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\ Exhibit 10.59
LIMITED LIABILITY COMPANY OPERATING AGREEMENT OF
AIRLOGICS, LLC
This Limited Liability Company Operating Agreement (including the
appendices attached hereto, the "Agreement") of AirLogics LLC, a Delaware
limited liability company (the "Company"), is made as of April 1, 0000 xxxxxxx
XXXXX XXXXXX ENERGY COMPANY ("SJE"), a New Jersey corporation, located at Number
Xxx Xxxxx Xxxxxx Xxxxx, Xxxxx 00, Xxxxxx, XX 00000 and GZA GEOENVIRONMENTAL,
INC. ("GZA"), a Massachusetts corporation, located at 000 Xxxxxxx Xxxxxx, Xxxxxx
Xxxxx Xxxxx, XX 00000 as the members of the Company ("Members," and each a
"Member").
ARTICLE I DEFINITIONS.
Capitalized terms used in this Agreement shall have the meanings set forth in
this Article I unless otherwise expressly provided.
1.1 "ACT" means the Delaware Limited Liability Company Act, as amended.
1.2 ADJUSTED CAPITAL ACCOUNT DEFICIT - with respect to any Member, the
deficit balance, if any, in such Members Capital Account as of the end of the
relevant Fiscal Year, after giving effect to the following adjustments:
(i) Credit to such Capital Account any amounts which such
Member is obligated to restore pursuant to any provision of
this Operating Agreement or is deemed to be obligated to
restore pursuant to the penultimate sentences of Regulations
Sections 1.704-2(g)(1) and 1.704-2(i)(5); and
(ii) Debit to such Capital Account the items described in
Regulations Sections 1.704-1(b)(2)(ii)(d)(4),
1.704-1(b)(2)(ii)(d)(5), and 1.704(b)(2)(ii)(d)(6).
The foregoing definition of Adjusted Capital Account Deficit
is intended to comply with the provisions of Regulations
Section 1.704-1 (b)(2)(ii)(d) and shall be interpreted
consistently therewith.
1.3 "AFFILIATE" means, with respect to any Person, any Person directly
or indirectly controlling, controlled by or under common control with such
Person. "Controlled Affiliate" means, with respect to any Person: (a) any Person
directly or indirectly controlled by such Person, and (b) any Person a majority
of whose equity securities are owned directly or indirectly by such Person. For
purposes of these definitions, the term "controls," "is controlled by," or "is
under common control with" shall mean the possession, direct or indirect, of the
power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise.
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1.4 "AGREEMENT" means the Limited Liability Company Operating Agreement
of the Company between SJE and GZA, as the Members of the Company.
1.5 "ASSETS" has the meaning defined in Section 3.1 (a).
1.6 " BUSINESS" has the meaning given that term in Section 3.1.
1.7 CAPITAL ACCOUNT - with respect to any Member, the Capital Account
maintained or such Person in accordance with the following provisions:
(i) To each Members Capital Account there shall be credited
such Members Capital Contributions, such Member's distributive
share of Profits and any items in the nature of income or gain
which are specially allocated pursuant to Sections 4.08 or
4.09 hereof, and the amount of any Company liabilities assumed
by such Member or which are secured by any Property
distributed to such Member.
(ii) To each Member's Capital Account there shall be debited
the amount of cash and the Gross Asset Value of any Property
distributed to such Member pursuant to any provision of this
Operating Agreement, such Member's distributive share of
Losses and any items in the nature of expenses or losses which
are specially allocated pursuant to Sections 4.08 or 4.09
hereof, and the amount of any liabilities of such Member
assumed by the Company or which are secured by any property
contributed by such Member to the Company.
(iii) In the event any interest in the Company is transferred
in accordance with the terms of this Operating Agreement, the
transferee shall succeed to the Capital Account of the
transferor to the extent it relates to the transferred
interest.
(iv) In determining the amount of any liability for purposes
of Sections 1.7(i) and 1.7(ii) hereof, there shall be taken
into account Code Section 752(c) and any other applicable
provisions of the Code and Regulations.
The foregoing provisions and the other provisions of this
Operating Agreement relating to the maintenance of Capital
Accounts are intended to comply with Regulations Section
1.7041 (b), and shall be interpreted and applied in a manner
consistent with such Regulations. In the event the Executive
Committee shall determine that it is prudent to modify the
manner in which the Capital Accounts, or any debits or credits
thereto (including, without limitation, debits or credits
relating to liabilities which are secured by contributed or
distributed property or which are assumed by the Company or
the Members), are computed in order to comply with such
Regulations, the Executive Committee may make such
modification, provided that is not likely to have a material
effect on the amounts distributable to any Member pursuant to
Article IX hereof upon the dissolution of the Company. The
Executive Committee also shall (i) make any adjustments that
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are necessary or appropriate to maintain equality between the
Capital Accounts of the Members and the amount of Company
capital reflected on the Company's balance sheet, as computed
for book purposes in accordance with Regulations Section
1.7041(b)(2)(iv)(g), and (ii) make any appropriate
modifications in the event unanticipated events might
otherwise cause this Operating Agreement not to comply with
Regulations Section 1.7041(b).
1.8 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 Percentage Interest held by such
Member pursuant to the terms of this Operating Agreement. The principal amount
of a promissory note which is not readily traded on an established securities
market and which is contributed to the Company by the maker of the note (or by a
Person related to the maker of the note within the meaning of Regulations
Section 1.7041(b)(2)(ii)(c)) shall not be included in the Capital Contribution
of any Member until the Company makes a taxable disposition of the note or until
(and to the extent) principal payments are made on the note, all in accordance
with Regulations Section 1.7041(b)(2)(iv)(d)(2).
1.9 COMPANY MINIMUM GAIN - Refers to "partnership minimum gain" as set
forth in Regulations Sections 1.7042(b)(2) and 1.7042(d).
1.10 "CERTIFICATE OF FORMATION" means the Certificate of Formation of
the Company as filed with the Secretary of State of Delaware, as the same may be
amended or restated from time to time.
1.11 "CODE" means the Internal Revenue Code of 1986, as amended from
time to time.
1.12 "COMPANY" means AirLogics, LLC, a Delaware limited liability
company.
1.13 "CONTRACT" means a contract for the sale of air monitoring
equipment and services to a customer.
1.14 "CONTROLLED AFFILIATE" has the meaning defined in Section 1.3.
1.15 "COVERED PERSON" is any Member, Executive Committee, employee or
agent of the Company.
1.16 "DEPRECIATION" - For each Fiscal Year, an amount equal to the
depreciation, amortization, or other cost recovery deduction allowable with
respect to an asset for such Fiscal Year, except that if the Gross Asset Value
of an asset differs from its adjusted basis for federal income tax purposes at
the beginning of such Fiscal 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 Fiscal
Year bears to such beginning adjusted tax basis; provided, however, that if the
adjusted basis for federal income tax purposes of an asset at the beginning of
such Fiscal Year is zero, Depreciation shall be determined with
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reference to such beginning Gross Asset Value using any reasonable method
selected by the Executive Committee.
1.17 "EFFECTIVE DATE" means April 1, 2000 which is the date on which
the Certificate of Formation is, by its express terms, to become effective.
1.18 GROSS ASSET VALUE - With respect to any asset, the asset's
adjusted basis for federal income tax purposes, except as follows:
(i) 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 majority of the Members;
(ii) The Gross Asset Values of all Company assets shall be
adjusted to equal their respective gross fair market values,
as determined by the Executive Committee, as of the following
times: (a) the acquisition of an additional interest in the
Company by any new or existing Member in exchange for more
than a de minimis Capital Contribution; (b) the distribution
by the Company to a Member of more than a de minimis amount of
Property as consideration for an interest in the Company; and
(c) the liquidation of the Company within the meaning of
Regulations Section 1.7041(b)(2)(ii)(g); provided, however,
that adjustments pursuant to clauses (a) and (b) above shall
be made only if the Executive Committee reasonably determines
that such adjustments are necessary or appropriate to reflect
the relative economic interests of the Members in the Company;
(iii) The Gross Asset Value of any Company asset distributed
to any Member shall be adjusted to equal the gross fair market
value of such asset on the date of distribution as determined
by the Executive Committee; and
(iv) The Gross Asset Values of Company assets shall be
increased (or decreased) to reflect any adjustments to the
adjusted basis of such assets pursuant to Code Sections 734(b)
or 743(b), but only to the extent that such adjustments are
taken into account in determining Capital Accounts pursuant to
Regulations Section 1.7041 (b)(2)(iv)(m) and Sections
2.01(42)(vi) and 9.03(e) hereof; provided, however, that Gross
Asset Values shall not be adjusted pursuant to this Section
2.01(18)(iv) to the extent the Executive Committee determines
that an adjustment pursuant to Section 2.01(17)(ii) hereof is
necessary or appropriate in connection with a transaction that
would otherwise result in an adjustment pursuant to this
Section 1.18(iv).
If the Gross Asset Value of an asset has been determined or
adjusted pursuant to these Sections 1.18(i), (ii), or (iv)
hereof, such Gross Asset Value shall thereafter
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be adjusted by the Depreciation taken into account with
respect to such asset for purposes of computing Profits and
Losses.
1.19 "GZA GEOENVIRONMENTAL INC." means GZA, a Massachusetts corporation
and Member of the Company.
1.20 "ENTITY" means any general partnership, limited partnership,
limited liability company, corporation, joint venture, trust, business trust,
cooperative or association, or any foreign trust, or foreign business
organization.
1.21 "EVENT OF DISSOLUTION" has the meaning defined in Section 9.1.
1.22 "EXECUTIVE COMMITTEE" has the meaning defined in Section 5.2(a).
1.23 "FISCAL YEAR" means (i) the period commencing on the Effective
Date and ending on the immediately succeeding December 31, and (ii) any
subsequent twelve month period commencing on January 1 and ending on December
31, and any portion of said subsequent period for which the Company is required
to allocate Profits, Losses, and other items of Company income, gain, loss, or
deduction.
1.24 LIQUIDATING EVENT - Any of the events described in Section 14.01.
1.25 "LLC LAW" means the Delaware Limited Liability Company Act and all
amendments thereto.
1.26 "MEMBER" means each of SJE and GZA; together SJE and GZA may be
referred to as "Members".
1.27 "MEMBER MONTHLY LOAN BALANCE" has the meaning defined in Section
6.2.
1.28 MEMBER NONRECOURSE DEBT - Refers to "partner nonrecourse debt" as
set forth in Regulations Section 1.7042(b)(4).
1.29 MEMBER NONRECOURSE DEBT MINIMUM GAIN - An amount, with respect to
each Member Nonrecourse Debt, equal to the Company Minimum Gain that would
result if such Member Nonrecourse Debt were treated as a Nonrecourse Liability,
determined in accordance with Regulations Section 1.7042(i)(3).
1.30 MEMBER NONRECOURSE DEDUCTIONS - Refers to "partner nonrecourse
deductions" as set forth in Regulations Sections 1.7042(i)(1) and 1.7042(i)(2).
1.31 NET CASH FROM OPERATIONS - The gross cash proceeds from Company
operations less the portion thereof used to pay or establish reserves for all
Company expenses, debt payments, capital improvements, replacements, and
contingencies, all as determined by the
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Executive Committee. "Net Cash From Operations" shall not be reduced by
depreciation, amortization, cost recovery deductions, or similar allowances, but
shall be increased by any reductions of reserves previously established pursuant
to the first sentence of this definition.
1.32 NONRECOURSE DEDUCTIONS - has the meaning set forth in Regulations
Section 1.7042(b)(3).
