Exhibit 3.44
OPERATING AGREEMENT
FOR
LANDBANK ENVIRONMENTAL PROPERTIES, LLC
A DELAWARE LIMITED LIABILITY COMPANY
This Operating Agreement is made as of June 4, 1997, by and between
LANDBANK, INC. (LandBank), a Delaware corporation and LANDBANK REMEDIATION
CORPORATION (LRC), a Delaware corporation (collectively referred to hereinafter
as the "Members" or individually as a "Member"), with reference to the following
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facts:
A. On June 3, 1997, a Certificate of Formation for LandBank Environmental
Properties, LLC (the, "Company"), a limited liability company under the laws of
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the State of Delaware, was filed with the Delaware Secretary of State.
B. The Members desire to adopt and approve an operating agreement for the
Company (the "Operating Agreement").
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C. Members desire that the business and purpose of the Company is
investment (either directly or indirectly) in real property, or debt instruments
secured by real property, the value of which is significantly impaired by actual
or perceived contamination conditions or other environmental liability risks
(each, an "Asset")and in "Project LLC's" which own or intend to own such assets
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and to do such other activities directly related to the foregoing business as
may be necessary or advisable to further such business in the reasonable opinion
of the Managing Member. The LLC shall not engage in business that is not
related to such purposes except with the consent of all of the Members as
provided herein.
D. The Members want the Operating Agreement to reflect their agreement
that the Company will be managed by a Managing Member and that LandBank will be
the Managing Member of the Company.
E. The Members further want the Operating Agreement to reflect their
agreement that the Company will be managed by a Board consisting of three
appointees designated by the Board of Directors of LandBank, and that the Board
will make decisions by unanimous agreement unless otherwise set forth herein to
the contrary.
NOW, THEREFORE, the Members by this Agreement set forth the operating
agreement for the Company upon the terms and subject to the conditions of this
Agreement.
ARTICLE 1.
DEFINITIONS
As used in this Agreement, the following terms shall have the following
meanings:
1.1 "Act" shall mean the Delaware Limited Liability Company Act,
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particularly Chapter 18, Title 6 of the Delaware Code.
1.2 "Affiliate" or "affiliate" shall mean any individual, partnership,
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corporation, trust or other entity or association, directly or indirectly,
through one or more intermediaries, controlling, controlled by, or under common
control with a Member. The term "control," as used in the immediately preceding
sentence, means, with respect to a corporation or limited liability company, the
right to exercise, directly or indirectly, more than fifty percent (50.0%) of
the voting rights attributable to the controlled corporation or limited
liability company, and, with respect to any individual, partnership, trust,
other entity or association, the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of the
controlled individual or entity.
1.3 "Agreement" shall mean this Operating Agreement, as amended by the
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Members from time to time.
1.4 "Asset" shall mean the real property, or a note secured by real
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property, the value of which is significantly impaired by actual or perceived
contamination conditions or other environmental liability risks.
1.5 "Bankruptcy" shall mean: (i) the filing of an application by a Member
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for, or its consent to, the appointment of a trustee, receiver, or custodian of
its other assets; (ii) the entry of an order for relief with respect to a Member
in proceedings under the United States Bankruptcy Code, as amended or superseded
from time to time; (iii) the making by a Member of a general assignment for the
benefit of creditors; (iv) the entry of an order, judgment, or decree by any
court of competent jurisdiction appointing a trustee, receiver, or custodian of
the assets of a Member unless the proceedings and the person appointed are
dismissed within ninety (90) days; or (v) the failure by a Member generally to
pay its debts as the debts become due within the meaning of Section 303(h)(1) of
the United States Bankruptcy Code, as determined by the Bankruptcy Court, or the
admission in writing of its inability to pay its debts as they become due.
1.6 "Board" shall mean the managing board of the Company which shall be
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composed of three (3) Directors appointed by the LandBank Board of Directors.
Three Directors shall constitute a
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quorum of the Board. Except as otherwise provided herein, the Board shall make
decisions by the unanimous vote of the Directors. Decisions of the Members shall
be made by action of the Board.
1.7 "Capital Account" shall mean with respect to any Member the capital
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account which the Company establishes and maintains for such Member pursuant to
Section 3.2 hereof.
1.8 "Capital Contribution" shall mean the amount of cash; the fair market
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value of real or personal property; and/or the services contributed, to the
Company or deemed contributed to the Company by a Member and credited to the
Member's Capital Account as provided in Article 3 hereof.
1.9 "Cash Flow" shall mean, as to any particular Fiscal Year or portion
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thereof, gross revenues less the aggregate amount of the following: (i) service
fees for LandBank, Inc. or Third Party Services; and (ii) a reasonable working
capital reserve and a reserve for future expenses in an amount reasonably
established by the Managing Member.
1.10 "Certificate" shall mean the Certificate of Formation for the Company
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originally filed with the Delaware Secretary of State and as amended from time
to time.
1.11 "Code" shall mean the Internal Revenue Code of 1986, as amended from
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time to time, and the provisions of succeeding law.
1.12 "Company Minimum Gain" shall have the meaning ascribed to the term
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"Partnership Minimum Gain" in Treasury Regulations Section 1.704-2(d).
