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EXHIBIT 10.2
DATED 16th April 1998
XXXX INTERNATIONAL (UK) LIMITED
- AND -
BLAKEDEW NINETY FOUR LIMITED
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DEED OF TAX COVENANT
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NEW COURT, 0 XXXXXX XXXXXX XXXX
XXXXXXXXXXX, XXXXXXXXX XX00 0XX
REF: XXX.79
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TABLE OF CONTENTS
CLAUSE HEADING PAGE NUMBER
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1. Definitions and interpretation
2. Covenant
3. Exclusions
4. Overprovisions and savings
5. Recovery from other persons
6. Disputes and conduct of claims
7. Tax returns
8. Due date of payment and interest
9. Deductions and Withholdings
10. Enforceability
11. Release
12. Assignability
13. General
14. Notices
15. Governing Law and Jurisdiction
The First Schedule
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THIS DEED made the 16th day of April 1998
BETWEEN :
(1) THE PERSON whose name and address is set out in the First Schedule
hereto (the "Covenantor"); and
(2) BLAKEDEW NINETY FOUR LIMITED a company registered under number
3516383 and whose registered office is at New Court, 1 Xxxxxx Xxxxxx
Road, Segensworth, Fareham, Hampshire PO15 5UA (the "Purchaser" which
expression shall, unless the context does not so permit, include its
successors in title).
WITNESSES as follows
1. DEFINITIONS AND INTERPRETATION
In this Deed
1.1 except where otherwise provided or unless there is something in the
subject matter or context inconsistent therewith, words and
expressions defined in the Agreement have the same meaning:-
1.2 the following words and expressions have the meanings set under
them:-
"AGREEMENT"
1.2.1 the agreement of even date herewith between the Covenantor and the
Purchaser for the sale and purchase of the Sale Shares;
"BUSINESS DAY"
1.2.2 a day (other than a Saturday) when banks are open for transaction of
normal banking business in London;
"CLAIM"
1.2.3 any assessment, notice, demand, letter or other document issued or
action taken on behalf of any Tax Authority from which it appears
that the Company is or
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may be placed under a Liability for Taxation (as hereinafter
defined);
"COMPANY"
1.2.4 Sowester Limited a company registered under number 463358 whose
registered office is at Xxxxxxxxx Xxxx, Xxxxxxxx Xxxxxxxxxx Xxxxxx,
Xxxxx XX00 0XX;
"COMPLETION"
1.2.5 completion of the sale and purchase of the Sale Shares under the
Agreement;
"COMPLETION ACCOUNTS DATE"
1.2.6 means 31 March 1998;
"DISTRIBUTION"
1.2.7 includes anything which is or is deemed to be a dividend or
distribution for the purposes of any Taxation and shall also include
any other Event which gives rise to an obligation to account for
advance corporation tax or amounts corresponding to or similar to
advance corporation tax;
"EVENT"
1.2.8 includes (without limitation) any payment, transaction act omission
any change in the residence of any person for the purpose of any tax,
the death of any person and a failure to take any action which would
avoid an apportionment or deemed distribution of income whether or
not the Company or the Purchaser is a party thereto and including
Completion and references to an Event occurring on or before any date
or time shall include an Event deemed pursuant to any Taxation
Statute, to occur or be treated or regarded as occurring on or before
that date or time;
"LIABILITY FOR TAXATION"
1.2.9 any liability of the Company to make a payment of or in respect of
Taxation and also:-
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1.2.9.1 the loss, counteraction, nullification, disallowance or
clawback for whatever reason of any relief, to the
extent that such relief is treated as an asset in
preparing the Completion Accounts or is taken into
account in computing (and so reducing or eliminating)
any provision which appears, or which but for the
presumed availability of the relief in question would
have appeared, in the Completion Accounts (an "Accounts
Relief");
1.2.9.2 the nullification, cancellation or set-off of a right
to repayment of Taxation to the extent that such
repayment is treated as an asset in preparing the
Completion Accounts or is taken into account in
computing (and so reducing or eliminating) any
provision which appears, or which but for the presumed
availability of the relief in question would have
appeared in the Completion Accounts (an "Accounts
Relief"); and
1.2.9.3 the set-off against, income profit or gains earned
accrued or received on or before the date hereof of any
relief to the extent that such was treated as an asset
in the Completion Accounts or any relief, allowance or
credit which is not available before the date hereof
but arises after the date hereof in circumstances
where, but for such set-off the Company would have had
an actual Taxation liability in respect of which the
Purchaser would have been able to make a claim against
the Covenantor under this Deed;
and:-
in a case within paragraph 1.2.9.1 and 1.2.9.3 above
the amount of the relief, allowance or credit or if
such relief allowance or credit is a deduction from or
set-off against gross income profits or against the
amount of Taxation which would on the basis of tax
rates current at the date of such loss counteraction
nullification disallowance or clawback have been saved
thereby but for such loss, counteraction nullification
disallowance or clawbacks;
or:-
in a case within paragraph 1.2.9.2 above the amount of
the repayment which would otherwise have been obtained
shall be treated as an amount of Taxation for which a liability on
the Company has arisen and fallen due; and in this Deed references to
"relief" means any
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loss, allowance, exemption, set-off, deduction, credit or other
relief from or relating to Taxation or to the computation of income,
profits, or gains for the purposes of any Taxation and or right to
repayment of Tax.
