Verna Goh Shilei, Student ID No.

: S9448557F, Contract Drafting Assignment Number 2

Question Number 1: In this scenario, a fraud has been carried out in which an individual stole the personal details of the CEO of the Company,
assuming his identity and under such identity, send emails to the finance controller of the Company instructing her to make several wire transfers
amounting to 10,000,000 to a bank located in China. The main issue in this scenario would be whether the Sellers have an obligation to indemnify
the Buyer the loss of 10,000,000 and in order to determine this, it is important to consider whether the Damage arose from a breach of Seller of any
of the Seller Operative Covenants, as provided under Clause 5.2(b) of the Agreement. Of particular interest to us in this scenario would be Clause 9.1
which pertains to Confidentiality of Information. In this case, the information stolen by the individual would be the personal details of the CEO of
the Company, including his email account password, would fall under the purview of Confidential Information as defined under Clause 9.1, which is
any information delivered by one Party to any other Party in connection with this Agreement that is either identified by the disclosing Party before
its disclosure to the receiving party as being confidential or that would be understood by the Parties, exercising reasonable business judgment, to be
confidential. It is thus important to determine here whether the root cause of the fraud can be traced to any illicit disclosure of Confidential Information
by the Sellers that constitutes a breach of the Seller Operative Covenant and hence imposes an obligation on the Seller to indemnify the Buyer for the
Damage arising from the breach. Here, it is unlikely that the Buyer will be able to claim an indemnification of 10,000,000 for the Sellers as firstly, it
is impossible to determine whether the fraud perpetuated is due mainly to a disclosure of the personal details of the Company CEO to any third parties,
and secondly, even if it is so, none of the obligations under Clause 9.1 of the Agreement have been breached on the facts. It is more likely due to a
fault or negligence on the part of the Buyer rather than the Seller that the individual could get hold of the information and carry out the fraud, for failing
to limit the distribution of the Confidential Information received to its or his Affiliates, his providers and potential providers of financing for the
purposes of the Transaction, his investors or potential investors and the investors or potential investors of its or his Affiliates and the officers employees,
agents, professional advisors and auditors. Thus, the Buyer is unlikely to be able to claim an indemnification from the Sellers and Founding Sellers.
Moreover, since there has not been any inaccuracy of Seller Fundamental Warranties and Operational Warranties that led to this fraud, it is unlikely
that the Damage would be indemnified by the Seller to the Buyer.

