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Common use of Capital Account Adjustments Clause in Contracts

Capital Account Adjustments. (a) Notwithstanding any provision in this Agreement to the contrary, each Member's Capital Account shall be maintained and adjusted in accordance with the Code and the Treasury Regulations thereunder, including without limitation (i) the adjustments permitted or required by Code Section 704(b) and (ii) the adjustments required to maintain Capital Accounts in accordance with the "substantial economic effect test" set forth in the Treasury Regulations under Code Section 704(b). (b) A Member's Capital Account shall be increased by (i) the amount of cash and the initial Book Value of any property contributed by such Member to the Company, (ii) such Member's allocable share of Profits, income and gain and (iii) the amount of any Company liabilities that are expressly assumed by such Member or that are secured by any Company property distributed to such Member. (c) A Member's Capital Account shall be decreased by (1) the amount of cash and the Book Value of any Company property distributed to such Member pursuant to any provision of this Agreement, (2) such Member's allocable share of Losses, deductions and other losses and (3) the amount of any liabilities of such Member that are expressly assumed by the Company or that are secured by any property contributed by such Member to the Company. (d) Upon the occurrence of certain events described in Treasury Regulations Section 1.704-1(b)(2)(iv)(f) (including, for the avoidance of doubt, in connection with the AMENDED AND RESTATED OPERATING AGREEMENT COBASYS LLC liquidation of the Company), the Management Committee shall increase or decrease the Capital Accounts of the Members to reflect a revaluation of Company property on the Company's books and any unrealized gain or loss shall be allocated in accordance with Article 4; provided that no such adjustment shall be required if the Management Committee unanimously determines that such adjustment would be de minimis or would otherwise have no effect on the distributions (including liquidating distributions) to which each Member is entitled hereunder. (e) The Capital Account of each Member shall be determined after giving effect to all transactions which have been effected prior to the time when such determination is made giving rise to the allocation of Profits and Losses and to all contributions and distributions theretofore made. Any Person who acquires an Interest directly from a Member, or whose Percentage Interest shall be increased by means of a Disposition to it of all or part of the Interest of another Member, shall have a Capital Account which includes all or part of the Capital Account balance of the Interest so acquired or Disposed of. (f) Any fees, salary or similar compensation payable to a Member pursuant to this Agreement shall be deemed a guaranteed payment for federal income tax purposes and not a distribution to such Member for such purposes. Such payments to a Member shall not reduce the Capital Account of such Member, except to the extent of its distributive share of any Losses or other downward capital adjustment resulting from such payment. (g) No Member with a deficit balance in its Capital Account shall have any obligation to the Company or any other Member to restore such deficit balance. In addition, no venturer or partner in any Member shall have any liability to the Company or any other Member for any deficit balance in such venturer's or partner's Capital Account in the Member in which it is a partner or venturer. Furthermore, a deficit Capital Account balance of a Member (or a deficit Capital Account of a venturer or partner in a Member) shall not be deemed to be a Company asset or Company property. (h) In the event of the conversion of a Preferred Interest pursuant to Section 3.6, Capital Accounts shall be adjusted and maintained to reflect such conversion in accordance with Proposed Treasury Regulations under Sections 704, 721, and 761 of the Code addressing partnership noncompensatory options (the "NCO Regulations") or such other reasonable method established by the Management Committee consistent with the Members' economic agreement; provided, that the NCO Regulations shall be applied (pursuant to their terms) from and after their adoption in temporary or final form.

