Fill and Sign the Llc Buyout Agreement Template Everything You Need to Know Form

Buy Sell or Purchase Agreement Covering Member Interest in a Limited Liability Company (LLC) with an Option to Fund the Purchase through Life Insurance Agreement made on the ___ day of __________, 20___, by and between _____________ of _______________________________________ (street address, city, county, state, zip code), hereinafter sometimes called ___________ and ___________________ , LLC, a limited liability company organized and existing under the laws of the state of Nevada, with its principal office located at _________________________________ (street address, city, county, state, zip code), referred to herein as LLC. WHEREAS, LLC was created and exists under the laws of the State of Nevada, with its principal place of business at (street address, city, and county) ; WHEREAS, _____________ is a member of the LLC as defined in NRS 86.081; and WHEREAS, _____________ owns a member’s interest (hereinafter called member interest ) in the LLC as defined in NRS 86.091; and WHEREAS, the parties to this Agreement believe it is to their mutual best interests to provide for continuity and harmony in the management and policies of the LLC; and WHEREAS, therefore, it is their mutual purpose (i) to provide for the purchase by the LLC of ____________ rights in and to the LLC, including all of _________________ member interest in the LLC should __________ desire to dispose of any of __________ m ember interest in the LLC during his lifetime or should he terminate employment with the LLC during his lifetime, and (ii) to set forth the terms and conditions under which the above and foregoing may be accomplished. NOW, THEREFORE, in consideration of their mutual agreements and covenants contained herein and for other valuable consideration, receipt of which is hereby acknowledged, it is mutually agreed by and between the parties to this Agreement as follows: I. Restriction on Transfer of Member Interest of ________________. ___________ shall not sell, assign, transfer, pledge, or dispose of his m ember interest in the LLC by operation of law or otherwise except as provided below. II. Purchase of ___________ Interest in LLC at Death of ___________. A. Purchase of __________ Member Interest Upon the death of ___________, his estate shall sell and the LLC shall purchase all of _____________ m ember interest in the LLC, now owned or hereafter acquired. B. Purchase Price at the Death of ___________. The purchase price to be paid for _________ m ember interest shall be [Insert here either the purchase price or the formula or method by which such a purchase price shall be determined. If a fixed purchase price is provided, additional provisions should be inserted providing for an annual re-valuation of the purchase price, which re-valuation should be set forth in Exhibit A to the agreement]. Notwithstanding the foregoing, however, the purchase price to be paid for ___________ m ember interest shall be adjusted as set forth in Section C of this Paragraph II of this Agreement. The purchase price of ___________ m ember interest shall be determined by the accounting firm for the LLC, using the accounting principles generally applied to the LLC, and said determination by the LLC’s accounting firm shall be final and conclusive upon all parties to this Agreement. C. Insurance on the Doe’s Life. At the time of execution of this Agreement, the LLC is the owner and beneficiary of certain life insurance policies described in Exhibit A attached hereto, insuring the life of the ________________ . In the event of the death of ____________, the face value of the insurance policies shall be paid to the estate of the _______________ in full or partial payment of the purchase as soon after receipt by the LLC of the face value of the insurance policies (as is reasonably practicable). In the event that any action, omission, or misstatement on the part of a _______________ results in the nonpayment by the insurance carrier of all or part of the face value of the insurance policies described in Exhibit A to this Agreement, then and in such events the purchase price set forth in Section B of this Paragraph II of the Agreement shall be reduced by a like amount and the LLC shall have no liability to _____________ estate for that portion of the face value of the insurance policies which is not paid by the insurance carrier. The LLC agrees to pay premiums on the insurance policies listed in Exhibit A to this Agreement and shall give proof of payment of premiums to ___________ whenever he requests. If a premium is not paid within 10 days after its due date, then _____________ shall have the right to pay such premium and be reimbursed therefore by the LLC. The LLC shall have the right to purchase additional insurance on the life of the ______________. Such additional insurance shall be listed in Exhibit A to this Agreement, along with any substitution or withdrawal of life insurance policies subject to this Agreement. In the event that the LLC decides to purchase additional life insurance on _____________, __________ hereby agrees to cooperate fully by performing all of the requirements of the life insurer which are necessary conditions precedent to the issuance of life insurance policies. The LLC shall be the sole owner of the policies issued to it and it may apply any dividends toward the payment of premiums. D. Payment of Balance of Purchase Price. In the event that the amount of insurance proceeds listed in Exhibit A to this Agreement as applied toward the purchase price of __________ m ember interest shall exceed said purchase price as determined in Section B of Paragraph II of this Agreement, then the excess insurance proceeds shall be distributed to _______________ estate as an additional death benefit from the LLC , payable to ___________ estate in equal consecutive monthly installments over a period of months, with the first installment due on the first day of the month beginning no later than days from the date of death. Said excess purchase price shall be evidenced by an installment note, bearing interest at %. The note shall provide for prepayment at any time without prepayment penalty. III. Purchase of ___________ Member Interest During Lifetime of ___________. A. Purchase of ____________ Member Interest while in the Employ of the LLC. In the event that ___________ desires to