DATE:
1. PARTIES
1.1 "The Vendors": The persons whose names addresses and particulars are set out in the Schedule hereto.
1.2 "The Company": (Company No. ) a company incorporated in Malaysia and having its registered office
2. RECITALS
2.1 This Deed is entered into pursuant to an agreement made between the Vendors and the Purchaser relating to the sale of the entire issued and paid up ordinary share capital of the Company ("the Agreement").
2.2 In the Agreement the Vendors agreed to execute this Deed on Completion.
OPERATIVE PART
DEFINITIONS
1. In this Deed:-
"taxation liability" means the Company's liability for all periods prior to the Completion Date for taxes, duties or levies including income tax, real property gains tax, social security contributions (SOCSO), Employees Providing Fund Contributions (EPF), sales tax, customs duty, stamp duty, and all costs, charges, interest, fines, penalties and expenses which are included in, or are incidental to or relate to, the Company's taxation liability.
"Company" were the context so admits includes each Group Company so that this Deed shall apply to each Group Company as if it were the Company and the covenants given by the Vendors are expressly given to each Group Company and may be enforced against the Vendors by each and every Group Company acting jointly or severally.
2. General Indemnity
2.1 The Vendors jointly and severally indemnifies the Purchaser and the Company in respect of any claims, liability, loss or damage which constitute a breach of any of the warranties contained in the Agreement.
2.2 The Vendors jointly and severally undertake to assume all liabilities of the Company whatsoever including contingent, unquantified or disputed liabilities incurred on or before the Completion Date and shall keep the Company and the Purchaser fully indemnified against the same
3. Taxation Indemnity
3.1 The Vendors jointly and severally indemnifies the Purchaser and the Company in respect of any taxation liability of the Company
3.2 If the Company receives after completion any correspondence, questionnaire, claim, demand or assessment relating to a taxation liability relating wholly or partly to any period before completion of the Agreement, the Company or the Purchaser will promptly notify the Vendors in writing and provide to the Vendors a copy of any written correspondence or material received in connection with that taxation liability.
3.3 In the event of a notice of assessment having been received by the Company in respect of a taxation liability within paragraph 3.1 which the Company is legally required to pay even if liability is contested, the Vendors will pay the amount required to be paid to the authority to receive payment, or if the company has paid the assessment, to the Company, within the time required in the assessment.
3.4 The Vendors may, before or after making such payment, require the Company to take the necessary action to contest the validity of the assessment and the Company's liability to taxation, at the Vendors' expense.
3.5 The Vendors jointly and severally indemnifies the Company and the Purchaser in respect of all reasonable costs which may be incurred by or on behalf of the Company in contesting the Company's taxation liability and any legal or other costs which the Company may be ordered to pay to the taxation authority if the Company's challenge is wholly or partly unsuccessful. The Company may require the Vendors to provide sufficient funds to be placed in a solicitor's trust account, to cover the Company's legal and other costs, expenses and the potential liability for the opponent's costs, to be provided progressively as those costs are incurred, but before the Company becomes legally liable to pay such costs, expenses and liability
3.6 The Company agrees to contest any taxation liability by retaining advocates and solicitors and other professional advisers requested by the Vendors, subject to the Company's approval of such advisers, any approval not be unreasonably delayed or withheld.
3.7 Any settlement or compromise with a taxation authority relating to a taxation liability shall require the consent of the Company and the Vendors such consent not to be unreasonably delayed or withheld.
3.8 If there is any dispute the Company (or the Purchaser) and the Vendors under paragraph 3.6 or relating to any proposed settlement or compromise within paragraph 3.7, whether the refusal of consent of either of them is reasonable or unreasonable shall be determined by an arbitrator, being a advocate and solicitor of at least seven years' standing, nominated by the Chairman for the time being of the Penang State Bar Committee whose decision shall be binding on the parties, and be final and conclusive.
3.9 The parties agree to co-operate and to give each other reasonable assistance and access to the Company's records, to enable any taxation liability to be contested.
3.10 If the Company receives any refund of money paid pursuant to a taxation liability which was paid by the Vendors under its indemnity, the Company will promptly repay the amount of together with any interest received from the taxation authority.
4. Measure of Liability
4.1 The Vendors' extent of indemnity shall take into account each of the following (without limiting the principles which apply to indemnities):-
4.1:1 any diminution in the value of the Company's assets below their value if there was no breach of warranty or other event rendering the Vendors liable under this indemnity
4.1:2 any additional liability for debt, damages, or any other loss incurred by the Company, including the costs of investigating and contesting claims giving rise to a breach of warranty; and
4.1:3 any taxation liability that will arise on the receipt of an amount under this indemnity.
4.2 When quantifying the Vendors' liability under this indemnity, the amount recoverable from the Vendors shall be reduced by each of the following:-
4.2a any compensation or reimbursement received by the Company or by the Purchaser from any third party or any benefit received by the Company as a result of, or consequent on, the matters giving rise to the liability for indemnity;
4.2b any reduction or extinguishment in the Company's taxation or other liability, as a result of the claim or payment giving rise to the Vendors' liability under this indemnity;
4.2c any contingency included or allowed in the Company's accounts, which is current at the date of completion of this Agreement, providing against the matter or event constituting a subject matter of this indemnity to the extent of that contingency.
5. General
5.1 This Deed shall be binding on the Vendors and its respective successors and personal representatives.
5.2 The benefit of this Deed may be assigned in whole or in part by the Company and the Purchaser.
5.3 The provisions of the Agreement relating to notices shall apply to any notice to be given under, or in connection with, this Deed.
5.4 The construction, validity and performance of this Deed shall be governed by the laws of Malaysia.
AS WITNESS the hands of the parties the day and year first above written.
The Common Seal of )
was hereunto )
affixed in the presence of:- )
The Common Seal of )
as hereunto )
affixed in the presence of:- )
