Section 8.01 Execution of Mortgages, Deeds of Trust or Pledges
The Board of Directors of the Cooperative shall have full power and authority, without authorization by the members thereof, to authorize the execution and delivery of a mortgage or mortgages or a deed or deeds of trust of, or the pledging or encumbering of, any or all of the property, assets, rights, privileges, licenses, franchises, and permits of the Cooperative, whether acquired or to be acquired, and wherever situated, as well as the revenues and income therefrom, all upon such conditions as the Board of Directors shall determine to secure any indebtedness of the Cooperative to the United States of America, to any agency or instrumentality thereof, to a national financing institution, organized on a cooperative plan for the purpose of financing its members’ programs, projects and undertakings in which the Cooperative holds membership, or to any other financing institution.
Section 8.02 Transfer of Cooperative Assets
Except for a sale, lease, exchange, disposition, conversion, or other transfer (“Transfer”) of Cooperative assets: (1) to secure indebtedness; (2) pursuant to condemnation or threat of condemnation; (3) pursuant to an existing legal obligation; (4) associated with a consolidation or merger; (5) consisting of the Cooperative’s ownership in an entity; or (6) to a Cooperative subsidiary, the Cooperative may transfer during a 12-month period, all or a substantial portion of the Cooperative’s assets only if:
- At the expense of the person seeking to purchase, lease, or acquire the Cooperative’s assets, the Board of Directors appoints three independent appraisers, each of whom, within a reasonable time of appointment, evaluates and renders an appraisal valuing the Cooperative’s assets specified in the proposed Transfer;
- The person seeking to purchase, lease, or acquire the Cooperative’s assets provides to the Cooperative any information requested by the Cooperative;
- Within a reasonable time of receiving the appraisals, the Cooperative invites any other entity operating on a cooperative basis, providing electric energy, and primarily located within the State of Maryland, or within a state adjacent to the State of Maryland, to submit proposals to purchase, lease, or acquire the Cooperative’s assets specified in the proposed Transfer, or to merge or consolidate with the Cooperative;
- At least a majority of the total membership approves the proposed Transfer;
- Notice of a member meeting at which members will consider the proposed Transfer states that one of the purposes of the member meeting is to consider the Transfer, and includes a copy or summary of the proposed Transfer;
- No director will benefit from the Transfer, financially or otherwise, in a manner unrelated to the director’s membership interest;
- Except for a Transfer to an entity operating on a cooperative basis and providing electric energy, all allocated capital credits are retired and paid at full and non-discounted value; and
- In proportion to the value or quantity of Cooperative services used by members during the period in which the Cooperative owned an asset, the Cooperative allocates to members as capital credits any consideration received for the Cooperative’s assets that exceeds the amount paid for the Cooperative assets.