Governance charter draft template for a Hadto venture

This draft is a working template for one Hadto venture. It is not legal advice, not a final charter, and not an offer to sell securities. Replace bracketed terms with venture-specific names before use.

This template assumes the capital stack described in the 2026-04-15 capital stack architecture memo: senior secured lending at the top, an optional Community Participation Layer in the middle, and operator common equity at the bottom where first loss sits and ordinary control stays. The charter should never create a hidden economic preference that jumps ahead of that stack.

Use the following constitutional baseline for [Venture HoldCo LLC], which owns 100% of [Venture OpCo LLC].

Board Composition

• [Venture HoldCo LLC] has 3 voting directors.
• The owner-operator appoints 2 directors and designates one as venture CEO by default.
• Hadto appoints 1 director.
• If the Community Participation Layer is outstanding, its holders receive 1 non-voting board observer seat selected under the community instrument.
• Senior lenders do not receive an ordinary board seat while the venture is solvent and in compliance, but lender observer, consultant, or workout rights after default come from the credit documents and are not limited by the charter.

This preserves the same operating rule as the capital stack memo: ordinary control stays with the layer that takes first loss, while lender control arrives only after default triggers.

Voting Rights Allocation

Ordinary voting equity is limited to HoldCo common units:

• the owner-operator holds 60% of voting common at formation and may not fall below 51% of total ordinary voting power except after a defined cause removal, insolvency proceeding, or lender-led restructuring;
• Hadto holds the remaining 40% sponsor common inside the same common layer;
• community participation preferred units have no ordinary operating vote;
• a single Mission Steward Unit may be issued as a governance-only veto instrument with no dividend, liquidation, or residual economics.

Constituency	Ordinary operating vote	Separate consent rights	Economic place in stack
Senior lenders	none under charter	credit-document consent rights after triggers or for debt amendments	first-priority claim
Community participation preferred	none	adverse changes to payout formula, liquidation preference, reporting, transfer rules, and any amendment that makes their priority junior to common	junior to senior, senior to common
Operator common	yes	elect board and approve ordinary matters	residual, first-loss layer
Mission Steward Unit	none	veto only over mission-lock matters	no cash-waterfall rights

Reserved matters require board approval plus consent from any directly affected class and any senior lender consent required by the loan documents. Reserved matters should include at minimum:

• sale of substantially all assets;
• issuance of debt senior to, or pari passu with, the existing senior facility;
• issuance of equity that reduces the owner-operator below 51% ordinary voting power outside the charter’s defined trigger events;
• changes to the community payout formula, liquidation preference, or transfer restrictions;
• bankruptcy filing, restructuring support agreement, or dissolution plan;
• amendments to the charter, equity plan, or mission provisions;
• related-party agreements outside an approved pricing policy;
• replacement of the owner-operator for cause.

The interpretive rule is simple: voting rights may govern operations, but they may not rewrite the cash priority of senior debt, the class protections of the community layer, or the first-loss position of common equity.

Profit Distribution Rules

Distributions follow the same stack order described in the capital stack memo and must be written into both the charter and the related security instruments:

1. operating cash first funds payroll, taxes, insurance, maintenance capex, and the board-approved liquidity reserve;
2. senior interest, fees, and scheduled principal are paid next according to the credit agreement;
3. community current yield, if earned and if all senior distribution tests remain satisfied, is paid next;
4. common distributions are paid last, pro rata within the common layer, after all higher-priority obligations and reserve thresholds are satisfied.

Additional template rules:

• no common distribution may be declared during a senior payment default, covenant breach, insolvency proceeding, or reserve shortfall;
• community distributions may be deferred under the instrument’s terms without converting the community layer into an operating-control class;
• Hadto does not receive a sponsor preference, management preference, or side-letter claim that ranks ahead of operator common or the community layer;
• refinance or sale proceeds follow the same order: statutory obligations, senior debt, community liquidation preference plus earned but unpaid distributions, then residual value to common equity.

This keeps governance aligned with economics: the people who can absorb residual upside also sit behind every senior and community claim in the waterfall.

Conflict Resolution

The charter should force conflicts into a defined order before they become governance theater.

• Every director and officer must disclose actual or reasonably apparent conflicts promptly in writing.
• Related-party transactions require review by disinterested directors and must fit an approved pricing or benchmarking policy.
• A dispute about ordinary operating matters goes first to the board for a recorded vote.
• A dispute that primarily affects one economic class goes next to a special committee of disinterested directors plus one non-voting representative of each directly affected class.
• If the dispute remains unresolved after [10] business days, the parties enter confidential mediation in [County, State].
• If mediation fails, the dispute proceeds to binding arbitration in [State], except that claims for fraud, willful misconduct, confidentiality breach, IP misuse, emergency lender remedies, or injunctive relief may be brought in court.

No conflict-resolution clause may be used to do indirectly what the charter forbids directly. An arbitrator or mediator may interpret the charter, but may not subordinate senior creditors, strip class protections from community holders, or waive the mission lock without the exact approvals required below.

Mission Lock Provisions

[Venture HoldCo LLC] adopts the following mission statement as a constitutional provision: [insert venture mission and public-benefit statement].

The mission lock is not an aspirational recital. It is a protected charter term that cannot be removed through the ordinary reserved-matters vote.

Mission-protected actions include:

• amending or deleting the mission statement or public-benefit purpose;
• converting the company into an entity form that does not carry materially equivalent mission protections;
• selling substantially all assets, merging, or entering a drag-along transaction that would leave the surviving business without materially equivalent mission protections;
• amending director duties so they no longer permit or require consideration of the mission alongside financial return.

A mission-protected action is effective only if all of the following occur:

1. all 3 directors approve the action;
2. holders of at least 80% of all voting common units approve the action;
3. holders of at least two-thirds of the Community Participation Layer, voting as a separate class, approve the action while that layer is outstanding;
4. the Mission Steward Unit approves the action in writing after finding that the replacement protection is materially equivalent or stronger;
5. the company gives at least 30 days’ prior written notice to all equity holders and publishes a plain-language explanation of the proposed change.

The Mission Steward Unit should be issued to [Hadto Steward LLC / a purpose trust / a designated mission steward nonprofit] under transfer restrictions that allow transfer only to another steward bound to the same veto standard. The unit has:

• no dividend right;
• no liquidation preference;
• no ordinary operating vote;
• no right to elect directors;
• only the narrow veto rights described in this section.

Because the steward instrument has no economic claim and no ordinary vote, it does not create a hidden fourth capital layer. Its only job is to stop a casual majority from stripping the venture’s mission once the business becomes valuable.

If a mission-protected action does not receive every approval listed above, it is void ab initio and may not be ratified by a later ordinary vote.

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This draft charter template is intended to sit beside Hadto’s venture capital stack memo and should be reviewed against the venture’s state-law entity form, lending documents, securities exemptions, and tax posture before adoption. Reviewed 2026-04-15.