Common use of 1Distributions Clause in Contracts

1Distributions. (a) Except as otherwise provided herein, the Company shall make Distributions to the Unitholders in respect of their Units at any time and from time to time as determined by the Board in its sole discretion; provided that such Distributions are permitted under any lending agreements to which the Company or any of its Subsidiaries is a party and under applicable law. Subject to Section 3.1(b), Distributions shall be made in the following order and priority: (i) First, to the Entrepreneur Preferred Unitholders in proportion to and to the extent of the Unreturned Capital with respect to such Entrepreneur Preferred Units held by each such Unitholder immediately prior to such Distribution; (ii) Second, to the Foundation Preferred Unitholders in proportion to and to the extent of the Unreturned Capital with respect to such Foundation Preferred Units held by each such Unitholder immediately prior to such Distribution; and (iii) Third, to the Common Unitholders ratably among such Unitholders based upon the number of outstanding Common Units held by each such Unitholder immediately prior to such Distribution. (b) Notwithstanding the priority of Distributions in Section 3.1(a), the Company will use reasonable efforts, consistent with any restrictions which may be imposed by any creditor of the Company or any of its Subsidiaries or applicable law, to make quarterly or more frequent Distributions of an amount of cash (a “Tax Distribution“) equal to the product of (i) the Company Income Amount for such calendar quarter or other period, multiplied by (ii) the Assumed Tax Rate for such Fiscal Year. The “Company Income Amount“ for a Fiscal Year shall be an amount, if positive, equal to the estimated net taxable income of the Company for such Fiscal Year based upon the Company’s estimated taxable income through such date, minus any net taxable loss of the Company for any prior Fiscal Year not previously taken into account for purposes of this Section 3.1(b). The “Assumed Tax Rate“ for a Fiscal Year shall be the maximum federal, foreign, state, and local income tax rate that would be applicable to a Unitholder if such Unitholder were taxed for such Fiscal Year (and the calendar quarters or other periods in such Fiscal Year) as a corporation or individual resident or domiciled in either the State of Vermont or the state where the Company is then domiciled (i.e., the highest of the rates, regardless of whether such Unitholder is a corporation, an individual, or another entity and regardless of whether such Unitholder is domiciled in Vermont or the state where the Company is then domiciled ) in respect of income recognized during each such Fiscal Year. The Company will use reasonable efforts to cause such Distributions to be made in a manner which permits such Unitholders to use the proceeds of such Distributions to make on a timely basis all required estimated payments of income taxes in respect of the taxable income so allocated to them. The Company will use reasonable best efforts to have Tax Distributions be permitted distributions pursuant to any credit and/or lending agreement or similar document with any creditor of the Company. (c) The Tax Distributions for each Fiscal Year shall be distributed to the Members in the same proportions that taxable income was or is anticipated to be allocated to the Members during such Fiscal Year. Each Distribution pursuant to this Section 3.1(c) shall be made to the Persons shown on the Company's books and records as holders of Units as of the date of such Distribution and shall be treated as an advance to such Persons of amounts to which they are otherwise entitled under Section 3.1(a). Each Distribution pursuant to this Section 3.1(c), to the extent attributable to Profits in excess of Losses (and Losses of any prior Fiscal Year not previously taken into account for purposes of this Section 3.1(c)) allocated to such Persons by virtue of Section 3.1(a), shall not be treated as an advance to such Persons of amounts to which they are otherwise entitled under Section 3.1(a) and, for the avoidance of doubt, shall not reduce the amount of any Distributions to such Persons pursuant to Section 3.1(a)(1). (d) The Unitholders shall look solely to the assets of the Company for any Distributions, whether liquidating Distributions or otherwise. If the assets of the Company remaining after the payment or discharge, or the provision for payment or discharge, of the debts, obligations, and other liabilities of the Company are insufficient to make any Distributions, no Unitholder shall have any recourse against the separate assets of any other Unitholder (except as otherwise expressly provided herein). (e) If the Company has, pursuant to any clear and manifest accounting or similar error, paid any Unitholder an amount in excess of the amount to which it is entitled pursuant to this Article III, such Unitholder shall reimburse the Company to the extent of such excess, without interest, within 30 days after demand by the Company.