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Island Cohousing LLC operating agreement

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ISLAND COHOUSING, LLC

Operating Agreement

This Operating Agreement of Island Cohousing, LLC (the “Community”) is made as of March __, 1997 by and between the persons identified as the Member Households and Individual Members on Schedule A attached hereto.

WHEREAS, the Community was formed as a limited liability company under the Massachusetts Limited Liability Company Act (as amended from time to time, the “Act”) on March __, 1997; and

WHEREAS, the Member Households and Individual Members wish to set out fully their respective rights, obligations and duties regarding the Community and its assets and liabilities;

NOW, THEREFORE, in consideration of the mutual covenants expressed herein, the parties hereby agree as follows:

ARTICLE I – Organization and Powers

1.1. Organization.1 Organization”“2”;. The Community has been formed by the filing of its Certificate of Organization with the Massachusetts Secretary of State pursuant to the Act. The Certificate of Organization may be amended or restated by the Member Households, from time to time, as provided in the Act. The Certificate of Organization as so amended from time to time, is referred to herein as the “Certificate.”

1.2. Purposes and Powers.2 Purposes and Powers”“2”;. The principal business activity and purpose of the Community shall initially be to purchase land on Martha’s Vineyard, Massachusetts in order to develop and build a cohousing community of 14‑22 private households and shared common facilities which, through the balance of individual autonomy and group opportunities, enhances the social and economic quality of life of the residents based upon the guiding principles set forth on Exhibit A hereto and to engage in any activity related thereto or useful in connection therewith. Notwithstanding the foregoing, the business and purposes of the Community shall not be limited to its initial principal business activity and, unless the Community otherwise determines, the Community shall have authority to engage in any other lawful business, trade, purpose or activity permitted by the Act, and it shall possess and may exercise all of the powers and privileges granted by the Act or together with any powers incidental thereto, so far as such powers or privileges are necessary or convenient to the conduct, promotion or attainment of the business, purposes or activities of the Community, including without limitation the following powers:

(a) to conduct its business and operations in any state, territory or possession of the United States or in any foreign country or jurisdiction;

(b) to purchase, receive, take, lease or otherwise acquire, own, hold, improve, maintain, use or otherwise deal in and with, sell, convey, lease, exchange, transfer or otherwise dispose of, mortgage, pledge, encumber or create a security interest in all or any of its real or personal property, or any interest therein, wherever situated;

(c) to borrow or lend money or obtain or extend credit and other financial accommodations, to invest and reinvest its funds in any type of security or obligation of or interest in any public, private or governmental entity, and to give and receive interests in real and personal property as security for the payment of funds so borrowed, loaned or invested;

(d) to make contracts, including contracts of insurance, incur liabilities and give guaranties, whether or not such guaranties are in furtherance of the business and purposes of the Community, including without limitation, guaranties of obligations of other persons who are interested in the Community or in whom the Community has an interest;

(e) to employ officers, employees, agents and other persons, to fix the compensation and define the duties and obligations of such personnel, to establish and carry out retirement, incentive and benefit plans for such personnel, and to indemnify such personnel to the extent permitted by this Agreement and the Act;

(f) to make donations irrespective of benefit to the Community for the public welfare or for community, charitable, religious, educational, scientific, civic or similar purposes; and

(g) to institute, prosecute, and defend any legal action or arbitration proceeding involving the Community, and to pay, adjust, compromise, settle, or refer to arbitration any claim by or against the Community or any of its assets.

1.3. Principal Place of Business.3 Principal Place of Business”“2”;. The principal address of the Community shall initially be P.O. Box 4376, Vinyard Haven, Massachusetts 02568‑4376. The Member Households may change the principal office or place of business of the Community at any time and may cause the Community to establish other offices or places of business.

1.4. Fiscal Year. .4FiscalYear.”“2”;The fiscal year of the Community shall end on December 31 in each year.

ARTICLE II – Members

2. ARTICLE II – Members

2.1. Individual Members.1 Individual Members;. An Individual Member is any individual who signs this Operating Agreement, and their successors in interest, (“Individual Member”) as the sole member of a Member Household or as one of several Individual Members in a Member Household.

2.2. Member Households.2 Member Households;. Each Individual Member shall belong to a household (“Member Household”) consisting of one or more individuals who plan to live in the same housing unit. Each Member Household shall consist of at least one Individual Member. Member Households may increase their size by including additional individuals at any time. Member Households shall participate in the activities and the governance of the Community as set forth herein. Each Individual Member shall cause his or her Member Household to participate in the activities of the Community and to attend Community meetings.

