Common use of Tax Treatment as Contribution Clause in Contracts

Tax Treatment as Contribution. So long as some portion of the consideration received is in the form of OP Units, the parties hereto intend and agree that, for federal income tax purposes, the contribution, transfer, conveyance and assignment effectuated pursuant to this Agreement shall be treated as a transaction in “assets-over” partnership merger pursuant to Treasury Regulation Section 1.708-1(c)(3). As a result, to the extent any Participating Party transfers all or any portion of a Participating Entity Interest to the Operating Partnership in exchange for a Cash Amount, or to the extent any portion of a Participating Party’s transfer of a Participating Entity Interest is otherwise treated as a “disguised sale” pursuant to Section 707 of the Code or the Treasury Regulations promulgated thereunder (such Participating Party referred to as a “Selling Party,” and the portion of the Participating Entity Interests sold referred to as a “Sold Interest”), such transfer shall be treated as a sale by the Selling Party and a purchase of the Sold Interest by the Operating Partnership directly from the Selling Party in accordance with the provisions of Treasury Regulation Section 1.708-1(c)(4). To the extent that Contributor constitutes a Selling Party, Contributor expressly agrees and consents to treat the transfer of the Sold Interests as a sale of an interest in the Participating Entity for all federal tax purposes. The Operating Partnership and Contributor agree that the transaction shall be treated for federal income tax purposes as if the Selling Party first sold the Sold Interests in the Participating Entity to the Operating Partnership, the Participating Entity then transferred its assets and liabilities (except to the extent attributable to the Sold Interests) to the Operating Partnership in exchange for OP Units, and then the Participating Entity liquidated, distributing the OP Units to its partners or members (other than the Selling Parties with respect to the Sold Interests) and distributing the balance of its assets and liabilities to the Operating Partnership in redemption of the Sold Interests acquired by the Operating Partnership. Any cash paid to a Contributor pursuant to this Agreement shall be paid only after the receipt of a consent from such Contributor that, for federal income tax purposes, such payment of cash shall be treated as a sale of the Sold Interests by the Contributor that is a Selling Party and a purchase of such Sold Interests by the Operating Partnership for the cash so paid.