Common use of Section 116 of the Canadian Tax Act Clause in Contracts

Section 116 of the Canadian Tax Act. At the Closing UK Holdings shall deliver to Buyer a certificate issued pursuant to Section 116 of the Income Tax Act (Canada) (the “Canadian Tax Act”) in respect of the sale and purchase of the equity interests in Canada Holdings, provided that: (a) Unless a certificate is issued by the Minister of National Revenue (Canada) pursuant to subsection 116(2) of the Canadian Tax Act in respect of the disposition of the equity interests in Canada Holdings to Buyer specifying a certificate limit in an amount that is not less than the portion of the Purchase Price (adjusted in accordance with Section 2.3) allocated to the equity interests in Canada Holdings, Buyer will be entitled to withhold from the portion of the Cash Purchase Price payable to UK Holdings the amount that Buyer may be required to remit pursuant to subsection 116(5) of the Canadian Tax Act in connection with its acquisition of the equity interests in Canada Holdings (the “Withheld Amount”), and amount so withheld will be credited to Buyer as payment on account of the Purchase Price. (b) If, prior to the 28th day after the end of the month in which the Closing Date occurs (or such later time before which the Canada Revenue Agency (the “CRA”) confirms in writing that the CRA will not enforce the remittance of funds as required by subsection 116(5) of the Canadian Tax Act and that Buyer will not be liable for interest and penalties in respect of the late remittance of the funds withheld (the “Comfort Letter”)), UK Holdings delivers to Buyer: (i) a certificate issued by the Minister of National Revenue under subsection 116(2) of the Canadian Tax Act in respect of the disposition of the equity interests in Canada Holdings to Buyer, Buyer will promptly pay to UK Holdings the lesser of (i) the Withheld Amount and (ii) the Withheld Amount less 25% of the amount, if any, by which the portion of the Purchase Price (adjusted in accordance with Section 2.3) allocated to the equity interest in Canada Holdings exceeds the certificate limit specified in such certificate, together with interest at the Applicable Rate on the Withheld Amount, accrued from the Closing Date to the date of such payment, or (ii) a certificate issued by the Minister of National Revenue under subsection 116(4) of the Canadian Tax Act in respect of the disposition of the equity interests in Canada Holdings to Buyer, Buyer will promptly pay the Withheld Amount to UK Holdings, together with interest at the Applicable Rate on the Withheld Amount, accrued from the Closing Date to the date of such payment. (c) If Buyer continues to hold all or a portion of the Withheld Amount on the later of the 28th day after the end of the month in which the Closing Date occurs and the time when (if the CRA has provided the Comfort Letter) Buyer is obliged to remit funds to the CRA, Buyer will remit to the Receiver General of Canada the amount required to be remitted pursuant to subsection 116(5) of the Canadian Tax Act and Buyer will pay to UK Holdings, prior to such remittance, any remaining portion of the Withheld Amount, together with interest at the Applicable Rate thereon, accrued from the Closing Date to the date of such payment. (d) Where any amount is remitted to the CRA pursuant to this Section 2.9, Buyer shall furnish UK Holdings with confirmation that such remittance has been made. Any such remittance will be deemed to have been paid by Buyer to UK Holdings on account of the Purchase Price.

Section 116 of the Canadian Tax Act. At the Closing UK Holdings shall deliver to Buyer a certificate issued pursuant to Section section 116 of the Income Tax Act (Canada) (the “Canadian Tax Act”) in respect of the sale and purchase of the equity interests in Canada Holdings, provided that: (a) Unless a certificate is issued by the Minister of National Revenue (Canada) pursuant to subsection 116(2) of the Canadian Tax Act in respect of the disposition of the equity interests in Canada Holdings to Buyer specifying a certificate limit in an amount that is not less than the portion of the Purchase Price (adjusted in accordance with Section 2.3) allocated to the equity interests in Canada Holdings, Buyer will be entitled to withhold from the portion of the Cash Purchase Price payable to UK Holdings the amount that Buyer may be required to remit pursuant to subsection 116(5) of the Canadian Tax Act in connection with its acquisition of the equity interests in Canada Holdings (the “Withheld Amount”), and amount so withheld will be credited to Buyer as payment on account of the Purchase Price. (b) If, prior to the 28th day after the end of the month in which the Closing Date occurs (or such later time before which the Canada Revenue Agency (the “CRA”) confirms in writing that the CRA will not enforce the remittance of funds as required by subsection 116(5) of the Canadian Tax Act and that Buyer will not be liable for interest and penalties in respect of the late remittance of the funds withheld (the “Comfort Letter”)), UK Holdings delivers to Buyer: (i) a certificate issued by the Minister of National Revenue under subsection 116(2) of the Canadian Tax Act in respect of the disposition of the equity interests in Canada Holdings to Buyer, Buyer will promptly pay to UK Holdings the lesser of (i) the Withheld Amount and (ii) the Withheld Amount less 25% of the amount, if any, by which the portion of the Purchase Price (adjusted in accordance with Section 2.3) allocated to the equity interest in Canada Holdings exceeds the certificate limit specified in such certificate, together with interest at the Applicable Rate on the Withheld Amount, accrued from the Closing Date to the date of such payment, or (ii) a certificate issued by the Minister of National Revenue under subsection 116(4) of the Canadian Tax Act in respect of the disposition of the equity interests in Canada Holdings to Buyer, Buyer will promptly pay the Withheld Amount to UK Holdings, together with interest at the Applicable Rate on the Withheld Amount, accrued from the Closing Date to the date of such payment. (c) If Buyer continues to hold all or a portion of the Withheld Amount on the later of the 28th day after the end of the month in which the Closing Date occurs and the time when (if the CRA has provided the Comfort Letter) Buyer is obliged to remit funds to the CRA, Buyer will remit to the Receiver General of Canada the amount required to be remitted pursuant to subsection 116(5) of the Canadian Tax Act and Buyer will pay to UK Holdings, prior to such remittance, any remaining portion of the Withheld Amount, together with interest at the Applicable Rate thereon, accrued from the Closing Date to the date of such payment. (d) Where any amount is remitted to the CRA pursuant to this Section 2.9, Buyer shall furnish UK Holdings with confirmation that such remittance has been made. Any such remittance will be deemed to have been paid by Buyer to UK Holdings on account of the Purchase Price.