EXHIBIT 2.2
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DATED 2004
DT HOLDINGS LIMITED
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FIRST DT HOLDINGS LIMITED
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SECOND DT HOLDINGS LIMITED
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PRESS ACQUISITIONS LIMITED
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TAX DEED
relating to sale and purchase of shares in
TELEGRAPH GROUP LIMITED
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Ref: 3885/5586/30842351
10\839795_7
TAX DEED
THIS DEED made on 2004
BETWEEN:
1. The persons listed in Schedule 1 to this Deed (the "COVENANTORS");
2. PRESS ACQUISITIONS LIMITED, a company incorporated in England and Wales
(registered number 5098596) and whose registered office is at ▇▇▇
▇▇▇▇▇, ▇▇ ▇▇ ▇▇▇▇▇'▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇ (the "PURCHASER").
WITNESSES as follows:
1. INTERPRETATION
1.1 In this Deed the following definitions are used:
"ACCOUNTS DATE" means 31 December 2003;
"AGREEMENT" means the agreement of even date herewith and made between
the Covenantors and the Purchaser for the sale and purchase of all the
issued share capital of the Company;
"CLAIM" means any notice, demand, assessment, return, account, letter
or other document issued or prepared or action taken from which it
appears that a liability for taxation is to, or may, fall on the
Company or any of the Subsidiaries;
"COMPANY" means Telegraph Group Limited, a company incorporated in
England and Wales with registered number 00451593 and whose registered
office is at ▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇;
"COMPLETION" means completion of the sale and purchase of the shares of
the Company in accordance with the terms of the Agreement;
"COMPLETION DATE" means the date hereof;
"EVENT" means an event, act, transaction or omission, including
(without limitation) the execution or performance of the Agreement;
"FINANCIAL LIMITATIONS" means the financial limitations on the
Covenantor's liability contained in clauses 8.6 and 8.7 of the
Agreement;
"GROUP RELIEF" means:
A. relief surrendered or claimed pursuant to Chapter IV of Part X
of the Taxes Act;
B. advance corporation tax surrendered or claimed pursuant to
Section 240 of the Taxes Act; and
C. any refund of taxation surrendered or claimed pursuant to
Section 102 of the Finance ▇▇▇ ▇▇▇▇;
"INCOME, PROFITS OR GAINS" shall include income, profits or gains which
are deemed to have been earned, accrued or received for the purposes of
any taxation;
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"LIABILITY FOR TAXATION" means:
A. a liability of the Company or any of the Subsidiaries to make
a payment of any taxation;
B. the utilisation of a Purchaser's Tax Relief in circumstances
where, but for such utilisation, a liability for taxation
mentioned in A above would have arisen in respect of which the
Purchaser would have been able to make a valid claim under
this Deed; or
C. the loss of or failure to obtain a Purchaser's Tax Relief
(other than a Tax Relief arising after the Working Capital
Date and not in respect of any event occurring on or before
the Working Capital Date),
and references to an "'A' Liability for Taxation", a "'B' Liability for
Taxation" and a "'C' Liability for Taxation" shall be construed
accordingly;
"PURCHASER'S TAX RELIEF" means:
A. any Tax Relief arising after the Working Capital Date and not
in respect of any event occurring on or before the Working
Capital Date; and
B. any Tax Relief or right to receive payment for Group Relief to
the extent that it is shown as an asset in the Working Capital
Statement or was taken into account in computing any provision
for taxation in the Working Capital Statement;
C. if Completion occurs on 30 July 2004 or 29 October 2004 and to
the extent not within sub-paragraph A. of this definition, any
Group Relief surrendered by a member of the Purchaser's Group
to the Company or any Subsidiary in respect of the period
commencing immediately after Completion.
"SUBSIDIARIES" means the companies the details of which are set out in
Schedule 2 to this Deed;
"TAX AUTHORITY" means any statutory, governmental, state, provincial,
local governmental or municipal authority, body or official with
responsibility in that capacity for taxation;
"TAX RELIEF" means:
A. any relief, allowance or credit in respect of any taxation;
B. any deduction in computing income, profits or gains for the
purposes of any taxation; and/or
C. any right to repayment of taxation;
"TAXATION" or "TAX" means all forms of taxes, duties and charges in the
nature of taxation including, without limitation, income tax (including
income tax required to be deducted or withheld from or accounted for in
respect of any payment), corporation tax, capital gains tax, advance
corporation tax, inheritance tax, stamp duty, stamp duty reserve tax,
stamp duty land tax, value added tax, customs duties, excise duties,
national insurance and other similar contributions, and any other
taxes,
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duties or withholdings corresponding to, similar to, replaced by or
replacing any of them together with any interest, penalty or fine in
connection with any such taxation and regardless of whether any such
taxes, duties, withholdings, interest, penalties or fines are
chargeable directly or primarily against or attributable directly or
primarily to the Company, any of the Subsidiaries or any other person
and of whether any amount in respect of any of them is recoverable from
any other person; and
"TAXES ACT" means the Income and Corporation Taxes ▇▇▇ ▇▇▇▇.