2.3. Members..3 Members.; The initial Member Households and Individual Members of the Community shall be listed on Schedule A and said schedule shall be amended from time to time to reflect the withdrawal of Member Households or the admission of additional Member Households pursuant to this Agreement. Schedule A shall set forth the percentage interest which each Member Household holds in the profits and losses of the Community (the “Membership Interests”). Member Households shall be notified of changes in Schedule A, which shall constitute the record list of the Member Households for all purposes of this Agreement.

2.4. Admission of New Members..4 Admission of New Members.; Additional Member Households may be admitted to the Community and may participate in the profits, losses, distributions, allocations and capital contributions of the Community upon such terms as are established by the Community, from time to time. The Community’s initial Membership Policy is set forth on Exhibit B attached hereto. The Membership Policy shall include provisions describing the terms upon which prospective households may explore the idea of co‑housing. The Membership Policy may only be amended upon the vote of the Member Households as set forth in Section 2.5.

2.5. Consensus Policy/Voting.5 Consensus Policy/Voting;. Decisions will be made by the Community by seeking consensus pursuant to the Consensus Policy attached hereto as Exhibit C. If a consensus (unanimity of the attending Individual Members providing there is a quorum) of the Community cannot be achieved during two consecutive meetings of the Member Households separated by a minimum of 24 hours and if requested by a any participant of the meeting, all actions, approvals or consents to be taken or given by the Member Households shall require the affirmative vote of 75% of the Member Households in attendance at a meeting or the written consent of 75% of the Member Households. In all matters requiring a vote each Member Household shall be afforded one vote on all matters to be decided by vote of the Member Households. The vote of a Member Household may be cast at any meeting or in any consent in lieu of meeting by any Individual Member residing within the Member Household. If the Individual Members within a Member Household cannot decide how the Member Household’s vote is to be cast at the time a vote is to be taken, the Member Household shall abstain from such vote. Unless otherwise required by the Act or this Agreement, all actions, approvals and consents to be taken or given by the Member Households under the Act, this Agreement or otherwise shall require the affirmative vote or written consent of the Member Households as provided herein.

2.6. Expulsion of Member Households.6 Expulsion of Member Households;. A Member Household and each of the Individual Members within the Member Household may be expelled from the Community by a unanimous consensus decision (without resort to a 75% vote) of the Member Households of the Community other than the Member Household to be expelled in an action taken at a Special Meeting of the Member Households pursuant to Section 2.5. Member Households may be expelled for, among other reasons, financial impropriety, embezzlement and/or fraud as determined by the other Member Households at such meeting. Individual Members whose Member Household is to be expelled shall be entitled to appear at the Special Meeting concerning their expulsion to defend themselves from the charges upon which the potential expulsion is based. Individual Member Households that are expelled for any of the reasons stated in the preceding sentence may be subject to forfeiture of all or a portion of their capital account.

2.7. Meetings of Member Households..7 Meetings of Members.;

(a) Regular Meetings. Regular meetings of Member Households shall be held on the first Sunday and third Sunday of each month or on such other days as may be determined by consensus of the Member Households at any regular or special meeting. No notice of regular meetings will be delivered to Member Households.

(b) Special Meetings. Special Meetings of Member Households may be called for any proper purpose at any time by a majority of the Member Households. The Member Households calling the Special Meeting shall determine the date, time and place of each meeting of Member Households, and written notice thereof shall be given to each Member Household not less than three days or more than 60 days prior to the date of the Special Meeting. The business of each meeting of Member Households shall be limited to the purposes described in the notice. A written waiver of notice, executed before or after a Special Meeting by an Individual Member on behalf of his or her Member Household or its authorized attorney and delivered to the Community shall be deemed equivalent to notice of the Special Meeting.

(c) Sixty percent (60%) of the Member Households shall constitute a quorum for the transaction of any business at a meeting of Member Households. Individual Members may attend a Special Meeting by proxy for purposes of a 75% override vote. Individual Members may also participate in a Special Meeting by means of conference telephone or similar communications equipment that permits all Individual Members present to hear each other. If less than a quorum of the Member Households is present, the meeting may be adjourned by the facilitator to a later date, time and place, and the meeting may be held as adjourned without further notice. When an adjourned meeting is reconvened, any business may be transacted that might have been transacted at the original meeting.

