Common use of Limitations on Clause in Contracts

Limitations on. Transfers of Series A Membership Interests. ----------------------------------------------- (a) A Member may transfer its Membership Interest at any time to a "Permissible TransfereePermissible Transferees." As used in this Section 13.1, "Permissible Transferee" with respect to a transferor means an entity that succeeds to the Member with substantially similar beneficial owners (including a liquidating trust), spouse, parent, child, brother or sister of such Member, including a trust for the benefit of such persons and Affiliates of such persons. Any such Permissible Transferee shall execute a copy of and agree to be bound by this Agreement. (b) In order that the intention of the parties with respect to the transfer of Membership Interest shall not be frustrated, impaired or restricted by any proceeding resulting from or otherwise in respect of the encumbering of any Membership Interest, except with the prior written consent of holders of seventy percent (70%) of the outstanding Percentage Interests, no Member shall at any time encumber any Membership Interest unless in connection therewith the person to whom such Membership Interest is encumbered (the "Secured PartySecured Party") agrees that upon foreclosure upon such Membership Interest following any default with respect to the indebtedness or other obligation secured thereby, the Secured Party will promptly make or obtain from a third party a bona fide offer for such Membership Interest, and the other Members and the Company shall have the first right to purchase such Membership Interest at the price offered by such third party all of the encumbered Membership Interest upon such terms and conditions as if such third party had made an offer to purchase all of such Membership Interest at such price pursuant to the provisions of Section 13.2. The purchase price for such Membership Interest shall be paid thirty percent (30%) in cash at closing, with the balance being paid in five equal annual installments on the anniversary of the closing. Such outstanding balance shall be represented by a promissory note bearing interest at a variable rate of the 5-Year Treasury Bxxx rate (as set forth in the Wall Street Journal) plus three percent (3%) and shall be secured by the Membership Interest being acquired. 13.2