Option to Purchase the Interest of a Member upon a Withdrawal Event. (a) Within thirty (30) days from the occurrence of a Withdrawal Event with respect to a Member, the Withdrawn Member (or the Withdrawn Member’s personal representative or other successor if applicable) shall provide the Company with written notice of the Withdrawal Event (“Withdrawal Notice”). (b) The Company shall then have the first option (such option to be exercised by a Majority-In-Interest of the Members, but excluding the Withdrawn Member) to purchase all of the Withdrawn Member’s Units (“Purchase Option”) in the place of making distributions to the Withdrawn Member (or the Withdrawn Member’s personal representative or other successor if applicable) as set forth in Section 10.3. If the Company does not exercise its Purchase Option for the Withdrawn Member’s Units, then the remaining Members (other than the Withdrawn Member) shall have the right to exercise the Purchase Option to purchase all the Withdrawn Member’s Units that the Company did not elect to purchase. In that case, if more than one Member wishes to exercise the Purchase Option, each such Member shall be entitled to purchase a portion of the Withdrawn Member’s Units on a pro rata basis, based on the Percentage Interests of the Members wishing to purchase Withdrawn Member’s Units. (c) The Purchase Option shall be exercisable at any time during the 30-day period following the Company’s and the other Member’s receipt of the Withdrawal Notice by delivery of written notice (the “Purchase Option Notice”) to the Withdrawn Member (or the Withdrawn Member’s personal representative or other successor if applicable) and only if all of the Withdrawn Member’s Units are purchased by the Company, the Members, or a combination of both. (d) The Purchase Option Notice shall indicate the date the purchase is to be effected (such date to be not less than five (5) Business Days, nor more than twenty (20) Business Days, after the date of the Purchase Option Notice), and the amount which the Company or the Member(s), as applicable, proposes to pay for the Units. If the Withdrawn Member (or the Withdrawn Member’s personal representative or other successor if applicable) does not agree to the amount proposed to be paid, then the price to be paid shall be the Agreed Value for such Units; provided, however that if the Withdrawal Event that triggered the Purchase Option is clause (a) or (j) of the definition of Withdrawal Event, then the price to be paid shall be 50% of the Agreed Value. In all instances, the purchase shall occur not more than ten (10) Business Days following the determination of the Agreed Value. (e) The purchase price for the Withdrawn Member’s interest shall be payable fifteen percent (15%) cash at closing and the remainder pursuant to a 10-year nonnegotiable promissory note bearing interest at the Default Interest Rate compounded annually on each anniversary of the note. The note shall be payable in annual installments of principal and interest accrued to date, with payments determined necessary to fully amortize the note with equal payments of principal and interest over the 10-year term of the note. Interest shall be computed on the basis of a computational year of 360 days of equal 30-day months. There shall be no pre-payment penalty on the note. The note shall be secured by a pledge of the Units redeemed/sold. On or before the closing date of any such redemption/purchase, the Withdrawn Member (or the Withdrawn Member’s personal representative or other successor if applicable) shall, at its sole cost, cause to be discharged any and all Liens on the its Units, and shall provide written evidence of any such discharges.
Appears in 2 contracts
Samples: Operating Agreement (World Tree Usa, LLC), Operating Agreement (World Tree Usa, LLC)
Option to Purchase the Interest of a Member upon a Withdrawal Event. (a) Within thirty (30) days from the occurrence of a Withdrawal Event with respect to a Member, the Withdrawn Member (or the Withdrawn Member’s personal representative or other successor if applicable) shall provide the Company with written notice of the Withdrawal Event (“Withdrawal Notice”).
(b) The Following a Withdrawal Event, the Company shall then have the first option (such option to be exercised by a Majority-In-Interest of the Members, but excluding the Withdrawn Member) to purchase all of the Withdrawn Member’s Units (“Purchase Option”) in the place of making distributions to the Withdrawn Member (or the Withdrawn Member’s personal representative or other successor if applicable) as set forth in Section 10.3. If the Company does not exercise its Purchase Option for the Withdrawn Member’s Units, then the remaining Members (other than the Withdrawn Member) shall have the right to exercise the Purchase Option to purchase all the Withdrawn Member’s Units that the Company did not elect to purchase. In that case, if more than one Member wishes to exercise the Purchase Option, each such Member shall be entitled to purchase a portion of the Withdrawn Member’s Units on a pro rata basis, based on the Percentage Interests of the Members wishing to purchase Withdrawn Member’s Units.
