(a) Unless otherwise specifically provided in the articles or bylaws, members or parties, other than the cooperative, to a contribution agreement or a contribution allowance agreement shall not have preemptive rights. If the articles or bylaws provide for the possibility of preemptive rights, these rights shall be granted on the terms and conditions prescribed in the articles or bylaws to provide a fair and reasonable opportunity to exercise the rights to acquire additional proportional interests.
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Terms Used In Tennessee Code 43-38-509

  • Bylaws: means a written agreement described in §. See Tennessee Code 43-38-103
  • Cooperative: means an association organized under this title conducting business on a cooperative plan as provided under this chapter. See Tennessee Code 43-38-103
  • Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
  • Majority: means , with respect to a vote of the members, if voting on a per capita basis, a majority in number of the members entitled to vote on a specific matter, or if the voting is determined otherwise, a majority of the voting interest, which may be expressed as a percentage, entitled to vote on a specific matter, and with respect to a vote of the directors, a majority in number of the directors entitled to vote on a specific matter. See Tennessee Code 43-38-103
  • Member: means a person or entity reflected on the books of the cooperative as the owner of governance rights of a membership interest of the cooperative and includes patron and nonpatron members. See Tennessee Code 43-38-103
  • State: when applied to the different parts of the United States, includes the District of Columbia and the several territories of the United States. See Tennessee Code 1-3-105
  • Statute: A law passed by a legislature.
  • United States: includes the District of Columbia and the several territories of the United States. See Tennessee Code 1-3-105
(b) A preemptive right is the right of a member to make contributions of a certain amount or to make a contribution allowance agreement specifying future contributions of a certain amount before the cooperative may accept new contributions from other persons or to make contribution allowance agreements with other persons.
(c) No preemptive rights arise as to contributions to be accepted from others or as to contribution allowance agreements to be made with others when the contribution is to be made:

(1) In a form other than money;
(2) Reflected pursuant to a plan of merger or exchange;
(3) Reflected pursuant to an employee or incentive benefit plan approved at a meeting by the affirmative vote of the owners of a majority of the voting power of all membership interests entitled to vote;
(4) Pursuant to a previously made contribution allowance agreement; or
(5) Reflected pursuant to a plan of reorganization approved by a court of competent jurisdiction pursuant to a statute of this state or of the United States.
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