Document:

magellanpetroleum3.htm

    

     

                                                   
 60;                                        EXHIBIT 10.2

     

     

    

                                                   
                                               

     

    

     

    

     

     

    DEED
OF SETTLEMENT

     

     

    BETWEEN

     

     

    

     

     

    MAGELLAN
PETROLEUM AUSTRALIA LIMITED ACN 009 728 581

     

     

    MAGELLAN
PETROLEUM (N.T.) PTY LTD ACN 009 718 183

     

     

    PAROO
PETROLEUM PTY LTD ACN 010 839 488

     

     

    

     

     

    AND

     

     

    THE
COMMISSIONER OF TAXATION

     

     

    OF THE
COMMONWEALTH OF AUSTRALIA

     

     

    

     

     

    

     

     

    

     

     

    

     

    n Ernst & Young
Law

    

    Sydney
Office

    The Ernst
& Young Building

    Level 41,
680 George Street, Sydney NSW 2000  Australia

    Tel  +61
2 9248 5555   Fax  +61 2 9248 5584

    WWW site:
http://www.ey.com.au

    REF:
HJA:60458530/12293168

     

    An
incorporated legal practice under the Legal Profession Act 2004

     

    Liability
Limited by a scheme approved under Professional Standards
Legislation

     

    
      
        
                                                                                                                                                
 60;                                                                   

        

         

      

      
        22

        
          

        

      

      
         

      

    

     

    DEED
OF SETTLEMENT

     

     

    THIS DEED is made the 7th day
of February, 2008.

     

     

    

     

     

    BETWEEN:

     

     

    

     

     

    MAGELLAN PETROLEUM AUSTRALIA LIMITED
ACN 009 728 581

     

     

    (‘the
first taxpayer’)

     

     

    

     

     

    AND

     

     

    

     

     

    MAGELLAN PETROLEUM (N.T.) PTY
LTD ACN 009 718 183

     

     

    (‘the
second taxpayer’)

     

     

    

     

     

    AND

     

     

    

     

     

    PAROO PETROLEUM PTY LTD ACN
010 839 488

     

     

    (‘the
third taxpayer’)

     

     

    of

     

     

    145 Eagle
Street Brisbane QLD, 4000

     

     

    (collectively
known as the “Taxpayers”)

     

     

    

     

     

    AND

     

     

    THE
COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA

     

     

    of

     

     

    2
Constitution Ave, Canberra, ACT, 2600 (‘the Commissioner’)

     

     

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

    

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

       

      CONTENTS

       

       

      

       

      
        	
                1.     DEFINITIONS
      AND INTERPRETATION

              	
                4

                 

              
	
                2.     OBLIGATIONS
      OF THE COMMISSIONER

              	
                6

                 

              
	
                3.     OBLIGATIONS
      OF THE TAXPAYER

              	
                7

                 

              
	
                4.     TAXPAYER’S
      WARRANTY AND ACKNOWLEDGEMENT

              	
                7

                 

              
	
                5.     AUTHORITY
      TO SIGN

              	
                8

                 

              
	
                6.     GENERAL

              	
                9

                 

              
	
                7.     DEFAULT
      CLAUSE

              	
                10

                 

              
	
                8.     NOTICES

              	
                11

              

      

    

     

     

                            

    
      
        
          
                                                                                                                                                  &
 #160;                                                                   

          

           

        

        
          24

          
            

          

        

        
           

        

      

    

    

     

    RECITALS

     

     

    
      	
              A.    

            	
              The
      Commissioner and the Taxpayers are in dispute as to the deductibility of
      the bad debts claimed by the first and third Taxpayers in the 1997 to 2005
      income years.

            

    

     

     

    
      	
              B.    

            	
              In
      particular, the Commissioner and the Taxpayers are in dispute as
      to:

            

    

     

     

    
      	
               
      

            	
              (a)

            	
              whether
      the amounts claimed by the first taxpayer as bad debts in the 2004 and
      2005 income years are allowable under section 25-35 of the ITAA
      1997;

            

    

     

     

    
      	
               
      

            	
              (b)

            	
              whether
      the first taxpayer was carrying on a money lending business in those
      years;

            

    

     

     

    
      	
               
      

            	
              (c)

            	
              whether
      the amounts claimed by the first taxpayer are allowable under section 8-1
      of the ITAA 1997 in those years;

            

    

     

     

    
      	
               
      

            	
              (d)

            	
              whether
      the losses transferred to the first and / or second taxpayers from the
      third taxpayer under section 80G of the ITAA 1936 and Subdivision 170-A of
      the ITAA 1997 in the 2003 and earlier income years are available to the
      extent claimed by the first and second
  taxpayers;

            

    

     

     

    
      	
               
      

            	
              (e)

            	
              whether
      the amounts claimed by the third taxpayer as bad debts in the 2003 and
      earlier income years are allowable under paragraph 63(1)(b) of the ITAA
      1936 or section 25-35 of the ITAA
1997;

            

    

     

     

    
      	
               
      

            	
              (f)

            	
              whether
      the third taxpayer was carrying on a money lending business in those
      years; and

            

    

     

     

    
      	
               
      

            	
              (g)

            	
              whether
      the amounts claimed by the third taxpayer as bad debts are allowable under
      subsection 51(1) of the ITAA 1936 or section 8-1 of the ITAA 1997 in those
      years.

