELLECTUAL PROPERTY

  	
   

  
	
  ARTICLE 18 PROHIBITED TRANSACTIONS

  	
   

  
	
  ARTICLE 19 MEDIATION AND ARBITRATION

  	
   

  
	
  ARTICLE 20 MISCELLANEOUS PROVISIONS

  	
   

  
	
   

  	
   

  
	
  Exhibit A: Members

  	
   

  
	
  Exhibit B: Initial Management Committee

  	
   

  

 

i

 

The Units represented by this document have
not been registered under any securities laws and thus their transferability is
restricted. The Units may not be sold, assigned, or transferred, nor will any
assignee, transferee, or endorsee thereof be recognized as having an interest
in such Units by the issuer for any purpose, unless (i) a registration
statement under the Securities Act of 1933, as amended, with respect to such
Units shall then be in effect and such transfer has been qualified under
applicable state securities laws, or (ii) the availability of any exemption
from registration and qualification shall be established to the satisfaction of
counsel for the Company.

 

The Units represented by this document are
subject to further restriction as to their sale, transferability, or
assignment as set forth in this Agreement and agreed to by each Member.
Said restriction provides, among other things, that no transferee or assignee
shall become a Substitute Member unless consented to by the Members.

 

JOINT VENTURE

 

LIMITED LIABILITY COMPANY AGREEMENT

 

FOR

 

ARMY FLEET SUPPORT, LLC

 

This Joint Venture Limited Liability Company Agreement is entered into
and shall be effective as of the Effective Date by and among the persons
executing this Agreement as Members. The Members of this Joint Venture desire
to enter into this Agreement to regulate or establish the affairs of the
Company, the conduct of its business and the relations of its Members.

 

The Members of the Joint Venture will work together to further the
business base and experience of the small business members. In recognizing the
small business participation for terms of compliance with the Program small
business goals, the Joint Venture will provide an accounting of revenue and
cost for each party’s participation in accordance with the contribution ratios
identified in Exhibit A. The large business participants pledge an enhanced
mentoring program for the small businesses through active inclusion in all
management decisions as specified in Article 7, Management Committee; as
well as program management involvement in specific areas of expertise of each
participant. All Members will share best practices employed by their respective
companies for the improved performance of the Joint Venture on the program.

 

The Members recognize the strategic importance of the Program in
providing safe and reliable aircraft for training Army Aviators as well as
providing a source of ‘depot’ maintenance

 

1

 

capability to U. S. Army Aviation and Missile Command and will dedicate
the necessary resources to ensure full performance of the Contract. Each Member
further recognizes the strengths of the other in its respective ability to
provide support to the Army for the Program and each will commit its general
management, maintenance management, logistics management, engineering
management, labor relations management and expertise and program management
resources as necessary to ensure that every requirement of the Contract is
performed in a compliant manner. Each party will use its best efforts to exceed
the Customer’s expectations.

 

For and in consideration of the mutual covenants herein contained and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the Members executing this Agreement hereby agree as
follows:

 

ARTICLE 1

FORMATION

 

1.1           Organization.  The Members agree to form the Company as a
Delaware limited liability company pursuant to the provisions of the Act.

 

1.2.          Name.  The name of the Company is Army Fleet
Support, LLC, and all business of the Company shall be conducted under that
name or under any other name. The Company shall hold all of its Property in the
name of the Company and not in the name of any Member.

 

1.3           Effective
Date.  This Agreement is effective
as of June 2, 2003, which is the date of the filing of the Certificate
with the Delaware Secretary of State (the “Effective Date”).

 

1.4           Term.  The term of the Company shall commence of
the Effective Date, and unless sooner terminated, liquidated, or dissolved
pursuant to the provisions hereof, shall continue until:

 

a.             All
obligations and liabilities, including warranty, assumed by or imposed upon the
Company under the Contract have been performed or discharged, and

 

b.             All
disputes, claims, causes of action, obligations and liabilities and other
similar matters arising out of or in connection with the Contract have been
resolved or discharged, and

 

c.             The
Company has received payment in full of sums due it under the Contract.

 

1.5           Registered
Agent and Office.  The registered
agent for service of process and the registered office shall be that Person and
location reflected in the Certificate as filed in the office of the Delaware
Secretary of State. The Management Committee, may, from time to time, change
the registered agent or office through appropriate filings with the Delaware
Secretary of State. In the event the registered agent ceases to act as such for
any reason or the registered

 

2

 

office shall change, the Management Committee shall promptly designate
a replacement registered agent or file a notice of change of address as the
case may be. If the Management Committee shall fail to designate a replacement
registered agent or change of address of the registered office, any Member may
designate a replacement registered agent or file a notice of change of address.

 

1.6           Principal
Office.  The Principal Office of the
Company shall be located at, and the Company’s mailing address shall be 555
Industrial Drive South; Madison, Mississippi 39110, or at such other location
and address as determined from time to time by the Management Committee.

 

ARTICLE 2

DEFINITIONS

 

2.1           Definitions.  For purposes of this Agreement, unless the
context clearly indicates otherwise, the following terms shall have the
following meanings:

 

Act. 
The Delaware Limited Liability Company Act and all amendments to the
Act.

 

Additional Member.  A Member or a Substitute Member who has acquired Units from the
Company pursuant to Section 13.3.

 

Admission Agreement.  The agreement between an Additional Member and the Company,
wherein the Additional Member agrees to be bound by all the terms and
conditions of this Agreement and which specifies the Capital Contribution to be
made by such Additional Member.

 

Affiliate. 
A natural person or an Organization that directly, or indirectly through
one or more intermediaries, controls or is controlled by, or is under common
control with, the Member.

 

Agreement. 
This Limited Liability Company Agreement including all amendments
adopted in accordance with this Agreement and the Act.

 

Assignee. 
A Person to whom Units have been transferred pursuant to the provisions
of Article 12 who has not been admitted as a Substitute Member.

 

Available Cash.  At the time of determination, Money, demand deposits or
short-term marketable securities arising out of, or acquired with proceeds
derived from, net cash flow from the operation of the Company that the
Management Committee determines is available for Distribution to the Members.

 

Business Day. 
Any day other than Saturday, Sunday or any legal holiday observed by the
United States Government.

 

3

 

Capital Account.  The account maintained for a Member or Assignee determined in
accordance with Article 9.

 

Capital
Contribution. 
With respect to any Member, the amount of Money and the initial Gross
Asset Value of any Property (other than Money) contributed to the Company with respect
to the Units held by such Member pursuant to the terms of this Agreement.

 

Capital Transaction.  A financing or refinancing, insurance recovery, condemnation,
award, easement sale, sale, exchange or other Disposition of all or any part of
the Property of the Company, and any other transaction, the proceeds of which,
in accordance with generally accepted accounting principals, are considered to
be capital in nature.

 

Certificate. 
The certificate of Formation of the Company described in
Section 18-201 of the Act, as originally filed with the Delaware Secretary
of State, and as amended, supplemented and restated from time to time.

 

Code. 
The Internal Revenue Code of 1986, as amended from time to time.

 

Company. 
Army Fleet Support, LLC, a limited liability company formed under the
laws of the State of Delaware, and any successor limited liability company.

 

Company
Liability.  Any
enforceable debt or obligation for which the Company is liable or which is
secured by any Company Property.

 

Company Property. Any Property owned by the
Company.

 

Contract. 
The prime contract for the Program, including any renewals, follow-ons,
recompetes or extensions of the Contract, and any options applicable to the
Contract, as defined.

 

Customer. The United States Army.

 

Depreciation. 
For each Taxable Year, an amount equal to the depreciation, amortization
or other cost recovery deduction allowable for federal income tax purposes with
respect to each Company Property for such Taxable Year, except that if the
Gross Asset Value of Company Property differs from its adjusted basis for
federal income tax purposes at the beginning of such Taxable Year, Depreciation
shall be an amount which bears the same ratio to such beginning Gross Asset
Value as the federal income tax depreciation, amortization or other cost
recovery deduction for such Taxable Year bears to such beginning tax basis;
provided, however, that if the adjusted basis for federal income tax purposes
of Company Property at the beginning of such Taxable Year is zero, Depreciation
shall be determined with reference to such beginning Gross Asset Value using
any reasonable method selected by the Management Committee.

 

4

 

Distribution. 
A transfer to Property to Member or Assignee on account of a Unit as
described in Article 10.

 

Disposition (Dispose).  Any sale, assignment, transfer, exchange,
mortgage, pledge, grant, hypothecation, or other transfer, whether absolute or
as security or encumbrance (including dispositions by operation of law).

 

Electronic Transmission.  Any process of communication not directly
involving the physical transfer of paper that is suitable for the retention,
retrieval and reproduction of information by the recipient.

 

General Manager.  The project manager as defined in Article 8.

