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Subvert Cooperative Form of Member Agreement (Artist)

Welcome to your Artist Member Agreement. This agreement outlines your rights, responsibilities, and what you can expect as an Artist Member of Subvert Cooperative.

This agreement works alongside the Cooperative's Bylaws — think of the Bylaws as the constitution of the organization, and this agreement as your personal contract with it. The Bylaws set the foundational rules for everyone. This agreement covers the practical day-to-day details specific to you as an Artist Member. Unlike the Bylaws, this agreement can be updated by the Board of Directors without a full membership vote, allowing the co-op to adapt to changing circumstances. You will always be notified of any changes.

Yes, there's legal language ahead. Even though this document is dense, it's important that we can all make sense of these agreements so they aren't scary. So we've added plain-English explainers in green boxes throughout. Important: The plain-English explainers are provided for readability only. They do not form part of this agreement, are not legally binding, and do not modify or supersede the legal text. In the event of any conflict between an explainer and the legal text, the legal text controls.

Subvert Cooperative LCA (“we or the “Cooperative) is a Colorado limited cooperative association organized under the Colorado Revised Statutes, Title 7, Article 58, the "Colorado Uniform Limited Cooperative Association Act" (“ULCAA”). The Cooperative’s purpose is to engage in any lawful act or activity for which limited cooperative associations may be organized under the ULCAA, which specifically includes providing and operating an online platform (“Subvert Platform”) for members of the Cooperative (“Members”) to engage in the sale and/or purchase of music, merch, or other physical or digital goods, and to serve any other purpose described in the Cooperative’s Articles of Organization, Bylaws, or permitted by law. The Cooperative intends to operate on a “cooperative basis under Section 1381(a)(2) of the US Internal Revenue Code of 1986, as amended (the “Code”).

As a limited cooperative association, the Cooperative will be owned by its Members. As owners of the Cooperative, Members will have the opportunity to elect members of the Cooperative’s board of directors (the “Board”), who will direct the affairs of the Cooperative in accordance with the Bylaws, in each case, subject to any vote by Members regarding matters proposed at member meetings or otherwise any vote by Members on matters for which Member votes are required by the Articles of Organization, Bylaws or law.

To become an Artist Member, you need to have your application accepted by the cooperative and agree to the cooperative's governing documents and platform policies.

When you are accepted you are awarded one "Member Unit." This is a basic binary designation. If you have a Member Unit, you are a member of the cooperative. If you don't have a Member Unit, you are not a member of the cooperative. Its purpose is purely to represent your membership. You also can't transfer it to anyone else.

In order to be considered an active member, you need to satisfy some criteria, like uploading at least one release to the platform.

Artist membership is free and there are no membership dues for artists. There is some language here that gives the cooperative flexibility to introduce them in the future with advance notice. This would only happen if the co-op and its elected representatives decided it was in the cooperative's best interest. This clause is a standard one, simply meant to give us all as a cooperative greater flexibility for rules around membership in the future.

Note: We have heard some anxiety about this provision and are also considering a Bylaws amendment that would explicitly grandfather and lock in membership fees at the time of each member's admission.

The terms and conditions set forth in this Member Agreement, the Cooperative’s Articles of Organization and Bylaws attached hereto as Exhibit A and Exhibit B, respectively, and the ULCAA, each as may be amended from time to time, will govern your membership in the Cooperative. You may be referred to as “you” (including “your” where applicable) or “Artist Member.” By entering this Member Agreement, you (a) acknowledge, accept, and agree to abide by the terms and conditions of this Member Agreement and to the Cooperative’s Articles of Organization and Bylaws; (b) agree to pay any general membership fee required to join the Cooperative (“Membership Fees”); and (c) agree to satisfy all other conditions set forth in your written membership application (collectively, the “Membership Conditions).

Membership

You're agreeing that you've read the governing documents and will follow them.

To become an Artist Member of the Cooperative, you must satisfy the following conditions, and by entering this Member Agreement, you hereby agree to:

  • Receive admission approval, as an Artist Member, from the Cooperative.
  • Upload and maintain original content releases on the Subvert platform
  • Abide by the Cooperative’s Articles of Organization and Bylaws attached hereto as Exhibit A and Exhibit B, this Member Agreement, the Subvert platform Terms of Use , and any rules and policies adopted from time to time by the Members and the Board;
  • Subscribe to one (1) membership unit of the Cooperative (a “Member Unit), which may be certificated or uncertificated, which Member Unit will be issued in your name upon signing of this Agreement;
  • Pay and remain current on Membership Fees due to the Cooperative, as determined by the Board.