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1.13 "Corporations Code" shall mean the Delaware Corporations Code, as
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amended from time to time, and provisions of succeeding law.
1.14 "Directors" shall mean the individuals appointed by LandBank as their
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appointed representatives on the Board.
1.15 "Dispute Letter," "Dispute Resolution Panel," and "Dispute Resolution
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Process" shall have the meanings ascribed to them in Article 16 hereof.
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1.16 "Fiscal Year" shall mean the Company's fiscal year, which shall be
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the calendar year.
1.17 "Former Member" and "Former Member's Interest" shall have the
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meanings ascribed to them in Section 11.2 hereof.
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1.18 "LandBank" shall mean LandBank, Inc., a Delaware corporation, and its
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successors in interest.
1.19 "LRC" shall mean LandBank Remediation Corporation, a Delaware
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Corporation and its successors in interest.
1.20 "Managing Member" shall mean LandBank, Inc or its successors in
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interest.
1.21 "Managing Member Services" shall include all services required to be
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provided in connection with the day-to-day management and operation of the
Company, including, without limitation, preparing annual budgets for the
operation of the Company on an ongoing basis.
1.22 "Member" shall mean each Person who: (i) is an initial signatory to
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this Agreement, has been admitted to the Company as a Member in accordance with
the Certificate and this Agreement or is a permitted assignee who has become a
Member in accordance with Article 9; and (ii) has not resigned, withdrawn, been
expelled or, if other than an individual, dissolved.
1.23 "Member Loan" shall mean any loan made by a Member or an Affiliate of
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a Member to the Company pursuant to the terms and conditions of this Agreement,
as amended from time to time.
1.24 "Member Nonrecourse Debt" shall have the meaning ascribed to the term
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"Partner Nonrecourse Debt" in Treasury Regulations Section 1.704-2(b)(4).
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1.25 "Member Nonrecourse Deductions" shall mean items of Company loss,
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deduction, or Code Section 705(a)(2)(B) expenditures which are attributed to
Member Nonrecourse Debt.
1.26 "Membership Interest" shall mean a Member's entire interest in the
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Company including the member's economic interest, the right to vote on or
participate in the management of the Company, and the right to receive
information concerning the business and affairs of the Company.
1.27 "Membership Percentage" shall mean a Member's percentage interest in
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the residual Net Profits and Net Losses of the Company, as shown on Exhibit A
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hereto.
1.28 "Net Profits" and "Net Losses" shall mean the income, gain, loss,
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deductions, and credits of the Company in the aggregate or separately stated, as
appropriate, determined in accordance with generally accepted accounting
principles employed under the method of accounting at the close of each fiscal
year on the Company's information tax return filed for federal income tax
purposes.
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1.29 "Nonrecourse Liability" shall have the meaning set forth in Treasury
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Regulations Section 1.752-1(a)(2).
1.30 "Person" shall mean an individual, general partnership, limited
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partnership, limited liability company, corporation, trust, estate, real estate
investment trust, association or any other entity.
1.31 "Project LLC" shall mean an LLC formed for the purpose of any of the
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following: acquiring, owning, remediating, restoring, developing, redeveloping,
improving, operating, maintaining, leasing, selling or otherwise enjoying the
economic benefits of an Asset.
1.32 "Term" shall have the meaning ascribed to it in Section 2.2 hereof.
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1.33 "Third Party Loan" shall mean any loan made by any Person other than
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a Member to Company pursuant to the terms and conditions of this Agreement, as
amended from time to time.
1.34 "Transactions" shall mean Acquisition Transactions.
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1.35 "Treasury Regulations" shall, unless the context clearly indicates
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otherwise, mean the final or temporary regulations in force at any moment in
time that have been issued by the U.S. Department of Treasury pursuant to its
authority under the Code.
ARTICLE 2.
ORGANIZATIONAL MATTERS
2.1 Name. The name of the Company shall be "LandBank Environmental
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Properties, LLC." The Company may conduct business under that name or any other
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name approved by the Members.
2.2 'Term. The Term of the Company commenced as of the Effective Date and
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shall end on December 31, 2037, unless sooner terminated under Article 12 hereof
and subject to any Member's option to terminate the Company by delivering to the
other Members written notice thereof (a "Notice of Termination") no later than
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sixty (60) calendar days prior to the end of a Fiscal Year. If no Member
terminates the Company by delivering such Notice of Termination to the other
Members within the time period set forth in the previous sentence, the Term of
the Company shall continue for another calendar year, subject to the previous
sentence.
2.3 Office and Agent. The Company shall continuously maintain an office
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and registered agent in the State of Delaware as required by the Act. The
principal office of the Company
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shall be at c/o LandBank Environmental Properties, LLC, 00000 X. Xxxxxxx Xxxx.,
Xxxxx 000, Xxxxxxxx, Xxxxxxxx 00000 or such location as the Board may determine.
The registered agent shall be as stated in the Certificate or as otherwise
determined by the Board.
