Template Operating Agreement: Worker Cooperative Llc With A Permanent Capital Member Page 6
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26(2) Second, the candidate for membership shall have executed (i) a counterpart of
this Agreement, agreeing to be bound hereby and (ii) appropriate acknowledgements that
Members are not employees and, therefore, not entitled to benefits employees may be
entitled to, including, without limitation, workers’ compensation.
(c) Promotion of Provisional Members to Active Members. Provisional Members
admitted under Section 2.2(b) may be promoted to Active Member status by a vote of the Active
and Provisional Members. To qualify for such promotion or admission, a Provisional Member
shall comply with the required initial capital contribution as and when required by Section
Section 6 of this Agreement and shall have rendered services to the Company as a Provisional
Member for no less than [PROVISIONAL PERIOD LENGTH]. In addition, (i) a Provisional
Member shall be promoted only upon the vote of the Active and Provisional Members, other
than the Member to be promoted. Such vote to promote or admit shall be held within seven (7)
months after a Provisional Member has been admitted as a Provisional Member, provided that
the Active and Provisional Members may vote to extend such Provisional Member’s Provisional
Member status for a term up to an additional seven (7) months.
(d) Demotion to Provisional Member; Return to Active Member Status. An
Active Member may be demoted to Provisional Member status, with or without cause, by a vote
of the Active and Provisional Members other than the Member in question or pursuant to
Section 2.7(b)(3). Members who are Provisional Members by virtue of this Section 2.2(d),
which group includes formerly Active Members reinstated as Provisional Members under
Section 2.7(b)(3), may be reinstated as Active Members only if, within seven (7) months of
becoming a Provisional Member under this Section 2.2(d), the Active and Provisional Members,
other than the Member in question, vote to return such Member to Active Member status.
(e) Automatic Removal of Provisional Members. A Provisional Member (i)
admitted under Section 2.2(b) who fails to be promoted to Active Member status pursuant to
Section 2.2(c) or (ii) who became a Provisional Member under Section 2.2(d) and has not been
reinstated within seven (7) months as required by Section 2.2(d), shall be removed automatically
as a Provisional Member in accordance with Section 2.7 of this Agreement.
(f) Automatic Termination of Provisional Employees. A Provisional Employee
who fails to be admitted as an Active Member pursuant to Section 2.2(c) shall be terminated and
shall no longer provide services to the Company.
2.3 Management by Active and Provisional Members. The business and affairs of
the Company shall be managed by the Active and Provisional Members, who shall have full and
complete authority, power, and discretion to manage and control the business, affairs, and
properties of the Company, to make all decisions regarding those matters and to perform any and
all other acts or activities customary or incident to the management of the Company’s business.
Except as otherwise expressly provided in this Agreement, action by the Active and Provisional
Members shall be taken by the vote of a majority of the total votes of all Active and Provisional
Members, with each having such voting rights as are provided under Section 2.1. The Active
and Provisional Members may, from time to time, delegate specified administrative functions
and/or authority to act on behalf of and bind the Company in administrative matters to one or
more Active or Provisional Members (including without limitation committees of Active or
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