All applications for membership are subject to acceptance by the Board in its sole discretion, and the Board may deny applications for membership for any reason or no reason subject to applicable law. We encourage you to review the Cooperative’s Articles of Organization and Bylaws and the ULCAA, and to consult with your own legal counsel for additional information regarding the rights and obligations of Members.

Agreement to Articles of Organization and Bylaws

You acknowledge and agree you have received a copy of the Articles of Organization and the Bylaws, and you agree to comply with all provisions of the Articles of Organization and Bylaws, as amended from time to time, and will comply with all policies, rules, and regulations adopted by the Board. You further agree that the Member Unit held by you pursuant to this Agreement will be held by you subject to all of the provisions of this Agreement, the Articles of Organization, the Bylaws, and all amendments and supplements thereto.

No Transfer of Membership or Member Units

Your co-op membership belongs to you and only you. It cannot be sold, transferred, or given to anyone else under any circumstances.

You may not assign, transfer, alienate, or encumber your membership in the Cooperative or your Member Unit in any manner or by any means whatsoever, either voluntarily or involuntarily. Any purported assignment, transfer, alienation, or encumbrance will be wholly void and confer no rights upon the purported assignee, transferee, or claimant.

Withdrawal and Termination

Membership is voluntary. You can leave at any time.

Your membership will end if you pass die, delete your account, haven't engaged with the platform in two years, or are removed for violating your Member Agreement or the cooperative's policies. If your membership ends due to inactivity, you can reinstate it automatically by becoming simply signing in again. No new application or Member Agreement required.

You may withdraw as an Artist Member at any time by providing 30 calendar days’ written notice to the Cooperative of your intent to withdraw by emailing such notice to info@subvert.fm, and as further described in the Cooperative’s Bylaws.

Your membership in the Cooperative will terminate upon the occurrence of any of the following:

  • Your death (in the case of Members who are individuals) or dissolution (in the case of Members that are entities), subject to limited exceptions set forth in the Bylaws.
  • If you have not engaged in any Patronage Activity in the previous two years. Note that if your membership is terminated for such reasons (and not for any other reason), you may have your membership reinstated without entering a new Member Agreement or acquiring a new Member Unit in the fiscal year that you again (i) engage in Patronage Activity in the minimum quantity or value prescribed by the Board and (ii) pay any Membership Fees then due.
  • If you delete your account on the Subvert Platform.
  • After due notice, you are expelled for failure to comply with the Cooperative’s Articles of Organization, Bylaws, this Member Agreement, or any rules and policies established and adopted by the Members or the Board, or for any other cause which the Board in its discretion deems sufficient. You will be given 30-daysʼ prior notice of termination and the reasons for the same.

Rights Upon Withdrawal or Termination

When you leave Subvert Cooperative, your membership fee (if you paid one) isn't refunded to you and you don't have a claim to any of the cooperative's assets.

If you withdraw your membership or your membership is terminated prior to the dissolution or the merger, consolidation, or sale of the Cooperative, the Cooperative will not be required to pay you any amount whatsoever for the value of any general property rights or interests (including any Member Units) you may have in the Cooperative. You acknowledge and agree that the value of any property rights and interests you may have in the general property of the Cooperative (prior to the dissolution or the merger, consolidation, or sale of the Cooperative) is nothing, and in the event of the withdrawal or termination of your membership prior to the dissolution or the merger, consolidation, or sale of the Cooperative, irrespective of how terminated, you will not be entitled to anything for the value of such property rights or interests (including any Member Units).

In the event of the withdrawal or termination of your membership, the Cooperative will pay you, or your executors, administrators, or permitted assigns, the amounts due to you in Patronage Refunds, but only on the same basis, at the same time, and in the same manner, as Members whose memberships have not been withdrawn or terminated. In the event of withdrawal or termination of your membership, you shall only be entitled to any rights you may have under the ULCAA upon such withdrawal or termination.

Meetings; Voting

As an Artist Member you have the right to participate in annual and special meetings, vote for your class representatives on the Board, and vote on any matter put to the membership. Each member in the co-op has one vote. This is a defining characteristic of co-ops. Your voting power is the same regardless of how long you've been a member or how much you sell on the platform.

