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GUARANTEE AND INDEMNITY(CORPORATE)
DATED THE DAY OF 2010
BY
............................................ (“the Guarantor”)
TO
............................................
(“the Bank”)
DRAWN BY:
Mark & Associates Attorneys,1st Floor, Wing ‘C’, NIC Life House,
Sokoine/Ohio Street,P.O. Box 8211,
DAR ES SALAAM.
THIS GUARANTEE and INDEMNITY is dated ……… 2010 and made
BETWEEN:
............................................, a limited liability company whose registered office is situate at ................................ Complex, .................... Industrial Area, P.O. Box ...................., Arusha (“the Guarantor”)
TO
............................................, a Public Limited liability company incorporated in Tanzania and licenced to carry on the business of banking whose registered Offices are at .................... House, ..................../.................... Street, P.O. Box ...................., Dar es Salaam (hereinafter referred to as the “the Bank”, which expression shall, where the context so admits, include its successors and assigns in title) of the other part;
WHEREAS:
A. The Bank has granted and continues to grant to the Debtor (hereinafter defined) the facilities more particularly defined and specified in a Facility Letter dated 23rd August 2010 with Reference No. ..................../COR/HN/................................/TL/01/2010 (hereinafter called the "Facilities Letter");
B. It was inter alia a condition of granting of the Facilities (hereinafter defined) by the Bank that the Guarantor would issue to the Bank a corporate guarantee (being this instrument) in respect of the Facilities granted or intended to be granted to the Debtor or any of them.
C. In consideration of the Bank granting or continuing to grant the Facilities to the Debtor or any of them and refraining from demanding the immediate repayment of the Facilities and treating as satisfied the condition that the Guarantor would provide this guarantee in respect of the obligations of the
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Debtor, the Guarantor has agreed to undertake the obligations hereinafter contained.
NOW THIS DEED WITNESSES and the Guarantor hereby agrees:
1. DEFINITIONS AND INTERPRETATION
1.1 Unless the context otherwise requires or unless otherwise defined in this Guarantee, words and expressions shall have the same respective meanings that are given to them in the Facility Documents.
1.2 In this Guarantee:
‘the Debtor’ means ................................ ...................., a limited liability company duly established under the laws of The United Republic of Tanzania of ................................ Complex, .................... Industrial Area, P.O. Box ...................., Arusha, and shall include any company into which it may be absorbed or with which it may amalgamate or any new company constituted by a merger with or by reconstruction of the Debtor company.
‘Debtor’sObligations’ all the Debtor's liabilities to the Bank of any kind
whatsoever whether present or future, whether actual or contingent, whether incurred as principal or as a surety or in any other capacity whatsoever, and whether incurred alone or jointly or severally with any other person), including liabilities in respect of interest, Expenses, banking charges and commission.
‘Expenses’ all costs and other expenses of whatsoever nature (on a full indemnity basis) incurred by the Bank or their agents in connection with the enforcement of the Debtor' Obligations in whole or in part, or the enforcement of this Guarantee in whole or in part, or the exercise of any power under this Guarantee or under any agreement between the Bank and the Debtor, including (without prejudice to the generality of the foregoing) any legal costs and disbursements,
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together with Interest from the date on which the Expenses are incurred.