2.4 Business of the Company. Notwithstanding the purpose of the Company
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which is described in the Preamble to this Agreement, the Company shall not
engage in any business other than the following without the consent of all of
the Members: (i) the investment (direct or indirect) in an Asset or Project
LLC; and (ii) such other activities directly related to the foregoing business
as may be necessary or advisable in the reasonable opinion of the Managing
Member to further such business.
ARTICLE 3.
CAPITAL CONTRIBUTIONS
3.1 Capital Contributions. Each Member shall make Capital Contributions
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to the Company as provided herein. Except as provided in this Agreement, no
Member may withdraw its Capital Contributions.
3.1.1 Initial Capital Contributions. Each Member shall make an
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initial cash Capital Contribution to the Company in the amount shown opposite
the Member's name on Exhibit A attached hereto.
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3.2 Capital Accounts. The Company shall establish an individual Capital
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Account for each Member. The Company shall determine and maintain each Capital
Account in accordance with Treasury Regulations Section 1.704-1(b)(2)(iv) Upon a
valid transfer of a Membership Interest in accordance with Article 10 hereof,
the new owner shall succeed to such transferring Member's Capital Account.
ARTICLE 4.
MEMBERS AND BOARD
4.1 Members.
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4.1.1 Identification. LandBank and LRC shall be the Members of the
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Company. No other person may become a Member except pursuant to a transfer
specifically permitted under and effected in compliance with Section 10 of this
Agreement or upon admission of a new Member with the prior written consent of
all of the Members.
4.1.2 Liability Several. The obligations of the Members to one
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another under this Agreement shall be in every case several and shall not be, or
be construed to be, either joint or joint and several.
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4.1.3 Withdrawals. The Members may not withdraw from the Company
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except as provided herein.
4.1.4 Reimbursement and Fees. Except as specified in this Agreement
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or pursuant to any separate written agreement executed by the Members, the
Members and their Affiliates shall not be entitled to remuneration for overhead
or general and administrative expenses.
4.2 Board. The Company shall be managed and controlled by the Board.
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4.2.1 Membership. The Board will consist of three (3) Directors,
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appointed by LandBank, Inc. The Directors shall elect one of their number as
Chair.
4.2.2 Voting. Each Director shall have one vote on any decision of
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the Board. A Director may give his written proxy to another Director to vote on
his behalf in his absence. All actions of the Board must be unanimously
approved, directly or by proxy, by the Directors (whether or not present at the
meeting at which such vote occurs).
4.2.3 Meetings of the Board; Time and Place. Unless otherwise agreed
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by the Board, regular meetings of the Board shall be held monthly at such time
and at such place as the Board shall determine. At such regular meetings,
management of the Company shall report on the financial performance and
condition of the Company on a year-to-date basis, progress reports on capital
projects, a report on the status of the Annual Business Plan and such other
matters relevant to the operation of the Company as the Directors may request or
the Managing Member may deem appropriate. Special meetings of the Board shall be
held on the call of any Director, provided that at least three (3) business
days' notice is given to all directors (unless written waiver of this
requirement by all Directors is obtained). A quorum for any Board meeting shall
consist of not less than three (3) Directors present either in person or by
proxy. The Board may make use of telephones and other electronic devices to hold
meetings, provided that each Director simultaneously participates with all of
the other Directors with respect to all discussions and votes of the Board. The
Board may act without a meeting if the action taken is reduced to writing and
approved by the Board in accordance with the other voting provisions of this
Agreement. Written minutes shall be taken at each meeting of the Board. However,
any action taken or matter agreed upon by the Board shall be deemed final,
whether or not written minutes are ever prepared or finalized. Without
limitation on the voting and approval requirements set forth in this Section
4.2.3, the Chair of the Board shall be entitled to consult with and advise the
Managing Member, from time to time, and shall not be required to call a meeting
of the Board to do so.
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4.2.4 Major Decisions. The Managing Member, subject to the control
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of the Board, shall manage the Company on a day-to-day basis, however no action
shall be taken, sum expended, decision made or obligation incurred by the
Managing Member or by any Member on behalf of the Company with respect to any
matter within the scope of any of the Major Decisions enumerated below, unless
approved by the Board. The "Major Decisions" shall mean and consist of the
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following:
(i) The approval of the Annual Business Plan and Project
Plan and each revision or amendment thereto;
(ii) The selection of a firm of independent certified public
accountants to perform an annual audit and issue an opinion letter with respect
to the financial statements of the Company, if such an audit is requested by the
Members.
(iii) The purchase, sale, lease or other disposition of an
Asset or membership in a Project LLC, other than as contemplated in the Annual
Business Plan and/or Project Plans;
(iv) The making of capital expenditures, other than those
contemplated in the Annual Business Plan and Project Plans;
(v) Filing for bankruptcy protection or similar
proceedings;
(vi) Each other decision or action under this Agreement or
the Certificate that requires the approval, consent, determination or agreement
of the Board.
4.2.5 Pending appointment of all Board members, Major Decisions
shall be approved by both Members.
ARTICLE 5.
OPERATIONS OF THE COMPANY
It is the express mutual intent of the Members that the terms and
conditions of this Article 5 shall control all Transactions of the Company and
all relationships between the Members relating to the Company, except where
expressly stated otherwise herein or when contracted for pursuant to a separate
agreement between a Member and the Company. The decisions to be made by the
Members shall be made by the action of the Board except where expressly set
forth to the contrary herein.