As an Artist Member, you will have the right to participate in annual and special member meetings. You will have the right to vote for the election of each member of the Board pursuant to the Bylaws of the Cooperative as currently in effect, and to vote regarding any other matter proposed at a meeting of the Members, in each case, subject to the Cooperative’s governing documents and applicable law. You will be entitled to cast one vote with respect to any permitted matter.

Patronage Activity; Good Standing

"Patronage activity" here means any active engagement the co-op recognizes - including simply signing in. Your patronage activity is tracked through a measurement we call "Ownership Points" which you can see in your Ownership Dashboard. The more Ownership Points you accumulate, and the larger your share of any future patronage refunds (co-op profits).

To stay in good standing as an Artist Member you need to:
• Follow the cooperative's policies and platform rules
• Log in to the platform at least once every 12 months
• Keep at least one original release uploaded to the platform

If you fall out of good standing you lose your voting rights until you meet the requirements again.

“Patronage Activity” includes the aggregate value of the Cooperative’s goods and services purchased from or contributed by each Artist Member during the applicable fiscal period. The Board shall have the authority to develop, review, and revise the methodology by which to calculate the Cooperative’s aggregate Patronage Activity and each Artist Member’s respective allocable share of Patronage Activity. Each Artist Member’s allocable share of the Cooperative’s net margin and net losses (as further detailed in the Bylaws) shall be made according to each Artist Member’s relative share of the aggregate Patronage Activity.

You shall be deemed to patronize the Cooperative by undertaking such patronage responsibilities, which may be prescribed by the Bylaws, by policies promulgated from time to time by the Board of Directors, or any other reasonable obligations, as determined by the Board from time to time and made known to you with reasonable notice.

You shall be deemed to remain in good standing as an Artist Member of the Cooperative by:

  • complying with the Cooperative’s policies and procedures as set forth in this Member Agreement, the Articles and Bylaws of the Cooperative, and the Subvert platform Terms of Use ;
  • logging in to your account on the Subvert platform at least one (1) time every twelve months (12);
  • maintaining at least one (1) original release uploaded to the Subvert platform;
  • protecting the interests of the Cooperative; and
  • participating in any committees, and fulfilling any assigned roles in the Cooperative.
As a co-op, profits are shared with members. When a co-op does this, it is called a "patronage refund." If Subvert Cooperative is profitable and the co-op decides to distribute those profits back to members, this section says that you are responsible for reporting that income to the IRS (if you are in the US) or to another tax agency if you are abroad. Worth noting: it's likely that the co-op will continue to reinvest in itself in the near future rather than distributing profits, so this may not affect you for some time.

BY BECOMING A MEMBER OF THE COOPERATIVE, YOU AUTOMATICALLY AGREE, BY SUCH ACT ALONE, TO TAKE INTO ACCOUNT ON YOUR INCOME TAX RETURN ANY DISTRIBUTIONS WITH RESPECT TO PATRONAGE REFUNDS THAT ARE MADE IN QUALIFIED WRITTEN NOTICES OF ALLOCATION (AS DEFINED IN SECTION 1388(C) OF THE CODE) AT THEIR STATED DOLLAR AMOUNTS IN THE MANNER PROVIDED IN SECTION 1385(A) OF THE CODE, IN THE TAXABLE YEAR IN WHICH YOU RECEIVE THE QUALIFIED WRITTEN NOTICES OF ALLOCATION; PROVIDED THAT THIS CONSENT WILL NOT EXTEND TO WRITTEN NOTICES OF ALLOCATION CLEARLY DENOMINATED ON THEIR FACE TO BE “Nonqualified.” IF PATRONAGE REFUNDS ARE MADE IN NON- QUALIFIED WRITTEN NOTICES OF ALLOCATION (AS DEFINED IN SECTION 1388(D) OF THE CODE), YOU AGREE TO TAKE INTO ACCOUNT THE CORRESPONDING AMOUNTS ON YOUR INCOME TAX RETURN IN THE MANNER PROVIDED IN SECTION 1385(C) OF THE CODE IN THE YEAR THE EQUITY IS REDEEMED BY THE COOPERATIVE. YOU WILL BE SOLELY RESPONSIBLE FOR ANY TAX LIABILITY INCURRED AS A RESULT OF PATRONAGE WITH THE COOPERATIVE. YOU AGREE TO INDEMNIFY AND FOREVER HOLD HARMLESS THE COOPERATIVE FROM ANY CLAIMS OF ANY KIND ARISING OUT OF YOUR PATRONAGE OR YOUR PURCHASE OR HOLDING OF MEMBER UNITS.

