OPERATING AGREEMENT OF WORKERBEE TECH CO-OP LLC
A Tennessee Limited Liability Company
THIS OPERATING AGREEMENT (the “Agreement”) is made and entered into as of the 7th day of March, 2025 (the “Effective Date”), by and between Destinee Brillian Orr, Patrick Burch, and Kevin Harmon each individually referred to as a “Member” and collectively as the “Members.”
RECITALS
WHEREAS, the Members desire to establish a limited liability company under the laws of the State of Tennessee to provide technology services, emphasizing a worker cooperative model that promotes democratic governance, equitable profit distribution, and member participation;
WHEREAS, the Members intend to define comprehensively their rights, duties, obligations, and responsibilities concerning the formation, management, operation, and dissolution of the Company, integrating cooperative principles such as labor-based profit allocation and member-driven decision-making;
WHEREAS, the initial Members, Destinee Brillian Orr, Kevin Harmon, and Patrick Burch, commit to contributing their skills, resources, and labor to the Company, with three additional tentative Members pending confirmation, to be admitted under the terms herein;
WHEREAS, the Members seek to establish a flexible yet robust governance structure that balances cooperative ideals with the legal and operational requirements of a Tennessee limited liability company;
NOW, THEREFORE, in consideration of the mutual promises, covenants, and agreements herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Members agree as follows:
ARTICLE 1: FORMATION AND PURPOSE
1.1 Formation
1.1.1 The Company is formed as a limited liability company pursuant to the Tennessee Revised Limited Liability Company Act, codified at Tenn. Code Ann. § 48-249-101 et seq. (the “Act”), effective upon the filing of the Articles of Organization with the Tennessee Secretary of State on or about March 7, 2025.
1.1.2 The Members hereby adopt, ratify, and approve the Articles of Organization, and all rights, duties, liabilities, and obligations of the Members and the Company shall be governed by this Agreement, the Articles, and the Act, in that order of precedence.
1.1.3 Any amendments to the Articles shall be filed promptly with the Tennessee Secretary of State and reflected in this Agreement as necessary.
1.2 Name
1.2.1 The legal name of the Company shall be “WorkerBee Tech Co-op LLC,” reflecting its cooperative nature and technological focus.
1.2.2 The Board of Managers may, by majority vote, alter the Company name, provided such change complies with Tennessee law and is filed with the Secretary of State.
1.2.3 The Company may use trade names or “doing business as” designations as approved by the Board, subject to registration requirements under Tenn. Code Ann. § 48-249-106.
1.3 Principal Place of Business
1.3.1 The principal office of the Company shall be located at 205 Pond Rd, Cottontown, TN 37048, USA, serving as the primary administrative and operational hub.
1.3.2 The Board of Managers may relocate the principal office by majority vote, notifying all Members within ten (10) business days of such decision via written or electronic notice.
1.3.3 Additional offices or places of business may be established as determined by the Board to facilitate the Company’s operations.
1.4 Purpose
1.4.1 The Company is organized to provide technology services, including software development, web and mobile application development, IT consulting, and related services, with a focus on small to medium-scale projects.
1.4.2 The Company shall operate as a worker cooperative, prioritizing employment opportunities for Members, equitable distribution of profits based on labor contributions, and democratic governance.
1.4.3 The Company may engage in any other lawful business activities permitted by the Act and consistent with the Articles, as approved by the Board and Active Members.
1.5 Term
1.5.1 The Company’s term shall commence on the Effective Date and continue perpetually unless terminated pursuant to Article 7 or as required by the Act.
1.5.2 The Members intend for the Company to endure beyond the involvement of any individual Member, subject to the dissolution provisions herein.
1.6 Registered Agent and Office
1.6.1 The initial registered agent for service of process shall be Destinee Brillian Orr, with the registered office at 205 Pond Road Cottontown, TN 37048, unless otherwise designated by the Board.
1.6.2 The Board shall ensure continuous appointment of a registered agent in Tennessee, updating the Secretary of State within thirty (30) days of any change per Tenn. Code Ann. § 48-249-109.
1.6.3 The registered office may differ from the principal office but must comply with statutory requirements.
1.7 Tax Status
1.7.1 The Cooperative shall be taxed as a C corporation for federal tax purposes and operated on a Cooperative basis under Subchapter T of the Internal Revenue Code (IRC).
1.7.2 The Board shall consult with tax professionals to determine the optimal tax structure, filing necessary elections with the Internal Revenue Service (IRS) within applicable deadlines.
ARTICLE 2: DEFINITIONS
2.1 Defined Terms
For the purposes of this Agreement, the following terms shall have the meanings set forth below unless the context clearly indicates otherwise:
2.1.1 “Act” means the Tennessee Revised Limited Liability Company Act, Tenn. Code Ann. § 48-249-101 et seq., as amended.
