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ARTICLE 5 <br />CAPITAL ACCOUNTS, DISTRIBUTIONS, ALLOCATIONS <br />5.1 Cal) ital Accounts. A capital account shall be maintained for each Member. Each <br />Member's capital account shall consist of its initial capital contribution, plus any <br />subsequent capital contributions by it under this Agreement, plus its distributive share of <br />profits, minus distributions to it in reduction of capital, and minus its share of losses. <br />5.2 Adi'ustments to Capital Accounts. The Members acknowledge that property may <br />be carried on the Company books at a value which differs from the Company's basis in <br />that property for income tax purposes, in which case the Members' capital accounts shall <br />be adjusted for allocations to them of depreciation, amortization, gain, and loss as <br />required under the Code. <br />5.3 Allocation of Profits and Losses. For accounting and tax purposes, all profits and <br />losses, including all items of income, gain, loss, deduction and credit, shall be allocated to <br />the Members' capital accounts as agreed by the Members from time to time, or in the <br />absence of agreement, in accordance with their respective Distribution Percentage <br />interests, except to the extent otherwise required by the Code. <br />5.4 Net Cash Flow. "Net Cash Flow" for an applicable period means gross cash <br />receipts from the Business operations or otherwise luding proceeds from the sale or <br />other disposition of the Company assets other than (inc in liquidation and. also including <br />distributions from entities in which the Company has an interest), less allowances for <br />capital, operating, and other expenses of the Company, and less reserves for the Company <br />and its Business, debts, obligations, contingencies, or other needs, as determined by the <br />Manager. <br />5.5 Distributions. The Manager, in its discretion, may distribute Net Cash Flow or <br />retain it in the Company; provided, however, in no event shall a distribution of Company <br />funds be made which would cause the Company to be in default under the terms and <br />provisions of this Agreement or any other agreement or undertaking of the Company, No <br />Member or assignee of a Membership Interest shall have any right to demand any <br />distribution from the Company except to the extent of any distribution under this Section, <br />and no Member or assignee of a Membership Interest may demand or receive <br />distributions of any kind from the Company in any form other than in cash. <br />5.6 Manner of Distributions. To the extent the Manager determines to distribute Net <br />Cash. Flow, it shall do so in proportion to the Members' Distribution Percentage Interests <br />except to the extent the Members may agree otherwise.. <br />5 <br />