 

Gross Asset Value.  With respect to any Company Property, the asset’s adjusted basis
for the federal income tax purposes, except as follows:

 

a.             The initial Gross
Asset Value of any asset contributed by a Member to the Company shall be the
gross fair market value of such asset, as determined by the contributing Member
and the Management Committee, provided that, if the contributing Member is a
member of the Management Committee, the determination of the fair market value
of the contributed assets shall require the consent of the Members;

 

b.             The Gross Asset
Values of all Company Property shall be adjusted to equal their respective fair
market values, as determined by the Management Committee, as of the following
times:

 

(i)                The acquisition of
additional Units in the Company by any new or existing Member in exchange for
more than a de minimus capital
contribution;

 

(ii)               The distribution by
the Company to a Member of more than a de
minimus amount of Company Property as consideration for an interest
in the Company; and

 

(iii)              The dissolution of
the Company;

 

Provided, however, that adjustments pursuant to clauses (i) and (ii)
above shall be made only if the Management Committee reasonably determines that
such adjustments are necessary or appropriate to reflect the relative economic
interest of the Members in the Company;

 

c.             The Gross Asset Value
of any Company Property distributed to any Member shall be equal to the gross
fair market value of such asset on the date of distribution as determined by
the distributee Member and the Management Committee, provided that if the
distributee is a member of the Management Committee the

 

5

 

determination of the fair market value of the
distributed asset shall require the consent of the Members; and

 

d.             The Gross Asset
Values of Company Property shall be increased (or decreased) to reflect any
adjustments to the adjusted basis of such assets pursuant to Code
section 734(b) or Code section 743(b), but only to the extent that
such adjustments are taken into account in determining capital accounts
pursuant to Regulations Section 704-1(b)(2)(iv)(m).

 

If the Gross Asset Value of any Company Property differs from its
adjusted tax basis, such Gross Asset Value shall thereafter be adjusted by the
Depreciation taken into account with respect to such assets for purposes of
computing Net Profits and Net Losses.

 

L-3 Com IS LP.  The Member so designated on Exhibit A.

 

Management Committee.  The Management Committee selected in
accordance with Article 7 herein and given the authority set forth in
Article 7 herein.

 

Member. 
A person holding Units in the Company, including, unless the context
expressly indicates to the contrary, an Assignee.

 

Money. 
Cash or other legal tender of the United States, or any obligation that
is immediately reducible to legal tender without delay or discount. Money shall
be considered to have a fair market value equal to its face amount.

 

Net Profits and Net Losses.  For each Taxable Year, an amount equal to
the Company’s taxable income or loss, respectively, for such Taxable Year
determined in accordance with Code section 703(a)  (including, for this purpose, all items of
income, gain, loss or deduction that would otherwise be separately stated) with
the following adjustments.

 

a.             Any income of the
Company that is exempt from federal income tax and not otherwise taken into
account shall be added to such taxable income or loss;

 

b.             Any expenditures of
the Company described in, or treated as, Code section 705(a)(2)(B)
expenditures and not otherwise taken into account in computing Net Profits or
Net Losses shall be subtracted from such taxable income or loss;

 

c.             In the even the Gross
Asset Value of any Company Property is adjusted pursuant to the requirements of
this Agreement, the amount of such adjustment shall be taken into account as
gain or loss from the disposition of such asset for purposes of computing Net
Profits and Net Losses;

 

d.             Gain or loss
resulting from any disposition of Company Property with respect to which gain
or loss is recognized for federal income tax purposes shall be

 

6

 

computed by reference to the Gross Asset
Value of the Property disposed of, regardless of whether the adjusted tax basis
for such Property differs from its Gross Asset Value;

 

e.             In lieu of
depreciation, amortization and other cost recovery deductions taken into
account in computing such taxable income or loss, there shall be taken into
account Depreciation for such Taxable Year, computed in accordance with the
terms of this Agreement;

 

f.              To the extend an
adjustment to the adjusted tax basis of any Company Property pursuant to Code
sections 734(b) or 743(b) is required pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)
to be taken into account in determining capital accounts, the amount of such
adjustment shall be treated as an item of gain (if the adjustment increases the
basis of the asset) or loss (if the adjustment decreases the basis of the asset)
from a disposition of the asset and shall be taken into account for purposes of
computing Net Profits and Net Loses; and

 

g.             Notwithstanding any
other provision of this definition, any items which are specifically allocated
pursuant to Section 10.2 hereof shall not be taken into account in
computing Net Profits or Net Losses.

 

Notice. 
Any Notice requires to be given to any Person or the Company Pursuant to
the terms of this Agreement or the Act shall be given in accordance with
Section 20.1 of this Agreement.

 

Offsettable Decrease.  Any allocation that unexpectedly causes or
increases a deficit in the Member’s or Assignee’s Capital Account as of the end
of the taxable year to which the allocation relates attributable to depletion
allowance under Section 1.704(b)(2)(iv)(k) of the Regulations, allocations
of loss and deductions under Sections 704(e)(2) or 706 of the Code or under
Section 1.751-1 of the Regulations, or distributions that, as of the end
of the year, are reasonably expected to be made to the extent they exceed the
offsetting increases to such person’s Capital Account that reasonably are
expected to occur during (or prior to) the taxable years in which the such
distributions are expected to be made.

 

Organization. 
A Person other than a natural person. Organization includes, without
limitation, corporations (both non-profit and other corporations), partnerships
(both limited and general), joint ventures, limited liability companies, and
unincorporated associations, but the term does not include joint tenancies and
tenancies by the entirety.

 

Percentage Interest.  With respect to any Member or Assignee, a fraction (expressed as
a percentage), the numerator of which is the total number of Units held by such
person and the denominator is the total number of Units of all Members and
Assignees.

 

PSI. The Member so designated on Exhibit A.

 

7

 

Person. 
An individual, trust, estate, or any incorporated or unincorporated
organization permitted to be a member of a limited liability company under the
laws of the State of Delaware.

 

Proceeding. 
Any judicial or administrative trial, hearing or other activity, civil,
criminal or investigative, the result of which may be that a court, arbitrator,
or governmental agency may enter a judgment, order, decree, or other
determination which, if not appealed and reversed, would be binding upon the
Company, a Member or other Person subject to the jurisdiction of such court,
arbitrator, or governmental agency.

 

Program. 
The Fort Rucker Fleet Support Program.

 

Property. 
Any property real or personal, tangible or intangible, including Money
and any legal or equitable interest in such property, but excluding services
and promises to perform services in the future.

 

RALLC. 
The Member so designated on Exhibit A.

 

Regulations. 
Except where the context indicates otherwise, the permanent, temporary,
proposed, or proposed and temporary regulations of the Department of the
Treasury under the Code as such regulations may be lawfully changed from time
to time.

 

Substitute Member.  An Assignee who has been admitted to all of the rights of
membership pursuant to this Agreement.

 

Taxable Year. 
The taxable year of the Company as determined pursuant to
section 706 of the Code.

 

Taxing Jurisdiction.  Any state, local, or foreign government that collects tax,
interest or penalties, however designated, on any Member’s share of the income
or gain attributable to the Company.

 

Units. 
The rights of a Member or Assignee in Distributions (liquidating or
otherwise) and allocations of the profits, losses, gains, deductions, and
credits of the Company.

 

Unrepaid Capital.  The excess, if any, of (i) the sum of the Capital Contributions
of a Member, over (ii) the proceeds from Capital Transactions, if any,
theretofore distributed to such Member.

 

USH. 
The Member so designated on Exhibit A.

 

Voting Right. 
The right of a Member to information and to consent to, approve or
otherwise vote on actions of the Company as specified herein.

 

8

 

ARTICLE 3

NATURE OF BUSINESS

 

3.1           Performance
of Contract.  The purpose, nature
and character of the business of the Company is to act as the contractor under
the Contract.

 

3.2           Limited
Purpose.  The purpose of the Company
is to engage solely in the foregoing business activities, together with such
other activities as may be ancillary or related thereto, or otherwise necessary
or advisable in connection with the foregoing activities.  The Company, without written consent of all
of the Members, shall not engage in any business unrelated to the Program, the
Contract, and ancillary and related activities.