(d) A facilitator selected by the Member Households shall preside at all meetings of the Member Households. The facilitator shall recommend the order of business and the procedures to be followed at each meeting of Member Households.

2.8. Action Without a Meeting.8 Action Without a Meeting;. There is no requirement that the Member Households hold a meeting in order to take action on any matter. Any action required or permitted to be taken by the Member Households may be taken without a meeting if one or more written consents to such action shall be signed by Individual Members representing the number of Member Households required to approve the action being taken. Such written consents shall be delivered to the Community and unless otherwise specified shall be effective on the date when the first consent is so delivered. The facilitator of the meeting shall give prompt notice to all Member Households who did not consent to any action taken by written consent of Member Households without a meeting.

2.9. Limitation of Liability of Members. .9 Limitation of Liability of Members.;Except as otherwise provided in the Act, no Individual Member of the Community shall be obligated personally for any debt, obligation or liability of the Community or of any other Individual Member, whether arising in contract, tort or otherwise, solely by reason of being an Individual Member of the Community. Except as otherwise provided in the Act, by law or expressly in this Agreement, no Individual Member shall have any fiduciary or other duty to another Individual Member with respect to the business and affairs of the Community, and no Individual Member shall be liable to the Community or any other Individual Member for acting in good faith reliance upon the provisions of this Agreement. The failure of the Community to observe any formalities or requirements relating to the exercise of its powers or the management of its business or affairs under this Agreement or the Act shall not be grounds for making its Individual Members responsible for the liabilities of the Community.

2.10. Authority.10 Authority;. Unless specifically authorized by the Community, no Individual Member shall be an agent of the Community or have any right, power or authority to act for or to bind the Community or to undertake or assume any obligation or responsibility of the Community or of any other Individual Member.

2.11. Right to Withdraw..11 No Right to Withdraw.; Subject to the terms and conditions hereof, Member Households may resign or withdraw from the Community at any time upon written notice to the Community. Upon withdrawal, a Member Household shall be entitled to repayment of its capital account as soon as reasonably possible without adversely affecting the financial situation of the Community, provided, however that, as soon as the Community admits a replacement Member Household and such new Member Household satisfies all financial requirements as set forth on Exhibit B hereto, the Community shall promptly repay to the Withdrawing Member the entire balance of the Withdrawing Member’s capital account. All assessments shall be non‑refundable. Any outstanding loans between the Community and the Withdrawing Member shall be repaid according to the terms of such loan.

2.12. Powers and Duties of the Member Households. .12 Powers and Duties of the Member Households; The business and affairs of the Community shall be managed under the direction of the Member Households, who shall have and may exercise on behalf of the Community all of its rights, powers, duties and responsibilities under Section 1.2 or as provided by law, including without limitation the right and authority:

(a) to manage the business and affairs of the Community and for this purpose to employ, retain or appoint any officers, employees, consultants, agents, brokers, professionals or other persons in any capacity for such compensation and on such terms as the Member Households deem necessary or desirable and to delegate to such persons such of their duties and responsibilities as the Member Households shall determine;

(b) to enter into, execute, deliver, acknowledge, make, modify, supplement or amend any documents or instruments in the name of the Community;

(c) to borrow money or otherwise obtain credit and other financial accommodations on behalf of the Community on a secured or unsecured basis as provided in Section 1.2(c), and to perform or cause to be performed all of the Community’s obligations in respect of its indebtedness and any mortgage, lien or security interest securing such indebtedness;

(d) to enter into such arrangements, partnerships, joint ventures or relationships as may be necessary or appropriate; and

(e) to make elections and prepare and file returns regarding any federal, state or local tax obligations of the Community.

Unless otherwise provided in this Agreement, any action taken by a duly authorized Individual Member, and the signature of an Individual Member on any agreement, contract, instrument or other document on behalf of the Community, shall be sufficient to bind the Community and shall conclusively evidence the authority of that Individual Member and the Community with respect thereto.

2.13. Rights to Information..13 Rights to Information.; Individual Member shall have the right to receive upon request a copy of the Certificate and of this Agreement, as amended from time to time, and such other information regarding the Community as is required by the Act, subject to reasonable conditions and standards established by the Individual Members, as permitted by the Act, which may include, without limitation, withholding or restrictions on the use of confidential information.

