Preferred Return Distributions Sample Clauses
The Preferred Return Distributions clause establishes the priority and rate at which certain investors receive returns on their investment before profits are shared among all participants. Typically, this clause specifies that investors are entitled to a fixed percentage return on their contributed capital, which must be paid out before any remaining profits are distributed to other stakeholders, such as general partners. Its core function is to incentivize investment by providing a measure of downside protection and ensuring that investors receive a minimum return before others participate in profit sharing.
Preferred Return Distributions. Except as otherwise provided in Section 13, the Company shall make distributions, as and when declared by the Managing Member, to the Class A Limited Members on each Class A Distribution Date, in an amount equal to the cumulative amount of the applicable Class A Limited Member Preferred Return accrued in respect of the related Class A Distribution Period for each such Class A Limited Member’s Unrecovered Capital. Distributions pursuant to this Section 4.1(a) (including any distributions made subsequent to the Class A Distribution Date on which they were required to be made but prior to the succeeding Class A Distribution Date on which distributions are required to be made) shall be made to the Class A Limited Members of record fifteen (15) days prior to the relevant Class A Distribution Date. In the event that the Managing Member declares a distribution in an amount less than the cumulative Class A Limited Member Preferred Return in respect of a particular Class A Distribution Period, and without limiting any other rights of the Class A Limited Members, the aggregate amount of the distribution shall be allocated between the classes of Class A Limited Membership Interests in the same proportion as would have been the case had the full amount been declared and such amount shall be paid to the holders of Class A Limited Membership Interests, as applicable, pro rata in proportion to such holders’ Unrecovered Capital of such series of Membership Interest. The Company shall make the distributions pursuant to this Section 4.1(a) to the Paying Agent or, at the Company’s option, the Administrative Agent (if any) for the account of the Class A Limited Members, by wire transfer of same day funds in Dollars to such account as the Paying Agent or the Administrative Agent, as applicable, shall have designated in writing to the Company from time to time. The Company shall cause the Paying Agent or the Administrative Agent, as applicable, to promptly thereafter distribute, from funds furnished by the Company, to each Class A Limited Member to such account or accounts as each Class A Limited Member shall have designated in writing to the Paying Agent or the Administrative Agent, as applicable, from time to time, the amount due to such Class A Limited Member pursuant to this Section 4.1(a). -35-
Preferred Return Distributions. Cumulative distributions to any Class P Member pursuant to Section 7.03(b)(i), Section 7.03(b)(ii)(2), Section 7.03(c)(i), Section 7.03(c)(ii)(2) and Section 13.02 (to the extent such distributions would have been made pursuant to Section 7.03(b)(i), Section 7.03(b)(ii)(2), Section 7.03(c)(i) and Section 7.03(c)(ii)(2) if such distributions had been made pursuant to Section 4.03 instead of pursuant to Section 10.02) shall not exceed the cumulative amount of Net Income and items of gross income allocated to such Member pursuant to Section 7.04 (the “Gross Income Principle”).
Preferred Return Distributions. Except as otherwise provided in Section 13, the Managing Member shall cause the Company to distribute Cash Available for Distribution (determined as of the time such distributions are required to be made pursuant to this Section 4.1(a)) to the Limited Members as follows:
(i) First, on each Class A Distribution Date, to the Class A Limited Members in proportion to, and to the extent of, an amount equal to the excess, if any, of (i) the cumulative amount of the Class A Limited Member Preferred Return accrued during the period from and including May 24, 2002 to but excluding the last day of the Fiscal Quarter ending on or immediately following such Class A Distribution Date for each such Class A Limited Member, over (ii) the cumulative amount of Cash previously distributed to such Class A Limited Member pursuant to this Section 4.1(a)(i); and
(ii) Second, on each Class B Distribution Date, commencing January 15, 2005, to the Class B Limited Members in proportion to, and to the extent of, an amount equal to the excess, if any, of (i) the cumulative amount of the Class B Limited Member Preferred Return accrued during the period from and including the May 24, 2002 to but excluding Class B Distribution Date, over (ii) the cumulative amount of Cash previously distributed to such Class B Limited Member pursuant to this Section 4.1(a)(ii); provided that no distributions shall be made pursuant to this Section 4.1(a)(ii) unless (A) at the time such distribution is otherwise required to be made and as of the immediately preceding Class A Distribution Date, Cash Available for Distribution was at least equal to the sum of (x) the amounts required to be distributed on such preceding Class A Distribution Date pursuant to Section 4.1(a)(i) plus (y) the amounts required to be distributed on the current Class B Distribution Date pursuant this Section 4.1(a)(ii); (B) Profits of the Company for the current Allocation Year through such Class B Distribution Date (calculated as if such date were the last day of the Allocation Year) equal or exceed the amounts required to be distributed pursuant to Section 4.1(a)(i) and (a)(ii) as of such Class B Distribution Date; and (C) at the time of such distribution no Class A Notice Event, Liquidating Event or other event or condition that, but for the requirement that time elapse or notice be given, or both, would constitute a Class A Notice Event or Liquidating Event has occurred and is continuing. Distributions pursuant to this Section 4....
Preferred Return Distributions. Subject to any restrictions under applicable law, before 100% of the initial capital investment of any Class A Preferred Holder has been returned, the Manager shall cause to be distributed to the Class A Preferred Holders 100% of all distributable income received by the Company in respect of its ownership interest in any other entity or business. Preferred Return Distributions shall be cumulative and shall continue until all Class A Preferred Holders have received a complete return of their Capital Contribution (less the aggregate amount of any Preferred Return Distributions previously made to such Members), at which time such distributions will cease.