Common use of Compensation of Deceased or Dissociated Members Clause in Contracts

Compensation of Deceased or Dissociated Members. (1) If the death or dissociation of a member causes the dissolution and termination of the Company (as provided in Article 10 below or under the Act), a dissociated member, or the estate or legal representative of a deceased member, will be entitled to participate in the winding up and liquidation of the Company to the same extent as a member. (2) If the death or dissociation of a member does not cause the dissolution and termination of the Company, a dissociated member, or the estate or legal representative of a deceased member, will be entitled to buy-out compensation in an amount equal to the following: The capital account of the deceased or dissociated member, as of the date of death or dissociation, Increased or decreased by the member’s share of Company profits or losses for the portion of the Company’s current fiscal year ending on the date of the member’s death or dissociation, Increased by the fair market value of all Company assets as set forth in Section 8.2(c), Decreased by any debt the dissociated member owed the Company as of the date of the date of dissociation but without acceleration of the payment of any other debts owed to the dissociated member by the Company, and Decreased by any damages sustained by the Company as a result of any expulsion or wrongful dissociation by a dissociated member. No allowance will be made for goodwill or other intangible assets except as those assets have been reflected in the Company books immediately prior to the death or dissociation of the member. (3) The fair market value of Company assets will be determined by: (a) agreement of the remaining members and the dissociated member or deceased member’s estate or legal representative (the “Parties”); (b) or if they cannot reach agreement, then by an independent appraiser. The fair market value of any assets will be reduced by the amount of liabilities encumbering any said assets on the specified valuation date. If an independent appraiser is required, the appraiser will be agreed upon and retained by the Parties within thirty (30) days of the date of death or dissociation. The appraiser will submit a copy of his or her written appraisal to the Parties within sixty (60) days of from the date the appraiser is retained. The dissociated member or deceased member’s estate or legal representative will pay the cost of the appraiser. In the event the Parties cannot reach agreement on the selection of an independent appraiser within thirty (30) days from the date of dissociation or death, then the Parties will each select and retain an independent appraiser within thirty (30) days from the date of dissociation or death, with each party to pay the cost of their own appraiser, notwithstanding any other provisions of this Agreement. The two (2) appraisers so named will then each submit a copy of their written appraisals to the Parties within sixty (60) days from the date the appraisers are retained. The average of the two appraisals will be binding on Parties as the fair market value of the subject assets. Should the dissociated member or deceased member’s legal representative or trustee fail to select and retain an appraiser as provided in this sub-section, the remaining members may select and retain an appraiser at the dissociated or deceased member’s expense and the appraiser’s valuation of the assets will be binding on the Parties. (4) The remaining members will have the right to purchase the dissociated or deceased member’s interest in pro rata shares in the ratio each electing purchasing member’s ownership percentage bears to the aggregate ownership percentages of all purchasing members. If the remaining members do not elect to purchase the interest, the Company will pay the compensation due for the dissociated or deceased member’s interest. The amount payable under this Article will be paid to the dissociated member, or to the estate or legal representative of a deceased member, in not more than ten (10) semi-annual installments with annual interest at the prime rate as determined by the Wall Street Journal on the date each payment is due, beginning not more than (12) months after the date of the death or dissociation. (5) If there is more than one member, each member of the Company will obtain key-man life insurance in an amount sufficient to pay compensation due for a deceased member’s interest under Article 8.2.

Compensation of Deceased or Dissociated Members. (1) If the death or dissociation of a member causes the dissolution and termination of the Company (as provided in Article 10 below or under the Act), a dissociated member, or the estate or legal representative of a deceased member, will be entitled to participate in the winding up and liquidation of the Company to the same extent as a member. (2) If the death or dissociation of a member does not cause the dissolution and termination of the Company, a dissociated member, or the estate or legal representative of a deceased member, will be entitled to buy-buy- out compensation in an amount equal to the following: : i. The capital account of the deceased or dissociated member, as of the date of death or dissociation, , ii. Increased or decreased by the member’s share of Company profits or losses for the portion of the Company’s current fiscal year ending on the date of the member’s death or dissociation, , iii. Increased by the fair market value of all Company assets as set forth in Section 8.2(c), , iv. Decreased by any debt the dissociated member owed the Company as of the date of the date of dissociation but without acceleration of the payment of any other debts owed to the dissociated member by the Company, and and v. Decreased by any damages sustained by the Company as a result of any expulsion or wrongful dissociation by a dissociated member. No allowance will be made for goodwill or other intangible assets except as those assets have been reflected in the Company books immediately prior to the death or dissociation of the member. (3) The fair market value of Company assets will be determined by: (a) agreement of the remaining members and the dissociated member or deceased member’s estate or legal representative (the “Parties”); (b) or if they cannot reach agreement, then by an independent appraiser. The fair market value of any assets will be reduced by the amount of liabilities encumbering any said assets on the specified valuation date. If an independent appraiser is required, the appraiser will be agreed upon and retained by the Parties within thirty (30) days of the date of death or dissociation. The appraiser will submit a copy of his or her written appraisal to the Parties within sixty (60) days of from the date the appraiser is retained. The dissociated member or deceased member’s estate or legal representative will pay the cost of the appraiser. In the event the Parties cannot reach agreement on the selection of an independent appraiser within thirty (30) days from the date of dissociation or death, then the Parties will each select and retain an independent appraiser within thirty (30) days from the date of dissociation or death, with each party to pay the cost of their own appraiser, notwithstanding any other provisions of this Agreement. The two (2) appraisers so named will then each submit a copy of their written appraisals to the Parties within sixty (60) days from the date the appraisers are retained. The average of the two appraisals will be binding on Parties as the fair market value of the subject assets. Should the dissociated member or deceased member’s legal representative or trustee fail to select and retain an appraiser as provided in this sub-section, the remaining members may select and retain an appraiser at the dissociated or deceased member’s expense and the appraiser’s valuation of the assets will be binding on the Parties. (4) The remaining members will have the right to purchase the dissociated or deceased member’s interest in pro rata shares in the ratio each electing purchasing member’s ownership percentage bears to the aggregate ownership percentages of all purchasing members. If the remaining members do not elect to purchase the interest, the Company will pay the compensation due for the dissociated or deceased member’s interest. The amount payable under this Article will be paid to the dissociated member, or to the estate or legal representative of a deceased member, in not more than ten (10) semi-annual installments with annual interest at the prime rate as determined by the Wall Street Journal on the date each payment is due, beginning not more than (12) months after the date of the death or dissociation. (5) If there is more than one member, each member of the Company will obtain key-man life insurance in an amount sufficient to pay compensation due for a deceased member’s interest under Article 8.2.;