48-221-101 - Preemptive rights. - Tennessee Statutes

48-221-101. Preemptive rights.

(a)  Presumption and Modification.  Unless otherwise provided in the articles, members and parties, other than the LLC, to a contribution agreement or a contribution allowance agreement shall not have preemptive rights. If the articles provide for the possibility of preemptive rights, such rights shall be granted on the terms and conditions prescribed in the articles or operating agreement to provide a fair and reasonable opportunity to exercise the rights to acquire additional proportional interests.

(b)  Definition.  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 LLC may accept new contributions from other persons or to make contribution allowance agreements with other persons.

(c)  Exemptions.  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.

[Acts 1994, ch. 868, § 1; 1995, ch. 403, § 30.]