Common use of Distribution Threshold Clause in Contracts

Distribution Threshold. Upon the issuance of any Class C Units or any other Units that the LLC issued as “profits interests” for U.S. federal income tax purposes (a “Distribution Threshold Unit”), the Board shall specify the Distribution Threshold, if any, applicable to such Units and enter it into the LLC’s records. The “Distribution Threshold” for any such Unit shall be equal to the amount determined by the Board in its discretion to be necessary to cause such Unit to constitute a “profits interest” for U.S. federal income tax purposes. Notwithstanding any provision of this Agreement to the contrary, in no event will the LLC make any distributions under Section 3.2 in respect of a Distribution Threshold Unit unless and until the LLC has already made aggregate distributions under Section 3.2 on each other Unit that is not a Distribution Threshold Unit equal to the Distribution Threshold of such Distribution Threshold Unit, taking into account only distributions thereunder since the date of issuance of such Distribution Threshold Unit, and thereafter such Distribution Threshold Unit shall be entitled only to its Sharing Percentage of excess distributions over and above its Distribution Threshold.

Distribution Threshold. Upon the issuance of any Class C Units or any other Units that the LLC Company issued as “profits interests” for U.S. federal income tax purposes (a “Distribution Threshold Unit”), the Board shall specify the Distribution Threshold, if any, applicable to such Units and enter it into the LLCCompany’s records. The “Distribution Threshold” for any such Unit shall be equal to the amount determined by the Board in its discretion to be necessary to cause such Unit to constitute a “profits interest” for U.S. federal income tax purposes. Notwithstanding any provision of this Agreement to the contrary, in no event will the LLC Company make any distributions under Section 3.2 in respect of a Distribution Threshold Unit unless and until the LLC Company has already made aggregate distributions under Section 3.2 on each other Unit that is not a Distribution Threshold Unit equal to the Distribution Threshold of such Distribution Threshold Unit, taking into account only distributions thereunder since the date of issuance of such Distribution Threshold Unit, and thereafter such Distribution Threshold Unit shall be entitled only to its Sharing Percentage of excess distributions over and above its Distribution Threshold.