DATED: 24th July 1998
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PARTIES:
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1. "Covenantors": The persons whose names/addresses are set out in the
------------- schedule
2. "Purchaser": Healthworld Holdings Limited (registered number
----------- 3458882) whose registered office is at 0 Xxxxxx
Xxxxxx, Xxxxxxx, Xxxxxxxxx XX0 0XX
RECITAL
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This deed is entered into in accordance with an agreement (the "Agreement") made
between the Covenantors and the Purchaser relating to the acquisition of the
entire issued share capital of Colwood House Medical Publication (UK) Limited
(registered in England and Wales under no: 2213846).
1 Definitions
1.1 In this deed:
1.1.1 the same meaning is given to words and expressions defined in the
Agreement except where otherwise provided or expressly defined below;
1.1.2 "Taxation" means all forms of taxation, duties and levies whatsoever
and whenever imposed, whether by governmental or other authority and
whether of the United Kingdom or elsewhere, and (without limitation)
includes:
1.1.3 income tax, corporation tax, capital gains tax, inheritance tax, stamp
duty, value added tax, customs and other import duties and national
insurance contributions and any payment whatsoever which the Company
may be or become bound to make to any person as a result of any
enactment relating to taxation and any other taxes, duties or levies
supplementing or replacing any of the above;
1.1.4 all interest, fines and penalties incidental, or relating, to any such
taxation, duties or levies, whatsoever.
1.2 "Relief" includes (without limitation) any loss, relief, allowance,
exemption, set-off or deduction in computing, or against, profits,
income or gains of any description or from any source, or credit
against Taxation.
1.3 "Liability to Taxation" means any liability to make a payment in
respect of Taxation but does not include:-
1.3.1 the loss, counteracting or clawing back of any Relief which would
otherwise have been available to the Company;
1.3.2 the nullifying, cancellation or set-off of a right to repayment of
Taxation which would otherwise have been available to the Company;
PROVIDED however that if the loss, counteracting or clawing back of any
Relief referred to in paragraph 1.3.1, or the nullifying, cancellation
or set-off of a right to repayment as referred to in paragraph 1.3.2
results in a liability of the Company to make a payment in respect of
Taxation in respect of an accounting period commencing prior to
Completion, that liability shall itself be a "Liability to Taxation"
for the purposes of this deed.
1.4 "Claim for Taxation" includes (without limitation) any notice, demand,
assessment, letter or other document issued, or action taken, by or on
behalf of the Inland Revenue or Customs and Excise authorities or any
other statutory or governmental authority or body whatsoever in any
part of the world or any form of self-assessment under the Pay and File
system introduced by the Finance Xxx 0000, whereby the Company is, or
is likely to be, subject to a Liability to Taxation (whether or not it
is primarily payable by the Company and whether or not the Company has,
or may have, any right of reimbursement).
1.5 "Final Determination" means, in relation to a Claim for Taxation where
there is an appeal against that assessment or self-assessment:
1.5.1 an agreement under section 54 Taxes Management Xxx 0000 or any
legislative provision corresponding to that section;
1.5.2 a decision of a court or tribunal from which either no appeal lies or
in respect of which no appeal is made within the prescribed time limit.
1.6 References to paragraphs are to paragraphs of this deed, unless
otherwise stated.
2. Covenant
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2.1 Subject as provided below, the Covenantors jointly and severally
covenant with the Purchaser that they will indemnify the Purchaser
against:
2.1.1 any Liability to Taxation or any depletion in the value of the assets
of the Company, arising by reason of, or in consequence of, or in
connection with, any Liability to Taxation; and
2.1.2 the costs, charges and expenses reasonably incurred by the Company in
relation to any demands, actions, proceedings and claims in respect of
Liabilities to Taxation or Claims for Taxation.
2.2 The covenant in paragraph 2.1 shall apply only where the Liability to
Taxation or the Claim for Taxation:-
2.2.1 results from or is made wholly or partly in respect of or in
consequence of any acts, omissions or transactions whatsoever of the
Company occurring or entered into on or before the Completion Date; or
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2.2.2 results from, or is calculated by reference to, any actual or deemed
income, profits or gains earned, received or accrued, or deemed to have
been earned, received or accrued, on or before the Completion Date; or
2.2.3 results from, or is calculated by reference to, any dividend or
distribution declared, paid or made, or deemed to have been paid or
made, on or before the Completion Date other than the Pre-Completion
Dividends.
