Common use of Income Tax Allocations Clause in Contracts

Income Tax Allocations. (a) Except as provided in this Section 9.4, each item of income, gain, loss and deduction of the Company for federal income tax purposes shall be allocated among the Members in the same manner as such items are allocated for book purposes under Sections 9.1, 9.2, 9.3 and 13.4(b). (b) In accordance with Code Section 704(c) and the applicable Treasury Regulations thereunder, income, gain, loss and deduction with respect to any property contributed to the Company shall, solely for tax purposes, be allocated among the Members so as to take account of any variation between the adjusted basis of such property to the Company for federal income tax purposes and its Gross Asset Value at the time of its contribution to the Company. If the Gross Asset Value of any Company property is adjusted in accordance with clause (c) or (d) of the definition of Gross Asset Value, then subsequent allocations of income, gain, loss and deduction shall take into account any variation between the adjusted basis of such property for federal income tax purposes and its Gross Asset Value as provided in Code Section 704(c) and the related Treasury Regulations. For purposes of such allocations, the Company shall elect the remedial allocation method described in Treasury Regulation Section 1.704-3(d). (c) All items of income, gain, loss, deduction and credit allocated to the Members in accordance with the provisions hereof and basis allocations recognized by the Company for federal income tax purposes shall be determined without regard to any election under Section 754 of the Code which may be made by the Company. (d) If any deductions for depreciation or cost recovery are recaptured as ordinary income upon the Transfer of Company properties, the ordinary income character of the gain from such Transfer shall be allocated among the Members in the same ratio as the deductions giving rise to such ordinary character were allocated.

Income Tax Allocations. (a) Except as provided in this Section 9.44.4, each item of income, gain, loss and deduction of the Company for federal income tax purposes shall be allocated among the Members in the same manner as such items are allocated for book Capital Account purposes under Sections 9.1, 9.2, 9.3 4.1 and 13.4(b)4.2. (b) In accordance with Code Section 704(c) and the applicable Treasury Regulations thereunderThe Members recognize that, income, gain, loss and deduction with respect to any Adjusted Property, there will be a difference between the Carrying Value of such property contributed at the time of revaluation and the adjusted tax basis of such property at the time. All items of tax depreciation, cost recovery, amortization, amount realized and gain or loss with respect to the Company shall, solely for tax purposes, such Adjusted Property shall be allocated among the Members so as to take into account of any variation the disparities between the Carrying Values and the adjusted tax basis of with respect to such property to the Company for federal income tax purposes and its Gross Asset Value at the time of its contribution to the Company. If the Gross Asset Value of any Company property is adjusted properties in accordance with clause (cthe provisions of Sections 704(b) or (dand 704(c) of the definition Internal Revenue Code and the Treasury Regulations under those sections; provided, however, that any tax items not required to be allocated under Sections 704(b) or 704(c) of Gross Asset Value, then subsequent the Internal Revenue Code shall be allocated in the same manner as such gain or loss would be allocated for Capital Account purposes under Sections 4.1 and 4.2. In making such allocations of income, gain, loss and deduction shall take into account any variation between the adjusted basis of such property for federal income tax purposes and its Gross Asset Value as provided in Code under Section 704(c) and of the related Treasury Regulations. For purposes of such allocationsInternal Revenue Code, the Company Board shall elect use the remedial allocation method described in pursuant to Treasury Regulation Section 1.704-3(d). (ce) All items recapture of income, gain, loss, deduction and credit allocated to the Members in accordance with the provisions hereof and basis allocations recognized by the Company for federal income tax purposes shall be determined without regard to any election under Section 754 of the Code which may be made by the Company. (d) If any deductions for depreciation or cost recovery are recaptured as ordinary income upon resulting from the Transfer of Company propertiesproperty shall, to the ordinary income character of maximum extent possible, be allocated to the Member to whom the deduction that gave rise to such recapture was allocated hereunder to the extent that such Member is allocated any gain from the Transfer of such Transfer property. For this purpose, deductions that were allocated as a component of Net Profit or Net Loss shall be treated as if allocated among the Members in the same ratio manner as the deductions giving rise to such ordinary character were allocatedallocation of the related Net Profit or Net Loss.

Income Tax Allocations. (a) Except as otherwise provided in this Section 9.44.5, for federal, state and local income tax purposes each item of income, gain, loss and deduction of the Company for federal income tax purposes shall be allocated among to the Members in the same manner as such items are allocated for book purposes under Sections 9.1, 9.2, 9.3 and 13.4(b)pursuant to this Article IV. (b) In accordance with Code Section 704(c) and the applicable Treasury Regulations thereunder, income, gain, loss loss, and deduction with respect to any property contributed to the capital of the Company shall, solely for tax purposes, be allocated among the Members so as to take account of any variation between the adjusted basis of such property to the Company for federal income tax purposes and its Gross Asset initial Value at (computed in accordance with the time definition of its contribution to Value) using the Company. If remedial allocation method permitted by Treasury Regulation Section 1.704- 3(d). (c) In the Gross Asset event the Value of any Company property Asset is adjusted in accordance with clause pursuant to subparagraph (c) or (dii) of the definition of Gross Asset Value, then subsequent allocations of income, gain, loss loss, and deduction with respect to such Asset shall take into account of any variation between the adjusted basis of such property Asset for federal income tax purposes and its Gross Asset Value in the same manner as provided in under Code Section 704(c) and the related Treasury Regulations. For purposes of such allocations, the Company shall elect the remedial allocation method described in Treasury Regulation Section 1.704-3(d). (c) All items of income, gain, loss, deduction and credit allocated to the Members in accordance with the provisions hereof and basis allocations recognized by the Company for federal income tax purposes shall be determined without regard to any election under Section 754 of the Code which may be made by the CompanyRegulations thereunder. (d) If Any items of loss or deduction attributable to property contributed by a Member shall to the extent of an amount equal to the excess of (A) the federal income tax basis of such property at the time of its contribution over (B) the Value of such property at such time, be allocated in its entirety to such contributing Member and the tax basis of such property for purposes of computing the amounts of all items allocated to any deductions for depreciation or cost recovery are recaptured as ordinary income upon the Transfer of Company properties, the ordinary income character other Member (including a transferee of the gain from such Transfer contributing Member) shall be allocated among the Members equal to its Value. (e) Allocations pursuant to this Section 4.5 are solely for federal, state, and local income taxes and shall not affect, or in the same ratio as the deductions giving rise any way be taken into account in computing, any Member’s Capital Account or share of Profits, Losses, other items, or distributions pursuant to such ordinary character were allocatedany provision of this Agreement.

