Dated this day of
SALE AND PURCHASE OF SHARES AGREEMENT
Between
…………………..
(“the Vendors”)
And
………………….
(“the Purchaser”)
AGREEMENT FOR SALE AND PURCHASE OF SHARES
THIS AGREEMENT is made on the day of
Between
…………………………………………………………….
all of the Vendors having the address of …………… (“the Vendors”);
AND
………….. of …………………….. (“the Purchaser”);
WHEREAS:-
A. ………… (“the Company”) is a company incorporated in Malaysia and having its registered office at [ ]. The Company has an authorised capital of Ringgit Malaysia… (RM …) divided into … (…..) ordinary shares of Ringgit One (RM 1.00) each and has an issued and paid-up share capital of Ringgit Malaysia …….. Only (RM ……….) divided into … (……..) ordinary shares of Ringgit One (RM 1.00) each.
B. The Company is registered as a Class “A” Contractor with {PKK} and has been issued with the following licences, copies of which are set out in Schedule 2:-
1.
2.
C. The Vendors are the legal and beneficial owners of the respective number of shares set out opposite the names of the respective vendors in Schedule 1 totalling … (…) ordinary shares of the Company (“the Sale Shares”) which represents one hundred per cent (100%) of the issued and paid up capital of the Company.
D. The Vendors are desirous of selling and the Purchaser is desirous of purchasing the Sale Shares upon the terms and conditions hereinafter set out.
E. The Vendor shall be responsible for obtaining approvals from the relevant Governmental Agency in respect of the acquisition of the Sale Shares.
IT IS AGREED as follows:-
1. Definitions
1.1 In this Agreement, unless the context otherwise requires, the following expressions shall have the following meanings:-
“Accounts” means the audited balance sheet and profit and loss account of the Company as at the Accounts Date;
“Accounts Date” means [ ] ………;
“Agreement” means this agreement for the sale and purchase of the Sale Shares, and any such modifications, variations, amendments or additions, as the Parties to this agreement may agree in writing from time to time;
“Company” means …………. Sdn Bhd;
“Company Secretary “ means [ ];
“Completion” means the day when the entire Sale Shares are transferred and registered in favour of the Purchaser or his nominee;
“Governmental Agency” means any government or governmental, semi-governmental, administrative, fiscal or judicial body, department, commission, authority, tribunal, agency or entity of Malaysia including the licencing authorities listed in Schedule 2 herein;
“Licences” means licences issued to the Company by the entities set out in Appendix 1 herein;
“Parties” means the parties to this Agreement and “Party” shall be construed accordingly;
“Partial Transfer” means the day when the events specified in Clause 4.2 occurs;
“Partial Transfer Date” means the date when the transfer of an aggregate of forty percentum (40%) of the Sale Shares in favour of the Purchaser or his nominee takes place as contemplated by Clause 4.1 of this Agreement;
“Purchase Price” means the amount Ringgit Malaysia …. (RM …) only;
“Remaining Shares” means the aggregate of sixty percentum (60%) of the Sale Shares;
“Sale Shares” means … (… ordinary shares of the Company which represents one hundred per cent (100%) of the issued and paid up capital of the Company owned by the Vendors which are to be sold to the Purchaser subject to the terms of this Agreement;
“Warranties” means all statements of fact in this Agreement;
1.2 In this Agreement, unless the context otherwise requires:
(a) words denoting the singular number include the plural and vice-versa;
(b) words denoting a gender include every gender;
(c) words denoting natural persons include bodies corporate and unincorporated;
(d) reference to clauses and schedules are to clauses and schedules to this Agreement;
(e) references to any legislation or to any provision of legislation shall include any modification or re-enactment of that legislation or any legislative provision substituted for, and all regulations and statutory instruments issued under such legislation are or provision;
(f) headings to the Clauses of this Agreement are inserted for convenience only and shall not affect the construction or interpretation of this Agreement;
(g) where a word or a phrase is defined, other parts of speech and grammatical forms of that word or phrase have corresponding meanings;
(h) references to any party to this Agreement or any other agreement or instrument shall include the party’s successors and permitted assigns;
(i) references to any agreement or instrument shall include references to such agreement or instrument as amended, novated, supplemented, varied or replaced from time to time;
(j) references to Ringgit Malaysia or “RM” shall be taken as referring to amounts in Malaysian currency;
(k) all schedules and annexures to this Agreement and its recitals and all certificates and other agreements delivered pursuant to this Agreement shall form a part of this Agreement; and
1.3 All warranties, representations, indemnities, covenants, agreements and obligations given or entered into by more than one person are given or entered into jointly and severally.
