EMPLOYMENT COMMONS LCA
Last updated on June 17, 2020
The undersigned (hereinafter referred to as "Member") having applied for membership with Employment Commons LCA, a Colorado public benefit limited cooperative association having its principal place of business at 3000 Lawrence St., Suite 121, Denver, Colorado 80205 ("Cooperative"), and having been approved by an authorized agent of the Cooperative for membership, hereby enters into this Agreement with the Cooperative, and agrees to be bound at all times by the Bylaws of the Cooperative, under which it is hereby agreed as follows:
WHEREAS, on the effective date of this Agreement, Member has applied for and been accepted by the Board of Stewards (the “Board”) of the Cooperative to become a Member of the Cooperative, as defined in the Articles of Organization (the “Articles”) and Bylaws of the Cooperative;
WHEREAS, Member will be issued one share of Membership Shares subject to the terms and conditions contained in the Articles and Bylaws of the Cooperative and this Agreement;
WHEREAS, each Member is a corporate legal entity which provides certain services on a freelance basis to third-parties through Member’s corporate entity (“Member”);
WHEREAS, the Cooperative will provide certain co-employment, payroll and benefits administration and human resources services, as such services may be amended from time to time, to Members (“Services”); and,
WHEREAS, the purposes of this Agreement are to establish the basis and set forth the provisions, terms, and conditions for the Member to be a Member of the Cooperative and for the Cooperative to provide the required Services.
NOW THEREFORE, 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 Member, who hereby seeks to become a Member and own one share of voting common stock in the Cooperative and is now entitled to be a full member of the Cooperative, agrees to the following:
- “Board of Stewards” and “Board” mean the board of directors of the Cooperative.
- "Bylaws" means the bylaws adopted and amended from time to time by the Members of the Cooperative.
- “Articles of Organization” means those articles of organization of the Cooperative filed with the Colorado Secretary of State, as may be amended from time to time.
- “Disposition” and “Dispose” mean and include any sale, transfer, assignment, pledge, using as security, gift, transfer in connection with a dissolution of marriage, or any other form of disposition or conveyance, whether voluntary, involuntary or by operation of law, inter-vivos or testamentary.
- Unless a provision specifically refers to a certain type of equity, “Membership Shares” and “Membership Stock” mean and include (a) any and all shares of the Membership Shares of the Cooperative, as defined in the Articles of Organization, which it is authorized to issue now or in the future, (b) any and all other equity (whether voting or non-voting) securities of the Cooperative at any time authorized and outstanding and held in the name of a Member, (c) any right to acquire any security of the Cooperative (including rights under this Agreement), and (d) any right or interest with respect to the foregoing.
- Incorporation by Reference. The Cooperative’s Bylaws and Articles are incorporated herein by reference.
- Bylaws. Member promises and agrees that it 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 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 shares of capital stock of the Cooperative hereby subscribed for by the Member will be held by the Member subject to all of the provisions of the Articles and the Bylaws of the Cooperative and all amendments and supplements thereto, and to all applicable provisions of this Agreement.
- Membership Share. Member agrees to subscribe and pay for one (1) share of common voting stock (par value) of the Cooperative at a price of $20.00, issued in the name of the Member in immediately available funds.
- Periodic Member Dues. Member hereby agrees to pay such periodic dues as may be required by the Cooperative as prescribed by the Board for general overhead expenses of the Cooperative or for such other purpose as the Board determines. The Member dues are determined by the Board and may be increased or decreased, from time to time.
- Dues Payment. Member agrees to make payments dues via reoccurring Electronic Funds Transfer, credit card or other reoccurring electronic payment methods approved and published by the Cooperative. Member agrees to provide Cooperative updated, active, and accurate billing information. Member agrees to cover additional billing expenses or fees that arise from inaccurate, expired or inactive account information or failure to provide accurate reoccurring billing information.
- Governance & Committees. Member agrees to take part in cooperative governance by availing itself to vote on matters for which 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.
- Code of Conduct. Member recognizes the unique and important position it holds as a patron-member-owner of the Cooperative and will: strive to maintain and support the mission of the Cooperative and its surrounding community; carry and represent 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.
- Duty of Candor and Accurate Representation. Member hereby expressly agrees, covenants and warrants that it has and will continue to truthfully, honestly, and accurately represent its identity and personal or other information submitted through the Cooperative. Without limiting its generality, any misrepresentation shall be grounds for termination of membership and for the Cooperative to seek any other remedy available at law or equity.
- Withdrawal. Member has read and expressly acknowledges the Cooperative’s Bylaws and further acknowledges that redemption of all or part of Member’s original capital contribution is at the sole discretion of the Board.