Appears in 2 contracts

Samples: Operating Agreement (Chevrontexaco Corp), Operating Agreement (Energy Conversion Devices Inc)

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Capital Account Adjustments. (a) Notwithstanding any provision in this Agreement to the contrary, each Member's Capital Account shall be maintained and adjusted in accordance with the Code and the Treasury Regulations thereunder, including without limitation (i) the adjustments permitted or required by Code Section 704(b) and (ii) the adjustments required to maintain Capital Accounts in accordance with the "substantial economic effect test" set forth in the Treasury Regulations under Code Section 704(b). (b) A Member's Capital Account shall be increased by (i1) the amount of cash and the initial Book Value of any property contributed by such Member to the Company, (ii2) such Member's allocable share of Profits, income and gain and (iii3) the amount of any Company liabilities that are expressly assumed by such Member or that are secured by any Company property distributed to such Member. (c) A Member's Capital Account shall be decreased by (1) the amount of cash and the Book Value of any Company property distributed to such Member pursuant to any provision of this Agreement, (2) such Member's allocable share of Losses, deductions and other losses and (3) the amount of any liabilities of such Member that are expressly assumed by the Company or that are secured by any property contributed by such Member to the Company. (d) Upon the occurrence of certain events described in Treasury Regulations Section Sections 1.704-1(b)(2)(iv)(f), 1.704-1(b)(4) (including, for the avoidance of doubt, in connection with the AMENDED AND RESTATED OPERATING AGREEMENT COBASYS LLC liquidation of the Company)and 1.704-2, the Management Committee shall increase or decrease the Capital Accounts of the Members to reflect a revaluation of Company property on the Company's books and any unrealized gain or loss shall be allocated in accordance with Article 4; provided that no such adjustment shall be required if the Management Committee unanimously determines that such adjustment would be de minimis or would otherwise have no effect on the distributions (including liquidating distributions) to which each Member is entitled hereunder. (e) The Capital Account of each Member shall be determined after giving effect to all transactions which have been effected prior to the time when such determination is made giving rise to the allocation of Profits and Losses and to all contributions and distributions theretofore made. Any Person who acquires an Interest directly from a Member, or whose Percentage Interest shall be increased by means of a Disposition to it of all or part of the Interest interest of another Member, shall have a Capital Account which includes all or part of the Capital Account balance of the Interest so acquired or Disposed of. (f) Any fees, salary or similar compensation payable to a Member pursuant to this Agreement shall be deemed a guaranteed payment for federal income tax purposes and not a distribution to such Member for such purposes. Such payments to a Member shall not reduce the Capital Account of such Member, except to the extent of its distributive share of any Losses or other downward capital adjustment resulting from such payment. (g) No Member with a deficit balance in its Capital Account shall have any obligation to the Company or any other Member to restore such deficit balance. In addition, no venturer or partner in any Member shall have any liability to the Company or any other Member for any deficit balance in such venturer's or partner's Capital Account in the Member in which it is a partner or venturer. Furthermore, a deficit Capital Account balance of a Member (or a deficit Capital Account of a venturer or partner in a Member) shall not be deemed to be a Company asset or Company property. (h) In the event of the conversion of a Preferred Interest pursuant to Section 3.6, Capital Accounts shall be adjusted and maintained to reflect such conversion in accordance with Proposed Treasury Regulations under Sections 704, 721, and 761 of the Code addressing partnership noncompensatory options (the "NCO Regulations") or such other reasonable method established by the Management Committee consistent with the Members' economic agreement; provided, that the NCO Regulations shall be applied (pursuant to their terms) from and after their adoption in temporary or final form.

Appears in 1 contract

Samples: Limited Liability Company Agreement (Energy Conversion Devices Inc)