1.33 NONRECOURSE LIABILITY - Has the meaning set forth in Regulations
Section 1.7042(b)(3).
1.34 "PERCENTAGE INTEREST" means, subject to Section 4.03, as to SJE
having 50% and GZA having 50% of all interests in the Company, which shall be
such Member's percentage share of (i) total Profits or Losses of the Company to
be allocated; (ii) the total amount of the initial and each additional capital
contribution; and (iii) the total amount of each distribution.
1.35 "PERSON" means any individual or Entity, and the executors,
administrators, legal representatives, successors, and assigns of a "Person"
when the context so permits.
1.36 PROFITS AND LOSSES - For each Fiscal Year, an amount equal to the
Company's taxable income or loss for such Fiscal Year, determined in accordance
with Code Section 703(a) (for this purposes, all items of income, gain, loss, or
deduction required to be stated separately pursuant to Code Section 703(a)(1)
shall be included in taxable income or loss), with the following adjustments:
(i) Any income of the Company that is exempt from federal
income tax and not otherwise taken into account in computing
Profits or Losses pursuant to this Section 1.37 shall be added
to such taxable income or loss;
(ii) Any expenditures of the Company described in Code Section
705(a)(2)(B) or treated as Code Section 705(a)(2)(B)
expenditures pursuant to Regulations Section
1.7041(b)(2)(iv)(i), and not otherwise taken into account in
computing Profits or Losses pursuant to this Section 1.37
shall be subtracted from such taxable income or added to such
loss;
(iii) In the event the Gross Asset Value of any Company asset
is adjusted pursuant to Section 1.18(ii) or Section 1.18(iii)
hereof, the amount of such adjustment shall be taken into
account as gain or loss from the disposition of such asset for
purposes of computing Profits or Losses;
(iv) Gain or loss resulting from any disposition of Property
with respect to which gain or loss is recognized for federal
income tax purposes shall be computed by reference to the
Gross Asset Value of the Property disposed of, notwithstanding
that the adjusted tax basis of such Property differs from its
Gross Asset Value;
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(v) In lieu of the 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 Fiscal Year, computed in accordance with
Section 1.16 hereof;
(vi) To the extent an adjustment to the adjusted tax basis of
any Company asset pursuant to Code Sections 734(b) or 743(b)
is required pursuant to Regulations Section
1.7041(b)(2)(iv)(m)(4) to be taken into account in determining
Capital Accounts as a result of a distribution other than in
liquidation of a Members interest in the Company, 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 the
disposition of the asset and shall be taken into account for
purposes of computing Profits or Losses; and
(vii) Notwithstanding any other provision of this Section
1.37, any items which are specially allocated pursuant to
Sections 4.08 and 4.09 hereof shall not be taken into account
in computing Profits or Losses.
The amounts of the items of Company income, gain, loss or
deduction available to be specially allocated pursuant to
Sections 4.08 and 4.09 hereof shall be determined by applying
rules analogous to those set forth in Sections 1.37(i) through
1.37(vi) above.
1.37 PROPERTY - All real and personal property acquired by the Company
and any improvements thereto, and shall include both tangible and intangible
property.
1.38 REGULATIONS - Income Tax Regulations, including Temporary
Regulations, promulgated under the Code, as such regulations may be amended from
time to time (including corresponding provisions of succeeding regulations).
1.39 REGULATORY ALLOCATIONS - Has the meaning set forth in Section 4.09
hereof.
1.40 "SJE" means South Jersey Energy Company, a New Jersey corporation
and Member of the Company.
1.41 "SUPPORT SERVICES AGREEMENT" has the meaning defined in Section
6.1.
1.42 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.
1.43 "TRANSACTION OPPORTUNITY" means the sale of equipment and/or
provision of service to perform automated real-time air monitoring.
1.44 "TRANSFER" means, in either noun or verb form, any voluntary or
involuntary
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transfer, sale, or other disposition.
ARTICLE II FORMATION, TERM, NAME AND STATUS.
2.1 FORMATION. The Members acknowledge that the Company is to be
formed pursuant to the Act by the filing of a Certificate of Formation in the
form required with the Delaware Secretary of State upon signing of the Operating
Agreement. The fact that the Certificate of Formation is on file with the
Department of State of the State of Delaware shall constitute notice that the
Company is a limited liability company. Simultaneously with the execution of
this Operating Agreement and filing and acceptance of the Certificate of
Formation, GZA and SJE shall be admitted as Members of the Company.
2.2 TERM. The term of the Company shall commence on the Effective Date
and, unless sooner dissolved in accordance with this Agreement or as required by
statute, shall continue until the twentieth anniversary of the Effective Date.
2.3 NAME. The name of the Company is AirLogics, LLC.
2.4 NO STATE LAW PARTNERSHIP, LIABILITY TO THIRD PARTIES. The Members
intend that the Company not be a partnership (including, without limitation, a
limited partnership), and that no Member be a partner or joint venture of any
other Member nor assume the duties that either such status may impose, for any
purposes other than federal and state tax purposes, and that this Agreement not
be construed otherwise. Except to the limited extent expressly provided in
Section 7.4, no Member shall be liable for the debts, obligations or liabilities
of the Company to third parties, including under a judgment, decree or order of
a court.
2.5 AGREEMENT, EFFECT OF INCONSISTENCIES WITH LLC LAW. For and in
consideration of the mutual covenants herein contained and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Members executing this Operating Agreement hereby agree to the
terms and conditions of this Operating Agreement, as it may from time to time be
amended according to its terms. It is the express intention of the Members that
this Operating Agreement shall be the sole source of agreement of the parties,
and, except to the extent a provision of this Operating Agreement expressly
incorporates federal income tax rules by reference to sections of the Code or
Regulations or is expressly prohibited or ineffective under the LLC Law, this
Operating Agreement shall govern, even when inconsistent with, or different
than, the provisions of the LLC Law or any other law or rule. To the extent any
provision of this Operating Agreement is prohibited or ineffective under the LLC
Law, this Operating Agreement shall be considered amended to the smallest degree
possible in order to make the agreement effective under the LLC Law. In the
event the LLC Law is subsequently amended or interpreted in such a way to make
any provision of this Operating Agreement that was formerly invalid valid, such
provision shall be considered to be valid from the effective date of such
interpretation or amendment. The Members hereby agree that each Member shall be
entitled to rely on the provisions of this Operating Agreement, and no Member
shall be liable to the Company or to any Member for any action or refusal to act
taken in good faith reliance on the terms of this Operating Agreement. The
Members hereby agree that the duties and obligations imposed on the Members
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as such shall be those set forth in this Operating Agreement, which is intended
to govern the relationship among the Company and the Members, notwithstanding
any provision of the LLC Law or common law to the contrary.
2.6 CONFIRMATION OF STATUS, SCOPE OF AUTHORITY. Each Member hereby
confirms and agrees to its status as a Member upon the terms and conditions set
forth in this Agreement.
2.7 PRINCIPAL OFFICE. The principal office of the Company shall be
located at 0 Xxxxx Xxxxxx Xxxxx, Xxxxxx, Xxx Xxxxxx 00000.
ARTICLE III PURPOSE, EXCLUSIVE DEALINGS, AND ASSETS.
3.1 PURPOSE.
(a) The Company has been organized for the purpose of
providing automated real-time air monitoring equipment and services,
(the "Business"). The Executive Committee shall have no authority to
undertake any activity outside of the parameters of the Business
without the unanimous support of all Members.
(b) In addition, the Company may engage in any act concerning
any or all other business or activity that now or hereafter may be
necessary, incidental, proper, advisable, or convenient to accomplish
the foregoing purposes and that is not forbidden by the law of the
jurisdiction in which the Company engages in that business; PROVIDED,
HOWEVER, THAT NOTWITHSTANDING ANYTHING STATED HEREIN TO THE CONTRARY,
the Company shall not engage in any activity which would cause the
Company to be a "public utility company" or a "holding company" as such
terms are used in the Public Utility Holding Company Act of 1935, as
amended. The Company may accomplish the purposes set forth in this
Section 3.1 by entering into any contract, subject to the provisions of
this Agreement, or taking any other action permitted under the Act and
any other applicable law and necessary or convenient to the conduct,
promotion or attainment of the business, purposes or activities of the
Company.
(c) Except as provided in Sections 3.2(a)-(d), any Member may
engage in or possess an interest in other business ventures of every
nature and description, independently or with others, and neither the
Company nor the Members shall have any right by virtue of this
Agreement in such other business ventures or to the income or profits
derived therefrom.
(d) The Company exists only for the purposes specified in
this Article III, and may not conduct any business other than the
Business without the approval of an unanimous decision of the Members.
Furthermore, notwithstanding the provisions of this Agreement, the
Company shall not do business in any jurisdiction that would jeopardize
the limitation on liability afforded to Members under the LLC Law or
this Operating Agreement.
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3.2 EXCLUSIVE DEALINGS.
(a) From the Effective Date, each Member must offer to the
Company each Transaction Opportunity which falls within the purpose defined
herein. Neither Member shall pursue (or permit its Affiliates or Controlled
Affiliates to pursue) such Transaction Opportunities for itself (or themselves)
except as permitted by Sections 3.2 (e), and 9.2(b).
(b) After a Transaction Opportunity has been offered to the
Company, the Members of the Executive Committee shall accept or reject the
Transaction Opportunity on behalf of the Company.
(c) If a Transaction Opportunity is accepted, the Executive
Committee shall document the acceptance of the Transaction Opportunity and
pursue the underlying transaction.
(d) Any Transaction Opportunity which the Executive Committee
does not accept within a reasonable time (two weeks) of its presentation to the
Executive Committee will be deemed to be rejected by the Company. For purposes
of Article XIV, such rejection shall not constitute a dispute unless there is a
good faith dispute as to whether or not a rejection actually occurred.
(e) If Transaction Opportunity is rejected by the Company:
(i) the Company shall not pursue the Transaction
Opportunity; and
(ii) either Member, or both, may pursue the
Transaction Opportunity for its own benefit.
3.3 INTELLECTUAL PROPERTY. Upon formation of AirLogics, LLC, SJE and
GZA agree to assign all of their intellectual property rights in the Perimeter
Air Monitoring System for which a patent is pending with the United States
Patent Office, Application No. 09/143,699 to Airlogics, LLC.
3.4 RESPONSIBILITY FOR WARRANTIES AND SYSTEM SUPPORT. AirLogics shall
be exclusively responsible for providing any warranties on sales of automated
air monitoring equipment. AirLogics shall provide all required system support on
equipment sold and services provided to customers.
ARTICLE IV MEMBER CONTRIBUTIONS, ALLOCATIONS, DISTRIBUTIONS AND TAXES.
4.1 INITIAL CAPITAL CONTRIBUTIONS. The names, addresses, initial
Capital Contributions, and Percentage Interests of the Members are set forth
below. The initial Capital Contributions shall be made concurrently with the
last execution of this Operating Agreement. Each Member acknowledges that the
interests in the Company have not been registered under the
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Securities Act of 1933, as amended, 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.
SJE: $250,000
GZA: $250,000
4.2 CAPITAL ACCOUNTS. A separate Capital Account shall be established
and maintained for each Member.
4.3 ADDITIONAL CAPITAL CONTRIBUTIONS.
(a) Additional monetary Capital Contributions, may be requested by the
Executive Committee in its reasonable discretion as may be needed to cover
ongoing operating expenses or to cover losses the Company has incurred, Such
additional monetary Capital Contributions shall be payable in cash in proportion
to the Percentage Interests of the Members. Except as stated above, no Member
shall be required to make any additional monetary capital contributions.