1.2 In this Deed, "stamp duty" means stamp duty which it is necessary to
discharge in order to effect registration in respect of the holding of
an asset or to establish title to an asset or to produce the relevant
instrument as evidence in civil proceedings or in a hearing before an
arbitrator or referee.
1.3 Any word or expression defined in the Agreement shall, save as
otherwise defined or as the context may otherwise require in this Deed,
have the same meaning in this Deed and the provisions of sub-clauses
1.2 to 1.4 of the Agreement shall apply to this Deed as if expressly
set out herein save that references to the expression "this Agreement"
shall be replaced by references to the expression "this Deed".
1.4 No term of this Deed is enforceable under the Contracts (Rights of
Third Parties) ▇▇▇ ▇▇▇▇ by a person who is not a party to the Deed.
2. COVENANT
Subject to the provisions of clause 3 of this Deed and sub-clauses 8.4,
8.5, 8.6, 8.7 and 8.10 of the Agreement, the Covenantors jointly and
severally covenant with the Purchaser that they will pay to the
Purchaser by way of repayment of the consideration payable for the
Shares an amount calculated in accordance with clause 4 below:
2.1 in respect of any Liability for Taxation which has arisen:
2.1.1 as the result of any event occurring or deemed to occur for
the purposes of taxation on or before the Working Capital
Date; or
2.1.2 as a result of income, profits or gains earned, accrued or
received on or before the Working Capital Date; or
2.1.3 as a result of the Company or any of the Subsidiaries ceasing,
or being deemed to cease, to be a member of any group or
associated with any other company for the purposes of any
taxation on or before Completion; or
2.1.4 as a result of any failure by any member of the Vendor's Group
to discharge that taxation which results in the Company or any
of the Subsidiaries becoming liable to pay or bear any
taxation chargeable directly or primarily against or
attributable directly or primarily to any member of the
Vendor's Group.
3. LIMITATIONS
3.1 The Covenantors shall not be liable under clause 2 above or in respect
of any breach of the Tax Warranties:
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3.1.1 to the extent that provision or reserve has been made for the
Liability for Taxation as a liability in the Working Capital
Statement;
3.1.2 to the extent that the Liability for Taxation would not have
arisen but for anything voluntarily done or omitted to be done
after Completion by the Purchaser, the Company or any of the
Subsidiaries or by any of their respective employees, agents
or successors in title provided that the following acts and
omissions shall not be treated as voluntary for the purposes
of this limitation 3.1.2:
(A) any act or omission carried out or effected in the
ordinary course of business of the Company or the
relevant Subsidiary (as carried out at Completion);
(B) any act or omission carried out or effected pursuant
to a legally binding obligation entered into by the
Company or the relevant Subsidiary prior to
Completion;
(C) any act or omission carried out or effected at the
written direction of or at the written request of the
Covenantors;
(D) the presentation of a document to the relevant Tax
Authority of any document for the purpose of paying
any stamp duty (for the avoidance of doubt,
interpreted in accordance with clause 1.2 of this
Deed) in respect of that document provided that the
act of bringing a document executed outside the
United Kingdom into the United Kingdom shall not be
excluded from constituting a voluntary act by this
sub-clause (D).
3.1.3 to the extent that the Liability for Taxation arises or is
increased as a result only of:
(A) an increase in rates of taxation made after the
Working Capital Date with retrospective effect;
(B) any change in generally accepted accounting practice
introduced after the Accounts Date; or
(C) the passing of any legislation, or making of any
subordinate legislation or a change in law (or a
change in judicial interpretation of the law) or a
change in practice of a Tax Authority after the
Working Capital Date;
3.1.4 to the extent that the Liability for Taxation would not have
arisen or would have been reduced or eliminated but for a
failure or omission on the part of the Company or any of the
Subsidiaries after Completion to make any claim election or
give any notice or consent or do any other thing the making or
giving or doing of which was taken into account in computing
the provision or reserve for taxation in the Working Capital
Statement;
3.1.5 to the extent that the Liability for Taxation would not have
arisen but for a disclaimer (of capital allowances or any
other Tax Relief) or a revision to or revocation of a claim
therefor where such revision or disclaimer is caused or made
by the Company or any of the Subsidiaries after Completion;
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3.1.6 to the extent that the income, profits or gains in respect of
which that Liability for Taxation arises were actually earned,
accrued or received by the Company or any of the Subsidiaries
in the period from 1 January 2004 to the Working Capital Date
but were not reflected in the Working Capital Statement;
3.1.7 to the extent that the Liability for Taxation arises or is
increased as a consequence of any failure by the Purchaser,
the Company and/or any of the Subsidiaries to comply with any
of their respective obligations under clauses 7, 10 and 11 of
