Common use of Regulatory and Special Allocations Clause in Contracts

Regulatory and Special Allocations. The following regulatory and special allocation rules are applicable to the Company because it is intended that the Company is taxed as a partnership for income tax purposes. (a) Any item of Company loss or deduction that is attributable to “nonrecourse debt,” other than “partner nonrecourse debt,” shall be allocated to Members in accordance with the Company Interests. Any item of Company loss, deduction, or Internal Revenue Code ("Code") 705(a)(2)(B) expenditure that is attributable (within the meaning of Regulation 1.704-2(b)(4) to a “partner nonrecourse debt” shall be allocated solely to the Member who bears the economic risk of loss for such debt. The foregoing is intended to comply with the “partner nonrecourse debt” allocation rules of Regulation 1.704-2(b), and shall be interpreted consistently therewith. (b) If there is a net decrease in “partnership minimum gain” or in the “minimum gain attributable to partner nonrecourse debt” (both as defined in Regulation 1.704-2(d)) during any Company taxable year, items of Company income and gain for such taxable year (and, if neces- sary, subsequent taxable years) shall be allocated to the Members in the amount and manner described in Regulation 1.704-2(b)(2)). The foregoing is intended to be a “minimum gain chargeback” provision as described in Regulation 1.704-2(b), and shall be interpreted consistently therewith. (c) A loss allocation shall not exceed the maximum amount of loss that can be allocated without causing or increasing a deficit balance in a Member's Capital Account as of the end of a fiscal year. Excess loss shall be allocated to other Members pro rata in proportion to, and to the extent of, their positive Capital Account balances. If any such excess loss is allocated for any taxable year to any Members, such Members shall be allocated a pro rata amount of items of Company income and gain for the next succeeding taxable year (and, if necessary, subsequent taxable years) to the extent necessary to offset, as quickly as possible, the allocation of excess loss under this Section 5.2.3. (d) If, notwithstanding the above, any Member has a Capital Account deficit balance as of the end of any Company taxable year, determined after the application of Section 5.2.3 but before the application of any other provision of this Article 5, then a pro rata amount of items of Company income and gain for such taxable year (and, if necessary subsequent taxable years) shall be allocated to all such Members pro rata in proportion to, and to the extent of, such Capital Account deficits. If any items of Company income or gain are allocated under this Section 5.2.4 for any taxable year to any Members, such Members shall be allocated a pro rata amount of items of Company deduction and loss for the next succeeding taxable year (and, if necessary, subsequent taxable years) to the extent necessary to offset, as quickly as possible, the allocations under this Section 5.2.4. This Section 5.2.4 is intended to be a “qualified income offset” provision as described in Regulation 1.704-1(b)(2) and shall be interpreted consistently therewith.

Regulatory and Special Allocations. The following regulatory and special allocation rules are applicable to the Company because it is intended that the Company is be taxed as a partnership for income tax purposes. (a) 5.2.1 Any item of Company loss or deduction that is attributable to “"nonrecourse debt,” " other than “"partner nonrecourse debt,” " shall be allocated to Members in accordance with the Company InterestsAllocation Percentages. Any item of Company loss, deduction, or Internal Revenue Code ("Code") ss. 705(a)(2)(B) expenditure that is attributable (within the meaning of Regulation ss. 1.704-2(b)(4)) to a “"partner nonrecourse debt” " shall be allocated solely to the Member who bears the economic risk of loss for such debt. The foregoing is intended to comply with the “"partner nonrecourse debt” " allocation rules of Regulation ss. 1.704-2(b), and shall be interpreted consistently therewith. (b) 5.2.2 If there is a net decrease in “"partnership minimum gain” " or in the “"minimum gain attributable to partner nonrecourse debt” " (both as defined in Regulation ss. 1.704-2(d)) during any Company taxable year, items of Company income and gain for such taxable year (and, if neces- sarynecessary, subsequent taxable years) shall be allocated to the Members in the amount and manner described in Regulation ss. 1.704-2(b)(2)). The