Template Operating Agreement: Worker Cooperative Llc With A Permanent Capital Member Page 11
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26(b) Use of PCA Funds. The Company shall use funds in the PCA as necessary to
support its operating, expansion and other needs (subject to any limitations and requirements
under any PCA Loan) and to pay principal, interest and any related expenses under any PCA
Loan.
4.3 ICA and PCA Investments. If the Company has sufficient cash for its operating,
expansion and other needs, then it may use ICA and PCA funds for investments, provided that,
any gain or return realized on Outside Investments shall be credited to the PCA (as required
under Section 4.2(a)) and any gain or return realized on ICA Group Investments shall be credited
to the Members’ ICAs (in accordance with Section 4.1(a)).
4.4 Member Guaranteed Payments. The company may, but shall not be obligated, to
provide Member Guaranteed Payments to Active Members. If the next distribution that would
otherwise be made pursuant to this Section 4 is smaller than the amount of such Member
Guaranteed Payment, the excess amount of the advance shall be repaid to the Company on the
date such distribution would otherwise be made.
4.5 Distributions from Operations. Net Company Profits for each Distribution Period
shall be applied as follows:
(a) first, the credit due on ICAs pursuant to Section 4.1(a)(2) and 4.1(a)(3)for the
period shall be deducted from Net Company Profits and credited to the ICAs;
(b) second, if any funds from the PCA or ICA were invested in Outside Investments,
then any return received on Outside Investments shall be deducted from Net Company Profits
and credited to the PCA (as required under Section 4.2(a));
(c) Third, the Member Profit Share Formula shall be applied to the Net Company
Profits to calculate the Member Profit Share, from which Permanent Capital Member Profit
Share is then calculated and allocated to the Permanent Capital Member.
(1) Then, the Percentage Share is applied to the Member Profit Share to calculate
the Member Gross Profit for each Member who rendered services during the Distribution
Period
(2) The ICA Required Payment shall be deducted and an Individual Capital
Credit shall be recorded for such Member as of the end of the distribution period in the
amount of such deductions;
(3) The balance shall be distributed to such Member.
4.6 Advances Against Distributions. The Company may, but shall not be obligated,
to make advances to Members against the next following distribution pursuant to this Section 4.
In such case, any such advance shall be repaid by offsetting it against the next distribution that
would otherwise be made pursuant to this Section 4. If the next distribution that would
otherwise be made pursuant to this Section 4 is smaller than the amount of such advance, the
excess amount of the advance shall be repaid to the Company on the date such distribution would
otherwise be made.
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