Common use of Net Income and Net Loss Clause in Contracts

Net Income and Net Loss. (a) Except as otherwise provided in this Agreement, the net income and net loss of the Company for each Fiscal Year shall be allocated in accordance with each Member’s Percentage Interest. (b) Notwithstanding anything herein to the contrary, if a Member has a deficit balance in such Member’s Capital Account (excluding from such Member’s deficit Capital Account any amount which such Member is obligated to restore in accordance with Treas. Reg. § 1.704-1(b)(2)(ii)(c), as well as any amount such Member is treated as obligated to restore under Treas. Reg. §§ 1.704-2(g)(1) and 1.704-2(i)(5)) and unexpectedly receives an adjustment, allocation or distribution described in Treas. Reg. § 1.704-1(b)(2)(ii)(d)(4), (5) or (6), then such Member will be allocated items of income and gain in an amount and manner sufficient to eliminate the deficit balance in such Member’s Capital Account as quickly as possible. If there is, an allocation to a Member pursuant to this Section 6.1(b), then future allocations of net income pursuant to Section 6.1(a) shall be adjusted so that those Members who were allocated less income, or a greater amount of loss, by reason of the allocation made pursuant to this Section 6.1(b), shall be allocated additional net income in an equal amount. It is the intention of the parties that the provisions of this Section 6.1(b) constitute a “qualified income offset” within the meaning of Treas. Reg. §§ 1.704-1(b)(2)(ii)(d), and such provisions shall be so construed. (c) If there is a net decrease in the Company’s Minimum Gain (within the meaning of Treas. Reg. § 1.704-2(b)(2)) or Partner Nonrecourse Debt Minimum Gain (within the meaning of Treas. Reg. § 1.704-2(i)(3)) during any Fiscal Year, each Member shall be allocated, before any other allocations hereunder, items of income and gain for such Fiscal Year (and subsequent Fiscal Years, if necessary), in an amount equal to such Member’s share (determined in accordance with Treas. Reg. §§ 1.704-2(g) and 1.704-2(i)(5), as applicable) of the net decrease in the Company’s Minimum Gain or Partner Nonrecourse Debt Minimum Gain, as applicable, for such Fiscal Year; provided, however, that no such allocation shall be required if any of the exceptions set forth in Treas. Reg. § 1.704-2(f) apply. It is the intention of the parties that this provision constitute a “minimum gain chargeback” within the meaning of Treas. Reg. §§ 1.704-2(f) and 1.704-2(i)(4), and this provision shall be so construed. (d) Notwithstanding anything herein to the contrary, the Company’s partner nonrecourse deductions (within the meaning of Treas. Reg. § 1.704-2(i)(2)) shall be allocated solely to the Member who has the economic risk of loss with respect to the partner nonrecourse liability related thereto in accordance with the provisions of Treas. Reg. § 1.704-2(i)(1). (e) Notwithstanding the provisions of Section 6.1(a), no net losses shall be allocated to a Member if such allocation would result in such Member having a deficit balance in such Member’s Capital Account (excluding from such Member’s deficit Capital Account any amount such Member is obligated to restore in accordance with Treas. Reg. § 1.704-1(b)(2)(ii)(c), as well as any amount such Member is treated as obligated to restore under Treas. Reg. §§ 1.704-2(g)(1) and 1.704-20(5)). In such case, the net loss that would have been allocated to such Member shall be allocated to the other Members to whom such loss can be allocated without violation of the provisions of this Section 6.1(e) in proportion to their respective Percentage Interest among themselves. (f) Notwithstanding the provisions of Section 6.1(a) hereof, to the extent losses are allocated to the Members by virtue of Section 6.1(e) hereof, the net income of the Company thereafter recognized shall be allocated to such Members (in proportion to the losses previously allocated to them pursuant to Section 6.1(e) hereof) until such time as the net income of the Company allocated to them pursuant to this Section 6.1(f) equals the net losses allocated to them pursuant to Section 6.1(e) hereof. (g) For Federal state and local income tax purposes only, with respect to any assets contributed by a Member to the Company (“Contributed Assets”) which have an agreed fair market value on the date of their contribution which differs from the Member’s adjusted basis therefor as of the date of contribution, the allocation of depreciation and gain or loss with respect to such Contributed Assets shall be determined in accordance with the provisions of Section 704(c) of the Code and the regulations promulgated thereunder using the traditional method within the meaning of Treas. Reg. § 1.704-3(b). For purposes of this Agreement, an asset shall be deemed a Contributed Asset if it has a basis determined, in whole or in part, by reference to the basis of a Contributed Asset (including an asset previously deemed to be a Contributed Asset pursuant to this sentence). Notwithstanding the foregoing, if the gain from the sale of any Contributed Asset is being reported on the installment method for income tax purposes, then the total amount of gain which is to be recognized by each of the Members in accordance with the above provision in all taxable years shall be computed and the amount of gain to be recognized by each of the Members in each year shall be in proportion to the total gain to be recognized by each of the Members in all taxable years.