No Employment

Being an Artist Member of Subvert does not make you an employee or contractor of the cooperative. You won't receive employment benefits and Subvert won't withhold taxes from your music sales payouts. You're a member, not staff.

Your relationship with the Cooperative will be that of a Member, and not that of an independent contractor or employee. You will not be eligible for any employee benefits, nor will the Cooperative make deductions from payments made to you for employment or income taxes, all of which will be your responsibility. You agree to indemnify and hold the Cooperative harmless from any liability for, or assessment of, any such taxes imposed on the Cooperative by relevant taxing authorities. You will have no authority to enter into contracts that bind the Cooperative or create obligations on the part of the Cooperative without the prior written authorization of the Cooperative.

Other Membership Limitations

As an Artist Member you are a co-owner of Subvert Cooperative, which owns Subvert Incorporated, PBC - the entity that holds the platform, the brand, and the code. You don't have a direct stake in Subvert Incorporated, PBC itself - your ownership is in the cooperative, which owns the corporation.

Your voice in the cooperative is exercised through important levers like Board elections, Bylaws amendments, and major organizational decisions. There are also many other ways to have influence and participate in the cooperative's direction.

What this agreement makes clear is that membership doesn't give a legal entitlement for any individual member to direct the workers or staff making day-to-day operations.

Your financial benefit as a member comes through patronage refunds (profits) if and when the cooperative distributes profits back to members.

YOU WILL NOT BE ENTITLED, BY VIRTUE OF HOLDING ANY MEMBER UNITS OR YOUR MEMBERSHIP IN THE COOPERATIVE, TO:

  • Receive any dividend, distribution of money or assets, profits, losses, or other financial benefits from the Cooperative, other than distributions of Patronage Refunds (if any) that you may receive in respect of net income from your Patronage Activity;
  • Manage or direct the affairs and business of the Cooperative, or make any decision regarding the Cooperative’s business or legal relationships;
  • Receive any goods or services from the Cooperative;
  • Become employed by the Cooperative, or sell goods or services to the Cooperative;
  • Own or use any intellectual property of the Cooperative;
  • Vote on any matter or take any action not expressly permitted for Members as described in the Cooperative’s Articles of Organization and Bylaws, or as provided by the Board or applicable law; or
  • Have any other rights, preferences, or privileges other than as provided in the Cooperative’s Articles of Organization, Bylaws, or applicable law.

Tax Matters

The cooperative is structured to share profits with members as "patronage refunds" under cooperative tax provisions in the US. If the co-op distributes profits back to you, you agree to report that income on your taxes — the cooperative doesn't withhold or pay it for you. Think of it the same way you'd report income from a freelance gig or a merch sale.

If you are based outside the United States, your tax obligations will depend on the laws of your country and any applicable tax treaties with the US.

For both US and international members, if we distribute profits to you - we'll send the necessary forms.

The Cooperative intends to operate on a “cooperative basis” as defined in Subchapter T of the Code. As an entity taxed under Subchapter T, among other things, (a) the Cooperative would be permitted to distribute any net income earned from Patronage Activity to Members in the form of Patronage Refunds; (b) the Cooperative will generally receive a US federal income tax deduction for Patronage Refunds upon payment in cash or qualified written notices of allocation or redemption in cash of non-qualified written notices of allocation, and (c) each Member would be responsible to pay applicable US federal, state, local, or non-US income and other taxes with respect to Patronage Refunds (if any) distributed to such Member. Taxable Patronage Refunds will generally be reported on Form 1099-PATR for US Members and Form 1042-S for non-US Members.

There can be no assurance that the US INTERNAL REVENUE SERVICE (THE “IRSˮ) will permit the Cooperative to be taxed under Subchapter T OF THE CODE. If the IRS DETERMINES THAT the Cooperative SHOULD NOT be taxed under Subchapter T, then (I) THE COOPERATIVE MAY BE REQUIRED TO PAY US FEDERAL INCOME TAX ON PATRONAGE REFUNDS, IN ADDITION TO APPLICABLE TAXES THAT EACH MEMBER IS REQUIRIED TO PAY; (II) THE COOPERATIVE MAY BE UNABLE TO DISTRIBUTE PATRONAGE REFUNDS TO MEMBERS; AND (III) the Cooperative may be required to cancel outstanding patronage equity.