5.1 Purpose. The Company shall invest directly or indirectly in Assets
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whose value may be enhanced by remediation, restoration, and redevelopment
and/or in Project LLC's.
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5.2 Identification of Potential Investments. The Members will attempt to
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identify Assets that would be appropriate for Company investment and will
present information about potential investments to the Board for Board approval.
5.2.1 Procedure for Investment Transactions. The Board may adopt and
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amend from time to time a written statement of the screening and assessment
phases and procedures for Board approval of investments in Assets and Project
LLC's.
5.2.2 After the Board has approved an Asset investment the Company
shall enter into an Asset purchase and sale agreement or other appropriate
agreement in form and substance acceptable to the Board. The closing of each
investment shall occur within sixty (60) to one hundred and twenty (120) days
after the date of the Board's approval.
5.2.3 Signature Authority. The Chair of the Board of Directors shall
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have authority to bind the Company by executing all agreements and other
documents necessary to consummate approved investments.
ARTICLE 6.
COMPANY DEBT
6.1 General. It is the specific mutual intent of the Members that
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financing be acquired from third parties on commercially reasonable terms. The
intent of this Article 6 is to provide for the repayment of Third Party Loans
and Member Loans made to the Company from Company funds, and to set forth the
procedures to be followed if such funds are insufficient for such purpose.
6.2 Payment of Third Party Loans. Payments of principal and interest on
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any Third Party Loans shall be obligations of the Company. Such payments shall
be made from Cash Flow in the priority set forth in this Agreement.
6.3 Payments of Member Loans. To the extent that a Member or its
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Affiliate provides all or some portion of financing for a Project: (i) if
commercially possible without jeopardizing Third Party Loans, payments of
principal, interest, priority returns on principal (if any), and any other fees
or charges attributable to such Member Loan shall be payable on the same
priority basis as Third Party Loans for the Project; and (ii) such Member Loan
payments are payable exclusively to the lending Member or its Affiliate and
shall not be considered revenue to the Company.
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ARTICLE 7.
ALLOCATIONS OF NET PROFITS AND NET LOSSES
7.1 Allocations of Net Profit and Net Loss. All Net Profits and Net
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Losses of the Company shall be allocated to the Members in proportion to their
respective Membership Percentages.
7.2 Code Section 704(c) Allocations. Notwithstanding any other provision
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in this Article 7, in accordance with Code Section 704(c) and Treasury
Regulations promulgated 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 fair market value on the date of contribution.
7.3 Compliance with Treasury Regulations. These allocation provisions are
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intended to have substantial economic effect within the meaning of Code Section
704(b) and the Treasury Regulations promulgated thereunder. To the extent not
otherwise inconsistent with the economic arrangements between the Members as set
forth in this Agreement, all of such Treasury Regulations and the allocations
provided for therein are incorporated herein by this reference.
ARTICLE 8.
DISTRIBUTIONS; PAYMENT OF SERVICE FEES
8.1 Distribution of Assets by the Company. Subject to applicable law and
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any limitations contained elsewhere in this Agreement the Managing Member shall
cause the Company to make cash distributions from Cash Flow on the fifteenth
(15th) day of each month and upon the receipt of proceeds from the sale or other
disposition of an Asset or membership in a Project LLC. Except as otherwise
provided herein, distributions shall be made to the Members according to the
following priorities:
8.1.1 FIRST, to pay all of the debts and expenses of the Company,
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including repayment of principal and accrued and unpaid interest then
outstanding and due and payable on any Third Party Loans or any Member Loans
made to the Company.
8.1.2 SECOND, to the Members, in proportion to their Membership
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Interests.
ARTICLE 9.
MANAGING MEMBER; MANAGEMENT AND CONTROL OF THE COMPANY
9.1 Initial Managing Member. LandBank shall be the Managing Member until
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the earlier of a Dissolution Event affecting LandBank or LandBank's removal for
cause pursuant to
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Section 9.2 below. As Managing Member, LandBank shall provide to the Company all
services not specifically designated in this Agreement to be provided by another
party.
9.2 Removal and Election of Managing Member. The Managing Member may be
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removed for any of the following reasons: (i) actual fraud or willful
misconduct; or (ii) the failure to perform a material obligation of the Managing
Member pursuant to the terms of this Agreement for a period of more than ten
(10) calendar days after notice thereof from any other Member. Upon the
occurrence of any of the above events, the Members other than the Managing
Member may vote to remove the Managing Member. Any deadlock shall be submitted
to the Dispute Resolution Panel and shall be resolved in accordance with the
terms of the Dispute Resolution Process. Upon removal, the Members (other than
the Member who was formerly the Managing Member) shall vote to elect a new
Managing Member.
9.3 Annual Business Plan & Project Plans. LandBank shall prepare an
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Annual Business Plan containing an annual budget for submission to and approval
by the Board. LandBank shall prepare Project Plans containing budgets for Asset
and Project LLC investments contemplated by the Company. LandBank shall obtain
from each Member and unrelated Third Parties such information about their area
of expertise as is required to prepare these Plans. LandBank shall include in
the budget for any Plan any costs to be expended pursuant to a separate Service
Agreement with LandBank.
