11
STAMP DUTY
11.1 The Covenantors jointly and severally warrant to the Buyer that, as at Completion, the documents relating to the title of any asset of the Company are duly stamped. If this warranty is not true with regard to any document, then the Covenantors shall procure the stamping of such document at their cost. We are aware of two possible means of dealing with Section 117, Stamp Act 1891: the above structure appears to us to be the safer. This is not a covenant or an indemnity, but a warranty. In the event that the warranty is not true, the Covenantors are obliged to remedy matters at their cost. The alternative is to provide a warranty and to specify that the damages under the warranty are computed as equivalent to the stamp duty payable. Our concern with this second option is that it appears to be perilously close to a covenant, in all but name.
12
THIRD PARTY RIGHTS
12.1 Nothing in this Deed is intended to confer an any person any right to enforce any term of this Deed which that person would not have had but for the Contracts (Rights of Third Parties) Act 1999.
13
GENERAL
13.1 Any payment made by the Covenantors under this Deed shall (so far as possible) be by way of reduction in, and repayment of, the consideration for the Shares under the Agreement. 13.2 The provisions of the following clauses of the Agreement shall have effect as if incorporated into this Deed mutatis mutandis with references to the Agreement being replaced with references to this Deed and with any other necessary modifications. 13.3 For the purposes of determining whether a Tax Liability or a Relief relates to a pre or post Completion period, an accounting period of the Company shall be deemed to have ended on Completion and the period against which losses can be set shall be deemed to be extended by the length of the period between the Last Accounts Date and Completion.
IN WITNESS whereof the parties hereto have duly executed this Deed on the day and year first before written
3 The New Format Tax Covenant in Practice
3.1 In order to demonstrate the use of this new tax covenant, we analyse below how various tax claims will be dealt with in practice.
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