Common use of Capital Accounts, Books and Records Clause in Contracts

Capital Accounts, Books and Records. (a) The Company shall keep books of account for the Company in accordance with the terms of this Agreement. Such books shall be maintained at the principal office of the Company. (b) An individual capital account (the “Capital Account”) shall be maintained by the Company for each Member as provided below: (i) The Capital Account of each Member shall, initially except as otherwise provided herein, be equal to the amount of such Member’s Deemed Capital Contribution as of the date hereof and shall thereafter be increased by the amount of cash and the fair market value of any property contributed to the Company by such Member (net of liabilities secured by such contributed property that the Company is considered to assume or take subject to under Section 752 of the Internal Revenue Code) and by such Member’s share of the Net Profits of the Company and special allocations of income or gain under Section 4.2, and shall be decreased by such Member’s share of the Net Losses of the Company and special allocations of deduction or loss under Section 4.2 and by the amount of cash or the fair market value of any property distributed to such Member (net of liabilities secured by such distributed property that such Member is considered to assume or take subject to under Section 752 of the Internal Revenue Code). The Capital Accounts shall also be increased or decreased upon the exercise of any noncompensatory option pursuant to the requirements of Treasury Regulation Sections 1.704-1(b)(2)(iv)(d)(4) and 1.704-1(b)(2)(iv)(s). (ii) Any adjustments of basis of Company property provided for under Sections 734 and 743 of the Internal Revenue Code (resulting from an election under Section 754 of the Internal Revenue Code) shall not affect the Capital Accounts of the Members (unless otherwise required by applicable Treasury Regulations), and the Members’ Capital Accounts shall be debited or credited pursuant to the terms of this Section 7.1 as if no such election had been made. (iii) Capital Accounts shall be adjusted, in a manner consistent with this Section 7.1, to reflect any adjustments in items of Company income, gain, loss or deduction (including Simulated Depletion, Simulated Gain and Simulated Loss) that result from amended returns filed by the Company or pursuant to an agreement by the Company with the Internal Revenue Service or a final court decision. (iv) The allocation of basis prescribed by Section 613A(c)(7)(D) of the Internal Revenue Code and provided for in Section 4.3(b) and each Member’s separately computed depletion deductions shall not reduce such Member’s Capital Account, but such Member’s Capital Account shall be decreased by its allocable share of Simulated Depletion. The Simulated Basis in each oil and gas property as of the date of this Agreement or hereafter acquired shall be allocated among the Members in proportion to their Sharing Ratios. Simulated Depletion with respect to each separate oil and gas property shall be allocated to the Members in proportion to their respective shares of the Simulated Basis in the related property. No Member’s Capital Account shall be decreased, however, by Simulated Depletion deductions attributable to any oil and gas property to the extent such deductions exceed such Member’s allocable share of the Company’s remaining Simulated Basis in such property. Any Simulated Gain shall be allocated to the Members and shall increase their respective Capital Accounts in the same manner as an equal amount of gain would have been allocated pursuant to Section 4.1. Any Simulated Loss shall be allocated to the Members and shall reduce their respective Capital Accounts in the same percentages as the basis of the property sold was allocated up to an amount equal to each Member’s share of the Company’s Simulated Basis in such property at the time of such sale. (v) It is the intention of the Members that the Capital Accounts of each Member be kept in the manner required under Treasury Regulation Section 1.704-1(b)(2)(iv). To the extent any additional adjustment to the Capital Accounts is required by such regulation, the Board is hereby authorized to make such adjustment after notice to the Members. (vi) Any Person who acquires a Company Interest directly from a Member, or whose Company Interest shall be increased by means of a Transfer to it of all or part of the Company Interest of another Member, shall have a Capital Account (including a credit for all Deemed Capital Contributions and subsequent Capital Contributions made by such Member Transferring such Company Interest) which includes the Capital Account balance of the Company Interest or portion thereof so acquired or Transferred.

