Capital Accounts Allocations. A separate capital account (singly, a "Capital Account"; collectively, the "Capital Accounts"), shall be established and maintained for each Member. As of any date, the amount of a Member's Capital Account shall be adjusted and any allocations of the Company's income, gain, loss, deductions, or credits (or items thereof) shall be determined and made as hereinafter provided and in accordance with the Company's records and, to the extent consistent herewith, applicable provisions of the Virginia Limited Liability Company Act as it may be amended or superseded from time to time (the "Act"): (i) Each Member's Capital Account (a) shall be increased by (i) the cash amount or agreed fair market value of all contributions hereafter made by such Member to the Company, (ii) any net income allocated (but not distributed) to such Member pursuant to this Section 3, and any items in the nature of income or gain that are specially allocated (but not distributed) to such Member, and (iii) the amount of any Company liabilities assumed by such Member or secured by any property of the Company distributed to such Member, and (b) shall be decreased by (i) the cash amount or agreed fair market value of all actual or deemed distributions of cash or property made to such Member pursuant to this agreement, (ii) any net loss allocated to such Member pursuant to this Section 3, and any items in the nature of expenses or losses that are specially allocated to such Member, and (iii) the amount of any liabilities of such Member assumed or secured by the Company. In determining the amount of any such liabilities, there shall be taken into account the provisions of ss. 752(c), and any other applicable provisions, of the Internal Revenue Code as amended from time to time (the "Code") and any applicable regulations (the "Regulations"; singly, a "Regulation") thereunder. (ii) In accordance with Regulation ss. 1.704, at appropriate times, the Capital Accounts of all Members and the carrying values of all Company properties shall be adjusted upwards or downwards to reflect any unrealized gain or loss attributable to each Company property, as if such unrealized gain or loss had been recognized upon an actual sale of each such property at such time and had been allocated to the Members pursuant to this Section 3. Similarly, in accordance with such Regulation, immediately prior to the distribution in kind of any Company property to a Member (including pursuant to a liquidation of the Company) the Capital Accounts of the Members shall be adjusted to reflect any unrealized gain or loss attributable to such property as if such unrealized gain or loss had been recognized upon an actual sale of such property at such time and had been allocated to the Members pursuant to this Section 3. Such unrealized gain or loss shall be determined using such methods of valuation as the Members in their sole discretion deem appropriate. (iii) For purposes of this agreement, net income, gross income and net loss shall be computed in the same manner as determined for federal income tax purposes, with the modifications set forth in Regulation ss. 1.704. (iv) Should any Member's adjusted capital account balance become negative as a result of any adjustment, allocation, or distribution, thereafter, acting as rapidly as is possible, from time to time such Member's share of the Company's income and gain, if any, shall be separately allocated to such Member's Capital Account until such time as such Member's Capital Account deficit is eliminated. (v) Non-recourse deductions shall be allocated in a manner that is reasonably consistent with other allocations of items of income, gain, or loss attributable to the property securing the non-recourse liabilities. In the first year in which the Company has non-recourse deductions or makes distributions attributable to an increase in minimum gain as defined in the Regulations, this agreement shall be deemed to include a "minimum gain chargeback" in accordance with the Regulations.
Appears in 18 contracts
Samples: Operating Agreement (Northland Holdings Management Inc), Operating Agreement (Northland Holdings Management Inc), Operating Agreement (Central Michigan Distribution Co Lp)
Capital Accounts Allocations. A separate capital account (singly, a) There shall be established for each Member a Capital Account (a "Capital Account"; collectively) which, in the "Capital Accounts")case of each Member, shall initially be established and maintained for equal to the Capital Contribution of such Member as set forth on SCHEDULE A hereto.
(b) The Capital Account of each MemberMember shall be adjusted in the following manner. As of any date, the amount of a Member's Each Capital Account shall be adjusted increased by such Member's allocable share of income and any allocations gain, if any, of the Company's income, gain, loss, deductions, or credits LLC (or items thereof) shall be determined and made as hereinafter provided and in accordance with well as the Company's records and, to the extent consistent herewith, applicable provisions of the Virginia Limited Liability Company Act as it may be amended or superseded from time to time (the "Act"):
(i) Each Member's Capital Account (a) shall be increased by (i) the cash amount or agreed fair market value of all contributions hereafter Contributions made by such a Member to after the Company, (iiEffective Date) any net income allocated (but not distributed) to such Member pursuant to this Section 3, and any items in the nature of income or gain that are specially allocated (but not distributed) to such Member, and (iii) the amount of any Company liabilities assumed by such Member or secured by any property of the Company distributed to such Member, and (b) shall be decreased by (i) such Member's allocable share of deductions and losses, if any, of the cash LLC and by the amount or agreed fair market value of all actual or deemed distributions of cash or property made to such Member pursuant to this agreement, (ii) any net loss allocated to such Member pursuant to this Section 3, and any items in the nature of expenses or losses that are specially allocated to such Member, and (iii) the . The amount of any liabilities distribution of assets other than cash shall be deemed to be the Fair Market Value of such Member assumed or secured by the Company. In determining the amount assets (net of any liabilities encumbering such liabilities, there property that the distributee Member is considered to assume or take subject to). Capital Accounts shall also be taken into account adjusted upon the provisions issuance of ss. 752(c), and any other applicable provisions, of the Internal Revenue Code additional LLC Interests as amended from time to time (the "Code"set forth in Section 5.5(c) and any applicable regulations (upon the "Regulations"; singlytransfer of LLC Interests as set forth in Section 5.1. To the extent not otherwise provided for in this Agreement, a "Regulation") thereunder.
(ii) In accordance with Regulation ss. 1.704, at appropriate times, the Capital Accounts of all Members and the carrying values of all Company properties shall be adjusted upwards or downwards to reflect any unrealized gain or loss attributable to each Company property, as if such unrealized gain or loss had been recognized upon an actual sale of each such property at such time and had been allocated to the Members pursuant to this Section 3. Similarly, in accordance with such Regulation, immediately prior to the distribution in kind of any Company property to a Member (including pursuant to a liquidation of the Company) the Capital Accounts of the Members shall be adjusted and maintained in accordance with the rules of Treasury Regulations Section 1.704-1(b)(2)(iv), as the same may be amended or revised. Any references in any section of this Agreement to reflect any unrealized gain or loss attributable the Capital Account of a Member shall be deemed to refer to such property Capital Account as if such unrealized the same may be credited or debited from time to time as set forth above.
(c) Subject to Sections 4.2(e), 4.2(g) and 4.5 hereof, all items of LLC income and gain or loss had been recognized upon an actual sale shall be allocated among the Members' Capital Accounts at the end of such property at such time every calendar quarter as follows:
(i) first, items of income and had been gain shall be allocated to the Members Manager Member in an amount equal to the Owners' Allocation for such calendar quarter (net of Owners' Allocation Expenditures for such calendar quarter) multiplied by a fraction (1) the numerator of which is the sum of the number of LLC Points held by the Manager Member as of the first day of such calendar quarter and (2) the denominator of which is the number of LLC Points outstanding as of the first day of such calendar quarter, provided, that for the first full calendar quarter following the Effective Date, the Manager Member shall be allocated additional items of income and gain totaling $112,000 pursuant to this Section 3. Such unrealized gain or loss clause (i);
(ii) second, the Manager Member shall be determined using such methods allocated items of valuation as income and gain until the Members Manager Member has been allocated cumulative income and gain under this Section 4.2(c)(ii) equal to the cumulative amount of losses and deductions allocated to the Manager Member under Sections 4.2(d)(ii) and 4.2(d)(iii) in their sole discretion deem appropriate.prior periods if any;
(iii) For purposes third, items of this agreement, net income, gross income and net loss shall be computed in the same manner as determined for federal income tax purposes, with the modifications set forth in Regulation ss. 1.704.
