Common use of Pledged Interest Clause in Contracts

Pledged Interest. In the event that the Managing Member consents to any pledge of or encumbrance on all or any part of a Member’s interest in the LLC (such interest which is subject to a pledge or encumbrance is referred to as the “Pledged Interest”), then upon the occurrence of an “Event of Default” by such Member under the document creating the pledge or encumbrance or upon such Member becoming a “Defaulting Member” under this Agreement (i) the Managing Member may elect to cause the LLC to accept an assignment of the Pledged Interest subject to such pledge or encumbrance, and the LLC must accept such assignment unless the Managing Member, in its sole and absolute discretion, declines to accept such assignment); and (ii) if the LLC accepts such assignment of the Pledged Interest, the LLC shall automatically assume the obligation(s) secured by the pledge of or encumbrance on the Pledged Interest, provided that (a) recourse on the obligation(s) secured by the pledge of or encumbrance on the Pledged Interest is and shall be limited only to the value of the Pledged Interest (even if such interest is effectively distributed to all of the Members and even if such value fluctuates from time to time); and (b) neither the LLC, nor any asset of the LLC (other than the value of the Pledged Interest), shall be personally liable, responsible or subject to execution for such obligation(s).

Pledged Interest. In the event that the Managing Member General Partner consents to any pledge of or encumbrance on all or any part of a MemberPartner’s interest in the LLC Partnership (such interest which is subject to a pledge or encumbrance is referred to as the “Pledged Interest”), then upon the occurrence of an “Event of Default” by such Member Partner under the document creating the pledge or encumbrance or upon such Member Partner becoming a “Defaulting MemberPartner” under this Agreement (i) the Managing Member General Partner may elect to cause the LLC Partnership to accept an assignment of the Pledged Interest subject to such pledge or encumbrance, and the LLC Partnership must accept such assignment unless the Managing MemberGeneral Partner, in its sole and absolute discretion, declines to accept such assignment); and (ii) if the LLC Partnership accepts such assignment of the Pledged Interest, the LLC Partnership shall automatically assume the obligation(s) secured by the pledge of or encumbrance on the Pledged Interest, provided that (a) recourse on the obligation(s) secured by the pledge of or encumbrance on the Pledged Interest is and shall be limited only to the value of the Pledged Interest (even if such interest is effectively distributed to all of the Members Partners and even if such value fluctuates from time to time); and (b) neither the LLCPartnership, nor any asset of the LLC Partnership (other than the value of the Pledged Interest), shall be personally liable, responsible or subject to execution for such obligation(s).