9.4 Implementation of Annual Business Plan by the Managing Member. The
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Managing Member shall, subject to the availability of operating revenues and
other cash flow (so long as the Managing Member has used reasonable efforts to
maximize the same), implement the then-applicable Annual Business Plan and
Project Plans. The Managing Member shall have the authority, together with the
obligation and responsibility, to manage the Company's business in accordance
with the Annual Business Plan and Project Plans. The Managing Member shall
devote such time and effort to managing the Company as is reasonably necessary
for the furtherance of the Company's business.
9.5 Reimbursement of Managing Member Expenses. The Managing Member shall
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be entitled to a monthly fee for management services as presented in the Annual
Budget and/or each Project Budget for the duration of the project. Such fee
shall be contributed services and will serve as the basis for the LandBank
Environmental Properties, LLC Membership Interest as presented in Exhibit A. In
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connection with provision of such management services, LandBank may pay for the
account of the Company certain amounts to third parties and incur certain
internal costs; and, the Annual Plan and/or Project Plans may budget such
expenses and provide for reimbursement of such expenses to the Managing Member.
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9.6 Member Approval. No annual or regular meetings of the Members are
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required to be held. However, if such meetings are held, such meetings shall be
noticed, held and conducted pursuant to the Act. In any instance in which the
approval of the Members is required under this Agreement, such approval may be
obtained by the approval of the Board or in any manner permitted by the Act.
Unless otherwise provided in this Agreement, approval of the Members shall mean
the approval of all of the Members.
9.7 Insurance.
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9.7.1 Coverage. The Managing Member shall procure and maintain, or
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cause to be procured and maintained, insurance sufficient to enable the Company
to comply with applicable laws, regulations and requirements and under which the
Company and the Members are named insureds. The Board may adopt and amend from
time to time written requirements and standards for such insurance.
9.8 Standard of Care. The Managing Member shall use reasonable efforts to
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perform its duties under this Article 9 including, without limitation, employing
necessary personnel, on and off-site. The Managing Member shall devote itself
to the business of the Company to the extent necessary for the efficient
carrying on thereof. Whenever reasonably requested by another Member, the
Managing Member shall render a just and faithful accounting of all dealings and
transactions relating to the business of the Company.
ARTICLE 10.
TRANSFER AND ASSIGNMENT OF INTERESTS
10.1 Transfer and Assignment of Interests. No Member shall be entitled to
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transfer, assign, convey, sell, encumber or in any way alienate all or any part
of its Membership Interest including any partial interest (collectively,
"Transfer") except with the prior approval of all of the other Members, which
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approval may be given or withheld, conditioned or delayed (as allowed by this
Agreement or in the Act), as such Members may determine in their sole
discretion. Notwithstanding the foregoing, a Member shall be permitted to
Transfer all or any part of its Economic Interest to an Affiliate of such Member
without the prior written consent of the other Members.
10.2 Substitution of Members. A transferee of a Membership Interest shall
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have the right to become a substitute Member only if: (i) consent of the
Members is given in accordance with Section 10.1; (ii) such person executes an
instrument satisfactory to the Members accepting and adopting the terms and
provisions of this Agreement; and (iii) such person pays any reasonable expenses
(including, without limitation, reasonable attorneys' fees and costs) in
connection with its
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admission as a new Member. The admission of a substitute Member shall not
release the Member who assigned the Membership Interest from any liability that
such Member may have to the Company.
10.3 Transfers in Violation of this Agreement and Transfers of Partial
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Membership Interests. Upon a Transfer in violation of this Article 10, the
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transferee shall have no right to vote or participate in the management of the
Company or to exercise any rights of a Member, and any such attempted Transfer
shall be null and void.
ARTICLE 11.
CONSEQUENCES OF DISSOLUTION EVENTS AND
TERMINATION OF MEMBERSHIP INTEREST
11.1 Dissolution Event. Any one or more of the following shall constitute
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a Dissolution Event: (i) the death, insanity, withdrawal, resignation,
expulsion, Bankruptcy, or dissolution of any Member; (ii) the willful misconduct
or material breach (as such terms are defined in Section 17.1) of a Member with
respect to the Company or the Members; or (iii) the delivery by any Member of a
Notice of Termination as provided in Section 2.2 hereof, in each case unless the
other Members consent to continue the business of the Company pursuant to
Section 11.2 hereof. The consent of the Members to continue the business of the
company pursuant to Section 11.2 shall not constitute a waiver of any rights or
claims such Members may have against the Member whose conduct may constitute a
Dissolution Event, all of which rights and claims are expressly reserved.
11.2 Consequences of Dissolution Event. Upon the occurrence of a
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Dissolution Event, the Company shall dissolve pursuant to Article 12 unless all
of the remaining or unaffected Members consent within ninety (90) calendar days
of the Dissolution Event to the continuation of the business of the Company. If
the remaining or unaffected Members so consent, the Company and/or the remaining
or unaffected Members or an Affiliate of a remaining or unaffected Member shall
purchase, and the Member (or its legal representative) whose actions or conduct
resulted in the Dissolution Event ("Former Member") shall sell, the Former
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Member's Membership Interest ("Former Member's Interest") for the fair market
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value of the Former Member's Interest determined by appraisal.