‘Facility Documents’ means all agreements made between the Bank and
the Debtor relating to the Facility, and includes all arrangements or Agreements made between the Debtor and the Bank in relation to the Facilities, whether or not any other person is also a party thereto and whether made before or after the date of this Guarantee, and includes without limitation the Facilities Letter;
‘Guaranteed
Liabilities’ means all the monies, obligations and liabilities expressed to be guaranteed by the Guarantor in Clause 2.1
‘Interest’ "Interest Rate" means the rate of interest specified in the Facility Documents or determined by the Bank from time to time as applicable to any moneys advances obligations or liabilities owing or incurred by the Debtor to the Bank under the terms of their respective Facilities Documents or in respect of the Facilities;
‘Bank’ ............................................, its successors and assigns, including any Bank into which it may be absorbed or with which it may amalgamate (reference to the Bank includes any one or more of the Bank)
‘Security’ shall include a Guarantee, Indemnity, Charge, Mortgage or Deposit, Letter of Credit or any other form of security real or personal and whether or not negotiable
1.3 In this Guarantee, unless the context clearly admits a contrary interpretation:
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(a) references to Clauses are to be construed as references to the clauses of this Guarantee;
(b) references to this Guarantee and any provisions of this Guarantee or to any other document or agreement are to be construed as references to this Guarantee, those provisions or that document or agreement in force for the time being and as amended, varied, supplemented, substituted or novated from time to time;
(c) words importing the singular number include the plural number and vice versa
(d) references to a person or persons shall include companies or other legal entities;
(e) references to any person are to be construed to include that person’s assigns or transferees or successors in title, whether direct or indirect;
(f) references to any statutory provision are to be construed as references to that statutory provision as amended, supplemented, re-enacted or replaced from time to time (whether before or after the date of this Guarantee) and are to include any orders, regulations, instruments or other subordinate legislation made under or deriving validity from that statutory provision;
(g) the words ‘other’ and ‘otherwise’ are not to be construed ejusdem generis with any foregoing words where a wider construction is possible;
(h) references to liability are to include any liability whether actual, contingent, present or future;
(i) clause headings are for ease of reference only and are not to affect the interpretation of this Guarantee;
(j) if two or more persons are included in the expression "Debtor", then that expression shall be deemed to refer to such persons both together and separately and any reference to the Debtor's Obligations shall be a reference to their joint and several obligations;
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(k) where this Guarantee is made by or on behalf of more than one person as Guarantor (other than as agents for a named principal) the agreements, obligations and liabilities on the part of the Guarantor contained herein shall take effect as joint and several agreements, liabilities and obligations and all references herein to ‘the Guarantor’ shall mean such persons or any of them, and none of them shall be released from liability hereunder by reason of this Guarantee not binding or ceasing for any reason to bind any other or others of them, whether or not by agreement with the Bank;
(l) interest will be calculated in accordance with the terms set out in the Facility Letter; and
(m) each of the provisions of this Guarantee shall be severable and distinct from one another and if one or more of such provisions is invalid or unenforceable the remaining provisions shall not be affected in any way.
2. GUARANTEE AND INDEMNITY
2.1 In consideration of the Bank making or continuing to make loans or advances to, or otherwise giving credit or granting banking facilities or accommodation or granting time to, the Debtor for so long as it may think fit, the Guarantor hereby unconditionally guarantees to discharge the Debtor's Obligations to the Bank on demand in writing by the Bank to the Guarantor without deduction, set-off or counterclaim from the date of such demand.
2.2 The Guarantor further agrees that if any of the Debtor's Obligations are at any time void or unenforceable against the Debtor for any reason whatsoever (whether known to the Bank or not), the Guarantor will be liable to the Bank as a principal borrower by way of indemnity for the same amount as that for which the Guarantor would have been liable had the Debtor's Obligations not been void or unenforceable, and further agrees to discharge the amount of that liability on demand in writing by the Bank to the Guarantor without deduction set-off or counterclaim from the date of such demand.
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2.3 The Guarantor further agrees to pay expenses to the Bank on demand in writing from the date of such demand.
PROVIDED THAT the amount recoverable from the Guarantor under this Guarantee (whether as surety or by way of indemnity) shall not exceed the aggregate of the principal amounts of Tanzania Shillings .................... (TZS ..................../=) only together with Interest on that sum since the date on which Interest was last compounded in the books of the Bank and Expenses (including any Interest accruing thereon).
3. CONTINUING SECURITY
3.1 This Guarantee is and shall remain a continuing security for the Debtor's Obligations to the Bank at any time and shall not be satisfied or otherwise affected by any repayment or recovery from time to time of the whole or any part of any amount which may then be due and owing from the Debtor to the Bank.