You agree that the Cooperative is authorized to withhold from Patronage Refunds and any other amounts distributable to Members with respect to the Cooperative, and pay over to any US federal, state, local, or non-US tax authority any amounts required to be paid or withheld with respect to any Member pursuant to any provisions of US federal, state, local, or non-US law. All amounts so paid or withheld will be treated as amounts distributed to applicable Members and will reduce the amount otherwise distributable to such Members. If the amount of such taxes is greater than any such distributable amounts, then notwithstanding anything in this Member Agreement or the Bylaws to the contrary, such Members and any successor to such Members will pay the amount of such excess to the Cooperative.

Furthermore, the Cooperative provides no representations or advice regarding the tax treatment of any Patronage Refunds paid to Members under the law of the United States, any state or territory of the United States, or any other country or territory.

Representations and Covenants Regarding Tax

This section is standard language that helps cover the co-op. It asks that you not rely on Subvert Cooperative for tax advice.

YOU REPRESENT AND WARRANT THAT YOU UNDERSTAND YOU MAY SUFFER ADVERSE TAX CONSEQUENCES AS A RESULT OF PAYING MEMBERSHIP FEES OR RECEIVING MEMBER UNITS OR PATRONAGE REFUNDS. YOU FURTHER REPRESENT AND WARRANT THAT (A) YOU HAVE CONSULTED WITH A TAX ADVISER THAT YOU DEEM TO BE ADVISABLE IN CONNECTION WITH PAYMENT OF MEMBERSHIP FEES AND THE RECEIPT OF MEMBER UNITS AND PATRONAGE REFUNDS OR YOU HAVE KNOWINGLY ELECTED NOT TO CONSULT WITH ANY TAX ADVISER, (B) YOU ARE NOT RELYING ON THE COOPERATIVE, OR ANY AGENTS, REPRESENTATIVES, OR ADVISORS OF THE COOPERATIVE, FOR ANY TAX ADVICE, AND (C) YOU UNDERSTAND, ACKNOWLEDGE, AND ASSUME ALL RISKS THAT THERE IS NO ASSURANCE THAT THE IRS WILL PERMIT THE COOPERATIVE TO BE TAXED UNDER SUBCHAPTER T OF THE CODE, AND THAT IN SUCH EVENT THERE MAY BE MATERIAL ADVERSE EFFECTS FOR YOU AND/OR THE COOPERATIVE. YOU AGREE THAT YOU ARE AND WILL BE FULLY RESPONSIBLE FOR ANY AND ALL TAXES RESULTING FROM YOUR PAYMENT OF MEMBERSHIP FEES

AND YOUR RECEIPT OF MEMBER UNITS AND PATRONAGE REFUNDS, AND THAT YOU WILL INDEMNIFY AND FOREVER HOLD HARMLESS THE COOPERATIVE FROM ANY CLAIMS OF ANY KIND ARISING OUT OF YOUR PAYMENT OF MEMBERSHIP FEES AND YOUR RECEIPT OF MEMBER UNITS AND PATRONAGE REFUNDS.

YOU REPRESENT AND WARRANT THAT YOU UNDERSTAND THAT THE COOPERATIVE MAY OWE TAXES IN CONNECTION WITH ITS RECEIPT OF MEMBERSHIP FEES, AND THAT THE COOPERATIVE’S TAX OBLIGATIONS MAY PREVENT IT FROM DISTRIBUTING NET INCOME TO MEMBERS IN THE FORM OF PATRONAGE REFUNDS.

No Securities Registration

Your Member Unit (co-op membership) is a membership credential, not a financial investment or a security like a stock or bond. The cooperative believes Member Units don't need to be registered with the SEC. They exist purely to represent your membership, not to generate financial returns.

The Cooperative believes, but makes no representation or warranty, that the Member Units will not be considered “securities as defined in the Securities Act of 1933, as amended (the “Securities Act).

The Member Units have not been and will not be registered or qualified under the Securities Act or any US state or non-US securities laws, rules or regulations, and the Member Units have not been and will not be reviewed or approved by the US Securities and Exchange Commission (the “SEC”) or any US state or non-US regulatory authority.

