Hi, Im trying to buyout a member of my company but the amount of money he's asking doesn't make a lot of sense to me. Maybe you guys can help me to figure out how much I have to pay him according to our contract
Here are some details of the contract:
2.1 The Members will contribute to the capital
of the Company the money and/or property or services (“Capital Contributions”) specified in Exhibit B to this Agreement. It is the understanding of the Members that Investor #1 shall be responsible for any and all initial monetary Capital Contributions. It is acknowledged that Investor #1 shall make an Initial Capital Contribution of $500,000.00, as set forth in the Schedule of Capital Contributions attached hereto. If a Member fails to make the initial Capital Contributions specified in this Section by November 1st, 2015, that Member’s entire Membership Interest will terminate, and that Member will indemnify and hold the Company and the other Members harmless from any loss, cost, or expense, including reasonable attorney fees caused by the failure to make the initial Capital Contribution.
2.5 In exchange for his provision of services to the Company, Investor #2 is hereby issued a Vested Capital Interest, in the amount of Six (6.00%) Percent of the Current Value of the Company, as well as an additional Unvested Capital Interest, in the amount of Twenty Four (24.00%) Percent of the Value of the Company, which shall vest in the amount of One Half of One Percent (0.5%) per month for so long as Investo #2 remains a Member of the Company but for no more than Forty Eight (48) Months, until Investor #2’s total Vested Capital Interest equals a maximum of Thirty (30%) Percent. Upon execution of this Agreement, Investor #2 shall be issued a Profits Interest (in compliance with the terms for issuing such) of Twenty Four (24%) Percent, such that the combined Profits Interest and Vested Capital Interest of Investor #2 on the date of this Agreement is equal to Thirty (30%) Percent. Upon the vesting of any unvested Capital Interest belonging to Investor #2 there shall be a corresponding reduction in his additional Profits Interest, such that Investor #2’s combined Vested Capital Interest and additional Profits Interest is always equal to precisely Thirty (30%) Percent. As Investor #2’s Capital Interests vest, Imvestor #1’s Capital Interest shall be reduced in the same amount as Investor #2’s Capital Interest increases. The Capital and Profits Interests of the respective members is set forth in Exhibit B annexed hereto.
MEMBERS; CAPITAL CONTRIBUTIONS; PROFITS INTERESTS
Name of Member. Initial Capital Contribution. Capital Account. Percentage of Interest in Company, LLC
-$30,000.00 USD (Value of Vested Capital Interest)
-6.00% Vested Capital Interest
24.00% Unvested Capital
30.00% Profits Interest
-94.00% Capital Interest
70.00% of Profits