Common use of PST Clause in Contracts

PST. (a) Unless any Seller Party delivers on or before Closing: (i) a certificate (a “PST Clearance Certificate”) issued by the Minister of Finance of British Columbia (“Finance Minister”) under Section 187 of the Provincial Sales Tax Act (British Columbia) (the “PST Act”) to the effect that all requisite taxes collectable and payable under the PST Act by Cypress ULC have been paid, or evidence that Cypress ULC has entered into an arrangement satisfactory to the Finance Minister for the payment of such taxes; and (ii) a certificate (a “SST Clearance Certificate”) issued by the Finance Minister under Section 99 of the Social Service Tax Act (British Columbia) (the “SST Act”) to the effect that all requisite taxes collected by Cypress ULC have been paid, or evidence that Cypress ULC has entered into an arrangement satisfactory to the Finance Minister for the payment of such taxes, then the Canadian Purchaser shall be entitled to withhold from the Canadian Purchaser Closing Consideration payable to Cypress ULC an amount equal to CDN$1,000,000 (the “Withholding Sales Tax Amount”). The Withholding Sales Tax Amount shall be held in trust on the conditions set out in this Section 3.6 and the escrow agreement in the form attached hereto as Exhibit L (the “Sales Tax Escrow Agreement”) to be entered into at Closing among the Canadian Purchaser, Cypress ULC and the Escrow Agent. For the avoidance of doubt, the Canadian Purchaser shall have no recourse against Cypress ULC in respect of the Canadian Purchaser PST Liability or the Canadian Purchaser SST Liability (each as defined below) for any amount in excess of the Withholding Sales Tax Amount withheld from the Canadian Purchaser Closing Consideration pursuant to this Section 3.6. (b) Subject to Section 3.6(c), upon receipt by Canadian Purchaser from Cypress ULC of the PST Clearance Certificate described in Section 3.6(a)(i) and the SST Clearance Certificate described in Section 3.6(a)(ii), the Canadian Purchaser and Cypress ULC shall instruct the Escrow Agent to promptly pay the Withholding Sales Tax Amount to Cypress ULC. (c) Upon receipt of notice by the Canadian Purchaser from the Finance Minister to the effect that the Canadian Purchaser is liable for an amount (the “Canadian Purchaser PST Liability”) pursuant to the PST Act that is the result of the Canadian Purchaser’s failure to obtain the PST Clearance Certificate described in Section 3.6(a)(i) from Cypress ULC, or upon receipt of notice by the Canadian Purchaser from the Finance Minister to the effect that the Canadian Purchaser is liable for an amount (the “Canadian Purchaser SST Liability”) pursuant to the SST Act that is the result of the Canadian Purchaser’s failure to obtain the SST Clearance Certificate described in Section 3.6(a)(ii) from Cypress ULC, then unless alternative arrangements are made to the reasonable satisfaction of the Canadian Purchaser, the Canadian Purchaser and Cypress ULC shall instruct the Escrow Agent to promptly pay an amount equal to the Canadian Purchaser PST Liability or Canadian Purchaser SST Liability, as applicable, to the Finance Minister. (d) Where the condition described in Section 3.6(b) has not been satisfied within twenty-four (24) months of the Closing Date, the Canadian Purchaser and Cypress ULC shall instruct the Escrow Agent to promptly pay the Withholding Sales Tax Amount to the Canadian Purchaser. (e) Subject to Section 3.6(f), where any portion of the Withholding Sales Tax Amount has been paid to the Canadian Purchaser pursuant to Section 3.6(d), the Canadian Purchaser agrees to be liable for any and all taxes, interest and penalties under the PST Act and/or the SST Act for which Cypress ULC is liable and shall indemnify and hold harmless Cypress ULC, its successors, Affiliates, assigns, directors, officers, and shareholders, whether direct or indirect, as applicable, from and against any and all losses actually incurred by Cypress ULC in respect of such taxes, interest or penalties. (f) The indemnity obligations of the Canadian Purchaser set out in Section 3.6(e) shall be limited in all respects to the amount of the Withholding Sales Tax Amount actually remitted by the Escrow Agent to the Canadian Purchaser pursuant to Section 3.6(d). (g) To the extent an amount is paid to the Finance Minister pursuant to this Section 3.6 on account of taxes, interests or penalties for which Cypress ULC is liable (or Canadian Purchaser is liable as a result of the ULC Canadian Asset Sale), the Canadian Purchaser agrees to cooperate with Cypress ULC to obtain a refund of such amount for the benefit of Cypress ULC, provided all expenses in connection therewith are borne by the Cypress ULC. (h) To the extent the Finance Minister seeks to recover at any time amounts from the Canadian Purchaser in respect of any liability of Cypress ULC for any taxes, interest and penalties under the PST Act and/or the SST Act and the total of such amounts exceeds the Withholding Sales Tax Amount (such excess amount referred to herein as the “Excess Sales Tax Liability”), Cypress ULC agrees to cooperate with and assist Canadian Purchaser in recovering such Excess Sales Tax Amount from any third party (including, but not limited to, Cypress Bowl Recreations Limited Partnership and any of its Affiliates), and any amounts so recovered on account of any Excess Sales Tax Liability shall be paid to the Finance Minister on account of any such Excess Sales Tax Liability or to the Canadian Purchaser to the extent of any amounts previously paid by the Canadian Purchaser to the Finance Minister on account of an Excess Sales Tax Liability. (i) For purposes only of this Section 3.6, all references to “Cypress ULC” shall be deemed to include Cypress ULC and its successors, Affiliates, assigns, directors, officers, and shareholders, whether direct or indirect.