"TAX AUTHORITY"
1.2.10 any taxing or other authority (whether within or outside the United
Kingdom) competent to impose any Liability for Taxation.
"TAXATION STATUTE"
1.2.11 any statute, enactment, law, regulation or arrangement wheresoever
enacted or issued coming into force or entered into providing for or
imposing any Taxation;
1.3 headings are for convenience only and shall not affect the
interpretation hereof;
1.4 references to any statutory provisions shall include any statute or
statutory provision which amends extends consolidates or replaces the
same or which has been amended extended consolidated or replaced by
the same and shall include orders regulations instruments bye-laws
and other subordinate legislation made under the relevant statute or
statutory provision;
1.5 references to any income profits or gains earned accrued or received
on or before a particular date or time or in respect of a particular
period shall include any income profits or gains deemed pursuant to
any relevant Taxation Statute to have been or treated or regarded as
earned, accrued or received on or before that date or time or in
respect of that period of the purpose of any Taxation;
1.6 unless the context otherwise requires the singular shall include the
plural and vice versa, the masculine shall include the feminine and
references to persons shall include bodies corporate, unincorporated
and associations and partnerships.
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2. COVENANT
Subject as hereinafter provided the Covenantor hereby covenants with
the Purchaser to pay to the Purchaser (so far as possible by way of
repayment of the consideration payable under the Agreement) an amount
equal to any of the following:-
2.1 any Liability for Taxation of the Company arising:-
2.1.1 as a consequence of or by reference to any Event which
occurred on or before Completion or was deemed to
occur on or before Completion for the purposes of any
Taxation; or
2.1.2 in respect of or by reference to any income, profits or
gains which were earned, accrued or received on or
before Completion or in respect of a period ending on
or before Completion;
2.2 any liability for Taxation of the Company arising as a consequence of
or by reference to either of the following occurring or being deemed
to occur at any time after Completion:-
(i) the disposal by any Relevant Company of any asset or of
any interest in or right over any asset which could
arise under s.189 and s.191 TCGA 1992; or
(ii) any Relevant Company ceasing to be resident in the
United Kingdom for the purposes of any tax which could
arise under s.132 FA 1988; or
(iii) the making by any Relevant Company of any such payment
or deemed payment as constitutes a chargeable payment
for the purposes of section 214 ICTA; or
(iv) the failure by any Relevant Company to pay such
Taxation if the Company is liable therefor by reason of
the operation of Sections 767A or 767B or Section 767AA
of the ICTA.
and for the purposes of this sub-clause, the term "Relevant Company"
shall mean the Covenantor and any company other than the Company or
the
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Purchaser or any company which the Company or the Purchaser comes to
control at any time after Completion;
2.3 any liability of the Company to repay or the loss of the right to
receive in whole or in part any payment for the surrender of group
relief or of the benefit of any surplus advance corporation tax
received or receivable by the Company pursuant to any agreement or
claim made on or before the date hereof;
2.4 any Liability for Taxation for which the Company is liable as a
result of being treated as a member of the same group with any body
corporate for the purposes of Section 43 of the Value Added Tax Act
1994 during any prescribed accounting period (as defined in Section
25(1) of the Value Added Tax Act 1994) which ended on or prior to or
was current on the date hereof and (so far as any such other bodies
corporate are concerned with which it was on the date hereof or has
previously been in such a group) the next following prescribed
accounting period; and
2.5 all reasonable costs and expenses properly incurred by the Company or
the Purchaser in connection with any Liability for Taxation, Claim or
any liability or loss under this clause or successfully taking or
defending any action under this Deed.