Income Tax Allocations. (a) Except as provided in this Section 9.44.4, each item of income, gain, loss and deduction of the Company for federal income tax purposes shall be allocated among the Members in the same manner as such items are allocated for book Capital Account purposes under Sections 9.1, 9.2, 9.3 Section 4.1 and 13.4(b)Section 4.2. (b) In The Members recognize that with respect to Adjusted Property, there will be a difference between the Carrying Value of such property at the time of contribution or revaluation and the adjusted tax basis of such property at the time. All items of tax depreciation, cost recovery, amortization, amount realized and gain or loss with respect to such Adjusted Property shall be allocated among the Members to take into account the disparities between the Carrying Values and the adjusted tax basis with respect to such properties in accordance with the provisions of Code Section Sections 704(b) and 704(c) and the applicable Treasury Regulations thereunderunder those sections; provided, however, that any tax items not required to be allocated under Code Sections 704(b) or 704(c) shall be allocated in the same manner as such gain or loss would be allocated for Capital Account purposes under Section 4.1 and Section 4.2. In making such allocations under Code Section 704(c), income, gain, gain deduction and loss and deduction with respect to any Company property contributed to the Company having a Carrying Value that differs from such property’s adjusted federal income tax basis shall, solely for federal income tax purposes, be allocated among the Members so in order to account for any such difference using the “traditional method with curative allocations” pursuant to Treasury Regulations Section 1.704-3(c), with the curative allocations limited to allocations of depreciation and amortization, or such other method or methods as determined by Super-Majority Board Approval to take account of any variation between the adjusted basis of such property to the Company for federal income tax purposes be appropriate and its Gross Asset Value at the time of its contribution to the Company. If the Gross Asset Value of any Company property is adjusted in accordance with clause (c) or (d) of the definition of Gross Asset Value, then subsequent allocations of income, gain, loss and deduction shall take into account any variation between the adjusted basis of such property for federal income tax purposes and its Gross Asset Value as provided in Code Section 704(c) and the related applicable Treasury Regulations. For purposes of such allocations, the Company shall elect the remedial allocation method described in Treasury Regulation Section 1.704-3(d). (c) All items recapture of income, gain, loss, deduction and credit allocated to the Members in accordance with the provisions hereof and basis allocations recognized by the Company for federal income tax purposes shall be determined without regard to any election under Section 754 of the Code which may be made by the Company. (d) If any deductions for depreciation or cost recovery are recaptured as ordinary income upon resulting from the Transfer of Company propertiesproperty shall, to the ordinary income character of maximum extent possible, be allocated to the Member to whom the deduction that gave rise to such recapture was allocated hereunder to the extent that such Member is allocated any gain from the Transfer of such Transfer property (taking into account the effect of curative allocations). For this purpose, deductions that were allocated as a component of Net Profit or Net Loss shall be treated as if allocated among the Members in the same ratio manner as the deductions giving rise to such ordinary character were allocatedallocation of the related Net Profit or Net Loss.

Income Tax Allocations. (a) Except as provided in this Section 9.46.3, each item of income, gain, loss and deduction of the Company for federal income tax purposes shall be allocated among the Members in the same manner as such items are allocated for book purposes under Sections 9.1, 9.2, 9.3 and 13.4(b)Section 6.2. (b) In accordance with Code Section 704(c) and the applicable Treasury Regulations thereunder, income, gain, loss and deduction with respect to any property contributed to the Company shall, solely for tax purposes, be allocated among the Members so as to take account of any variation between the adjusted basis of such property to the Company for federal Federal income tax purposes and its Gross Asset Value at initial Book Value. In the time of its contribution to event the Company. If the Gross Asset Book Value of any Company property is adjusted in accordance with pursuant to clause (cb) or (d) of the definition of Gross Asset Book Value, then subsequent allocations of income, gain, loss and deduction with respect to such property shall take into account of any variation between the adjusted basis of such property for federal Federal income tax purposes and its Gross Asset Book Value in the same manner as provided in under Code Section 704(c) and the related applicable Treasury RegulationsRegulations thereunder. For purposes of such allocations, the Company shall elect the remedial allocation method described in Treasury Regulation Section 1.704-3(d)) unless the Board determines that another method is more appropriate. (c) All items of income, gain, loss, deduction and credit allocated to the Members in accordance with the provisions hereof and basis allocations recognized by the Company for federal income tax purposes shall be determined without regard to any election under Code Section 754 of the Code which may be made by the Company. (d) If any deductions for depreciation or cost recovery are recaptured as ordinary income upon the Transfer sale or other disposition of Company properties, the ordinary income character of the gain from such Transfer sale or disposition shall be allocated among the Members in the same ratio as the deductions giving rise to such ordinary income character were allocated. (e) Allocations pursuant to this Section 6.3 are solely for purposes of federal, state and local taxes and shall not affect, or in any way be taken into account in computing, any Member’s Capital Account or share of Profits, Losses, other items or distributions pursuant to any provision of this Agreement.

