THESE BYLAWS are entered into and is effective as of September 17th, 2020, by and between by the Members (as defined below), pursuant to the provisions of the Act, on the terms and conditions set forth in these Bylaws.

ARTICLE 1
The Cooperative

1.1 Formation.

HERO eCooperative (the “Cooperative”) was organized under Minnesota Statutes Chapter 308B (the “Act”) as a cooperative and will operate in accordance with the Act and upon the terms and conditions in these Bylaws. To the extent the rights or obligations of any Member are different by reason of any provision of these Bylaws than they would be in the absence of those provisions, these Bylaws will, to the extent permitted by the Act, control.

1.2 Name.

The name of the Cooperative is HERO eCooperative and all business of the Cooperative will be conducted in this name. The Board of Directors, with written notice to the Members may change the name of the Cooperative from time to time in accordance with the Act.

1.3 Purpose; Powers.

(a) Purpose. The purposes of the Cooperative are: (1) to create a supply chain of regenerative, clean foods from local farms delivered to Patron Members at home or sold in stores or other retail venues; (2) to the extent that that other goods and services are offered by the Cooperative or on Behalf of Patron Members, the Patron Members will conduct business in a manner that complies with association exemptions from antitrust enforcement under the Capper Volstead Act (7 U.S.C. 291, 292); and (3) to engage in any other business activity authorized by the Act as well as state and federal laws, as determined by the management of the Cooperative and the Board of Directors.

(b) Powers. The Cooperative has the power to do any and all acts necessary, appropriate, proper, advisable, incidental or convenient to or in furtherance of the purposes of the Cooperative set forth in this section and has, without limitation, any and all powers that may be exercised on behalf of the Cooperative by the Board of Directors pursuant to Article 6.

1.4 Corporate Cooperative Tax Status.

This Cooperative shall elect to be taxed as a corporation and comply with taxation as a cooperative under Subchapter T of the Internal Revenue Code as determined by the Board of Directors.

1.5 Principal Place of Business.

The principal place of business of the Cooperative is [3340 Peachtree Rd. Suite 1910, Atlanta, GA 30326]. The Board may change the principal place of business of the Cooperative to any other place within or without the State of Iowa. The registered office of the Cooperative in the State of Minnesota initially is located at 730 Center Avenue, Suite 202, Moorhead, Minnesota 56560 and the registered agent at that address is Capitol Corporate Services. The records required by the Act will be maintained at the Cooperative’s principal place of business.

1.6 Existence.

The Cooperative was organized on February 4th, 2020 and shall continue until the winding up and liquidation of the Cooperative and its business is completed following a Dissolution, as provided in Section 12.1.

1.7 Filings.

(a) Organization. The Organizer has caused the necessary organizational documents to be filed in the office of the Secretary of State of the State of Minnesota in accordance with the Act. The Cooperative must take any and all other actions reasonably necessary to perfect and maintain the status of the Cooperative as a cooperative under the laws of the State of Minnesota. The Board shall cause amendments to be filed whenever required by the Act.

(b) Registration in Foreign Jurisdictions. The Board must take any and all other actions as may be reasonably necessary to perfect and maintain the status of the Cooperative as a cooperative or similar type of entity under the laws of any other jurisdictions in which the Cooperative engages in business.

(c) Dissolution Filings. Upon the dissolution and completion of the winding up and liquidation of the Cooperative in accordance with Article 12, the Board must promptly execute and cause to be filed a Certificate of Dissolution in accordance with the Act and the laws of any other jurisdictions in which the Board deems such filing necessary or advisable.

1.8 Title to Property.

All property owned by the Cooperative is owned by the Cooperative as an entity and no Member has any ownership interest in the property in the Member’s individual name, and each Member’s interest in the Cooperative is personal property for all purposes. At all times after the Effective Date, the Cooperative will hold title to all of its property in the name of the Cooperative and not in the name of any Member.

1.9 Independent Activities; Waiver of Conflicts.

(a) Devotion of Time to the Cooperative. Each Director shall be required to devote only the time to the affairs of the Cooperative as may be necessary to manage the business and affairs of the Cooperative in accordance with Article 6 and shall be free to serve any other Person or enterprise in any capacity that the Director may deem appropriate in his or her discretion.

(b) No Rights In Member Activities. These Bylaws govern the Members actions and activities with and relating to the Cooperative and does not grant rights of any Member to another Member, or to the company managing and providing services to the Cooperative (the “Management Company”).

(c) Conflicts of Interests. The Members recognize that any transaction with or through the Cooperative will be managed with and through the Management Company and entities selected by the Management Company to carry out the services to Members. The Management Company and the Members may be participating in other similar transactions. The Member hereby agrees that any conflict of interest of the Management Company, its officers, directors, and employees and agents and its designated service providers, or other Members is hereby waived and that the Member will have the rights and protection afforded in the contractual documents required to enter a transaction with the Cooperative.

1.10 Authority of Member.

Each Member represents and warrants to the Cooperative and to the other Members that the Member, if not an individual, is duly organized, validly existing and in good standing under the laws of its state of organization and is duly qualified and in good standing as a foreign organization in the jurisdiction of its principal place of business if not organized in that jurisdiction; and, in all instances:

(1) the Member has full corporate, limited liability company, partnership, trust or other applicable power and authority to execute and agree to these Bylaws and the core documents of the Cooperative which include the Membership Agreement and one or more documents to obtain the forward pricing services collectively referred to as the “Forward Pricing Agreement”, as well as other services pursuant to the documents required by the Cooperative and the Member agrees to perform its obligations under all Cooperative documents, contracts with and through the Cooperative and perform all necessary actions required of the Members under these Bylaws;

(2) the Member has duly executed and delivered these Bylaws; and

(3) the Member’s authorization, execution, delivery and performance does not conflict with any other agreement or arrangement to which that Member is a party or by which it is bound.

1.11 Access to and Confidentiality of Information.

(a) Information to Members. In addition to the other rights specifically set forth in these Bylaws, each Member is entitled to have access to information as provided in the Act under the circumstances and subject to the conditions in the Act and these Bylaws, which conditions include, but are not limited to, reasonable standards governing what information and documents are to be furnished at what time and location and at whose expense as established by the Board of Directors. However, without limiting the foregoing, the Members agree that, except as otherwise provided by law, the Board of Directors may from time to time determine, due to contractual obligations, business concerns or other considerations, that certain information regarding the business, affairs, properties, and financial condition of the Cooperative should be kept confidential and not provided to some or all of the Members or that it is not just or reasonable for some or all of the Members or their representatives to examine or copy any information that is confidential or may only allow copying or certain terms and conditions.

(b) Protection of Cooperative Information. Each Member acknowledges that from time to time the Member may receive information from or regarding the Cooperative in the nature of trade secrets or that is otherwise confidential, the release of which may be damaging to the Cooperative, Members, or Persons with which it does business. Each Member agrees to hold in strict confidence any information it receives regarding the Cooperative, its Members, business, operations, contracts, or financings that is identified as being confidential (and if the information is provided in writing, is so marked) and may not disclose the information to any Person, except for disclosures: (1) to another Member having the right to the information; (2) compelled by law, provided the Member must promptly notify an officer of the Board of Directors of any request or demand for the information, to the extent reasonably possible; (3) to advisors or representatives of the Member, but only if in each case such Person has agreed to be bound by the provisions of this section and the Member notifies the Board of Directors within five calendar days prior to any proposed disclosure; or (4) of information that the Member has also received from a source independent of the Cooperative that the Member reasonably believes has the legal right to disclose the information to the Member. Each Member acknowledges that a breach of the provisions of this section may cause the Cooperative irreparable harm and injury for which monetary damages are inadequate or difficult to calculate or both. Accordingly, each Member specifically agrees that the Cooperative shall be entitled to injunctive relief to enforce the provisions of this section, that such relief may be granted without the necessity of proving actual damages, and that the injunctive or equitable relief shall be in addition to, not in lieu of, the right to recover monetary damages for any breach of this section by the Member. The obligations referred to in this section shall survive the termination of a Member’s membership in the Cooperative.

