Common use of Regulatory and Curative Allocations Clause in Contracts

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. 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)(l2(g)(1) 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.