Contributions; Distributions; Redemption Events Sample Clauses
The "Contributions; Distributions; Redemption Events" clause defines the rules and procedures for how members contribute capital to an entity, how profits or assets are distributed among them, and the circumstances under which members can redeem or withdraw their interests. Typically, this clause outlines the timing and method for making contributions, the formula or priority for distributing profits or assets, and the process for handling redemption events such as a member's withdrawal or buyout. Its core function is to ensure transparency and fairness in the financial interactions between members, preventing disputes by clearly setting expectations for contributions, distributions, and redemptions.
Contributions; Distributions; Redemption Events. (A) Each Member agrees that it will contribute property to the Investing Pool only if such property has, to the best of that Member’s knowledge after reasonable inquiry, a basis for tax purposes equal to the fair market value of such property, and acknowledges that the Investing Pool will rely upon such fair market value basis for purposes of determining and allocating items of income, gain, loss, deduction, basis and other tax items. For this purpose, Section 3.12 shall apply to determine fair market value.
(B) In determining which CERFs and Short-Term Securities, if any, are to be distributed to a Member or sold or closed out in connection with a Redemption Event pursuant to the provisions of this Agreement, the Manager shall adopt a standard procedure for selecting such CERFs or Short-Term Securities that is applied consistently to all Redemption Events. Unless the Manager determines that another lot selection method more accurately allocates taxable gain and loss to Members in a manner that corresponds to their economic gain and loss, the procedure shall be “first in, first out,” “last in, last out,” or a combination thereof.
Contributions; Distributions; Redemption Events. (A) Each Member agrees that it will contribute property to the Investing Pool only if such property has, to the best of that Member’s knowledge after reasonable inquiry, a basis for tax purposes equal to the fair market value of such property, and acknowledges that the Investing Pool will rely upon such fair market value basis for purposes of determining and allocating items of income, gain, loss, deduction, basis and other tax items. For this purpose, Section 3.12 shall apply to determine fair market value.
(B) In determining which Index Futures and Short-Term Securities, if any, are to be distributed to a Member or sold or closed out in connection with a Redemption Event pursuant to the provisions of this Agreement, the Manager shall adopt a standard procedure for selecting such Index Futures or Short-Term Securities that is applied consistently to all Redemption Events. Unless the Manager determines that another lot selection method more accurately allocates taxable gain and loss to Members in a manner that corresponds to their economic gain and loss, the procedure shall be 50% “first in, first out,” 50% “last in, first out,” with any remaining Index Futures and Short-Term Securities, to the extent not evenly divisible on a 50/50 basis, determined on a “first in, first out” basis.