A CORPORATE FRANCHISE TAX IMPOSED IN LIEU OF AN
INCOME TAX SHALL BE TREATED AS AN INCOME TAX.
THE BOARD OF MANAGERS, ACTING IN
THEIR REASONABLE DISCRETION, MAY ADJUST THE DETERMINATION OF TAX PERCENTAGES
PURSUANT TO THIS SECTION 4.1(A)(II): (X) AS NECESSARY TO ENSURE THAT THE
DISTRIBUTION REQUIRED TO BE MADE TO EACH MEMBER PURSUANT TO SECTION 4.1(A)(I)
FOR ANY FISCAL YEAR IS NOT LESS THAN SUCH MEMBER'S ACTUAL FEDERAL AND STATE
INCOME TAX LIABILITY IN RESPECT OF ALLOCATIONS MADE TO SUCH MEMBER BY THE
COMPANY FOR SUCH FISCAL YEAR; OR (Y) TO REFLECT ANY CITY OR OTHER LOCAL INCOME
TAX TO WHICH ANY MEMBER OR MEMBERS MAY BE SUBJECT; PROVIDED, HOWEVER, THAT THE
TAX PERCENTAGE WITH REGARD TO A PARTICULAR TYPE OF INCOME OR GAIN SHALL IN ALL
EVENTS BE THE SAME PERCENTAGE FOR ALL MEMBERS.
[III]
FOR PURPOSES OF CALCULATING THE COMPANY'S NET INCOME AND GAIN
UNDER CLAUSE (I), ABOVE, THERE SHALL BE DISREGARDED ANY ITEMS OF LOSS, EXPENSE
OR DEDUCTION THE ULTIMATE DEDUCTIBILITY OF WHICH MAY, IN RESPECT OF ANY MEMBER
OR EQUITYHOLDER OF A MEMBER, BE SUBJECT TO LIMITATION UNDER SECTION 67 OF THE
CODE.
11
[IV]
FOR PURPOSES OF DETERMINING WHETHER THE COMPANY HAS SATISFIED ITS
DISTRIBUTION OBLIGATION UNDER SECTION 4.1(A)(I), ALL CASH DISTRIBUTIONS MADE
DURING A FISCAL YEAR SHALL BE TREATED AS DISTRIBUTIONS MADE PURSUANT TO SECTION
4.1(A)(I) IN RESPECT OF SUCH FISCAL YEAR (EXCEPT TO THE EXTENT THAT SUCH
DISTRIBUTIONS WERE REQUIRED TO SATISFY THE OBLIGATIONS OF THE COMPANY UNDER
SECTION 4.1(A)(I) IN RESPECT OF ONE OR MORE PRIOR FISCAL YEARS, IN WHICH CASE
SUCH DISTRIBUTIONS SHALL BE TREATED AS HAVING BEEN MADE PURSUANT TO SECTION
4.1(A)(I) IN RESPECT OF SUCH PRIOR FISCAL YEAR OR YEARS).
[V]
AT THE ELECTION OF THE BOARD OF MANAGERS, NO DISTRIBUTION SHALL BE
REQUIRED PURSUANT TO SECTION 4.1(A)(I) IN RESPECT OF ANY FISCAL YEAR IF THE
COMPANY DOES NOT HAVE THE FUNDS NECESSARY TO MAKE THE DISTRIBUTIONS.
[B]
DISCRETIONARY DISTRIBUTIONS. IN ADDITION TO THE DISTRIBUTIONS
PROVIDED FOR IN SECTION 4.1(A), THE BOARD OF MANAGERS MAY CAUSE THE COMPANY TO
DISTRIBUTE CASH OR PROPERTY TO THE MEMBERS, IN PROPORTION TO THE MEMBERS'
RESPECTIVE ALLOCATION PERCENTAGES, AT SUCH TIMES AND IN SUCH AMOUNTS AS THE
BOARD OF MANAGERS SHALL DETERMINE.
4.2
LIQUIDATING DISTRIBUTIONS.
NOTWITHSTANDING THE PROVISIONS OF
SECTION 4.1, CASH OR PROPERTY OF THE COMPANY AVAILABLE FOR DISTRIBUTION UPON THE
DISSOLUTION OF THE COMPANY (INCLUDING CASH OR PROPERTY RECEIVED UPON THE SALE OR
OTHER DISPOSITION OF ASSETS IN ANTICIPATION OF OR IN CONNECTION WITH SUCH
DISSOLUTION) SHALL BE DISTRIBUTED IN ACCORDANCE WITH THE PROVISIONS OF
SECTION 8.3.
4.3
LIMITATION ON DISTRIBUTIONS.
NO DISTRIBUTION SHALL BE MADE TO A
MEMBER PURSUANT TO SECTION 4.1 IF AND TO THE EXTENT THAT SUCH DISTRIBUTION
WOULD: (I) CREATE A NEGATIVE BALANCE IN THE UPDATED CAPITAL ACCOUNT OF SUCH
MEMBER OR INCREASE THE AMOUNT BY WHICH SUCH UPDATED CAPITAL ACCOUNT BALANCE IS
NEGATIVE; (II) CAUSE THE COMPANY TO BE INSOLVENT; (III) RENDER THE MEMBER LIABLE
FOR A RETURN OF SUCH DISTRIBUTION UNDER APPLICABLE