foregoing is intended to be a “"minimum gain chargeback” " provision as described in Regulation ss. 1.704-2(b), ) and shall be interpreted consistently therewith. (c) 5.2.3 A loss allocation shall not exceed the maximum amount of loss that can be allocated without causing or increasing a deficit balance in a Member's Capital Account as of the end of a fiscal yearFiscal Year. Excess loss shall be allocated to other Members pro rata in proportion to, and to the extent of, of their positive Capital Account balances. If any such excess loss is allocated for any taxable year to any Members, such Members shall be allocated a pro rata amount of items of Company income and gain for the next succeeding taxable year (and, if necessary, subsequent taxable years) to the extent necessary to offset, as quickly as possible, the allocation of excess loss under this Section 5.2.3. (d) 5.2.4 If, notwithstanding the above, any Member has a Capital Account deficit balance as of the end of any Company taxable year, determined after the application of Section 5.2.3 but before the application of any other provision of this Article 5, then a pro rata amount of items of Company income and gain for such taxable year (and, if necessary subsequent taxable years) shall be allocated to all such Members pro rata in proportion to, and to the extent of, such Capital Account deficits. If any items of Company income or gain are allocated under this Section 5.2.4 for any taxable year to any Members, such Members shall be allocated a pro rata amount of items of Company deduction and loss for the next succeeding taxable year (and, if necessary, subsequent taxable years) to the extent necessary to offset, as quickly as possible, the allocations under this Section 5.2.4. This Section 5.2.4 is intended to be a “"qualified income offset” " provision as described in Regulation ss. 1.704-1(b)(2) and shall be interpreted consistently therewith. 5.2.5 In the event any Member unexpectedly receives any adjustments, allocations, or distributions described in Treas. Reg. ss.ss. 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(0), or 1.704-1(b)(2)(ii)(d)(6), which causes such Member to have a deficit Capital Account at the end of any Company Fiscal Year which is in excess of the sum of (i) the amount such Member is obligated to restore under the terms of the Operating Agreement, and (ii) the amount of the Member's share of minimum gain determined pursuant to Reg. ss. 1.704-1(b)(iv)(f), which is treated as the amount such Member is obligated to restore, then items of Company income and gain shall be specially allocated to such Members in an amount and manner sufficient to eliminate the deficit balances in their Capital Accounts created by such adjustments, allocations, or distributions as quickly as possible.

Regulatory and Special Allocations. The following regulatory and special allocation rules are applicable to Notwithstanding the Company because it is intended that the Company is taxed as a partnership for income tax purposes.provisions of Section 7.1: (a) Any item If during any Fiscal Year of the Company loss or deduction that there is a net increase in Company Minimum Gain attributable to “nonrecourse debt,” other than “partner nonrecourse debt,” shall be allocated a Member Nonrecourse Debt that gives rise to Members in accordance with the Company Interests. Any item of Company lossMember Nonrecourse Deductions, deduction, or Internal Revenue Code ("Code") 705(a)(2)(B) expenditure that is attributable (within the meaning of Regulation 1.704-2(b)(4) to a “partner nonrecourse debt” shall be allocated solely to the each Member who bears bearing the economic risk of loss for such debt. The foregoing is intended to comply with the “partner nonrecourse debt” allocation rules of Regulation 1.704-2(b), and Member Nonrecourse Debt shall be interpreted consistently therewithallocated items of Company deductions and losses for such year (consisting first of cost recovery or depreciation deductions with respect to property that is subject to such Member Nonrecourse Debt and then, if necessary, a pro rata portion of the Company’s other items of deductions and losses, with any remainder being treated as an increase in Minimum Gain attributable to Member Nonrecourse Debt in the subsequent year) equal to such Member’s share of Member Nonrecourse Deductions, as determined in accordance with applicable IRS Regulations. (b) If for any Fiscal Year of the Company there is a net decrease in “partnership minimum gain” or in the “minimum gain