Common use of Allocations Generally Clause in Contracts

Allocations Generally. (a) Except as otherwise provided in Sections 2.2(b) through (i), Net Income or Net Loss for any Company Fiscal Year, and, to the extent that the Board determines it is necessary or appropriate, individual items of income, gain, loss and deduction of the Company shall be allocated among the Members so as to cause each Member’s capital account balance to equal as nearly as possible (i) the amount of the distribution that such Member would receive pursuant to Section 7.2(d) if, at the end of such Company Fiscal Year, each Company asset were sold for an amount of cash equal to such asset’s Book Value, each liability of the Company were satisfied in cash in accordance with its terms (limited, with respect to each Nonrecourse Liability, to the Book Value of any asset or assets securing such Nonrecourse Liability), and all remaining cash of the Company were distributed to the Members in accordance with Section 7.2 minus (ii) such Member’s shares of Company Minimum Gain and Minimum Gain Attributable to Member Nonrecourse Debt, computed immediately prior to the hypothetical sale of assets. The Principals shall be entitled to review and the Principal Base shall be entitled to approve the allocations pursuant to this Section 2.2; provided, however, that approval may not be unreasonably withheld, conditioned or delayed and the Principals may only withhold approval on the basis that the allocations are unreasonable, and if MSG and the Principals dispute the reasonableness of any allocation, KPMG LLP or, if KPMG is not available or has a conflict of interest that causes it to decline the engagement, another nationally recognized accounting firm upon which MSG and the Principals shall mutually agree, shall resolve such dispute. (b) If there is a net decrease in Company Minimum Gain during a Company taxable year, each Member shall be specially allocated items of income and gain for such year (and, if necessary, for subsequent years) in the order specified in Treasury Regulation §1.704-2(j)(2) in proportion to, and to the extent of, an amount equal to the portion of such Member’s share of the net decrease in Company Minimum Gain during such year (which share of such net decrease shall be determined under Treasury Regulation §1.704-2(g)(2)). This Section 2.2(b) is intended to be a “minimum gain chargeback” described in Treasury Regulation §1.704-2(f) and is to be interpreted in a manner consistent therewith. (c) If there is a net decrease during a Company taxable year in the Minimum Gain Attributable to a Member Nonrecourse Debt (as determined under Treasury Regulation §1.704-2(i)(3)), any Member with a share of Minimum Gain Attributable to such Member Nonrecourse Debt at the beginning of such year shall be specially allocated items of income and gain for such year (and, if necessary, for subsequent years) in the order specified in Treasury Regulation §1.704-2(j)(2) in proportion to, and to the extent of, an amount equal to the portion of such Member’s share of the net decrease in Minimum Gain Attributable to such Member Nonrecourse Debt (as determined under Treasury Regulation §1.704-2(g)(2)), during such year. This Section 2.2(c) is intended to be a “partner minimum gain chargeback” described in Treasury Regulation §1.704-2(i)(4) and is to be interpreted in a manner consistent therewith. (d) Items of Company loss, deduction or Section 705(a)(2)(B) Expenditure that are attributable to a Member Nonrecourse Debt (“Member Nonrecourse Deductions”) shall be allocated among the Members who bear the Economic Risk of Loss for such Member Nonrecourse Debt. This provision is to be interpreted in a manner consistent with the requirements of Treasury Regulation §1.704-2(i)(1). (e) The Nonrecourse Deductions for each taxable year of the Company shall be allocated to the Members in proportion to their Percentage Shares. (f) In the event that any Member unexpectedly receives any adjustments, allocations or distributions described in Treasury Regulation §1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), or 1.704-1(b)(2)(ii)(d)(6), items of Company income and gain shall be specifically allocated to such Member in an amount and manner sufficient to eliminate, to the extent required by the Treasury Regulations promulgated under Section 704(b) of the Code, any Adjusted Capital Account Deficit created by such adjustments, allocations or distributions as quickly as possible. This provision is intended to be a “qualified income offset” described in Treasury Regulation §1.704-1(b)(2)(ii)(d) and is to be interpreted in a manner consistent therewith. (g) To the extent that an adjustment to the adjusted tax basis of any Company property pursuant to Code Section 734(b) or Code Section 743(b) is required, pursuant to Treasury Regulation §1.704-1(b)(2)(iv)(m)(2) or Treasury Regulation §1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining capital accounts as a result of a distribution to a Member, the amount of such adjustment to the capital accounts shall be treated as an item of gain (if the adjustment increases the basis of