Initial Class D Common Unit Clause Samples
The Initial Class D Common Unit clause defines the creation and characteristics of a specific class of ownership units within a company or investment vehicle, known as Class D Common Units. This clause typically outlines the number of units issued, the rights and privileges attached to these units—such as voting rights, dividend entitlements, or conversion features—and any restrictions or conditions on their transfer or ownership. For example, it may specify that these units are issued to certain investors at the outset of the company or fund. The core practical function of this clause is to clearly establish the terms and structure for this class of equity, ensuring all parties understand their rights and obligations, and to prevent future disputes regarding ownership or control.
Initial Class D Common Unit. The following changes shall apply to the provisions of Sections 2.13(g), 8.3(a)(ii) and 8.4(b) of the Limited Partnership Agreement with respect to the Limited Partner and any Related Trusts, and his or their Initial Class D Common Unit: (A) the Initial Class D Common Unit shall be treated as a Class A Common Unit thereunder, (B) the Initial Class D Common Unit shall be conditionally vested upon issuance, subject to the other terms hereof, (C) the consequences of any breach by the Limited Partner of any of the covenants set forth in Section 2.13(b)(i) (as modified hereunder) and Section 2.13(b)(ii) of the Limited Partnership Agreement shall be as set forth in Section 5(b)(ii) below, and (D) if the Initial Class D Common Unit (or any Class A Common Unit acquired in respect thereof) is reallocated under Section 5(b)(ii) below, any such reallocated Common Units shall remain vested.