 

ARTICLE 4

ACCOUNTING AND RECORDS

 

4.1           Records to be Maintained.  The Management Committee shall maintain the
following records at the Principal Office:

 

a.             A current list of the
full name and last known business address of each Member, former Member and
other holder of a Unit (including as Assignee), together with such person’s
current Percentage Interest;

 

b.             A current list of the
full name and last known business address of each member of the Management
Committee;

 

c.             A copy of the
Certificate and all amendments thereto, together with executed copies of any
powers of attorney pursuant to which the Certificate has been executed;

 

d.             Copies of the
Company’s federal, foreign, state and local income tax returns and reports, if
any, for the three most recent years or for the period of time required under
the Contract, whichever is longer;

 

e.             Copies of this
Agreement including all amendments thereto;

 

f.              Any financial
statements of the Company for the three most recent years or for the period of
time required under the Contract, whichever is longer;

 

g.             If not set forth in
this Agreement, a writing or other data compilation from which information can
be obtained through retrieval devices into reasonably usable form setting forth
the following:

 

9

 

(i)            The amount of cash and
a description and statement of the agreed value of the other property or
services contributed by each Member and which each Member has agreed to
contribute;

 

(ii)           The times at which or
events upon the happening of which any additional contributions agreed to be
made by each Member are to be made; and

 

(iii)          Any events upon the
happening of which the Company is to be dissolved and its affairs wound up.

 

4.2           Reports to Members:

 

a.             The Management
Committee shall provide reports at least annually to the Members at such time
and in such manner as the Management Committee may determine reasonable.

 

b.             The Management
Committee shall provide all Members and Assignees with those information
returns required by the Code and the laws of any Taxing Jurisdiction.

 

4.3           Method of Accounting.  The records of the Company shall be maintained
on an accrual basis, in accordance with generally accepted accounting
principles.

 

ARTICLE 5

NAMES OF MEMBERS

 

5.1           Names.  The names of the Members are as reflected on
Exhibit A attached hereto and by this reference made a part hereof as if
set forth fully herein.

 

ARTICLE 6

RIGHTS AND DUTIES OF MEMBERS

 

6.1           Voting Rights.

 

a.             Except as provided in
subsection (b) of this Section 6.1, all Members shall be entitled to
the right to vote on any matter submitted to a vote of the Members pursuant to
this Agreement or the Act. No Assignee shall be entitled to Voting Rights
unless admitted as a Substitute Member pursuant to the terms of this Agreement.
At every Members’ meeting, any vote shall be by the Members based on and in
proportion to the Percentage Interests as of the record date. A vote may be
cast by a Member either in person or by proxy pursuant to Section 6.12
herein.

 

b.             For the purposes of
voting in elections of members of the Management Committee only, the Member
designated as “RA LLC” on Exhibit A attached hereto shall

 

10

 

have the right to elect four (4) members of the Management Committee;
the Member designated as “L-3 Com IS LP” on Exhibit A attached hereto
shall have the right to elect four (4) members of the Management Committee; the
Member designated as “PSI” on Exhibit A attached hereto shall have the
right to elect one (1) member of the Management Committee; and the Member
designated as USH on Exhibit A attached hereto shall have the right to elect
one (1) member of the Management Committee.

 

6.2           Approval of the Members.  Unless specified otherwise in this Agreement
or required by the Act, the approval of the Members having a majority of
fifty-one percent (51%) of the Percentage Interests at a meeting where a quorum
is present shall constitute the action of the Members. Assignees shall not be
considered Members entitled to vote for the purpose of determining such
supermajority.

 

6.3           Annual
Meetings.  The annual meeting of the
Members shall be held during the second quarter of each year, at the Principal
Office of the Company, at such date, time or place as may be designated in the
notice thereof as herein provided, or as may be designated by the Members at a
previous meeting thereof, or as may be unanimously agreed upon by the Members,
which agreement may be indicated by the presence of the Members at such
meeting, either in person or by proxy. If the said date be a legal holiday, the
annual meeting shall be held on the next succeeding Business Day. The purposes
of the annual meeting shall be the election of the Management Committee and the
transaction of any other business that may properly come before the meeting.

 

6.4           Special Meetings.  Special meetings of the Members, for any
purpose or purposes, shall be held at the Principal Office of the Company, or
at such other place, and at such date and time, as may be designated in the
notice thereof, or as may be fixed by the Members at a previous meeting
thereof, or as may be unanimously agreed upon by the Members, which agreement
may be indicated by the presence of Members at such special meeting, either in
person or by proxy, and may be called at any time by the Management Committee.
The Management Committee may call such a meeting on its own accord, and shall
be obligated to call such a meeting whenever so requested in one or more
signed, dated and written demands for a meeting (describing the purpose or
purposes for which it is to be held) delivered to the Management Committee by
the Members holding at least ten percent (10%) of the Percentage Interests. No
matter shall be proposed for action or other consideration at such meeting
except as stated in the notice thereof delivered to the Members, unless such
notice shall have been unanimously waived by the Members entitled to notice
that such proposed action or other consideration on such matter is a purpose of
such special meeting.

 

6.5           Notice.  Notice meeting the requirements of
Section 20.1 of this Agreement and stating the place, date and time of all
Members’ meetings, annual or special, shall be given not less than five (5) or
more than sixty (60) days before the date of the meeting, by or at the
direction of the Management Committee, to each Member, unless such notice shall
be waived thereby. Notice of a special meeting shall include a description of
the purpose or purposes for

 

11

 

which the meeting is called. However, notice of an annual meeting need
not include a description of the purpose or purposes for which it is called.

 

6.6           Record
Date.  The Management Committee
shall determine the record date for identifying the Members and their
Percentage Interests entitled to notice of and to vote at an annual or special
meeting of the Members. If the Management Committee does not otherwise fix a
record date, then the record date is the day before the first notice is
delivered to Members; the record date for determining Members entitled to take
action without a meeting is the date the first Member signs a consent; and the
record date for determining Members entitled to demand a special meeting is the
date the first Member signs the demand.

 

6.7           Adjournment.  Any meeting of Members, annual or special,
may adjourn to a different date or time to reconvene at the same or some other
place, and notice need not be given of any such adjourned meeting if the date,
time and place thereof are announced at the meeting at which the adjournment is
taken before the adjournment thereof. At the adjourned meeting the Members may
transact any business which might have been transacted at the original meeting.
If after the adjournment a new record date is fixed for the reconvened meeting,
a notice of the reconvened meeting shall be given to each Member of record as
of the new record date. The Management Committee must fix a new record date if
the meeting is adjourned to a date more than one hundred twenty (120) days
after the date fixed for the original meeting.

 

6.8           Quorum.  Unless otherwise provided by this Agreement,
a quorum for action on any matter at any Members’ meeting shall consist of a
majority of the Percentage Interests, whether the Percentage Interests are
represented in person or by proxy. Once a Percentage Interest is represented
for any purpose at a meeting, it is deemed present for quorum purposes for the
remainder of the meeting and for any adjournment of that meeting unless a new
record date is or must be set for that reconvened meeting. If a quorum be not
so represented at such a meeting, a majority of those Percentage Interests so
represented may adjourn the meeting to a future date, time and place, and
thereafter from time to time, as provided herein.

 

6.9           Action
Without Meeting.  Any action
required or permitted to be taken by the Act or this Agreement at a meeting of
the Members may be taken without such a meeting if one or more written
consents, describing the action so taken, shall be signed by each of the
Members and delivered to the Management Committee for filing with the Company
records. Such a consent is to have the same effect as a meeting vote and may be
described as such in any document.

 

6.10         Organization.  The Chairman of the Management Committee, or
his or her designee, shall call meetings of the Members to order and shall act
as Chairman of such meetings, unless otherwise determined by the holders of the
majority of all of the Percentage Interests present in person or by proxy. The
presiding officer shall appoint another person to act as secretary of that
meeting.

 

6.11         [Reserved]

 

12

 

6.12         Proxies.  All appointments by a Member of a proxy to
vote or otherwise act for such Member shall be duly appointed in writing,
properly signed (either personally or by that Member’s attorney-in-fact) and
shall be effective when received by the Management Committee or other person
authorized by the Management Committee to tabulate votes prior to the
commencement of the meeting. A proxy shall be valid for eleven (11) months from
the date of its execution unless a longer or shorter period is expressly
provided in the proxy appointment form and shall be revocable and not
irrevocable. The death or incapacity of the Member granting a proxy does not
affect the right of the Company to accept the proxy’s authority unless notice of
the death or incapacity of that Member is received by the Management Committee
or other person authorized by the Management Committee to tabulate votes before
the proxy exercises his or her authority under the proxy appointment. Subject
to the provisions of this Section 6.12, as well as any express limitations
on the proxy’s authority appearing on the face of the proxy appointment form,
the Company is entitled to accept the proxy’s vote or other action as that of
the Member granting the proxy.

 

6.13         [Reserved]

 

6.14         Liability
of Members.  No Member shall be
liable as such for the liabilities of the Company. The failure of the Company
to observe any formalities or requirements relating to the exercise of its
powers or management of its business or affairs under this Agreement or the Act
shall not be grounds for imposing personal liability on the Members for
liabilities of the Company.

