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I'll look at this a little later today. I've been up all night working on a lease, and I'm too old for this s***.
Could you review this document? My main concerns are the language in the first couple of paragraphs, as well as 1.1 and 1.2 In 4.5, the choice of law provision, should the conflict of laws language be included?
***Not sure why there would be a conflict of law here, if the entire contract is taking place in MO. That aside, language specifying jurisdiction for the resolution of any dispute, an arbitration clause, and prevailing party attorney's fees and costs may be useful.
Is Article II sufficient as an assignment?
***Consider providing an attachment itemizing everything being transferred and its agreed upon value.
PURCHASE AND SALE OF LLC MEMBERSHIP INTERESTS AGREEMENT This PURCHASE AND ASSIGNMENT OF LLC MEMBERSHIP INTERESTS Agreement is entered this the __________ day of December, 2009, by and between ____________________, hereinafter referred to as SELLER, and _________________________, hereinafter referred to as BUYER.
WHEREAS, the parties hereto desire that SELLER's 20 percent (20%) interest, as an individual, in the capital and profits of ______________________, a Missouri limited liability company, hereinafter referred to as LLC, be sold to BUYER pursuant to this Agreement on the day and year first above written;
and WHEREAS, the parties hereto desire to set forth certain representations, warranties, and covenants made by each to the other as an inducement to the consummation of the sale;
NOW, THEREFORE, in consideration of the premises and of the mutual representations, warranties, and covenants herein contained, the parties hereby agree as follows:
1.1 The SELLER shall sell the said LLC membership interest for a purchase price to be determined in accordance with SELLER's positive capital account balances pursuant to Treasury Regulation 1.704-I(b)(2)(ii)(b)(2).
***Consider including an example to show how the Regulation would be used to calculate the sales price, so as to limit the possibility of any misunderstandings.
1.2 The BUYER shall deliver to SELLER a cashiers check in the amount determined under Article 1.1 hereof as soon as reasonably possible.
***Consider making the date certain for tender of consideration.
2.1 SELLER represents and warrants to BUYER that as of the day and year first above written:
(a) To the best of SELLER's knowledge and belief, the LLC has good and marketable title to all properties, assets, and leasehold estates, real and personal, subject to no mortgage, pledge, lien, conditional sales agreement, encumbrance, or charge, except for:
(1) liens for current taxes and assessments which are currently not in default; and
(2) liens arising by operation of law of which the SELLER has no knowledge.
(b) The LLC carries insurance on its properties, assets, and business, which SELLER believes to be adequate in character and amount, with reputable insurers and such insurance policies are still in full force and effect.
(c) To the knowledge of the SELLER there are no claims, actions, suits, or proceedings threatened presently or which in the future may be threatened against or affecting the LLC at law or in equity, or before or by any federal, state, municipal, or other governmental department, commission, board, bureau, agency, or instrumentality wherever located.
3.1 From and after the day and year first above written, all equitable and legal rights, title and interests in and to the Interest shall be owned, held and exercised by BUYER. All capital calls, obligations and liabilities under the LLC's Operating Agreement shall, in regard to the Interest, be the sole responsibility of BUYER.
***This Article appears to be the actual "assignment." Note: The other members must vote or otherwise assent to the buyer's management rights, if any because a member can't independently assign his/her management authority.
4.1 This Agreement constitutes the entire agreement and understanding between the parties and supersedes any prior agreement and/or understanding relating to the subject matter of this Agreement. This Agreement may only be modified or amended by a duly authorized written instrument executed by both parties hereto.
4.2 This Agreement may be executed simultaneously in two or more counterparts. Each counterpart shall be deemed an original, and all of the counterparts together shall constitute but one and the same instrument. 4.3 Any notice or communication required or permitted hereunder shall be sufficiently given if sent by certified or registered mail, postage prepaid, with return receipt requested:
(a) To BUYER at:
(b) To SELLER at:
4.4 In executing and carrying out the provisions of this Agreement, the parties hereto are relying solely on the representations, warranties, and agreements contained in this Agreement and not upon any representation, warranty, agreement, promise, or information, written or oral, made by any person other than as specifically set forth herein or therein.
4.5 This Agreement shall be construed in accordance with the laws of the State of Missouri, without regard, however, to such jurisdiction's principles of conflict of laws.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.
Witnesses: ___________________________________ ___________________________________
STATE OF MISSOURI County of _______________________
On this _______ day of ____________________________, _______, before me personally appeared ______________________________, known to me to be the person described in and who executed the foregoing instrument and acknowledged that he or she executed the same as ____________________________________'s own free act and deed. _________________________________ ______________________ (County) Notary Public ______________________ (State) My Commission Expires: ________________
***Hope this helps.
1.2 The BUYER shall deliver to SELLER a cashiers check in the amount determined under Article 1.1 hereof no later than April 1, 2010. Q: Is the above language valid?
A: Seems okay to me. Drop the "hereof."
"Note: The other members must vote or otherwise assent to the buyer's management rights, if any because a member can't independently assign his/her management authority." Q: If the LLC is manager-managed rather than member-managed, isn't it true that other members would have no management authority to assign?
A: Yes, if your operating is set up with such different classifications.
If any provision of this Agreement is held to be invalid or unenforceable, that holding shall be without effect upon the validity or enforceability of any other provision of this Agreement. Q: Should the above language be included?
A: It's pretty standard language for any contract.
I am at your service...thank you.
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