Changes in Members. Death, Dissolution, Retirement or Bankruptcy of Member . As contemplated in the Articles, the death, retirement, resignation, expulsion, bankruptcy or dissolution of a Member, or the occurrence of any other event which terminates the continued membership of a Member in the Company (a "Dissolution Event"), shall dissolve the Company unless the remaining Member(s) unanimously consent to the continuation of the business of the Company ("Unanimous Consent"). If the Member whose actions or conduct result in the Dissolution Event ("Former Member") or such Former Member's trustee(s), personal representative(s) or heir(s), rightfully demands the return of its contributions to capital by a written notice to the remaining Member(s) pursuant to the Act or this Agreement, the Company (if the remaining Member(s) unanimously consent in writing) or remaining Member(s), to avoid dissolution of Company, shall purchase the Former Member's Interest as provided in subsections 6.1.2 and 6.1.3, and shall give the Unanimous Consent within 60 days of the occurrence of the Dissolution Event. Upon the occurrence of the Dissolution Event, and the Unanimous Consent, the remaining Member(s) shall have an option to purchase such Former Member's Interest. Within thirty (30) days of the Unanimous Consent, the remaining Member(s) shall notify the Manager or other Members in writing of their desires to purchase a portion of the Former Member's Interest. The failure of any Member to submit a notice within the applicable period shall constitute an election on the part of the remaining Member not to purchase any of the Former Member's Interest. Each remaining Member shall be entitled to purchase a portion of the Former Member's Interest based on the remaining Member's Pro Rata Part on the date of the Unanimous Consent or the date of receipt of the rightful demand for the return of its Interest by the Former Member or such Former Member's trustee(s) or heir(s). In the event any remaining Member elects to purchase none or less than all of such remaining Member's Pro Rata Part of the Former Member's Interest then the Company may at its election purchase such portion of the Former Member's Interest. In the event the Company elects not to purchase the Former Member's Interest, the unpurchased portion may be purchased by those remaining Members that elected to purchase more than their Pro Rata Part. If the remaining Members fail to purchase the entire interest of the Former Member, the same shall pass by operation of law to any Assignee or shall remain in the hands of the Former Member, subject to any right of the holder of such interest to demand payment therefor according to this Agreement or the Act. Notwithstanding any provision of this Section 6.1.2 to the contrary, the remaining Members may mutually agree to an allocation of the Former Member's Interest to be purchased by each of them. The Former Member's Interest shall be valued according to its book value for federal income tax purposes, provided, however that if any party to a purchase of the same pursuant to Section 6.1.2 above deems the same to vary from fair market value, an appraisal may be requested. In such event, the Former Member's Interest shall equal the fair market value of such Interest as determined by agreement within sixty (60) days after the notice of the occurrence of a Dissolution Event or of a rightful demand for withdrawal to remaining Members or, in case of a failure to agree within such sixty (60) day period, as determined by an appraiser agreeable to all parties, but if a single appraiser cannot be agreed upon within such sixty (60) day period, as determined by three appraisers, one selected by the Former Member or such Former Member's trustee(s) or heir(s), one selected by the remaining Member(s), and one selected by the two appraisers so named. The appraiser shall be instructed to appraise the fair market value of the underlying assets of the Company in determining the fair market value of the Interest to be valued, without application of any discount to reflect lack of marketability, minority interest or otherwise. The fair market value of the Former Member's Interest in the Company shall be based upon the average of the two appraisals closest in amount to each other. The party requesting such appraisal shall pay all expense of the same. The purchase price shall be paid by the Company (if all Members consent in writing) or such remaining Member(s), as the case may be, either: (i) in ten (10) equal annual installments of principal together with interest, commencing to accrue from the date of closing, at the then current Long-Term Applicable Federal Rate (the "AFR") under Section 1274(d) of the Code for the month in which the first payment is made (or a rate per annum equal to what the AFR would be for such month under Section 1274(d) of the Code if the AFR is no longer published) to fully amortize such purchase price over such ten (10) payments with the first payment being due and payable 15 days after the determination of the fair market value of the Former Member's Interest in the Company, or (ii) within fifteen (15) days after the determination of the fair market value of the Former Member's Interest in the Company, as the Company and/or the remaining Member(s), as the case may be, may elect in their sole discretion. Nothing contained herein is intended to prohibit Members from agreeing upon terms and conditions for the purchase by the Company or any Member(s) of the Interest of any Member in the Company desiring to retire, withdraw or resign, in whole or in part, as a Member (on such terms and conditions as may be agreed upon by the selling Member and the Company or the remaining Member(s) as the case may be), nor is anything herein intended to limit or otherwise affect the ability of a Member to demand a return of the Member's contribution to the Company as is otherwise specifically provided in this Agreement or in the Act. Transfer and Assignment of Members' Interest . No Member shall be entitled to assign, convey, sell, encumber or in any way alienate all or any part of the Member's Interest in the Company and as a Member except with the prior written consent of the all other Members, which consent may be given or withheld, conditioned or delayed (as allowed by this Agreement or the Act), as the remaining Members may determine in their sole discretion. Any attempted transfer shall be void and the transferee shall not become an assignee or substitute Member without the unanimous consent of all Members as contemplated herein. Further Restrictions on Transfer . No Member shall assign, convey, sell, encumber or in any way alienate all or any part of the Member's Interest in the Company if the Interest to be sold or exchanged, when added to the total of all other Interests sold or exchanged in the preceding twelve (12) consecutive months prior thereto, would result in the termination of the Company under Section 708 of the Code.
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Sources: Operating Agreement