Common use of Section 116 Certificate Clause in Contracts

Section 116 Certificate. Ajay ▇▇▇▇▇▇▇ ▇▇▇ll on or before the Closing Date, deliver to the Buyer a certificate issued by Canada Customs and Revenue Agency pursuant to subsection 116(2) of the Income Tax Act (Canada) (a "Section 116 Certificate") in respect of the proposed disposition by Ajay ▇▇▇▇▇▇▇, ▇▇ trustee of the Shares owned by Ajay ▇▇▇▇▇▇▇, ▇▇ Trust (the "Trust Shares"). The Section 116 Certificate delivered by Ajay ▇▇▇▇▇▇▇ ▇▇▇ll specify a "certificate limit" in an amount not less than the "proceeds of disposition" (the "Proceeds") on account of the Purchase Price payable in respect of the Trust Shares, as those terms are defined for purposes of Section 116. The Section 116 Certificate shall be deemed not to have been delivered in respect of any payment or part thereof on account of the Purchase Price payable in respect of the Trust Shares if, in the opinion of the Buyer and its counsel, acting reasonably, it does not exonerate the Buyer from liability under Section 116 of the Income Tax Act (Canada) in respect of such payment or part thereof on account of the Proceeds; (a) In the event that the Section 116 Certificate required under this Section 6.16 has not been delivered by Ajay ▇▇▇▇▇▇▇ ▇▇ the Buyer on or before the Closing Date, or in the event that a Section 116 Certificate that is delivered by Ajay ▇▇▇▇▇▇▇ ▇▇▇s not specify a "certificate limit" that is no less than the Proceeds, the Buyer shall withhold from the Purchase Price an amount equal to 331/3% of the amount due on account of the Trust Shares, or, if a Section 116 Certificate has been delivered by Ajay ▇▇▇▇▇▇▇, ▇▇ amount equal to 331/3% of the Purchase Price payable in respect of the Trust Shares less the certificate limit specified in the Section 116 Certificate (the "Withheld Amount"). The Withheld Amount shall be deposited by the Buyer's counsel pursuant to an irrevocable direction of the Buyer in an interest bearing trust account at a bank located in Ontario to be held for the benefit of Ajay ▇▇▇▇▇▇▇, ▇▇ Trust or in accordance with his direction, to be disposed of as set out herein. The Withheld Amount shall be remitted by Buyer's counsel to the Receiver General of Canada on the day that the Withheld Amount is required to be so remitted pursuant to subsection 116(5) of the Income Tax Act (Canada) (the "Remittance Date"). All interest earned on the Withheld Amount shall be for the account of Ajay ▇▇▇▇▇▇▇, ▇▇ Trust, and the full amount of such interest less any applicable taxes of any nature whatsoever applicable to such interest shall be paid by Buyer's counsel to Ajay ▇▇▇▇▇▇▇, ▇▇ Trust or in accordance with his direction, on the Remittance Date. (b) Notwithstanding the foregoing, if a Non-Resident Shareholder delivers a Section 116 Certificate to Buyer's counsel at any time after the Closing Date and prior to the day that is two Business Days before the Remittance Date that in the opinion of Buyer and its counsel exonerates the Buyer from liability under Section 116 of the Income Tax Act (Canada) in respect of any payment on account of the Proceeds in the amount of the "certificate limit" specified in the Section 116 Certificate, Buyer's Counsel shall pay to Ajay ▇▇▇▇▇▇▇, ▇▇ Trust, or in accordance with his direction, on account of the Proceeds an amount equal to the amount, if any, by which (i) the aggregate of (A) the Withheld Amount and (B) the amount, if any, by which (I) the amount of interest received by Buyer's counsel on the Withheld Amount exceeds (II) the amount of any tax payable by the Buyer in respect of any interest on the Withheld Amount or which the Buyer or Buyer's counsel is required or entitled to withhold or deduct in respect of such interest exceeds (ii) 33 1/3% of the amount, if any, by which (A) the Proceeds exceeds (B) the "certificate limit" specified in the Section 116 Certificate. In the event that the Proceeds are subsequently adjusted upward so that they exceed the certificate limit of a Section 116 Certificate delivered by Ajay ▇▇▇▇▇▇▇, ▇▇ay ▇▇▇▇▇▇▇ ▇▇▇ll deliver a revised Section 116 Certificate or the Buyer will withhold 33 1/3% of the amount payable in respect of such adjustment and the provisions of this Section shall apply to such withheld amount, mutatis mutandis.

