eTrade 2000 Annual Report Download - page 232

Company shall have all remedies available at law or in equity in the event any such contribution is not so made. In the event of any
legal proceedings relating to a default by a Defaulting Member, such Defaulting Member shall pay all costs and expenses incurred by
the Company, including attorneys’ fees, if the Company shall prevail. Further, such Defaulting Member shall be obligated to pay the
Company interest with respect to the amount of any capital contribution not
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made when required by this Agreement, with such interest commencing on the date such contribution is initially due and ending on the
date such contribution is made to the Company. Such interest shall be calculated on the basis of the then current reference rate
announced by Wells Fargo Bank, N.A., or by any other U.S. commercial bank with capital in excess of Five Hundred Million Dollars
($500,000,000) selected by the Managing Members, plus two percent (2%) per annum.
(b)In addition to the remedies provided under Paragraph5.4(a), if the Defaulting Member does not remedy a default in the payment of
a required contribution within ten(10) business days of the receipt of the notice specified in Paragraph5.4(a): (i)the Defaulting Member
shall no longer have the right (if any) to vote on any Company matter, and (ii)if the Managing Members so elect, the other Members
shall have the option to pay the remaining capital contributions of the Defaulting Member in accordance with any procedures and in
such proportions as may be established by the Managing Members. In such event, such Defaulting Member shall be deemed to have
withdrawn from the Company and to have forfeited its interest in the Net Income and Net Losses of the Company. Such Defaulting
Member shall be entitled to receive only the amount of its Capital Account at the time of the def ault, with such amount payable,
without interest, to the Defaulting Member upon the dissolution of the Company.
ARTICLE VI
CAPITAL ACCOUNTS AND ALLOCATIONS
6.1. Capital Accounts. A Capital Account shall be maintained on the Company’ s books for each Member. In the event any interest in
the Company is transferred in accordance with the terms of this Agreement, the transferee shall succeed to the Capital Account of the
transferor to the extent it relates to the transferred interest.
6.2. Definitions. Unless the context requires otherwise, the following terms have the meanings specified below for purposes of this
Agreement:
(a) Book Value . The Book Value with respect to any asset shall be the asset’ s adjusted basis for federal income tax purposes, except
as follows:
(1)The initial Book Value of any asset contributed by a Member to the Company shall be the fair market value of such asset at the time
of contribution, as determined by the contributing Member and the Company.
(2)In the discretion of the Managing Members, the Book Values of all Company assets may be adjusted to equal their respective fair
market values, as determined by the Managing Members, and the amount of such adjustment shall be treated as Net Income or Net
Loss and allocated to the Capital Accounts of the Members, as of the following times: (A)the acquisition of an additional interest in the
Company by any new or existing Member in exchange for more than a deminimis capital contribution; and(B) the distribution by the
Company to a Member of more than a de minimis amount of Company assets in connection with an adjustment of such Member’ s
interest in the Company.
(3)The Book Values of all Company assets shall be adjusted to equal their respective fair market values, as determined by the
Managing Members, and the amount of such adjustment shall be treated as Net Income or Net Loss and allocated to the Capital
Accounts of the Members, as of the following times: (A)the date the Company is liquidated within the meaning of Treasury Regulation
Section 1.704-1(b)(2)(ii)(g); and (B) the termination of the Company pursuant to the provisions of this Agreement.
(4)The Book Values of the Company’ s assets shall be increased or decreased to the extent required under Treasury Regulation Section
1.704-1(b)(2)(iv)(m) in the event that the adjusted tax basis of the Company’ s assets is adjusted pursuant to Code Section732, 734 or
743.
(5)The Book Value of a Company asset shall be adjusted by the depreciation, amortization or other cost recovery deductions, if any,
taken into account by the Company with respect to such asset in computing Net Income or Net Loss.
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(b) Capital Account . An account maintained by the Company with respect to each Member in accordance with the following
2002. EDGAR Online, Inc.