Section 56.4 Election Clause Samples

Section 56.4 Election. The Parties intend that the conditions set forth in subsection 56.4(7) of the ITA have been met such that subsection 56.4(5) of the ITA applies to any “restrictive covenants” (as defined in subsection 56.4(1) of the ITA) granted by Seller pursuant to this Agreement with respect to the Business, including the conditions set forth in Sections 8.3 and 8.4 (the “Restrictive Covenants”). The Parties acknowledge and agree (a) that the Restrictive Covenants are integral to this Agreement and are being granted, executed and delivered to maintain or preserve the fair market value of the Acquired Assets, and (b) that no proceeds or other amount received or receivable under this Agreement by Seller shall be for granting any Restrictive Covenant under this Agreement. At the request of Buyer or Seller and to the extent permitted by the ITA, the Parties shall make and file any election or amended election in prescribed form (or such other form as Buyer or Seller may reasonably request) and within the prescribed time limits pursuant to subsection 56.4(7) of the ITA, and any analogous provision of Canadian provincial or territorial Tax Laws.

Section 56.4 Election. The Purchaser and the Vendor intend that the conditions set out in Subsection 56.4(7) of the Income Tax Act (Canada) (the “Tax Act”) have been met such that Subsection 56.4(5) of the Tax Act applies to any "restrictive covenants" (as defined in Subsection 56.4(1) of the Tax Act) granted by any the Vendor pursuant to the Non-Competition Agreement (the "Non-Competition Covenants"). For greater certainty: (a) for the purposes of paragraph 56.4(7)(d) of the Tax Act, no proceeds will be attributable, allocable, received or receivable by the Vendor for granting the Non-Competition Covenants; (b) the Non-Competition Covenants are integral to this Agreement and have been granted to maintain or preserve the fair market value of the Subject Shares; and (c) the Purchaser would not purchase the Subject Shares without having the benefit of the Non-Competition Covenants. Notwithstanding the foregoing, nothing in this Section 2.4 will diminish, limit or derogate from the validity or enforceability of any of the Non-Competition Covenants and the Vendor is agree that they will not assert or claim that this Section 2.4 diminishes, limits or derogates from the validity or enforceability of such Non-Competition Covenants in any manner whatsoever. The Purchaser will, within five Business Days of a written request from the Vendor to do so, make jointly with the Vendor one or more elections pursuant to or in respect of Subsection 56.4(7) of the Tax Act in the required manner and using a form prescribed for such purposes (if applicable) and otherwise reasonably acceptable to their respective counsels, as will cause Subsection 56.4(5) of the Tax Act to apply to the Non-Competition Covenants granted by the Vendor. Such election will reflect that the Parties have allocated no consideration to the restrictive covenant. Provided that the Purchaser complies with this Section 2.4, Purchaser will have no Liability to the Vendor or otherwise with respect to any consequences arising pursuant to the Tax Act associated with any such election.

Section 56.4 Election. If requested by a party, each party agrees to make any available elections or amended elections in prescribed form (or such other form as is reasonably requested) and within the prescribed time limits pursuant to proposed section 56.4 of the Income Tax Act (Canada) as it reads as of the date of this Agreement or any amended or successor provision thereto, including any provision with retroactive application, and any analogous provision of any provincial or territorial tax statute.

Section 56.4 Election. If requested by either Party, the other Party agrees to make any available elections or amended elections in prescribed form (or such other form as is reasonably requested) and within the prescribed time limits pursuant to section 56.4 of the Tax Act and any analogous provision of any provincial or territorial tax statute.

Section 56.4 Election. The parties hereto acknowledge and agree that the non-competition and non-solicitation covenants in Section 7.20 are integral to this Agreement and are being granted and delivered to maintain or preserve the fair market value of the Acquired Assets, and that no proceeds or other amount received or receivable under this Agreement by the applicable Seller Party shall be for granting any such non-competition or non-solicitation covenant. At the request of the Buyer or a Buyer Designee, or the applicable Seller Party, and to the extent permitted by the Tax Act, the parties hereto shall make, and the applicable Seller Party shall file, any election or amended election in prescribed form (or such other form as requested by the Buyer, Buyer Designee or applicable Seller Party, as applicable) and within the prescribed time limits pursuant to Section 56.4(7) of the Tax Act, and any analogous provisions of provincial or territorial Tax legislation. Each Seller Party covenants and agrees that this Section 7.8(i)(ii) cannot and shall not be used or referred to in support of any challenge to the enforceability of any such covenants.