APPEALS AND CONDUCT OF CLAIMS. 4.1 Each of the Sellers shall be entitled, subject to the remaining provisions of this paragraph 4, to resist any Assessment for and on behalf and in the name of a Group Company which is or could relate to a Tax Liability for which the Sellers might be liable under this Schedule or for breach of any Tax Warranty or to resist any matter which could reduce a Relevant Amount as referred to in paragraph 7. 4.2 If a Group Company receives or the Buyer receives an Assessment which may give rise to a Tax Liability for which the Sellers might be liable under this Schedule or for breach of any Tax Warranty or which could result in a reduction of a Relevant Amount as referred to in paragraph 7: 4.2.1 the Buyer shall as soon as reasonably practicable give notice in writing of the Assessment (including, to the extent known, reasonably sufficient details of such Assessment, the due date for any payment, the time limits for any appeal and, so far as practicable, the amount of the claim under this Schedule or for breach of any Tax Warranty in respect thereof) to the Sellers and in any event within 15 Business Days of the Group Company or the Buyer becoming aware of such Assessment PROVIDED THAT if the time limit for appealing or otherwise disputing or resisting an Assessment is within 30 days from the date of such Assessment, the Buyer shall give such notice in writing of such Assessment to the Sellers within 10 Business Days of the Group Company or the Buyer becoming aware of such Assessment; and 4.2.2 subject to paragraphs 4.3 to 4.5 inclusive, the Buyer shall, and shall ensure that each Group Company shall, take any action the Sellers may reasonably request to avoid, dispute, resist or compromise the Assessment (an Assessment where action is so requested being hereafter referred to as a “Tax Dispute”). 4.3 The Sellers shall have the right (if they so wish) to control the conduct of a Tax Dispute, and the Sellers shall in any event be kept fully informed of any actual or proposed developments (including any meetings), and shall be provided with copies of all correspondence and documentation relating to such Tax Dispute and such other information, assistance and access to records and personnel as they reasonably request. 4.4 The Sellers shall reimburse to the Buyer its reasonable out-of-pocket costs and expenses (including reasonable fees and disbursements of outside legal counsel and other external advisers but other than management costs and expenses) properly incurred in connection with any action or proceedings taken at the request of the Sellers pursuant to paragraph 4.2.2 above. 4.5 Subject to paragraph 4.10, the Buyer shall procure that (i) to the extent that (a) the Sellers could be required to make a payment under this Schedule or any of the Tax Warranties in respect of any Tax Liability that is the subject of the Tax Dispute, or (b) a Relevant Amount as referred to in paragraph 7 could be reduced, the Tax Dispute is not settled or otherwise compromised without the prior written consent of the Sellers (such consent not to be unreasonably withheld or delayed) and (ii) each Group Company and any of its respective advisors shall, so far as it is reasonable to do so, not submit any document or give notice of any matter to a Tax Authority which could (a) give rise to or increase any claim under this Schedule or any of the Tax Warranties, or (b) reduce a Relevant Amount as referred to in paragraph 7 without first allowing the Sellers’ reasonable opportunity to review such document, and the Buyer shall, or will procure that the relevant Group Company shall, make such reasonable amendments to such document as the Sellers, on a timely basis, may request. 4.6 In the event that the Sellers elect to take control of the conduct of a Tax Dispute in accordance with paragraph 4.3 then: 4.6.1 the Sellers shall keep the Buyer reasonably informed of all relevant matters and shall promptly forward or procure to be forwarded to the Buyer copies of all relevant correspondence and other relevant information and documentation; 4.6.2 all communications written or otherwise relating to the Tax Dispute which are to be transmitted to a Tax Authority shall first be submitted to the Buyer to afford it a reasonable opportunity to comment thereon and the Sellers shall take account of the Buyer’s reasonable comments provided that such comments are provided by the Buyer to the Sellers on a timely basis; and 4.6.3 the Sellers shall make no settlement or compromise of the Tax Dispute which would result in a material increase in any future liability to Tax of the Buyer or any Buyer’s Group Undertaking without the prior approval of the Buyer, such approval not to be unreasonably withheld or delayed. 4.7 Neither the Buyer nor any Buyer’s Group Undertaking shall be obliged to take action, or cede control of the conduct of a Tax Dispute, pursuant to this paragraph 4 unless: 4.7.1 in a case where an Assessment relates to a Tax Liability for which the Sellers might be liable under this Schedule or for breach of any Tax Warranty , the Sellers shall provide written notice to the Buyer acknowledging that in the event that a Tax Liability or a liability for breach of any Tax Warranty were to arise as a result of such Assessment then, subject to the limitations set out in Schedule 5 to this Agreement, the Sellers would be liable for such Tax Liability or liability for breach of any of the Tax Warranties; 4.7.2 the Sellers are and will remain, in the reasonable determination of the Buyer, solvent and capable of fully satisfying their obligations under paragraph 4.7.1; and 4.7.3 the Sellers progress the conduct of the Tax Dispute within a reasonable time. 4.8 Neither the Buyer nor any Buyer’s Group Undertaking shall be obliged to take action pursuant to this paragraph 4 (i) which would be likely to be materially prejudicial to the relationship of the Buyer or the relevant Group Company with the relevant Tax Authority; or (ii) which involves contesting an Assessment beyond the first appellate body (excluding the Tax Authority which has made the Assessment) in the jurisdiction concerned unless leading counsel specialising in Tax (with at least 10 years’ call) or reasonable equivalent outside the United Kingdom appointed by the Sellers and the Buyer, or failing agreement on such appointment, appointed by the Chair (or equivalent) of the local Bar Association, opines that such a course of action having regard to the merits of the case, the size of the Tax Liability and any other relevant factors is reasonable PROVIDED THAT such course of action shall not for this purpose be reasonable unless such leading counsel opines that, on the merits, there is a reasonable basis for success. 4.9 In the event of a dispute between the Sellers and the Buyer as to whether any action pursuant to this paragraph 4 would be likely to be materially prejudicial to the relationship of the Buyer or the relevant Group Company with the relevant Tax Authority, such dispute shall be referred to leading counsel specialising in Tax (with at least 10 years’ call) or reasonable equivalent outside the United Kingdom appointed by the Sellers and the Buyer, or failing agreement on such appointment, appointed by the Chair (or equivalent) of the local Bar Association who shall determine whether such action would be likely to be so materially prejudicial. 4.10 If the Sellers do not request the Buyer to take any appropriate action under paragraph 4.2.2 within 30 days of notice being given to the Sellers under paragraph 4.2.1, the Buyer shall be free to settle the relevant Assessment but shall take reasonable steps to mitigate or minimise the amount of any Tax Liability arising in relation to such Assessment. 4.11 The Sellers’ rights under this paragraph 4 with respect to an Assessment and related Tax Claim shall terminate upon Buyer’s written acknowledgement to, and written agreement with, the Sellers that the Sellers shall have no liability with respect to such Assessment and Tax Claim, and that such Assessment shall not reduce any Relevant Amount under this Agreement.
Appears in 2 contracts
Samples: Agreement for the Sale and Purchase of the Entire Share Capital (Skype S.a r.l.), Agreement for the Sale and Purchase of the Entire Share Capital (Ebay Inc)
APPEALS AND CONDUCT OF CLAIMS. 4.1 Each of If, and only if, the Sellers shall be entitledCompany, subject to Cinemasonline Limited or the remaining provisions of this paragraph 4, to resist any Assessment for and on behalf and in the name of Buyer receives a Group Company which is or could relate Claim relating to a Tax Liability for which the Sellers might be liable under this Schedule or for breach of any Tax Warranty or to resist any matter which could reduce a Relevant Amount as referred to mentioned in paragraph 7.
4.2 If a Group Company receives or the Buyer receives an Assessment which may give rise to a Tax Liability for which the Sellers might be liable under this Schedule or for breach of any Tax Warranty or which could result in a reduction of a Relevant Amount as referred to in paragraph 7Clause 2.1:
4.2.1 4.1.1 the Buyer shall as soon as reasonably practicable give notice in writing of the Assessment (including, to the extent known, reasonably sufficient details of such Assessment, the due date for any payment, the time limits for any appeal and, so far as practicable, the amount of the claim under this Schedule or for breach of any Tax Warranty in respect thereof) to the Sellers and in any event within 15 not less than fifteen Business Days prior to the expiry of any time for appeal) give notice or procure that notice is given of the Group Company or the Buyer becoming aware of such Assessment PROVIDED THAT if the time limit for appealing or otherwise disputing or resisting an Assessment is within 30 days from the date of such Assessment, the Buyer shall give such notice in writing of such Assessment Claim to the Sellers within 10 Business Days Warrantors setting out reasonable particulars of the Group Company or Claim but notice is not a condition precedent to the Buyer becoming aware of such AssessmentWarrantors’ liability under this Tax Covenant; and
4.2.2 4.1.2 subject to paragraphs Clauses 4.3 to 4.5 inclusiveand 4.4, the Buyer shall, and shall ensure that each Group the Company shalland Cinemasonline Limited will, take any action the Sellers Warrantors may reasonably request to avoid, dispute, resist or compromise the Assessment Claim if the Warrantors have first agreed (an Assessment where to the Buyer’s reasonable satisfaction) to indemnify the Buyer, the Company and Cinemasonline Limited against the Tax, and any additional Tax and costs which the Buyer, the Company or Cinemasonline Limited may reasonably and properly incur in connection with the taking of such action.
4.2 The Warrantors’ rights under Clause 4.1.2 cease if the Warrantors (a) fail to request the Buyer or the Company to take any action under paragraph 4.1.2 within 15 Business Days of the date of notice of the Claim being given by the Buyer or the Company or (b) the Warrantors fail to indemnify the Buyer or the Company to the Buyer’s reasonable satisfaction within a period of time (commencing with the date of the notice given to the Warrantors) that is so requested being hereafter referred reasonable, having regard to the nature of the Claim and the existence of any time limit in relation to avoiding, disputing, defending, resisting, appealing or compromising such Claim, and which period shall not in any event exceed a period of 15 Business Days or (c) if any of the Warrantors:
4.2.1 takes action, or other steps are taken or legal proceedings are started for his bankruptcy; or
4.2.2 is unable to pay his debts as they fall due, starts negotiations with a “Tax Dispute”)creditor with a view to the general readjustment or rescheduling of his indebtedness or makes a general assignment for the benefit of, or a composition with, his creditors.
4.3 The Sellers Buyer is not obliged to take, or cause to be taken, any action pursuant to Clause 4.1.2 which involves actually fighting a dispute before the first appellate body (excluding the Taxation Authority which has made the Claim, the Special Commissioners, the General Commissioners and the VAT and Duties Tribunal) in the jurisdiction concerning unless the Warrantors shall have produced to the right Buyer (if the Tax is a United Kingdom tax or arises within the United Kingdom) the opinion of tax counsel of not less than 7 years’ call, or (otherwise) the opinion of an expert of similar standing (and in each case appointed by agreement between the Buyer and the Warrantor or (if they so wishdo not agree) upon the application by either party to control the conduct President for the time being of a Tax Disputethe Law Society, and the Sellers whose determination shall in any event be kept fully informed of any actual or proposed developments (including any meetingsfinal), and shall be provided with copies of all correspondence and documentation relating to that such Tax Dispute and such other information, assistance and access to records and personnel as they reasonably requestaction is reasonable.
4.4 The Sellers Clause 4.1.2 does not apply, or shall reimburse cease to apply, if the Buyer its Warrantors or, (if before Completion), the Company or Cinemasonline Limited:
4.4.1 appear, in the reasonable out-of-pocket costs and expenses (including reasonable fees and disbursements of outside legal counsel and other external advisers but other than management costs and expenses) properly incurred in connection with any action or proceedings taken at the request opinion of the Sellers pursuant Company’s auditors to paragraph 4.2.2 abovehave sought to evade the Tax Liability in question or
4.4.2 appear, in the reasonable opinion of the Company’s auditors, to have acted fraudulently, or fraudulently omitted to act, in relation to that Tax Liability, whether before or after the making of any Claim.
4.5 Subject The action which the Warrantors may request under Clause 4.1.2 above shall include the Company or Cinemasonline Limited applying to paragraph 4.10postpone (so far as legally possible) the payment of any Tax.
4.6 Following receipt of any instructions as referred to in Clause 4.1.2 above, the Buyer shall procure that (i) to the extent that (a) the Sellers could be required to make a payment under this Schedule or any of the Tax Warranties in respect of any Tax Liability that is the subject of the Tax Dispute, or (b) a Relevant Amount as referred to in paragraph 7 could be reduced, the Tax Dispute Claim is not settled or otherwise compromised without the Warrantors’ prior written consent of the Sellers (consent, such consent not to be unreasonably withheld or delayed) and (ii) each Group Company and any of its respective advisors shall, so far as it is reasonable to do so, not submit any document or give notice of any matter to a Tax Authority which could (a) give rise to or increase any claim under this Schedule or any of the Tax Warranties, or (b) reduce a Relevant Amount as referred to in paragraph 7 without first allowing the Sellers’ reasonable opportunity to review such document, and the Buyer shall, or will procure that the relevant Group Company shall, make such reasonable amendments to such document as the Sellers, on a timely basis, may request.
4.6 In the event that the Sellers elect to take control of the conduct of a Tax Dispute in accordance with paragraph 4.3 then:
4.6.1 the Sellers shall keep the Buyer reasonably informed of all relevant matters and shall promptly forward or procure to be forwarded to the Buyer copies of all relevant correspondence and other relevant information and documentation;
4.6.2 all communications written or otherwise relating to the Tax Dispute which are to be transmitted to a Tax Authority shall first be submitted to the Buyer to afford it a reasonable opportunity to comment thereon and the Sellers shall take account of the Buyer’s reasonable comments provided that such comments are provided by the Buyer to the Sellers on a timely basis; and
4.6.3 the Sellers shall make no settlement or compromise of the Tax Dispute which would result in a material increase in any future liability to Tax of the Buyer or any Buyer’s Group Undertaking without the prior approval of the Buyer, such approval not to be unreasonably withheld or delayed.
