Common use of Loss Limitations Clause in Contracts

Loss Limitations. Losses allocated pursuant to Section 5.01(a) and any items of loss or deduction allocated pursuant to Section 5.01(b)(viii) and Sections 12.02(a)(iv) and (v) shall not exceed the maximum amount of Losses and other items of loss or deduction that can be allocated without causing any Member to have an Adjusted Capital Account Deficit at the end of any Allocation Year. In the event some but not all of the Members would have Adjusted Capital Account Deficits as a consequence of an allocation of Losses pursuant to Section 5.01(a) or any items of loss or deduction allocated pursuant to Section 5.01(b)(viii) or Section 12.02(a)(iv) and (v), the limitation set forth in this Section 5.01(d) shall be applied on a Member by Member basis and Losses and items of loss or deduction not allocable to any Member as a result of such limitation shall be allocated to the other Members pursuant to Sections 5.01 and 12.02 to the extent such other Member’s have positive balances in their Capital Accounts so as to allocate the maximum permissible Losses to each Member under Treasury Regulation Section 1.704-1(b)(2)(ii)(d).