(b) In the event that a Member fails to make any additional monetary
Capital Contribution as provided above, all other Members may elect to make any
monetary Capital Contributions that have not been made by the non-contributing
Member. Such election shall be made in writing, with notice to all other
Members, within twenty-five (25) days after the issuance of the original written
notice from the Executive Committee regarding the additional Capital
Contributions. If more than one Member elects to make the additional Capital
Contribution, then all such electing Members shall contribute on a pro rata
basis determined by their respective Percentage Interests.
(c) In the event that a Member fails to make an additional Capital
Contribution as provided above, the Percentage Interests of the Members shall be
adjusted so that the Percentage Interest of each Member shall equal the Gross
Asset Value of the Capital Contributions made by such Member divided by the
Gross Asset Value of all Capital Contributions.
4.4 LOANS. If any Member shall make any loan or loans to the Company or
advance money on its behalf, the amount of any such loan or advance
shall not be treated as a Capital Contribution of the Company but shall
be a debt due from the Company. The amount of such loan or advance by a
lending Member shall be repayable out of the Company's cash and shall
bear interest at the rate agreed between the Company and the lending
Member. No Member shall be obligated to make any loan or advance to the
Company.
4.5 OTHER CONTRIBUTIONS MATTERS.
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(a) Under circumstances requiring a return of any Capital
Contributions, no Member shall have the right to receive property other than
cash except as may be specifically provided herein.
(b) No Member shall receive any interest, salary, or drawing with
respect to its Capital Contributions or its Capital Account or for services
rendered on behalf of the Company or otherwise in its capacity as Member, except
as otherwise provided in this Operating Agreement.
(c) Each Member waives any and all rights that it may have to maintain
an action for partition of the Company's Property.
4.6 PROFITS. After giving effect to the special allocations set forth
in Sections 4.8 and 4.9 hereof, Profits for any Fiscal Year shall be allocated
among the Members in proportion to their Percentage Interests.
4.7 LOSSES.
(a) After giving effect to the special allocations set forth in
Sections 4.8 and 4.9 hereof, Losses for any Fiscal Year shall be allocated among
the Members in proportion to their Percentage Interests.
(b) The Losses allocated pursuant to Section 4.7(a) hereof shall not
exceed the maximum amount of Losses that can be so allocated without causing any
Member to have an Adjusted Capital Account Deficit at the end of any Fiscal
Year. In the event some but not all of the Members would have Adjusted Capital
Account Deficits as a consequence of an allocation of Losses pursuant to Section
4.7(a) hereof, the limitation set forth in this Section 4.7(b) shall be applied
on a Member by Member basis so as to allocate the maximum permissible Losses to
each Member under Regulations Section 1.7041(b)(2)(ii)(d). All Losses in excess
of the limitations set forth in this Section 4.7(b) shall be allocated to the
Members in proportion to their Percentage Interests.
4.8 SPECIAL ALLOCATIONS. The following special allocations shall be
made in the following order:
(a) Minimum Gain Chargeback. Except as otherwise provided in
Regulations Section 1.7042(f), notwithstanding any other provision of this
Article IV, if there is a net decrease in Company Minimum Gain during any
Company Fiscal Year, each Member shall be specially allocated items of Company
income and gain for such Fiscal Year (and, if necessary, subsequent Fiscal
Years) in an amount equal to such Member's share of the net decrease in Company
Minimum Gain, determined in accordance with Regulations Section 1.7042(g).
Allocations pursuant to the previous sentence shall be made in proportion to the
respective amounts required to be allocated to each Member pursuant thereto. The
items to be so allocated shall be determined in accordance with Regulations
Sections 1.7042(f)(6) and 1.70420)(2). This Section
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4.8(a) is intended to comply with the minimum gain chargeback requirement in
Regulations Section 1.7041 (f) and shall be interpreted consistently therewith.
(b) Member Minimum Gain Chargeback. Except as otherwise provided in
Regulations Section 1.7041 (i)(4), notwithstanding any other provision of this
Article IV, if there is a net decrease in Member Nonrecourse Debt Minimum Gain
attributable to a Member Nonrecourse Debt during any Company Fiscal Year, each
Member who has a share of the Member Nonrecourse Debt Minimum Gain attributable
to such Member Nonrecourse Debt, determined in accordance with Regulations
Section 1.7042(i)(5), shall be specially allocated items of Company income and
gain for such Fiscal Year (and, if necessary, subsequent Fiscal Years) in an
amount equal to such Member's share of the net decrease in Member Nonrecourse
Debt Minimum Gain attributable to such Member Nonrecourse Debt, determined in
accordance with Regulations Section 1.7042(i)(4). Allocations pursuant to the
previous sentence shall be made in proportion to the respective amounts required
to be allocated to each Member pursuant thereto. The items to be so allocated
shall be determined in accordance with Regulations Sections 1.7042(i)(4) and
1.70420)(2). This Section 4.8(b) is intended to comply with the minimum gain
chargeback requirement in Regulations Section 1.7042(i)(4) and shall be
interpreted consistently therewith.
(c) Nonrecourse Deductions. Nonrecourse Deductions for any Fiscal Year
shall be specially allocated among the Members in proportion to their Percentage
Interests.
(d) Member Nonrecourse Deductions. Any Member Nonrecourse Deductions
for any Fiscal Year shall be specially allocated to the Member who bears the
economic risk of loss with respect to the Member Nonrecourse Debt to which such
Member Nonrecourse Deductions are attributable in accordance with Regulations
Section 1.7042(i)(1).
(e) Code Section 754 Adjustment. To the extent an adjustment to the
adjusted tax basis of any Company asset pursuant to Code Sections 734(b) or
743(b) is required, pursuant to Regulations Sections 1.7041(b)(2)(iv)(m)(2) or
1.7041(b)(2)(iv)(m)(4), to be taken into account in determining Capital Accounts
as the result of a distribution to a Member in complete liquidation of its
interest in the Company, the amount of such adjustment to the Capital Accounts
shall be treated as an item of gain (if the adjustment increases the basis of
the asset) or loss (if the adjustment decreases such basis) and such gain or
loss shall be specially allocated to the Members in accordance with their
Percentage Interests in the Company in the event Regulations Section
1.7041(b)(2)(iv)(m)(2) applies, or to the Members to whom such distribution was
made in the event Regulations Section 1.7041(b)(2)(iv)(m)(4) applies.
(f) Allocations Relating to Taxable Issuance of Percentage Interests.
Any income, gain, loss or deduction realized as a direct or indirect result of
the issuance of an interest in the Company to a Member (the "Issuance Items")
shall be allocated among the Members so that, to the extent possible, the net
amount of such Issuance Items, together with all other allocations under this
Operating Agreement to each Member, shall be equal to the net amount that would
have been allocated to each such Member if the Issuance Items had not been
realized.
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(g) Qualified Income Offset. In the event any Member unexpectedly
receives any adjustments, allocations, or distributions described in Regulations
Sections 1.7041(b)(2)(ii)(d) (4), 1.704(b)(2)(ii)(d)(5), or
1.7041(b)(2)(ii)(d)(6), items of Company income and gain shall be specially
allocated to each such Member in an amount and manner sufficient to eliminate,
to the extent required by the Regulations, the Adjusted Capital Account Deficit
of such Member as quickly as possible, provided that an allocation pursuant to
this Section 4.8(g) shall be made only if and to the extent that such Member
would have an adjusted Capital Account Deficit after all other allocations
provided for in this Section 4.8 have been tentatively made as if this Section
4.8(g) were not included in this Operating Agreement.
4.9 CURATIVE ALLOCATIONS. The allocations set forth in Sections 4.8(a),
4.8(b), 4.8(c), 4.8(d), 4.8(e) and 4.8(g) hereof (the "Regulatory Allocations")
are intended to comply with certain requirements of the Regulations. It is the
intent of the Members that, to the extent possible, all Regulatory Allocations
shall be offset either with other Regulatory Allocations or with special
allocations of other items of Company income, gain, loss, or deduction pursuant
to this Section 4.9. Therefore, notwithstanding any other provision of this
Article IV (other than the Regulatory Allocations), the Executive Committee
shall make such offsetting special allocations of Company income, gain, loss or
deduction in whatever manner it determines appropriate so that, after such
offsetting allocations are made, each Member's Capital Account balance is, to
the extent possible, equal to the Capital Account balance such Member would have
had if the Regulatory Allocations were not part of this Operating Agreement and
all Company items were allocated pursuant to Sections 4.6 and 4.7 hereof. In
exercising its discretion under this Section 4.9, the Executive Committee shall
take into account future Regulatory Allocations under Sections 4.8(a) and 4.8(b)
that, although not yet made, are likely to offset other Regulatory Allocations
previously made under Sections 4.8(c) and 4.8(d).
4.10 OTHER ALLOCATION RULES.
(a) The Members are aware of the income tax consequences of the
allocations made by this Article IV and hereby agree to be bound by the
provisions of this Article IV in reporting their shares of Company income and
loss for income tax purposes.
(b) For purposes of determining the Profits, Losses, or any other items
allocable to any period, Profits, Losses, and any such other items shall be
determined on a daily, monthly, or other basis, as determined by the Executive
Committee using any permissible method under Code Section 706 and the
Regulations thereunder.
(c) Solely for purposes of determining a Member's proportionate share
of the "excess nonrecourse liabilities" of the Company, within the meaning of
Regulations Section 1.7523(a) (3), the Members' interests in Company profits are
in proportion to their Percentage Interests.
(d) To the extent permitted by Regulations Section 1.7042(h)(3), the
Executive Committee shall endeavor not to treat distributions of Net Cash from
Operations as having been made from the proceeds of a Nonrecourse Liability or a
Member Nonrecourse Debt.
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4.11 TAX ALLOCATIONS: CODE SECTION 704(C). In accordance with Code
Section 704(c) and the Regulations thereunder, income, gain, loss, and deduction
with respect to any Property contributed to the capital of the Company shall,
solely for tax purposes, be allocated among the Members so as to take account of
any variation between the adjusted basis of such property to the Company for
federal income tax purposes and its initial Gross Asset Value (computed in
accordance with Section 1.18 hereof).
In the event the Gross Asset Value of any Company asset is adjusted
pursuant to Section 1.18 hereof, subsequent allocations of income, gain, loss,
and deduction with respect to such asset shall take account of any variation
between the adjusted basis of such asset for federal income tax purposes and its
Gross Asset Value in the same manner as under Code Section 704(c) and the
Regulations thereunder.
Any elections or other decisions relating to such allocations shall be
made by the Executive Committee in any manner that reasonably reflects the
purpose and intention of this Operating Agreement. Allocations pursuant to this
Section 4.11 are solely for purposes of federal, state, and local taxes and
shall not affect, or in any way be taken into account in computing, any Member's
Capital Account or share of Profits, Losses, other items, or distributions
pursuant to any provisions of this Operating Agreement.
4.12 TAX CHARACTERIZATION AND RETURNS.
(a) The Members acknowledge that the Company will be treated as a
"partnership" for federal and State of Delaware state tax purposes. All
provisions of this Operating Agreement and the Company's Articles of
Organization are to be construed so as to preserve that tax status.
(b) In accordance with Section 10.03, within ninety (90) days after the
end of each Fiscal Year, the Executive Committee will cause to be delivered to
each person who was a Member at any time during such Fiscal Year a Form K-1 and
such other information, if any, with respect to the Company as may be necessary
for the preparation of each Members federal or state income tax (or information)
returns, including a statement showing each Member's share of income, gain or
loss, and credits for the Fiscal Year.