1.12 Limited Liability.

Except as otherwise expressly provided by the Act, these Bylaws or agreed to under another written agreement, the debts, obligations and liabilities of the Cooperative, whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of the Cooperative, and no Member or Director of the Cooperative shall be obligated personally for any debt, obligation or liability of the Cooperative solely by reason of being a Member or Shareholder or acting as a Director of the Cooperative. The failure of the Cooperative to observe any formalities or requirements relating to the exercise of its powers or management of its business or affairs under these Bylaws or the Act shall not be grounds for imposing liability on the Members, Shareholders or Directors for any debt, obligation or liability of the Cooperative.

ARTICLE 2
Members’ Capital; Membership Shares

2.1 Members.

The Members of this Cooperative shall be Patron Members, who shall hold at least one (1) share of Membership Common Stock (“Membership Shares” and “Membership Stock”). A Patron Member shall be entitled to vote but shall have only one vote upon any matter submitted to the Members for a vote regardless of the number of shares of stock held by the Patron Member. Patron Members possess the voting power of the Cooperative. The name, original capital contribution, Membership Share of each Member are set out in Exhibit A, which shall be amended by the Board of Directors or its designee from time to time as changes occur or as additional shares are issued, and new Members are approved.

2.2 Shares; Authorized Amounts.

This Cooperative is organized with capital stock consisting of Membership Stock and Common Stock which has Membership Shares and Common Shares. The Board has the authority to authorize and issue one thousand (1,000) shares of Membership Stock and one million (1,000,000) shares of Common Stock with the Membership Stock and Common Stock each having a par value of $0.00001 per share.

The Board may authorize and issue different classes or series of Common Stock with rights and preferences as determined by the Board of Directors, in addition to the 1,00,000 shares of common stock. The forward looking plans of the cooperative is to have consumer patron common shares, supply chain partner common or preferred shares (processors, kitchens, restaurants, and retailers, and institutional and government shares for school systems, healthcare clients, universities, private organizations and foundations, governments, and nonprofits.

2.3 Membership Shares.

(a) Eligible Holders. The Membership Shares of the Cooperative may only be held by Patron Members who intend to Heal the Environment and Regenerate Ourselves, by supporting farms and supply chains and practices that strive to lower the carbon footprint and encourage cleaner ways of making food.

(b) Rights and Preferences. The Membership Shares may have rights, preferences, limitations and restrictions as determined by resolution of the Board of Directors.

(c) Ineligible Holders. In the event the Board of Directors of the Cooperative shall find that any Membership Share has come into the hands of a Person who is not eligible for membership or no longer eligible for membership, the holder shall have no rights or privileges on account of the Membership Shares, which shall cancel and forfeit to the Cooperative, or vote or voice in the management or affairs of the Cooperative other than the right to participate in accordance with law in case of liquidation or dissolution.

(d) Dividends. No dividends shall be paid on the Membership Shares of this Cooperative.

2.4 No Mandatory Additional Capital Contributions.

No Member shall be obligated to make any Additional Capital Contributions to the Cooperative or to pay any assessment to the Cooperative, other than the unpaid portion of the Membership Share and annual membership fees as determined by the Board of Directors or any other Shares subscribed to by the Member, and no Shares shall be subject to any mandatory assessment, requests or demands for capital.

ARTICLE 3
Patronage Refunds

The net income (Total Annual Net Savings) in excess of any dividends, management compensation paid to the Management Company, and additions to reserves shall be distributed to Patron Members on the basis of patronage as determined by the Board of Directors and the records of the Cooperative may show the Interest of Patron Members in the reserves. These allocations shall be redeemable only upon resolution of the Board of Directors in their discretion.

ARTICLE 4
Liquidation

In the event of any liquidation, dissolution or winding up of this Cooperative, whether voluntary or involuntary, all debts and liabilities of the Cooperative shall be paid first according to their respective priorities. Holders of Membership Shares and Common Shares shall then be entitled to receive the amount paid for the Membership Shares and Common Shares. All equity credits and other non-stock capital furnished through patronage shall then be retired without priority on a pro rata basis to the holders to whom it is allocated on the books of the Cooperative. Any remaining assets of the Cooperative shall be distributed among the Patron Members of the Cooperative, in the proportion which the aggregate patronage of each patron bears to the total patronage of all patrons as shown by the records of the Cooperative.

ARTICLE 5
Distributions

5.1 Net Cash Flow.

Except as otherwise provided in Article 12, Net Cash Flow in excess of the established amount of reserves, and dividends, if any, shall be allocated to any patronage pools as determined by the Board of Directors, distributed to the Patron Members collectively within any pool and further distributed to Patron Members in the pool individually based on the patronage business conducted with the Cooperative as determined by the Board of Directors. The Management Company shall recommend the number of reserves to be established by the Cooperative prior to the payment of any distributions.

5.2 Amounts Withheld.

All amounts withheld pursuant to the Code or any provision of any state, local or foreign tax law with respect to any payment, distribution, or allocation to the Cooperative or the Patron Members shall be treated as amounts paid or distributed, as the case may be, to the Patron Members with respect to which such amount was withheld pursuant to this Section for all purposes under these Bylaws. The Cooperative is authorized to withhold from payments and distributions, or with respect to allocations to the Patron Members, and to pay over to any federal, state and local government or any foreign government, any amounts required to be so withheld pursuant to the Code or any provisions of any other federal, state or local law or any foreign law, and shall allocate any the amounts to the Patron Member with respect to which the amount was withheld.

5.3 Limitations on Distributions.

A Member may not receive a distribution from the Cooperative to the extent that, after giving effect to the distribution, all liabilities of the Cooperative cannot be paid as they come due, other than liabilities to Patron Members on account of their Patronage.

ARTICLE 6
Management and Operations

6.1 Management of the Cooperative.

(a) Allocation of Authority. Except those matters for which approval of the Members is required by these Bylaws, or any nonwaivable provisions of the Act, and except for the provisions reserved to the Board of Directors, and subject to the provisions of Section 6.2; the powers and privileges of the Cooperative shall be exercised by or under the authority of, and the business and affairs of the Cooperative shall be managed under the direction of the Management Company contracted by the Board of Directors and not by the Members. No Member, other than a Member acting in his or her capacity as an officer of the Board of Directors or as an officer of the Cooperative, has the power or authority to act for or on behalf of the Cooperative, to bind the Cooperative by any act, or to incur any expenditures on behalf of the Cooperative, except with the prior consent of the Board of Directors.

(b) Management Company Authority. Without limiting the foregoing authority of the Board of Directors to contract with a Management Company or the actions reserved to the Board of Directors and the Board of Directors oversight of the Management Company, the Management Company shall have the right to make the following decisions and take the following actions:

(1) Conduct consumer food distribution services and related services for the Cooperative and its contracted Members.

(2) Conduct other services for the Cooperative and its relations with Members as agreed by the Management Company.

(3) Solicit Members for the Cooperative and services provided by the Management Company for Members.

(4) Operate, maintain, finance and conduct operations of the Cooperative with respect to the scope of duties of the Management Company including purchase, lease or otherwise of real or personal property.

(5) Execute any and all agreements, contracts, documents, certifications, and instruments necessary or convenient in connection with the management, maintenance, and operation of the business or affairs of the Cooperative, including but not limited to selling all or any interest of the cooperative, or any of its brands, and intellectual property.

(6) Borrow money and issue evidence of indebtedness, and secure the same by mortgage, pledge, or other lien on any or all of the Cooperative’s assets with notice and consent of the Board of Directors.