Net Income and Net Loss. (a) Except as otherwise provided in this Agreement, the net income and net loss of the Company for each Fiscal Year shall be allocated in accordance with each Member’s Percentage Interest100% to PHCI ("Allocation Interests"). (b) Notwithstanding anything herein to the contrary, if a Member has a deficit balance in such Member’s 's Capital Account (excluding from such Member’s 's deficit Capital Account any amount which such Member is obligated to restore in accordance with Treas. Reg. § Section 1.704-1(b)(2)(ii)(cl(b)(2)(ii)(c), as well as any amount such Member is treated as obligated to restore under Treas. Reg. §§ Sections 1.704-2(g)(12(g)(l) and 1.704-2(i)(5)) and unexpectedly receives an adjustment, allocation or distribution described in Treas. Reg. § Section 1.704-1(b)(2)(ii)(d)(4l(b)(2)(ii)(d)(4), (5) or (6), then such Member will be allocated items of income and gain in an amount and manner sufficient to eliminate the deficit balance in such Member’s 's Capital Account as quickly as possible. If there is, is an allocation to a Member pursuant to this Section 6.1(b6. l(b), then future allocations of net income pursuant to Section 6.1(a6.1 (a) shall be adjusted so that those Members who were allocated less income, or a greater amount of loss, by reason of the allocation made pursuant to this Section 6.1(b), shall be allocated additional net income in an equal amount. It is the intention of the parties that the provisions of this Section 6.1(b) constitute a “"qualified income offset” " within the meaning of Treas. Reg. §§ Sections 1.704-1(b)(2)(ii)(dl(b)(2)(ii)(d), and such provisions shall be so construed. (c) If there is a net decrease in the Company’s 's Minimum Gain (within the meaning of Treas. Reg. § Section 1.704-2(b)(2)) or Partner Nonrecourse Debt Minimum Gain (within the meaning of Treas. Reg. § Section 1.704-2(i)(3)) during any Fiscal Year, each Member shall be allocated, before any other allocations hereunder, items of income and gain for such Fiscal Year (and subsequent Fiscal Years, if necessary), in an amount equal to such Member’s 's share (determined in accordance with Treas. Reg. §§ Sections 1.704-2(g) and 1.704-2(i)(5), as applicable) of the net decrease in the Company’s Minimum Gain or Partner Nonrecourse Debt Minimum Gain, as applicable, for such Fiscal Year; provided, however, that no such allocation shall be required if any of the exceptions set forth in Treasdecrease Section 1. Reg. § 1.704704-2(f2(1) apply. It is the intention of the parties that this provision constitute a “"minimum gain chargeback” " within the meaning of Treas. Reg. §§ Sections 1.704-2(f) and 1.704-2(i)(4), and this provision shall be so construed. (d) Notwithstanding anything herein to the contrary, the Company’s 's partner nonrecourse deductions (within the meaning of Treas. Reg. § Section 1.704-2(i)(2)) shall be allocated solely to the Member who has the economic risk of loss with respect to the partner nonrecourse no recourse liability related thereto in accordance with the provisions of Treas. Reg. Section 1. § 1.704704-2(i)(12(i)(l). (e) Notwithstanding the provisions of Section 6.1(a6.1 (a), no net losses shall be allocated to a Member if such allocation would result in such Member having a deficit balance in such Member’s 's Capital Account (excluding from such Member’s 's deficit Capital Account any amount such Member is obligated to restore in accordance with Treas. Reg. § 1.704-1(b)(2)(ii)(cSection 1.704- l(b)(2)(ii)(c), as well as any amount such Member is treated as obligated to restore under Treas. Reg. §§ Sections 1.704-2(g)(12(g)(l) and 1.704-20(52(i)(5)). In such case, the net loss that would have been allocated to such Member shall be allocated to the other Members to whom such loss can be allocated without violation of the provisions of this Section 6.1(e) in proportion to their respective Percentage