2.3 If any payment due from the Covenantors under this deed will be, or has
been, subject to a Liability to Taxation, the Purchaser shall be
entitled to receive from the Covenantors on demand such amount as
ensures that the net receipt, after Taxation, to the Purchaser in
respect of the payment is the same as it would have been were the
payment not subject to Taxation in the hands of the Purchaser.
3 Exclusions
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3.1 The indemnity in paragraph 2.1 shall not apply to any Liability to
Taxation or Claim for Taxation:
3.1.1 to the extent that allowance, provision or reserve is made in the Last
Accounts or is specifically referred to and quantified in the notes to
those accounts;
3.1.2 for which the Company is, or may become, liable wholly or primarily as
a result of transactions in the ordinary course of its business after
the Last Accounts Date;
3.1.3 to the extent that the Liability to Taxation or Claim for Taxation
arises as a result of any increase in rates of Taxation made after the
Last Accounts Date;
3.1.4 which is attributable to the Company ceasing to be entitled to the
small companies' rate of corporation tax as a result of the purchase of
the Shares by the Purchaser;
3.1.5 to the extent that it would not have arisen but for the fact that the
treatment in future accounts of the Company of assets or liabilities,
or of the Taxation attributable to timing differences, is different
from the treatment in the Last Accounts.
3.2 If any provision or reserve for Taxation in the Last Accounts or the
Completion Accounts shall at the date of any payment required to be
made by the Warrantors provide to have been an overprovision or
overreserve, then the amount of such overprovision or overreserve shall
be set-off against any actual liability of the Warrantors in respect of
any claim(s) under the Deed of Indemnity.
3.3 The provisions of Schedule 6 of the Agreement shall apply to this deed.
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4 Mitigation
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4.1 Except as provided in paragraph 4.2, the Covenantors shall be liable
under the indemnity in paragraph 2.1 notwithstanding any Reliefs,
rights of repayment, or other rights or claims of a similar nature
which may be available to any person entitled to the benefit of the
indemnity to set against or otherwise mitigate any Liability to
Taxation so that the indemnity in paragraph 2.1 shall take effect as
though the Reliefs, rights of repayment, or other rights or claims were
not available.
4.2 The provisions of paragraph 4.1 shall not apply if and to the extent
that the Reliefs, rights of repayment or other rights or claims arose
wholly or mainly by reason of any act, omission or transaction of the
Company on or before the Last Accounts Date.
4.3 Where and to the extent that paragraph 4.2 applies, credit shall be
given to the Covenantors against any liability under this deed for any
such Reliefs, rights of repayment or other rights or claims as are
mentioned in paragraph 4.1.
4.4 When the Covenantors have satisfied an obligation under this deed to
indemnify the Purchaser against a Liability to Taxation and the
Purchaser or the Company has (whether by operation of law, contract or
otherwise) a right of reimbursement (including by way of indemnity)
against any other person or persons in respect of the Liability to
Taxation, the Purchaser shall or shall procure that the Company shall
take all reasonable steps to enforce the right, and repay to the
Covenantors any sum recovered by the Purchaser or the Company by reason
of the right, or shall or shall procure that the Company shall, at the
request and expense of the Covenantors, assign the right to the
Covenantors, in such form as they shall reasonably require.
5 Notification of claims
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The Purchaser shall notify the Covenantors in writing of any Claim for
Taxation which comes to its or the Company's notice, whereby it appears
that the Covenantors are or may become liable to indemnify the
Purchaser under this deed as soon as reasonably practicable after the
date on which the Claim for Taxation comes to the notice of the
Purchaser and no later than 10 Business Days prior to the expiry of any
time limit for appealing the Claim for Taxation except that failure to
give such notice shall not prejudice the Purchaser's right to bring a
claim under this deed.
