Common use of Distribution Rate Clause in Contracts

Distribution Rate. The Preferred Return shall accrue at a per annum rate of 13.0% initially (the “Fixed Distribution Rate”). At the fifth (5th) anniversary of the Closing Date, the Requisite Class P Members may make a one-time irrevocable election (the “Floating Rate Election”) for all outstanding Class P Units to accrue Preferred Return from and after the fifth (5th) anniversary at a rate equal to the five-year Treasury Rate, plus 1,000 basis points, resetting quarterly to reflect the then current five-year Treasury Rate (the “Floating Distribution Rate”). The Floating Rate Election shall be made by means of a written notice delivered, in accordance with Section 11.02 of the LLC Agreement, by the Requisite Class P Members to the Company at any time during the thirty (30) days immediately prior to the fifth (5th) anniversary of the Closing Date, and the Company shall promptly notify all non-electing Holders of such election. On the seventh (7th), eighth (8th) and ninth (9th) anniversaries of the Closing Date, the Fixed Distribution Rate or, if the Floating Distribution Rate is then applicable, the spread over the then applicable five-year Treasury Rate, will increase by 100 basis points per annum, 100 basis points per annum and 50 basis points per annum, respectively.