Texas State Tax Matters. For purposes of Texas franchise taxes, it is the intention of the parties that the Trust be classified (i) as a passive entity within the meaning of Sections 171.0002 through 171.0004 of the Texas Tax Code, and (ii) not as a “business trust” within the meaning of Treasury Regulations Section 301.7701-4(b). The Trust Depositor and the Certificateholder, by acceptance of a Trust Certificate, agree to treat the Trust in a manner consistent with such intention, unless otherwise required by law. Notwithstanding anything to the contrary contained herein, nothing in this Agreement should be read to imply that the Trust is doing business in Texas or has sufficient nexus with Texas in order for the Texas franchise tax to apply to the Trust. ARTICLE THREE
Texas State Tax Matters. If it is determined that, contrary to the intent of the parties hereto and the position of the Certificateholder, the Issuer has "gross receipts" for purposes of HB3, it is the intention of the parties hereto that the Issuer be treated as a "passive entity" for purposes of HB3, formed to hold assets to facilitate securitization transactions in a manner similar to grantor trusts and real estate mortgage investment conduits as defined by Section 860D of the Code. The Depositor, and each Certificateholder, by acceptance of a Certificate, agree that if it is determined that, contrary to the intent of the parties hereto and the position of the Certificateholder, the Issuer has "gross receipts" for purposes of HB3, they will, unless otherwise required by law, treat the Issuer as a "passive entity" for purposes of HB3 and will not, unless otherwise required by law, take any action to include the Issuer as part of an affiliated group engaged in a unitary business (as such terms are used in HB3). Notwithstanding anything to the contrary contained herein, nothing in this Agreement should be read to imply that the Issuer is doing business in Texas or has sufficient nexus with Texas in order for HB3 to apply to the Issuer.