(7) Execute any contract, or other instrument purporting to convey or encumber any or all of the Cooperative’s assets with notice and consent of the Board of Directors.

(8) Prepay in whole or in part, refinance, recast, increase, modify, or extend any liabilities affecting the assets of the Cooperative and in connection therewith execute any extensions or renewals of encumbrances on any or all of the assets with notice and consent of the Board of Directors.

(9) Engage in any kind of activity and perform and carry out contracts of any kind (including contracts of insurance covering risks to Cooperative assets and Director liability) and perform contractual services with Members, as may be lawfully carried on or performed by a cooperative under the laws of each state in which the Cooperative is formed or qualified.

(10) Take, or refrain from taking, all actions, not expressly proscribed or limited by these Bylaws, as may be necessary or appropriate to accomplish the purposes of the Cooperative; and

(c) Board of Directors Authority. The Board of Directors shall enter into agreements to retain the Management Company and, if necessary, on behalf of the Cooperative, to terminate the contract with the Management Company, which termination shall be done according to the terms of the agreement(s) with the Management Company. In addition, the Board of Directors shall:

(1) adopt policies, rules, and regulations and may take such actions as it shall deem advisable in furtherance of the purposes of the Cooperative, provided that the Board of Directors shall not act in a manner contrary to these Bylaws.

(2) institute, prosecute, defend, settle, compromise, and dismiss lawsuits or other judicial or administrative proceedings brought on or in behalf of, or against, the Cooperative, the Members or the Directors in connection with activities arising out of, connected with, or incidental to these Bylaws, and to engage counsel or others in connection with those actions and proceedings;

(3) indemnify a Member or Director or officer or former Member or Director or officer, and to make any other indemnification that is authorized by these Bylaws in accordance with the Act; and

(4) provide oversight of the Management Company on behalf of the Patron Members.

(d) Executive Committee. The Board shall, by resolution, delegate any necessary decisions of the Board by resolution to an Executive Committee as provided in Section 6.5(b).

(e) Delegation of Authority. The Board of Directors shall act: (1) collectively through meetings held and conducted pursuant to the provisions of these Bylaws or by written action taken pursuant to the provisions of these Bylaws; (2) through committees established pursuant to Section 6.3(b); and (3) through officers of the Cooperative or other employees or agents to whom authority and duties have been delegated pursuant to the provisions of these Bylaws.

(f) Committees. The Board of Directors, by resolution approved by the affirmative vote of a majority of the Directors then holding office, may from time to time establish one or more committees, each of which shall be comprised of one or more natural persons who may but need not be Directors or Members, provided that a majority of committee members on each committee must be a Director or Member. Any such committee shall have and may exercise only the authority and duties to the extent provided by the Board of Directors in the resolution, subject at all times to the limitations set forth in the Act, these Bylaws and to the direction and control of the Board of Directors. Unless otherwise provided by the Board of Directors, the presence of a majority of the members of any committee shall constitute a quorum for the transaction of business at a meeting of the committee, and the committee shall act by the affirmative vote of a majority of committee members present at a duly held meeting. In other matters of procedure, the provisions of these Bylaws shall apply to committees and the members to the same extent they apply to the Board of Directors and Directors, including, without limitation, the provisions with respect to meetings and notice, absent members, written actions, and valid acts. Each committee shall keep regular minutes of its proceedings and report the same to the Board of Directors. The Board of Directors may dissolve any committee at any time.

6.2 Matters for Which Member Approval Is Required.

Notwithstanding Section 6.1(a), the Board of Directors and the Management Company shall not have authority to approve, authorize, or take the following actions with respect to the Cooperative without the approval or consent of a majority of the Members and any consents under a designation certificate issued under Section 2.6: (1) sell, lease, exchange or otherwise dispose of all or substantially all of the assets of the Cooperative unless the provisions of Minn. Stat. §308B.571, Subdivision 1 are met; (2) merge or consolidate the Cooperative with another entity; (3) make any change in the business purpose of the Cooperative as provided in Section 1.3(a); or (4) voluntarily dissolve the Cooperative, unless the provisions of Minn. Stat. §308B.571, Subdivision 1, are met.

6.3 Officers of the Board.

(a) Number; Qualification; Election. Officers of the Board of Directors must be natural persons and shall be elected or appointed by the Board of Directors on an annual basis. The officers of the Cooperative shall consist of the officers of the Board of Directors and the CEO or Manager of the Management Company. The officers of the Board of Directors shall consist of a Chair, one or more Vice Chairs, a Secretary and a Financial Officer. The Secretary and Financial Officer position may be held by the same person. The offices of Chair and Vice Chairs must be Members. Except as otherwise provided in these Bylaws, the Board of Directors shall fix the powers, duties, and compensation of all officers of the Board of Directors.

(b) Term of Office. An officer of the Board shall hold office for a term of one year and until a successor shall have been duly elected or appointed, unless prior thereto such officer shall have resigned or been removed from office as hereinafter provided. Any other officer of the Cooperative (other than the CEO or Manager designated by the Management Company) shall hold office at the pleasure of the Board of Directors and may be removed at any time with or without cause, subject to any contract rights which then may be in existence.

(c) Removal and Vacancies. Any officer elected or appointed by the Board of Directors may be removed, with or without cause, at any time by a resolution of the Board of Directors. Any vacancy in an office of the Cooperative shall be filled by a resolution of the Board of Directors. An officer may resign at any time by giving written notice to the Cooperative. The resignation is effective without acceptance when the notice is given to the Cooperative, unless a later effective date is specified in the notice.

(d) Chair. Unless provided otherwise by a resolution adopted by the Board of Directors, the Chair shall preside at meetings of the Members and Board of Directors; shall see that all orders and resolutions of the Board of Directors are carried into effect; may execute all documents, agreements, and instruments on behalf of the Cooperative; may maintain records of and certify proceedings of the Board of Directors and Members; and shall perform such other duties as may from time to time be prescribed by the Board of Directors.

(e) Vice Chair. The Vice Chair shall, in the absence or disability of the Chair, perform the duties and exercise the powers of the Chair and shall perform such other duties as the Board of Directors or the Chair may from time to time prescribe. The Board of Directors may designate more than one Vice Chair, in which case the Vice Chair shall be designated as to denote which is most senior in office.

(f) Chief Financial Officer. Unless provided otherwise by a resolution adopted by the Board of Directors, the Chief Financial Officer of the Cooperative shall perform all the duties of the Treasurer and the Secretary and: shall cause to be kept accurate financial records for the Cooperative; shall cause deposit of all funds in the name of and to the credit of the Cooperative in such financial institutions as the Board of Directors shall designate from time to time; shall cause the receipt or deposit of all funds received by the Cooperative as directed by the Management Company and the Board of Directors, making proper receipts; shall disburse Cooperative funds in the name of the Cooperative as directed by the Management Company Board of Directors, shall render to the Management Company and the Board of Directors, whenever requested, an account of all such Officer’s transactions as Treasurer and of the financial condition of the Cooperative, and shall perform such other duties as may be prescribed by the Board of Directors or the Management Company from time to time.

(g) Secretary. The Chief Financial Officer performing the duties of Secretary shall attend all meetings of the Board of Directors and of the Members and shall maintain records of, and whenever necessary, certify all proceedings of the Board of Directors and of the Members. The Secretary shall cause to be kept the required records of the Cooperative, when so directed by the Board of Directors or other person or persons authorized to call such meetings, shall give or cause to be given notice of meetings of the Members and of meetings of the Board of Directors, and shall also perform such other duties and have such other powers as the Chair or the Board of Directors may prescribe from time to time.

(h) Delegation. Unless prohibited by a resolution of the Board of Directors, an officer elected or appointed by the Board of Directors may delegate in writing some or all of the duties and powers of such person’s management position to other persons. An officer who delegates the duties or powers of an office remains subject to the standard of conduct for an officer with respect to the discharge of all duties and powers so delegated.

