(b) without limiting the other rights and duties of a transferee of an ownership interest pursuant to this agreement, in the event of a permitted sale or exchange of an ownership interest in the company, (1) the capital account of the transferor shall become the capital account of the transferee to the extent it relates to the transferred ownership interest in accordance with section 1.7041(b)(2)(iv) of the regulations; and (2) the transferee shall be treated as the transferor for purposes of allocations and distributions pursuant to article 9 to the extent that such allocations and distributions relate to the transferred ownership interest.
(c) subject to section 11.5, upon liquidation of the company, liquidating distributions shall be made in accordance with the positive capital account balances of the equity owners, as determined after taking into account all capital account adjustments for the company's taxable year during which the liquidation occurs. liquidation proceeds shall be paid in accordance with section 12.3 and section 9.4(b). the company may offset damages for breach of this agreement by any equity owner whose interest is liquidated (either upon the withdrawal of the equity owner or the liquidation of the company) against the amount otherwise distributable to such equity owner. subject to section 8.1, no equity owner shall have any obligation to restore all or any portion of a deficit balance in such equity owner's capital account.
8.4 withdrawal or reduction of equity owners' contributions to capital.
(a) an equity owner shall not receive a distribution of any part of its capital contribution to the extent such distribution would violate
section 9.5.
article 9.
allocations, income tax,distributions, elections and reports
9.1 allocations of profits and losses from operations. except as provided in sections 9.2 and section 9.3, and article 11, the profits and losses for each fiscal year shall be allocated as follows:
(a) losses shall be allocated as follows:
(1) first, to the hhh partners pro rata in accordance with their respective common units until the total unrecovered losses (as defined in section 9.1(b)(1)) allocated pursuant to this section 9.1(a)(1) equals $,_________;
(2) thereafter, to the equity owners proportionately in accordance with their common units.
(b) profits shall be allocated as follows:
(1) first, to each equity owner which previously has been allocated losses pursuant to section 9.1(a) which have not been fully offset by allocations of profit pursuant to this section 9.1(b)(1), section 11.2, section 11.3 and section 11.4 ('unrecovered losses') until the total amount of profits allocated to each such equity owner pursuant to this section 9.1(b)(1), section 11.2, section 11.3 and section 11.4 is equal to the total amount of losses which have been allocated to such equity owner pursuant to section 9.1(a). profits allocated pursuant to this section 9.1(b)(1) shall be allocated to the equity owners in proportion to their respective unrecovered losses; and