Common use of Payment of Distribution Clause in Contracts

Payment of Distribution. The distribution provided for in paragraph (c) of this Section 3.8 shall be paid in three equal annual installments bearing no interest, with the first such installment payment due within 90 days following the end of the fiscal year of the Company in which the Termination Date falls, unless the Manager approves a shorter payment period with equal periodic payments. The subsequent installment payments shall be due within the same time period in subsequent years. Notwithstanding the foregoing, no payment may be made by the Company pursuant to this Section if such payment would (i) render the Company insolvent or materially impair or threaten the financial stability of the Company, as determined by the Manager; (ii) reduce the Company’s capital below the amount needed to provide adequate surplus or reserves; (iii) jeopardize the Company’s licensure by the Montana Department of Insurance; (iv) be opposed or otherwise not approved by the Montana Department of Insurance; or (v) otherwise be prohibited by law. The distribution owed to the Member shall be subordinated to all legal debts, obligations and liabilities of the Company.