No Code Section 355 or 361 Transactions Clause Samples
The "No Code Section 355 or 361 Transactions" clause prohibits the parties from engaging in certain tax-free corporate reorganizations or distributions as defined under Sections 355 and 361 of the Internal Revenue Code. In practice, this means that the parties agree not to structure any part of their transaction as a tax-free spin-off, split-off, or similar reorganization that would otherwise qualify for nonrecognition of gain or loss under these tax provisions. By including this clause, the agreement ensures that all transfers or restructurings related to the deal are subject to standard tax treatment, thereby preventing unexpected tax consequences and maintaining clarity regarding the tax obligations of each party.
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No Code Section 355 or 361 Transactions. Neither National nor any of its Subsidiaries has distributed stock of another Person, or has had its stock distributed by another Person, in a transaction (i) that was purported or intended to be governed in whole or in part by Section 355 or Section 361 of the Code or (ii) that could otherwise constitute part of a “plan” or “series of related transactions” (within the meaning of Section 355(e) of the Code) in conjunction with the transactions contemplated by this Agreement.