            

    

     

     

    
      	
              C.    

            	
              The
      parties remain in dispute as to the alleged taxation liability or
      entitlement of the Taxpayers.

            

    

     

     

    D.               The
parties nonetheless wish to settle their dispute on the following
terms.

     

    

    OPERATIVE
PART

     

    In
consideration of the mutual promises contained in this document, the parties to
this  agree as follows:

     

     

    1.     DEFINITIONS AND
INTERPRETATION

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

     

    
      	
              1.1

            	
              In
      this document:

              ‘Bank Bill Rate’ means
      the 90-day Bank Accepted Bill Rate.

               

              ‘Commissioner’ means the
      Commissioner of Taxation of the Commonwealth of Australia and as required,
      his successors or assigns and any delegate or authorised representative
      acting on his behalf.

               

               

              ‘GIC’ means the General
      Interest Charge calculated pursuant to Division 1 of Part IIA of the TAA
      1953.

              ‘ITAA 1936’ means the
      Income Tax Assessment
      Act 1936
      (as amended).

              ‘ITAA 1997’ means the
      Income Tax Assessment
      Act 1997 (as amended).

              ‘party’ or ‘parties’
      means the Taxpayers and/or the Commissioner.

               

              ‘person’ means any
      natural person and includes a firm, corporation, body corporate,
      unincorporated association or any governmental authority.

              ‘relevant years’ means
      the financial years ended 30 June 1997 to 30 June 2005.

              ‘SIC’ means Shortfall
      Interest Charge calculated pursuant to Division 280 of Schedule 1 of the
      TAA 1953.

              ‘TAA 1953’ means the
      Taxation Administration
      Act 1953 (as amended).

              ‘Taxpayers’ means
      Magellan Petroleum Australia Limited A.C.N. 009 728 581, Magellan
      Petroleum (N.T.) Pty Ltd A.C.N. 009 718 183 and Paroo Petroleum Pty Ltd
      A.C.N. 010 839 488.

              ‘the first taxpayer’
      means Magellan Petroleum Australia Limited A.C.N. 009 728
      581.

              ‘the second taxpayer’
      means Magellan Petroleum (N.T.) Pty Ltd A.C.N. 009 718
      183.

              ‘the third taxpayer’
      means Paroo Petroleum Pty Ltd  A.C.N. 010 839
      488.

              ‘this Deed’ means this
      Deed of Settlement between the Commissioner and the
Taxpayers.

               

            
	
              1.2

            	
              In
      this document, unless the contrary intention
  appears:

            

    

     

    
      	
               
      

            	
              1.2.1.

            	
              a
      reference to this document means this Deed, and references to clauses and
      schedules are references to clauses and schedules of this
      Deed;

            

    

     

     

    
      	
               
      

            	
              1.2.2.

            	
              any
      word, term or expression for which a particular or special meaning has
      been attributed or ascribed by the Act, shall be given that particular or
      special meaning in this Deed;

            

    

     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              1.2.3.

            	
              singular
      includes the plural and vice versa;

            

    

     

     

    
      	
               
      

            	
              1.2.4.

            	
              a
      reference to any one gender includes each other gender (as the case may
      require);

            

    

     

     

    
      	
               
      

            	
              1.2.5.

            	
              a
      reference to a person includes a reference to that person's executors,
      administrators, legal personal representatives, successors and permitted
      assigns; and

            

    

     

     

    
      	
               
      

            	
              1.2.6.

            	
              an
      agreement on the part of, or in favour of, two or more persons binds them
      or any one of them jointly and
severally;

            

    

     

    
      	
                 

            	
              1.2.7        time
      is of the essence in the performance by the parties of their respective
      obligations under this Deed;

            

    

    

            

    

    2.     OBLIGATIONS
OF THE COMMISSIONER

    

    
      	
              2.1

            	
              The
      Commissioner will do the following in the order in which they appear
      below:

            

    

     

    
      	
               
      

            	
              2.1.1.

            	
              issue
      assessments for the relevant years to each of the
    Taxpayers.

