Common use of The Preferred Return Clause in Contracts

The Preferred Return. Members will generally be entitled to receive an annualized Preferred Return calculated by reference to their capital account balances, payable after the end of each quarter (and prorated as applicable for the amount of time that a Member was a member of the Company during such quarter) (the “Preferred Return”). This Preferred Return will be payable prior to any other distributions to Members (however, all expenses and fees other than profit participation will be paid to the Manager and any allocation of income for a loan loss reserve will be made prior to the distribution of the Preferred Return). The Preferred Return for any Member shall be equal to a non-cumulative annualized rate of Seven Percent (7%), calculated and payable on a quarterly basis. In addition, in the event that the Company does not have funds available to pay the Preferred Return, the payment of the Preferred Return may be delayed until such funds are available, at the sole and absolute discretion of the Manager.