Appears in 1 contract

Samples: Limited Liability Company Agreement (WildHorse Resource Development Corp)

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Capital Accounts, Books and Records. (a) The Company General Partner shall keep books of account for the Company Partnership in accordance with the terms of this Agreement. Such books shall be maintained at the principal office of the CompanyPartnership. (b) An individual capital account (the “Capital Account”) shall be maintained by the Company Partnership for each Member Partner as provided below: (i) Each Partner's Capital Contributions when made shall be credited to such Partner's capital account. The Capital Account capital account of each Member Partner shall, initially except as otherwise provided herein, be equal to the amount of such Member’s Deemed Capital Contribution as of the date hereof and shall thereafter be increased by (A) credited with the amount of cash and contributed to the Partnership by such Partner; (B) credited with the fair market value of any property contributed to the Company by such Member (net of liabilities secured by such contributed property that the Company is considered to assume or take subject to under Section 752 of the Internal Revenue Code) and by such Member’s share of the Net Profits of the Company and special allocations of income or gain under Section 4.2, and shall be decreased by such Member’s share of the Net Losses of the Company and special allocations of deduction or loss under Section 4.2 and by the amount of cash or the fair market value of any property distributed to such Member (net of liabilities secured by such distributed property that such Member is considered to assume or take subject to under Section 752 of the Internal Revenue Code). The Capital Accounts shall also be increased or decreased upon the exercise of any noncompensatory option pursuant to the requirements of Treasury Regulation Sections 1.704-1(b)(2)(iv)(d)(4) and 1.704-1(b)(2)(iv)(s).to (ii) Any adjustments of basis of Company Partnership property provided for under Sections 734 and 743 of the Internal Revenue Code and comparable provisions of state law (resulting from an election under Section 754 of the Internal Revenue CodeCode or comparable provisions of state law) shall not affect the Capital Accounts capital accounts of the Members (unless otherwise Partners except to the extent required by applicable Treasury RegulationsRegulation Section 1.704-1(b)(2)(iv)(m), and the Members’ Capital Accounts Partners' capital accounts shall be debited or credited pursuant to the terms of this Section 7.1 as if no such election had been made. (iii) Capital Accounts accounts shall be adjusted, in a manner consistent with this Section 7.1, to reflect any adjustments in items of Company Partnership income, gain, loss or deduction (including Simulated Depletion, Simulated Gain and Simulated Loss) that result from amended returns filed by the Company Partnership or pursuant to an agreement by the Company Partnership with the Internal Revenue Service or a final court decision. (iv) The allocation In the case of basis prescribed property contributed to the Partnership by Section 613A(c)(7)(D) of a Partner, the Internal Revenue Code and provided for in Section 4.3(b) and each Member’s separately computed depletion deductions shall not reduce such Member’s Capital Account, but such Member’s Capital Account Partners' capital accounts shall be decreased by its allocable share debited and credited for items of Simulated Depletion. The Simulated Basis in each oil depreciation, cost recovery, amortization and gas property as of the date of this Agreement gain or hereafter acquired shall be allocated among the Members in proportion to their Sharing Ratios. Simulated Depletion loss with respect to each separate oil and gas such property shall be allocated to the Members in proportion to their respective shares of the Simulated Basis in the related property. No Member’s Capital Account shall be decreased, however, by Simulated Depletion deductions attributable to any oil and gas property to the extent such deductions exceed such Member’s allocable share of the Company’s remaining Simulated Basis in such property. Any Simulated Gain shall be allocated to the Members and shall increase their respective Capital Accounts computed in the same manner as an such items would be computed if the adjusted tax basis of such property were equal amount to its fair market value on the date of gain would have been allocated pursuant to Section 4.1. Any Simulated Loss shall be allocated its contribution to the Members and shall reduce their respective Capital Accounts Partnership, in the same percentages as the basis lieu of the property sold was allocated up to an amount equal to each Member’s share of the Company’s Simulated Basis capital account adjustments provided above for such items, all in such property at the time of such saleaccordance with Treasury Regulation Section 1.704-1(b)(2)(iv)(g). (v) It is the intention of the Members Partners that the Capital Accounts capital accounts of each Member Partner be kept in the manner required under Treasury Regulation Section 1.704-1(b)(2)(iv). To the extent any additional adjustment to the Capital Accounts is required by such regulation, the Board is hereby authorized to make such adjustment after notice to the Members. (vi) Any Person who acquires a Company Interest directly from a Member, or whose Company Interest shall be increased by means of a Transfer to it of all or part of the Company Interest of another Member, shall have a Capital Account (including a credit for all Deemed Capital Contributions and subsequent Capital Contributions made by such Member Transferring such Company Interest) which includes the Capital Account balance of the Company Interest or portion thereof so acquired or Transferred.To

