Encumbrances of Membership Interest Clause Samples
The "Encumbrances of Membership Interest" clause defines restrictions or limitations on a member's ability to transfer, pledge, or otherwise encumber their ownership interest in a company. Typically, this clause prohibits members from using their membership interest as collateral for loans or from granting security interests to third parties without prior written consent from the company or other members. By establishing these boundaries, the clause helps maintain control over the ownership structure and prevents unwanted third parties from gaining an interest in the company, thereby protecting the integrity and stability of the business.
POPULAR SAMPLE Copied 2 times
Encumbrances of Membership Interest. A Member may not Encumber its Membership Interest except by complying with both of the following requirements: (i) such Member must receive the consent of the other Member, which consent may be granted or withheld in the sole discretion of such other Member; and (ii) the instrument creating such Encumbrance must provide that any foreclosure of such Encumbrance (or Disposition in lieu of such foreclosure) must comply with the requirements of Section 9.01(b).
Encumbrances of Membership Interest. A Member may not Encumber its Membership Interest in a Series, except by complying with one of the following paragraphs:
(i) (A) such Member must receive the consent of [***] with respect to such Series (calculated without reference to the Sharing Ratio of any Founding Member of such Series that is the Encumbering Member), which consent (as contemplated by Section 6.02(f)(ii)) may be granted or withheld in the Sole Discretion of each applicable Representative; and (B) the instrument creating such Encumbrance must provide that any foreclosure of such Encumbrance (or Disposition in lieu of such foreclosure) must comply with the requirements of Sections 3.03(a) and (b); or
(ii) such Encumbrance is required by the terms of a Financing Commitment.
Encumbrances of Membership Interest. A Member may Encumber its Membership Interest if the instrument creating such Encumbrance provides that any foreclosure of such Encumbrance (or Disposition in lieu of such foreclosure) must comply with the requirements of Section 3.03(b).
Encumbrances of Membership Interest. A Member may encumber its Membership Interest if the instrument creating such Encumbrance provides that any Transfer upon foreclosure of such Encumbrance (or Transfer in lieu of such foreclosure) must comply with the requirements of Sections 9.1(b)(i) and 9.1(b)(iii). Any such Encumbrance, and any Transfer upon foreclosure of such Encumbrance (or Transfer in lieu of such foreclosure) that complies with such requirements shall be a Permitted Encumbrance and a permitted transfer pursuant to this Section 9.1.
Encumbrances of Membership Interest. A Member may Encumber its Membership Interest, and any Parent of a Member may Encumber such Membership Interest indirectly, so long as the instrument creating such Encumbrance provides that any Transfer upon foreclosure of such Encumbrance (or Transfer in lieu of such foreclosure) shall, and the actual Transfer relating to such Encumbrance (whether through foreclosure or in lieu of foreclosure) shall (a) not be to a Disqualified Transferee, (b) during the Investment Period, shall only be to a Qualified Transferee and (c) otherwise comply with the requirements of Section 9.3. Notwithstanding the foregoing provisions of this Section 9.4 (a) the Members agree to act in a commercially reasonable manner in connection with a financing in which a Member intends to grant a security interest in its Units and take such actions (or refrain from taking such actions) as are reasonably requested by such Member to facilitate the closing of such financing, including reasonably cooperating with such Member to enter into a consent to assignment, provided that such consent to assignment is reasonably acceptable to the Members, with such Member’s financing parties and (b) such Member may Encumber its Membership Interests pursuant to and subject to the terms of any such consent.
Encumbrances of Membership Interest. A Member may Encumber its Membership Interest if the instrument creating such Encumbrance provides that any Disposition upon foreclosure of such Encumbrance (or Disposition in lieu of such foreclosure) must comply with the requirements of Section 3.03(b)(iii). Any such Encumbrance, and any Disposition upon foreclosure of such Encumbrance (or Disposition in lieu of such foreclosure) that complies with such requirements shall be a Permitted Disposition, subject to the proviso in the definition thereof.
Encumbrances of Membership Interest. 55 Section 9.5 Admission of Transferee as a Member. 55 Section 9.6 [***]. 55 Section 9.7 Terminated Member. 55 Section 9.8 Class B Member Matters. 56 ARTICLE 10 [RESERVED] 56 ARTICLE 11 Indemnification 56 Section 11.1 Indemnification. 56 Section 11.2 Procedure for Indemnification. 57 Section 11.3 Exclusivity. 57
Encumbrances of Membership Interest. 66 Section 9.5 Admission of Transferee as a Member. 66 Section 9.6 Change in Control. 67 Section 9.7 Terminated Member. 68 ARTICLE X AGGREGATE TRACKING MODEL AND DISPUTE 69 Section 10.1 Aggregate Tracking Model. 69 Section 10.2 Dispute. 69 ARTICLE XI INDEMNIFICATION 70 Section 11.1 Indemnification by the Members. 70 Section 11.2 Limitation on Liability. 72 Section 11.3 Procedure for Indemnification. 73 Section 11.4 Exclusivity. 74 Section 11.5 No Right of Contribution. 74 Section 11.6 Entire Agreement. 74 ARTICLE XII DISSOLUTION, LIQUIDATION AND TERMINATION 74 Section 12.1 Dissolution. 74
Encumbrances of Membership Interest. A Member may make a Collateral Assignment of all or part of its Membership Interest in connection with a bona fide financing or refinancing, if the counterparty to the instrument creating such Encumbrance is a financial institution and such instrument otherwise complies with this Section 9.1(e) (any such Member, an “Encumbering Member”). The occurrence of a foreclosure, acceptance of an assignment in lieu of foreclosure, or any other enforcement action involving the Transfer of all or any portion of the Membership Interests subject to the Collateral Assignment shall not be deemed to be a proposed Transfer of all Membership Interests subject to the Collateral Assignment; provided, that, (i) such Encumbering Member shall promptly notify the Company and the other Members in writing following the commencement of any such foreclosure remedies or proceedings; and (ii) in the event the creditor of such Encumbering Member following such foreclosure proposes to Transfer such Membership interests to any Person (whether by public auction, private sale or otherwise), such Transfer shall be subject to Section 9.3 and the other applicable provisions of this Article IX (other than Section 9.5). Each Member hereby covenants and agrees that it will execute and deliver, or cause its Affiliate to execute and deliver, documents reasonably required by another Member’s financial institution in connection with a Collateral Assignment and reasonably acceptable to the countersigning Member or its Affiliate, as applicable; provided, that, reasonable advance notice thereof is provided.
Encumbrances of Membership Interest. A Member may not Encumber its Membership Interest, unless (i) such Encumbrance is required by the terms of a Financing Commitment or such Member receives the prior consent of a Majority Interest of the non-Encumbering Members (calculated without reference to the Sharing Ratio of the Encumbering Member), which consent may be granted or withheld in the Sole Discretion of each such other Member, and (ii) the instrument creating such Encumbrance provides that any foreclosure of such Encumbrance (or Disposition in lieu of such foreclosure) must comply with the requirements of Sections 3.03(a) and (b).