Regulatory and Curative Allocations. The allocations set forth in Section 4.1 hereof are intended to comply with the requirements of Regulations Sections 1.704-1(b) and 1.704-2. If the Partnership incurs “nonrecourse deductions” or “partner nonrecourse deductions,” or if there is any change in the Partnership’s “minimum gain,” as defined in such Regulations, the allocation of Profits, Losses and items thereof to the Partners shall be modified in a reasonable manner deemed necessary or advisable by the Partners, upon appropriate legal or tax advice, to comply with such Regulations.
Regulatory and Curative Allocations. 4.6.1 Notwithstanding the other provisions of Article IV, the “qualified income offset,” “minimum gain chargeback,” and “partner nonrecourse debt minimum gain chargeback” provisions of Treasury Regulations under IRC § 704(b) shall be incorporated herein by reference and shall be given effect. Deductions attributable to partner nonrecourse liabilities (within the meaning of IRC § 1.704-(2(i)(2)) shall be allocable to the Member or Members who bear the risk of loss with respect to the nonrecourse liability.
4.6.2 If the allocation of deductions to any Member would cause the Member to have a deficit Capital Account balance at the end of any taxable year (after all other allocations provided for in Article IV have been made), such deductions shall instead be allocated to the other Members. For purposes of this Section 4.6.2, the Members’ Capital Accounts shall be increased by the sum of (i) the amount such Member is obligated to restore pursuant to any provision of this Agreement, (ii) the amount such Member is deemed to be obligated to restore pursuant to the penultimate sentences of Treas. Reg. §§ 1.704-2(g)(l) and 1.704-2(i)(5), and (iii) the amount of liabilities of the Company allocable to such Member under IRC § 752 with respect to which the Member bears the economic risk of loss to the extent such liability is not “partner nonrecourse debt.”
4.6.3 The allocations set forth in Sections 4.6.1 and 4.6.2 shall be taken into account in determining other and subsequent allocations of items of income, gain, loss and deduction, so that, to the extent possible, the Capital Account balances of the Members shall be equal to the Capital Account balances that would have existed in the absence of such allocations.
4.6.4 The Managers shall adjust the Members’ Ownership Interests to reflect their Capital Accounts.
Regulatory and Curative Allocations. (a) Notwithstanding the foregoing provisions of this Article VI, the Partnership shall allocate items of book income and gain in a manner that constitutes a "minimum gain chargeback" as described in Section 1.704-2 of the Treasury Regulations and the term "minimum gain" shall have the meaning assigned to it therein. Determinations of each Partner's share of minimum gain shall be made in accordance with Section 1.704-2 of the Treasury Regulations. In addition, "partner nonrecourse deductions" shall be allocated to the Partners bearing the risk of loss with respect to such deductions in accordance with Section 1.704-2 of the Treasury Regulations.
(b) The Partners acknowledge and ratify the following modifications to the provisions of this Article VI that were adopted pursuant to discussions among the Partners and the Partnership accountants:
(i) For purposes of allocating income with respect to each year, distributions are to be taken into account on the day in which they occur, and the effective profit and loss percentages shall be determined as of each date such distributions occur;
(ii) The following items are allocated in the ratios that apply to Capital Events cash flow: depreciation, write-offs of plant and well capital costs, fees paid to Southern California Edison related to transmission lines, and alternative minimum tax adjustments and preferences associated with property, plant and equipment; and
(iii) The initial capital contributions of the Partners are determined by reference to the generally accepted accounting principle financial statement figures for such capital contributions.
(c) As stated in Treasury Regulations Section 1.704-1(b)(4)(i), when any property of the Partnership is reflected in the Capital Accounts of the Partners and on the books of the Partnership at a book value that differs from the adjusted tax basis of such property, then certain book items with respect to such property will differ from certain tax items with respect to that property. Since the Capital Accounts of the Partners are required to be adjusted solely for allocation of the book items, the Partners' shares of the corresponding tax items are not independently reflected by adjustments to the Capital Accounts. These tax items must be shared among the Partners in a manner that takes account of the variation between the adjusted tax basis of the applicable property and its book value pursuant to or in the same manner as variations between the adjusted tax basis and f...