Capital Account Adjustments. (a) Notwithstanding any provision in this Agreement to the contrary, each Member's Capital Account shall be maintained and adjusted in accordance with the Code and the Treasury Regulations thereunder, including without limitation (i) the adjustments permitted or required by Code Section 704(b) and (ii) the adjustments required to maintain Capital Accounts in accordance with the "substantial economic effect test" set forth in the Treasury Regulations under Code Section 704(b). (b) A Member's Capital Account shall be increased by (i1) the amount of cash and the initial Book Value of any property contributed by such Member to the Company, (ii2) such Member's allocable share of Profits, income and gain and (iii3) the amount of any Company liabilities that are expressly assumed by such Member or that are secured by any Company property distributed to such Member. (c) A Member's Capital Account shall be decreased by (1) the amount of cash and the Book Value of any Company property distributed to such Member pursuant to any provision of this Agreement, (2) such Member's allocable share of Losses, deductions and other losses and (3) the amount of any liabilities of such Member that are expressly assumed by the Company or that are secured by any property contributed by such Member to the Company. (d) Upon the occurrence of certain events described in Treasury Regulations Section Sections 1.704-1(b)(2)(iv)(f), 1.704-1(b)(4) (including, for the avoidance of doubt, in connection with the AMENDED AND RESTATED OPERATING AGREEMENT COBASYS LLC liquidation of the Company)and 1.704-2, the Management Committee shall increase or decrease the Capital Accounts of the Members to reflect a revaluation of Company property on the Company's books and any unrealized gain or loss shall be allocated in accordance with Article 4; provided that no such adjustment shall be required if the Management Committee unanimously determines that such adjustment would be de minimis or would otherwise have no effect on the distributions (including liquidating distributions) to which each Member is entitled hereunder. (e) The Capital Account of each Member shall be determined after giving effect to all transactions which have been effected prior to the time when such determination is made giving rise to the allocation of Profits and Losses and to all contributions and distributions theretofore made. Any Person who acquires an Interest directly from a Member, or whose Percentage Interest shall be increased by means of a Disposition to it of all or part of the Interest interest of another Member, shall have a Capital Account which includes all or part of the Capital Account balance of the Interest so acquired or Disposed of. (f) Any fees, salary or similar compensation payable to a Member pursuant to this Agreement shall be deemed a guaranteed payment for federal income tax purposes and not a distribution to such Member for such purposes. Such payments to a Member shall not reduce the Capital Account of such Member, except to the extent of its distributive share of any Losses or other downward capital adjustment resulting from such payment. (g) From time to time the Management Committee may make such modifications to the manner in which the Capital Accounts are computed to comply with Treasury Regulations Sections 1.704-1(b) and 1.704-2 provided that such modification is not likely to have a material effect on the amounts distributable to any Member pursuant to this Agreement. (h) The foregoing provisions and the other provisions of this Agreement relating to the maintenance of Capital Accounts are intended to comply with Treasury Regulations Sections 1.704-1(b) and 1.704-2, and shall be interpreted and applied in a manner consistent with such Treasury Regulations. (i) No Member with a deficit balance in its Capital Account shall have any obligation to the Company or any other Member to restore such deficit balance. In addition, no venturer or partner in any Member shall have any liability to the Company or any other Member for any deficit balance in such venturer's or partner's Capital Account in the Member in which it is a partner or venturer. Furthermore, a deficit Capital Account balance of a Member (or a deficit Capital Account of a venturer or partner in a Member) shall not be deemed to be a Company asset or Company property. (h) In the event of the conversion of a Preferred Interest pursuant to Section 3.6, Capital Accounts shall be adjusted and maintained to reflect such conversion in accordance with Proposed Treasury Regulations under Sections 704, 721, and 761 of the Code addressing partnership noncompensatory options (the "NCO Regulations") or such other reasonable method established by the Management Committee consistent with the Members' economic agreement; provided, that the NCO Regulations shall be applied (pursuant to their terms) from and after their adoption in temporary or final form.

Appears in 1 contract

Samples: Limited Liability Company Agreement (Energy Conversion Devices Inc)