3. Exclusions
3.1 The Covenantor shall not be liable under clause 2 above in respect of
any Liability for Taxation payable or which may become payable as is
mentioned in clause 2 above to the extent that:-
3.1.1 such Liability for Taxation was discharged (whether by
payment or by the utilisation of any relief allowance
or credit in respect of Taxation) prior to 31 March
1998; or
3.1.2 recovery has been made in respect of the matter giving
rise to such Liability for Taxation by the Purchaser
under the Warranties; or
3.1.3 such Liability for Taxation would not have arisen but
for or is increased by any voluntary act, omission,
transaction or
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arrangement of the Company or any company controlled by
the Purchaser or a person or persons controlling the
Purchaser (construing "controlled" and "controlling" in
accordance with section 416 of the ICTA) after
Completion but only where the Company or the Purchaser
knew or ought to have known that such act omission,
transaction or arrangement would give rise to such
Liability for Taxation or the extent of such Liability
for Taxation and provided that this exclusion shall
apply only to the amount of the increase and not to the
Taxation which would otherwise have arisen and shall
not apply to anything done or omitted to be done with
the written request of the Covenantor or its
professional representatives; or
3.1.4 such Liability for Taxation would not have arisen but
for or has been increased by:
(i) a disclaimer, claim or election made or
notice or consent given after Completion by
the Purchaser or the Company otherwise than
at the request of the Covenantor under the
provisions of this Deed; or
(ii) a failure or omission by the Company to make
any claim, election, surrender or disclaimer
or give any notice or consent or do any other
thing after Completion the making giving or
doing of which was taken into account in
computing any provision for Taxation in the
Completion Accounts and the making giving or
doing of which the Covenantor disclosed to
the Purchaser in the Disclosure Letter or in
writing a reasonable time before the claim
etc is required to be made or done; or
3.1.5 such Liability for Taxation would not have arisen but
for some Event occurring prior to Completion with the
written approval of the Purchaser or its
representative; or
3.1.6 such Liability for Taxation arises from any change in
accounting or Taxation policy or practice of or
affecting the Company, including the method of
submission of Taxation returns, introduced or having
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effect on or after Completion except where such change
in accounting policy is to bring the policy into line
with generally accepted accounting principles; or
3.1.7 such Liability for Taxation consists of any amount
payable to the Commissioners of Customs & Excise other
than an amount payable under clause 2.5 of this Deed;
or
3.1.8 such Liability for Taxation is on or in respect of any
prepayments received by the Company in the ordinary
course of business; being payments which are not taken
into account in computing profits in the Completion
Accounts; or
3.1.9 specific provision or reserve in respect of such
Liability for Taxation was made in the Completion
Accounts; or
3.1.10 such Liability for Taxation arises from an Event
(including the disposal of a capital asset) in the
ordinary course of business of the Company since the
Completion Accounts Date provided that the following
shall not be treated for these purposes as Taxation
arising from an Event in the ordinary course of
business:-
(a) any Distribution;
(b) the disposal or acquisition of any asset
(including trading stock) or the supply of
any services or business facility of any kind
(including a loan of money or the letting,
hiring or licensing of any tangible or
intangible property) in circumstances where
the consideration actually received (if any)
for such disposal or acquisition or supply is
less than or greater than the consideration
deemed to have been received or paid for the
purposes of any Tax where such disposal,
acquisition or supply was:-
(i) made at the request of the Vendor or
a member of the Vendor's Group; or
(ii) made to or by the Vendor or a
member of the Vendor's Group;
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(c) the Company ceasing or being deemed to cease
to be a member of any group of companies or
associated with any other company for the
purposes of any Tax; or
(d) any Event or the earning of any income
profits or gains which results in the Company
becoming liable to pay or bear a tax
liability chargeable directly or primarily
against or attributable directly or primarily
to another person (not being the Company); or
(e) any other Event which gives rise to a tax
liability on deemed (as opposed to actual)
income, profits or gains being an Event;
(i) which occurred at the request of the
Vendor or a member of the Vendor's
Group; or
(ii) which involved a transaction or
arrangement to which the Vendor or a
member of the Vendor's Group was a
party.
