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A membership purchase agreement is a legal document that is used when a member of a limited liability company (LLC) wants to sell their membership interest. LLCs have 'members', as opposed to partners, and these members have membership interest in the LLC.
Membership purchase agreements would typically be used after the LLC has been operating for some time.
Below is a list of common sections included in Membership Purchase Agreements. These sections are linked to the below sample agreement for you to explore.
MEMBERSHIP INTEREST PURCHASE AGREEMENT
This MEMBERSHIP INTEREST PURCHASE AGREEMENT (the “Agreement”) is dated as of January 30, 2006, by and between CASUAL MALE RETAIL GROUP, INC. , a Delaware corporation (the “Seller”), and SPIRIT FINANCE ACQUISITIONS, LLC , a Delaware limited liability company (the “Purchaser”).
WHEREAS, Seller, Spirit SPE Canton, LLC , a Delaware limited liability company (the “Company”) and Purchaser entered into that certain Contribution Agreement of even date herewith (the “Property Transfer Agreement”), pursuant to which Seller agreed to contribute to the Company the real property described on Exhibit A of the Property Transfer Agreement (the “Property”) for the consideration as set forth therein; and
WHEREAS, pursuant to the Property Transfer Agreement, Purchaser agreed to acquire the membership interests and any all right, title and interest relating thereto of Seller in the Company (collectively, the “Interests”) upon the transfer by Seller of the Property to the Company; and
WHEREAS, Seller desires to enter into this Agreement to document and confirm the terms and conditions under which Purchaser shall acquire and Seller shall sell to Purchaser all of the Interests (the “Membership Interest Transaction”); and
WHEREAS, capitalized terms used and not defined herein shall have the meaning given such terms in the Property Transfer Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein set forth, and for the consideration set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:
SALE AND PURCHASE OF INTERESTS .
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Section 1.02. Payment of Purchase Price; Condition Precedent. The aggregate purchase price to be paid by Purchaser to Seller for the Interests is Fifty Seven Million and 00/100 Dollars ($57,000,000) (the “Purchase Price”). Adjustments, if any, to the Purchase Price shall be made to accommodate the allocations and prorations in connection with the transfer of the Property from Seller to the Company as set forth in and in accordance with the terms of the Property Transfer Agreement, including without limitation, pursuant to the provisions of Sections 1.04, 1.05 and 2.05 of the Property Transfer Agreement. The Purchase Price, as
adjusted pursuant to requirements of this Agreement, shall be paid to Seller contemporaneously with the closing of the transfer of the Property from Seller to the Company (the “Property Closing”) by wire transfer in immediately available United States funds in accordance with Seller’s instructions (such closing on the Membership Interest Transaction and transfer of the Interests herein, the “Membership Interests Closing”). Notwithstanding anything herein to the contrary, the obligation of Purchaser to acquire the Interests is contingent upon the Closing of the acquisition of the Property by the Company under the terms set forth in the Property Sale Agreement.
Section 1.03. Earnest Money . Within two (2) Business Days after the Effective Date, Purchaser shall deposit the sum of Five Hundred Thousand and 00/100 Dollars ($500,000.00) with the Title Company (with all interest accrued thereon, the “Earnest Money Deposit”), at which time, the Earnest Money Deposit shall be non-refundable. The Earnest Money Deposit shall be placed in an interest-bearing account by the Title Company, and shall be held by the Title Company and applied against the Purchase Price at Closing or disbursed as provided herein.
Section 1.04. Transaction Costs . Seller shall be responsible for the payment of all Transactions Costs incurred by the Company under the Property Transfer Agreement. At Purchaser’s election, (a) at the Membership Interests Closing, the Transaction Costs shall be paid by Seller to the Company or shall be deducted from the Purchase Price to be paid by Purchaser for the Interests in the Company, or (b) upon request therefore by Purchaser either prior to Closing or in the event that the Transaction does not close (for any reason whatsoever), Seller shall immediately pay to Purchaser the amount requested by Purchaser to pay in full all Transaction Costs. The provisions of this Section 1.04 shall survive the Closing and the Membership Interest Closing or termination of the Property Transfer Agreement or this Agreement for any reason.
Section 1.05. Deliveries. Contemporaneously with the execution and delivery of this Agreement:
(a) Seller shall have delivered to Purchaser the following documents:
(i) The Certificate of Formation of the Company, certified as of a recent date by the Secretary of State of the state of the Company’s organization, and a certificate of such authority dated as of a recent date as to the due formation and good standing of the Company and listing all documents of the Company on file with said authority;
(ii) A certificate of the Secretary of the Seller, or such other person with a similar function, dated as of the date hereof certifying: (A) that attached thereto is a true and complete copy of the Limited Liability Company Agreement (the LLC Agreement”) as in effect on the date of such certification; (B) that the Certificate of Formation of the Company has not been amended by Seller; (C) that the LLC Agreement has not been amended by Seller; (D) that attached thereto is a true and complete copy of all resolutions adopted by the Board of Directors of the Seller authorizing the execution, delivery and performance of this Agreement and
sale and delivery of the Interests, and that all such resolutions are in full force and effect and are all the resolutions adopted in connection with the transaction contemplated by this Agreement; and (E) that each officer of Seller executing this Agreement and any agreement, certificate or instrument furnished pursuant hereto, was, at the respective times of such execution and delivery of such documents, duly elected or appointed, qualified and acting as such officer, and the signatures of such persons appearing on such documents are their genuine signatures or true facsimiles thereof;
(iii) a duly executed power evidencing the transfer of the Interests to Purchaser;
(iv) a true sale opinion of counsel to Seller in form and substance acceptable to Purchaser with respect to the transfer of the Interests;
(v) such transfer documents and instruments as may be necessary to comply with Section 9.02 of the LLC Agreement; and
(vi) an Indemnification Agreement in form and substance acceptable to Purchaser with respect to the transfer of the Property to the Company, a form of which is attached to the Property Transfer Agreement.
(b) Purchaser shall have delivered to Seller the Purchase Price as provided in Section 1.02 hereof.
REPRESENTATIONS AND WARRANTIES