4.13 TAX ELECTIONS. The Executive 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, including the election
referred to in Code Section 754 to adjust the basis of Company assets.
4.14 TAXES OF TAXING JURISDICTIONS. To the extent that the laws of any
Taxing Jurisdiction require, each Member (or such Members as maybe required by
the Taxing 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, and
interest, and 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
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tax, penalty and interest determined under the laws of the Taxing Jurisdiction
with respect to such income.
The Tax Partner on behalf of the Executive Committee, where permitted
by the rules of any Taxing Jurisdiction, may file a composite, combined or
aggregate tax return reflecting the income of the Company and pay the tax,
interest and penalties of some or all of the Members on such income to the
Taxing Jurisdiction, in which case the Company shall inform the Members of the
amount of such tax interest and penalties so paid.
4.15 TAX MATTERS PARTNER. SJE is initially designated as the "tax
matters partner" of the Company pursuant to Code Section 321 (a)(7). The Members
may, by vote of a majority of the Members, designate any Member as tax matters
partner. Any Member designated as tax matters partner shall take such action as
may be necessary to cause each other Member to become a "notice partner" within
the meaning of Code Section 6223. Any Member who is designated tax matters
partner may not take any action contemplated by Code Sections 6222 through 6232
without the consent of the other Member.
ARTICLE V MANAGEMENT.
5.1 MANAGEMENT BY MEMBERS. The business and affairs of the Company
shall be directed by its Members in accordance with the provisions of this
Agreement as set forth below.
5.2 EXECUTIVE COMMITTEE.
(a) The Company shall be managed by and at the direction of
its Members through a committee consisting of two
representatives of SJE and two representatives of GZA (the
"Executive Committee"). Each meeting of the Executive
Committee shall be deemed a meeting of the Members. Meetings
of the Members (apart from meetings of the Executive
Committee) are neither necessary nor required.
(b) From time to time, each Member shall elect its two
representatives to the Executive Committee, and such election
shall be communicated in writing to the LLC. At the time of
formation, GZA names M. Xxxxxx Xxxx and Xxxxxxx X. Xxxxxx as
its representatives. SJE names Xxxxxx X. Xxxxxx and Xxxxxx X.
Xxxxxx as its representatives.
(c) The Executive Committee shall have the authority to manage
and establish policies and strategies of the Company
including, without limitation, the authority to:
(i) enter into any and all agreements, contracts,
documents, certifications, and instruments necessary
or convenient in connection with the management,
maintenance and operation of the property of the
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Company, or in connection with managing the affairs
of the Company, including amendments to this
Agreement and the Certificate of Formation in
accordance with the terms of this Agreement;
(ii) allocate and distribute Profits and Losses to
Members in accordance with their Percentage
Interests;
(iii) establish an Operating Committee, if desired,
establish and modify Operating Committee Procedures
from time to time;
(iv) establish reserves from Profits which otherwise
would be distributed to Members;
(v) borrow money and issue evidence of indebtedness
necessary, convenient, or incidental to the
accomplishment of the purpose of the Company; and
secure the same by mortgage, pledge, or other lien on
any property or asset of the Company;
(vi) prepay in whole or part, refinance, recast,
increase, modify or extend any liabilities affecting
the property of the Company and in connection
therewith execute any extensions or renewals of
encumbrances on any or all of such property;
(vii) invest, manage, and distribute Company funds to
the Members in accordance with the provisions of this
Agreement, and perform all matters in furtherance of
the objectives of the Company or this Agreement,
including but not limited to opening and maintaining
Company bank accounts and authorizing signatories
with respect thereto;
(viii) employ accountants, legal counsel, managing
agents and other Persons (including but not limited
to Affiliates of Members, subject to Section 6.1 of
the Agreement) to perform service for the Company and
to compensate them from Company funds;
(ix) make any and all elections for federal, state,
and local tax purposes including, without limitation,
any election, if permitted by applicable law: (A) to
adjust the basis of property of the Company pursuant
to Code Sections 754, 734(b), and 743(b), or
comparable provisions of state or local law, in
connection with Company distributions; (B) to extend
the statute of limitations for assessment of tax
deficiencies against Members with respect to
adjustments to the Company's federal, state, or local
tax returns; and (C) to the extent provided in Code
Sections 6221 through 6231, to represent the Company
and its Members before taxing authorities or courts
of competent jurisdiction in tax matters affecting
the Company and its Members, and to file any tax
returns and to
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execute any agreements or other documents relating to
or affecting such tax matters, including agreements
or other documents that bind the Members with respect
to such tax matters or otherwise affect the rights of
the Company or the Members;
(x) institute, prosecute, defend, settle, compromise,
and dismiss lawsuits or other judicial or
administrative proceedings brought on or in behalf
of, or against, the Company or the Members in
connection with activities arising out of, connected
with, or incidental to this Agreement, and to engage
counsel or others in connection therewith;
(xi) engage in any kind of activity and perform and
carry out contracts of any kind (including contracts
of insurance covering risks to property of the
Company) necessary or incidental to, or in connection
with, the accomplishment of the purposes of the
Company, as may be lawfully carried on or performed
by a limited liability company under the Act;
(xii) take, or refrain from taking, all actions not
expressly proscribed or limited by or addressed in
this Agreement, as may be necessary or appropriate to
accomplish the purposes of the Company, including but
not limited to the establishment, maintenance, and
expenditure of reserves to provide for working
capital, debt service, and such other purposes as it
may deem necessary or advisable;
(xiii) sell all or substantially all of the assets of
the Company;
(xiv) merge or consolidate the Company;
(xv) mortgage or encumber all or substantially all of
the assets of the Company;
(xvi) approve the Company's budget;
(xvii) vote to dissolve the Company;
(xviii) vote to seek bankruptcy protection for the
Company; and
(xix) distribute excess cash to the Members.
(d) Any decision or act of the Executive Committee taken in
accord with the provisions of this Agreement shall control and
bind the Company.
(e) Any Member may replace either or both of its
representatives on the Executive Committee at any time.
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5.3 DECISIONS OF THE EXECUTIVE COMMITTEE. All decisions of the
Executive Committee require the assent of a majority of all then current
Executive Committee members, provided that such majority assent shall include
the assent of at least one representative each of SJE and GZA.
5.4 RIGHT TO RELY ON EXECUTIVE COMMITTEE.
(a) Any Person dealing with the Company may rely (without duty of
further inquiry) upon a certificate signed by any member of the Executive
Committee as to:
(i) the identity of any member of the Executive or
Operating Committees or Member of the Company;
(ii) the existence or nonexistence of any fact or
facts which constitute a condition precedent to acts by the
Executive Committees or which are in any other manner germane
to the affairs of the Company;
(iii) the Persons who are authorized to execute and
deliver any instrument or document of the Company; or
(iv) any act or failure to act by the Company or any
other matter whatsoever involving the Company or any member of
the Executive Committee, or any Member of the Company.
(b) Except as otherwise required by law, the signature of any member of
the Executive Committee shall be sufficient to constitute execution of a
document, on behalf of the Company, which has been properly authorized by action
of the Executive Committee. Notwithstanding Article XIII, the Members agree that
a copy of this Agreement may be shown to appropriate parties in order to confirm
the same. Any member of the Executive Committee shall have the power and
authority to execute on behalf of the Company, the Executive Committee, or the
Members any document to be filed with the Secretary of the State of Delaware
pursuant to the Act.
5.5 DESIGNATION OF OFFICER TITLES. The Members may provide officer
titles for members of the Executive Committee of the Company. The officer titles
may include, but shall not be limited to, a Chairman, a President, one or more
Vice Presidents, a Treasurer, a Secretary and such other officer titles as the
Members decide to appoint.
5.6 FUNCTIONING OF THE EXECUTIVE COMMITTEE
(a) Quorum and Voting. Three of the four members of the
Executive Committee shall constitute a quorum for the conducting of
business. Approval of any matter brought before the Executive Committee
requires the assent of three of the four members of the Executive
Committee. Each member of the Executive Committee shall have one vote
on each matter.
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(b) Chairman. One of the members of the Executive Committee
shall serve as the Chairman of the Executive Committee for a term of
one year. The position of Chairman shall rotate annually between a
representative of SJE and a representative of GZA. The initial Chairman
of the Executive Committee shall be a representative of GZA. The
Chairman shall vote solely in his capacity as a member of the Executive
Committee.
(c) Meetings. Regular meetings of the Executive Committee
shall be held as determined by the Chairman of the Executive Committee,
but at least quarterly. Members of the Executive Committee may
participate in a meeting of the Executive Committee by a means of a
conference telephone or similar communications equipment whereby all
persons participating in the meeting can hear each other and be heard
sufficiently to permit contemporaneous exchange and debate.
Participation in a meeting in this manner shall constitute presence in
person at the meeting.
(d) Notice, Waiver, and Minutes. All members of the Executive
Committee shall receive a notice of each regular meeting of the
Executive Committee together with a copy of the proposed agenda for
such meeting at least five days prior to a scheduled regular meeting
date. The Chairman or any two members of the Executive Committee may,
upon two day's notice (such notice to include a proposed agenda) to the
other members of the Executive Committee, call a special meeting of the
Executive Committee at any time. Attendance at any meeting of the
Executive Committee (either in person or by means of conference
telephone or similar communications equipment) shall constitute waiver
of notice thereof. The Executive Committee shall cause minutes of its
meetings to be kept which shall be open for inspection by any Member at
any time.
(e) Alternate Representatives. Each member of the Executive
Committee shall be entitled to appoint (and to change) an alternate
representative to attend meetings of the Executive Committee in such
member's place. A member of the Executive Committee may appoint as an
alternate, only a representative of the same Member. An alternate may
not be a member of the Executive Committee in his own right. Alternate
representatives shall be appointed or changed by the appointer serving
notice to the effect upon SJE and GZA. An alternate representative
shall not be entitled to vote in his capacity as such at any meeting at
which his appointer is present.
(f) Action Without Meeting. Any action which may be taken by
the Executive Committee at a meeting thereof may be taken without a
meeting by the unanimous written consent of all members of the
Executive Committee.
ARTICLE VI SUPPORT BY MEMBERS.
6.1 SUPPORT SERVICES AGREEMENTS. With the execution of this Agreement,
each of SJE and GZA intend to execute support services agreements in
substantially similar form to those which are attached as Appendices A and B.
Such agreements will provide for the rendition
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of services to the Company on the terms stated therein. Each such agreement is
referred to as a "Support Services Agreement."
6.2 REIMBURSEMENTS TO COMMITTEE MEMBERS. Subject to limits established
in the Company's budget, reasonable travel expenses of the Executive Committee
members shall be reimbursed by the Company.
6.3 STATEMENTS TO MEMBERS FOR SERVICES RENDERED. After a period of two
years from the date a statement for services rendered under an Support Services
Agreement or for a sale of Assets is delivered to the Company, neither the
Company nor the other Member may contest the amount or validity of such
statement.
6.4 MEMBERS ACTING AS AGENT. With the prior, specific, written
authorization of the Executive Committee in each case, a Member may from time to
time in its own name but as agent for and on behalf of the Company enter into
transactions for the acquisition or disposition of Assets. Any Member which acts
as an agent of the Company pursuant to this Section 6.6 shall have the benefit
of the guarantee set forth in Section 7.3.
ARTICLE VII LIABILITIES, LIMITATION OF LIABILITIES AND INDEMNIFICATION.