4.7 Neither the Buyer nor any Buyer’s Group Undertaking shall be obliged to take action, or cede control of the conduct of a Tax Dispute, pursuant to this paragraph 4 unless:
4.7.1 in a case where an Assessment relates to a Tax Liability for which the Sellers might be liable under this Schedule or for breach of any Tax Warranty , the Sellers shall provide written notice Subject to the Buyer acknowledging that complying with its obligations under and the provisions of this Clause 4, any sum bona fide paid by the Company or Cinemasonline Limited in discharge or settlement of the event that a Tax Liability relevant liability or a purported liability, or any figures bona fide agreed or not contested by the Company or Cinemasonline Limited which determine what any relevant liability or purported liability is or would have been, shall be conclusively presumed to constitute the relevant liability for breach the purposes of any Tax Warranty were to arise as a result of such Assessment then, subject to the limitations set out in Schedule 5 to this Agreement, the Sellers would be liable for such Tax Liability or liability for breach of any of the Tax Warranties;
4.7.2 the Sellers are and will remain, in the reasonable determination of the Buyer, solvent and capable of fully satisfying their obligations under paragraph 4.7.1; and
4.7.3 the Sellers progress the conduct of the Tax Dispute within a reasonable timeClause 2.
4.8 Neither If, on or before the Buyer nor seventh anniversary of Completion, the auditors for the time being of the Company or Cinemasonline Limited certify (at the request and expense of the Warrantors) that any Buyer’s Group Undertaking shall be obliged to take action pursuant to this paragraph 4 (i) which would be likely provision for Tax in the Accounts has proved to be materially prejudicial to the relationship of the Buyer or the relevant Group Company with the relevant Tax Authority; or (ii) which involves contesting an Assessment beyond the first appellate body (excluding the Tax Authority which has made the Assessment) in the jurisdiction concerned unless leading counsel specialising in Tax (with at least 10 years’ call) or reasonable equivalent outside the United Kingdom appointed by the Sellers and the Buyer, or failing agreement on such appointment, appointed by the Chair (or equivalent) of the local Bar Association, opines that such a course of action having regard to the merits of the case, the size of the Tax Liability and any other relevant factors is reasonable PROVIDED THAT such course of action shall not for this purpose be reasonable unless such leading counsel opines that, on the merits, there is a reasonable basis for success.Overprovision:
4.9 In the event of a dispute between the Sellers and the Buyer as to whether any action pursuant to this paragraph 4 would be likely to be materially prejudicial to the relationship of the Buyer or the relevant Group Company with the relevant Tax Authority, such dispute shall be referred to leading counsel specialising in Tax (with at least 10 years’ call) or reasonable equivalent outside the United Kingdom appointed by the Sellers and the Buyer, or failing agreement on such appointment, appointed by the Chair (or equivalent) of the local Bar Association who shall determine whether such action would be likely to be so materially prejudicial.
4.10 If the Sellers do not request the Buyer to take any appropriate action under paragraph 4.2.2 within 30 days of notice being given to the Sellers under paragraph 4.2.1, the Buyer shall be free to settle the relevant Assessment but shall take reasonable steps to mitigate or minimise 4.8.1 the amount of any Tax Liability arising in relation to such Assessment.
4.11 The Sellers’ rights Overprovision will first be set-off against any payment then due from the Warrantors under this paragraph 4 with respect Tax Covenant; and to the extent that there is an Assessment excess, a refund will be made to the Warrantors of any previous payment or payments made by the Warrantors under this Tax Covenant (and related not previous refunded under this Tax Claim shall terminate upon Buyer’s written acknowledgement to, and written agreement withCovenant) up to the amount of such excess; and
4.8.2 to the extent that such excess as referred to in 4.7.1 above is not exhausted, the Sellers remainder of that excess will be carried forward and set-off against any future payment or payments which become due from the Sellers shall have no liability with respect to such Assessment and Tax Claim, and that such Assessment shall not reduce any Relevant Amount Warrantors under this AgreementTax Covenant.
Appears in 1 contract
APPEALS AND CONDUCT OF CLAIMS. 4.1 Each 5.1 If the Buyer or the Company (or any of the Sellers shall be entitledtheir officers, subject to the remaining provisions of this paragraph 4employees, to resist any Assessment for and on behalf and in the name servants or agents) becomes aware of a Group Company which is or could relate to a Tax Liability for which the Sellers might be liable under this Schedule or for breach of any Tax Warranty or to resist any matter which could reduce a Relevant Amount as referred to in paragraph 7.
4.2 If a Group Company receives or Claim, the Buyer receives an Assessment which may give rise to a Tax Liability for which shall or shall procure that the Sellers might be liable under this Schedule or for breach of any Tax Warranty or which could result in a reduction of a Relevant Amount as referred to in paragraph 7:
4.2.1 the Buyer Company shall as soon as reasonably practicable give written notice in writing of the Assessment (including, Claim to the extent known, reasonably sufficient details of such Assessment, the due date for any payment, the time limits for any appeal Seller and, so far as practicable, the amount of the claim under this Schedule or for breach of any Tax Warranty in respect thereof) to the Sellers and in any event within 15 Business Days of the Group Company event, where a statutory or the Buyer becoming aware of such Assessment PROVIDED THAT if the other time limit is applicable for responding to or appealing against the Claim or otherwise disputing to any assessment, notice, demand or resisting an Assessment is within 30 days from other document issued (or deemed to be issued) or action taken which constitutes the date of such AssessmentClaim, the Buyer shall give such written notice in writing of the Claim to the Seller at least 14 days prior to the expiry of such Assessment time limit. Such written notice shall include to the Sellers within 10 Business Days extent it is reasonable to do so an estimate of the Group Company Seller's liability under this schedule in respect of such Claim and such details of the Claim as are then available to the Buyer or the Buyer becoming aware of such Assessment; andCompany.
4.2.2 subject to paragraphs 4.3 to 4.5 inclusive, the 5.2 The Buyer shall, and shall ensure procure that each Group the Company shall, take any such action the Sellers may reasonably request to appeal, protest against, mitigate, reduce, avoid, dispute, resist or compromise the Assessment (an Assessment where action is so requested being hereafter referred to Claim and make available such documents, information and assistance in connection with the Claim as a “Tax Dispute”).
4.3 The Sellers the Seller may by written notice request provided the Seller shall have indemnify the right (if they so wish) to control the conduct of a Tax Dispute, Buyer and the Sellers shall in any event be kept fully informed of any actual or proposed developments (including any meetings), and shall be provided with copies of Company against all correspondence and documentation relating to such Tax Dispute and such other information, assistance and access to records and personnel as they reasonably request.
4.4 The Sellers shall reimburse to the Buyer its reasonable out-of-pocket costs and expenses (including reasonable fees which the Buyer or the Company incurs as a result of taking such action or providing such information and disbursements of outside legal counsel and other external advisers but other than management costs and expenses) properly incurred in connection with assistance.
5.3 The Seller may elect to have any action or proceedings taken at the request of the Sellers pursuant to paragraph 4.2.2 above.
4.5 Subject to paragraph 4.10, the Buyer shall procure that (i) to the extent that (a) the Sellers could be required to make a payment under this Schedule or any of the Tax Warranties in respect of any Tax Liability that is the subject of the Tax Dispute, or (b) a Relevant Amount as referred to in paragraph 7 could 5.2 conducted by professional advisers acting in the name of the Company but reporting to the Seller in which event the provisions of paragraph 5.4 shall apply. Such appointment shall be reduced, the Tax Dispute is not settled or otherwise compromised without subject to the prior written consent of the Sellers (such consent not to be unreasonably withheld or delayed) and (ii) each Group Company and any of its respective advisors shall, so far as it is reasonable to do so, not submit any document or give notice of any matter to a Tax Authority which could (a) give rise to or increase any claim under this Schedule or any of the Tax Warranties, or (b) reduce a Relevant Amount as referred to in paragraph 7 without first allowing the Sellers’ reasonable opportunity to review such document, and the Buyer shall, or will procure that the relevant Group Company shall, make such reasonable amendments to such document as the Sellers, on a timely basis, may request.
4.6 In the event that the Sellers elect to take control of the conduct of a Tax Dispute in accordance with paragraph 4.3 then:
4.6.1 the Sellers shall keep the Buyer reasonably informed of all relevant matters and shall promptly forward or procure to be forwarded to the Buyer copies of all relevant correspondence and other relevant information and documentation;
4.6.2 all communications written or otherwise relating to the Tax Dispute which are to be transmitted to a Tax Authority shall first be submitted to the Buyer to afford it a reasonable opportunity to comment thereon and the Sellers shall take account of the Buyer’s reasonable comments provided that such comments are provided by the Buyer to the Sellers on a timely basis; and
4.6.3 the Sellers shall make no settlement or compromise of the Tax Dispute which would result in a material increase in any future liability to Tax of the Buyer or any Buyer’s Group Undertaking without the prior approval of the Buyer, such approval not to be unreasonably withheld or delayed.
4.7 Neither the Buyer nor any Buyer’s Group Undertaking shall be obliged to take action, or cede control of the conduct of a Tax Dispute, pursuant to this paragraph 4 unless:
4.7.1 in a case where an Assessment relates to a Tax Liability for which the Sellers might be liable under this Schedule or for breach of any Tax Warranty , the Sellers shall provide written notice 5.4 The Seller hereby undertakes to the Buyer acknowledging that in to
(a) keep the event that a Tax Liability or a liability for breach Buyer informed of any Tax Warranty were to arise as a result of such Assessment then, subject all matters relating to the limitations set out in Schedule 5 action and deliver to this Agreement, the Sellers would be liable for such Tax Liability or liability for breach Buyer copies of any all material correspondence relating to the action;
(b) obtain the prior written approval of the Tax Warranties;
4.7.2 Buyer (not to be unreasonably withheld or delayed) to the Sellers are content and will remain, in sending of written communications and to the reasonable determination content of material oral communications relating to the Buyer, solvent and capable of fully satisfying their obligations under paragraph 4.7.1action to a Taxation Authority; and
4.7.3 (c) obtain the Sellers progress prior written approval of the Buyer (not to be unreasonably withheld or delayed) to:
(i) the settlement or compromise of the Claim which is the subject of the action; and
(ii) the agreement of any matter in the conduct of the Tax Dispute within a reasonable time.
4.8 Neither the Buyer nor any Buyer’s Group Undertaking shall be obliged to take action pursuant to this paragraph 4 (i) which would be is likely to be materially prejudicial to the relationship of the Buyer or the relevant Group Company with the relevant Tax Authority; or (ii) which involves contesting an Assessment beyond the first appellate body (excluding the Tax Authority which has made the Assessment) in the jurisdiction concerned unless leading counsel specialising in Tax (with at least 10 years’ call) or reasonable equivalent outside the United Kingdom appointed by the Sellers and the Buyer, or failing agreement on such appointment, appointed by the Chair (or equivalent) of the local Bar Association, opines that such a course of action having regard to the merits of the case, the size of the Tax Liability and any other relevant factors is reasonable PROVIDED THAT such course of action shall not for this purpose be reasonable unless such leading counsel opines that, on the merits, there is a reasonable basis for success.
4.9 In the event of a dispute between the Sellers and the Buyer as to whether any action pursuant to this paragraph 4 would be likely to be materially prejudicial to the relationship of the Buyer or the relevant Group Company with the relevant Tax Authority, such dispute shall be referred to leading counsel specialising in Tax (with at least 10 years’ call) or reasonable equivalent outside the United Kingdom appointed by the Sellers and the Buyer, or failing agreement on such appointment, appointed by the Chair (or equivalent) of the local Bar Association who shall determine whether such action would be likely to be so materially prejudicial.
4.10 If the Sellers do not request the Buyer to take any appropriate action under paragraph 4.2.2 within 30 days of notice being given to the Sellers under paragraph 4.2.1, the Buyer shall be free to settle the relevant Assessment but shall take reasonable steps to mitigate or minimise affect the amount of any Tax Liability arising in relation to such Assessmentthe Claim.
4.11 The Sellers’ rights under this paragraph 4 with respect to an Assessment and related Tax Claim shall terminate upon Buyer’s written acknowledgement to, and written agreement with, the Sellers that the Sellers shall have no liability with respect to such Assessment and Tax Claim, and that such Assessment shall not reduce any Relevant Amount under this Agreement.
Appears in 1 contract
Samples: Agreement for the Sale and Purchase of Shares (Independent Energy Holdings PLC)
APPEALS AND CONDUCT OF CLAIMS. 4.1 Each 6.1 If the Buyer or the Company (or any of the Sellers shall be entitledtheir officers, subject to the remaining provisions of this paragraph 4, to resist any Assessment for and on behalf and in the name employees or agents) becomes aware of a Group Company which is or could relate to a Tax Liability for which the Sellers might be liable under this Schedule or for breach of any Tax Warranty or to resist any matter Claim which could reduce a Relevant Amount as referred to in paragraph 7.
4.2 If a Group Company receives or the Buyer receives an Assessment which may give rise to a liability of the Seller under the Tax Liability for which Covenant or in respect of the Sellers might be liable under this Schedule or for breach of any Tax Warranty or which could result in a reduction of a Relevant Amount as referred to in paragraph 7:
4.2.1 Warranties, the Buyer shall or shall procure that the Company shall as soon as reasonably practicable give written notice in writing of the Assessment (including, Claim to the extent known, reasonably sufficient details of such Assessment, the due date for any payment, the time limits for any appeal Seller and, so far as practicable, the amount of the claim under this Schedule or for breach of any Tax Warranty in respect thereof) to the Sellers and in any event within 15 Business Days of the Group Company event, where a statutory or the Buyer becoming aware of such Assessment PROVIDED THAT if the other time limit is applicable for responding to or appealing against the Claim or otherwise disputing to any assessment, notice, demand or resisting an Assessment is within 30 days from other document issued (or deemed to be issued) or action taken which constitutes the date of such Assessment, the Buyer shall give such notice in writing of such Assessment to the Sellers within 10 Business Days of the Group Company or the Buyer becoming aware of such Assessment; and
4.2.2 subject to paragraphs 4.3 to 4.5 inclusiveClaim, the Buyer shall, where reasonably practicable, give written notice of the Claim to the Seller at least 21 days prior to the expiry of such time limit. Such written notice shall, where reasonably practicable, include an estimate of the liability of the Seller under the Tax Covenant or in respect of the Tax Warranties in respect of such Claim, the basis of calculation of that estimate and such details of the Claim as are then available to the Buyer or the Company.
6.2 The Buyer shall, and shall ensure procure that each Group the Company shall, take any such action the Sellers may reasonably request to appeal, compromise, protest against, mitigate, reduce, avoid, dispute, resist or compromise the Assessment (an Assessment where action is so requested being hereafter referred to Claim and make available such documents, information and assistance in connection with the Claim as a “Tax Dispute”).
4.3 The Sellers the Seller may by written notice reasonably request provided the Seller shall have indemnify the right (if they so wish) to control the conduct of a Tax Dispute, Buyer and the Sellers shall in any event be kept fully informed of any actual or proposed developments (including any meetings), and shall be provided with copies of Company against all correspondence and documentation relating to such Tax Dispute and such other information, assistance and access to records and personnel as they reasonably request.
