Common use of Method of Liquidation Clause in Contracts

Method of Liquidation. Upon the happening of any of the events specified in Section 10.1 above, which require the Partnership to be liquidated and dissolved, the then General Partner of the Partnership or, in the event there is no remaining General Partner of the Partnership, such persons as may be designated by a majority of the Limited Partners, shall convert the Partnership assets into cash, and shall account for all cash proceeds separately for each Restaurant. All such cash shall be applied and distributed separately for each Restaurant in the following manner and in the following order of priority: (a) to the payment of the debts and liabilities of the Partnership relating to that Restaurant and to the expenses of liquidation in the order of priority as provided by law; then, (b) to the establishment of any reserves deemed necessary by the then General Partner of the Partnership, or by the persons designated by a majority in interest of the Limited Partners in the event there is no remaining General Partner of the Partnership, for any contingent or unforeseen liabilities or obligations of the Partnership relating to that Restaurant; provided, however, that any such reserves established hereunder shall be paid over to a third party to be held in escrow for the purpose of paying any such contingent or unforeseen liabilities or obligations and, at the expiration of such period as the then General Partner of the Partnership, or the persons designated by a majority in interest of the Limited Partners in the event there is no remaining General Partner of the Partnership, deem advisable, of distributing the balance of such reserves in the manner provided hereinafter in this Section 10.2; then, (c) to the repayment of any liabilities or debts, other than capital accounts, of the Partnership to any of the Partners relating to that Restaurant; then, (d) to the Partners in proportion to their Partnership Interests (as specified on Exhibit B).