this Deed;
3.1.8 to the extent that a Relevant Company (as defined in
sub-clause 5.3 of this Deed) has been assessed to corporation
tax in the name of the Company or any of the Subsidiaries
pursuant to Section 767A of the Taxes Act in respect of the
same Liability for Taxation;
3.1.9 to the extent that it would not have arisen but for a change
in the accounting reference date or of any accounting
principles or practice of the Company or of any of the
Subsidiaries adopted after Completion, provided that this
limitation 3.1.9 shall not apply where such change is
necessary to comply with generally accepted accounting
practice in the UK applicable at Completion;
3.1.10 to the extent that the Purchaser makes or has made recovery in
respect of that Liability for Taxation under any provision of
the Agreement;
3.1.11 to the extent that any Tax Relief (other than a Purchaser's
Tax Relief) is available to relieve or mitigate that Liability
for Taxation (or is for no consideration made available by the
Covenantors to the Company or any of the Subsidiaries) or
would have been so available but for the setting off of the
Tax Relief against profits or a Liability for Taxation, in
either case in respect of which the Covenantors would not
(ignoring the financial limitations) have been liable to make
a payment under this Deed;
3.1.12 to the extent that the Liability for Taxation arises or is
increased as a result of any delay or default by the Purchaser
or the relevant Company or Subsidiary in paying over to any
Tax Authority any amount received from the Covenantors or any
of them under this Deed or for breach of the Tax Warranties;
3.1.13 to the extent that an amount in respect of the Liability for
Taxation has already been recovered by the relevant Company or
Subsidiary from another person (not being the Purchaser, the
Company or any of the Subsidiaries);
3.1.14 to the extent that the Liability for Taxation has been
discharged before the Working Capital Date (and so that any
instalment payments of corporation tax made in accordance with
the Corporation Tax (Instalment Payments) Regulations 1998 (SI
1998/3175) prior to the Working Capital Date shall be treated
for the purposes of this Deed as wholly attributable to the
accounting period deemed to end at the Working Capital Date
(reducing the liability deemed to arise in respect of that
deemed period to a minimum of zero);
3.1.15 to the extent that the Liability for Taxation has been made
good by insurers or otherwise compensated for without cost to
the Purchaser or the Company or any of the Subsidiaries;
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3.1.16 to the extent that the Liability for Taxation would not have
arisen but for a cessation of, or any changes in the conduct
of, any trade carried on by the Company or any of the
Subsidiaries at Completion, being a cessation or change
occurring after Completion; or
3.1.17 if Completion occurs on 30 July 2004 or 29 October 2004, to
the extent that the Liability for Taxation arises in respect
of any event outside the ordinary course of trading of the
Company in the period commencing immediately after Completion
and ending on (and including) the Working Capital Date.
4. AMOUNT OF LIABILITY
4.1 In the event that the Covenantors are liable to make any payment under
clause 2 the amount of that payment shall be equal to:
4.1.1 in respect of an 'A' Liability for Taxation, the amount of the
liability to make the relevant payment;
4.1.2 in respect of a 'B' or 'C' Liability for Taxation, the amount
of any liability to make a payment of taxation which would not
have been made or become due had there been no such
utilisation of the Purchaser's Tax Relief in the case of a 'B'
Liability for Taxation or no such loss or failure to obtain
the Tax Relief in question in the case of a 'C' Liability for
Taxation,
and (in any case) the amount of any costs and expenses reasonably and
properly incurred by the Purchaser, the Company and/or any of the
Subsidiaries in investigating, assessing or contesting any such
Liability for Taxation as gives rise to the liability of the
Covenantors under this Deed.
5. COUNTER-INDEMNITY
5.1 The Purchaser hereby covenants with each of the Covenantors to hold the
Covenantors indemnified and to keep them indemnified against:
5.1.1 any taxation liability or increased taxation liability of any
of the Covenantors or their subsidiaries which arises as a
result of or by reference to any reduction or disallowance of
group relief that would otherwise have been available to the
relevant Covenantor or any subsidiary of the Covenantor to the
extent that such reduction or disallowance occurs as a result
of or by reference to any total or partial withdrawal or
disclaimer effected by the Company or any of the Subsidiaries
after the Completion Date of any claim for the surrender of
group relief by the Company or any of the Subsidiaries
submitted to the Inland Revenue on or before the Completion
Date in respect of any accounting period ended on or before
the Completion Date save where any such withdrawal or
disclaimer is effected at the express instigation or with the
consent in writing of the Covenantors; and
5.1.2 any costs and expenses reasonably and properly incurred by any
of the Covenantors or their subsidiaries in investigating,
assessing or contesting any such taxation liability or
increased taxation liability as gives rise to the liability of
the Purchaser under this clause 5.