4.4 The Sellers shall reimburse to the Buyer its reasonable out-of-pocket costs and expenses (including reasonable fees which the Buyer or the Company properly incurs as a result of taking such action or providing such information and disbursements of outside legal counsel and other external advisers but other than management costs and expenses) properly incurred in connection with assistance.
6.3 The Seller may, at the Seller’s expense, elect to have any action or proceedings taken at the request of the Sellers pursuant to paragraph 4.2.2 above.
4.5 Subject to paragraph 4.10, the Buyer shall procure that (i) to the extent that (a) the Sellers could be required to make a payment under this Schedule or any of the Tax Warranties in respect of any Tax Liability that is the subject of the Tax Dispute, or (b) a Relevant Amount as referred to in paragraph 7 could be reduced, 6.2 conducted by professional advisers acting in the Tax Dispute is not settled or otherwise compromised without name of the Company but reporting to the Seller in which event the provisions of paragraph 6.4 shall apply.
6.4 The Seller hereby undertakes to the Buyer to:
(a) keep the Buyer informed of all matters relating to the action and deliver to the Buyer copies of all material correspondence relating to the action;
(b) obtain the prior written consent approval of the Sellers Buyer (such consent not to be unreasonably withheld or delayed) and (ii) each Group Company and any of its respective advisors shall, so far as it is reasonable to do so, not submit any document or give notice of any matter to a Tax Authority which could (a) give rise to or increase any claim under this Schedule or any of the Tax Warranties, or (b) reduce a Relevant Amount as referred to in paragraph 7 without first allowing the Sellers’ reasonable opportunity to review such document, and the Buyer shall, or will procure that the relevant Group Company shall, make such reasonable amendments to such document as the Sellers, on a timely basis, may request.
4.6 In the event that the Sellers elect to take control of the conduct of a Tax Dispute in accordance with paragraph 4.3 then:
4.6.1 the Sellers shall keep the Buyer reasonably informed of all relevant matters and shall promptly forward or procure to be forwarded to the Buyer copies content and sending of all relevant correspondence and other relevant information and documentation;
4.6.2 all written communications written or otherwise relating to the Tax Dispute which are to be transmitted action to a Tax Authority shall first be submitted to the Buyer to afford it a reasonable opportunity to comment thereon and the Sellers shall take account of the Buyer’s reasonable comments provided that such comments are provided by the Buyer to the Sellers on a timely basisTaxation Authority; and
4.6.3 (c) obtain the Sellers shall make no settlement or compromise of the Tax Dispute which would result in a material increase in any future liability to Tax prior written approval of the Buyer or any Buyer’s Group Undertaking without the prior approval of the Buyer, such approval (not to be unreasonably withheld or delayed.) to:
4.7 Neither (i) the Buyer nor any Buyer’s Group Undertaking shall be obliged to take action, settlement or cede control compromise of the conduct of a Tax Dispute, pursuant to this paragraph 4 unless:
4.7.1 in a case where an Assessment relates to a Tax Liability for Claim which is the Sellers might be liable under this Schedule or for breach of any Tax Warranty , the Sellers shall provide written notice to the Buyer acknowledging that in the event that a Tax Liability or a liability for breach of any Tax Warranty were to arise as a result of such Assessment then, subject to the limitations set out in Schedule 5 to this Agreement, the Sellers would be liable for such Tax Liability or liability for breach of any of the Tax Warranties;
4.7.2 the Sellers are and will remain, in the reasonable determination of the Buyer, solvent and capable of fully satisfying their obligations under paragraph 4.7.1action; and
4.7.3 (ii) the Sellers progress agreement of any matter in the conduct of the Tax Dispute within a reasonable timeaction which is likely to affect the amount of the Claim.
4.8 Neither the 6.5 The Buyer nor any Buyer’s Group Undertaking shall not be obliged to procure that the Company take any action pursuant to under this paragraph 4 6 (i) which would be likely to be materially prejudicial to the relationship of the Buyer or the relevant Group Company with the relevant Tax Authority; or (iiincluding paragraph 6.3) which involves contesting an Assessment any matter beyond the first appellate body (excluding the Tax Taxation Authority which has or shall have made the AssessmentClaim in question, the statutory pre-tribunal review, the Tax Chamber of the First-tier Tribunal and the Finance and Tax Chamber of the Upper Tribunal) unless the Seller furnishes the Buyer with the written opinion of Counsel of at least five years call who is experienced in the jurisdiction concerned unless leading counsel specialising subject matter of the Claim to the effect that an appeal in Tax (with respect of the matter in question has a reasonable prospect of being won.
6.6 If at least 10 years’ call) or reasonable equivalent outside any time the United Kingdom appointed by Seller has not exercised the Sellers and election referred to in paragraph 6.3 but requests that the BuyerBuyer take, or failing agreement on such appointmentprocure that the Company take, appointed by the Chair (or equivalent) of the local Bar Association, opines that such a course of any action having regard referred to the merits of the casein paragraph 6.2, the size provisions of the Tax Liability paragraph 6.4 shall apply as if references to “Seller” are references to “Buyer” and any other relevant factors is reasonable PROVIDED THAT such course of action shall not for this purpose be reasonable unless such leading counsel opines that, on the merits, there is a reasonable basis for successreference to “Buyer” are references to “Seller”.
4.9 In the event of a dispute between the Sellers and the Buyer as to whether any action pursuant to this paragraph 4 would be likely to be materially prejudicial to the relationship of the Buyer or the relevant Group Company with the relevant Tax Authority, such dispute shall be referred to leading counsel specialising in Tax (with at least 10 years’ call) or reasonable equivalent outside the United Kingdom appointed by the Sellers and the Buyer, or failing agreement on such appointment, appointed by the Chair (or equivalent) of the local Bar Association who shall determine whether such action would be likely to be so materially prejudicial.
4.10 If the Sellers do not request the Buyer to take any appropriate action under paragraph 4.2.2 within 30 days of notice being given to the Sellers under paragraph 4.2.1, the Buyer shall be free to settle the relevant Assessment but shall take reasonable steps to mitigate or minimise the amount of any Tax Liability arising in relation to such Assessment.
4.11 The Sellers’ rights under this paragraph 4 with respect to an Assessment and related Tax Claim shall terminate upon Buyer’s written acknowledgement to, and written agreement with, the Sellers that the Sellers shall have no liability with respect to such Assessment and Tax Claim, and that such Assessment shall not reduce any Relevant Amount under this Agreement.
Appears in 1 contract
Samples: Sale and Purchase Agreement (CompuCredit Holdings Corp)
APPEALS AND CONDUCT OF CLAIMS. 4.1 Each 6.1 If the Purchaser or the Company after Completion shall become aware of any Claim the Purchaser shall, or shall procure that the Company shall, give written notice of the Sellers shall be entitled, subject Claim to the remaining provisions of this paragraph 4, to resist any Assessment for and on behalf and in the name of a Group Company which is or could relate to a Tax Liability for which the Sellers might be liable under this Schedule or for breach of any Tax Warranty or to resist any matter which could reduce a Relevant Amount as referred to in paragraph 7.
4.2 If a Group Company receives or the Buyer receives an Assessment which may give rise to a Tax Liability for which the Sellers might be liable under this Schedule or for breach of any Tax Warranty or which could result in a reduction of a Relevant Amount as referred to in paragraph 7:
4.2.1 the Buyer shall Vendors as soon as is reasonably practicable give notice in writing of the Assessment (including, to the extent known, reasonably sufficient details of such Assessment, the due date for any payment, the time limits for any appeal and, so far as practicable, the amount of the claim under this Schedule or for breach of any Tax Warranty in respect thereof) to the Sellers and in any event within 15 Business Days at least 14 days prior to the expiry of the Group Company or the Buyer becoming aware of such Assessment PROVIDED THAT if the any time limit for appealing appeal or otherwise disputing or resisting response to any such Claim. Such written notice shall include an Assessment is within 30 days from estimate of the date Vendors' liability under this schedule in respect of such AssessmentClaim, the Buyer shall give basis of calculation of that estimate and such notice in writing details of such Assessment the Claim as are then available to the Sellers within 10 Business Days of the Group Company Purchaser or the Buyer becoming aware of such Assessment; andCompany.
4.2.2 subject to paragraphs 4.3 to 4.5 inclusive, the Buyer 6.2 The Purchaser shall, and shall ensure procure that each Group the Company shall, take any such action the Sellers may reasonably request to appeal, protest against, mitigate, reduce, avoid, dispute, resist or compromise the Assessment (an Assessment where action is so requested being hereafter referred to Claim and make available such documents, information and assistance in connection with the Claim as a “Tax Dispute”).
4.3 The Sellers the Vendors may by written notice reasonably request provided the Vendors shall have indemnify the right (if they so wish) to control the conduct of a Tax Dispute, Purchaser and the Sellers shall in any event be kept fully informed of any actual or proposed developments (including any meetings), and shall be provided with copies of Company against all correspondence and documentation relating to such Tax Dispute and such other information, assistance and access to records and personnel as they reasonably request.
4.4 The Sellers shall reimburse to the Buyer its reasonable out-of-pocket costs and expenses (including reasonable fees which the Purchaser or the Company incurs as a result of taking such action or providing such information and disbursements of outside legal counsel and other external advisers but other than management costs and expenses) properly incurred in connection with assistance.
6.3 The Vendors may elect to have any action or proceedings taken at the request of the Sellers pursuant to paragraph 4.2.2 above.
4.5 Subject to paragraph 4.10, the Buyer shall procure that (i) to the extent that (a) the Sellers could be required to make a payment under this Schedule or any of the Tax Warranties in respect of any Tax Liability that is the subject of the Tax Dispute, or (b) a Relevant Amount as referred to in paragraph 7 could be reduced, 6.2 conducted by professional advisers acting in the Tax Dispute is not settled or otherwise compromised without name of the Company but reporting to the Vendors in which event the provisions of paragraph 6.4 shall apply.
6.4 The Vendors hereby undertake to the Purchaser to:
6.4.1 keep the Purchaser informed of all matters relating to the action and deliver to the Purchaser copies of all material correspondence relating to the action;
6.4.2 obtain the prior written consent approval of the Sellers Purchaser (such consent not to be unreasonably withheld or delayed) and (ii) each Group Company and any of its respective advisors shall, so far as it is reasonable to do so, not submit any document or give notice of any matter to a Tax Authority which could (a) give rise to or increase any claim under this Schedule or any of the Tax Warranties, or (b) reduce a Relevant Amount as referred to in paragraph 7 without first allowing the Sellers’ reasonable opportunity to review such document, and the Buyer shall, or will procure that the relevant Group Company shall, make such reasonable amendments to such document as the Sellers, on a timely basis, may request.
4.6 In the event that the Sellers elect to take control of the conduct of a Tax Dispute in accordance with paragraph 4.3 then:
4.6.1 the Sellers shall keep the Buyer reasonably informed of all relevant matters and shall promptly forward or procure to be forwarded to the Buyer copies content and sending of all relevant correspondence and other relevant information and documentation;
4.6.2 all written communications written or otherwise relating to the Tax Dispute which are to be transmitted action to a Tax Authority shall first be submitted to the Buyer to afford it a reasonable opportunity to comment thereon and the Sellers shall take account of the Buyer’s reasonable comments provided that such comments are provided by the Buyer to the Sellers on a timely basisTaxation Authority; and
4.6.3 the Sellers shall make no settlement or compromise of the Tax Dispute which would result in a material increase in any future liability to Tax of the Buyer or any Buyer’s Group Undertaking without 6.4.3 obtain the prior written approval of the Buyer, such approval Purchaser (not to be unreasonably withheld or delayed.) to:
4.7 Neither (a) the Buyer nor any Buyer’s Group Undertaking shall be obliged to take action, settlement or cede control compromise of the conduct of a Tax Dispute, pursuant to this paragraph 4 unless:
4.7.1 in a case where an Assessment relates to a Tax Liability for Claim which is the Sellers might be liable under this Schedule or for breach of any Tax Warranty , the Sellers shall provide written notice to the Buyer acknowledging that in the event that a Tax Liability or a liability for breach of any Tax Warranty were to arise as a result of such Assessment then, subject to the limitations set out in Schedule 5 to this Agreement, the Sellers would be liable for such Tax Liability or liability for breach of any of the Tax Warranties;
4.7.2 the Sellers are and will remain, in the reasonable determination of the Buyer, solvent and capable of fully satisfying their obligations under paragraph 4.7.1action; and
4.7.3 (b) the Sellers progress agreement of any matter in the conduct of the Tax Dispute within a reasonable timeaction which is likely to affect the amount of the Claim.
4.8 Neither the Buyer nor any Buyer’s Group Undertaking 6.5 The Purchaser shall not be obliged to procure that the Company take any action pursuant to under this paragraph 4 (i) which would be likely to be materially prejudicial to the relationship of the Buyer or the relevant Group Company with the relevant Tax Authority; or (ii) which involves contesting an Assessment any matter beyond the first appellate body (excluding the Tax Taxation Authority which has or shall have made the AssessmentClaim in question and the General and Special Commissioners) unless the Vendors furnish the Purchaser with the written opinion of Counsel of at least five years call who is experienced in the jurisdiction concerned unless leading counsel specialising subject matter of the Claim to the effect that an appeal in Tax (with respect of the matter in question has a reasonable prospect of being won.
6.6 If at least 10 years’ call) or reasonable equivalent outside any time the United Kingdom appointed by Vendors have not exercised the Sellers and election referred to in paragraph 6.3 but request that the BuyerPurchaser take, or failing agreement on such appointmentprocure that the Company take, appointed by the Chair (or equivalent) of the local Bar Association, opines that such a course of any action having regard referred to the merits of the casein paragraph 6.2, the size provisions of paragraph 6.4 shall apply as if references to "the Tax Liability Vendors" are references to "the Purchaser" and any other relevant factors is reasonable PROVIDED THAT such course of action shall not for this purpose be reasonable unless such leading counsel opines that, on reference to "the merits, there is a reasonable basis for successPurchaser" are references to "the Vendors".
4.9 In the event of a dispute between the Sellers and the Buyer as to whether any action pursuant to this paragraph 4 would be likely to be materially prejudicial to the relationship of the Buyer or the relevant Group Company with the relevant Tax Authority, such dispute shall be referred to leading counsel specialising in Tax (with at least 10 years’ call) or reasonable equivalent outside the United Kingdom appointed by the Sellers and the Buyer, or failing agreement on such appointment, appointed by the Chair (or equivalent) of the local Bar Association who shall determine whether such action would be likely to be so materially prejudicial.
4.10 If the Sellers do not request the Buyer to take any appropriate action under paragraph 4.2.2 within 30 days of notice being given to the Sellers under paragraph 4.2.1, the Buyer shall be free to settle the relevant Assessment but shall take reasonable steps to mitigate or minimise the amount of any Tax Liability arising in relation to such Assessment.