2.. Sale of the Sale Shares
2.1 Subject to the terms and conditions of this Agreement, the Vendors as legal and beneficial owner shall sell the Sale Shares to the Purchaser at the Purchase Price free from all charges, liens and encumbrance and with all rights now attached and hereafter attaching thereto and the Purchaser relying on the warranties, representations and indemnity by the Vendors herein contained shall purchase the Sale Shares upon the terms and condition herein contained.
2.2 The Purchase Price shall be paid by the Purchaser to the Vendors in the following manner:-
(a) immediately upon the execution of this Agreement, a sum of Ringgit Malaysia ……. (RM …) Only being fifteen percentum (15%) of the Purchase Price (receipt of which is hereby acknowledged by the Vendors);
(b) fourteen (14) days from the date of this Agreement or any other date as agreed to between the parties, a sum of Ringgit Malaysia …….. (RM ……) Only being thirty five percentum (35%) of the Purchase Price;
(c) on the date on which the Accounts of the Company as at the Accounts Date is extended to the Purchaser to the Purchaser’s satisfaction by the Vendors, a sum of Ringgit Malaysia … (RM…) Only being Fifty Percentum (50%) of the Purchase Price.
1.3 The parties acknowledge and agree that the value of the Sale Shares has been arrived at on a willing buyer and willing seller basis.
1.4 Subject to Clause 2.9, the Vendors hereby agree to sell and the Purchaser hereby agrees to purchase the Sale Shares provided that the Company shall at all relevant times pay to the Vendors a royalty sum calculated at the rate of one half percentum (1/2%) of all secured future (construction) contract sums payable as and when the relevant progress payment in respect of any such contract is forwarded by the relevant Employer to the Company.
1.5 The parties agree that an aggregate of Forty Percentum (40%) of the Sale Shares shall be registered in favour of the Purchaser on the Partial Transfer Date and the remaining Sixty Percentum (60%) of the Sale Shares (the “Remaining Sale Shares”) shall be duly registered in favour of the Purchaser or his nominee at the time and manner specified by the Purchaser.
1.6 In consideration of the Purchaser paying the full Purchase Price in the manner specified in Clause 2.2 above, the Vendors hereby irrevocably undertake and agree that as long as the Remaining Shares are registered in the name of the Vendors, they shall not sell, charge and/or deal with the Remaining Shares in any manner without the prior consent in writing from the Purchaser.
1.7 Subject to Clause 2.9 herein, the parties further agree that save for the demise of … or the winding up of the Company voluntary or otherwise, or in the event a material adverse change has occurred in the business, assets, liabilities, prospects or financial or trading position of the Company, … shall be paid a monthly director’s fee in the sum of Ringgit Malaysia … (RM…) only by the Company.
1.8 The Vendors hereby agree to sell and the Purchaser hereby agrees to purchase the Sale Share provided that the Vendors shall be responsible for the renewal of the existing Licences on or prior to expiry of the same from the relevant Governmental Agency.
1.9 In the event the Vendors fail to renew the Licences for any reason whatsoever other than that being attributable to any act or omission of the Company, the parties hereby agree that as of the date of such rejection by the relevant licensing authority the Vendor shall NOT be entitled to (a) payments in respect of director’s fee as set out in Clause 2.7; and (b) in respect of royalty payments made pursuant to Clause 2.3 hereabove.
3. Delivery of Documents
3.1 Immediately upon the execution of this Agreement, the Vendors shall deliver the following documents to the Company Secretary to facilitate the transfer of the Sale Shares in accordance with the terms and conditions of this Agreement:
(a) the share certificates of all the Sale Shares;
(b) the transfer forms in respect of the Sale Shares duly executed by the Vendors in respect of their respective proportions of the Sale Shares in favour of the Purchaser or its nominees;
(c) the resolution of the Board of Directors or the governing body of the Company approving the transfer and registration of the Sale Shares to the Purchaser; and
(d) such other documents as may be required to give good title to the Sale Shares and to enable the Purchaser or its nominee(s) to become the registered holders of such shares.
