EXHIBIT 10.2
Tax Deed
THIS DEED is made on 23 January 1999
BETWEEN:
(1) INTERTAN, INC., a corporation organised under the laws of the State of
Delaware, USA and having its principal offices at 000 Xxxx Xxxxxx, Xxxxx
0000, Xxxx Xxxxx, Xxxxx, 00000, XXX. ("Seller") and
(2) BEHEER-EN BELEGGINGSMAATSCHAPPIJ ANTIKA B.V. a company registered in the
Netherlands and of which the registered office is at Xxxxxxxxxxx 00,
0000 XX Xxxxxxxxx ("Buyer")
1. INTRODUCTION
1.1 By an agreement (the "Agreement") dated the date of this Deed and made
between (1) Seller and (2) Buyer, Buyer agreed to purchase the Shares
(as defined in the Agreement).
1.2 Clause 6.2. of the Agreement provides that Seller will deliver today a
duly executed deed in this form.
2. DEFINITIONS AND INTERPRETATION
2.1 In this Deed expressions defined in the Agreement shall bear the same
meanings unless the context otherwise requires or unless they are
expressly given different meanings.
2.2 In this Deed unless the context otherwise requires:
WORD MEANING
"Balance Sheet Date" means 30 June 1998;
"Claim" includes any notice, assessment,
letter or other document issued,
or action taken, by or on behalf
of the Revenue or any other
governmental or statutory
authority, body or official,
whether of the United Kingdom or
elsewhere, whereby the Company
is or may be placed under a
liability to Taxation;
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"Company" means InterTAN UK Limited number
2191786;
"event" includes any act, omission,
transaction or circumstance
(including any of such matters
provided for under the
Agreement) or where the Company
is deprived of or required to
set off, any relief which would
otherwise be available to the
Company and references to an
event occurring on or before
Closing include a series or
combination of events one or
more of which occurred on or
before Closing;
"Relief" includes any loss, allowance,
exemption, set-off, credit or
deduction relevant to the
computation of any Taxation or
right to repayment of Taxation;
and
"Taxation" or "Tax" means all forms of taxation,
duties (including stamp duty and
all duties of Customs & Excise),
levies, imposts, charges,
withholdings, national insurance
and other contributions, rates
and PAYE liabilities (including
any related or incidental
penalty, fine, interest or
surcharge) whenever created or
imposed and whether of the
United Kingdom or elsewhere.
2.3 In this Deed references to a "liability to Taxation" include, subject
to Clause 0, not only a liability to make any payment or increased
payment in respect of Tax but also:
2.3.1 the loss or the use or set off of any Relief which has been
taken into account in computing, or in obviating the need for,
any provision for Tax or deferred Tax in the Accounts or which
was reflected or shown as an asset in the Accounts;
2.3.2 the use or set off of any Relief which arises in respect of an
event occurring or period ending after Closing where the use or
set off of that Relief has the effect of reducing or
eliminating any liability to Taxation which would otherwise
have given rise to a claim;
2.3.3 any payment by the Company for group relief or for the
surrender of advance corporation tax or for a transferred tax
refund or any repayment by the Company of a payment for group
relief or for the surrender of advance corporation tax or for a
transferred tax refund; and
2.3.4 the enforcement or exercise of any mortgage or charge or power
of sale over any of the Shares or over any of the assets of the
Company in connection with the payment of any Taxation;
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PROVIDED THAT:
2.3.5 in any case falling within Clause 2.3.1 above, where the Relief
lost, used or set off would have operated as a deduction from
gross income, profits or gains, the liability to Taxation shall
be treated as being equal to the amount of the Relief
multiplied by the rate of corporation tax in force at the date
when it is lost used or set off;
2.3.6 in any other case falling within Clause 2.3.1 the liability to
Taxation shall be treated as being equal to the amount of the
Relief lost, used or set off;
2.3.7 in any case falling within Clause 2.3.2 above, the liability to
Taxation shall be treated as being equal to the amount of Tax
saved as a consequence of the application of the Relief;
2.3.8 in any case falling within Clause 2.3.3 above, the liability to
Taxation shall be treated as being equal to the amount of the
payment required to be paid or repaid; and
2.3.9 in any case falling within Clause 2.3.4 above, the liability to
Taxation shall be treated as being equal to the amount of Tax
which is or is liable to be paid out of the proceeds of
enforcement or exercise of the mortgage, charge or power of
sale together with the amount of any costs or expenses incurred
in connection with such enforcement or exercise which are
liable to be paid out of these proceeds.