(iv) Should any Member's adjusted capital account balance become negative as a result of any adjustment, allocation, or distribution, thereafter, acting as rapidly as is possible, from time to time such Member's share of the Company's income and gain, if any, shall be separately allocated (A) first, to each Non-Manager Member in an amount equal to the Owners' Allocation for such calendar quarter (net of Owners' Allocation Expenditures for such calendar quarter) multiplied by a fraction (1) the numerator of which is the sum of the number of Vested LLC Points held by such Non-Manager Member as of the first day of such calendar quarter and (2) the denominator of which is the number of LLC Points outstanding as of the first day of such calendar quarter, and (B) second, to Xxxxxx X. Xxxxx if he was a Non-Manager Member as of the first day of such calendar quarter, and otherwise among all Non-Manager Members in accordance with (and in proportion to) each Non-Manager Member's respective number of Vested LLC Points on the first day of such calendar quarter, in an amount equal to the remaining Owners' Allocation for such calendar quarter (net of Owners' Allocation Expenditures for such calendar quarter), until the aggregate amount of such items allocated to the Members (including both the Manager Member and the Non-Manager Members) pursuant to Sections 4.2(c)(i) and 4.2(c)(ii) and this 4.2(c)(iii) for such calendar quarter equal the aggregate amount of the Owners' Allocation (net of Owners' Allocation Expenditures) for such calendar quarter, provided, that for the first full calendar quarter following the Effective Date, the aggregate items of income and gain allocated to the Non-Manager Members pursuant to this clause (iii) shall be reduced by $112,000 (such reduction to be borne pro rata by the Non-Manager Members in accordance with the proportions of income and gain allocated to the Non-Manager Members pursuant to this clause (iii) for such calendar quarter);
(iv) finally, all remaining items of LLC income and gain shall be allocated among the Non-Manager Members in accordance with (and in proportion to) each Non-Manager Member's respective number of Vested LLC Points on the first day of such calendar quarter.
(d) Except to the extent provided in Sections 4.2(f), 4.2(g) and 4.5, all items of LLC loss and deduction shall be allocated among the Members' Capital Accounts at the end of every calendar quarter as follows:
(i) first, all items of LLC loss and deduction for such calendar quarter shall be allocated (A) first, among the Non-Manager Members in accordance with (and in proportion to) each Non-Manager Member's respective number of Vested LLC Points on the first day of such calendar quarter, until the aggregate allocations to the Non-Manager Members pursuant to this clause (A) equals the aggregate amount of allocations of income and gain to the Non-Manager Members pursuant to Section 4.2(c)(iv) for such calendar quarter, (B) second, to Xxxxxx X. Xxxxx if he was a Non-Manager Member as of the first day of such calendar quarter, and otherwise among all Non-Manager Members in accordance with (and in proportion to) each Non-Manager Member's respective number of Vested LLC Points on the first day of such calendar quarter, until the aggregate allocations to such Person(s) pursuant to this clause (B) equals the aggregate amount of allocations of income and gain to such Person(s) pursuant to Section 4.2(c)(iii)(B) for such calendar quarter, and (C) third, among the Non-Manager Members in accordance with (and in proportion to) their respective numbers of Vested LLC Points on the first day of such calendar quarter, until all such Capital Accounts shall have been reduced to zero (0) (after giving effect to the allocations of income and gain for such calendar quarter under Section 4.2(c)), provided that no additional loss or deduction shall be allocated to any Non-Manager's Capital Account pursuant to this Section 4.2(d)(i) once such Capital Account has been reduced to zero (0) (but losses and deductions shall continue to be allocated to the Capital Accounts of the other Non-Manager Members pursuant to this Section 4.2(d)(i) until all such time as Non-Manager Members' Capital Accounts have been reduced to zero (0));
(ii) second, all items of LLC loss and deduction for such calendar quarter not allocated to the Non-Manager Members under Section 4.2(d)(i) shall be allocated to the Manager Member until its Capital Account shall have been reduced to zero (0); and
(iii) finally, all items of LLC loss and deduction for such calendar quarter not allocated to the Members under Sections 4.2(d)(i) and 4.2(d)(ii) shall be allocated among all Members in accordance with (and in proportion to) each Member's Capital Account deficit is eliminatedrespective number of LLC Points as of the first day of such calendar quarter.
(ve) Non-recourse deductions If the LLC has a net gain from any sale, exchange or disposition of all, or substantially all, of the assets of the LLC, then that net gain shall be allocated among the Members as follows:
(i) first, gain shall be allocated to the Manager Member until the Manager Member has been allocated cumulative gain which, together with income and gain previously allocated to the Manager Member under Section 4.2(c)(ii) hereof, equals the cumulative amount of losses and deductions allocated to the Manager Member under Sections 4.2(d)(ii) and 4.2(d)(iii) in prior periods;
(ii) thereafter, gain shall be allocated among the Members in accordance with (and in proportion to) their respective number of Vested LLC Points as of the date of the transaction.
(f) If the LLC has a manner net loss from any sale, exchange or other disposition of all, or substantially all, of the assets of the LLC, then that net loss shall be allocated among the Members in accordance with (and in proportion to) their respective number of Vested LLC Points as of the date of the transaction, provided that no additional losses shall be allocated to a Member once its Capital Account has been reduced to zero (0), unless all Members' Capital Accounts have then been reduced to zero (0). All items of LLC deduction relating to the payment by the LLC of a Royalty (as defined therein) ("Royalty") for a calendar quarter pursuant to the License Agreement shall be allocated at the end of such calendar quarter solely to the Manager Member.
(g) In the event that during any calendar quarter (or any fiscal year) there is reasonably consistent with other allocations any change of items Members or LLC Points (whether as a result of the admission of an Additional Non-Manager Member, the redemption by the LLC of all (or any portion of) any Non-Manager Member's LLC Points, an issuance or transfer of any LLC Points or otherwise), the following shall apply: (i) such transfer shall be deemed to have occurred as of the end of the last day of the calendar quarter in which such change occurred, (ii) the books of account of the LLC shall be closed effective as of the close of business on the effective date of any such change as set forth in clause (i) and such fiscal year shall thereupon be divided into two or more portions, (iii) each item of income, gain, or loss attributable and deduction shall be determined (on the closing of the books basis) for the portion of such fiscal year ending with the date on which the books of account of the LLC are so closed, and (iv) each such item for such portion of such fiscal year shall be allocated (pursuant to the property securing the non-recourse liabilities. In the first provisions of Sections 4.2(c) and (d) hereof) to those Persons who were Members during such portion of such fiscal year in which the Company has non-recourse deductions or makes distributions attributable to an increase in minimum gain as defined in the Regulations, this agreement shall be deemed to include a "minimum gain chargeback" in accordance with the Regulationstheir respective LLC Points during such period.
Appears in 1 contract
Samples: Limited Liability Company Agreement (Affiliated Managers Group Inc)
Capital Accounts Allocations. A separate capital account (singly, a "Capital Account"; collectively, the "Capital Accounts"), a) There shall be established and maintained for each Member a Capital Account (a “Capital Account”) which, in the case of each Member, shall initially be equal to the Capital Contribution of such Member as set forth on Schedule A hereto.
(b) The Capital Account of each Member shall be adjusted in the following manner. As of any date, the amount of a Member's Each Capital Account shall be adjusted increased by such Member’s allocable share of income and any allocations gain, if any, of the Company's incomeLLC (as well as the Capital Contributions made by a Member after the Effective Time, gainincluding, losswithout limitation, deductions, or credits (or items thereof) shall be determined and any Capital Contributions deemed to have been made as hereinafter provided and in accordance with the Company's records and, to the extent consistent herewith, applicable provisions of LLC by the Virginia Limited Liability Company Act as it may be amended or superseded from time to time (the "Act"):
(i) Each Member's Capital Account (a) shall be increased by (i) the cash amount or agreed fair market value of all contributions hereafter made by such Manager Member pursuant to the Company, operation of clause (ii) any net income allocated (but not distributed) to such Member pursuant to this Section 3, and any items in the nature of income or gain that are specially allocated (but not distributed) to such Member, and (iii) the amount of any Company liabilities assumed by such Member or secured by any property of the Company distributed to such Member, last paragraph of Section 3.5(b) hereof) and (b) shall be decreased by (i) such Member’s allocable share of deductions and losses, if any, of the cash LLC and by the amount or agreed fair market value of all actual or deemed distributions of cash or property made to such Member pursuant to this agreement, (ii) any net loss allocated to such Member pursuant to this Section 3, and any items in the nature of expenses or losses that are specially allocated to such Member, and (iii) the . The amount of any liabilities distribution of assets other than cash shall be deemed to be the Fair Market Value of such Member assumed or secured by the Company. In determining the amount assets (net of any liabilities encumbering such liabilities, there property that the distributee Member is considered to assume or take subject to). Capital Accounts shall also be taken into account adjusted upon the provisions issuance of ss. 752(c), and any other applicable provisions, of the Internal Revenue Code additional LLC Interests as amended from time to time (the "Code"set forth in Section 5.5(c) and any applicable regulations (upon the "Regulations"; singlytransfer of LLC Interests as set forth in Section 5.1. To the extent not otherwise provided for in this Agreement, a "Regulation") thereunder.
