Common use of Restrictions on Transfers by a Non-Managing Member Clause in Contracts

Restrictions on Transfers by a Non-Managing Member. (a) No Non-Managing Member may directly or indirectly, sell, exchange, transfer, assign, pledge, hypothecate or otherwise dispose of all or any portion of its interest in the Company without the prior written consent of the Managing Member (which may, in the Managing Member’s sole discretion, be withheld or granted on such terms as the Managing Member determines). In no event may a Non-Managing Member engage in any aforementioned transfer of any portion of its interest in the Company nor may a substituted Non-Managing Member be admitted to the Company if such transfer or such admission would, in the judgment of the Managing Member, cause non-compliance with any matter set forth in Section 2.03.. (b) Notwithstanding anything to the contrary herein, the Company shall not participate in the establishment of a secondary market for interests in the Company or the substantial equivalent thereof as defined in Treasury Regulation Section 1.7704-1(c) or the inclusion of interests in the Company on such a market or on an established securities market as defined in Treasury Regulation Section 1.7704-1(b), nor shall it recognize any aforementioned transfer of interests in the Company made on any of the foregoing markets by admitting the purported transferee to the Company or otherwise recognizing the rights of such transferee.