MEMBERS, TO REVISE THE PRESCRIBED RATIO TO THE NUMERICALLY CLOSEST
RATIO THAT DOES SATISFY SUCH REQUIREMENTS.
(VI)
MEMBER NONRECOURSE DEDUCTIONS.
MEMBER NONRECOURSE DEDUCTIONS FOR
ANY TAXABLE PERIOD SHALL BE ALLOCATED 100% TO THE MEMBER THAT BEARS THE
"ECONOMIC RISK OF LOSS" (AS DEFINED IN THE TREASURY REGULATIONS) WITH RESPECT TO
THE MEMBER NONRECOURSE DEBT TO WHICH SUCH MEMBER NONRECOURSE DEDUCTIONS ARE
ATTRIBUTABLE IN ACCORDANCE WITH TREASURY REGULATIONS SECTION 1.704-2(I).
IF
MORE THAN ONE MEMBER BEARS THE ECONOMIC RISK OF LOSS WITH RESPECT TO A MEMBER
NONRECOURSE DEBT, SUCH MEMBER NONRECOURSE DEDUCTIONS ATTRIBUTABLE THERETO SHALL
BE ALLOCATED BETWEEN OR AMONG SUCH MEMBERS IN ACCORDANCE WITH THE RATIOS IN
WHICH THEY SHARE SUCH ECONOMIC RISK OF LOSS.
(VII)
NONRECOURSE LIABILITIES.
NONRECOURSE LIABILITIES OF THE COMPANY
DESCRIBED IN TREASURY REGULATIONS SECTION 1.752-3(A)(3) SHALL BE ALLOCATED AMONG
THE MEMBERS IN THE MANNER CHOSEN BY THE MANAGING MEMBER AND CONSISTENT WITH SUCH
SECTION OF THE TREASURY REGULATIONS.
(VIII)
CODE SECTION 754 ADJUSTMENTS.
TO THE EXTENT AN ADJUSTMENT TO THE
ADJUSTED TAX BASIS OF ANY COMPANY ASSET PURSUANT TO SECTION 734(B) OR 743(B) OF
THE CODE IS REQUIRED, PURSUANT TO TREASURY REGULATIONS
SECTION 1.704-1(B)(2)(IV)(M), TO BE TAKEN INTO ACCOUNT IN DETERMINING CAPITAL
ACCOUNTS, THE AMOUNT OF SUCH ADJUSTMENT TO THE CAPITAL ACCOUNTS SHALL BE TREATED
AS AN ITEM OF GAIN (IF THE ADJUSTMENT INCREASES THE BASIS OF THE ASSET) OR LOSS
(IF THE ADJUSTMENT DECREASES SUCH BASIS), AND SUCH ITEM OF GAIN OR LOSS SHALL BE
SPECIALLY ALLOCATED TO THE MEMBERS IN A MANNER CONSISTENT WITH THE MANNER IN
WHICH THEIR CAPITAL ACCOUNTS ARE REQUIRED TO BE ADJUSTED PURSUANT TO SUCH
SECTION OF THE TREASURY REGULATIONS.
(IX)
CURATIVE ALLOCATION.
(1)
THE REQUIRED ALLOCATIONS ARE INTENDED TO COMPLY WITH CERTAIN
REQUIREMENTS OF THE TREASURY REGULATIONS. IT IS THE INTENT OF THE MEMBERS THAT,
TO THE EXTENT POSSIBLE, ALL REQUIRED ALLOCATIONS SHALL BE OFFSET EITHER WITH
OTHER REQUIRED ALLOCATIONS OR WITH SPECIAL ALLOCATIONS OF OTHER ITEMS OF COMPANY
INCOME, GAIN, LOSS OR DEDUCTION PURSUANT TO THIS SECTION 5.1(B)(IX)(1).
THEREFORE, NOTWITHSTANDING ANY OTHER PROVISION OF THIS ARTICLE V (OTHER THAN THE
REQUIRED ALLOCATIONS), THE MANAGING MEMBER SHALL MAKE SUCH OFFSETTING SPECIAL
ALLOCATIONS OF COMPANY INCOME, GAIN, LOSS OR DEDUCTION IN WHATEVER MANNER IT
DETERMINES APPROPRIATE SO THAT, AFTER SUCH OFFSETTING ALLOCATIONS ARE MADE, EACH
MEMBER'S
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CAPITAL ACCOUNT BALANCE IS, TO THE EXTENT POSSIBLE, EQUAL TO THE CAPITAL ACCOUNT
BALANCE SUCH MEMBER WOULD HAVE HAD IF THE REQUIRED ALLOCATIONS WERE NOT PART OF
THIS AGREEMENT AND ALL COMPANY ITEMS WERE ALLOCATED PURSUANT TO THE ECONOMIC
AGREEMENT AMONG THE MEMBERS.
(2)
THE MANAGING MEMBER SHALL, WITH RESPECT TO EACH TAXABLE PERIOD,
(1) APPLY THE PROVISIONS OF SECTION 5.1(B)(IX)(1) IN WHATEVER ORDER IS MOST
LIKELY TO MINIMIZE THE ECONOMIC DISTORTIONS THAT MIGHT OTHERWISE RESULT FROM THE
REQUIRED ALLOCATIONS, AND (2) DIVIDE ALL ALLOCATIONS PURSUANT TO
SECTION 5.1(B)(IX)(1) AMONG THE MEMBERS IN A MANNER THAT IS LIKELY TO MINIMIZE
SUCH ECONOMIC DISTORTIONS.
(X)
DEFICIT CAPITAL ACCOUNTS.
NO MEMBER SHALL BE REQUIRED TO PAY TO
THE COMPANY, TO ANY OTHER MEMBER OR