(a) A written agreement among persons who are then members, including a sole member, or who have signed subscription or contribution agreements, relating to the control of any phase of the business and affairs of the cooperative, its liquidation, dissolution and termination, or the relations among members or persons who have signed subscription or contribution agreements is valid as provided in subsection (b). Wherever this chapter provides that a particular result may or must be obtained through a provision in the articles of organization or bylaws, the same result can be accomplished through a member control agreement valid under this section or through a procedure established by a member control agreement valid under this section.

Terms Used In Tennessee Code 43-38-524

  • articles of organization: means articles of organization as originally filed and subsequently amended. See Tennessee Code 43-38-103
  • Bylaws: means a written agreement described in §. See Tennessee Code 43-38-103
  • Cooperative: means an association organized under this title conducting business on a cooperative plan as provided under this chapter. See Tennessee Code 43-38-103
  • Distribution: means a direct or indirect transfer of money or other property, except its own membership interests, with or without consideration, or an incurrence or issuance of indebtedness, whether directly or indirectly, including through a guaranty, by a cooperative to or for the benefit of any of its members in respect of membership interests. See Tennessee Code 43-38-103
  • Financial rights: means a member's right to:
    (A) Share in profits and losses as provided in §. See Tennessee Code 43-38-103
  • Member: means a person or entity reflected on the books of the cooperative as the owner of governance rights of a membership interest of the cooperative and includes patron and nonpatron members. See Tennessee Code 43-38-103
  • Patron: means a person or entity who conducts patronage business with the cooperative. See Tennessee Code 43-38-103
  • Patron member: means a member holding a patron membership interest. See Tennessee Code 43-38-103
  • Person: includes a corporation, firm, company or association. See Tennessee Code 1-3-105
  • Signed: means that the signature of a person has been written on a document, and, with respect to a document required by this chapter to be filed with the secretary of state, means that the document has been signed by a person authorized to do so by this chapter, the articles or bylaws, or by a resolution approved by the directors or the members. See Tennessee Code 43-38-103
  • Subscription: includes a mark, the name being written near the mark and witnessed. See Tennessee Code 1-3-105
  • Termination: means the end of a cooperative's existence as a legal entity and occurs when the articles of termination are filed with the secretary of state under §. See Tennessee Code 43-38-103
  • written: includes printing, typewriting, engraving, lithography, and any other mode of representing words and letters. See Tennessee Code 1-3-105
(b) Other than patron member voting control under § 43-38-522 and patron member allocation and distribution provisions under §§ 43-38-901 and 43-38-902, a written agreement among persons described in subsection (a) that relates to the control of or the liquidation, dissolution and termination of the cooperative, the relations among them, or any phase of the business and affairs of the cooperative, including, without limitation, the management of its business, the declaration and payment of distributions, the sharing of profits and losses, the election of directors, the employment of members by the cooperative, or the arbitration of disputes, is valid, if the agreement is signed by all persons who are then the members of the cooperative, whether or not the members all have voting power, and all those who have signed contribution agreements, regardless of whether those signatories will, when members, have voting power.
(c) This section does not apply to, limit, or restrict agreements otherwise valid, nor is the procedure set forth in this section the exclusive method of agreement among members or between the members and the cooperative with respect to any of the matters described.
(d) Any assignee of any member’s financial rights may not be a party to an agreement under subsection (a), unless that assignee is also a member or person or entity bound by a binding contribution agreement at the time the agreement is entered into.
(e) Unless otherwise provided in the articles, bylaws or the member control agreement, the member control agreement will not terminate if the cooperative is combined into a new cooperative pursuant to merger, whether by a merger in dissolution or otherwise. Any other termination of the cooperative’s existence will automatically terminate the member control agreement.
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