Common use of Distribution of Net Proceeds Clause in Contracts

Distribution of Net Proceeds. The Members shall continue to allocate Net Profits and Losses and Available Cash Flow during the winding-up period in the same manner and the same priorities as provided in ARTICLES 3. The proceeds from the Liquidation shall be applied in the following order: 10.4.1 To the repayment of creditors, in the order of priority as provided by law, except to Members on account of their contributions; 10.4.2 To the repayment of loans or advances that may have been made by any of the Members or their Principals for working capital or other requirements of Palace; 10.4.3 For the first three years of operation only, to the repayment to Low of all sums in his capital account; 10.4.4 For the first three years of operation only, to the repayment to CRC of all sums in its capital account; 10.4.5 To the Members in accordance with the positive balances in their Capital Accounts after adjustments for all allocations of Net Profits and Net Loss. Where the distribution pursuant to SECTION 10.4 consists both of cash (or cash equivalents) and non-cash assets, the cash (or cash equivalents) shall first be distributed, in a descending order, to fully satisfy each category starting with the most preferred category above. In the case of noncash assets, the distribution values are to be based on the fair market value thereof as determined in good faith by the liquidator, and the shortest maturity portion of such non-cash assets (e.g., notes or other indebtedness) shall, to the extent such non-cash assets (e.g., sets are readily divisible, be distributed, in a descending order, to fully satisfy each category above, starting with the most preferred category.