3.2 This Guarantee shall remain in force notwithstanding the bankruptcy or insolvency of the Debtor, but may be discontinued and the liability hereunder crystallized (except as regards unascertained or contingent liabilities and any liability for Interest and Expenses) by three months’ notice in writing to the Bank from the Guarantor or sureties other than the Guarantor giving notice.
3.3 If notice of discontinuance under Clause 3.2 is given, the Guarantor will be liable for the amount of the Debtor’s Obligations at the date of the expiry of such notice whether or not any demand has been made on the Guarantor or on the Debtor before that date. Such notice shall not affect the liability of the Bank or any of the Guarantor or surety other than the Guarantor giving notice.
3.4 This Guarantee shall continue and shall be enforceable notwithstanding any change in the names of the Bank or any change in the constitution of the Bank, their successors or assigns or by their absorption of or by their amalgamation with any other bank or Bank.
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3.5 Where the Debtor is a company, the Debtor’s Obligations shall include those undertaken by the Debtor under a different name or style to that stated in this Guarantee and the Guarantor’ liability hereunder shall continue without any prejudice and this Guarantee shall be available to the Bank despite any change in the name or business of the Debtor or change in the constitution of the Debtor (whether by amalgamation consolidation reconstruction or otherwise). In the event of such a change, the expressions ‘Debtor’ and ‘Debtor’s Obligations’ shall be deemed to apply to the new or amalgamated or reconstituted company and its obligations to the Bank as if it had been the company whose obligations were originally guaranteed, as well as to the original company and its obligations to the Bank incurred prior to the change, and this Guarantee shall be interpreted accordingly.
4. ARRANGEMENTS WITH THE DEBTOR AND OTHERS
The Bank may in its absolute discretion as it thinks fit and without the consent of the Guarantor and without releasing or reducing or otherwise affecting whatsoever the liability of the Guarantor under this Guarantee or the validity of the security hereby created do any of the following:
4.1 enter into, renew, vary or determine any agreement or other arrangement with the Debtor or any other person; and without prejudice to the generality of the foregoing, grant to the Debtor any new or increased facility and increase any rate of interest or charge;
4.2 renew, vary, hold over, exchange, modify, assign, release or refrain from enforcing or perfecting any present or future security from the Debtor or any other person which is now or may be held by the Bank hereafter in respect of the Debtor's Obligations;
4.3 grant time or indulgence to or compound with the Debtor or any other person;
4.4 refuse at any time without notice to the Guarantor or to the Debtor to grant any further loans or advances or credit or banking or credit facilities or other accommodation to the
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Debtor notwithstanding that the limit of this Guarantee shall not have been reached;
4.5 resort to any other means of payment of the Debtor's Obligations or any of them at any time and in any order which the Bank thinks fit;
4.6 make a demand under or enforce this Guarantee either with or without first resorting to other means of payment or to other securities and with or without making a demand from, or taking proceedings against, the Debtor or any co-surety;
And the security hereby created shall not be discharged nor shall the liability of the Guarantor under Clause 2 be affected by anything which would not have discharged, released, reduced or otherwise affected the liability of the Guarantor if the Guarantor had been Principal Debtor of the Bank instead of Guarantor.
5. ADDITIONAL SECURITY
5.1 This Guarantee shall be additional to any other security which the Bank may hold now or at any time hereafter from the Guarantor or the Debtor or from any other person in respect of the Debtor's Obligations, and shall not merge with or prejudice or otherwise affect such other security or any contractual or legal rights of the Bank.
5.2 This Guarantee and the liability of the Guarantor hereunder shall not be affected by the invalidity or unenforceability of any defect, irregularity or informality of any other security held by the Bank in respect of the Debtor's Obligations.
