Common use of Allocations of Net Profits and Net Losses from Operations Clause in Contracts

Allocations of Net Profits and Net Losses from Operations. (a) After giving effect to the special allocations set forth in Section 10.2, the Net Profits of the Company for each Fiscal Year will be allocated in the following order and priority: (i) First, to the Members in proportion to their Membership Interest Percentages to offset prior allocations of Net Losses pursuant to Section 10.1(b)(i) to the extent such allocations have not been so previously offset; and (ii) Second, to the Members in proportion to their Membership Interest Percentages. (b) Subject to Section 10.2, the Net Losses of the Company for each Fiscal Year will be allocated to the Members in proportion to their Membership Interest Percentages. Except as otherwise required by the last sentence of this Section 10.1(b), no allocations of loss, deduction, and/or expenditures described in Code §705(a)(2)(B) will be charged to the Capital Accounts of any Member if such allocation would cause such Member to have an Adjusted Deficit Capital Account. The amount of the loss, deduction, and/or Code §705(a)(2)(B) expenditure which would have caused a Member to have an Adjusted Deficit Capital Account will instead be charged to the Capital Account of any Members which would not have an Adjusted Deficit Capital Account as a result of the allocation, in proportion to their positive Capital Accounts (after giving effect to the adjustments described in the definition of Adjusted Deficit Capital Account), or, if no such Members exist, then to the Members in accordance with their Percentage Interests. (c) Subject to any specific requirements to the contrary, the general allocation rules for Net Profits and Net Losses of the Company will be as follows: (i) Allocations to reverse prior allocations pursuant to Section 10.1(a)(i) will reverse the earliest prior allocations first, and, if prior allocations arising in the same Fiscal Year that are subject to reversal exceed the current Fiscal Year allocations that remain to reverse prior allocations, the remaining current Fiscal Year allocations will be deemed to reverse the prior allocations for each Member pro rata in accordance with such Member’s prior Fiscal Year allocations. (ii) All allocations of Net Profits and Net Losses will be deemed to be comprised of a proportionate share of all items comprising those Net Profits and Net Losses.