EXHIBIT 2.2
DATED MAY 23, 1997
_______________________________________________
(1) TRANSATLANTIC TRUST CORPORATION
and Others
(2) ASECO CORPORATION
_____________________________________
TAX DEED
_____________________________________
XXXXXXX XxXXXXX
Sceptre Court
00 Xxxxx Xxxx
Xxxxxx
XX0X 0XX
Tel: 0000-000 0000
Fax: 0000-000 0000
Telex: 925779
THIS DEED is made the 23rd day of May, 1997 BETWEEN:
(1) The persons whose names and addresses are set out in the schedule
hereto (the "Covenantors"); and
(2) ASECO CORPORATION a corporation registered under the laws of
Delaware, USA whose registered office is at 000 Xxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx, Xxxxxxxxxxxxx 00000 XXX (the "Purchaser").
RECITAL
This deed is entered into pursuant to the provisions of an agreement of even
date herewith between (1) the Sellers and (2) the Purchaser (the "Agreement")
whereby the Purchaser agreed, inter alia, to acquire the entire issued share
capital of Western Equipment Developments Holdings Limited (the "Acquired
Company").
NOW THIS DEED WITNESSES as follows:
1. Definitions and interpretation
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1.1 Words and expressions defined in the Agreement shall (except
where the context otherwise requires) have the same meanings
wherever used herein and those provisions of the Agreement dealing
with construction or interpretation shall (except where otherwise
provided) apply as if expressly set out herein.
1.2 In this deed the following expressions shall have the following
meanings:
"Business Day" a day (other than a Saturday) when banks are open for
the transaction of normal banking business in London
"Claim" any claim notice demand assessment letter or other document
issued or claim made or action taken by or on behalf of any Tax
Authority from which it appears that the Company is liable or is
sought to be made liable to make any payment or any increased or
further payment or any payment on account of Taxation or is or is
sought to be denied or deprived of any Relief
"Company" the Acquired Company and Western Equipment Developments
Limited a company registered in England under number 1681842 whose
registered office is Garden Close, Langage Industrial Estate,
Plympton, Plymouth PL7 5EU
3.
"Event" any event act transaction (including completion of the
Agreement in accordance with its terms) or omission of whatever
nature and without limitation any receipt or accrual of any income
or gains, and any distribution, failure to distribute, acquisition,
disposal, transfer, payment, loan or advance, and references to an
Event on or before any date shall be deemed to include any
combination of two or more Events only the first or some of which
shall have taken place or be deemed to have taken place on or before
that date
"Relief" any relief loss allowance exemption set-off deduction right
to repayment or credit or other relief of a similar nature granted
by or available in relation to Taxation pursuant to any legislation
or otherwise
"Tax Authority" any fiscal revenue statutory governmental federal
state provincial municipal authority body or official thereof
including the Inland Revenue and HM Customs & Excise whether of the
United Kingdom or elsewhere
"Taxation" any taxation duty levy charge impost or contribution of
whatever nature imposed by any Tax Authority (whether or not the
same is primarily payable by the Company and whether or not the
Company has or may have any right of reimbursement against any other
person) whenever imposed and any interest surcharge penalty or fine
in relation thereto.
1.3 Any reference to profits includes income profits or
gains (including capital gains) of any description or from any
source and reference to profits earned accrued or received include
profits deemed to have been or treated as earned accrued or
received.
1.4 Any reference to a liability for Taxation shall include not only
liabilities of the Company to make payments of or in respect of
Taxation but also:
4.
(a) the loss reduction or set-off of any Relief where such
Relief has been taken into account in computing and so reducing
any provision or accrual for Taxation which appears in the
Accounts (or which but for such Relief would have appeared in
the Accounts);
(b) the set-off or utilisation against profits or Taxation of
any Relief which is not available before Completion and arises
in respect of an Event occurring after Completion where but for
the set-off or utilisation of such Relief the Company would
have had a liability for Taxation in respect of which the
Purchaser would have been able to make a claim against the
Covenantors under this deed; and
(c) the loss reduction or set-off of a right to repayment of
Taxation which has been treated as an asset of the Company in
preparing the Accounts,
and in such circumstances the amount of the repayment which
would otherwise have been obtained or the amount of Taxation
which would have been saved by the Relief shall be treated as
the amount of the liability for Taxation as appropriate.
