Common use of TAX PARTNERSHIP ALLOCATIONS Clause in Contracts

TAX PARTNERSHIP ALLOCATIONS. 6.1. FMV CAPITAL ACCOUNT ALLOCATIONS Each item of income, gain, loss, or deduction shall be allocated to each Party as follows: 6.1.1. Actual or deemed income from the sale, exchange, distribution or other disposition of production shall be allocated to the Party entitled to such production or the proceeds from the sale of such production as provided in the Agreement. The amount received from the sale of production and the amount of the FMV of production taken in kind by the Parties are deemed to be identical; accordingly, such items may be omitted from the adjustments made to the Parties’ FMV capital accounts. 6.1.2. Exploration cost, IDC, operating and maintenance cost shall be allocated to each Party in accordance with its respective contribution, or obligation to contribute, to such cost; provided that the first amounts of IDC paid or incurred by Summit for xxxxx jointly drilled by Summit and Xxx in Area One during the Area One Carry Period ( including, without limitation, IDC incurred with respect to Pending Area One Xxxxx after the Closing Date) that are credited against the Area One Drilling Carry Obligation (all terms as defined in the Agreement), will be allocated to Xxx up to, but not in excess of, an amount equal to (a) eighty-five percent (85%) of Rex’s adjusted tax basis in the Original Interests in all Xxx Area One Leases as of the Effective Date (herein called the “Xxx Tax Basis Amount”), minus (b) all depreciation allocated to R.E. Gas pursuant to Section 6.1.3 for costs of depreciable equipment in Area One paid for by Summit during the Area One Carry Period that are credited against the Area One Drilling Carry Obligation; provided that the IDC paid by Summit that is allocated to R.E. Gas with respect to xxxxx jointly drilled by Summit and R.E. Gas in Area One during the Area One Carry Period shall not exceed the Area One Drilling Carry Obligation less all other credits against the Area One Drilling Carry Obligation other than such IDC provided for in the Agreement. 6.1.3. Depreciation shall be allocated to each Party in accordance with its contribution, or obligation to contribute, to the cost of the underlying asset, except that depreciation with respect to the undivided interests in depreciable property in Area One that are paid for by Summit during the Area One Carry Period the cost of which is credited against the Area One Drilling Carry Obligation shall be allocated to Xxx up to, but not in excess of, an amount equal to (a) the Xxx Tax Basis Amount, minus (b) all IDC allocated to R.E. Gas pursuant to Section 6.1.2 for amounts of IDC paid or incurred by Summit for xxxxx jointly drilled by Summit and R.E. in Area One during the Area One Carry Period that are credited against the Area One Drilling Carry Obligation; provided that the depreciation allocated to Xxx for costs of depreciable equipment in Area One paid by Summit during the Area One Carry Period in the aggregate shall not exceed the Area One Drilling Carry Obligation less all other credits against the Area One Drilling Carry Obligation other than such costs provided for in the Agreement. 6.1.4. Simulated depletion shall be allocated to each Party in accordance with its FMV capital account adjusted basis in the applicable oil and gas property of the Tax Partnership, except that an amount of simulated depletion equal to the lesser of the Xxx Tax Basis Amount or the Area One Drilling Carry Obligation shall be allocated first to Summit’s FMV capital account. 6.1.5. Loss (or simulated loss) upon the sale, exchange, distribution, abandonment or other disposition of depreciable or depletable property shall be allocated to the Parties in the ratio of their respective FMV capital account adjusted bases in the depreciable or depletable property. 6.1.6. Gain (or simulated gain) upon the sale, exchange, distribution, or other disposition of depreciable or depletable property shall be allocated to the Parties so that the FMV capital account balances of the Parties with respect to such property will most closely reflect their respective percentage or fractional interests under the Agreement determined without regard to the TPPs. 6.1.7. Costs or expenses of any other kind shall be allocated to each Party in accordance with its respective contribution, or obligation to contribute, to such costs or expense. 6.1.8. Any other income item shall be allocated to the Parties in accordance with the manner in which such income is realized by each Party.