- Tax. Each individual or entity, as applicable, who becomes a Member on or after the effective date of the Bylaws, shall by such act alone agree to take into account on such Member’s income tax return any patronage dividends which are made in “qualified written notices of allocation” (as defined in Section 1388 of the Internal Revenue Code of 1986, as amended, or any successor thereto (the “Code”)) at their stated dollar amounts in the manner provided in Section 1385(a) of the Code, in the taxable year in which the Member receives the qualified written notices of allocation. Each Member shall be solely responsible for any tax liability incurred as a result of patronage with the Cooperative. Each Member shall indemnify and forever hold harmless the Cooperative from any claims of any kind arising out of their patronage or their purchase or holding of Membership Shares.
- Lien. The Member agrees that the Cooperative, to the extent of any indebtedness owing at any time to it by the Member, shall have a first lien upon and a right of set-off against all shares of the Cooperative's capital stock held by the Member and any patronage dividends which accrue for the account of or become distributable to the Member.
- Waiver of §7-58-405. Member hereby waives its right to approve amendments to the Bylaws regarding equity capital structure of the Cooperative, including the relative rights, preferences, and restrictions granted to or imposed upon one or more districts, classes, or voting groups of similarly situated members.
- Proxy Voting. Member may appoint one or more Steward as its proxy to vote or otherwise act, as may be required by law, for Member with respect to designating rights and terms associated with a series, class of stock or membership that the Board may designate, within its powers as set forth in the Bylaws, by signing an appointment form, either personally or by the Member's attorney-in-fact.
- No Membership Shares may be transferred to any person or entity, except to a successor in interest; to a business entity controlled by such holder; or to the Cooperative upon the redemption or acquisition thereof by the Cooperative. The right of the Cooperative to repurchase a Member’s Membership Shares is set forth in the Bylaws.
- The Cooperative shall not, nor shall it be required to, transfer, issue, or reissue any of the Membership Shares in violation of this Agreement or without proof of compliance with this Agreement, the Bylaws, and the Articles.
- The restrictions, terms, and conditions of this Agreement shall remain in effect as to all Membership Shares owned now or in the future by a Member, whether or not acquired or disposed of in accordance with this Agreement and whether or not the Membership Shares ARE in the hands of an original Member or a subsequent owner (including the estate of a Member), regardless of how or when acquired. No acquisition or disposition of Membership Shares shall in any way enlarge or limit any rights or obligations under this Agreement.
- The Cooperative shall not be required to issue any paper stock certificates unless and until so determined by the Board. If the Cooperative issues paper stock certificates, the Cooperative and Members shall cause any certificates for shares subject to this Agreement to be endorsed and marked conspicuously substantially as follows:
- Member Withdrawal. A Member may withdraw from the Cooperative by providing the Secretary of the Cooperative a written notice of withdrawal which shall result in automatic termination of the Member’s membership in the Cooperative. The withdrawal shall become effective immediately upon delivery to the Secretary and without any action required on the part of the Cooperative. Withdrawal shall not relieve the withdrawing Member from any obligation for debts owed by the Member to the Cooperative, or charges incurred, dues, assessments, or fees, and this Section shall not diminish any right of the Cooperative to enforce any such obligation or obtain damages for breach of a Member’s obligations to the Cooperative.
- Termination. A Member may be terminated by the Cooperative in accordance with the following:
- Failure to Pay Member Dues. If Member Dues are in arrears for one month, any patronage distributions will be applied to unpaid Member Dues. If Member Dues remain in arrears for three (3) months, then the Board may suspend the Member’s voting rights, if any, and suspend distribution accrual. If Member Dues remain in arrears for one (1) year, the Board may terminate membership.
- Failure to Abide by Cooperative Terms of Service. The Board may suspend Member’s voting rights or terminate Member’s membership upon a breach of the Cooperative’s Terms of Service.
- Action by the Board. Membership will be terminated by action of the Board following a transfer of Membership Shares prohibited by the Bylaws.
- Automatically. If a Member dissolves, becomes insolvent or declares bankruptcy, the Member’s termination shall be automatic, including any voting rights; however, the financial rights and obligations of the Member shall be transferred to any trustee in bankruptcy, if applicable, solely for completing any obligations of the Member to the Cooperative or of the Cooperative to the Member.