Interest Allocation Interests among themselves. (f) Notwithstanding the provisions of Section 6.1(a6.1 (a) hereof, to the extent losses are allocated to the Members by virtue of Section 6.1(e) hereof, the net income of the Company thereafter recognized shall be allocated to such Members (in proportion to the losses previously allocated to them pursuant to Section 6.1(e) hereof) hereof until such time as the net income of the Company allocated to them pursuant to this Section 6.1(f) equals the net losses allocated to them pursuant to Section 6.1(e) hereof. (g) For Federal state and local income tax purposes only, with respect to any assets contributed by a Member to the Company (“"Contributed Assets”") which have an agreed fair market value on the date of their contribution which differs from the Member’s 's adjusted basis therefor as of the date of contribution, the allocation of depreciation and gain or loss with respect to such Contributed Assets shall be determined in accordance with the provisions of Section 704(c) of the Code and the regulations promulgated thereunder using the traditional method with curative allocations within the meaning of Treas. Reg. Section 1. § 1.704704-3(b3(c). For purposes of this Agreement, an asset shall be deemed a Contributed Asset if it has a basis determined, in whole or in part, by reference to the basis of a Contributed Asset (including an asset previously deemed to be a Contributed Asset pursuant to this sentence). Notwithstanding the foregoing, if the gain from the sale of any Contributed Asset is being reported on the installment method for income tax purposes, then the total amount of gain which is to be recognized by each of the Members in accordance with the above provision in all taxable years shall be computed and the amount of gain to be recognized by each of the Members in each year shall be in proportion to the total gain to be recognized by each of the Members in all taxable years.

Net Income and Net Loss. (a) Except as otherwise provided in this Agreement, the net income and net loss of the Company for each Fiscal Year shall be allocated in accordance with each Member’s Percentage Interest100% to PNG ("Allocation Interests"). (b) Notwithstanding anything herein to the contrary, if a Member has a deficit balance in such Member’s 's Capital Account (excluding from such Member’s 's deficit Capital Account any amount which such Member is obligated to restore in accordance with Treas. Reg. § Reg Section 1.704-1(b)(2)(ii)(cl(b)(2)(ii)(c), as well as any amount such Member is treated as obligated to restore under Treas. Reg. §§ Sections 1.704-2(g)(12(g)(l) and 1.704-2(i)(5)) and unexpectedly receives an adjustment, allocation or distribution described in Treas. Reg. § Section 1.704-1(b)(2)(ii)(d)(4l(b)(2)(ii)(d)(4), (5) or (6), then such Member will be allocated items of income and gain in an amount and manner sufficient to eliminate the deficit balance in such Member’s 's Capital Account as quickly as possible. If there is, is an allocation to a Member pursuant to this Section 6.1(b6.1 (b), then future allocations of net income pursuant to Section 6.1(a) shall be adjusted so that those Members who were allocated less income, or a greater amount of loss, by reason of the allocation made pursuant to this Section 6.1(b), shall be allocated additional net income in an equal amount. It is the intention of the parties that the provisions of this Section 6.1(b) constitute a “"qualified income offset” " within the meaning of Treas. Reg. §§ Sections 1.704-1(b)(2)(ii)(dl(b)(2)(ii)(d), and such provisions shall be so construed. (c) If there is a net decrease in the Company’s 's Minimum Gain (within the meaning of Treas. Reg. § Section 1.704-2(b)(2)) or Partner Nonrecourse Debt Minimum Gain (within the meaning of Treas. Reg. § Reg Section 1.704-2(i)(3)) during any Fiscal Year, each Member shall be