the Company property) or loss (if the adjustment decreases the basis of the Company property), and such gain or loss shall be allocated to the Members in accordance with Treasury Regulation §1.704-1(b)(2)(iv)(m)(2) or Treasury Regulation §1.704-1(b)(2)(iv)(m)(4), as the case may be. (h) Net Loss allocated pursuant to Section 2.2(a) shall not exceed the maximum amount of Net Loss that can be allocated without causing any Member to have an Adjusted Capital Account Deficit at the end of any Company Fiscal Year. In the event some but not all of the Members would have Adjusted Capital Account Deficits as a consequence of an allocation of Net Loss pursuant to Section 2.2(a), the limitation set forth in this Section 2.2(j) shall be applied on a Member by Member basis and Net Loss not allocable to any Member as a result of such limitation shall be allocated to the other Members in accordance with the positive balances in such Members’ capital accounts so as to allocate the maximum permissible Net Loss to each Member under Treasury Regulation §1.704-1(b)(2)(ii)(d) and, thereafter, pro rata based on Percentage Shares. (i) In the event that any item of Company income, gain, loss, deduction or Section 705(a)(2)(B) Expenditure is allocated pursuant to Section 2.2(b) through (g), subsequent items of Company income, gain, loss, deduction or Section 705(a)(2)(B) Expenditure (as determined for purposes of computing Net Income or Net Loss) shall, to the extent consistent with Section 2.2(b) through (h), be allocated between the Members so as to eliminate as quickly as possible on a proportionate basis, with respect to each Member, any disparity between (i) the sum of (x) such Member’s capital account balance and (y) such Member’s share of Company Minimum Gain and Minimum Gain Attributable to Member Nonrecourse Debts determined in accordance with Treasury Regulation §§1.704-2(g) and (i)(5) and (ii) the capital account which such Member would have had if all Company Minimum Gain and Minimum Gain Attributable to any Member Nonrecourse Debt had been realized and all allocations of Net Income and Net Loss had been made pursuant to Section 2.2(a) (without giving effect to the reference therein to Section 2.2(b) through (h)). (j) In the event that any item or items of income, gain, loss or deduction of the Company or any Member (or any Person related to a Member) is reallocated between the Company and any Member (or any Person related to a Member) pursuant to Code Section 482, then the allocation of the income, gain, loss or deduction of the Company for the year in which such reallocation occurs shall be made in such a fashion that the capital accounts of all Members, after taking into account any deemed contributions or distributions arising in connection with such reallocation, shall be equal to what they would have been if no reallocation had occurred. (k) In the event that the Percentage Shares of the Members shall change pursuant to the terms of this Agreement, there shall be an interim closing of the books of the Company as of the close of the day of such change (the “Interest Change Date”) and the capital accounts of the Members shall be revalued pursuant to Treasury Regulation §1.704-1(b)(2)(iv)(f) effective immediately prior to the event giving rise to the interim closing of the books of the Company. The Net Income or Net Loss of the Company for the period ending on the Interest Change Date shall be allocated to the Members in accordance with this Section 2.2 as if the Company Fiscal Year ended on such date, without taking into account any change in Percentage Shares on the Interest Change Date. For purposes of the preceding sentence, the day on which the Effective Time occurs shall be treated as an Interest Change Date. The Net Income or Net Loss of the Company for any period commencing after the Interest Change Date shall be allocated to the Members in accordance with Section 2.2, taking into account their respective Percentage Shares in effect after the Interest Change Date. Notwithstanding the foregoing, if the Interest Change Date is not the last day of a month, Net Income or Net Loss of the Company for the month in which the Interest Change Date occurs shall be prorated on a daily basis between the portion of the month ending on the Interest Change Date and the remainder of such month. (l) Excess nonrecourse liabilities, within the meaning of Treasury Regulation §1.752-3, shall be allocated to the Members in accordance with their Percentage Shares. No Member may take any action (e.g., providing a guarantee or other credit support) that would have the effect of shifting the Economic Risk of Loss with respect to any Company liability without the consent of the applicable Members affected by such shift. Subject to the preceding sentence, the Company and MSG shall reasonably cooperate with the Principals to minimize any adverse U.S. federal income tax consequences arising as a result of any prepayment, refinancing or other action with respect to any indebtedness of the Company that would have the effect of shifting the allocation of liabilities of the Company under Section 752 of the Code.