4.11 The Sellers’ rights under this paragraph 4 with respect to an Assessment and related Tax Claim shall terminate upon Buyer’s written acknowledgement to, and written agreement with, the Sellers that the Sellers shall have no liability with respect to such Assessment and Tax Claim, and that such Assessment shall not reduce any Relevant Amount under this Agreement.
Appears in 1 contract
Samples: Put and Call Option Agreement (RSL Communications LTD)
APPEALS AND CONDUCT OF CLAIMS. 4.1 Each 43.1 If the Buyer or the Company (or any of the Sellers shall be entitledtheir officers, subject to the remaining provisions of this paragraph 4, to resist any Assessment for and on behalf and in the name employees or agents) becomes aware of a Group Company which is or could relate to a Tax Liability for which the Sellers might be liable under this Schedule or for breach of any Tax Warranty or to resist any matter Claim which could reduce a Relevant Amount as referred to in paragraph 7.
4.2 If a Group Company receives or the Buyer receives an Assessment which may give rise to a liability of the Warrantors under the Tax Liability for which Covenant or in respect of the Sellers might be liable under this Schedule or for breach of any Tax Warranty or which could result in a reduction of a Relevant Amount as referred to in paragraph 7:
4.2.1 Warranties, the Buyer shall or shall procure that the Company shall as soon as reasonably practicable give written notice in writing of the Assessment (including, Claim to the extent known, reasonably sufficient details of such Assessment, the due date for any payment, the time limits for any appeal Warrantors and, so far as practicable, the amount of the claim under this Schedule or for breach of any Tax Warranty in respect thereof) to the Sellers and in any event within 15 Business Days of the Group Company event, where a statutory or the Buyer becoming aware of such Assessment PROVIDED THAT if the other time limit is applicable for responding to or appealing against the Claim or otherwise disputing to any assessment, notice, demand or resisting an Assessment is within 30 days from other document issued (or deemed to be issued) or action taken which constitutes the date of such AssessmentClaim, the Buyer shall give such written notice in writing of the Claim to the Warrantors at least 21 days prior to the expiry of such Assessment time limit or, if later, 5 days after the Buyer becomes aware of the Claim. Such written notice shall, so long as it is reasonably practicable for them to do so, include an estimate of the liability of the Warrantors under the Tax Covenant or in respect of the Tax Warranties in respect of such Claim, the basis of calculation of that estimate and such reasonable details of the Claim as are then available to the Sellers within 10 Business Days of the Group Company Buyer or the Buyer becoming aware of such Assessment; andCompany.
4.2.2 subject to paragraphs 4.3 to 4.5 inclusive, the 43.2 The Buyer shall, and shall ensure procure that each Group the Company shall, take any such action the Sellers may reasonably request which is reasonable to appeal, compromise, protest against, mitigate, reduce, avoid, dispute, resist or compromise the Assessment (an Assessment where action is so requested being hereafter referred to Claim and make available such documents, information and assistance in connection with the Claim as a “Tax Dispute”).
4.3 The Sellers the Warrantors may by written notice reasonably request provided the Warrantors shall have indemnify the right (if they so wish) to control the conduct of a Tax Dispute, Buyer and the Sellers shall in any event be kept fully informed of any actual or proposed developments (including any meetings), and shall be provided with copies of Company against all correspondence and documentation relating to such Tax Dispute and such other information, assistance and access to records and personnel as they reasonably request.
4.4 The Sellers shall reimburse to the Buyer its reasonable out-of-pocket costs and expenses (including reasonable fees any additional Tax) which the Buyer or the Company properly incurs as a result of taking such action or providing such information and disbursements of outside legal counsel and other external advisers but other than management costs and expenses) properly incurred in connection with assistance.
43.3 The Warrantors may elect to have any action or proceedings taken at referred to in paragraph 43.2 conducted by professional advisers acting in the request name of the Sellers pursuant Company but reporting to the Warrantors in which event the provisions of paragraph 4.2.2 above43.4 shall apply.
4.5 43.4 The Warrantors hereby undertake to the Buyer to:
(a) keep the Buyer fully and promptly informed of all matters relating to the action and promptly deliver to the Buyer copies of all correspondence relating to the action;
(b) permit a representation of the Buyer to attend any meeting with a Taxation Authority;
(c) obtain the prior written approval of the Buyer (not to be unreasonably withheld or delayed) to the content and sending of written communications relating to the action to a Taxation Authority; and
(d) obtain the prior written approval of the Buyer (not to be unreasonably withheld or delayed) to:
(i) the settlement or compromise of the Claim which is the subject of the action; and
(ii) the agreement of any matter in the conduct of the action which is likely to affect the amount of the Claim or the future Taxation liability of the Company.
43.5 The Buyer shall not be obliged to procure that the Company take any action under this paragraph 43 which involves contesting any matter beyond the first appellate body (excluding the Taxation Authority which has or shall have made the Claim in question) unless the Warrantors furnish the Buyer with the written opinion of Counsel acceptable to all parties of at least ten years call who is experienced in the subject matter of the Claim to the effect that an appeal in respect of the matter in question is more likely than not to succeed.
43.6 Subject to paragraph 4.106.7, the Buyer shall procure that (i) to the extent that (a) the Sellers could be required to make a payment under this Schedule or any of the Tax Warranties in respect of any Tax Liability that no Claim is the subject of the Tax Dispute, or (b) a Relevant Amount as referred to in paragraph 7 could be reduced, the Tax Dispute is not settled or otherwise compromised without the Warrantors’ prior written consent of the Sellers (such consent not to be unreasonably withheld or delayed) and (ii) each Group Company and any of its respective advisors the Buyer shall, so far as it is reasonable to do soand shall procure that the Company will, not submit any document or give notice of any matter written communications relating to the Claim to a Tax Taxation Authority which where the Buyer is aware that the effect of submitting such communication could (a) give rise to or increase any a claim under this Schedule schedule or any in respect of the Tax Warranties, or (b) reduce a Relevant Amount as referred to in paragraph 7 without first allowing the Sellers’ reasonable opportunity to review such document, and the Buyer shall, or will procure that the relevant Group Company shall, make such reasonable amendments to such document as the Sellers, on a timely basis, may request.
4.6 In the event that the Sellers elect to take control of the conduct of a Tax Dispute in accordance with paragraph 4.3 then:
4.6.1 the Sellers shall keep the Buyer reasonably informed of all relevant matters and shall promptly forward or procure to be forwarded to the Buyer copies of all relevant correspondence and other relevant information and documentation;
4.6.2 all communications written or otherwise relating to the Tax Dispute which are to be transmitted to a Tax Authority shall first be submitted to the Buyer to afford it a reasonable opportunity to comment thereon and the Sellers shall take account of the Buyer’s reasonable comments provided that such comments are provided by the Buyer to the Sellers on a timely basis; and
4.6.3 the Sellers shall make no settlement or compromise of the Tax Dispute which would result in a material increase in any future liability to Tax of the Buyer or any Buyer’s Group Undertaking without the prior written approval of the Buyer, such approval Warrantors (not to be unreasonably withheld or delayed) to the content and sending of such communication.
4.7 Neither the Buyer nor any Buyer’s Group Undertaking shall be obliged to take action, or cede control of the conduct of a Tax Dispute, pursuant to this paragraph 4 unless:
4.7.1 in a case where an Assessment relates to a Tax Liability for which the Sellers might be liable under this Schedule or for breach of any Tax Warranty , the Sellers shall provide written notice to the Buyer acknowledging that in the event that a Tax Liability or a liability for breach of any Tax Warranty were to arise as a result of such Assessment then, subject to the limitations set out in Schedule 5 to this Agreement, the Sellers would be liable for such Tax Liability or liability for breach of any of the Tax Warranties;
4.7.2 the Sellers are and will remain, in the reasonable determination of the Buyer, solvent and capable of fully satisfying their obligations under paragraph 4.7.1; and
4.7.3 the Sellers progress the conduct of the Tax Dispute within a reasonable time.
4.8 Neither the Buyer nor any Buyer’s Group Undertaking shall be obliged to take action pursuant to this paragraph 4 (i) which would be likely to be materially prejudicial to the relationship of the Buyer or the relevant Group Company with the relevant Tax Authority; or (ii) which involves contesting an Assessment beyond the first appellate body (excluding the Tax Authority which has made the Assessment) in the jurisdiction concerned unless leading counsel specialising in Tax (with at least 10 years’ call) or reasonable equivalent outside the United Kingdom appointed by the Sellers and the Buyer, or failing agreement on such appointment, appointed by the Chair (or equivalent) of the local Bar Association, opines that such a course of action having regard to the merits of the case, the size of the Tax Liability and any other relevant factors is reasonable PROVIDED THAT such course of action shall not for this purpose be reasonable unless such leading counsel opines that, on the merits, there is a reasonable basis for success.
4.9 In the event of a dispute between the Sellers and the Buyer as to whether any action pursuant to this paragraph 4 would be likely to be materially prejudicial to the relationship of the Buyer or the relevant Group Company with the relevant Tax Authority, such dispute shall be referred to leading counsel specialising in Tax (with at least 10 years’ call) or reasonable equivalent outside the United Kingdom appointed by the Sellers and the Buyer, or failing agreement on such appointment, appointed by the Chair (or equivalent) of the local Bar Association who shall determine whether such action would be likely to be so materially prejudicial.
4.10 43.7 If the Sellers Warrantors do not request the Buyer to take any appropriate action under paragraph 4.2.2 within 30 days of receipt of notice being given to the Sellers under them in accordance with paragraph 4.2.143.1, the Buyer shall be free to satisfy or settle the relevant Assessment but shall take reasonable steps to mitigate or minimise the amount of any Tax Liability arising in relation to Claim on such Assessmentterms as it may think fit.
4.11 The Sellers’ rights under this paragraph 4 with respect to an Assessment and related Tax Claim shall terminate upon Buyer’s written acknowledgement to, and written agreement with, the Sellers that the Sellers shall have no liability with respect to such Assessment and Tax Claim, and that such Assessment shall not reduce any Relevant Amount under this Agreement.
Appears in 1 contract
Samples: Share Purchase Agreement (Stream Global Services, Inc.)
APPEALS AND CONDUCT OF CLAIMS. 4.1 Each of the Sellers (i) Purchaser shall be entitled, subject give notice in writing to the remaining provisions of this paragraph 4, to resist any Assessment for and on behalf and in the name of a Group Company which is or could relate to a Tax Liability for which the Sellers might be liable under this Schedule or for breach Sellers' Representative of any Tax Warranty or to resist any matter which could reduce a Relevant Amount as referred to Claim in paragraph 7.
4.2 If a Group Company receives or the Buyer receives an Assessment which may give rise to a Tax Liability for which the Sellers might be liable under this Schedule or for breach respect of any Tax Warranty liability or any other event for which Sellers could result in a reduction of a Relevant Amount as referred to in paragraph 7:
4.2.1 the Buyer shall become liable under Section 6.2(a) as soon as reasonably practicable after becoming aware thereof provided that failure to give such notice in writing of the Assessment (including, to the extent known, reasonably sufficient details of such Assessment, the due date for any payment, the time limits for any appeal and, so far as practicable, the amount of the claim shall not release Sellers from liability under this Schedule or for breach of any Tax Warranty Section 6.2(a) in respect thereof) . As used herein, the term "Tax Claim" means any claim, notice, demand, assessment, charge, letter or other document issued or action taken or omission made by or on behalf of any Taxing Authority or any other Person whereby any Person is or may be placed or sought to the Sellers and be placed under a Tax liability or is or may be or sought to be denied a Tax Relief or whereby any assets of or shares in any event within 15 Business Days of the Group Company Companies is or may be made or sought to be made subject to any Inland Revenue charge as mentioned in Section 237 Inheritance Tax Act 1984 and/or any power to raise inheritance tax under Section 212 Inheritance Tax Act 1984 or any similar provision of the Buyer becoming aware laws of such Assessment PROVIDED THAT if any other jurisdiction; (ii) Purchaser shall and shall procure that the time limit for appealing or otherwise disputing or resisting an Assessment is within 30 days from the date of such AssessmentCompanies shall (subject to Purchaser, the Buyer shall give Companies and any Affiliate of any of them being indemnified and secured to Purchaser's reasonable satisfaction against all costs, expenses and additional Tax which may be incurred in relation thereto) take such notice in writing of such Assessment to the Sellers within 10 Business Days of the Group Company or the Buyer becoming aware of such Assessment; and
4.2.2 subject to paragraphs 4.3 to 4.5 inclusive, the Buyer shall, and shall ensure that each Group Company shall, take any action the as Sellers may reasonably request to avoid, dispute, resist resist, appeal, compromise or compromise defend any Tax Claim with respect to a period which ends on or before the Assessment Closing Date; provided, however, that neither Purchaser nor the Companies shall be obliged to take any action which involves contesting any Tax Claim beyond the first appellate body (an Assessment where action is so requested being hereafter referred to as excluding the Taxing Authority demanding the Tax in question) in the jurisdiction concerned unless Sellers furnish Purchaser with the written opinion of a “leading Tax Dispute”).
4.3 The Sellers shall have Counsel in the right United Kingdom (if they so wishor of a senior tax adviser of equivalent professional standing in the relevant jurisdiction concerned outside the United Kingdom) to control the effect that an appeal against the Tax Claim in question should, on a balance of probabilities, be successful; (iii) The action which Sellers may reasonably request under Section 6.2(d)(ii) shall include allowing Sellers upon giving written notice to that effect to take over at their own expense the conduct of a all proceedings in connection with the Tax Dispute, and Claim in question. If Sellers take over the Sellers conduct of any such proceedings: (A) Purchaser shall in any event be kept fully informed of any actual or proposed developments (including any meetings), all matters relating to the Tax Claim and shall be provided with receive copies of all correspondence and documentation relating to such Tax Dispute and such other information, assistance and access to records and personnel as they reasonably request.
4.4 The Sellers shall reimburse to the Buyer its reasonable out-of-pocket costs and expenses (including reasonable fees and disbursements of outside legal counsel and other external advisers but other than management costs and expenses) properly incurred in connection with any action or proceedings taken at the request of the Sellers pursuant to paragraph 4.2.2 above.
