allocation of
income or losses, or any distribution.
4.4 Other Distribution Rules.
Except as provided in Section 4.5 below, (a) no
Member will have the right to demand and receive property other than cash in
payment for its share of any distribution and (b) distribution of non-cash
property may be made with the consent of both Members.
The preceding sentence
expressly overrides the contrary provisions of DLLCA § 18 - 605 as to non-cash
distributions.
4.5 Liquidating Distribution Provisions.
Distributions made upon liquidation of
any Member Interest will be made in accordance with the positive Book Capital
Account balance of the Member.
These balances will be determined after taking
into account all Book Capital Account adjustments for the Company's Fiscal Year
during which the liquidation occurs.
In the
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event of a liquidation of the Company, distributions of the positive Book
Capital Account Balance of each Member, if any, will be made as follows:
(A)
EXCEPT AS OTHERWISE AGREED IN WRITING BY THE PARTIES, EACH NON-CASH
OPERATING ASSET OF THE COMPANY CONTRIBUTED TO THE COMPANY AT CLOSING (AS WELL
EACH NON-CASH OPERATING ASSET SUBSEQUENTLY PURCHASED BY THE COMPANY TO REPLACE A
CONTRIBUTED ASSET) (EACH, A "CONTRIBUTED OPERATING ASSET") SHALL BE DISTRIBUTED
TO THE MEMBER THAT CONTRIBUTED SUCH ASSET, OR THE ASSET IT REPLACED AS
APPLICABLE, TO THE COMPANY. EACH NON-CASH OPERATING ASSET OF THE COMPANY THAT IS
NOT A CONTRIBUTED OPERATING ASSET (EACH, AN "OTHER OPERATING ASSET" AND,
TOGETHER WITH THE CONTRIBUTED OPERATING ASSETS, THE "OPERATING ASSETS") SHALL BE
DISTRIBUTED TO THE MEMBER THAT, AS OF THE DATE OF SUCH DISTRIBUTION, PURCHASES
AT LEAST 60% OF THE PRODUCTS MANUFACTURED USING SUCH OTHER OPERATING ASSET OR,
IN THE CASE OF INVENTORY, USES SUCH OTHER OPERATING ASSET (SUCH MEMBER, THE
"PRINCIPAL CUSTOMER" OF SUCH OTHER OPERATING ASSET), IN ALL CASES IRRESPECTIVE
OF WHETHER OR NOT THE AGGREGATE FAIR MARKET VALUE OF THE OPERATING ASSETS
DISTRIBUTED TO SUCH MEMBER EXCEEDS SUCH MEMBER'S BOOK CAPITAL ACCOUNT BALANCE;
PROVIDED, HOWEVER, THAT IN THE EVENT THAT THERE IS NO PRINCIPAL CUSTOMER WITH
RESPECT TO AN OTHER OPERATING ASSET, SUCH OTHER OPERATING ASSET SHALL BE
DISTRIBUTED PURSUANT TO THE DETERMINATION OF THE BOARD OF DIRECTORS;
(B)
TO THE EXTENT THE FAIR MARKET VALUE OF THE OPERATING ASSETS ALLOCATED TO A
MEMBER PURSUANT TO SECTION 4.5(A) HEREOF EXCEEDS SUCH MEMBER'S BOOK CAPITAL
ACCOUNT BALANCE (SUCH EXCESS, IF ANY, THE "EXCESS DISTRIBUTION AMOUNT"), SUCH
MEMBER WILL, EXCEPT AS OTHERWISE AGREED BY THE MEMBERS, (I) CONTRIBUTE AN AMOUNT
OF CASH TO THE COMPANY EQUAL TO THE EXCESS DISTRIBUTION AMOUNT, (II) ASSUME
ADDITIONAL ACCRUED LIABILITIES OF THE COMPANY IN AN AMOUNT EQUAL TO THE EXCESS
DISTRIBUTION AMOUNT OR (III) CONTRIBUTE CASH AND ASSUME ACCRUED LIABILITIES SUCH
THAT THE TOTAL AMOUNT OF THE CASH CONTRIBUTION AND ACCRUED LIABILITIES ASSUMED
EQUALS THE EXCESS DISTRIBUTION AMOUNT.
The Members shall cooperate reasonably in order to determine the fair market
value of the Operating Assets required to be distributed pursuant to this
Section 4.5.
In the event that the Members cannot agree on the fair market
value