2.1.2 “Active Member” means a Member currently employed by or actively providing labor to the Company, retaining full voting and participation rights, unless classified as an Inactive Member under Article 3, Section 6.
2.1.3 “Articles” means the Articles of Organization of the Company filed with the Tennessee Secretary of State, including all amendments thereto.
2.1.4 “Board” or “Board of Managers” means the elected group of Active Members responsible for managing the Company’s business and affairs under Article 5.
2.1.5 “Capital Account” means the individual account maintained for each Member, tracking contributions, allocations, and distributions, in accordance with Treasury Regulation § 1.704-1(b)(2)(iv).
2.1.6 “Capital Contribution” means any cash, property, or services contributed by a Member to the Company, including amounts withheld from wages under the Withholding System, as documented in Exhibit A.
2.1.7 “Collective Account” means the Company’s internal reserve of Surplus, Profit, and other funds retained for working capital, operational needs, or contingencies, not distributed to Members.
2.1.8 “Electronic Transmission” means any communication (e.g., email, secure digital platform) that creates a retrievable record, compliant with Tenn. Code Ann. § 48-249-103(8).
2.1.9 “Inactive Member” means a Member who has ceased active labor contributions due to leave, inactivity, or suspension, as defined in Article 3, Section 6.
2.1.10 “Joinder Agreement” means the document in Exhibit B executed by new Members to bind them to this Agreement.
2.1.11 “Manager” means an individual elected to serve on the Board of Managers under Article 5.
2.1.12 “Member” means a natural person admitted to the Company under Article 3, listed in Exhibit A, whether Active or Inactive.
2.1.13 “Membership Interest” means a Member’s aggregate rights in the Company, including economic interests, voting rights, management participation, and access to Company information.
2.1.14 “Patronage Contribution” means the documented hours of labor contributed by a Member to the Company, tracked via time sheets, project logs, or client records specifying date, time, and work performed.
2.1.15 “Patronage Dividends” means distributions of Surplus allocated to Members based on their Patronage Contributions, meeting the definition under IRC § 1388(a) if taxed as a cooperative.
2.1.16 “Profit” means the excess of revenues over expenses for a fiscal year attributable to non-Member labor, determined under GAAP.
2.1.17 “Surplus” means the excess of revenues over expenses for a fiscal year attributable to Member labor, determined under GAAP.
2.1.18 “Transfer” means to sell, assign, pledge, hypothecate, or otherwise dispose of a Membership Interest, whether voluntarily or involuntarily.
2.1.19 “Withholding System” means the mechanism by which a Board-determined percentage of a Member’s wages is deducted and credited as a Capital Contribution to their Capital Account.
2.2 Interpretation
2.2.1 Terms not defined herein shall have their ordinary legal meaning under Tennessee law unless context dictates otherwise.
2.2.2 References to statutes include all amendments and successor provisions.
ARTICLE 3: MEMBERSHIP
3.1 Membership Classes
3.1.1 The Company shall recognize two distinct classes of Members: Active Members and Inactive Members.
3.1.2 All Members shall be classified as Active Members unless they meet the criteria for Inactive status under Section 6 of this Article.
3.2 Initial Members
3.2.1 The initial Members of the Company are Destinee Brillian Orr, Kevin Harmon, and Patrick Burch, as detailed in Exhibit A, effective as of the Effective Date.
3.2.2 Three additional tentative Members are under consideration, to be admitted upon satisfying the requirements of Section 4 below and updating Exhibit A accordingly.
3.3 Membership Qualifications
3.3.1 To qualify for Membership, an individual must:
3.3.1.1 Be a natural person actively employed by or providing labor to the Company;
3.3.1.2 Complete a candidacy period by contributing five hundred (500) work hours to the Company, during which membership dues of three dollars ($3.00) per hour are withheld from their wages, totaling one thousand five hundred dollars ($1,500.00), unless waived by the Board for demonstrated technical competence or client recruitment;
3.3.1.3 Be admitted pursuant to the procedures in Section 4 upon completion of the candidacy period and payment of the full $1,500 membership share price through the dues described in Section 3.3.1.2;
3.3.1.4 Execute this Agreement or the Joinder Agreement attached as Exhibit B, along with any additional documents required by the Board.
3.3.2 Upon completion of the five hundred (500) work hours and payment of the $1,500 membership share price via withheld dues, the candidate shall be eligible for admission as an Active Member, subject to the admission process in Section 4.
3.3.3 The Board may establish supplemental qualifications (e.g., specific skills, certifications) by majority vote, subject to Active Member ratification by a majority vote.