Question Number 2: The main issue to consider would be whether the Sellers and Founding Sellers are liable to the Buyer and thus have an obligation
to indemnify the Buyer in accordance with the Agreement. In order to determine this, we turn to Clause 5 of the Agreement, which provides for the
right of the Buyer to be indemnified by the Sellers pursuant to the terms, conditions, limitations and qualifications set forth. It is provided further in
Clause 5.2(a) that each Seller and the Founding Sellers would be liable to indemnify the Buyer for any Damages arising from an Inaccuracy in Seller
Fundamental Warranties (granted by each Seller in Part A of Schedule 5.2) and Seller Operational Warranties (granted by the Founding Sellers in Part
B of Schedule 5.2) respectively. As such, we examine whether any of the Seller Fundamental Warranties in Part A of Schedule 5.2 or any Seller
Operational Warranties in Part B of Schedule 5.2 have been breached. In Part B, under Clause 12, which provides for warranties relating to tax issues,
we notice that the Founding Sellers warrant under Clause 12.1, it is expressly stated that Other than as disclosed in the Data Room Documentation or
in the Disclosure Letter, each of the Companies has always (i) timely filed all tax returns required to be filed by it with any tax authority under
applicable Laws in respect of all accounting periods ended prior to the date hereof and such tax returns were correctly prepared in all material respects
in compliance with applicable Laws and (ii) duly and timely paid or provisioned in full all Taxes as reflected in such tax returns. Moreover, under
Clause 12.2, it is also provided that other than disclosed in the Data Room Documentation or in the Disclosure Letter, there are no outstanding, or
threatened in writing actions, investigations or proceedings for the assessment or collection of Taxes involving any of the Companies in respect of any
accounting period ended prior to the date hereof. According to the facts of the scenario, the Brazilian tax authorities carried out an inspection in
connection with a tax issue arising from the Brazilian subsidiary of the Company six months after the execution of the share purchase agreement. As
a result, the tax authorities have imposed a fine amounting to 2,750,000 and requested the repayment of all related due tax obligations amounting to
300,000. At first glance, the Founding Sellers appear to have breached Clause 12.1 in timely filing and preparing all tax returns in compliance with
applicable Laws and Clause 12.2, in that there is still an outstanding investigation for the assessment or collection of Taxes. However, on closer
examination, the tax issue was in fact disclosed by the Founding Sellers in the Disclosure Letter provided to the Buyer, including the potential
consequences which would be a fine amounting to 5,000,000. Thus, since the tax issue and potential fine had already been disclosed to the Buyer
upon execution, the Seller would not be liable under Clause 5 of the Agreement, when read with Clause 12 of Schedule 5.2, for the fine amounting to
2,750,000. However, for the related due tax obligations amounting to 300,000, these did not appear to be explicitly provided for in the Disclosure
Letter and thus may be considered to not have been disclosed to the Buyer. As such, this would constitute an Inaccuracy in the Warranty provided
under Clause 12.1, that all Taxes had been duly and timely paid or provisioned in full. As such, the Founding Sellers would potentially be liable to
indemnify the Buyer the 300,000 of tax obligations. To claim such liability, the procedure that the Buyer would have to undertake is provided for
under Clause 6.2 of the Agreement. Here, since the Buyer Claim is in relation to a Sellers breach of his obligation under the Seller Operative Covenants,
the Buyer will firstly, have to give notice to the Sellers of the Claim promptly within fifteen Business Days following the date on which the Buyer first
becomes aware of the existence of such a Claim. This notice would include (i) a detailed description of the relevant facts that form the basis of the
Claim, (ii) a description of the basis on which the Buyer contends that such facts constitute an Inaccuracy or breach of a Sellers obligations under the
Seller Operative Covenants, (iii) the nature and amount of the Damage suffered (including expected Damages) and (iv) copies of the documentation
supporting such Claim. Following the delivery of the Notice of Buyer Claim, the Sellers shall send a Notice of Response to the Buyer, stating whether
the Sellers accept or reject, totally or partially, the Claim. If the Sellers object, then the Sellers and the Buyer shall, during the one-month period
following the date of delivery of the Notice of Response, conduct good faith discussions to agree on a suitable redress mechanism. Finally, if no
agreement regarding the Claim is reached during the one-month period, the Buyer may submit the dispute to arbitration within sixty Business Days. If
the dispute is not submitted within sixty days, the Buyer will be deemed to have abandoned its Claim. It is also important to note the presence of Clause
5.5 in the Agreement which provides for a conditional obligation that indemnification by the Sellers is conditional upon the absence of a direct or
indirect change of Control of the Company or relevant Subsidiary resulting in the Company or Subsidiary no longer being ultimately Controlled by
the Guarantor. As such, in order for indemnification to take place, it is important to ensure that there is no direct or indirect change in Control.

Question Number 3: In this scenario, the shareholders of the SPV, which was incorporated by one of the Sellers in Luxembourg for investing in the
Company, decided to wind up the SPV in order to distribute the proceeds arising from the sale of the Company in tax efficient manner to the ultimate
investors of the venture capital entity. The main issue here is whether such a winding up of the SPV is possible or not under the share purchase
agreement, and in order to answer this question, we have to first examine the Assignment provision in the Agreement. Clause 9.4 of the Agreement
provides that the rights and obligations under the Agreement shall not be assignable, delegable or otherwise transferable by any Party without the
prior written consent of the other Parties. As such, the winding up of the SPV would constitute a breach of Clause 9.4 of the Agreement. The SPVs
only asset was the Sellers relevant stake in the Company, which has now been sold off under the Agreement to the Buyer, and the SPVs present asset
are the proceeds arising from the sale of that share of the Company. Winding up the SPV would mean that the assets, in other words, the proceeds,
would be transferred by way of legal or equitable assignment to the ultimate investors of Seller, who is a venture capital entity. As such, this would
not be permitted by Clause 9.4 of the Agreement and thus the winding up would not be possible under the Agreement. If the shareholders went ahead
and liquidated the SPV, this would constitute a breach of Clause 9.4 of the Agreement, unless the Buyer had given its prior written consent to the
Sellers. Clause 9.4 expressly states that [a]ny attempted assignment in violation of this Clause 9.4 shall be null and void. As such, the winding up or
liquidation of the SPV would be deemed null and void (regarded as it had not taken place) and all the Parties would be put back in the position as
though the winding up had not taken place. As such, the SPV would still hold proprietary interest in the assets of the Company, which in this case
would be the proceeds arising from the sale of the stake in the Company. Apart from this, the breach of Clause 9.4 by the Seller constitutes a breach
of covenant and hence according to Clause 5.2, the Seller would be liable to indemnify the Buyer for the damage he suffered as a result of the breach.