Common use of Tax Related Adjustments and Tax Reporting of Transactions Clause in Contracts

Tax Related Adjustments and Tax Reporting of Transactions. (a) VTDC and the Partnership agree that any payment of Indemnified Costs made hereunder will be treated by the Parties on their tax returns as an adjustment to the Cash Distribution. (b) Except as otherwise provided in clause (iii) of this Section 7.6(b), VTDC and the Partnership further acknowledge and agree that the transactions described in this Agreement are properly characterized as transactions described in Sections 721(a) and 731 of the Code and agree to file all tax returns in a manner consistent with such treatment. In this regard, VTDC and the Partnership agree that the Cash Distribution shall be treated (i) as a “debt-financed transfer” to VTDC under Treasury Regulation Section 1.707-5(b) to the extent the cash is traceable under the principles of Treasury Regulation Section 1.163-8T to VTDC’s allocable share, determined under Treasury Regulation Section 1.707-5(b)(2), of indebtedness of the Partnership, (ii) as a reimbursement of capital expenditures (within the meaning of Treasury Regulation Section 1.707-4(d)) with respect to the tankage and related assets owned by Valero XxXxx, to the extent that VTDC provides to the Partnership on or before January 15, 2017 a statement that states the amount of qualifying capital expenditures and evidence satisfactory to the Partnership documenting the capital expenditures and their qualification, and (iii) as the proceeds of a sale by assets by VTDC to the Partnership to the extent clause (i), clause (ii), or any other exception to the “disguised sale” rules under Section 707 and the Treasury Regulations thereunder, are inapplicable. The Parties acknowledge that Valero XxXxx is disregarded for federal income tax purposes as an entity apart from VTDC. Except with the prior written consent of VTDC, the Partnership agrees to act at all times in a manner consistent with the foregoing intended treatment of the Cash Distribution, including, if required, disclosing the distribution of the Cash Distribution in accordance with the requirements of Treasury Regulation Section 1.707-3(c)(2).

Tax Related Adjustments and Tax Reporting of Transactions. (a) VTDC and the Partnership agree that any payment of Indemnified Costs made hereunder will be treated by the Parties on their tax returns as an adjustment to the Cash Distribution. (b) Except as otherwise provided in clause (iii) of this Section 7.6(b), VTDC and the Partnership further acknowledge and agree that the transactions described in this Agreement are properly characterized as transactions described in Sections 721(a) and 731 of the Code and agree to file all tax returns in a manner consistent with such treatment. In this regard, VTDC and the Partnership agree that the Cash Distribution shall be treated (i) as a “debt-financed transfer” to VTDC under Treasury Regulation Section 1.707-5(b) to the extent the cash is traceable under the principles of Treasury Regulation Section 1.163-8T to VTDC’s allocable share, determined under Treasury Regulation Section 1.707-5(b)(2), of indebtedness of the Partnership, (ii) as a reimbursement of capital expenditures (within the meaning of Treasury Regulation Section 1.707-4(d)) with respect to the tankage and related assets owned by Valero XxXxxeither Subject Entity, to the extent that VTDC provides to the Partnership on or before January 15, 2017 a statement that states the amount of qualifying capital expenditures and evidence satisfactory to the Partnership documenting the capital expenditures and their qualification, and (iii) as the proceeds of a sale by of assets by VTDC to the Partnership to the extent clause (i), clause (ii), or any other exception to the “disguised sale” rules under Section 707 and the Treasury Regulations thereunder, are inapplicable. The Parties acknowledge that Valero XxXxx is the Subject Entities are disregarded for federal income tax purposes as an entity entities apart from VTDC. Except with the prior written consent of VTDC, the Partnership agrees to act at all times in a manner consistent with the foregoing intended treatment of the Cash Distribution, including, if required, disclosing the distribution of the Cash Distribution in accordance with the requirements of Treasury Regulation Section 1.707-3(c)(2).

Tax Related Adjustments and Tax Reporting of Transactions. (a) VTDC The Contributors and the Partnership agree that any payment of Indemnified Costs made hereunder will be treated by the Parties on their tax returns as an adjustment to the Cash DistributionTotal Consideration. (b) Except as otherwise provided in clause (iii) of this Section 7.6(b), VTDC the Contributors and the Partnership further acknowledge and agree that the transactions described in this Agreement are properly characterized as transactions described in Sections 721(a) and 731 of the Code and agree to file all tax returns in a manner consistent with such treatment. In this regard, VTDC the Contributors and the Partnership agree that the Cash Distribution shall be treated (i) as a “debt-financed transfer” to VTDC under Treasury Regulation Section 1.707-5(b) to the extent the cash is traceable under the principles of Treasury Regulation Section 1.163-8T to VTDC’s allocable share, determined under Treasury Regulation Section 1.707-5(b)(21.707‑5(b)(2), of indebtedness of the Partnership, (ii) as a reimbursement of VRNO’s and VTDC’s capital expenditures (within the meaning of Treasury Regulation Section 1.707-4(d1.707‑4(d)) with respect to the tankage and related assets owned by Valero XxXxxLouisiana and/or Valero Houston, to the extent that VTDC provides to the Partnership on or before January 15, 2017 2016 a statement that states the amount of qualifying capital expenditures and evidence satisfactory to the Partnership documenting the capital expenditures and their qualification, and (iii) as the proceeds of a sale by assets by VTDC to the Partnership to the extent clause (i), clause (ii), or any other exception to the “disguised sale” rules under Section 707 and the Treasury Regulations thereunder, are inapplicable. The Parties parties acknowledge that VRNO, Valero XxXxx is Houston and Valero Louisiana are disregarded for federal income tax purposes as an entity entities apart from VTDC; accordingly, references to VTDC in this Section include VRNO, Valero Houston or Valero Louisiana as the context requires. Except with the prior written consent of VTDC, the Partnership agrees to act at all times in a manner consistent with the foregoing intended treatment of the Cash Distribution, including, if required, disclosing the distribution of the Cash Distribution in accordance with the requirements of Treasury Regulation Section 1.707-3(c)(2).

