Common use of Dissolution and Final Liquidation Clause in Contracts

Dissolution and Final Liquidation. (A) UPON ANY DISSOLUTION OF THE COMPANY, THE COMPANY SHALL NOT TERMINATE, BUT SHALL CEASE TO ENGAGE IN FURTHER BUSINESS EXCEPT TO THE EXTENT NECESSARY TO PERFORM EXISTING CONTRACTS AND PRESERVE THE VALUE OF ITS ASSETS. ITS ASSETS SHALL BE LIQUIDATED AND ITS AFFAIRS SHALL BE WOUND UP AS SOON AS PRACTICAL THEREAFTER BY THE MANAGERS, OR IF FOR ANY REASON THERE IS NO MANAGER, BY ANOTHER PERSON DESIGNATED BY A SUPERMAJORITY VOTE OF THE MEMBERS. IN WINDING UP THE COMPANY AND LIQUIDATING ASSETS, THE MANAGERS, OR OTHER PERSON SO DESIGNATED FOR SUCH PURPOSE, MAY ARRANGE, EITHER DIRECTLY OR THROUGH OTHERS, FOR THE COLLECTION AND DISBURSEMENT TO THE MEMBERS OF ANY FUTURE RECEIPTS FROM THE HOSPITAL OR OTHER SUMS TO WHICH THE COMPANY MAY BE ENTITLED, AND SHALL SELL THE COMPANY'S INTEREST IN THE HOSPITAL AND THE EQUIPMENT TO ANY PERSON, INCLUDING HHBF OR ANY AFFILIATE THEREOF, ON SUCH TERMS AND FOR SUCH CONSIDERATION AS SHALL BE CONSISTENT WITH OBTAINING THE FAIR MARKET VALUE THEREOF; PROVIDED IF THE BUYER IS HHBF OR ANY OF ITS AFFILIATES, SUCH FAIR MARKET VALUE SHALL, AT THE OPTION OF THE INVESTOR MANAGER, BE DETERMINED BY INDEPENDENT APPRAISAL. (B) UPON ANY SUCH DISSOLUTION AND LIQUIDATION OF THE COMPANY, THE NET ASSETS, IF ANY, OF THE COMPANY AVAILABLE FOR DISTRIBUTION, INCLUDING ANY CASH PROCEEDS FROM THE LIQUIDATION OF COMPANY ASSETS, SHALL BE APPLIED AND DISTRIBUTED IN THE FOLLOWING MANNER OR ORDER, TO THE EXTENT AVAILABLE: (I) TO THE PAYMENT OF OR CREATION OF RESERVES FOR ALL DEBTS, LIABILITIES, AND OBLIGATIONS TO ALL CREDITORS OF THE COMPANY (OTHER THAN THE MEMBERS OR THEIR AFFILIATES) AND THE EXPENSES OF LIQUIDATION; (II) TO THE PAYMENT OF ALL DEBTS AND LIABILITIES (INCLUDING INTEREST) OWED TO THE MEMBERS OR THEIR AFFILIATES AS CREDITORS; AND (III) THE BALANCE TO THE MEMBERS WITH POSITIVE CAPITAL ACCOUNT BALANCES AFTER TAKING INTO ACCOUNT ALL OTHER ADJUSTMENTS DURING THE FISCAL YEAR IN WHICH LIQUIDATION OCCURS. (C) THE MEMBERS SHALL LOOK SOLELY TO THE ASSETS, IF ANY, OF THE COMPANY FOR ANY RETURN OF THEIR CAPITAL CONTRIBUTIONS AND, IF THE ASSETS OF THE COMPANY REMAINING AFTER PAYMENT OR DISCHARGE OF THE COMPANY'S DEBTS AND LIABILITIES, OR PROVISION THEREFOR, ARE INSUFFICIENT TO RETURN ALL OR ANY PART OF THE CAPITAL CONTRIBUTIONS, NO MEMBER SHALL HAVE ANY RIGHT OF RECOURSE AGAINST THE MANAGERS OR OTHER MEMBERS OR TO CHARGE THE MANAGERS OR OTHER MEMBERS FOR ANY AMOUNTS EXCEPT AS PROVIDED HEREIN AND EXCEPT TO THE EXTENT OTHERWISE PROVIDED BY THE ACT AND/OR NORTH CAROLINA LAW. (D) UPON SUCH DISSOLUTION, REASONABLE TIME SHALL BE ALLOWED FOR THE ORDERLY LIQUIDATION OF THE ASSETS OF THE COMPANY AND THE DISCHARGE OF LIABILITIES TO CREDITORS SO AS TO MINIMIZE THE LOSSES NORMALLY ATTENDANT TO A LIQUIDATION. (E) THE CAPITAL ACCOUNTS OF THE MEMBERS, AS ADJUSTED, SHALL BE UTILIZED BY THE COMPANY FOR THE PURPOSE OF MAKING DISTRIBUTIONS TO THOSE MEMBERS WITH POSITIVE BALANCES IN THEIR RESPECTIVE CAPITAL ACCOUNTS PURSUANT TO SECTION 7.3(B). IN MAKING SUCH DISTRIBUTIONS, THE MANAGERS OR THE PERSON WINDING UP THE AFFAIRS OF THE COMPANY SHALL DISTRIBUTE ALL FUNDS AVAILABLE FOR DISTRIBUTION TO THE MEMBERS AND ECONOMIC INTEREST OWNERS (AFTER ESTABLISHING ANY RESERVES THAT THE MANAGERS DEEM OR THE PERSON WINDING UP THE AFFAIRS OF THE COMPANY DEEMS REASONABLY NECESSARY PURSUANT TO SECTION 7.3(B)) PRIOR TO THE LATER OF (A) THE END OF THE TAXABLE YEAR IN WHICH THE EVENT OCCURS WHICH CAUSED THE TERMINATION AND DISSOLUTION OF THE COMPANY, OR (B) NINETY (90) DAYS AFTER THE OCCURRENCE OF SUCH EVENT. THE MANAGERS IN THEIR SOLE DISCRETION, OR THE PERSON WINDING UP THE AFFAIRS OF THE COMPANY, IN ITS DISCRETION, MAY ELECT TO HAVE THE COMPANY RETAIN ANY INSTALLMENT OBLIGATIONS OWED TO THE COMPANY UNTIL COLLECTED IN FULL SO LONG AS ANY PORTION OF THE RESERVES WHICH ARE LATER DETERMINED TO BE UNNECESSARY, AND ALL COLLECTIONS ON SUCH INSTALLMENT OBLIGATIONS WHICH ARE NOT DEEMED TO BE REASONABLY NECESSARY BY THE MANAGERS OR THE PERSON WINDING UP THE AFFAIRS OF THE COMPANY TO ADD TO SUCH RESERVES ARE DISTRIBUTED AS SOON AS PRACTICABLE IN ACCORDANCE WITH THE PROVISIONS OF SECTION 7.3(B) AS MODIFIED BY THIS SECTION. (F) EACH ECONOMIC INTEREST OWNER SHALL BE ENTITLED TO THE DISTRIBUTIONS TO WHICH ITS PREDECESSOR IN INTEREST WOULD HAVE BEEN ENTITLED PURSUANT TO THIS ARTICLE VII HAD IT RETAINED THE ECONOMIC INTEREST ACQUIRED BY THE ECONOMIC INTEREST OWNER.