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6 Dates for and quantum of payments
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6.1 This clause shall apply solely for determining the date on which any
payments or repayments shall be made by or to the Covenantors pursuant
to this deed and (where expressly provided) the amounts of the payments
or repayments.
6.2 The Covenantors shall make payment to the Purchaser to the extent that,
and on the date on which, the Company discharges or is deemed to
discharge a Liability to Taxation in respect of which the Purchaser is
entitled to be indemnified under this deed.
6.3 The Purchaser shall make a repayment to the Covenantors to the extent
that, and on the date on which, the Purchaser or the Company receives
any repayment of any amount paid in respect of any Liability to
Taxation pursuant to paragraph 6.2. Any repayment to the Covenantors
pursuant to this paragraph 6.3 shall not prejudice the rights of the
Purchaser against the Covenantors in the event that a further Liability
to Taxation is imposed upon the Company, whether in respect of matters
to which the repayment relates or otherwise.
6.4 For the purposes of paragraph 6.2, the Company shall be deemed to
discharge a Liability to Taxation:
6.4.1 on the date on which the Company pays any amount of Taxation; or
6.4.2 on the date on which any Liability to Taxation would have fallen due
but for Reliefs, rights of repayment, or other rights or claims of a
similar nature to which paragraph 4.1 applies.
6.5 For the purpose of paragraph 6.3, the Company shall be deemed to
receive a repayment:
6.5.1 on the date on which the Company receives a repayment of Taxation to
which paragraph 6.2 applies;
6.5.2 if and when the Company would have received a repayment but for a
Liability to Taxation in respect of which the Company is not entitled
to be indemnified under this deed;
6.5.3 if and when the Company would have received a repayment had the
Liability to Taxation been discharged by a payment of Taxation; or
6.5.4 if and when the Company is able to obtain the benefit of a reduction in
its Liability to Taxation as a result of the right to repayment.
6.6 Upon Final Determination of a relevant Claim for Taxation the
Covenantors shall promptly pay to the Purchaser such amount, or further
amount in addition to any sums already paid under this deed, as is
required to cover the full liability of the Covenantors under this
deed.
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6.7 Any dispute in relation to the provisions of paragraphs 6.4, 6.5 or 6.6
may be referred, by the Purchaser or the Covenantors, to the auditors
for the time being of the Company, acting as experts and not as
arbitrators, whose certificate shall be final and binding upon the
parties in the absence of manifest error.
6.8 In lieu of making any payment under this deed to the Purchaser the
Covenantors shall at the direction of the Purchaser be entitled to make
it direct to the Inland Revenue on behalf of the Company and any such
payment shall pro tanto discharge the obligations of the Covenantors
under this deed.
7 General
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7.1 The provisions of the Agreement relating to notices shall apply to
notices to be given under, or in connection with, this deed except that
references to "Warrantors" in these provisions will be deemed to be
references to "Covenantors".
7.2 The construction, validity and performance of this deed shall be
governed by the laws of England and Wales.
Executed by the parties as a deed on the date of this deed.
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SCHEDULE
Xxxxxxx Xxxxx Xxxxxx
Barn Xxxxx
Castle Grove Road
Chobham
Woking
Surrey GU24 8EF
Xxxxxxx Xxxxxx Cantle
Xxxxxxxxx Xxxxx
Xxxxxxxxx Xxxx
Xxxxx
Xxxxxxxxx XX00 0XX
EXECUTED and DELIVERED as a deed )
by XXXXXXX XXXXX XXXXXX in the ) /s/ Xxxxxxx Xxxxx Xxxxxx
presence of: )
Witness signature: [illegible]
Witness name: [illegible]
Witness address: [illegible]
Occupation: Solicitor
EXECUTED and DELIVERED as a deed )
by XXXXXXX XXXXXX CANTLE in the ) /s/ Xxxxxxx Xxxxxx Cantle
presence of: )
Witness signature: [illegible]
Witness name: As above
Witness address:
Occupation:
EXECUTED and DELIVERED as a deed )
by HEALTHWORLD HOLDINGS LIMITED ) /s/ Xxxxxx Xxxxxxx
acting by: )
Director
/s/ Xxxxxx X. Xxxxxxxx
Company Secretary