YOU ACKNOWLEDGE AND AGREE THAT THERE IS NO GUARANTEE THAT MEMBER UNITS AND PATRONAGE EQUITY WILL NOT BE DEEMED TO BE “Securities” UNDER APPLICABLE LAWS, RULES, OR REGULATIONS, AND, THEREFORE,

(A) THE COOPERATIVE MAY BE SUBJECT TO ENFORCEMENT ACTION, LITIGATION, OR OTHER LIABILITY IN CONNECTION WITH ITS OFFER, SALE, OR ISSUANCE OF MEMBER UNITS TO YOU OR ANY OTHER PERSON AND (B) IN THE EVENT THE COOPERATIVE BECOMES SUBJECT TO SUCH ENFORCEMENT ACTION, LITIGATION, OR OTHER LIABILITY, THE COOPERATIVE MAY BE UNABLE TO CARRY ON ANY OPERATIONS, INCLUDING BUT NOT LIMITED TO PROVIDING ANY PATRONAGE REFUNDS.

Representations, Warranties, and Covenants

This section is a list of acknowledgments confirming that you understand the nature of your membership. The key points are ones we've already covered: your membership fee is not an investment and is non-refundable, your Member Unit has no financial value and can never be transferred or sold, and there is no guarantee of financial returns from your membership beyond patronage refunds if the cooperative distributes profits.

By entering this Member Agreement, you represent, warrant, and covenant to and with the Cooperative for its benefit as follows:

  • You understand that you may suffer a total loss of your Membership Fee amount or any other amount paid in satisfaction of the Membership Conditions.
  • You understand and agree that your Membership Fees and any

other amount paid in satisfaction of the Membership Conditions are final and nonrefundable.

  • You have received, carefully read, and reviewed this Member Agreement. In paying Membership Fees and satisfying the Membership Conditions, you have relied solely on this Member Agreement and your own independent knowledge of the Cooperative, and you have not relied on any other offering materials or oral representations.
  • You understand that your Membership Fees and any other amount paid in satisfaction of the Membership Conditions are not an investment in the Cooperative.
  • You understand that you have no rights to receive any compensation or any other consideration or value for your Membership Fees, any Member Units, or any amount paid in satisfaction of the Membership Conditions except as expressly set forth herein or in the Bylaws.
  • You understand that Member Units are not and will never be transferable, there will never be any market for Member Units, and the Cooperative has not and will not take any actions whatsoever to create or support any market for the Member Units.
  • You are purchasing the Member Unit for your own account and primarily for your personal use and not with a primary purpose of financial gain or investment.
  • You expressly acknowledge, understand, and appreciate that the Member Unit is generally not subject to and is not being acquired for the purpose of realizing financial appreciation. Rather, you are seeking to become a Member of the Cooperative to support and gain access to the Cooperative’s products and services.
  • You understand that holders of Member Units will not be able to receive any profits (or any losses) through dividends or otherwise by virtue of being a holder of such Member Units other than (a) distributions of Patronage Refunds that holders may receive in respect of net income from their Patronage Activity and (b) payments the Cooperative makes upon redemption of such Patronage Equity.
  • You understand that Member Units have not been, and will not be, registered with or qualified by the SEC or any securities regulatory authority of any US state or non-US jurisdiction, by reason of specific exemptions from the registration provisions of the same, which depend upon, among other things, the bona fide nature of the your non-pecuniary motivation to become a Member in the Cooperative..
  • You understand that there is no guarantee that any Member Units will not be deemed to be “securities under applicable laws, rules, or regulations, and therefore, (a) the Cooperative may be subject to enforcement action, litigation, or other liability in connection with its offer, sale, or issuance of any Member Units and Patronage Equity to you or any other person and (b) in the event the Cooperative becomes subject to such enforcement action, litigation, or other liability, the Cooperative may become unable to carry out any operations whatsoever, including but not limited to providing Patronage Refunds.
  • This Member Agreement binds you and your personal and legal representatives, heirs, guardians, and successors.
  • Equity will not be registered with or qualified by the SEC or any securities regulatory authority of any US state or non-US jurisdiction.
  • You understand that there is no guarantee that any Member Units will not be deemed to be “securities” under applicable laws, rules, or regulations, and therefore, (a) the Cooperative may be subject to enforcement action, litigation, or other liability in connection with its offer, sale, or issuance of any Member Units to you or any other person and (b) in the event the Cooperative becomes subject to such enforcement action, litigation, or other liability, the Cooperative may become unable to maintain services agreements with Participating Businesses or carry out any operations whatsoever, including but not limited to providing Patronage Refunds.
  • This Member Agreement binds you and your personal and legal representatives, heirs, guardians, and successors.
  • You expressly acknowledge, understand, and appreciate 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.
  • You have 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.