3.3.4 Membership dues of $3 per hour shall cease upon completion of the candidacy period and admission as a Member, with no further automatic wage withholdings required unless additional Capital Contributions are approved per Article 4, Section 4.2.
3.4 Admission of New Members
3.4.1 The Board shall develop and maintain written application procedures, including forms, deadlines, and evaluation criteria, available to all prospective Members.
3.4.2 Admission of a new Member requires:
3.4.2.1 A formal recommendation by a majority vote of the Board of Managers;
3.4.2.2 Approval by a seventy-five percent (75%) vote of Active Members at a duly called meeting or via written consent;
3.4.2.3 Full compliance with all qualifications under Section 3.3, including completion of the candidacy period and payment of the $1,500 membership share price via withheld dues.
3.4.3 Upon admission, new Members shall be bound by this Agreement, including all current and future amendments, and Exhibit A shall be amended to reflect their inclusion within ten (10) business days.
3.4.4 The Board shall notify the new Member in writing or via Electronic Transmission within five (5) business days of approval, providing copies of this Agreement and related documents.
3.5 Capital Contributions
3.5.1 Initial Members’ Contributions are as follows:
| Member Name | Contribution | Value of Contribution |
|---|---|---|
| Destinee Brillian Orr | Cash and 100 hours of labor | $2,160.00 |
| Patrick Burch | Cash and 100 hours of labor | $3,000.00 |
| Kevin Harmon | Equipment Donation and 100 hours of labor | $3,500.00 |
3.5.2 New Members shall fund their initial Capital Contribution, defined as the membership share price, through membership dues of three dollars ($3.00) per hour withheld from wages over five hundred (500) work hours during the candidacy period, totaling one thousand five hundred dollars ($1,500.00), as specified in Section 3.3.1.2.
3.5.3 The $1,500 membership share price represents the full initial Capital Contribution required for Membership, credited to the Member’s Capital Account upon admission per Article 4, Section 1.
3.5.4 No additional membership dues or withholdings shall be required beyond the $1,500 membership share price unless additional Capital Contributions are approved under Article 4, Section 4.2.
3.5.5 Contributions shall be documented in the Company’s records and reflected in each Member’s Capital Account per Article 4, Section 1, with updates provided quarterly by the Treasurer.
3.6 Inactive Members
3.6.1 A Member shall be classified as an Inactive Member if they:
3.6.1.1 Submit written notice to the Board of a leave of absence, effective seven (7) days after receipt, not to exceed three (3) years unless extended by Board approval;
3.6.1.2 Are deemed inactive by a majority vote of the Board after thirty (30) consecutive days without documented labor contributions or fourteen (14) days of non-responsiveness during an assigned project, with prior notice to the Member;
3.6.1.3 Are suspended under Section 8 of this Article.
3.6.2 Inactive Members shall:
3.6.2.1 Lose all voting rights on Company matters;
3.6.2.2 Be ineligible to work for the Company or serve as Managers;
3.6.2.3 Automatically resign from any Manager position upon becoming Inactive.
3.6.3 An Inactive Member may request reinstatement to Active status by submitting a written request to the Board, which shall decide by majority vote within thirty (30) days, considering the Member’s prior contributions and Company needs.
3.7 Termination of Membership
3.7.1 Membership shall terminate upon the occurrence of any of the following events:
3.7.1.1 Death of the Member, effective immediately upon notification to the Board;
3.7.1.2 Delivery of a written resignation notice to the Board, effective upon receipt unless a later date is specified, not to exceed thirty (30) days;
3.7.1.3 Failure of an Inactive Member under Section 3.6.1.2 to resume Active status within sixty (60) days or by the end of the fiscal year, whichever is longer, unless extended by the Board;
3.7.1.4 Removal pursuant to Section 9 of this Article.
3.7.2 Upon termination, the Member’s Capital Account balance shall be handled per Article 4, Section 8, and Exhibit A shall be updated within ten (10) business days.
3.8 Suspension of a Member
3.8.1 The Board may suspend a Member by a two-thirds (2/3) vote if it determines that the Member has:
3.8.1.1 Engaged in unlawful conduct (e.g., theft, fraud) or improper behavior (e.g., harassment, discrimination) materially affecting the Company;
3.8.1.2 Posed a significant risk of harm or disruption to the Company’s operations or reputation.
3.8.2 Suspension shall take effect immediately upon the Board’s vote, rendering the Member Inactive, with written notice provided to the Member and all Active Members within five (5) business days.
3.8.3 The Board shall refer the matter to Active Members for a removal vote under Section 9 within thirty (30) days of suspension.
3.8.4 The Board may reverse a suspension by majority vote prior to removal, reinstating the Member to Active status with full rights restored.