(i) Compensation. Officers shall receive compensation as may be determined from time to time by resolution of the Board of Directors.

(j) Bonds and Insurance. The Board of Directors may require all officers, agents and employees charged by this Cooperative with responsibility for the custody of any of its funds or property to give bonds. Bonds shall be furnished by a responsible bonding company, the Management Company or its affiliates and approved by the Board of Directors, and the cost shall be paid by the Cooperative. The Board of Directors shall cause the Cooperative to provide for insurance of the property of the Cooperative, or property which may be in the possession of the Cooperative and not otherwise adequately insured by the owner of the property. In addition, the Board of Directors shall cause the Cooperative to provide for insurance covering liability of the Cooperative to all employees and the public, in such commercially reasonable amounts as is customary for businesses similar to the Cooperative.

6.4 The Board of Directors.

(a) Number, Qualification and Term of Office.

(1) Initial Board of Directors. The Initial Directors shall be designated for the terms as prescribed by these Bylaws. The initial Directors of the Cooperative comprising the initial Board of Directors, who shall serve for the terms and in the manner as prescribed by these Bylaws, are listed at Exhibit B to these Bylaws.

(2) Number. The number of Directors serving the Cooperative shall initially be three (3). The Directors shall be elected by the Patron Members, provided, however, the Management Company shall designate one director which may or may not be a voting member of the Board of Directors. The Board of Directors may authorize by resolution additional Directors so that the total number of Directors does not exceed seven (7). Other than the director designated by the Management Company, all Directors must be Members, or an individual representative of a Member that is not a natural person.

(3) Term. Except in cases where these Bylaws or a designation of a class or series of Shares allows appointment of directors or as otherwise provided in these Bylaws, all Directors shall serve three-year terms and until their successors are duly elected and qualified, or until their earlier death, resignation or removal. In order to preserve continuity of governance and the harmonious transition of the initial Board of Directors to the successor Board of Directors, the terms of the initial Directors shall be staggered to one, two, and three years.

(b) Resignation. Any Director may resign at any time. The resignation shall be made in writing and shall take effect at the time specified in the notice or, if no time be specified then at the time of its receipt by the Chair or the Vice Chair of the Cooperative. The acceptance of a resignation shall not be necessary to make it effective, unless expressly so provided in the resignation.

(c) Removal. A Director elected by Patron Members may be replaced or removed for cause by the affirmative vote of two-thirds of the remaining initial Directors then serving. Following the election of a Director, a Director may be removed for any reason by the affirmative vote of the holders of a majority of the voting power of the Members entitled to vote at an election of that Director. The notice of the meeting shall state that the removal will be discussed and acted upon at the meeting and must also be provided to the Director in question at least 10 days in advance of such meeting. The Director in question has a right to be heard at the meeting.

(d) Vacancies. Any vacancy occurring on the Board of Directors other than the Director appointed by the Management Company may be filled by appointment through an affirmative vote of a majority of the remaining Directors elected by the Members that elected the Director for which the vacancy exists, though less than a quorum. A Director appointed by the Board of Directors to fill a vacancy for an elected Director shall serve until the next annual or special meeting of the Members held for the purpose of electing Directors, at which time the Members shall elect a new Director to serve for the remainder of the original term of the vacated position. At the next annual or special meeting of the Members, the Members shall elect a Director to fill the unexpired term of the vacant Director’s position.

(e) Meetings. Regular meetings of the Board of Directors shall be held quarterly or from time to time as determined by the Board of Directors. Special meetings of the Board of Directors shall be held upon the call of the Chair or a quorum of Directors. Board of Directors meetings shall be held at the principal office of the Cooperative or at such other place, either within or without the State of Minnesota, as shall be designated by the person calling the meeting and stated in the notice of the meeting or a duly executed waiver of notice thereof. Directors may participate in a Board of Directors meeting by means of video or audio conferencing or similar communications equipment whereby all Directors participating in the meeting can hear each other.

(f) Notice. Oral or written notice of each meeting of the Board of Directors, stating the place, day and hour of the meeting, shall be given to each Director at least three days before the day on which the meeting is to be held. The notice or waiver of notice of any special or regular meeting of the Board of Directors does not need to specify the business to be transacted or the purpose of the meeting.

(g) Waiver. Whenever any notice of a meeting or otherwise is required to be given to a Director under the provisions of these Bylaws, a waiver of the notice in writing signed by the Director, whether before or after the time stated in the notice, shall be deemed equivalent to the giving of the notice. Attendance of a Director at any meeting of the Board of Directors shall constitute waiver of notice of the meeting by the Director, except where the Director attends a meeting for the express purpose of stating his or her objection to the transaction of any business because the meeting is not lawfully called or convened.

(h) Quorum. A majority of the Directors in office shall constitute a quorum necessary for the transaction of business at any regular or special meeting of the Board of Directors. If less than a quorum is present, those Directors present may adjourn the meeting from time to time until a quorum shall be present.

(i) Voting and Act of the Board. Each voting Director shall have one vote. The Board of Directors shall take action by the affirmative vote of a majority of the Directors present at a duly held meeting at which a quorum is present.

(j) Action Without a Meeting. Any action required or permitted to be taken at a meeting of the Board of Directors may be taken by written action signed by all of the Directors comprising the Board of Directors.

(k) Absentee Directors. A Director of the Cooperative may give advance written consent or opposition to a proposal to be acted on at a Board meeting. If the Director is not present at the meeting, consent or opposition to a proposal does not constitute presence for purposes of determining the existence of a quorum, but consent or opposition shall be counted as a vote in favor of or against the proposal and shall be entered in the minutes or other record of action at the meeting, if the proposal acted on at the meeting is substantially the same or has substantially the same effect as the proposal to which the Director has consented or objected.

(l) Compensation. The Board of Directors may fix the compensation, if any, of Directors. Directors shall also be entitled to reimbursement for actual expenses within guidelines determined by the Board incurred in attending meetings of the Board of Directors or other business of the Cooperative.

6.5 Duties and Obligations of Directors.

The Board of Directors shall cause the Cooperative to conduct its business and operations separate and apart from that of any Member, Director or any of its Affiliates, provided, however, it is recognized and approved that the Director representing the Management Company has conflicts of interest as described in Section 1.9(c) and that those conflicts are hereby waived. The Board of Directors shall take all actions which may be necessary or appropriate: (1) for the continuation of the Cooperative’s valid existence as a cooperative under the laws of the State of Minnesota and each other jurisdiction in which such existence is necessary to protect the limited liability of Members or to enable the Cooperative to conduct the business in which it is engaged; and (2) for the accomplishment of the Cooperative’s purposes, including providing forward pricing services for its Members in accordance with the agreement entered into by the Cooperative; (3) cooperate and work with the Management Company to perform the forward pricing services and other services for Patron Members; and (4) prosecute, discharge, release or abandon any claims assigned to the Cooperative by its Members. Each Director shall have the duty to discharge the foregoing duties in good faith, in a manner the Director believes to be in the best interests of the Cooperative, and with the care and ordinarily prudent person in a like position would exercise under similar circumstances. No Director shall be under any other duty to the Cooperative or the Members to conduct the affairs of the Cooperative in a particular manner.

6.6 Limitation of Liability; Indemnification of Directors, Officers, and Management Company.

(a) No Personal Liability. No Director, officer of the Cooperative, or personnel of the Management Company performing their work for the Cooperative, shall be personally liable to this Cooperative or its Members for monetary damages for a breach of fiduciary duty by such Director, officer, or personnel of the Management Company to the greatest extent allowed by law; provided that this provision shall not eliminate or limit the liability of a Director or officer for an act or failure to act in a manner that constitutes any of the following: (1) a breach of the Director’s duty of loyalty to the Cooperative or its Members; (2) an act or omission that is not in good faith or involves intentional misconduct or a knowing violation of law; (3) a knowing violation of securities laws under Minnesota Statutes §80A.23 or for illegal distributions; or (4) a transaction from which the Director derived an improper personal profit.