Articles of Organization; Bylaws; Incorporated

The Cooperative's Articles of Organization and Bylaws are part of this agreement. If anything in this Member Agreement conflicts with the Bylaws, the Bylaws take precedent.

The Cooperative’s Articles of Organization and Bylaws, each as amended from time to time, are incorporated into this Member Agreement by this reference. To the extent there is any conflict between this Member Agreement, on one hand, and the Cooperative’s Articles of Organization and Bylaws, on the other hand, the Cooperative’s Articles of Organization and Bylaws will control.

Inapplicability of Agreement in Certain Circumstances

If the cooperative merges, sells its assets, or dissolves, this Member Agreement no longer governs your rights. The Bylaws and applicable law take over. As a reminder, those decisions require both a two-thirds Board vote and a majority member vote. Subvert cannot be sold unless members vote for it.

Merger, Consolidation or Sale of Assets. Nothing contained in this Agreement shall be deemed to prevent or restrict any merger or consolidation of the Cooperative into or with one or more other corporations or other legal entities, or any sale, exchange, lease, mortgage, pledge or other disposition of all or substantially all of its assets to any person or persons, in accordance with any applicable provisions of law and of the Articles of Organization and Bylaws then in effect. No provision of this Agreement shall apply to any shares or other securities of any issuer received upon a merger, consolidation or sale, exchange, lease, mortgage, pledge or other disposition of assets unless at the time of the merger, consolidation or disposition of assets the shares or other securities received are made subject to this Agreement by written agreement of all the Members.

Dissolution of Cooperative. The Cooperative may be dissolved at any time pursuant to the Bylaws. If the Cooperative is dissolved, (a) the Board of Directors shall proceed with reasonable promptness to liquidate the business of the Cooperative, (b) this Agreement shall no longer be applicable, (c) no sale of Member Units otherwise provided or allowed by this Agreement shall occur, and (d) each Member or the Member’s legal representative shall instead receive the Member’s proportionate share, if any, of the Cooperative’s assets upon such winding up and dissolution in accordance with priorities established by the Articles of Organization, the Bylaws or law.

Governing Law; Arbitration

The Membership Fees, the payment of any amount in satisfaction of the Membership Conditions, and issuance of Member Units and Patronage Equity are governed by, and this Member Agreement will be construed in accordance with, the laws of the State of Colorado, without regard to conflict of laws principles. All disputes with the Cooperative by you or your successors or assigns directly or indirectly arising under or in relation to this Member Agreement, your Membership Fees, any amount paid in satisfaction of the Membership Conditions will be brought and resolved solely and exclusively in final and binding arbitration in the State of Washington under the Rules of Arbitration of the American Arbitration Association.

Class Action Waiver

This section asks you to agree that if you have a dispute with the cooperative, you'll bring it as an individual claim rather than joining a class action lawsuit. This is standard language in many platform agreements.

TO THE EXTENT PERMISSIBLE BY LAW, ALL CLAIMS MADE WITH RESPECT TO THE COOPERATIVE AND ITS SUBSIDIARIES MUST BE BROUGHT IN A PARTYʼS INDIVIDUAL CAPACITY, AND NOT AS A PLAINTIFF OR CLASS MEMBER IN ANY PURPORTED CLASS, COLLECTIVE ACTION, OR REPRESENTATIVE PROCEEDING. THE ARBITRATOR MAY NOT CONSOLIDATE MORE THAN ONE PERSON'S CLAIMS OR ENGAGE IN ANY CLASS ARBITRATION. YOU ACKNOWLEDGE THAT, BY AGREEING TO THESE TERMS, YOU AND THE COOPERATIVE FOR ITSELF AND ON BEHALF OF ITS SUBSIDIARIES ARE EACH WAIVING THE RIGHT TO A TRIAL BY A

JUDGE OR A JURY IN A PUBLIC FORUM AND THE RIGHT TO PARTICIPATE IN A CLASS ACTION.

Disclaimer and Limitation of Liability

This section is standard legal protection for the cooperative. It says that Subvert makes no guarantees about your membership beyond what is explicitly stated in this agreement, and that the cooperative is not liable for losses or damages arising from your membership - except in cases of fraud or intentional wrongdoing on our part.