2.14. Committees..14. Committees.; The Community may appoint from the Community a Committee or Committees, each having such number of members as Community shall determine but not fewer than two (2) Members. Members of all such Committees shall serve during the pleasure of the Community. In the event that any member of a committee shall cease to be a Member of the Community for any reason, such Member shall forthwith cease to a member of such Committee. Any Committee shall possess and may exercise any powers expressly delegated to such Committee by the Community, other than those powers the delegation of which is expressly forbidden by law. All action taken by a Committee shall be subject to revision or alteration by the Members; provided that no rights or acts of third parties shall be affected by any such revision or alteration. Each Committee shall fix its own rules of procedure, shall meet as provided by such rules or by resolution of the Community, and shall keep records of its actions and proceedings, which records shall be made available for examination by the Individual Members. The greater of two members or a majority of the members of a Committee shall constitute a quorum and in every case where a quorum is present, the consensus of the members of such Committee present at any meeting shall be necessary for the adoption of any resolution by such Committee.

 

ARTICLE III -Indemnification

3. ARTICLE III -

3.1. Definitions. For purposes of this Article:

“Officer” includes (i) Any Individual Member or other person serving as an officer of the Community or in a similar executive capacity appointed by the Community and exercising rights and duties delegated by the Community, (ii) a person serving at the request of the Community as a director, officer, employee, committee member or other agent of another organization, and (iii) any person who formerly served in any of the foregoing capacities;

“expenses” means all expenses, including attorneys’ fees and disbursements, actually and reasonably incurred in defense of a proceeding or in seeking indemnification under this Article, and except for proceedings by or in the right of the Community or alleging that an Officer received an improper personal benefit, any judgments, awards, fines, penalties and reasonable amounts paid in settlement of a proceeding; and

“proceeding” means any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, and any claim which could be the subject of a proceeding.

3.2. Right to Indemnification..2 Right to Indemnification.; Except as limited by law and subject to the provisions of this Article, the Community shall indemnify each of its Officers against all expenses incurred by them in connection with any proceeding in which an Officer is involved as a result of serving in such capacity, except that no indemnification shall be provided for an Officer regarding any matter as to which it shall be finally determined that said Officer did not act in good faith and in the reasonable belief that its action was in the best interests of the Community. Subject to the foregoing limitations, such indemnification may be provided by the Community with respect to a proceeding in which it is claimed that a Officer received an improper personal benefit by reason of its position, regardless of whether the claim arises out of the Officer’s service in such capacity, except for matters as to which it is finally determined that an improper personal benefit was received by the Officer.

3.3. Award of Indemnification..3 Award of Indemnification.; The determination of whether the Community is authorized to indemnify an Officer hereunder and any award of indemnification shall be made in each instance by the holders of a majority of the Membership Interests of the Member Households who are not parties to the proceeding in question. The Community shall be obliged to pay indemnification applied for by an Officer unless there is an adverse determination (as provided above) within forty‑five (45) days after the application. If indemnification is denied, the applicant may seek an independent determination of its right to indemnification by a court, and in such event, the Community shall have the burden of proving that the applicant was ineligible for indemnification under this Article. Notwithstanding the foregoing, in the case of a proceeding by or in the right of the Community in which an Officer is adjudged liable to the Community, indemnification hereunder shall be provided to said Officer only upon a determination by a court having jurisdiction that in view of all the circumstances of the case, said Officer is fairly and reasonably entitled to indemnification for such expenses as the court shall deem proper.

3.4. Successful Defense..4 Successful Defense.; Notwithstanding any contrary provisions of this Article, if an Officer has been wholly successful on the merits in the defense of any proceeding in which it was involved by reason of its position as Officer or as a result of serving in such capacity (including termination of investigative or other proceedings without a finding of fault on the part of the Officer), the Officer shall be indemnified by the Community against all expenses incurred by the Officer in connection therewith.

3.5. Advance Payments..5 Advance Payments.; Except as limited by law, expenses incurred by an Officer in defending any proceeding, including a proceeding by or in the right of the Community, shall be paid by the Community to the Officer in advance of final disposition of the proceeding upon receipt of its written undertaking to repay such amount if the Officer is determined pursuant to this Article or adjudicated to be ineligible for indemnification, which undertaking shall be an unlimited general obligation but need not be secured and may be accepted without regard to the financial ability of the Officer to make repayment; provided, however, that no such advance payment of expenses shall be made if it is determined pursuant to Section 4.3 of this Article on the basis of the circumstances known at the time (without further investigation) that the Officer is ineligible for indemnification.