allocated, before any other allocations hereunder, items of income and gain for such Fiscal Year (and subsequent Fiscal Years, if necessary), in an amount equal to such Member’s 's share (determined in accordance with Treas. Reg. §§ Sections 1.704-2(g) and 1.704-2(i)(5), as applicable) of the net decrease in the Company’s Minimum Gain or Partner Nonrecourse Debt Minimum Gain, as applicable, for such Fiscal Year; provided, however, that no such allocation shall be required if any of the exceptions set forth in Treasdecrease Section 1. Reg. § 1.704704-2(f) apply. It is the intention of the parties that this provision constitute a “"minimum gain chargeback” " within the meaning of Treas. Reg. §§ Sections 1.704-2(f) and 1.704-2(i)(4), and this provision shall be so construed. (d) Notwithstanding anything herein to the contrary, the Company’s 's partner nonrecourse deductions (within the meaning of Treas. Reg. § Section 1.704-2(i)(2)) shall be allocated solely to the Member who has the economic risk of loss with respect to the partner nonrecourse liability related thereto in accordance with the provisions of Treas. Reg. Section 1. § 1.704704-2(i)(12(i)(l). (e) Notwithstanding the provisions of Section 6.1(a6.1 (a), no net losses shall be allocated to a Member if such allocation would result in such Member having a deficit balance in such Member’s 's Capital Account (excluding from such Member’s 's deficit Capital Account any amount such Member is obligated to restore in accordance with Treas. Reg. § Section 1.704-1(b)(2)(ii)(cl(b)(2)(ii)(c), as well as any amount such Member is treated as obligated to restore under Treas. Reg. §§ Sections 1.704-2(g)(1) and 1.704-20(52(i)(5)). In such case, the net loss that would have been allocated to such Member shall be allocated to the other Members to whom such loss can be allocated without violation of the provisions of this Section 6.1(e) in proportion to their respective Percentage Interest Allocation Interests among themselves. (f) Notwithstanding the provisions of Section 6.1(a6.1 (a) hereof, to the extent losses are allocated to the Members by virtue of Section 6.1(e) hereof, the net income of the Company thereafter recognized shall be allocated to such Members (in proportion to the losses previously allocated to them pursuant to Section 6.1(e) hereof) hereof until such time as the net income of the Company allocated to them pursuant to this Section 6.1(f) equals the net losses allocated to them pursuant to Section 6.1(e) hereof. (g) For Federal state and local income tax purposes only, with respect to any assets contributed by a Member to the Company (“"Contributed Assets”") which have an agreed fair market value on the date of their contribution which differs from the Member’s 's adjusted basis therefor as of the date of contribution, the allocation of depreciation and gain or loss with respect to such Contributed Assets shall be determined in accordance with the provisions of Section 704(c) of the Code and the regulations promulgated thereunder using the traditional method with curative allocations within the meaning of Treas. Reg. Section 1. § 1.704704-3(b3(c). For purposes of this Agreement, an asset shall be deemed a Contributed Asset if it has a basis determined, in whole or in part, by reference to the basis of a Contributed Asset (including an asset previously deemed to be a Contributed Asset pursuant to this sentence). Notwithstanding the foregoing, if the gain from the sale of any Contributed Asset is being reported on the installment method for income tax purposes, then the total amount of gain which is to be recognized by each of the Members in accordance with the above provision in all taxable years shall be computed and the amount of gain to be recognized by each of the Members in each year shall be in proportion to the total gain to be recognized by each of the Members in all taxable years.

