Also see all Dojo4 Co-op legal documents here: https://github.com/dojo4/policy/tree/master/co-op and in the Dojo4 Concord account at concordnow.com.
THIS COUNCIL MEMBER MEMBERSHIP AGREEMENT (the “Agreement”) is made effective __________________, 201_, (the “Effective Date”) by and among dojo4, LCA, a Colorado cooperative having its principal place of business at 2030 17th Street, Boulder, CO 80302 (the "Cooperative") and _______________, whose address is_______________________________ (“Council Member”), agree to be bound at all times by the Bylaws of the Cooperative, under which it is hereby agreed as follows:
Council Member meets all eligibility requirements of and has satisfied all conditions to becoming a Council Member pursuant to the Bylaws
As of the Effective Date, on ____________Council Member has applied for and been admitted by the Board of Directors of the Cooperative to become a member pursuant to the Cooperative’s Bylaws, which have been duly adopted and as may be amended or restated from time to time by the members (the “Bylaws”);
Council Member and the Cooperative are party to a services agreement dated ________________, whereby Council Member has agreed to render services to the Cooperative or to the Cooperative’s members and the Cooperative has accepted the rendering of such services; and
Council Member will be issued one Class A Unit subject to the terms and conditions set forth in the Bylaws.
In consideration of the execution of this Agreement, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties agree as follows:
The Operating Council Member agrees to the following:
Council Member agrees to subscribe and pay for one (1) Class A Unit of the Cooperative as follows:
- one (1) Class A Unit of the Cooperative at a price of $6,000.00, issued in the name of the Council Member (the “Class A Unit”);
- (b) to make payment of the total price for the above Class A Unit either [CIRCLE ONE] <<(i) in immediately available funds>>, or <<(ii) by paying $__________ in immediately available funds and by agreeing to periodic equal installments of $_____________ per month for __ consecutive months, deducted from payments made pursuant to a subcontractor or services agreement, if applicable, or by check, ACH, or such other means as may be approved by the Cooperative, which installment payments shall be due and payable as of the first business day of each calendar month following execution of this Agreement.
Subject to Section 2 hereof, Council Member shall be deemed to patronize the Cooperative by rendering or contributing services to the Cooperative or clients of the Cooperative according to a written services agreement between the Cooperative and a member, either as a partner, independent contractor, subcontractor, consultant, strategic partner or any other lawful means pursuant to a written agreement;
The Cooperative’s Board of Directors shall, pursuant to its powers under the Bylaws, determine the precise methodology by which Council Member’s patronage shall be calculated and allocated. Without limiting the generality of the foregoing, each increment of 10-hours contributed shall be credited with one (1) patronage unit (“Patronage Units”). Patronage Units may be accrued for billable work performed for clients of the Cooperative, as well as for general value-add time contributed to the Cooperative. Unless otherwise set forth in writing, the determination of whether certain activity is eligible for Patronage Units shall be made in the discretion of the Managers.
Without limiting the generality of the confidentiality provision contained in Article XV of the Bylaws, all information relating to membership, fees, financial performance or projections, products or services, trade secrets, correspondence and all other Cooperative documents and information furnished to the Council Member by the Cooperative will be kept in strict confidence, and upon termination of the membership privileges in the Cooperative Council Member shall immediately return to the Cooperative or its agent all such documents which had been provided by the Cooperative to Council Member.
Council Member has received a copy of the Bylaws of the Cooperative, and Council Member promises and agrees that s/he shall comply with all provisions of said Bylaws, as amended from time to time, which apply in any way to any of the relationships between the Council Member and the Cooperative, and will further comply with all policies, rules and regulations adopted from time to time by the Board of Directors of the Cooperative which apply to any of said relationships, and that the Units of capital stock of the Cooperative hereby subscribed for by the Council Member will be held by the Council Member subject to all of the provisions of the Articles of Incorporation and the Bylaws of the Cooperative and all amendments and supplements thereto, and to all applicable provisions of this Agreement.