3.1.11 save where such Liability for Taxation in question
falls within clause 2.2 of this Deed by virtue of the
operation of clause 10.4 of this Deed; such Taxation
arises or is increased as a result of any increase in
rates of Taxation or the imposition of new Taxation
legislation or any change in applicable law regulation
or regulatory requirements or published practice of a
Tax Authority made after Completion whether with or
without retrospective effect.
3.2 The provisions of paragraphs 1.1, 1.4, and 7 of Schedule 6 and clause
24 in the Share Purchase Agreement shall have effect as if expressly
incorporated into this Deed but the provisions of such Schedule shall
not apply to any claim under this Deed which arises in consequence of
the fraud wilful concealment or wilful default of the Covenantor its
officers or employees.
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3.3 It is hereby agreed that the Purchaser shall not have any claim
hereunder if any unutilised relief (not being an Accounts Relief as
defined in clause 1.2.9.1) of the Company as at or arising before
Completion shall prove to be unavailable or otherwise incapable of
being utilised in reducing the profits of the Company earned, accrued
or received on or after Completion or the Taxation liabilities of the
Company in respect of any period after Completion.
4. OVERPROVISIONS AND SAVINGS
4.1 If:-
4.1.1 any provision for Tax (including deferred Tax)
contained in the Completion Accounts shall at the date
of any payment by the Covenantor pursuant to clause 2
be or have been (at the Covenantor's request and
expense) certified by the Company's auditors for the
time being to be an over-provision (hereinafter
referred to as an "Over-provision"); or
4.1.2 the Liability for Taxation which has resulted in such
payment by the Covenantor shall give rise to a
corresponding saving for the Company (hereinafter
referred to as a "Saving");
the value (as certified by the Company's auditors for the time being)
of such Over-provision or Saving shall be set-off first against the
payment then due from the Covenantor under this Deed and secondly (to
the extent there is any excess) against any further such payment(s)
in chronological order until exhausted PROVIDED THAT if it shall
subsequently be found that an Over-provision or Saving so certified
by the relevant Company's auditors was not in fact an Over-provision
or Saving or the certified amount or value thereof was excessive,
any amount which has been set-off under this clause in respect of
such purported Over-provision or Saving shall on demand forthwith be
paid by the Covenantor to the Purchaser .
4.2 If the Company or the Purchaser shall discover that there has been an
Over-provision or Saving the Purchaser shall or shall procure that
the Company concerned shall forthwith give such details as are then
available thereof to the Covenantor and the Purchaser shall or shall
procure that the Company concerned shall supply to the Covenantor
such information as it may reasonably require to verify the amount of
the Over-provision or Saving.
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4.3 For the purposes of clause 4.1 the Company obtains a Saving if as a
result of the Taxation which results in a claim by the Purchaser
hereunder the Company is relieved in whole or in part of a liability
to make some other payment of Taxation which it would otherwise have
been liable to make or obtains a right to repayment of Taxation which
would not otherwise have been available.
5. RECOVERY FROM OTHER PERSONS
5.1 If, in the event of any payment becoming due from the Covenantor
pursuant to clause 2, the Company either is immediately entitled at
the due date for the making of that payment to recover from some
other person (not being the Company but excluding any Tax Authority)
any sum in respect of the Liability for Taxation that has resulted in
that payment becoming due from the Covenantor, or at some subsequent
date becomes entitled to make such recovery then the Purchaser shall
or shall procure that the Company shall (in either of those cases)
promptly notify the Covenantor of its entitlement and shall, if so
required by the Covenantor and at the Covenantor's sole expense,
procure that the Company take all appropriate steps to enforce that
recovery (keeping the Covenantor fully informed of the progress of
any action taken) and shall account within 14 Business Days to the
Covenantor for whichever is the lesser of:-
5.1.1 any sum so recovered (including any interest or
repayment supplement paid by the Tax Authority or other
person on or in respect thereof less all costs of
recovery to the extent not previously paid by the
Covenantor and after deducting any Taxation chargeable
on the Company in respect of the recovery in question);
and
5.1.2 the amount paid by the Covenantor or pursuant to clause
2 in respect of the Liability for Taxation and not
previously repaid to the Covenantor.