 

6.15         Representations
and Warranties.  Each Member, and in
the case of an Organization, the person(s) executing this Agreement on behalf
of the Organization, hereby represents and warrants to the Company and each
other Member that: (a) if that 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 organizational power to execute and agree to
this Agreement to perform its obligations hereunder; (b) that the Member is
acquiring its interest in the Company for the Member’s own account as an
investment and without an intent to distribute the interest; (c) the Member
acknowledges that the interests have not been registered under the Securities
Act of 1933 or any state securities laws, and may not be resold or transferred
by the Member without appropriate registration or the availability of an
exemption from such requirements.

 

6.16         Conflicts
of Interest.  Nothing herein shall
be construed to prohibit any of the Members or their respective Affiliates from
seeking or taking advantage of other opportunities in their respective fields
of work, whether or not in competition with one another; provided, however,
that no Member nor its Affiliates may compete with the Company with respect to
the Program. Each Member recognizes that the other Members have or may have
other business interests, activities and investments, some of which may be in
conflict or competition with the business of the Company, and that each such
other Member is entitled to carry on such other business interests, activities
and investments. Neither the Company nor any Member shall have

 

13

 

any right, by virtue of this Agreement, in or to such activities, or
the income or profits derived therefrom, and the pursuit of such activities,
even if competitive with the business of the Company, shall not be deemed
wrongful or improper. Without limiting the generality of the foregoing, subject
only to an obligation not to act in bad faith, each Member shall be free to
take its own interests into account when determining what position to take in
respect to a proposed act or omission of the Company.

 

6.17         Events
of Bankruptcy.  A person shall not
cease to be a Member of the Company upon the happening of any of the events
specified in Section 18-304, or its successor, of the Act.

 

ARTICLE 7

MANAGEMENT COMMITTEE

 

7.1           Duties.  The business and affairs of the Company
shall be managed and controlled under the direction of the Management
Committee. All powers that may be exercised and/or performed by the Company,
under the Act, the Certificate and this Agreement shall be exercised by or
under the authority of the Management Committee.

 

7.2           Actions
Requiring Management Committee or Member Approval; Day-to-Day Authority of the
General Manager.

 

a.             Management
Committee or Member Approval Required. 
All actions outside the ordinary course of business of the Company, to
be taken by or on behalf of the Company, shall require the approval of the
Management Committee; provided  however, that the following
actions shall require the approval of the Members:

 

(i)            Consummation of a
merger or share exchange to which the Company is a party;

 

(ii)           Consummation of a sale
or other transfer of all or substantially all assets of the Company;

 

(iii)          Amendment of the
Certificate;

 

(iv)          Admission to the Company
of additional Members; or

 

(v)           Dissolution of the
Company.

 

b.             General Manager.  The General Manager of the Company shall
have the power and authority to take (or authorize other officers, employees or
agents of the Company to take) all actions on behalf of the Company (without
the need for the consent or approval of any Member or any other person) that
are within the ordinary course of

 

14

 

business of the Company unless the Management
Committee shall have previously restricted (specifically or generally) such
power and authority of the General Manager.

 

7.3           Number
and Designation Procedure.  The
Management Committee shall consist of ten (10) individuals. Each Member shall
elect representatives to the Management Committee as provided in
Section 6.1, and may designate one or more alternates to serve in lieu of
any of the representatives so elected. A new Management Committee
representative of a Member (or alternate) may be named by written designation
by any executive officer of that Member. Each Member shall be responsible for
the Compensation and expenses of its representatives on the Management
Committee. The initial Management Committee is designated in Exhibit B.

 

7.4           Actions
of the Management Committee.  The
Members shall be represented at the Management Committee meetings by their
respective members (member in lower case letters shall refer in this
Article 7 to a Management Committee member as opposed to a Member of the
Company) who shall have full authority to act for and bind the respective
Members. Each member so designated shall have one vote on the Management
Committee. The Management Committee shall elect a Chairman annually, to serve a
term beginning on October 1 and ending on the following September 30.
Actions and decisions by the Management Committee shall require a majority vote
of fifty-one percent (51%) of the members present at the meeting.

 

7.5           Regular
Meetings.  The Management Committee
shall meet not less than once every three months. Meetings of the Management
Committee shall be held at the Program site or at such other location as the
Members of the Management Committee may decide. Any member of the Management
Committee may participate in meetings of the Management Committee by telephone
or video conference.

 

7.6           Special
Meetings.  Any member of the
Management Committee may call a special meeting of the Management Committee
upon two (2) business day’s written notice to the other members. Such notice
shall satisfy the requirements of Section 20.1 of this Agreement. By
unanimous consent of the members of the Management Committee, special meetings
of the Management Committee may be held without notice, at any time and place.
Any and all types and items of business may be taken up, considered, acted upon
and transacted at a special meeting.

 

7.7           Quorum.  A quorum of the Management Committee shall
consist of six (6) members, provided that the members present include two (2)
members representing L-3 Com IS LP; two (2) members representing RA LLC; one
member from PSI; and one (1) member from USH. If at the meeting of the
Management Committee there is less than a quorum present, a majority of those
present may adjourn the meeting.

 

7.8           Minutes
of Meetings.  All business
transacted at meetings of the Management Committee shall be recorded in a
suitable Minute Book to be kept at such place as the Management Committee shall
decide and shall be available during business hours for inspection

 

15

 

by the Members. The Management Committee shall designate a Secretary
who shall take and keep the minutes of meetings and maintain the records of
unanimous written consents, notices and other actions of the Management
Committee and its members. The Secretary need not be a member of the Management
Committee.

 

7.9           [Reserved]

 

7.10         Action
Without a Meeting by Consent. 
Unless otherwise provided by law, any action required to be taken or any
action which may be taken at a meeting of the Management Committee, may be
taken without meeting if one or more consents in writing, setting forth the
action so taken, shall be signed by each of the members of the Management
Committee entitled to vote with respect to the subject matter thereof and
delivered to the Company for filing in the minutes or filing with the corporate
records. Such consents shall have the same effect as a meeting vote and may be
described as such in any document.

 

7.11         Management
Committee Member’s Standard of Care. 
A Management Committee member’s duty of care in the discharge of his or
her duties to the Company and to the Members shall be limited to refraining
from engaging in grossly negligent or reckless conduct, intentional misconduct,
or a knowing violation of law. In discharging his or her duties, a member shall
be fully protected in relying in good faith upon the records required to be
maintained under Article 4 and upon such information, opinions, reports or
statements by any of the Company’s officers, Members, other members or agents
of any of the preceding, or by any other person, as to matters the member of
the Management Committee reasonably believes are within such other person’s
professional or expert competences and who has been selected with reasonable
care by or on behalf of the Company, including information, opinions, reports
or statements as to the value and amount of the assets, liabilities, profits or
losses of the Company or any other facts pertinent to the existence and amount
of assets from which distributions to members might properly be paid.

 

ARTICLE 8

GENERAL MANAGER

 

8.1           Authority
of General Manager.  The Management
Committee shall designate a project manager who shall work at the Contract site
and be assigned the title “General Manager”. The General Manager shall be
responsible for the day-to-day management of the Company and its performance of
the Contract and the Program. The General Manager shall act as the central
point of contact with the Customer. The General Manager shall implement the
policies of the Management Committee and shall have full authority to act on
behalf of the Company in connection with all Contract matters relating to the
daily operation of the Contract and the Program. The General Manager shall have
the power to expend Company funds in such amounts and for such purposes as contemplated
under the then-current budget approved by the Management Committee. The General
Manager shall have such other and further duties as contemplated under the
Contract, including but not limited to the following:

 

16

 

a.             serving as the primary contact with the
onsite ACO and other designated government representatives;

 

b.             signing contracts and work requests;

 

c.             negotiating, signing and implementing all
necessary subcontracts and lease agreements as required to execute the Program
and within the reimbursement guidelines of the Contract;

 

d.             hiring and firing employees of the
Company; and

 

e.             delegating portions of his
responsibilities and authority to employees of the Company, with certain of
those employees, as expressly approved by the Management Committee.

 

8.2           General
Manager’s Standard of Care.  The
General Manager’s duty of care in the discharge of the General Manger’s duties
to the Company and the Members is limited to refraining from engaging in grossly
negligent or reckless conduct, intentional misconduct, or a knowing violation
of law. In discharging his or her duties, the General Manager shall be fully
protected in relying in good faith upon the records required to be maintained
under Article 4 and upon such information, opinions, reports or statements
by any of the Company’s officers, its Members, the Management Committee, or
agents of any of the preceding, or by any other person, as to matters the
General Manager reasonably believes are within such other person’s professional
or expert competence and who has been selected with reasonable care by or on
behalf of the Company, including information, opinions, reports or statements
as to the value and amount of the assets, liabilities, profits or losses of the
Company or any other facts pertinent to the existence and amount of assets from
which distributions to members might properly be paid.

