Common use of Payments in Liquidation Clause in Contracts

Payments in Liquidation. On the final distribution in the winding up of the Fund, the assets of the Fund shall be distributed in the following order:‌‌ (a) to the creditors of the Fund, other than Members, in the order of priority established by law, either by payment or establishment of reserves; (b) to the Members, in repayment of any loans made to, or other debts owed by, the Fund to such Members; (c) the balance, if any, to the Members in respect of the positive balances in their Capital Accounts in compliance with Treasury Regulation Section 1.704-1(b)(2)(ii)(b)(2). No Member shall be obligated to restore any deficit in its Capital Account; provided that, (i) the Managing Member may withhold from the liquidating distribution an amount determined by the Managing Member in good faith to be necessary for the payment by the Fund of expenses relating to the Fund’s dissolution and termination, and the Non-Managing Members hereby agree that to the extent such withheld amount exceeds by up to $500,000 the actual amount paid by the Fund in its liquidation and termination, the Managing Member shall be entitled to retain such excess amount and not distribute such excess amount to the Members, and (ii) any assets or amounts, including without limitation, accounts receivable, prepaid rents or other items, that were written off by the Managing Member at the time of the Fund’s final liquidating distribution and that are subsequently collected may be retained by the Managing Member and not distributed among the Members hereunder.

Payments in Liquidation. On the final distribution in the winding up of the Fund, the assets of the Fund shall be distributed in the following order:‌‌order: (a) to the creditors of the Fund, other than Members, in the order of priority established by law, either by payment or establishment of reserves; (b) to the Members, in repayment of any loans made to, or other debts owed by, the Fund to such Members; (c) the balance, if any, to the Members in respect of the positive balances in their Capital Accounts in compliance with Treasury Regulation Section 1.704-1(b)(2)(ii)(b)(2). No Member shall be obligated to restore any deficit in its Capital Account; provided that, (i) the Managing Member may withhold from the liquidating distribution an amount determined by the Managing Member in good faith to be necessary for the payment by the Fund of expenses relating to the Fund’s dissolution and termination, and the Non-Managing Members hereby agree that to the extent such withheld amount exceeds by up to $500,000 the actual amount paid by the Fund in its liquidation and termination, the Managing Member shall be entitled to retain such excess amount and not distribute such excess amount to the Members, and (ii) any assets or amounts, including without limitation, accounts receivable, . prepaid rents or other items, that were written off by the Managing Member at the time of the Fund’s final liquidating distribution and that are subsequently collected may be retained by the Managing Member and not distributed among the Members hereunder.