Common use of Allocations to Former Partners Clause in Contracts

Allocations to Former Partners. Amounts which are relevant for income tax purposes for a particular fiscal year of the Partnership and which are otherwise allocable pursuant to Section 5.3 hereof, shall be allocated to a Partner who ceased to be a Partner during the particular fiscal year (a “former Partner”) pursuant to the terms of any agreement made between the Partnership and such former Partner notwithstanding that such former Partner is not a Partner at the end of the particular fiscal year, to the extent of any Partnership Interest redeemed, repurchased or otherwise retired during the particular fiscal year on the basis of the proportion such amounts bear to the portion of the fiscal year of the Partnership ending on the last day of the month following the effective date of the termination of such Partnership Interest, subject to the particular terms of the agreement between the Partnership and the specific former Partner to whom such allocation is to be made. Such allocations shall be treated by the Partnership and by the former Partner as allocations of a share of income under subsection 96(1.1) of the Income Tax Act with the result that such payments will be treated as allocations of the earnings and income of the Partnership for tax purposes and treated by the former Partner as income as if the former Partner were still a Partner. Notwithstanding any intention to cease being a Partner of the Partnership, a former Partner may, pursuant to the terms of any agreement between the Partnership and the former Partner, retain a residual Partnership Interest for the purposes of section 98.1 of the Income Tax Act.