Investor Advance Contributions

Investor Advance Contributions

• Investor possesses the right but not the obligation to pre-fund anticipated capital contributions, termed "Investor Advance Contributions."
• Investor will designate the bank accounts for depositing Investor Advance Contributions.
• Interest earned on these contributions is labeled "Investor Advance Contribution Interest" and belongs to the investor who funded the contributions.
• Both Investor Advance Contributions and the associated interest are considered Company property, subject to covering Company liabilities if other means are insufficient.

Usage and Conversion

• The Manager has the ability to utilize an Investor's Investor Advance Contributions and accrued interest to fulfill capital contribution obligations.
• When used for a capital call, the Manager must transfer the funds to a different Company or Subsidiary bank account.
• Post-transfer, the funds are no longer considered Investor Advance Contributions or interest; they're treated as standard Capital Contributions made on the transfer date.
• This affects calculations for Preferred Return, Percentage Interests, and the Investor Contribution Cap, with exceptions as outlined in Section 3.8(d).
• The Manager is required to issue a capital call for all accrued Investor Advance Contribution Interest at least quarterly, ensuring it's contributed to the Company account.

Distribution

• Upon the Investor's written request, the Investor's Advance Contributions (excluding any interest) can be distributed back to them.
• This does not apply to any contributions that have already been converted into Capital Contributions.

Investment Guidelines

• Investor Advance Contributions, including interest, must be invested solely in working capital assets compliant with the Working Capital Safe Harbor.
• The intention behind establishing, funding, and releasing these contributions is to meet Working Capital Safe Harbor criteria.
• The Manager bears the responsibility for ensuring the Investor Advance Contributions, along with the Company's relevant bank account, adhere to the Working Capital Safe Harbor guidelines.
• This includes managing the permissible levels of Working Capital Assets within the bank account and creating necessary documentation for the Investor's reliance on the Safe Harbor.

Tax Implications

• For income tax purposes, Investor Advance Contributions are treated as capital contributions that increase the Member’s Capital Account when contributed.
• Subsequent conversion of an Investor Advance Contribution or Investor Advance Contribution Interest into a Capital Contribution does not further increase the Member’s Capital Account, nor is it treated as a distribution that decreases it.
• Investor Advance Contributions and their associated interest are treated as amounts to be distributed to the applicable Investor for income and loss allocation under Section 10.1 and 10.3(g).