Article X

ARTICLE X – DISPOSITION AND PLEDGING OF PROPERTY: DISTRIBUTION OF SURPLUS ASSETS ON DISSOLUTION

Section 10.1 – Disposition and Pledging of Property. (a) Not inconsistent with the provisions of 1978 New Mexico Statutes Ann. Section 62-15-21 and of subsection (b) hereof, the members of the cooperative may authorize the sale, lease, lease-sale, exchange, transfer or other disposition of all or a substantial portion of the cooperative's property and assets by the affirmative vote of at least two-thirds (2/3) of the total members of the cooperative, at a duly held meeting of the members. The Board of Trustees without authorization by the members shall have full power and authority to (1) borrow monies from any source and in such amounts as the Board may from time to time determine, (2) mortgage or otherwise pledge or encumber any or all of the cooperative's property or assets as security therefore, and (3) sell, lease, lease-sell, exchange, transfer or otherwise dispose of merchandise or property no longer necessary or useful for the operation of the cooperative. (b) Supplementary to the foregoing subsection (1) and any other applicable provisions of law or Bylaws, no sale, lease, lease-sale, exchange, transfer or other disposition of all or a substantial portion of the cooperative's property and assets shall (except as provided in (3) in the last sentence of Subsection (a) foregoing) be authorized except in conformity with the following: (1) If the Board of Trustees looks with favor upon any proposal for such sale, lease, lease-sale, exchange, transfer or other disposition, it shall first cause three (3) independent appraisers, except in such matters, to render their individual opinions as to the value of the cooperative with respect to such a sale, lease, lease-sale, exchange, transfer or other disposition and as to any other terms and conditions which should be considered. The three (3) such appraisers shall be designated by a District Court Resident Judge for the Judicial District in New Mexico in which the cooperative's headquarters are located. If such judge refuses to make such designations, they shall be made by the Board of Trustees. (2) If the Board of Trustees, after receiving such appraisals (and other terms and conditions which are submitted, if any), determines that the proposal should be submitted for consideration by the members, it shall first give every other electric cooperative corporately sited and operating in New Mexico (which has not made such an offer for such sale, lease, lease-sale, exchange, transfer or other disposition) an opportunity to submit competing proposals. Such opportunity shall be in the form of a written notice to such electric cooperatives, which notice shall be attached to a copy of the proposal which the cooperative has already received and copies of the respective reports of the three (3) appraisers. Such electric cooperatives shall be given not less than thirty (30) days during which to submit competing proposals, and the actual minimum period within which proposals are to be submitted shall be stated in the written notice given to them. (3) If the Board of Trustees 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 not less than sixty (60) days before calling a meeting of the members thereon, expressing in detail each of such proposals, and shall call a special meeting of the members for consideration thereof, which meeting shall not be held sooner than twenty-five (25) days after the giving of such notice to the members: 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 meeting is not held sooner than twenty-five (25) days after the giving of such notice. (4) Any fifty (50) or more members, by so petitioning the Board of Trustees not less than thirty (30) days prior to the date of such special or annual meeting, may cause the cooperative, with the cost to be borne by the cooperative, to mail to all members any opposing or alternative positions which they may have to the proposals that have been submitted or any recommendation that the Board of Trustees has made. The provisions of this subsection (b) shall not apply to a sale, lease, lease-sale, exchange, transfer or other disposition to one or more other electric cooperatives if the substantive or actual legal effect thereof is to merge or consolidate with such other one or more electric cooperatives.

Section 10.2 – Distribution of Surplus Assets on Dissolution. Upon the cooperative's dissolution, any assets remaining after all liabilities or obligations of the cooperative have been satisfied and discharged shall, to the extent practicable as determined by the Board of Trustees, and not inconsistently with the third paragraph of Section 8.02 of these Bylaws, be distributed without priority but on a patronage basis among all persons who are or who have been members of the cooperative for any period(s) during the seven years next preceding the date of the filing of a certificate of election to dissolve: PROVIDED, HOWEVER, that if in the judgment of the Board the amount of such surplus is too small to justify the expense of making such distribution, the Board may, in lieu thereof, donate, or provide for the donation of, such surplus to one or more non- profit charitable or educational organizations that are exempt from Federal income taxation.

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