Net Income and Net Loss. (a) Except as otherwise provided in this Agreement, the net income and net loss of the Company for each Fiscal Year shall be allocated in accordance with each Member’s Percentage Interest100% to PNG ("Allocation Interests"). (b) Notwithstanding anything herein to the contrary, if a Member has a deficit balance in such Member’s 's Capital Account (excluding from such Member’s 's deficit Capital Account any amount which such Member is obligated to restore in accordance with Treas. Reg. § Reg Section 1.704-1(b)(2)(ii)(c), as well as any amount such Member is treated as obligated to restore under Treas. Reg. §§ Sections 1.704-2(g)(1) and 1.704-2(i)(5)) and 2(i)(5))and unexpectedly receives an adjustment, allocation or distribution described in Treas. Reg. § Section 1.704-1(b)(2)(ii)(d)(4), (5) or (6), then such Member will be allocated items of income and gain in an amount and manner sufficient to eliminate the deficit balance in such Member’s 's Capital Account as quickly as possible. If there is, is an allocation to a Member pursuant to this Section 6.1(b6.1 (b), then future allocations of net income pursuant to Section 6.1(a) shall be adjusted so that those Members who were allocated less income, or a greater amount of loss, by reason of the allocation made pursuant to this Section 6.1(b), shall be allocated additional net income in an equal amount. It is the intention of the parties that the provisions of this Section 6.1(b) constitute a “"qualified income offset” " within the meaning of Treas. Reg. §§ Sections 1.704-1(b)(2)(ii)(d), and such provisions shall be so construed. (c) If there is a net decrease in the Company’s 's Minimum Gain (within the meaning of Treas. Reg. § Section 1.704-2(b)(2)) or Partner Nonrecourse Debt Minimum Gain (within the meaning of Treas. Reg. § Reg Section 1.704-2(i)(3)) during any Fiscal Year, each Member shall be allocated, before any other allocations hereunder, items of income and gain for such Fiscal Year (and subsequent Fiscal Years, if necessary), in an amount equal to such Member’s 's share (determined in accordance with Treas. Reg. Section 1. §§ 1.704704-2(g) and 1.704-2(i)(5), as applicable) of the net decrease in the Company’s Minimum Gain or Partner Nonrecourse Debt Minimum Gain, as applicable, for such Fiscal Year; provided, however, that no such allocation shall be required if any of the exceptions set forth in Treasdecrease Section 1. Reg. § 1.704704-2(f) apply. It is the intention of the parties that this provision constitute a “"minimum gain chargeback” " within the meaning of Treas. Reg. §§ Sections 1.704-2(f) and 1.704-2(i)(4), and this provision shall be so construed. (d) Notwithstanding anything herein to the contrary, the Company’s 's partner nonrecourse deductions (within the meaning of Treas. Reg. § Section 1.704-2(i)(2)) shall be allocated solely to the Member who has the economic risk of loss with respect to the partner nonrecourse liability related thereto in accordance with the provisions of Treas. Reg. § 1.704Section 1.7.04-2(i)(1). (e) Notwithstanding the provisions of Section 6.1(a6.1 (a), no net losses shall be allocated to a Member if such allocation would result in such Member having a deficit balance in such Member’s 's Capital Account (excluding from such Member’s 's deficit Capital Account any amount such Member is obligated to restore in accordance with Treas. Reg. § 1.704-Section 1.704- 1(b)(2)(ii)(c), as well as any amount such Member is treated as obligated to restore under Treas. Reg. §§ Sections 1.704-2(g)(1) and 1.704-20(52(i)(5)). In such case, the net loss that would have been allocated to such Member shall be allocated to the other Members to whom such loss can be allocated without violation of the provisions of this Section 6.1(e) in proportion to their respective Percentage Interest Allocation Interests among themselves. (f) Notwithstanding the provisions of Section 6.1(a6.1 (a) hereof, to the extent losses are allocated to the Members by virtue of Section 6.1(e) hereof, the net income of the Company thereafter recognized shall be allocated to such Members (in proportion to the losses previously allocated to them pursuant to Section 6.1(e) hereof) hereof until such time as the net income of the Company allocated to them pursuant to this Section 6.1(f) equals the net losses allocated to them pursuant to Section 6.1(e) hereof. (g) For Federal state and local income tax purposes only, with respect to any assets contributed by a Member to the Company (“"Contributed Assets”") which have an agreed fair market value on the date of their contribution which differs from the Member’s 's adjusted basis therefor therefore as of the date of contribution, the allocation of depreciation and gain or loss with respect to such Contributed Assets shall be determined in accordance with the provisions of Section 704(c) of the Code and the regulations promulgated thereunder using the traditional method with curative allocations within the meaning of Treas. Reg. § 1.704Section 1,704-3(b3(c). For purposes of this Agreement, an asset shall be deemed a Contributed Asset if it has a basis determined, in whole or in part, by reference to the basis of a Contributed Asset (including an asset previously deemed to be a Contributed Asset pursuant to this sentence). Notwithstanding the foregoing, if the gain from the sale of any Contributed Asset is being reported on the installment method for income tax purposes, then the total amount of gain which is to be recognized by each of the Members in accordance with the above provision in all taxable years shall be computed and the amount of gain to be recognized by each of the Members in each year shall be in proportion to the total gain to be recognized by each of the Members in all taxable years.

