Free and clear of

English translation: net of

22:08 Aug 10, 2015
English language (monolingual) [PRO]
Law (general)
English term or phrase: Free and clear of
This is a SBLC-backed Senior Secured Term Loan Facility

Withholding Tax-
1. "All payments under the Facility shall be made free and clear of all present and future taxes, deductions, charges, withholding, stamp duty, liability or impost of whatever nature (except as required by applicable law)."

There were two understanding of this sentence.

1 ) the payments need be paid in full without deducting any tax, stamp ducting tax, or etc?
2) the payments should not include present and future taxes, deductions, charges, withholding, etc.?

I am not sure which one is correct. Can anyone help? Thanks!
Bin Xue
Australia
Local time: 22:01
Selected answer:net of
Explanation:
I'm somewhat beyond my comfort zone here, but 'free and clear of' most likely equates to 'net of', as we say in other variants of English:

All payments under the Facility shall be made free and clear of all present and future taxes, deductions, ...

All payments under the Facility shall be made net of of all present and future taxes, deductions, ...

IOW, the payER pays all those taxes, deductions etc. before transfering the net amount to the payEE.

Accounting Changes and Error Corrections [Abstract ...
services.corporate-ir.net/SEC/Document.Service?id...
... Accumulated Other Comprehensive Income (Loss), Net of Tax Accumulated other ... Common Stock Additional paid-in capital Additions to the contingent liability .... Financial Services [Member] Financial Standby Letter of Credit [Member] ...
Fair Value Disclosures [Abstract] Fair Value Measurements ...
services.corporate-ir.net/SEC/Document.Service?id...
... Share Based Compensation Arrangement By Share Based Payment Award ... and Translation Adjustment, Net of Tax Defined pension and post-retirement ..... Standby Letter of Credit [Member] Term loan Unsecured Debt [Member] Debt ...
pke-20130602_lab.xml
www.parkelectro.com/investor/xbrl/FY14 Q1/pke-20130602_lab....
Jun 2, 2013 - ... Paid in Capital, Common Stock, Ending Balance Additional Paid in Capital, ... Other Comprehensive Income (Loss), Net of Tax Accumulated Other .... Of Standby Letter Of Credit Issued Number Of Standby Letter Of Credit ...
Selected response from:

Jennifer Levey
Chile
Local time: 08:01
Grading comment
Thanks!!!
4 KudoZ points were awarded for this answer



SUMMARY OF ALL EXPLANATIONS PROVIDED
3 +7net of
Jennifer Levey
5The recipient isn't responsible for those things
JW Narins
5neither 1 nor 2
Charlesp
Summary of reference entries provided
dictionary
Charlesp

  

Answers


6 mins   confidence: Answerer confidence 5/5
free and clear of
The recipient isn't responsible for those things


Explanation:
The entity TO WHICH it's paid gets the money without any tax obligations or anything else like that that would be owed by the entity paying on the obligation. If there are taxes to have been paid, they're the responsibility of the entity obliged to pay (unless the law requires otherwise).

--------------------------------------------------
Note added at 50 mins (2015-08-10 22:59:00 GMT)
--------------------------------------------------

Precisely said, the entity paying on the obligation is supposed to pass the amount of the obligation on without any claims against it - for taxes or anything else. The recipient isn't supposed to have to pay such things. Correct.

JW Narins
United States
Local time: 08:01
Works in field
Native speaker of: Native in RussianRussian, Native in EnglishEnglish
PRO pts in category: 8
Notes to answerer
Asker: Thanks JW! do you mean the borrowers will pay for it rather than the lender?

Asker: Thanks JW! just want to double confirm as this is crucial to the agreement. Does it mean "the Borrower shall be obligated to make all payments of the interest and fees without deduction due to tax paid, stamp duty, withholding tax, etc.?


Peer comments on this answer (and responses from the answerer)
neutral  writeaway: it's a matter of liability, not responsibility. 100% CL is a bit OTT
9 hrs

neutral  Charlesp: probably correct, but not clear.
1 day 20 hrs
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56 mins   confidence: Answerer confidence 3/5Answerer confidence 3/5 peer agreement (net): +7
free and clear of
net of


Explanation:
I'm somewhat beyond my comfort zone here, but 'free and clear of' most likely equates to 'net of', as we say in other variants of English:

All payments under the Facility shall be made free and clear of all present and future taxes, deductions, ...

All payments under the Facility shall be made net of of all present and future taxes, deductions, ...

IOW, the payER pays all those taxes, deductions etc. before transfering the net amount to the payEE.

Accounting Changes and Error Corrections [Abstract ...
services.corporate-ir.net/SEC/Document.Service?id...
... Accumulated Other Comprehensive Income (Loss), Net of Tax Accumulated other ... Common Stock Additional paid-in capital Additions to the contingent liability .... Financial Services [Member] Financial Standby Letter of Credit [Member] ...
Fair Value Disclosures [Abstract] Fair Value Measurements ...
services.corporate-ir.net/SEC/Document.Service?id...
... Share Based Compensation Arrangement By Share Based Payment Award ... and Translation Adjustment, Net of Tax Defined pension and post-retirement ..... Standby Letter of Credit [Member] Term loan Unsecured Debt [Member] Debt ...
pke-20130602_lab.xml
www.parkelectro.com/investor/xbrl/FY14 Q1/pke-20130602_lab....
Jun 2, 2013 - ... Paid in Capital, Common Stock, Ending Balance Additional Paid in Capital, ... Other Comprehensive Income (Loss), Net of Tax Accumulated Other .... Of Standby Letter Of Credit Issued Number Of Standby Letter Of Credit ...

Jennifer Levey
Chile
Local time: 08:01
Specializes in field
Native speaker of: Native in EnglishEnglish
PRO pts in category: 28
Grading comment
Thanks!!!

Peer comments on this answer (and responses from the answerer)
agree  writeaway
8 hrs

agree  B D Finch: Presumably, there's a difference between "free of" and "clear of", so both "net of" and paid in such a way that the recipient doesn't incur liabilities.
11 hrs

agree  Yvonne Gallagher: concise
14 hrs

agree  Tina Vonhof (X)
20 hrs

agree  acetran
1 day 13 hrs

agree  Veronika McLaren
1 day 23 hrs

agree  Phong Le
3 days 5 hrs
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1 day 21 hrs   confidence: Answerer confidence 5/5
free and clear of
neither 1 nor 2


Explanation:
bad wording. poor legal work. incorrect terminology.

Charlesp
Sweden
Local time: 14:01
Specializes in field
Native speaker of: English
PRO pts in category: 12
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Reference comments


11 hrs
Reference: dictionary

Reference information:
;-0


    Reference: http://dictionary.law.com/
Charlesp
Sweden
Specializes in field
Native speaker of: English
PRO pts in category: 12

Peer comments on this reference comment (and responses from the reference poster)
neutral  B D Finch: Your ref. doesn't include either this phrase or obvious variations of it.
1 hr
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