Allocations Generally. (a) Except as otherwise provided in Sections 2.2(b) through (i), Net Income or Net Loss for any Company Fiscal Year, and, to the extent that the Board determines it is necessary or appropriate, individual items of income, gain, loss and deduction of the Company shall be allocated among the Members so as to cause each Member’s capital account balance to equal as nearly as possible (i) the amount of the distribution that such Member would receive pursuant to Section 7.2(d) if, at the end of such Company Fiscal Year, each Company asset were sold for an amount of cash equal to such asset’s Book Value, each liability of the Company were satisfied in cash in accordance with its terms (limited, with respect to each Nonrecourse Liability, to the Book Value of any asset or assets securing such Nonrecourse Liability), and all remaining cash of the Company were distributed to the Members in accordance with Section 7.2 minus (ii) such Member’s shares of Company Minimum Gain and Minimum Gain Attributable to Member Nonrecourse Debt, computed immediately prior to the hypothetical sale of assets. The Principals shall be entitled to review and the Principal Base shall be entitled to approve the allocations pursuant to this Section 2.2; provided, however, that approval may not be unreasonably withheld, conditioned or delayed and the Principals may only withhold approval on the basis that the allocations are unreasonable, and if MSG and the Principals dispute the reasonableness of any allocation, KPMG LLP or, if KPMG is not available or has a conflict of interest that causes it to decline the engagement, another nationally recognized accounting firm upon which MSG and the Principals shall mutually agree, shall resolve such dispute. (b) If there is a net decrease in Company Minimum Gain during a Company taxable year, each Member shall be specially allocated items of income and gain for such year (and, if necessary, for subsequent years) in the order specified in Treasury Regulation §1.704-2(j)(2) in proportion to, and to the extent of, an amount equal to the portion of such Member’s share of the net decrease in Company Minimum Gain during such year (which share of such net decrease shall be determined under Treasury Regulation §1.704-2(g)(2)). This Section 2.2(b) is intended to be a “minimum gain chargeback” described in Treasury Regulation §1.704-2(f) and is to be interpreted in a manner consistent therewith. (c) If there is a net decrease during a Company taxable year in the Minimum Gain Attributable to a Member Nonrecourse Debt (as determined under Treasury Regulation §1.704-2(i)(3)), any Member with a share of Minimum Gain Attributable to such Member Nonrecourse Debt at the beginning of such year shall be specially allocated items of income and gain for such year (and, if necessary, for subsequent years) in the order specified in Treasury Regulation §1.704-2(j)(2) in proportion to, and to the extent of, an amount equal to the portion of such Member’s share of the net decrease in Minimum Gain Attributable to such Member Nonrecourse Debt (as determined under Treasury Regulation §1.704-2(g)(2)), during such year. This Section 2.2(c) is intended to be a “partner minimum gain chargeback” described in Treasury Regulation §1.704-2(i)(4) and is to be interpreted in a manner consistent therewith. (d) Items of Company loss, deduction or Section 705(a)(2)(B) Expenditure that are attributable to a Member Nonrecourse Debt (“Member Nonrecourse Deductions”) shall be allocated among the Members who bear the Economic Risk of Loss for such Member Nonrecourse Debt. This provision is to be interpreted in a manner consistent with the requirements of Treasury Regulation §1.704-2(i)(1). (e) The Nonrecourse Deductions for each taxable year of the Company shall be allocated to the Members in proportion to their Percentage Shares. (f) In the event that any Member unexpectedly receives any adjustments, allocations or distributions described in Treasury Regulation §1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), or 1.704-1(b)(2)(ii)(d)(6), items of Company income and gain shall be specifically allocated to such Member in an amount and manner sufficient to eliminate, to the extent required by the Treasury Regulations promulgated under Section 704(b) of the Code, any Adjusted Capital Account Deficit created by such adjustments, allocations or distributions as quickly as possible. This provision is intended to be a “qualified income offset” described in Treasury Regulation §1.704-1(b)(2)(ii)(d) and is to be interpreted in a manner consistent therewith. (g) To the extent that an adjustment to the adjusted tax basis of any Company property pursuant to Code Section 734(b) or Code Section 743(b) is required, pursuant to Treasury Regulation §1.704-1(b)(2)(iv)(m)(2) or Treasury Regulation §1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining capital accounts as a result of a distribution to a Member, the amount of such adjustment to the capital accounts shall be treated as an item of gain (if the adjustment increases the basis of the Company property) or loss (if