2.4 The covenants contained in this Deed shall be construed as separate
and independent and none of them shall be affected or restricted one
by any other except to the extent that any payment made by Seller and
received by Buyer in respect of one covenant shall discharge the same
liability under the other covenants which shall arise out of the same
subject matter.
3. COVENANTS
3.1 Seller covenants with Buyer to pay to Buyer an amount equal to:
3.1.1 any liability to Taxation of the Company in respect of, by
reference to or in consequence of either any income, profits or
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gains earned, accrued or received or deemed to have been or
treated as or regarded as earned, accrued or received on or
before Closing; and/or any event which occurred or is deemed to
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have occurred on or before Closing;
3.1.2 any liability to Taxation of the Company for which it is not
primarily liable in respect of, by reference to or in
consequence of any event which occurred or is deemed to have
occurred on or before Closing;
3.1.3 any Taxation arising in respect of or in connection with any
amounts paid or
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payable pursuant to or otherwise in connection with the
Agreement or this Deed (including any breach thereof); and
3.1.4 all reasonable costs and expenses incurred by Buyer in
enforcing the provisions of this Deed.
3.2 All sums payable by Seller under the covenants contained in this Deed
shall be paid free and clear of all deductions or withholdings or
rights of counterclaim or set-off unless the deduction or withholding
is required by law.
3.3 If Seller is required by law to make any deduction or withholding from
any payment under this Deed or the Agreement, the sum due from Seller
in respect of such payment shall be increased to the extent necessary
to ensure that after the making of such deduction or withholding Buyer
receives and retains a net sum equal to the sum it would have received
had no deduction or withholding been required to be made.
3.4 In the event that any sum paid to Buyer pursuant to this Deed or the
Agreement is or will be chargeable to Tax Seller shall be obliged to
pay such further sum as will, after payment of the Tax leave a sum
equal to the amount that would otherwise have been payable if Tax had
not been so chargeable.
4. EXCLUSIONS
4.1 The covenants in clause 0 shall not apply to any liability to Taxation
to the extent that:
4.1.1 specific provisions, allowance or reserve in respect of such
Taxation was made in the Accounts; or
4.1.2 the Company is liable to corporation tax in respect of actual
income, profits or gains of the Company arising in the ordinary
and normal course of business in the period from the Balance
Sheet Date to Closing which have been retained by the Company
at Closing; or
4.1.3 it shall arise in respect of VAT on any supply made and imports
received by the Company in the ordinary course of its business
in respect of a prescribed VAT return period ending after the
Balance Sheet Date for which a valid VAT invoice has been
issued and for which the Company has made full provision in its
accounting records and the said VAT has been collected but the
time to account for it has not yet arisen; or
4.1.4 it shall arise in respect of PAYE or employee's national
insurance contributions in respect of payments made in the
ordinary course of the Company's business in a period ending
after the Balance Sheet Date and for which the Company has kept
accurate and complete deductions working sheets and the time to
account and pay such amounts has not
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yet arisen and for which liability the Company has made full
provision in its accounting records; or
4.1.5 which would not have arisen but for, or any provision, reserve,
or allowance in the Accounts for any liability of the Company
which is the subject matter of such liability to Taxation being
insufficient by reason of, any retrospective change in
legislation (including without limitation any increase in rates
of Taxation) or in the published practice of any Taxing
Authority (in the UK or elsewhere) coming into force after
Closing and not announced before Closing; or
4.1.6 such liability to Taxation arises by virtue of any change in
the bases upon which the accounts of the Company after Closing
are prepared and/or in the policies or practice adopted in the
preparation of such accounts provided that the previous bases
or policies or practices were in accordance with generally
accepted accounting principles; or
4.1.7 which would not have arisen but for a voluntary act, omission
or transaction carried out by the Company or Buyer or any of
their directors, employees or agents on or after Closing
otherwise than in the ordinary and normal course of the
Company's business as presently carried on which the Buyer knew
or ought to have known would give rise to the liability in
question.
4.1.8 such liability arises by reason of the crystallisation after
closing of chargeable gains previously rolled over under s152
et seq Taxation of Chargeable Gains Xxx 0000 provided that such
liability is, or is capable of being, offset by the use of a
Relief (other than (i) a Relief within clause 0 or (ii) a
Relief which gives rise to an obligation on the Buyer to make a
payment of Deferred Consideration, in which case the covenants
in clause 0 shall be limited only to the extent that a
liability to make such payment of Deferred Consideration
arises).