- Suspension or Expulsion. A Member may, for any lawful reason, be suspended or expelled from the Cooperative by a vote of at least a supermajority of the Members at a duly called meeting of the Members. The Member must be given fifteen (15) days’ prior notice of the expulsion or suspension and the reasons therefor and the Member shall have an opportunity to be heard, orally or in writing, not less than five (5) days before the effective date of the expulsion, suspension, or termination by a person or body authorized by the Board to decide that the proposed expulsion, termination, or suspension not take place. A Member who is expelled or suspended or whose membership is terminated shall be liable for any charges incurred, dues, assessments, or fees incurred before expulsion, suspension, or termination or arising from contract or otherwise.
- If the Board finds the Member has otherwise ceased to be eligible for Membership in the Cooperative.
- Effect of Termination or Withdrawal.
- Membership. On the date that a Member provides written notice of intent to withdraw to the Secretary in accordance with Section 18 or upon the termination of the Member’s membership in the Cooperative in accordance with Section 19, all rights and interests of the Member in the Cooperative, including any voting rights, shall cease, except as provided in these Bylaws.
- Redemption. Member or Member's assignees or assigns shall be entitled to redemption of the price paid by the Member for the Member’s Membership Share plus any accrued and unpaid patronage distributions, less any obligation owed to the Cooperative by the Member (the “Redemption Price”). The Redemption Price shall be paid in accordance with the Bylaws and any redemption policies created by the Board.
- Director/Officer Termination. If a Member is serving as Director or Officer withdraws or is terminated in accordance with Sections 18 or 19, that person’s position as Director or Officer shall be automatically terminated without further action by the Cooperative.
- Unencumbered Shares. All Membership Shares purchased by the Cooperative pursuant this Agreement shall be delivered to the Cooperative free and clear of all claims, liens and encumbrances of any nature, except such restrictions or encumbrances as may exist in accordance with this Agreement or as required by federal or state securities laws.
- The Cooperative assists Member by providing human resources and benefits administration services to Members pursuant to the Cooperative’s Terms of Service (“Terms”), as may be amended from time to time. By entering into this Agreement, Member hereby agrees to be bound by the Terms, as amended from time to time.
- In consideration for the Services provided by the Cooperative pursuant to the Terms, Member will be required to pay to the Cooperative, a Deposit in connection with Member’s use of the Services on a consumption-based basis.
- Indemnification by Member. To the fullest extent permitted by law, Member will indemnify and hold Cooperative harmless from any claim, loss or damage and expenses, including all costs and attorneys’ fees, resulting to Cooperative, directly or indirectly, from Member’s inadequate performance of or failure to perform any of Member’s obligations under this Agreement, including without limitation Member's obligations in relation to the Cooperative’s performance of Services. Member shall assume full responsibility for its employees, officers, agents and business invitees. Member agrees to indemnify and hold Cooperative harmless from and against any claim, loss, or damage, including all defense costs and attorneys’ fees, which may be asserted by any person arising out of any actions or omissions or claimed actions or omissions by Member or its employees, officers, agents or business invitees, including, but not limited to third party actions for injury or death otherwise covered under applicable workers’ compensation laws, and regardless of any collateral or contributing factors on the part of anyone.
- Indemnification by Cooperative. Cooperative will indemnify and hold Member harmless from any claim, loss, or damage, including all defense costs and attorneys’ fees, resulting to Member directly or indirectly from Cooperative’s failure to perform its obligations under this Agreement, including without limitation Cooperative's obligations to Member, except to the extent that Member is to perform Cooperative’s obligations under this Agreement.
- Limitation of Liability. TO THE MAXIMUM EXTENT PERMITTED BY LAW, THE COOPERATIVE SHALL NOT BE LIABLE IN ANY WAY AND BY ANY THEORY FOR CLAIMS, LOSSES, DAMAGES OR BREACHES ARISING IN CONNECTION WITH MEMBER, CLIENT OR A THIRD PARTY’S USE OF MEMBER PROVIDED INFORMATION TO THE EXTENT OUTSIDE THE REASONABLE CONTROL OF THE COOPERATIVE.