2. Covenant
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Subject as hereinafter provided the Covenantors for themselves
and on behalf of their respective personal representatives
hereby jointly and severally covenant with the Purchaser to pay
to the Purchaser an amount equal to the amount of:
(a) any liability of the Company for Taxation which relates to
an Event occurring on or before Completion or in respect of any
profits earned accrued or received on or before Completion; and
(b) any depletion or reduction in the value of the assets of
the Company or any increase in its liabilities arising as a
result of any liability of the Company to repay in whole or in
part any payment for group relief or payment for the surrender
of surplus advance corporation tax received on or before
Completion; and
(c ) any reasonable costs and expenses properly incurred or
payable by the Purchaser or the Company in connection with or
in consequence of any of the foregoing.
3. Limitations and exclusions
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3.1 The covenant given by clause 2 of this deed does not apply to any
liability for Taxation:
5.
(a) to the extent that provision or reserve in respect thereof was made
in the Accounts;
(b) to the extent that such liability for Taxation arises as a result
only of any such provision or reserve being insufficient by reason
of any increase in rates of Taxation made after the date hereof
with retrospective effect;
(c) for which the Company is primarily liable as a result of an
Event which has occurred in the ordinary course of the Company's
business since the Accounts Date provided that for the purposes of
this deed none of the following shall be regarded as an Event which
has occurred in the ordinary course of the Company's business:
(i) any Event giving rise to a liability for Taxation under
part VIII Taxes Management Act 1970 (charges on non-
residents);
(ii) any Event giving rise to a liability for Taxation under
part XVII Taxes Act 1988 (tax avoidance);
(iii) any distribution as defined by part VI with section 418
Taxes Act 1988;
(iv) any acquisition disposal supply or deemed acquisition
disposal or supply of any assets goods service or business
facility of any kind (including a loan of money or the
letting hiring or licensing of any tangible or intangible
property) for a consideration deemed for Taxation purposes to
be different from that (if any) actually received to the
extent of that difference;
(v) any Event as a result of which the Company becomes liable
to pay or bear Taxation chargeable directly or primarily
against or attributable directly or primarily to another
person firm or company;
(vi) any Event in respect of which Taxation arises as a
result of a failure to deduct, recover or account for
Taxation;
(vii) a disposal of capital assets;
(d) to the extent that such liability to Taxation would not
have arisen but for an increase in the number of associated
companies (within the meaning of section 13(4) Taxes Act) of
the Company on or after Completion;
(e) to the extent that such liability to Taxation results
from or is increased after Completion by any change in
the accounting policies employed by
6.
the Company in the preparation of its accounts
(including any variation of the accounting bases upon
which the Company values its assets) except where such
change is necessary to comply with generally accepted
accounting policies;
(f) to the extent that such liability to Taxation would not
have arisen or would have reduced or eliminated but for
the failure or omission on the part of the Company to
make any claim, election, surrender or disclaimer or to
give any notice or consent or to do any other thing
under the provisions of any legislation relating to
Taxation after Completion, the making, giving or doing
of which was taken into account in computing the
provision for Taxation in the Accounts;
(g) to the extent that such liability to Taxation would not
have arisen but for the amendment or withdrawal (in
whole or in part) by the Company after Completion of any
claim, election or surrender made before Completion or
the making of any disclaimer by the Company after
Completion save for any amendment or withdrawal made in
the ordinary course of business or at the written
request of the Covenantors;
(h) to the extent that such liability to Taxation is in
respect of income, profits or gains earned or accrued in
respect of any period ended on or before the Accounts
Date which were actually received by the Company
(whether before or after Completion) but were not
reflected in the Accounts provided that such income,
profits or gains earned or accrued are retained by the
Company at Completion;
(i) to the extent that such liability for Taxation would not
have arisen or would have been reduced but for:
(i) a cessation of a trade carried on by the Company
at Completion; or
(ii) a change in the nature or conduct of a trade
carried on by the Company after Completion; or
(iii) the passing of a resolution for the voluntary
winding up of the Company,
(in each case) occurring after Completion;
(j) to the extent that such liability for Taxation has
actually been reduced by a Relief or right to repayment
of Taxation which:
(i) arises as a consequence of or by reference to an
Event occurring (or deemed to occur) before
Completion and not as a consequence of or by
reference to any Event occurring (or deemed
7.
to occur) on or after Completion; and
(ii) is not a Relief or right to repayment of
Taxation which (in either case) has been treated as
an asset of the Company in preparing the Accounts.
3.2 The Covenantors will not be liable under clause 2 of this deed
unless the aggregate liability for Taxation for all Claims made
under this deed exceeds (Pounds)25,000.