4.2 For the purposes of clause 0 none of the following shall be regarded
as occurring in the ordinary and normal course of business or trading
of the Company:
4.2.1 an event giving rise to a liability under Part XVII Taxes Act;
4.2.2 a distribution within the meaning given by Section 209 or 418
Taxes Act;
4.2.3 an acquisition, disposal or supply or deemed acquisition
disposal or supply of assets, goods, services or business
facilities of any kind (including a loan of money or a letting,
hiring or licensing of tangible or intangible property) for a
consideration which is treated for Taxation purposes as
different from the actual consideration;
4.2.4 an event which results in the Company being liable for Taxation
for which it is not primarily liable;
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4.2.5 an event in respect of which Taxation arises as a result of a
failure by the Company to deduct, withhold or account for
Taxation; and
4.2.6 any disposal of capital assets in excess of (Pounds)100,000.
5. FURTHER LIMITATIONS
Clause 6 of the Agreement shall have effect to the extent it is stated in
the Agreement to apply to this Deed.
6. DATE FOR PAYMENT
6.1 Seller shall make payments to Buyer in cleared funds in respect of its
obligations under this Deed not later than on the following dates:
6.1.1 where a Claim represents Taxation to be borne by the Company
but which has not yet become due, Seller shall make the payment
in respect of that Claim (or so much thereof as represents that
Taxation) one working day before the last date upon which
payment of that Taxation is due;
6.1.2 where a Claim consists of the loss of a right to repayment of
Taxation, Seller shall make the payment in respect of that
Claim (or so much thereof as represents that loss) on the later
of the date on which that repayment would otherwise have become
due or 5 working days after notification by Buyer; and
6.1.3 in any other case, Seller shall make the payment 5 working days
after the date on which a notice containing a written demand
for the amount of the payment required to be made is delivered
to Seller.
6.2 If any payment required to be made by Seller under this Deed is not
made by the due date for payment, that payment shall carry interest
from the due date of payment until actual payment (as well after
judgement as before) at the rate of 2 per cent above the base rate
from time to time of Lloyds Bank Plc.
7. CONDUCT OF CLAIMS
7.1 Buyer shall or shall procure that notice is given to Seller as soon as
reasonably practicable after it shall become aware of any claim which
may be made pursuant to this Deed and in any event 15 days before the
expiry of any deadline for lodging an appeal.
7.2 Buyer shall (and it shall procure that the Company shall) take such
action and provide such information and documentation as Seller may
reasonably request to avoid, dispute, resist, appeal compromise or
defend any claim and any adjudication in respect thereof (a "dispute")
subject to Buyer and the
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Company being indemnified and secured to Buyer's reasonable
satisfaction by Seller against the liability to Taxation and all
losses, costs, expenses, damages, interest, penalties and surcharges
thereby incurred. Buyer shall account to Seller for any sum so
recovered (net of Taxation) (if any) on such sum and any costs of
recovery borne by Buyer) up to an amount not exceeding the amount paid
by Seller under clause 0 in respect of the liability in question.
7.3 If Seller does not request Buyer to take any such action within thirty
days of the notice to Seller which should be in writing, Buyer or the
Company shall (without prejudice to their rights under this Deed) be
free to pay or settle the claim on such terms as they may in their
absolute discretion think fit.
7.4 Subject to the above, any dispute relating to a liability to Taxation
shall be conducted by Seller but:
7.4.1 Seller shall keep Buyer fully informed of all relevant matters
and shall promptly forward or procure to be forwarded to Buyer
copies of all relevant correspondence and other relevant
material information and documentation;
7.4.2 all communications relating to the dispute which are to be
transmitted to a Taxing Authority shall first be submitted to
the Company or Buyer for approval and shall only be finally
transmitted if such approval is given, such approval not to be
unreasonably withheld or delayed;
7.4.3 the appointment of solicitors or other professional advisers
shall be subject to the prior written approval of Buyer, such
approval not to be unreasonably withheld or delayed; and
7.4.4 If Buyer shall reasonably and in good faith consider that the
dispute would be materially prejudicial to its relationship
with any Taxing Authority or that of the Company Seller shall
not proceed with the conduct of the dispute unless and until
the parties concerned are advised by leading tax counsel that
Seller will on a balance of probabilities succeed in the
proposed conduct of the dispute. Such leading tax counsel shall
be selected by Seller with the agreement of Buyer and shall be
instructed jointly but his fees paid by Seller.
