BASED UPON THE
GENERAL PARTNER'S ESTIMATE OF THE NET TAXABLE INCOME, MULTIPLIED BY THE
APPLICABLE TAX PERCENTAGE (THE "TAX AMOUNT") AND SHALL ONLY BE PAID TO THE
EXTENT PREVIOUS DISTRIBUTIONS PURSUANT TO SECTION 7.1 DURING SUCH TAXABLE YEAR
ARE INSUFFICIENT TO COVER THE TAX AMOUNT FOR SUCH TAXABLE YEAR.
TAX
DISTRIBUTIONS SHALL BE DISTRIBUTED TO THE PARTNERS ON A PRO RATA BASIS IN
ACCORDANCE WITH THEIR RESPECTIVE PARTICIPATIONS IN SUCH TAXABLE INCOME, AND
SHALL BE TREATED IN ALL RESPECTS AS OFFSETS AGAINST SUBSEQUENT DISTRIBUTIONS
PURSUANT TO SECTION 7.1.
SECTION 7.3.
SECTION 83(B) ELECTION.
WITHIN 30 DAYS AFTER ACQUIRING ANY
INTERESTS (OTHER THAN CLASS A INTERESTS), EACH MANAGEMENT LIMITED PARTNER SHALL
MAKE AN ELECTION WITH THE INTERNAL REVENUE SERVICE ("IRS") UNDER SECTION 83(B)
OF THE CODE (OR ANY SIMILAR PROVISION UNDER OTHER TAX LAWS APPLICABLE TO THE
MANAGEMENT LIMITED PARTNER) AND THE REGULATIONS PROMULGATED THEREUNDER (AN
"83(B) ELECTION") IN THE FORM OF EXHIBIT D ATTACHED HERETO.
EACH MANAGEMENT
LIMITED PARTNER SHALL SUBMIT SUCH 83(B) ELECTION TO THE IRS WITHIN 30 CALENDAR
DAYS AFTER ACQUIRING THE INTERESTS AND SHALL PROMPTLY SEND A COPY TO THE
PARTNERSHIP.
ARTICLE VIII
ALLOCATIONS
SECTION 8.1.
ALLOCATIONS OF PROFITS AND LOSSES.
EXCEPT AS OTHERWISE PROVIDED
IN THIS AGREEMENT, PROFITS AND LOSSES AND TO THE EXTENT NECESSARY, INDIVIDUAL
ITEMS OF INCOME, GAIN OR LOSS OR DEDUCTION OF THE PARTNERSHIP SHALL BE ALLOCATED
IN A MANNER SUCH THAT THE CAPITAL
24
ACCOUNT OF EACH PARTNER AFTER GIVING EFFECT TO THE SPECIAL ALLOCATIONS SET FORTH
IN SECTION 8.2 IS, AS NEARLY AS POSSIBLE, EQUAL (PROPORTIONATELY) TO (I) THE
DISTRIBUTIONS THAT WOULD BE MADE PURSUANT TO SECTION 7.1 IF THE PARTNERSHIP WERE
DISSOLVED, ITS AFFAIRS WOUND UP AND ITS ASSETS SOLD FOR CASH EQUAL TO THEIR BOOK
VALUE, ALL PARTNERSHIP LIABILITIES WERE SATISFIED (LIMITED WITH RESPECT TO EACH
NON-RECOURSE LIABILITY TO THE BOOK VALUE OF THE ASSETS SECURING SUCH LIABILITY)
AND THE NET ASSETS OF THE PARTNERSHIP WERE DISTRIBUTED IN ACCORDANCE WITH
SECTION 7.1 TO THE PARTNERS IMMEDIATELY AFTER MAKING SUCH ALLOCATION, MINUS (II)
SUCH PARTNER'S SHARE OF PARTNER MINIMUM GAIN AND PARTNER NONRECOURSE DEBT
MINIMUM GAIN, COMPUTED IMMEDIATELY PRIOR TO THE HYPOTHETICAL SALE OF ASSETS.
SECTION 8.2.
SPECIAL ALLOCATIONS.
NOTWITHSTANDING ANY OTHER PROVISION IN THIS
ARTICLE VIII:
(A)
MINIMUM GAIN CHARGEBACK.
IF THERE IS A NET DECREASE IN PARTNER
MINIMUM GAIN OR PARTNER NONRECOURSE DEBT MINIMUM GAIN (DETERMINED IN ACCORDANCE
WITH THE PRINCIPLES OF TREASURY REGULATIONS SECTIONS 1.704-2(D) AND 1.704-2(I))
DURING ANY PARTNERSHIP TAXABLE YEAR, THE PARTNERS SHALL BE SPECIALLY ALLOCATED
ITEMS OF PARTNERSHIP INCOME AND GAIN FOR SUCH YEAR (AND, IF NECESSARY,
SUBSEQUENT YEARS) IN AN AMOUNT EQUAL TO THEIR RESPECTIVE SHARES OF SUCH NET
DECREASE DURING SUCH YEAR, DETERMINED PURSUANT TO TREASURY REGULATIONS SECTIONS
1.704-2(G) AND 1.704-2(I)(5).
THE ITEMS TO BE SO ALLOCATED SHALL BE DETERMINED
IN ACCORDANCE WITH TREASURY REGULATIONS SECTION 1.704-2(F).
THIS SECTION 8.2(A)
IS INTENDED TO COMPLY WITH THE MINIMUM GAIN CHARGEBACK REQUIREMENTS IN SUCH
TREASURY REGULATIONS SECTIONS AND SHALL BE INTERPRETED CONSISTENTLY THEREWITH;
INCLUDING THAT NO CHARGEBACK SHALL BE REQUIRED TO THE EXTENT