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I W-1 i V I U11 <br />Allocations of Profits and Losses <br />Section 1. The terms "net profits" and "net losses," as used herein, shall mean the net <br />amount of the Partnership's profits and losses, as determined for federal income tax purposes, <br />and shall also include each Partner's share of income described in Section 705(a)(1)(B) of the <br />Code, any expenditures described in Section 702(a)(2)(B) of the Code, any expenditures <br />described in Section 709(a) of the Code which are not deducted or amortized in accordance with <br />Section 709(b) of the Code, basis adjustments required pursuant to Section 48(q) of the Code, <br />and losses not deductible pursuant to Section 267(a) or 707(b) of the Code. <br />Section 2. Notwithstanding any provision of this Agreement to the contrary, income, <br />gain, loss and deduction attributable to property contributed to the Partnership by a Partner shall <br />be allocated to the Partner contributing such Property and shall not be allocated to the other <br />Partners in whole or in part. <br />Section 3. Partnership income, gain, loss, and deduction shall be allocated to the Partners <br />in accordance with the portion of the year during which the Partners have held their respective <br />Partnership Units. All items of income and loss shall be considered to have been earned ratably <br />over the fiscal year of the Partnership, except that gains and losses arising from the disposition of <br />assets shall be taken into account as of the date thereof. <br />Section 4. Notwithstanding any provision of the foregoing Partnership Agreement to the <br />contrary, at all times during the existence of the Partnership, the interest of each Partner in each <br />material item of Partnership income, gain, loss, deduction or credit will be equal to at least one <br />percent (1 %) of each such item. <br />Section 5. Notwithstanding any provision of the foregoing Partnership Agreement to the <br />contrary, in the event the Partnership is entitled to a deduction for imputed interest under any <br />provision of the Code on any loan or advance from a Partner, such deduction shall be allocated <br />solely to such Partner. <br />Section 6. Notwithstanding any provision of the foregoing Partnership Agreement to the <br />contrary, losses aIIocated pursuant to Paragraph 10. of the Partnership Agreement shall not <br />exceed the maximum amount of losses that can be so allocated without causing the Partner <br />receiving such allocation to have an Adjusted Deficit Capital Account Balance (as defined <br />below) at the end of any fiscal year of the Partnership. <br />Section 7. Notwithstanding any provision of the foregoing Partnership Agreement to the <br />contrary, if there is a net decrease in Partnership Minimum Gain during any Partnership fiscal <br />year, Partners who would otherwise have an Adjusted Deficit Capital Account Balance at the end <br />of such year shall be specially allocated items of Partnership income and gain for such year (and, <br />if necessary, subsequent years) in an amount and manner sufficient to eliminate such Adjusted <br />Deficit Capital Account Balance as quickly as possible. The items to be so allocated shall be <br />17 <br />