3.9 Removal of a Member
3.9.1 A suspended Member may be removed by a seventy-five percent (75%) vote of Active Members at a meeting called for that purpose or via written consent.
3.9.2 Notice of the removal vote shall be provided to all Active Members at least ten (10) days in advance, including the basis for suspension and proposed removal.
3.9.3 Upon removal, the Member’s Membership Interest terminates, and Capital Account repayment proceeds per Article 4, Section 8.
3.10 Reinstatement of a Member
3.10.1 A terminated Member may seek reinstatement by submitting a written request to the Board within one (1) year of termination, outlining their intent to resume active participation.
3.10.2 Reinstatement requires a two-thirds (2/3) vote of Active Members at a meeting or via written consent, considering the Member’s prior conduct and Company needs.
3.10.3 Reinstated Members resume Active status, with Capital Accounts restored to their pre-termination balance, adjusted for any prior distributions.
3.11 Transfer of Membership Interest
3.11.1 No Member may Transfer their Membership Interest, in whole or in part, without the unanimous written consent of the Board and all Active Members.
3.11.2 Any attempted Transfer without consent shall be void, and the purported transferee shall have no rights in the Company.
3.11.3 This restriction ensures the cooperative nature of Membership remains intact.
3.12 Limited Liability
3.12.1 Members shall not be personally liable for the debts, obligations, or liabilities of the Company beyond their Capital Contributions, except as expressly provided in this Agreement or required by the Act (e.g., personal guarantees).
3.12.2 This limitation shall not affect Members’ obligations to the Company under this Agreement, such as repayment of offsets per Article 4, Section 8.
ARTICLE 4: CAPITAL CONTRIBUTIONS AND ACCOUNTS
4.1 Capital Accounts
4.1.1 The Company shall establish and maintain an individual Capital Account for each Member in accordance with Treasury Regulation § 1.704-1(b)(2)(iv) and GAAP.
4.1.2 Each Capital Account shall be:
4.1.2.1 Credited with the Member’s Initial Capital Contributions (including the $1,500 membership share price for new Members), additional approved Capital Contributions, and allocations of Surplus or Patronage Dividends;
4.1.2.2 Debited by losses allocated to the Member and distributions of cash, property, or Patronage Dividends.
4.1.3 The Treasurer shall update Capital Accounts quarterly and provide Members with statements within thirty (30) days of each fiscal quarter-end.
4.2 Initial Capital Contributions
4.2.1 The Initial Contributions of the founding Members are detailed in Article 3, Section 5.1, credited as of the Effective Date.
4.2.2 For new Members, the Initial Capital Contribution shall be the membership share price of one thousand five hundred dollars ($1,500.00), payable through membership dues of three dollars ($3.00) per hour withheld from wages over five hundred (500) work hours during the candidacy period, as specified in Article 3, Section 3.3.1.2.
4.2.3 No Member may withdraw their Initial Capital Contribution, including the $1,500 membership share price, without the unanimous written consent of all Active Members, documented in the Company’s records.
4.2.4 Additional Capital Contributions beyond the Initial Contribution:
4.2.4.1 Shall not exceed one thousand five hundred dollars ($1,500.00) per Member without prior approval;
4.2.4.2 May be proposed by the Board or any Member in the form of cash, property, or services, up to the $1,500 cap, and accepted by a majority vote of the Board;
4.2.4.3 Amounts exceeding $1,500 per Member require approval by a seventy-five percent (75%) vote of Active Members at a duly called meeting or via written consent, with the value and terms (e.g., cash, in-kind) specified in the approval notice.
4.2.5 All additional Capital Contributions shall be voluntary, and no Member shall be obligated to contribute beyond the $1,500 membership share price unless approved under Section 4.2.4.3.
4.2.6 The Board shall maintain a record of all Contributions, updating Exhibit A and notifying Members within ten (10) business days of any approved additional Contributions.
4.3 Withholding System Replaced by Membership Dues
4.3.1 The previously contemplated Withholding System is replaced by the membership dues structure outlined in Article 3, Section 3.3.1.2, wherein new Members pay dues of three dollars ($3.00) per hour for five hundred (500) work hours during the candidacy period, totaling the $1,500 membership share price.
4.3.2 No ongoing wage withholdings shall apply to Active Members post-admission unless additional Capital Contributions are approved per Section 4.2.4.
4.3.3 During the candidacy period, withheld dues shall be:
4.3.3.1 Deducted from wages earned on Company projects at the rate of $3.00 per hour worked;
4.3.3.2 Deposited monthly into the Company’s designated account and credited to the candidate’s provisional Capital Account;
4.3.3.3 Fully credited as the $1,500 membership share price upon completion of 500 hours and admission as a Member.
4.3.4 If a candidate fails to complete the candidacy period, withheld dues shall be refunded, less any administrative costs (not to exceed $50), within thirty (30) days of termination of candidacy, unless the Board determines otherwise by majority vote.