(b) Indemnification. The Cooperative, its receiver, or its trustee (in the case of its receiver or trustee, to the extent of Cooperative property) shall indemnify, defend, save harmless, and pay all judgments and claims against, and reasonable expenses of, each present and former Director, officer, or personnel of the Management Company performing work for the Cooperative relating to any liability or damage or reasonable expenses incurred with respect to a proceeding if the Director, officer, or personnel from the Management Company (or former Director, officer, or personnel of the Management Company) was a party to the proceeding in the capacity of a Director or officer of the Cooperative (which reasonable expenses including reasonable attorneys’ fees may be paid as incurred). Notwithstanding the foregoing provisions, the Cooperative shall not indemnify, defend, save harmless, or pay all judgments and claims against, and reasonable expenses of, a Director, officer, or personnel of the Management Company (or former Director, officer, or personnel of the Management Company) under the foregoing provisions where the judgments and claims or proceedings arise out of or are related to act or failure to act of the Director, officer, or personnel of the Management Company in a manner that constitutes any of the acts listed at Section 6.6(a).

(c) Insurance. The Cooperative shall purchase and maintain insurance on behalf of any Person in the Person’s official capacity against any liability asserted against and incurred by the Person in or arising from that capacity, whether or not the Cooperative would otherwise be required to indemnify the Person against the liability, which insurance shall be in an amount determined by the Board of Directors upon recommendation of the Management Company in an amount appropriate for the Person’s capacity.

ARTICLE 7
Members

7.1 Rights or Powers.

Other than the right to designate or elect Directors to the Board of Directors, no Member, other than a Member acting in his or her capacity as a Director or officer of the Cooperative, has any right or power to take part in the management or control of the Cooperative or its business and affairs or to act for or bind the Cooperative in any way. Notwithstanding the foregoing, the Members have all the rights and powers specifically set forth in these Bylaws and, to the extent not inconsistent with these Bylaws, in the Act.

7.2 Membership Requirements and Member Voting.

(a) Membership. The Cooperative has one class of membership: Patron Members. To be a Patron Member of the Cooperative a Person or entity must subscribe to one (1) Membership Share and execute these Bylaws or an agreement to be subject to these Bylaws, enter into a Member Agreement with the Cooperative, and meet and comply with the provisions of Section 7.6(a).

(b) Member Voting. Members shall elect Directors to the Board of Directors in the manner provided in Section 6.4. Each Patron Member is entitled to only one vote. The Members shall take action by the affirmative vote of a majority of the voting power of the Patron Members that constitute a quorum for the transaction of business at the meeting.

7.3 Meetings of the Members.

(a) Calling of Meetings. Meetings of the Members may be called by a majority vote of the Board or the written petition of at least 20% of the Patron Members. The call shall state the location of the meeting and the nature of the business to be transacted. Notice of any meeting shall be issued within 10 days from the date of petition and the meeting must be held within 30 days of the petition. Members may vote in person, by proxy or by electronic methods authorized by the Board of Directors for the vote at the meeting and may waive advance notice of the meeting. Whenever the vote or consent of Members is permitted or required under the Agreement, the vote or consent may be given at a meeting of the Members or may be given in accordance with the procedure prescribed in this Section 7.3.

(b) Proxies. Each Member may authorize any Person or Persons to act for it by proxy on all matters in which a Member is entitled to participate, including waiving notice of any meeting, or voting or participating at a meeting; except that a Patron Member may only grant a proxy to vote to another Patron Member. Every proxy must be signed by the Member or its attorney‑in‑fact. No proxy shall be valid after the expiration of eleven (11) months from the date thereof unless otherwise provided in the proxy. Every proxy shall be revocable at the pleasure of the Member executing it.

(c) Chair of Meetings. Each meeting of Members shall be chaired and conducted by the Chair of the Board or another individual Person as the Chair designates.

(d) Action By Writing or Electronic Communication. Notwithstanding this Section 7.3, the Members may take any action contemplated under these Bylaws as approved by the consent of the Patron Members required for the action, if the consent is provided in writing, or by electronic communication as expressed by the Board of Directors.

7.4 Members Not Liable for Debts of Cooperative.

A Member, a holder of a Membership Share or Common Shares, or the Management Company shall not be liable under a judgment, decree or order of a court, or in any other manner for the debts or any other obligations or liabilities of the Cooperative. A Member or a holder of Membership Shares or Common Shares shall be liable only to make its Capital Contribution and shall not be required to lend any funds to the Cooperative or, after its Capital Contribution has been made, to make any additional contributions, assessments or payments to the Cooperative other than annual membership fees, provided that a Member may be required to repay distributions made to it as provided in of the Act. A Director, in the position of Director shall not have any personal liability for the repayment of any Capital Contribution of any Member.

7.5 Transactions Between a Member and the Cooperative.

Except as otherwise provided by applicable law, any Member may, but shall not be obligated to, lend money to the Cooperative, act as surety for the Cooperative and transact other business with the Cooperative and has the same rights and obligations when transacting business with the Cooperative as a Person or entity who is not a Member.

7.6 Membership Requirements; Termination.

(a) Membership Requirements. To be accepted as a Member of the Cooperative and to maintain Membership in the Cooperative a person or entity must:

(1) complete and execute a Membership Agreement.

(2) patronize the Cooperative as provided in agreements and policies of the Cooperative.

(3) pay annual membership fees as determined by the Cooperative.

(a) Members that are a duly qualified organization engaged in commercial agriculture or engaged in a commercial agricultural-related operation paying annual dues of $250;

(b) Members who are employees of a Member that is a qualified organization engaged in commercial agriculture or are employees a commercial organization engaged in agricultural-related operation paying annual dues of $25;

(c) Members who are customers of a Member that is a qualified organization engaged in commercial agriculture or are customers of a commercial organization engaged in agricultural-related operation paying annual dues of $25;

(4) comply and be in compliance with the agreements between the Member and the Cooperative as well as guidance and directives provided by the Cooperative to maintain compliance with third party contracts with the Member or the Cooperative.

(5) comply and be in compliance with policies of the Cooperative regarding how the Member patronizes and interacts with the Cooperative and other Members.

(6) not take actions or omit taking actions the result of which are detrimental to the Cooperative or other Members; and

(7) comply with the provisions of the Cooperative’s articles and bylaws.

(b) Termination. The Cooperative may terminate the membership of a Member if the Member does not comply with the Membership requirements in Section 7.6(a) or otherwise acts in a manner that is detrimental to the Cooperative, the Cooperative’s operations and management, or to the Members of the Cooperative, all of which as determined by the Cooperative in its discretion is in the best interests of the Cooperative and its other Members.

(c) Resignation or Withdrawal. In addition, the membership of a Member in the Cooperative shall terminate upon the occurrence of events described in the Act or these Bylaws, including resignation and withdrawal.

(d) Effect of Termination. Upon termination of the Member, this Cooperative may but need not terminate any contract or agreement between the Cooperative and the terminated Member. Any stock held by the Member may be redeemed at 80% of the purchase price by the Cooperative in up to four equal calendar quarter with payments starting at the end of the first calendar quarter after termination.

(e) Voting Rights. A person or entity that ceases to be a Member shall lose all voting rights. The terminated Member shall have no right to any information or accounting of the affairs of the Cooperative, shall not be entitled to inspect the books or records of the Cooperative, shall not be entitled to vote on any matters reserved to the Members, and shall not have any of the other rights of a Member under these Bylaws or of a Member under the Act.

ARTICLE 8
Share and Interest Records

8.1 Share and Interest Records.

The Cooperative shall keep records and document the interests of Members and holders of Membership Shares and Common Shares in the form as determined by the Board of Directors. The Chair or the Vice Chair and the Secretary of the Cooperative shall keep the Share Records of the Cooperative.