(ii) In accordance with Regulation ss. 1.704, at appropriate times, the Capital Accounts of all Members and the carrying values of all Company properties shall be adjusted upwards or downwards to reflect any unrealized gain or loss attributable to each Company property, as if such unrealized gain or loss had been recognized upon an actual sale of each such property at such time and had been allocated to the Members pursuant to this Section 3. Similarly, in accordance with such Regulation, immediately prior to the distribution in kind of any Company property to a Member (including pursuant to a liquidation of the Company) the Capital Accounts of the Members shall be adjusted and maintained in accordance with the rules of Treasury Regulations Section 1.704-1(b)(2)(iv), as the same may be amended or revised. Any references in any section of this Agreement to reflect any unrealized gain or loss attributable the Capital Account of a Member shall be deemed to refer to such property Capital Account as the same may be credited or debited from time to time as set forth above.
(c) Subject to Sections 4.2(e), 4.2(g) and 4.5 hereof, all items of LLC income and gain shall be allocated among the Members’ Capital Accounts at the end of every calendar quarter as follows:
(i) first, items of income and gain (if such unrealized gain or loss had been recognized upon an actual sale of such property at such time and had been any) shall be allocated to the Manager Member in an amount equal to the product of (A) the Owners’ Allocation for such calendar quarter, multiplied by (B) a fraction (I) the numerator of which is the number of LLC Units held by the Manager Member as of the first day of such calendar quarter and (II) the denominator of which is the number of LLC Units outstanding as of the first day of such calendar quarter;
(ii) second, items of income and gain (if any) shall be allocated to the Manager Member until the Manager Member has been allocated cumulative income and gain under this Section 4.2(c)(ii) equal to the cumulative amount of losses and deductions allocated to the Manager Member under Sections 4.2(d)(ii) and 4.2(d)(iii) in prior periods (if any);
(iii) third, items of income and gain (if any) shall be allocated to each Non-Manager Member in an amount equal to the product of (I) the Owners’ Allocation for such calendar quarter, multiplied by (II) a fraction (x) the numerator of which is the number of LLC Units held by such Non-Manager Member as of the first day of such calendar quarter and (y) the denominator of which is the number of LLC Units outstanding as of the first day of such calendar quarter, until the aggregate amount of such items of income and gain allocated to the Members (including both the Manager Member and the Non-Manager Members) pursuant to Sections 4.2(c)(i), 4.2(c)(ii) and this 4.2(c)(iii) for such calendar quarter equals the total amount of the Owners’ Allocation for such calendar quarter; and
(iv) finally, all remaining items of LLC income and gain shall be allocated among the Non-Manager Members in accordance with (and in proportion to) each Non-Manager Member’s respective number of LLC Units on the first day of such calendar quarter.
(d) Subject to Sections 4.2(f), 4.2(g) and 4.5 hereof, all items of LLC loss and deduction shall be allocated among the Members’ Capital Accounts at the end of every calendar quarter as follows:
(i) first, all items of LLC loss and deduction for such calendar quarter shall be allocated: (A) first, among the Non-Manager Members in accordance with (and in proportion to) each Non-Manager Member’s respective number of LLC Units on the first day of such calendar quarter, until the aggregate amount of such items of loss and deduction allocated to the Non-Manager Members pursuant to this clause (A) equals the aggregate amount of allocations of income and gain to the Non-Manager Members pursuant to Section 4.2(c)(iv) for such calendar quarter and (B) second, among the Non-Manager Members in accordance with (and in proportion to) their respective numbers of LLC Units on the first day of such calendar quarter, until the Capital Accounts of all of the Non-Manager Members shall have been reduced to zero (0) (after giving effect to the allocations of income and gain for such calendar quarter under Section 4.2(c)); provided that no additional loss or deduction shall be allocated to any Non-Manager’s Capital Account pursuant to this Section 4.2(d)(i) once such Capital Account has been reduced to zero (0) (but items of loss and deduction shall continue to be allocated to the Capital Accounts of the other Non-Manager Members pursuant to this Section 3. Such unrealized gain or 4.2(d)(i) until all such Non-Manager Members’ Capital Accounts have been reduced to zero (0));
(ii) second, any remaining items of LLC loss and deduction for such calendar quarter not allocated to the Non-Manager Members under Section 4.2(d)(i) shall be determined using such methods of valuation as allocated to the Members in their sole discretion deem appropriate.Manager Member until its Capital Account shall have been reduced to zero (0); and
(iii) For purposes finally, any remaining items of LLC loss and deduction for such calendar quarter not allocated to the Members under Sections 4.2(d)(i) and 4.2(d)(ii) shall be allocated among all Members in accordance with (and in proportion to) each Member’s respective number of LLC Units as of the first day of such calendar quarter.
(e) If the LLC has a net gain from the sale, exchange or other disposition of all, or a substantial portion (as determined by the Manager Member) of, the assets of the LLC and its Controlled Affiliates, then that net gain shall be allocated among the Members as follows:
(i) first, net gain shall be allocated to the Manager Member until the Manager Member has been allocated cumulative gain which, together with income and gain previously allocated to the Manager Member under Section 4.2(c)(ii) hereof and this Section 4.2(e)(i), equals the cumulative amount of losses and deductions allocated to the Manager Member under Sections 4.2(d)(ii) and 4.2(d)(iii) in prior periods;
(ii) second, an aggregate amount of net gain equal to the positive difference between (A) the Liquidation Preference and (B) the aggregate positive Capital Account balances of those Members holding Series A LLC Units as of the date of the transaction (or an allocable portion thereof, in the case of any Member holding both Series A LLC Units and Series B LLC Units as of the date of such transaction) shall be allocated among those Members holding Series A LLC Units as of the date of the transaction in accordance with (and in proportion to) their respective number of Series A LLC Units as of the date of the transaction; provided, however, that, in the event the ratio of (I) the aggregate Capital Account balances of any Non-Manager Members holding Series A LLC Units, on the one hand, to (II) the Capital Account balance of the Manager Member, on the other hand, is less than the ratio of (X) the Applicable Aggregate Non-Manager Member Allocation Percentage, on the one hand, to (Y) the Applicable Manager Member Allocation Percentage, on the other hand, then in such event, the aggregate net gain described in this clause (ii) shall first be allocated to such Non-Manager Members holding Series A LLC Units (in accordance with, and in proportion to, their respective number of Series A LLC Units) until such ratios are equal (and thereafter shall be allocated in accordance with this clause (ii) without further application of this agreementproviso);
(iii) third, net incomegain shall be allocated among the Non-Manager Members in accordance with (and in proportion to) their respective number of LLC Units as of the date of the transaction, gross income until the ratio of (I) the aggregate Capital Account balances of the Non-Manager Members, on the one hand, to (II) the Capital Account balance of the Manager Member, on the other hand, is equal to the ratio of (X) the Applicable Aggregate Non-Manager Member Allocation Percentage, on the one hand, to (Y) the Applicable Manager Member Allocation Percentage, on the other hand; and
(iv) thereafter, net gain shall be allocated among the Members in accordance with (and in proportion to) their respective number of LLC Units as of the date of the transaction.
(f) If the LLC has a net loss from any sale, exchange or other disposition of all, or a substantial portion (as determined by the Manager Member) of, the assets of the LLC and its Controlled Affiliates, then that net loss shall be computed allocated among the Members in accordance with (and in proportion to) their respective number of LLC Units as of the same manner date of the transaction; provided that no additional losses shall be allocated to a Member once its Capital Account has been reduced to zero (0) (but losses shall continue to be allocated to the Capital Accounts of the other Members pursuant to this Section 4.2(f)) until all Members’ Capital Accounts have been reduced to zero (0), and thereafter any remaining amount of such losses shall be allocated among all Members pursuant to this Section 4.2(f) in accordance with (and in proportion to) each Member’s respective number of LLC Units as determined for federal income tax purposes, with of the modifications set forth in Regulation ss. 1.704first day of such calendar quarter.
