Common use of Tax Allocations; Code Section 704(c) Clause in Contracts

Tax Allocations; Code Section 704(c). (a) In accordance with Section 704(c) of the Code and the Treasury Regulations promulgated thereunder, income, gain, loss and deduction with respect to any property contributed to the capital of the Company shall, solely for income tax purposes, be allocated among the Members so as to take account of any variation between the adjusted basis of such property to the Company for federal income tax purposes and its Fair Market Value at the time of contribution. In addition, all cancellation of indebtedness income resulting from the Exchange Offer and related transactions relating to the Company achieving Bank Holding Company Status shall be allocated only among the Common Holders owning Common Membership Interests immediately prior to the Exchange Offer (and such related transactions) in accordance with their relative Company Interests. (b) In the event that the Tax Book Value of any Company asset is subsequently adjusted in accordance with the last sentence of the definition of Tax Book Value, any allocation of income, gain, loss and deduction with respect to such asset shall thereafter take account of any variation between the adjusted tax basis of the asset to the Company and its Tax Book Value in the same manner as under Section 704(c) of the Code and any Treasury Regulations promulgated thereunder. Any elections or other decisions relating to such allocations shall be made by the Board of Managers in a manner that reasonably reflects the purpose and intention of this Agreement. (c) Allocations pursuant to this Section 6.5 are solely for purposes of federal, state and local taxes and shall not affect, or in any way be taken into account in computing, any Member’s Capital Account or share of Tax Book Profit, Tax Book Loss or Distributions pursuant to any provision of this Agreement.

Tax Allocations; Code Section 704(c). (a) In accordance with Section 704(c) of the Code and the Treasury Regulations promulgated thereunder, income, gain, loss loss, and deduction with respect to any property contributed to the capital of the Company shall, solely for income tax purposes, be allocated among the Members so as to take account of any variation between the adjusted basis of such property to the Company for federal income tax purposes and its Fair Market Value at the time of contribution. In addition, all cancellation of indebtedness income resulting from the Exchange Offer and related transactions relating to the Company achieving Bank Holding Company Status shall be allocated only among the Common Holders owning Common Membership Interests immediately prior to the Exchange Offer (and such related transactions) in accordance with their relative Company Interestsinitial Gross Asset Value. (b) In the event that the Tax Book Gross Asset Value of any Company asset is subsequently adjusted in accordance with the last sentence of the definition Company shall be adjusted pursuant to the provisions of Tax Book Valuethis Agreement, any allocation subsequent allocations of income, gain, loss and deduction with respect to such asset shall thereafter take account of any variation between the adjusted tax basis of the such asset to the Company for federal income tax purposes and its Tax Book Gross Asset Value in the same manner as under Section 704(c) of the Code and any the Treasury Regulations promulgated thereunder. . (c) Any elections or other decisions relating to such Section 704(c) allocations shall be made by the Board of Managers Members in a any manner that reasonably reflects the purpose and intention of this Agreement. (c. Section 704(c) Allocations allocations pursuant to this Section 6.5 5.6 are solely for purposes of federal, state state, and local taxes and shall not affect, or in any way be taken into account in computing, any Member’s Capital Account or share of Tax Book ProfitProfits, Tax Book Loss Losses, other items, or Distributions distributions pursuant to any provision of this Agreement. (d) Except as otherwise determined by the Managing Member with the approval of the GE Representative Member, the Company shall use the “traditional method” (as defined in Regulations Section 1.704-3(b)) for purposes of computing section 704(c) allocations with respect to property contributed to the Company with a Gross Asset Value that differs from its adjusted tax basis at the time of contribution, and for purposes of computing reverse section 704(c) allocations with respect to property for which differences between Gross Asset Value and adjusted tax basis are created when the Company revalues Company property pursuant to Regulations Section 1.704-1(b)(2)(iv)(f).