6. PRESERVATION OF BANK' CLAIMS AGAINST THE DEBTOR
Until all claims of the Bank in respect of the Debtor's Obligations have been discharged in full;
6.1 The Guarantor shall not be entitled to share in any security held by the Bank or money received by the Bank in respect of the Debtor's Obligations or to stand in the place of the Bank in respect of any security or money.
6.2 The Guarantor has not taken and will not take any security from the Debtor or from any co-surety in respect of this Guarantee
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without the written consent of the Bank. Any security taken by the Guarantor or by any person on behalf of the Guarantor from the Debtor or any co-surety (whether taken prior to or subsequent to the date of this Guarantee) shall be held in trust for the Bank as security for the Guarantor's liability to the Bank under this Guarantee.
6.3 If the Debtor is wound up, or reconstructed in insolvency proceedings, or the Debtor makes any composition or arrangement with his creditors, then notwithstanding any payment which may have been made under this Guarantee, the Bank may rank as creditors and prove for the full amount of the Debtor's Obligations. Any dividends or payments which the Bank may receive from the Debtor or any other person shall be taken and applied as payments in gross and shall not prejudice the right of the Bank to recover from the Guarantor to the full extent of the security hereby created the ultimate balance of the Debtor's Obligations which after the receipt of such dividends or payments, remains outstanding. The Guarantor's obligations under this Guarantee shall remain in force and the full amount hereby guaranteed shall be payable by the Guarantor until the Bank have received from all sources one hundred per cent in respect of the Debtor's Obligations.
6.4 The Guarantor shall not in competition with or in priority to the Bank seek to enforce repayment or to exercise any other rights or legal remedies of whatsoever kind which may accrue to it in respect of any amount which may have been paid by the Guarantor to the Bank hereunder, and in particular (without prejudice to the generality of the foregoing) shall not make any claim against the Debtor or any co-surety nor make any claim in the bankruptcy or liquidation of the Debtor or any co-surety nor enforce any security from or against the Debtor or any co-surety.
PROVIDED THAT on making a claim under this Guarantee the Bank may in its sole discretion instruct the Guarantor to take any of the steps referred to in Clause 6.4. The Guarantor shall comply with any such instructions at their own expenses and any monies or other benefit thereby obtained by the Guarantor shall be held in trust by the Guarantor for the Bank.
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7. PRESERVATION OF THE BANK' RIGHTS AGAINST THE GUARANTOR
7.1 Any settlement, discharge or release between the Guarantor and the Bank shall be conditional upon no security or payment to the Bank by the Debtor or any other person being avoided or reduced by virtue of any provisions or enactments relating to bankruptcy or liquidation from time to time in force. Subject to any limit in the total amount recoverable under the security hereby created, the Bank shall be entitled;
7.1.1 in the event of such avoidance or reduction, to recover the value or amount of any such security or payment from the Guarantor subsequently as if such settlement or discharge had not occurred;
7.1.2 to retain any security held by it for the Guarantor’s liability until it is satisfied that it will not have to make any repayment under such law.
8. APPROPRIATION
8.1 The Bank may appropriate all payments received in respect of the Debtor's Obligations in reduction of any part of the Debtor's obligations as the Bank decides.
8.2 After this Guarantee has been discontinued or otherwise terminated or the Bank has demanded payment from the Guarantor, the Bank may continue any account or accounts with the Debtor notwithstanding such discontinuance, termination or demand. In any event, no payment received by the Bank for the account of the Debtor after such discontinuance, termination or demand, if followed by a payment out of or debit to or any other dealings with the Debtor's account or accounts, shall be appropriated towards or deemed to be appropriated towards or have the effect of discharging any part of the Debtor's Obligations outstanding at the time of such discontinuance termination or demand.
8.3 The Bank may place to the credit of a suspense account for so long as it considers desirable any money received under this
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Guarantee without any obligation to apply it towards discharge of the Debtor's Obligations.
9. NEW ACCOUNTS
9.1 (a) If this Guarantee ceases to be continuing for any reason whatsoever, then the Bank may open a new account or accounts in the name of the Debtor.