the adjustment decreases the basis of the Company property), and such gain or loss shall be allocated to the Members in accordance with Treasury Regulation §1.704-1(b)(2)(iv)(m)(2) or Treasury Regulation §1.704-1(b)(2)(iv)(m)(4), as the case may be. (h) Net Loss allocated pursuant to Section 2.2(a) shall not exceed the maximum amount of Net Loss that can be allocated without causing any Member to have an Adjusted Capital Account Deficit at the end of any Company Fiscal Year. In the event some but not all of the Members would have Adjusted Capital Account Deficits as a consequence of an allocation of Net Loss pursuant to Section 2.2(a), the limitation set forth in this Section 2.2(j2.2(h) shall be applied on a Member by Member basis and Net Loss not allocable to any Member as a result of such limitation shall be allocated to the other Members in accordance with the positive balances in such Members’ capital accounts so as to allocate the maximum permissible Net Loss to each Member under Treasury Regulation §1.704-1(b)(2)(ii)(d) and, thereafter, pro rata based on Percentage Shares. (i) In the event that any item of Company income, gain, loss, deduction or Section 705(a)(2)(B) Expenditure is allocated pursuant to Section 2.2(b) through (g), subsequent items of Company income, gain, loss, deduction or Section 705(a)(2)(B) Expenditure (as determined for purposes of computing Net Income or Net Loss) shall, to the extent consistent with Section 2.2(b) through (h), be allocated between the Members so as to eliminate as quickly as possible on a proportionate basis, with respect to each Member, any disparity between (i) the sum of (x) such Member’s capital account balance and (y) such Member’s share of Company Minimum Gain and Minimum Gain Attributable to Member Nonrecourse Debts determined in accordance with Treasury Regulation §§1.704-2(g) and (i)(5) and (ii) the capital account which such Member would have had if all Company Minimum Gain and Minimum Gain Attributable to any Member Nonrecourse Debt had been realized and all allocations of Net Income and Net Loss had been made pursuant to Section 2.2(a) (without giving effect to the reference therein to Section 2.2(b) through (h)). (j) In the event that any item or items of income, gain, loss or deduction of the Company or any Member (or any Person related to a Member) is reallocated between the Company and any Member (or any Person related to a Member) pursuant to Code Section 482, then the allocation of the income, gain, loss or deduction of the Company for the year in which such reallocation occurs shall be made in such a fashion that the capital accounts of all Members, after taking into account any deemed contributions or distributions arising in connection with such reallocation, shall be equal to what they would have been if no reallocation had occurred. (k) In the event that the Percentage Shares of the Members shall change pursuant to the terms of this Agreement, there shall be an interim closing of the books of the Company as of the close of the day of such change (the “Interest Change Date”) and the capital accounts of the Members shall be revalued pursuant to Treasury Regulation §1.704-1(b)(2)(iv)(f) effective immediately prior to the event giving rise to the interim closing of the books of the Company. The Net Income or Net Loss of the Company for the period ending on the Interest Change Date shall be allocated to the Members in accordance with this Section 2.2 as if the Company Fiscal Year ended on such date, without taking into account any change in Percentage Shares on the Interest Change Date. For purposes of the preceding sentence, the day on which the Effective Time occurs shall be treated as an Interest Change Date. The Net Income or Net Loss of the Company for any period commencing after the Interest Change Date shall be allocated to the Members in accordance with this Section 2.2, taking into account their respective Percentage Shares in effect after the Interest Change Date. Notwithstanding the foregoing, if the Interest Change Date is not the last day of a month, Net Income or Net Loss of the Company for the month in which the Interest Change Date occurs shall be prorated on a daily basis between the portion of the month ending on the Interest Change Date and the remainder of such month. (l) Excess nonrecourse liabilities, within the meaning of Treasury Regulation §1.752-3, shall be allocated to the Members in accordance with their Percentage Shares. No Member may take any action (e.g., providing a guarantee or other credit support) that would have the effect of shifting the Economic Risk of Loss with respect to any Company liability without the consent of the applicable Members affected by such shift. Subject to the preceding sentence, the Company and MSG shall reasonably cooperate with the Principals to minimize any adverse U.S. federal income tax consequences arising as a result of any prepayment, refinancing or other action with respect to any indebtedness of the Company that would have the effect of shifting the allocation of liabilities of the Company under Section 752 of the Code.