A member control agreement, or MCA, is a contract that outlines the rights and responsibilities of both parties involved in membership. Business owners starting an association should understand what they need to do to ensure they have a valid MCA before their members sign it.
Member control agreements outline the percentage of ownership and roles and responsibilities in exchange for that ownership. This type of agreement helps lay out expectations between multiple parties controlling a company, such as a limited liability company.
Control Agreement Regarding Limited Liability
AGREEMENT (as amended, modified, restated and/or supplemented from time to time, this “ Agreement ”), dated as of February 22, 2005, among BioDelivery Sciences International, Inc., a Delaware corporation (the “ Pledgor ”), Laurus Master Fund, Ltd. (the “ Pledgee ”), and Bioral Nutrient Delivery, LLC, a Delaware limited liability company, as the issuer of the Limited Liability Company Interests (as defined below) (the “ Issuer ”).
W I T N E S S E T H :
WHEREAS, the Pledgor and the Pledgee have entered into a Stock Pledge Agreement, dated as of February 22, 2005 (as amended, modified, restated and/or supplemented from time to time, the “ Pledge Agreement ”), under which, among other things, in order to secure the payment of the Indebtedness (as defined in the Pledge Agreement), the Pledgor has or will pledge to the Pledgee, and grant a security interest in favor of the Pledgee in, all of the right, title and interest of the Pledgor in and to any and all equity interests (including, without limitation, limited liability company interests and membership interests) from time to time issued by the Issuer (collectively, the “ Limited Liability Company Interests ”), whether now existing or hereafter from time to time acquired by the Pledgor (with all of such Limited Liability Company Interests being herein collectively called the “ Issuer Pledged Interests ”); and
WHEREAS, the Pledgor desires the Issuer to enter into this Agreement in order to perfect the security interest of the Pledgee under the Pledge Agreement in the Issuer Pledged Interests, to vest in the Pledgee control of the Issuer Pledge Interests and to provide for the rights of the parties under this Agreement;
NOW THEREFORE, in consideration of the premises and the mutual promises and agreements contained herein, and for other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:
1. The Pledgor hereby irrevocably authorizes and directs the Issuer , and the Issuer hereby agrees, to comply with any and all instructions and orders originated by the Pledgee (and its successors and assigns) regarding any and all of the Issuer Pledged Interests without the further consent by the registered owner (including the Pledgor), and, following its receipt of a notice from the Pledgee stating that the Pledgee is exercising exclusive control of the Issuer Pledged Interests in accordance with the Stock Pledge Agreement, not to comply with any instructions or orders regarding any or all of the Issuer Pledged Interests originated by any person or entity other than the Pledgee (and its successors and assigns) or a court of competent jurisdiction.
2. The Issuer hereby certifies that (i) no notice of any security interest , lien or other encumbrance or claim affecting the Issuer Pledged Interests (other than the security interest of the Pledgee) has been received by it, and (ii) the security interest of the Pledgee in the Issuer Pledged Interests has been registered in the books and records of the Issuer.
3. The Issuer hereby represents and warrants that (i) the pledge by the Pledgor of , and the granting by the Pledgor of a security interest in, the Issuer Pledged Interests to the Pledgee, does not violate any agreement governing the Issuer or the Issuer Pledged Interests.
4. All notices , statements of accounts, reports, prospectuses, financial statements and other communications to be sent to the Pledgor by the Issuer in respect of the Issuer will also be sent to the Pledgee at the following address:
Laurus Master Fund, Ltd.
c/o Laurus Capital Management, LLC
825 Third Avenue, 14 th Floor