4. Condition Precedents for Partial Transfer
4.1 Subject to Clause 3, the conditions set out in Clause 4.2 must take place within [fourteen (14)] days from the date of this Agreement or any other date agreed in writing between the Parties .
4.2 At Partial Transfer:-
(a) the Vendors must procure that a meeting of the directors of the Company conducts the following business:
(i) remove the existing directors nominated by the Vendors save and except for …..as chairman;
(ii) appoint the persons nominated by the Purchaser to become directors of the Company;
(iii) appoint the Purchaser as the managing director of the Company;
(iv) revoke all mandates and authorities given by it to any individual to operate the bank accounts of the Company; and
(v) appoint such persons nominated by the Purchaser to become the authorised signatories of the Company’s bank accounts;
(b) the Vendors must further ensure that:
(vi) the following documents are delivered to the Company Secretary, namely:-
(A) all statutory and other books and records duly written up to date of the Company;
(B) the Company’s common seal, certificate of incorporation and all available copies of its Memorandum and Articles of Association or its constituent documents; and
(C) all other documents, titles, books, records, securities and memoranda relating to the business assets and properties of the Company;
(c) the Vendors must cause the Company Secretary to register the relevant Transfer forms in respect of an aggregate of Forty percentum (40%) of the Sale Shares in favour of the Purchaser or his nominee and further the Vendors must instruct the Company Secretary in writing to transfer the Remaining Shares in favour of the Purchaser or his nominee at the time and manner as directed by the Purchaser to the Company Secretary; and
(d) the Purchaser shall deliver to the Vendors banker’s drafts for the amount equal to …. Percentum of the Purchase Price being the sum of Ringgit Malaysia … (RM…) Only drawn in favour of the Vendors or in such other manner as the Vendors may direct in writing .
4.3 Transfer is conditional on each of the Purchaser and the Vendor complying with all of its obligations under this Clause 4. If either the Vendors or the Purchaser fails to comply with those obligations and those obligations are not waived by the other party on Transfer, then:
(a) each party must return to the other party all documents delivered to it under this Agreement;
(b) each party must repay to the other all payments and moneys received by it under this Agreement;
(c) each party must do everything reasonably required by the other party to reverse any action taken pursuant to this Agreement; and
(d) any agreement entered into in accordance with this Agreement will be of no effect,
without prejudice to any other rights any Party may have in respect of that failure.
4.4 Completion of this Agreement shall take place upon the registration of the transfer of the entire Sale Shares in favour of the Purchaser or his nominee and the Vendors hereby agree that all Warranties, representations and undertakings contained in this Agreement shall be deemed repeated immediately before Completion and relate to the facts then existing.
5. Warranties
5.1 The Vendors jointly and severally warrant and represent to and undertake with the Purchaser in respect of and as to the accuracy of all the matters set out herebelow:-
5.1.1. Vendors Authority
(a) The Vendors are fully empowered to enter into and perform this Agreement
(b) This Agreement constitutes valid and binding obligations of the Vendors in accordance with its terms.
5.1.2. Sale Shares
(a) The Vendors are the registered and beneficial owners of the Sale Shares in the respective proportions set out in Schedule 1 and is entitled to sell and transfer the full legal and beneficial ownership of the same to the Purchaser or its nominees.
5.1.3 Licenses
All necessary licenses, consents, permits and authorities (public or private):
(a) have been obtained by the Company to enable it to carry on its business effectively in the places and in the manner which such business is now carried on; and
(b) are valid and subsisting and there is no reason why any of them will be suspended, cancelled or revoked.
5.1.4. Books and Records
(a) The Company has not received any notice that any accounts, books, ledgers and financial and other records of the Company is incorrect or should be rectified.
(b) The Accounts:
(i) have been prepared in accordance with the requirements of all relevant statutes and approved accounting standards consistently applied in Malaysia;
(ii) show a true and fair view of the assets and liabilities of the Company as at the Accounts Date and the profits of the Company for the year ended on the Accounts Date;
(iii) disclose and make proper provision or reserve for or note all contingent liabilities, capital or burdensome commitments and deferred taxation; and
(iv) have been prepared adopting the same bases and policies of accounting of the Company (including depreciation) as those adopted for the purpose of preparing the audited accounts of the Company for the preceding accounting periods.