Income Tax Allocations. (a) Except as provided in this Section 9.44.4, each item of income, gain, loss and deduction of the Company for federal income tax purposes shall be allocated among the Members in the same manner as such items are allocated for book Capital Account purposes under Sections 9.1, 9.2, 9.3 Section 4.1 and 13.4(b)Section 4.2. (b) In The Members recognize that with respect to Adjusted Property, there will be a difference between the Carrying Value of such property at the time of contribution or revaluation and the adjusted tax basis of such property at the time. All items of tax depreciation, cost recovery, amortization, amount realized and gain or loss with respect to such Adjusted Property shall be allocated among the Members to take into account the disparities between the Carrying Values and the adjusted tax basis with respect to such properties in accordance with the provisions of Code Section Sections 704(b) and 704(c) and the applicable Treasury Regulations thereunderunder those sections; provided, however, that any tax items not required to be allocated under Code Sections 704(b) or 704(c) shall be allocated in the same manner as such gain or loss would be allocated for Capital Account purposes under Section 4.1 and Section 4.2. In making such allocations under Code Section 704(c), income, gain, gain deduction and loss and deduction with respect to any Company property contributed to the Company having a Carrying Value that differs from such property’s adjusted federal income tax basis shall, solely for federal income tax purposes, be allocated among the Members so in order to account for any such difference using the “traditional method with curative allocations” pursuant to Treasury Regulations Section 1.704-3(c), with the curative allocations limited to allocations of depreciation and amortization, or such other method or methods as determined by the Board to take account of any variation between the adjusted basis of such property to the Company for federal income tax purposes be appropriate and its Gross Asset Value at the time of its contribution to the Company. If the Gross Asset Value of any Company property is adjusted in accordance with clause (c) or (d) of the definition of Gross Asset Value, then subsequent allocations of income, gain, loss and deduction shall take into account any variation between the adjusted basis of such property for federal income tax purposes and its Gross Asset Value as provided in Code Section 704(c) and the related applicable Treasury Regulations. For purposes of such allocations, the Company shall elect the remedial allocation method described in Treasury Regulation Section 1.704-3(d). (c) All items recapture of income, gain, loss, deduction and credit allocated to the Members in accordance with the provisions hereof and basis allocations recognized by the Company for federal income tax purposes shall be determined without regard to any election under Section 754 of the Code which may be made by the Company. (d) If any deductions for depreciation or cost recovery are recaptured as ordinary income upon resulting from the Transfer of Company propertiesproperty shall, to the ordinary income character of maximum extent possible, be allocated to the Member to whom the deduction that gave rise to such recapture was allocated hereunder to the extent that such Member is allocated any gain from the Transfer of such Transfer property (taking into account the effect of curative allocations). For this purpose, deductions that were allocated as a component of Net Profit or Net Loss shall be treated as if allocated among the Members in the same ratio manner as the deductions giving rise to such ordinary character were allocatedallocation of the related Net Profit or Net Loss.

Income Tax Allocations. (a) Except as provided in this Section 9.46.2, each item of income, gain, loss and deduction of the Company for federal income tax purposes shall be allocated among the Members in the same manner as such items are allocated for book purposes under Sections 9.1, 9.2, 9.3 and 13.4(b)Section 6.1. (b) In accordance with Code Section 704(c) and the applicable Treasury Regulations thereunder, income, gain, loss and deduction with respect to any property contributed to the Company shall, solely for tax purposes, be allocated among the Members so as to take account of any variation between the adjusted basis of such property to the Company for federal Federal income tax purposes and its Gross Asset Value at initial Book Value. In the time of its contribution to event the Company. If the Gross Asset Book Value of any Company property is adjusted in accordance with pursuant to clause (cb) or (d) of the definition of Gross Asset Book Value, then subsequent allocations of income, gain, loss and deduction with respect to such property shall take into account of any variation between the adjusted basis of such property for federal Federal income tax purposes and its Gross Asset Book Value in the same manner as provided in under Code Section 704(c) and the related applicable Treasury RegulationsRegulations thereunder. For purposes of such allocations, the Company shall elect use the remedial allocation method described in Treasury Regulation Section 1.704-3(d)3 selected by the Board. (c) All items of income, gain, loss, deduction and credit allocated to the Members in accordance with the provisions hereof and basis allocations recognized by the Company for federal income tax purposes shall be determined without regard to any election under Section 754 of the Code which may be made by the Company; provided, however, such allocations, once made, shall be adjusted as necessary or appropriate to take into account the adjustments permitted by sections 734 and 743 of the Code. (d) If any deductions for depreciation or depreciation, cost recovery or depletion are recaptured as ordinary income upon the Transfer sale or other disposition of Company properties, the ordinary income character of the gain from such Transfer sale or disposition shall be allocated among the Members in the same ratio as the deductions giving rise to such ordinary income character were allocated.

Income Tax Allocations. (a) Except as provided in this Section 9.46.3, each item of income, gain, loss and deduction of the Company for federal income tax purposes shall be allocated allocated, to the maximum extent possible, among the Members in the same manner as the corresponding items (if any) are allocated for purposes of maintaining Capital Accounts under Section 6.2. (b) The Members recognize that there may be a difference between the Book Value of a Company asset and the asset’s adjusted tax basis at the time of the property’s contribution or revaluation pursuant to this Agreement. In such a case, all items are of tax depreciation, cost recovery, amortization, and gain or loss with respect to such asset shall be allocated among the Members to take into account the disparities between the Book Values and the adjusted tax basis with respect to such properties in accordance with the provisions of Sections 704(b) and 704(c) of the Code and the Treasury Regulations under those sections as determined by the Board. Any tax items not required to be allocated under Sections 704(b) or 704(c) of the Code shall be allocated in the same manner as such gain or loss would be allocated for book purposes under Sections 9.1, 9.2, 9.3 and 13.4(b). (b) In accordance with Code Section 704(c) and the applicable Treasury Regulations thereunder, income, gain, loss and deduction with respect to any property contributed to the Company shall, solely for tax purposes, be allocated among the Members so as to take account of any variation between the adjusted basis of such property to the Company for federal income tax purposes and its Gross Asset Value at the time of its contribution to the Company. If the Gross Asset Value of any Company property is adjusted in accordance with clause (c) or (d) of the definition of Gross Asset Value, then subsequent allocations of income, gain, loss and deduction shall take into account any variation between the adjusted basis of such property for federal income tax purposes and its Gross Asset Value as provided in Code Section 704(c) and the related Treasury Regulations. For purposes of such allocations, the Company shall elect the remedial allocation method described in Treasury Regulation Section 1.704-3(d)6.2. (c) All items of income, gain, loss, deduction and credit allocated to the Members in accordance with the provisions hereof and basis allocations recognized by the Company for federal income tax purposes shall be determined without regard to any election under Section 754 of the Code which may be made by the Company; provided, however, that such allocations, once made, shall be adjusted as necessary or appropriate to take into account the adjustments permitted by Sections 734 and 743 of the Code. (d) If any deductions for depreciation depreciation, amortization or cost recovery are recaptured as ordinary income upon the Transfer sale or other disposition of Company properties, the ordinary income character of the gain from such Transfer sale or disposition shall be allocated among the Members in the same ratio as the deductions giving rise to such ordinary income character were allocated.