Net Income and Net Loss. The Company shall use its best efforts to determine and allocate all items of income, gain, loss and deductions, as described below, with respect to each Accounting Period of the Company within forty-five (a45) days after the end of each Accounting Period (other than any Accounting Period ending on the last day of the Fiscal Year, in which case the Company shall make such allocations as soon as reasonably practicable following the end of such Fiscal Year). (i) Except as otherwise provided in this Agreement, the net income and net loss Net Income of the Company (and items thereof other than those attributable to the Brokerage Assets) for each Fiscal Year Accounting Period shall be allocated in accordance with each Member’s Percentage Interest.allocated: (bA) Notwithstanding anything herein first, to the contrary, if a Member has a deficit balance in such Member’s Capital Account (excluding from such Member’s deficit Capital Account any amount which such Member is obligated to restore in accordance with Treas. Reg. § 1.704-1(b)(2)(ii)(c), as well as any amount such Member is treated as obligated to restore under Treas. Reg. §§ 1.704-2(g)(1) and 1.704-2(i)(5)) and unexpectedly receives an adjustment, allocation or distribution described in Treas. Reg. § 1.704-1(b)(2)(ii)(d)(4), (5) or (6), then such Member will be allocated items of income and gain in extent that an amount of Net Loss has been allocated under Section 8.1(a)(ii) for a prior Accounting Period and manner sufficient to eliminate the deficit balance in such Member’s Capital Account as quickly as possible. If there is, an that allocation to has not been offset by a Member subsequent allocation of Net Income pursuant to this Section 6.1(b8.1(a)(i)(A), then future allocations of net income pursuant to Section 6.1(a) shall be adjusted so that those the Members who were allocated less income, or a greater amount of loss, by reason of the allocation made pursuant to this Section 6.1(b), shall be allocated additional net income in an equal amount. It is the intention of the parties that the provisions of this Section 6.1(b) constitute a “qualified income offset” within the meaning of Treas. Reg. §§ 1.704-1(b)(2)(ii)(d)proportion to, and such provisions shall be so construed. (c) If there is a net decrease in the Company’s Minimum Gain (within the meaning of Treas. Reg. § 1.704-2(b)(2)) or Partner Nonrecourse Debt Minimum Gain (within the meaning of Treas. Reg. § 1.704-2(i)(3)) during any Fiscal Year, each Member shall be allocated, before any other allocations hereunder, items of income and gain for such Fiscal Year (and subsequent Fiscal Years, if necessary), in an amount equal to, the unrecovered amount of such Net Loss (and, if there is an unrecovered Net Loss for more than one Accounting Period or that has been allocated pursuant to such Member’s share (determined in accordance with Treas. Reg. §§ 1.704-2(gSection 8.1(a)(ii)(A) and 1.704-2(i)(5or Section 8.1(a)(ii)(B), as applicable) of the net decrease in the Company’s Minimum Gain or Partner Nonrecourse Debt Minimum Gain, as applicable, for such Fiscal Year; provided, however, that no such allocation shall be required if any of the exceptions set forth in Treas. Reg. § 1.704-2(f) apply. It is the intention of the parties that then this provision constitute a “minimum gain chargeback” within the meaning of Treas. Reg. §§ 1.704-2(f) and 1.704-2(i)(4), and this provision shall be so construed. (d) Notwithstanding anything herein to the contrary, the Company’s partner nonrecourse deductions (within the meaning of Treas. Reg. § 1.704-2(i)(2)Section 8.1(a)(i)(A) shall be allocated solely applied first to the Member who has Net Loss arising in the economic risk of loss most recent Accounting Period until that Net Loss is recovered fully, and thereafter successively to each preceding Accounting Period for which there is an unrecovered Net Loss, ending with respect the first such Accounting Period, in each case offsetting Net Losses allocated pursuant to Section 