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AGREEMENT OF LIMITED PARTNERSHIP

Limited Partnership Agreement

AGREEMENT OF LIMITED PARTNERSHIP | Document Parties: ECCA Distribution Investments, Inc | ECCA Distribution Management, Inc | ECCA DISTRIBUTION SERVICES, LTD You are currently viewing:
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ECCA Distribution Investments, Inc | ECCA Distribution Management, Inc | ECCA DISTRIBUTION SERVICES, LTD

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Title: AGREEMENT OF LIMITED PARTNERSHIP
Governing Law: Texas     Date: 5/3/2005

AGREEMENT OF LIMITED PARTNERSHIP, Parties: ecca distribution investments  inc , ecca distribution management  inc , ecca distribution services  ltd
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Exhibit 3.49

 

AGREEMENT OF LIMITED PARTNERSHIP

 

OF

 

ECCA DISTRIBUTION SERVICES, LTD.

 

This Agreement of Limited Partnership (this “Agreement”) is entered into by and between ECCA Distribution Management, Inc., a Delaware corporation, as General Partner, and ECCA Distribution Investments, Inc., a Delaware corporation, as Limited Partner, to be effective as of February 26, 2003 (the “Effective Date”).

 

RECITATIONS

 

The parties hereto desire to form a limited partnership for the purposes and on the terms hereinafter set forth and to avail themselves of such liability protection as is provided under the Limited Partnership Act.

 

In consideration for the mutual covenants contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties desire to enter into this Agreement to embody the terms of their agreement with respect to their partnership.

 

The Partnership will be formed with ECCA Distribution Management, Inc., a Delaware corporation (“ECCA Management”), owning a .5% partnership interest and serving as the General Partner and ECCA Distribution Investments, Inc., a Delaware corporation (“ECCA Investments”), owning a 99.5% partnership interest and being a Limited Partner.

 

ECCA Management, the General Partner, and ECCA Investments, the Limited Partner, desire to adopt this Partnership Agreement to read as follows as hereinafter set forth.

 

NOW, THEREFORE, to reflect the foregoing, the parties hereto agree as follows:

 

  1. ECCA Investments is hereby admitted to the Partnership as a limited partner.

 

  2. The General Partner and the Limited Partners agree as follows:

 

ARTICLE I

DEFINITIONS

 

1.1 Definitions . As used in this Agreement, the following terms shall have the respective meanings indicated:

 

“Adjusted Capital Account Deficit” shall mean, with respect to any Partner, the deficit balance, if any, in such Partner’s Capital Account as of the end of the relevant year, after giving effect to the following adjustments: (i) credit to such Capital Account any amounts which the Partner is obligated to contribute to the Partnership, (ii) credit to such Capital Account the

 


Partner’s share of Partner Minimum Gain and the Partner’s share of Minimum Gain; and (iii) debit to such Capital Account the items described in Treasury Regulations § 1.704-l(b)(2)(ii)(d)(4), (5) and (6). The foregoing definition of Adjusted Capital Account Deficit is intended to comply with the provisions of Treasury Regulations § 1.704-l(b)(2)(ii)(d) and shall be interpreted consistently therewith.

 

“Affiliate” shall mean, when used with reference to a specific Person, (a) any Person that directly or indirectly controls, is controlled by, or is under common control with the specified Person, (b) any Person that is an officer, director, partner, trustee, or serves in a similar capacity with respect to the specified Person, or for which the specified Person is an officer, partner, trustee, or serves in a similar capacity, and (c) any Person that, directly or indirectly, is the beneficial owner of ten percent (10%) or more of any class of equity securities of the specified Person, or of which the specified Person, directly or indirectly, is the owner of ten percent (10%) or more of any class of equity securities.

 

“Agreement” or “Partnership Agreement” shall mean this Agreement of Limited Partnership of ECCA Distribution Services, Ltd., as amended or restated from time to time.

