PROFIT AND LOSS. Means, for each taxable year of the Company (or other period for which Profit or Loss must be computed), the Company's taxable income or loss, including the receipt of dividends, distributions or proceeds from the sale, exchange or other disposition of Carried Interests, determined in accordance with Code Section 703(a), with the following adjustments: (i) all items of income, gain, loss, deduction, or credit required to be stated separately pursuant to Code Section
... 703(a)(l) will be included in computing such taxable income or loss; (ii) any tax-exempt income of the Company, not otherwise taken into account in computing Profit or Loss, will be included in computing taxable income or loss; 5 (iii) any expenditures of the Company described in Code Section 705(a)(2)(B) (or treated as such pursuant to Regulation Section 1.704-l(b)(2)(iv)(i)) and not otherwise taken into account in computing Profit or Loss, will be subtracted from taxable income or loss; (iv) gain or loss resulting from any taxable disposition of Company property will be computed by reference to the Gross Asset Value of the property disposed of, notwithstanding the fact that the Gross Asset Value differs from the adjusted basis of the property for federal income tax purposes; and (v) in lieu of the depreciation, amortization, or cost recovery deductions allowable in computing taxable income or loss, there will be taken into account Depreciation; and (vi) in the event that an Additional Member is admitted, or there is a redemption of the Units or Unit of any person (or interest therein), but more than a de minimis amount in either case, the Board may determine to restate the Gross Asset Value of the assets of the Company to equal their fair market value, and the gain or loss resulting from this restatement will be taken into account in determining Profit and Loss.
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