7.1 LIMITATION OF LIABILITY of Members, and Executive Committee members
and Limitation of Duty Owed by Members, and Executive Committee members. It is
specifically understood and agreed that:
(a) a Member or Executive Committee member shall not be
required to devote full time to Company business;
(b) except as expressly otherwise provided herein to the
contrary regarding Transaction Opportunities, in no event shall any
doctrine similar to the doctrine of corporate opportunity apply with
regard to the actions or activities of any Member, or Executive
Committee member;
(c) in no event shall any doctrine or duty similar to the duty
of loyalty owed by corporate directors be owed by any Member or
Executive Committee member;
(d) except as expressly otherwise provided herein to the
contrary, each Member and Executive Committee member shall be free to
conduct any business or activity whatsoever, without obligation to the
Company or any other Member.
(e) except as otherwise provided by the LLC Law, the debts,
obligations and liabilities of the Company, whether arising in
contract, tort or otherwise, shall be solely the debts, obligations and
liabilities of the Company, and no Covered Person shall be obligated
personally for any such debt, obligation or liability of the Company
solely by reason of being a Covered Person.
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(f) except as otherwise required by law, a Member, in its
capacity as Member, shall have no liability in excess of (i) the amount
of its Capital Contributions, (ii) its share of any assets and
undistributed Profits of the Company, (iii) its obligation to make
other payments expressly provided for in this Operating Agreement, and
(iv) the amount of any distributions wrongfully distributed to it.
7.2 ACTIONS BEYOND SCOPE OF AGREEMENT. Any Member who binds or
obligates the Company for any debt or liability or causes the Company to act
except in accordance with the provisions of this Agreement shall be liable to
the Company for any such debt, liability or act.
7.3 INDEMNIFICATION.
(a) To the fullest extent permitted by law, a Member (herein the
"Indemnifying Member") shall INDEMNIFY and DEFEND the Company and the other
Member and HOLD them HARMLESS from and against all claims, losses, costs,
liabilities, damages and expenses (including, without limitation, costs of suit
or proceeding and attorneys' fees) they may incur by virtue of claims by third
parties arising out of any action of the Indemnifying Member that could obligate
or bind the Company for any debt, liability or act except as such may be
incurred in accordance with the provisions of this Agreement. For the avoidance
of doubt, the Members agree that the indemnification provided in the immediately
preceding sentence applies only to claims by third parties.
(b) To the fullest extent permitted by applicable law, a Covered Person
shall be entitled to indemnification from the Company for any loss, 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 and in
a manner reasonably believed to be within the scope of authority conferred on
such Covered Person by this Operating Agreement, except that no Covered Person
shall be entitled to be indemnified in respect of any loss, damage or claim
incurred by such Covered Person by reason of gross negligence or willful
misconduct with respect to such acts or omissions or if a judgment or other
final adjudication adverse to such Covered Person establishes that the Covered
Person's acts or omissions were in bad faith or involved intentional misconduct
or a knowing violation of law or that the Covered Person personally gained in
fact a financial profit or other advantage to which the Covered Person is not
entitled; provided, however, that any indemnity pursuant to this Section shall
be provided out of and to the extent of Company assets only, and no Covered
Person shall have any personal liability on account thereof.
(c) The Company may purchase and maintain insurance, to the extent and
in such amounts as the Executive Committee shall, in its sole discretion, deem
reasonable, on behalf of such of the Covered Persons and other Persons as the
Executive Committee shall determine, against any liability that may be asserted
against or expenses that may be incurred by any such Person in connection with
the activities of the Company or such indemnities, regardless of whether the
Company would have the power to indemnify such Person against such liability
under the provisions of this Operating Agreement. The Company may, with the
approval of the Executive Committee, enter into indemnity contracts with Covered
Persons and adopt written
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procedures pursuant to which arrangements are made for the advancement of
expenses and the funding of obligations under Section 7.3 hereof and containing
such other procedures regarding indemnification as are appropriate.
(d) To the fullest extent permitted by applicable law, expenses
(including legal fees) 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 upon receipt by the Company of an undertaking by or on behalf of the
Covered Person to repay such amount if it shall be determined that the Covered
Person is not entitled to be indemnified as authorized in Section 7.3 hereof.
ARTICLE VIII NO TRANSFER OF INTERESTS.
Except pursuant to a corporate reorganization of one of the Members, no
Member shall transfer, encumber, mortgage, pledge, or create a security interest
in all or any part of its Percentage Interest in the Company unless approved by
all the Members. Any purported Transfer of a Percentage Interest shall be null
and void and of no effect.
ARTICLE IX DISSOLUTION AND TERMINATION.
9.1 EVENTS OF DISSOLUTION. Each of the following shall each be an
"Event of Dissolution":
(a) a unanimous decision by the Executive Committee to
dissolve the Company;
(b) the expiration of the term of the Company stated in
Section 2.2;
(c) June 1, 2002 and each June 1 thereafter, if at least six
months prior to any such date, either Member has given written notice
to the other that it elects to dissolve the Company;
(d) the giving of written notice of dissolution by either
Member to the other Member after any breach of Article XIII
(Non-Disclosure) by the other Member;
(e) a material breach of this Agreement (other than a breach
of Article XIII) or of any Support Services Agreement by a Member and
the continuation of such breach for 30 days after the other Member has
given written notice of such breach and of its election to dissolve to
the breaching Member;
(f) the expulsion, bankruptcy (which shall mean being the
subject of an order for relief under Title 11 of the United States
Code), or dissolution of a Member, or occurrence of any other event
that terminates the continued membership of a Member in the Company;
(g) a Change of Control of a Member, at the written election
of either
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Member to dissolve where:
(i) for purposes of this Section 9.1 a "Change of
Control" means:
(A) the acquisition, directly or indirectly,
of 25% or more of the voting securities of a
Member by any Person other than a Person who
owns, directly or indirectly, 25% or more of
such securities on the Effective Date, or
(B) the ability to elect a majority of the
directors of a Member by any Person other
than a Person who possesses such ability on
the Effective Date; and
(ii) notwithstanding Section 9.1(g)(i) above, a
public offering or distribution to existing shareholders of the
securities of a Member or its Affiliates or a management buyout of all
the shares of the securities of a Member shall not be deemed an Event
of Dissolution;
(h) as otherwise required by the Act, including but not limited to the
entry of a decree of judicial dissolution pursuant to the Act;
9.2 EFFECT OF DISSOLUTION.
(a) Upon the occurrence of an Event of Dissolution set forth in Section
9.1, the Executive Committee shall commence dissolution of the Company which
shall continue solely for the purpose of winding up its affairs in an orderly
manner, disposing of its Assets in a commercially reasonable manner consistent
with obtaining the fair market value thereof, and satisfying the claims of its
creditors and Members.
(b) After the occurrence of an Event of Dissolution, the obligations of
each Member to offer Transaction Opportunities to the Company shall be
terminated. The Executive Committee shall cause the Company's Assets, with the
exception of the intellectual property rights to the real-time automated air
monitoring system for which a patent is pending as identified in Section 3.4, to
be disposed of as promptly as is consistent with obtaining the fair market value
thereof (or limiting loss incurred with respect thereto). The intellectual
property rights of the real-time automated air monitoring system shall first be
offered to the Members at a price which is mutually agreeable to all the
Members. If none of the Members is interested in purchasing the intellectual
property rights to the aforementioned system, then those rights shall be
disposed of as is consistent with obtaining the fair market value thereof.
(c) The Executive Committee shall be responsible for overseeing the
winding up and dissolution of the Company, shall take full account of the
Company's liabilities
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and property, and shall cause the proceeds from the liquidation of the Company's
property, to the extent sufficient therefore, to be applied and distributed in
the following order:
(i) first, to the payment and discharge of all the
Company's debts and liabilities to creditors other than
Members or their Affiliates;
(ii) second, to the payment and discharge of all of
the Company's debts and liabilities to Members and their
Affiliates; and
(iii) third, to the Members pro rata in accordance
with their positive capital account balances, after giving
effect to all contributions, distributions, and allocations
for all periods.
No Member shall receive any additional compensation for any services performed
pursuant to this Section 9.2. Each Member understands and agrees that by
accepting the provisions of this Section 9.2 setting forth the priority of the
distribution of the assets of the Company to be made upon its liquidation, such
Member expressly waives any right which it, as a creditor of the Company, might
otherwise have under the Act to receive distributions of assets of the Company
in satisfaction of any liability of the Company, and hereby subordinates to said
creditors any such right.
(d) after an Event of Dissolution, no Member or member of the Executive
Committee shall take any action that is inconsistent with, or not appropriate
for, winding up the Company's business and affairs.
(e) To the extent not inconsistent with the foregoing, all covenants
and obligations in this Agreement shall continue in full force and effect until
such time as the Company Assets have been disposed of or distributed and the
Company's risk management contracts satisfied or terminated. When that has
occurred, the Members shall have no further obligations under this Agreement
except under Sections 13.2, 13.3 and 13.4, which shall survive dissolution and
winding up of the Company.
9.3 FILING OF ARTICLES OF CANCELLATION. Upon the completion of the
disposition of the Assets pursuant to Section 9.2, the Executive Committee shall
(or, on the failure of the Executive Committee to act, either Member may)
promptly file a Certificate of Cancellation with the office of the Delaware
Secretary of State.
9.4 RESERVE. Notwithstanding the provisions of Section 9.2, the
Executive Committee may retain such funds as it deems necessary as a reserve for
any contingent liabilities or obligations of the Company, which reserve, after
the passage of a reasonable period of time, shall be distributed pursuant to
Section 9.2(c).
ARTICLE X ACCOUNTING AND BANK ACCOUNTS.
10.1 ACCOUNTING METHOD. The books of the Company shall be kept using
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accrual accounting in accordance with generally accepted accounting principles.
10.2 BOOKS AND RECORDS The books and records of the Company shall be
maintained at the office of the Member which provides bookkeeping services under
its respective Support Services Agreement. Books and records shall be maintained
for the longer of two years or any period required by applicable statute or
regulation. In any event, the other Member, at its expense, shall have the right
during ordinary business hours and upon reasonable notice to inspect and copy
such books and records.
10.3 FINANCIAL REPORTS.
(a) The Company shall cause to be prepared and delivered to each
Member, financial statements of the Company in such detail and with such
frequency as either Member may reasonably request, together with all information
with respect to the Company necessary for the preparation of the Members'
federal, state, and local income tax returns.
(b) At either Member's request, the annual financials may be audited at
the expense of the Company.
10.4 TAX RETURNS AND ELECTIONS. The Company shall cause to be prepared
and timely filed all federal, state and local income tax returns or other
returns or statements required by applicable law. The Company shall claim all
deductions and make such elections for federal or state income tax purposes
which the Executive Committee reasonably believes will produce the most
favorable tax results for the Members.
10.5 BANK ACCOUNTS. All funds of the Company shall be deposited in a
separate bank, money market or similar account or accounts approved by the
Executive Committee and in the name of the Company. Withdrawals therefrom shall
be made only by Persons, and for purposes, authorized by the Executive
Committee.
ARTICLE XI REPRESENTATIONS AND WARRANTIES OF SJE.
SJE represents, warrants and covenants to GZA as follows:
11.1 ORGANIZATION, QUALIFICATION. SJE is a corporation duly organized
and validly existing under the laws of the State of New Jersey. SJE has all
requisite power and authority to carry on its business as and where presently
being conducted.