Income Tax Allocations. (a) Code Section 704(c). Except as otherwise provided in this Section 9.45.01(f), each item of income, gain, loss loss, and deduction of the Company for federal income tax purposes shall be allocated among the Members in the same manner as such items are allocated for book purposes under Sections 9.1, 9.2, 9.3 and 13.4(b). (b) pursuant to this Section 5.01. In accordance with Code Section 704(c) and the applicable Treasury Regulations thereunder, income, gain, loss loss, and deduction with respect to any property Property contributed to the capital of the Company shall, solely for tax purposes, be allocated among the Members so as to take account of any variation between the adjusted basis of such property Property to the Company for federal income tax purposes and its initial Gross Asset Value at (computed in accordance with the time definition of its contribution to Gross Asset Value) using the Companyremedial allocation method permitted by Treasury Regulation Section 1.704-3(d). If In the event the Gross Asset Value of any Company property asset is adjusted in accordance with clause pursuant to subsection (c) or (db) of the definition of Gross Asset Value, then subsequent allocations of income, gain, loss loss, and deduction with respect to such asset shall take into account of any variation between the adjusted basis of such property asset for federal income tax purposes and its Gross Asset Value in the same manner as provided in under Code Section 704(c) and the related Treasury RegulationsRegulations thereunder. For purposes of Any elections or other decisions relating to such allocations, the Company allocations shall elect the remedial allocation method described in Treasury Regulation Section 1.704-3(d). (c) All items of income, gain, loss, deduction and credit allocated to the Members in accordance with the provisions hereof and basis allocations recognized by the Company for federal income tax purposes shall be determined without regard to any election under Section 754 of the Code which may be made by the Company. Managing Member in any manner that reasonably reflects the purpose and intention of this Agreement; provided, for the avoidance of doubt, any items of loss or deduction attributable to property contributed by a Member shall, to the extent of an amount equal to the excess of (dA) If the federal income tax basis of such property at the time of its contribution over (B) the Gross Asset Value of such property at such time, be allocated in its entirety to such contributing Member and the tax basis of such property for purposes of computing the amounts of all items allocated to any deductions for depreciation or cost recovery are recaptured as ordinary income upon the Transfer of Company properties, the ordinary income character other Member (including a transferee of the gain from such Transfer contributing Member) shall be allocated among equal to its Gross Asset Value upon its contribution to the Members Company. Allocations pursuant to this Section 5.01(f) are solely for purposes of federal, state, and local taxes and shall not affect, or in the same ratio as the deductions giving rise any way be taken into account in computing, any Member’s Capital Account or share of Profits, Losses, other items, or distributions pursuant to such ordinary character were allocatedany provision of this Agreement.

Income Tax Allocations. (a) Except as otherwise provided in this Section 9.44.5, for federal, state and local income tax purposes each item of income, gain, loss and deduction of the Company for federal income tax purposes shall be allocated among to the Members in the same manner as such items are allocated for book purposes under Sections 9.1, 9.2, 9.3 and 13.4(b)pursuant to this Article IV. (b) In accordance with Code Section 704(c) and the applicable Treasury Regulations thereunder, income, gain, loss loss, and deduction with respect to any property contributed to the capital of the Company shall, solely for tax purposes, be allocated among the Members so as to take account of any variation between the adjusted basis of such property to the Company for federal income tax purposes and its Gross Asset initial Value at (computed in accordance with the time definition of its contribution to Value) using the Company. If remedial allocation method permitted by Treasury Regulation Section 1.7043(d). (c) In the Gross Asset event the Value of any Company property Asset is adjusted in accordance with clause pursuant to subparagraph (c) or (dii) of the definition of Gross Asset Value, then subsequent allocations of income, gain, loss loss, and deduction with respect to such Asset shall take into account of any variation between the adjusted basis of such property Asset for federal income tax purposes and its Gross Asset Value in the same manner as provided in under Code Section 704(c) and the related Treasury Regulations. For purposes of such allocations, the Company shall elect the remedial allocation method described in Treasury Regulation Section 1.704-3(d). (c) All items of income, gain, loss, deduction and credit allocated to the Members in accordance with the provisions hereof and basis allocations recognized by the Company for federal income tax purposes shall be determined without regard to any election under Section 754 of the Code which may be made by the CompanyRegulations thereunder. (d) If Any items of loss or deduction attributable to property contributed by a Member shall to the extent of an amount equal to the excess of (A) the federal income tax basis of such property at the time of its contribution over (B) the Value of such property at such time, be allocated in its entirety to such contributing Member and the tax basis of such property for purposes of computing the amounts of all items allocated to any deductions for depreciation or cost recovery are recaptured as ordinary income upon the Transfer of Company properties, the ordinary income character other Member (including a transferee of the gain from such Transfer contributing Member) shall be allocated among the Members equal to its Value. (e) Allocations pursuant to this Section 4.5 are solely for federal, state, and local income taxes and shall not affect, or in the same ratio as the deductions giving rise any way be taken into account in computing, any Member’s Capital Account or share of Profits, Losses, other items, or distributions pursuant to such ordinary character were allocatedany provision of this Agreement.

