This excerpt taken from the VRSN 10-Q filed Jul 16, 2007.
10.1 Restriction on Transfers.
(a) No Member may Transfer all, or any portion, of its Units, other than to a Permitted Transferee, without the prior written consent of the other Member, which consent may be given or withheld for any reason or for no reason. Any purported Transfer of Units not made in compliance with this Article X shall be null and void and of no force or effect whatsoever.
(b) Transfers to Permitted Transferees. The restriction on Transfer contained in this Section 10.1 shall not apply to Transfers by a Member to (a) any Affiliate of such Member or (b) any other Member (collectively, Permitted Transferees); provided, however, that such Permitted Transferee shall become a Member of the Company in accordance with Section 10.2 (unless such Permitted Transferee is already a Member) and in any event such Units so Transferred in the hands of each such Permitted Transferee shall remain subject to this Agreement.
10.2 Admission of New Members.
(a) No Person shall be admitted as a new Member of the Company without first complying with the following provisions:
(i) the new Member shall, at the request of the Board, deliver an opinion of counsel, in form and substance reasonably satisfactory to counsel designated by the Board, that such Transfer and any offerings made in connection therewith are in compliance with applicable federal and state securities laws;
(ii) the new Member shall execute a statement that it is acquiring such Units for its own account for investment and not with a view to the distribution or resale thereof; and
(iii) the new Member shall execute an instrument accepting and adopting the terms and provisions of this Agreement.
(b) Upon the admission of such a new Member in accordance with the Delaware Act and this Agreement, the Company shall establish a Capital Account which shall be credited with the Capital Contribution of the new Member and Schedule A shall be adjusted accordingly, including to reflect the Percentage Interest and Units of each Member.
(c) In addition, the Members shall make such amendments to this Agreement as the Board determines are necessary or appropriate to effect the admission of such new Member.
10.3 Covenants. Each Member hereby represents, covenants and agrees with the Company for the benefit of the Company and each other Member, that (a) it is not currently making a market in Company Interests and will not in the future make a market in Company Interests, (b) it will not Transfer its Company Interest on an established securities market, a secondary market (or the substantial equivalent thereof) within the meaning of Code Section 7704(b) (and any regulations, proposed regulations, revenue rulings, or other official pronouncements of the Internal Revenue Service or Treasury Department that may be promulgated or published thereunder), and (c) such Member either (x) is not a grantor trust, partnership or S corporation for U.S. federal income tax purposes, or (y) was not formed with, and will not be used for, a principal purpose of permitting the Company to satisfy the one hundred (100) partner limitation contained in Section 1.7704-1(h)(1)(ii) of the Treasury Regulations.
10.4 Distributions and Allocations in Respect of Transferred Company Interests. If any Company Interest is Transferred during any Fiscal Year in compliance with the provisions of this Article X, Profits, Losses, each item thereof and all other items attributable to the Transferred Units for such Fiscal Year shall be divided and allocated between the transferor and the transferee by taking into account their varying Company Interests during such Fiscal Year in accordance with Section 15.5. All distributions on or before the date of such Transfer shall be made to the transferor, and all distributions thereafter shall be made to the transferee. Solely for purposes of making such allocations and distributions, the Company shall recognize such Transfer not later than the end of the calendar month during which it is given notice of such Transfer; provided, however, that, if the Company is given notice of a Transfer at least ten (10) Business Days prior to the Transfer, the Company shall recognize such Transfer as the date of such Transfer; and provided, further, that, if the Company does not receive a notice stating the date such Company Interest was Transferred and such other information as the Board may reasonably require within thirty (30) days after the end of the Fiscal Year during which the Transfer occurs, then all such items shall be allocated, and all distributions shall be made, to the Person who, according to the books and records of the Company, was the owner of the Company Interest on the last day of the Fiscal Year during which the Transfer occurred. Neither the Company nor any Member or Manager shall incur any liability for making allocations and distributions in accordance with the provisions of this Section 10.4, whether or not any Member or the Company has knowledge of any Transfer of ownership of any Company Interest.
10.5 Termination. The respective rights and obligations of the Members under Section 10.1 shall terminate immediately prior to the consummation of a Qualified IPO.