Tax Deed of Covenant
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WORLD-WIDE HOLDINGS LIMITED
DATED AS OF DECEMBER 31, 2001
PACIFIC LIFE INSURANCE COMPANY
and
SCOTTISH ANNUITY & LIFE HOLDINGS, LTD.
TAX DEED OF COVENANT
relating to the sale and purchase
of the whole of the issued share capital
of WORLD-WIDE HOLDINGS LIMITED
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Reference - ACT
TAX DEED OF COVENANT
This deed is made as of December 31, 2001.
Between
(1) PACIFIC LIFE INSURANCE COMPANY a company registered in California, United
States at 700 Newport Center Drive, Newport Beach, California CA92660-6397,
United States (the "Seller"); and
(2) SCOTTISH ANNUITY & LIFE HOLDINGS, Ltd. a company registered in the Cayman
Islands at Maples and Calder, Ugland House, South Church Street, P.O. Box
309 G.T., Grand Cayman, Cayman Islands, B.W.I. (the "Buyer").
Recitals
By an agreement (the "Agreement") dated August 6, 2001, as amended, and made
between the Seller and the Buyer, the Seller agreed to sell the whole of the
issued share capital of World-Wide Holdings Limited, a company registered and
incorporated in accordance with the laws of England and Wales having
registration number 2145545 and its registered address at Old Bank House, Thames
Street, Windsor, Berkshire SL4 1PZ, United Kingdom, to the Buyer and the Seller
agreed on the Closing Date of such sale to enter into this Deed.
It is agreed as follows:
1. Interpretation
1.1 In this Deed words and expressions defined in the Agreement have the
same meaning except where otherwise provided or unless there is
something in the subject matter or context which is inconsistent with
them.
1.2 "Auditors" means the auditors for the time being of the relevant Group
Company;
1.3 "Covenantors' Reliefs" means any Relief or right to repayment of
Taxation which is or becomes available to any Group Company in respect
of or by reference to any period or part of a period prior to the
Closing Date other than a Purchaser's Relief;
1.4 "Group Company" means either Holdings or the Company, and "Group"
means both of them.
1.5 "Event" means the existence of any state of affairs and any payment,
transaction, act, omission or occurrence of whatever nature whether or
not a Group Company or the Buyer is a party thereto and for the
avoidance of doubt includes:
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1.5.1 the execution of the Agreement and closing of the sale of
the Shares to the Buyer; and
1.5.2 the death of any person; and references to an Event
occurring on or before the Closing Date shall include an
Event deemed, pursuant to any Taxation Statute, to occur or
which is otherwise treated or regarded as occurring on or
before the Closing Date. References to an Event which
occurred on or before the Closing Date include the combined
result of two or more Events all of which occurred on or
before the Closing Date.
1.6 "Liability for Taxation" means any liability of a Group Company to
make an actual payment of or in respect of Taxation whether or not the
same is primarily payable by the Group Company and whether or not the
Group Company has or may have any right of reimbursement against any
other person or persons and shall also include:
1.6.1 the Loss of any Relief where such Relief has been taken into
account in computing and so reducing or eliminating any
provision for deferred Tax which appears in the 2000 Company
Financials (or which but for such Relief would have appeared
in the 2000 Company Financials) or where such Relief was
treated as an asset of the Group in the 2000 Company
Financials or was taken into account in computing any
deferred Tax asset which appears in the 2000 Company
Financials in which case the amount of the Liability for
Taxation shall be the amount of Taxation which would (on the
basis of Tax rates current at the Balance Sheet Date) have
been saved but for such Loss assuming for this purpose that
the Company had sufficient profit or was otherwise in a
position to use the relief;
1.6.2 the Loss of any right to repayment of Taxation (including
any repayment supplement) which was treated as an asset in
the 2000 Company Financials in which case the amount of the
Liability for Taxation shall be the amount of the right to
repayment and any related repayment supplement; and
1.6.3 the set off or use against income, profits or gains earned,
accrued or received or against any Tax chargeable in respect
of an event occurring on or before the Closing Date of any
Relief or right to repayment of taxation (including any
repayment supplement) which is not available before the
Closing Date but arises after the Closing Date in
circumstances where, but for such set off or use, a Group
Company would have had a liability to make an actual payment
of or in respect of Taxation for which the Buyer would have
been able to make a claim against the Seller under this Deed
in which case the amount of the Liability for Taxation shall
be the amount of Taxation saved by a Group Company as a
result of such set off or use.