4.5 Subject to paragraph 4.10, the Buyer shall procure that it; (iB) to the extent that (a) the Sellers could be required to make a payment under this Schedule or any of the Tax Warranties in respect of any Tax Liability that is the subject of the Tax Dispute, or (b) a Relevant Amount as referred to in paragraph 7 could be reduced, the Tax Dispute is not settled or otherwise compromised without the prior all written consent of the Sellers (such consent not to be unreasonably withheld or delayed) and (ii) each Group Company and any of its respective advisors shall, so far as it is reasonable to do so, not submit any document or give notice of any matter to a Tax Authority which could (a) give rise to or increase any claim under this Schedule or any of the Tax Warranties, or (b) reduce a Relevant Amount as referred to in paragraph 7 without first allowing the Sellers’ reasonable opportunity to review such document, and the Buyer shall, or will procure that the relevant Group Company shall, make such reasonable amendments to such document as the Sellers, on a timely basis, may request.
4.6 In the event that the Sellers elect to take control of the conduct of a Tax Dispute in accordance with paragraph 4.3 then:
4.6.1 the Sellers shall keep the Buyer reasonably informed of all relevant matters and shall promptly forward or procure to be forwarded to the Buyer copies of all relevant correspondence and other relevant information and documentation;
4.6.2 all communications written or otherwise relating to the Tax Dispute which are to be transmitted to a the Taxing Authorities in connection with the Tax Authority Claim shall first be submitted to Purchaser and shall not be dispatched without its prior written consent (which consent shall not be unreasonably refused or delayed); (C) the Buyer to afford it a reasonable opportunity to comment thereon appointment by Sellers of solicitors and the Sellers other professional advisers shall take account of the Buyer’s reasonable comments provided that such comments are provided by the Buyer be subject to the Sellers on a timely basisprior written consent of Purchaser (which consent shall not be unreasonably refused or delayed); and
4.6.3 the (D) Sellers shall make no settlement or compromise of any Tax Claim nor agree any matter in the conduct of such claim which is likely to affect the amount thereof or the future Tax Dispute which would result in a material increase in liability of any future liability to Tax of Purchaser, the Buyer Companies or any Buyer’s Group Undertaking Affiliate of any of them without the prior approval written consent of the Buyer, such approval Purchaser which consent shall not to be unreasonably withheld refused or delayed.
4.7 Neither the Buyer nor any Buyer’s Group Undertaking shall be obliged to take action, ); (iv) Purchaser or cede control of the conduct of a Tax Dispute, pursuant to this paragraph 4 unless:
4.7.1 in a case where an Assessment relates to a Tax Liability for which the Sellers might be liable under this Schedule or for breach of any Tax Warranty , the Sellers shall provide written notice to the Buyer acknowledging that in the event that a Tax Liability or a liability for breach of any Tax Warranty were to arise as a result of such Assessment then, subject to the limitations set out in Schedule 5 to this Agreement, the Sellers would be liable for such Tax Liability or liability for breach of any of the Companies shall be at liberty without further reference to Sellers to admit, compromise, settle, discharge or otherwise deal with any Tax Warranties;
4.7.2 Claim on or after the Sellers are and will remainearliest of: (A) the expiry of a period of fourteen days (or, if earlier, the expiry of any period for the making of an appeal against the Tax Claim in the reasonable determination question) following service of notice of the Buyer, solvent and capable Tax Claim on Sellers' Representative under Section 6.2(d)(i) if Sellers have not by that date notified Purchaser of fully satisfying their obligations under paragraph 4.7.1request to take any action in relation to the Tax Claim; and
4.7.3 (B) the service of notice by Sellers' Representative on Purchaser to the effect that Sellers progress do not wish to request any action in relation to the Tax Claim; (C) the expiry of five Business Days following the service of notice by Purchaser on Sellers' Representative (Sellers having requested the right to take conduct of the Tax Dispute within a reasonable time.
4.8 Neither the Buyer nor any Buyer’s Group Undertaking shall be obliged to take action pursuant to this paragraph 4 (iClaim) which would be likely to be materially prejudicial to the relationship of the Buyer or the relevant Group Company effect that Sellers are not properly and effectively dealing with the relevant Tax Authority; or (ii) which involves contesting an Assessment beyond Claim if during the first appellate body (excluding the Tax Authority which has made the Assessment) in the jurisdiction concerned unless leading counsel specialising in Tax (with at least 10 years’ call) or reasonable equivalent outside the United Kingdom appointed by the Sellers and the Buyer, or failing agreement on such appointment, appointed by the Chair (or equivalent) of the local Bar Association, opines that such a course of action having regard to the merits of the case, the size of the Tax Liability and any other relevant factors is reasonable PROVIDED THAT such course of action shall not for this purpose be reasonable unless such leading counsel opines that, on the merits, there is a reasonable basis for success.
4.9 In the event of a dispute between the Sellers and the Buyer as to whether any action pursuant to this paragraph 4 would be likely to be materially prejudicial to the relationship of the Buyer or the relevant Group Company with the relevant Tax Authority, such dispute shall be referred to leading counsel specialising in Tax (with at least 10 years’ call) or reasonable equivalent outside the United Kingdom appointed by the Sellers and the Buyer, or failing agreement on such appointment, appointed by the Chair (or equivalent) of the local Bar Association who shall determine whether such action would be likely to be so materially prejudicial.
4.10 If the period Sellers do not request take steps properly and effectively to deal with such Tax Claim; (D) any action or other steps being taken or legal proceedings being started for the Buyer bankruptcy of any of Sellers; (E) the failure by Sellers to take comply with any appropriate action of their obligations under paragraph 4.2.2 within 30 days Section 6.2(d)(iii); and (F) the service of notice being given to on Sellers' Representative by Purchaser that it has become aware that any of Sellers or the Sellers under paragraph 4.2.1, the Buyer shall be free to settle the relevant Assessment but shall take reasonable steps to mitigate Companies has committed an act or minimise the amount of any Tax Liability arising is responsible for an omission in relation to such Assessment.
4.11 The Sellers’ rights under this paragraph 4 with respect to an Assessment and related the Tax liability or Tax Claim shall terminate upon Buyer’s written acknowledgement to, and written agreement with, the Sellers that the Sellers shall have no liability with respect to such Assessment and Tax Claim, and that such Assessment shall not reduce any Relevant Amount under this Agreementin question which constitutes fraudulent conduct.
Appears in 1 contract
Samples: Share Sale and Purchase Agreement (Mettler Toledo Holding Inc)
APPEALS AND CONDUCT OF CLAIMS. 4.1 Each of the Sellers shall be entitled, subject to the remaining provisions of this paragraph 4, to resist any Assessment for and on behalf and in the name of a Group Company which is or could relate to a Tax Liability for which the Sellers might be liable under this Schedule or for breach of any Tax Warranty or to resist any matter which could reduce a Relevant Amount as referred to in paragraph 7.
4.2 If a Group Company receives or the Buyer receives an Assessment which may give rise to a Tax Liability for which the Sellers might be liable under this Schedule or for breach of any Tax Warranty or which could result in a reduction of a Relevant Amount as referred to in paragraph 7:
4.2.1 the Buyer shall as soon as reasonably practicable give notice in writing of the Assessment (including, to the extent known, reasonably sufficient details of such Assessment, the due date for any payment, the time limits for any appeal and, so far as practicable, the amount of the claim under this Schedule or for breach of any Tax Warranty in respect thereof) to the Sellers and in any event within 15 Business Days of the Group Company or the Buyer becoming aware of such Assessment PROVIDED THAT if the time limit for appealing or otherwise disputing or resisting an Assessment is within 30 days from the date of such Assessment, the Buyer shall give such notice in writing of such Assessment to the Sellers within 10 Business Days of the Group Company or the Buyer becoming aware of such Assessment; and
4.2.2 subject to paragraphs 4.3 to 4.5 inclusive, the Buyer shall, and shall ensure that each Group Company shall, take any action the Sellers may reasonably request to avoid, dispute, resist or compromise the Assessment (an Assessment where action is so requested being hereafter referred to as a “Tax Dispute”).
4.3 The Sellers shall have the right (if they so wish) to control the conduct of a Tax Dispute, and the Sellers shall in any event be kept fully informed of any actual or proposed developments (including any meetings), and shall be provided with copies of all correspondence and documentation relating to such Tax Dispute and such other information, assistance and access to records and personnel as they reasonably request.
4.4 The Sellers shall reimburse to the Buyer its reasonable out-of-pocket costs and expenses (including reasonable fees and disbursements of outside legal counsel and other external advisers but other than management costs and expenses) properly incurred in connection with any action or proceedings taken at the request of the Sellers pursuant to paragraph 4.2.2 above.
4.5 Subject to paragraph 4.10, the Buyer shall procure that (i) to the extent that (a) the Sellers could be required to make a payment under this Schedule or any of the Tax Warranties in respect of any Tax Liability that is the subject of the Tax Dispute, or (b) a Relevant Amount as referred to in paragraph 7 could be reduced, the Tax Dispute is not settled or otherwise compromised without the prior written consent of the Sellers (such consent not to be unreasonably withheld or delayed) and (ii) each Group Company and any of its respective advisors shall, so far as it is reasonable to do so, not submit any document or give notice of any matter to a Tax Authority which could (a) give rise to or increase any claim under this Schedule or any of the Tax Warranties, or (b) reduce a Relevant Amount as referred to in paragraph 7 without first allowing the Sellers’ reasonable opportunity to review such document, and the Buyer shall, or will procure that the relevant Group Company shall, make such reasonable amendments to such document as the Sellers, on a timely basis, may request.
4.6 In the event that the Sellers elect to take control of the conduct of a Tax Dispute in accordance with paragraph 4.3 then:
4.6.1 the Sellers shall keep the Buyer reasonably informed of all relevant matters and shall promptly forward or procure to be forwarded to the Buyer copies of all relevant correspondence and other relevant information and documentation;
4.6.2 all communications written or otherwise relating to the Tax Dispute which are to be transmitted to a Tax Authority shall first be submitted to the Buyer to afford it a reasonable opportunity to comment thereon and the Sellers shall take account of the Buyer’s reasonable comments provided that such comments are provided by the Buyer to the Sellers on a timely basis; and
4.6.3 the Sellers shall make no settlement or compromise of the Tax Dispute which would result in a material increase in any future liability to Tax of the Buyer or any Buyer’s Group Undertaking without the prior approval of the Buyer, such approval not to be unreasonably withheld or delayed.
4.7 Neither the Buyer nor any Buyer’s Group Undertaking shall be obliged to take action, or cede control of the conduct of a Tax Dispute, pursuant to this paragraph 4 unless:
4.7.1 in a case where an Assessment relates to a Tax Liability for which the Sellers might be liable under this Schedule or for breach of any Tax Warranty , the Sellers shall provide written notice to the Buyer acknowledging that in the event that a Tax Liability or a liability for breach of any Tax Warranty were to arise as a result of such Assessment then, subject to the limitations set out in Schedule 5 to this Agreement, the Sellers would be liable for such Tax Liability or liability for breach of any of the Tax Warranties;
4.7.2 the Sellers are and will remain, in the reasonable determination of the Buyer, solvent and capable of fully satisfying their obligations under paragraph 4.7.1; and
4.7.3 the Sellers progress the conduct of the Tax Dispute within a reasonable time.
4.8 Neither the Buyer nor any Buyer’s Group Undertaking shall be obliged to take action pursuant to this paragraph 4 (i) which would be likely to be materially prejudicial to the relationship of the Buyer or the relevant Group Company with the relevant Tax Authority; or (ii) which involves contesting an Assessment beyond the first appellate body (excluding the Tax Authority which has made the Assessment) in the jurisdiction concerned unless leading counsel specialising in Tax (with at least 10 years’ call) or reasonable equivalent outside the United Kingdom appointed by the Sellers and the Buyer, or failing agreement on such appointment, appointed by the Chair (or equivalent) of the local Bar Association, opines that such a course of action having regard to the merits of the case, the size of the Tax Liability and any other relevant factors is reasonable PROVIDED THAT such course of action shall not for this purpose be 103 reasonable unless such leading counsel opines that, on the merits, there is a reasonable basis for success.
4.9 In the event of a dispute between the Sellers and the Buyer as to whether any action pursuant to this paragraph 4 would be likely to be materially prejudicial to the relationship of the Buyer or the relevant Group Company with the relevant Tax Authority, such dispute shall be referred to leading counsel specialising in Tax (with at least 10 years’ call) or reasonable equivalent outside the United Kingdom appointed by the Sellers and the Buyer, or failing agreement on such appointment, appointed by the Chair (or equivalent) of the local Bar Association who shall determine whether such action would be likely to be so materially prejudicial.
4.10 If the Sellers do not request the Buyer to take any appropriate action under paragraph 4.2.2 within 30 days of notice being given to the Sellers under paragraph 4.2.1, the Buyer shall be free to settle the relevant Assessment but shall take reasonable steps to mitigate or minimise the amount of any Tax Liability arising in relation to such Assessment.
4.11 The Sellers’ rights under this paragraph 4 with respect to an Assessment and related Tax Claim shall terminate upon Buyer’s written acknowledgement to, and written agreement with, the Sellers that the Sellers shall have no liability with respect to such Assessment and Tax Claim, and that such Assessment shall not reduce any Relevant Amount under this Agreement.
Appears in 1 contract
Samples: Sale and Purchase Agreement
APPEALS AND CONDUCT OF CLAIMS. 4.1 Each 6.1 If the Purchaser or the Company (or any of the Sellers shall be entitledtheir officers, subject to the remaining provisions of this paragraph 4employees, to resist any Assessment for and on behalf and in the name servants or agents) becomes aware of a Group Claim, the Purchaser shall or shall procure that the Company which is or could relate to a Tax Liability for which the Sellers might be liable under this Schedule or for breach of any Tax Warranty or to resist any matter which could reduce a Relevant Amount as referred to in paragraph 7.
4.2 If a Group Company receives or the Buyer receives an Assessment which may give rise to a Tax Liability for which the Sellers might be liable under this Schedule or for breach of any Tax Warranty or which could result in a reduction of a Relevant Amount as referred to in paragraph 7:
4.2.1 the Buyer shall as soon as reasonably practicable give written notice in writing of the Assessment (including, Claim to the Warrantors and, in any event, where a statutory or other time limit is applicable for responding to or appealing against the Claim or to any assessment, notice, demand or other document issued (or deemed to be issued) or action taken which constitutes the Claim, the Purchaser shall give written notice of the Claim to the Warrantors at least 14 days prior to the expiry of such time limit. To the extent knownreasonably possible, reasonably sufficient having regard to the information and time available, such written notice shall include an estimate of the Warrantors' liability under this schedule in respect of such Claim, the basis of calculation of that estimate and such details of such Assessment, the due date for any payment, the time limits for any appeal and, so far Claim as practicable, the amount of the claim under this Schedule or for breach of any Tax Warranty in respect thereof) are then available to the Sellers and in any event within 15 Business Days of the Group Company Purchaser or the Buyer becoming aware of such Assessment PROVIDED THAT if the time limit for appealing or otherwise disputing or resisting an Assessment is within 30 days from the date of such Assessment, the Buyer shall give such notice in writing of such Assessment to the Sellers within 10 Business Days of the Group Company or the Buyer becoming aware of such Assessment; andCompany.