3.3 The Covenantors will not be liable under clause 2 of this deed in
respect of a liability for Taxation unless within seven years after
the date of this deed the Purchaser has given notice to the
Covenantors of any Claim whatsoever relating to such liability for
Taxation or of any Event which may give rise to such a Claim
provided that such time limit will not apply in any case involving
fraud or wilful default.
3.4 The Covenantors shall only be liable under clause 2 of this deed to
the extent of the availability of Escrow Funds (as defined in the
Agreement).
4. Notification and conduct of Claims
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4.1 If the Purchaser shall become aware of a Claim the Purchaser
shall as soon as reasonably practicable thereafter give written
notice of such Claim to the Covenantors but so that the giving of
such notice shall not be a condition precedent to the liability of
the Covenantors under this deed.
4.2 Subject to the Covenantors indemnifying the Purchaser to its
reasonable satisfaction in respect of any Taxation additional
Taxation losses fines penalties interest charges reasonable costs
and expenses the Purchaser shall (subject to clauses 4.3 and 4.4
below) take such action as the Covenantors may reasonably require to
dispute resist appeal compromise or defend such Claim to the intent
that the Covenantors shall have the right to have any such action
conducted by professional advisers nominated by them provided that:
(a) the Covenantors have been advised by their solicitors or
other professional advisers after disclosure of all relevant
information and documents that it is reasonable to resist such
Claim in the manner proposed by the Covenantors;
(b) the appointment of solicitors or other professional
advisers shall be subject to the approval of the Purchaser
(such approval not to be unreasonably withheld or delayed);
(c) all communications written or otherwise relating to a Claim
which are to be transmitted to any Tax Authority or its
advisers or agents shall first be submitted to the Purchaser
for approval and shall only be transmitted if such approval is
given (such approval not to be unreasonably withheld or
8.
delayed);
(d) the Purchaser shall be kept fully informed of all matters
pertaining thereto and shall be entitled to see copies of all
relevant correspondence;
(e) no settlement or compromise of the Claim which is the
subject of the dispute nor any agreement of any matter in the
conduct of such dispute which is likely to affect the amount
thereof or the future liability of the Company in respect of
Taxation or their relationships with any Tax Authority shall be
made by the Covenantors without the prior written approval of
the Purchaser (such approval not to be unreasonably withheld or
delayed).
4.3 The Purchaser shall not be obliged to take any action pursuant
to this clause 4 which involves contesting a Claim beyond the first
appellate body (excluding the authority or body demanding the
Taxation in question) in the jurisdiction concerned unless they have
been advised in writing by tax counsel of at least 10 years call
instructed by agreement between the Purchaser and the Covenantors at
the expense of the Covenantors that an appeal against the assessment
for Taxation in question will, on the balance of probabilities, be
won by the Purchaser, or as the case may be, the Company.
4.4 If any of the Covenantors or the Company or any of its officers or
employees shall have committed acts or omissions on or before
Completion which constitute fraud or wilful default clause 4.2 shall
not apply or shall cease to have effect.
5. Payments
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5.1 Where the Company is to make any payment of or in respect of
Taxation which is required to be paid by the Covenantors pursuant to
clause 2(a) above the Covenantors shall pay to the Purchaser an
amount equal to the amount of such payment five Business Days prior
to the date on which the Taxation in question is payable to the
authority official or person demanding the same.
5.2 Notice of the amount of the payment required to be made by the
Covenantors under clause 2(a) (in the case of the loss reduction
set-off or utilisation of some Relief or right to repayment of
Taxation) or under clause 2(b) above shall be certified in writing
by the Purchaser and the Purchaser shall provide to the Covenantors
a computation and any other relevant documents which show how such
amount is computed. If requested by and at the expense of the
Covenantors the notice of such amount shall be certified by the
Company's auditors from time to time (acting as experts and not as
arbitrators) and shall (save for manifest error) be conclusive and
binding on the Covenantors. The Covenantors shall pay such amount
to the Purchaser on or before the tenth Business Day following the
date of demand.
5.3 The reasonable costs and expenses referred to in clause 2(c) above
shall be paid by the Covenantors on demand.
5.4 Any sum not paid under this deed on the due date for payment thereof
shall bear
9.
interest (which shall accrue from day to day after as well as before
judgment) at the rate of 3 per cent per annum above the base rate
for the time being of National Westminster Bank Plc compounded
quarterly.