 

“Bankrupt” or “Bankruptcy” shall mean, in respect of a Partner, the occurrence of any of the following with respect to such Partner:

 

(a) such Partner shall (i) voluntarily consent to an order for relief by filing a petition for relief under the laws of the United States codified as Title 11 of the United States Code, (ii) seek, consent to, or not contest the appointment of a receiver, custodian, or trustee for itself or for all or any part of its property, (iii) file a petition seeking relief under the bankruptcy, arrangement, reorganization, or other debtor relief laws of any state or other competent jurisdiction, (iv) make a general assignment for the benefit of creditors, or (v) admit in writing that it is generally not paying its debts as such debts become due;

 

(b) (i) a petition is filed against such Partner seeking an order for relief under the laws of the United States codified as Title 11 of the United States Code, or seeking relief under the bankruptcy, arrangement, reorganization, or other debtor relief laws of the United States or any state or other competent jurisdiction, or (ii) a court of competent jurisdiction enters an order, judgment, or decree appointing, without the consent of such Partner, a receiver, custodian, or trustee for it, or for all or any part of its property, and such petition, order, judgment, or decree shall not be and remain discharged or stayed within sixty (60) days after its entry; or

 

(c) the interest in the Partnership or any Partner is seized or subjected to a charging order by a creditor of such Partner and the same is not released from seizure or charging order or bonded out within thirty (30) days from the date of notice of such seizure or charging order.

 

“Capital Account” shall have the meaning assigned to it in Section 7.2 .

 

“Capital Contributions” of a Partner shall mean the amount of cash and the net fair market value (as set forth in Exhibit A ) of property contributed by that Partner to the Partnership pursuant to Article 6 .

 

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“Capital Percentage” shall mean, as to any Partner as of the date of determination, a fraction (expressed as a percentage), the numerator of which is the Capital Account balance of such Partner as of such date, and the denominator of which is the total Capital Account balances of all Partners as of such date.

 

“Certificate of Limited Partnership” shall mean a certificate in the form acceptable for filing with the Secretary of State of the State of Texas under the Limited Partnership Act.

 

“Code” shall mean the Internal Revenue Code of 1986, as amended from time to time, and the corresponding provisions of any successor statute.

 

“Dispose,” “Disposing,” and “Disposition” shall mean a sale, assignment, transfer, gift, exchange, mortgage, pledge, grant of a security interest, or other disposition or encumbrance or the acts thereof.

 

“Effective Date” shall have the meaning set forth in the recitals.

 

“General Partner” shall mean ECCA Distribution Management, Inc., a Delaware corporation, together with each other Person (if any) that subsequently becomes a General Partner in the Partnership pursuant to the provisions of this Agreement, but excludes any such Person that subsequently ceases to be a General Partner pursuant to the provisions of this Agreement.

 

“Independent Accountants” shall mean the independent accountants selected by the General Partner.

 

“Limited Partners” shall mean each Person set forth on Exhibit A hereto and that is designated on the signature pages hereof as, and that has executed this Agreement as a Limited Partner, but excludes any such Person that subsequently ceases to be a Limited Partner pursuant to the provisions of this Agreement, all as shown on the books and records of the Partnership.

 

“Limited Partnership Act” shall mean the Texas Revised Limited Partnership Act, Texas Civil Statutes, Article 6132a-l, adopted 1987, as amended from time to time, and any successor to said Act.

 

“Liquidator” shall have the meaning set forth in Section 13.2 hereof.

 

“Minimum Gain” shall mean the aggregate gain, if any, that would be realized by the Partnership for purposes of computing income or loss with respect to each Partnership asset if each Partnership asset was disposed of by the Partnership in a taxable transaction in full satisfaction of all nonrecourse liabilities of the Partnership secured by such asset. Minimum Gain with respect to each Partnership asset shall be further determined in accordance with the rules of Treasury Regulations § 1.704-2(d) and any subsequent rule or regulation governing the determination of minimum gain. A Partner’s share of Minimum Gain at the end of any Partnership year shall equal the aggregate Nonrecourse Deductions allocated to such Partner (or

 

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his predecessors in interest) up to that time, less such Partner’s (and predecessors’) aggregate share of decreases in Minimum Gain determined in accordance with Treasury Regulations § l.704-2(g).

 

“Net Cash Flow” shall mean, with respect to any period, (i) all cash revenues and receipts received by the Partnership (excluding Capital Contributions); less cash expended (other than to the extent expended from reserves established in accordance with clause (ii) of this definition) for debts and expenses and interest and principal payments on any indebtedness of the Partnership and (ii) reserves that the General Partner reasonably determines to be necessary for future capital expenditures, expenses and contingencies. For purposes of determining Net Cash Flow, depreciation and amortization shall not be considered an expense of the Partnership. Net Cash Flow shall be determined consistent with the financial statements of the Partnership.