11.2 AUTHORIZATION AND ENFORCEABILITY. SJE has the full corporate power
and authority to make, execute, deliver and perform this Agreement, and the
execution, delivery and performance of this Agreement by SJE has been duly
authorized by all necessary corporate action, including, if necessary,
shareholder approval. This Agreement has been duly executed and delivered by SJE
and this Agreement constitutes, when executed, the legal, valid and binding
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obligation of SJE enforceable in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency and similar
laws relating to creditors' rights generally.
11.3 NO VIOLATION OF LAWS OR AGREEMENTS. The execution and delivery of
this Agreement does not, and the consummation of the transactions contemplated
by this Agreement and the compliance with the terms, conditions and provisions
of this Agreement by SJE will not, conflict with or result in any violation of
or default (with or without notice or lapse of time, or both) under, or give
rise to a right of termination, cancellation or acceleration of any obligation
or loss of a material benefit under, or result in the creation of any lien upon
any of the business, assets or properties of SJE under, any provision of (A) its
Articles of Incorporation, Bylaws or other corporate documents, or (B) any note,
bond, mortgage, indenture, license, lease, contract, commitment, agreement or
arrangement to which SJE is a party, or (C) any judgment, order, decree,
statute, law, ordinance, rule or regulation applicable to SJE or the business
assets or properties of SJE.
11.4 CONSENTS. No consent, approval, order or authorization of, or
registration, declaration or filing with, any court, administrative agency or
commission or authority, is required to be obtained or made, by or with respect
to, SJE in connection with the execution and delivery of this Agreement or the
consummation by SJE of the transactions contemplated hereby.
ARTICLE XII REPRESENTATIONS AND WARRANTIES OF GZA.
GZA represents, warrants and covenants to SJE as follows:
12.1 ORGANIZATION, QUALIFICATION. GZA is a corporation duly organized
and validly existing under the laws of the Commonwealth of Massachusetts. GZA
has all requisite power and authority to carry on its business as and where
presently being conducted.
12.2 AUTHORIZATION AND ENFORCEABILITY. GZA has the full corporate power
and authority to make, execute, deliver and perform this Agreement, and the
execution, delivery and performance of this Agreement by GZA has been duly
authorized by all necessary corporate action, including, if necessary,
shareholder approval. This Agreement has been duly executed and delivered by GZA
and this Agreement constitutes, when executed, the legal, valid and binding
obligation of GZA enforceable in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency and similar
laws relating to creditors' rights generally.
12.3 NO VIOLATION OF LAWS OR AGREEMENTS. The execution and delivery of
this Agreement does not, and the consummation of the transactions contemplated
by this Agreement and the compliance with the terms, conditions and provisions
of this Agreement by GZA will not, conflict with or result in any violation of
or default (with or without notice or lapse of time, or both) under, or give
rise to a right of termination, cancellation or acceleration of any obligation
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or loss of a material benefit under, or result in the creation of any lien upon
any of the business, assets or properties of GZA under, any provision of (A) its
Articles of Incorporation, Bylaws or other corporate documents, or (B) any note,
bond, mortgage, indenture, license, lease, contract, commitment, agreement or
arrangement to which GZA is a party, or (C) any judgment, order, decree,
statute, law, ordinance, rule or regulation applicable to GZA or the business,
assets or properties of GZA.
12.4 CONSENTS. No consent, approval, order or authorization of, or
registration, declaration or filing with, any court, administrative agency or
commission or authority, is required to be obtained or made, by or with respect
to, GZA in connection with the execution and delivery of this Agreement or the
consummation by GZA of the transactions contemplated hereby.
ARTICLE XIII NON-DISCLOSURE.
13.1 COMPANY-INFORMATION. From the date of this Agreement, each Member
hereby agrees to use only on behalf of the Company and not otherwise disclose
information regarding the business and finances of the Company until the later
of the dissolution of the Company or the extinguishment of both Members'
obligations under Section 9.2, except that a Member may disclose such
confidential information of the Company at any time to:
(a) a regulatory or judicial authority when given under
appropriate confidentiality arrangements; and
(b) Affiliates of either Member except those Affiliates which
from time to time compete with the Company.
After the later of dissolution of the Company or the extinguishment of both
Members' obligations under Section 9.2, no restrictions on disclosure or use of
such Company information shall continue.
13.2 MEMBER INFORMATION. From the date of this Agreement, each Member
hereby agrees to keep confidential all information regarding the business and
finances of the other Member, except that a Member may disclose confidential
information about the Company at any time to a regulatory or judicial authority
when given under appropriate confidentiality arrangements.
13.3 GENERALLY AVAILABLE INFORMATION. Notwithstanding Sections 13.1 and
13.2, the obligation of non-disclosure shall not apply to any information
relating to the business and finances of the Company which is or becomes
generally available to the public through no fault of any Person owing an
obligation of non-disclosure or confidentiality to the Company.
13.4 BREACH AND RECOURSE. Each Member hereby acknowledges and agrees
that a breach of this covenant of non-disclosure may cause immediate and
irreparable injury to the
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Company and its Members and will authorize recourse by the Company and Members
to injunction and/or specific performance, as well as all other available legal
or equitable remedies.
ARTICLE XIV ARBITRATION.
14.1 RESOLUTION OF DISPUTES BY ARBITRATION AND SELECTION OF
ARBITRATORS. Any and all good faith differences and disputes of whatsoever
nature arising out of this Agreement shall be resolved and finally settled by
binding arbitration. The Members shall each appoint one arbitrator, and the two
arbitrators so appointed will select a third arbitrator, all of such arbitrators
to be qualified by education, knowledge, and experience to resolve the
difference or dispute.
14.2 JURISDICTION OF ARBITRATORS AND RULES APPLIED TO ARBITRATION. The
jurisdiction of the arbitrators will be limited to the issue(s) referred to
arbitration, and the arbitration shall be conducted pursuant to the rules of the
American Arbitration Association and the substantive laws of Delaware; provided,
however, that should there be any conflict between such guidelines and the
procedures set forth in this Agreement, the terms of this Agreement shall
control.
14.3 INDIVIDUAL ISSUE RESOLUTION AND DISCOVERY. Within 15 days
following selection of the third arbitrator, each Member shall furnish the
arbitrators in writing its position regarding the issue being arbitrated. In the
event multiple issues are in dispute, each Member shall submit its position
regarding each issue and the arbitrators shall resolve each issue individually
unless the Members otherwise agree. The arbitrators may, if they deem necessary
or desirable, convene a hearing regarding the issue(s) being arbitrated.
Discovery shall be permitted by the arbitrators to the extent that, though
requested by a Member, witnesses do not agree to appear or do not appear at the
arbitration or documents are not produced at least 20 days before the
arbitration. Within 30 days following the later of the appointment of the third
arbitrator or of the hearing, if one is held, the arbitrators shall notify the
Members in writing as to which position of the two Members on each issue is most
consistent with the applicable provision(s) of this Agreement, if any, which are
relevant to the dispute. Such decision shall be binding on the Members hereto
until and unless changed in accordance with the provisions of this Agreement.
14.4 ENFORCEMENT of the award may be entered in any court having
jurisdiction over the Members.
14.5 EXPENSES. Each Member will pay the expenses of the arbitrator
selected by or for it, and its counsel, witnesses and employees and the
presentation of its case. All other costs of arbitration will be divided equally
between the Members.
14.6 INJUNCTION AND SPECIFIC PERFORMANCE. Notwithstanding anything to
the contrary contained in Sections 14.1 through 14.5, in the event interim
judicial relief (including, without limitation, that referred to in Section
13.4) is necessary prior to rendition of any arbitral award in order to avoid
irreparable injury to either Member, then such Member may seek interim measures
of protection, including without limitation orders of injunction, specific
performance or other equitable relief, from any court of competent jurisdiction.
The provisions of this Section 14.6 shall not be deemed to preclude the awards.
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ARTICLE XVI MISCELLANEOUS PROVISIONS.
15.1 NOTICES. Any notice, demand or communication required or permitted
to be given by any provision of this Agreement shall be deemed to have been
sufficiently given or served for all purposes if delivered personally to the
party or to an executive officer of the party to whom the same is directed or if
sent by registered or certified mail, postage and charges prepaid, return
receipt requested, or by overnight courier of national reputation or transmitted
by telecopy with evidence of the telephone number to which sent, in each case
addressed to the Member's and/or Company's address or telecopier number, as
appropriate, which is set forth in the books and records of the Company. Any
such notice shall be deemed to be given as of the date so delivered or
telecopied if delivered or telecopied during regular business hours, as of the
next business day if delivered by overnight courier or delivered or telecopied
after regular business hours, and if sent by mail, three business days after the
date on which the same was deposited in a regularly maintained receptacle for
the deposit of United States mail, addressed and sent as aforesaid.
15.2 GOVERNING LAW. This Agreement and all questions with respect to
its construction, enforcement or interpretation, the rights and obligations of
the parties hereto, or the formation, administration, or termination of the
Company shall be governed by the Act and other applicable laws of the State of
Delaware without regard to Delaware's conflict of law rules.
15.3 EXECUTION OF ADDITIONAL INSTRUMENTS. Each Member hereby agrees to
execute such documents or instruments as may be necessary to comply with
applicable laws, rules, or regulations.
15.4 CONSTRUCTION. Whenever the singular number is used in this
Agreement and when required by the context, the same shall include the plural
and vice versa, and the neuter gender shall include the masculine and feminine
genders and vice versa.
15.5 HEADINGS. The headings in this Agreement are for convenience only
and are in no way intended to describe, interpret, define, or limit the scope,
extent, or intent of this Agreement or any of its provisions.
15.6 WAIVERS. The failure of any party to seek redress for violation of
or to insist upon the strict performance of any covenant or condition of this
Agreement shall not constitute a waiver of any subsequent violation or of the
right to so insist.
15.7 RIGHTS AND REMEDIES CUMULATIVE. The rights and remedies provided
by this Agreement are cumulative, and also are provided in addition to any other
rights the parties may have by law, statute, ordinance, or otherwise.
15.8 SEVERABILITY. Any provision of this Agreement that is invalid,
illegal, or unenforceable in any jurisdiction shall be ineffective only in such
jurisdiction and only to the extent of such invalidity, illegality, or
unenforceability, and without rendering ineffective the remaining provisions of
the Agreement in any jurisdiction.
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15.9 SUCCESSORS AND ASSIGNS. The rights, duties and obligations of a
Member under this Agreement may not be assigned without the prior written
consent of the other Member which may be given or withheld in its sole
discretion. To the extent that such consent is given, each and all of the
covenants, terms, provisions, and agreements contained in this Agreement shall
be binding upon and inure to the benefit their successors in interest.
15.10 NO THIRD PARTY BENEFICIARIES. None of the provisions of this
Agreement shall be construed to be for the benefit of or enforceable by any
Person other than the parties hereto and, to the extent permitted by this
Agreement, their successors in interest.
15.11 COUNTERPARTS. This Agreement may be executed in counterparts,
each of which shall be deemed an original and all of which shall constitute one
and the same instrument.
15.12 FACSIMILE SIGNATURES. The Members agree that a facsimile
signature will serve as an original, and that the Statute of Frauds will be
waived as to any claim associated with transmittal or acceptance of the
facsimile signature.
15.13 ENTIRE AGREEMENT. This Agreement, including any exhibits, is the
entire agreement between the parties regarding the subject matter of the
formation and operation of the limited liability company. It supersedes any
other representations or agreements, whether oral or written and specifically
supersedes and nullifies the January 21, 1999 Letter of Intent as it pertains to
the formation of the limited liability company between the parties. The
contractual documents that underlie the transactions regarding automated air
monitoring services provided to customers prior to formation of the limited
liability company are to be given full force and effect and are not affected by
the formation of the limited liability company. This paragraph is not intended
to supersede or nullify those documents.