 

8.3           Bank
Accounts.  All funds of the Company
shall be deposited in a bank account or accounts opened in the Company’s name.
The Management Committee shall determine the institution or institutions at
which the accounts will be opened and maintained, the types of accounts, and
the persons who will have authority with respect to the accounts and the funds
therein.

 

ARTICLE 9

CONTRIBUTIONS AND CAPITAL ACCOUNTS

 

9.1           Capital
Contributions.  All working capital
deemed necessary by the Management Committee for operation of the Company shall
be furnished by the Members proportionately in accordance with their respective
Percentage Interests in the Company, at such times and in such

 

17

 

amounts as designated by the Management Committee upon ten days written
notice meeting the requirements of Section 20.1 of this Agreement.  Any required capital contribution of a
Member for operation of the Company may be funded by such Member from any
available loan facilities, other third party financing sources, working capital
loans, or other arrangements of such Member. 
If any Member borrows funds to meet its obligations hereunder, such
borrowing shall be the sole and separate obligation of that Member and shall
not be the debt or obligation of the Company, or of the other Members.  No Member hereto shall have the power to
borrow monies in the name of, or pledge the credit of, the other Members
subject to this Agreement, or to pledge their joint credit.

 

9.2           Default for Failure to Pay.  Each Member shall be required to provide its
proportionate share of working capital funds to the Company within ten business
days after written notice by the Management Committee.  In the event the funds are not paid within
such ten-day period, the Management Committee or the contributing Member shall
provide the non-contributing Member with a further written demand for
payment.  In the event that the
non-contributing Member fails to pay its proportionate share of such funds
within five business days of the second notice, such failure to pay shall be a
material breach of this Agreement.  Each
Member shall be legally liable (to the Company and other Members, but not to
third parties or Company creditors) to contribute to the Company its share of
working capital.

 

9.3           Default Loans.

 

a.             In the event that any Member (a
“Defaulting Member”) shall be in material breach as a result of its failure to
contribute its share of working capital, any other Member, provided such other
Member shall have advanced the full amount of its capital contribution (the
“Non-Defaulting Member”), shall have the right and option at any time
thereafter, but not the obligation, to lend (any such loan being herein
referred to as a “Default Loan”) to the Company all or any portion of the
capital contribution required of the Defaulting Member (herein referred to as
the “Defaulted Amount”).  If more than
one Non-Defaulting Member shall desire to make a Default Loan, such
Non-Defaulting Members shall loan the Defaulted Amount in such proportions as
they shall decide; if they cannot decide, each Non-Defaulting Member’s Default
Loan shall be made in the proportion that its Percentage Interest bears to the
Percentage Interests of all Non-Defaulting Members desiring to make a Default
Loan.  Default Loans shall (i) earn
interest on the outstanding principal amount thereof at a rate equal to the
lessor from time to time of (1) 10% per annum, and (2) the maximum rate then
permitted by applicable law as to the Defaulting Member in respect to whom the
Default Loan is made, from the date the Default Loan is deemed to have been
made until the same is repaid in full, (ii) unless repaid sooner pursuant to
any other provision of this agreement, be repaid by the Company on the fifth
anniversary of the due date of the Defaulted Amount in respect of which such
Default Loan was made,  (iii) be
reflected on the books of the Company, (iv) be entitled to distribution in the
order of priority provided in Article 10 hereof, and (v) as contributed
from time to time, have priority vis-à-vis other Default Loans based upon the
inverse order of the date of contribution of the same.

 

18

 

b.             If the Defaulting Member shall fail to
advance the full amount of any capital contribution due from such Member
hereunder (whether or not a Default Loan shall have been made), such Defaulting
Member shall have no right to take any actions or to vote on any matters as a
Member and the Non-Defaulting Members shall have the sole and full right to
exercise all of the powers of the Members; provided, however, that the
disability of the Defaulting Member shall immediately cease and the other
rights of the Defaulting Member shall be reinstated upon (i) if no Default Loan
was made, the advance by the Defaulting Member to the Company of its defaulted
capital contribution or (ii) if a Default Loan was made, the payment to the
Company by the Defaulting Member for payment to the holder of the Default Loan
the full outstanding principal amount of the Default Loan and all accrued
interest due thereon.

 

9.4           No
Third Party Beneficiaries.  No
creditor or other third party having dealings with the Company shall have the
right to enforce any right or obligation of any Member to make Capital
Contributions or pursue any right or remedy hereunder or at law or in equity,
it being understood and agreed that the provisions of this Agreement shall be
solely for the benefit of, and may be enforced solely by the parties hereto and
their respective successors and assigns. 
None of the rights or obligations of the Members herein set forth to
make Capital Contributions to the Company shall be deemed an asset of the
Company for any purpose by any creditor or other third party, nor may such
rights or obligations be sold, transferred or assigned by the Company or
pledged or encumbered by the Company to secure any debt or other obligation of
the Company or of any of the Members.

 

9.5           Maintenance
of Capital Accounts.  The Company
shall establish and maintain Capital Accounts for each Member and Assignee,
which shall be:

 

a.             Increased by such person’s Capital
Contributions, distributive share of Net Profits and any items in the nature of
income or gain which are specially allocated pursuant to Section 10.2
hereof, and the amount of any Company Liabilities assumed by such person or
which are secured by any Company Property distributed to such person.

 

b.             Decreased by the amount of Money and the
Gross Asset Value of any Company Property distributed to such person pursuant
to any provision of this Agreement, such person’s distributive share of Net
Losses and the amount of any liabilities of such person assumed by the Company
or which are secured by any Property contributed by such person to the Company.

 

9.6           Transfer of Interest.  In the event of a transfer of Units in the
Company in accordance with the terms of this Agreement, the Capital Account of
the transferring Member shall become the capital account of the Assignee, to
the extent it relates to the Units transferred.

 

19

 

9.7           Compliance
with Section 704(b) of the Code. 
The provisions of this Agreement relating to the maintenance of Capital
Accounts are intended to comply with Regulations section 1.704-1(b), and
shall be interpreted and applied in a manner consistent with such Regulations.
In the event the Management Committee determines that it is prudent to modify
the manner in which the Capital Accounts are computed in order to comply with
such Regulations, the Management Committee may make such modification, provided
that it is not likely to have a material effect on the amounts distributable to
any Member upon dissolution of the Company. The Management Committee also shall
(i) make any adjustments that are necessary or appropriate to maintain equality
between the Capital Accounts of the Members and the amount of the Company
capital reflected on the Company’s balance sheet, as computed for book purposes
in accordance with Regulations section 1.704-1(b)(2)(iv)(g) and (ii) make
any appropriate modifications in unanticipated events might otherwise cause
this Agreement not to comply with the Regulations.

 

ARTICLE 10

ALLOCATIONS AND DISTRIBUTIONS

 

10.1         Allocations
of Net Profits and Net Losses from Operations.  After giving effect to the special allocations set forth in
paragraph 10.2 herein, Net Profits, Net Losses, and other items of income, gain,
loss, deduction and credit shall be apportioned among the Members and Assignees
in proportion to their Percentage Interests.

 

10.2         Qualified
Income Offset.  In the event any
Member or Assignee, in such capacity, unexpectedly receives an Offsettable Decrease,
such person will be allocated items of income and gain (consisting of a pro
rata portion of each item of partnership income and gain for such year) in an
amount and manner sufficient to offset such Offsettable Decrease as quickly as
possible.

 

10.3         Distributions.  Available Cash shall be distributed by the
Management Committee without regard to the profits or losses of the Company;
provided, however, that no cash distributions shall be made (i) which will
impair the ability of the Company to pay its just debts as they mature, (ii)
result in an excess of the Company’s liabilities over its assets, (iii) reduce
the working capital of the Company to a level that would jeopardize its
performance of its on-going obligations, or (iv) violate the requirements of
its lenders or bonding companies. The Management Committee shall determine when
distributions shall be made to the Members pursuant to the provisions of this
Agreement. Available Cash shall be distributed not less frequently than
quarterly and not more frequently than monthly by the Management Committee to
the Members as follows and in the following order of priority:

 

a.     To the Members holding the
same, the outstanding principal amount of any Default Loans advanced by
Non-Defaulting Members, plus accrued and unpaid interest thereon (any such
distributions to be applied first to all accrued but unpaid interest and then
to outstanding principal); provided, however, that Default Loans, as advanced
from

 

20

 

time to time, shall have priority vis-à-vis other Default Loans based
upon the inverse order of the dates in respect of which the same were advanced,
to-wit: the last such loan made shall be repaid first; and provided further,
however that, as to Default Loans advanced on the same date, amounts
distributable pursuant to this clause are to be distributed to the Members
holding the same pro rata in accordance with the principal amounts thereof
which have not then been repaid; and

 

b.     To the Members, the balance,
pro rata in accordance with their respective Percentage Interests.