4.4 Determination of Surplus and Profit
4.4.1 Surplus and Profit shall be calculated annually as of December 31, based on the Company’s financial statements prepared under GAAP.
4.4.2 The calculation shall exclude Capital Contributions, Patronage Dividends, and income taxes, focusing solely on operational revenues and expenses.
4.4.3 The Treasurer shall present preliminary determinations to the Board within sixty (60) days of fiscal year-end, with final approval by the Board and ratification by Active Members at the annual meeting.
4.5 Allocation of Profit
4.5.1 Profit (from non-Member labor) shall be credited entirely to the Collective Account to support Company growth, unless the Board, by majority vote and with Active Member ratification, directs otherwise.
4.5.2 Any deviation from this allocation shall be documented in the annual financial report, specifying the amount and purpose (e.g., special projects, reserves).
4.6 Allocation of Surplus
4.6.1 Surplus (from Member labor) shall be allocated as follows:
4.6.1.1 A minimum of twenty-five percent (25%) to the Collective Account, adjustable by the Board with seventy-five percent (75%) Active Member approval, to ensure operational stability;
4.6.1.2 The remainder as Patronage Dividends, distributed to Active Members in proportion to their Patronage Contributions for the fiscal year.
4.6.2 The Board shall determine the exact percentage for the Collective Account by March 31 of the following year, notifying Members within ten (10) business days.
4.7 Allocation of Losses
4.7.1 Losses attributable to non-Member labor shall be allocated fully to the Collective Account, preserving Member Capital Accounts.
4.7.2 Losses attributable to Member labor shall be allocated:
4.7.2.1 Seventy-five percent (75%) to Capital Accounts, proportional to each Member’s Patronage Contributions for the year;
4.7.2.2 Twenty-five percent (25%) to the Collective Account, unless the Board adjusts these percentages with Active Member approval.
4.7.3 If a loss exceeds a Member’s Capital Account balance, the Board may assess the Member to cover the deficit or carry the loss forward, notifying the Member within thirty (30) days.
4.8 Payment on Termination
4.8.1 Upon termination of Membership, the Member’s Capital Account balance as of the most recent fiscal quarter shall automatically convert to a debt owed by the Company.
4.8.2 The Company shall repay this debt:
4.8.2.1 Within three (3) years of termination, in equal annual installments unless accelerated by the Board;
4.8.2.2 With simple interest at the Federal Reserve Bank of Atlanta discount rate, calculated annually on the outstanding balance.
4.8.3 The Board may offset any debts owed by the Member to the Company (e.g., unpaid assessments) against this amount, providing a detailed accounting to the former Member within sixty (60) days of termination.
4.8.4 No other payments (e.g., goodwill, future profits) shall be due unless expressly agreed by the Board and Active Members.
4.9 Patronage Dividends
4.9.1 Patronage Dividends may be issued as:
4.9.1.1 Qualified written notices of allocation, with at least twenty percent (20%) paid in cash within eight and one-half (8.5) months of fiscal year-end, per IRC § 1388;
4.9.1.2 Non-qualified written notices, fully credited to Capital Accounts, payable at the Board’s discretion.
4.9.2 The Board shall determine the form and timing of Patronage Dividends by March 31 of the following year, notifying Members via written or Electronic Transmission.
4.9.3 Members shall report qualified notices on their tax returns per IRC § 1385(a), with the Company providing IRS Form 1099-PATR annually.
4.10 Periodic Distributions
4.10.1 The Company shall endeavor to distribute all amounts credited to Capital Accounts (excluding Initial Contributions) within three (3) years of crediting, subject to:
4.10.1.1 The Company’s ability to pay debts as they become due;
4.10.1.2 Maintenance of total assets exceeding total liabilities;
4.10.1.3 Compliance with the Act and other applicable laws.
4.10.2 Distributions shall prioritize the oldest credited amounts, unless the Board accelerates repayment of terminated Members’ balances, with notice to all Members.
4.10.3 If insufficient funds exist, distributions shall be pro rata based on Capital Account balances, detailed in the annual financial report.
4.11 Member Loans
4.11.1 Members may provide short-term, interest-free loans to the Company with unanimous Active Member approval, not credited to Capital Accounts.
4.11.2 The Board shall negotiate repayment terms, prioritizing such loans over distributions, documented in writing within ten (10) business days of approval.
ARTICLE 5: BOARD OF MANAGERS
5.1 Management Structure
5.1.1 The Company shall be manager-managed, with all powers, business, and affairs vested in the Board of Managers, subject to Active Member oversight as specified herein.
