704(C) OF
THE CODE OR (Y) OTHERWISE TO PRESERVE OR ACHIEVE UNIFORMITY OF THE UNITS (OR ANY
CLASS OR CLASSES THEREOF); AND (IV) ADOPT AND EMPLOY SUCH METHODS FOR (A) THE
MAINTENANCE OF CAPITAL ACCOUNTS FOR BOOK AND TAX PURPOSES, (B) THE DETERMINATION
AND ALLOCATION OF ADJUSTMENTS UNDER SECTIONS 704(C), 734 AND 743 OF THE CODE,
(C) THE DETERMINATION AND ALLOCATION OF TAXABLE INCOME, TAX LOSS AND ITEMS
THEREOF UNDER THIS AGREEMENT AND PURSUANT TO THE CODE, (D) THE DETERMINATION OF
THE IDENTITIES AND TAX CLASSIFICATION OF MEMBERS, (E) THE PROVISION OF TAX
INFORMATION AND REPORTS TO THE MEMBERS, (F) THE ADOPTION OF REASONABLE
CONVENTIONS AND METHODS FOR THE VALUATION OF ASSETS AND THE DETERMINATION OF TAX
BASIS, (G) THE ALLOCATION OF ASSET VALUES AND TAX BASIS, (H) THE ADOPTION AND
MAINTENANCE OF ACCOUNTING METHODS, (I) THE RECOGNITION OF THE TRANSFER OF UNITS
AND (J) TAX COMPLIANCE AND OTHER TAX-RELATED REQUIREMENTS, INCLUDING WITHOUT
LIMITATION, THE USE OF COMPUTER SOFTWARE, AS IT DETERMINES IN ITS SOLE
DISCRETION ARE NECESSARY AND APPROPRIATE TO EXECUTE THE PROVISIONS OF THIS
AGREEMENT AND TO COMPLY WITH FEDERAL, STATE AND LOCAL TAX LAW, AND TO ACHIEVE
UNIFORMITY OF UNITS WITHIN A CLASS. THE MANAGING MEMBER MAY ADOPT SUCH
CONVENTIONS, MAKE SUCH ALLOCATIONS AND MAKE SUCH AMENDMENTS TO THIS AGREEMENT AS
PROVIDED IN THIS SECTION 5.2(C) ONLY IF SUCH CONVENTIONS, ALLOCATIONS OR
AMENDMENTS WOULD NOT HAVE A MATERIAL ADVERSE EFFECT ON THE MEMBERS, THE HOLDERS
OF ANY CLASS OR CLASSES OF UNITS ISSUED AND OUTSTANDING OR THE COMPANY, AND IF
SUCH ALLOCATIONS ARE CONSISTENT WITH THE PRINCIPLES OF SECTION 704 OF THE CODE.
(D)
FOR PURPOSES OF DETERMINING THE ITEMS OF COMPANY INCOME, GAIN,
LOSS, DEDUCTION, OR CREDIT ALLOCABLE TO ANY MEMBER WITH RESPECT TO ANY PERIOD,
SUCH ITEMS SHALL BE DETERMINED ON A DAILY, MONTHLY, OR OTHER BASIS, AS
DETERMINED BY THE MANAGING MEMBER USING ANY PERMISSIBLE METHOD UNDER CODE
SECTION 706 AND THE TREASURY REGULATIONS PROMULGATED THEREUNDER.
(E)
TAX CREDITS, TAX CREDIT RECAPTURE AND ANY ITEMS RELATED THERETO
SHALL BE ALLOCATED TO THE MEMBERS ACCORDING TO THEIR INTERESTS IN SUCH ITEMS AS
REASONABLY DETERMINED BY THE MANAGING MEMBER TAKING INTO ACCOUNT THE PRINCIPLES
OF TREASURY REGULATIONS SECTIONS 1.704-1(B)(4)(II) AND 1.704-1T(B)(4)(XI).
(F)
ALLOCATIONS PURSUANT TO THIS SECTION 5.2 ARE SOLELY FOR THE
PURPOSES OF FEDERAL, STATE AND LOCAL TAXES AND SHALL NOT AFFECT, OR IN ANY WAY
BE TAKEN INTO ACCOUNT IN
25
COMPUTING, ANY MEMBER'S CAPITAL ACCOUNT OR SHARE OF INCOME, LOSS, DISTRIBUTIONS
OR OTHER COMPANY ITEMS PURSUANT TO ANY PROVISION OF THIS AGREEMENT.
Section 5.3.
Members' Tax Reporting.
The Members acknowledge and are aware of
the income tax consequences of the allocations made pursuant to this ARTICLE V
and, except as may otherwise be required by applicable law or regulatory
requirements, hereby agree to be bound by the provisions of this ARTICLE V in
reporting their shares of Company income, gain, loss, deduction and credit for
federal, state and local income tax purposes.
Section 5.4.
Certain Costs and Expenses.
The Company shall (i)