(ivg) Should In the event that during any Member's adjusted capital account balance become negative calendar quarter (or any fiscal year of the LLC) there is any change of Members or LLC Units held by the Members (whether as a result of the admission of an Additional Non-Manager Member, the redemption by the LLC of all (or any adjustmentportion) of any Member’s LLC Units, allocationan issuance or transfer of any LLC Units or otherwise), or distribution, thereafter, acting the following shall apply (and shall be implemented as rapidly determined by the Manager Member): (i) such change shall be deemed to have occurred as is possible, from time to time such Member's share of the Company's income and gainend of the last day of the calendar quarter in which such change occurred, if any, (ii) the books of account of the LLC shall be separately allocated to closed effective as of the close of business on the effective date of any such Member's Capital Account until change as set forth in clause (i) and such time as such Member's Capital Account deficit is eliminated.
fiscal year shall thereupon be divided into two or more portions, (viii) Non-recourse deductions shall be allocated in a manner that is reasonably consistent with other allocations of items each item of income, gain, or loss attributable and deduction shall be determined (on the closing of the books basis) for the portion of such fiscal year ending with the date on which the books of account of the LLC are so closed, and (iv) each such item for such portion of such fiscal year shall be allocated (pursuant to the property securing the non-recourse liabilities. In the first provisions of Sections 4.2(c) and (d) hereof) to those Persons who were Members during such portion of such fiscal year in which the Company has non-recourse deductions or makes distributions attributable to an increase in minimum gain as defined in the Regulations, this agreement shall be deemed to include a "minimum gain chargeback" in accordance with the Regulationstheir respective LLC Units during such period.
Appears in 1 contract
Samples: Limited Liability Company Agreement (Highbury Financial Inc)
Capital Accounts Allocations. 8.1. A separate book capital account (singly, a "Capital Account"; collectively, the "Capital Accounts"), ) shall be established and maintained for each MemberMember in accordance with the regulations promulgated under Section 704 of the Code. As The Capital Account of any date, each Member as of the close of each month of each Year shall be: (a) credited with (i) the amount of cash and the agreed-upon Fair Market Value of any property contributed by such Member to the Company during such month (net of liabilities secured by such contributed property that the Company is considered to assume or take subject to under Section 752 of the Code), including cash contributed by a Member as such Member's Initial Capital Contribution, (ii) such Member's share of any Net Income during such month allocated to it under this Agreement, and (iii) such Member's share of other items required to be credited thereto under Treasury Regulation Section 1.704-1(b)(2)(iv); and (b) shall be debited with (i) the amount of cash and the Fair Market Value of any property distributed to such Member during such month (net of liabilities secured by such distributed property that such Member is considered to assume or take subject to under Section 752 of the Code), (ii) such Member's share of any Net Loss during such month allocated to it under this Agreement, and (iii) such Member's share of other items required to be debited thereto under Treasury Regulations Section 1.704-1(b)(2)(iv). Any adjustments to the tax basis of the Company property under Sections 732, 734 or 743 of the Code will be reflected as adjustments to the Capital Accounts of the Members only in the manner and to the extent provided in Treasury Regulations Section 1.704-1(b)(2)(iv)(m). If any Asset is to be distributed in kind, such Asset shall be distributed on the basis of its Fair Market Value after the Members' Capital Accounts have been adjusted to reflect the manner in which any unrealized gain or loss with respect to such Asset (that has not been previously reflected in the Capital Accounts) would be allocated among the Members if there were a taxable disposition of the Asset for its Fair Market Value in the manner provided in Treasury Regulation Section 1.704-1(b)(2)(iv)(e). These provisions and other provisions of this Agreement relating to the maintenance of Capital Accounts are intended to comply with Treasury Regulations Section 1.704-1(b), and shall be interpreted and applied in a manner consistent with such section of the Treasury Regulations.
8.2. If any interest in the Company is transferred, the proportionate Capital Account and Interest attributable to such interest in the Company shall continue to be attributable to such interest in the Company.
8.3. After giving effect to the special allocations set forth in Sections -------- 8.1, 8.4 and 8.7, if any, Net Income or Net Loss for a Year shall be adjusted and allocated -------- --- among the Members in accordance with their respective Interests.
8.4.1 If during any allocations Year of the Company's Company there is a net decrease in Company minimum gain (as such term is defined by Treasury Regulation Section 1.704-2(d) with
8.4.1 is intended to comply with the Company minimum gain ------------- chargeback requirements of Treasury Regulation Section 1.704-2.
8.4.2 If during any Year of the Company there is a net decrease in Member nonrecourse debt minimum gain (as such term is defined by Treasury Regulation Section 1.704-2(i) with respect to partner nonrecourse debt minimum gain) then each Member shall be allocated Gross Income for such year (and, if necessary, for subsequent Years) in the manner provided in Treasury Regulation Sections 1.704-2(i) and 1.704-2(j)(2). This Section
8.4.2 is intended to comply with ------------- the Member nonrecourse debt minimum gain chargeback provisions of Treasury Regulation Section 1.704-2(i).
8.4.3 Member nonrecourse deductions (as defined in Treasury Regulation Section 1.704-2(i)(2) with respect to partner nonrecourse deductions) shall be allocated as prescribed in Treasury Regulation Section 1.704-2(i)(1).
8.5. Taxable income, gain, loss or deduction of the Company (as well as any credits and the basis of property to which such credits apply) as determined for federal income tax purposes shall be allocated in the same manner as the corresponding income, gain, loss or deduction is allocated for purposes of adjusting Capital Accounts hereunder.
8.6. Subject to Section 706 of the Code and to any applicable Treasury Regulations, Net Income, Net Loss and items of income, gain, loss, deductionsdeduction or credit for federal income tax purposes for a Year that are attributable to any interest in the Company that is transferred or assigned during such Year shall be allocated between the portion of the Year during which such interest was held by the transferor and the portion of the Year during which such interest was held by the transferee on the basis of the number of days of the year such interest was held by each.
8.7. Any Net Loss otherwise allocable to a Member with, or credits (or items thereof) which would produce, a deficit balance in such Member's Adjusted Capital Account Balance shall be determined and made as hereinafter provided allocated to the extent of the aggregate of and in accordance proportion to the positive Adjusted Capital Account Balances of other Members. In the event that at any time any Member receives any adjustments, allocations, or distributions described in Treasury Regulations Section 1.704-1(b)(2)(ii)(d)(5) or 1.704-1(b)(2)(ii)(d)(6) that create or increase a deficit balance in their Adjusted Capital Account Balances, then the next allocation of Gross Income that would otherwise have been allocated to the other Members shall be specially allocated to such Member in an amount and a manner sufficient to eliminate the deficit balance in such Adjusted Capital Account Balance created by such adjustments, allocations, or distributions as quickly as possible. The preceding sentence is intended to comply with the Company's records andqualified income offset provision in Treasury Regulations Section 1.704-1(b)(2)(ii)(d). In addition, to the extent consistent herewithnot otherwise required by the preceding sentences, applicable provisions if any Member would otherwise have a deficit Adjusted Capital Account Balance as of the Virginia Limited Liability Company Act as it may be amended last day of a Year or superseded from time to time (the "Act"):
(i) Each Member's Capital Account (a) other period, items of Gross Income shall be increased by (i) the cash amount or agreed fair market value of all contributions hereafter made by such Member to the Company, (ii) any net income specially allocated (but not distributed) to such Member so as to eliminate such deficit as quickly as possible. Any special allocations pursuant to this Section 3, and any items in the nature of income or gain that are specially allocated (but not distributed) to such Member, and (iii) the amount of any Company liabilities assumed by such Member or secured by any property of the Company distributed to such Member, and (b) shall be decreased by (i) the cash amount or agreed fair market value of all actual or deemed distributions of cash or property made to such Member pursuant to this agreement, (ii) any net loss allocated to such Member pursuant to this Section 3, and any items in the nature of expenses or losses that are specially allocated to such Member, and (iii) the amount of any liabilities of such Member assumed or secured by the Company. In determining the amount of any such liabilities, there 8.7 shall be taken into account in computing subsequent ----------- allocations pursuant to this Article 8, so that the allocations of Net Income --------- and Gross Income allocated to each Member pursuant to this Article 8 shall be --------- equal to the allocations of Net Income and Gross Income that would have been allocated to each Member pursuant to the provisions of ss. 752(c)this Article 8 if the --------- adjustments, and any other applicable provisionsallocations, of the Internal Revenue Code as amended from time to time (the "Code") and any applicable regulations (the "Regulations"; singly, a "Regulation") thereunder.