Council Member specifically acknowledges receipt of a copy of Article I, Section 5 of the Bylaws of the Cooperative entitled "Consent to Tax Treatment" and of the provisions therein contained which provide, among other things, that a member of the Cooperative, by the act of becoming or continuing as a member, consents that the amount of any allocation received by the Council Member from the Cooperative in the form of a Schedule K-1 will be taken into account by the Council Member for federal income tax purposes. This provision is not intended to limit the generality of Article I, Section 5 of the Bylaws.
As provided for in Article VII, Section 9 of the Cooperative's Bylaws, and without limiting the generality of the same, the Cooperative, to the extent of any indebtedness owing at any time to the Cooperative by Council Member, will have a first lien upon and a right of set-off against all Units and any patronage allocations which accrue for the account of or become distributable from time to time to the Council Member.
Council Member agrees to take part in cooperative governance by availing him/her/itself to vote on matters for which Council Members are eligible to vote, and to volunteer and serve on Committees, as may be made available from time to time by the Board of Directors, and applicable.
Council Member recognizes the unique and important position s/he/it holds as a Council Member of the Cooperative and will: strive to maintain and support the mission of the Cooperative and its surrounding community; carry and represent her/him/itself and the Cooperative with fairness and respect, both within and external to the community; and adhere to the Cooperative’s rules, guidelines, policies and code of conduct, as applicable.
Council Member has read and expressly acknowledges Article I, Section 3 of the Cooperative’s Bylaws and further acknowledges: (i) the Cooperative requires substantial working capital to satisfy the cash demands of the Cooperative’s business (including direct investments in real property and improvements thereupon); (ii) redemption of all or part of Council Member’s original capital contribution is at the sole discretion of the board and should be considered at-risk for delayed or partial redemption, or no redemption at all in certain circumstances.
Council Member has a received a copy of and understands the Cooperative’s Articles of Organization and Bylaws and has had access to, and an opportunity to inspect, all relevant information and documents relating to the Cooperative. Council Member has also had the opportunity to ask questions of the Board and of the officers of the Cooperative and has received satisfactory answers thereto, and has obtained such additional information as Council Member has desired to obtain regarding the Cooperative.
(a) Each Council Member shall, for so long as associated with the Cooperative, agrees to perform such services on behalf of the Cooperative as set forth in any employment agreement or independent contractor agreement between the Cooperative and such Member as applicable (the “Service Obligations”).
The Council Member recognizes and acknowledges that all intellectual property work product related to the business of the Cooperative (the “Cooperative’s Business”) that each Council Member conceives, creates, develops or reduces to practice, in whole or part in connection with the performance of their respective Service Obligations or conceived, created, developed or reduced to practice in whole or in part in connection with the Cooperative’s Business prior to the date of this Agreement, including all “works of original authorship,” inventions, improvements, enhancements, designs, ideas, formula, processes, techniques, discoveries, or know-how related to the Cooperative’s Business, whether or not patentable or copyrightable (the “Cooperative Intellectual Property”), are “works for hire”. The Council Member acknowledges and agrees that the Cooperative Intellectual Property shall become and remain the sole and exclusive property of the Cooperative and the Cooperative shall be the sole owner of all patents, copyrights and other rights in connection therewith throughout the world (collectively, “Cooperative Proprietary Rights”).
On the date of this Agreement, each Council Member shall complete and deliver to the Cooperative a reasonably detailed list of all “works of original authorship” and all source code, software, content, inventions, improvements, enhancements, designs, ideas, formula, processes, techniques, discoveries or know-how that such Council Member conceived, created, developed or reduced to practice prior to the formation of the Cooperative and that are owned either by such Council Member or his or her former employer or an unrelated third party (collectively, the “Other Intellectual Property”). This list can simply be in the form of some github URLs and any other references, as appropriate. Each Council Member and the Cooperative may amend such list from time to time to reflect a description of other “works of original authorship” and all source code, software, content, inventions, improvements, enhancements, designs, ideas, formula, processes, techniques, discoveries or know-how that such Council Member may conceive, create, develop or reduce to practice after the date of this Agreement, but outside the scope of their respective Service Obligations. If no such list is delivered to the Cooperative, such Council Member represents and warrants to the Cooperative that there is no Other Intellectual Property. Each Council Member acknowledges and agrees that he or she shall not, without the prior written consent of the Cooperative: (i) use or incorporate any Other Intellectual Property into any work product of any type he or she develops on behalf of the Cooperative; or (ii) use or incorporate any Cooperative Intellectual Property into any work product of any type he or she develops outside of the scope of their respective Service Obligations, including without limitation, into any Other Intellectual Property. In the event a Council Member incorporates any Other Intellectual Property owned by such Council Member into any work product of any type he or she develops on behalf of the Cooperative, he or she shall be deemed to have granted the Cooperative a royalty-free, irrevocable, perpetual, worldwide license to use and modify such Other Intellectual Property in connection with the development, marketing, sale and distribution of the Cooperative’s products and services.
