Common use of Special Allocations and Compliance with Section 704(b) Clause in Contracts

Special Allocations and Compliance with Section 704(b). The following special allocations shall, except as otherwise expressly provided in this Agreement, be made in the following order: (a) Notwithstanding any other provision of this Article VI, if there is a net decrease in Company Minimum Gain or in any Member Minimum Gain during any taxable year of the Company, prior to any other allocation pursuant hereto, such Member shall be specially allocated items of Profit for such year (and, if necessary, subsequent years) in an amount and manner required by Treasury Regulation Sections 1.704-2(f) or 1.704-2(i)(4). The items to be so allocated shall be determined in accordance with Treasury Regulation Section 1.704-2. (b) Any Member who unexpectedly receives an adjustment, allocation or distribution described in Treasury Regulation Section 1.704-1(b)(2)(ii)(d)(4), (5) or (6) which causes or increases a negative balance in his or its adjusted Capital Account shall be allocated items of Profit sufficient to eliminate such increase or negative balance caused thereby, as quickly as possible, to the extent required by such Treasury Regulation. (c) Nonrecourse Deductions for any taxable year of the Company or other period with respect to the Class A Properties, the Class B Properties or the Class C Properties shall be allocated (as nearly as possible) under Treasury Regulation Section 1.704-2 to the Members, pro rata in proportion to their respective Class A Property Percentage Interests, Class B Property Percentage Interests or Class C Property Percentage Interests, as the case may be. (d) Any Member Nonrecourse Deductions for any taxable year of the Company or other period shall be allocated to the Member that made, or guaranteed or is otherwise liable with respect to the loan to which such Member Nonrecourse Deductions are attributable in accordance with principles under Treasury Regulation Section 1.704-2(i). (e) No allocation of Loss or Net Loss shall be made to any Member if, as a result of such allocation, such Member would have an Adjusted Capital Account Deficit.

Special Allocations and Compliance with Section 704(b). The following special allocations shall, except as otherwise expressly provided in this Agreementprovided, be made in the following order: (a) Notwithstanding any other provision of this Article VI, if there is a net decrease in Company Minimum Gain or in any Member Minimum Gain during any taxable year of the Company, prior to any other allocation pursuant hereto, such Member shall be specially allocated items of Profit for such year (and, if necessary, subsequent years) in an amount and manner required by Treasury Regulation Sections 1.704-2(f) or 1.704-2(i)(4). The items to be so allocated shall be determined in accordance with Treasury Regulation Section 1.704-2. (b) Items of Profit shall be allocated to each Member receiving distributions pursuant to Section 6.03(a) hereof until the aggregate items of Profit allocated to such Member under this Section 6.02(b) is equal to the aggregate amount theretofore distributed (and immediately available for distribution) pursuant to such clause (other than amounts constituting a return of capital with respect to Priority Member Advances). (c) Any Member who unexpectedly receives an adjustment, allocation or distribution described in Treasury Regulation Section 1.704-1(b)(2)(ii)(d)(4), (5) or (6) which causes or increases a negative balance in his or its adjusted Capital Account shall be allocated items of Profit sufficient to eliminate such increase or negative balance caused thereby, as quickly as possible, to the extent required by such Treasury Regulation. (cd) Nonrecourse Deductions for any taxable year of the Company or other period with respect to the Class A Properties, the Class B Properties or the Class C Properties shall be allocated (as nearly as possible) under Treasury Regulation Section 1.704-2 to the Members, pro rata in proportion to their respective Class A Property Percentage Interests, Class B Property Percentage Interests or Class C Property Percentage Interests, as the case may be. (de) Any Member Nonrecourse Deductions for any taxable year of the Company or other period shall be allocated to the Member that made, or guaranteed or is otherwise liable with respect to the loan to which such Member Nonrecourse Deductions are attributable in accordance with principles under Treasury Regulation Section 1.704-2(i). (ef) No allocation of Loss or Net Loss shall be made to any Member if, as a result of such allocation, such Member would have an Adjusted Capital Account Deficit. Any such disallowed allocation shall be made to the Members entitled to receive such allocation under Treasury Regulation Section 1.704 in proportion to their respective Percentage Interests.

Special Allocations and Compliance with Section 704(b). The following special allocations shall, except as otherwise expressly provided in this Agreementprovided, be made in the following order: (ai) Notwithstanding any other provision of this Article VIAgreement, if there is a net decrease in Company Partnership Minimum Gain or in any Member Partnership Minimum Gain during any taxable year of the CompanyCompany or other period, prior to any other allocation pursuant hereto, such Member shall be specially allocated items of Profit Company income and gain for such year period (and, if necessary, subsequent years) in an amount and manner required by Treasury Regulation Regulations Sections 1.704-2(f) or 1.704-2(i)(4). The items to be so allocated shall be determined in accordance with Treasury Regulation Regulations Section 1.704-2. (bii) Any Member who unexpectedly receives an adjustment, allocation or distribution described in Treasury Regulation Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) or (6) which causes or increases a negative balance in his or its adjusted such Member’s Capital Account shall be allocated items of Profit income and gain sufficient to eliminate such increase or negative balance caused therebybalance, as quickly as possible, to the extent required by such Treasury RegulationRegulations. (ciii) Nonrecourse Deductions for any taxable year of the Company or other period with respect to the Class A Properties, the Class B Properties or the Class C Properties shall be allocated (as nearly as possible) under Treasury Regulation Regulations Section 1.704-2 to the Members, pro rata in proportion to their respective Class A Property Percentage Interests, Class B Property Percentage Interests percentage interest in the Investment or Class C Property Percentage Interestsother assets giving rise to such Nonrecourse Deductions, as determined by the case may beManaging Member. (div) Any Member Nonrecourse Deductions for any taxable year of the Company or other period shall be allocated to the Member that made, or guaranteed or is otherwise liable with respect to the loan to which such Member Nonrecourse Deductions are attributable in accordance with principles under Treasury Regulation Regulations Section 1.704-2(i). (e) . No allocation of Loss or Net Loss shall be made to any Member if, as a result of such allocation, such Member would have an Adjusted Capital Account Deficit. Any such disallowed allocation shall be made to the Members entitled to receive such allocation under Treasury Regulations Section 1.704-1 in proportion to their respective percentage interest in the Company.