Income Tax Allocations. (a) Except as provided in this Section 9.44.3, each item of income, gain, loss and deduction of the Company for federal income tax purposes shall be allocated among the Members in the same manner as such items are allocated for book Capital Account purposes under Sections 9.1, 9.2, 9.3 Section 4.1 and 13.4(b)Section 4.2. (b) In accordance with Code Section 704(c) and the applicable Treasury Regulations thereunder, income, gain, loss and The deduction for depletion with respect to any each separate oil and gas property contributed to (as defined in Section 614 of the Company Internal Revenue Code) shall, solely for tax purposesin accordance with Section 613A(c)(7)(D) of the Internal Revenue Code, be allocated among the Members so as to take account of any variation between the adjusted basis of such property to the Company computed for federal income tax purposes and its Gross Asset Value at separately by the time of its contribution to Members rather than the Company. If the Gross Asset Value of any Company property is adjusted in accordance with clause (c) or (d) of the definition of Gross Asset Value, then subsequent allocations of income, gain, loss and deduction shall take into account any variation between the adjusted basis of such property for federal income tax purposes and its Gross Asset Value Except as provided in Code Section 704(c) and the related Treasury Regulations. For 4.3(d), for purposes of such allocationscomputation, the Company shall elect the remedial allocation method described in Treasury Regulation Section 1.704-3(d). (c) All items adjusted tax basis of income, gain, loss, deduction each oil and credit allocated to the Members in accordance with the provisions hereof and basis allocations recognized by the Company for federal income tax purposes shall be determined without regard to any election under Section 754 of the Code which may be made by the Company. (d) If any deductions for depreciation or cost recovery are recaptured as ordinary income upon the Transfer of Company properties, the ordinary income character of the gain from such Transfer gas property shall be allocated among the Members in proportion to their Sharing Ratios at the time of the acquisition of such property. Each Member, with the assistance of the Tax Matters Member, shall separately keep records of its share of the adjusted tax basis in each separate oil and gas property, adjust such share of the adjusted tax basis for any cost or percentage depletion allowable with respect to such property and use such adjusted tax basis in the computation of its cost depletion or in the computation of its gain or loss on the Transfer of such property by the Company. Upon the request of the Tax Matters Member, each Member shall advise the Tax Matters Member of its adjusted tax basis in each separate oil and gas property and any depletion computed with respect thereto, both as computed in accordance with the provisions of this subsection. The Tax Matters Member may rely on such information and, if it is not provided by the Member, may make such reasonable assumptions as it shall determine with respect thereto. (c) Except as provided in Section 4.3(d), for the purposes of the separate computation of gain or loss by each Member on the Transfer of each separate oil and gas property (as defined in Section 614 of the Internal Revenue Code), the Company’s allocable share of the “amount realized” (as such term is defined in Section 1001(b) of the Internal Revenue Code) from such Transfer shall be allocated for federal income tax purposes among the Members as follows: (i) first, to the extent such amount realized constitutes a recovery of the Simulated Basis of the property, to the Members in the same ratio proportion as the depletable basis of such property was allocated to the Members pursuant to Section 4.3(b) (without regard to any special allocation of basis under Section 4.3(d)); and (ii) second, the remainder of such amount realized, if any, to the Members so that, to the maximum extent possible, the amount realized that is allocated to each Member under this Section 4.3(c)(ii) will equal such Member’s share of the Simulated Gain recognized by the Company from such Transfer. (d) The Members recognize that with respect to Adjusted Property, there will be a difference between the Carrying Value of such property at the time of revaluation or contribution and the adjusted tax basis of such property at the time. All items of tax depreciation, cost recovery, amortization, adjusted tax basis of depletable properties, amount realized and gain or loss with respect to such Adjusted Property shall be allocated among the Members to take into account the disparities between the Carrying Values and the adjusted tax basis with respect to such properties in accordance with the provisions of Sections 704(b) and 704(c) of the Internal Revenue Code and the Treasury Regulations under those sections; provided, however, that any tax items not required to be allocated under Sections 704(b) or 704(c) of the Internal Revenue Code shall be allocated in the same manner as such gain or loss would be allocated for Capital Account purposes under Section 4.1 and Section 4.2. In making such allocations, the Board shall use such method or methods of allocation as it shall determine, in its absolute discretion, to be reasonable and in accord with the applicable Treasury Regulations. (e) All recapture of income tax deductions giving resulting from the Transfer of Company property shall, to the maximum extent possible, be allocated to the Member to whom the deduction that gave rise to such ordinary character recapture was allocated hereunder to the extent that such Member is allocated any gain from the Transfer of such property. For this purpose, deductions that were allocatedallocated as a component of Net Profit or Net Loss shall be treated as if allocated in the same manner as the allocation of the related Net Profit or Net Loss. (f) If, as a result of an exercise of a noncompensatory option, a Capital Account reallocation is required under Treasury Regulation Section 1.704-1(b)(2)(iv)(s)(3), the Company shall make corrective allocations pursuant to Treasury Regulation Section 1.704-1(b)(4)(x).