(c) The Company has complied with the provisions of the legislation relating to the establishment and regulation of corporate entities in Malaysia.
5.1.5 Material Contracts
All material contracts are in full force and effect and unamended and no material default exists in respect of such material contracts on the part of the Company and such material contracts will not require any consent or otherwise be affected by the terms of this Agreement and the performance of their terms and the Company has the capacity to perform all of its obligations under such contracts.
5.1.6. Powers of Attorney
(a) There are no powers of attorney given by the Company which are in force.
(b) No person, as agent or otherwise, is entitled or authorised to bind or commit the Company to any obligation not in the ordinary and proper course of its business.
5.1.7. Breaches of Contract
To the best of the knowledge or belief of the Vendors, the Company is not in breach of any contract to which it is party and no third party is in breach of any contract which the Company has entered into with.
5.2 The Vendors acknowledge that the Purchaser as entered into this Agreement in reliance of the Warranties, notwithstanding any investigation which the Purchaser, its agents or advisors may have made or conducted on the Company.
6. Conduct of the Company’s Business Pending Completion
6.1 The Vendors must procure that, between the date of this Agreement and upon Completion, the Company:
(a) maintains and carries on its business in the ordinary and proper course;
(b) does not carry out or perform any act or omission other than in such ordinary and proper course of business, unless with the prior written consent of the Purchaser;
(c) does not pass any resolution of directors or members, except with the prior written consent of the Purchaser;
(d) does not pay or declare any dividend (in cash or otherwise) or make any distribution
or the return of any capital to its members or pay any management fee, or similar amount, to its members of any of its related corporation of any of its members;
(e) does not issue any share, stock, security or otherwise in the Company which are convertible into shares or approve any transfer of shares in the Company or create any option, warrants or rights of whatever nature over any of the registered capital or interest in the Company;
(f) continues to carry on and manage its business in the same manner as at the date of this Agreement and in accordance with all regulations applicable to the Company and/or its shareholders;
(g) does not borrow any money, unless with the prior written consent of the Purchaser;
(h) does not effect any transaction of any kind (including the payment of any money or offsetting of any account) with or for the benefit, directly or indirectly, of the Vendors or any person in any way connected with the Vendors;
(i) does not enter into any contract or incur any liability or obligation unless with the prior written consent of the Purchaser;
(j) does not create or permit to arise any lien, charge, encumbrance, pledge, mortgage or other third party right or interest on or in respect of any of its undertaking, property or assets;
(k) does not dispose of any fixed assets ;
(l) does not enter into any long term or abnormal contract or capital commitment;
(m) does not do any thing, other than acts in the ordinary and proper course of its business, which will render its financial position to be materially less favourable than the position at the date of this Agreement;
(n) does not alter its Memorandum and Articles of Association or its constituent documents, unless such alteration is required by the relevant Governmental Agency and the consent of the Purchaser is obtained;
(o) does not make any material change to the remuneration or benefits which are now payable to its directors, officers or employees or any of them;
(p) does not engage any new employee or change the terms of any employee, unless the Purchaser first consents in writing;
(q) does not permit any lien to arise on any of its assets, except for those liens arising in the ordinary and proper course of business or by law; and
(r) does not to take any action or perform or do any deed, thing or matter which would cause the Vendors to cease becoming the registered owners of the Sale Shares.
7. Rescission and Damages
7.1 If, before or at Completion:
(a) a material adverse change has occurred in the business, assets, liabilities, prospects or financial or trading position of the Company since the Accounts Date;
(b) there is a material breach of a Warranty, which has a material and adverse effect on the value of the Sale Shares; or
(c) there is a breach by any of the Vendors of any term of this Agreement;
then the Purchaser may terminate this Agreement by giving written notice to the Vendors before or at Completion and after service of such notice the Vendors shall refund all monies paid by the Purchaser to the Vendors in respect of this Agreement and no party shall have any further obligation to buy or sell the Sale Shares.
7.2 For the purpose of Clause 7.1, the Vendors undertake with the Purchaser to disclose in writing to the Purchaser immediately of any event or circumstances which may arise or become known to it after the date of this Agreement and prior to Completion which is materially inconsistent with:
(a) any of the Warranties; or
(b) undertakings of the Vendors under this Agreement.