Appears in 1 contract

Samples: Agreement of Limited Partnership (DNR Mesa Holdings L P)

Capital Accounts, Books and Records. (a) The Company shall keep books of account for the Company in accordance with the terms of this Agreement. Such books shall be maintained at the principal office of the Company. (b) An individual capital account (the “Capital Account”) shall be maintained by the Company for each Member as provided below: (i) The Capital Account of each Member shall, initially except as otherwise provided herein, be equal to the amount of such Member’s Deemed Capital Contribution as of the date hereof and shall thereafter be increased by the amount of cash and the fair market value of any property contributed to the Company by such Member (net of liabilities secured by such contributed property that the Company is considered to assume or take subject to under Section 752 of the Internal Revenue Code) and by such Member’s share of the Net Profits of the Company and special allocations of income or gain under Section 4.2, and shall be decreased by such Member’s share of the Net Losses of the Company and special allocations of deduction or loss under Section 4.2 and by the amount of cash or the fair market value of any property distributed to such Member (net of liabilities secured by such distributed property that such Member is considered to assume or take subject to under Section 752 of the Internal Revenue Code). The Capital Accounts shall also be increased or decreased (A) to reflect a revaluation of Company property pursuant to paragraph (b) of the definition of Carrying Value and (B) upon the exercise of any noncompensatory option warrant pursuant to the requirements of Proposed Treasury Regulation Sections 1.704-1(b)(2)(iv)(d)(4) and 1.704-1(b)(2)(iv)(s), as such Proposed Treasury Regulations may be amended or modified, including upon the issuance of temporary or final Treasury Regulations. (ii) Any adjustments of basis of Company property provided for under Sections 734 and 743 of the Internal Revenue Code and comparable provisions of state law (resulting from an election under Section 754 of the Internal Revenue CodeCode or comparable provisions of state law) shall not affect the Capital Accounts of the Members (unless otherwise required by applicable Treasury Regulations), and the Members’ Capital Accounts shall be debited or credited pursuant to the terms of this Section 7.1 as if no such election had been made. (iii) Capital Accounts shall be adjusted, in a manner consistent with this Section 7.1, to reflect any adjustments in items of Company income, gain, loss or deduction (including Simulated Depletion, Simulated Gain and Simulated Loss) that result from amended returns filed by the Company or pursuant to an agreement by the Company with the Internal Revenue Service or a final court decision. (iv) The allocation Immediately before the exercise of basis prescribed by Section 613A(c)(7)(D) an Incentive Option to acquire Units (the “Exercise”), the Capital Accounts of the Internal Revenue Code existing Members shall be adjusted by assuming that the assets of the Company were sold by the Company for cash at their respective fair market values as of the date of Exercise, and provided for in Section 4.3(b) and crediting or debiting each Member’s separately computed depletion deductions shall not reduce Capital Account with its respective share of the hypothetical gains and losses resulting from such assumed sales in the same manner as gains or losses on actual sales of such properties would be credited or debited to such Member’s Capital Account. Thereafter, but such Member’s Capital Account the Company shall be decreased by its allocable share of Simulated Depletion. The Simulated Basis in each oil and gas property as of the date of this Agreement or hereafter acquired shall be allocated among the Members in proportion deemed to their Sharing Ratios. Simulated Depletion with respect to each separate oil and gas property shall be allocated have distributed to the Members person exercising the option (the “Optionee”) cash in proportion to their respective shares of the Simulated Basis in the related property. No Member’s Capital Account shall be decreased, however, by Simulated Depletion deductions attributable to any oil and gas property to the extent such deductions exceed such Member’s allocable share of the Company’s remaining Simulated Basis in such property. Any Simulated Gain shall be allocated to the Members and shall increase their respective Capital Accounts in the same manner as an equal amount of gain would have been allocated pursuant to Section 4.1. Any Simulated Loss shall be allocated to the Members and shall reduce their respective Capital Accounts in the same percentages as the basis of the property sold was allocated up to an amount equal to each Member’s share the Distributed Asset Amount (as defined below) and, thereafter, the Optionee shall be deemed to have contributed such cash and the Exercise price to the Company. “Distributed Asset Amount” shall be the excess of (a) the product of (x) the sum of the Company’s Simulated Basis in such property at Exercise price plus the time of such sale. (v) It is the intention fair market value of the Members that the Capital Accounts of each Member be kept in the manner required under Treasury Regulation Section 1.704-1(b)(2)(iv). To the extent any additional adjustment to the Capital Accounts is required by such regulation, the Board is hereby authorized to make such adjustment after notice to the Members. (vi) Any Person who acquires a Company Interest directly from a Member, or whose Company Interest shall be increased by means of a Transfer to it of all or part net assets of the Company Interest immediately before the Exercise, multiplied by (y) the percentage obtained by dividing the number of another MemberUnits issued to the Optionee by the total number of Units outstanding (taking into account the Units issued to the Optionee), shall have a Capital Account over (including a credit for all Deemed Capital Contributions and subsequent Capital Contributions made by such Member Transferring such Company Interestb) which includes the Capital Account balance of the Company Interest or portion thereof so acquired or TransferredExercise price.

