Form Sc-00llc-1 - Llc Operating Agreement Page 10
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2031.
Encumbrance. A Member can encumber his LLC interest by a security interest or other
form of collateral only with the consent of a majority of the other Members. Such consent shall
only be given if the proceeds of the encumbrance are contributed to the LLC to respond to a cash
call of the LLC.
32.
Sale of Interest. A Member can sell his LLC interest only as follows:
(a)
If a Member desires to sell his/her interest, in whole or in part, he/she shall give
written notice to the LLC of his desire to sell all or part of his/her interest and must first
offer the interest to the LLC. The LLC shall have the option to buy the offered interest at
the then existing Set Price as provided in this Agreement. The LLC shall have thirty (30)
days from the receipt of the assigning Member's notice to give the assigning Member
written notice of its intention to buy all, some, or none of the offered interest. The
decision to buy shall be made by a majority of the other Members. Closing on the sale
shall occur within sixty (60) days from the date that the LLC gives written notice of its
intention to buy. The purchase price shall be paid in cash at closing unless the total
purchase price is in excess of $_______________ in which event the purchase price shall
be paid in __________ (____) equal quarterly installments beginning with the date of
closing. The installment amounts shall be computed by applying the following interest
factor to the principal amount: interest compounded quarterly at the Quarterly Federal
Short-Term Rate existing at closing under the Applicable Federal Rates used for purposes
of Internal Revenue Code § 1 274(d), or any successor provision.
(b) To the extent the LLC does not buy the offered interest of the selling Member, the
other Members shall have the option to buy the offered interest at the Set Price on a pro
rata basis based on the Members' percentage interests at that time. If Member does not
desire to buy up to his/her proportional part, the other Members can buy the remaining
interest on the same pro rata basis. Members shall have fifteen (15) days from the date
the LLC gives its written notice to the selling Member to give the selling Member notice
in writing of their intention to buy all, some, or none of the offered interest. Closing on
the sales shall occur within sixty (60) days from the date that the Members give written
notice of their intention to buy. The purchase price from each purchasing Member shall
be paid in cash at closing.
(c) To the extent the LLC or the Members do not buy the offered interest, the selling
Member can then assign the interest to a non-member. The selling Member must close
on the assignment within ninety (90) days of the date that he gave notice to the LLC. If
he does not close by that time, he must again give the notice and options to the LLC and
the LLC Members before he sells the interest.
(d) The selling Member must close on the assignment within ninety (90) days of the date
that he gave notice to the LLC. If he does not close by that time, he must again give the
notice and options to the LLC and the LLC Members before he sells the interest.
(e) A non-member purchaser of a member’s interest cannot exercise any rights of a
Member unless a majority of the non-selling Members consent to him becoming a
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