TO SECTION
7.2(D)(II) HEREOF UNTIL THE AMOUNT ALLOCATED AND PREVIOUSLY ALLOCATED PURSUANT
TO THIS SECTION 7.2(E)(V) EQUALS THE AMOUNTS ALLOCATED AND PREVIOUSLY ALLOCATED
PURSUANT TO SECTION 7.2(D)(II) HEREOF; AND
(VI)
THEREAFTER, PRO RATA AMONG ALL THE MEMBERS IN
PROPORTION TO THEIR PERCENTAGE INTERESTS.
(F)
NOTWITHSTANDING SECTIONS 7.2(D) AND (E)
HEREOF:
(I)
FOR FEDERAL INCOME TAX PURPOSES BUT NOT
FOR PURPOSES OF CREDITING OR CHARGING CAPITAL ACCOUNTS, DEPRECIATION OR GAIN OR
LOSS REALIZED BY THE COMPANY WITH RESPECT TO ANY PROPERTY THAT WAS CONTRIBUTED
TO THE COMPANY OR THAT WAS HELD BY THE COMPANY AT A TIME WHEN THE BOOK VALUE OF
THE COMPANY ASSETS WAS ADJUSTED PURSUANT TO THE THIRD SENTENCE OF SECTION 7.1(B)
SHALL, IN ACCORDANCE WITH SECTION 704(C) OF THE CODE AND TREASURY REGULATION
SECTIONS 1.704-1(B)(2)(IV)(D) AND (F) AND 1.704-3(A)(9), BE ALLOCATED AMONG THE
MEMBERS IN A MANNER WHICH TAKES INTO ACCOUNT THE DIFFERENCES BETWEEN THE
ADJUSTED BASIS FOR FEDERAL INCOME TAX PURPOSES TO THE COMPANY OF ITS INTEREST IN
SUCH PROPERTY AND THE FAIR MARKET VALUE OF SUCH INTEREST AT THE TIME OF ITS
CONTRIBUTION OR REVALUATION.
(II)
IF THERE IS A NET DECREASE IN THE MINIMUM
GAIN OF THE COMPANY DURING A TAXABLE YEAR (INCLUDING ANY MINIMUM GAIN
ATTRIBUTABLE TO MEMBER-FUNDED DEBT), EACH MEMBER AT THE END OF SUCH YEAR SHALL
BE ALLOCATED, PRIOR TO ANY OTHER ALLOCATIONS REQUIRED UNDER THIS ARTICLE 7,
ITEMS OF GROSS INCOME FOR SUCH YEAR (AND, IF NECESSARY, FOR SUBSEQUENT YEARS) IN
THE AMOUNT AND PROPORTIONS DESCRIBED IN TREASURY REGULATION SECTIONS 1.704-2(G)
AND 1.704-2(I)(4).
(III)
NOTWITHSTANDING THE ALLOCATIONS PROVIDED FOR
IN SECTIONS 7.2(D) AND (E), NO ALLOCATION OF AN ITEM OF LOSS OR DEDUCTION SHALL
BE MADE TO A MEMBER TO THE EXTENT SUCH ALLOCATION WOULD CAUSE OR INCREASE A
DEFICIT BALANCE IN SUCH MEMBER'S CAPITAL ACCOUNT AS OF THE END OF THE TAXABLE
YEAR TO WHICH SUCH ALLOCATION RELATES.
IF ANY MEMBER RECEIVES AN ADJUSTMENT,
ALLOCATION OR DISTRIBUTION THAT CAUSES OR INCREASES SUCH A DEFICIT BALANCE,
TAKING INTO ACCOUNT THE
54
RULES OF TREASURY REGULATION SECTIONS 1.704-1(B) (2)(II)(D)(4), (5) AND (6),
SUCH MEMBER SHALL BE ALLOCATED (AFTER TAKING INTO ACCOUNT ANY ALLOCATIONS MADE
PURSUANT TO SECTION 7.2(F)(II)) ITEMS OF INCOME AND GAIN IN AN AMOUNT AND MANNER
TO ELIMINATE THE MEMBER'S CAPITAL ACCOUNT DEFICIT ATTRIBUTABLE TO SUCH
ADJUSTMENT, ALLOCATION OR DISTRIBUTION AS QUICKLY AS POSSIBLE.
FOR PURPOSES OF
THIS SECTION 7.2(F)(III), THERE SHALL BE EXCLUDED FROM A MEMBER'S DEFICIT
CAPITAL ACCOUNT BALANCE AT THE END OF A TAXABLE YEAR OF THE COMPANY (A) SUCH
MEMBER'S SHARE, DETERMINED IN ACCORDANCE WITH SECTION 704(B) OF THE CODE AND
TREASURY REGULATION SECTION 1.704-2(G) OF MINIMUM GAIN (PROVIDED THAT IN THE
CASE OF MINIMUM GAIN ATTRIBUTABLE TO MEMBER-FUNDED DEBT, SUCH MINIMUM GAIN SHALL
BE ALLOCATED TO THE MEMBER OR MEMBERS TO WHOM SUCH DEBT IS ATTRIBUTABLE PURSUANT
TO TREASURY REGULATION SECTION 1.704-2(I)) AND (B) THE AMOUNT, IF ANY, THAT SUCH
MEMBER IS OBLIGATED TO RESTORE TO THE COMPANY UNDER TREASURY REGULATION SECTION
1.704-1(B)(2)(II)(C).
(IV)
NOTWITHSTANDING THE ALLOCATIONS PROVIDED FOR
IN SUBSECTION (I) OF