1.7 "Loss" means any reduction, modification, loss, counteraction,
nullification, utilisation, disallowance or claw back for whatever
reason.
1.8 "Purchaser's Relief" means any Relief or right to repayment of
Taxation as is mentioned in clauses 1.6.1 to 1.6.3.
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1.9 "Relevant Company" means any company other than a Group Company, the
Buyer and any company that may be treated as being a member of the
same group of companies as the Buyer or as being associated with the
Buyer for the purposes of the Tax that has given rise to the Liability
for Taxation under clause 2.1.2.
1.10 "Relief" means any loss, relief, allowance, credit, exemption or set
off in respect of Taxation or any deduction in computing income,
profits or gains for the purposes of Taxation.
1.11 "Tax" or "Taxation" means:
1.11.1 all forms of Taxation (both direct and indirect) including
and without limitation any charge, tax, duty, levy, impost,
withholding or liability wherever chargeable imposed for
support of national, state, federal, municipal or local
government or any other person and whether of the UK or any
other jurisdiction; and
1.11.2 any penalty, fine, surcharge, interest, charges or costs
payable in connection with any taxation within clause 1.11.1
above.
1.12 "Tax Claim" means any assessment, self assessment, notice, demand,
letter or other document issued or action taken by or on behalf of any
Taxation Authority from which it appears that a Group Company or the
Buyer is or may be subject to a Liability for Taxation or other
liability in respect of which the Seller are or may be liable under
this Deed.
1.13 "Taxation Authority" means the Inland Revenue, Customs & Excise,
Department of Social Security and any other governmental or other
authority whatsoever competent to impose any Taxation whether in the
United Kingdom or elsewhere.
1.14 "Taxation Statute" means any directive, statute, enactment, law or
regulation wheresoever enacted or issued, coming into force or entered
into providing for imposing any Taxation and shall include orders,
regulations, instruments, by-laws or other subordinate legislation
made under the relevant statute or statutory provision and any
directive, statute, enactment, law, order, regulation or provision
which amends, extends, consolidates or replaces the same or which has
been amended, extended, consolidated or replaced by the same.
1.15 Headings are for convenience only and shall not affect the
construction of this Deed.
1.16 References to gross receipts, income, profits or gains earned, accrued
or received shall include any gross receipts, income, profits or gains
deemed pursuant to the relevant Taxation Statute to have been or
treated or regarded as earned, accrued or received.
1.17 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
associations and partnerships in each case whether or not having
separate legal personality.
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2. Covenant
2.1 Subject as hereinafter provided the Seller hereby covenants to pay to
the Buyer an amount equal to:
2.1.1 any Liability for Taxation resulting from or by reference to
any Event occurring on or before the Closing Date or in
respect of any gross receipts, income, profits or gains
earned, accrued or received by the Group Company in question
on or before the Closing Date;
2.1.2 any Liability for Taxation for which the Group Company in
question would not have been liable but for being treated as
being or having been a member of the same group as or
associated with any Relevant Company on or prior to the
Closing Date for the purposes of any Tax; and
2.1.3 all costs and expenses reasonably and properly incurred and
payable by a Group Company or the Buyer in connection with
any action taken to avoid, resist or settle any Tax Claim,
Liability for Taxation or otherwise taking or defending any
action under this Deed.