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5.2 Where an assessment is made on a Relevant Company as defined
in sub-clause 5.3 below in respect of a corporation tax
liability of the Company or any Subsidiary the Purchaser
covenants to indemnify each Relevant Company in respect of
that proportion of the assessment:
5.2.1 which arises as a result of the failure of the Purchaser or
the Company or the Subsidiary to apply a Relevant Amount as
defined in sub-clause 5.4 below to discharge a liability for
taxation to which that Relevant Amount relates; or
5.2.2 which relates to any liability for taxation which arises in
respect of any event occurring or deemed to occur for the
purposes of taxation after Completion or any liability for
taxation which arises as a result of income, profits or gains
earned, accrued or received after Completion;
provided that the Purchaser shall not be liable to indemnify any
Relevant Company in respect of any Liability for Taxation in respect of
which the Covenantors would have had a liability to make a payment
under this Deed (ignoring the effect of the financial limitations and
clause 3.1.8).
5.3 "RELEVANT COMPANY" for the purposes of sub-clause 5.2 above means:
5.3.1 any company which had control of the Company or the Subsidiary
for the purposes of Section 767A(2) or Section 767AA of the
Taxes Act at any time before Completion;
5.3.2 any company of which a company falling within paragraph 5.3.1
above has at any time had control for the purposes of Section
767A(2) of the Taxes Act; or
5.3.3 any company which was a member of the same group as the
Company (or the Subsidiary) within the meaning of Section 190
of the TCGA.
5.4 "RELEVANT AMOUNT" for the purposes of sub-clause 5.2 above means:
5.4.1 an amount provided for in the Working Capital Statement; or
5.4.2 an amount paid by any of the Covenantors to the Purchaser
pursuant to clause 2 of this Deed.
6. OVER-PROVISIONS AND REFUNDS
6.1 If:
6.1.1 the auditors for the time being of the Company or the relevant
Subsidiary shall certify (at the request and expense of the
Covenantors) that any provision for taxation in the Working
Capital Statement has proved to be an over-provision;
6.1.2 the auditors for the time being of the Company or the relevant
Subsidiary shall certify (at the request and expense of the
Covenantors) that any liability for taxation which has
resulted in a payment having been made or becoming due from
the Covenantors under this Deed or under the Tax Warranties
will give rise to a Tax Relief for the Company or any of the
Subsidiaries which would not otherwise have arisen and shall
further certify the value of that Tax Relief (taking into
account timing differences), the amount certified shall be
dealt with in accordance with sub-clause 6.2; or
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6.1.3 the Company or the relevant Subsidiary shall become entitled
to any repayment of corporation tax overpaid by the Company or
the relevant Subsidiary in respect of any period ending on or
before the Working Capital Date which (a) was not taken into
account in the Working Capital Statement and (b) is not a
repayment made as a result of a surrender of Group Relief in
accordance with Clause 11,
then any such amounts shall be dealt with in accordance with sub-clause
6.2.
6.2 Where it is provided under sub-clause 6.1 that any amount (the
"RELEVANT AMOUNT") is to be dealt with in accordance with this
sub-clause 6.2:
6.2.1 the Purchaser shall, or shall procure that the Company or
relevant Subsidiary shall, notify the Covenantors (and provide
the Covenantors with full details thereof) as soon as
reasonably practicable, and in any event within four Business
Days of it coming to the notice of the Purchaser, the Company
or any Subsidiary that there is likely to be an over
provision, Tax Relief or right of repayment as referred to in
sub-clause 6.1, and the Purchaser shall provide prompt replies
to reasonable enquiries by the Covenantors and their agents,
and provide reasonable assistance and information, in relation
to these matters;
6.2.2 the Relevant Amount shall first be set off against any payment
then due from the Covenantors under this Deed or for breach of
the Tax Warranties;
6.2.3 to the extent there is an excess, the Purchaser shall procure
that a refund shall be made to the Covenantors of any previous
payment or payments made by the Covenantors under this Deed or
for breach of the Tax Warranties and not previously refunded
under this sub-clause up to the amount of such excess; and
6.2.4 to the extent that the excess referred to in paragraph 6.2.3
of this sub-clause is not exhausted under that paragraph, the
remainder of that excess (an "EXCESS RELEVANT AMOUNT") shall,
subject to clause 6.2.5, be paid to the Covenantors within ten
business days of the certification or receipt giving rise to
the Relevant Amount;
6.2.5 no payment shall be made pursuant to sub-clause 6.2.4 above
unless and until the aggregate amount of the liability of the
Purchaser in respect of all Excess Relevant Amounts exceeds
(pound)1 million, in which case only the excess shall be
payable.
6.3 Where any such certification as is mentioned in sub-clause 6.1 of this
clause has been made, the Covenantors or the Purchaser may (at
their/its own expense) request the auditors to review such
certification in the light of all relevant circumstances, including any
facts which have become known only since such certification, and to
certify whether such certification remains correct or whether, in the
light of those circumstances, the amount that was the subject of such
certification should be amended.