4.2.2 subject to paragraphs 4.3 to 4.5 inclusive, the Buyer 6.2 The Purchaser shall, and shall ensure procure that each Group the Company shall, take any such action the Sellers may reasonably request to appeal, protest against, mitigate, reduce, avoid, dispute, resist or compromise the Assessment Claim and make available such documents, information and assistance in connection with the Claim as the Warrantors (an Assessment where action is so requested being hereafter referred to as a “Tax Dispute”).
4.3 The Sellers or the Vendors' Representatives on behalf of the Warrantors) may by written notice request provided the Warrantors shall have indemnify the right (if they so wish) to control the conduct of a Tax Dispute, Purchaser and the Sellers shall in any event be kept fully informed of any actual or proposed developments (including any meetings), and shall be provided with copies of all correspondence and documentation relating Company to such Tax Dispute and such other information, assistance and access to records and personnel as they reasonably request.
4.4 The Sellers shall reimburse to the Buyer its their reasonable out-of-pocket satisfaction against reasonable costs and expenses (including reasonable fees and disbursements any fines, penalties, surcharges, interest or additional Taxation which the Purchaser or the Company incurs as a result of outside legal counsel and other external advisers but other than management costs and expenses) properly incurred in connection with any taking such action or proceedings taken at providing such information and assistance.
6.3 The Warrantors (or the request Vendors' Representatives on behalf of the Sellers pursuant to paragraph 4.2.2 above.
4.5 Subject to paragraph 4.10Warrantors) may, if the Buyer shall procure that Warrantors (ior the Vendors' Representatives on behalf of Warrantors) to request in writing and the extent that (a) the Sellers could be required to make a payment under this Schedule or any of the Tax Warranties in respect of any Tax Liability that is the subject of the Tax Dispute, or (b) a Relevant Amount as referred to in paragraph 7 could be reduced, the Tax Dispute is not settled or otherwise compromised without the prior written consent of the Sellers Purchaser consents (such consent not to be unreasonably withheld or delayed) and (ii) each Group Company and to such request, elect to have any of its respective advisors shall, so far as it is reasonable to do so, not submit any document or give notice of any matter to a Tax Authority which could (a) give rise to or increase any claim under this Schedule or any of the Tax Warranties, or (b) reduce a Relevant Amount as action referred to in paragraph 7 without first allowing 6.2 conducted by professional advisers acting in the Sellers’ reasonable opportunity to review such documentname of the Company but reporting to, and taking instructions from, the Buyer shall, Warrantors (or will procure that the relevant Group Company shall, make such reasonable amendments to such document as Vendors' Representatives on behalf of the Sellers, on a timely basis, may requestWarrantors) in which event the provisions of paragraph 6.4 shall apply.
4.6 In 6.4 The Warrantors hereby undertake to the event that the Sellers elect to take control of the conduct of a Tax Dispute in accordance with paragraph 4.3 thenPurchaser to:
4.6.1 the Sellers shall 6.4.1 keep the Buyer reasonably Purchaser informed of all relevant matters and shall promptly forward or procure to be forwarded relating to the Buyer action and deliver to the Purchaser copies of all relevant material correspondence and other relevant information and documentation;
4.6.2 all communications written or otherwise relating to the Tax Dispute which are action;
6.4.2 obtain the prior written approval of the Purchaser (not to be transmitted unreasonably withheld or delayed) to the content and sending of written communications relating to the action to a Tax Authority shall first be submitted to the Buyer to afford it a reasonable opportunity to comment thereon and the Sellers shall take account of the Buyer’s reasonable comments provided that such comments are provided by the Buyer to the Sellers on a timely basisTaxation Authority; and
4.6.3 6.4.3 obtain the Sellers shall make no prior written approval of the Purchaser (not to be unreasonably withheld or delayed) to:
(a) the settlement or compromise of the Tax Dispute Claim which would result in a material increase in any future liability to Tax is the subject of the Buyer or action; and
(b) the agreement of any Buyer’s Group Undertaking without matter in the prior approval conduct of the Buyer, action which is likely to affect the amount of the Claim.
6.5 The Purchaser shall not be obliged to procure that the Company take any action under this clause which involves contesting a Claim before any appellate tribunal or court unless the Warrantors furnish the Purchaser with the written opinion of Counsel of at least ten years call approved by the Purchaser (such approval not to be unreasonably withheld or delayed) who is experienced in the subject matter of the Claim to the effect that an appeal in respect of the matter in question has a reasonable prospect of being won.
4.7 Neither 6.6 If at any time the Buyer nor any Buyer’s Group Undertaking shall be obliged to take actionWarrantors request that the Purchaser take, or cede control of procure that the conduct of a Tax DisputeCompany take, pursuant any action referred to this in paragraph 4 unless:
4.7.1 6.2, but do not make any request referred to in a case where an Assessment relates paragraph 6.3 (or the Purchaser does not consent to a Tax Liability for which the Sellers might be liable under this Schedule or for breach of any Tax Warranty such request), the Sellers provisions of paragraph 6.4 shall provide written notice apply as if references to "the Buyer acknowledging that in Warrantors" are references to "the event that a Tax Liability or a liability for breach of any Tax Warranty were Purchaser" and reference to arise as a result of such Assessment then, subject "the Purchaser" are references to "the limitations set out in Schedule 5 to this Agreement, the Sellers would be liable for such Tax Liability or liability for breach of any of the Tax Warranties;
4.7.2 the Sellers are and will remain, in the reasonable determination of the Buyer, solvent and capable of fully satisfying their obligations under paragraph 4.7.1; and
4.7.3 the Sellers progress the conduct of the Tax Dispute within a reasonable timeWarrantors".
4.8 Neither the Buyer nor any Buyer’s Group Undertaking shall be obliged to take action pursuant to this paragraph 4 (i) which would be likely to be materially prejudicial to the relationship of the Buyer or the relevant Group Company with the relevant Tax Authority; or (ii) which involves contesting an Assessment beyond the first appellate body (excluding the Tax Authority which has made the Assessment) in the jurisdiction concerned unless leading counsel specialising in Tax (with at least 10 years’ call) or reasonable equivalent outside the United Kingdom appointed by the Sellers and the Buyer, or failing agreement on such appointment, appointed by the Chair (or equivalent) of the local Bar Association, opines that such a course of action having regard to the merits of the case, the size of the Tax Liability and any other relevant factors is reasonable PROVIDED THAT such course of action shall not for this purpose be reasonable unless such leading counsel opines that, on the merits, there is a reasonable basis for success.
4.9 In the event of a dispute between the Sellers and the Buyer as to whether any action pursuant to this paragraph 4 would be likely to be materially prejudicial to the relationship of the Buyer or the relevant Group Company with the relevant Tax Authority, such dispute shall be referred to leading counsel specialising in Tax (with at least 10 years’ call) or reasonable equivalent outside the United Kingdom appointed by the Sellers and the Buyer, or failing agreement on such appointment, appointed by the Chair (or equivalent) of the local Bar Association who shall determine whether such action would be likely to be so materially prejudicial.
4.10 If the Sellers do not request the Buyer to take any appropriate action under paragraph 4.2.2 within 30 days of notice being given to the Sellers under paragraph 4.2.1, the Buyer shall be free to settle the relevant Assessment but shall take reasonable steps to mitigate or minimise the amount of any Tax Liability arising in relation to such Assessment.
4.11 The Sellers’ rights under this paragraph 4 with respect to an Assessment and related Tax Claim shall terminate upon Buyer’s written acknowledgement to, and written agreement with, the Sellers that the Sellers shall have no liability with respect to such Assessment and Tax Claim, and that such Assessment shall not reduce any Relevant Amount under this Agreement.
Appears in 1 contract
APPEALS AND CONDUCT OF CLAIMS. 4.1 Each of the Sellers shall be entitled, subject to the remaining provisions of this paragraph 4, to resist any Assessment for and on behalf and in the name of a Group Company which is or could relate to a Tax Liability for which the Sellers might be liable under this Schedule or for breach of any Tax Warranty or to resist any matter which could reduce a Relevant Amount as referred to in paragraph 7.
4.2 5.1 If a Group Company or the Purchaser receives or the Buyer makes an Assessment or receives an Assessment inquiry notice relating to a liability for Tax as mentioned in clause 2.1 or which may give rise to a Tax Liability for which the Sellers might be liable under this Schedule or for breach of any Tax Warranty or which could result in a reduction of a Relevant Amount as referred to in paragraph 7Claim:
4.2.1 5.1.1 the Buyer shall Purchaser will as soon as reasonably practicable give notice in writing of the Assessment (including, to the extent knownVendor, reasonably sufficient details of such Assessment, the due date for any payment, the time limits for any appeal and, so far as practicable, the amount of the claim but notice is not a condition precedent to Purchaser's liability under this Schedule or for breach of any Tax Warranty in respect thereof) to the Sellers and in any event within 15 Business Days of the Group Company or the Buyer becoming aware of such Assessment PROVIDED THAT if the time limit for appealing or otherwise disputing or resisting an Assessment is within 30 days from the date of such Assessment, the Buyer shall give such notice in writing of such Assessment to the Sellers within 10 Business Days of the Group Company or the Buyer becoming aware of such AssessmentDeed; and
4.2.2 5.1.2 subject to paragraphs 4.3 to 4.5 inclusiveclauses 5.4 and 5.5, the Buyer shallPurchaser will, and shall will ensure that each Group Company shallwill, take any action the Sellers Vendor may reasonably request to avoid, dispute, resist or compromise the Assessment if the Vendor has first agreed (an Assessment where to the Purchaser's reasonable satisfaction) to indemnify the Purchaser and each Group Company against the Tax, and any additional Tax and costs which the Purchaser or any Group Company may reasonably incur in connection with the taking of action is so requested being hereafter pursuant to clause 5.1.2.
5.2 The Vendor may have any action referred to as a “Tax Dispute”).in clause 5.1.2 taken by professional advisers nominated by it for this purpose if the Vendor:
4.3 The Sellers shall have 5.2.1 keeps the right (if they so wish) to control the conduct of a Tax Dispute, and the Sellers shall in any event be kept Purchaser fully informed of any actual or proposed developments (including any meetings), all matters relating to the Assessment and shall be provided with delivers to the Purchaser copies of all correspondence and documentation relating to such Tax Dispute and such other information, assistance and access to records and personnel as they reasonably request.
4.4 The Sellers shall reimburse to the Buyer its reasonable out-of-pocket costs and expenses (including reasonable fees and disbursements of outside legal counsel and other external advisers but other than management costs and expenses) properly incurred in connection with any action or proceedings taken at the request of the Sellers pursuant to paragraph 4.2.2 above.
4.5 Subject to paragraph 4.10, the Buyer shall procure that (i) to the extent that (a) the Sellers could be required to make a payment under this Schedule or any of the Tax Warranties in respect of any Tax Liability that is the subject of the Tax Dispute, or (b) a Relevant Amount as referred to in paragraph 7 could be reduced, the Tax Dispute is not settled or otherwise compromised without the prior written consent of the Sellers (such consent not to be unreasonably withheld or delayed) and (ii) each Group Company and any of its respective advisors shall, so far as it is reasonable to do so, not submit any document or give notice of any matter to a Tax Authority which could (a) give rise to or increase any claim under this Schedule or any of the Tax Warranties, or (b) reduce a Relevant Amount as referred to in paragraph 7 without first allowing the Sellers’ reasonable opportunity to review such document, and the Buyer shall, or will procure that the relevant Group Company shall, make such reasonable amendments to such document as the Sellers, on a timely basis, may request.
4.6 In the event that the Sellers elect to take control of the conduct of a Tax Dispute in accordance with paragraph 4.3 then:
4.6.1 the Sellers shall keep the Buyer reasonably informed of all relevant matters and shall promptly forward or procure to be forwarded to the Buyer copies of all relevant correspondence and other relevant information and documentation;
4.6.2 all communications written or otherwise relating to the Tax Dispute which are to be transmitted to a Tax Authority shall first be submitted to Assessment;
5.2.2 obtains the Buyer to afford it a reasonable opportunity to comment thereon and the Sellers shall take account of the Buyer’s reasonable comments provided that such comments are provided by the Buyer to the Sellers on a timely basis; and
4.6.3 the Sellers shall make no settlement or compromise of the Tax Dispute which would result in a material increase in any future liability to Tax of the Buyer or any Buyer’s Group Undertaking without the Purchaser's prior written approval of the Buyer, (such approval not to be unreasonably withheld or delayed.
4.7 Neither the Buyer nor any Buyer’s Group Undertaking shall be obliged to take action), or cede control of the conduct of a Tax Dispute, pursuant to this paragraph 4 unlessto:
4.7.1 in a case where an Assessment relates (a) the appointment of solicitors or other professional advisers; and
(b) the content and sending to a Tax Liability for which the Sellers might be liable under this Schedule Authority of each communication (written or for breach of any Tax Warranty , the Sellers shall provide written notice otherwise) relating to the Buyer acknowledging that in the event that a Tax Liability or a liability for breach of any Tax Warranty were to arise as a result of such Assessment then, subject (other than routine communications immaterial to the limitations set out in Schedule 5 to this Agreement, the Sellers would be liable for such Tax Liability or liability for breach of any subject matter of the Tax WarrantiesAssessment);
4.7.2 (c) the Sellers are and will remain, in the reasonable determination settlement or compromise of the Buyer, solvent and capable of fully satisfying their obligations under paragraph 4.7.1Assessment; and
4.7.3 (d) the Sellers progress the conduct agreement of the Tax Dispute within a reasonable time.
4.8 Neither the Buyer nor any Buyer’s Group Undertaking shall be obliged to take action pursuant to this paragraph 4 (i) matter which would be is likely to be materially prejudicial to the relationship of the Buyer or the relevant Group Company with the relevant Tax Authority; or (ii) which involves contesting an Assessment beyond the first appellate body (excluding the Tax Authority which has made the Assessment) in the jurisdiction concerned unless leading counsel specialising in Tax (with at least 10 years’ call) or reasonable equivalent outside the United Kingdom appointed by the Sellers and the Buyer, or failing agreement on such appointment, appointed by the Chair (or equivalent) of the local Bar Association, opines that such a course of action having regard to the merits of the case, the size of the Tax Liability and any other relevant factors is reasonable PROVIDED THAT such course of action shall not for this purpose be reasonable unless such leading counsel opines that, on the merits, there is a reasonable basis for success.