 

“Net Income” shall mean, for a taxable year of the Partnership, the excess of (i) the income and gain of the Partnership for such year determined in accordance with the accounting principles described in Article 7.1(a) , over (ii) the deductions and losses of the Partnership for such year determined in accordance with the accounting principles described in Article 7.1(a) .

 

“Net Loss” shall mean, for a taxable year of the Partnership, the excess of (i) the deductions and losses of the Partnership for such year determined in accordance with the accounting principles described in Article 7.1(a) , over (ii) the income and gain of the Partnership for such year determined in accordance with the accounting principles described in Section 7.1(a) .

 

“Nonrecourse Deductions” shall mean the excess, if any, of the net increase in the amount of Minimum Gain during a Partnership year over the aggregate amount of any distributions during such year of proceeds of a nonrecourse liability that are allocable to an increase in Minimum Gain. The Nonrecourse Deductions of a year shall consist first of depreciation with respect to each item of Partnership property to the extent of the increase in Minimum Gain attributable to nonrecourse liabilities of the Partnership secured by such Partnership property, with the remainder of any Nonrecourse Deductions made up of a pro rata portion of the Partnership’s other items of loss. Nonrecourse Deductions shall be further determined in accordance with the rules of Treasury Regulations §§ 1.704-2(b)(1) and 1.704-2(c) and any subsequent rule or regulation governing the determination of nonrecourse deductions.

 

“Partners” or “Partner” shall mean the General Partner and the Limited Partners, or any one of them.

 

“Partner Minimum Gain” shall mean the aggregate of the partner nonrecourse debt minimum gain amounts of the Partnership computed in accordance with Treasury Regulations § 1.704-2(i)(3).

 

“Partner Nonrecourse Deductions” shall be determined in accordance with the principles of Treasury Regulations § 1.704-2(i)(l). The amount of Partner Nonrecourse Deductions for a year is determined in accordance with Treasury Regulations § 1.704-2(i)(2) and generally equals the net increase, if any, in the amount of Partner Minimum Gain during that year, determined pursuant to Treasury Regulations § 1.704-2(i)(3).

 

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“Partnership” shall have the meaning attributed to it in Section 3.1 .

 

“Partnership Interest” shall mean the interest of each Partner in the Partnership (which shall include, without limitation, its rights as General Partner or Limited Partners, as the case may be, and its interest in revenues, income, gains, losses, deductions, Net Cash Flow, and distributions.

 

“Partnership Year” shall mean the calendar year.

 

“Person” shall mean an individual, partnership, corporation, trust, unincorporated association, or other entity or association.

 

“Regulations” shall mean the Income Tax Regulations promulgated under the Code, as such regulations may be amended from time to time (including corresponding provisions of succeeding regulations).

 

“Regulatory Allocations” shall have the meaning assigned to it in Section 7.1(d).

 

“Securities Act” shall mean the Securities Act of 1933, as amended.

 

“Section 754 Election” shall have the meaning set forth in Section 8.5(a) hereof.

 

“Voting Interest” shall mean the interest of each Partner as set forth on Exhibit A , as said interests may be adjusted, from time to time, pursuant to this Agreement.

 

“Winding Up” shall mean the period following a dissolution of the Partnership.

 

ARTICLE II

FORMATION OF LIMITED PARTNERSHIP:

INITIAL CLOSING AND ORGANIZATIONAL CERTIFICATES

 

2.1 Formation and Continuation of Limited Partnership . The parties hereby form the Partnership under and pursuant to the Limited Partnership Act. Except as provided to the contrary in this Agreement, the rights, duties, status, and liabilities of the Partners, and the formation, administration, dissolution, and continuation or termination of the Partnership, shall be as provided in the Limited Partnership Act.

 

2.2 Organizational Certificates . Upon the request of the General Partner, each Limited Partner shall promptly execute, acknowledge, swear to, and deliver all certificates and other instruments and perform such additional acts consistent with the terms of this Agreement as may be necessary to enable the General Partner to form, qualify and continue the Partnership as a limited partnership under the laws of the State of Texas.

 

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ARTICLE III

PARTNERSHIP NAME, OFFICES, AND TERM

 

3.1 Limited Partnership Name . The name of the Partnership shall be “ECCA Distribution Services, Ltd.” and the business of the Partnership shall be conducted under such name or under such assumed name as may be selected from time to time by the General Partner.