Regulatory and Curative Allocations. The allocations set forth in Section 4.1 are intended to comply with the requirements of Regulations Sections 1.704-1 (b) and 1.704-2. If the Company incurs “nonrecourse deductions” or “partner nonrecourse deductions”, or if there is any change in the Company’s “minimum gain” or “partner nonrecourse debt minimum gain”, as defined in such Regulations, or if the Manager determines that the foregoing allocations fail for any reason to comply with the Regulations, the allocation of Profits, Losses and items thereof to the Members shall be modified in a reasonable manner deemed necessary or advisable by the Manager to comply with the Regulations. In determining allocations to be made pursuant to this Section 4, the Manager shall take into account any requirements of Code Sections 704(c) and 706 (and any Regulations that require allocations to be made in a manner consistent with such Code Sections) and shall make such modifications to the allocations under this Section 4 as are reasonably deemed necessary by the Manager to comply with the requirements of such Code and Regulation Sections.
Regulatory and Curative Allocations. The allocations set forth in Section 4.1 are intended to comply with the requirements of Regulations Sections 1.704-1(b) and 1.704-2. If the Company incurs "nonrecourse deductions" or "partner nonrecourse deductions," or if there is any change in the Company's "minimum gain" or "partner nonrecourse debt minimum gain," as defined in such Regulations, or if the Executive Committee determines that the foregoing allocations fail for any reason to comply with the Regulations, the allocation of Profits, Losses and items thereof to the Members shall be modified in a reasonable manner deemed necessary or advisable by the Executive Committee to comply with the Regulations; provided that to the extent permitted by the Regulations, all "nonrecourse deductions" shall be allocated to the Members in proportion to their Percentage Interests. 7
Regulatory and Curative Allocations. This Agreement shall be deemed to contain provisions relating to “minimum gain chargeback,” “nonrecourse deductions,” “qualified income offset,” “gross income allocations,” and any other provision required to be contained in this Agreement pursuant to the Treasury Regulations promulgated under section 704(b) of the Code (the “Regulatory Allocations”), other than any requirement that a Member be required to contribute to the Company an amount equal to any deficit in the Member’s Capital Account. No allocation of Loss shall be made to a Member if the allocation would result in a negative balance in the Member’s Capital Account in excess of the Member’s share of the Company’s debt (determined pursuant to Code section 752 and the Treasury Regulations under such section). In the event there is a negative balance in the Member’s Capital Account in excess of the amount(s) set forth above, the Member shall be allocated income and gain in the amount of that excess as quickly as possible. Any Loss that cannot be allocated to a Member pursuant to the restrictions contained in this paragraph shall be allocated to other Members. The Regulatory Allocations are intended to comply with the Treasury Regulations promulgated under section 704(b) of the Code. The other provisions of this Article V notwithstanding, the Regulatory Allocations shall be taken into account in allocating other Profits, Losses, and items of income, gain, and deduction among the Members so that, to the extent possible, the net amount of the allocations of other Profits, Losses, and other items and the Regulatory Allocations to each Member shall equal the net amount that would have been allocated to each such Member if the Regulatory Allocations had not occurred.
Regulatory and Curative Allocations. Notwithstanding the provisions of Section 4.1:
(A) In order to comply with Treasury Regulation §§ 1.704-1(b) and 1.704-2, the minimum gain chargeback requirements in Treasury Regulation § 1.704-2(f) and 1.704-2(i)(4) are hereby incorporated in this Agreement. In addition, notwithstanding anything else in this Article 4, (i) deductions associated with Company nonrecourse liabilities described in Treasury Regulation § 1.704-2(c) shall be allocated in accordance with Percentage Interests, and (ii) deductions associated with Member nonrecourse liabilities described in Treasury Regulation § 1.704-2(i)(1) shall be allocated to the Member or Members who bear the economic risk of loss with respect to the Member nonrecourse liability to which such deductions are attributable, in accordance with Treasury Regulation § 1.704-2(i).
(B) If any Member unexpectedly receives an adjustment, allocation or distribution of the type contemplated by Treasury Regulation § 1.704-1(b)(2)(ii)(d)(4), (5) and (6) that causes such Member to have an Adjusted Capital Account deficit, items of income and gain shall be allocated to all such Members (in proportion to the amounts of their respective Adjusted Capital Account deficits) in an amount and manner sufficient to eliminate the deficit balances in such Members’ Capital Accounts that are in excess of such Members’ respective Adjusted Capital Account deficits, as quickly as possible. It is intended that this Section 4.2(B) qualify and be construed as a “qualified income offset” within the meaning of Treasury Regulation § 1.704-1(b)(2)(ii)(d).