Tax Related Adjustments and Tax Reporting of Transactions. (a) VTDC and the Partnership agree that any payment of Indemnified Costs made hereunder will be treated by the Parties on their tax returns as an adjustment to the Cash Distribution. (b) Except as otherwise provided in clause (iii) of this Section 7.6(b), VTDC and the Partnership further acknowledge and agree that the transactions described in this Agreement are properly characterized as transactions described in Sections 721(a) and 731 of the Code and agree to file all tax returns in a manner consistent with such treatment. In this regard, VTDC and the Partnership agree that the Cash Distribution shall be treated (i) as a “debt-financed transfer” to VTDC under Treasury Regulation Section 1.707-5(b) to the extent the cash is traceable under the principles of Treasury Regulation Section 1.163-8T to VTDC’s allocable share, determined under Treasury Regulation Section 1.707-5(b)(2), of indebtedness of the Partnership, (ii) as a reimbursement of capital expenditures (within the meaning of Treasury Regulation Section 1.707-4(d)) with respect to the tankage and related assets owned by Valero XxXxxPort Xxxxxx, to the extent that VTDC provides to the Partnership on or before January 15, 2017 2018 a statement that states the amount of qualifying capital expenditures and evidence satisfactory to the Partnership documenting the capital expenditures and their qualification, and (iii) as the proceeds of a sale by of assets by VTDC to the Partnership to the extent clause (i), clause (ii), or any other exception to the “disguised sale” rules under Section 707 and the Treasury Regulations thereunder, are inapplicable. The Parties acknowledge that Valero XxXxx Port Xxxxxx is disregarded for federal income tax purposes as an entity apart from VTDC. Except with the prior written consent of VTDC, the Partnership agrees to act at all times in a manner consistent with the foregoing intended treatment of the Cash Distribution, including, if required, disclosing the distribution of the Cash Distribution in accordance with the requirements of Treasury Regulation Section 1.707-3(c)(2).

Tax Related Adjustments and Tax Reporting of Transactions. (a) VTDC and the Partnership agree that any payment of Indemnified Costs made hereunder will be treated by the Parties on their tax returns as an adjustment to the Cash DistributionTotal Consideration. (b) Except as otherwise provided in clause (iii) of this Section 7.6(b7.6 (b), VTDC and the Partnership further acknowledge and agree that the transactions described in this Agreement are properly characterized as transactions described in Sections 721(a) and 731 of the Code and agree to file all tax returns in a manner consistent with such treatment. In this regard, VTDC and the Partnership agree that the Cash Distribution shall be treated (i) as a “debt-financed transfer” to VTDC under Treasury Regulation Section 1.707-5(b5 (b) to the extent the cash is traceable under the principles of Treasury Regulation Section 1.163-8T to VTDC’s allocable share, determined under Treasury Regulation Section 1.707-5(b)(21.707‑5(b)(2), of indebtedness of the Partnership, (ii) as a reimbursement of capital expenditures (within the meaning of Treasury Regulation Section 1.707-4(d1.707‑4 (d)) with respect to the tankage and related assets owned by Valero XxXxxCorpus East and/or Valero Corpus West, to the extent that VTDC provides to the Partnership on or before January 15, 2017 2016 a statement that states the amount of qualifying capital expenditures and evidence satisfactory to the Partnership documenting the capital expenditures and their qualification, and and (iii) as the proceeds of a sale by assets by VTDC to the Partnership to the extent clause (i), clause (ii), or any other exception to the “disguised sale” rules under Section 707 and the Treasury Regulations thereunder, are inapplicable. The Parties acknowledge that Valero XxXxx is the Subject Entities are disregarded for federal income tax purposes as an entity entities apart from VTDC. Except with the prior written consent of VTDC, the Partnership agrees to act at all times in a manner consistent with the foregoing intended treatment of the Cash Distribution, including, if required, disclosing the distribution of the Cash Distribution in accordance with the requirements of Treasury Regulation Section 1.707-3(c)(23 (c) (2).