3 - LOAN AGREEMENT FOR AMCAL_2018-01-16 (2)

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EXHIBIT 3 reasonable expectation that such improvements or payments would reduce the Minimum Gain below the sum of the deficit Capital Account balances. 7.6. Recourse Debt Loss Allocation. The allocation of loss or deduction (or items thereof] not attributable to nonrecourse debt which is secured by Partnership property shall not be made to a Partner if such Partner has a deficit Capital Account balance. Any such loss shall be allocated first among the Partners with positive Capital Account balances (and among them in proportion to their then positive Capital Account Balances) and then to the Administrative General Partner (and among them in proportion to their then respective Partnership Interests). Furthermore, losses attributable to nonrecourse liabilities of the Partnership where a Partner has economic risk of loss shall be allocated as required pursuant to Treasury Regulations Section 1.704-1(b)(4) (iv)(g). 7.7. Allocation of Ordinary Income. Notwithstanding anything to the contrary contained herein, any gain which is taxable as ordinary income as a result of depreciation or cost recovery taken by the Partnership shall be allocated among the Partners in the proportion that depreciation or cost recovery deductions were previously allocated among the Partners. 7.8. Qualified Income Offset. Notwithstanding anything to the contrary contained herein, allocations of profits, gain and losses to the Partners shall be made in a manner to comply with the provisions of Treasury Regulations Section 1.704-1(b)(2)(ii)(d). It is the Partners' intent that the following provisions, to the extent permitted by Treasury Regulations Section 1.704-1(b)(2)(ii)(d), shall not affect (a) losses or deductions (or items thereof) attributable to nonrecourse debt which is secured by Partnership property and/or (b) the priority allocation, if any, pursuant to subparagraph 7.5.2. In furtherance thereof, the following provisions shall apply to the extent required pursuant to the provisions of Treasury Regulations Section 1.704-1(b)(2)(ii)(d). 7.8.1. Losses shall not be allocated to any Partner if such allocation would, together with any decrease (and increase) of such Partner's Capital Account pursuant to the provisions of Treasury Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) and (6), cause or increase a deficit balance (in excess of any limited dollar amount of such deficit that such Partner is obligated to restore which shall include the amount of any Partner's share of minimum gain as provided by the provisions of Treasury Regulations Section 1.704-1 [b][4][iv][f]) in such Partner's Capital Account as of the end of the Partnership's taxable year to which such allocation relates. A Partner's Capital Account adjusted as provided by this subparagraph 7.8.1 (including any obligation to restore any deficit) shall be referred to as the "Adjusted Capital Account". 7.8.2. Any losses not allocable to a Partner pursuant to the foregoing subparagraph shall be allocated to such Partners who have positive Adjusted Capital Accounts in proportion to their respective positive Adjusted Capital ,Accounts, with any losses in excess of such positive Adjusted Capital Accounts, being allocated to the Administrative General Partner (and among them in proportion to their then respective Partnership Interests. 7.8.3. If a Partner unexpectedly receives an adjustment, allocation or distribution described in Treasury Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) and/or (6), initial 4F Agreement .. Santa lana 9.1.159.1.15 3-118