8. TAX PROVISIONS
8.1 The amount of Seller's liability under the Agreement and this Deed
shall be reduced by the amount (if any) by which any provision for any
liability to Taxation in the Accounts shall at the date of such claim
be confirmed by the Auditors at the request of any party to be an
over-provision; and to the extent that any such over-provision shall
be so taken into account it shall not thereafter be regarded as an
over-provision or under-statement in the Accounts.
8.2 If Seller shall have paid any amount under the Agreement and/or this
Deed and
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subsequently the amount of any provision in the Accounts shall be
confirmed by the Auditors at the request of any party to be shown to
have been an over-provision, the Company shall repay to Seller an
amount equal to the lesser of:-
8.2.1 such payment; and
8.2.2 the amount over-provided and the amount of any relevant over-
provision shall thereafter for the purposes of this Clause be
treated as reduced by the amount of such repayment.
8.3 If Buyer shall discover that there has been such an over-provision or
under-statement it shall as soon as reasonably practicable give to
Seller such material details of it of which Buyer shall be aware, as
soon as possible together with such other relevant information as
Seller shall reasonably request for the purposes of determining the
extent of such over-provision or under-statement.
9. RECOVERY
9.1 If the Company or Buyer shall be or become entitled to recover from
any person (including, without limitation, a Taxing Authority) any sum
in respect of any matter to which this Deed relates, Buyer shall (and
it shall procure that the Company shall) take such action as Seller
shall reasonably request to enforce such recovery against the person
in question and assign any such rights of reimbursement to Seller in
such form as it shall request.
9.2 Any such action shall be at the expense of Seller and, if required by
Buyer, Seller shall indemnify and secure (to Buyer's reasonable
satisfaction) Buyer and the Company against all reasonable and proper
costs or expenses which may thereby be incurred.
9.3 Buyer shall (or shall procure that the Company shall) account to
Seller within five business days of receipt of any sum so recovered
(including any interest or repayment supplement paid by such person on
such sum but after deduction of any costs of recovery and any Tax on
the amount recovered) up to an amount not exceeding any amount paid by
Seller to Buyer for the Company under Clause 0 in respect of the same
matter.
10. RELIEFS AND CORRESPONDING SAVINGS
10.1 Where an amount of Taxation paid or payable by the Company has
resulted in a Relief which would not otherwise have arisen (a
"Relevant Relief"), Buyer shall:-
10.1.1 procure that the Company shall so far as possible utilise such
Relevant Relief; and
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10.1.2 (if Seller shall have made any payment in respect of such
amount of Taxation pursuant to this Deed) repay to Seller an
amount equal to the reduction in the Company's liability to
Taxation as a result of the utilisation of the Relevant Relief
(or, if less, the payment made by Seller).
10.2 Any repayment required to be made under Clause 0 shall be made 3
business days prior to the date on which the Company would have been
liable to make a payment of Taxation but for the Relevant Relief.
10.3 Seller shall be entitled to require and Buyer shall procure that the
Company's auditors shall (at the expense of Seller) certify the amount
of any payment due under this clause.
11. REDUCTION OF PURCHASE PRICE
Any amounts payable pursuant to this Deed shall be deemed to constitute a
reduction in the Consideration.
12. BUYER'S FURTHER OBLIGATIONS
Buyer shall preserve and shall procure that the Company preserves all
documents, records, correspondence, accounts and other information
whatsoever in respect of or which may be relevant for the purposes of
determining the liability of the company to Taxation until such time as
Seller shall cease to have any liability or contingent liability under this
Deed.
13. WAIVER
No delay of Buyer in exercising any rights under this Deed shall prejudice
such rights or be construed as a waiver or partial waiver of such rights,
nor shall it exclude the further exercise of such rights.
14. LAW
This Deed shall be governed by and construed in all respect in accordance
with English law and the parties agree to submit to the non-exclusive
jurisdiction of the English Courts.
15. NOTICES
The provisions of clause 15 of the Agreement shall apply equally to this
Deed.
IN WITNESS WHEREOF this document has been executed as a Deed under Seal and the
Parties intend it to be delivered on the above date.
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Signed as a deed )
by INTERTAN, INC. )
in the presence of: )
Signed as a deed )
by BEHEER-EN )
BELEGGINGSMAATSCHAPPIJ )
ANTIKA B.V )
in the presence of: )
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