Capital Account Adjustments. (a) Notwithstanding any provision in this Agreement to the contrary, each Member's Capital Account shall be maintained and adjusted in accordance with the Code and the Treasury Regulations thereunder, including without limitation (i) the adjustments permitted or required by Code Section 704(b) and (ii) the adjustments required to maintain Capital Accounts in accordance with the "substantial economic effect test" set forth in the Treasury Regulations under Code Section 704(b). (b) A Member's Capital Account shall be increased by (i) the amount of cash and the initial Book Value of any property contributed by such Member to the Company, (ii) such Member's allocable share of Profits, income and gain and (iii) the amount of any Company liabilities that are expressly assumed by such Member or that are secured by any Company property distributed to such Member. (c) A Member's Capital Account shall be decreased by (1) the amount of cash and the Book Value of any Company property distributed to such Member pursuant to any provision of this Agreement, (2) such Member's allocable share of Losses, deductions and other losses and (3) the amount of any liabilities of such Member that are expressly assumed by the Company or that are secured by any property contributed by such Member to the Company. (d) Upon the occurrence of certain events described in Treasury Regulations Section Sections 1.704-1(b)(2)(iv)(f), 1.704-1(b)(4) (including, for the avoidance of doubt, in connection with the AMENDED AND RESTATED OPERATING AGREEMENT COBASYS LLC liquidation of the Company)and 1.704-2, the Management Committee shall increase or decrease the Capital Accounts of the Members to reflect a revaluation of Company property on the Company's books and any unrealized gain or loss shall be allocated in accordance with Article 4; provided that no such adjustment shall be required if the Management Committee unanimously determines that such adjustment would be de minimis or would otherwise have no effect on the distributions (including liquidating distributions) to which each Member is entitled hereunder. (e) The Capital Account of each Member shall be determined after giving effect to all transactions which have been effected prior to the time when such determination is made giving rise to the allocation of Profits and Losses and to all contributions and distributions theretofore made. Any Person who acquires an Interest directly from a Member, or whose Percentage Interest shall be increased by means of a Disposition to it of all or part of the Interest of another Member, shall have a Capital Account which includes all or part of the Capital Account balance of the Interest so acquired or Disposed of. (f) Any fees, salary or similar compensation payable to a Member pursuant to this Agreement shall be deemed a guaranteed payment for federal income tax purposes and not a distribution to such Member for such purposes. Such payments to a Member shall not reduce the Capital Account of such Member, except to the extent of its distributive share of any Losses or other downward capital adjustment resulting from such payment. (g) From time to time the Management Committee may make such modifications to the manner in which the Capital Accounts are computed to comply with Treasury Regulations Sections 1.704-1(b) and 1.704-2 provided that such modification is not likely to have a material effect on the amounts distributable to any Member pursuant to this Agreement. (h) The foregoing provisions and the other provisions of this Agreement relating to the maintenance of Capital Accounts are intended to comply with Treasury Regulations Sections 1.704-1(b) and 1.704-2, and shall be interpreted and applied in a manner consistent with such Treasury Regulations. (i) No Member with a deficit balance in its Capital Account shall have any obligation to the Company or any other Member to restore such deficit balance. In addition, no venturer or partner in any Member shall have any liability to the Company or any other Member for any deficit balance in such venturer's or partner's Capital Account in the Member in which it is a partner or venturer. Furthermore, a deficit Capital Account balance of a Member (or a deficit Capital Account of a venturer or partner in a Member) shall not be deemed to be a Company asset or Company property. (h) In the event of the conversion of a Preferred Interest pursuant to Section 3.6, Capital Accounts shall be adjusted and maintained to reflect such conversion in accordance with Proposed Treasury Regulations under Sections 704, 721, and 761 of the Code addressing partnership noncompensatory options (the "NCO Regulations") or such other reasonable method established by the Management Committee consistent with the Members' economic agreement; provided, that the NCO Regulations shall be applied (pursuant to their terms) from and after their adoption in temporary or final form.

Appears in 1 contract

Samples: Operating Agreement (Energy Conversion Devices Inc)

