(i) Capital contributions and loans to the Company shall
not be included in Cash Flow;
(ii) Depreciation of any kind shall not be a deduction
from Cash Flow;
(iii) Reserves that the Manager may reasonably establish
from time to time shall be a deduction from Cash Flow, such reserves to include,
without limitation, (A) working capital reserves to reflect the difference
between accounts payable and accounts receivable and (B) reserves deemed
necessary or appropriate by the Manager to fund the Company's operations,
satisfy liabilities, repay indebtedness, capital expenditures, acquisitions or
(iv) Capital expenditures shall be a deduction from Cash
Flow to the extent such capital expenditures are in excess of reserves
previously established for such expenditures and are not paid with proceeds from
(v) Insurance proceeds received on account of rental or
business interruption shall be included in Cash Flow;
(vi) Amounts released from reserves for distribution shall
be an increase in Cash Flow; and
(vii) Amortization of any indebtedness of the Company or
any part thereof, shall be a deduction from Cash Flow.
(d) No Member who is entitled to a distribution pursuant to
this Agreement shall be entitled to demand and receive such distribution in any
form other than cash.
(e) No Member having a negative balance in its Capital Account
shall be required to contribute funds to the Company in order to restore its
Capital Account to zero.
(f) Notwithstanding the foregoing, not later than April 1 of
each year, the Company shall make distributions (the "Tax Distributions") to
each Member in an amount equal to the estimated federal and state income tax
liability arising from such Member's membership interest in the Company during
the immediately prior year (based upon a tax rate reflecting the highest
applicable federal and state rates for such Member for such year).
ARTICLE 7. Allocation of Profits and Losses.
(a) All Profits as determined in accordance with Section 7(d)
herein shall be allocated among the Members as follows:
(i) First, Profits shall be allocated to all of the
Members in the amount of and in proportion to the excess, if any, of (A) the
aggregate distributions which have been paid, or are payable, to such Member as
of the last day of the current year; less (B) the aggregate amount of Profits
previously allocated to such Member pursuant to this Section 7(a)(i) for all
prior years; and