6. DISPUTES AND CONDUCT OF CLAIMS
6.1 If the Purchaser or (after Completion) the Company shall become aware
of a Claim which could give rise to a liability on the Covenantor to
make a payment under clause 2 of this Deed the Purchaser shall or
shall procure that the
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Company shall as soon as reasonably practicable and in any event
within 15 days of becoming aware of that Claim give written notice
thereof to the Covenantor.
6.2 If the Covenantor shall
(a) indemnify the Company and the Purchaser to the
reasonable satisfaction of the Purchaser against all
liabilities, costs, damages or expenses which may be
incurred thereby including any additional Liability for
Taxation; and
(b) secure the Company and the Purchaser to the reasonable
satisfaction of the Purchaser against all liabilities,
costs, damages or expenses which may be incurred
thereby including any additional Liability for Taxation
which consists of interest on any unpaid Taxation;
then the Purchaser shall procure that the Company shall take such
action to avoid, dispute, defend, resist appeal or compromise the
Claim as the Covenantor may by written notice reasonably request.
6.3 Subject as mentioned in clause 6.2 and subject to clauses 6.5 and 6.8
below and to the Covenantor complying with clause 6.4 below, the
Covenantor may elect to have any action referred to in clause 6.2
conducted by professional advisers acting in the name of the Company
but reporting to the Covenantor.
6.4 The Covenantor hereby undertakes to the Purchaser to:
(a) 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;
(b) obtain the prior written approval of the Purchaser (not
to be unreasonably withheld or delayed) to the content
and sending of written communications relating to the
action to a Tax Authority; and
(c) obtain the prior written approval of the Purchaser (not
to be unreasonably withheld or delayed) to:
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(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 increase the
amount of the Claim.
6.5 The Purchaser shall not be obliged to procure that the Company take
any action under this clause (and the Covenantor shall not be
entitled to take any action in the name of the Company) which
(a) involves contesting any matter beyond the first
appellate body (excluding the Tax Authority which has
or shall have made the Claim in question and the
general and special commissioners) unless the
Covenantor furnishes the Purchaser with the written
opinion of Counsel who has been practising in Taxation
matters for at least five years to the effect that an
appeal in respect of the matter in question has a
reasonable prospect of being won; or
(b) is likely to increase the liability of the Company to
any Taxation
without the prior written approval of the Purchaser and in a case
falling within 6.5(b) above, the Purchaser shall not unreasonably
withhold or delay its approval.
6.6 If there is a dispute between the Covenantor and the Purchaser as to
whether any action requested by the Covenantor under clause 6.2 is
reasonable or whether the withholding or delay of any approval
required pursuant to clause 6.4(b) or 6.4(c) or clause 6.5(b) is
reasonable and the dispute is not resolved between the Covenantor and
the Purchaser, such dispute shall be referred for determination to an
independent member of the Chartered Institute of Taxation or to an
independent accountant specialising in Tax matters in either case of
at least 10 years' experience, appointed by agreement between the
Covenantor and the Purchaser or (if they do not agree) upon the
application made by either party to the President for the time being
of the Chartered Institute of Taxation who shall also be authorised
to determine how the costs of obtaining his opinion should be
allocated between the parties hereto.
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6.7 If any time the Covenantor has not exercised its right referred to in
clause 6.3 in respect of any Claim but requests that the Purchaser
take, or procure that the Company take, any action referred to in
clause 6.2, the provisions of clause 6.4 shall apply as if references
to "the Covenantor" are references to "the Purchaser" and reference
to "the Purchaser" are references to "the Covenantor".
6.8 If the Covenantor does not request the Purchaser or the Company to
take any action under clause 6.2 or 6.3 in respect of any Claim
within 35 days of notice in writing from the Purchaser requesting it
to indicate what action is required to be taken in respect of the
relevant Claim or if Covenantor shall fail to indemnify or secure the
Purchaser and the Company to their reasonable satisfaction in
accordance with clause 6.2 within fifteen days of written notice
having been given to the Covenantor requesting it to give such
indemnity or security, the Purchaser or Company shall (without
prejudice to its rights under this Deed) be free to pay or settle the
Claim on such terms as the Purchaser or the Company may in its
absolute discretion consider fit.
