Common use of Tax Characterization and Elections Clause in Contracts

Tax Characterization and Elections. The parties intend that (A) each Direct Exchange shall give rise to Basis Adjustments, (B) each Redemption using cash contributed to the LLC by the Corporation and Endeavor Manager shall be treated as a direct purchase of Units from the applicable Exchange TRA Parties pursuant to Section 707(a)(2)(B) of the Code that shall give rise to Basis Adjustments, (C) payments pursuant to this Agreement with respect to an Exchange (except with respect to amounts that constitute Imputed Interest) shall be treated as consideration in respect of such Exchange that give rise to additional Basis Adjustments, and (D) the rights received pursuant to this Agreement by the Reorganization TRA Parties and (without duplication) Tax Benefit Payments (excluding any amount that constitutes Imputed Interest thereon) made in respect of a Pre-IPO Covered Tax Asset will be treated as non-qualifying property or money for purposes of Section 356 of the Code received in the Reorganization. The Corporation and Endeavor Manager will ensure that, on and after the date hereof and continuing through the term of this Agreement, the LLC and each of its direct and indirect subsidiaries that they control and that is treated as a partnership for U.S. federal income tax purposes will have in effect an election under Section 754 of the Code.

Tax Characterization and Elections. The parties intend that (A) each Direct Exchange shall give rise to Basis Adjustments, (B) each Redemption using cash contributed to the LLC by the Corporation and Endeavor Manager shall be treated as a direct purchase of Units from the applicable Exchange TRA Parties pursuant to Section 707(a)(2)(B) of the Code that shall give rise to Basis Adjustments, (C) payments pursuant to this Agreement with respect to an Exchange (except with respect to amounts that constitute Imputed Interest) shall be treated as consideration in respect of such Exchange that give rise to additional Basis Adjustments, and (D) the rights received pursuant to this Agreement by the Reorganization TRA Parties and (without duplication) Tax Benefit Payments (excluding any amount that constitutes Imputed Interest thereon) made in respect of a Pre-IPO Reorganization Covered Tax Asset will be treated as non-qualifying property or money giving rise to capital gain treatment for purposes of Section 356 of the Code received in the Reorganization. The Corporation and Endeavor Manager will ensure that, on and after the date hereof of this Agreement and continuing through the term of this Agreement, the LLC and each of its direct and indirect subsidiaries that they control and that is treated as a partnership for U.S. federal income tax Tax purposes will have in effect an election under Section 754 of the Code. The parties hereto agree to file their income Tax Returns in a manner consistent with this Section 7.16, except as otherwise required by a determination (within the meaning of Section 1313 of the Code).