ONE LOVE COOP, LLC
MEMBERSHIP AGREEMENT FOR COMMON MEMBERS
This is a Membership Agreement (this “Agreement”) between One Love Coop, LLC, a Kentucky limited liability company (the “Company”), and the undersigned common member (the “Common Member”). For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, including the issuance by the Company to the Common Member of a Company common share, the Company and the Common Member agree as follows.
1. Subscription and Eligibility. The Common Member desires to become a common member of the Company. The Common Member hereby subscribes for one *Series B, C, D, E, or F common share of the Company. The Common Member represents that it is eligible to be a member of the Company as described in the Company’s Operating Agreement (as amended from time to time, the “LLC Agreement”) and acknowledges that it has received a copy of the LLC Agreement.
*[ Series B, C, D, E, or F is representative of Tiers 1, 2, 3, 4, and 5]
The Common Member represents that (i) the Common Member has such knowledge and experience in financial and business matters that the Common Member is capable of evaluating the risks and merits of a purchase of a common share; and (ii) the share of common stock will be purchased for the Common Member’s own account and not with a view toward distribution which is prohibited.
2. Payment for Common Shares. The Common Member has made payment for the full purchase price of the share subscribed for above.
3. Purchase and Other Commitments. In the case of each Common Member, as long as the Common Member is a member of the Company, the Common Member may participate in the supply chain programs managed and operated by the Company relating to the purchase goods, property, and services, and other initiatives conducted by the Company.
(a) The Common Member understands, acknowledges and agrees to abide by the terms of the LLC Agreement. The Common Member further understands, acknowledges and agrees that the Common Member is hereby making certain commitments to the Company and that the Common Member agrees to abide by and to fulfill such commitments in all respects.
(b) The Common Member understands, acknowledges and agrees that the Company may from time to time collect from the Common Member a fee (an “Administration Fee”) in consideration of and to fund the Company’s supply chain programs and services, and authorizes the Company, as an administrative convenience, from time to time, to cause suppliers and distributors of goods, property, and services to collect Administration Fees, as authorized by the Company’s Board of Directors, from the Common Member for the account of the Company.
(c) As a supplement to Sections 5.3 and 16.1 of the LLC Agreement, the Common Member acknowledges and agrees that (i) any notice to the common members given by the Company may be mailed, sent via overnight delivery, given by any form of electronic transmission, or sent as otherwise permitted by applicable law and (ii) on any matter to be voted on by common members, the common members may vote in person or by proxy, and such proxy may be granted in writing, by means of electronic transmission, or as otherwise permitted by applicable law.
4. Tax Treatment. The Common Member understands and acknowledges that the Company will be treated as an association taxable as a corporation for federal income tax purposes, and shall operate on a cooperative basis under Subchapter T of the Internal Revenue Code. The Common Member agrees not to take any position or action, in a tax return or otherwise, inconsistent with such treatment.
5. Restrictions on Shares. The Common Member understands that the shares have not been, and will not be, registered under the Securities Act of 1933, as amended. The Common Member is aware of and agrees to all of the terms and conditions with respect to owning a share, as set forth in the LLC Agreement, including the prohibition on the transfer to a third party of share(s) by virtue of the LLC Agreement and provisions of applicable law.
6. Patronage Dividend as Gross Income. The Common Member understands and agrees to be bound by Section 11.6 of the LLC Agreement which states in pertinent part:
Membership in the Company by Common Members shall constitute a consent of each such Common Member to include in its gross income the amount of any patronage dividend which is paid by the Company, including those with respect to direct sales from the Company, and indirect sales through Distributors, in money, "qualified checks," "qualified written notices of allocation" or other property (except "nonqualified written notices of allocation" as defined in Section 1388(d) of the IRC) and which is received by it during the taxable year from the Company. Each Common Member of the Company, through initiating or retaining its membership after adoption of this Article 11 of this Agreement, as amended from time to time, consents to be bound hereby. The provisions of this Article 11, as amended from time to time, shall be a contract between the Company and each Common Member as fully as though each Common Member had signed a specific separate instrument in which the Common Member agreed to be bound by all of the terms and provisions of this Article 11, as amended from time to time.
7. Management Agreement. The Common Member understands and acknowledges that the Company anticipates that it will enter into, or has entered into, a management agreement for the provision of management services, operation of the day-to-day affairs of the Company, and/or conduct purchasing programs on behalf of the Company and its members, with 212ths Limited Liability Company for an initial three-year term, and that 212ths Limited Liability Company is controlled by Lafe Taylor and Lamar Wilson, who are members of the Company and two of the three initial directors of the Company.