5.1.2 The Board shall operate collectively, with no single Manager having unilateral authority unless expressly delegated by a Board resolution.
5.2 Number and Qualifications
5.2.1 The Board shall consist of a minimum of two (2) Managers or ten percent (10%) of the total number of Active Members, whichever is greater, up to a maximum of ten (10) Managers.
5.2.2 All Managers must be Active Members in good standing, with demonstrated competence in Company operations or technology services.
5.2.3 The initial Managers shall be Destinee Brillian Orr, Kevin Harmon, and Patrick Burch, serving until the first annual meeting or their successors are elected.
5.3 Term
5.3.1 Each Manager shall serve a term of two (2) years, commencing at the annual meeting of election, and may serve consecutive terms without limit.
5.3.2 A Manager’s term ends upon expiration, resignation, removal, or loss of Active Member status, with successors elected per Section 5.4.
5.4 Election and Removal
5.4.1 Managers shall be elected by a majority vote of Active Members at the annual meeting or a special meeting called for that purpose, with nominations open to all Active Members.
5.4.2 In case of a vacancy, Active Members shall elect a replacement by majority vote within sixty (60) days to serve the unexpired term.
5.4.3 A Manager may be removed by a seventy-five percent (75%) vote of Active Members, with cause (e.g., neglect of duties, misconduct) stated in a notice provided ten (10) days prior to the vote.
5.4.4 The Board may remove a Manager by unanimous vote of remaining Managers if the Manager fails to respond to Board communications for fourteen (14) consecutive days and does not reply to a removal notice within forty-eight (48) hours.
5.5 Duties and Powers
5.5.1 The Board shall:
5.5.1.1 Develop and propose an annual budget for Active Member approval by majority vote;
5.5.1.2 Approve new projects and determine revenue allocation (e.g., wages vs. Collective Account);
5.5.1.3 Hire, supervise, and terminate non-Member employees or contractors;
5.5.1.4 Recommend prospective Members for admission per Article 3, Section 4;
5.5.1.5 Manage day-to-day operations, including contract execution, financial oversight, and compliance with this Agreement and the Act;
5.5.1.6 Delegate specific tasks to Officers or committees as needed, with clear written instructions.
5.5.2 The Board may refer any matter to Active Members for decision by majority vote, ensuring cooperative governance.
5.6 Meetings
5.6.1 Regular meetings shall occur at least quarterly, with the first annual meeting within ninety (90) days of the Effective Date, scheduled by the President with two (2) days’ written notice.
5.6.2 Special meetings may be called by any Manager with forty-eight (48) hours’ notice, specifying the purpose.
5.6.3 Meetings may be held in person or via teleconference, provided all participants can hear each other simultaneously, constituting presence per Tenn. Code Ann. § 48-249-307.
5.6.4 Minutes shall be recorded by the Secretary, distributed to all Members within seven (7) days via Electronic Transmission, unless deemed confidential by unanimous Board vote.
5.7 Quorum and Voting
5.7.1 A majority of Managers then serving (e.g., 2 of 3, 3 of 5) shall constitute a quorum for transacting business.
5.7.2 Each Manager shall have one (1) vote, with decisions requiring a majority of those present at a quorate meeting.
5.7.3 Tie votes shall defer action until the next meeting or resolution by Active Members if urgent.
5.8 Action Without Meeting
5.8.1 The Board may act without a meeting if:
5.8.1.1 All Managers receive written notice of the proposed action at least forty-eight (48) hours in advance;
5.8.1.2 A majority of Managers submit written consents via Electronic Transmission;
5.8.1.3 Such consents are filed with the Company’s records within five (5) business days.
5.9 Compensation
5.9.1 Managers may receive reasonable compensation for their services in their capacity as Manager, as determined by a majority vote of Active Members annually, not to exceed 200% of the lowest paid Member per Manager without seventy-five percent (75%) approval of Active Members.
5.9.2 The Company shall reimburse Managers for documented expenses incurred in performing their duties, with receipts submitted within thirty (30) days.
5.10 Conflicts of Interest
5.10.1 A Manager with a material financial interest in a transaction (beyond their Membership Interest) or other conflict impairing impartiality shall:
5.10.1.1 Disclose the conflict and all relevant facts to the Board in writing prior to deliberation;
5.10.1.2 Recuse themselves from voting, though they may provide requested information;
5.10.1.3 Ensure the transaction is approved by a majority of disinterested Managers.
5.10.2 Failure to disclose a conflict may result in suspension per Article 3, Section 8.
ARTICLE 6: OFFICERS
6.1 Designation and Qualifications
6.1.1 The Board shall appoint a President, Treasurer, and Secretary from among the Active Members, and may designate additional officers (e.g., Vice President) as needed.