Income Tax Allocations. (a) Except as provided in this Section 9.44.4, each item of income, gain, loss and deduction of the Company for federal income tax purposes shall be allocated among the Members in the same manner as such items are allocated for book Capital Account purposes under Sections 9.1, 9.2, 9.3 Section 4.1 and 13.4(b)Section 4.2. (b) In accordance with Code Section 704(c) and the applicable Treasury Regulations thereunder, income, gain, loss and The deduction for depletion with respect to any each separate oil and gas property contributed to (as defined in Section 614 of the Company Internal Revenue Code) shall, solely in accordance with Section 613A(c)(7)(D) of the Internal Revenue Code, be computed for federal income tax purposespurposes separately by the Members rather than the Company. Except as provided in Section 4.4(d), for purposes of such computation, the adjusted tax basis of each oil and gas property shall be allocated among the Members so as in proportion to take account their Sharing Ratios at the time of any variation between the acquisition of such property. Each Member, with the assistance of the Tax Matters Member, shall separately keep records of its share of the adjusted tax basis in each separate oil and gas property, adjust such share of the adjusted tax basis for any cost or percentage depletion allowable with respect to such property and use such adjusted tax basis in the computation of its cost depletion or in the computation of its gain or loss on the Transfer of such property to by the Company Company. Upon the request of the Tax Matters Member, each Member shall advise the Tax Matters Member of its adjusted tax basis in each separate oil and gas property and any depletion computed with respect thereto, both as computed in accordance with the provisions of this subsection. The Tax Matters Member may rely on such information and, if it is not provided by the Member, may make such reasonable assumptions as it shall determine with respect thereto (c) Except as provided in Section 4.4(d), for the purposes of the separate computation of gain or loss by each Member on the Transfer of each separate oil and gas property (as defined in Section 614 of the Internal Revenue Code), the Company’s allocable share of the “amount realized” (as such term is defined in Section 1001(b) of the Internal Revenue Code) from such Transfer shall be allocated for federal income tax purposes and its Gross Asset among the Members as follows: (i) first, to the extent such amount realized constitutes a recovery of the Simulated Basis of the property, to the Members in the same proportion as the depletable basis of such property was allocated to the Members pursuant to Section 4.4(b) (without regard to any special allocation of basis under Section 4.4(d)); and (ii) second, the remainder of such amount realized, if any, to the Members so that, to the maximum extent possible, the amount realized that is allocated to each Member under this Section 4.4(c)(ii) will equal such Member’s share of the Simulated Gain recognized by the Company from such Transfer. (d) The Members recognize that with respect to Adjusted Property, there will be a difference between the Carrying Value of such property at the time of its contribution to the Company. If the Gross Asset Value of any Company property is adjusted in accordance with clause (c) or (d) of the definition of Gross Asset Value, then subsequent allocations of income, gain, loss revaluation and deduction shall take into account any variation between the adjusted tax basis of such property at the time. All items of tax depreciation, cost recovery, amortization, adjusted tax basis of depletable properties, amount realized and gain or loss with respect to such Adjusted Property shall be allocated among the Members to take into account the disparities between the Carrying Values and the adjusted tax basis with respect to such properties in accordance with the provisions of Sections 704(b) and 704(c) of the Internal Revenue Code and the Treasury Regulations under those sections; provided, however, that any tax items not required to be allocated under Sections 704(b) or 704(c) of the Internal Revenue Code shall be allocated in the same manner as such gain or loss would be allocated for federal income tax Capital Account purposes under Section 4.1 and its Gross Asset Value as provided in Code Section 4.2. In making such allocations under Section 704(c) and of the related Treasury Regulations. For purposes of such allocationsInternal Revenue Code, the Company Board shall elect use the remedial allocation method described in pursuant to Treasury Regulation Section 1.704-3(d). (ce) All items recapture of income, gain, loss, deduction and credit allocated to the Members in accordance with the provisions hereof and basis allocations recognized by the Company for federal income tax purposes shall be determined without regard to any election under Section 754 of the Code which may be made by the Company. (d) If any deductions for depreciation or cost recovery are recaptured as ordinary income upon resulting from the Transfer of Company propertiesproperty shall, to the ordinary income character of maximum extent possible, be allocated to the Member to whom the deduction that gave rise to such recapture was allocated hereunder to the extent that such Member is allocated any gain from the Transfer of such Transfer property. For this purpose, deductions that were allocated as a component of Net Profit or Net Loss shall be treated as if allocated among the Members in the same ratio manner as the deductions giving rise to such ordinary character were allocatedallocation of the related Net Profit or Net Loss.

Income Tax Allocations. (a) Except as provided in this Section 9.49.3, each item of income, gain, loss and deduction of the Company Partnership for federal income tax purposes shall will be allocated among the Members Partners in the same manner as such items are allocated for book purposes under Sections 9.1, Section 9.1 and Section 9.2, 9.3 and 13.4(b). (b) In accordance with Code Section 704(c) and the applicable Treasury Regulations thereunder, income, gain, loss and deduction with respect to any property contributed to the Company shallPartnership will, solely for tax purposes, be allocated among the Members Partners so as to take account of any variation between the adjusted basis of such property to the Company Partnership for federal income tax purposes and its Gross Asset Value at the time of its contribution to the CompanyPartnership. If the Gross Asset Value of any Company Partnership property is adjusted in accordance with clause (cb) or (d) of the definition of Gross Asset Value, then subsequent allocations of income, gain, loss and deduction shall will take into account any variation between the adjusted basis of such property for federal income tax purposes and its Gross Asset Value as provided in Code Section 704(c) and the related Treasury Regulations. For purposes of such allocations, the Company shall Partnership will elect the remedial allocation method described in Treasury Regulation Regulations Section 1.704-3(d). (c) All items of income, gain, loss, deduction and credit allocated to the Members Partners in accordance with the provisions hereof and basis allocations recognized by the Company Partnership for federal income tax purposes shall will be determined without regard to any election under Section 754 of the Code which may be made by the CompanyPartnership. (d) If any deductions for depreciation or cost recovery are recaptured as ordinary income upon the Transfer of Company properties, the ordinary income character of the gain from such Transfer shall will be allocated among the Members Partners in the same ratio as the deductions giving rise to such ordinary character were allocated.

