Common use of Net Equity Clause in Contracts

Net Equity. The “Net Equity” of a Member’s Membership Interest in the Company, as of any day, shall be the amount that would be distributed to such Member in liquidation of the Company pursuant to Article 12 hereof if (1) all of the Company assets were sold for the Stated Amount, (2) the Company paid its accrued, but unpaid, liabilities and established reserves for the payment of reasonably anticipated contingent or unknown liabilities, and (3) the Company distributed the remaining proceeds to the Members in liquidation, all as of such day. The Net Equity of each Member’s Membership Interest in the Company shall be determined, without audit or certification, from the books and records of the Company by the accountants regularly employed by the Company. The Net Equity of a Member’s Membership Interest shall be determined within thirty (30) days of the day upon which such accountants are apprised in writing of the Stated Amount and the amount of such Net Equity shall be disclosed to the Company and each of the Members by written notice. The Net Equity determination by the accountants shall be final and binding in the absence of a showing of gross negligence or willful misconduct.