6.4 If the auditors certify under sub-clause 6.3 of this clause that an
amount previously certified should be amended, that amended amount
shall be substituted for the purposes of sub-clause 6.2 of this clause
as the Relevant Amount, and such adjusting payment (if any) as may be
required by virtue of the above-mentioned substitution
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shall be made as soon as practicable by the Covenantors or (as the case
may be) to the Covenantors.
7. RECOVERY FROM OTHER PERSONS
7.1 If any payment becomes due from the Covenantors under clause 2 of this
Deed or for breach of the Tax Warranties and the Company or any of the
Subsidiaries either:
7.1.1 is immediately entitled at the due date for the making of that
payment to recover from some other person (not being the
Company or any of the Subsidiaries but including, without
limitation, any Tax Authority) any sum in respect of the
Liability for Taxation that has resulted in that payment
becoming due from the Covenantors; or
7.1.2 becomes entitled at some subsequent date to make such a
recovery,
the Purchaser shall procure that the Company or the Subsidiary entitled
to make that recovery shall (in either of those cases) promptly notify
the Covenantors of their entitlement and shall, if so required by the
Covenantors and at the Covenantors' sole expense, procure that the
Company or the relevant Subsidiary shall take all appropriate steps to
enforce that recovery (keeping the Covenantors fully informed of the
progress of any action taken) and shall account to the Covenantors for
whichever is the lesser of:
(A) any sum so recovered (including any interest or repayment
supplement paid by the Tax Authority or other person on or in
respect thereof less any tax chargeable on the Company or
relevant Subsidiary in respect of that interest) after
deduction of all costs and expenses incurred by the Company or
the relevant Subsidiary in enforcing such recovery; and
(B) the aggregate of the amount paid by the Covenantors pursuant
to clause 2 or for breach of the Tax Warranties in respect of
the Liability for Taxation in question and any interest (after
tax) and any repayment supplement paid by the Tax Authority or
other person in respect of the sum recovered.
8. DUE DATE FOR PAYMENT
8.1 Where the Covenantors become liable to make any payment pursuant to
clause 2 or sub-clause 8.4 of this Deed the due date for the making of
that payment shall be:
8.1.1 (save as mentioned in paragraph 8.1.2 below and subject to the
provisions of sub-clause 8.2 below), the date falling ten
Business Days after the date when the Covenantors have been
notified by the Company or the Purchaser or any of the
Subsidiaries, that the Covenantors have a liability for a
determinable amount under clause 2 or sub-clause 8.4; or
8.1.2 in respect of an 'A' Liability for Taxation only, the date (if
later than that specified in paragraph 8.1.1 above) two
Business Days prior to:
(A) in the case of tax in respect of which there is no
provision for payment by instalments, the latest date
on which the tax in question can be paid to the
relevant Tax Authority in order to avoid a liability
to interest or penalties accruing;
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(B) in the case of tax in respect of which there is
provision for payment by instalments, each date on
which an instalment of such tax becomes payable (and
so that on each such date an appropriate proportion
of the amount claimed shall be paid, such proportion
to be notified by the Purchaser to the Covenantors at
least five Business Days prior to each such date);
(C) in the case of a payment relating to Group Relief,
the date on which the repayment of the Group Relief
is payable to the person demanding the same; or
8.1.3 in the case of a 'B' Liability for Taxation or a 'C' Liability
for Taxation only the equivalent date (if later than that
specified in paragraph 8.1.1 above) to the date in paragraph
8.1.2 above for the tax which is payable by the Company or any
of the Subsidiaries which would not have been payable had
there been no utilisation of the Purchaser's Tax Relief in the
case of a 'B' Liability for Taxation, or no loss or failure to
obtain the Purchaser's Tax Relief in the case of a 'C'
Liability for Taxation.
8.2 Notwithstanding the provisions of sub-clause 8.1 above, if the date on
which tax to which this clause applies can be recovered is deferred
following application to the appropriate Tax Authority and the
Covenantors indemnify the Purchaser and the Company and the Subsidiary
concerned to their reasonable satisfaction, the date for payment by the
Covenantors (if later than that specified in paragraph 8.1.1 above)
shall be the earlier of the date on which the tax becomes recoverable
by the relevant Tax Authority (notwithstanding any initial deferral)
and such date when the amount of tax is finally and conclusively
determined. For this purpose, an amount of tax shall be deemed to be
finally and conclusively determined when, in respect of such amount, an
agreement under Section 54 of the Taxes Management Act 1970 is made, or
a decision of a court or tribunal is given or any binding agreement or
determination is made from which either no appeal lies or in respect of
which no appeal is made within the prescribed time limit.