TAX PARTNERSHIP ALLOCATIONS. 6.1. FMV CAPITAL ACCOUNT ALLOCATIONS Each item of income, gain, loss, or deduction shall be allocated to each Party as follows: 6.1.1. Actual or deemed income from the sale, exchange, distribution or other disposition of production shall be allocated to the Party entitled to such production or the proceeds from the sale of such production as provided in the Agreement. The amount received from the sale of production and the amount of the FMV of production taken in kind by the Parties are deemed to be identical; accordingly, such items may be omitted from the adjustments made to the Parties’ FMV capital accounts. 6.1.2. Exploration cost, IDC, operating and maintenance cost shall be allocated to each Party in accordance with its respective contribution, or obligation to contribute, to such cost; provided that the first amounts of IDC paid or incurred by Summit for xxxxx jointly drilled by Summit and Xxx in Area One Two during the Area One Two Carry Period ( including, without limitation, IDC incurred with respect to Pending Area One Xxxxx after the Closing Date) that are credited against the Area One Two Drilling Carry Obligation (all terms as defined in the Agreement), will be allocated to Xxx up to, but not in excess of, an amount equal to (a) eighty-five eighty percent (8580%) of Rex’s adjusted tax basis in the Original Interests in all Xxx Area One Two Leases as of the Effective Date (herein called the “Xxx Tax Basis Amount”), minus (b) all depreciation allocated to R.E. Gas Xxx pursuant to Section 6.1.3 for costs of depreciable equipment in Area One Two paid for by Summit during the Area One Two Carry Period that are credited against the Area One Two Drilling Carry Obligation; provided that the IDC paid by Summit that is allocated to R.E. Gas Xxx with respect to xxxxx jointly drilled by Summit and R.E. Gas Xxx in Area One Two during the Area One Two Carry Period shall not exceed the Area One Two Drilling Carry Obligation less all other credits against the Area One Two Drilling Carry Obligation other than such IDC provided for in the Agreement. 6.1.3. Depreciation shall be allocated to each Party in accordance with its contribution, or obligation to contribute, to the cost of the underlying asset, except that depreciation with respect to the undivided interests in depreciable property in Area One Two that are paid for by Summit during the Area One Two Carry Period the cost of which is credited against the Area One Two Drilling Carry Obligation shall be allocated to Xxx up to, but not in excess of, an amount equal to (a) the Xxx Tax Basis Amount, minus (b) all IDC allocated to R.E. Gas Xxx pursuant to Section 6.1.2 for amounts of IDC paid or incurred by Summit for xxxxx jointly drilled by Summit and R.E. Xxx in Area One Two during the Area One Two Carry Period that are credited against the Area One Two Drilling Carry Obligation; provided that the depreciation allocated to Xxx for costs of depreciable equipment in Area One Two paid by Summit during the Area One Two Carry Period in the aggregate shall not exceed the Area One Two Drilling Carry Obligation less all other credits against the Area One Two Drilling Carry Obligation other than such costs provided for in the Agreement. 6.1.4. Simulated depletion shall be allocated to each Party in accordance with its FMV capital account adjusted basis in the applicable oil and gas property of the Tax Partnership, except that an amount of simulated depletion equal to the lesser of the Xxx Tax Basis Amount or the Area One Two Drilling Carry Obligation shall be allocated first to Summit’s FMV capital account. 6.1.5. Loss (or simulated loss) upon the sale, exchange, distribution, abandonment or other disposition of depreciable or depletable property shall be allocated to the Parties in the ratio of their respective FMV capital account adjusted bases in the depreciable or depletable property. 6.1.6. Gain (or simulated gain) upon the sale, exchange, distribution, or other disposition of depreciable or depletable property shall be allocated to the Parties so that the FMV capital account balances of the Parties with respect to such property will most closely reflect their respective percentage or fractional interests under the Agreement determined without regard to the TPPs. 6.1.7. Costs or expenses of any other kind shall be allocated to each Party in accordance with its respective contribution, or obligation to contribute, to such costs or expense. 6.1.8. Any other income item shall be allocated to the Parties in accordance with the manner in which such income is realized by each Party.