(ii) In accordance with Regulation ss. 1.704, at appropriate times, the Capital Accounts of all Members or distributions and the carrying values of all Company properties shall be adjusted upwards or downwards to reflect any unrealized gain or loss attributable to each Company property, as if such unrealized gain or loss had been recognized upon an actual sale of each such property at such time and had been allocated to the Members resulting special allocations pursuant to this Section 38.7 had not occurred. Similarly, in -----------
8.8. In accordance with such RegulationCode Section 704(c) and the Treasury Regulations thereunder, immediately prior income, gain, loss, and deduction with respect to any property contributed to the distribution in kind capital of the Company shall, solely for income tax purposes, be allocated among the Members so as to take account of any Company property to a Member (including pursuant to a liquidation of variation between the Company) the Capital Accounts of the Members shall be adjusted to reflect any unrealized gain or loss attributable to such property as if such unrealized gain or loss had been recognized upon an actual sale basis of such property at such time and had been allocated to the Members Company for federal income tax purposes and its Fair Market Value at the time of contribution. Any elections or other decisions relating to such allocations shall be made by the Manager in a manner that reasonably reflects the purpose and intention of this Agreement. In the event of any adjustments to Capital Accounts pursuant to Section 7.5.5, the ------------- principles of Code Section 704(c) shall be applied with respect to such adjustments. Allocations pursuant to this Section 3. Such unrealized gain or loss shall be determined using such methods of valuation as the Members in their sole discretion deem appropriate.
(iii) For 8.8 are solely for purposes of this agreement----------- federal, net incomestate, gross income and net loss local taxes and shall be computed in the same manner as determined for federal income tax purposes, with the modifications set forth in Regulation ss. 1.704.
(iv) Should any Member's adjusted capital account balance become negative as a result of any adjustment, allocationnot affect, or distributionin any way be taken into account in computing, thereafter, acting as rapidly as is possible, from time to time such Member's share of the Company's income and gain, if any, shall be separately allocated to such any Member's Capital Account until such time as such Member's Capital Account deficit is eliminatedor share of Net Income, Net Loss or distributions pursuant to any provision of this Agreement.
(v) Non-recourse deductions shall be allocated in a manner that is reasonably consistent with other allocations of items of income, gain, or loss attributable to the property securing the non-recourse liabilities. In the first year in which the Company has non-recourse deductions or makes distributions attributable to an increase in minimum gain as defined in the Regulations, this agreement shall be deemed to include a "minimum gain chargeback" in accordance with the Regulations.
Appears in 1 contract
Samples: Limited Liability Company Agreement (G&l Realty Corp)
Capital Accounts Allocations. A separate capital account (singly, each a "Capital Account"; collectively, the "Capital Accounts"), ) shall be established and maintained for each MemberMember and shall be maintained in accordance with applicable regulations under Section 704 of the Code. As of any date, the amount of a Such Capital Accounts shall be adjusted as follows:
(a) There shall be credited to each Member's Capital Account shall be adjusted and the amount of any allocations cash actually contributed by such Member to the capital of the Company's incomeLLC, gainthe fair market value of any property contributed by such Member to the capital of the LLC (it being understood that, lossfor this purpose, deductions, or credits the fair market value of the Intellectual Property (or items thereofas defined in Section 8.4(c)) shall be determined and made adjusted in the same manner as hereinafter provided and described in accordance with the Company's records andlast sentence of Section 8.4(c)), the amount of liabilities of the LLC assumed by the Member or to which property distributed to the extent consistent herewithMember was subject, applicable provisions and such Member's share of the Virginia Limited Liability Company Act as it may be amended or superseded from time to time (Net Profits of the "Act"):
(i) Each Member's Capital Account (a) shall be increased by (i) the cash amount or agreed fair market value LLC and of all contributions hereafter made by such Member to the Company, (ii) any net income allocated (but not distributed) to such Member pursuant to this Section 3, and any items in the nature of income or gain that are specially separately allocated (but not distributed) to the Member; and there shall be charged against each Member's Capital Account the amount of all cash distributions to such Member, and (iii) the amount of any Company liabilities assumed by such Member or secured by any property of the Company distributed to such Member, and (b) shall be decreased by (i) the cash amount or agreed fair market value of all actual or deemed distributions of cash or any property made distributed to such Member pursuant by the LLC, the amount of liabilities of the Member assumed by the LLC or to this agreement, (ii) any net loss allocated which property contributed by the Member to the LLC was subject and such Member pursuant to this Section 3, Member's share of the Net Losses of the LLC and of any items in the nature of expenses losses or losses that are specially deductions separately allocated to such Member, and (iii) the amount of any liabilities of such Member assumed or secured by the Company. In determining the amount of any such liabilities, there shall be taken into account the provisions of ss. 752(c), and any other applicable provisions, of the Internal Revenue Code as amended from time to time (the "Code") and any applicable regulations (the "Regulations"; singly, a "Regulation") thereunderMembers.
(iib) In accordance with Regulation ss. 1.704, If the LLC at appropriate timesany time distributes any of its assets in-kind to any Member, the Capital Accounts of all Members and the carrying values of all Company properties shall be adjusted upwards or downwards to reflect any unrealized gain or loss attributable to each Company property, as if such unrealized gain or loss had been recognized upon an actual sale Account of each such property at such time and had been allocated to the Members pursuant to this Section 3. Similarly, in accordance with such Regulation, immediately prior to the distribution in kind of any Company property to a Member (including pursuant to a liquidation of the Company) the Capital Accounts of the Members shall be adjusted to reflect any unrealized gain account for that Member's allocated share of the Net Profits, Net Losses or loss attributable items thereof that would have been realized by the LLC had it sold the assets that were distributed at their respective fair market values (taking Code section 7701(g) into account) immediately prior to such property as if such unrealized gain or loss had been recognized upon an actual sale of such property at such time and had been allocated to the Members pursuant to this Section 3. Such unrealized gain or loss shall be determined using such methods of valuation as the Members in their sole discretion deem appropriatedistribution.
(iiic) If elected by the LLC, at any time specified in Treasury Regulation section 1.704-1(b)(2)(iv)(f), the Capital Account of each Member shall be adjusted to the extent provided under such regulation to reflect the Member's allocable share (as determined under this Section 8.3) of the items of Net Profits or Net Losses that would be realized by the LLC if it sold all of its property at its fair market value (taking Code section 7701(g) into account) on the day of the adjustment.
(d) For purposes of this agreementAgreement, net income"Net Profits" and "Net Losses" mean the taxable income or loss, gross income and net loss shall be computed in as the same manner case may be, for a period as determined for federal income tax purposesin accordance with Code section 703(a), with the modifications set forth in Regulation ss. 1.704.
(iv) Should any Member's adjusted capital account balance become negative as a result of any adjustment, allocation, or distribution, thereafter, acting as rapidly as is possible, from time to time such Member's share of the Company's income and gain, if any, shall be separately allocated to such Member's Capital Account until such time as such Member's Capital Account deficit is eliminated.
(v) Non-recourse deductions shall be allocated in a manner that is reasonably consistent with other allocations of items of income, gain, or loss attributable to the property securing the non-recourse liabilities. In the first year in which the Company has non-recourse deductions or makes distributions attributable to an increase in minimum gain as defined in the Regulations, this agreement shall be deemed to include a "minimum gain chargeback" in accordance with the Regulations.following adjustments:
Appears in 1 contract
Samples: Limited Liability Company Agreement (Stockeryale Inc)
Capital Accounts Allocations. A separate capital account (singly, a) There shall be established for each Member a Capital Account (a "Capital Account"; collectively) which, in the "Capital Accounts")case of each Member, shall initially be established and maintained for equal to the Capital Contribution of such Member as of immediately following the Effective Time as set forth on SCHEDULE A hereto.
