Common use of Limitation on Distribution Clause in Contracts

Limitation on Distribution. No distribution may be made if, after giving effect to the distribution: 1. the Company would not be able to pay its debts as they become due in the usual course of business; or 2. the Company's assets would be less than the sum of its liabilities plus, the amount that would be needed, if the Company were to be dissolved, wound up, and terminated at the time of the distribution, to satisfy the preferential rights upon dissolution, winding up and termination of Member whose preferential rights are superior to those receiving the distribution. The Company may base a determination that a distribution is not prohibited upon the provisions of Section 33-44-406(b) and (c) of the Act.

Limitation on Distribution. No distribution may be made if, after giving effect to the distribution: 1. A. the Company would not be able to pay its debts as they become due in the usual course of business; or 2. B. the Company's assets would be less than the sum of its liabilities plus, the amount that would be needed, if the Company were to be dissolved, wound up, and terminated at the time of the distribution, to satisfy the preferential rights upon dissolution, winding up and termination of Member whose preferential rights are superior to those receiving the distribution. The Company may base a determination that a distribution is not prohibited upon the provisions of Section 33-44-406(b) and (c) of the Act.