ARTICLE 9
Accounting, Books and Records

9.1 Accounting, Books and Records.

(a) Retention. The books and records of the Cooperative shall be kept, and the financial position and the results of its operations recorded, in accordance with GAAP, consistently applied; provided, that the financial provisions in these Bylaws relating to Capital Contributions, Profits and Losses, distributions and Capital Accounts shall be construed and determined in accordance with these Bylaws without regard to whether such provisions are inconsistent with GAAP. The books and records shall reflect all the Cooperative’s transactions and shall be appropriate and adequate for the Cooperative’s business. The Cooperative shall maintain at its principal office all of the following:

(1) a current list of the full name and last known business or residence address of each holder of Shares set forth in alphabetical order, together with the Capital Contributions, interests and Shares of each holder;

(2) the full name and business address of each Director;

(3) a copy of the Articles and any and all amendments thereto together with executed copies of any powers of attorney pursuant to which the Articles or any amendments thereto have been executed;

(4) copies of the Cooperative’s federal, state, and local income tax or information returns and reports, if any, for the three most recent taxable years;

(5) a copy of these Bylaws and any and all amendments thereto together with executed copies of any powers of attorney pursuant to which these Bylaws or any amendments thereto have been executed;

(6) copies of the financial statements of the Cooperative, if any, for the three most recent Fiscal Years; and

(7) the Cooperative’s books and records as they relate to the internal affairs of the Cooperative for at least the current and past four Fiscal Years.

(b) Accrued Method of Accounting. The Cooperative shall use the accrual method of accounting in preparing its financial reports and for tax purposes and shall keep its books and records accordingly. The Board of Directors may, without any further consent of the Members (except as specifically required by the Code), apply for IRS consent to, and otherwise effect a change in, the Cooperative’s Fiscal Year.

(c) Access to Records. Any Member or its designated representative has the right to have reasonable access to and inspect and copy the contents of such books or records and shall also have reasonable access during normal business hours as determined by the Board of Directors to such additional financial information, documents, books and records as they relate to a legitimate business purpose of the Member as determined by the Board of Directors in its discretion. The rights granted to a Member pursuant to this Section 9.1 are expressly subject to compliance by the Member with the safety, security and confidentiality procedures and guidelines of the Cooperative, as such procedures and guidelines may be established from time to time by the Board of Directors.

9.2 Reports.

(a) In General. The Chief Financial Officer of the Cooperative shall be responsible for causing the preparation of financial reports of the Cooperative and the coordination of financial matters of the Cooperative with the Cooperative’s accountants.

(b) Periodic and Other Reports. The Cooperative shall maintain and provide to each Member upon request, the financial statements prepared, in each case in accordance with GAAP consistently applied (and, file with the Securities and Exchange Commission, if required, for purposes of reporting under the Securities Exchange Act of 1934, Regulation S-X).

9.3 Tax Matters.

(a) Tax Elections. The Board of Directors shall, without any further consent of the Members being required (except as specifically stated), make any and all elections for federal, state, local, and foreign tax purposes.

(b) Tax Information. Necessary tax information shall be delivered to each Member and holder of Shares as soon as practicable after the end of each Fiscal Year of the Cooperative.

9.4 Delivery to Members and Inspection.

(a) Copy of Information To Members. Upon the request of any Member for purposes reasonably related to the interest of that Person as a Member, the Board of Directors shall promptly deliver to the requesting Member, at the expense of the Cooperative, a copy of the information required to be maintained under Sections 9.1(a)(1), (2), (3) and (4), a copy of these Bylaws and all amendments hereto.

(b) Inspection Rights. Each Member has the right, upon reasonable request for purposes reasonably related to the interest of the Person as a Member and for proper purposes, to:

(1) Inspect and copy during normal business hours any of the Cooperative records described in Sections 9.1(a)(1) through (7); and

(2) Obtain from the Members, promptly after their becoming available, a copy of the Cooperative’s federal, state, and local income tax or information returns for each Fiscal Year.

ARTICLE 10
Amendments

These Bylaws may be amended by the Board to the extent allowed by the Act. Amendments to these Bylaws may be proposed by the Board of Directors for adoption by the Members. Following approval of any amendment proposal, the Board shall submit to the Members a verbatim statement of any proposed amendment, providing that legal counsel for the Cooperative shall have approved of the same in writing as to form, and the Board of Directors shall include in any submission a recommendation as to the proposed amendment. The Board shall seek the written vote of the Members on the proposed amendment or shall call a meeting to vote thereon and to transact any other business that it may deem appropriate. A proposed amendment shall be adopted and be effective as an amendment hereto only if approved by a majority of the Members.

Notwithstanding the above, this Article 10 shall not be amended without the consent of a majority of all Patron Members.

ARTICLE 11
Transfers

11.1 Restrictions on Transfers.

Membership Shares of the Cooperative other than Membership Shares may not be transferred. Shares of stock of this Cooperative may be transferred only with the consent of the Board of Directors of the Cooperative and on the books of the Cooperative, and then only to Persons eligible to hold the Shares. Membership Shares are not transferable. No purported assignment or transfer of Shares shall pass to any Person not eligible to hold it, nor any rights or privileges on account of the Shares, nor vote or voice in the management of the affairs of the Cooperative.

A transfer of Common Shares is not valid except specifically permitted by this Article 11. It is the intent of these Bylaws that: (1) the tax status of the Cooperative be the same as for a corporation eligible for the Cooperative deductions under Subchapter T of the Internal Revenue Code; (2) this Cooperative preserve its cooperative tax status; and (3) to the extent possible, these Bylaws shall be read and interpreted to prohibit the free transferability of Shares.

11.2 Permitted Transfers.

No Transfer of Common Shares shall be binding on this Cooperative without the approval of the Board of Directors nor until the Transfer is entered in the books and records of this Cooperative. The Board of Directors may adopt a Share Transfer Policy to further implement the provisions of this Article 11 for the Transfer of Shares.

ARTICLE 12
Dissolution and Winding Up

12.1 Dissolution Events.

(a) Dissolution. The Cooperative shall dissolve and shall commence winding up and liquidating upon the first to occur of any of the following (each a “Dissolution Event”):

the affirmative vote of each of the Board of Directors and a two-thirds (2/3) majority of the Members to dissolve, wind up, and liquidate the Cooperative; or
the entry of a decree of judicial dissolution pursuant to the Act.

(b) Restriction. The Members hereby agree that, notwithstanding any provision of the Act, the Cooperative shall not dissolve prior to the occurrence of a Dissolution Event.

12.2 Winding Up.

Upon the occurrence of a Dissolution Event, the Cooperative shall continue solely for the purposes of winding up its affairs in an orderly manner, liquidating its assets, and satisfying the claims of its creditors, and Members, and no Member shall take any action that is inconsistent with, or not necessary to or appropriate for, the winding up of the Cooperative’s business and affairs. The Liquidator shall be responsible for overseeing the prompt and orderly winding up and dissolution of the Cooperative. The Liquidator shall take full account of the Cooperative’s liabilities and Property and shall cause the Property or the proceeds from the sale thereof, to the extent sufficient therefor, to be applied and distributed, to the maximum extent permitted by law, in the following order:

(1) first, to creditors (including Directors and Members who are creditors, to the extent otherwise permitted by law) in satisfaction of all of the Cooperative’s debts and other liabilities (whether by payment or the making of reasonable provision for payment thereof), other than liabilities for which reasonable provision for payment has been made; and

(2) second, the balance, if any, to repay patronage as stated on the books of the Cooperative, and the balance to Members in accordance with their patronage with the Cooperative over the prior ten years or as determined by the Board of Directors.