8.3 Where the Purchaser becomes liable to make any payment pursuant to
clause 5, 6 or clause 7 of this Deed the due date for payment shall be
as follows:
8.3.1 in respect of a liability to make a payment under clause 5,
the date falling two Business Days before the last date upon
which the relevant Covenantor would have to pay the taxation
that has given rise to the liability of the Purchaser under
clause 5 in order to avoid incurring a liability to pay
interest or a charge or penalty;
8.3.2 in respect of a liability to make a payment under clause 6,
the date falling two Business Days after the amount of any
over provision or the amount by which the liability to tax of
the Purchaser, the Company or any Subsidiary is reduced by
reason of the Tax Relief, is determined in accordance with the
provisions of clause 6; and
8.3.3 in respect of a liability to make a payment under clause 7,
the date falling two Business Days after the date when the
Purchaser, the Company or the relevant Subsidiary has received
any sum as is referred to in clause 7.1.2 (A) of this Deed.
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8.4 If any payment required to be made under this Deed is not made by the
due date for the making thereof as described in sub-clauses 8.1, 8.2
and 8.3 above, then the party required to make the payment ("the
payer") shall pay to the party entitled to receive the payment ("the
payee") interest from that due date until the date when the payment is
actually made calculated on a daily basis at the rate of 2% per annum
above the base rate from time to time of Barclays Bank PLC, less the
amount by which the payee is compensated for late payment by virtue of
the payer's relevant liability under clauses 2 or 5 (as the case may
be) extending to interest.
9. DEDUCTIONS OR WITHHOLDINGS
9.1 Any payment made under clauses 2 or 5 of the Deed shall be made free
and clear of all taxation whatsoever save only for any deductions or
withholdings required by law.
9.2 If any deductions or withholdings are required by law to be made in
respect of any such payment or if any such payment is subject to any
taxation in the hands of the payee the payer shall be liable to pay to
the payee such further sums as shall ensure that the aggregate of the
sums paid or payable under this sub-clause and the payment shall, after
deducting therefrom all deductions or withholdings from, or taxation
liabilities in respect of such aggregate amount leave the payee with
the same amount as it would have been entitled to receive under clauses
2 or 5 in the absence of any such deductions, withholdings or taxation
liabilities.
9.3 Sub-clauses 9.1 and 9.2 above shall not apply to the extent that the
deduction, withholding or tax would not have arisen but for:
9.3.1 the payee not being tax resident in the UK, or having some
connection with a territory outside the UK; or
9.3.2 an assignment by the payee of any of its rights under the
Agreement or this Deed.
10. CLAIMS PROCEDURE
10.1 Upon the Purchaser or the Company or any of the Subsidiaries becoming
aware of any Claim being made against the Company or any of the
Subsidiaries in respect of a liability for taxation which may give rise
to a liability under this Deed or under the Agreement for breach of the
Tax Warranties, the Purchaser will or will procure that the Company or
the relevant Subsidiary will, as soon as reasonably practicable and in
any event within twelve Business Days of becoming so aware give notice
of the Claim to the Covenantors specifying the extent to which the
Purchaser, the Company or the Subsidiary concerned knows, or could make
itself by reasonable endeavours aware, of the events giving rise to the
Claim and the amount of taxation involved, and the Purchaser shall
procure that the Company or the Subsidiary concerned will take such
reasonable action and give such reasonable information and assistance
in connection with the affairs of the Company or that Subsidiary as may
be both reasonably requested in writing by the Covenantors and
reasonably necessary to avoid, resist, appeal or compromise the Claim.
10.2 The Covenantors shall themselves be entitled to take such action as is
reasonably necessary to avoid, dispute, resist, appeal, compromise or
defend the claim in the name of the Company or the relevant Subsidiary
and to have the conduct of any incidental negotiations, in which case
the Covenantors shall keep the Purchaser
11
informed of all material matters relating to that action, provided that
the Covenantors shall indemnify the Purchaser, the Company and the
Subsidiaries to the reasonable satisfaction of the Purchaser against
all losses, costs, damages and expenses which are reasonably thereby
incurred and in connection with such action taken by the Covenantors:
10.2.1 the appointment of solicitors and other professional advisers
to the Company shall be subject to the prior written approval
of the Purchaser, such approval not to be unreasonably
withheld or delayed;
10.2.2 the Covenantors shall not submit any material correspondence,
pleading, computation, return or other document and shall not
make any settlement or compromise of the subject matter of the
claim and shall not agree any matter in the conduct of any
dispute in relation thereto which is likely materially to
affect the future liability of the Company or the Subsidiaries
to Taxation, in each case without the prior written approval
of the Purchaser, such approval not to be unreasonably
withheld or delayed; and
10.2.3 save as otherwise expressly provided herein, the Purchaser
shall procure that the Company shall give the Covenantors all
reasonable co-operation and assistance for the purposes of
taking such action as aforesaid.