Income Tax Allocations. (a) Except as provided in this Section 9.44.3, each item of income, gain, loss and deduction of the Company for federal income tax purposes shall be allocated among the Members in the same manner as such items are allocated for book Capital Account purposes under Sections 9.1, 9.2, 9.3 Section 4.1 and 13.4(b)Section 4.2. (b) In accordance with Code Section 704(c) and the applicable Treasury Regulations thereunder, income, gain, loss and The deduction for depletion with respect to any each separate oil and gas property contributed to (as defined in Section 614 of the Company Internal Revenue Code) shall, solely for tax purposesin accordance with Section 613A(c)(7)(D) of the Internal Revenue Code, be allocated among the Members so as to take account of any variation between the adjusted basis of such property to the Company computed for federal income tax purposes and its Gross Asset Value at separately by the time of its contribution to Members rather than the Company. If the Gross Asset Value of any Company property is adjusted in accordance with clause (c) or (d) of the definition of Gross Asset Value, then subsequent allocations of income, gain, loss and deduction shall take into account any variation between the adjusted basis of such property for federal income tax purposes and its Gross Asset Value Except as provided in Code Section 704(c) and the related Treasury Regulations. For 4.3(d), for purposes of such allocationscomputation, the Company shall elect the remedial allocation method described in Treasury Regulation Section 1.704-3(d). (c) All items adjusted tax basis of income, gain, loss, deduction each oil and credit allocated to the Members in accordance with the provisions hereof and basis allocations recognized by the Company for federal income tax purposes shall be determined without regard to any election under Section 754 of the Code which may be made by the Company. (d) If any deductions for depreciation or cost recovery are recaptured as ordinary income upon the Transfer of Company properties, the ordinary income character of the gain from such Transfer gas property shall be allocated among the Members in proportion to their Sharing Ratios at the time of the acquisition of such property. Each Member, with the assistance of the Tax Matters Member, shall separately keep records of its share of the adjusted tax basis in each separate oil and gas property, adjust such share of the adjusted tax basis for any cost or percentage depletion allowable with respect to such property and use such adjusted tax basis in the computation of its cost depletion or in the computation of its gain or loss on the Transfer of such property by the Company. Upon the request of the Tax Matters Member, each Member shall advise the Tax Matters Member of its adjusted tax basis in each separate oil and gas property and any depletion computed with respect thereto, both as computed in accordance with the provisions of this subsection. The Tax Matters Member may rely on such information and, if it is not provided by the Member, may make such reasonable assumptions as it shall determine with respect thereto (c) Except as provided in Section 4.3(d), for the purposes of the separate computation of gain or loss by each Member on the Transfer of each separate oil and gas property (as defined in Section 614 of the Internal Revenue Code), the Company’s allocable share of the “amount realized” (as such term is defined in Section 1001(b) of the Internal Revenue Code) from such Transfer shall be allocated for federal income tax purposes among the Members as follows: (i) first, to the extent such amount realized constitutes a recovery of the Simulated Basis of the property, to the Members in the same ratio proportion as the depletable basis of such property was allocated to the Members pursuant to Section 4.3(b) (without regard to any special allocation of basis under Section 4.3(d)); and (ii) second, the remainder of such amount realized, if any, to the Members so that, to the maximum extent possible, the amount realized that is allocated to each Member under this Section 4.3(c)(i) will equal such Member’s share of the Simulated Gain recognized by the Company from such Transfer. (d) The Members recognize that with respect to Adjusted Property, there will be a difference between the Carrying Value of such property at the time of revaluation or contribution and the adjusted tax basis of such property at the time. All items of tax depreciation, cost recovery, amortization, adjusted tax basis of depletable properties, amount realized and gain or loss with respect to such Adjusted Property shall be allocated among the Members to take into account the disparities between the Carrying Values and the adjusted tax basis with respect to such properties in accordance with the provisions of Sections 704(b) and 704(c) of the Internal Revenue Code and the Treasury Regulations under those sections; provided, however, that any tax items not required to be allocated under Sections 704(b) or 704(c) of the Internal Revenue Code shall be allocated in the same manner as such gain or loss would be allocated for Capital Account purposes under Section 4.1 and Section 4.2. In making such allocations, the Board shall use such method or methods of allocation as it shall determine, in its absolute discretion, to be reasonable and in accord with the applicable Treasury Regulations. (e) All recapture of income tax deductions giving resulting from the Transfer of Company property shall, to the maximum extent possible, be allocated to the Member to whom the deduction that gave rise to such ordinary character recapture was allocated hereunder to the extent that such Member is allocated any gain from the Transfer of such property. For this purpose, deductions that were allocatedallocated as a component of Net Profit or Net Loss shall be treated as if allocated in the same manner as the allocation of the related Net Profit or Net Loss.

Income Tax Allocations. (a) Except as provided in this Section 9.45.2, each item of income, gain, loss and deduction of the Company for federal income tax purposes shall be allocated allocated, to the maximum extent possible, among the Members in the same manner as such the corresponding items (if any) are allocated for book purposes of maintaining Capital Accounts under Sections 9.1, 9.2, 9.3 and 13.4(b)Section 5.1. (b) In accordance with Code Section 704(c) The Members recognize that there may be a difference between the Book Value of a Company asset and the applicable Treasury Regulations thereunderasset’s adjusted tax basis at the time of the property’s contribution or revaluation pursuant to this Agreement. In such a case, incomeall items of tax depreciation, gaincost recovery, amortization, and gain or loss and deduction with respect to any property contributed to the Company shall, solely for tax purposes, such asset shall be allocated among the Members so as to take into account of any variation the disparities between the Book Values and the adjusted tax basis of with respect to such property to the Company for federal income tax purposes and its Gross Asset Value at the time of its contribution to the Company. If the Gross Asset Value of any Company property is adjusted properties in accordance with clause (cthe provisions of Sections 704(b) or (dand 704(c) of the definition of Gross Asset Value, then subsequent allocations of income, gain, loss and deduction shall take into account any variation between the adjusted basis of such property for federal income tax purposes and its Gross Asset Value as provided in Code Section 704(c) and the related Treasury Regulations. For purposes of such allocations, Regulations utilizing the Company shall elect the “remedial allocation method described in method” under Treasury Regulation Section 1.704-3(d). (c) All items of income, gain, loss, deduction and credit allocated to the Members in accordance with the provisions hereof and basis allocations recognized by the Company for federal income tax purposes shall be determined without regard to any election under Section 754 of the Code which may be made by the Company; provided, however, that such allocations, once made, shall be adjusted as necessary or appropriate to take into account the adjustments permitted by Sections 734 and 743 of the Code. (d) If any deductions for depreciation depreciation, amortization or cost recovery are recaptured as ordinary income upon the Transfer sale or other disposition of Company properties, the ordinary income character of the gain from such Transfer sale or disposition shall be allocated among the Members in the same ratio as the deductions giving rise to such ordinary income character were allocated. (e) All items of income, gain, loss, deduction and credit allocable to Units that have been transferred shall be allocated between the transferor and the transferee based on the portion of the calendar year during which each was recognized as the owner of such Units, without regard to the results of Company operations during any particular portion of that calendar year and without regard to whether cash distributions were made to the transferor or the transferee during that calendar year; provided, however, that this allocation must be made in accordance with a method permissible under Code Section 706 and the regulations thereunder.