Special Allocations and Compliance with Section 704(b). The following special allocations shall, except as otherwise expressly provided in this Agreementprovided, be made in the following order: (a) Notwithstanding any other provision of this Article VIIII, if there is a net decrease in Company Minimum Gain or in any Member Minimum Gain during any taxable year of the Company, prior to any other allocation pursuant hereto, such Member shall be specially allocated items of Company Profit for such year (and, if necessary, subsequent years) in an amount and manner required by Treasury Regulation Sections 1.704-2(f) or 1.704-2(i)(4). The items to be so allocated shall be determined in accordance with Treasury Regulation Section 1.704-2. (b) Any Member who receives a distribution pursuant to clause (ii) of Section 6.02(a) shall be allocated items of Profit until the aggregate amount allocated pursuant to Section 3.2(b) for all periods is equal to the aggregate amounts therefor distributed pursuant to Section 6.02(a)(ii). (c) Any Member who unexpectedly receives an adjustment, allocation or distribution described in Treasury Regulation Section 1.704-1(b)(2)(ii)(d)(4), (5) or (6) which causes or increases a negative balance in his or its adjusted Capital Account shall be allocated items of Profit sufficient to eliminate such increase or negative balance caused thereby, as quickly as possible, to the extent required by such Treasury Regulation. (cd) Nonrecourse Deductions for any taxable year of the Company or other period with respect to the Class A Properties, the Class B Properties or the Class C Properties shall be allocated (as nearly as possible) under Treasury Regulation Section 1.704-2 to the Members, pro rata in proportion to their respective Class A Property Percentage Interests, Class B Property Percentage Interests or Class C Property Percentage Interests, as the case may be. (de) Any Member Nonrecourse Deductions for any taxable year of the Company or other period shall be allocated to the Member that made, or guaranteed or is otherwise liable with respect to the loan to which such Member Nonrecourse Deductions are attributable in accordance with principles under Treasury Regulation Section 1.704-2(i). (ef) No allocation of Loss or Net Loss shall be made to any Member if, as a result of such allocation, such Member would have an Adjusted Capital Account Deficit. Any such disallowed allocation shall be made to the Members entitled to receive such allocation under Treasury Regulation Section 1.704 in proportion to their respective Percentage Interests.

Special Allocations and Compliance with Section 704(b). The following special allocations shall, except as otherwise expressly provided in this Agreementprovided, be made in the following order: (a) Notwithstanding any other provision of this Article VISection 4, if there is a net decrease in Company Minimum Gain or in any Member Minimum Gain during any taxable year of the CompanyFiscal Year or other period, prior to any other allocation pursuant hereto, such Member shall be specially allocated items of Profit Company income and gain for such year (and, if necessary, subsequent years) in an amount and manner required by Treasury Regulation Sections 1.704-2(f) or 1.704-2(i)(4). The items to be so allocated shall be determined in accordance with Treasury Regulation Section 1.704-2. (b) Any Member who unexpectedly receives an adjustment, allocation or distribution described in Treasury Regulation Section 1.704-1(b)(2)(ii)(d)(4), (5) or (6) which causes or increases a negative balance in his or its adjusted Capital Account shall be allocated items of Profit income and gain sufficient to eliminate such increase or negative balance caused thereby, as quickly as possible, to the extent required by such Treasury Regulation. (c) Nonrecourse Deductions for any taxable year of the Company Fiscal Year or other period with respect to the Class A Properties, the Class B Properties or the Class C Properties shall be allocated (as nearly as possible) under Treasury Regulation Section 1.704-2 to the Members, pro rata in proportion with fifty percent (50%) allocated to their respective Class A Property Percentage Interests, Class B Property Percentage Interests or Class C Property Percentage Interests, as the case may beIHP and fifty percent (50%) to TNHC. (d) Any Member Nonrecourse Deductions for any taxable year of the Company Fiscal Year or other period shall be allocated to the Member that made, or guaranteed or is otherwise liable with respect to the loan to which such Member Nonrecourse Deductions are attributable in accordance with principles under Treasury Regulation Section 1.704-2(i). (e) No allocation The allocations contained in Sections 4(a), 4(b), 4(c) and 4(d) (the “Regulatory Allocations”) are intended to comply with certain requirements of Loss or Treasury Regulation Section 1.704. The Regulatory Allocations shall be taken into account in allocating Net Profit and Net Loss shall be and other items of income, gain, loss and deduction among the Members so that to the extent possible, the allocations contained in this Agreement other than the Regulatory Allocations and the Regulatory Allocations made to any each Member if, as a result of such allocation, such Member shall equal the net amount that would have an Adjusted Capital Account Deficitbeen allocated to each Member had the Regulatory Allocations not occurred.