8. Confidential Information. As a common member of the Company, information of the Company, its common members and preferred members, or others with whom the Company has or had an ongoing business relationship (including its suppliers) which is confidential or proprietary in nature and is labeled or disclosed as confidential (“Confidential Information”) may be disclosed or made available to the Common Member. Confidential Information is the exclusive property of the Company. The Common Member acknowledges and agrees that the Common Member (a) is receiving the Confidential Information in trust and shall treat the Confidential Information as confidential both during and following membership in the Company, (b) shall neither disclose nor give to any person, either during membership in the Company or thereafter, any Confidential Information, (c) shall not copy or reproduce Confidential Information, and (d) shall use Confidential Information only for purposes expressly permitted by the Company. Notwithstanding the foregoing, the parties agree that information shall not be deemed Confidential Information, and the Common Member shall have no obligation with respect to any such information where the Common Member can document that such information: (i) is lawfully known to the Common Member without restriction prior to the date of this Agreement; (ii) is or becomes publicly known through no wrongful act of the Common Member; (iii) is disclosed to the Common Member from a source other than the Company without similar restriction and without breach of this Agreement; or (iv) must be disclosed to comply with applicable law or court order.
9. Access to Information. The Common Member has received all information as the Common Member deems necessary and appropriate to enable the Common Member to evaluate the financial and other risks and undertakings with respect to membership in the Company. The Common Member has received satisfactory and, to the Common Member’s knowledge, complete information concerning the business and financial condition of the Company and the obligations of membership in the Company in response to all inquiries in respect thereof. The Common Member has such knowledge and experience in financial and business matters that the Common Member is capable of evaluating the merits and risks of membership in the Company.
10. Series Realignment. The Common Member understands, acknowledges and agrees that there may be amendments to the LLC Agreement from time to time which may require that the Common Member be assigned a share of a different Series than the Series the Common Member is initially assigned, in which case the Common Member’s Series B, C, or D share shall be redeemed, and a new share in the appropriate Series shall be issued to the Common Member.
11. Terms if Purchasing Directly from the Company. The terms in this paragraph only apply if the Common Member is purchasing directly from the Company. The Common Member shall pay the Company for all goods, property, and services delivered or provided net cash ten (10) days. The Company reserves the right, at its sole option, to modify or withdraw these terms of credit at any time, and the Company may, if the Common Member fails to pay any amount when due, require full payment in cash before making any deliveries or otherwise providing goods, property or services under this Agreement. The Common Member either has authorized the Company, or will authorize the Company concurrently with this Agreement, to initiate debit entries and/or adjustments as payment for goods, property, and services in accordance with this section by completing and executing an “Authorization Agreement for Direct Payments (ACH Transactions).”
[The Common Member acknowledges that any and all services provided to the Common Member are subject to the Company’s Credit Policy, as amended by the Company from time to time.]
12. Default. Upon failure of the Common Member to pay any amount when due, the Company, consistent with its Credit Policy, may: (a) cease allowing the Common Member to purchase any goods, property, or services by or through the Company until all amounts past due are paid in full; (b) suspend further shipments and deliveries to the Common Member; and/or (c) place the Common Member on probation until all amounts past due are paid in full and, during such period of probation, continue allowing purchases and/or shipments to the Common Member only if prior cash payment is received in full for each future purchase or shipment. The Common Member shall remain liable to the Company for all loss or damage sustained by reason of such default and will pay all costs of collection, including reasonable attorney's fees and all costs and fees incident to the enforcement of payment or collection or recovery of merchandise by any action or participation in, or in connection with, a case or proceeding under Chapter 7, 11 or 13 of the Bankruptcy Code or any successor statute thereto.
The Common Member shall be in default under this Agreement if any warranty, representation or statement made or furnished to the Company by or on behalf of the Common Member proves to have been false in any material respect when made or furnished. In addition, the Common Member shall be in default if bankruptcy or insolvency proceedings are instituted by or against the Common Member, whether voluntary or involuntary, or if the Common Member makes any assignment for the benefit of creditors.
No waiver by the Company of any default shall operate as a waiver of any other default or of the same type of default on future occasions.
