(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.
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Terms Used In Tennessee Code 48-221-101

  • Contribution agreement: means a binding agreement between a person and an LLC under which:
    (A) The person has an obligation to make a contribution to the LLC in the future. See Tennessee Code 48-202-101
  • Contribution allowance agreement: means an agreement between a person and an LLC, under which:
    (A) The person has the right, but not the obligation, to make a contribution to the LLC in the future. See Tennessee Code 48-202-101
  • Court: includes every court and judge having jurisdiction in the case. See Tennessee Code 48-202-101
  • Employee: includes an officer but not a director. See Tennessee Code 48-11-201
  • 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.
  • LLC: means a limited liability company, organized under chapters 201-248 of this title. See Tennessee Code 48-202-101
  • Member: means a person reflected in the required records of an LLC as the owner of some governance rights of a membership interest of the LLC. See Tennessee Code 48-202-101
  • Membership: means the rights and obligations a member has pursuant to a corporation's charter, bylaws and chapters 51-68 of this title. See Tennessee Code 48-51-201
  • Operating agreement: means a written agreement described in §. See Tennessee Code 48-202-101
  • Owners: means members in the case of an LLC, shareholders in the case of a corporation, partners in the case of general or limited partnerships and the equivalent with respect to other entities. See Tennessee Code 48-202-101
  • 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 district, authority, bureau, commission, department, and any other agency of the United States. See Tennessee Code 48-11-201
  • Voting power: means the total number of votes entitled to be cast for the election of directors at the time the determination of voting power is made, excluding a vote which is contingent upon the happening of a condition or event that has not occurred at the time. See Tennessee Code 48-51-201
(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.
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