TAX PARTNERSHIP ALLOCATIONS. 6.1. FMV CAPITAL ACCOUNT ALLOCATIONS Each item of income, gain, loss, or deduction shall be allocated to each Party as follows: 6.1.1. Actual or deemed income from the sale, exchange, distribution or other disposition of production shall be allocated to the Party entitled to such production or the proceeds from the sale of such production as provided in the Agreement. The amount received from the sale of production and the amount of the FMV of production taken in kind by the Parties are deemed to be identical; accordingly, such items may be omitted from the adjustments made to the Parties’ FMV capital accounts. 6.1.2. Exploration cost, IDC, operating and maintenance cost shall be allocated to each Party in accordance with its respective contribution, or obligation to contribute, to such cost; provided that the first amounts of IDC paid or incurred by Summit for xxxxx jointly drilled by Summit and Xxx in Area One Three during the Area One Three Carry Period ( including, without limitation, IDC incurred with respect to Pending Area One Xxxxx after the Closing Date) that are credited against the Area One Three Drilling Carry Obligation (all terms as defined in the Agreement), will be allocated to Xxx up to, but not in excess of, (a) an amount equal to (a) eighty-five fifty percent (8550%) of Rex’s adjusted tax basis in the Original Interests in all Xxx Area One Three Leases as of the Effective Date (herein called the “Xxx Tax Basis Amount”), minus (b) all depreciation allocated to R.E. Gas Xxx pursuant to Section 6.1.3 for costs of depreciable equipment in Area One Three paid for by Summit during the Area One Three Carry Period that are credited against the Area One Three Drilling Carry Obligation; provided that the IDC paid by Summit that is allocated to R.E. Gas Xxx with respect to xxxxx jointly drilled by Summit and R.E. Gas Xxx in Area One Three during the Area One Three Carry Period shall not exceed the Area One Three Drilling Carry Obligation less all other credits against the Area One Three Drilling Carry Obligation other than such IDC provided for in the Agreement. 6.1.3. Depreciation shall be allocated to each Party in accordance with its contribution, or obligation to contribute, to the cost of the underlying asset, except that depreciation with respect to the undivided interests in depreciable property in Area One Three that are paid for by Summit during the Area One Three Carry Period the cost of which is credited against the Area One Three Drilling Carry Obligation shall be allocated to Xxx up to, but not in excess of, an amount equal to (a) the Xxx Tax Basis Amount, minus (b) all IDC allocated to R.E. Gas Xxx pursuant to Section 6.1.2 for amounts of IDC paid or incurred by Summit for xxxxx jointly drilled by Summit and R.E. Xxx in Area One Three during the Area One Three Carry Period that are credited against the Area One Three Drilling Carry Obligation; provided that the depreciation allocated to Xxx for costs of depreciable equipment in Area One Three paid by Summit during the Area One Three Carry Period in the aggregate shall not exceed the Area One Three Drilling Carry Obligation less all other credits against the Area One Three Drilling Carry Obligation other than such costs provided for in the Agreement. 6.1.4. Simulated depletion shall be allocated to each Party in accordance with its FMV capital account adjusted basis in the applicable oil and gas property of the Tax Partnership, except that an amount of simulated depletion equal to the lesser of the Xxx Tax Basis Amount or the Area One Three Drilling Carry Obligation shall be allocated first to Summit’s FMV capital account. 6.1.5. Loss (or simulated loss) upon the sale, exchange, distribution, abandonment or other disposition of depreciable or depletable property shall be allocated to the Parties in the ratio of their respective FMV capital account adjusted bases in the depreciable or depletable property. 6.1.6. Gain (or simulated gain) upon the sale, exchange, distribution, or other disposition of depreciable or depletable property shall be allocated to the Parties so that the FMV capital account balances of the Parties with respect to such property will most closely reflect their respective percentage or fractional interests under the Agreement determined without regard to the TPPs. 6.1.7. Costs or expenses of any other kind shall be allocated to each Party in accordance with its respective contribution, or obligation to contribute, to such costs or expense. 6.1.8. Any other income item shall be allocated to the Parties in accordance with the manner in which such income is realized by each Party.