Each Council Member and their respective Member shall assign all of his, her or its rights, title and interest in and to any and all Cooperative Intellectual Property and Cooperative Proprietary Rights to the Cooperative, whether or not patentable or registrable under copyright or similar statutes. Each Council Member and their respective Member hereby waives and forever discharges any moral rights and claims for infringement, misappropriation, breach of contract or other cause of action he or she may have against the Cooperative arising from the Cooperative’s use of all Cooperative Intellectual Property and Cooperative Proprietary Rights.
Upon the Cooperative’s reasonable request and expense, each Council Member shall assist the Cooperative in obtaining and enforcing Cooperative Proprietary Rights. Each Council Member shall execute and deliver such documents and take such additional actions as the Cooperative may reasonably request and at its expense in connection with the Cooperative’s efforts to obtain, perfect, maintain and enforce such Cooperative Proprietary Rights and the assignment thereof. Each Council Member’s obligation to assist the Cooperative with respect to Cooperative Proprietary Rights shall survive the sale, assignment, liquidation, or other divestment of the Membership Interest of the Member associated with such Council Member, provided that the Cooperative shall reimburse such Council Member for any direct out-of-pocket expenses actually incurred in connection with rendering such assistance.
In the event that any Council Member has entered into a separate agreement that governs the performance of his or her Service Obligations and the terms and conditions applicable thereto and there is a conflict between the terms and conditions set forth in such separate agreement and the terms and conditions set forth in this Section 15, the Council Member acknowledge and agree that the Cooperative shall be entitled to determine, in its sole discretion, whether to enforce the obligations of such Council Member, under any such other agreements or both.
Each Council Member or any other entity in which such Council Member is an owner, stockholder, member, officer, director, employee, agent or representative may transact business with the Cooperative from time to time to provide professional and other services, materials, inventory, goods and/or deliverables for the benefit of the Cooperative, including entering into any licensing, professional services or similar agreements between the Cooperative and such Member.
So long as each Council Member continues to fully comply with and perform his or her Service Obligations and subject to applicable duties Council Member owes to the Cooperative, as defined in the Bylaws, such Council Member may, without notice to or consent from any other Council Member or the Cooperative, engage and invest in other business ventures of any nature. Neither the Cooperative nor any other Member or Council Member shall by virtue of this Agreement have any right or interest in such other ventures or the income or profits derived therefrom.
Each Council Member agrees that he or she is an officer or executive of the Cooperative (as such term is used in § 8-2-113(2)(d) of the Colorado Revised Statutes) and possesses or will possess knowledge, skills and reputation in the Cooperative’s Business that are of material importance to the Cooperative, and that are special, unique and extraordinary. Each Council Member agrees that the Cooperative’s loss of his or her services, or a competitor of the Cooperative’s receipt of his or her services, may result in the unauthorized disclosure of Confidential Information and may cause irreparable harm to the Cooperative. Therefore, in order to protect the Confidential Information and prevent unfair competition by the Cooperative’s competitors, each Council Member agrees that for the period commencing on the date of this Agreement and expiring upon the six (6) month anniversary of the effective date of the redemption, sale or other transfer of the Unit associated with such Council Member (the “Restricted Period”), such Member shall not, without prior written agreement, within the geographic territory (defined by a 100 mile radius around the Cooperative’s primary location) served by the Cooperative, do any of the following:
- participate or engage in any activities that compete or conflict with the Cooperative during the Restricted Period;
- canvass, solicit, or accept, or aid or assist any other person or entity in any effort to canvass, solicit or accept, any business in competition with the Cooperative from any present or past customer of the Cooperative;
- directly or indirectly request or advise any past, present or potential future customer of the Cooperative to withdraw, curtail, cancel, or not engage in business with the Cooperative;
- breach any confidentiality agreement that Cooperative has with any of its past or present customers; or
- suggest, solicit, or encourage any employee of the Cooperative to leave their employment with the Cooperative or any other Council Member, consultant, independent contractor or other party to terminate their relationship or contracts with the Cooperative; or
- disparage the Cooperative or it conditions of employment.