Income Tax Allocations. (a) Except as provided in this Section 9.45.3, each item of income, gain, loss and deduction of the Company for federal income tax purposes shall be allocated among the Members in the same manner as such items are allocated for book purposes under Sections 9.1, 9.2, 9.3 and 13.4(b)Section 5.2. (b) In accordance with Code Section 704(c) The Members recognize that there may be a difference between the Gross Asset Value of a Company asset and the applicable Treasury Regulations thereunderasset’s adjusted tax basis at the time of the property’s contribution or revaluation pursuant to this Agreement. In such a case, incomeall items of tax depreciation, gaincost recovery, amortization, and gain or loss and deduction with respect to any property contributed to the Company shall, solely for tax purposes, such asset shall be allocated among the Members so as to take into account of any variation the disparities between the adjusted basis of such property to the Company for federal income tax purposes and its Gross Asset Value at the time of its contribution to the Company. If the Gross Asset Value of any Company property is Values and the adjusted tax basis with respect to such properties in accordance with clause (cthe provisions of sections 704(b) or (dand 704(c) of the definition of Gross Asset ValueCode and the Treasury Regulations under those sections; provided, then subsequent allocations of incomehowever, gain, loss and deduction shall take into account that any variation between the adjusted basis of such property for federal income tax purposes and its Gross Asset Value as provided in Code Section items not required to be allocated under sections 704(b) or 704(c) of the Code shall be allocated in the same manner as such gain or loss would be allocated for book purposes under Section 5.2. The Manager shall choose an allocation method permitted by the Treasury Regulations and the related Treasury Regulations. For purposes of make any elections or other decisions relating to such allocations, the Company shall elect the remedial allocation method described in Treasury Regulation Section 1.704-3(d). (c) All items of income, gain, loss, deduction and credit allocated to the Members in accordance with the provisions hereof and basis allocations recognized by the Company for federal income tax purposes shall be determined without regard to any election under Section 754 of the Code which may be made by the Company; provided, however, such allocations, once made, shall be adjusted as necessary or appropriate to take into account the adjustments permitted by sections 734 and 743 of the Code. (d) If any deductions for depreciation or depreciation, cost recovery or depletion are recaptured as ordinary income upon the Transfer sale or other disposition of Company properties, the ordinary income character of the gain from such Transfer sale or disposition shall be allocated among the Members in the same ratio as the deductions giving rise to such ordinary income character were allocated.

Income Tax Allocations. (a) Except as provided in this Section 9.46.3, each item of income, gain, loss and deduction of the Company for federal income tax purposes shall be allocated among the Members in the same manner as such items are allocated for book purposes under Sections 9.1, 9.2, 9.3 and 13.4(b)Section 6.2. (b) In accordance with Code Section 704(c) The Members recognize that there may be a difference between the Book Value of a Company asset and the applicable Treasury Regulations thereunderasset’s adjusted tax basis at the time of the property’s contribution or revaluation pursuant to this Agreement. In such a case, incomeall items of tax depreciation, gaincost recovery, amortization and gain or loss and deduction with respect to any property contributed to the Company shall, solely for tax purposes, such asset shall be allocated among the Members so as to take into account of any variation the disparities between the Book Values and the adjusted tax basis of with respect to such property to the Company for federal income tax purposes and its Gross Asset Value at the time of its contribution to the Company. If the Gross Asset Value of any Company property is adjusted properties in accordance with clause (cthe provisions of Sections 704(b) or (dand 704(c) of the definition of Gross Asset ValueCode and the Treasury Regulations under those sections; provided, then subsequent allocations of incomehowever, gain, loss and deduction shall take into account that any variation between the adjusted basis of such property for federal income tax purposes and its Gross Asset Value as provided in Code Section items not required to be allocated under Sections 704(b) or 704(c) and of the related Treasury RegulationsCode shall be allocated in the same manner as such gain or loss would be allocated for book purposes under Section 6.2. For purposes of The Board shall make any elections or other decisions relating to such allocations, the Company shall elect the remedial allocation method described in Treasury Regulation Section 1.704-3(d). (c) All items of income, gain, loss, deduction and credit allocated to the Members in accordance with the provisions hereof and basis allocations recognized by the Company for federal income tax purposes shall be determined without regard to any election under Section 754 of the Code which may be made by the Company; provided, however, such allocations, once made, shall be adjusted as necessary or appropriate to take into account the adjustments permitted by Sections 734 and 743 of the Code. (d) If any deductions for depreciation or depreciation, cost recovery or depletion are recaptured as ordinary income upon the Transfer sale or other disposition of Company properties, the ordinary income character of the gain from such Transfer sale or disposition shall be allocated among the Members in the same ratio as the deductions giving rise to such ordinary income character were allocated.

Income Tax Allocations. (a) Except as provided in this Section 9.46.3, each item of income, gain, loss and deduction of the Company for federal income tax purposes shall be allocated among the Members in the same manner as such items are allocated for book purposes under Sections 9.1, 9.2, 9.3 and 13.4(b)Section 6.2. (b) In accordance with Code Section 704(c) The Members recognize that there may be a difference between the Book Value of a Company asset and the applicable Treasury Regulations thereunderasset’s adjusted tax basis at the time of the property’s contribution or revaluation pursuant to this Agreement. In such a case, incomeall items of tax depreciation, gaincost recovery, amortization, and gain or loss and deduction with respect to any property contributed to the Company shall, solely for tax purposes, such asset shall be allocated among the Members so as to take into account of any variation the disparities between the Book Values and the adjusted tax basis of with respect to such property to the Company for federal income tax purposes and its Gross Asset Value at the time of its contribution to the Company. If the Gross Asset Value of any Company property is adjusted properties in accordance with clause (cthe provisions of Sections 704(b) or (dand 704(c) of the definition of Gross Asset Value, then subsequent allocations of income, gain, loss and deduction shall take into account any variation between the adjusted basis of such property for federal income tax purposes and its Gross Asset Value as provided in Code Section 704(c) and the related Treasury RegulationsRegulations under those sections. For purposes of The Board shall make any elections or other decisions relating to such allocations, the Company shall elect the remedial allocation method described in Treasury Regulation Section 1.704-3(d). (c) All items of income, gain, loss, deduction and credit allocated to the Members in accordance with the provisions hereof and basis allocations recognized by the Company for federal income tax purposes shall be determined without regard to any election under Section 754 of the Code which may be made by the Company; provided, however, such allocations, once made, shall be adjusted as necessary or appropriate to take into account the adjustments permitted by Sections 734 and 743 of the Code. (d) If any deductions for depreciation or depreciation, cost recovery or depletion are recaptured as ordinary income upon the Transfer sale or other disposition of Company properties, the ordinary income character of the gain from such Transfer sale or disposition shall be allocated among the Members in the same ratio as the deductions giving rise to such ordinary income character were allocated.