6 Costs and Expenses
(e) in the case of costs and expenses, within clause 2.8 of this Deed, the date which is five days after the date on which invoices are received in respect of such costs and expenses. 6.1 This is an unexceptional requirement: as noted earlier, the main protections here for the Covenantors are in ensuring that the costs are reasonable and are in respect of valid claims. It is clearly possible to argue that the time period should be extended from 5 days to 15 or 30 days. This is especially the case as the Covenantors will understandably want to establish to their own satisfaction that the costs are reasonable and are properly incurred.
7 Effect of not Meeting Above Conditions
4.2 If any payment due to be made by the Covenantors under this Deed is not made on the due date for payment, then except to the extent that the Covenantor’s liability under clause 2 compensates the Buyer for the payment by virtue of it extending to interest and penalties, the Covenantor shall pay interest on such sum for the period from and including the due date up to the date of actual payment in accordance with this clause. The Covenantors shall pay interest at the Interest Rate. Interest under this clause shall accrue on the basis of the actual number of days elapsed and a 365 day year and shall be paid by the Covenantors on demand. Unpaid interest shall be compounded annually;
7.1 There is a concern with interest that there should not be an element of double counting: if HMRC charge interest on the Tax Liabilities, then this interest can be recovered from the Covenantors under the main Covenant clauses. In such circumstances there should not then be an additional charge on the Covenantors relating to interest. Resistance to this point is not to be expected.
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