 

10.4         Capital
Transactions.  The proceeds of any
Capital Transaction, after payment and reserve for all costs and expenses
incurred by the Company in connection therewith, shall be applied as follows:

 

a.             To the Members holding the same, the
outstanding principal amount of any Default Loans advanced by Non-Defaulting
Members, plus accrued and unpaid interest thereon (any such distributions to be
applied first to all accrued but unpaid interest and then to outstanding
principal); provided, however, that Default Loans, as advanced from time to
time, shall have priority vis-à-vis other Default Loans based upon the inverse
order of the dates in respect of which the same were advanced, to-wit: the last
such loan made shall be repaid first; and provided further, however, that, as
to Default Loans advanced on the same date, amounts distributable pursuant to
this clause are to be distributed to the Members holding the same pro rata in
accordance with the principal amounts thereof which have not then been repaid;

 

b.             To the Members, to the extent of and in
proportion to their Unrepaid Capital; and

 

c.             To the Members, the balance, pro rata in
accordance with their respective Percentage Interests.

 

ARTICLE 11

TAXES

 

11.1         Elections.  The Management Committee may make any tax
elections for the Company allowed under the Code or the tax laws of any state
or other jurisdiction having taxing jurisdiction over the Company.

 

11.2         Taxes
of Taxing Jurisdictions.  To the
extent that the laws of any Taxing Jurisdiction require, each Member (or such
Members as may be required by the Taxing

 

21

 

Jurisdiction) will submit an agreement indicating that the Member will
make timely income tax payments to the Taxing Jurisdiction and that the Member
accepts personal jurisdiction of the Taxing Jurisdiction with regard to the
collection of income taxes attributable to the Member’s income, plus any
interest or penalties assessed on such income. If the Member fails to provide
such agreement, the Company may withhold and pay over to such Taxing
Jurisdiction the amount of tax, penalty and interest determined under the laws
of the Taxing Jurisdiction with respect to such income. Any such payments with
respect to the income of a Member shall be treated as a distribution for
purposes of Article 10.

 

11.3         Tax
Matters Member.  RA LLC shall be the
tax matters partner of the
Company pursuant to section 6231(a)(7) of the Code.

 

a.             The tax matters
partner shall take such action as may be necessary to cause each Member to
become a notice partner within
the meaning of section 6223 of the Code. The tax matters partner shall
inform each other Member of all significant matters that may come to its attention
in its capacity as tax matters partner by giving notice thereof within ten (10)
Business Days after becoming aware thereof and, within such time, shall forward
to each other Member copies of all significant written communications it may
receive in such capacity. The tax matters partner may not take any action
contemplated by sections 6222 through 6232 of the Code without the consent of
the Members. This provision is not intended to authorize the tax matters
partner to take any action left to the determination of an individual Member
under Sections 6222 through 6232 of the Code. Expenses of administrative and
judicial proceedings relating to the determination of Company items at the
Company level undertaken by the tax matters partner shall be Company expenses.

 

b.             The tax matters
partner shall cause to be prepared and filed all necessary federal and state
income tax returns for the Company. Each Member shall furnish to the tax
matters partner all pertinent information in its possession relating to Company
operations that is necessary to enable such income tax returns to be prepared
and filed.

 

c.             The following
elections shall be made on the appropriate returns of the Company:

 

i.              to adopt the
calendar year as the Company’s fiscal year;

 

ii.             to adopt the accrual
method of accounting;

 

iii.            if there shall be a
distribution of Company Property as described in Section 734 of the Code
or it there shall be a transfer of a Company Interest as described in
Section 743 of the Code, upon

 

22

 

written request of any Member, to elect
pursuant to section 754 of the Code, to adjust the basis of Company
Properties;

 

iv.            to amortize the
organizational expenses of the Company ratably over a period of sixty (60)
months as permitted by Section 709(b) of the Code;

 

v.             any other election
the tax matters member may deem appropriate and in the best interest of the
Partners.

 

No election shall be made by the Company or any Member to be excluded
from the application of the provisions of subchapter K of Chapter 1 of
Subtitle A of the Code or any similar provisions of applicable state laws.

 

11.4         Tax
Advances.  At least ten days before
each date prescribed by the Code for a calendar year corporation to pay
quarterly installments of estimated tax, the Company shall distribute to each
Member cash equal to 40% of the estimated partnership taxable income for that
period. Any distributions for tax advances under this section shall be
treated as reductions in the Member’s capital balance, net of accrued
partnership income. Rights to tax advance distributions shall rank senior to
any rights to distributions in any other sections of this Agreement.

 

ARTICLE 12

DISPOSITION OF MEMBERSHIP INTERESTS

 

12.1         Disposition.  No Member of Assignee may Dispose of all or
a portion of the Member’s or Assignee’s Units without the written consent of
all other Members and except upon compliance with this Section 12.1. No
Unit shall be Disposed of:

 

a.             if such Disposition,
alone or when combined with other transactions, would result in a termination
of the Company within the meaning of Section 708 of the code;

 

b.             unless and until the
Management Committee receives from the Assignee the information and agreements
that the Management Committee may reasonably require, including, but not
limited to any taxpayer identification number and any agreement that may be
required by any taxing jurisdiction;

 

c.             unless and until the
Management Committee receives either (i) satisfactory evidence that such Units
are to be registered under the Securities Act of 1933, as amended, and any
applicable state securities laws, or (ii) the transferor Member or Assignee
provides an opinion of counsel, which opinion and counsel shall be satisfactory
to the Company, to the effect that such Disposition is exempt from all

 

23

 

applicable registration requirements and that
such Disposition will not violate any applicable laws regulating the
Disposition of securities; and

 

d.             unless and until the
Management Committee receives documentation of the assignment wherein the
Assignee agrees to be subject to and bound by all of the terms of this
Agreement.

 

12.2         Dispositions
not in Compliance with this Article Void.  Any attempted Disposition of Units, or any part thereof, not in
compliance with Section 12.1 shall be, and is declared to be, null and
void.

 

12.3         Compliance
with 41 U.S.C. 15(a).  It is not the
intent of the LLC members to circumvent the statutory prohibition on the
transfer of contracts to another party under 41 U.S.C. 15(a), or to limit the
Government’s rights. Disposition of Membership Interests does not constitute an
assignment of the LLC’s prime contract with the Government.

 

ARTICLE 13

ADMISSION OF ASSIGNEES AND ADDITIONAL MEMBERS

 

13.1         Rights
of Assignees.  The Assignee of a
Unit has no Voting Rights nor any right to become a Member. The Assignee is
only entitled to receive the Distributions and return of capital, and to be
allocated the Net Profits and Net Losses attributable to the Unit.

 

13.2         Admission
of Substitute Members.  An Assignee
of a Unit shall be admitted as a Substitute Member and admitted to all the
rights of the Member who initially assigned the Unit only with the approval,
which may be withheld in their sole and absolute discretion, of Members holding
fifty-one percent (51%) of the Percentage Interests. If so admitted, the
Substitute Member has all the rights and powers and is subject to all the
restrictions and liabilities of the Member who initially assigned the Unit. The
admission of a Substitute Member, without more, shall not release the Member
initially assigning the Unit from any liability to the Company that may have
existed prior to the approval.

 

13.3         Admission
of Additional Members.  Upon
unanimous approval of the Members and a determination by the Management
Committee of the Capital Contribution required, Additional Members may be
admitted to the Company. Each Additional Member shall execute an Admission
Agreement.

 

13.4         Compliance
with 41 U.S.C. 15(a).  It is not the
intent of the LLC members to circumvent the statutory prohibition on the
transfer of contracts to another party under 41 U.S.C. 15(a) or to limit the
Government’s rights thereof. Substitution of members does not constitute an
assignment of the LLC’s contract with the Government. The agreement does
provide for

 

24

 

assignment under the Assignment of Claims Act, reference FAR 52.232-23
and 41 U.S.C. 15(b), as contained in 1.50 of the Government’s Request For Proposal.

 

ARTICLE 14

DISSOLUTION AND WINDING UP

 

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

 

a.             the approval of the
Members; or

 

b.             the entry of a decree
of judicial dissolution under Section 18-802 of the Act.

 

The Company shall not be dissolved by the death, bankruptcy,
withdrawal, expulsion or dissolution of a Member or by the occurrence of any
other event of bankruptcy under the Act with respect to a Member in the Company,
and the remaining Members, by executing this Agreement, hereby agrees to
continue the business of the Company without dissolution after the occurrence
of such an event.

 

14.2         Effect
of Dissolution.  Upon dissolution,
the Company shall cease carrying on as distinguished from the winding up of the
Company business; the Company is not thereby terminated, but continues until
the winding up of the affairs of the Company is completed and the certificate
of cancellation has been issued by the Secretary of State.

