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be allocated, charged and distributed in conformity with the requirements of Treasury Regulation Section <br /> 1.704-2. <br /> (d) Subject to subsection (c) above, if there is a net decrease in Company minimum gain [as <br /> defined in Treasury Regulations Section 1.704-2(b)(2)] during a Company taxable year, all Interest <br /> Owners with a deficit Capital Account balance at the end of such year [excluding from each Interest <br /> Owner's deficit Capital Account balance any amount that such Interest Owner is obligated to restore <br /> under Treasury Regulations Section 1.704-1(b)(2)(ii)(c)], shall be allocated,before any other allocation is <br /> made under Section 704(b) of the Code of Company items for such taxable year, items of income and <br /> gain for such year (and, if necessary, subsequent years) in the amount and in the proportions needed to <br /> eliminate such deficits as quickly as possible. For purposes of the preceding sentence, Interest Owners' <br /> Capital Accounts shall be reduced for the items described in Treasury Regulations Section 1.704- <br /> 1(b)(2)(ii)(d)(4), (5), and(6). The foregoing provisions are intended to be a "minimum gain chargeback" <br /> in compliance with Treasury Regulations Section 1.704-2(f), and the applicable requirements of such <br /> section are incorporated herein. <br /> (e) In the event of a transfer of, or other change in, an interest in the Company during a <br /> Fiscal Year, each item of taxable income and loss shall be prorated in accordance with Section 706 of the <br /> Code,using any convention permitted by law and selected by a Majority in Interest of the Members. <br /> 3. Allocations for Tax Purposes. Except as otherwise provided herein, each item of <br /> taxable income or loss of the Company shall be allocated to the Interest Owners in the same manner as <br /> such allocations are made for book purposes pursuant to Section 6.1 above. <br /> 4. Compliance with Treasury Regulations. The above provisions of this Addendum C <br /> notwithstanding, it is specifically understood that a Majority in Interest of the Members may make such <br /> elections, tax allocations and adjustments, including amendments to this Agreement, as they deem <br /> necessary or appropriate to maintain to the greatest extent possible the validity of the tax allocations set <br /> forth in this Agreement,particularly with regard to Treasury Regulations under Code Section 704(b). <br /> C-2 <br />