sell, assign, transfer, pledge, or dispose of his member interest in the LLC owned by him at a time when ____________ is in the employ of the LLC, he shall first offer in writing to sell all of his member interest in the LLC to the LLC. The written offer by ______________ shall state the name of any other intended transferee (the Intended Transferee ) and the terms and conditions of the intended transfer, including the proposed purchase price. At any time during the period of 30 days beginning with the day on which such written offer is received, the LLC may purchase all of ___________ m ember interest at a purchase price equal to the lesser of (i) the price offered by the Intended Transferee or (ii) the price determined in accordance with Section C of Paragraph III of this Agreement. Any of ______________ m ember interest not purchased by the LLC within 30 days after receipt of such offer in writing shall be offered in writing at the same price to the other Members of the LLC, each of whom shall have the right to purchase such portion of ________________ m ember interest offered for sale as the Member’s member interest owned by him at such date shall bear to the total member interest owned by all of the other Members excluding __________. If any of the Members elect to purchase less than his pro rata proportion of the offered member interest of ____________ , or elect to purchase none at all, then the other Members (excluding __________) shall have the right to purchase the member interest which the Member declines to purchase in such proportion as the total member interest purchased by each Member exercising his right to purchase bears to the total member interest purchased by all Members (excluding ___________) exercising their right to purchase. If the LLC or the remaining Members do not purchase all of _________ member interest within 60 days of the initial receipt of the offer to sell by the LLC, _________ may sell his member interest to the Intended Transferee, but only on the same terms and conditions, including the same purchase price, as set forth in the written offer. If the sale to the Intended Transferee is not completed within 120 days of the initial receipt of the offer to sell by the LLC, the right of _________ to sell his member interest to the Intended Transferee shall terminate and ___________ must again comply with the requirements of this Section A in order to sell or otherwise transfer his member interest hereunder. B. Purchase of Member Interest of _________ while Not in the Employ of LLC. In the event that ___________ employment with the LLC is terminated prior to his Retirement (as such term is defined in Section D of Paragraph III of this Agreement) or his Total Disability (as such term is defined in Section B of Paragraph IV of this Agreement) ___________ shall sell and the LLC shall purchase all, but not less than all, of ________m ember interest in the LLC at a price determined in accordance with Section C of Paragraph III of this Agreement. C. Purchase Price During Lifetime Sale. The purchase price to be paid for __________ m ember interest if he desires to sell his m ember interest during his lifetime pursuant to the terms of Section A or Section B of Paragraph III of this Agreement shall be [Insert here either the purchase price or the formula or method at which such a purchase price shall be determined. If a fixed purchase price is provided, additional provisions should be inserted providing for an annual re-valuation of the purchase price, which re-valuation should be set forth in Exhibit B to the Agreement.]. The purchase price of the m ember interest as set forth in this Section shall be determined by the accounting firm for the LLC, using the accounting principles generally applied to the LLC, and said determination by the LLC’s accounting firm shall be final and conclusive upon all parties to this Agreement.D. Purchase and Purchase Price of Member Interest of John Doe at or Following Retirement. In the event that a ____________ employment with the LLC is terminated due to his Retirement, as such term is defined below, __________ shall sell and the LLC shall purchase all of __________ m ember interest in the LLC at a price determined in accordance with this Section. The purchase price to be paid __________ m ember interest pursuant to the terms of this Section shall be [Insert here either the purchase price or the formula or method at which such a purchase price shall be determined. If a fixed purchase price is provided, additional provisions should be inserted providing for an annual re-valuation of the purchase price, which re-valuation should be set forth in Exhibit B to the Agreement.]. The purchase price of _______ m ember interest as set forth in this Section shall be determined by the accounting firm for the LLC, using the accounting principles generally applied to the LLC, and said determination by the LLC’s accounting firm shall be final and conclusive upon all parties to this Agreement. For purposes of this Section, the term Retirement shall mean the termination of ______ employment with the LLC on or after _______ has reached the age of (e.g., 70) and with the then present intention on the part of _______ neither to seek employment either with another employer nor to become self-employed and provide services or products similar in nature as those provided by the LLC. Whether or not ________ termination of employment is on account of his Retirement (and, therefore, whether or not said he is entitled to the benefits of this Section of the Agreement) shall be made at the time of termination of employment. E. Installment Purchase Member Interest. In the event of a sale by _______ of his member interest during his lifetime, ____ percent of the purchase price shall be paid on the date falling _______days after the close of the LLC’s fiscal year in which _________ terminates employment or the written offer to sell or written notice of sale is first received by the LLC. The balance of the purchase price shall be evidenced by an installment note executed by the LLC or the purchasing Member(s), providing for ______equal consecutive monthly installments, with the first installment due on the first day of the month following the initial percent payment, said note to bear interest at ____%. The note shall provide for prepayment at any time without prepayment penalty. F. Purchase of Life Insurance. In the event