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Capital Account Adjustments. (a) Notwithstanding any provision As of the end of each Accounting Period, the balance in this Agreement to the contrary, each Member's ’s Capital Account shall be maintained and adjusted by (a) increasing such balance by such Member’s (i) allocable share of Net Profit (allocated in accordance with the Code Article VIII) or other income and the Treasury Regulations thereunder, including without limitation (i) the adjustments permitted or required by Code Section 704(b) and (ii) the adjustments required to maintain Capital Accounts gain allocated in accordance with the "substantial economic effect test" set forth in the Treasury Regulations under Code Section 704(b). this Agreement, (b) A Member's Capital Account shall be increased by (iii) the amount of cash and the initial Book Gross Asset Value of any property (as of the date of the contribution thereof and net of any liabilities encumbering such property) contributed by such Member to the CompanyCompany during such Accounting Period, (ii) such Member's allocable share of Profitsif any, income and gain and (iii) the net amount of any Company liabilities that are expressly assumed by such Member or that are secured by any Company property assets distributed to such Member. Member and (cb) A Member's Capital Account shall be decreased decreasing such balance by (1i) the amount of cash and the Book Gross Asset Value of any Company property (as of the date of the distribution thereof and net of any liabilities encumbering such property) distributed to such Member pursuant to any provision of this Agreementduring such Accounting Period, (2ii) such Member's ’s allocable share of Losses, deductions Net Loss (allocated in accordance with Article VIII) or other loss and other losses deduction allocated in accordance with this Agreement and (3iii) the net amount of any liabilities of such Member that are expressly assumed by the Company or that are secured by any property contributed by such Member to the Company. . The provisions of this Agreement relating to the maintenance of Capital Accounts are intended to comply with Treasury Regulations Sections 1.704-1(b) and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations. In addition, the Capital Accounts shall be increased or decreased upon a revaluation of Company property pursuant to clause (db) Upon of the occurrence definition of certain events described Gross Asset Value in the manner prescribed in Treasury Regulations Section 1.704-1(b)(2)(iv)(f) (including). In determining the amount of any liability for purposes of this Section 7.4, for there shall be taken into account Section 752 of the avoidance Code and any other applicable provisions of doubtthe Code and the Treasury Regulations. Notwithstanding any provision to the contrary in this Agreement, in connection with the AMENDED AND RESTATED OPERATING AGREEMENT COBASYS LLC liquidation income and gain of the Company), the Management Committee shall increase or decrease the Capital Accounts loss and deductions of the Members Company, and all other items attributable to reflect a revaluation of Company property on any Units Transferred for the Company's books Accounting Period in which such Units are Transferred will be divided and any unrealized gain allocated between (or loss shall be allocated among) the affected Persons by taking into account their varying interests during the period in accordance with Article 4; provided that no such adjustment shall be required if Code Section 706(d), using any conventions permitted by law and approved by the Management Committee unanimously determines that such adjustment would be de minimis or would otherwise have no effect on Managing Member and the distributions (including liquidating distributions) to which each Member is entitled hereunder. (e) The Capital Account of each Member shall be determined after giving effect to all transactions which have been effected prior to the time when such determination is made giving rise to the allocation of Profits and Losses and to all contributions and distributions theretofore made. Any Person who acquires an Interest directly from a Member, or whose Percentage Interest shall be increased by means of a Disposition to it of all or part of the Interest of another Member, shall have a Capital Account which includes all or part of the Capital Account balance of the Interest so acquired or Disposed of. (f) Any fees, salary or similar compensation payable to a Member pursuant to this Agreement shall be deemed a guaranteed payment for federal income tax purposes and not a distribution parties to such Member for such purposes. Such payments to a Member shall not reduce the Capital Account of such Member, except to the extent of its distributive share of any Losses or other downward capital adjustment resulting from such paymentTransfer. (g) No Member with a deficit balance in its Capital Account shall have any obligation to the Company or any other Member to restore such deficit balance. In addition, no venturer or partner in any Member shall have any liability to the Company or any other Member for any deficit balance in such venturer's or partner's Capital Account in the Member in which it is a partner or venturer. Furthermore, a deficit Capital Account balance of a Member (or a deficit Capital Account of a venturer or partner in a Member) shall not be deemed to be a Company asset or Company property. (h) In the event of the conversion of a Preferred Interest pursuant to Section 3.6, Capital Accounts shall be adjusted and maintained to reflect such conversion in accordance with Proposed Treasury Regulations under Sections 704, 721, and 761 of the Code addressing partnership noncompensatory options (the "NCO Regulations") or such other reasonable method established by the Management Committee consistent with the Members' economic agreement; provided, that the NCO Regulations shall be applied (pursuant to their terms) from and after their adoption in temporary or final form.

Appears in 1 contract

Samples: Merger Agreement (Third Coast Midstream, LLC)

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