3.6. Insurance..6 Insurance.; The Community shall have power to purchase and maintain insurance on behalf of any Officer, against any liability or cost incurred by such person in any such capacity or arising out of its status as such, whether or not the Community would have power to indemnify against such liability or cost.

3.7. Heirs and Personal Representatives..7 Heirs and Personal Representatives.; The indemnification provided by this Article shall inure to the benefit of the heirs and personal representatives of each Officer.

3.8. Non-Exclusivity.8 Non-Exclusivity.;. The provisions of this Article shall not be construed to limit the power of the Community to indemnify its Officers to the full extent permitted by law or to enter into specific agreements, commitments or arrangements for indemnification permitted by law. The absence of any express provision for indemnification herein shall not limit any right of indemnification existing independently of this Article.

3.9. Amendment.9 Amendment;. The provisions of this Article may be amended or repealed in accordance with Section 10.5. However, no amendment or repeal of such provisions that adversely affects the rights of an Officer under this Article with respect to his/her acts or omissions at any time prior to such amendment or repeal shall apply to said Officer without his/her consent.

ARTICLE IV – Conflicts of Interest

4. ARTICLE IV – Conflicts of Interest

4.1. Transactions with Interested Persons..1 Transactions with Interested Persons.; Unless entered into in bad faith, no contract or transaction between the Community and one or more of its Individual Members, or between the Community and any other corporation, partnership, association or other organization in which one or more of its Individual Members have a financial interest or are directors, partners, or officers, shall be voidable solely for this reason or solely because said Individual Member was present or participated in the authorization of such contract or transaction if:

(a) the material facts as to the relationship or interest of said Individual Member and as to the contract or transaction were disclosed or known to the Community and the contract or transaction was authorized by the disinterested Member Households; or

(b) the contract or transaction was not patently unfair to the Community as of the time it was authorized, approved or ratified by the disinterested Member Households; and no Individual Member interested in such contract or transaction, because of such interest, shall be considered to be in breach of this Agreement or liable to the Community, any Individual Member, or any other person or organization for any loss or expense incurred by reason of such contract or transaction or shall be accountable for any gain or profit realized from such contract or transaction.

ARTICLE V – Capital Accounts and Contributions

5. ARTICLE V – Capital Accounts and Contributions

5.1. Capital Accounts.1 Capital Accounts.;.

(a) There shall be established on the books of the Community a separate capital account (a “Capital Account”) for each Member Household.

(b) The Capital Account of each Member Household (regardless of the time or manner in which such Member Household’s interest was acquired) shall be maintained in accordance with the rules of Section 704(b) of the Internal Revenue Code of 1986, as amended, from time to time (the “Code”) (together with Section 1.704‑1(b)(2)(iv) of the Treasury Regulations). Adjustments shall be made to the Capital Accounts for distributions and allocations as required by the rules of Section 704(b) of the Code and the Treasury Regulations thereunder.

(c) If there is a transfer of all or a part of an interest in the Community by a Member Household, the Capital Account of the transferor that is attributable to the transferred interest shall carry over to the transferee of such Member Household.

5.2. Contributions..2 Contributions.; Each Member Household shall make the contributions to the capital of the Community (herein “Contributions”) specified on Schedule A. All Contributions shall be paid in cash unless otherwise specified on Schedule A or agreed to by the Member Households. The Community may determine, from time to time, that additional contributions are needed to enable the Community to conduct its operations and achieve its goals. Upon making such a determination, the Community shall give Notice to all Member Households in writing at least 10 business days prior to the date on which such contribution is due. Such Notice shall set forth the amount of additional contribution needed, the purpose for which the contribution is needed, and the date by which the Member Households should contribute. Each Member Household shall be entitled to contribute a proportionate share of such additional contribution. No Member Household shall be obligated to make any such additional contributions if such Member Household is granted an exemption from making such contribution pursuant to the process established by the Finance Committee of the Community. In the event any one or more Member Households do not make their additional contribution, the other Member Households shall be given the opportunity to make the contributions. The Community may borrow from its Member Households as well as from banks or other lending institutions to finance its working capital or the acquisition of assets upon such terms and conditions as shall be approved by the Member Households, and any such borrowing from Member Households shall not be considered Contributions or reflected in their Capital Accounts. The value of all non‑cash Contributions made by Member Households shall be set forth on Schedule A. No Member Household shall be entitled to any interest or compensation with respect to its Contribution or any services rendered on behalf of the Community except as specifically provided in this Agreement or approved by the Member Households. No Member Household shall have any liability for the repayment of the Contribution of any other Member Household and each Member Household shall look only to the assets of the Community for return of its Contribution.

