Common use of Prohibition against Cash Distributions and Application of Cash Flow Clause in Contracts

Prohibition against Cash Distributions and Application of Cash Flow. Borrower shall first apply all cash flow from the Project to pay Project expenses, including amounts due to Lender pursuant to the Loan Documents. No cash flow from the Project shall be distributed to any partners, principals, members or shareholders of Borrower or applied to the payment of any obligations, debts or expenses not related to the Project if an Event of Default has occurred or if there is a reasonable likelihood that such money will be necessary for capital expenditures that are required to prevent a material decrease in the value of the Project, the operation of the Project or the payment of principal and interest due in connection with the Loan within ninety (90) days following any contemplated cash flow distribution.

Prohibition against Cash Distributions and Application of Cash Flow. Borrower shall first apply all cash flow from the Project to pay Project expenses, including amounts due to Lender pursuant to the Loan Documents. No cash flow from the Project shall be distributed to any partners, principals, members or shareholders of Borrower or applied to the payment of any obligations, debts or expenses not related to the Project if an Event of Default has occurred or if there is a reasonable likelihood that such money will be necessary for capital expenditures that are required to prevent a material decrease in the value of the Project, the operation of the Project or the payment of principal and interest due in connection with the Loan within ninety (90) days following any contemplated cash flow distribution.