-172-
day of the Fiscal Year (such amount being referred to
herein as a “Full Distribution”) plus the sum of the
Unpaid Distributions with respect to any prior annual
distributions to such holders.[122]
(ii) Second. The holders of Common Interests
shall receive pro rata in accordance with their
respective Percentage Common Interests an amount equal
to Excess Cash Flow minus the amount of any
distributions made to holders of Preferred Interests
pursuant to paragraph (i) above.
Under the LLC agreement, the term “Excess Cash Flow” means, with
respect to any Fiscal Year:
(x) the sum of (1) Operating Cash Flow, (2) net cash
proceeds from the sale of any asset of the Company
other than in the ordinary course of business, (3) cash
proceeds of any payment in respect of debt owing to the
Company (including debts of Members or Affiliates of
Members) and (4) capital expenditures that the Company
committed to make in prior Fiscal Years but has
determined not to make, less (y) the sum of (1)
payments on any debt obligation of the Company and (2)
capital expenditures that the Company has committed to
make in the relevant period.[123]
Like the conversion rights, these distribution rights were
not a point of negotiation between the parties; the language
addressing these distribution rights appears to have been drafted
by Shearman & Sterling, on behalf of Rockport Capital. Because
122 With respect to any annual distribution made to holders
of preferred interests, the term “Unpaid Distribution” means:
“the amount equal to the Full Distribution minus the Excess Cash
Flow; provided, that such amount shall not be deemed to be an
Unpaid Distribution if such amount has been previously
distributed to holders of Preferred Interests.”
123 “Operating Cash Flow” is defined as: “the gross revenues
of the Company from its businesses that are actually received
less the expenses associated with such businesses that are
actually paid.”
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