11.3 Closing. The closing of the purchase of the Former Member's Interest
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shall occur within ninety (90) calendar days after the determination of the fair
market value of the Former Member's Interest as set forth in Section 11.2.
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ARTICLE 12.
DISSOLUTION AND WINDING UP
12.1 Conditions of Dissolution. The Company shall dissolve upon the
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occurrence of any of the following events:
12.1.1 Upon the happening of any event of dissolution specified in
the Certificate;
12.1.2 Upon the entry of a decree of judicial dissolution pursuant
to Section 17351 of the Corporations Code;
12.1.3 Upon the vote of all of the Members which may only be taken
if the Company has completed all remediation work which would be required to
sell any Assets owned by the Company or Project LLC's as if such Assets were not
environmentally impaired;
12.1.4 Upon the occurrence of a Dissolution Event and the failure
of the remaining Members to consent in accordance with Section 11.2 to continue
the business of the Company within ninety (90) calendar days after the
occurrence of such event; provided, however, that the Company may not be
dissolved until the Company has completed all remediation work which would be
required for the Assets owned by the Company or Project LLC in order to sell the
Assets as if it were not environmentally impaired; or
12.1.5 Upon vote of all of the Members after sale of all or
substantially all of the assets of the Company.
12.2 Winding Up. Upon the dissolution of the Company, the Company's
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assets shall be disposed of and its affairs wound up. The Company shall give
written notice of the commencement of the dissolution to all of its known
creditors.
12.3 Order of Payment of Liabilities Upon Dissolution. After determining
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that all the known debts and liabilities of the Company have been paid or
adequately provided for, the remaining assets shall be distributed to the
Members in accordance with their membership interests, after taking into account
income and loss allocations for the Company's taxable year during which
liquidation occurs.
12.4 Limitations on Payments Made in Dissolution. Except as otherwise
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specifically provided in this Agreement, each Member shall be entitled to look
only to the assets of the Company for its share of the net profits and shall
have no recourse for its share of Net Profits against any other Member.
12.5 Certificates. The Company shall file with the Delaware Secretary of
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State a Certificate of Dissolution upon the
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dissolution of the Company and a Certificate of Cancellation upon the completion
of the winding up of the Company's affairs.
ARTICLE 13.
ACCOUNTING, RECORDS, REPORTING BY MEMBERS
13.1 Books and Records. The books and records of the Company shall be
-----------------
kept in accordance with generally accepted accounting principles. The Company
shall maintain at its principal office in Colorado all of the following:
a. current list of the full name and last known business or residence
address of each Member set forth in alphabetical order, together with the
Capital Contributions, Capital Account and Membership Percentage of each Member;
b. a copy of the Certificate and any and all amendments thereto together
with executed copies of any powers of attorney pursuant to which the Certificate
or any amendments thereto have been executed;
c. copies of the Company's federal, state, and local income tax or
information returns and reports, if any, for the six (6) most recent taxable
years;
d. a copy of this Agreement and any and all amendments thereto together
with executed copies of any powers of attorney pursuant to which this Agreement
or any amendments thereto have been executed;
e. copies of the financial statements of the Company, if any, for the
six (6) most recent Fiscal Years; and
f. the Company's books and records as they relate to the internal
affairs of the Company for at least the current and past four (4) Fiscal Years.
13.2 Reports. The Managing Member shall cause to be filed, in accordance
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with the Act, all reports and documents required to be filed by or on behalf of
the Company with any governmental agency. The Managing Member shall cause to be
prepared at least annually information concerning the Company's operations
necessary for the completion of the Members' federal and state income tax
returns. The Managing Member shall send or cause to be sent to each Member
within ninety (90) days after the end of each taxable year: (i) such
information as is necessary to complete the Members' federal and state income
tax or information returns; and (ii) a copy of the Company's federal, state, and
local income tax or information returns for the year.
13.3 Bank Accounts. The Managing Member shall maintain the funds of the
-------------
Company in one or more separate bank accounts in the name of the Company, and
shall not permit the funds of the
15
Company to be commingled in any fashion with the funds of any other person. Any
Member, acting alone, is authorized to endorse checks, drafts, and other
evidences of indebtedness made payable to the order of the Company, but only for
the purpose of deposit into the Company's accounts. All checks, drafts and other
instruments obligating the Company to pay money must be signed on behalf of the
Company by an authorized representative of the Managing Member.
13.4 Tax Matters for the Company. LandBank, Inc. is designated as the
---------------------------
"Tax Matters Partner" (as defined in Code Section 6231), to represent the
Company (at the Company's expense) in connection with all examinations of the
Company's affairs by tax authorities and to expend Company funds for
professional services and costs associated therewith.
ARTICLE 14.