Minimum Gain attributable to partner nonrecourse debt” (both as defined in Regulation 1.704-2(d)) during any Company taxable yearNonrecourse Liabilities, each Member shall be allocated items of Company income and gain for such taxable year (andconsisting first of gain recognized from the disposition of Company property subject to one or more Company Nonrecourse Liabilities and then, if neces- sarynecessary, for subsequent taxable years) shall be allocated equal to such Member’s share of such net decrease (except to the Members extent such Member’s share of such net decrease is caused by a change in debt structure with such Member commencing to bear the amount and manner described in Regulation 1.704-2(b)(2)). The foregoing is intended economic risk of loss as to be all or part of any Company Nonrecourse Liability or by such Member contributing capital to the Company that the Company uses to repay a “minimum gain chargeback” provision as described in Regulation 1.704-2(bCompany Nonrecourse Liability), and shall be interpreted consistently therewithas determined in accordance with applicable IRS Regulations. (c) A loss allocation If for any Fiscal Year there is a net decrease in Minimum Gain attributable to a Member Nonrecourse Debt, each Member shall be allocated items of Company income and gain for such year (consisting first of gain recognized from the disposition of Company property subject to Member Nonrecourse Debt, and then if necessary, a pro rata portion of the Company’s other items of income and gain, and if necessary, for subsequent years) equal to such Member’s share of such net decrease (except to the extent such Member’s share of such net decrease is caused by a change in debt structure or by the Company’s use of capital contributed by such Member to repay the Member’s Nonrecourse Debt) as determined in accordance with applicable IRS Regulations. (d) The Losses allocated pursuant to this Article 7 for any Fiscal Year shall not exceed the maximum amount of loss Losses that can be allocated to a Member without causing or increasing a deficit balance in a the Member's ’s Adjusted Capital Account as Account. All Losses in excess of the end of a fiscal year. Excess loss limitations set forth in this Section 7.2(d) shall be allocated to other Members pro rata with positive Adjusted Capital Account balances remaining at such time in proportion toto such balances. (e) In the event that a Member unexpectedly receives any adjustment, and to the extent ofallocation or distribution described in IRS Regulations Section 1.704-1(b)(2)(ii)(d)(4)-(6) that causes or increases a deficit balance in such Member’s Adjusted Capital Account, their positive Capital Account balances. If any such excess loss is allocated for any taxable year to any Members, such Members shall be allocated a pro rata amount of items of Company income and gain for shall be allocated to that Member in an amount and manner sufficient to eliminate the next succeeding taxable year (and, if necessary, subsequent taxable years) to the extent necessary to offset, deficit balance as quickly as possible, the allocation of excess loss under this Section 5.2.3. (df) IfThe allocations set forth in subsections (a) through (e) of this Section 7.2 (collectively, notwithstanding the above, any Member has a Capital Account deficit balance as “Regulatory Allocations”) are intended to comply with certain requirements of the end IRS Regulations. It is the intent of any Company taxable yearthe Members that, determined after the application of Section 5.2.3 but before the application of any other provision of this Article 5, then a pro rata amount of items of Company income and gain for such taxable year (and, if necessary subsequent taxable years) shall be allocated to all such Members pro rata in proportion to, and to the extent ofpossible, such Capital Account deficits. If any items of Company income all Regulatory Allocations that are made be offset either with other Regulatory Allocations or gain are allocated under with special allocations pursuant to this Section 5.2.4 for any taxable year to any Members, such Members shall be allocated a pro rata amount of items of Company deduction and loss for the next succeeding taxable year (and, if necessary, subsequent taxable years) to the extent necessary to offset, as quickly as possible, the allocations under this Section 5.2.4. This Section 5.2.4 is intended to be a “qualified income offset” provision as described in Regulation 1.704-1(b)(2) and shall be interpreted consistently therewith7.2(f).