In addition, the Common Member understands and agrees that, pursuant to Section 11.8 of the LLC Agreement, the portion of any patronage dividend that would otherwise be payable in cash to the Common Member; or otherwise amounts that would otherwise be paid to redeem written notices of allocation issued to the Common Member, or any other amounts the Company owes to the Common Member may be applied by the Company to the payment of any indebtedness, the repayment of which is in default, owed to the Company by the Common Member.
13. Indemnification. The Common Member agrees to indemnify and hold harmless the Company and its directors, officers, representatives, employees and agents from and against any and all expenses, costs and damages any or all of them may sustain by reason of or arising from the Common Member's breach of this Agreement, including, but not limited to, costs of collection, reasonable attorney's fees and interest at a rate equal to the lower of eighteen (18%) percent per annum or the highest legally permissible rate. This provision is without limitation to any other rights or remedies that may be available to the parties to be indemnified, whether at law or in equity, including the termination of this Agreement.
14. Service. The Company shall not be liable for losses or damages incurred by the Common Member by reason of the Common Member not receiving any goods, property, and services, or with respect to any such other acts or omissions as may occur in connection with its activities hereunder.
15. Annual Fee. The Common Member shall pay the Company an annual fee (the "Annual Fee") as set forth in the LLC Agreement, which may be changed from time to time by the Company. The Common Member understands and agrees that the Annual Fee shall be non-refundable. The Common Member shall be in breach of this Agreement and the LLC Agreement if the Annual Fee is not timely paid.
16. Further Acts. The Common Member shall execute such additional documents and take such other actions as the Company shall reasonably request to consummate the transactions contemplated in this Agreement and to carry into effect the provisions and intent of this Agreement. In addition, the Common Member agrees to provide such additional information about the Common Member and its ownership as may be required to assign such Common Member to a particular Series of common shares in the Company.
17. Construction; Governing Law. This Agreement shall be governed by and construed (i) in accordance with the laws of the United States and the Commonwealth of Kentucky, without regard to its conflict of law principles, and (ii) in accordance with the Company’s Articles of Organization and LLC Agreement, as amended from time to time.
18. Representations. Each party hereby represents and warrants that: (i) it has authority to enter into this Agreement; (ii) it has been duly authorized by all required corporate or other action, if applicable, to enter into this Agreement; and (iii) that this Agreement does not conflict with the terms of any agreements, governing documents or other restrictions to which such party is subject or bound. The Common Member represents and warrants that all information provided by the Common Member to the Company in connection with entering into this Agreement is true, correct, and complete in all respects and that the Common Member will provide the Company with updated information upon any material changes to the information previously provided. The Company shall at all times be entitled to rely on all such information received from each and every Common Member without further inquiry. The Common Member shall provide the Company with such information and documentation as requested by the Company from time to time to confirm the accuracy of the information provided by the Common Member to the Company in connection with this Agreement.
19. Effective Date. This Agreement shall be effective upon execution by a duly authorized officer of the Company.
20. Termination. The Common Member’s membership in the Company will terminate immediately if the Common Member ceases to be eligible to be a member of the Company under the applicable provisions of the LLC Agreement. In addition, the Company may terminate the Common Member’s membership in the Company if the Common Member breaches any of the terms of this Agreement or fails to make any payment owed to the Company when due. The Company shall promptly redeem the Common Member’s common share if the Common Member no longer qualifies as a common member of the Company. The redemption price for the common share shall be the price the Common Member paid for the common share (provided that such redemption price shall not include any payments of the Annual Fee). Notwithstanding the foregoing, the obligations hereunder of the Common Member to pay all invoices or other amounts within the terms specified, together with interest and the costs of collection upon default, shall survive any termination of this Agreement.
21. Severability. If any provision of this Agreement shall be adjudged by any court of competent jurisdiction to be invalid, illegal or unenforceable, in any respect, the validity, legality and enforceability of that provision and of all other provisions of this Agreement shall in no other way be affected or impaired.
22. Acceptance of Membership. The Company reserves the right to accept or reject subscriptions for membership in the Company in its sole discretion. If the Company rejects a subscription, the Company will promptly refund any and all fees paid with respect to the subscription without interest.
23. Binding Contract; Successors and Assigns. The Common Member acknowledges and agrees that this Agreement is a legally binding contract which will be relied upon and will be enforceable by the Company. This Agreement supersedes all prior membership, purchase commitment, and similar agreements between the Common Member and the Company. This Agreement is intended to bind and inure to the benefit of and be enforceable by the Company and the Common Member and their respective successors and assigns. The Common Member may not assign its rights or delegate its duties or obligations hereunder without the prior written consent of the Company.