3. Limitation of Sellers Liability
3.1 The covenant given by clause 2 above shall not cover any Liability for
Taxation:
3.1.1 to the extent that a provision or reserve in respect thereof
was made in the 2000 Company Financials;
3.1.2 to the extent that such Liability for Taxation arises from
any gross receipts, income, profits or gains earned, accrued
or received, Event, act or transaction of a Group Company to
which the Liability for Taxation relates in the ordinary
course of its trading of the Group Company since the Balance
Sheet Date;
3.1.3 to the extent that such Liability for Taxation arises or is
increased wholly as a result of any decision of any court or
tribunal or the coming into force of or any change in any
enactment, law, regulation, directive, requirement or any
published practice of any government, government department
or agency or regulatory body (including but not limited to
extra statutory concessions of any Taxation Authority) after
the date hereof;
3.1.4 to the extent recovery (less costs and expenses) has been
made by the Buyer or a Group Company under the Agreement in
respect of the same subject matter;
3.1.5 to the extent that such Liability for Taxation would not
have arisen but for a voluntary act or transaction carried
out by the Buyer or a Group Company after the date hereof
otherwise than in the ordinary course of business or
otherwise than pursuant to a legally binding obligation
created on or before the date hereof, wherein either such
case such act or transaction was carried out without the
consent of the Seller and where the Buyer or a Group Company
knew or ought reasonably to have known that such act or
transaction would give rise to such Liability for Taxation;
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3.1.6 except in the case of fraudulent conduct unless written
notice of such Liability for Taxation or any Tax Claim which
may give rise to such Liability for Taxation specifying in
reasonable detail the circumstances giving or which may give
rise to such Liability for Taxation and the amount thereof
has been served on the Seller on or prior to the seventh
anniversary of the Closing Date;
3.1.7 in respect of stamp duty or stamp duty reserve Tax payable
on the transfer or agreement to transfer the Shares pursuant
to the Agreement;
3.1.8 to the extent that the Liability for Taxation has been made
good or otherwise compensated for or extinguished at no
expense to the Buyer or a Group Company;
3.1.9 where the Liability for Taxation is attributable to a Group
Company ceasing to be entitled to the small companies' rate
of corporation tax;
3.1.10 to the extent that the Liability for Taxation arises or is
increased as a consequence of the failure of the Buyer to
comply with or procure the compliance of a Group Company
with their respective obligations under clauses 4 (disputes
and conduct of Tax claims), 7 (recovery from other persons),
and 8 (corporation Tax returns);
3.1.11 to the extent that the Auditors of the relevant Group
Company confirm that a specific amount in respect of that
Liability for Taxation was taken into account in computing
any provision or reserve for deferred Taxation in the 2000
Company Financials;
3.1.12 to the extent that the Liability for Taxation has been paid
or otherwise extinguished on or before the Closing Date;
3.1.13 to the extent that the Liability for Taxation can be
discharged at no cost to the Group Company in question by
the surrender of a Relief by the Seller to the Group Company
in question;
3.1.14 to the extent that any Covenantors' Reliefs are available to
relieve or mitigate that Liability for Taxation or would
have been available but for the application of any of
sections 245, 245A, 245B or 768 ICTA 1988 in so far as the
Loss of any of the Covenantors' Reliefs arises as a result
of an Event occurring after Completion and any Relief that
is so available in relation to more than one Liability for
Taxation to which this Deed applies shall be deemed, so far
as possible, to be used in such a way as to reduce to the
maximum extent possible the Seller's total liability
hereunder;
3.1.15 the Liability for Taxation arises or is increased as a
result of any increase in the rates of Taxation or variation
in the method of applying or calculating the rate of
Taxation made after the Closing Date with retrospective
effect;
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3.1.16 the Liability for Taxation comprises interest or penalties
arising by virtue of an underpayment of Tax prior to
Completion, insofar as such underpayment would not have been