ARTICLE VI – Profits, Losses and Distributions

6. ARTICLE VI – Profits, Losses and Distributions

6.1. Profits, Losses and Distributions.1 Profits, Losses and Distributions.;.

(a) All profits and losses arising from the normal course of business operations or otherwise and all cash available for distribution from whatever source, commencing with the date of this Agreement, shall be allocated or distributed to the Member Households according to their Membership Interests.

(b) All profits and losses allocated to the Member Households shall be credited or charged, as the case may be, to their Capital Accounts. The terms “profits” and “losses” as used in this Agreement shall mean income and losses, and each item of income, gain, loss, deduction or credit entering into the computation thereof, as determined in accordance with the accounting methods followed by the Community and computed in a manner consistent with Treasury Regulation Section 1.704‑1(b)(2)(iv). Profits and losses for Federal income tax purposes shall be allocated in the same manner as profits and losses for purposes of this Article VI, except as provided in Section 6.3(a).

6.2. Distributions Upon Dissolution..2 Distributions Upon Dissolution.;

(a) Upon dissolution and termination, after payment of, or adequate provision for, the debts and obligations of the Community, the remaining assets of the Community (or the proceeds of sales or other dispositions in liquidation of the Community assets, as may be determined by the remaining or surviving Member Household(s)) shall be distributed to the Member Households in accordance with the positive balances in their Capital Accounts after taking into account all Capital Account adjustments for the Community taxable year.

(b) With respect to assets distributed in kind to the Member Households in liquidation or otherwise, (i) any unrealized appreciation or unrealized depreciation in the values of such assets shall be deemed to be profits and losses realized by the Community immediately prior to the liquidation or other distribution event; and (ii) such profits and losses shall be allocated to the Member Households and credited or charged to their Capital Accounts, and any property so distributed shall be treated as a distribution of an amount in cash equal to the excess of such fair market value over the outstanding principal balance of and accrued interest on any debt by which the property is encumbered. For the purposes of this Section 6.2(b), “unrealized appreciation” or “unrealized depreciation” shall mean the difference between the fair market value of such assets, taking into account the fair market value of the associated financing but subject to Section 7701(g) of the Code, and the Community’s basis in such assets as determined under Treasury Regulation Section 1.704-1(b). This Section 6.2(b) is merely intended to provide a rule for allocating unrealized gains and losses upon liquidation or other distribution event, and nothing contained in this Section 6.2(b) or elsewhere in this Agreement is intended to treat or cause such distributions to be treated as sales for value. The fair market value of such assets shall be determined by an appraiser to be selected by the Members Household.

6.3. Distribution of Assets in Kind..3 Distribution of Assets in Kind.; No Member Household shall have the right to require any distribution of any assets of the Community to be made in cash or in kind. If the Member Households determine to distribute assets of the Community in kind, such assets shall be distributed on the basis of their fair market value as determined by the Member Households. Any Member Household entitled to any interest in such assets shall, unless otherwise determined by the Member Households, receive separate assets of the Community, and not an interest as tenant-in-common with other Member Households so entitled in each asset being distributed. Distributions in kind need not be made on a pro-rata basis but may be made on any basis which the Member Households determine to be reasonable under the circumstances.

ARTICLE VII – Transfers of Interests

7. ARTICLE VII – Transfers of Interests.

7.1. Admission of Member; Effect of Transfer..1 Admission of Member; Effect of Transfer.;

(a) In no event may any person obtaining an interest in the Community by assignment, transfer, pledge or other means from an existing Member Household be admitted as a successor Member Household without the affirmative vote or written consent of the Member Households pursuant to Section 2.4 hereof (without resort to a 75% vote), exclusive in each case of the Member Household of the Member whose interest is being transferred.

(b) If the transferee is admitted as a Member Household or is already a Member Household, the Member Household transferring its interest shall be relieved of liability with respect to the transferred interest arising or accruing under this Agreement on or after the effective date of the transfer, unless the transferor affirmatively assumes such liability; provided, however, that the transferor shall not be relieved of any liability for prior distributions and unpaid contributions unless the transferee affirmatively assumes such liabilities.

(c) Any person who acquires in any manner an interest or any part thereof in the Community, whether or not such person has accepted and assumed in writing the terms and provisions of this Agreement or been admitted as a Member Household, shall be deemed by the acquisition of such interests to have agreed to be subject to and bound by all of the provisions of this Agreement with respect to such interest, including without limitation, the provisions hereof with respect to any subsequent transfer of such interest.