7.3 The Purchaser may exercise its right of rescission under Clause 7.1, without affecting any of its other rights and remedies.
8. Indemnity
8.1 Without limiting any other provision of this Agreement the Vendors jointly and severally indemnify the Purchaser against :
(a) all claims or actions made by any person against the Company, damages, liabilities, outgoings losses, costs (including legal costs on a solicitor and client basis) and expenses which the Purchaser suffers or incurs or is liable arising before Completion; and
(c) any fine, penalty or interest charged on the Company in respect of any breach before Completion;
(d) any claim for tax against the Company arising from any circumstances occurring prior to Completion .
8.2 This Clause shall remain in full force and effect notwithstanding termination of this Agreement for any reason whatsoever.
9. Breach by Purchaser
9.1 If the Purchaser defaults in the performance of its obligations contained in this Agreement, the Vendors shall be entitled to terminate this Agreement by serving a notice in writing to such effect on the Purchaser.
10. Breach by Vendors
10.1 If the Vendors breach any of its obligations under this Agreement, the Purchaser shall be entitled to take such action as may be available to the Purchaser at law or in equity or as specified in this Agreement, to enforce the terms of this Agreement and/or to claim damages which it has suffered or incurred as a result of such breach by the Vendors.
10.2 The Vendors hereby indemnify the Purchaser against all costs, charges and expenses incurred or suffered by the Purchaser (including fees, on a solicitor and client basis) in connection with the bringing of any action, suit, proceeding or claim by the Purchaser in the enforcement or attempted enforcement of the terms of this Agreement.
11. Notices
11.1 Any notice, or other communication, including, but not limited to any request, demand, consent or approval to or by a Party under this Agreement:
(a) must be in writing and in English or Bahasa Malaysia and addressed to the relevant address shown above in this Agreement.
(b) is deemed to be duly given by the sender and received by or served on the addressee:
(i) if by delivery, in person or by cable, when delivered to the addressee;
(ii) if by post, three (3) business days from and including the date of postage;
(iii) in by facsimile transmission, when received by the addressee,
but if delivery or receipt is on a day which is not a business day or is after 4.00 pm (addressee’s time) it is deemed to be duly given on the next Business Day; and
(c) can be relied on by the recipient and recipient will not be liable to any other person for any consequences of that reliance if the recipient believes it to be genuine, correct and duly authorised by the sender.
3. Miscellaneous
12.1 Further Assurance
Each Party shall take all such steps, execute all such documents and do all such acts and things as may be reasonably required by the other party to give effect to any of the transactions contemplated by this Agreement.
12.2 Entire Contract
This Agreement contains the entire agreement and understanding of the Parties with respect to the subject matter and supersedes all prior understandings and representations between the Parties with respect to the Sale Shares.
12.2 Amendments
A variation or an amendment of any term of this Agreement must be in writing and signed by the Parties.
12.3 Non-Waiver
Waiver of any breach or provision of, or any default under, this Agreement must be in writing and signed by the Party granting the waiver.
12.4 Costs
Each Party is responsible for its own legal costs incurred in relation to the preparation of this Agreement. Stamp duty in respect of this Agreement and the transfer of the Sale Shares will be borne by the Purchaser.
12.5 Time of the Essence
Time for the performance of the obligations under this Agreement, whenever stated in this Agreement, shall be of the essence.
32.6 Governing Law
This Agreement shall be governed by and construed in accordance with the laws of Malaysia.
12.9 Severability
(a) Any provision of, or the application of any provision of, this Agreement which is prohibited in any jurisdiction is, in that jurisdiction, ineffective only to the extent of that prohibition.
(b) Any provision of, or the application of any provision of this Agreement, which is void, illegal or unenforceable in any jurisdiction does not affect the validity, legality or enforceability of that provision in any other jurisdiction or of the remaining provision of this Agreement in that or any other jurisdiction.
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SCHEDULE 1
Vendors
Name Percentage No. of Shares
_________ ___________
100.00%
SCHEDULE 2
Licences
IN WITNESS WHEREOF the parties hereto have set their respective hands and seals the day and year abovewritten.
SIGNED by )
)
in the presence of:- )
SIGNED by )
)
in the presence of:- )
SIGNED by )
)
in the presence of:- )
SIGNED by )
)
in the presence of:- )