            

    

     

     

    The
adjustments to be made are as follows:

     

    
      	
              Taxpayer

            	
              Increase
      in Tax

            
	
              First
      taxpayer:

            	
               3,317,551

            
	
              Second
      taxpayer:

            	
               5,674,192

            
	
              Third
      taxpayer:

            	
                1,349,053

            
	
              Total:

            	
              10,340,796

            

    

     

    
      	
               
      

            	
              2.1.2.

            	
              not
      impose any tax shortfall penalties on any of the Taxpayers for the
      relevant years of income.

            

    

     

     

    
      	
               

            	
              2.1.3.

            	
              in
      relation to the assessments referred to in clause 2.1.1. above remit GIC
      and SIC in respect of each of the Taxpayers for the relevant years so that
      the interest charged is calculated at the Bank Bill Rate, from the date
      that the amended tax liabilities become due and payable, to 30 April 2007.
      The interest payable by the Taxpayers in respect of the assessments is as
      follows:

            

    

     

    
      	
              Taxpayer

            	
              Interest

            
	
              First
      taxpayer:

            	
                                656,673

            
	
              Second
      taxpayer:

            	
               3,054,508

            
	
              Third
      taxpayer:

            	
               
        590,017

            
	
              Total:

            	
              4,301,198

            

    

     

    
 

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

    
      	
               2.2

            	
              The
      Commissioner has issued the assessments referred to in clause
      2.1.

               

            

    

    

    

    3.     OBLIGATIONS
OF THE TAXPAYERS

     

    The
Taxpayers:-

     

    
      	
               3.1

            	
              will
      not object to or request an amendment or review of the assessments
      referred to in 2.1  above if raised on the terms set out in this
      Deed;

               

            
	
              3.2

            	
              will
      not appeal against the Commissioner’s decision to any relevant
      objection;

               

            
	
              3.3

            	
              will
      pay a good faith deposit of AUD $5 million to the Commissioner by 20
      January 2008 such deposit monies to be applied by the Commissioner at his
      discretion to the liabilities of the Taxpayers referred to in clauses
      2.1.1 and 2.1.3. The Commissioner confirms that a deposit of AUD $5
      million was received by the Commissioner on 21 January 2008 in full
      satisfaction of this obligation.;

               

            
	
              3.4

            	
              will
      pay to the Commissioner an amount equal to the liabilities and interest
      referred to in clauses 2.1.1 and 2.1.3 , reduced by any amount paid by the
      Taxpayers as a good faith deposit, by whichever is the later of 14
      February 2008 or within 14 days of receiving the assessments;

               

            
	
              3.5

            	
              will
      not seek any review of the issues agreed in this Deed, or of related
      decisions, under the Administrative Decisions
      Judicial Review Act 1977 or
      administrative law generally. This does not include review by the
      Ombudsman;

               

            
	
              3.6

            	
              will
      not seek disclosure under the Freedom Of Information Act
      1982 of Australian Tax Office documents in relation to issues or
      decisions relevant to the settlement recorded by this Deed;
      and

               

            
	
              3.7

            	
              make
      no admissions as to liability not withstanding any provisions in this
      Deed.

               

            

    

     

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

    4.     TAXPAYERS’ WARRANTY AND
ACKNOWLEDGEMENT

     

    
      	
              4.1

            	
              The
      Taxpayers warrant that to the best of their knowledge and belief they have
      made a full and true disclosure of all relevant facts to the Commissioner
      prior to entering into this Deed and they will promptly disclose to the
      Commissioner any material facts which come to their knowledge after the
      execution of this Deed.

               

            
	
              4.2

            	
              The
      Taxpayers acknowledge that, if there has not been a full and true
      disclosure of all relevant facts to the Commissioner as required by clause
      4.1, the Commissioner may in his absolute discretion take whatever further
      action he considers appropriate, including, without
      limitation:

            

    

     

    
      	
               

            	
              4.2.1.

            	
              electing
      that this Deed be terminated;

            

    

     

     

    
      	
               
      

            	
              4.2.2.

            	
              electing
      that this Deed is void (as if it had never been executed) as against all
      parties to this Deed (except insofar as the warranties or indemnities
      referred to in this Deed are concerned);
or

            

    

     

     

    
      	
               
      

            	
              4.2.3.

            	
              rescinding,
      reversing or amending any of the things referred to in clause
      2.

            

    

     

    
      	
              4.3

            	
                  The
      Taxpayers acknowledge that, if they default in performing their
      obligations under clauses 3.4 the taxpayer will not contest any recovery
      steps taken by the Commissioner.  The Commissioner
      may:

            

    

     

    
      	
               
      

            	
              4.3.1.

            	
              obtain
      judgment against the Taxpayers; and

            

    

     

     

    
      	
               
      

            	
              4.3.2.

            	
              cause
      the Taxpayers to be wound-up.

            

    

     

     

    
      	
               4.4
      

            	
                      The
      Taxpayers acknowledge that if they default in performing their obligations
      under clause 3.4:

            

    

     

    
      	
              4.4.1.           
        

            	
              the
      Commissioner will be entitled to take whatever action he considers is
      necessary to recover the full amount outstanding by the Taxpayers in
      relation to the relevant years including the commencement or
      recommencement of audits and assessments in relation to the Taxpayers, and
      in relation to any other associated persons or entities
  or;

            

    

     

    
      	
              4.4.2          
         

                         

            	
                  in
      particular, and without limiting the foregoing, the Commissioner may, at
      the Commissioner’s complete and unfettered discretion, and without further
      reference to the Taxpayers, elect either to sue the Taxpayers jointly or
      severally for the balance of the debts which are the subject of this Deed,
      on the basis of, and in the same manner as if this Deed had not been
      entered into, or elect to sue the Taxpayers for breach of the Taxpayers’
      obligations pursuant to this Deed.

            

    

     

    

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

    5.     AUTHORITY TO
SIGN

    

    
      	
              5.1

            	
              Tax
      Office Authority

               

              This
      Deed is to be signed by either a delegate or authorised officer of the Tax
      Office, as follows:

            

    

     

    
      	
               
      

            	
              5.1.1.

            	
              The
      person signing this Deed is Tom Rengers, Assistant Commissioner Small and
      Medium Enterprises and a delegate of the Commissioner, who has the power
      to make, enter into and execute this Deed on the Commissioner's
      behalf.

            

    

     

     

    
      	
               
      

            	
              5.1.2.

            	
              It
      is acknowledged by the parties to this Deed that Tom Rengers shall have no
      personal liability as a result of being the authorised signatory of the
      Commissioner to sign this Deed and it is further acknowledged that he is
      the agent of the Commissioner acting within the scope of his
      authority.

            

    

     

     

    6.     GENERAL

     

    
      	
              6.1

            	
              This
      Deed shall operate in respect to the matters herein and does not release
      the Taxpayers from their future taxation
  obligations.

            

    

     

    

     

    
      	
              6.2

            	
              No
      modification, variation or amendment of this Deed shall be of any force
      unless such modification, variation or amendment is in writing, expressed
      to be a variation of this Deed and signed by the
  parties.

            

    

     

    

     

    
      	
              6.3

            	
              The
      warranties referred to in this Deed shall survive the expiration or
      termination of this Deed.

            

    

     

    

     

    
      	
              6.4

            	
              Any
      provision of this Deed which is unenforceable or partly unenforceable is,
      where possible, to be severed to the extent necessary to make this Deed
      enforceable, unless this would materially change the intended effect of
      this Deed.

            

    

     

    

     

    
      	
              6.5

            	
              The
      parties mutually covenant and agree that they will each do all the acts
      and things and execute all the Deeds and documents as shall, from time to
      time, be reasonably required for the purpose of, and to give effect to,
      this Deed.

               

            
	
              6.6

            	
              This
      Deed is confidential to the parties and shall not be disclosed by any of
      the parties, except:

            

    

     

    
      	
               
      

            	
              6.6.1.

            	
              as
      is required or permitted by any law, including Australian and US federal
      securities and stock exchange rules and
  regulations;

            

    

     

     

    
      	
               
      

            	
              6.6.2.

            	
              by
      the Taxpayers to their auditors, bankers, tax advisers or legal advisers;
      and

            

    

     

     

    
      	
               
      

            	
              6.6.3.

            	
              by
      the Commissioner to his legal
advisers.

            

    

     

     

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

    
      	
              6.7

            	
              This
      Deed constitutes the entire agreement and undertaking between the parties
      in relation to the subject matter, and supersedes any previous Deeds,
      agreements, arrangements, and undertakings between them.

               

            
	
              6.8

            	
              Provided
      that the amended tax liabilities as set out in 2.1 above are paid by the
      dates specified in accordance with clause 3.4 above, the parties agree
      that this Deed constitutes a complete release and extinguishment of the
      Taxpayers’ liability with regard to the assessments, and related
      matters.

               

            
	
              6.9

            	
              This
      Deed shall be construed and governed in accordance with the laws in force
      in Queensland and shall take effect between the parties from the date this
      Deed is signed or executed.

               

            
	
              6.10

            	
              All
      parties acknowledge that this Deed is not to be considered a general
      precedent but applies only to the parties mentioned, and only on the
      merits of the case and for the years covered by the
      settlement.

            

    

     

    7.     DEFAULT CLAUSE

     

    
      	
              7.1

            	
              Any
      party to this Deed who becomes aware of a breach of any of the terms of
      the settlement contained herein (other than a breach of clause 3.4 ), may
      serve a written notice on the defaulting party specifying the breach and
      requiring that it be rectified.

               

            
	
              7.2

            	
              Any
      defaulting party to this Deed who has received written notification under
      clause 7.1 above, has fourteen (14) days to rectify the
      breach.

               

            
	
              7.3

            	
              If
      the defaulting party fails to rectify the breach within the time required
      by clause 7.2, the non-defaulting party may, without further notice to the
      defaulting party, take whatever action is necessary (including injunctive
      or other relief) to require the defaulting party to rectify the
      breach.

               

            
	
              7.4

            	
               For
      the purposes of this Deed, an event of default occurs if:

              7.4.1  payment
      is not made to the Commissioner by the time stipulated in clause 3.4
      hereof unless the Commissioner grants an extension of time;
or

              7.4.2  the
      Taxpayers stop or threaten to stop payment to the Commissioner;
      or

              7.4.3
      this Deed is or becomes wholly or partly void, voidable or unenforceable
      or is claimed to be so by either party or anyone on their behalf;
      or

              7.4.4  the
      Taxpayers do not observe any obligation under this Deed.

               

            
	
              7.5

            	
              If
      the Taxpayers default in payment, pursuant to clause 3.4, then the balance
      of the amount owing in respect of the tax related liabilities for the
      relevant years shall become immediately due and payable and the
      Commissioner will be entitled to sue for the balance of the tax related
      liabilities which are the subject of this Deed on the basis and in the
      same manner as if this agreement had not been entered
  into.

            

    

     

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

    8.     NOTICES

     

    
      	
              8.1

            	
              Any
      notice, request or other communication to be given or served pursuant to
      this Deed shall be in writing and dealt with as
  follows:

            

    

    

    
      	
               
      

            	
              8.1.1.

            	
              if
      given by the Taxpayers (or any of them) to the Commissioner – addressed
      and forwarded to the Commissioner for the attention
  of:

            

    

    

    
      	
               
      

            	
              Geoff
      Williams

            

    

    28
Macgregor Street

    Upper
Mount Gravatt

    QLD
4122

    

    at the
address set out above or as otherwise notified by the Commissioner.

     

    
      	
               
      

            	
              8.1.2.

            	
              if
      given by the Commissioner to the Taxpayers (or any of them) – signed by
      the Commissioner and forwarded to the Taxpayers (or any of them) at the
      address indicated at the commencement of this
  Deed.

            

    

     

    
      	
              8.2

            	
              Any
      such notice, request or other communication shall be delivered by hand or
      sent by pre-paid security post, facsimile or e-mail, to the address of the
      party to which it is sent.

               

            
	
              8.3

            	
              Any
      notice, request or other communication will be deemed to be
      received:

            

    

     

    
      	
               
      

            	
              8.3.1.

            	
              if
      delivered personally, on the date of
delivery;

            

    

     

     

    
      	
               
      

            	
              8.3.2.

            	
              if
      sent by prepaid security post, upon the expiration of 2 business days
      after the date on which it was sent;
and

            

    

     

     

    
      	
               
      

            	
              8.3.3.

            	
              if
      transmitted electronically, upon receipt by the sender of an
      acknowledgment that the communication has been properly transmitted to the
      recipient.

            

    

     

     

    

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

    

     

     

    

     

     

     

     

    EXECUTED
BY THE PARTIES AS A DEED

     

    
      	
              Signed,
      sealed and delivered by

            	
              )

            	 
      
	
              Magellan
      Petroleum Australia Limited

            	
              )

            	 
      
	
              ACN
      009 728 581

            	
              )

            	 
      
	 
      	 
      	 
      
	
              As
      permitted under the Corporations Act (CA) 2001

            	
              )

            	 
      
	 
      	
              )

            	 
      
	 
      	
              )

            	 
      
	
              /s/
      Bruce McInnes

              Secretary/Director

            	 
      	
              /s/
      Robert J. Mollah

              Director

            
	
              Bruce
      McInnes

              Print
      name

            	 
      	
              Robert
      J. Mollah

              Print
      name

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	
              Signed,
      sealed and delivered by

            	 
      	 
      
	
              Magellan
      Petroleum (N.T.) Pty Ltd

            	
              )

            	 
      
	
              ACN
      009 718 183

            	
              )

            	 
      
	 
      	 
      	 
      
	
              As
      permitted under the Corporations Act (CA) 2001

            	
              )

            	 
      
	 
      	
              )

            	 
      
	
              /s/
      Bruce McInnes

              Secretary/Director

            	 
      	
              /s/
      Thomas Gwynn Davies

              Director

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	
              Bruce
      McInnes

              Print
      name

            	 
      	
              Thomas
      Gwynn Davies

              Print
      name

            

    

    

    

    

    

    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

    

    

    

    

     

    
      	 
      	
              Signed,
      sealed and delivered by

            	
              )

            	 
      	 
      
	 
      	
              Paroo
      Petroleum Pty Ltd

            	
              )

            	 
      	 
      
	 
      	
              ACN
      010 839 488

            	
              )

            	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
              As
      permitted under the Corporations Act (CA) 2001

            	
              )

            	 
      	 
      
	 
      	 
      	
              )

            	 
      	 
      
	 
      	
              /s/
      Bruce McInnes

              Secretary/Director

            	 
      	
              /s/
      Thomas Gwynn Davies

              Director

            	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
              Bruce
      McInnes

              Print
      name

            	 
      	
              Thomas
      Gwynn Davies

              Print
      name

            	 
      
	
               

               

              SIGNED
      for and on behalf of the Commissioner of Taxation by Tom Rengers,
      Assistant Commissioner Small and Medium Enterprises in the presence
      of

               

               

            	 
      
	
              /s/
      Robert Zuanetti

              Signature
      of witness

               

               

            	
              /s/
      Thomas Rengers

              Signature
      of authorised officer

            
	
              Robert
      Zuanetti

              Name
      of witness

               

            	
              Thomas
      Rengers

              Name
      of authorised officer

            

    

     

    

     

    

    
      
        
                                                                                                                                                
 60;                                                                   

        

         

      

      
        34FORM
      OF RIGHT CERTIFICATE

     

    
      
        	
                Certificate No. R-

              	 	
                Rights

              

      

    

     

    NOT
      EXERCISABLE AFTER [________] OR EARLIER IF REDEEMED, EXCHANGED OR AMENDED.
      THE
      RIGHTS ARE SUBJECT TO REDEMPTION, EXCHANGE AND AMENDMENT AT THE OPTION OF THE
      COMPANY, ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
      CIRCUMSTANCES SPECIFIED IN THE RIGHTS AGREEMENT, RIGHTS THAT ARE OR WERE
      BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN AFFILIATE OR AN ASSOCIATE OF
      AN
      ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) OR A
      TRANSFEREE THEREOF MAY BECOME NULL AND VOID.

    

    RIGHT
      CERTIFICATE

    

    CLARUS
      CORPORATION

    

    This
      certifies that                          
      ,
      or its
      registered assigns, is the registered owner of the number of Rights set forth
      above, each of which entitles the owner thereof, subject to the terms,
      provisions, and conditions of the Rights Agreement (the “Rights Agreement”), by
      and between Clarus Corporation, a Delaware corporation (the “Company”), and
      American Stock Transfer & Trust Company, a New York corporation (the “Rights
      Agent”), dated as of February 12, 2008, to purchase from the Company at any time
      after the Distribution Date (as such term is defined in the Rights Agreement)
      and prior to 5:00 p.m. (Eastern time) on the Expiration Date (as such term
      is
      defined in the Rights Agreement) at the principal office of the Rights Agent
      designated for such purpose, one one-hundredth of a fully paid nonassessable
      share of Series A Junior Participating Preferred Stock, par value $0.0001 per
      share (the “Preferred Shares”), of the Company, at a purchase price of $12 per
      one one-hundredth of a Preferred Share (the “Purchase Price”), upon presentation
      and surrender of this Right Certificate with the Form of Election to Purchase
      and related Certificate duly executed. If this Right Certificate is exercised
      in
      part, the holder will be entitled to receive upon surrender hereof another
      Right
      Certificate or Right Certificates for the number of whole Rights not exercised.
      The number of Rights evidenced by this Right Certificate (and the number of
      one
      one-hundredths of a Preferred Share which may be purchased upon exercise
      thereof) set forth above, and the Purchase Price set forth above, are the number
      and Purchase Price as of the date of the Rights Agreement, based on the
      Preferred Shares as constituted at such date. Terms used herein with initial
      capital letters and not defined herein are used herein with the meanings
      ascribed thereto in the Rights Agreement.

    

    As
      provided in the Rights Agreement, the Purchase Price and/or the number and/or
      kind of securities issuable upon the exercise of the Rights evidenced by this
      Right Certificate are subject to adjustment upon the occurrence of certain
      events.

    

    This
      Right Certificate is subject to all of the terms, provisions and conditions
      of
      the Rights Agreement, which terms, provisions and conditions are hereby
      incorporated herein by reference and made apart hereof and to which Rights
      Agreement reference is hereby made for a full description of the rights,
      limitations of rights, obligations, duties and immunities of the Rights Agent,
      the Company and the holders of the Right Certificates, which limitations of
      rights include the temporary suspension of the exercisability of the Rights
      under the circumstances specified in the Rights Agreement. Copies of the Rights
      Agreement are on file at the office of the Rights Agent and can be obtained
      from
      the Company without charge upon written request therefor.

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    Pursuant
      to the Rights Agreement, from and after the occurrence of a Flip-in Event,
      any
      Rights that are Beneficially Owned by (i) any Acquiring Person (or any Affiliate
      or Associate of any Acquiring Person), (ii) a transferee of any Acquiring Person
      (or any such Affiliate or Associate) who becomes a transferee after the
      occurrence of a Flip-in Event or (iii) a transferee of any Acquiring Person
      (or
      any such Affiliate or Associate) who became a transferee prior to or
      concurrently with the Flip-in Event pursuant to either (a) a transfer from
      an
      Acquiring Person to holders of its equity securities or to any Person with
      whom
      it has any continuing agreement, arrangement or understanding regarding the
      transferred Rights or (b) a transfer which the Board of Directors of the Company
      has determined is part of a plan, arrangement or understanding which has the
      purpose or effect of avoiding certain provisions of the Rights Agreement, and
      subsequent transferees of any of such Persons, will be void without any further
      action and any holder of such Rights will thereafter have no rights whatsoever
      with respect to such Rights under any provision of the Rights Agreement. From
      and after the occurrence of a Flip-in Event, no Right Certificate will be issued
      that represents Rights that are or have become void pursuant to the provisions
      of the Rights Agreement, and any Right Certificate delivered to the Rights
      Agent
      that represents Rights that are or have become void pursuant to the provisions
      of the Rights Agreement will be canceled.

    

    This
      Right Certificate, with or without other Right Certificates, may be transferred,
      split up, combined or exchanged for another Right Certificate or Right
      Certificates entitling the holder to purchase a like number of one
      one-hundredths of a Preferred Share (or other securities, as the case may be)
      as
      the Right Certificate or Right Certificates surrendered entitled such holder
      (or
      former holder in the case of a transfer) to purchase, upon presentation and
      surrender hereof at the principal office of the Rights Agent designated for
      such
      purpose, with the Form of Assignment (if appropriate) and the related
      Certificate duly executed.

    

    Subject
      to the provisions of the Rights Agreement, the Rights evidenced by this
      Certificate may be redeemed by the Company at its option at a redemption price
      of $0.0001 per Right or may be exchanged in whole or in part. The Rights
      Agreement may be supplemented and amended by the Company, as provided therein.
      

    

    The
      Company is not required to issue fractions of Preferred Shares (other than
      fractions which are integral multiples of one one-hundredth of a Preferred
      Share, which may, at the option of the Company, be evidenced by depositary
      receipts) or other securities issuable upon the exercise of any Right or Rights
      evidenced hereby. In lieu of issuing such fractional Preferred Shares or other
      securities, the Company may make a cash payment, as provided in the Rights
      Agreement.

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    No
      holder
      of this Right Certificate, as such, will be entitled to vote or receive
      dividends or be deemed for any purpose the holder of the Preferred Shares or
      of
      any other securities of the Company which may at any time be issuable upon
      the
      exercise of the Right or Rights represented hereby, nor will anything contained
      herein or in the Rights Agreement be construed to confer upon the holder hereof,
      as such, any of the rights of a stockholder of the Company or any right to
      vote
      for the election of directors or upon any ratter submitted to stockholders
      at
      any meeting thereof, or to give or withhold consent to any corporate action,
      or
      to receive notice of meetings or other actions affecting stockholders (except
      as
      provided in the Rights Agreement), or to receive dividends or subscription
      rights, or otherwise, until the Right or Rights evidenced by this Right
      Certificate have been exercised in accordance with the provisions of the Rights
      Agreement.

    

    This
      Right Certificate will not be valid or obligatory for any purpose until it
      has
      been countersigned by the Rights Agent.

    

    [REMAINDER
      OF PAGE LEFT INTENTIONALLY BLANK] 

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    

    WITNESS
      the facsimile signature of the proper officers of the Company and its corporate
      seal.

    

    Dated
      as
      of ________________,
      _____.

    

    
      	
              CLARUS
                CORPORATION

            
	 	 
	 	 
	
              By:

            	 
	 	
              Name:

            
	 	
              Title:

            

    

    

    COUNTERSIGNED:

     

    [ 
        ]

     

    
      	
              By:

            	 
	 	
              Name:

            
	 	
              Title:

            

    

    

    [SIGNATURE
      PAGE TO RIGHT CERTIFICATE]

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    Form
      of
      Reverse Side of Right Certificate

    

    FORM
      OF ASSIGNMENT

    

    (To
      be
      executed by the registered holder if such holder desires to transfer the Right
      Certificate)

    

    FOR
      VALUE
      RECEIVED, ____________________________________
      hereby
      sells, assigns and transfers unto

    

    
      	 
	
              (Please
                print name and address of
                transferee)

            

    

    

    this
      Right Certificate, together with all right, title and interest therein, and
      does
      hereby irrevocably constitute and appoint _________________________,
      Attorney, to transfer the within Right Certificate on the books of the
      within-named Company, with full power of substitution.

     

    
      Dated:
        _____________________, _________.

       

    

    
      	___________________________________
	
              Signature

            	 

    

    

    Signature(s)
      Guaranteed:

    

    SIGNATURE(S)
      SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS,
      SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED
      SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO S.E.C. RULE
      17Ad-15.

    

    The
      undersigned hereby certifies that the Rights evidenced by this Right Certificate
      are not beneficially owned by an Acquiring Person or an Affiliate or Associate
      thereof (as defined in the Rights Agreement).

    

    
      	___________________________________
	
              Signature

            	 

    

    

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

    CERTIFICATE

    

    The
      undersigned hereby certifies by checking the appropriate boxes that:

    

    
      	
              (1)

            	
              the
                Rights evidenced by this Right Certificate  ̈
                are /  ̈
                are not being sold, assigned, transferred, split up, combined or
                exchanged
                by or on behalf of a Person who is or was an Acquiring Person or
                an
                Affiliate or Associate of any such Person (as such terms are defined
                in
                the Rights Agreement); and

            

    

     

    
      	
              (2)

            	
              after
                due inquiry and to the best knowledge of the undersigned, it  ̈
                did /  ̈
                did not acquire the Rights evidenced by this Right Certificate from
                any
                Person who is, was or became an Acquiring Person or an Affiliate
                or
                Associate of an Acquiring Person.

            

    

     

    
      Dated:
        _____________________________

    

     

    
      	___________________________________
	
              Signature

            	 

    

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    Form
      of
      Reverse Side of Right Certificate - continued

    

    FORM
      OF ELECTION TO PURCHASE

    (To
      be
      executed if holder desires to exercise the Right Certificate)

    

    To
      Clarus
      Corporation:

    

    The
      undersigned hereby irrevocably elects to exercise  
      Rights
      represented by this Right Certificate to purchase the one one-hundredths of
      a
      Preferred Share or other securities issuable upon the exercise of such Rights
      and requests that certificates for such securities be issued in the name of
      and
      delivered to:

    

      
        	
                Please insert social security or other identifying number:

              	 

      

    

     

    
      	 
	
              (Please
                print name and address)

            
	 
	 
	 
	 

    

    

    If
      such
      number of Rights is not all the Rights evidenced by this Right Certificate,
      a
      new Right Certificate for the balance remaining of such Rights will be
      registered in the name of and delivered to:

    

      
        
          	
                  Please insert social security or other identifying number:

                	 

        

    

    

    
      	 
	
              (Please
                print name and address)

            
	 
	 
	 
	 

    

    

     Dated:
      _____________________________

     

    
      	
               

            
	
              Signature

            

    

    

    Signature(s)
      Guaranteed:

    

    SIGNATURE(S)
      SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS,
      SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED
      SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO S.E.C. RULE
      17Ad-15.

    

    The
      undersigned hereby certifies that
      the
      Rights evidenced by this Right Certificate are not beneficially owned by an
      Acquiring Person or an Affiliate or Associate thereof (as defined in the Rights
      Agreement).

    

    
      	 
	
              Signature

            

    

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    CERTIFICATE

    

    The
      undersigned hereby certifies by checking the appropriate boxes that:

    

    
      	
              (1)

            	
              the
                Rights evidenced by this Right Certificate  ̈
                are /  ̈
                are not being exercised by or on behalf of a Person who is or was
                an
                Acquiring Person or an Affiliate or Associate of any such Person
                (as such
                terms are defined pursuant to the Rights Agreement);
                and

            

    

     

    
      	
              (2)

            	
              after
                due inquiry and to the best knowledge of the undersigned, it  ̈
                did /  ̈
                did not acquire the Rights evidenced by this Right Certificate from
                any
                Person who is, was, or became an Acquiring Person or an Affiliate
                or
                Associate of an Acquiring Person.

            

    

     

    
      Dated:
        _____________________________

    

    

    
      	___________________________________
	
              Signature

            	 

    

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    NOTICE

    

    Signatures
      on the foregoing Form of Assignment and Form of Election to Purchase and in
      the
      related Certificates must correspond to the name as written upon the face of
      this Right Certificate in every particular, without alteration or enlargement
      or
      any change whatsoever.

    

    In
      the
      event the certification set forth above in the Form of Assignment or the Form
      of
      Election to Purchase, as the case may be, is not completed, the Company and
      the
      Rights Agent will deem the beneficial owner of the Rights evidenced by this
      Right Certificate to be an Acquiring Person or an Affiliate or Associate thereof
      (as defined in the Rights Agreement) and such assignment or election purchase
      will not be honored.

    
      
        
        

      

      
        9

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