Common use of Distribution of Reserves Clause in Contracts

Distribution of Reserves. The amount established by the Non-Defaulting Member for reserves pursuant to Section 7.03(iii) above shall be invested by the Company into a separate interest bearing account and shall be drawn upon solely to satisfy any contingent, unmatured or conditional liabilities or obligations of the Company in existence as of the effective date of the Default Notice for which such reserve was established. Within one (1) year following the closing of the purchase of the entire Interest of the Defaulting Member in the Company pursuant to this Article VII, the Non-Defaulting Member shall pay to the Defaulting Member an amount equal to the difference between the Defaulting Member's Purchase Price determined pursuant to Section 7.03 and the amount that the Defaulting Member's Purchase Price would have been equal to if (i) no reserves had been established or deducted in calculating the Defaulting Member's Purchase Price, and (ii) the amount used in determining the Defaulting Member's Purchase Price under Section 7.03(iv) had been reduced by the aggregate amount of any contingent, unmatured or conditional liabilities of the Company (for which such reserve was established) that were actually paid by the Company during such one (1)-year period. Any interest earned on the proceeds invested in the interest bearing account shall be paid to the Defaulting Member in the same ratio as the principal balance of such proceeds is distributed in accordance with this Section 7.12.

Distribution of Reserves. The amount established by the Non-Defaulting Member for reserves pursuant to Section 7.03(iii) above shall be invested by the Company into a separate interest bearing account and shall be drawn upon solely to satisfy any contingent, unmatured or conditional liabilities or obligations of the Company in existence as of the effective date of the Default Notice for which such reserve was established. Within one (1) year following the closing of the purchase of the entire Interest of the Defaulting Member in the Company pursuant to this Article VII, the Non-Defaulting Member shall pay to the Defaulting Member an amount equal to the difference between the Defaulting Member's Purchase Price determined pursuant to Section 7.03 and the amount that the Defaulting Member's Purchase Price would have been equal to if (i) no reserves had been established or deducted in calculating the Defaulting Member's Purchase Price, and (ii) the amount used in determining the Defaulting Member's Purchase Price under Section 7.03(iv) had been reduced by the aggregate amount of any contingent, unmatured or conditional liabilities of the Company (for which such reserve was established) that were actually paid by the Company during such one (1)-year period. Any interest earned on the proceeds invested in the interest bearing account shall be paid to the Defaulting Member in the same ratio as the principal balance of such proceeds is distributed in accordance with this Section 7.12.. 1116763.08/OC 373745-00002/0-0-00/pdo/agt 33 54430-10898/2652216.4