ITEMS FOR FEDERAL INCOME TAX PURPOSES IN ACCORDANCE WITH THE FOREGOING
PROVISIONS OF THIS SECTION 7.1.
7.2
Distributions.
(A)
TAX DISTRIBUTIONS.
(I)
WITH RESPECT TO EACH FISCAL QUARTER, SUBJECT TO THE LIMITATIONS
PROVIDED IN SUBSECTION (II) BELOW AND IN SECTION 7.4(B), AND AFTER MAKING
PAYMENT OR PROVISION FOR CURRENT OBLIGATIONS AND OPERATING EXPENSES OF THE
COMPANY, BUT OTHERWISE NOTWITHSTANDING ANYTHING TO THE CONTRARY PROVIDED FOR IN
THIS SECTION 7.2, THE COMPANY, TO THE EXTENT OF ITS AVAILABLE CASH, WILL MAKE
DISTRIBUTIONS OF CASH TO THE MEMBERS PRO RATA IN ACCORDANCE WITH THEIR
RESPECTIVE PERCENTAGE INTERESTS DURING SUCH FISCAL QUARTER, AS PROMPTLY AS
PRACTICABLE AND IN ANY EVENT BY THE TAX DISTRIBUTION DATE FOR SUCH FISCAL
QUARTER, SO THAT EACH MEMBER WILL RECEIVE AN AMOUNT (A "TAX DISTRIBUTION") EQUAL
TO ITS FEDERAL, STATE AND LOCAL INCOME TAXES (INCLUDING OBLIGATIONS FOR
ESTIMATED TAX) ON THE TAXABLE INCOME THAT IT DERIVES AS A MEMBER OF THE COMPANY
FOR SUCH FISCAL QUARTER (BASED UPON AN ASSUMED COMBINED MARGINAL RATE OF
FEDERAL, STATE AND LOCAL TAXATION OF FORTY-TWO PERCENT (42%), OR AS THE MANAGING
BOARD WILL OTHERWISE REASONABLY DETERMINE). IN DETERMINING THE TAXABLE INCOME OF
A MEMBER WITH RESPECT TO ANY FISCAL QUARTER, TO THE EXTENT THAT ACTUAL TAXABLE
INCOME FOR THE RELEVANT PERIOD IS NOT AVAILABLE AS OF THE TAX DISTRIBUTION DATE,
THE
- 21 -
DETERMINATION WILL BE MADE BY THE COMPANY BASED UPON A GOOD FAITH ESTIMATE OF
ACTUAL TAXABLE INCOME FOR SUCH PERIOD AND MAY BE BASED UPON THE METHODOLOGY
PERMITTED BY THE CODE WHICH RESULTS IN THE LOWEST ESTIMATED TAX LIABILITY FOR
SUCH MEMBERS. IN DETERMINING THE TAX DISTRIBUTION FOR ANY FISCAL QUARTER, THE
CUMULATIVE AMOUNT OF TAXABLE INCOME OR LOSS FOR PRIOR FISCAL QUARTERS IN THE
SAME FISCAL YEAR AND THE TAX DISTRIBUTIONS WITH RESPECT TO SUCH PRIOR FISCAL
QUARTERS CAN BE TAKEN INTO ACCOUNT. TO THE EXTENT THE AMOUNT BASED UPON
ESTIMATES IS MORE OR LESS THAN THE ACTUAL TAXABLE INCOME FOR SUCH PERIOD AS
SUBSEQUENTLY DETERMINED, THE MANAGING BOARD MAY APPROPRIATELY DECREASE OR
INCREASE, RESPECTIVELY, SUBSEQUENT DISTRIBUTIONS TO TAKE INTO ACCOUNT SUCH
VARIANCE. IN THE EVENT THAT THE PERCENTAGE INTEREST OF ANY MEMBER CHANGES DURING
THE FISCAL QUARTER, THE APPROPRIATE PERCENTAGE INTERESTS TO BE USED IN
DETERMINING THE AMOUNT OF ANY TAX DISTRIBUTION WITH RESPECT TO SUCH FISCAL
QUARTER WILL BE DETERMINED IN A MANNER CONSISTENT WITH SECTION 7.1(D). TO THE
EXTENT CASH IS NOT AVAILABLE TO MAKE ANY TAX DISTRIBUTION IN FULL, THE
UNDISTRIBUTED AMOUNT THEREOF WILL BE CARRIED FORWARD ON A CUMULATIVE BASIS AND
DISTRIBUTED FROM AVAILABLE CASH AS SOON AS REASONABLY PRACTICABLE THEREAFTER.
(II)
THE AGGREGATE AMOUNT OF TAX DISTRIBUTIONS MAY BE REDUCED WITH
RESPECT TO ANY FISCAL QUARTER (X) TO REFLECT A REDUCTION IN THE APPLICABLE U.S.
FEDERAL INCOME TAX RATE; OR (Y) IF AND TO THE EXTENT THAT THE MANAGING BOARD
DETERMINES THAT THE COMPANY'S CASH RESERVES ARE INADEQUATE FOR SUCH PURPOSE IN
VIEW OF IDENTIFIABLE COMPANY EXPENSES AND PROJECTED INVESTMENT ACTIVITIES.
(III)
"TAX DISTRIBUTION DATE" WILL MEAN A DATE IN