6.9 Neither the Purchaser nor the Company shall be subject to any claim
by or liability to the Covenantor for non compliance with any of the
foregoing provisions of this Clause 6 if the Purchaser or the Company
has bona fide acted in accordance with the instructions of the
Covenantor.
7. TAX RETURNS
7.1 The Covenantor or its duly authorised agents shall prepare the tax
returns of the Company for all accounting periods ended on or prior
to the Completion Accounts Date, to the extent that the same shall
not have been prepared before Completion.
7.2 The Purchaser shall procure that the Company shall cause the returns
mentioned in sub-clause 7.1 of this clause to be authorised, signed
and submitted without delay to the appropriate authority without
amendment or with such amendments as the Covenantor shall agree, and
shall give the Covenantor or its agents all such assistance as may be
required to agree those returns with the appropriate authorities;
PROVIDED THAT the Company shall not be obliged to take and the
Purchaser shall not be obliged to procure that the Company takes any
such action as is mentioned in this sub-clause in relation to any tax
return which is in the opinion of the Purchaser or directors of the
Company is not full, true and accurate in all material respects.
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7.3 Nothing done by the Purchaser or the Company pursuant to this clause
shall in any respect restrict or reduce any rights the Purchaser may
have to make a claim against the Covenantor under this Deed in
respect of any such tax liability as is mentioned in clause 2.
8. DUE DATE OF PAYMENT AND INTEREST
8.1 Where the Covenantor is liable to the Purchaser pursuant to the
covenant contained in clause 2 above the following provisions shall
apply in determining when a payment in respect of such liability
shall be made.
8.1.1 In a case which involves and to the extent that it
involves an actual payment of or in respect of Taxation
by the Company the date that is three Business Days
prior to the date on which the Taxation in question
would have had to have been paid in order to prevent a
liability to interest or a fine charge or penalty from
arising in respect of the Liability to Taxation in
question or as the case may be three Business Days
prior to the date on which the Taxation in question
must be paid in order to entitle the Company or the
Purchaser to make an appeal against an assessment to
the Taxation in question.
8.1.2 In a case falling within any of sub-paragraphs 1.2.9.1
to 1.2.9.3 or clause 2.3 the date falling fourteen days
after the date when the Covenantor has been notified by
the Company or the Purchaser that the auditors for the
time being of the Company have certified, at the
request of the Purchaser or the Company that the
Covenantor has a liability for a determinable amount
under clause 2.
8.1.3 In a case not falling within clauses 8.1.1 or 8.1.2
fourteen days after notice from the Purchaser of the
liability to make the payment in question.
8.2 Any sums not paid by the Covenantor on the date specified in this
Deed ("the Due Date") shall bear interest (which shall accrue day to
day from the Due Date until the payment is actually made at the rate
of 3% per annum over the
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base rate from time to time of The Governor and Company of the Bank
of Scotland.
9. DEDUCTIONS AND WITHHOLDINGS
9.1 All sums payable by the Covenantor to the Purchaser under this Deed
shall be paid free and clear of all counterclaims deductions or
withholdings whatsoever save only as may be required by law.
9.2 If any deductions or withholdings are required by law to be made from
any of the sums payable as mentioned in sub-clause 9.1 of this
clause, the Covenantor shall be obliged to pay to the relevant person
such sum as will, after the deduction or withholding has been made
leave that person with the same amount as it would have been entitled
to receive in the absence of any such requirement to make a deduction
or withholding.
9.3 If any sum payable by the Covenantor to the Purchaser under this Deed
(other than interest under clause 8.2) shall be subject to a tax
liability in the hands of the Purchaser the Covenantor shall be
under the same obligation to make an increased payment in relation to
the tax liability as if the liability were a deduction or withholding
required by law.