ARTICLE VIII – Dissolution, Liquidation and Termination

8. ARTICLE VIII – Dissolution, Liquidation and Termination

8.1. Dissolution.1 Dissolution;. The Community shall dissolve and its affairs shall be wound up upon the first to occur of the following:

(a) the written consent of the Member Households;

(b) the entry of a decree of judicial dissolution under Section 44 of the Act; or

(c) The consolidation or merger of the Community in which it is not the resulting or surviving entity.

8.2. Liquidation..2 Liquidation.; Upon dissolution of the Community, the Member Households may appoint one or more Individual Members as liquidating trustee. The liquidating trustees shall proceed diligently to liquidate the Community and wind up its affairs and shall dispose of the assets of the Community as provided in Section 6.2 hereof. Until final distribution, the liquidating trustees may continue to operate the business and properties of the Community with all of the power and authority of the Member Households. As promptly as possible after dissolution and again after final liquidation, the liquidating trustees shall cause an accounting by the accounting firm then serving the Community of the Community’s assets, liabilities, operations and liquidating distributions to be given to the Member Households.

8.3. Certificate of Cancellation.3 Certificate of Cancellation;. Upon completion of the distribution of Community assets as provided herein, the Community shall be terminated, and the Community (or such other person or persons as the Act may require or permit) shall file a Certificate of Cancellation with the Secretary of State of Massachusetts under the Act, cancel any other filings made pursuant to Sections 1.1, 1.3 and 1.5, and take such other actions as may be necessary to terminate the existence of the Community.

ARTICLE IX – General Provisions

9. ARTICLE IX – General Provisions

9.1. Offset..1 Offset.; Whenever the Community is obligated to make a distribution or payment to any Member Household, any amounts that Member Household owes the Community may be deducted from said distribution or payment.

9.2. Notices..2 Notices.; Except as expressly set forth to the contrary in this Agreement, all notices, requests, or consents required or permitted to be given under this Agreement must be in writing and shall be deemed to have been properly given if sent by registered or certified mail, postage prepaid, by commercial overnight courier, by facsimile or if delivered in hand to Member Households at their addresses on Schedule A, or such other address as a Member Household may specify by notice to the Community at the address of the principal office of the Community specified in Section 1.3. Whenever any notice is required to be given by law, the Certificate or this Agreement, a written waiver thereof, signed by the person entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice.

9.3. Entire Agreement..3 Entire Agreement.; This Agreement constitutes the entire agreement of the Members relating to the Community and supersedes all prior oral or written agreements or understandings with respect to the Community.

9.4. Binding Effect.4 Binding Effect;. This Agreement is binding on and inures to the benefit of the parties and their respective successors, permitted assigns and legal representatives.

9.5. Amendment or Modification.5 Amendment or Modification;. Except as specifically provided herein, this Agreement may be amended or modified from time to time upon the consensus of the Member Households pursuant to Section 2.5 authorizing such amendment, provided, however, an amendment or modification to reflect the admission of a new Member Household that is an assignee of an existing Member Household, shall be subject to approval as provided in Section 7.1.

9.6. Governing Law; Severability.6 Governing Law; Severability;. This Agreement is governed by and shall be construed in accordance with the law of the Commonwealth of Massachusetts, exclusive of its conflict‑of‑laws principles. In the event of a conflict between the provisions of this Agreement and any provision of the Certificate or the Act, the applicable provision of this Agreement shall control, to the extent permitted by law. If any provision of this Agreement or the application thereof to any person or circumstance is held invalid or unenforceable to any extent, the remainder of this Agreement and the application of that provision shall be enforced to the fullest extent permitted by law.