an underpayment but for any event or events occurring wholly
after the Closing Date;
3.1.17 the Liability for Taxation arises or is increased as a
result of any change made after Completion to the accounting
period or the accounting policy or practice of or applicable
to the Buyer or any Group Company after the Closing Date;
3.1.18 the Liability for Taxation would not have arisen or would
have been reduced or eliminated but for:
(i) the making of a claim, election, surrender or
disclaimer or the giving of a notice or consent or
the doing of any other thing by any Group Company
or any other person connected with any of them
(other than the making giving or doing of which
was taken in to account in computing any provision
or reserve for Taxation in the 2000 Company
Financials under or in connection with a provision
of an enactment of regulation relating to Taxation
otherwise than at the written direction of the
Seller; or
(ii) the failure or omission on the part of any Group
Company or any other person connected with any of
them to make any such valid claim, election,
surrender or disclaimer or give any notice or
consent or do any other thing the making or giving
or doing of which was disclosed to the Buyer as
taken into account in computing any provision or
reserve for Taxation in 2000 Company Financials;
3.1.19 the matter giving rise to the Liability for Taxation is an
amount for which the Buyer or relevant Group Company has a
right of recovery against, or an indemnity from, a person
other than the Seller or a Relevant Company;
3.1.20 the Liability for Taxation arises or is increased by any
voluntary act of the Buyer or a Group Company after the
Closing Date which has the result that any instalment of
corporation Tax (within the meaning of section 6 of the
Taxes Act 1988) paid prior to the Closing Date pursuant to
the Corporation Tax (Instalment Payments) (Large Companies)
Regulations 1998 is insufficient.
and for the purposes of this clause 3 only "Liability for Taxation"
shall be deemed to include a liability or loss falling within clause
2.1.3 above.
3.2 The Seller shall have no liability to the Buyer under any part of this
Deed in respect of any non-availability, inability to use, or loss or
restriction of any Relief ("failure of relief") where such failure of
relief does not give rise to a Tax liability to which clause 2
applies.
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4. Disputes and Conduct of Tax Claims
4.1 If the Buyer or a Group Company shall become aware of a Tax Claim of
which the Seller is not then aware, the Buyer shall or shall procure
that a Group Company shall within 14 days thereafter give written
notice thereof to the Seller.
4.2 If the Seller shall indemnify a Group Company and/or (as the case
shall require) the Buyer to the Buyer's reasonable satisfaction
against all liabilities, reasonable costs, damages or reasonable
expenses which may be incurred thereby including any additional
Liability for Taxation, the Buyer shall and shall procure that a Group
Company shall take such action as the Seller may reasonably request by
notice in writing given to a Group Company and the Buyer to avoid,
dispute, defend, resist, appeal, postpone or compromise any Tax Claim
(such a Tax Claim where action is so requested being hereinafter
referred to as a "Dispute"). Provided that neither a Group Company nor
the Buyer shall be obliged to appeal or procure an appeal against any
assessment to Taxation raised on either of them if, the Seller has
been given written notice of the receipt of such assessment the Buyer
has not at least 5 Business Days prior to the last day for filing
notice of appeal received instructions in writing from the Seller to
do so.
4.3 If the Seller does not request the Buyer or a Group Company to take
any action under clause 4.2 of this Deed or fails to indemnify the
Buyer and a Group Company to the Buyer's reasonable satisfaction
within a period of time (commencing with the date of the notice given
to the Seller) that is reasonable having regard to the nature of the
Tax Claim and the existence of any time limit in relation to avoiding,
disputing, defending, resisting, appealing or compromising such Tax
Claim and which period shall not in any event exceed a period of 90
days or the Dispute concerns fraudulent conduct, the Buyer or Company
shall have the conduct of the Dispute absolutely (without prejudice to
its rights under this Deed) and shall be free to pay or settle the Tax
Claim on such reasonable terms as the Buyer or a Group Company may in
its absolute discretion consider fit.