 

14.3         Distribution
of Assets on Dissolution.  Upon the
winding up of the Company, the Company Property shall be distributed:

 

a.             to creditors,
including Members who are creditors, to the extent permitted by law, in
satisfaction of Company Liabilities;

 

b.             to Members and
Assignees in accordance with positive Capital Account balances taking into
account all Capital Account adjustments for the Company’s taxable year in which
the liquidation occurs. Liquidation proceeds shall be paid within 60 days of
the end of the Company’s taxable year or, if later, within 90 days after the
date of liquidation. Such distributions shall be in cash or Property (which
need not be distributed proportionately) or partly in both, as determined by
the Management Committee.

 

14.4         Winding
Up and Certificate of Cancellation. 
The winding up of the Company shall be completed when all debts,
liabilities, and obligations of the Company have been paid and discharged or
reasonably adequate provision therefor has been made, and all of the remaining
property and assets of the Company have been distributed to the Members. Upon
the Completion of winding up of the Company, a certificate of cancellation
shall be delivered

 

25

 

promptly to the Secretary of State for filing. The certificate of
cancellation shall set forth the information required by the Act.

 

ARTICLE 15

AMENDMENT

 

15.1         Agreement
May Be Modified.  This Agreement may
be modified as provided in this Article (as the same may from time to time
be amended). No Member or Management Committee member shall have any vested
rights in this Agreement which may not be modified through an amendment to this
Agreement.

 

15.2         Amendment
or Modification of Agreement.  This
Agreement may be amended or modified from time to time only by a written
instrument executed by all Members.

 

ARTICLE 16

LIABILITY OF MEMBERS, MANAGEMENT COMMITTEE
AND GENERAL

MANAGER; INDEMNIFICATION

 

16.1         Exculpation.

 

a.             No Member, Management
Committee member or the General Manager (each, a “Covered Person”),
shall be liable to the Company or a Member for any loss, liability, damage or
claim incurred by reason of any act or omission performed or omitted by such
Covered Person in good faith on behalf of the Company. Whenever in this Agreement
a Covered Person is permitted or required to make decisions in good faith, the
Covered Person shall act under such standard and shall not be subject to any
other or different standard imposed by this Agreement or any relevant
provisions of laws or in equity or otherwise.

 

b.             A Covered Person
shall be fully protected in relying in good faith upon the records of the
Company and upon such information, opinions reports or statements presented to
the Company by any person or entity as to matters the Covered Person reasonably
believes are within such person’s or entity’s professional or expert
competence.

 

16.2         Fiduciary.  To the extent that, at law or in equity, a
Covered Person has duties (including fiduciary duties) and liabilities relating
thereto to the Company or to another Covered Person or to an other person that
is a party to or is otherwise bound by this Agreement, a Covered Person acting
under this Agreement shall not be liable to the Company or to such other person
for such Covered Person’s good faith reliance on the provisions of this
Agreement. The provisions of this Agreement, to the extent that they restrict
the duties and liabilities of a

 

26

 

Covered Person otherwise existing at law or in equity, are agreed by
the parties hereto to replace such other duties and liabilities of such Covered
Person.

 

16.3         Indemnification.  To the fullest extent permitted by
applicable law, a Covered Person shall be entitled to indemnification from the
Company for any costs and expenses (including attorneys’ fees and
disbursements), loss, liability, damage or claim incurred by such Covered
Person by reason of any act or omission performed or omitted by such Covered
Person in good faith on behalf of the Company.

 

16.4         Expenses.  To the fullest extent permitted by
applicable law, expenses (including attorneys’ fees and disbursements) incurred
by a Covered Person in defending any claim, demand, action, suit or proceeding
shall, from time to time, be advanced by the Company prior to the final
disposition of such claim, demand, action, suit or proceeding, subject to
recapture by the Company following a later determination that such Covered
Person was not entitled to be indemnified hereunder.

 

ARTICLE 17

INTELLECTUAL PROPERTY

 

17.1         Rights
to Intellectual Property:

 

a.             For purposes of this
Agreement, the term “Intellectual Property” shall mean patented and unpatented
inventions, mask works, copyrighted works, trade secrets, know-how and
proprietary information of either party. It is mutually understood and agreed
that no Member shall acquire, directly or by implication, any rights in any
Intellectual Property of any of the other Members owned, controlled, acquired,
developed, authored, conceived or reduced to practice prior to the date of this
Agreement, including but not limited to, inventions described and claimed in
applications for U.S. or foreign Letters Patent filed prior to the date of this
Agreement, except as expressly provided herein or in any resulting subcontract among
the Members.

 

b.             Each Member, insofar
as it is free to do so without obligation to others, hereby authorizes the
Company and other Members to use its Intellectual Property solely as necessary
for the performance of the Company under the Contract and of each Member under
this Agreement.

 

c.             Subject to any rights
of the Customer, each Member shall retain title to any Intellectual Property if
developed, authored, conceived or reduced to practice independently and solely
by that Member during the performance of this Agreement without the other
Members’ Intellectual Property, without the participation of Company’s agents,
employees, and contractors, and without the expenditure of Company funds. In
such event, no license, express or implied, shall inure to the benefit of the
other Members to prepare or distribute copies and to prepare derivative works
of such copyrighted works

 

27

 

or to make, have made, use, sell, offer to sell, have sold and
export/import products or processes incorporating such Intellectual Property.

 

d.             In the event Intellectual Property is
developed by one Member during the performance of this Agreement without the
participation of the Company’s agents, employees, and contractors and without the
expenditure of Company funds, which necessarily derives from and incorporates
Intellectual Property disclosed by another Member (the “Contributing Member”),
such developed Intellectual Property shall be and remain the property of the
developing Member; provided, however, that the developing party shall and does
hereby grant to the Contributing Member a nonexclusive, worldwide,
royalty-free, irrevocable right and license to make and distribute copies and
prepare derivative works of such Intellectual Property, and to make, have made,
use, sell, offer to sell and have sold for any purpose such inventions,
products or processes incorporating such developed Intellectual Property.

 

e.             In the event Intellectual Property is
developed by the Company or jointly by Members during the performance of this
Agreement, including Intellectual Property with the participation of Company
agents, employees and contractors and/or Company funds, such Intellectual
Property shall be owned jointly by such Members unless one of such Members
elects not to participate in such joint ownership. None of such Members shall
take action with respect to such jointly developed Intellectual Property which
will adversely affect the rights of any other of such Members without the prior
written consent thereof. As to all such jointly owned Intellectual Property,
each of the owning Members shall be free to use, practice and license
non-exclusively such jointly owned Intellectual Property, without in any way
accounting to the other owning Members, except that each owning Member agrees
to use reasonable efforts to maintain such jointly owned Intellectual Property
as confidential and proprietary in the same manner it treats its own
Intellectual Property of a similar character. Procedures for seeking and
maintaining protection such as patents or copyrights for jointly owned
Intellectual Property shall be mutually agreed upon in good faith by the owning
Members. Any owning Member which does not bear its proportionate share of
expenses in securing and maintaining patent protection on jointly owned
Intellectual Property in any particular country or countries shall surrender
its joint ownership under any resulting patents in such country or countries.

 

ARTICLE 18

PROHIBITED TRANSACTIONS

 

18.1         Prohibited
Transitions. During the time of the organization or continuance of the
Company, none of the Members hereof shall (except to the extent otherwise
provided herein) do any of the following:

 

28

 

a.             Use the name of the
Company (or any substantially similar name) or any trademark or trade name
adopted by the company, except in the ordinary course of the Company’s
business;

 

b.             Disclose to any
non-Member any of the Company business practices, trade secrets, or any other
information not generally known to the business community;

 

c.             Do any other act or
deed with the intention of harming the business operations of the Company;

 

d.             Possess Company
Property or assign the right of the Company or its Members in specific Company
Property for other than a Company purpose;

 

e.             Employ or make an
offer of employment to any of the personnel of the Company without the express
written consent of the other Member, which prohibition shall continue in effect
for ninety (90) days after the end of the term defined in Section 1.4; and

 

f.              No Member shall have
a right and each Member hereby agrees not to withdraw from the Company, nor
shall the Members dissolve, terminate, or liquidate the Company, or petition a
court for the dissolution, termination or liquidation of the Company, except as
provided in this Agreement.

 

ARTICLE 19

MEDIATION AND ARBITRATION

 

19.1         Mediation.  Prior to institution of the arbitration
procedures hereafter provided for, the Members shall endeavor to settle
disputes by mediation. Demand for mediation shall be filed in writing with the
other party to this Agreement and with the American Arbitration Association. A
demand for mediation shall be made within a reasonable time after the claim,
dispute or other matter in question has arisen. In no event shall the demand
for mediation be made after the date which is 30 days prior to the date when
institution of legal or equitable proceedings based on such claim, dispute or
other matter in question would be barred by the applicable statutes of repose
or limitations.