10.3 The Purchaser shall not settle, make any admission of liability nor
compromise any claim or matter which gives rise or may give rise to a
liability of the Covenantors under this Deed without the prior written
consent of the Covenantors, such consent not to be unreasonably
withheld or delayed.
11. CONDUCT OF TAX AFFAIRS
11.1 Subject to and in accordance with the provisions of this clause 11, the
Covenantors or their duly authorised agents shall:
11.1.1 prepare, submit, negotiate and otherwise deal with all
computations and returns relating to taxation and
correspondence relating thereto; and
11.1.2 prepare, submit and deal with (or procure the preparation and
submission of) all claims, elections, surrenders, disclaimers,
notices and consents for taxation purposes;
in respect of all periods relevant for taxation purposes of the Company
or any of the Subsidiaries ending on or before the Accounts Date
("PRE-ACCOUNTS DATE PERIODS").
11.2 The Covenantors or their duly authorised agents shall deliver all
documents prepared by the Covenantors in accordance with this clause 11
(the "TAX DOCUMENTS") to the Purchaser for authorisation and signing
prior to submission. Subject to the provisions of this Clause 11, the
Purchaser shall procure that the Tax Documents are so authorised and
signed as soon as reasonably practicable by or on behalf of the Company
or the relevant Subsidiary as appropriate without amendment unless
manifestly incorrect, misleading or inaccurate. The Covenantors shall
ensure that the Purchaser is afforded a reasonable opportunity to
consider such computations and returns and make representations to the
Covenantors prior to submission to the Tax Authority and shall take
into account the Purchaser's reasonable comments.
12
11.3 The Purchaser shall procure that the Company and each of the
Subsidiaries shall, to the extent they can lawfully do so, surrender to
the Covenantors or to such third party as the Covenantors may specify
all such relief for amounts available for surrender by way of Group
Relief as the Covenantors may reasonably direct in respect of any
Pre-Accounts Date Periods or in respect of any accounting period of the
Company or any of the Subsidiaries during which Completion occurs
("CROSS-COMPLETION PERIODS") provided that the Purchaser shall not be
obliged to procure anything pursuant to this sub-clause 11.3 to the
extent that it would give rise to a Liability for Taxation in respect
of which the Covenantors would (ignoring the financial limitations)
have had a liability to make a payment under this Deed but in respect
of which (taking into account the financial limitations) the
Covenantors are not required to make a payment under this Deed.
11.4 Neither the Company nor any of the Subsidiaries shall be entitled to
receive any payment or reward from the Covenantors or any other person
in respect of the making of any such surrender as is referred to in
sub-clause 11.3 above.
11.5 The Purchaser shall procure, in respect of any Pre-Accounts Date
Periods or Cross-Completion Periods of the Company or any Subsidiary,
that the Company or such Subsidiary shall forthwith make such claims
and elections and give such consents including such provisional or
final claims for set-off or to accept the surrender of Group Relief in
respect of any of the said accounting periods as the Covenantors may
reasonably direct in writing, provided that the Purchaser shall not be
obliged to procure acceptance of Group Relief to the extent that the
aggregate Group Relief accepted would thereby exceed the provision for
corporation tax in the Working Capital Statement.
11.6 Where, pursuant to sub-clause 11.5 Group Relief is surrendered to the
Company or relevant Subsidiary then the Purchaser shall procure that a
payment will be made for such Group Relief surrender to the
surrendering company of an amount in cash equal to the taxation saved
by the recipient company as a consequence of the surrender of Group
Relief to it (so that Group Relief surrendered to the recipient company
pursuant to this clause 11 shall be deemed to reduce tax payable by the
recipient before any Group Relief surrendered to the recipient by the
Purchaser or any company (other than the Company or any Subsidiary)
associated with the Purchaser) together with an amount equal to any
interest and/or repayment supplement received by such company as a
consequence of the surrender, provided that no payment shall be made to
the extent that the Group Relief is surrendered against a Liability for
Taxation in respect of which the Covenantors would (ignoring the
financial limitations) have had a liability to make a payment under
this Deed.
11.7 Any payment for Group Relief to be made pursuant to sub-clause 11.6
shall:
11.7.1 to the extent that the surrender of Group Relief (or any
surrender of Group Relief assumed to the Purchaser's
reasonable satisfaction to be available in respect of the
Cross-Completion Period) reduces a Liability for Taxation
otherwise due on an instalment payment date (as defined in the
Corporation Tax (Instalment Payment) Regulations 1998 (SI
1998/3175) relating to the Cross-Completion Period, be made on
that instalment payment date;
11.7.2 to the extent that the surrender of Group Relief does not fall
within sub-clause 11.7.1. above and reduces a Liability for
Taxation which has already been paid
13
at the time that the relevant surrender elections are made, be
made on the date falling two Business Days after the date when
a refund of taxation arising as a result of the surrender is
received by the Company or the relevant Subsidiary; and
11.7.3 to the extent that such payment represents interest or a
repayment supplement, be made on the date falling two Business
Days after the date when the interest or repayment supplement
is received by the Company or the relevant Subsidiary.