4.4 Subject to sub-clause 4.3, if the Seller indemnifies the Buyer and a
Group Company in accordance with clause 4.2, the conduct of a Dispute
shall be delegated to the Seller upon the following terms (or such
other terms as may be agreed from time to time between the Buyer and
the Seller):
4.4.1 the Buyer shall promptly be kept fully informed of all
matters pertaining to a Dispute and shall be entitled to see
and keep copies of all correspondence and notes or other
written records of telephone conversations or meeting and,
in the event that there is no written record, shall be given
a report of all telephone conversations with any Taxation
Authority to the extent that it relates to a Dispute;
4.4.2 the appointment of solicitors or other professional advisers
to any Group Company shall be subject to the approval of the
Buyer, such approval not to be unreasonably withheld;
4.4.3 all written communications pertaining to the Dispute which
are to be transmitted to the relevant Taxation Authority
shall first be submitted to the Buyer and a Group Company
for approval and shall only be finally
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transmitted if such approval is given, which approval is not
to be unreasonably withheld or delayed; and
4.4.4 the Seller shall make no settlement or compromise of the
Dispute or agree to any matter in the conduct of the Dispute
which is likely to affect the amount of any material future
Liability for Taxation of a Group Company or of the Buyer
without the prior approval of a Group Company and the Buyer
(as may be appropriate), such approval not to be
unreasonably withheld or delayed.
4.5 Neither the Buyer nor a Group Company shall be subject to any claim by
or liability to the Seller for non-compliance with any of the
foregoing provisions of this clause 4 if the Buyer or a Group Company
has bona fide acted in accordance with the instructions of the Seller.
5. Payment Date and Interest
5.1 Where the Seller is liable to make any payment under clause 2, the due
date for the making of that payment (the "Due Date") shall be the
later of the date falling seven days after the Buyer has served a
notice on the Seller demanding that payment and:
5.1.1 in a case that involves an actual payment of Taxation by a
Group Company, the date on which the Taxation in question
would have had to have been paid to the relevant Taxation
Authority in order to prevent a liability to a fine,
surcharge or penalty from arising in respect of the
Liability for Taxation in question; or
5.1.2 in any case that involves a Liability for Taxation falling
within clause 1.6.1 the last date upon which the Taxation is
or would have been required to be paid to the relevant
Taxation Authority in respect of the period in which the
Loss of the Relief occurs (assuming for this purpose that a
Group Company had sufficient profits or was otherwise in a
position to use the Relief); or
5.1.3 in any case that involves a Liability for Taxation falling
within Clause 1.6.2 the date upon which the repayment was
due from the relevant Taxation Authority; or
5.1.4 in any case that involves a Liability for Taxation falling
within clause 1.6.3 the date upon which the Taxation saved
by a Group Company is or would have been required to be paid
to the relevant Taxation Authority.
5.2 Any dispute as to the amount specified in any notice served on the
Seller under clause 5.1.2, 5.1.3 or 5.1.4 shall be determined by the
Auditors of a Group Company for the time being, acting as experts and
not as arbitrators (the costs of that determination being shared
equally the Seller and the Buyer).
5.3 If any sums required to be paid by the Seller under this Deed are not
paid on the Due Date, then, except to the extent that the Seller's
liability under clause 2 compensates the Buyer for the late payment by
virtue of it extending to interest and penalties, such sums
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shall bear interest (which shall accrue from day to day after as well
as before any judgment for the same) at the rate equal to the base
rate from time to time of Buyer's bank or (in the absence thereof) at
such similar rate as the Buyer shall select from the day following the
Due Date up to and including the day of actual payment of such sums
such interest to be compounded quarterly.
6. Taxation of Payments
6.1 Any sum payable by the Seller to the Buyer under this Deed shall be
paid free and clear of any deduction or withholding whatsoever, save
only as may be required by law.
6.2 If any deduction or withholding is required by law to be made from any
payment by the Seller under this Deed (other than a payment made
pursuant to clause 5.3) or if (ignoring any Relief) the Buyer is
subject to Taxation in respect of such payment the Seller shall
increase the amount of the payment by such additional amount as is
necessary to ensure that the net amount received and retained by the
Buyer (after taking account of all deductions or withholdings or
Taxation) is equal to the amount which it would have received and
retained had the payment in question not been subject to any
deductions or withholdings or Taxation.
