Common use of DISTRIBUTION ON LIQUIDATION Clause in Contracts

DISTRIBUTION ON LIQUIDATION. Upon an event of liquidation, the business of the Company shall be wound up, the Manager shall take full account of the Company assets and liabilities, and all assets shall be liquidated as promptly as is consistent with obtaining the fair value thereof. If any assets are not sold, gain or loss shall be allocated to the Members in accordance with Article VI as if such assets had been sold at their fair market value at the time of liquidation. If any assets are distributed to a Member, rather than sold, the Distribution shall be treated as a Distribution equal to the fair market value of the asset at the time of the liquidation. The assets of the Company shall be used and distributed in the following order of priority: (a) To the payment of all debts and liabilities of the Company, including all fees due the Members and their Affiliates, and including any loans or advance that may have been made by the Members to the Company, in the order of priority as provided by law; (b) To the establishment of any reserves reasonably deemed necessary by the Manager or the Person winding up the affairs of the Company for any contingent liabilities or obligations of the Company; (c) To DRF in an amount equal to $1,108,000 (less any amounts which have been paid to DRF under Section 6.3(c) in respect of any Distributions made from the proceeds of a refinancing or refinancings; (d) To Telex in an amount equal to the amount distributed to DRF under (c) above; and (e) To the extent of any balance remaining to each Member, ratably in proportion to its respective Membership Percentage Interest.