Section 116 Certificate. Ajay ▇▇▇▇▇▇▇ ▇▇▇ll on or before the Closing Date, deliver to the Buyer (a) If a certificate issued by Canada Customs and the Minister of National Revenue Agency pursuant to under subsection 116(2) of the Income Tax Act (Canada) (such certificate, a "Section 116 116(2) Certificate") in respect of the proposed disposition of Purchase Shares by Ajay ▇▇▇▇▇▇▇, ▇▇ trustee any Seller who is a non-resident of Canada for purposes of the Shares owned by Ajay ▇▇▇▇▇▇▇Tax Act (such shares, ▇▇ Trust (the "Trust Non-Resident Purchase Shares"). The Section 116 Certificate delivered by Ajay ▇▇▇▇▇▇▇ ▇▇▇ll specify , and any such Seller, a "Non-Resident Seller"), specifying a certificate limit" limit in an amount which is not less than the "proceeds of disposition" Purchase Price as determined prior to any adjustment under Section 1.4 allocable to such Non-Resident Purchase Shares (the "ProceedsNon-Resident Purchase Price") on account of the Purchase Price payable in respect of the Trust Shares), as those terms are defined for purposes of Section 116. The Section 116 Certificate shall be deemed is not delivered to have been delivered in respect of any payment or part thereof on account of the Purchase Price payable in respect of the Trust Shares if, in the opinion of the Buyer and its counsel, acting reasonably, it does not exonerate the Buyer from liability under Section 116 of the Income Tax Act (Canada) in respect of such payment or part thereof on account of the Proceeds; (a) In the event that the Section 116 Certificate required under this Section 6.16 has not been delivered by Ajay ▇▇▇▇▇▇▇ ▇▇ the Buyer Purchaser on or before the Closing DateClosing, or in the event that a Section 116 Certificate that is delivered by Ajay ▇▇▇▇▇▇▇ ▇▇▇s not specify a "certificate limit" that is no less than the Proceeds, the Buyer then Purchaser shall withhold from the Purchase Price payment to be made to such Non-Resident Seller under Section 1.3 an amount equal to 331/325% of the amount due on account of the Trust Shares, oramount, if a Section 116 Certificate has been delivered any, by Ajay ▇▇▇▇▇▇▇, ▇▇ amount equal to 331/3% of which the Non-Resident Purchase Price payable in respect of the Trust Shares less the exceeds such certificate limit specified in the Section 116 Certificate limit, if any (the "Withheld Amount"). The Withheld Amount shall in respect of each Non-Resident Seller will be deposited by the Buyer's counsel pursuant to an irrevocable direction of the Buyer Purchaser in an interest bearing trust account at a bank located in Ontario to be held for Ogilvy Renault LLP (the benefit of Ajay "Section 116 Escrow Agent"). Any interest or o▇▇▇▇ ▇▇▇▇▇▇ ▇▇, ▇▇ Trust or rned in accordance with his direction, to be disposed respect of as set out herein. The each Withheld Amount shall be remitted by Buyer's counsel to (net of any applicable Taxes) will accrue for the Receiver General of Canada on the day that the Withheld Amount is required to be so remitted pursuant to subsection 116(5) benefit of the Income Tax Act (Canada) (the "Remittance Date"). All interest earned on the Withheld Amount shall be for the account of Ajay ▇▇▇▇▇▇▇, ▇▇ Trust, and the full amount of such interest less any applicable taxes of any nature whatsoever applicable to such interest shall be paid by Buyer's counsel to Ajay ▇▇▇▇▇▇▇, ▇▇ Trust or in accordance with his direction, on the Remittance DateNon-Resident Seller. (b) Notwithstanding If, prior to the foregoing29th day after the end of the month in which the Closing occurs (the "Certificate Date"), if a Non-Resident Shareholder Seller delivers a Section 116 Certificate or causes to Buyer's counsel at any time after the Closing Date and prior be delivered to the day that is two Business Days before the Remittance Date that in the opinion of Buyer and its counsel exonerates the Buyer from liability under Section 116 of the Income Tax Act (Canada) in respect of any payment on account of the Proceeds in the amount of the "certificate limit" specified in the Section 116 Certificate, Buyer's Counsel shall pay to Ajay ▇▇▇▇▇▇▇, ▇▇ Trust, or in accordance with his direction, on account of the Proceeds an amount equal to the amount, if any, by whichPurchaser: (i) a Section 116(2) Certificate in respect of the aggregate of disposition of the Non-Resident Purchase Shares, then the Section 116 Escrow Agent will promptly