(C) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Code Section 734(b) is required, pursuant to Treasury Regulation §§ 1.704-1(b)(2)(iv)(m)(2) or 1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining Capital Accounts as the result of a distribution to a Member in complete liquidation of its Membership Interest, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis) and such gain or loss shall be specially allocated to the Members in accordance with their interests in the Company in the event that Treasury Regulation § 1.704-1(b)(2)(iv)(m)(2) applies, or to the Members to whom such distribution was made in the event that Treasury Regulation § 1.704-1(b)(2)(iv)(m)(4) applies.
(D) The allocations set forth in Secti...
Regulatory and Curative Allocations. The allocations set forth in Section 4.1 are intended to comply with the requirements of Regulations Sections 1.704-1(b) and 1.704-2. If the Company incurs "nonrecourse deductions" or "partner nonrecourse deductions," or if there is any change in the Company's "minimum gain" or "partner nonrecourse debt minimum gain," as defined in such Regulations, or if the Executive Committee determines that the foregoing allocations fail for any reason to comply with the Regulations, the allocation of Profits, Losses and items thereof to the Members shall be modified in a reasonable manner deemed necessary or advisable by the Executive Committee to comply with the Regulations; provided that to the extent permitted by the Regulations, all "nonrecourse deductions" shall be allocated to the Members in proportion to their Percentage Interests. In accordance with Code Section 704(c) and the Regulations thereunder, income or gain resulting from the disposition of all or any portion of the Property shall be specially allocated to SunPower, to take into account the excess of the Gross Property Value over the Company's initial tax basis in the Property (the "Built-in-Gain"). For purposes of the immediately preceding sentence, the Built-in-Gain shall be allocated on a proportional basis across the entire Property, in the same ratio in which the Company's initial tax basis is allocated across the Property. As soon as practicable following the execution of this Agreement, SunPower shall provide a written statement to the Company setting forth the Company's initial basis in the Property.
Regulatory and Curative Allocations. (a) Company Minimum Gain Chargeback. Except as otherwise provided in Section 1.704-2(f) of the Treasury Regulations, notwithstanding any other provision of this Agreement, if there is a net decrease in Company Minimum Gain during any Fiscal Year, each Member shall be specially allocated items of Company income and gain for such Fiscal Year (and, if necessary, for subsequent Fiscal Years) in an amount equal to the portion of that Member's share of the net decrease in Company Minimum Gain during such year that is allocable to the disposition of any Company assets subject to one or more Nonrecourse Liabilities of the Company. Allocations pursuant to the previous sentence shall be made in proportion to the respective amounts required to be allocated to each Member pursuant thereto. The items to be so allocated shall be determined in accordance with Treasury Regulation Section 1.704-2(j)(2)(i). Any Member's share of any net decrease in Company Minimum Gain shall be determined in accordance with Treasury Regulation Section 1.704-2(g). This section is intended to comply with the minimum gain chargeback requirement in the Treasury Regulations and shall be interpreted consistently therewith.
(b) Member Minimum Gain Chargeback. Notwithstanding any other provision of this Agreement except Section 3.4(a), if there is a net decrease in -------------- Member Minimum Gain attributable to Member Nonrecourse Debt during any Fiscal Year, each Member who has a share of the Member Minimum Gain attributable to such Member Nonrecourse Debt shall be specially allocated items of Company income and gain for such year (and, if necessary, subsequent years) in an amount equal to the portion of such Member's share of the net decrease of Member Minimum Gain. Allocations pursuant to the previous sentence shall be made in proportion to the respective amounts required to be allocated to each Member pursuant thereto. The items to be so allocated shall be determined in accordance with Treasury Regulation Section 1.704-2(j)(2)(ii). Any Member's share of the net decrease in Member Minimum Gain shall be determined in accordance with Treasury Regulation Section 1.704-2(i)(5). This section is intended to comply with the minimum gain chargeback requirements in the Treasury Regulations and shall be interpreted consistently therewith.
Regulatory and Curative Allocations. The allocations set forth in Sections 5.01 and 5.02 are intended to comply with the requirements of T.R. 1.704-1(b) and 1.704-2. If the Company incurs "nonrecourse deductions" or "partner nonrecourse deductions," or if there is any change in the Company's "minimum gain" or "partner nonrecourse debt minimum gain," all as defined in the Regulations promulgated under Code Section 704(b), the allocation of Profits and Losses (and items of Profits and Losses) to the Members shall be modified in a reasonable manner deemed necessary or advisable by the tax matters partner to comply with the applicable Regulations. In determining allocations to be made under this Article V, the Company shall comply with any requirements of Code Section 704(c) and 706 and any applicable Resolutions, and shall make modifications to the allocations required under this Article V as are deemed reasonably necessary by the Members to comply with the Regulations.