10. PURCHASER'S COVENANTS
10.1 The Purchaser hereby covenants with the Covenantor to pay to the
Covenantor, by way of adjustment to the consideration for the Sale
Shares an amount equivalent to:-
10.1.1 any Taxation for which the Covenantor, or any other
person connected with the Covenantor falling within
section 767A(2) or section 767AA(4) of the Taxes Act,
becomes liable by virtue of the operation of sections
767AA, 767A and 767B of the Taxes Act in circumstances
where the tax-payer company (as referred to in section
767(1)) or the transferred company (as referred to in
section 767AA(1)) is the Company; and
10.1.2 any Taxation for which the Covenantor or any person
connected with the Covenantor becomes liable under
Section 179(11)or Section 190(1)TCGA as a result of the
failure by the Company to discharge such Taxation.
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10.2 The covenant contained in clause 10.1 shall:
10.2.1 extend to any reasonable costs properly incurred by the
Covenantor or such other person in connection with such
Taxation or a claim under clause 10.1;
10.2.2 not apply to Taxation to the extent that the Purchaser
is entitled to claim payment in respect of it under
clause 2; and
10.2.3 not apply to Taxation which has been recovered under
section 767(B)(2) of the Taxes Act or any other
relevant statutory provision (and the Covenantor shall
procure that no such recovery is sought to the extent
that payment is made hereunder).
10.3 Clauses 6 and 8 (conduct of disputes and due date for payment) shall
apply to the covenant contained in clause 10.1 as they apply to the
covenants contained in clause 2, replacing references to the
Covenantor by the Purchaser (and vice versa) and making any other
necessary modifications.
10.4 For the purposes of this clause 10 and clause 2.2, it is assumed that
section 767AA of the Taxes Act and the consequential amendments to be
made on its enactment, are enacted in the form proposed in the Inland
Revenue Press Release 16/98, dated 17 February 1998. If those
provisions are amended before enactment, it is the intention of the
parties that clause 10 and clause 2.2 shall still apply in relation
to the enacted legislation in the same manner as it would apply in
relation to the draft legislation in Press Release 16/98, mutatis
mutandis.
11. ENFORCEABILITY
For the avoidance of doubt the indemnity herein contained shall be
enforceable before as well as after any payment covered by such
indemnity has been made and in the event that any indemnity herein
contained shall be found void but would be valid if the application
thereof to a particular Claim, Event or form of Taxation were limited
or deleted such indemnity shall apply with such modification as may
be necessary to make it valid and effective.
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12. GENERAL
12.1 This Deed shall be binding upon and enure for the benefit of the
successors in title of each of the parties hereto.
12.2 No variation hereof shall be effective unless in writing and executed
as a Deed by the parties hereto.
12.3 This Deed may be executed in any number of counterparts all of which
taken together shall constitute one and the same agreement and any of
the parties hereto may execute this Deed by executing such a
counterpart.
12.4 The rights and remedies of the Purchaser and the Company and/or the
Covenantor under this Deed at law or in equity shall not be
diminished or extinguished or deemed to be waived by the granting of
any indulgence, forbearance or extension of time by any of them or by
the failure of or delay by any of them in asserting any such rights
or remedies.
12.5 The provisions of clause 12 (Assignment) 18 (Releases, Waivers etc by
Purchaser), clause 20 (Law and Jurisdiction) and clause 24 (Notices)
of the Agreement shall apply as if set out in full in this Deed.
IN WITNESS whereof the parties hereto have executed this document as a Deed the
day and year first above written.
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SCHEDULE 1
THE COVENANTOR
Name Address
---- -------
Xxxx International Columbia Centre
(UK) Limited Xxxxxx Xxxxxx
Xxxxxxxxx
Xxxxxxxxx XX00 0XX
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EXECUTED AS A DEED (AND DELIVERED ) [/s/ X.X. XXXXXX
when dated) ) -------------------------------
XXXX INTERNATIONAL (UK) LIMITED ) DIRECTOR
)
) [/s/ XXXXXX X. XXXXXXXX, XX.
-------------------------------
DIRECTOR
EXECUTED AS A DEED (AND DELIVERED ) [/s/ XXXX X. XXXX
when dated) ) -------------------------------
BLAKEDEW NINETY FOUR LIMITED ) DIRECTOR
on behalf of )
) [/s/ XXXXXX X. XXXXXX
in the presence of:- ) -------------------------------
SECRETARY
-------------------------------
-------------------------------
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