pay to the Non-Resident Seller the lesser of (A1) the Withheld Amount and and (B2) the amount, if any, by which (I) the amount of interest received by Buyer's counsel on the Withheld Amount exceeds (II) the amount of any tax payable by the Buyer in respect of any interest on the Withheld Amount or which the Buyer or Buyer's counsel is required or entitled to withhold or deduct in respect of such interest exceeds (ii) 33 1/3less 25% of the amount, if any, by which (A) which the Proceeds exceeds (B) Non-Resident Purchase Price exceeds the "certificate limit" limit specified in such Section 116(2) Certificate, together with any interest or other income earned on the Withheld Amount to the date of that payment (net of any applicable Taxes), and the Section 116 Certificate. In Escrow Agent will promptly pay to the event that Receiver General for Canada 25% of the Proceeds are subsequently adjusted upward so that they exceed amount, if any, by which the Non-Resident Purchase Price exceeds the certificate limit of a specified in such Section 116 116(2) Certificate delivered by Ajay ▇▇▇▇▇▇▇, ▇▇ay ▇▇▇▇▇▇▇ ▇▇▇ll deliver a revised Section 116 Certificate or (and the Buyer amount so paid will withhold 33 1/3% be credited to Purchaser as payment on account of the amount payable owing to the Non-Resident Seller in respect of such adjustment and the Purchase Price); or (ii) a certificate issued under subsection 116(4) of the Tax Act (a "Section 116(4) Certificate") in respect of the disposition of the Non-Resident Purchase Shares, then the Section 116 Escrow Agent will promptly pay the Withheld Amount to the Non-Resident Seller, together with any interest or other income earned on the Withheld Amount to the date of that payment (net of any applicable Taxes). (c) If Purchaser has withheld any amount payable to a Non-Resident Seller under the provisions of this Section 1.5 and no Section 116(2) Certificate or Section 116(4) Certificate has been delivered to the Purchaser by the Non-Resident Seller in accordance with Section 1.5(b), then the Withheld Amount in respect of such Non-Resident Seller will be remitted by the Section 116 Escrow Agent to the Receiver General for Canada as contemplated by Subsection 116(5) of the Tax Act on the 30th day after the end of the month in which Closing occurs (the "Remittance Date"), and the amount so remitted will be credited to Purchaser on account of the amount payable to the Non-Resident Seller by the Purchaser in respect of the Purchase Price; provided, however, that if the Canada Revenue Agency confirms in writing on or before the Remittance Date that Purchaser may continue to hold the Withheld Amount until a later date or event without adverse consequences to the Purchaser, then the Section 116 Escrow Agent will continue to hold that amount on the terms and conditions of this Section 1.5, and on the terms outlined in the confirmation from the Canada Revenue Agency, if any, and the Certificate Date and the Remittance Date will be deemed to have been extended until that later date or event specified by the Canada Revenue Agency. Any interest or other income earned in connection with the Withheld Amount from Closing to the Remittance Date (net of any applicable Taxes) will be paid promptly by the Section 116 Escrow Agent to the Non-Resident Seller upon the release or remittance of the Withheld Amount. (d) If, following Closing, the Canada Revenue Agency indicates, in respect of a particular Non-Resident Seller, that a Section 116(2) Certificate with a certificate limit in an amount which is not less than the Non-Resident Purchase Price or a Section 116(4) Certificate will be issued in respect of the disposition of Non-Resident Purchase Shares upon the payment of an amount (the "Tax Amount") that does not exceed the applicable Withheld Amount, then the Section 116 Escrow Agent will remit the Tax Amount to the Receiver General for Canada as payment of the Tax Amount (and the amount so remitted will be credited to Purchaser as payment on account of the amount owing to the applicable Non-Resident Seller in respect of the Purchase Price). Upon delivery of such certificate, the Section 116 Escrow Agent shall apply release the Withheld Amount to such withheld amountthe applicable Non-Resident Seller (plus any interest or other income earned thereon, mutatis mutandisnet of any applicable Taxes), less the Tax Amount.