11.8 Subject to the provisions of clause 10 and this clause 11 the Purchaser
shall take full responsibility for the outstanding tax affairs of the
Company and any Subsidiary in respect of accounting periods commencing
after the Accounts Date and shall prepare and submit such computations
and returns to the appropriate taxing authorities whether in the UK or
elsewhere and deal with all negotiations, correspondence and agreements
with respect thereto. The Purchaser shall procure that the Company and
the Subsidiaries shall not submit any material correspondence,
pleading, computation, return or other document which relates to any
extent to a period before the Working Capital Date or any event
occurring on or before the Working Capital Date and which is likely
materially to affect the liability of the Covenantors under this Deed,
without the prior written approval of the Covenantors, such approval
not to be unreasonably withheld or delayed.
11.9 The Purchaser shall ensure that all communications with any Tax
Authority which relate to an event in the period between the Accounts
Date and the Working Capital Date which might affect the liability of
the Covenantors under this Deed shall first be sent in draft to the
Covenantors and the Purchaser will incorporate any reasonable comments
of the Covenantors.
11.10 The Purchasers shall procure that the Covenantors and their duly
authorised agents are (on reasonable notice in writing to the
Purchasers) afforded such reasonable access to the books, accounts,
personnel, correspondence and documentation of the Company and its
Subsidiaries and such other reasonable assistance as may be reasonably
be required to enable the Covenantors to discharge their obligations
under this clause 11.
11.11 Where the Purchaser, the Company and/or any relevant Subsidiary (the
"Paying Company") has made a payment for Group Relief pursuant to
sub-clause 11.6 or otherwise the Covenantors will procure that the
Paying Company is reimbursed within two Business Days after written
demand is made therefor to the extent such Group Relief is not
available.
11.12 Subject to Clause 11.13, the terms of this Clause 11 shall override and
supersede any previous agreement relating to the surrender of Group
Relief between the Company and any of the Subsidiaries and the
Covenantors and any associated company of the Covenantors.
11.13 For avoidance of doubt, the Purchaser shall not be required to make
payment for Group Relief under this Clause 11 in respect of the Group
Relief surrender referred to in clause 5.4 of the Agreement and
sub-clause 11.12 shall not apply to that surrender.
14
12. NOTICES
Clause 16 of the Agreement shall apply mutatis mutandis to any notice,
approval, consent or other communication in connection with this Deed.
13. GOVERNING LAW, JURISDICTION AND SERVICE OF PROCESS
Clause 17 of the Agreement shall apply mutatis mutandis to determine
the governing law, jurisdiction and service of process in connection
with this Deed.
IN WITNESS whereof the parties hereto have executed this Deed on the date first
mentioned above.
15
SIGNED as a DEED by )
)
duly authorised for and on behalf ) .................................
of DT HOLDINGS LIMITED ) (Director)
in the presence of: )
SIGNED as a DEED by )
)
duly authorised for and on behalf ) .................................
of FIRST DT HOLDINGS ) (Director)
LIMITED )
in the presence of: )
SIGNED as a DEED by )
)
duly authorised for and on behalf ) ................................
of SECOND DT HOLDINGS ) (Director)
LIMITED )
in the presence of: )
SIGNED as a DEED by )
)
duly authorised for and on behalf ) .................................
of PRESS ACQUISITIONS ) (Director)
LIMITED in the )
presence of: )
16
SCHEDULE 1
THE COVENANTORS
NAME ADDRESS
---- -------
DT Holdings Limited (registered number 02621255) ▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
First DT Holdings Limited (registered number 2629934) ▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Second DT Holdings Limited (registered number 0417330) ▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
17
SCHEDULE 2
THE SUBSIDIARIES
COUNTRY OF
NAME INCORPORATION REGISTERED NUMBER REGISTERED OFFICE
----------------------------------- ------------- ----------------- -----------------
▇▇▇▇▇▇▇▇▇ Telegraph New Media UK 03806441 1 Canada Square, ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇ Telegraph New Media UK 04048812 ▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Telegraph Publishing Limited UK 01984132 ▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
The Spectator (1828) Limited UK 01232804 ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇
Doubleclick (UK) Limited UK 03434861 ▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Electronic Telegraph Limited UK 04014415 ▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Telegraph Books Limited UK 02002119 ▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Telegraph (British) Limited UK 03912775 ▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Telegraph Trustees Limited UK 01933296 ▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
The Evening Post Limited UK 00213322 ▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
The Morning Post Limited UK 01933369 ▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
18
COUNTRY OF
NAME INCORPORATION REGISTERED NUMBER REGISTERED OFFICE
----------------------------------- ------------- ----------------- -----------------
The Sunday Telegraph Limited UK 00667848 ▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Young Telegraph Limited UK 01985535 ▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
19