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IN WITNESS WHEREOF, the parties have executed this Agreement to be
effective the date first noted above.
SOUTH JERSEY ENERGY COMPANY
BY:
--------------------------------
TITLE:
-----------------------------
DATE OF EXECUTION:
GZA GEOENVIRONMENTAL INC.
BY:
--------------------------------
TITLE:
-----------------------------
DATE OF EXECUTION:
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Exhibit A
SUPPORT SERVICES AGREEMENT
BETWEEN
SOUTH JERSEY ENERGY COMPANY
AND
AIRLOGICS, L.L.C.
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SUPPORT SERVICES AGREEMENT
This Agreement is made as of April 1, 2000 by and between SOUTH JERSEY
ENERGY COMPANY, a New Jersey corporation with its principal place of business at
Xxx Xxxxx Xxxxxx Xxxxx, Xxxxx 00, Xxxxxx, XX 00000 ("SJE"), and AIRLOGICS,
L.L.C., a Delaware Limited Liability Company with its principal place of
business at 0 Xxxxx Xxxxxx Xxxxx, Xxxxxx, XX 00000 ("AIRLOGIC").
WHEREAS, SJE is willing to provide support services to AIRLOGICS; and
WHEREAS, AIRLOGICS requires support services and desires to use and
purchase such services from SJE; and
NOW, THEREFORE, it is hereby agreed as follows:
ARTICLE I - GENERAL SCOPE OF SERVICES
1. SJE shall provide, as needed, support services to AIRLOGICS,
enumerated in Exhibit A, attached hereto and made a part hereof, subject to the
applicable provisions of this Agreement; provided, however, that SJE and
AIRLOGICS shall not be responsible for policy or management decisions of the
other, such functions being reserved exclusively for each party to this
Agreement, respectively.
2. SJE shall provide support services using personnel from within its
own organization. In addition, SJE may use persons from outside its organization
with the other party's approval, such approval not to be unreasonably withheld.
ARTICLE II - PAYMENT FOR SERVICES
1. All of the support services rendered under this Agreement shall be
charged to the other in accordance with the fee schedule identified in Exhibit
B. Support services that benefit both SJE and AIRLOGICS shall be fairly and
equitably allocated between the parties. The methods of determining the costs
and the allocation may be modified or changed by either party with the prior
written approval of the other party. If either party objects, in writing, to the
proposed changes or modifications, the parties agree to make a good faith effort
to renegotiate the terms and conditions of Exhibit B. If no agreement can be
reached within sixty (60) days of the proposal to modify Exhibit B, the proposed
modifications will not take effect and either party may terminate this Agreement
as provided herein.
2. SJE shall submit itemized invoices for services rendered,
including, when requested or required by AIRLOGICS, all sales, use, excise, or
similar taxes that may be applicable to such services, as soon as practicable
after the close of each month. All invoices submitted by SJE shall have adequate
documentation to justify all labor and material costs. AIRLOGICS shall pay such
invoice within thirty days after receipt, to the extent the costs are not
disputed. Such disputes must be raised within eighteen (18) months after receipt
of the invoice with the disputed
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cost. Simple annual interest at the prime rate then in effect at Bank Boston,
plus 1.5%, shall accrue on any undisputed invoice items not paid within thirty
days after receipt by the other, interest computed from the 31st day following
the date of receipt.
3. Upon the written request of AIRLOGICS, SJE shall permit AIRLOGICS
reasonable access to its books and records for the purpose of auditing charges
billed by SJE.
ARTICLE III - TERM OF CONTRACT
This Agreement shall commence on the date first written above and
continue until terminated by either party by at least two (2) months prior
written notice to the other.
ARTICLE IV - CHANGES
No waiver, alteration, amendment, consent, or modification of any of
the provisions of this Agreement shall be binding unless in writing and signed
by a duly authorized representative of both parties.
ARTICLE V - ASSIGNMENT
Neither SJE nor AIRLOGICS may assign any of its rights or obligations
hereunder, except with the prior written consent of the other; provided,
however, SJE shall be entitled to use affiliates, as its agent, to provide
services hereunder.
ARTICLE VI - FORCE MAJEURE
Force Majeure means an event that is beyond the reasonable control
of, and without the fault or negligence of, the party claiming Force Majeure,
which delays, hinders, or prevents performance of that party's obligations under
this Agreement. SJE or AIRLOGICS shall not be liable to the other for loss or
damage resulting from (1) any delay in performance, in whole or in part, or (2)
nonperformance of its contractual obligations, in whole or in part, insofar as
such delay or nonperformance is caused by Force Majeure, provided that the party
invoking Force Majeure provides written notice to the other party of the
circumstances giving rise to such delay or nonperformance within a reasonable
time after learning of such circumstances and, to the extent possible, takes
reasonable steps to correct or alleviate the circumstances that led to the Force
Majeure event.
ARTICLE VII - INSURANCE AND INDEMNIFICATION
1. SJE may, with respect to the services performed under this
Agreement, self-insure or obtain insurance coverage with respect to its
facilities and shall maintain the following coverage, naming the other party to
this Agreement as an additional insured, as applicable:
a) Workers' Compensation Insurance that complies with
the provisions of applicable law.
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b) Employer's Liability Insurance with limits not less
than $1,000,000 each occurrence;
c) General Liability Insurance with limits not less than
$2,000,000 combined bodily injury and property damage
liability;
d) Automobile Liability Insurance with limits not less
than $1,000,000 combined bodily injury and property
damage.
e) Professional Liability Insurance with limits not less
than $3,000,000 per claim and annual aggregate
including coverage for damages resulting from a
release of pollutants
2. SJE shall defend (at the other's option), indemnify, and hold
harmless AirLogics, its directors, officers, employees, contractors, agents,
successors, and assigns from and against, any actions, penalties, claims, costs
(including, but not limited to, reasonable attorney's fees), or damages of any
nature caused in whole or in part by any act or omission of SJE related to the
services performed by SJE pursuant to this Agreement and resulting in personal
injury or property damage.
3. SJE shall defend (at the other's option), indemnify, and hold
harmless AirLogics, its directors, officers, employees, contractors, agents,
successors, and assigns from and against, any actions, penalties, claims, costs
(including, but not limited to, reasonable attorney's fees), or damages of any
nature caused by SJE's negligent professional acts, errors and omissions. SJE
shall in no case be required to pay an amount disproportionate to SJE's
negligence, nor shall SJE be required to pay any amount or sum levied against
AirLogics to recognize more than actual and/or reasonable damages.
4. SJE shall name AirLogics as an "Additional Insured" on its General
Liability and Automobile Liability Insurance policies. Certified copies of said
policies or certificates evidencing such insurance shall be filed with
AirLogics.
ARTICLE VIII - GENERAL LIMITATIONS OF LIABILITY AND WAIVER
1. SJE shall provide well-qualified and experienced staff to perform
services covered by this Agreement. Names and backgrounds of said personnel
shall be provided to AIRLOGICS on request.
2. Services provided by SJE hereunder shall be performed in a
prudent, professional, and workmanlike manner. If any such services provided by
SJE fail to conform to this standard, AIRLOGICS shall, at its option, have the
right to correct or re-perform such services, the cost of which shall be
deducted from the monies owed to SJE.
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3. Except for the obligation in (2) above to correct or re-perform
services, SJE shall not be liable for any reason to the other for claims for
incidental, indirect, consequential, or other damages of any nature connected
with or resulting from the performance or non-performance of this Agreement by
SJE or AIRLOGICS, whether or not due to negligence by SJE or AIRLOGICS.
4. Except for the obligation imposed upon it for the payment of
support services pursuant to Article III, neither party shall be liable to the
other for claims for direct, incidental, indirect, consequential, or other
damages of any nature connected with or resulting from performance or
non-performance of this Agreement by SJE or AIRLOGICS, whether or not due to
negligence by SJE or AIRLOGICS.
5. EXCEPT AS MAY BE PROVIDED IN PARAGRAPHS 1 AND 2 OF THIS ARTICLE,
NO WARRANTIES OF ANY KIND WHETHER STATUTORY, WRITTEN, ORAL OR IMPLIED,
INCLUDING, WITHOUT LIMITATION, WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE, SHALL APPLY TO SERVICES PERFORMED HEREUNDER.
ARTICLE IX - NOTICE
1. All communications and notices by AIRLOGICS to SJE under this
Agreement shall be sent to and addressed as follows:
South Jersey Energy Company
Xxx Xxxxx Xxxxxx Xxxxx
Xxxxx 00
Xxxxxx, XX 00000
ATTN: Xxxxxx X. Xxxxx
2. All communications and notices by SJE to AIRLOGICS under this
Agreement shall be sent to and addressed as follows:
AirLogics, LLC AirLogics, L.L.C.
0 Xxxxx Xxxxxx Xxxxx X/X XXX GeoEnvironmental, Inc.
Xxxxxx, XX 00000 000 Xxxxxxx Xxxxxx
ATTN: Xxxxxx X. Xxxxxx Newton, MA 02446-1594
Attn: M. Xxxxxx Xxxx
3. Either party may change the address set forth by written notice to
the other.
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ARTICLE X - APPLICABLE LAW
1. This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware except that its conflict of law shall not
apply.
2. This Agreement shall be subject to approval by any regulatory body
whose approval is a legal prerequisite to its execution, delivery, or
performance.
3. This Agreement constitutes the entire Agreement between the
parties for the services to be provided hereunder, and supersedes all prior
representations and Agreements, whether written or oral, between the parties as
to such services.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed in duplicate by their duly authorized representatives, to become
effective as of the date first written above.
SOUTH JERSEY ENERGY COMPANY
By: _______________________________
Its: _______________________________
AIRLOGICS, LLC
By: ________________________________
Its: ________________________________
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EXHIBIT A
to
Support Services Agreement
GENERAL DESCRIPTION OF SOUTH JERSEY ENERGY COMPANY
SUPPORT SERVICES
The services available under this Agreement that are to be provided under this
Agreement and are the services normally furnished by AIRLOGICS are as follows:
1. Accounting
2. Administrative Support including billing, collection,
clerical, records management, and legal
3. Tax and insurance services
4. Insurance
5. Technical support
6. Sales, client development & relations, proposal preparation
7. Marketing support
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EXHIBIT B
TO
SUPPORT SERVICES AGREEMENT
DETERMINATION OF COST OF SERVICE AND ALLOCATION THEREOF
SJE shall xxxx AIRLOGICS for costs incurred on behalf of
performing services as described using the fixed hourly/monthly rates outlined
below. These rates are in effect for the year ending December 31, 2000 and may
be adjusted annually thereafter to reflect inflation and other cost-of-living
increases.
Where services performed by SJE benefit other entities, SJE shall
equitably allocate the costs of such services among the entities benefiting from
such services.
SJE shall maintain records adequate to support the costs to be
charged to AIRLOGICS. These records shall be made available to the other for
audit as requested.
Services in support of equipment fabrication will be separated to
allow capitalization of these costs with the equipment.
SERVICE PROVIDED - FEE
1. Accounting - $71.45 per hour
2. Administrative Support including billing, collection,
clerical, records - $46.16 per hour
3. Tax and insurance services - $84.60 per hour
4. Technical support - $ 130.45 per hour
5. Sales, client development & relations, proposal preparation -
$6,500 plus comm. per month
6. Marketing support - $109.34 per hour
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EXHIBIT B
SUPPORT SERVICES AGREEMENT
BETWEEN
GZA GEOENVIRONMENTAL INC.
