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4.2.2. Loss. After giving effect to the
special allocation [for purposes of subchapter K of the
Internal Revenue Code] set forth in Section 4.3, Loss
from a Capital Transaction shall be allocated as
follows:
4.2.2.1. If one or more Interest
Holder(s) has a Positive Capital Account, to those
Interest Holders, in proportion to their Positive
Capital Accounts, until all Positive Capital Accounts
have been reduced to zero.
4.2.2.2. Any Loss not allocated to
reduce Positive Capital Accounts to zero pursuant to
Section 4.2.2.1. shall be allocated to the Interest
Holders in proportion to their Percentages.
4.2.3. Capital Proceeds. Capital Proceeds
shall be distributed and applied by the Company in the
following order and priority:
4.2.3.1. to the payment of all expenses
of the Company incident to the Capital Transaction;
then
4.2.3.2. to the payment of debts and
liabilities of the Company then due and outstanding
(including all debts due to any Interest Holder); then
4.2.3.3. to the establishment of any
reserves which the General Manager deems necessary for
liabilities or obligations of the Company; then
4.2.3.4. the balance shall be
distributed as follows:
4.2.3.4.1. to the Interest Holders
in proportion to their Adjusted Capital Balances, until
their remaining Adjusted Capital Balances have been
paid in full;
4.2.3.4.2. if any Interest Holder
has a Positive Capital Account after the distributions
made pursuant to Section 4.2.3.4.1 and before any
further allocation of Profit pursuant to Section
4.2.1.3., to those Interest Holders in proportion to
their Positive Capital Accounts; then
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Last modified: March 27, 2008