IS DEEMED TO BE OBLIGATED TO RESTORE PURSUANT TO THE
PENULTIMATE SENTENCES OF SECTIONS 1.704 2(G)(1) AND 1.704-2(I)(5) OF THE
REGULATIONS, EACH SUCH MEMBER SHALL BE SPECIALLY ALLOCATED ITEMS OF OPERATING
COMPANY INCOME AND GAIN IN THE AMOUNT OF SUCH EXCESS AS QUICKLY AS POSSIBLE,
PROVIDED THAT AN ALLOCATION PURSUANT TO THIS SECTION 10.3.3 SHALL BE MADE ONLY
IF AND TO THE EXTENT THAT SUCH MEMBER WOULD HAVE A DEFICIT CAPITAL ACCOUNT IN
EXCESS OF SUCH SUM AFTER ALL OTHER ALLOCATIONS PROVIDED FOR IN THIS AGREEMENT
HAVE BEEN MADE AS IF THIS SECTION 10.3.3 WERE NOT IN THIS AGREEMENT.
26
10.3.4
ADJUSTMENTS TO CAPITAL ACCOUNTS.
IF THE VALUE FOR CAPITAL ACCOUNT
PURPOSES OF ANY OPERATING COMPANY PROPERTY IS ADJUSTED PURSUANT TO SECTION 9.3
HEREOF, SUBSEQUENT ALLOCATIONS OF INCOME, GAIN, LOSS, AND DEDUCTION WITH RESPECT
TO SUCH ASSET SHALL TAKE ACCOUNT OF ANY VARIATION BETWEEN THE ADJUSTED BASIS OF
SUCH ASSET FOR FEDERAL INCOME TAX PURPOSES AND ITS ADJUSTED VALUE IN THE SAME
MANNER AS UNDER SECTION 704(C) OF THE CODE AND THE REGULATIONS THEREUNDER.
10.3.5
CORRECTIVE ALLOCATIONS.
CORRECTIVE ALLOCATIONS (CONSISTING OF A PRO
RATA PORTION OF EACH ITEM) OF ITEMS OF GROSS INCOME AND GAIN, OR GROSS LOSS AND
DEDUCTION, SHALL BE SPECIALLY ALLOCATED TO TAKE INTO ACCOUNT THE DIFFERENCES IN
THE OPERATING COMPANY'S CORRESPONDING BOOK ITEMS AS A RESULT OF SECTION 9.3.4.
10.3.6
ALLOCATION OF CLASS A OPTION AND OTHER COMPENSATION DEDUCTIONS.
ANY
DEDUCTIONS FOR COMPENSATION ASSOCIATED WITH THE GRANT OR EXERCISE OF A CLASS A
OPTION, OR THE PAYMENTS UNDER SECTION 15.4, SHALL BE ALLOCATED SOLELY TO THE
MANAGEMENT COMPANY AND WITHOUT REGARD TO THE PROVISIONS OF SECTIONS 10.1 AND
10.2 HEREOF.
10.4.
OTHER ALLOCATION RULES.
10.4.1
CALCULATION OF PROFITS AND LOSSES.
EXCEPT AS OTHERWISE SET FORTH IN
THIS AGREEMENT, PROFITS AND LOSSES OF THE OPERATING COMPANY SHALL BE DETERMINED
FOR EACH FISCAL YEAR IN ACCORDANCE WITH THE METHOD OF ACCOUNTING FOLLOWED BY THE
OPERATING COMPANY FOR FEDERAL INCOME TAX PURPOSES AND OTHERWISE IN ACCORDANCE
WITH GAAP, AS MODIFIED BY SECTION 1.704-1(B)(2)(IV) OF THE REGULATIONS.
EXCEPT
AS OTHERWISE PROVIDED IN THIS AGREEMENT, WHENEVER A PROPORTIONATE PART OF THE
OPERATING COMPANY PROFIT OR LOSS IS ALLOCATED TO A MEMBER, EVERY ITEM OF INCOME,
GAIN, LOSS OR DEDUCTION ENTERING INTO THE COMPUTATION OF SUCH PROFIT AND LOSS
SHALL BE CONSIDERED ALLOCATED AND EVERY ITEM OF CREDIT OR TAX PREFERENCE
APPLICABLE TO THE PERIOD DURING WHICH SUCH PROFIT OR LOSS WAS REALIZED SHALL BE
CONSIDERED ALLOCATED TO SUCH MEMBER IN THE SAME PROPORTION.
ALL ALLOCATIONS OF
SUCH ITEMS FOR FEDERAL INCOME TAX PURPOSES SHALL BE IDENTICAL TO THE ALLOCATIONS
SET FORTH IN THIS ARTICLE 10, EXCEPT AS OTHERWISE REQUIRED BY SECTION 704(C) OF
THE CODE AND SECTION 1.704-1(B)(4) OF THE REGULATIONS.
10.4.2
SUBSTANTIAL ECONOMIC EFFECT.
THE MEMBERS INTEND THAT THE ALLOCATIONS
OF PROFITS AND LOSSES UNDER THIS AGREEMENT SHALL HAVE SUBSTANTIAL ECONOMIC
EFFECT (OR BE CONSISTENT WITH THE MEMBERS' INTERESTS IN THE OPERATING COMPANY IN
THE CASE OF ALLOCATION OF LOSSES ATTRIBUTABLE TO NONRECOURSE DEBT) WITHIN THE
MEANING OF SECTION