6. Waiver
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No delay or omission of the Purchaser in exercising any right power
or privilege hereunder shall impair such right power or privilege or
be construed as a waiver thereof and any single or partial exercise
of any such right power or privilege shall not preclude the further
or subsequent exercise of any right power or privilege. The rights
and remedies of the Purchaser provided in this deed are cumulative
and not exclusive of any rights and remedies provided by law.
7. Taxation
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7.1 Subject to clause 7.2 below all payments made by the Covenantors
under this deed shall be made gross free of any rights of
counterclaim or set-off and without any deductions or withholdings
of any nature.
7.2 If the Covenantors are required by law to make any deductions or
withholding from any payment hereunder they shall do so and the sum
due from the Covenantors in respect of such payment shall be
increased to the extent necessary to ensure that after the making of
such deduction or withholding the Purchaser receives and retains
(free and clear of any liability in respect of any such deduction or
withholding) a net sum equal to the sum it would have received and
retained had no deduction or withholding been required to be made.
7.3 If the Purchaser is satisfied that any payment (other than interest
paid pursuant to clause 5.4) under this deed will be or has been
subject to Taxation the Purchaser may demand in writing from the
Covenantors from time to time such amount (after taking into account
any Taxation payable in respect of such amount) as will ensure that
the Purchaser receives and retains a net sum equal to the sum it
would have received had the payment not been subject to Taxation.
Notice of such amount shall be certified in writing by the
Purchaser. If requested by and at the expense of the Covenantors
the notice of such amount shall be certified by the Company's
auditors from time to time (acting as experts and not as
arbitrators) and shall be conclusive and binding on the Covenantors.
The Covenantors shall pay such amount to the Purchaser on or before
the tenth Business Day following the date of demand.
8. Recovery
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Where the Covenantors have made a payment to the Purchaser pursuant
to the indemnity contained in clause 2 and the Purchaser or the
Company is entitled to recover from any other person any sum in
respect of the matter to which such payment related the Purchaser
shall or shall procure that the
10.
Company shall (if requested by and at the expense of the Covenantors
and upon the Covenantors providing an indemnity to the reasonable
satisfaction of the Purchaser against all losses reasonable costs or
expenses which may thereby be properly incurred) take such action as
the Covenantors shall reasonably request to enforce such recovery
against the person in question provided that the Purchaser shall not
be obliged to take any action which the Purchaser shall reasonably
consider to be prejudicial to its interests. The Purchaser shall
account to the Covenantors for any sum so recovered (including any
interest paid by such person) net of Taxation (if any) on such sum
up to an amount not exceeding the related amount paid by the
Covenantors under clause 2.
9. Purchaser's Covenants
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9.1 The Purchaser hereby covenants with the Covenantors to procure
that the Company reimburses the Covenantors pursuant to section
767B(2) Taxes Act (or otherwise itself to pay to the Covenantors by
way of adjustment to the purchase price) an aggregate amount equal
to any Taxation (including interest and penalties) assessed on the
Covenantors pursuant to section 767A Taxes Act to the extent that
such assessment relates to any corporation tax assessed on the
Company in respect of an accounting period beginning after
Completion and which remains unpaid at any time after the Relevant
Date (as defined in section 767A(9) Taxes Act).
9.2 The covenant contained in this paragraph shall extend to any
reasonable costs and expenses incurred by the Covenantors in
connection therewith.
9.3 No liability shall arise under this clause 9 unless written notice
of the claim has been given by or on behalf of the Covenantors to
the Purchaser specifying in such detail as is available to the
Covenantors with supporting evidence of the claim within three years
after Completion. Any claim that may be made under this clause 9
(if it has not been previously satisfied, settled or withdrawn)
shall be deemed to have been waived or withdrawn at the expiry of 6
months after the date on which such claim is made unless proceedings
in respect thereof shall have been commenced against the Purchaser
and for this purpose proceedings shall not be deemed to have been
commenced unless they have been both issued and served on the
Purchaser.
9.4 The provision of clause 5 and 7 of this deed shall apply to payments
made under this clause 9.
10. Tax Savings
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10.1 In this clause 10 "Tax Saving" means the reduction or
elimination of any liability to Taxation to the extent that such
reduction or elimination would not have occurred but for the payment
or discharge by the Company of a previous liability to Taxation (the
"Prior Liability") in respect of which the Covenantors have made
payment to the Purchaser under this deed.
