Common use of Pursuant to Treas Clause in Contracts

Pursuant to Treas. Reg. § 1.752-3(a)(3), solely for purposes of determining each Member’s proportionate share of the “excess nonrecourse liabilities” of the Company (as defined in Treas. Reg. § 1.752-3(a)(3)), the Members’ respective interests in Company profits shall be determined under any permissible method reasonably determined by the Managing Member; provided, however, that each Member who has contributed property to the Company shall be allocated, to the extent possible, a share of “excess nonrecourse liabilities” of the Company which results in such Member being allocated nonrecourse liabilities in an amount which is at least equal to the amount of income required to be allocated to such Member pursuant to Section 704(c) of the Code and the Treasury Regulations promulgated thereunder (the “Liability Shortfall”). If there is an insufficient amount of nonrecourse liabilities to be able to allocate to each Member nonrecourse liabilities equal to the Liability Shortfall, nonrecourse liabilities shall be allocated to each Member in pro rata in accordance with each such Member’s Liability Shortfall.