Common use of Distribution of Liquidation Proceeds Clause in Contracts

Distribution of Liquidation Proceeds. The proceeds from liquidation of the Company, including repayment of any debts of Members to the Company, and any Company assets that are not sold in connection with the liquidation will be applied in the following order of priority: (i) First, to payment of the debts and satisfaction of the other obligations of the Company, including without limitation debts and obligations to Members; (ii) Second, to the establishment of any reserves deemed appropriate by the Liquidator for any liabilities or obligations of the Company, which reserves will be held for the purpose of paying liabilities or obligations and, after the expiration of a period the Liquidator deems appropriate, will be distributed to the Members in proportion to their respective Percentage Interests; and (iii) Third, to the Members in proportion to their respective positive Capital Account balances. Upon liquidation, prior to making any liquidating distributions hereunder, the Liquidator is hereby authorized and directed to make any and all special allocations of Profits, Losses and items of Company gain and deduction in a manner which results in the Members’ respective Capital Accounts having balances equal to (or as close thereto as possible) the aggregate liquidating distribution that each such Member shall receive hereunder. If the Company makes distributions in kind of Company property which secures indebtedness, each of the Members receiving the distribution of property subject to the indebtedness will be severally liable (as among each other, not for the benefit of others) for his, her or its Proportionate Share of the indebtedness, provided, that no Member will be deemed to have assumed any liability on any indebtedness secured by property distributed to any Member for which the Member is not liable under the terms of the instrument creating the indebtedness, and provided that the liability of each Member to other Members for indebtedness secured by property distributed to him, her or it will be limited to the value of his, her or its interest in the property. Indebtedness secured by property distributed to Members in kind need not be discharged out of the proceeds of liquidation of the Company.

Distribution of Liquidation Proceeds. The proceeds from liquidation of the Company, including repayment of any debts of Members to the Company, and any Company assets that are not sold in connection with the liquidation will be applied in the following order of priority: (i) First, to payment of the debts and satisfaction of the other obligations of the Company, including without limitation debts and obligations to Members; (ii) Second, to the establishment of any reserves deemed appropriate by the Liquidator for any liabilities or obligations of the Company, which reserves will be held for the purpose of paying liabilities or obligations and, after the expiration of a period the Liquidator deems appropriate, will be distributed to the Members in proportion to their respective Percentage Interests; and (iii) Third, to the Members in proportion to their respective positive Capital Account balancesPercentage Interests. Upon liquidation, prior to making any liquidating distributions hereunder, the Liquidator is hereby authorized and directed to make any and all special allocations of Profits, Losses and items of Company gain and deduction in a manner which results in the Members’ respective Capital Accounts having balances equal to (or as close thereto as possible) the aggregate liquidating distribution that each such Member shall receive hereunder. If the Company makes distributions in kind of Company property which secures indebtedness, each of the Members receiving the distribution of property subject to the indebtedness will be severally liable (as among each other, not for the benefit of others) for his, her or its Proportionate Share of the indebtedness, provided, that no Member will be deemed to have assumed any liability on any indebtedness secured by property distributed to any Member for which the Member is not liable under the terms of the instrument creating the indebtedness, and provided that the liability of each Member to other Members for indebtedness secured by property distributed to him, her or it will be limited to the value of his, her or its interest in the property. Indebtedness secured by property distributed to Members in kind need not be discharged out of the proceeds of liquidation of the Company.