(b) If the Bank do not open a new account or accounts pursuant to Clause 9.1(a), it shall nevertheless be treated as if it had done so at the time that this Guarantee ceases to be continuing (whether by determination, calling in or otherwise) in relation to the Debtor.
(c) As from that time, all payments made to the Bank by or on behalf of the Debtor shall be credited or be treated as having been credited to the new account or accounts and shall not operate to reduce the amount for which this Guarantee is available at that time nor shall the liability of the Guarantor under this Guarantee in any manner be reduced or affected by any subsequent transactions, receipts or payments into or out of any such accounts.
10. PAYMENTS, CURRENCIES AND TAXES
10.1 The obligation of the Guarantor shall be to make payment to the Bank in the currency in which, and at the time and place at which, the Guaranteed Liabilities are payable by the Debtor.
10.2 All payments to be made by the Guarantor hereunder shall be made in full, without any set-off, condition or counter-claim whatsoever and, subject as provided below, free and clear of any deductions or withholdings whatsoever. If at any time any applicable law, regulation or regulatory requirement of any governmental authority, monetary agency or Central Bank requires the Guarantor to make any deduction or withholding in respect of taxes, levies, duties, imposts or any charges whatsoever from any payment due hereunder for the account of the Bank, the sum due from the Guarantor in respect of such payment shall be increased to the extent necessary to ensure
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that, after the making of such deduction or withholding, the Bank receives on the due date for such payment (and retains, free from any liability in respect of such deduction or withholding) a net sum equal to the sum which it would have received had no such deduction or withholding been required to be made and the Guarantor shall indemnify the Bank against any losses or costs incurred by reason of any failure of the Guarantor to make any such deduction or withholding or by reason of any increased payment not being made on the due date for such payment. The Guarantor shall promptly deliver to the Bank any receipts, certificates or other proof evidencing the amount (if any) paid or payable in respect of any deduction or withholding as aforesaid.
11. LIEN AND SET-OFF
11.1 The Bank shall be entitled (both before and after demand hereunder) to set off the liability of the Guarantor to the Bank under this Guarantee against any credit balance on any account of the Guarantor with the Bank (subject to notice of default of the Guarantor).
11.2 Notwithstanding any term to the contrary in relation to any deposit or credit balance on any account of the Guarantor with the Bank, no such deposit or credit balance shall be repayable by the Bank to the Guarantor until all liability of the Guarantor to the Bank under this Guarantee has been discharged.
12. CERTIFICATE OF THE DEBTOR’S OBLIGATIONS
A certificate signed by officials of the Bank as to the amount of the Debtor's Obligations or the amount due from the Guarantor under this Guarantee shall be conclusive evidence of that amount save in the case of manifest error.
13. CURRENCY INDEMNITY
13.1 If, under any applicable law or regulation or pursuant to a judgment or order being made or registered against the Guarantor or the liquidation of the Guarantor or without limitation for any other reason, any payment under or in connection with this Guarantee is made or falls to be satisfied in a currency (the ‘payment currency’) other than the currency
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in which such payment is expressed to be due under or in connection with this Guarantee (the ‘contractual currency’) then, to the extent that the amount of such payment actually received by the Bank, when converted into the contractual currency at the rate of exchange, falls short of the amount due under or in connection with this Guarantee, the Guarantor, as a separate and independent obligation, shall indemnify and hold harmless the Bank against the amount of such shortfall. For the purposes of this Clause, ‘rate of exchange’ means the rate at which the Bank is able on or about the date of such payment to purchase, in accordance with its normal practice, the contractual currency with the payment currency and shall take into account (and the Guarantor shall be liable for) any premium and other costs of exchange including any taxes or duties incurred by reason of any such exchange.
14. MISCELLANEOUS
14.1 No failure, delay or other relaxation or indulgence on the part of the Bank to exercise any power, right or remedy hereunder or at law shall operate as a waiver thereof nor shall any single or any partial exercise or waiver of any such power, right or remedy, preclude its further exercise or the exercise of any other power, right or remedy.
