Bylaws of Merit Network, Inc.Amended July 6, 2007Article XII. Withdrawal. Reinstatement, or Dissolution
Merit is the leading research and education network in Michigan and the operator of a statewide high-speed backbone that connects
Member and Affiliate organizations to each other, to the broader Internet, and to Internet2. Merit's activities necessarily require
a substantial capital outlay and long-term contractual commitments. These obligations are incurred in support of, and in reliance upon,
the Members. In fairness to each other, the Members hereby recognize their portion of these commitments in the event of the withdrawal
of their support from Merit. The purpose of this Article XII is to define the obligation of the Members in the event of the cessation
of their support or their withdrawal as a Member.
Section 1.
A Member Institution may withdraw from Merit Network, Inc with proper notice and fulfillment of financial obligations to other
Member Institutions as provided in this Section. Any such Member Institution withdrawal shall be effective as of the last day of Merit
Network, Inc.'s fiscal year, which is currently June 30 in any given calendar year. If the notice is not provided in a timely manner,
then the effective date of the Member Institution's withdrawal shall be the last day of the fiscal year of Merit Network, Inc.
following the fiscal year in which the notice is provided.
Section 2.
The Member Institution seeking to withdraw must provide written notice to each of the other Member Institutions at least 30 days
prior to the Annual Meeting. This notice shall be in the form of a request to withdraw. The Board of Directors shall review and
act upon the withdrawal request during the Annual Meeting.
Section 3.
In the event of the withdrawal from Merit Network, Inc. by a Member Institution, all Merit Network, Inc. assets in the possession or
control of that Member Institution shall be returned to Merit Network, Inc. Except for equipment that must be removed by Merit Network,
Inc., all such items shall be returned to Merit Network, Inc. within 60 days following the effective date of the Member Institution's
withdrawal. The withdrawing Member Institution agrees to provide access and any other assistance reasonably necessary to enable Merit
Network, Inc. to remove such equipment.
Section 4.
The withdrawing Member Institution shall be obligated to make a payment to Merit Network, Inc. for the withdrawing Member
Institution's share of continuing contractual obligations and liabilities undertaken by Merit Network, Inc. in the conduct of its
operations on behalf of the Member Institutions (hereinafter referred to as "Member Withdrawal Payment"). The Member Withdrawal
Payment shall be in an amount equal to the sum of the following:
- Contractual obligations undertaken by Merit Network, Inc. on behalf of the Member Institutions to the extent not fulfilled;
accumulated deficits in operating accounts; accrued vacation and other Merit Network, Inc. staff obligations, and similar obligations
computed as of the effective date of the Member Institution's withdrawal and multiplied by a fraction, the numerator of which is the
Member Fees paid by the withdrawing Member Institution in each of the five (5) fiscal years immediately preceding the fiscal year in
which the effective date of the Member Institution's withdrawal occurs and the denominator of which is the total Member Fees paid to
Merit Network, Inc. by all of the Member Institutions in each of the five (5) fiscal years immediately preceding the fiscal year in
which the effective date of the Member Institution's withdrawal occurs; reduced by
- Merit Network, Inc. cash and liquid assets computed as of the effective date of the Member Institution's withdrawal and
multiplied by a fraction, the numerator of which is the Member Fees paid by the withdrawing Member Institution in each of the five (5)
fiscal years immediately preceding the fiscal year in which the effective date of the Member Institution's withdrawal occurs and the
denominator of which is the total Member Fees paid to Merit Network, Inc. by all of the Member Institutions in each of the five (5)
fiscal years immediately preceding the fiscal year in which the effective date of the Member Institution's withdrawal occurs; plus
- One-time costs incurred by Merit Network, Inc. in connection with the Member Institution's withdrawal including, without limitation, the cost
of transferring the withdrawing Member Institution's network Point of Presence to a new location and the cost of removing any Merit
Network, Inc. equipment located at the withdrawing Member Institution.
Section 5.
Merit Network, Inc. shall compute the withdrawing Member Institution's Member Withdrawal Liability within 60 days after the effective
date of the Member Institution's withdrawal, and payment by the withdrawing Member Institution of the Member Withdrawal Payment shall
then be made to Merit Network, Inc. within 90 days after the effective date of withdrawal ("Payment Due Date"). If payment is not made
in a timely manner, then interest shall accrue on the unpaid portion of the Member Withdrawal Liability beginning from the effective
date of withdrawal until the date of payment at one (1) percentage point above the then-current prime rate, as determined as of
the Payment Due Date and then adjusted as of the first day of each month thereafter until the Member Withdrawal Payment is fully
paid.
Section 6.
Once a Member has requested to withdraw from Merit Network, Inc. and such request has been reviewed and acted upon by the Merit Board,
Merit will take all reasonable steps to minimize costs in relation to the departing Member in order to limit the Member Withdrawal
Payment, so long as these steps do not harm Merit's ability to provide services to the other Members and to Affiliate organizations.
Section 7.
A former Member Institution requesting reinstatement within one year of withdrawal may have a portion of its Member Withdrawal Payment
applied to its next annual fee, at the discretion of the Merit Board, taking into consideration any expenses that Merit may have borne
as a result of the Member's withdrawal.
Section 8.
In the event of dissolution of Merit Network, Inc., all of its assets, real and personal property shall be distributed to the then
current Member Institutions in proportion to the Member fees paid by each of them as of the effective date of dissolution.
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