AZ LAW BOOK

the articles of incorporation, bylaws or an agreement between the member and the corporation or a procedure that is otherwise appropriate. B. For purposes of subsection A, a procedure is otherwise appropriate if either: 1. The following are provided: (a) A written notice at least fifteen days before the expulsion, suspension or termination and the reasons therefor. (b) An opportunity for the member to be heard, orally or in writing, at least five days before the effective date of the expulsion, suspension or termination by a person or persons authorized to decide that the proposed expulsion, termination or suspension should not take place. 2. It is fair and reasonable taking into consideration all of the relevant facts and circumstances. C. Any written notice that is mailed shall be sent to the last address of the member shown on the corporation's records. D. Any proceeding challenging an expulsion, suspension or termination, including a proceeding in which defective notice is alleged, shall begin within six months after the effective date of the expulsion, suspension or termination. E. A member who has been expelled or suspended may be liable to the corporation for dues, assessments or fees as a result of obligations incurred or commitments made prior to expulsion or suspension. F. This section does not apply to corporations organized primarily for religious purposes. 10-3622. Purchase of memberships Except as provided in the articles of incorporation or bylaws, a corporation may purchase the membership of a member who resigns or whose membership is terminated for the amount and pursuant to the conditions set forth in or authorized by its articles of incorporation or bylaws. A corporation shall not make a payment that violates section 10-11301 or 10-11302. Article 4 Derivative Suits 10-3630. Definitions In this article, unless the context otherwise requires: 1. "Derivative proceeding" means a civil suit in the right of a domestic corporation or, to the extent provided in section 10-3637, in the right of a foreign corporation. 2. "Independent person" means a person with no personal interest in the transaction and no personal or other relationship which influences the person. 10-3631. Standing A. A proceeding may be brought in the right of a domestic corporation to procure a judgment in its favor by either: 1. In the case of a corporation that has members, any member or members having twenty-five per cent or more of the voting power or by fifty members, whichever is less. 2. In the case of a corporation that does not have members, any director or twenty-five per cent of the directors, whichever is greater. B. In any such proceeding, each complainant shall both: 1. Have been a member or director, as applicable, of the corporation at the time of the act or omission complained of. 2. Fairly and adequately represent the interests of the corporation in enforcing the right of the corporation. 10-3632. Demand No complainant may commence a derivative proceeding until both: 1. A written demand has been made on the corporation to take suitable action. 2. Ninety days have expired from the date the demand was made unless the complainant has earlier been notified that the demand has been rejected by the corporation or unless the statute of

Page 299

Law Book Revised 11.02.2017