4.9 In the event of a dispute between the Sellers and the Buyer as to whether any action pursuant to this paragraph 4 would be likely to be materially prejudicial to the relationship of the Buyer or the relevant Group Company with the relevant Tax Authority, such dispute shall be referred to leading counsel specialising in Tax (with at least 10 years’ call) or reasonable equivalent outside the United Kingdom appointed by the Sellers and the Buyer, or failing agreement on such appointment, appointed by the Chair (or equivalent) of the local Bar Association who shall determine whether such action would be likely to be so materially prejudicial.
4.10 If the Sellers do not request the Buyer to take any appropriate action under paragraph 4.2.2 within 30 days of notice being given to the Sellers under paragraph 4.2.1, the Buyer shall be free to settle the relevant Assessment but shall take reasonable steps to mitigate or minimise affect the amount of any Tax Liability arising the Assessment or the future liability of a Group Company or of the Purchaser in relation respect of Tax; and
5.2.3 agrees (to such Assessment.the Purchaser's reasonable satisfaction) to indemnify the Purchaser and each Group Company against all costs which the Purchaser or a Group Company may reasonably incur in connection with the use of professional advisers nominated by the Vendor under this clause 5.2
4.11 5.3 The Sellers’ Vendor's rights under this paragraph 4 with respect to an Assessment and related Tax Claim shall terminate upon Buyer’s written acknowledgement to, and written agreement with, the Sellers that the Sellers shall have no liability with respect to such Assessment and Tax Claim, and that such Assessment shall not reduce any Relevant Amount under this Agreementclause 5.
Appears in 1 contract
APPEALS AND CONDUCT OF CLAIMS. 4.1 Each 6.1 If the Buyer or the Company (or any of the Sellers shall be entitledtheir officers, subject to the remaining provisions of this paragraph 4employees, to resist any Assessment for and on behalf and in the name servants or agents) becomes aware of a Group Company which is or could relate to a Tax Liability for which the Sellers might be liable under this Schedule or for breach of any Tax Warranty or to resist any matter which could reduce a Relevant Amount as referred to in paragraph 7.
4.2 If a Group Company receives or Claim, the Buyer receives an Assessment which may give rise to a Tax Liability for which shall or shall procure that the Sellers might be liable under this Schedule or for breach of any Tax Warranty or which could result in a reduction of a Relevant Amount as referred to in paragraph 7:
4.2.1 the Buyer Company shall as soon as reasonably practicable give written notice in writing of the Assessment (including, Claim to the extent known, reasonably sufficient details Relevant Seller (provided always that the service of such Assessmentnotice shall not constitute a condition precedent to the liability of the Relevant Seller) and, in any event, where a statutory or other time limit is applicable for responding to or appealing against the Claim or to any assessment, notice, demand or other document issued (or deemed to be issued) or action taken which constitutes the Claim, the due date for any payment, the time limits for any appeal and, so far as practicable, the amount Buyer shall give written notice of the claim Claim to the Relevant Seller at least 15 days prior to the expiry of such time limit. Such written notice shall (if reasonably possible) include an estimate of the Relevant Seller's liability under this Schedule or schedule and/or for breach of any Tax Warranty in respect thereof) of such Claim, the basis of calculation of that estimate and such details of the Claim as are then available to the Sellers and in any event within 15 Business Days of the Group Company Buyer or the Buyer becoming aware of such Assessment PROVIDED THAT if the time limit for appealing or otherwise disputing or resisting an Assessment is within 30 days from the date of such Assessment, the Buyer shall give such notice in writing of such Assessment to the Sellers within 10 Business Days of the Group Company or the Buyer becoming aware of such Assessment; andCompany.
4.2.2 subject to paragraphs 4.3 to 4.5 inclusive, the 6.2 The Buyer shall, and shall ensure procure that each Group the Company shall, take any such action the Sellers may reasonably request to appeal, protest against, mitigate, reduce, avoid, dispute, resist or compromise the Assessment (an Assessment where action is so requested being hereafter referred to Claim and make available such documents, information and assistance in connection with the Claim as a “Tax Dispute”).
4.3 The Sellers the Relevant Seller may by written notice reasonably request provided the Relevant Seller shall have indemnify the right (if they so wish) to control the conduct of a Tax Dispute, Buyer and the Sellers shall in any event be kept fully informed of any actual or proposed developments (including any meetings), and shall be provided with copies of Company against all correspondence and documentation relating to such Tax Dispute and such other information, assistance and access to records and personnel as they reasonably request.
4.4 The Sellers shall reimburse to the Buyer its reasonable out-of-pocket costs and expenses (including reasonable fees which the Buyer or the Company incurs as a result of taking such action or providing such information and disbursements of outside legal counsel and other external advisers but other than management costs and expenses) properly incurred in connection with assistance.
6.3 The Relevant Seller may elect to have any action or proceedings taken at the request of the Sellers pursuant to paragraph 4.2.2 above.
4.5 Subject to paragraph 4.10, the Buyer shall procure that (i) to the extent that (a) the Sellers could be required to make a payment under this Schedule or any of the Tax Warranties in respect of any Tax Liability that is the subject of the Tax Dispute, or (b) a Relevant Amount as referred to in paragraph 7 could be reduced, 6.2 conducted by professional advisers acting in the Tax Dispute is not settled or otherwise compromised without name of the Company (at the cost and expense of the Relevant Seller) but reporting to and taking instructions from the Relevant Seller in which event the provisions of paragraph 6.4 shall apply.
6.4 The Relevant Seller hereby undertakes to the Buyer to:
(a) obtain the prior written consent approval of the Sellers Buyer (such consent not to be unreasonably withheld or delayed) and (ii) each Group Company and any of its respective advisors shall, so far as it is reasonable to do so, not submit any document or give notice of any matter the professional advisers to a Tax Authority which could (a) give rise be appointed to or increase any claim under this Schedule or any of act in connection with the Tax Warranties, or action;
(b) reduce a Relevant Amount as referred to in paragraph 7 without first allowing the Sellers’ reasonable opportunity to review such document, and the Buyer shall, or will procure that the relevant Group Company shall, make such reasonable amendments to such document as the Sellers, on a timely basis, may request.
4.6 In the event that the Sellers elect to take control of the conduct of a Tax Dispute in accordance with paragraph 4.3 then:
4.6.1 the Sellers shall keep the Buyer reasonably informed of all relevant matters relating to the action and shall promptly forward or procure to be forwarded deliver to the Buyer copies of all relevant material correspondence and other relevant information and documentation;
4.6.2 all communications written or otherwise relating to the Tax Dispute which are to be transmitted to a Tax Authority shall first be submitted to action;
(c) obtain the Buyer to afford it a reasonable opportunity to comment thereon and the Sellers shall take account of the Buyer’s reasonable comments provided that such comments are provided by the Buyer to the Sellers on a timely basis; and
4.6.3 the Sellers shall make no settlement or compromise of the Tax Dispute which would result in a material increase in any future liability to Tax prior written approval of the Buyer or any Buyer’s Group Undertaking without the prior approval of the Buyer, such approval (not to be unreasonably withheld or delayed.
4.7 Neither ) to the Buyer nor any Buyer’s Group Undertaking shall be obliged content and sending of written communications relating to take action, or cede control of the conduct of a Tax Dispute, pursuant to this paragraph 4 unless:
4.7.1 in a case where an Assessment relates action to a Tax Liability for which the Sellers might be liable under this Schedule or for breach of any Tax Warranty , the Sellers shall provide written notice to the Buyer acknowledging that in the event that a Tax Liability or a liability for breach of any Tax Warranty were to arise as a result of such Assessment then, subject to the limitations set out in Schedule 5 to this Agreement, the Sellers would be liable for such Tax Liability or liability for breach of any of the Tax Warranties;
4.7.2 the Sellers are and will remain, in the reasonable determination of the Buyer, solvent and capable of fully satisfying their obligations under paragraph 4.7.1Taxation Authority; and
4.7.3 (d) obtain the Sellers progress prior written approval of the Buyer (not to be unreasonably withheld or delayed) to:
(i) the settlement or compromise of the Claim which is the subject of the action; and
(ii) the agreement of any matter in the conduct of the Tax Dispute within a reasonable timeaction which is likely to affect the amount of the Claim or any future liability to Taxation of the Company.
4.8 Neither the 6.5 The Buyer nor any Buyer’s Group Undertaking shall not be obliged to procure that the Company take any action pursuant to under this paragraph 4 (i) which would be likely to be materially prejudicial to the relationship of the Buyer or the relevant Group Company with the relevant Tax Authority; or (ii) clause which involves contesting an Assessment any matter beyond the first appellate body (excluding the Tax Taxation Authority which has or shall have made the AssessmentClaim in question and the General and Special Commissioners) unless the Relevant Seller furnishes the Buyer with the written opinion of Counsel of at least five years call or, as the case may be, an advocate and solicitor (within the meaning of the Singapore Legal Profession Act (Cap 161), where the Company is incorporated in Singapore) who is experienced in the jurisdiction concerned unless leading counsel specialising subject matter of the Claim to the effect that an appeal in Tax (with respect of the matter in question has a reasonable prospect of being won.
6.6 If at least 10 years’ call) or reasonable equivalent outside any time the United Kingdom appointed by Relevant Seller has not exercised the Sellers and election referred to in paragraph 6.3 but requests that the BuyerBuyer take, or failing agreement on such appointmentprocure that the Company take, appointed by the Chair (or equivalent) of the local Bar Association, opines that such a course of any action having regard referred to the merits of the casein paragraph 6.2, the size provisions of the Tax Liability paragraph 6.4 shall apply as if references to "Relevant Seller" are references to "Buyer" and any other relevant factors is reasonable PROVIDED THAT such course of action shall not for this purpose be reasonable unless such leading counsel opines that, on the merits, there is a reasonable basis for successreference to "Buyer" are references to "Relevant Seller".
4.9 In the event of a dispute between the Sellers and the Buyer as to whether any action pursuant to this paragraph 4 would be likely to be materially prejudicial to the relationship of the Buyer or the relevant Group Company with the relevant Tax Authority, such dispute shall be referred to leading counsel specialising in Tax (with at least 10 years’ call) or reasonable equivalent outside the United Kingdom appointed by the Sellers and the Buyer, or failing agreement on such appointment, appointed by the Chair (or equivalent) of the local Bar Association who shall determine whether such action would be likely to be so materially prejudicial.
4.10 If the Sellers do not request the Buyer to take any appropriate action under paragraph 4.2.2 within 30 days of notice being given to the Sellers under paragraph 4.2.1, the Buyer shall be free to settle the relevant Assessment but shall take reasonable steps to mitigate or minimise the amount of any Tax Liability arising in relation to such Assessment.
4.11 The Sellers’ rights under this paragraph 4 with respect to an Assessment and related Tax Claim shall terminate upon Buyer’s written acknowledgement to, and written agreement with, the Sellers that the Sellers shall have no liability with respect to such Assessment and Tax Claim, and that such Assessment shall not reduce any Relevant Amount under this Agreement.
Appears in 1 contract
APPEALS AND CONDUCT OF CLAIMS. 4.1 Each of the Sellers 5.1 The Sellers’ Representative shall be entitled, subject to the remaining provisions of this paragraph 4Paragraph 5 and at the Sellers expense, to resist any Assessment for and on behalf and in the name of a the relevant Group Company which is or could relate to a Tax Liability for which the Sellers might be liable under this Schedule or for breach of any Tax Warranty Paragraph 2 or to resist any matter which could reduce a Relevant Amount as any Corresponding Saving, Over-provision or overpayment referred to in paragraph 7at Paragraph 8.
4.2 5.2 If a Group Company receives or the Buyer Purchaser receives an Assessment which may give rise to a Tax Liability for which the Sellers might be liable under this Schedule or for breach of any Tax Warranty paragraph 2 or which could result in a reduction of a Relevant Amount Corresponding Saving Over-Provision or overpayment as referred to in paragraph 78:
4.2.1 (a) the Buyer Purchaser shall as soon as reasonably practicable give notice in writing of the Assessment (including, to the extent knownSellers’ Representative, reasonably sufficient details of such Assessment, the due date for any payment, the time limits for any appeal and, so far as practicable, the amount of the claim under this Schedule or for breach of any Tax Warranty in respect thereof) to the Sellers and in any event within 15 10 Business Days of the Group Company or the Buyer becoming aware of such Assessment PROVIDED THAT if the time limit for appealing or otherwise disputing or resisting an Assessment but notice is within 30 days from the date of such Assessment, the Buyer shall give such notice in writing of such Assessment not a condition precedent to the Sellers within 10 Business Days of the Group Company or the Buyer becoming aware of such Assessmentliability under this Schedule; and
4.2.2 (b) subject to paragraphs 4.3 5.3 to 4.5 5.5 inclusive, the Buyer Purchaser shall, and shall ensure that each Group Company shallwill, take any action the Sellers Sellers’ Representative may reasonably request to avoid, dispute, resist or compromise the Assessment if the Sellers have first agreed (an Assessment where to the Purchaser’s reasonable satisfaction) to indemnify and secure the Purchaser and each Group Company against the Tax, and any additional Tax and costs which the Purchaser or each Group Company may incur in connection with the taking of action is so requested being hereafter referred pursuant to as a “Tax Dispute”)this paragraph.
4.3 5.3 The Sellers shall have keep the right (if they so wish) to control the conduct of a Tax Dispute, and the Sellers shall in any event be kept Purchaser fully informed of any actual or proposed developments (including any meetings)all matters relating to the Assessment, and shall be provided with deliver to the Sellers’ Representative copies of all correspondence and documentation relating to such Tax Dispute and such other informationthe Assessment, assistance and access to records and personnel as they reasonably request.
4.4 The Sellers shall reimburse to obtain the Buyer its reasonable out-of-pocket costs and expenses (including reasonable fees and disbursements of outside legal counsel and other external advisers but other than management costs and expenses) properly incurred in connection with any action or proceedings taken at the request of the Sellers pursuant to paragraph 4.2.2 above.
