Common use of Hurdle Amount Clause in Contracts

Hurdle Amount. Each LTIP Unit shall be subject to a hurdle amount (the “Hurdle Amount”), which shall be: (a) as of the date hereof with respect to each outstanding LTIP Unit, as set forth on the Member Schedule or (b) with respect to each subsequently issued LTIP Unit that is intended to constitute a Profits Interest for U.S. federal income tax purposes, an amount not less than the amount determined by the Managing Member to be necessary to cause such LTIP Unit to constitute a Profits Interest, as set forth on the Member Schedule. The Hurdle Amount may be adjusted by the Managing Member in good faith to account for any reverse split pursuant to Section 4.02(f) or for any Capital Contributions and distributions made pursuant to Section 5.03(b) or in connection with any other change in the Company’s capital structure to prevent such changed capital structure from changing the economic rights represented by the LTIP Unit in a manner that is disproportionately favorable or unfavorable in relation to the economic rights of other outstanding LTIP Units or Class X Umbrella Units. Each subsequently issued LTIP Unit that is intended to constitute a Profits Interest shall have an initial Capital Account at the time of its issuance equal to zero dollars ($0.00).