Procedure in Dissolution and Liquidation. (a) Upon dissolution of the Company pursuant to Section 10.02 hereof, the Managers shall immediately commence to wind up its affairs and the Managers shall proceed with reasonable promptness to liquidate the business of the Company. (b) During the period of the winding up of the affairs of the Company, the rights and obligations of the Managers set forth herein with respect to the management of the Company shall continue. For purposes of winding up, the Managers shall continue to act as such and shall make all decisions relating to the conduct of any business or operations during the winding up period and to the sale or other disposition of Company assets. (c) Net income and net loss of the Company following the date of dissolution shall be determined in accordance with the provisions of this Agreement and shall be credited or charged to the Capital Accounts of each Member in the same manner as profits of the Company would have been credited or charged if there were no termination, dissolution and liquidation. (d) The assets of the Company shall be applied or distributed in liquidation in the following order of priority: (i) in payment of debts and obligations of the Company owed to third parties, which shall include any Member or its affiliate as the holder of any secured loan; (ii) in payment of debts and obligations of the Company to the Members; and (iii) to the Members in accordance with the balances remaining in the Members’ Capital Account. While a deficit balance in a Capital Account shall reduce such Member’s right to a return of capital of the Company, a deficit balance shall not constitute an obligation of that Member to the Company to repay the amount of such deficit balance. (e) Every reasonable effort shall be made to dispose of the assets of the Company so that the distribution may be made to the Members in cash. If at the time of the dissolution of the Company, the Company owns any assets in the form of work in progress, notes, deeds of trust or other non-cash assets, such assets, if any, shall be distributed in kind to the Members, in lieu of cash, proportionately to their right to receive the assets of the Company on an equitable basis reflecting the net fair market value of the assets so distributed.
Appears in 2 contracts
Sources: Operating Agreement (Smart Move, Inc.), Operating Agreement (Smart Move, Inc.)