10.2 If the Purchaser becomes aware that a Tax Saving has arisen the
Purchaser shall
11.
notify the Covenantors in writing of such Tax Saving as soon as
reasonably practicable. If (at the request and expense of the
Covenantors) the Company's auditors for the time being certify that
the Company has obtained a Tax Saving, the Purchaser shall repay to
the Covenantors the lesser of:
(a) the amount of such Tax Saving (as certified by the
auditors) after deduction therefrom of an amount equal
to any reasonable costs properly incurred in obtaining
it; and
(b) the aggregate amounts (if any) previously paid by the
Covenantors to the Purchaser under this deed in respect
of the Prior Liability.
10.3 The Purchaser shall (and shall procure that the Company shall)
seek to obtain the benefit of any Tax Saving in the year of
assessment in which it arises provided that the Purchaser shall not
be obliged to take any action which the Purchaser considers to be
materially prejudicial to the business or Taxation affairs of the
Company, the Purchaser or any other member of the same group of
companies as the Purchaser or to which the Purchaser objects on any
other reasonable ground. For the purposes of this clause 10, the
Company shall be regarded as obtaining a Tax Saving on the date on
which it obtains relief from taxation by reason of the Tax Saving.
10.4 Where the Purchaser becomes liable to make a repayment pursuant to
this clause 10, the due date for the making of the repayment shall
be the date which is the later of:
(a) ten Business Days after the date on which a notice
containing a written demand for the amount of the
repayment required to be made is received by the
Purchaser; and
(b) the date on which the Company is treated as obtaining
the Tax Saving in question.
11. Overprovisions
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11.1 If any provision for taxation contained in the Accounts shall
at the date of any payment due from the Covenantors pursuant to this
deed be or have been (at the Covenantors' request and expense)
certified by the Company's auditors for the time being to be an
overprovision, the value of such overprovision shall:
(a) first be set off against any payment then due from the
Covenantors under this deed;
(b) secondly, to the extent that there is an excess, there shall
be refunded to the Covenantors any previous payment or payments
made by the Covenantors under this deed up to the amount of the
excess; and
(c) thirdly, to the extent that the excess referred to in
paragraph (b) has not been exhausted under that sub-clause, the
remainder of such excess shall be carried forward and be set
against any future such payment or
12.
payments in chronological order until exhausted.
11.2 If the Purchaser or the Company becomes aware that an
overprovision has arisen the Purchaser shall notify the Covenantors
in writing of such overprovision as soon as reasonably practicable.
12. Miscellaneous
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12.1 The Purchaser shall not be entitled to recover from the
Covenantors under clause 2 of this deed in respect of a liability to
Taxation if and to the extent that the Covenantors have already made
a payment to the Purchaser in full satisfaction of a claim for
breach of the Warranties in respect of the same liability.
12.2 Any payment made by the Covenantors pursuant to clause 2 shall, so
far as possible, be treated as an adjustment to the consideration
paid by the Purchaser for the issued share capital of the Company
under the Agreement.
13. Assignment
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The Purchaser may assign the benefit of this deed on the same terms
as the Purchaser may assign the benefit of the Agreement in
accordance with Section 7.02 of the Agreement.
14. Law
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This deed shall be construed according to and governed by the law of
England and each of the parties submits to the non-exclusive
jurisdiction of the English courts.
15. Notices
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15.1 The respective addresses for service of notices under this deed
shall be those set out in Section 7.03 of the Agreement, provided
always that any party may, by written notice to the others,
substitute another address for the service of notices hereunder.
15.2 Notices may be given by being delivered to the notice address
of the addressee (in which case the notice shall be deemed to be
served at the time of delivery) or by being sent by facsimile (in
which case the notice shall be deemed to be served upon
transmission) or by being sent by first class post (in which case
the notice shall be deemed to be served 24 hours after time of
posting).
15.3 Any notice given to the Seller Representative shall be deemed to be
notice to all the Covenantors.
15.4 In proving service of any notice, it shall be sufficient to prove
that delivery was
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made or that the envelope containing the notice was properly
addressed and posted or that the facsimile was transmitted to the
correct number, as the case may be.
IN WITNESS the parties have signed this instrument as a deed and have delivered
it upon dating it.
Signed as a deed by )
ASECO CORPORATION acting )
by ) /s/ Xxxx X. Xxxxxx, Xx.
xxxx authorised on its behalf ) -----------------------
Signed as a deed by )
TRANSATLANTIC TRUST )
CORPORATION acting by ) /s/ Xxxxxx Xxxxx
its duly authorised attorney ) ----------------
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