EXCEPT AS EXPRESSLY SET FORTH HEREIN, NEITHER THE COOPERATIVE NOR ANY OF ITS SUBSIDIARIES MAKE ANY REPRESENTATIONS OR WARRANTIES WHATSOEVER, EXPRESS OR IMPLIED, IN CONNECTION WITH THIS MEMBER AGREEMENT, ANY MEMBER UNITS, ANY MEMBERSHIP FEES OR OTHERWISE, INCLUDING, WITHOUT LIMITATION, ANY (A) WARRANTY OF MERCHANTABILITY, (B) WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE, (C) WARRANTY OF TITLE, OR (D) WARRANTY AGAINST INFRINGEMENT OF INTELLECTUAL PROPERTY RIGHTS OF A THIRD PARTY, WHETHER ARISING BY LAW, COURSE OF DEALING, COURSE OF PERFORMANCE, USAGE OF TRADE, OR OTHERWISE. EXCEPT AS EXPRESSLY SET FORTH HEREIN, YOU ACKNOWLEDGE THAT YOU HAVE NOT RELIED UPON ANY REPRESENTATION OR WARRANTY MADE BY THE COOPERATIVE, ANY OF ITS SUBSIDIARIES, OR ANY OTHER PERSON ON THE COOPERATIVEʼS BEHALF.

WITHOUT PREJUDICE TO ANY OTHER PROVISION OF THIS MEMBER AGREEMENT, YOU ACKNOWLEDGE AND AGREE THAT, EXCEPT IN THE CASE OF THE FRAUD OR WILLFUL MISCONDUCT OF THE COOPERATIVE OR ANY OF ITS SUBSIDIARIES, AND EXCEPT AS OTHERWISE REQUIRED BY ANY NON-WAIVABLE PROVISION OF APPLICABLE LAW, NEITHER THE COOPERATIVE NOR ANY OF ITS SUBSIDIARIES OR REPRESENTATIVES WILL BE LIABLE IN ANY MANNER WHATSOEVER TO YOU OR ANY OTHER PERSON FOR LOSSES OR DAMAGES OF ANY KIND, WHETHER ARISING IN CONTRACT, TORT, OR OTHERWISE, ARISING FROM ANY PAYMENT OF MEMBERSHIP FEES OR AMOUNTS IN SATISFACTION OF THE MEMBERSHIP CONDITIONS, ANY ISSUANCE OF MEMBER UNITS TO ANY PERSON, ANY DISTRIBUTION OR NON-DISTRIBUTION OF ANY PATRONAGE REFUNDS, OR ANY ACTS OR OMISSIONS OF THE COOPERATIVE OR ITS SUBSIDIARIES IN CONNECTION WITH THE OPERATIONS THEREOF.

Term and Termination

This agreement lasts as long as your membership lasts. When your membership ends (for any reason) this agreement ends with it.

The term of this Agreement shall be governed by the Bylaws’ provisions governing withdrawal and termination of membership.

Disclosure Statement

As a member you have the right to request financial documents and records.

As an entity that was recently formed, the Cooperative has no financial statements, no operating history, and no other historical information that a limited cooperative association might otherwise be required to disclose to potential members. A copy of the Cooperative’s documents and financial statements may be obtained (once available) by contacting us at: info@subvert.fm. Documents and information submitted to the applicable state under applicable law may be available from the office of the Secretary of State of such jurisdiction for the cost of copying and postage.

EXHIBIT A: ARTICLES OF ORGANIZATION

EXHIBIT B: BYLAWS

EXHIBIT C

MEMBER WRITTEN CONSENT

This is to notify you that membership in Subvert Cooperative LCA (the “Cooperative) constitutes consent by each Member (as defined in the Cooperative’s Bylaws) that, for US federal income tax purposes, the Member will take into income, at their stated value, all qualified written notices of allocation received from the Cooperative in accordance with Section 1385(a) of the US Internal Revenue Code of 1986, as amended, and that these written notices of allocation will be taken into income in the year in which they are received. This requirement is contained in Article II(j) of the Cooperative’s Bylaws, the text of which is set forth below:

Article II(j) Consent to Tax Treatment. By becoming a Member of the Cooperative, each individual or entity automatically agrees, by such act alone, to take into account on the Member’s income tax return any distributions with respect to patronage refunds that are made in qualified written notices of allocation (as defined in Section 1388(c) of 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; provided that this consent will not extend to written notices of allocation clearly denominated on their face to be “non-qualified If patronage refunds are made in non-qualified written notices of allocation (as defined in Section 1388(d) of the Code), the Member agrees to take into account the corresponding amounts on the Member’s income tax return in the manner provided in Section 1385(c) of the Code in the year the equity is redeemed by the Cooperative. 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 units in the Cooperative.