10-1434

10-1434. Election to purchase in lieu of
dissolution

A. In a proceeding under section 10-1430, subsection B to dissolve a corporation
that has no shares listed on a national securities exchange or regularly traded in a
market maintained by one or more members of a national or affiliated securities
association, the corporation may elect or, if it fails to elect, one or more shareholders
may elect to purchase all shares owned by the petitioning shareholder at the fair value
of the shares. An election pursuant to this section is irrevocable unless the court
determines that it is equitable to set aside or modify the election.

B. An election to purchase pursuant to this section may be filed with the court at
any time within ninety days after the filing of the petition under section 10-1430,
subsection B or at a later time as the court may allow. If the election to purchase is
filed by one or more shareholders, the corporation, within ten days after the filing,
shall give written notice to all shareholders other than the petitioner. The notice
shall state the name and number of shares owned by the petitioner and the name and number
of shares owned by each electing shareholder and shall advise the recipients of their
right to join in the election to purchase shares in accordance with this
section. Shareholders who wish to participate shall file notice of their intention to
join in the purchase no later than thirty days after the effective date of the notice to
them. All shareholders who have filed an election or notice of their intention to
participate in the election to purchase become parties to the proceeding and shall
participate in the purchase in proportion to their ownership of shares as of the date the
first election was filed, unless they otherwise agree or the court otherwise
directs. After an election has been filed by the corporation or one or more
shareholders, the proceeding under section 10-1430, subsection B shall not be
discontinued or settled, and the petitioning shareholder shall not sell or otherwise
dispose of his shares, unless the court determines that it would be equitable to the
corporation and the shareholders other than the petitioner to permit this discontinuance,
settlement, sale or other disposition.

C. If, within sixty days of the filing of the first election, the parties reach
agreement as to the fair value and terms of purchase of the petitioner's shares, the
court shall enter an order directing the purchase of the petitioner's shares on the terms
and conditions agreed to by the parties.

D. If the parties are unable to reach an agreement as provided for in subsection C
of this section, the court, on application of any party, shall stay the proceedings under
section 10-1430, subsection B and determine the fair value of the petitioner's shares as
of the day before the date on which the petition under section 10-1430, subsection B was
filed or as of another date as the court deems appropriate under the circumstances.

E. On determining the fair value of the shares, the court shall enter an order
directing the purchase on the terms and conditions as the court deems appropriate, which
may include payment of the purchase price in installments, if necessary in the interests
of equity, provision for security to assure payment of the purchase price and any
additional costs, fees and expenses as may have been awarded and, if the shares are to be
purchased by shareholders, the allocation of shares among them. In allocating the
petitioner's shares among holders of different classes of shares, the court shall attempt
to preserve the existing distribution of voting rights among holders of different classes
insofar as practicable and may direct that holders of a specific class or classes shall
not participate in the purchase. Interest may be allowed at the rate and from the date
determined by the court to be equitable, but if the court finds that the refusal of the
petitioning shareholder to accept an offer of payment was arbitrary or otherwise not in
good faith, interest shall not be allowed. If the court finds that the petitioning
shareholder had probable grounds for relief under section 10-1430, subsection B,
paragraph 2 or 4, it may award to the petitioning shareholder reasonable fees and
expenses of an attorney and of any experts employed by him.

F. On entry of an order under subsection C or E of this section, the court shall
dismiss the petition to dissolve the corporation under section 10-1430 and the
petitioning shareholder does not have any rights or status as a shareholder of the
corporation, except the right to receive the amounts awarded to the petitioning
shareholder by the order of the court that is enforceable in the same manner as any other
judgment.

G. The purchase ordered pursuant to subsection E of this section shall be made
within ten days after the date the order becomes final unless before that time the
corporation files with the court a notice of its intention to adopt articles of
dissolution pursuant to sections 10-1402 and 10-1403, which articles shall be adopted and
filed within fifty days thereafter. On filing of the articles of dissolution, the
corporation shall be dissolved in accordance with sections 10-1405, 10-1406 and 10-1407,
and the order entered pursuant to subsection E of this section does not have any force or
effect, except that the court may award the petitioning shareholder reasonable fees and
expenses in accordance with subsection E of this section and the petitioner may continue
to pursue any claims previously asserted on behalf of the corporation.

H. Any payment by the corporation pursuant to an order under subsection C or E of
this section, other than an award of fees and expenses pursuant to subsection E of this
section, is subject to section 10-640.