12.3 Rights of Shareholders.

Except as otherwise provided in these Bylaws, each Shareholder shall look solely to the property of the Cooperative for the return of its Capital Contribution and has no right or power to demand or receive property other than cash from the Cooperative. If the assets of the Cooperative remaining after payment or discharge of the debts or liabilities of the Cooperative are insufficient to return the Capital Contribution, the Shareholders shall have no recourse against the Cooperative or any other Shareholder or Shareholders.

12.4 Notice of Dissolution/Termination.

(a) Notice. Upon the occurrence of a Dissolution Event, the Board shall, within thirty (30) days thereafter, provide written notice to each of the Members, and the Board may notify its known claimants and/or publish notice as further provided in the Act.

(b) Certificate of Dissolution. Upon completion of the distribution of the Cooperative’s Property as provided in this Article 12, the Cooperative shall be terminated, and the Liquidator shall cause the filing of a Certificate of Dissolution in accordance with the Act and shall take all other actions as may be necessary to terminate the Cooperative.

12.5 Allocations During Period of Liquidation.

During the period commencing on the first day of the Fiscal Year during which a Dissolution Event occurs and ending on the date on which all of the assets of the Cooperative have been distributed to the Members pursuant to Article 12.2 (the “Liquidation Period”), the Members shall continue to share Profits, Losses, gain, loss and other items of Cooperative income, gain, loss or deduction in the manner provided in Article 3.

ARTICLE 13
Dispute Resolution

If a dispute arises out of or relates to these Bylaws, or the performance or breach of these Bylaws, the parties agree first to try in good faith to settle the dispute by mediation under the Commercial Mediation Rules of the American Arbitration Association, before resorting to arbitration. Thereafter, any remaining unresolved controversy or claim arising out of or relating to these Bylaws, or the performance or breach of these Bylaws, shall be settled by binding arbitration pursuant to the Commercial Arbitration Rules of the American Arbitration Association as modified by this Article 13, PROVIDED, that this Article 13 shall not require use of the American Arbitration Association Rules (only that the Rules as modified by this Article 13 shall be followed). The arbitration shall be conducted in the State of Iowa unless the state where the main business office of the Cooperative is located is selected by the Board of Directors. Any award rendered shall be final and conclusive upon the parties and a judgment thereon may be entered in any court having competent jurisdiction. The parties shall: (1) agree upon and appoint as the arbitrator a retired former trial Judge in the jurisdiction where the arbitration is held; (2) direct the arbitrator to follow substantive rules of law and the Federal Rules of Evidence; (3) allow for the parties to conduct discovery pursuant to the rules then in effect under the Federal Rules of Civil Procedure for a period not to exceed 60 days; (4) require the testimony to be transcribed; and (5) require the award to be accompanied by findings of fact and a statement of reasons for the decision. The cost and expense of the arbitrator and location costs shall be borne equally by the parties to the dispute. All other costs and expenses, including reasonable attorney’s fees and expert’s fees, of all parties incurred in any dispute which is determined and/or settled by arbitration pursuant to this Article 13 shall be borne by the party incurring such cost and expense. Except where clearly prevented by the area in dispute, both parties agree to continue performing their respective obligations under these Bylaws while the dispute is being resolved.

ARTICLE 14
Definitions; Miscellaneous

14.1 Definitions.

Capitalized words and phrases used in these Bylaws have the following meanings:

“Act” means the Minnesota Cooperative Associations Act as set forth in Minnesota Statutes, §§ 308B.001 to 308B.975, as amended from time to time (or any corresponding provision or provisions of any succeeding law).

“Additional Capital Contributions” means, with respect to any holder of Common Shares, the Capital Contributions made with respect to the Common Shares held or purchased by the holder pursuant to Sections 2.4 and 2.6. If Shares are transferred in accordance with the terms of these Bylaws, the transferee will succeed to the Additional Capital Contributions of the transferor to the extent they relate to the Transferred Shares.

The foregoing definition is intended to comply with the provisions of Section 1.704-1(b)(2)(ii)(d) of the Regulations and shall be interpreted consistently therewith.

“Affiliate” means, with respect to any Person (1) any Person directly or indirectly controlling, controlled by or under common control with the Person; (2) any officer, director, general partner, member or trustee of such Person; or (3) any Person who is an officer, director, general partner, member or trustee of any Person described in clauses (1) or (2) of this sentence. For purposes of this definition, the terms “controlling,” “controlled by” or “under common control with” means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person or entity, whether through the ownership of voting securities, by contract or otherwise, or the power to elect at least 50% of the directors, officers, members, or Persons exercising similar authority with respect to such Person or entities.

“Agreement” or “Operating Agreement” means this Operating Agreement and Bylaws of the Cooperative, as amended from time to time. Words such as “herein,” “hereinafter,” “hereof,” “hereto” and “hereunder” refer to these Bylaws as a whole, unless the context otherwise requires.

“Articles” means the Articles of Organization and related documents filed with the Minnesota Secretary of State for the purpose of the Cooperative becoming subject to the Act.

“Board” or “Board of Directors” means collectively the persons who are named as Directors of the Cooperative in or designated or elected as Directors of the Cooperative under these Bylaws.

“Code” means the United States Internal Revenue Code of 1986, as amended from time to time.

“Common Share” means a Share of Common Stock as provided in Sections 2.2 and 2.3.

“Common Stock” means the stock of the Cooperative as defined in Sections 2.2 other than the Membership Stock.

“Cooperative” means the cooperative formed pursuant to these Bylaws and the Articles and the cooperative continuing the business of this Cooperative in the event of dissolution of the Cooperative.

“Depreciation” means, for each Fiscal Year, an amount equal to the depreciation, amortization, or other cost recovery deduction allowable with respect to an asset for such Fiscal Year, except that if the Gross Asset Value of an asset differs from its adjusted basis for federal income tax purposes at the beginning of such Fiscal Year, Depreciation shall be an amount which bears the same ratio to such beginning Gross Asset Value as the federal income tax depreciation, amortization, or other cost recovery deduction for such Fiscal Year bears to such beginning adjusted tax basis; provided, however, that if the adjusted basis for federal income tax purposes of an asset at the beginning of such Fiscal Year is zero, Depreciation shall be determined with reference to such beginning Gross Asset Value using any reasonable method selected by the Members.

“Dissolution Event” has the meaning set forth in Section 12.1.

“Effective Date” means the date these Bylaws is to be effective as stated in the first paragraph of these Bylaws.

“Fiscal Year” means the twelve-month period commencing on January 1 and ending on December 31, and (iii) the period commencing on the immediately preceding January 1 and ending on the date on which all Property is distributed to Shareholders pursuant to Section 12, or, if the context requires, any portion of a Fiscal Year for which an allocation of Profits or Losses or a distribution is to be made.

“GAAP” means generally accepted accounting principles in effect in the United States of America from time to time.

“Gross Asset Value” means with respect to any asset, the asset’s adjusted basis for federal income tax purposes, except as follows:

The initial Gross Asset Value of any asset contributed by a Shareholder to the Cooperative shall be the gross fair market value of such asset, as determined by the Members provided that the initial Gross Asset Values of the assets contributed to the Cooperative pursuant to Section 2.3 shall be as set forth in such Section;
The Gross Asset Values of all Cooperative assets shall be adjusted to equal their respective gross fair market values as determined by the Board of Directors as of the following times: (A) the acquisition of an additional interest in the Cooperative by any new or existing Shareholder in exchange for more than a de minimis Capital Contribution; (B) the distribution by the Cooperative to a Shareholder of more than a de minimis amount of Cooperative Property as consideration for an interest in the Cooperative; and (c) the liquidation of the Cooperative, provided that an adjustment described in clauses (A) and (B) of this paragraph shall be made only if the Board of Director determines that such adjustment is necessary to reflect the relative economic interests of the shareholders in the Cooperative;
The Gross Asset Value of any item of Cooperative assets distributed to any Shareholder shall be adjusted to equal the gross fair market value of the asset on the date of distribution as determined by the Board of Directors; and
The Gross Asset Values of Cooperative assets shall be increased (or decreased) to reflect any adjustments to the adjusted basis of the assets.