6.1.2 Officers must be Active Members, with no individual serving in multiple capacities requiring simultaneous signature authority (e.g., Treasurer and Secretary on checks).
6.2 Term and Removal
6.2.1 Officers shall serve one (1)-year terms, renewable by Board majority vote, until resignation or removal.
6.2.2 The Board may remove an Officer with or without cause by majority vote, effective immediately upon notice to the Officer.
6.2.3 Resignation shall be effective upon written notice to the Board, unless a later date is specified, not exceeding thirty (30) days.
6.3 President
6.3.1 The President shall:
6.3.1.1 Preside over all Board and Member meetings, ensuring orderly conduct;
6.3.1.2 Execute contracts, deeds, and other instruments on behalf of the Company as authorized by the Board;
6.3.1.3 Coordinate Board activities and report to Active Members annually.
6.4 Treasurer
6.4.1 The Treasurer shall:
6.4.1.1 Oversee financial management, maintaining accurate books under GAAP;
6.4.1.2 Deposit and disburse funds as directed by the Board, using designated accounts;
6.4.1.3 Provide quarterly financial reports to the Board and an annual report to Members;
6.4.1.4 Advise the Board on significant financial matters requiring action.
6.5 Secretary
6.5.1 The Secretary shall:
6.5.1.1 Record and maintain minutes of all Board and Member meetings, distributing them within seven (7) days;
6.5.1.2 Issue notices for meetings per Articles 5 and 7;
6.5.1.3 Maintain a current Member roster with contact details, updated quarterly;
6.5.1.4 Authenticate Company records as needed.
6.6 Compensation
6.6.1 Officers shall receive no additional compensation for the position beyond Manager compensation unless approved by a majority of Active Members, documented in meeting minutes.
ARTICLE 7: MEMBER MEETINGS AND VOTING
7.1 Annual Meeting
7.1.1 Active Members shall hold an annual meeting within ninety (90) days of fiscal year-end (December 31) to review finances, elect Managers, and address other business.
7.1.2 The Board shall set the date, time, and location, with flexibility to delegate to Members by majority vote.
7.1.3 If a quorum is not achieved, the meeting shall be rescheduled within thirty (30) days.
7.2 Special Meetings
7.2.1 Special meetings may be called by the Board or twenty percent (20%) of Active Members, with a written request stating the purpose submitted to the Secretary.
7.2.2 The Secretary shall schedule the meeting within fifteen (15) days of the request, unless urgent, requiring forty-eight (48) hours’ notice.
7.3 Notice
7.3.1 Written notice of annual meetings shall be provided fourteen (14) days in advance, and seven (7) days for special meetings, via Electronic Transmission or mail to each Active Member’s last known address.
7.3.2 Notices shall include the date, time, location, agenda, and any proposed amendments to this Agreement or the Articles.
7.4 Quorum and Voting
7.4.1 A majority of Active Members present in person or via remote means shall constitute a quorum.
7.4.2 Each Active Member shall have one (1) vote, with decisions requiring a majority of those present unless otherwise specified (e.g., 75% for removal).
7.4.3 Remote participation via teleconference or video conference is permitted, counting toward quorum per Tenn. Code Ann. § 48-249-307.
7.5 Action Without Meeting
7.5.1 Active Members may act without a meeting if:
7.5.1.1 The Board provides written notice of the proposed action and a seven (7)-day voting deadline;
7.5.1.2 A majority of Active Members submit affirmative votes via Electronic Transmission;
7.5.1.3 Votes are filed with the Secretary within five (5) business days.
7.6 Proxies
7.6.1 Active Members may appoint proxies in writing, valid for eleven (11) months unless otherwise stated, delivered to the Secretary before the meeting.
7.7 Required Approvals
7.7.1 The following actions require Active Member approval by majority vote unless otherwise noted:
7.7.1.1 Annual budgets;
7.7.1.2 Admission and removal of Members (75%);
7.7.1.3 Manager compensation (75%);
7.7.1.4 Amendments to this Agreement or Articles (75%);
7.7.1.5 Dissolution (unanimous).
ARTICLE 8: DISSOLUTION AND WINDING UP
8.1 Events of Dissolution
8.1.1 The Company shall dissolve upon:
8.1.1.1 Unanimous written consent of all Active Members;
8.1.1.2 An event rendering it unlawful or impossible to continue operations (e.g., loss of licensure);
8.1.1.3 Sale or disposition of all or substantially all assets without replacement within ninety (90) days.
8.1.2 The Board shall provide written notice to all Members within five (5) business days of a dissolution event, initiating winding-up procedures.
