ARTICLE VIII - Disposition of Cooperative Property
The Cooperative may not sell, lease or dispose of all or substantially all of its property (other than property which, in the judgment of the Board, is neither necessary nor useful in operation and maintaining the Cooperative’s system and which in any one (1) year shall not exceed ten percent (10%) in value of the value of all the property of the Cooperative, or merchandise), unless authorized so to do by the vote of at least two thirds majority of the Members. Notwithstanding the foregoing, the Cooperative (a) may mortgage, finance (including, without limitation, pursuant to a sale and lease back or lease and leaseback transaction), or otherwise encumber its assets by a vote of at least two-thirds of the Board; (b) may sell or transfer its assets to another cooperative upon the vote of a majority of the Members at any regular or special meeting if the notice of such meeting contains a copy of the terms of the proposed sale or transfer; (c) may sell or transfer distribution system facilities to a city or town at any time following the annexation of additional territory pursuant to Law by a vote of at least two-thirds of the Board; or (d) may sell, lease or dispose of its property pursuant to a plan for functional separation of utility functions that has been approved by any relevant regulatory authority and at least two-thirds of the Board.
Offer for Competing Proposals. No sale, lease, lease-sale, exchange, or other disposition of all or a substantial portion of the Cooperative’s assets to any other entity shall be authorized except in conformity with the following:
A. If the Board of Directors looks with favor upon any proposal for such sale, lease, lease-sale, exchange, or other disposition, it shall first obtain an independent
appraisal as to the value of the Cooperative with respect to such a sale, lease, lease-sale, exchange, or other disposition and as to any other terms and conditions which should be considered.
B. If the Board of Directors, after receiving such appraisal, determines that the proposal should be submitted for consideration by the Members, it shall first give every other power supply or distribution electric cooperative with the same power supplier (which has not made such an offer for such sale, lease, lease-sale, exchange, or other disposition) an opportunity to submit competing proposals. Such opportunity shall be in the form of a written notice to such other cooperatives, which notice shall be attached to a copy of the proposal which the Cooperative has already received and a copy of the appraisal. Such other cooperatives shall be given not less than sixty (60) days during which to submit competing proposals, and the actual minimum period within which proposals are to be submitted shall be fixed and shall be stated in the written notice given to themgiving due consideration to the time required for the Rural Utilities Service loan approval process.
C. If the Board then determines that favorable consideration should be given to the initial or any subsequent proposal which has been submitted to it, it shall so notify the Members, expressing in detail each of any such proposals, and shall call a special meeting of theMembers for consideration thereof which meeting shall be heldwithin sixty (60) days after the giving of such notice to theMembers: PROVIDED, that consideration thereof by the Members may be given at the next Annual Member Meeting if the Board so determines and if such Annual Member Meeting is held within sixty (60) days after the giving of such notice.
D. Any one hundred (100) or moreMembers, by so petitioning the Board not less than thirty (30) days prior to the date of such special or Annual Member Meeting,may cause the Cooperative, with the cost to be borne by the Members submitting such petition, to mail to all Members any opposing or alternative positions which theymay have to the proposals that have been submitted or any recommendations that the Board has made. The foregoing provisions shall not apply to a sale, lease, lease-sale, exchange, or other disposition to one or more other such cooperatives if the substantive effect thereof is to merge or consolidate with such other one or more cooperatives.