 

3.2 Principal Place of Business .

 

(a) The address of the registered office of the Partnership in the State of Texas shall be 800 Brazos, Suite 1100, Austin Texas 78701 and the name of the registered agent at such address is Capital Corporate Services, Inc.

 

(b) The principal place of business of the Partnership shall be 11103 West Avenue, San Antonio, Texas 78701, or such other place as may be designated by the General Partner. The books and records of the Partnership shall be maintained at the Partnership’s principal place of business. The Partnership shall have such other places of business as the General Partner deems necessary or desirable. The General Partner shall notify the Limited Partners of any change in the principal place of business of the Partnership.

 

(c) The General Partner’s principal place of business is 11103 West Avenue, San Antonio, Texas 78213.

 

3.3 Term . The Partnership shall continue, unless sooner terminated in accordance with any provision of this Agreement, until the close of Partnership business on December 31, 2050.

 

ARTICLE IV

PURPOSES

 

The purpose and intent of this Partnership will be as follows:

 

(a) To hold the various assets and liabilities of Eye Care Centers of America, Inc., a Texas corporation, (“Parent”), related to, associated with or used in connection with the operation of the distribution center of the Parent and thereafter operating the distribution center; and

 

(b) For any other lawful business which may be carried on by a limited partnership under the laws of the State of Texas.

 

ARTICLE V

DISPOSITION OF PARTNERSHIP INTERESTS

 

5.1 Dispositions . No Limited Partner shall Dispose of any Partnership Interests it owns or may acquire except with the written consent of all of the Partners.

 

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5.2 Status After Disposition . No Limited Partner shall have the right, without the consent of the General Partner, to constitute its assignee as a Limited Partner (whether or not such transfer is permitted under Article V ). In addition, no Disposition by a Limited Partner shall release such Limited Partner from any of its obligations under this Agreement without the written consent of the General Partner (which consent may be granted or withheld in the sole discretion of the General Partner). A Person that receives an interest or right in or in respect of the Partnership but that is not admitted to the Partnership as a substituted or additional Partner shall not be entitled to vote, and the interest of such Person shall not be counted in determining, for voting or quorum purposes, the Voting Interests. Any Person receiving an interest or right in or in respect of the Partnership (whether or not such Person becomes a Limited Partner) shall not be entitled to Dispose of its interest or right or any part thereof without fulfilling the conditions of Section 5.1 to the same extent and in the same manner as any Limited Partner that desires to effect a Disposition of an interest in the Partnership.

 

5.3 Disposition Documents . Notwithstanding Section 5.1, the Partnership shall not recognize, for any purpose, any purported Disposition of all or any portion of or interest in a Limited Partner’s Partnership Interests unless and until the provisions of this Article V have been satisfied and there shall have been delivered to the General Partner a dated notification of such Disposition (i) executed, acknowledged, and sworn to by both the Limited Partner effecting such Disposition and the Person to whom such interest is Disposed, (ii) if the assignee wishes to become a substituted Limited Partner, the acceptance by such assignee of all of the terms and provisions of this Agreement (including, without limitation, a grant by such assignee to the General Partner and any successors thereto and each of its officers of the power of attorney set forth in Article XIV), and (iii) containing a representation that such Disposition was made in accordance with all applicable laws and regulations. Each Disposition shall be effective as of the first day of the calendar month immediately following the month in which the Partnership actually receives the aforesaid notification of Disposition.

 

5.4 Disposition Costs . All costs incurred by the Partnership in connection with the Disposition of an interest in the Partnership (including, without limitation, the fees incurred in connection with the obtaining of the legal opinions referred to in Section 11.1(e) ) shall be borne and paid by the Partner effecting the Disposition within ten (10) days after the receipt by such Partner (or such Partner’s estate or legal representative, as applicable) of the Partnership’s invoice for the amount due.

 

5.5 Admission of a Substituted Limited Partner . The General Partner may, in its absolute discretion, and without the consent or agreement of any other Partner, admit an assignee of a Partnership Interest as a substituted Limited Partner. Upon admission, a substituted Limited Partner shall be subject to all provisions of this Agreement as if originally a party hereto.