8.2 Winding Up
8.2.1 The Board, or a liquidator appointed by majority vote of Active Members if the Board is unable, shall wind up the Company’s affairs per Tenn. Code Ann. § 48-249-601 et seq.
8.2.2 Assets shall be liquidated in an orderly manner, with proceeds applied as follows:
8.2.2.1 First, to creditors (excluding Members) in order of legal priority;
8.2.2.2 Second, to Member loans per Article 4, Section 11;
8.2.2.3 Third, to Members for positive Capital Account balances;
8.2.2.4 Fourth, to current and former Members proportional to aggregate Patronage Contributions.
8.2.3 Distributions may be in cash or in kind, as determined by the Board or liquidator, with a final accounting provided to all Members within ninety (90) days of dissolution.
8.3 Termination
8.3.1 Upon completion of winding up, the Board or liquidator shall file a Certificate of Dissolution with the Tennessee Secretary of State, terminating the Company’s legal existence.
ARTICLE 9: BOOKS, RECORDS, AND REPORTING
9.1 Books and Records
9.1.1 The Company shall maintain at its principal office or a secure digital server:
9.1.1.1 Complete books of account under GAAP;
9.1.1.2 Copies of the Articles, this Agreement, and all amendments;
9.1.1.3 Minutes of Board and Member meetings;
9.1.1.4 A current Member roster with names, addresses, and contact details;
9.1.1.5 Federal, state, and local tax returns for the prior three (3) years.
9.1.2 Members may inspect these records during regular business hours with reasonable notice, at their own expense.
9.2 Bank Accounts
9.2.1 All Company funds shall be deposited in accounts designated by the Board, with withdrawals authorized by the Treasurer or a Board-designated agent.
9.2.2 Funds shall not be commingled with personal accounts of Members or others.
9.3 Fiscal Year
9.3.1 The fiscal year shall commence January 1 and end December 31 annually.
9.4 Annual Report
9.4.1 Within ninety (90) days of fiscal year-end, the Treasurer shall provide each Member an annual report including:
9.4.1.1 Income statement;
9.4.1.2 Balance sheet;
9.4.1.3 Cash flow statement;
9.4.1.4 Capital Account breakdown;
9.4.1.5 Tax return copies.
9.5 Audits
9.5.1 Any Member may request an audit by an independent accounting firm, approved by the Board, with costs borne by the Company, limited to one (1) audit per fiscal year.
ARTICLE 10: INDEMNIFICATION AND INSURANCE
10.1 Indemnification
10.1.1 The Company may indemnify Members, Managers, or Officers against claims arising from their roles, if they acted in good faith and in the Company’s best interest, as determined by a majority vote of disinterested Managers.
10.1.2 Indemnification shall not apply to gross negligence, willful misconduct, or breaches of this Agreement.
10.2 Insurance
10.2.1 The Board may purchase directors and officers (D&O) insurance, general liability insurance, and other policies deemed prudent, with coverage limits set annually.
ARTICLE 11: MISCELLANEOUS PROVISIONS
11.1 Governing Law
11.1.1 This Agreement shall be governed by and construed under the laws of Tennessee, without regard to conflict of law principles, with the Act controlling unresolved matters.
11.2 Entire Agreement
11.2.1 This Agreement constitutes the full and final understanding among the Members, superseding all prior agreements, negotiations, or representations, whether written or oral.
11.3 Amendments
11.3.1 Amendments to this Agreement or the Articles require a seventy-five percent (75%) vote of Active Members, except for Exhibit A updates by the Board.
11.4 Counterparts
11.4.1 This Agreement may be executed in multiple counterparts, each an original, collectively constituting one instrument, with electronic signatures valid per Tenn. Code Ann. § 48-249-103(8).
11.5 Severability
11.5.1 If any provision is deemed invalid by a court of competent jurisdiction, it shall be severed, and the remaining provisions shall remain enforceable to the fullest extent permitted by law.
11.6 Notices
11.6.1 Notices shall be effective upon:
11.6.1.1 Hand delivery;
11.6.1.2 Electronic Transmission with confirmation of receipt;
11.6.1.3 Three (3) business days after mailing via U.S. certified mail, postage prepaid, to the Member’s address in Exhibit A.
11.7 Binding Effect
11.7.1 This Agreement binds the Members and their heirs, executors, administrators, successors, and permitted assigns.
SIGNATURES
IN WITNESS WHEREOF, the undersigned Members have executed this Agreement as of the Effective Date, affirming their commitment to its terms.
Destinee Brillian Orr
Destinee Brillian Orr Date: March 7, 2025
Patrick Burch
Patrick Burch Date: March 7, 2025
Kevin Harmon
Kevin Harmon Date: March 7, 2025