(b) The Capital Account of each MemberMember shall be adjusted in the following manner. As of any date, the amount of a Member's Each Capital Account shall be adjusted increased by such Member's allocable share of income and any allocations gain, if any, of the Company's income, gain, loss, deductions, or credits LLC (or items thereof) shall be determined and as well as the Capital Contributions made as hereinafter provided and in accordance with by a Member after the Company's records and, Effective Time (including without limitation any Capital Contributions deemed to have been made to the extent consistent herewith, applicable provisions of LLC by the Virginia Limited Liability Company Act as it may be amended or superseded from time to time (the "Act"):
(i) Each Member's Capital Account (a) shall be increased by (i) the cash amount or agreed fair market value of all contributions hereafter made by such Member to the Company, (ii) any net income allocated (but not distributed) to such Manager Member pursuant to this Section 3, and any items in the nature of income or gain that are specially allocated (but not distributed) to such Member, and (iii) the amount of any Company liabilities assumed by such Member or secured by any property operation of the Company distributed to such Member, last paragraph of Section 3.5(c) hereof)) and (b) shall be decreased by (i) such Member's allocable share of deductions and losses, if any, of the cash LLC and by the amount or agreed fair market value of all actual or deemed distributions of cash or property made to such Member pursuant to this agreement, (ii) any net loss allocated to such Member pursuant to this Section 3, and any items in the nature of expenses or losses that are specially allocated to such Member, and (iii) the . The amount of any liabilities distribution of assets other than cash shall be deemed to be the Fair Market Value of such Member assumed or secured by the Company. In determining the amount assets (net of any liabilities encumbering such liabilities, there property that the distributee Member is considered to assume or take subject to). Capital Accounts shall also be taken into account adjusted upon the provisions issuance of ss. 752(c), and any other applicable provisions, of the Internal Revenue Code additional LLC Interests as amended from time to time (the "Code"set forth in Section 5.5(c) and any applicable regulations (upon the "Regulations"; singlytransfer of LLC Interests as set forth in Section 5.1. To the extent not otherwise provided for in this Agreement, a "Regulation") thereunder.
(ii) In accordance with Regulation ss. 1.704, at appropriate times, the Capital Accounts of all Members and the carrying values of all Company properties shall be adjusted upwards or downwards to reflect any unrealized gain or loss attributable to each Company property, as if such unrealized gain or loss had been recognized upon an actual sale of each such property at such time and had been allocated to the Members pursuant to this Section 3. Similarly, in accordance with such Regulation, immediately prior to the distribution in kind of any Company property to a Member (including pursuant to a liquidation of the Company) the Capital Accounts of the Members shall be adjusted and maintained in accordance with the rules of Treasury Regulations Section 1.704-1(b)(2)(iv), as the same may be amended or revised. Any references in any section of this Agreement to reflect any unrealized gain or loss attributable the Capital Account of a Member shall be deemed to refer to such property Capital Account as the same may be credited or debited from time to time as set forth above.
(c) Subject to Sections 4.2(e), 4.2(g) and 4.5 hereof, all items of LLC income and gain shall be allocated among the Members' Capital Accounts at the end of every calendar quarter (or portion thereof, in the case of the first calendar quarter end following the Effective Time, if such unrealized the Effective Time did not fall on the first day of a calendar quarter) as follows:
(i) first, items of income and gain or loss had been recognized upon an actual sale of such property at such time and had been (if any) shall be allocated to the Manager Member in an amount equal to the product of (A) the Owners' Allocation for such calendar quarter (net of any Owners' Allocation Expenditures for such calendar quarter), multiplied by (B) a fraction (I) the numerator of which is the number of LLC Points held by the Manager Member as of the first day of such calendar quarter and (II) the denominator of which is the number of Vested LLC Points outstanding as of the first day of such calendar quarter;
(ii) second, items of income and gain (if any) shall be allocated to the Manager Member until the Manager Member has been allocated cumulative income and gain under this Section 4.2(c)(ii) which, together with income and gain previously allocated to the Manager Member under Section 4.2(e)(i) hereof, equals the cumulative amount of losses and deductions allocated to the Manager Member under Sections 4.2(d)(ii), 4.2(d)(iii) and 4.2(f) in prior periods (if any);
(iii) third, solely to the extent (if any) that FAI's Capital Account balance is less than its then-applicable Preferred Capital Account Balance, items of income and gain (if any) shall be allocated to FAI until FAI has been allocated cumulative income and gain under this Section 4.2(c)(iii) which, together with income and gain previously allocated to FAI under Section 4.2(e)(ii) hereof, equals the cumulative amount of losses and deductions allocated to FAI under Sections 4.2(d)(i)(B), 4.2(d)(iii) and 4.2(f) in prior periods (if any);
(iv) fourth, items of income and gain (if any) shall be allocated to each Non-Manager Member in an amount equal to the product of (I) the Owners' Allocation for such calendar quarter (net of any Owners' Allocation Expenditures for such calendar quarter), multiplied by (II) a fraction (x) the numerator of which is the number of Vested LLC Points held by such Non-Manager Member as of the first day of such calendar quarter and (y) the denominator of which is the number of Vested LLC Points outstanding as of the first day of such calendar quarter, until the aggregate amount of such items of income and gain allocated to the Members (including both the Manager Member and the Non-Manager Members) pursuant to Sections 4.2(c)(i), 4.2(c)(ii), 4.2(c)(iii) and this 4.2(c)(iv) for such calendar quarter equals the total amount of the Owners' Allocation (net of any Owners' Allocation Expenditures) for such calendar quarter; and
(v) finally, all remaining items of LLC income and gain shall be allocated among the Non-Manager Members in accordance with (and in proportion to) each Non-Manager Member's respective number of Vested LLC Points on the first day of such calendar quarter.
(d) Subject to Sections 4.2(f), 4.2(g) and 4.5 hereof, all items of LLC loss and deduction shall be allocated among the Members' Capital Accounts at the end of every calendar quarter (or portion thereof, in the case of the first calendar quarter end following the Effective Time, if the Effective Time did not fall on the first day of a calendar quarter) as follows:
(i) first, all items of LLC loss and deduction for such calendar quarter shall be allocated: (A) first, among the Non-Manager Members in accordance with (and in proportion to) each Non-Manager Member's respective number of Vested LLC Points on the first day of such calendar quarter, until the aggregate amount of such items of loss and deduction allocated to the Non-Manager Members pursuant to this clause (A) equals the aggregate amount of allocations of income and gain to the Non-Manager Members pursuant to Section 4.2(c)(v) for such calendar quarter and (B) second, among the Non-Manager Members in accordance with (and in proportion to) each Non-Manager Member's respective numbers of Vested LLC Points on the first day of such calendar quarter, until the Capital Accounts of all of the Non-Manager Members shall have been reduced to zero (0) (after giving effect to the allocations of income and gain for such calendar quarter under Section 4.2(c)); provided that no additional loss or deduction shall be allocated to any Non-Manager's Capital Account pursuant to this Section 4.2(d)(i) once such Capital Account has been reduced to zero (0) (but items of loss and deduction shall continue to be allocated to the Capital Accounts of the other Non-Manager Members pursuant to this Section 3. Such unrealized gain or 4.2(d)(i) until all such Non-Manager Members' Capital Accounts have been reduced to zero (0));
(ii) second, any remaining items of LLC loss and deduction for such calendar quarter not allocated to the Non-Manager Members under Section 4.2(d)(i) shall be determined using such methods of valuation as allocated to the Members in their sole discretion deem appropriate.Manager Member until its Capital Account shall have been reduced to zero (0); and
(iii) For purposes finally, any remaining items of this agreementLLC loss and deduction for such calendar quarter not allocated to the Members under Sections 4.2(d)(i) and 4.2(d)(ii) shall be allocated among all Members in accordance with (and in proportion to) each Member's respective number of Vested LLC Points as of the first day of such calendar quarter.