AND
AIRLOGICS, L.L.C.
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SUPPORT SERVICES AGREEMENT
This Agreement is made as of April 1, 2000 by and between GZA
GEOENVIRONMENTAL INC., a Massachusetts corporation with its principal place of
business at 000 Xxxxxxx Xx., Xxxxxx Xxxxx Xxxxx XX 00000 ("GZA"), and AIRLOGICS,
L.L.C., a Delaware Limited Liability Company with its principal place of
business 0 Xxxxx Xxxxxx Xxxxx, Xxxxxx, Xxx Xxxxxx 00000 ("AIRLOGIC").
WHEREAS, GZA is willing to provide support services to AIRLOGICS; and
WHEREAS, AIRLOGICS requires support services and desires to use and
purchase such services from GZA; and
NOW, THEREFORE, it is hereby agreed as follows:
ARTICLE I - GENERAL SCOPE OF SERVICES
1. GZA shall provide, as needed, support services to AIRLOGICS,
enumerated in Exhibit A, attached hereto and made a part hereof, subject to the
applicable provisions of this Agreement; provided, however, that GZA and
AIRLOGICS shall not be responsible for policy or management decisions of the
other, such functions being reserved exclusively for each party to this
Agreement, respectively.
2. GZA shall provide support services using personnel from within its
own organization. In addition, GZA may use persons from outside its organization
with the other party's approval, such approval not to be unreasonably withheld.
ARTICLE II - PAYMENT FOR SERVICES
1. All of the support services rendered under this Agreement shall be
charged to the other in accordance with schedule in Exhibit B. Support services
that benefit both GZA and AIRLOGICS shall be fairly and equitably allocated
between the parties. The methods for determining fees for support services may
be modified or changed by either party with the prior written approval of the
other party. If either party objects, in writing, to the proposed changes or
modifications, the parties agree to make a good faith effort to renegotiate the
terms and conditions of Exhibit B. If no agreement can be reached within sixty
(60) days of the proposal to modify Exhibit B, the proposed modifications will
not take effect and either party may terminate this Agreement as provided
herein.
2. GZA shall submit itemized invoices for services rendered,
including, when requested or required by AIRLOGICS, all sales, use, excise, or
similar taxes that may be applicable to such services, as soon as practicable
after the close of each month. All invoices submitted by GZA shall have adequate
documentation, where applicable, to justify all labor and material costs.
AIRLOGICS shall pay such invoice within thirty days after receipt, to the extent
the costs are not
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disputed. Such disputes must be raised within eighteen (18) months after receipt
of the invoice with the disputed cost. Simple annual interest at the prime rate
then in effect at Bank Boston, plus 1.5%, shall accrue on any undisputed invoice
items not paid within thirty days after receipt by the other, interest computed
from the 31st day following the date of receipt.
3. Upon the written request of AIRLOGICS, GZA shall permit AIRLOGICS
reasonable access to its books and records for the purpose of auditing charges
billed by GZA.
ARTICLE III - TERM OF CONTRACT
This Agreement shall commence on the date first written above and
continue until terminated by either party by at least two (2) months prior
written notice to the other.
ARTICLE IV - CHANGES
No waiver, alteration, amendment, consent, or modification of any
of the provisions of this Agreement shall be binding unless in writing and
signed by a duly authorized representative of both parties.
ARTICLE V - ASSIGNMENT
Neither GZA nor AIRLOGICS may assign any of its rights or
obligations hereunder, except with the prior written consent of the other;
provided, however, GZA shall be entitled to use affiliates, as its agent, to
provide services hereunder.
ARTICLE VI - FORCE MAJEURE
Force Majeure means an event that is beyond the reasonable control
of, and without the fault or negligence of, the party claiming Force Majeure,
which delays, hinders, or prevents performance of that party's obligations under
this Agreement. GZA or AIRLOGICS shall not be liable to the other for loss or
damage resulting from (1) any delay in performance, in whole or in part, or (2)
nonperformance of its contractual obligations, in whole or in part, insofar as
such delay or nonperformance is caused by Force Majeure, provided that the party
invoking Force Majeure provides written notice to the other party of the
circumstances giving rise to such delay or nonperformance within a reasonable
time after learning of such circumstances and, to the extent possible, takes
reasonable steps to correct or alleviate the circumstances that led to the Force
Majeure event.
ARTICLE VII - INSURANCE AND INDEMNIFICATION
1. GZA may, with respect to the services performed under this
Agreement, self-insure or obtain insurance coverage with respect to its
facilities and shall maintain the following coverage, naming the other party to
this Agreement as an additional insured, as applicable:
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a) Workers' Compensation Insurance that complies with the
provisions of applicable law.
b) Employer's Liability Insurance with limits not less than
$1,000,000 each occurrence;
c) General Liability Insurance with limits not less than
$2,000,000 combined bodily injury and property damage
liability; and
d) Automobile Liability Insurance with limits not less than
$1,000,000 combined bodily injury and property damage.
e) Umbrella Liability with limits not less than $5,000,000 per
claim and aggregate
f) Professional Liability Insurance with limits not less than
$3,000,000 per claim and annual aggregate including coverage
for damages resulting from a release of pollutants
2. GZA shall defend (at the other's option), indemnify, and hold
harmless AirLogics, its directors, officers, employees, contractors, agents,
successors, and assigns from and against, any actions, penalties, claims, costs
(including, but not limited to, reasonable attorney's fees), or damages of any
nature caused in whole or in part by any act or omission of GZA related to the
services performed by GZA pursuant to this Agreement and resulting in personal
injury or property damage.
3. GZA shall defend (at the other's option), indemnify, and hold
harmless AirLogics, its directors, officers, employees, contractors, agents,
successors, and assigns from and against, any actions, penalties, claims, costs
(including, but not limited to, reasonable attorney's fees), or damages of any
nature caused by GZA's negligent professional acts, errors and omissions. GZA
shall in no case be required to pay an amount disproportionate to GZA's
negligence, nor shall GZA be required to pay any amount or sum levied against
AirLogics to recognize more than actual and/or reasonable damages.
4. GZA shall name AirLogics as an "Additional Insured" on its General
Liability and Automobile Liability Insurance policies. Certified copies of said
policies or certificates evidencing such insurance shall be filed with
AirLogics.
ARTICLE VIII - GENERAL LIMITATIONS OF LIABILITY AND WAIVER
1. GZA shall provide well-qualified and experienced staff to perform
services covered by this Agreement. Names and backgrounds of said personnel
shall be provided to AIRLOGICS on request.
2. Services provided by GZA hereunder shall be performed in a
prudent, professional, and workmanlike manner. If any such services provided by
GZA fail to conform to this standard,
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AIRLOGICS shall, at its option, have the right to correct or re-perform such
services, the cost of which shall be deducted from the monies owed to GZA.
3. Except for the obligation in (2) above to correct or re-perform
services, GZA shall not be liable for any reason to the other for claims for
incidental, indirect, consequential, or other damages of any nature connected
with or resulting from the performance or non-performance of this Agreement by
GZA or AIRLOGICS, whether or not due to negligence by GZA or AIRLOGICS.
4. Except for the obligation imposed upon it for the payment of
support services pursuant to Article III, neither party shall be liable to the
other for claims for direct, incidental, indirect, consequential, or other
damages of any nature connected with or resulting from performance or
non-performance of this Agreement by GZA or AIRLOGICS, whether or not due to
negligence by GZA or AIRLOGICS.
5. EXCEPT AS MAY BE PROVIDED IN PARAGRAPHS 1 AND 2 OF THIS ARTICLE,
NO WARRANTIES OF ANY KIND WHETHER STATUTORY, WRITTEN, ORAL OR IMPLIED,
INCLUDING, WITHOUT LIMITATION, WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE, SHALL APPLY TO SERVICES PERFORMED HEREUNDER.
ARTICLE IX - NOTICE
1. All communications and notices by AIRLOGICS to GZA under this
Agreement shall be sent to and addressed as follows:
GZA Geoenvironmental Technologies, Inc.
000 Xxxxxxx Xx.
Xxxxxx Xxxxx Xxxxx, XX 00000
Attn.: Xxxxxx Xxxx
2. All communications and notices by GZA to AIRLOGICS under this
Agreement shall be sent to and addressed as follows:
AIRLOGICS, L.L.C. AIRLOGICS, L.L.C.
0 Xxxxx Xxxxxx Xxxxx. X/X XXX GeoEnvironmental, Inc.
Xxxxxx, XX 00000 000 Xxxxxxx Xxxxxx
ATTN: Xxxxxx X. Xxxxxx Xxxxxx, XX 00000-0000
Attn: Xxxxxxx X. Xxxxxx
3. Either party may change the address set forth by written notice to
the other.
ARTICLE X - APPLICABLE LAW
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1. This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware except that its conflict of law shall not
apply.
2. This Agreement shall be subject to approval by any regulatory body
whose approval is a legal prerequisite to its execution, delivery, or
performance.
3. This Agreement constitutes the entire Agreement between the
parties for the services to be provided hereunder, and supersedes all prior
representations and Agreements, whether written or oral, between the parties as
to such services.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed in duplicate by their duly authorized representatives, to become
effective as of the date first written above.
GZA GEOENVIRONMENTAL, INC.
By: ____________________________
Title: ____________________________
AIRLOGICS, LLC
BY: _______________________________
TITLE:______________________________
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EXHIBIT A
to
Support Services Agreement
GENERAL DESCRIPTION OF GZA GEOENVIRONMENTAL TECHNOLOGIES, INC
SUPPORT SERVICES
The services available under this Agreement that are to be provided under this
Agreement and are the services normally furnished by AIRLOGICS are as follows:
- Patent Application and Support
- Air Monitoring Equipment Design/Configuration
- Fabrication Oversight
- Procurement and Expediting Support
- Regulatory Support
- Equipment Mobilization
- System Start-up and Troubleshooting
- Operations - Field Technicians, Supervision and Technical Support
- Engineering, Design and Consulting Services
- Marketing and Proposal Preparation
- Data Management and Record Management
- Client Development and Relations
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EXHIBIT B
TO
SUPPORT SERVICES AGREEMENT
DETERMINATION OF COST OF SERVICE AND ALLOCATION THEREOF
GZA shall xxxx AIRLOGICS for costs incurred on behalf of
performing services as described using the fixed hourly rates outlined below.
These rates are in effect for the year ending December 31, 2000 and may be
adjusted annually thereafter to reflect inflation and other cost-of-living
increases.
Where services performed by GZA benefit other entities, GZA shall
equitably allocate the costs of such services among the entities benefiting from
such services.
GZA shall maintain records adequate to support the costs to be
charged to AIRLOGICS. These records shall be made available to the other for
audit as requested.
Services in support of equipment fabrication will be separated to
allow capitalization of these costs with the equipment.
- Principal-in-Charge $105.40
- Technical Project Manager 83.80
- Assistant Project Manager 61.70
- Engineer I 55.70
- Engineer II 36.90
- Engineer Technician, Lead 55.90
- Engineering Field Technician 48.90
- Technician II 36.90
- Administrative Staff 38.20
GZA shall hire, or assign temporarily, two Technician II personnel for the
AirLogics at a reduced multiplier of 1.7 times raw salary commencing April 1,
2000. Each Technician will be full-time chargeable (minimum of 40 hours/week)
for a period of one year to AirLogics. Costs to hire, train and certify these
new employees will be shared equally by the AirLogics members.
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