Llc Operating Agreement (Sample) (Page 24 of 32) in pdf

Capital Account is attributable to the transferred Interest; (d) If the book value of Company property is

adjusted pursuant to the provisions of Exhibit C to the Agreement, the Capital Account of each Interest

Holder shall be adjusted to reflect the aggregate adjustment in the same manner as if the Company had

recognized gain or loss equal to the amount of such aggregate adjustment; and (e) It is intended that the

Capital Accounts of all Interest Holders shall be maintained and adjusted in accordance with the Code

and the Regulations promulgated thereunder, and all provisions of the Agreement relating to the

maintenance of Capital Accounts shall be interpreted and applied in a manner consistent with those

Regulations. In determining the amount of liabilities for purposes of the foregoing, there shall be taken

into account Code Section 752(c) and any other applicable provisions of the Code or Regulations.

“Capital Contribution” means, with respect to any Member, the total amount of cash and the fair

market value of any other assets contributed (or deemed contributed under Regulations Section 1.704-

l(b)(2)(iv)(d)) as capital to the Company with respect to the Interest held by such Member, net of

liabilities assumed or to which the contributed assets may be subject at the time of such contribution.

“Capital Transaction” means any transaction not in the ordinary course of business which results in the

Company’s receipt of cash or other consideration other than Capital Contributions, including, without

limitation, proceeds of sales or exchanges or other dispositions of assets not in the ordinary course of

business, financings, refinancings, condemnations, recoveries of damage awards, and insurance proceeds.

“Class A Member(s),” “Class B Member(s),” or “Class C Member(s),” shall mean an individual

Member or the group of Members collectively, who own(s) an Interest or the Interests belonging to the

referenced class.

“Code” means the Internal Revenue Code of 1986, as amended. Any reference to a section thereof shall

be deemed to include any corresponding tax provision in statutory codes of any state or a political

subdivision thereof, or [State], and shall be deemed to include any corresponding provision of any future

Internal Revenue Codes of the United States.

“Company” means the limited liability company formed and continued under the Agreement.

“Depreciation” means, for each Fiscal Year, an amount equal to the depreciation, amortization, or other

cost recovery deduction allowable with respect to an asset for such Fiscal Year, except that if the Gross

Asset Value of an asset differs from its adjusted basis for federal income tax purposes at the beginning of

such Fiscal Year, Depreciation shall be an amount which bears the same ratio to such beginning Gross

Asset Value as the federal income tax depreciation, amortization, or other cost recovery deduction for

such Fiscal Year bears to such beginning adjusted tax basis; provided, however, that if the adjusted basis

for federal income tax purposes of an asset at the beginning of such Fiscal Year is zero, Depreciation

shall be determined with reference to such beginning Gross Asset Value using any reasonable method

selected by the Manager.

“Executive Employee” means an employee of the Company to whom the Manager has delegated

specific duties and authority to carry out the operation and management of the Company’s business.

“Fiscal Year” means any of the applicable periods ending on December 31 during the existence of the

Company, or any other applicable period for which the Company shall close its books and records for

accounting and tax reporting purposes.

“Gross Asset Value” means, with respect to any asset, the asset’s adjusted basis for federal income tax

purposes, except as follows:

(a) The initial Gross Asset Value of any asset contributed by a Member to the Company as a Capital

Contribution shall be the gross fair market value of such asset, as determined by the contributing

Member and the Manager;

(b) The Gross Asset Values of all Company assets shall be adjusted to equal their respective gross

fair market values, as determined by the Manager, as of the following times: (i) the acquisition of

Llc Operating Agreement (Sample) Page 24

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