8.1(a)(ii)(B) before those allocated pursuant to Section 8.1(a)(ii)(A)); and (B) second, (1) twenty percent (20%) to the partner nonrecourse liability related thereto in accordance with Members holding the provisions of Treas. Reg. § 1.704-2(i)(1). Series A Interests on a pro rata basis and (e2) Notwithstanding eighty percent (80%) to the provisions of Section 6.1(a), no net losses shall be allocated to a Member if such allocation would result in such Member having a deficit balance in such Member’s Capital Account (excluding from such Member’s deficit Capital Account any amount such Member is obligated to restore in accordance with Treas. Reg. § 1.704-1(b)(2)(ii)(c), as well as any amount such Member is treated as obligated to restore under Treas. Reg. §§ 1.704-2(g)(1) and 1.704-20(5)). In such caseSeries B Members, the net loss that would have been allocated to such Member shall be allocated to Series C Members, the other Series D Members to whom such loss can be allocated without violation of and the provisions of this Section 6.1(e) Series E Members on a pro rata basis in proportion to their respective Percentage Interest among themselvesInterests at the beginning of such Accounting Period. (fii) Notwithstanding Except as otherwise provided in this Agreement, Net Loss of the provisions of Section 6.1(aCompany (and items thereof other than those attributable to the Brokerage Assets) hereoffor each Accounting Period shall be allocated: (A) first, to the extent losses are allocated to the Members by virtue of Section 6.1(e) hereof, the net income of the Company thereafter recognized shall be allocated to such Members (in proportion to the losses amounts of Net Income previously allocated to them pursuant to Section 6.1(e) hereof) 8.1(a)(i)(B), until such time as amounts have been offset in full or the net income Capital Accounts of such Members have been reduced to zero; and (B) second, to the Company allocated Series B Members, the Series C Members, the Series D Members and the Series E Members on a pro rata basis in proportion to them pursuant to this Section 6.1(f) equals their respective Percentage Interests at the net losses allocated to them pursuant to Section 6.1(e) hereofbeginning of such Accounting Period. (giii) For Federal state and local income tax purposes only, with respect to any assets contributed by a Member Any Net Income or Net Loss attributable to the Company (“Contributed Assets”) which have an agreed fair market value on the date of their contribution which differs from the Member’s adjusted basis therefor as of the date of contribution, the allocation of depreciation and gain or loss with respect to such Contributed Brokerage Assets shall be determined allocated pro rata to the Series A Members in accordance with the provisions proportion of Section 704(c) of the Code and the regulations promulgated thereunder using the traditional method within the meaning of Treas. Reg. § 1.704-3(b)Series A Interests held by such Members. For purposes of this AgreementSection 8.1 and for other relevant purposes hereunder, an asset Accounting Period shall be deemed a Contributed Asset if it has a basis determinedto end either at or immediately preceding, in whole or in partas may be appropriate, by reference to the basis of a Contributed Asset (including an asset previously deemed to be a Contributed Asset pursuant to this sentence). Notwithstanding the foregoing, if the gain from the sale time of any Contributed Asset is being reported on issuance or redemption of Member Interests or other event that results in a change in the installment method for income tax purposes, then the total amount of gain which is to be recognized by each of the Members in accordance with the above provision in all taxable years Member Interests (and a new Accounting Period shall be computed and the amount of gain to be recognized by each of the Members in each year shall be in proportion to the total gain to be recognized by each of the Members in all taxable yearscommence immediately thereafter).