14.2 This Guarantee shall remain binding on the Guarantor notwithstanding any change in the constitution of the Bank or its absorption in, or amalgamation with, or the acquisition of all or part of its undertaking or assets by, any other person, or any reconstruction or reorganization of any kind, to the intent that this Guarantee shall remain valid and effective in all respects in favour of any assignee, transferee or other successor in title of the Bank in the same manner as if such assignee, transferee or other successor in title had been named herein as a party instead of, or in addition to, the Bank.
15 NOTICES AND DEMANDS
15.1 Any demand made under this Guarantee shall be in writing signed by an authorised official of the Bank.
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15.2 Any such demand may be served personally on the Guarantor or left for them at their addresses or places of business last known to the Bank or sent by post or by facsimile or telex to those addresses.
15.3 If such demand is sent by post, it shall be sent by first-class or registered mail and addressed to the Guarantor at its address or place of business last known to the Bank.
15.4 Any demand which has not been served personally on the Guarantor shall be considered as having been duly made and shall be deemed to have reached the addressee on the third business day of posting, transmission, or delivery by hand at the said address, whether or not the same be later returned undelivered and notwithstanding the insolvency of the Guarantor.
15.5 Any notice of discontinuance or other notice given by the Guarantor or their personal representatives on the Bank hereunder shall be served by sending the same by first class or registered mail addressed to the addresses shown hereinabove and, in the absence of evidence to the contrary, shall be deemed to have been received by the Bank within 48 hours after posting.
16. ENTIRE AGREEMENT
This Guarantee embodies all the agreements and all the terms agreed between the parties hereto relating to the Guarantor’ liabilities to the Bank in respect of the Debtor's Obligations, and the Guarantor hereby acknowledge that there have been no representations warranties or promises made to them by or on behalf of the Bank and agree that none of the parties hereto shall be bound by any representation or promise or agreement which is not embodied herein, or any variation to the terms of this Guarantee which is not agreed by the Bank in writing.
17. LAW AND JURISDICTION
17.1This Guarantee shall be governed by and construed in accordance with Tanzanian law.
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17.2The Guarantor irrevocably agrees for the exclusive benefit of the Bank that the courts of Tanzania shall have jurisdiction to hear and determine any suit action or proceeding, and to settle any dispute, which may arise out of or in connection with this Guarantee and for such purposes hereby irrevocably submits to the jurisdiction of such courts.
17.3Nothing contained in this Clause shall limit the right of the Bank to take proceedings against any of the Guarantor in any other court of competent jurisdiction, nor shall the taking of any such proceedings in one or more jurisdictions preclude the taking of proceedings in any other jurisdiction, whether concurrently or not (unless precluded by applicable law).
17.4The Guarantor irrevocably waives any objection which it may have now or in the future to the courts of Tanzania being nominated for the purpose of this Clause on the ground of venue or otherwise and agrees not to claim that any such court is not a convenient or appropriate forum.
IN WITNESS WHEREOF THIS GUARANTEE HAS BEEN DULY EXECUTED by the GUARANTOR in manner and on the date hereinafter appearing.
SEALED with the COMMON SEAL of the )said ................................ .................... )and DELIVERED in the presence of us this )________day of ___________________ 2010 )
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Name: _______________________________
Signature: _______________________________
Postal Address: _______________________________
Qualification: _______________________________
Name: _______________________________
Signature: _______________________________
Postal Address: _______________________________
Qualification: _______________________________
SEALED with the COMMON SEAL of the said)............................................ )and DELIVERED in the presence of us this )________day of ___________________ 2010 )
Name: _______________________________
Signature: _______________________________
Postal Address: P. O. BOX ...................., DAR ES SALAAM
Qualification: _______________________________
Name: _______________________________
Signature: _______________________________
Postal Address: P. O. BOX ...................., DAR ES SALAAM
Qualification: _______________________________
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