INDEMNIFICATION
The Company shall indemnify each Member and each Director and may indemnify
any Person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding by reason of the
fact that he or she or it is or was a Member, Director, employee or other agent
of the Company or that, being or having been such a Member, Director, employee
or agent he or she or it is or was serving at the request of the Company as a
manager, director, employee or other agent of another limited liability company,
corporation, partnership, joint venture, trust or other enterprise, to the
fullest extent permitted by applicable law in effect on the date hereof and to
such greater extent as applicable law may hereafter from time to time permit.
ARTICLE 15.
INVESTMENT REPRESENTATIONS
Each Member hereby represents and warrants to, and agrees with, the Members
and the Company as follows:
15.1 Preexisting Relationship or Experience. (i) Such Member has a
--------------------------------------
preexisting personal or business relationship with the Company or one or more of
its officers or controlling persons, or (ii) by reason of its business or
financial experience, or by reason of the business or financial experience of
its financial advisor who is unaffiliated with and who is not compensated,
directly or indirectly, by the Company or any Affiliate or selling agent of the
Company, it is capable of evaluating the risks and merits of an investment in
the Company and of protecting its own interests in connection with this
investment.
16
15.2 No Advertising. Such Member has not seen, received, been presented
--------------
with, or been solicited by any leaflet, public promotional meeting, article or
any other form of advertising or general solicitation with respect to the sale
of the Membership Interest.
15.3 Investment Intent. Such Member is acquiring the Membership Interest
-----------------
for investment purposes for its own account only and not with a view to or for
sale in connection with any distribution of all or any part of the Membership
Interest. No other person will have any direct or indirect beneficial, interest
in or right to the Membership Interest.
15.4 Purpose of Entity. If the Member is a corporation, partnership,
-----------------
limited liability company, trust, or other entity, it was not organized for the
specific purpose of acquiring the Membership Interest.
15.5 Residency. Such Member is a resident of, or is incorporated or
---------
formed under the laws of and has its principal place of business in, the State
of Delaware.
15.6 Economic Risk. Such Member is financially able to bear the economic
-------------
risk of an investment in the Membership Interest, including the total loss
thereof.
15.7 No Registration of Membership Interest. Such Member acknowledges
--------------------------------------
that the Membership Interest has not been registered under the Securities Act of
1933, as amended, or qualified under the Delaware Corporate Securities Law of
1968, as amended, or any other applicable blue sky laws in reliance, in part, on
its representations, warranties, and agreements herein.
ARTICLE 16.
DISPUTE RESOLUTION
16.1 General. The Members hereby recognize that the Company is entering a
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rapidly-evolving new real estate transaction market, which is expected to reach
maturity during the Term of this Agreement. Accordingly, the Members acknowledge
that time is of the essence to this Agreement, and that prompt performance of
the respective and joint obligations of each Member is critical. The Members
likewise acknowledge that each is making a substantial commitment to the other
to pursue this market jointly, and that each Member may or will forego other
Transaction opportunities in order to fulfill its respective obligations under
this Agreement. Accordingly, the Members mutually intend that all disputes which
may arise under this Agreement or the transactions contemplated hereby be
resolved promptly and in a manner aimed at encouraging the Members to continue
to work together following the resolution of any disputed matter.
17
16.2 Dispute Resolution Process. In furtherance of the specific mutual
--------------------------
intent of the Members set forth in Section 16.1 above, all disputes between the
Members shall be resolved as follows (the "Dispute Resolution Process"):
--------------------------
16.2.1 A Member shall describe in writing the nature of the disputed
matter (each, a "Dispute Letter") and trigger the Dispute Resolution Process.
--------------
16.2.2 Each Member shall appoint one (1) representative to a panel
(the "Dispute Resolution Panel" or "Panel") within five (5) business days of
------------------------
delivery of a Dispute Letter. The two Member-appointed representatives on the
Dispute Resolution Panel shall agree, within three (3) business days, to a third
Panel member who (i) has no prior affiliation (business, financial or otherwise)
with either Member and (ii) has established expertise in the matter that is the
subject of the Dispute Letter.
16.2.3 Within five (5) business days from the date the third Dispute
Resolution Panel member is confirmed, the moving Member shall submit to the
Panel three (3) copies of (i) the Dispute Letter, (ii) this Agreement, and (iii)
a written statement of position setting forth such Member's position with
respect to the subject matter of the Dispute Letter, which statement shall be no
longer than five (5) typewritten pages. The moving Member shall deliver one (1)
copy of its statement of position to the responding Member concurrently with its
delivery to the Panel. The responding Member shall submit three (3) copies of
its statement of position to the panel, with one (1) copy to the moving Member,
within five (5) business days of its receipt of the other Member's statement of
position. The Dispute Resolution Panel may request from the Members any other
relevant written evidence or documentation related to the subject matter of the
Dispute Letter which is reasonably necessary to resolve such dispute.
16.2.4 The Panel shall meet within three (3) business days of
submission of the responding Member's statement of position and resolve the
dispute by the vote of a majority of the members of the Panel. The Members
agree that the decision of the Panel shall become binding on the Members. The
cost and expense of the third neutral Panel member shall be allocated to the
Members at the Panel's discretion.
ARTICLE 17.