TAX PARTNERSHIP ALLOCATIONS. 6.1. FMV CAPITAL ACCOUNT ALLOCATIONS Each item of income, gain, loss, or deduction shall be allocated to each Party as follows: 6.1.1. Actual or deemed income from the sale, exchange, distribution or other disposition of production shall be allocated to the Party entitled to such production or the proceeds from the sale of such production as provided in the Agreement. The amount received from the sale of production and the amount of the FMV of production taken in kind by the Parties are deemed to be identical; accordingly, such items may be omitted from the adjustments made to the Parties’ FMV capital accounts. 6.1.2. Exploration cost, IDC, operating and maintenance cost shall be allocated to each Party in accordance with its respective contribution, or obligation to contribute, to such cost; provided that the first amounts of IDC paid or incurred by Summit for xxxxx jointly drilled by Summit and Xxx in Area One Four during the Area One Four Carry Period ( including, without limitation, IDC incurred with respect to Pending Area One Xxxxx after the Closing Date) that are credited against the Area One Four Drilling Carry Obligation (all terms as defined in the Agreement), will be allocated to Xxx up to, but not in excess of, (a) an amount equal to (a) eighty-five fifty percent (8550%) of Rex’s adjusted tax basis in the Original Interests Interest in all the Xxx Area One Leases Four Lease as of the Effective Date (herein called the “Xxx Tax Basis Amount”), minus (b) all depreciation allocated to R.E. Gas Xxx pursuant to Section 6.1.3 for costs of depreciable equipment in Area One Four paid for by Summit during the Area One Four Carry Period that are credited against the Area One Four Drilling Carry Obligation; provided that the IDC paid by Summit that is allocated to R.E. Gas Xxx with respect to xxxxx jointly drilled by Summit and R.E. Gas Xxx in Area One Four during the Area One Four Carry Period shall not exceed the Area One Four Drilling Carry Obligation less all other credits against the Area One Four Drilling Carry Obligation other than such IDC provided for in the Agreement. 6.1.3. Depreciation shall be allocated to each Party in accordance with its contribution, or obligation to contribute, to the cost of the underlying asset, except that depreciation with respect to the undivided interests in depreciable property in Area One Four that are paid for by Summit during the Area One Four Carry Period the cost of which is credited against the Area One Four Drilling Carry Obligation shall be allocated to Xxx up to, but not in excess of, (a) an amount equal to (a) the Xxx Tax Basis Amount, minus (b) all IDC allocated to R.E. Gas Xxx pursuant to Section 6.1.2 for amounts of IDC paid or incurred by Summit for xxxxx jointly drilled by Summit and R.E. Xxx in Area One Four during the Area One Four Carry Period that are credited against the Area One Four Drilling Carry Obligation; provided that the depreciation allocated to Xxx for costs of depreciable equipment in Area One Four paid by Summit during the Area One Four Carry Period in the aggregate shall not exceed the Area One Four Drilling Carry Obligation less all other credits against the Area One Four Drilling Carry Obligation other than such costs provided for in the Agreement. 6.1.4. Simulated depletion shall be allocated to each Party in accordance with its FMV capital account adjusted basis in the applicable oil and gas property of the Tax Partnership, except that an amount of simulated depletion equal to the lesser of the Xxx Tax Basis Amount or the Area One Four Drilling Carry Obligation shall be allocated first to Summit’s FMV capital account. 6.1.5. Loss (or simulated loss) upon the sale, exchange, distribution, abandonment or other disposition of depreciable or depletable property shall be allocated to the Parties in the ratio of their respective FMV capital account adjusted bases in the depreciable or depletable property. 6.1.6. Gain (or simulated gain) upon the sale, exchange, distribution, or other disposition of depreciable or depletable property shall be allocated to the Parties so that the FMV capital account balances of the Parties with respect to such property will most closely reflect their respective percentage or fractional interests under the Agreement determined without regard to the TPPs. 6.1.7. Costs or expenses of any other kind shall be allocated to each Party in accordance with its respective contribution, or obligation to contribute, to such costs or expense. 6.1.8. Any other income item shall be allocated to the Parties in accordance with the manner in which such income is realized by each Party.