# INVESTOR PREMIUM CLAUSE — DRAFTING LANGUAGE
*Frame × Frame Academy · Producer Kit · Adapt with counsel*

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## STANDARD PREMIUM (25%)

> "Each Investor shall be entitled to receive an amount equal to **one hundred twenty-five percent (125%)** of such Investor's Capital Contribution (the "Investor Premium Amount") from Distributable Cash, paid in priority to any other distributions to Members. The Investor Premium Amount shall be distributed pro rata among the Investors based on each Investor's Capital Contribution until each Investor has received the full Investor Premium Amount."

## VARIATIONS

### 20% Premium (Lower-Risk Tier)
> "...one hundred twenty percent (120%) of such Investor's Capital Contribution..."

### 30% Premium (Higher-Risk / Faster-Recoup)
> "...one hundred thirty percent (130%) of such Investor's Capital Contribution..."

### Premium + Annual Accrual
> "Each Investor shall receive (i) one hundred twenty percent (120%) of Capital Contribution, plus (ii) an additional five percent (5%) of unrecouped Capital Contribution per annum, compounded annually, until recouped in full."

## PRIORITY LANGUAGE (place ahead of profit-pool clause)

> "**Distribution Waterfall.** Distributable Cash shall be applied in the following order of priority:
>
> **(a) First**, to the Investors, until each Investor has received in cash an amount equal to the Investor Premium Amount;
>
> **(b) Second**, to any Deferred Compensation accrued under approved Producer or Talent Deal Memos;
>
> **(c) Third**, to the Net Profit Pool, divided as follows:
>   - [Fifty percent (50%)] to the Investor Class on a pro rata basis;
>   - [Fifty percent (50%)] to the Producer Class, allocated as set forth in Schedule [B]."

## DEFINITIONS TO INCLUDE

- **Capital Contribution:** Cash contributed by each Investor to the Company in exchange for Units.
- **Distributable Cash:** All gross receipts from any source LESS (i) reasonable operating expenses, (ii) reserves for known liabilities, (iii) distribution fees, (iv) third-party participations agreed in writing.
- **Investor Premium Amount:** Defined above; for clarity, includes the original Capital Contribution.

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**Note:** Premium structures are heavily negotiated. Larger investors may demand higher premium; smaller / earlier money may accept lower in exchange for FIFO priority. Match the structure to the deal you can actually close.