(e) If the LLC has a net gain from the sale, exchange or other disposition of all, or substantially all (as determined by the Manager Member), of the assets of the LLC and its Controlled Affiliates and the DE LLC and its Controlled Affiliates, then that net incomegain shall be allocated among the Members as follows:
(i) first, gross to the Manager Member until the Manager Member has been allocated cumulative gain which, together with income and gain previously allocated to the Manager Member under Section 4.2(c)(ii) and this Section 4.2(e)(i), equals the cumulative amount of losses and deductions allocated to the Manager Member under Sections 4.2(d)(ii), 4.2(d)(iii) and 4.2(f) in prior periods;
(ii) second, solely to the extent (if any) that FAI's Capital Account balance is less than its then-applicable Preferred Capital Account Balance, to FAI until FAI has been allocated cumulative gain which, together with income and gain previously allocated to FAI under Section 4.2(c)(iii) and this Section 4.2(e)(ii), equals the cumulative amount of losses and deductions allocated to FAI under Sections 4.2(d)(i)(B), 4.2(d)(iii) and 4.2(f) in prior periods;
(iii) third, an aggregate amount of gain equal to the positive difference between (A) the Liquidation Preference and (B) the aggregate positive Capital Account balances of those Members holding Series A LLC Points and/or Series B-1 LLC Points as of the date of the transaction (or an allocable portion thereof, in the case of any Member holding both Series A LLC Points and/or Series B-1 LLC Points, on the one hand, and Series B-2 LLC Points, on the other hand, as of the date of such transaction) to those Members holding Vested Series A LLC Points and/or Vested Series B-1 LLC Points as of the date of the transaction in accordance with (and in proportion to) their respective number of Vested Series A LLC Points and Vested Series B-1 LLC Points as of the date of the transaction; PROVIDED, HOWEVER, that if any gain would be allocable to the Non-Manager Members holding Series A LLC Points (other than FAI) pursuant to this Section 4.2(e)(iii), any gain allocable to FAI pursuant to this Section 4.2(e)(iii) shall instead be allocated to the Non-Manager Members holding Series A LLC Points (other than FAI) in accordance with (and in proportion to) their respective number of Vested Series A LLC Points as of the date of the transaction until the ratio of (I) the aggregate Capital Account balances of the Non-Manager Members holding Series A LLC Points (other than FAI) arising as a result of allocations made pursuant to this Section 4.2(e)(iii) and 4.2(e)(iv), on the one hand, to (II) the aggregate Preferred Capital Account Balances of the Manager Member and FAI, on the other hand, is equal to the ratio of (X) the Applicable Series A Aggregate Non-Manager Member Allocation Percentage, on the one hand, to (Y) the sum of the Applicable Manager Member Allocation Percentage plus the Applicable FAI Allocation Percentage, on the other hand;
(iv) fourth, with respect to each remaining dollar of gain, (A) to the Manager Member that percentage of such dollar of gain equal to the Applicable Manager Member Allocation Percentage and (B) to the Non-Manager Members (other than FAI) the remaining portion of such dollar of gain (with such portion to be allocated among the Non-Manager Members (other than FAI) in accordance with (and in proportion to) their respective number of Vested LLC Points as of the date of the transaction), until the ratio of (I) the aggregate Capital Account balances of the Non-Manager Members (other than FAI) arising as a result of allocations made pursuant to Section 4.2(e)(iii) and this Section 4.2(e)(iv), on the one hand, to (II) the aggregate Preferred Capital Account Balances of the Manager Member and FAI, on the other hand, is equal to the ratio of (X) the Applicable Aggregate Non-Manager Member Allocation Percentage, on the one hand, to (Y) the sum of the Applicable Manager Member Allocation Percentage plus the Applicable FAI Allocation Percentage, on the other hand; and
(v) thereafter, among the Members in accordance with (and in proportion to) their respective number of Vested LLC Points as of the date of the transaction.
(f) If the LLC has a net loss from any sale, exchange or other disposition of all, or substantially all (as determined by the Manager Member), of the assets of the LLC and its Controlled Affiliates and the DE LLC and its Controlled Affiliates, then that net loss shall be computed allocated among the Members in accordance with (and in proportion to) their respective number of Vested LLC Points as of the same manner date of the transaction; provided that no additional losses shall be allocated to a Member once its Capital Account has been reduced to zero (0) (but losses shall continue to be allocated to the Capital Accounts of the other Members pursuant to this Section 4.2(f)) until all Members' Capital Accounts have been reduced to zero (0), and thereafter any remaining amount of such losses shall be allocated among all Members pursuant to this Section 4.2(f) in accordance with (and in proportion to) each Member's respective number of Vested LLC Points as determined for federal income tax purposes, with of the modifications set forth in Regulation ss. 1.704date of the transaction.
(ivg) Should any Upon the making of an indemnification payment pursuant to Article 13 of the Purchase Agreement (or offset of such a required payment against an amount owed to an indemnitor as permitted under the Purchase Agreement), which payment is treated as an adjustment to the WY LLC Closing Purchase Price, (i) the Manager Member's and FAI's respective Preferred Capital Account Balances and (ii) the Capital Account balances of each of the Members shall be adjusted capital account balance become negative on a pro forma basis to such levels as would have been in effect at the time of such indemnification payment if the WY LLC Closing Purchase Price had instead been reduced by the amount of such indemnification payment as of the Effective Time.
(h) Following (and not including) the date on which the Effective Time occurs, in the event that during any calendar quarter (or any fiscal year of the LLC) there is any change of Members or LLC Points held by the Members (whether as a result of the admission of an Additional Non-Manager Member, the redemption by the LLC of all (or any adjustment, allocation, or distribution, thereafter, acting as rapidly as is possible, from time to time such portion of) any Member's share LLC Points, an issuance or transfer of the Company's income and gainany LLC Points or otherwise), if any, shall be separately allocated to such Member's Capital Account until such time as such Member's Capital Account deficit is eliminated.
(v) Non-recourse deductions shall be allocated in a manner that is reasonably consistent with other allocations of items of income, gain, or loss attributable to the property securing the non-recourse liabilities. In the first year in which the Company has non-recourse deductions or makes distributions attributable to an increase in minimum gain as defined in the Regulations, this agreement transfer shall be deemed to include a "minimum gain chargeback" have occurred as of the end of the last day of the calendar quarter in accordance which such change occurred; PROVIDED, HOWEVER, that allocations in respect of Subsequent Purchase LLC Points for periods prior to the Subsequent Closing shall be made to FAI (with FAI and the RegulationsManager Member to receive respective allocations in respect of such LLC Points for the calendar quarter in which the Subsequent Closing occurs ratably based upon the number of days in such quarter that each of them held such LLC Points).
Appears in 1 contract
Samples: Limited Liability Company Agreement (Affiliated Managers Group Inc)
Capital Accounts Allocations. A separate capital account (singly, a) There shall be established for each Member a Capital Account (a "Capital Account"; collectively) which, in the "Capital Accounts")case of each Member, shall initially be established and maintained for equal to the Capital Contribution of such Member as of immediately following the Effective Time as set forth on SCHEDULE A hereto.
(b) The Capital Account of each MemberMember shall be adjusted in the following manner. As of any date, the amount of a Member's Each Capital Account shall be adjusted increased by such Member's allocable share of income and any allocations gain, if any, of the Company's income, gain, loss, deductions, or credits LLC (or items thereof) shall be determined and as well as the Capital Contributions made as hereinafter provided and in accordance with by a Member after the Company's records and, Effective Time (including without limitation any Capital Contributions deemed to have been made to the extent consistent herewith, applicable provisions of LLC by the Virginia Limited Liability Company Act as it may be amended or superseded from time to time (the "Act"):
(i) Each Member's Capital Account (a) shall be increased by (i) the cash amount or agreed fair market value of all contributions hereafter made by such Member to the Company, (ii) any net income allocated (but not distributed) to such Manager Member pursuant to this Section 3, and any items in the nature of income or gain that are specially allocated (but not distributed) to such Member, and (iii) the amount of any Company liabilities assumed by such Member or secured by any property operation of the Company distributed to such Member, last paragraph of Section 3.5(c) hereof)) and (b) shall be decreased by (i) such Member's allocable share of deductions and losses, if any, of the cash LLC and by the amount or agreed fair market value of all actual or deemed distributions of cash or property made to such Member pursuant to this agreement, (ii) any net loss allocated to such Member pursuant to this Section 3, and any items in the nature of expenses or losses that are specially allocated to such Member, and (iii) the . The amount of any liabilities distribution of assets other than cash shall be deemed to be the Fair Market Value of such Member assumed or secured by the Company. In determining the amount assets (net of any liabilities encumbering such liabilities, there property that the distributee Member is considered to assume or take subject to). Capital Accounts shall also be taken into account adjusted upon the provisions issuance of ss. 752(c), and any other applicable provisions, of the Internal Revenue Code additional LLC Interests as amended from time to time (the "Code"set forth in Section 5.5(c) and any applicable regulations (upon the "Regulations"; singlytransfer of LLC Interests as set forth in Section 5.1. To the extent not otherwise provided for in this Agreement, a "Regulation") thereunder.