7. Recovery from other persons
7.1 Where the Buyer or a Group Company is or becomes entitled to recover
from some other person not being the Buyer a Group Company or any
other company within the same group of companies as the Buyer or a
Group Company (i) any amount or Relief which is referable to a
Liability for Taxation which has resulted in a payment being made by
the Seller under this Deed; or (ii) any amount or Relief which is
referable to any deduction or withholding under clause 6.2, the Buyer
shall or procure that a Group Company shall:
7.1.1 notify the Seller of its entitlement; and
7.1.2 if required by the Seller and, subject to the Buyer and a
Group Company being secured and indemnified by the Seller
against any Taxation that may be suffered on receipt of that
amount and any costs and expenses incurred in recovering
that amount or obtaining that Relief, take or procure that a
Group Company takes all reasonable steps to enforce that
recovery or right.
7.2 If the Buyer or a Group Company recovers or obtains any amount or
Relief referred to in clause 7.1 the Buyer shall account to the Seller
for:
7.2.1 any amount recovered (including any related interest or
related repayment supplement) less any Taxation suffered in
respect of that amount and any costs and expenses incurred
in recovering that amount (save to the extent that that
amount has already been made good by the Seller under
sub-clause 7.1.2) within five Business Days of the date of
recovery; and
7.2.2 in the case of a Relief, the Purchaser shall, within five
Business Days of the date on which Taxation would otherwise
have been payable had
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such credit not been available, pay to the Covenantor an
amount equal to the amount of such Taxation;
subject to a maximum of the aggregates of the amounts paid by the
Seller under clause 2 and clause 6 in respect of the Liability for
Taxation in question.
8. Over-provisions and Savings
8.1 If the Buyer discovers (or is made aware) that any provision for
Taxation in the 2000 Company Financials (excluding any provision for
deferred tax) may prove to be an over-provision (an "Over-provision")
or any Liability for Taxation which may result in a payment under this
Deed by the Seller may give rise to a saving of Taxation by any Group
Company (a "Saving"), it shall or shall procure that the Group Company
give full details to the Seller. The Buyer shall (at the Seller's
request and expense) procure that the Auditors certify the amount of
the Over-provision or the value of the Saving.
8.2 In the case of a Saving, the Buyer will as soon as reasonably
practicable after the amount of the Saving is certified by the
Auditors in accordance with clause 8.1 repay to the Seller the lesser
of:
8.2.1 the amount of the Saving (as determined by the Auditors)
less any costs incurred by the Group Companies or the Buyer;
and
8.2.2 the amount paid by the Seller under clause 2 in respect of
the Liability for Taxation which gave rise to the Saving
less any part of the amount previously repaid to the Seller
under any provision of this Deed or otherwise.
8.3 In the case of an Over-provision, the Buyer shall as soon as
reasonably practicable after the amount of the Over-provision is
certified by the Auditors in accordance with clause 8.1:
8.3.1 set off the Over-provision against any payment then due from
the Sellers under this Deed;
8.3.2 to the extent there is an excess, refund to the Sellers any
previous payment or payments made by the Sellers under this
Deed; and
8.3.3 to the extent the excess referred to in clause 8.3.2 is not
exhausted under that clause, the remainder of that excess
shall be carried forward and set off against any future
payment or payments which become due from the Covenantors
under this Deed.
8.4 Where any such certification as is mentioned in clause 8.1 has been
made, the Seller or the Buyer (in either case at the expense of the
person requesting the review) may 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.
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8.5 If the Auditors certify under clause 8.4 that an amount previously
certified should be amended, that amended amount shall be substituted
for the purposes of clauses 8.2 and 8.3 as the amount of the
Over-provision or Saving (as appropriate) in respect of the
certification in question in place of the amount originally certified,
and such adjusting payment (if any) as may be required by virtue of
the above-mentioned substitution shall be made as soon as practicable
by the Buyer or (as the case may be) to the Seller.
8.6 For the purposes of this clause, an Over-provision is a provision for
Taxation in the 2000 Company Financials (excluding a provision for
deferred taxation) which is or proves to be an Over-provision.