 

5.6 Disposition of General Partner’s Interests . The General Partner shall have the right, from time to time, to effect a Disposition of all or any portion of its interests in the Partnership to one or more Persons and to admit the Person or Persons to whom such interest or portion thereof is Disposed as an additional or substituted General Partner; provided, however such disposition must be approved by the shareholders and the board of directors of the General Partner. In the event any Person is admitted as a substituted General Partner, such admission

 

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shall occur contemporaneously with the withdrawal of the General Partner that disposes of its interest. Any additional or substituted General Partner shall continue the business of the Partnership. Notwithstanding anything in this Agreement to the contrary, any General Partner who voluntarily or involuntarily for any reason withdraws from the Partnership (including, without limitation, a withdrawal by a General Partner pursuant to Section 13.1(b) ), or sells, transfers, or assigns his interest in the Partnership, shall be and remain liable for all obligations and liabilities incurred by him as a General Partner prior to the time of such withdrawal, sale, transfer, or assignment, but he shall be free of any obligation or liability as a General Partner incurred as a result of the activities of the Partnership from and after the time of such withdrawal, sale, transfer, or assignment.

 

5.7 Pledge of Partnership Interest . Nothing in this Agreement including, without limitation, Section 5.1, shall prevent any Partner from pledging its Partnership Interest to any financial institution, whether acting on its own behalf or as a collateral trustee or an agent, to which such Partner or the Partnership has incurred or guaranteed any obligation, and neither any such financial institution which exercises its rights and remedies under any such pledge agreement nor any person who becomes a holder of Partnership Interests as the result thereof or its successors or assigns shall be bound by the restrictions set forth in Section 5.1 .

 

ARTICLE VI

CAPITAL OF THE PARTNERSHIP

 

6.1 Initial Capital Contributions of the Partners . The initial Capital Contributions to the Partnership by the Partners are as set forth in Exhibit A.

 

6.2 Return of Capital; Partner’s Loans . No Partner is entitled to the return of his or her contribution or any subsequent contributions to the Partnership or to be paid interest in respect of either of his or her Capital Account or any contribution made by him or her to the Partnership. No unrepaid capital contribution shall be deemed or considered to be a liability of the Partnership or of any Partner. No Partner shall be required to contribute or loan any cash or property to the Partnership to enable the Partnership to return any Partner’s contribution to the Partnership. Notwithstanding the prior sentence, nothing herein shall prevent a Partner from loaning money to the Partnership under terms and conditions determined by the General Partner.

 

6.3 Schedule of Partners; Contributions; Capital Percentages . The name, address, and initial Capital Percentages of each Partner are set forth in Exhibit A attached hereto. Exhibit A hereto shall be amended by the General Partner from time to time to reflect (i) any additional Capital Contributions made by the Partners, and (ii) the admission of additional or substituted Partners. The Partnership Interests owned by Partners hereunder shall not be represented by certificates.

 

6.4 No Further Obligation . Except as expressly provided for in or contemplated by this Article 6, neither the General Partner nor the Limited Partners shall have any obligation to provide funds to the Partnership under this Agreement, whether by contributions to capital, loans, return of monies received or otherwise.

 

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ARTICLE VII

ALLOCATIONS, NET CASH FLOW AND DISTRIBUTIONS

 

7.1 Allocations .

 

(a) In General . The recognition and classification of the items of income, gain, loss and deduction of the Partnership (whether recognized prior to or during Winding Up) shall be the same for purposes of this Section 7.1 as their recognition and classification for federal income tax purposes determined (i) without regard to any Section 754 Election which may have been made, (ii) without regard to any provision of the Code which provides that an item of income or gain is not includable in gross income or that an expenditure is not deductible or chargeable to a capital account, and (iii) without regard to any items allocated pursuant to Section 7.1(e) .

 

(b) Net Income . Net Income shall be allocated in the following priority:

 

(i) First, to each Partner in proportion to, and to the extent of, the amount by which (A) the amount of the cumulative Net Loss allocated to each Partner pursuant to Section 7.1(d)(i) , if applicable, and next pursuant to Section 7.1(c) , exceeds (B) the cumulative Net Income theretofore allocated to each Partner pursuant to this Section 7.1(b)(i) ; and

 

(ii) Second, to the Partners in accordance with their respective Capital Percentages.

 

(c) Net Loss . Net Loss shall be allocated to the Partners in accordance with their respective positive Capital Account balances.

 

(d) Restrictions on Allocations . Notwithstanding anything in this Section 7.1 to the contrary:

 

(i) The Net Loss allocated to a Partner pursuant to Section 7.1(c) shall not exceed the maximum amount of Net Loss that can be so allocated without causing such Partner to have an Adjusted Capital Account Deficit at the end of the year. All Net Loss in excess of the limitation set forth in this Section 7.1(d)(i) shall be allocated to the General Partner.