Council Member acknowledges and agrees that the restrictions set forth in Sections 18 above are reasonable and necessary to protect the legitimate interests of the Cooperative, and that such Council Member’s violation or default in the performance of his, her or its obligations as set forth in Sections 18 above will result in irreparable injury to the Cooperative. Each Council Member also acknowledges and agrees that the Cooperative shall be entitled to specific performance of the terms and conditions set forth in Sections 18 above and to preliminary and permanent injunctive relief relating to such provisions, which rights shall be cumulative and in addition to any other rights or remedies to which the Cooperative may be entitled. The Cooperative shall not be required to post a bond or to show special damages in any proceeding seeking any such equitable relief.
- Fractional and indivisible ownership of the Cooperative;
- Voting rights as part of the Cooperative’s governance model;
- Patronage Units to be allocated in proportion to the Council Member’s patronage with, through and of the Cooperative’s products and services;
- The Cooperative further agrees to promote the Cooperative’s products and services and those transacted as a result of or derivative from membership in the Cooperative, whether in whole or in part, or whether directly or indirectly arising from Cooperative membership.
In accordance with the applicable provisions of the Cooperative's Bylaws and any then effective policy or plan established by the Board of Directors of the Cooperative with respect to the distribution and calculation of patronage dividends, the Cooperative will allocate to its Council Members as patronage dividends, the proportionate Unit of the net earnings allocable to the Council Member.
Council Member shall not make, attempt to make or permit a disposition of any Units owned now or in the future unless in compliance with the terms and conditions of this Agreement. No disposition of any Units shall be effective (a) unless made in compliance with this Agreement and (b) unless and until a proposed transferee (except the Cooperative) shall be accepted by the Board of Directors pursuant to the Cooperative's Bylaws.
It shall be a condition precedent to the issuance of Units to any person by the Cooperative that the person shall agree to be bound by the terms and conditions of the Cooperative's Bylaws and this Agreement by a written instrument. Notwithstanding the foregoing, if Units are issued to or received by any person without the person having agreed in writing to be bound by the terms and conditions of this Agreement, upon receipt and retention of the Units, the person shall automatically become a party to this Agreement and shall be subject to all the terms and conditions of this Agreement whether or not the person has acknowledged and signed this Agreement or accepted its terms and conditions by a written instrument.
The Cooperative shall not, nor shall it be required to, transfer, issue or reissue any of the Units in violation of this Agreement or without proof of compliance with this Agreement.
The restrictions, terms and conditions of this Agreement shall remain in effect as to all Units owned now or in the future by a Council Member, whether or not acquired or disposed of in accordance with this Agreement and whether or not the Units are in the hands of an original Council Member or a subsequent owner (including the estate of a Council Member), regardless of how or when acquired. No acquisition or disposition of Units shall in any way enlarge or limit any rights or obligations under this Agreement.
The terms and conditions of this Agreement shall apply to any person who receives capital interest units of the Cooperative.
The Cooperative shall not be required to issue any paper equity interest certificates unless and until so determined by the Cooperative’s Directors. If the Cooperative issues paper certificates, the Cooperative and Council Members shall cause any certificates for Units subject to this Agreement to be endorsed substantially as follows:
This certificate and the Units represented by it are subject to the provisions of a Council Membership Agreement effective ______________, 20 (as it may be amended from time to time) whereby the disposition in any manner of such Unit or any interest therein is restricted and pursuant to which any person acquiring Units represented by this Certificate is deemed to have agreed to the terms and conditions of the Agreement. A copy of the Agreement is on file at the principal business office of the Cooperative where it may be inspected.
