APPROPRIATE TO MAINTAIN EQUALITY AMONG THE
CAPITAL ACCOUNTS OF THE MEMBERS AND THE AMOUNT OF CAPITAL REFLECTED ON THE
COMPANY'S BALANCE SHEET, AS COMPUTED FOR BOOK PURPOSES, IN ACCORDANCE WITH
TREASURY REGULATIONS SECTION 1.704-1(B)(2)(IV)(Q), AND (II) MAKE ANY APPROPRIATE
MODIFICATIONS, NOTWITHSTANDING THE TERMS OF THIS AGREEMENT, IN THE EVENT
UNANTICIPATED EVENTS MIGHT OTHERWISE CAUSE THIS AGREEMENT NOT TO COMPLY WITH
TREASURY REGULATIONS SECTION 1.704-1(B).
(B)
FOR PURPOSES OF COMPUTING THE AMOUNT OF ANY ITEM OF INCOME, GAIN,
LOSS OR DEDUCTION, WHICH IS TO BE ALLOCATED PURSUANT TO ARTICLE V AND IS TO BE
REFLECTED IN THE MEMBERS' CAPITAL ACCOUNTS, THE DETERMINATION, RECOGNITION AND
CLASSIFICATION OF ANY SUCH ITEM SHALL BE THE SAME AS ITS DETERMINATION,
RECOGNITION AND CLASSIFICATION FOR FEDERAL INCOME TAX PURPOSES (INCLUDING,
WITHOUT LIMITATION, ANY METHOD OF DEPRECIATION, COST RECOVERY OR AMORTIZATION
USED FOR THAT PURPOSE), PROVIDED, THAT:
(I)
SOLELY FOR PURPOSES OF THIS SECTION 3.3, THE COMPANY SHALL BE
TREATED AS OWNING DIRECTLY ITS PROPORTIONATE SHARE (AS DETERMINED BY THE
MANAGING MEMBER) OF ALL PROPERTY OWNED BY ANY PARTNERSHIP, LIMITED LIABILITY
COMPANY, UNINCORPORATED BUSINESS OR OTHER ENTITY OR ARRANGEMENT THAT IS
CLASSIFIED AS A PARTNERSHIP FOR FEDERAL INCOME TAX PURPOSES, OF WHICH THE
COMPANY IS, DIRECTLY OR INDIRECTLY, A PARTNER.
(II)
EXCEPT AS OTHERWISE PROVIDED IN TREASURY REGULATIONS SECTION
1.704-1(B)(2)(IV)(M), THE COMPUTATION OF ALL ITEMS OF INCOME, GAIN, LOSS AND
DEDUCTION SHALL BE MADE WITHOUT REGARD TO ANY ELECTION UNDER SECTION 754 OF THE
CODE WHICH MAY BE MADE BY THE COMPANY AND, AS TO THOSE ITEMS DESCRIBED IN
SECTION 705(A)(1)(B) OR
15
705(A)(2)(B) OF THE CODE, WITHOUT REGARD TO THE FACT THAT SUCH ITEMS ARE NOT
INCLUDABLE IN GROSS INCOME OR ARE NEITHER CURRENTLY DEDUCTIBLE NOR CAPITALIZED
FOR FEDERAL INCOME TAX PURPOSES. 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 IN THE CAPITAL ACCOUNTS SHALL BE TREATED AS AN ITEM OF GAIN OR LOSS.
(III)
ANY INCOME, GAIN OR LOSS ATTRIBUTABLE TO THE TAXABLE DISPOSITION
OF ANY COMPANY PROPERTY SHALL BE DETERMINED AS IF THE ADJUSTED BASIS OF SUCH
PROPERTY AS OF SUCH DATE OF DISPOSITION WERE EQUAL IN AMOUNT TO THE COMPANY'S
CARRYING VALUE WITH RESPECT TO SUCH PROPERTY AS OF SUCH DATE.
(IV)
IN ACCORDANCE WITH THE REQUIREMENTS OF SECTION 704(B) OF THE CODE,
ANY DEDUCTIONS FOR DEPRECIATION, COST RECOVERY OR AMORTIZATION ATTRIBUTABLE TO
ANY CONTRIBUTED PROPERTY SHALL BE DETERMINED IN THE MANNER DESCRIBED IN TREASURY
REGULATIONS SECTION 1.704-1(B)(2)(IV)(G)(3) AS IF THE ADJUSTED BASIS OF SUCH
PROPERTY ON THE DATE IT WAS ACQUIRED BY THE COMPANY WERE EQUAL TO THE AGREED
VALUE OF SUCH PROPERTY.
UPON AN ADJUSTMENT PURSUANT TO SECTION 3.3(D) TO THE
CARRYING VALUE OF ANY ADJUSTED PROPERTY THAT IS SUBJECT TO DEPRECIATION, COST
RECOVERY OR AMORTIZATION, ANY FURTHER DEDUCTIONS FOR SUCH DEPRECIATION, COST
RECOVERY OR AMORTIZATION ATTRIBUTABLE TO SUCH PROPERTY SHALL BE DETERMINED