An assignment of membership interest is a legal document that allows members of a Limited Liability Company (or LLC) to reassign their interest in the company to a different party. LLC laws are different from state to state, so what's required in an assignment of membership agreement changes.
Typically seen when a member wishes to exit a business, the assignment of membership interest agreement is used when transferring membership interest to another person. It is possible to transfer membership of an LLC to something like a revocable trust but requires those terms and conditions to be set in the assignment agreement.
ASSIGNMENT OF MEMBERSHIP INTEREST
THIS ASSIGNMENT OF MEMBERSHIP INTEREST (this “ Assignment ”) is made as of this 5 th day of February, 2004 (the “ Effective Date ”), by and between D. LEE McCREARY, JR. (“ Assignor ”) and ELDERTRUST OPERATING LIMITED PARTNERSHIP, a Delaware limited partnership (“ Assignee ”).
WHEREAS, Assignor is the sole member of Vernon ALF, L.L.C., a Delaware limited liability company (the “ Company ”), pursuant to that certain Operating Agreement of Limited Partnership of Vernon ALF, L.L.C. dated as of October 23, 1998 (the “ Operating Agreement ”); and
WHEREAS, pursuant to that Option Agreement between Assignor and Assignee (the “ Option Agreement ”), dated September 25, 2002, Assignor granted to Assignee an option to purchase Assignor’s membership interest as the sole member of the Company (the “ Membership Interest ”); and
WHEREAS, Assignee has exercised its option to purchase Assignee’s Membership Interest; and
WHEREAS, Massachusetts Housing Finance Agency has been obtained in accordance with the terms of the Option Agreement and the parties wish to effect the transfer of Assignor’s Membership Interest to Assignee in accordance with the terms of the Option Agreement and as set forth below;
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
1. Assignor hereby assigns to Assignee , and Assignee hereby accepts from Assignor, all of the Membership Interest, together with all of Assignor’s right, title and interest as the sole member of the Company under the Operating Agreement, under any other documents related to the Membership Interest or under applicable law and in and to any and all of (a) the Company’s assets, and (b) any and all of Assignor’s other rights under the Operating Agreement.
2. On the Effective Date , for and in consideration of the assignment to Assignee pursuant to paragraph 1 above, Assignee shall pay to Assignor a purchase price in the amount of Three Thousand Two Hundred Forty-Four dollars ($3,244.00) in cash by wire transfer, certified or bank check, or delivery of other immediately available funds.
3. To induce the Assignee to enter into this Assignment and to accept the assignment of the Membership Interest , Assignor hereby represents and warrants to Assignee that Assignor owns the Membership Interest, free and clear of all security interests, liens, adverse claims, pledges, options, rights of first refusal, limitations on voting rights, charges and any other encumbrances of any nature whatsoever.
4. Assignee hereby is admitted as the sole member of the Company and shall have all the rights , obligations and responsibilities of the sole member arising or
accruing after the date hereof under the Operating Agreement granted to the sole member. Any references to the sole member or the “Member” in the Operating Agreement with respect to the period from and after the date hereof shall be deemed to mean Assignee as admitted to the Company hereunder.
5. Assignee hereby accepts the rights , responsibilities and obligations of the sole member arising or accruing after the date hereof under the Operating Agreement and agrees to assume and to be bound by the terms thereof.
6. Assignor hereby agrees to execute any other documents and take any other action as may be commercially reasonable to effectuate the transactions contemplated by this Assignment .
7. This Assignment constitutes the entire agreement of the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and undertakings , both written and oral, between the parties hereto with respect to the subject matter hereof.