Net Income and Net Loss. (a) Except as otherwise provided in this Agreement, the net income and net loss of the Company for each Fiscal Year shall be allocated in accordance with each Member’s Percentage Interest99% to PDC and 1% to PHCI ("Allocation Interests"). (b) Notwithstanding anything herein to the contrary, if a Member has a deficit balance in such Member’s 's Capital Account (excluding from such Member’s 's deficit Capital Account any amount which such Member is obligated to restore in accordance with Treas. Reg. § Reg Section 1.704-1(b)(2)(ii)(cl(b)(2)(ii)(c), as well as any amount such Member is treated as obligated to restore under Treas. Reg. §§ Sections 1.704-2(g)(12(g)(l) and 1.704-2(i)(5)) and unexpectedly receives an adjustment, allocation or distribution described in Treas. Reg. § Section 1.704-1(b)(2)(ii)(d)(4l(b)(2)(ii)(d)(4), (5) or (6), then such Member will be allocated items of income and gain in an amount and manner sufficient to eliminate the deficit balance in such Member’s 's Capital Account as quickly as possible. If there is, is an allocation to a Member pursuant to this Section 6.1(b), then future allocations of net income pursuant to Section 6.1(a) shall be adjusted so that those Members who were allocated less income, or a greater amount of loss, by reason of the allocation made pursuant to this Section 6.1(b), shall be allocated additional net income in an equal amount. It is the intention of the parties that the provisions of this Section 6.1(b) constitute a “"qualified income offset” " within the meaning of Treas. Reg. §§ Sections 1.704-1(b)(2)(ii)(d), and such provisions shall be so construed. (c) If there is a net decrease in the Company’s 's Minimum Gain (within the meaning of Treas. Reg. § Section 1.704-2(b)(2)) or Partner Nonrecourse Debt Minimum Gain (within the meaning of Treas. Reg. § Reg Section 1.704-2(i)(3)) during any Fiscal Year, each Member shall be allocated, before any other allocations hereunder, items of income and gain for such Fiscal Year (and subsequent Fiscal Years, if necessary), in an amount equal to such Member’s 's share (determined in accordance with Treas. Reg. §§ Sections 1.704-2(g) and 1.704-2(i)(5), as applicable) of the net decrease in the Company’s 's Minimum Gain or Partner Nonrecourse Debt Minimum Gain, as applicable, for such Fiscal Year; provided, however, that no such allocation shall be required if any of the exceptions set forth in Treas. Reg. Section 1. § 1.704704-2(f) apply. It is the intention of the parties that this provision constitute a “"minimum gain chargeback” " within the meaning of Treas. Reg. §§ 1.704-Sections 1.704- 2(f) and 1.704-2(i)(4), and this provision shall be so construed. (d) Notwithstanding anything herein to the contrary, the Company’s 's partner nonrecourse deductions (within the meaning of Treas. Reg. § Section 1.704-2(i)(2)) shall be allocated solely to the Member who has the economic risk of loss with respect to the partner nonrecourse liability related thereto in accordance with the provisions of Treasallocated Section 1. Reg. § 1.704704-2(i)(12(i)(l). (e) Notwithstanding the provisions of Section 6.1(a6.1 (a), no net losses shall be allocated to a Member if such allocation would result in such Member having a deficit balance in such Member’s 's Capital Account (excluding from such Member’s 's deficit Capital Account any amount such Member is obligated to restore in accordance with Treas. Reg. § 1.704-1(b)(2)(ii)(cSection 1.704- l(b)(2)(ii)(c), as well as any amount such Member is treated as obligated to restore under Treas. Reg. §§ Sections 1.704-2(g)(12(g)(l) and 1.704-20(52(i)(5)). In such case, the net loss that would have been allocated to such Member shall be allocated to the other Members to whom such loss can be allocated without violation of the provisions of this Section 6.1(e) in proportion to their respective Percentage Interest Allocation Interests among themselves. (f) Notwithstanding the provisions of Section 6.1(a6.1 (a) hereof, to the extent losses are allocated to the Members by virtue of Section 6.1(e) hereof, the net income of the Company thereafter recognized shall be allocated to such Members (in proportion to the losses previously allocated to them pursuant to Section 6.1(e) hereof) until such time as the net income of the Company allocated to them pursuant to this Section 6.1(f) equals the net losses allocated to them pursuant to Section 6.1(e) hereof. (g) For Federal state and local income tax purposes only, with respect to any assets contributed by a Member to the Company (“"Contributed Assets”") which have an agreed fair market value on the date of their contribution which differs from the Member’s 's adjusted basis therefor as of the date of contribution, the allocation of depreciation and gain or loss with respect to such Contributed Assets shall be determined in accordance with the provisions of Section 704(c) of the Code and the regulations promulgated thereunder using the traditional method with curative allocations within the meaning of Treas. Reg. Section 1. § 1.704704-3(b3(c). For purposes of this Agreement, an asset shall be deemed a Contributed Asset if it has a basis determined, in whole or in part, by reference to the basis of a Contributed Asset (including an asset previously deemed to be a Contributed Asset pursuant to this sentence). Notwithstanding the foregoing, if the gain from the sale of any Contributed Asset is being reported on the installment method for income tax purposes, then the total amount of gain which is to be recognized by each of the Members in accordance with the above provision in all taxable years shall be computed and the amount of gain to be recognized by each of the Members in each year shall be in proportion to the total gain to be recognized by each of the Members in all taxable years.