TERMINATION OF AGREEMENT; EXTENSION OF TERM
17.1 Termination. This Agreement is subject to termination for the
-----------
willful misconduct or material breach of a Member in discharging its obligations
hereunder. For the purposes of this Section 17.1, "willful misconduct" shall
-------------------
18
include, without limitation, making fraudulent or intentional misrepresentations
or similar acts of dishonesty. For the purposes of this Section 17.1, "material
--------
breach" shall include, the negligent performance of the services presented in
------
the Business Plan. Any dispute regarding the existence or severity of any such
willful misconduct or material breach shall be resolved under the Dispute
Resolution Process.
17.2 Extension of Term. The Members may extend the Term of this Agreement
-----------------
by executing a written agreement to such effect.
ARTICLE 18.
MISCELLANEOUS
18.1 Complete Agreement. Except as expressly contemplated herein, this
------------------
Agreement and the Certificate constitute the complete and exclusive statement of
agreement among the Members with respect to the subject matter herein and
therein and replace and supersede all prior written and oral agreements among
the Members. To the extent that any provision of the Certificate conflict with
any provision of this Agreement, the Certificate shall control.
18.2 Binding Effect. Subject to the provisions of this Agreement relating
--------------
to transferability, this Agreement will be binding upon and inure to the benefit
of the Members, and their respective successors and assigns.
18.3 Interpretation. All pronouns shall be deemed to refer to the
--------------
masculine, feminine, or neuter, singular or plural, as the context in which they
are used may require. All headings herein are inserted only for convenience and
ease of reference and are not to be considered in the interpretation of any
provision of this Agreement. Numbered or lettered articles, sections and
subsections herein contained refer to articles, sections and subsections of this
Agreement unless otherwise expressly stated. In the event any claim is made by
any Member relating to any conflict, omission or ambiguity in this Agreement, no
presumption or burden of proof or persuasion shall be implied by virtue of the
fact that this Agreement was prepared by or at the request of a particular
Member or its counsel.
18.4 Jurisdiction. Each Member hereby consents to the exclusive
------------
jurisdiction of the state and federal courts sitting in Delaware in any action
on a claim arising out of, under or in connection with this Agreement or the
transactions contemplated by this Agreement. Each Member further agrees that
personal jurisdiction over it may be effected by service of process by
registered or certified mail addressed as provided in Section 18.6 of this
Agreement, and that when so made shall be as if served upon it personally within
the State of Delaware.
19
18.5 Severability. If any provision of this Agreement or the application
------------
of such provision to any person or circumstance shall be held invalid, the
remainder of this Agreement or the application of such provision to persons or
circumstances other than those to which it is held invalid shall not be affected
thereby.
18.6 Notices. Any notice to be given or to be served upon the Company or
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any party hereto in connection with this Agreement must be in writing (which may
include facsimile) and will be deemed to have been given and received when
delivered to the address specified by the party to receive the notice. Such
notices will be given to a Member at the address specified in Exhibit B hereto.
---------
Any party may, at any time by giving five (5) business days' prior written
notice to the other Members, designate any other address in substitution of the
foregoing address to which such notice will be given.
18.7 Amendments. No amendment to this Agreement shall be effective unless
----------
it is in writing and signed by all of the Members.
18.8 Multiple Counterparts. This Agreement may be executed in two or more
---------------------
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.
18.9 Attorneys' Fees. In the event that any dispute between the Company
---------------
and the Members or among the Members should result in litigation or any Dispute
Resolution Process, the prevailing party in such dispute shall be entitled to
recover from the other party all reasonable fees, costs and expenses of
enforcing any right of the prevailing party, including without limitation,
reasonable attorneys' fees and expenses, all of which shall be deemed to have
accrued upon the commencement of such action and shall be paid whether or not
such action is prosecuted to judgment. Any judgment or order entered in such
action shall contain a specific provision providing for the recovery of
attorneys' fees and costs incurred in enforcing such judgment and an award of
prejudgment interest from the date of the breach at the maximum rate allowed by
law. For the purposes of this Section: (a) attorneys' fees shall include,
without limitation, fees incurred in the following: (1) postjudgment motions;
(2) contempt proceedings; (3) garnishment, levy, and debtor and third party
examinations; (4) discovery; and (5) bankruptcy litigation and (b) "prevailing
----------
party" shall mean the party who is determined in the proceeding to have
-----
prevailed or who prevails by dismissal, default otherwise.
18.10 Remedies Cumulative. The remedies under this Agreement are
-------------------
cumulative and shall not exclude any other remedies to which any person may be
lawfully entitled.
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EXHIBIT A
INITIAL CAPITAL CONTRIBUTIONS
AND MEMBERSHIP PERCENTAGES
Member Name and Address Capital Contribution Membership
----------------------- --------------------- ----------
Percentage
----------
LandBank, Inc. $00 99%
LandBank Remediation $00 01%
Corporation
21
EXHIBIT B
Notices
LandBank, Inc
Attention: Xxxxxxx X. Xxxxxx, President
00000 Xxxx Xxxxxxx Xxxxxxx, #000
Xxxxxxxx, XX) 00000
LandBank Remediation, Corporation
Attention: Xxxxxx X. Xxxxx, Director
00000 Xxxx Xxxxxxx Xxxxxxx, #000
Xxxxxxxx, XX 00000