9.7. Dispute Resolution. Any dispute, controversy or claim arising out of or in connection with this Agreement shall be resolved by face‑to‑face negotiations between the parties involved, such negotiations to be conducted in the spirit of the Community’s guiding principles. If the dispute cannot be resolved by face‑to‑face negotiation, either party may demand such mediation proceedings to occur at a mutually acceptable time and place, with a mutually acceptable mediator and mutually acceptable procedures as soon as possible following the demand for mediation. In the event that the dispute, controversy or claim cannot be settled by negotiations or mediation, either party may demand, by written notice to the other party, that the dispute be submitted to arbitration. The arbitration shall be conducted according to the provisions of this Section. If the parties to the dispute mutually agree upon one or more individuals to arbitrate the dispute, such individuals shall arbitrate the dispute. If the parties mutually agree upon the rules for conducting the arbitration, such rules shall govern the arbitration. If, however, the parties cannot agree upon the identity of the arbitrators and/or the rules for conducting the arbitration within seven (7) days after the notice demanding arbitration, either party may request the American Arbitration Association (the “AAA”) to appoint, on an expedited basis, one arbitrator who shall have substantial experience as an arbitrator, be experienced in the subject matter of the dispute and be able to commence the arbitration proceedings (with at least an initial hearing), according to the requirements of this Section and other complimentary rules of the American Arbitration Association, within fourteen (14) days after the appointment.

The arbitration proceedings shall be completed within thirty (30) days after the initial hearing and the arbitrator’s decision shall be provided to the parties within seven (7) days thereafter. The decision of the arbitrator shall be final and binding provided such decision is set forth in a writing by the arbitrator which recites the decision and all findings and orders relative to the implementation thereof including, without limitation, the amount and/or nature of any awards and the allocation of responsibility among the parties to pay the AAA fees and the fees of the attorneys and other professionals incurred by the parties, in accordance with this Section. The arbitrator’s decision may be enforced by a court of competent jurisdiction located in the Commonwealth of Massachusetts. The parties hereby expressly submit to the jurisdiction of all federal and state courts located in the Commonwealth of Massachusetts in connection with any action brought to enforce or otherwise relating to this Agreement.

Except where clearly inconsistent with the subject matter of the dispute, the parties agree to continue performing their respective obligations under this Agreement while the dispute is being resolved. Prior to receipt of the arbitrator’s decision, each of the parties shall pay their own expenses in connection with the mediation and/or arbitration and shall share the costs of any mediator and/or arbitrator. The arbitrator may order that either of the parties that is entitled to an award on the merits of the dispute shall have its costs (including AAA fees and attorney and other professional fees), paid by the other party; provided, however, that the arbitrator shall have discretion to apportion the responsibility for the costs of the parties in the event that the arbitrator’s decision is not solely in favor of one of the parties.

Notwithstanding the foregoing requirement to arbitrate any dispute, in the event either of the parties determines it necessary to seek injunctive relief against another, the party seeking the injunction may seek such injunction without complying with the prerequisite of mediation and arbitration. The parties hereto agree that any arbitrator(s) utilized hereunder shall have the authority to issue injunctive orders for specific enforcement.

9.8. Waiver of Dissolution Rights.8. Waiver of Certain Rights;. Each Individual Member irrevocably waives any right it may have to maintain any action for dissolution of the Community or for partition of the property of the Community.

9.9. Third‑Party Beneficiaries..9 Third‑Party Beneficiaries.; The provisions of this Agreement are not intended to be for the benefit of any creditor or other person to whom any debts or obligations are owed by, or who may have any claim against, the Community or any of its Individual Members. Notwithstanding any contrary provision of this Agreement, no such creditor or person shall obtain any rights under this Agreement or shall, by reason of this Agreement, be permitted to make any claim against the Community or any Individual Member.

9.10. Interpretation..10 Interpretation; For the purposes of this Agreement, terms not defined in this Agreement shall be defined as provided in the Act; and all nouns, pronouns, and verbs used in this Agreement shall be construed as masculine, feminine, neuter, singular, or plural, whichever shall be applicable. Titles or captions of Articles and Sections contained in this Agreement are inserted as a matter of convenience and for reference, and in no way define, limit, extend or describe the scope of this Agreement or the intent of any provision hereof.

9.11. Counterparts.11 Counterparts;. This Agreement may be executed in any number of counterparts with the same effect as if all parties had signed the same document, and all counterparts shall be construed together and shall constitute the same instrument.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement under seal as of the date set forth above.

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ISLAND COHOUSING, LLC

Schedule A

MEMBERS

Member Household Individual Member Contribution Membership Names Interest

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Member Household Individual Member Contribution Membership Names Interest

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By: Brian Hughes and Philippe Jordi (The Legal Committee)

We happily link to the following organizations, all of whom share our strong commitment to promoting community and a more cooperative world:
Cohousing The Federation of Egalitarian Communities - Communes Coop Community Cooperative Sustainable Intentional North American Students of Cooperation Global Ecovillage Network
Special thanks to the sponsors of our Art of Community Events.