Common use of Wakalah Clause in Contracts

Wakalah. A Shariah-compliant agency agreement through which an agent is appointed by a principal to carry specific tasks with or without fees; Under the Shariah principle of Wakalah, the Investor hereby irrevocably and unconditionally appoints the Company as its agent and the Company hereby accepts this appointment to represent the Investor in a Musharakah agreement with the Issuer in the Project via this Agreement, for the purpose of investing in the Project. The Company shall exercise due diligence to the best of its expertise, knowledge and skills to ensure that all the transactions in the Musharakah are Shariah-compliant. The Commitment Amount by the Investor Group is as described in Section 4 of the Appendix. The fixed Wakalah fee of the Company is as described in Section 5 of the Appendix. The Company charges service fees for facilitating the Musharakah agreement between the Investor and the Issuer, as described in Section 5 of the Appendix. The service fees will be charged upfront and will be considered as a cost for the Project, which will not reduce the capital contribution of the Investor Group in the Project. A performance incentive fee from the Projected Gross Return (if any) on Commitment Amount will be charged by the Company as described in Section 5 of the Appendix. In the event that no returns are realised, the Company will not charge any incentive fee. The Issuer promises to forego a portion of the Issuer’s own profits realised from the project to grant Investors the higher projected return. However, this will only apply if: The project makes a profit; and The Issuer is not deprived of all profits as a result of this arrangement. The Investor agrees to contribute to capital as described in Section 9 of the Appendix. In the case of loss, the Investor Group and the Issuer will bear loss proportionately to the capital contribution of each Party. Notwithstanding the above, the Issuer is liable for any loss attributed to negligence, misconduct or breach of contractual terms. The profit will be shared between the Investor Group and the Issuer based on the Profit Sharing Ratio (PSR) as described in Section 10 of the Appendix.