OF SUCH STATEMENT SHALL BE FURNISHED TO EACH OF THE MEMBERS WITHIN NINETY
(90) DAYS AFTER SUCH DISSOLUTION.
THEREAFTER, THE LIQUIDATOR SHALL WIND UP THE
AFFAIRS OF THE COMPANY AND DISTRIBUTE THE COMPANY ASSETS IN THE FOLLOWING ORDER
OF PRIORITY:
(A)
TO CREDITORS (INCLUDING MEMBERS WHO ARE
CREDITORS) IN SATISFACTION OF THE LIABILITIES OF THE COMPANY, OTHER THAN
LIABILITIES TO EXISTING AND FORMER MEMBERS FOR DISTRIBUTIONS FROM THE COMPANY;
(B)
TO THE ESTABLISHMENT OF ANY RESERVES WHICH
THE LIQUIDATOR DEEMS REASONABLY NECESSARY FOR ANY CONTINGENCIES OR UNFORESEEN
LIABILITIES OR OBLIGATIONS OF THE COMPANY.
SUCH RESERVES SHALL BE PAID OVER BY
THE LIQUIDATOR TO AN ESCROW AGENT OR SHALL BE HELD BY THE LIQUIDATOR FOR THE
PURPOSE OF DISBURSING SUCH RESERVES IN PAYMENT OF ANY OF SUCH CONTINGENCIES.
AT
THE EXPIRATION OF SUCH PERIOD AS THE LIQUIDATOR DEEMS ADVISABLE, THE BALANCE
THEREOF SHALL BE DISTRIBUTED IN THE MANNER AND ORDER PROVIDED IN THIS SECTION;
(C)
TO EXISTING AND FORMER MEMBERS IN
SATISFACTION OF ANY LIABILITIES TO THEM, IF ANY, FOR DISTRIBUTIONS FROM THE
COMPANY;
(D)
TO THE MEMBERS IN ACCORDANCE WITH SECTION
6.1 ABOVE.
NOTWITHSTANDING ANYTHING TO THE CONTRARY, IN THE EVENT THE COMPANY IS
"LIQUIDATED" WITHIN THE MEANING OF REGULATIONS SECTION 1.704-1(B)(2)(II)(G) AND
AN EVENT DESCRIBED IN SECTION 12.1(A) SHALL HAVE OCCURRED, LIQUIDATING
DISTRIBUTIONS SHALL BE MADE PURSUANT TO THIS SECTION 12.2 BY THE END OF THE
TAXABLE YEAR IN WHICH THE COMPANY IS LIQUIDATED, OR, IF LATER, WITHIN NINETY
(90) DAYS AFTER THE DATE OF SUCH LIQUIDATION.
DISTRIBUTIONS PURSUANT TO THE
PRECEDING SENTENCE MAY BE MADE TO A TRUST FOR THE PURPOSE OF AN ORDERLY
LIQUIDATION OF THE COMPANY BY THE TRUST IN ACCORDANCE WITH THE ACT.
12.3
COMPLIANCE WITH TREASURY REGULATIONS.
IT IS THE
INTENT OF THE MEMBERS THAT THE ALLOCATIONS PROVIDED IN SECTION 7.1 RESULT IN
DISTRIBUTIONS REQUIRED PURSUANT TO SECTION 12.2(D) BEING IN ACCORDANCE WITH
POSITIVE CAPITAL ACCOUNTS AS PROVIDED FOR IN THE TREASURY REGULATIONS UNDER CODE
SECTION 704(B).
HOWEVER, IF AFTER GIVING HYPOTHETICAL EFFECT TO THE ALLOCATIONS
REQUIRED BY SECTION 7.1, THE CAPITAL ACCOUNTS OF THE MEMBERS ARE IN SUCH RATIOS
OR BALANCES THAT DISTRIBUTIONS PURSUANT TO SECTION 12.2(D) WOULD NOT BE IN
ACCORDANCE WITH THE POSITIVE CAPITAL ACCOUNTS OF THE MEMBERS AS REQUIRED BY THE
TREASURY REGULATIONS UNDER CODE SECTION 704(B), SUCH FAILURE SHALL NOT AFFECT OR
ALTER THE DISTRIBUTIONS REQUIRED BY SECTION 12.2(D).
RATHER, THE LIQUIDATOR
WILL HAVE THE AUTHORITY TO MAKE OTHER ALLOCATIONS OF PROFITS AND LOSSES (OR
ITEMS THEREOF) AMONG THE MEMBERS WHICH, TO THE EXTENT POSSIBLE, WILL RESULT IN
THE CAPITAL ACCOUNTS OF EACH MEMBERS HAVING A BALANCE PRIOR TO DISTRIBUTION
EQUAL TO THE AMOUNT OF DISTRIBUTIONS TO BE RECEIVED BY SUCH MEMBERS PURSUANT TO
SECTION 12.2(D).
27
12.4
NO DEFICIT CAPITAL ACCOUNT OBLIGATION.
NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY IN THIS AGREEMENT, UPON A
LIQUIDATION WITHIN THE MEANING OF SECTION 1.704-1(B)(2)(II)(G) OF THE
REGULATIONS, IF ANY MEMBER HAS A DEFICIT CAPITAL ACCOUNT (AFTER GIVING EFFECT TO
ALL CONTRIBUTIONS, DISTRIBUTIONS, ALLOCATIONS AND OTHER CAPITAL ACCOUNT
ADJUSTMENTS FOR ALL TAXABLE