4.5 Subject to paragraph 4.10, the Buyer shall procure that (i) to the extent that (a) the Sellers could be required to make a payment under this Schedule or any of the Tax Warranties in respect of any Tax Liability that is the subject of the Tax Dispute, or (b) a Relevant Amount as referred to in paragraph 7 could be reduced, the Tax Dispute is not settled or otherwise compromised without the Purchaser’s prior written consent of the Sellers approval (such consent not to be unreasonably withheld or delayed) to the appointment of solicitors or other professional advisers, submit to the Purchaser for comments all correspondence and (ii) each Group Company and any of its respective advisors shall, so far as documents relating to the Assessment which it is reasonable intends to do so, not submit any document or give notice of any matter to a Tax Authority which could and take into account all such reasonable comments as the Purchaser may make;
5.4 The Sellers rights (a) give rise to or increase any claim under this Schedule or any and those of the Tax Warranties, or (b) reduce a Relevant Amount as referred to in paragraph 7 without first allowing the Sellers’ reasonable opportunity Representative) under this paragraph cease if any steps are taken or legal proceedings are started for a Sellers’ bankruptcy, winding up, dissolution, administration or re organisation or for the appointment of a receiver, administrator, trustee or similar officer or if a Seller is unable to review such documentpay its debts as they fall due, and starts negotiations with a creditor with a view to the Buyer shallgeneral readjustment or rescheduling of its indebtedness or makes a general assignment for the benefit of, or will procure that the relevant Group Company shalla composition with, make such reasonable amendments its creditors unless a Seller (or Sellers) who are not subject to such document as steps, proceedings, debt repayment problems negotiations, readjustment, rescheduling, provides reasonable security against costs connected with the Sellers, on a timely basis, may requestTax Liability and dispute of the Assessment.
4.6 In the event that the Sellers elect to take control of the conduct of a Tax Dispute in accordance with paragraph 4.3 then:
4.6.1 the Sellers shall keep the Buyer reasonably informed of all relevant matters and shall promptly forward or procure to be forwarded to the Buyer copies of all relevant correspondence and other relevant information and documentation;
4.6.2 all communications written or otherwise relating to the Tax Dispute which are to be transmitted to a Tax Authority shall first be submitted to the Buyer to afford it a reasonable opportunity to comment thereon and the Sellers shall take account of the Buyer’s reasonable comments provided that such comments are provided by the Buyer to the Sellers on a timely basis; and
4.6.3 the Sellers shall make no settlement or compromise of the Tax Dispute which would result in a material increase in any future liability to Tax of the Buyer or any Buyer’s Group Undertaking without the prior approval of the Buyer, such approval 5.5 The Purchaser is not to be unreasonably withheld or delayed.
4.7 Neither the Buyer nor any Buyer’s Group Undertaking shall be obliged to take action, or cede control of the conduct of a Tax Dispute, pursuant to this paragraph 4 unless:
4.7.1 in a case where an Assessment relates to a Tax Liability for which the Sellers might be liable under this Schedule or for breach of any Tax Warranty , the Sellers shall provide written notice to the Buyer acknowledging that in the event that a Tax Liability or a liability for breach of any Tax Warranty were to arise as a result of such Assessment then, subject to the limitations set out in Schedule 5 to this Agreement, the Sellers would be liable for such Tax Liability or liability for breach of any of the Tax Warranties;
4.7.2 the Sellers are and will remain, in the reasonable determination of the Buyer, solvent and capable of fully satisfying their obligations under paragraph 4.7.1; and
4.7.3 the Sellers progress the conduct of the Tax Dispute within a reasonable time.
4.8 Neither the Buyer nor any Buyer’s Group Undertaking shall be obliged to take action pursuant to this paragraph 4 (i) which would be likely to be materially prejudicial to the relationship of the Buyer or the relevant Group Company with the relevant Tax Authority; or (ii) which involves contesting an Assessment beyond the first appellate body (excluding the Tax Authority which has made the Assessment) in the jurisdiction concerned unless leading counsel specialising in Tax (with at least 10 years’ years call) or reasonable equivalent outside the United Kingdom appointed by the Sellers and the Buyer, or failing agreement on such appointment, appointed by the Chair (or equivalent) of the local Bar Association, Sellers’ Representative opines that such a course of action having regard to the merits of the case, the size of the Tax Liability and any other relevant factors is reasonable PROVIDED THAT such course of action shall not for this purpose be reasonable unless such leading counsel opines that, on the merits, there is a reasonable basis for successreasonable.
4.9 In the event 5.6 The rights of a dispute between the Sellers and the Buyer as to whether any action pursuant to this paragraph 4 would be likely to be materially prejudicial to the relationship of the Buyer or the relevant Group Company with the relevant Tax Authority, such dispute shall be referred to leading counsel specialising in Tax (with at least 10 years’ call) or reasonable equivalent outside the United Kingdom appointed by the Sellers and the Buyer, or failing agreement on such appointment, appointed by the Chair (or equivalent) of the local Bar Association who shall determine whether such action would be likely to be so materially prejudicial.
4.10 If the Sellers do not request the Buyer to take any appropriate action under paragraph 4.2.2 within 30 days of notice being given to the Sellers under this paragraph 4.2.1, the Buyer shall be free to settle the relevant Assessment but shall take reasonable steps to mitigate do not apply if any Seller or minimise the amount of any Tax Liability arising a Group Company have committed an act or is responsible for an omission which constitutes fraudulent or grossly negligent conduct in relation to such Assessmentthe Group Company’s Tax affairs.
4.11 The Sellers’ rights under this paragraph 4 with respect to an Assessment and related Tax Claim shall terminate upon Buyer’s written acknowledgement to, and written agreement with, the Sellers that the Sellers shall have no liability with respect to such Assessment and Tax Claim, and that such Assessment shall not reduce any Relevant Amount under this Agreement.
Appears in 1 contract
APPEALS AND CONDUCT OF CLAIMS. 4.1 Each 7.1 If a Purchaser's Group Undertaking receives or becomes aware of an Assessment, the Sellers Purchaser shall be entitled, subject give written notice to the remaining provisions of this paragraph 4, to resist any Assessment for and on behalf and in the name of a Group Company which is or could relate to a Tax Liability for which the Sellers might be liable under this Schedule or for breach of any Tax Warranty or to resist any matter which could reduce a Relevant Amount as referred to in paragraph 7.
4.2 If a Group Company receives or the Buyer receives an Assessment which may give rise to a Tax Liability for which the Sellers might be liable under this Schedule or for breach of any Tax Warranty or which could result in a reduction of a Relevant Amount as referred to in paragraph 7:
4.2.1 the Buyer shall as soon as reasonably practicable give notice in writing Seller of the Assessment (including, including to the extent known, reasonably sufficient available details of such the Assessment, the amount of any liability for Tax, the due date for any payment, payment required to be made and the time limits for any appeal and, so far appeal) as soon as reasonably practicable, the amount of the claim under this Schedule or for breach of any Tax Warranty in respect thereof) to the Sellers and but in any event within 15 fifteen (15) Business Days Days, after the Purchaser's Group Undertaking receives the Assessment (but notice is not a condition precedent to the Seller's liability in respect of a Tax Claim).
7.2 The Purchaser shall consult with the Seller with respect to the Assessment and shall ensure that each Purchaser's Group Company Undertaking will provide to the Seller and its advisers reasonable access to premises and personnel and to relevant assets, documents and records within the power or control of each Purchaser's Group Undertaking for the Buyer becoming aware purposes of investigating the Assessment and enabling the Seller to take the action referred to in paragraph 7.3 below. The Seller (at its cost) may take copies of such Assessment PROVIDED THAT if documents or records and the time limit for appealing or otherwise disputing or resisting an Assessment is within 30 days from the date of such Assessment, the Buyer shall give such notice in writing of such Assessment to the Sellers within 10 Business Days of the Group Company or the Buyer becoming aware of such Assessment; and
4.2.2 subject to paragraphs 4.3 to 4.5 inclusive, the Buyer Purchaser shall, and shall ensure that each Purchaser's Group Company Undertaking will, preserve all documents, records, correspondence, accounts and other information relevant to the Assessment.
7.3 Subject to paragraph 7.6, the Purchaser shall, and shall ensure that each Purchaser's Group Undertaking will, take any action and institute any proceedings, and give any information and assistance, as the Sellers Seller may reasonably request to avoid, dispute, resist resist, appeal, compromise, defend, remedy or compromise mitigate the Assessment (an Assessment where action is so requested being hereafter referred to as a “or postpone any Tax Dispute”).
4.3 The Sellers due in respect of the Assessment, and the Seller shall have the right (if they so wishit notifies the Purchaser accordingly) to control conduct any proceedings related to the conduct of a Tax Dispute, and Assessment.
7.4 The Purchaser shall:
7.4.1 promptly keep the Sellers shall in any event be kept fully Seller reasonably informed of any actual or proposed developments (including any meetings), and shall be provided in relation to the Assessment;
7.4.2 promptly provide the Seller with copies of all correspondence and documentation documents relating to such the Assessment;
7.4.3 not, and shall ensure that no Purchaser's Group Undertaking will, send any material communication or document to a Tax Dispute and such Authority or other information, assistance and access to records and personnel as they reasonably request.
4.4 The Sellers shall reimburse third party (other than its advisers) in relation to the Buyer its Assessment without first giving the Seller a reasonable out-of-pocket costs opportunity to comment on such communication or document, and expenses (including reasonable fees and disbursements of outside legal counsel and other external advisers but other than management costs and expenses) properly incurred in connection with any action or proceedings taken at then incorporating the request of the Sellers pursuant to paragraph 4.2.2 above.
4.5 Subject to paragraph 4.10, the Buyer shall procure that (i) Seller's comments to the extent it is reasonable to do so;
7.4.4 give the Seller reasonable advance notice of any meeting or discussion with a Tax Authority relating to the Assessment and the opportunity to participate in such meeting or discussion; and
7.4.5 not, and shall ensure that (a) the Sellers could be required to make a payment under this Schedule or any of the Tax Warranties no Purchaser's Group Undertaking will, admit liability in respect of any Tax Liability that is the subject of the Tax Disputeof, or (b) a Relevant Amount as referred to in paragraph 7 could be reducedcompromise or settle, the Tax Dispute is not settled or otherwise compromised Assessment without the prior written consent of the Sellers Seller (such consent not to be unreasonably withheld or delayed) and (ii) each Group Company and any of its respective advisors shall, so far as it is reasonable to do so, not submit any document or give notice of any matter to a Tax Authority which could (a) give rise to or increase any claim under this Schedule or any of the Tax Warranties, or (b) reduce a Relevant Amount as referred to in paragraph 7 without first allowing the Sellers’ reasonable opportunity to review such document, and the Buyer shall, or will procure that the relevant Group Company shall, make such reasonable amendments to such document as the Sellers, on a timely basis, may request).
4.6 In the event that the Sellers elect to take control of the conduct of a Tax Dispute in accordance with paragraph 4.3 then:
4.6.1 the Sellers shall keep the Buyer reasonably informed of all relevant matters and shall promptly forward or procure to be forwarded to the Buyer copies of all relevant correspondence and other relevant information and documentation;
4.6.2 all communications written or otherwise relating to the Tax Dispute which are to be transmitted to a Tax Authority shall first be submitted to the Buyer to afford it a reasonable opportunity to comment thereon and the Sellers shall take account of the Buyer’s reasonable comments provided that such comments are provided by the Buyer to the Sellers on a timely basis; and
4.6.3 the Sellers shall make no settlement or compromise of the Tax Dispute which would result in a material increase in any future liability to Tax of the Buyer or any Buyer’s Group Undertaking without the prior approval of the Buyer, such approval not to be unreasonably withheld or delayed.
4.7 Neither the Buyer nor any Buyer’s Group Undertaking shall be obliged to take action, or cede control of the conduct of a Tax Dispute7.5 Where, pursuant to this paragraph 4 unless:
4.7.1 7.3, the Seller chooses to conduct proceedings in a case where an relation to the Assessment, then paragraph 7.4 shall, in addition, apply in relation to those proceedings as if references to the Seller were references to the Purchaser (and vice versa) and as if references to the Assessment relates were references to a Tax Liability for the proceedings of which the Sellers might be liable under this Schedule or for breach of any Tax Warranty , the Sellers shall provide written notice to the Buyer acknowledging that in the event that a Tax Liability or a liability for breach of any Tax Warranty were to arise as a result of such Assessment then, subject to the limitations set out in Schedule 5 to this Agreement, the Sellers would be liable for such Tax Liability or liability for breach of any of the Tax Warranties;
4.7.2 the Sellers are and will remain, in the reasonable determination of the Buyer, solvent and capable of fully satisfying their obligations under paragraph 4.7.1; and
4.7.3 the Sellers progress the conduct of the Tax Dispute within a reasonable timeSeller has conduct.
4.8 Neither the Buyer nor any Buyer’s Group Undertaking 7.6 The Purchaser shall not be obliged required to take any action pursuant to this paragraph 4 7.3:
7.6.1 unless the Seller has indemnified (i) which would be likely to be materially prejudicial to the relationship of the Buyer or the Purchaser's reasonable satisfaction) each relevant Purchaser's Group Company Undertaking against any reasonable costs and expenses properly incurred in relation to such action and any additional Tax which they may incur in connection with the relevant Tax Authoritytaking of such action; or (ii) or
7.6.2 which involves contesting an Assessment beyond the first appellate body (excluding the Tax Authority which has made the Assessment) in the jurisdiction concerned unless leading counsel specialising in Tax the Seller obtains (with at least 10 years’ callthe Seller’s cost) or reasonable equivalent outside the United Kingdom appointed by the Sellers and the Buyer, or failing agreement on such appointment, appointed by the Chair (or equivalent) of the local Bar Association, opines that such a course of action having regard to the merits of the case, the size of the Tax Liability and any other relevant factors is reasonable PROVIDED THAT such course of action shall not for this purpose be reasonable unless such leading counsel opines that, on the merits, there is a reasonable basis for success.
4.9 In the event opinion of a dispute between leading law firm in the Sellers and the Buyer as to whether any action pursuant to this paragraph 4 would be likely to be materially prejudicial to the relationship of the Buyer or the relevant Group Company with the relevant Tax Authority, such dispute shall be referred to leading counsel specialising in Tax (with at least 10 years’ call) or reasonable equivalent outside the United Kingdom appointed by the Sellers and the Buyer, or failing agreement on such appointment, appointed by the Chair (or equivalent) of the local Bar Association who shall determine whether such action would be likely to be so materially prejudicial.
4.10 If the Sellers do not request the Buyer to take any appropriate action under paragraph 4.2.2 within 30 days of notice being given to the Sellers under paragraph 4.2.1, the Buyer shall be free to settle the relevant Assessment but shall take reasonable steps to mitigate or minimise the amount of any Tax Liability arising in relation to such Assessment.
4.11 The Sellers’ rights under this paragraph 4 with respect to an Assessment and related Tax Claim shall terminate upon Buyer’s written acknowledgement to, and written agreement with, the Sellers jurisdiction concerned that the Sellers shall have no liability with respect appeal is more likely than not to such Assessment and Tax Claim, and that such Assessment shall not reduce any Relevant Amount under this Agreementsucceed.
Appears in 1 contract
Samples: Share Purchase Agreement