 

(ii) In the event a Partner receives any adjustments, allocations or distributions described in Treasury Regulations § 1.704-1 (b) (2) (ii) (d) (4), (5) or (6), items of Net Income shall be specially allocated to such Partner in an amount and manner sufficient to eliminate, to the extent required by the Treasury Regulations, the Adjusted Capital Account Deficit of such Partner as quickly as possible.

 

(iii) In the event a Partner has an Adjusted Capital Account Deficit at the end of any Partnership Year, such Partner shall be specially allocated items of Net Income in the amount and manner sufficient to eliminate, to the extent required by Treasury Regulations, the Adjusted Capital Account Deficit of such Partner as quickly as possible.

 

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(iv) Notwithstanding any other provision of this Agreement, but subject to the exceptions set forth in Treasury Regulations § 1.704-2(f)(2), (3), (4) or (5), if there is a net decrease in Minimum Gain during a Partnership Year, the Partners must be allocated items of Net Income for such year (and, if necessary, subsequent years) in the proportion to, and to the extent of, an amount equal to such Partner’s share of the net decrease in Minimum Gain (as such share is determined in accordance with Treasury Regulations § 1.704-2(g)(2)). The Minimum Gain charge back shall consist first of Net Income from the disposition of Partnership assets subject to nonrecourse liabilities of the Partnership with the remainder of the Minimum Gain charge back, if any, made up of a pro rata portion of the Partnership’s other items of income or gain for such year and shall be determined in accordance with Treasury Regulations §§ 1.704-2(f)(6), 1.704-2(g)(2) and 1.704-2(j)(2)(i), or any successor provisions. If such Net Income from the disposition of Partnership assets exceeds the amount of Minimum Gain charge back, a proportionate share of each item of such Net Income shall constitute a part of the Minimum Gain charge back.

 

(v) Notwithstanding any other provision of this Agreement, but subject to the exceptions referenced in Treasury Regulations § 1.704-2(i)(4), if there is a net decrease in Partner Minimum Gain during any year, items of income and gain for such year (and, if necessary subsequent years) shall first be allocated to each Partner with a share of that Partner Minimum Gain in proportion to, and to the extent of, an amount equal to such Partner’s share of the net decrease in Partner Minimum Gain (as such share is determined in accordance with Treasury Regulations § 1.704-2(i)(4)). The items to be so allocated shall be determined in accordance with Treasury Regulations § 1.704-2(i)(4), or any successor provision.

 

(vi) Nonrecourse Deductions for any taxable year shall be allocated among the Partners in the same manner as are the other Net Income and Net Loss of the Partnership for such year. Partner Nonrecourse Deductions for any taxable year should be allocated among the Partners in accordance with Treasury Regulations § 1.704-2(i)(1).

 

(vii) The allocations set forth in this Section 7.1(d) (“Regulatory Allocations”) are intended to comply with certain requirements of Treasury Regulations §§ 1.704-1 and 1.704-2. Notwithstanding any other provision of this Section 7.1 (other than the Regulatory Allocations), the Regulatory Allocations shall be taken into account in allocating other Net Income and Net Loss among the Partners so that, to the extent possible, the net amount of such allocations of other Net Income and Net Loss and the Regulatory Allocations to the Partners shall be equal to the net amount that would have been allocated among the Partners if the Regulatory Allocations had not occurred.

 

(e) Section 704(c) . Items of income, gain, loss, and deduction with respect to an asset contributed to the Partnership by a Partner that has a fair market value (as set forth in this Agreement, or if not set forth in this Agreement, as determined by the General Partner) at the time of such contribution which is different from its adjusted tax basis shall, for tax purposes only, be allocated among the Partners in the manner provided under Section 704(c) of the Code

 

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and Treasury Regulations thereunder so as to take into account any variation between the basis of the property to the Partnership and its fair market value at the time of contribution. Such allocations shall be made in accordance with the traditional method set forth in Treasury Regulations § 1.704-3(b).

 

7.2 Computation of Capital Account . The balance of the “Capital Account” of a Partner is initially zero and as of any date is increased by (i) the amount of cash contributed by that Partner to the Partnership on or prior to that date; (ii) the fair market value (as set f


 
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