If the Gross Asset Value of an asset has been determined or adjusted pursuant to subparagraph (ii) or (iv), such Gross Asset Value shall thereafter be adjusted by the Depreciation taken into account with respect to the asset, for purposes of computing Profits and Losses.

“Interest” means, collectively, a Member’s share of the “Profits” and “Losses” of the Cooperative, a Shareholder’s right to receive distributions of the Cooperative’s assets, and, with respect to a Member, any right of the Member to vote or participate in the management of the Cooperative.

“Liquidation Period” has the meaning set forth in Section 12.5.

“Losses” has the meaning set forth in the definition of “Profits” and “Losses.”

“Member” means any Person who is the owner of one or more Membership Share, meets and maintains the requirements to be a Member as determined by the Board of Directors from time to time, and who has not ceased to be a Member pursuant to the terms of these Bylaws. “Members” means all such Persons. A Member is a Patron Member.

“Net Cash Flow” means the gross cash proceeds of the Cooperative less the portion thereof used to pay or establish reserves for all Cooperative expenses, debt payments, payments to the Management Company, capital improvements, replacements, and contingencies, all as reasonably determined by the Board of Directors. “Net Cash Flow” shall not be reduced by depreciation, amortization, cost recovery deductions, or similar allowances, but shall be increased by any reductions of reserves previously established.

“Patron Member” means a holder of at least one (1) Membership Share who has entered a Membership Agreement with the Cooperative, is admitted by the Cooperative as a Member of the Cooperative, continues to meet the requirements for Membership and has not ceased to be a Member and the Cooperative has not terminated the Membership in the Cooperative.

“Permitted Transfer” has the meaning set forth in Section 11.2.

“Person” means any individual, partnership (whether general or limited), limited liability Cooperative, trust, estate, association, nominee or other entity.

“Profits” and “Losses” mean, for each Fiscal Year, an amount equal to the Cooperative’s taxable income or loss for the Fiscal Year.

“Property” means all real and personal property acquired by the Cooperative, including cash, and any improvements thereto, and shall include both tangible and intangible property.

“Regulations” means the Income Tax Regulations, including Temporary Regulations, promulgated under the Code, as such regulations are amended from time to time.

“Securities Act” means the Securities Act of 1933, as amended.

“Shares” means Membership Shares and Common Shares as defined in Section 2.2.

“Subsidiary” means any partnership, joint venture, limited liability company, association or other entity in which such Person owns, directly or indirectly, fifty percent (50%) or more of the outstanding equity securities or interests, the holders of which are generally entitled to vote for the election of the Board of Directors or other governing body of such entity.

“Transfer” means, as a noun, any voluntary or involuntary transfer, sale, pledge or hypothecation or other disposition and, as a verb, voluntarily or involuntarily to transfer, sell, pledge or hypothecate or otherwise dispose of.

14.2 Notices.

Any notice, payment, demand, or communication required or permitted to be given by any provision of these Bylaws shall be in writing and shall be deemed to have been delivered, given, and received for all purposes: (1) if delivered personally to the Person or to an officer of the Person to whom the same is directed, or (2) when the same is actually received, if sent either by registered or certified mail, postage and charges prepaid, or by facsimile, if the facsimile is followed by a hard copy of the facsimile communication sent promptly thereafter by registered or certified mail, postage and charges prepaid, addressed as follows, or to such other address as the Person may from time to time specify by notice to the Cooperative and the Members:

If to the Cooperative, to the address determined pursuant to Section 1.4; and
If to the Members, to the address set forth on record with the Cooperative.

14.3 Binding Effect.

Except as otherwise provided in these Bylaws, every covenant, term, and provision of these Bylaws shall be binding upon and inure to the benefit of the Members and their respective successors, transferees, and assigns.

14.4 Construction.

Every covenant, term, and provision of these Bylaws shall be construed simply according to its fair meaning and not strictly for or against any Member.

14.5 Time.

In computing any period of time pursuant to these Bylaws, the day of the act, event or default from which the designated period of time begins to run shall not be included, but the time shall begin to run on the next succeeding day. The last day of the period so computed shall be included, unless it is a Saturday, Sunday or legal holiday, in which event the period shall run until the end of the next day which is not a Saturday, Sunday or legal holiday.

14.6 Headings.

Section and other headings contained in these Bylaws are for reference purposes only and are not intended to describe, interpret, define, or limit the scope, extent, or intent of these Bylaws or any provision hereof.

14.7 Severability.

Except as otherwise provided in the succeeding sentence, every provision of these Bylaws is intended to be severable, and, if any term or provision of these Bylaws is illegal or invalid for any reason whatsoever, the illegality or invalidity shall not affect the validity or legality of the remainder of these Bylaws. Notwithstanding the foregoing, if such illegality or invalidity would be to cause any Member to lose the material benefit of its economic bargain, then the Members agree to negotiate in good-faith to amend these Bylaws in order to restore such lost material benefit.

14.8 Incorporation by Reference.

Every exhibit, schedule, and other appendix attached to these Bylaws and referred to herein is not incorporated in these Bylaws by reference unless these Bylaws expressly otherwise provides.

14.9 Variation of Terms.

All terms and any variations thereof shall be deemed to refer to masculine, feminine, or neuter, singular or plural, as the identity of the Person or Persons may require.

14.10 Governing Law.

The laws of the State of Minnesota shall govern the validity of these Bylaws, the construction of its terms, and the interpretation of the rights and duties arising hereunder.

14.11 Waiver of Jury Trial.

Each of the Members irrevocably waives to the extent permitted by law, all rights to trial by jury and all rights to immunity by sovereignty or otherwise in any action, proceeding or counterclaim arising out of or relating to these Bylaws.

14.12 Counterpart Execution.

These Bylaws may be executed in any number of counterparts with the same effect as if all of the Members had signed the same document. All counterparts shall be construed together and shall constitute one agreement.

14.13 Specific Performance.

Each Member agrees with the other Members that the other Members would be irreparably damaged if any of the provisions of these Bylaws are not performed in accordance with their specific terms and that monetary damages would not provide an adequate remedy in such event. Accordingly, it is agreed that, in addition to any other remedy to which the nonbreaching Members may be entitled, at law or in equity, the nonbreaching Members shall be entitled to injunctive relief to prevent breaches of the provisions of these Bylaws and specifically to enforce the terms and provisions hereof in any action instituted in any court of the United States or any state thereof having subject matter jurisdiction thereof.

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MEMBER SIGNATURE PAGE

IN WITNESS WHEREOF, in connection with the formation of HERO eCooperative and as a condition to the undersigned’s acquiring a Membership Share, the undersigned hereby executes and enters into these Bylaws as a Member as of the date indicated below and agrees to be bound by the terms and conditions of these Bylaws on and after the Effective Date.

Date Signed:


Member (Individual):

Signature

Print Name


Member (Entity):

Name of Entity

Signature

Print Name

Its:

Member Number ___________________________________

EXHIBIT A

HERO ECOOPERATIVE

___________________________________

Names of Members,
Capital Contribution and Membership Share Issued

11/28/2020

Name of Members	Membership Share	Original Capital Contribution
Terrence Childers	33.33%	$25
Constantine Loles	33.33%	$25
Thomas Fernandes	33.33%	$25

EXHIBIT B

INITIAL DIRECTORS

Name

Terrence Childers (Appointed) ___________________________________ ___________________________________ ___________________________________
Constantine Loles (Appointed) ___________________________________ Thomas Fernandes (Appointed)______________ _________________________________ _________________________________ _________________________________ _________________________________