(ii) In accordance with Regulation ss. 1.704, at appropriate times, the Capital Accounts of all Members and the carrying values of all Company properties shall be adjusted upwards or downwards to reflect any unrealized gain or loss attributable to each Company property, as if such unrealized gain or loss had been recognized upon an actual sale of each such property at such time and had been allocated to the Members pursuant to this Section 3. Similarly, in accordance with such Regulation, immediately prior to the distribution in kind of any Company property to a Member (including pursuant to a liquidation of the Company) the Capital Accounts of the Members shall be adjusted and maintained in accordance with the rules of Treasury Regulations Section 1.704-1(b)(2)(iv), as the same may be amended or revised. Any references in any section of this Agreement to reflect any unrealized gain or loss attributable the Capital Account of a Member shall be deemed to refer to such property as if such unrealized gain or loss had been recognized upon an actual sale of such property at such time and had been allocated to the Members pursuant to this Section 3. Such unrealized gain or loss shall be determined using such methods of valuation Capital Account as the Members in their sole discretion deem appropriate.
(iii) For purposes of this agreement, net income, gross income and net loss shall same may be computed in the same manner as determined for federal income tax purposes, with the modifications set forth in Regulation ss. 1.704.
(iv) Should any Member's adjusted capital account balance become negative as a result of any adjustment, allocation, credited or distribution, thereafter, acting as rapidly as is possible, debited from time to time such Member's share as set forth above.
(c) Subject to Sections 4.2(e), 4.2(g) and 4.5 hereof, all items of LLC income and gain shall be allocated among the Members' Capital Accounts at the end of every calendar quarter (or portion thereof, in the case of the Company's first calendar quarter end following the Effective Time, if the Effective Time did not fall on the first day of a calendar quarter) as follows:
(i) first, items of income and gain, gain (if any, ) shall be separately allocated to such Memberthe Manager Member until the Manager Member has been allocated cumulative income and gain under this Section 4.2(c)(i) which, together with income and gain previously allocated to the Manager Member under Section 4.2(e)(i) hereof, equals the cumulative amount of losses and deductions allocated to the Manager Member under Sections 4.2(d)(ii), 4.2(d)(iii) and 4.2(f) in prior periods (if any);
(ii) second, solely to the extent (if any) that FAID's Capital Account until such time as such Member's balance is less than its then-applicable Preferred Capital Account deficit is eliminated.
Balance, items of income and gain (vif any) Non-recourse deductions shall be allocated in a manner that is reasonably consistent to FAID until FAID has been allocated cumulative income and gain under this Section 4.2(c)(ii) which, together with other allocations of items of income, gain, or loss attributable income and gain previously allocated to the property securing the non-recourse liabilities. In the first year in which the Company has non-recourse deductions or makes distributions attributable to an increase in minimum gain as defined in the Regulations, this agreement shall be deemed to include a "minimum gain chargeback" in accordance with the Regulations.FAID under Section 4.2(e)(i) hereof,
Appears in 1 contract
Samples: Limited Liability Company Agreement (Affiliated Managers Group Inc)
Capital Accounts Allocations. (a) A separate capital account (singly, a "Capital Account"; collectively, the "Capital Accounts"), shall be established and maintained on the books of the Company for each Member. As of any date, the amount of a Member's Capital Account which shall be adjusted and (1) as of December 31 of each year, (2) immediately prior to the acquisition of any allocations Unit by any Person, (3) effective as of the Company's incomedate of sale of the Company (whether by way of asset sale, gainUnit sale, loss, deductionsrecapitalization, or credits merger in which the Members immediately prior to such transaction shall cease to own a majority of all Units owned by all Members) and (or items thereof4) shall be determined and made as hereinafter provided and in accordance with on the Company's records and, to the extent consistent herewith, applicable provisions date of dissolution of the Virginia Limited Liability Company Act as it may be amended or superseded from time to time (the "Act"):follows:
(i) Each Member's Capital Account (a) shall be increased by (i) the cash amount or agreed of money and the fair market value of all contributions hereafter made property (net of any liabilities secured by such property that the Company assumes or takes subject to) contributed by such Member to the Company, (ii) any net income allocated (but not distributed) to such Member pursuant to this Section 3, and any items in the nature of income or gain that are specially allocated (but not distributed) Company shall be credited to such Member, and 's capital account;
(iiiii) the amount of any Company distributions (including (A) the fair market value (as determined by the Board of Managers in good faith) of property other than cash (net of any liabilities assumed by that such Member assumes or secured by takes subject to) and (B) any property distribution in respect of the Company a payment with respect to Preferred Units in accordance with Section 3.5 hereof) distributed to such Member, and (b) Member shall be decreased by debited from such Member's capital account; and
(iiii) the cash amount or agreed fair market value of all actual or deemed distributions of cash or property made to such Member pursuant to this agreement, Net Profits (ii) any net loss allocated to such Member pursuant to this Section 3, and any items in the nature of expenses income or losses that are gain specially allocated pursuant to such Member, Sections 6.2(b)(iii) and (iii6.2(c)(ii)) the amount of any liabilities of such Member assumed or secured incurred by the Company. In determining Company since the amount of any such liabilities, there last date on which Net Profits or Net Losses shall be taken into account the provisions of ss. 752(c), and any other applicable provisions, of the Internal Revenue Code as amended from time to time (the "Code") and any applicable regulations (the "Regulations"; singly, a "Regulation") thereunder.
(ii) In accordance with Regulation ss. 1.704, at appropriate times, the Capital Accounts of all Members and the carrying values of all Company properties shall be adjusted upwards or downwards to reflect any unrealized gain or loss attributable to each Company property, as if such unrealized gain or loss had been recognized upon an actual sale of each such property at such time and had have been allocated to the Members shall be credited to such Member's capital account and Net Losses (and any items of loss or deduction that are specially allocated pursuant to this Section 3. Similarly, in accordance with such Regulation, immediately prior to 6.2(c)(ii)) incurred by the distribution in kind of any Company property to a Member (including pursuant to a liquidation of since the Company) the Capital Accounts of the Members last date on which Net Losses or Net Profits shall be adjusted to reflect any unrealized gain or loss attributable to such property as if such unrealized gain or loss had been recognized upon an actual sale of such property at such time and had have been allocated to the Members pursuant to this Section 3. Such unrealized gain or loss shall be determined using such methods of valuation as the Members in their sole discretion deem appropriate.
(iii) For purposes of this agreement, net income, gross income and net loss shall be computed in the same manner as determined for federal income tax purposes, with the modifications set forth in Regulation ss. 1.704.
(iv) Should any Member's adjusted capital account balance become negative as a result of any adjustment, allocation, or distribution, thereafter, acting as rapidly as is possible, from time to time such Member's share of the Company's income and gain, if any, shall be separately allocated debited to such Member's Capital Account until such time capital account, which allocations shall be made as such Member's Capital Account deficit is eliminated.follows:
(vA) Non-recourse deductions Net Profits (or items of gross income or gain) shall be allocated in a manner that is reasonably consistent with other allocations of items of incomeallocated, gainfirst, or loss attributable to the property securing holders of Preferred Units (other than Paid Preferred Units) pro rata until the non-recourse liabilities. In the first year in which the Company has non-recourse deductions or makes distributions attributable to capital account of each such holder equals an increase in minimum gain as defined in the Regulations, this agreement shall be deemed to include a "minimum gain chargeback" in accordance with the Regulations.amount equal to
Appears in 1 contract
Samples: Operating Agreement (Donjoy LLC)
