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accordance with Treasury Regulation section 1.704-2(i).

1.26. “Membership Interest” or “Interest” means a Member’s entire membership interest in the
Company including such Member’s Economic Interest and Percentage Interest.

1.27. “Net Cash Flow” means, for any given period, all receipts from the conduct of the business of
the Company for such period, from whatever source derived, which are available for distribution by
the Company following (a) the payment of all operating expenses, debt service and capital expenses
of the Company and (b) the establishment or replenishment, as deemed reasonably necessary by
the Manager, of reserves for taxes, debt service, maintenance, repairs and other expenses and other
working capital requirements of the Company or for contingent and unforeseen liabilities of the
Company. Net Cash Flow shall be determined without regard to Capital Contributions.

1.28. “Net Income” and “Net Loss” means for each fiscal year or part thereof, the Company’s
taxable income or loss for such year determined in accordance with Code section 703(a) (for this
purpose, all items of income, gain, loss or deduction required to be stated separately pursuant to
Code section 703(a)(1) will be included in taxable income or loss) with the following adjustments:

any income of the Company that is exempt from federal income tax will be added to such
taxable income or loss;

any expenditures of the Company described in Code section 705(a)(2)(B) or treated as such
pursuant to Treasury Regulation section 1. 704-1(b)(2)(iv)(i) (to the extent such expenditures
are not taken into account in computing the Members’ shares of Company Non-recourse
Deductions or Member Non-recourse Deductions) will be subtracted from such taxable
income or loss;

Depreciation for such fiscal year will be taken into account in lieu of the depreciation,
amortization and other cost recovery deductions taken into account in computing such
taxable income or loss;

gain or loss resulting from any disposition of Company property with respect to which gain,
or loss is recognized for federal income tax purposes will be computed with reference to the
Book Value of the property disposed of, rather than the adjusted tax basis of such property;

such taxable income or loss will not be deemed to include any income, gain, loss, deduction
or other item thereof allocated pursuant to this Agreement;

if any property is distributed in kind to any Member, the difference between its Fair Market

Re-LIFE-Ment: Reinventing Past Notions of Retirement
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