Common use of Loss Limitations Clause in Contracts

Loss Limitations. Notwithstanding Section 4.1, Losses shall not be allocated to the Members in an amount which is greater than the maximum amount of Losses that can be so allocated without causing any Member to have a deficit Capital Account balance, determined at the end of the Company’s tax year, after giving effect to the following adjustments: A. Crediting to such Capital Accounts any amounts which each Member is obligated to restore pursuant to this Agreement or is deemed to be obligated to restore pursuant to the penultimate sentences of Treas. Reg. §§ 1.704–2(g)(1) and 1.704– 2(i)(5); and B. Debiting to such Capital Accounts the items described in Treas. Reg. §§ 1.704– 1(b)(2)(ii)(d)(4), (5) and (6). If some, but not all, of the Members would have a deficit Capital Account balance as described in the foregoing sentence, the limitations set forth in this Section B.1 shall be applied on a Member by Member basis so as to allocate the maximum permissible Losses to each Member under Treas. Reg. § 1.704(b)(2)(ii)(d). The foregoing loss limitation is intended to comply with the provisions of Treas. Reg. § 1.704–1(b)(2)(ii)(d), and shall be interpreted consistently with said Regulation.