of a sale of _________ member interest during his lifetime, or if this Agreement terminates before the death of ________ , then _________ shall have the right to purchase the policy or policies on his life owned by the LLC by paying an amount in cash equal to the cash surrender value as of the date of transfer, less any existing indebtedness charged against the policy or policies. This right shall lapse if not exercised within 30 days after such sale or termination. IV. Purchase of Member Interest in the Event of Disability A. Purchase In the event of six months of continuous Total Disability of __________, as defined in Section C of Paragraph IV of this Agreement, _______ shall sell and the LLC shall purchase all, but not less than all, of __________ member interest in the LLC at a price determined in accordance with Section B of Paragraph IV of this Agreement. The provisions of Sections E and F of Paragraph III shall apply in the event of a sale of ___________ member interest under this Paragraph IV. B. Purchase Price in the Event of Disability. The purchase price to be paid for __________ member interest following six months of continuous Total Disability, shall be [Insert here either the purchase price or the formula or method at which such a purchase price shall be determined. If a fixed purchase price is provided, additional provisions should be inserted providing for an annual re-valuation of the purchase price, which re-valuation should be set forth in Exhibit B to the Agreement.] The purchase price of _____________ member interest as set forth in this Section shall be determined by the accounting firm for the LLC using the accounting principles generally applied to the LLC, and said determination by the LLC฀s accounting firm shall be final and conclusive upon all parties to this Agreement. C. Definition of Total Disability. Total Disability shall have the same meaning as the term Totally Disabled (or any term of like import) has under any policy or plan of group disability insurance insuring pursuant to a plan of insurance carried by the LLC covering ____________. In the event that _________ is not covered by any such plan of group disability insurance, then and in such event Total Disability shall mean a physical or mental condition of resulting from bodily injury, disease, or mental disorder which renders him incapable of continuing his usual and customary employment with the LLC. In the event that the preceding sentence shall apply, the disability of ________ shall be determined by a licensed physician chosen by the LLC. In the event that ___________ shall disagree with the findings of the licensed physician chosen by the LLC, _________ shall have the right to choose a second licensed physician and the licensed physician so chosen, together with the licensed physician chosen by the LLC, shall agree upon a third licensed physician, and the decision of a majority of said three licensed physicians shall be binding upon the LLC and ___________. V. Endorsement on Certificates of Membership Interest The following endorsement shall be printed on each certificate of membership interest certificate subject to this Agreement: ฀Transfer is subject to the terms and provisions of a Membership Purchase Agreement on file with the Managing Member of this LLC. ฀ VI. Execution of Instruments to Effect the Terms of this Agreement ___________ or his legal representative if he is deceased or disabled shall make, execute, and deliver any documents necessary to carry out the provisions of this Agreement. This Agreement shall be binding upon the LLC, the Members, their heirs, legal representatives, successors, and assigns. It is hereby agreed by the parties hereto that the LLC shall not merge or consolidate with any other limited liability company or corporation, except and unless such successor limited liability company or corporation shall agree to the terms and conditions of this Agreement. VII. Termination of the AgreementThis Agreement shall terminate upon the occurrence of any of the following events:1.The bankruptcy, receivership or dissolution of the LLC; or 2. Written agreement of the Members and the LLC; or 3. Death or termination of employment of all of the Members simultaneously, or within a period of 30 days. No modification, termination, or waiver shall be valid unless in writing and signed by the parties sought to be charged thereunder. VIII. LLC Restrictions on Purchase of Membership Interest. If the LLC is unable to make any purchase required of it hereunder because of the provisions of applicable statutes or its operating agreement or bylaws, the LLC agrees to take such action as may be necessary to permit it to make such purchase. IX. NOTICE All notices, including offers and acceptances, shall be deemed to have been given if delivered or mailed, by certified or registered mail, to all parties entitled thereto at t heir addresses as contained in the records of the LLC. The date of such delivery, or the date of mailing by certified or registered mail, shall be the date of such notice for purposes of this Agreement. X. Prior Agreements This Buy Sell Agreement shall supersede and replace all prior buy sell or member interest purchase agreements executed by any or all of the Members or the LLC regarding their member interest in the LLC. Any such previously executed agreements shall have no effect upon the execution of this Agreement. XI. Governing Law This Agreement shall be governed by the laws of the State of Nevada. IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the____ day of _________, 20____. _____________________, LLC By:_______________________ ___________________________Managing Member (Acknowledgement before Notary Public) Exhibit A to Buy Sell Agreement The following policies of life insurance are owned by and insure the life of ___________ for the purpose of this Agreement: Issuer: Policy Number: Restricted Face Amount1 ___________________________ ___________________ ___________________________ ___________________ Exhibit B to Buy Sell Agreement (Exhibit B should set forth the re-valuation procedures for setting a fixed purchase price for member interests at death of a Member. See Paragraph II, Section B, Paragraph III, Section C, Paragraph III, Section D, and Paragraph IV, Section A). 1 Portion of the Face Amount of the Policy which Is Restricted for Payment Pursuant to Section C of Paragraph II of this Agreement