9. Corporation Tax Returns
9.1 The Seller or its authorised agent shall at the Seller's cost and
expense prepare the corporation Tax returns and computations of a
Group Company for all accounting periods ended on or prior to the
Balance Sheet Date, to the extent that the same shall not have been
prepared before the Closing Date, and submit them to the Buyer.
9.2 The Buyer shall procure that the returns and computations mentioned in
clause 9.1 shall be authorised, signed and submitted to H.M. Inspector
of Taxes without amendment or with such amendments as the Buyer
reasonably considers to be necessary and shall give the Seller or its
agents all such assistance as may reasonably be required (at the
Seller's cost and expense) to agree those returns and computations
with H.M. Inspector of Taxes provided that the Buyer shall not be
obliged to take any such action as is mentioned in this clause 9.2 in
relation to any return that is not full, true and accurate in all
material respects.
9.3 The Seller or its duly authorised agents shall at the Seller's cost
and expense prepare all documentation and shall have conduct of all
matters (including correspondence) relating to the corporation Tax
returns and computations of a Group Company for all accounting periods
ended on or prior to the Balance Sheet Date provided that the Seller
shall not without the prior written consent of the Buyer (not to be
unreasonably withheld or delayed) transmit any communication (written
or otherwise) to H.M. Inspector of Taxes or agree any matter with H.M.
Inspector of Taxes.
9.4 The Buyer shall procure that a Group Company, affords such access to
its books, accounts and records as is necessary and reasonable to
enable the Seller or its duly authorised agents to prepare the
corporation Tax returns and computations of a Group Company for all
accounting periods ended on or before the Balance Sheet Date and
conduct matters relating to them in accordance with this clause 9.
9.5 The Seller shall take all reasonable steps to ensure that the
corporation Tax returns and computations of a Group Company for all
accounting periods ended on or before the Balance Sheet Date are
prepared and agreed with H.M. Inspector of Taxes as soon as possible.
10. General
10.1 The provisions of clauses 9.1 (Coordination of Tax Deed Covenant and
the Agreement), 11.1 (Consent to Jurisdiction and Service of Process),
11.2 (Notices),
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11.8 (Interpretation) and 11.11 (Counterparts) of the Agreement shall
apply mutatis mutandis to this Deed.
10.2 The benefit of this Deed may be assigned by the Buyer only with the
prior written consent of the Covenantors (such consent not to be
unreasonably withheld or delayed).
10.3 The Buyer hereby covenants with the Seller to pay to the Seller by way
of adjustment to the consideration for the sale of the Shares, an
amount equivalent to any Taxation for which the Seller or any other
person falling within section 767A(2) of Taxes Act 1988 ("ICTA")
become liable by virtue of the operation of sections 767A, 767AA and
767B of ICTA in circumstances where the taxpayer company (as referred
to in section 767A(1)) is any Group Company. The covenant contained in
this clause 10.3 shall:
10.3.1 extend to any reasonable costs incurred by the Seller or
such person in connection with such taxation or a claim
under clause 10.3;
10.3.2 not apply to Taxation to the extent that the Buyer could
claim payment in respect of it under clause 2; and
10.3.3 not apply to Taxation which has been recovered under section
767B(2) of ICTA (and the Seller shall procure that no such
recovery is sought to the extent that payment is made
hereunder).
10.4 This Deed shall be governed by and construed in accordance with the
laws of New York. The parties irrevocably submit to the exclusive
jurisdiction of the Courts of New York in respect of any claim,
dispute or difference arising out of or in connection with this Deed
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This deed has been entered into on the date stated at the beginning of this
document.
Signed as a Deed by: )
Pacific Life Insurance Company )
presence of: ) /s/ Sharon A. Cheever
--------------------------
Sharon A. Cheever
Vice President, Investment Counsel
/s/ Audrey L. Milfs
--------------------------
Audrey L. Milfs
Vice President and Secretary
Signed as a Deed by: )
Scottish Annuity & Life Holdings, Ltd. )
presence of: ) /s/ Scott E. Willkomm
--------------------------
Scott E. Willkomm
President and Chief Financial
Officer
14