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Membership Interest Redemption Agreement
"Need a Membership Interest Redemption Agreement for our Ontario-based tech startup where we're buying out a founding member's 25% interest in quarterly installments over 18 months, starting March 2025, with special provisions for intellectual property protection."
1. Parties: Identifies and defines the company, the selling member, and any other relevant parties to the agreement
2. Background: Recitals explaining the context of the redemption, including the member's current ownership interest and the parties' desire to enter into the redemption transaction
3. Definitions: Defines key terms used throughout the agreement
4. Redemption and Purchase: Details the specific membership interests being redeemed and the agreement to sell and purchase
5. Purchase Price: Specifies the total purchase price and how it was determined
6. Payment Terms: Outlines the payment structure, including timing, method, and any installment arrangements
7. Closing: Specifies the closing date, location, and mechanics of the transaction
8. Representations and Warranties of Selling Member: Member's confirmations regarding ownership, authority to sell, and absence of encumbrances
9. Representations and Warranties of Company: Company's confirmations regarding authority, financial condition, and ability to complete the transaction
10. Covenants: Ongoing obligations of the parties before and after closing
11. Release: Mutual release of claims related to the membership interest
12. Confidentiality: Provisions regarding confidential treatment of agreement terms and company information
13. General Provisions: Standard clauses including governing law, notices, amendments, and entire agreement
1. Tax Matters: Special tax provisions and allocations when specific tax treatment is desired
2. Regulatory Approvals: Required when the redemption needs regulatory or third-party approvals
3. Non-Competition: Restrictions on the selling member's future competitive activities, if applicable
4. Installment Payment Security: Security provisions when payment is made in installments
5. Earn-out Provisions: When part of the purchase price is contingent on future performance
6. Member Resignation: Required when the selling member holds positions in company management
7. Survival: Specific provisions about which representations and warranties survive closing
1. Schedule A - Description of Membership Interest: Detailed description of the membership interest being redeemed
2. Schedule B - Purchase Price Calculation: Detailed calculation or valuation method used to determine the purchase price
3. Schedule C - Closing Deliverables: List of all documents and items to be delivered at closing
4. Schedule D - Payment Schedule: If applicable, detailed schedule of installment payments
5. Schedule E - Company Resolutions: Copies of relevant company resolutions approving the redemption
6. Schedule F - Required Consents: List of third-party consents required for the redemption
7. Appendix 1 - Form of Release: Form of mutual release to be executed at closing
8. Appendix 2 - Transfer Documents: Forms of transfer documents required to effect the redemption
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Finance
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Managing Director
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Compliance Officer
Partnership Manager
Business Unit Head
Treasury Manager
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