Appears in 1 contract

Samples: Limited Liability Company Agreement (Centennial Resource Development, Inc.)

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Capital Accounts, Books and Records. (a) The Company shall keep books of account for the Company in accordance with the terms of this Agreement. Such books shall be maintained at the principal office of the Company. (b) An individual capital account (the “Capital Account”) shall be maintained by the Company for each Member as provided below: (i) The Capital Account of each Member shall, initially except as otherwise provided herein, be equal to the amount of such Member’s Deemed Capital Contribution as of the date hereof and shall thereafter be increased by the amount of cash and the fair market value of any property contributed to the Company by such Member (net of liabilities secured by such contributed property that the Company is considered to assume or take subject to under Section 752 of the Internal Revenue Code) and by such Member’s share of the Net Profits of the Company and special allocations of income or gain under Section 4.2, and shall be decreased by such Member’s share of the Net Losses of the Company and special allocations of deduction or loss under Section 4.2 and by the amount of cash or the fair market value of any property distributed to such Member (net of liabilities secured by such distributed property that such Member is considered to assume or take subject to under Section 752 of the Internal Revenue Code). The Capital Accounts shall also be increased or decreased upon the exercise to reflect a revaluation of any noncompensatory option Company property pursuant to paragraph (b) of the requirements definition of Treasury Regulation Sections 1.704-1(b)(2)(iv)(d)(4) and 1.704-1(b)(2)(iv)(s)Carrying Value. (ii) Any adjustments of basis of Company property provided for under Sections 734 and 743 of the Internal Revenue Code and comparable provisions of state law (resulting from an election under Section 754 of the Internal Revenue CodeCode or comparable provisions of state law) shall not affect the Capital Accounts of the Members (unless otherwise required by applicable Treasury Regulations), and the Members’ Capital Accounts shall be debited or credited pursuant to the terms of this Section 7.1 as if no such election had been made. (iii) Capital Accounts shall be adjusted, in a manner consistent with this Section 7.1, to reflect any adjustments in items of Company income, gain, loss or deduction (including Simulated Depletion, Simulated Gain and Simulated Loss) that result from amended returns filed by the Company or pursuant to an agreement by the Company with the Internal Revenue Service or a final court decision. (iv) The allocation Immediately before the exercise of basis prescribed by Section 613A(c)(7)(D) an Incentive Option to acquire Units (the “Exercise”), the Capital Accounts of the Internal Revenue Code existing Members shall be adjusted by assuming that the assets of the Company were sold by the Company for cash at their respective fair market values as of the date of Exercise, and provided for in Section 4.3(b) and crediting or debiting each Member’s separately computed depletion deductions shall not reduce Capital Account with its respective share of the hypothetical gains and losses resulting from such assumed sales in the same manner as gains or losses on actual sales of such properties would be credited or debited to such Member’s Capital Account. Thereafter, but such Member’s Capital Account the Company shall be decreased by its allocable share of Simulated Depletion. The Simulated Basis in each oil and gas property as of the date of this Agreement or hereafter acquired shall be allocated among the Members in proportion deemed