(c) The Purchase Option shall be exercisable at any time during the thirty (30-) day period following the Company’s and the other Member’s receipt of the Withdrawal Notice (or if no Withdrawal Notice is delivered, within the thirty (30)-day period following the date on which the Company becomes aware of the Withdrawal Event) by delivery of written notice (the “Purchase Option Notice”) to the Withdrawn Member (or the Withdrawn Member’s personal representative or other successor if applicable) and only if all of the Withdrawn Member’s Units are purchased by the Company, the Members, or a combination of both).
(d) The Purchase Option Notice shall indicate the date the purchase is to be effected (such date to be not less than five (5) Business Daysbusiness days, nor more than twenty ten (2010) Business Daysbusiness days, after the date of the Purchase Option Notice), and the amount which the Company or the Member(s), as applicable, proposes to pay for the Units. If the Withdrawn Member (or the Withdrawn Member’s personal representative or other successor if applicable) does not agree to the amount proposed to be paid, then the price to be paid shall be the Agreed Value for such Units; provided, however that if the Withdrawal Event that triggered the Purchase Option is clause (a) or (j) of the definition of Withdrawal Event, then the price to be paid shall be 50% of the Agreed Value. In all instances, the purchase shall occur not more than ten (10) Business Days following the determination of the Agreed Value.
(e) The purchase price for the Withdrawn Member’s interest Units shall be payable fifteen an amount equal to the fair market value (as determined by the Company’s Management Board) of such Units, taking into account discounts for lack of marketability and lack of control, to the extent applicable. The Purchase Option Notice shall include the proposed purchase price. If the Withdrawn Member disputes the proposed purchase price, such Withdrawn Member shall deliver written notice of such dispute to the Company within twenty (20) days of receipt of the repurchase notice (the “Withdrawn Member Notice”). If such Withdrawn Member fails to deliver a Withdrawn Member Notice to the Company within such 20-day period, such Withdrawn Member shall be deemed to have agreed with and shall be bound by the purchase price proposed in the Purchase Option Notice. If such Withdrawn Member delivers a Withdrawn Member Notice to the Company within such 20-day period, the Company and such Withdrawn Member shall select a reputable valuation firm to determine the fair market value of the Withdrawn Member’s Units. In the event that the Company and such Withdrawn Member do not agree upon a valuation firm within sixty (60) days of the date the Company delivered the Purchase Option Notice to such Withdrawn Member, the Company and such Withdrawn Member shall each select a reputable valuation firm and instruct the valuation firms to select a third reputable valuation firm. The fair market value of the Withdrawn Member’s Units shall then be determined by such third valuation firm. The fees and costs of the valuation firms engaged pursuant to this Section 10.4(e) shall be borne by the Withdrawn Member, provided, however, that the Company shall bear the fees and costs of the valuation firm if the fair market value of the Withdrawn Member’s Units determined by the valuation firm is more than ten percent (1510%) cash at closing and below the remainder pursuant to a 10-year nonnegotiable promissory note bearing interest at fair market value determined by the Default Interest Rate compounded annually on each anniversary of Management Board.
(f) The purchase price for the note. The note Withdrawn Member’s interests shall be payable in annual installments of principal and interest accrued to date, with payments determined necessary to fully amortize the cash or a promissory note with equal payments of principal and interest over mutually agreeable terms.
(g) In the 10-year term of the note. Interest shall be computed on the basis case of a computational year Restricted Member, Section 3.9 and Section 3.10 shall apply in place of 360 days of equal 30-day months. There shall be no pre-payment penalty on the note. The note shall be secured by a pledge of the this Section 10.4 with respect to Restricted Units redeemed/sold. On or before the closing date of any such redemption/purchase, the Withdrawn Member (or the Withdrawn Member’s personal representative or other successor if applicable) shall, at its sole cost, cause to be discharged any and all Liens on the its Units, and shall provide written evidence of any such dischargesonly.
Appears in 2 contracts
Samples: Operating Agreement (Franklin Covey Co), Operating Agreement (Franklin Covey Co)
