ARTICLE 4.
ASSIGNMENT
Section 4.1 Transfer Prohibited. No Partner may sell, transfer, assign, pledge, hypothecate or otherwise encumber or permit or suffer any encumbrance of all or any part of his
interest in the Joint Venture or his interest in any Joint Venture property or in the Property (hereinafter collectively sometimes referred to as his "Interest"), including any involuntary transfer by operation of law or otherwise, except as provided in this Article 4. Any attempt to so transfer or encumber any such Interest shall be void. Either partner may record a memorandum of this Agreement setting forth the foregoing restrictions on transfer of the Property in the place where real property records are recorded in King County, Washington.
Section 4.2 Defaults and Involuntary Transfers. Each of the following shall constitute an "Event of Default":
4.2.1 If any Partner makes an assignment for thebenefit of creditors or applies for appointment of a trustee, liquidator or receiver of any substantial part of his assets or commences any proceedings relating to himself under any bankruptcy (including Chapter XI) reorganization, arrangement or similar law;
4.2.2 If any such application is filed or proceeding is commenced against any Partner and such Partner indicates his consent thereto or an order is entered appointing a trustee,
liquidator or receiver or approving the petition in any such proceeding which order remains in effect for more than sixty (60) days;
4.2.3 If any sale or other transfer of any Interest, whether made voluntarily or by operation of law or by the virtue of enforcement of any pledge or encumbrance is m~de contrary to the provisions hereof;
4.2.4 If any Partner or transferee thereof institutes any proceeding in a court of competent jurisdiction for sale or partition of an interest in the Joint Venture or in the Property;
4.2.5 In the event a Partner fails to pay his respective share of Joint Venture obligation, including but not limited to his additional capital contribution pursuant to Section 2.2, at the time the same is due and payable, time being of the essence thereof; provided, however, that the remaining Partner may at its option advance and pay such share. The amount
so advanced and paid shall constitute a debt due and owing by the delinquent Partner and shall be paid upon demand, with interest from the date of payment until repaid, at the rate of twelve percent (12%) or the highest rate allowed by law, whichever is less. Such advances shall be deemed to cure the default; provided, however, that at any time before such indebtedness is
repaid the Partner making such advance may, by thirty (30) days' notice in writing to the delinquent Partner require payment or withdrawal and purchase of the Interest of the delinquent Partner as provided in Section 4.4, and apply said debt to the purchase price; or
4.2.6 If a Partner breaches a material provision of this Agreement and fails to cure said breach within thirty (30) days after receiving written notice from the Joint Venture or the nondefaulting Partner specifying the nature of the breach.
Section 4.3 Voluntary Transfer. If a Partner desires to sell all or any part of his Interest or has received an offer to purchase and desires to accept such offer, he shall first offer to sell such Interest to the other Partner, in writing, as
follows:
4.3.1 Such offer shall be addressed by the selling Partner to the nonselling Partner at his address as listed below and be mailed, postage prepaid, by registered or certified mail. The offer of sale shall contain the price for which such Interest is offered for sale and shall include the name and address of such person or persons and the terms of the offer of purchase
received.
4.3.2 If the nonselling Partner wishes to purchase such Interest offered for sale, he shall advise the selling Partner forthwith within forty-five (45) days of receipt of the
notice of sale. The nonselling Partner shall be deemed to have consented to the proposed sale if he fails to give the necessary notice within the forty-five (45) day period and to purchase the Interest pursuant to the terms of the offer.
4.3.3 If the nonselling Partner does not wish to purchase such Interest as provided in the terms of the selling Partner's offer, then the nonselling Partner shall either give
the selling Partner notice of his election to (i) permit the selling Partner to sell such Interest or (ii) require that all Joint Venture property be sold and the Joint Venture dissolved and terminated pursuant to Article 5. Such notice of election must be given within forty-five (45) days from the date on which the nonselling Partner received notice of the proposed sale. If the nonselling Partner shall fail to exercise the right herein granted to purchase such Interest or to require that all of the property owned by the Joint Venture be sold, then the selling Partner shall be free to transfer such Interest in accordance with the terms and conditions and to the person described in his offer of sale, for a consideration not less than that stated in his offer of sale, but not otherwise.
Section 4.4 Sale to Remaining Partner. Upon the occurrence of:
4.4.1 An Event of Default, as defined in Section 4.2; or
4.4.2 A deadlock with respect to a Major Decision, followed by the effective election to purchase by a consenting Partner under Section 3.1; or
4.4.3 The election by a Partner to withdraw from the Joint Venture, which election shall be exercised by giving the other Partner written notice, the nondefaulting Partner, the nonwithdrawing Partner, or the consenting Partner, as the case may be, shall have the right and option to terminate the Joint Venture by purchasing the defaulting, withdrawing, or
nonconsenting Partner's Interest as provided below in this Section 4.4 or to dissolve and terminate the Joint Venture pursuant to Sections 5.1 and 5.2. (Such nondefaulting,
nonwithdrawing, or consenting Partner shall hereinafter be referred to as the "Remaining Partner," and the other Partner shall hereinafter be referred to as the "Selling Partner"). The
option of the Remaining Partner to purchase the Interest of the Selling Partner shall be exercised by serving notice of intention to purchase upon the Selling Partner within forty-five (45) days
after receiving notice of the Event of Default or notice of nonconsent or withdrawal, as the case may be. The purchase price shall be equal to ninety percent (90%) of the valuation as
determined under Section 4.5 below and shall be payable, together with interest at the rate of twelve percent (12%) per annum, in four (4) equal semiannual installments sufficient to amortize
repayment over a period of two (2) years. The first payment shall be due three (3) months after the date of exercise of the option, and subsequent payments shall be due on the same date