Distributions of cash and allocations of profit and loss. 1. Distributions of Net Cash Receipts. The limited partners in the aggregate will be entitled to receive 100% of any distributions of net cash receipts. 2. Distributions of Net Cash Proceeds. Distributions of net cash proceeds will be in the following order: first, to the limited partners, an amount equal to 100% of their capital contribution without deduction for prior distributions of net cash receipts but with deduction for prior distributions of net cash proceeds. The remaining distributions of net cash proceeds will be 75% to the limited partners and 25% to the General Partner. Notwithstanding the above, in the event of any transaction resulting in net cash proceeds in connection with the complete liquidation of the partnership, the amount of the net cash proceeds to be distributed to each partner shall be an amount equal to his or her respective capital account, as determined pursuant to section 3.D. 3. Profit and Loss. A. Profit and loss of the partnership shall be determined and allocated with respect to each fiscal year of the partnership as of the end of that year, except as otherwise required or as required for federal income tax purposes. B. All profit and loss prior to the date on which limited partners are admitted to the partnership shall be allocated 100% to the general partner. C. Except as provided in sections 3.B and 3.D, profit and loss not arising from a transaction producing net cash proceeds shall be allocated in each fiscal year, 99% to the limited partners and 1% to the general partner. Loss arising from a transaction producing net cash proceeds shall be allocated entirely to the limited partners. D. Profit from a transaction resulting in net cash proceeds shall be allocated as follows: (i) first, to the limited partners until their respective capital accounts equal the amount of their original capital accounts, minus the amount of all prior distributions of net cash proceeds charged to their respective capital accounts; (ii) then, to the general partner until their respective capital accounts equal the algebraic sum of (a) their respective capital accounts immediately preceding the transaction and (b) the dollar amount of their respective distributive share of net cash proceeds as if all of the net cash proceeds from the transaction were being distributed currently to the partners; and (iii) the balance to be allocated to the limited partners. 4. Determination of Allocations and Distributions Among Partners. A. Except as provided in section 4.D, all distributions to the limited partners and all profit and loss allocable to the limited partners shall be distributed or allocated, as the case may be, to each limited partner or other holder of units entitled to the distribution or allocation in the ratio which the units held by the limited partner or other holder of units bears to the total units outstanding. B. Except as provided in section 4.D, all profit and loss not arising from a transaction producing net cash proceeds which is allocable to the limited partners shall be distributed to the persons recognized (in accordance with Section _________ in the case of a transfer of units) as the holders of the units for this purpose as of the first day of the fiscal quarter with respect to which the allocation or distribution is to be made. C. Except as otherwise provided in this section 4, all profit or loss arising from a transaction producing net cash proceeds allocable to the limited partners shall be allocated, and all net cash proceeds distributable to the limited partners shall be distributed, to the persons recognized (in
accordance with Section _________ in the case of a transfer of units) as the holders of the units for this purpose as of the date of the transaction producing net cash proceeds. All profit or loss which is attributable to, and all net cash proceeds not received by the partnership as cash upon a transaction producing net cash proceeds but later received by the partnership as a result of an installment or other deferred sale, shall be allocated or distributed, as the case may be, to the persons recognized (in accordance with Section _________ in the case of a transfer of units) for this purpose as of the date the net cash proceeds are received by the partnership. D. All profit and loss not arising from a transaction producing net cash proceeds for a fiscal year allocable to any units which shall have been transferred during the year, shall be allocated between the transferor and the transferee based upon the number of quarterly periods that each was recognized (in accordance with Section _________ in the case of a transfer of units) as the holder of the units for this purpose, without regard to whether the partnership's operations during particular quarterly periods of the fiscal year produced profit or loss or distributions of net cash receipts.