FURTHER, TO THE MAXIMUM EXTENT PERMITTED BY LAW, THE COOPERATIVE DISCLAIMS AND SHALL NOT BE LIABLE FOR ANY INJURY, LOSS, OR CLAIM, OR ANY DIRECT, INCIDENTAL, SPECIAL, EXEMPLARY, OR CONSEQUENTIAL DAMAGES DIRECTLY OR INDIRECTLY ARISING FROM OR IN ANY WAY CONNECTED WITH MEMBER’S MEMBERSHIP IN THE COOPERATIVE, OR ANY OF ITS SERVICES OR THOSE OFFERED THROUGH THE COOPERATIVE BY THIRD PARTIES, EVEN IF MEMBER HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH CLAIMS OR DAMAGES. IN NO EVENT SHALL THE COOPERATIVE’S TOTAL LIABILITY TO MEMBER FOR ALL DAMAGES, CAUSES OR CAUSES OF ACTION (WHETHER SOUNDING IN TORT, CONTRACT, STRICT LIABILITY, OR OTHERWISE) ARISING FROM MEMBER’S MEMBERSHIP IN THE COOPERATIVE EXCEED THE MEMBER’S COMMON SHARE PRICE PLUS ANY DECLARED BUT UNDISTRIBUTED DIVIDENDS.
- No Employment Relationship. Pursuant to this Agreement and subject to the Terms, the Cooperative will become the Member’s “employer of record” whereby the Cooperative will assume certain compliance duties for Member’s employees, such as payroll and payroll tax compliance, benefits administration, workers’ compensation, processing unemployment claims, and other HR-related administrative tasks as available. Notwithstanding the foregoing, neither the execution of this Agreement, nor participating as a Member in the activities of or opportunities offered by the Cooperative shall be deemed to create an employee-employer relationship between the Member and the Cooperative other than as the “employer of record” relationship set forth herein and in the Terms. Members are not employees of the Cooperative and are not entitled to protections or benefits available to employees under federal or state law, including but not limited to the Fair Labor Standards Act, the National Labor Relations Act, or state unemployment, workers compensation, wage and hour, or benefits laws. Member’s execution of this Agreement constitutes acknowledgment and acceptance of this disclosure.
- Additional Documentation Required. All persons bound by or subject to this Agreement, their heirs, legal representatives, successors, and assigns, shall execute and deliver any and all documents or legal instruments necessary to carry out the provisions of this Agreement, including the Cooperative Terms of Service.
- Forfeiture of Membership. Violation of this Agreement in any material respect by Member, or violation of the terms and conditions of the Bylaws of the Cooperative, will be grounds for the Board of Directors to terminate Member’s membership in the Cooperative.
- No Security. The 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 regulatory agency
- Member understands that membership interest and the Membership Shares has 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.
- Member expressly acknowledges, understands and appreciates that the Membership Shares are generally not subject to and is not being acquired for the purpose of realizing financial appreciation. Rather, Member is seeking to become a member in the Cooperative to gain access to the Cooperative’s Services.
- 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.
- Member has sufficient experience in business, financial and investment matters to be able to evaluate the risks involved in the transaction contemplated herein and to make an informed decision with respect to such transaction.
- Member can afford a complete loss of the value of the shares being acquired hereby and is able to bear the economic risk of holding such shares for an indefinite period.
- No Assignment; Non-Transferable. 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. Member acknowledges and agrees that its membership in the Cooperative and the Membership Shares are not transferable without the prior written consent of the Board.
- Confidential Information. Without limiting the generality of the confidentiality provision contained in 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 Member by the Cooperative will be kept in strict confidence, and upon termination of the membership privileges in the Cooperative, Member shall immediately return to the Cooperative or its agent all such documents which had been provided by the Cooperative to Member. Members may choose what personal information to share with and through the Cooperative, however, disclosure of specific personal information may be required for Members to be eligible for specific Services.
- Governing Law and Venue. The laws of the State of Colorado shall govern this Agreement, and venue for enforcement of this Agreement will be in Denver, Colorado.
- Dispute Resolution. The Member and the Cooperative agree to submit and resolve any dispute arising out of this Agreement, any other agreements between the Member and the Cooperative, or any agreements made between Members in connection with business directly connected to the Cooperative’s business, by referring such dispute to binding arbitration in accordance with the commercial arbitration rules of the American Arbitration Association.
- Board Powers. The Cooperative’s Board 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.
- Preemption. This Agreement contains provisions which duplicate the Bylaws and in the event of a conflict between the them, the Bylaws shall prevail. Further, the Articles and Bylaws of the Cooperative shall at all times be interpreted to be consistent with the provisions of this Agreement and shall take precedence over this Agreement.
THE MEMBERSHIP SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE PROVISIONS OF A MEMBERSHIP AGREEMENT (AS MAY BE AMENDED FROM TIME TO TIME) AND THE COOPERATIVE’S BYLAWS WHEREBY THE DISPOSITION IN ANY MANNER OF SUCH MEMBERSHIP SHARE OR ANY INTEREST THEREIN IS RESTRICTED AND PURSUANT TO WHICH ANY PERSON ACQUIRING SHARES 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 MEMBERSHIP SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS.