Guarantor Indemnity Agreement Template for Malaysia

The Guarantor Indemnity Agreement is a fundamental document in Malaysian commercial and financial transactions, commonly used when additional security is required for loans, financial facilities, or other commercial obligations. It is particularly relevant when a creditor requires additional comfort beyond the principal debtor's covenant. The document combines both guarantee and indemnity provisions to provide maximum protection for the creditor, ensuring they have recourse to the guarantor in case of the principal debtor's default or inability to perform. This agreement is governed by Malaysian law, including the Contracts Act 1950, Civil Law Act 1956, and relevant banking regulations where applicable. It typically includes comprehensive provisions regarding the scope of guaranteed obligations, payment terms, representations and warranties, and enforcement mechanisms.

1. Parties: Identifies and defines the creditor, guarantor, and principal debtor (the party whose obligations are being guaranteed)

2. Background: Sets out the context of the guarantee and indemnity, including reference to the principal agreement or facility

3. Definitions and Interpretation: Defines key terms and establishes interpretation rules for the agreement

4. Guarantee: Details the guarantor's obligations to pay and perform the guaranteed obligations

5. Indemnity: Sets out the guarantor's obligation to indemnify the creditor against losses

6. Nature and Preservation of Liability: Establishes that the guarantee and indemnity are continuing obligations and survive various events

7. Representations and Warranties: Guarantor's confirmations regarding capacity, authority, and financial condition

8. Payment Provisions: Details of how and when payments must be made, including provisions for taxes and set-off

9. Costs and Expenses: Allocation of costs related to preparation, enforcement, and preservation of the guarantee

10. Governing Law and Jurisdiction: Specifies Malaysian law as governing law and establishes jurisdiction for disputes