Common use of Inter-relationship with normal gross-up clause Clause in Contracts

Inter-relationship with normal gross-up clause. Paragraph 5(d) is designed to govern the relationship between the normal gross-up clause in the Agreement (paragraph 6(b)) and the position as described above. The effect of paragraph 5(d) is as follows. The Buyer will not, if it has to account for any tax when making a payment in respect of equities pursuant to paragraph 5(c), normally be required to pay an additional amount by way of gross-up under paragraph 6(b) if some withholding is required on making the payment to the Seller. This is consistent with the view that generally, the Buyer's position should, as cash provider, be protected under an agreement to repo equities. An exception is made in a circumstance where, in relation to the Income payment on the equities in question, the Buyer can obtain a tax credit which means that the withholding or deduction does not amount to a true cost for the Buyer. In such a circumstance, the gross-up clause is reinstated. 3.11

Inter-relationship with normal gross-up clause. Paragraph 5(d) is designed to govern the relationship between the normal gross-up clause in the Agreement (paragraph 6(b)) and the position as described above. The effect of paragraph 5(d) is as follows. The Buyer will not, if it has to account for any tax when making a payment in respect of equities pursuant to paragraph 5(c), normally be required to pay an additional amount by way of gross-up under paragraph 6(b) if some withholding is required on making the payment to the Seller. This is consistent with the view that generally, the Buyer's ’s position should, as cash provider, be protected under an agreement to repo equities. An exception is made in a circumstance where, in relation to the Income payment on the equities in question, the Buyer can obtain a tax credit which means that the withholding or deduction does not amount to a true cost for the Buyer. In such a circumstance, the gross-up clause is reinstated. 3.11.