Common use of Characterization of Special Unit as Profits Interests Clause in Contracts

Characterization of Special Unit as Profits Interests. The Special Unit issued under this Agreement is intended to qualify as “profits interests” under IRS Revenue Procedures 93-27 and 2001-43, and the sections of this Agreement relating to such interests shall be interpreted and applied consistently therewith. In addition, the Board of Directors is hereby authorized upon publication of final Regulations in the Federal Register (or other official pronouncement), to amend this Agreement as it determines, in its sole discretion, to provide for: (A) the election of a safe harbor under Regulation Section 1.83-3(1) (or any similar provision) under which the fair market value of any Special Units that are transferred in connection with the performance of services are treated as being equal to the liquidation value of such Membership Interests, with (B) an agreement by the Company and all of its Members to comply with all the requirements set forth in such regulations and Notice 2005-43 (and any other guidance provided by the Internal Revenue Service with respect to such election) with respect to all Special Units transferred in connection with the performance of services while the election remains effective, (C) the allocation of items of income, gains, deductions, and losses required by any final Regulations similar to Proposed Regulation Sections 1.704-1(b)(4)(xii)(b) and (c), and (D) any other related amendments. The Members acknowledge and agree that the exercise by the Board of Directors of any discretion provided to it hereunder shall not be a modification or amendment to this Agreement.