The Council Member acknowledges that the Class A Unit acquired hereby does not constitute a security, as defined by the Securities Act of 1933. The Council Member’s interest in the Cooperative and rights acquired as a result of becoming a member in the Cooperative are not a security. As such, no aspect of this Agreement or the transaction contemplated hereby have been reviewed, passed over, or approved by a federal or state regulatory agency.
The Council Member understands that the membership interest and the Class A Unit have not been, and will not be, registered under the Securities Act of 1933, as amended (the “Securities Act”) or under any state’s Blue Sky laws, by reason of specific exemptions from the registration provisions of the same, which depend upon, among other things, the bona fide nature of the Council Member’s non-pecuniary motivation to become a member in the Cooperative.
Council Member expressly acknowledges, understands and appreciates that the Class A Unit is generally not subject to and is not being acquired for the purpose of realizing financial appreciation on the stock. Rather, Council Member is seeking to become a member in the Cooperative to support and gain access to certain non-pecuniary aspects of the business of the Cooperative.
Council Member expressly acknowledges, understands and appreciates that the Cooperative has no intention, and has in fact created certain disincentives to sell the Cooperative or substantially all of its assets for the financial gain of its members.
The Council Member has sufficient experience in the business of the Cooperative, its financial condition and related investment risks sufficient to enable him/her to be able to evaluate the risks involved in the transaction contemplated herein and to make an informed decision with respect to such transaction.
The Council Member can afford a complete loss of the value of the Units being acquired hereby and is able to bear the economic risk of holding such Units for an indefinite period.
Council Member and Cooperative agree to submit and resolve any dispute arising out of this Agreement, any other agreements between the Council Member and the Cooperative, or any agreements made between Council Members in connection to business directly connected to the Cooperative’s business, to the Dispute Resolution provision as outlined in Article X of the Cooperative’s Bylaws.
Violation of this Agreement in any material respect by Council Member, or violation of the terms and conditions of the Bylaws of the Cooperative, will be grounds for the Board of Directors to terminate Council Member¹s membership in the Cooperative.
Except as permitted by this Agreement, the Council Member may not assign its interest or rights in this Agreement. This Agreement will be binding on the parties and their heirs, successors and assigns. Council Member acknowledges and agrees that except as provided for in this Agreement, its membership in the Cooperative and the Class A Unit is not transferable without the prior written consent of the Board.
Council Member hereby agrees to indemnify and hold harmless the Cooperative and its officers, directors, members, employees, consultants, representatives, and agents from and against any and all causes of action, charges, claims, damages, demands, liabilities, losses, obligations, penalties and other recoveries and any and all related costs and expenses (including, without limitation, reasonable attorneys’ fees and costs) arising, directly or indirectly, from any misrepresentation made by Council Member herein, any breach by Council Member of the representations and warranties made by Council Member herein, any failure by Council Member to fulfill any of Council Member’s covenants set forth herein, for any negligent act or omission by the Council Member at any time arising out of Council Member’s membership in the Cooperative, or any resale, transfer or other distribution of the Class M Unit in violation of this Agreement or the Cooperative’s Bylaws.
The laws of the State of Colorado will govern this Agreement, and venue for enforcement of this Agreement will be in Boulder County, Colorado.
It is the intent that all Class A Council Membership Agreements are to be uniform in all material respects, except that the Class A Common Unit price is subject to change, in the discretion of the Board of Directors.
The Cooperative’s Board of Directors or an authorized representative or delegate of the same shall have all necessary powers and authority to administer and enforce the terms of this Agreement, to the extent not inconsistent with the same and to the extent required or reasonably necessary.
This Agreement is executed and delivered by Applicant on the ____ day of __________, 2015.
Signature:
Name:
Social Security Number:
Address:
Phone:
Facsimile:
Email:
Accepted and effective
This _____ day of ______________, 201__:
Dojo4 LCA
By:
Name:
Title: