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SAMPLE

THIS CORPORATE GUARANTEE is made on the

day of

200..

BETWEEN:-

(1)

.. (Company No:), a company incorporated in Malaysia and


having its office at . (hereinafter referred to as A) of the one part;

and

(2)

.. (COMPANY NO: ) a company incorporated in Malaysia and


having its registered office at . (hereinafter referred to as the
Guarantor) of the other part.

WHEREAS:-

(A)

By a joint venture agreement dated the

day of

(hereinafter referred to as the JV Agreement) made between A of the


one part and the Guarantor of the other part, A and the Guarantor
have agreed to enter into a joint venture to undertake a residential
and/or commercial development (hereinafter referred to as the
Project) in respect of all that land held under H.S. (D) ., P.T. No. ,
in the Mukim of, District of , State of (hereinafter referred to as
the Development Land) subject to and upon the terms and
conditions therein contained.

(B)

Pursuant to the terms of the JV Agreement the Guarantor has agreed


to pay A an Entitlement as therein defined and in accordance with the
terms and provisions of the JV Agreement.

(C)

As security for the performance of its obligations to pay A the


Entitlement in accordance with the terms and conditions of the JV
Agreement, the Guarantor has pursuant to the JV Agreement agreed
to execute this Corporate Guarantee upon the terms and conditions
hereinafter appearing.

NOW IT IS HEREBY AGREED as follows :-

1.INTERPRETATION

1.1

Definitions

In this Guarantee, unless the context otherwise requires or


unless it is hereby expressly provided the expressions as defined
in the JV Agreement shall have the same meaning when used
herein:-

Entitlement means the payment due and payable to A in


accordance with the terms and conditions of the JV Agreement.

1.2

Construction

Any reference in this Guarantee to :-

(a)

a Clause shall, subject to any contrary indication, be


construed as a reference to a Clause hereof;

(b)

a month is a reference to a period beginning in one


calendar

month

and

ending

on

the

numerically

corresponding day in the next calendar month or where


there is no date in the next calendar month numerically
corresponding as aforesaid, the last day of such calendar
month and reference to months and monthly shall be
construed accordingly;

(c)

a Recital, Schedule and Appendix shall, subject to


any contrary indication, be construed as a reference to a
recital, schedule and appendix hereto respectively;

(d)

RM and Ringgit Malaysia denote the lawful currency of


Malaysia;

(e)

save where the contrary is indicated, any reference in this


Guarantee to:-

(i)

this Guarantee or any other agreement or document


shall be construed as a reference to this Guarantee
or, as the case may be, such other agreement or

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document, as the same may be or have been, or
may from time to time be, amended, varied or
supplemented;

(ii)

a statute shall be construed as a reference to such


statute as the same may have been, or may from
time to time be, amended or re-enacted; and

(iii)

words importing the plural shall include the


singular and vice versa.

1.3

Headings

The headings as appearing in this Guarantee are for ease of


reference

only and shall be

ignored

in construing

this

Guarantee.

2.

GUARANTEE

In consideration of A making available the Development Land to the


Guarantor for the purposes of the Project and fulfilling its obligations
as contained in the JV Agreement, and PROVIDED ALWAYS that the
JV Agreement is not terminated by either party in accordance with the
provisions therein contained, the Guarantor hereby guarantees as a
continuing obligation to A, the due payment of the Entitlement as and

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when the same shall become due and payable in accordance with the
terms and provisions of the JV Agreement.

3.

GUARANTEE IN ADDITION TO OTHER RIGHTS AND REMEDIES

This Guarantee is in addition to and shall not merge with or otherwise


prejudice or affect any other right remedy guarantee indemnity or
security available to A pursuant to the JV Agreement.

4.

GUARANTOR LIABLE AS PRINCIPAL DEBTOR

The Guarantor shall not be discharged, nor shall its liabilities be


affected by the following :-

4.1

any time, indulgence, forbearance, waiver granted to or


arrangement or composition with the Guarantor;

4.2

any variation of or amendment or addendum to the JV


Agreement or this Guarantee or either of them so that
references to the JV Agreement and this Guarantee shall
include each such variation, amendment or addendum;

4.3

the making or absence of any demand on the Guarantor for


payment of the Entitlement;

4.4

the liquidation and/or winding up of the Guarantor;

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4.5

the enforcement, absence of enforcement or release of any other


security, guarantee or indemnity at any time existing in favour
of A whether from the Guarantor or otherwise;

4.6

any legal limitation, disability, incapacity or other circumstances


relating to the Guarantor;

4.7

the illegality, invalidity or enforceability of or any defect in any


provision of the JV Agreement (provided that such illegality
invalidity or enforceability shall not affect the commencement
and/or the completion of the Project) and this Guarantee shall
be construed accordingly as if there were no such illegality,
invalidity or enforceability;

4.8

any other fact, circumstance, provision of statute or rule of law


which may entitle the Guarantor to be released in whole or in
part from its undertaking;

4.9

any change in the constitution of the Guarantor whether by way


of amalgamation, consolidation, reconstruction or otherwise,
but shall endure and be available for all intents and purposes
as if the new or amalgamated or resulting company or entity, as
the case may be, had been the one whose obligations were
originally guaranteed.

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5.

OBLIGATIONS TO REMAIN IN FULL FORCE AND EFFECT

5.1

The obligations of the Guarantor under this Guarantee are and


will remain in full force and effect by way of continuing security
until the Entitlement has been paid in full to A.

5.2

Any amount which is not recoverable from the Guarantor under


this Guarantee because of any legal limitation disability or
incapacity of the Guarantor shall be recoverable from the
Guarantor on the basis of an indemnity.

5.3

A shall not be obliged to take any other action or proceedings


against the Guarantor before taking steps to enforce this
Guarantee.

6.

GUARANTORS REPRESENTATIONS

6.1

The Guarantor hereby represents warrants and undertakes as


follows:-

(a)

it has the capacity and power to enter into and to comply


with the terms and conditions of this Guarantee;

(b)

all action, conditions and things required to be taken,


fulfilled and done in order:-

(i)

to enable it lawfully to enter into and perform and


comply with its obligations under this Guarantee;

(ii)

to ensure that those obligations are legally binding


and enforceable; and

(iii)

to make this Guarantee admissible as evidence in


the courts of Malaysia;

have been taken, fulfilled and done;

(c)

the execution of and/or performance of or compliance with


its obligations under this Guarantee do not and will not
violate:-

(i)

any law to which it is subject; or

(ii)

any agreement to which it is a party or which is


binding on it or its assets;

(d)

its obligations under this Guarantee are valid, binding


and enforceable in accordance with their respective
terms;

(e) that the indebtedness and other obligations incurred or to be


incurred by it hereunder will rank at least pari passu in

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priority of payment and in all other respects with all its
other

general

unsecured

liabilities

and

obligations

whether actual or contingent except for those which are


preferred by law;

(f) that it is not in default under any agreement to which it is


bound which may materially and adversely affect its
financial condition or its ability to perform its obligation
under this Guarantee nor are there any litigation or
arbitration proceedings pending or threatened against it
which may have a similar or analogous effect;

(g) all information furnished by it in connection with this


Guarantee do not contain any untrue statement or omit to
state any fact the omission of which makes any statement
made therein in the light of the circumstances under
which they are made misleading;

(h) all necessary returns have been delivered by or on behalf of


the Guarantor to the relevant taxation authorities and it
is not in default in the payment of any taxes, levies,
duties, charges and fees of a material amount, and no
material claim is being asserted with respect to taxes,
levies, duties, charges and fees; and

(i) no winding-up proceedings have been instituted or are


pending against it.

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6.2

The Guarantor hereby covenants and undertakes with A that


each of the representations and warranties referred to in Clause
6.1 will continue to be in full force and effect until the
Entitlement has been paid in full to A.

7.

PAYMENTS

All payments under this Guarantee shall be made by the Guarantor in


Ringgit Malaysia free of any restriction and counterclaim and without
any set-off but subject to deductions on account of any tax or
expenses or otherwise charged, imposed, levied, collected, withheld or
assessed by or within Malaysia or any jurisdiction in or through which
any payment is made by the Guarantor under this Guarantee to the
extent as required by law.

8.

WRITTEN STATEMENT CONCLUSIVE ON AMOUNTS DUE

A written statement of A as to the amount or amounts (if any) for the


time being due and payable by the Guarantor under this Guarantee
shall be conclusive evidence save for manifest error as against the
Guarantor of the amount or amounts so due and payable.

9.

COSTS AND EXPENSES

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Each party hereto shall bear its own solicitors' costs arising from
and/or in connection with the preparation and/or execution of this
Guarantee but the stamp duty payable shall be borne by A.

10.

WAIVER

No forbearance indulgence or relaxation or inaction by A to require


performance of any provisions of this Guarantee shall in any way
affect, diminish or prejudice the right of A to require strict
performance of that provision and any waiver or acquiescence by A
shall not be construed as a waiver or acquiescence of any continuing
or succeeding breach of such provisions or a waiver of any right under
or arising out of this Guarantee or acquiescence to or recognition of
rights and/or position other than those expressly stipulated in this
Guarantee.

11.

SEVERABILITY

Any term condition stipulation provision covenant or undertaking of


this Guarantee which is illegal prohibited or unenforceable in any
jurisdiction shall as to such jurisdiction be ineffective to the extent of
such illegality, voidness, prohibition or unenforceability but shall not
invalidate or render illegal, void or unenforceable the whole of this
Guarantee or any such term condition stipulation provision covenant
or undertaking in any other jurisdiction.

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12.

TIME

Time whenever mentioned is of the essence of this Guarantee.

13.

GOVERNING LAW AND JURISDICTION


This Guarantee shall be construed and take effect under the laws of
Malaysia and the parties hereto hereby submit unconditionally to the
non-exclusive jurisdiction of the courts of Malaysia.

14.

SUCCESSORS-IN-TITLE

This Guarantee shall be binding upon the successors-in-title,


administrators, receivers, liquidators and assigns of the parties
hereto.

15 .

ENTIRE AGREEMENT

This Guarantee constitutes the entire obligation of the parties hereto


with respect of the subject matter hereof and shall supersede any
prior expressions of intent or understanding in writing, signed by or
on behalf of all of the parties to this Guarantee.

16. TERMINATION OF THE JV AGREEMENT


In the event that the JV Agreement shall be terminated by either A or
the Guarantor pursuant to the terms and conditions therein, this
Guarantee shall immediately cease to be of effect and the Guarantor

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shall be automatically discharged from the performance of its
obligations contained herein.

IN WITNESS HEREOF the parties hereto have hereunto set their hands and
seal the day and year first above written.

The execution of this Guarantee by

was carried out in the manner

authorised by its constitution and

its Common Seal was hereunto

affixed in the presence of:-

The execution of this Guarantee by

was carried out in the manner

authorised by its constitution and

its Common Seal was hereunto

affixed in the presence of:-

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