Common use of Profits Interests; Section 83(b) Election Clause in Contracts

Profits Interests; Section 83(b) Election. (a) Each of the Management Units is intended to constitute a “profits interest” within the meaning of Internal Revenue Service Revenue Procedure 93-27 and 2001-43. A profits interest is granted in connection with the performance of services and is a right to receive distributions funded solely by the profits of the Company which are generated after the grant. As such, the Managing Member shall, if necessary, limit distributions and allocations of profits to Grantee so that such distributions and allocations do not exceed the available profits in respect of Grantee’s related profits interest. Consequently, under certain circumstances, distributions and allocations with respect to a Management Unit may differ in amount from distributions and allocations with respect to other Units issued or Transferred at a different time.