Common use of Allocation of Net Profit and Net Loss Clause in Contracts

Allocation of Net Profit and Net Loss. Except as otherwise provided in Sections 8.6 through 8.10 and subject to Section 8.5, as of the last day of each Fiscal Period, any Net Profit or Net Loss for the Fiscal Period, shall be allocated among and credited to or debited against the Capital Accounts of the Holders in accordance with their respective Capital Account balances for such Fiscal Period. (a) Net Profit shall be allocated on a preliminary basis to the Capital Accounts of each Holder in proportion to their respective Capital Account balances for such Fiscal Period (the amount allocated to a particular Partner is hereinafter referred to as the "PRELIMINARY AMOUNT"). (b) The aggregate of the Preliminary Amounts initially allocated to the Capital Account of a particular Holder for each Fiscal Period in a Fiscal Year shall be finally allocated to the Capital Account of that Holder at the end of such Fiscal Year (or at the time of a Holder's withdrawal if such Holder's Withdrawal Date is a date other than the last day of a Fiscal Year) as follows: (i) an amount equal to that Holder's Loss Carryforward (but in no event more than the aggregate of such Holder's Preliminary Amounts) shall be allocated to it; (ii) an amount of Net Profits such that such Holder's Capital Account shall have grown at an annualized rate of return equal to the rolling twelve-month geometric average of the three-month U.S. Treasury ▇▇▇▇ rate as published monthly by Federal Reserve (the "HURDLE RATE"); and (iii) subject to the Incentive Allocation allocated to the Special Advisory Accounts pursuant to Section 8.5, the remaining portion of the Preliminary Amount, if any, shall be finally allocated to such Holder's Capital Account. (c) In the event that a Holder makes a Capital Contribution after the beginning of a Fiscal Year or redeems all or a portion of its Capital Account on a date that is other than the end of the Fiscal Year, the Hurdle Rate shall be pro rated with respect to the amount contributed to or withdrawn from the Fund. (d) Net Loss, if any, for an Accounting Period shall be allocated to the Holders in proportion to their respective Capital Account balances as of the last day of that Fiscal Period, as adjusted for purchases and repurchases occurring during the Fiscal Period. (e) In the event that the Fund has both a Net Loss for at least one Fiscal Period and a Net Profit for at least one Fiscal Period during the same Fiscal Year, then the Fund shall make further equitable adjustments to the Capital Accounts of some or all of the Holders as of the last day of the Fiscal Year, in such proportions and amounts as the Fund shall determine, in order to assure, to the extent practicable, that no Holder receives a benefit or suffers a detriment as a result of multiple Fiscal Periods during a single Fiscal Year.