Positive Cash Flow means that the farmer's projected cash income (including all farm and non- farm income) exceeds or equals the farmer's total estimated cash expenses (including all farm and non- farm debt service and other expenses) on an annualized basis.
The Owner will pay to the Operator in such first month the amount that is the lesser of (i) the sum of (A) accrued Operator Fees and (B) loan repayments owed KTIA (on whose behalf Operator may collect such loan repayments) or (ii) the amount of Net Positive Cash Flow.
For purposes of this Section 3.01(b), "Net Positive Cash Flow" means, for any period of determination, (i) net income plus depreciation and amortization, less (ii) capital expenditures and the Working Capital Reserve Requirement; and "Working Capital Reserve Requirement" means $2,000,000 or such lesser amount as 80% of the Board of Directors of the Owner may require from time to time.
Payment of accrued Operator Fees will commence the first month following the first fiscal quarter of the Owner in which there is Net Positive Cash Flow.
Each month thereafter Net Positive Cash Flow will be applied first to accrued and unpaid Operator Fees and loan repayments to the KTIA, on a pro rata basis, and following payment in full of accrued Operator Fees and loan repayments to the KTIA, then to current Operator Fees and loan repayments to the KTIA then due.
Subtenant's Positive Cash Flow shall be determined in accordance with Subtenant's historical accounting practices, consistently applied.