Operating Agreement Template Page 10
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16personal representative of the dissociated Member to establish the value of the dissociated
Member's Membership Interest. If the parties are not able to reach agreement as to the value of
the dissociated Member's Membership Interest within ninety (90) days after the remaining
Members give notice of their election to liquidate the Membership Interest of the dissociated
Member, then the value of such Membership Interest shall be determined as hereinafter
provided. The remaining Members, as a group (or the Company), and the dissociated Member or
the dissociated Member's personal representative, shall forthwith each appoint an appraiser who,
in turn, shall jointly appoint an arbitrator. The appraisers shall submit to the arbitrator their
separate appraised values of the dissociated Member's Membership Interest based upon whatever
methods of valuation each appraiser considers most appropriate to reflect the fair market value.
The arbitrator, in his sole discretion, shall choose one of the appraised values, or any value in
between the two appraised values, as the value of the dissociated Member's Membership Interest.
Such determination shall be binding upon all parties, provided, however, that the remaining
Members (or the Company) may withdraw their election to liquidate the Membership Interest of
a dissociated Member at any time. The dissociated Member or the dissociated Member’s
Personal Representative and the remaining Members (or the Company) shall each pay the costs
of the appraisers they appoint, and the costs of the arbitrator shall be paid one half (1/2) by the
dissociated Member and one half (1/2) by the remaining Members (or the Company.
7.4 Payments; Hold Harmless. If the remaining Members (or the Company) elect to
liquidate the Membership Interest of a dissociated Member, then within sixty (60) days after the
value of the dissociated Member's Membership Interest is determined, the remaining Members
(or the Company) shall pay to the dissociated Member or the dissociated Member’s personal
representative an amount equal to twenty percent (20%) of the value of the dissociated Member's
Membership Interest and shall deliver to such dissociated Member or dissociated Member’s
personal representative a promissory note in an amount equal to the unpaid value of the
dissociated Member's Membership Interest. Such promissory note shall provide for equal annual
payments over a period of four (4) years from the date of delivery and shall bear interest at a
fixed annual rate equal to the then current average interest rate of the performing loans in the
Company’s loan portfolio, with the right of prepayment without penalty. Additionally, the
Company and the remaining Members shall indemnify and hold the dissociated Member or the
dissociated Member’s estate harmless from any and all liabilities of the Company incurred from
and after the date of dissociation.
7.5 Non-Liquidated Membership Interest of Deceased Member. In the event neither the
Company nor the surviving Members elect to liquidate the Membership Interest of a deceased
Member as provided in this Article 7, then the deceased Member’s Membership Interest,
including both economic and voting interests, shall continue to be held by the deceased
Member’s personal representative or beneficiaries, as the case may be.
7.6 Termination of a Member. Any Member may be removed by agreement of a super-
majority of two thirds (2/3) of all of the Members. Written notice of a meeting where removal of
a Member is to be considered shall include a specific reference to this matter. The vote action
shall be treated as receipt of a request for dissociation. The removal shall become effective upon
payment of the value of the removed Member's capital account, which shall be in accordance
with the provisions set forth in this Article 7.
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