to their Sharing Ratios. Simulated Depletion with respect to each separate oil and gas property shall be allocated have distributed to the Members person exercising the option (the “Optionee”) cash in proportion to their respective shares of the Simulated Basis in the related property. No Member’s Capital Account shall be decreased, however, by Simulated Depletion deductions attributable to any oil and gas property to the extent such deductions exceed such Member’s allocable share of the Company’s remaining Simulated Basis in such property. Any Simulated Gain shall be allocated to the Members and shall increase their respective Capital Accounts in the same manner as an equal amount of gain would have been allocated pursuant to Section 4.1. Any Simulated Loss shall be allocated to the Members and shall reduce their respective Capital Accounts in the same percentages as the basis of the property sold was allocated up to an amount equal to each Member’s share the Distributed Asset Amount (as defined below) and, thereafter, the Optionee shall be deemed to have contributed such cash and the Exercise price to the Company. “Distributed Asset Amount” shall be the excess of (a) the product of (x) the sum of the Company’s Simulated Basis in such property Exercise price plus the fair market value of the net assets of the Company immediately before the Exercise, multiplied by (y) the percentage obtained by dividing the number of Units issued to the Optionee by the total number of Units outstanding (taking into account the Units issued to the Optionee) over (b) the Exercise price. The initial Capital Account attributable to the Company Interest received by a Person exercising an Incentive Option shall be an amount equal to the portion of the Capital Accounts (which Capital Accounts shall at that point already reflect the time payment of such salethe exercise price) of all Members that is equal to the ratio that the Sharing Ratio received by the Person exercising an Option bears to the Sharing Ratios of all of the Members immediately after the Incentive Option exercise. (v) It is the intention of the Members that the Capital Accounts of each Member be kept in the manner required under Treasury Regulation Section 1.704-1(b)(2)(iv). To the extent any additional adjustment to the Capital Accounts is required by such regulation, the Board is hereby authorized to make such adjustment after notice to the Members. (vi) In accordance with the provisions of Treasury Regulation Section 1.704-1(b)(2)(iv)(f), upon a Member’s contribution to the Company of cash or properties in exchange for a Company Interest, the Capital Accounts of all Members and the Carrying 37 Values of all Company properties shall, immediately prior to such issuance, be adjusted upward or downward to reflect any Unrealized Gain or Unrealized Loss attributable to the Company properties, as if such Unrealized Gain or Unrealized Loss had been recognized on an actual Transfer of each such property immediately prior to such contribution for an amount equal to its fair market value and had been allocated to the Members at such time pursuant to Section 4.1 and Section 4.2. (vii) Any Person who acquires a Company Interest directly from a Member, or whose Company Interest shall be increased by means of a Transfer to it of all or part of the Company Interest of another Member, shall have a Capital Account (including a credit for all Deemed Capital Contributions and subsequent Capital Contributions made by such Member Transferring such Company Interest) which includes the Capital Account balance of the Company Interest or portion thereof so acquired or Transferred.

Appears in 1 contract

Samples: Limited Liability Company Agreement

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