 

19.2         Arbitration.  Any controversy or claim arising out of or
relating to this Agreement, or breach thereof, which cannot first be settled
amicably and satisfactorily between

 

29

 

or among the parties, either directly or through mediation as herein
provided, shall be settled in a place mutually agreed to by the parties by
arbitration in the English language in accordance with the Commercial Rules of
Arbitration of the American Arbitration Association. The panel of arbitrators
shall consist of a single arbitrator selected in accordance with the
aforementioned rules. The award of the arbitrator shall be final. Judgment upon
the award rendered by the arbitrator may be entered in any court having
jurisdiction thereof. Except as otherwise provided herein, this Agreement is
governed by the provisions of the Federal Lay Arbitration Act. The arbitrator’s
award may include compensatory damages against any party. Under no circumstances
will the arbitrator be authorized to, nor shall he or she award consequential
or punitive damages or multiple damages against a party. The arbitrator shall
have the authority but not the obligation to award the costs of arbitration and
reasonable attorney’s fees to the prevailing party as hereafter provided;
however, if the arbitrator does not award such costs and fees, each party will
be responsible for its costs incurred in arbitration except that the costs and
fees imposed by the arbitrator for his or her expenses and the fees of the
American Arbitration Association shall be borne equally by the parties.

 

Notwithstanding the above, a party may seek injunctive relief in any
court of competent jurisdiction against improper use or disclosure of proprietary
information.

 

Notwithstanding the above, the parties’ failure in good faith to reach
mutual agreement on the terms and conditions of the Contract shall not be
considered a controversy or claim subject to arbitration under this Article,
nor shall it otherwise constitute a legally justiciable issue.

 

ARTICLE 20

MISCELLANEOUS PROVISIONS

 

20.1         Form
of Notice.

 

a.             Notice under this
Agreement shall be in writing unless oral notice is reasonable under the
circumstances. Notice by Electronic Transmission is written notice.

 

b.             Notice may be
communicated in person; by mail or other method of delivery; or telephone,
voice mail or other electronic means.

 

c.             Written notice to a
Member, if in a comprehensible form, is effective (i) upon deposit in the
United States mail, if mailed postpaid and correctly addressed to the Member’s
address shown in the Company’s current record of Members or (ii) when
electronically transmitted to the Member in a manner authorized by the Member.

 

d.             Written notice to the
Company may be addressed to its registered agent at its registered office or to
the President at the Company’s principal office described in Section 1.6
herein.

 

30

 

e.             Except as provided in
subsection (c), written notice, if in a comprehensible form, is effective
at the earliest of the following:

 

(i)            When received;

 

(ii)           Five (5) days after its
deposit in the United States mail, if mailed postpaid and correctly addressed;

 

(iii)          On the date shown on the
return receipt, if sent by registered or certified mail, return receipt
requested, and the receipt is signed by or on behalf of the addressee.

 

f.              Oral notice is
effective when communicated if communicated in a comprehensive manner.

 

g.             Whenever any notice
is required to be given under this Agreement or the Act, a person entitled to
notice may waive any such notice. A waiver must be in writing, signed by the
person entitled to such notice (whether before or after the date and time
stated in the notice), and delivered to the Company for inclusion in the
minutes or filing with the Company records. A person’s attendance at or
participation in a meeting, as the case may be, waives such person’s objection
(a) to lack of any required notice or a defective notice of the meeting, unless
such person, at the beginning of the meeting or promptly upon his arrival,
objects to holding the meeting or transacting business at the meeting and does
not thereafter vote for action taken at the meeting, and (b) to consideration
of a particular matter at the meeting that is not within the purpose or
purposes described in the meeting notice (if the purposes are required to be
described in the notice), unless such person objects to consideration of the
matter when it is presented and does not thereafter vote for action taken with
respect to the matter.

 

20.2         Entire
Agreement.  This Agreement
represents the entire agreement among all the Members and, except to the extent
a revision of this Agreement expressly incorporates federal income tax rules by
reference to sections of the Code or Regulations or is expressly prohibited or
ineffective under the Act, this Agreement shall govern, even when inconsistent
with, or different than, the provisions of the Act or any other law or rule.

 

20.3         Rights
of Creditors and Third Parties under Agreement.  This Agreement is entered into for the exclusive benefit of the
Members, and their successors and assignees. This Agreement is expressly not
intended for the benefit of any creditor of the Company or any other Person.
Except and only to the extent provided by applicable statute, no such creditor
or third party shall have any rights under this Agreement, Admission Agreement
or any agreement between the Company and any Member with respect to any Capital
Contribution or otherwise.

 

31

 

20.4         Headings.  Paragraph and other headings contained in
this Agreement are for reference purposes only and are not intended to
describe, interpret, define or limit the scope, extent or intent of this
Agreement or any provision hereof.

 

20.5         Incorporation
by Reference.  Every exhibit,
schedule or other appendix attached to this Agreement and referred to
herein is hereby incorporated in this Agreement by reference.

 

20.6         Variation
of Pronouns.  All pronouns and any
variations thereof shall be deemed to refer to masculine, feminine or neuter,
singular or plural, as the identity of the Person or Persons may require.

 

20.7         Applicable
Law.  This Agreement shall be
governed by the laws of the State of Delaware, including its statutes of
limitations. To the extent any provision of this Agreement is prohibited or
ineffective under the Act, this Agreement shall be considered amended to the
least 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 any provision of this Agreement that was formerly invalid valid, such
provision shall be considered to be valid from the effective date of such
interpretation or amendment.

 

20.8         Counterpart
Execution.  This Agreement may be
executed in any number of counterparts with the same effect as if all of the
Members had signed the same document. All counterparts shall be construed
together and shall constitute one agreement.

 

20.9         No
State-Law Company.  The Members
intend that the Company not be a partnership (including, without limitation, a
limited partnership), and that no Member be a Member of any other Member, for
any purposes other than federal and state tax purposes, and this Agreement may
not be construed to suggest otherwise.

 

32

 

IN WITNESS WHEREOF, we, the Members of the
Joint Venture, have executed this Agreement effective as of the Effective Date.

 

	
   

  	
  L-3 COMMUNICATIONS INTEGRATED

  SYSTEMS, LP

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert W. Drewes

  	
   

  
	
   

  	
   

  	
  Robert W. Drewes, President

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  PARAGON SYSTEMS, INC.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Charles Keathley

  	
   

  
	
   

  	
   

  	
    Charles Keathley, President

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  RAYTHEON AEROSPACE, LLC

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Daniel A. Grafton

  	
   

  
	
   

  	
   

  	
    Daniel A. Grafton, President

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  U.S. HELICOPTER INCORPORATED

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ David R. Thaxton

  	
   

  
	
   

  	
   

  	
    David R. Thaxton, President / CEO

  	
   

  

 

33

 

EXHIBIT A

 

	
  Member

  	
   

  	
  Initial
  Capital

  Contribution and

  Value

  	
   

  	
  Units

  	
   

  	
  Percentage

  Interests

  	
   

  
	
  L-3 Communications Integrated Systems, LP

  	
   

  	
  $

  	
  4,000.00

  	
   

  	
  40.0

  	
   

  	
  40.00

  	
  %

  
	
  10001 Jack Finney Boulevard

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Greenville, Texas 75402

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (L-3 Com IS LP)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Paragon Systems, Inc.

  	
   

  	
  $

  	
  1,000.00

  	
   

  	
  10.0

  	
   

  	
  10.00

  	
  %

  
	
  3317 Triana Boulevard, S.W.

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Huntsville, Alabama 35805

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (PSI)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Raytheon Aerospace, LLC

  	
   

  	
  $

  	
  4,000.00

  	
   

  	
  40.0

  	
   

  	
  40.00

  	
  %

  
	
  555 Industrial Drive South

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Madison, Mississippi 39110

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (RA LLC)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  U.S. Helicopter Incorporated

  	
   

  	
  $

  	
  1,000.00

  	
   

  	
  10.0

  	
   

  	
  10.00

  	
  %

  
	
  668 Parker Drive

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Ozark, Alabama 36360

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (USH)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total:

  	
   

  	
  $

  	
  10,000.00

  	
   

  	
  100.00

  	
   

  	
  100.00

  	
  %

  

 

34

 

EXHIBIT B

 

Initial Management Committee

 

Jay Ward

Dave Robinson

Jim Van Dusen

Steve Sinquefield

Willy Wilson

Harold Bright

Ed Gloviak

Walt Yates

Bill Powell

David Merriam

 

35

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00072-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00072-of-00352.parquet"}]]