Section 351 Exchange Sample Clauses
A Section 351 Exchange clause outlines the terms under which property can be transferred to a corporation in exchange for its stock without immediate recognition of gain or loss for tax purposes. In practice, this clause applies when one or more persons transfer property to a corporation and, as a result, collectively own at least 80% of the corporation’s stock immediately after the exchange. This mechanism facilitates the tax-deferred formation or capitalization of corporations, allowing contributors to defer taxable events and encouraging investment and business structuring without immediate tax consequences.
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Section 351 Exchange. The parties hereto acknowledge and agree that the Merger and the Contribution and issuance of the Securities in exchange therefore, together, are intended to be treated for tax purposes as part of an exchange described in Section 351 of the Code.
Section 351 Exchange. (a) Each of CPT and Inuvo shall use its commercially reasonable best efforts to cause the Exchanges to qualify as an “exchange” governed by the provisions of Section 351 of the Code. None of CPT, Inuvo, or their respective Subsidiaries shall take, or agree to take, fail to take, or agree to fail to take, any action (including any action otherwise permitted by Section 6.1 in the case of CPT) that would reasonably be expected to prevent or impede the Exchanges from qualifying as an “exchange” governed by the provisions of Section 351 of the Code. Pursuant to the foregoing, each Party agrees to make such commercially reasonable additions or modifications to the terms of this Agreement as may be reasonably necessary to permit the Exchanges to so qualify.
(b) Unless otherwise required by applicable Law, each of Parent, CPT, CPT Merger Sub, Inuvo and Inuvo Merger Sub (i) shall report the Exchanges as an “exchange” governed by the provisions of Section 351 of the Code, (ii) shall not take any Tax reporting position inconsistent with such characterization and (iii) shall properly file with their federal income Tax Returns all information required by Treasury Regulations Section 1.351-3.
(c) The Parties hereto shall cooperate and use their commercially reasonable efforts to deliver to CPT’s and Inuvo’s Tax counsel and Tax advisors a certificate containing representations reasonably requested by such counsel and/or advisors in connection with the rendering of the Tax opinions to be issued by such counsel and/or advisors with respect to the treatment of the Exchanges as an “exchange” governed by the provisions of Section 351 of the Code as required under Section 7.2(f) and Section 7.3(d) and in connection with the filing of the Registration Statement. CPT’s and Inuvo’s Tax counsel and Tax advisors shall be entitled to rely upon such representations in rendering any such opinions.
(d) The certificates required pursuant to Section 6.13(c) and the tax opinions required pursuant to Section 7.2(e) and Section 7.3(d) will be in a form and content that is reasonably acceptable to both CPT and Inuvo.
Section 351 Exchange. It is the intent of the parties that the transfer of cash to GHI by the Investors pursuant to the Subscription Agreement and the transfer of the Transferred Assets to GHI by Transferors pursuant to this Agreement shall constitute mutually interdependent steps in a single plan. The obligation of Transferors to consummate the transfer of the Transferred Assets to GHI under this Agreement is subject to the transfer to GHI, on or prior to the Closing Date, of cash and notes by the Investors, in exchange for shares of Common Stock representing all of the issued and outstanding shares of Common Stock immediately following the Closing. The parties shall report such transfers in a manner consistent with Section 351 of the Code pursuant to Section 9.4(e).
Section 351 Exchange. It is intended that for U.S. federal income tax purposes, the Contribution, taken together with the Merger, shall constitute an exchange under Section 351 of the Code.
Section 351 Exchange. 17 ARTICLE III