Common use of Nonliquidating Distributions Clause in Contracts

Nonliquidating Distributions. (a) Subject to Section 5.1(c) below, all nonliquidating distributions of cash and other property shall be distributed to the Members of the Company, pro rata, in accordance with their percentage Interests. All nonliquidating distributions other than Tax Distributions shall be made in such amounts and at such times as may be determined by the Managing Member. The Managing Member may establish reasonable reserves to provide funds for improvements, contingencies or working capital of the Company. No distribution shall be made if the distribution would leave the Company unable to pay its debts as they become due in the ordinary course of business or would violate the obligations of the Company under any material agreement relating to indebtedness. (b) Subject to the above limitations, to the extent of available cash and as permitted under any contracts in respect of indebtedness to which the Company is a party, the Company shall distribute pro rata to all Members in accordance with their percentage Interests, at least five days prior to the date on which U.S. federal corporate estimated tax payments are due, cash to the Members as determined under this Section 5.1(b) (“Tax Distributions”). The minimum quarterly Tax Distribution for each Member shall be equal to (a) the cumulative taxable net income for the quarter (taking into account prior losses, if any, allocated to such Member in respect of its Interest in the Company to the extent such loss (x) is of a character that would permit such loss to be deducted against the income of such taxable period and (y) has not previously been taken into account for purposes of determining Tax Distributions to such Member and determined by taking into account allocations under Section 704(c) of the Code) allocated to such Member with respect to its Interest in the Company, multiplied by the Assumed Tax Rate, less (b) any Tax Distributions previously made with respect to such period pursuant to clause (a). The minimum annual Tax Distributions, if any, for each Member shall be equal to (a) the cumulative taxable net income for the taxable year (taking into account prior losses, if any, allocated to such Member in respect of its Interests in the Company to the extent such loss (x) is of a character that would permit such loss to be deducted against the income of such taxable period and (y) has not previously been taken into account for purposes of determining any Tax Distributions to such Member and determined by taking into account allocations under Section 704(c) of the Code) allocated to such Member with respect to its Interest in the Company multiplied by the Assumed Tax Rate, less (b) the sum of the minimum quarterly Tax Distributions made with respect to such taxable year pursuant to the preceding sentence. For the avoidance of doubt, Tax Distributions shall be made to all Members on a pro rata basis in accordance with their percentage Interests, notwithstanding the differing actual tax liabilities of such Members. (c) Notwithstanding the provisions of Section 5.1(a), the Managing Member, in its sole discretion, may authorize that (i) cash be paid to Pubco (which payment shall be made without pro rata distributions to the other Members) in exchange for the redemption, repurchase or other acquisition of Units held by Pubco to the extent that such cash payment is used to redeem, repurchase or otherwise acquire an equal number of shares of Class A Common Stock in accordance with Section 3.6(b), and (ii) to the extent that the Managing Member determines that expenses or other obligations of Pubco are related to its role as the Managing Member or the business and affairs of Pubco that are conducted through the Company or any of the Company’s direct or indirect subsidiaries, cash (and, for the avoidance of doubt, only cash) distributions may be made to Pubco (which distributions shall be made without pro rata distributions to the other Members) in amounts required for Pubco to pay (1) operating, administrative and other similar costs incurred by Pubco, including payments in respect of indebtedness and preferred stock (in either case only to the extent economically equivalent indebtedness or Equity Securities of the Company were not issued to Pubco), to the extent the proceeds are used or will be used by Pubco to pay expenses or other obligations described in this clause (ii), (2) payments representing interest with respect to payments not made when due under the terms of the Tax Receivable Agreements and payments pursuant to any legal, tax, accounting and other professional fees and expenses (but, for the avoidance of doubt, excluding any tax liabilities of Pubco), (3) any judgments, settlements, penalties, fines or other costs and expenses in respect of any claims against, or any litigation or proceedings involving, Pubco, (4) fees and expenses related to any securities offering, investment or acquisition transaction (whether or not successful) authorized by the board of directors of Pubco and (5) other fees and expenses in connection with the maintenance of the existence of Pubco. For the avoidance of doubt, distributions made under this Section 5.1(b) may not be used to pay or facilitate dividends or distributions on the Class A Common Stock or any Equity Securities (other than preferred stock) of Pubco and must be used solely for one of the express purposes set forth under clause (i) or (ii) of the immediately preceding sentence.