[Member] Sale of Shares [s1005]

MyLegalWebSHAREHOLDERS AGREEMENT TEMPLATE

SAMPLE – SALE OF SHARES AGREEMENT

_______________________________________________________________________________________________________________ 

THIS AGREEMENT is made on the         day   of                                    201…

 

BETWEEN:

 

The persons whose names and addresses are as set out in the first column of Schedule 1 annexed hereto (hereinafter collectively called ‘the Vendors’);

 

AND

 

…. SDN BHD (Company No. ********) of ………..   (hereinafter  called “the Purchaser”).

 

WHEREAS:

A.                                        SDN BHD  (Company No.           ), is a company  incorporated in Malaysia and having its registered address at                                                                                                                                 (hereinafter called ‘the Company’).

B. As at the date hereof, the Company has an authorized share capital of RM***** consisting of ******* ordinary shares of RMx.00 each of which  *** of said ordinary shares have been issued and are fully paid-up.

C. The Vendors are the beneficial and registered owners of  *** ordinary   shares being the  ***% the issued and paid-up ordinary shares in the capital of the Company as stated in the second column of Schedule 1 hereof  (hereinafter called ‘the Shares’).

D. By a letter of approval issued by the Pejabat Setiausaha Kerajaan Negeri Selangor Darul Ehsan dated the ** day of ** 20** (hereinafter called “the Approval Letter”), the State Government of Negeri Selangor Darul Ehsan has approved the alienation of all that parcel of state land measuring … acres in area (excluding the 66 feet road reserve at the western side and the 50 feet road reserve at the southern side of the said land as marked in the plan annexed herewith as Schedule 5) at ………… (hereinafter called “the said Land”) to the Company. A copy of the Approval Letter is annexed herewith as Schedule 4.

E. The Vendors are desirous of selling and the Purchaser is desirous of purchasing the Shares subject to the terms and conditions hereinafter contained.

 

NOW IT IS HEREBY AGREED as follows:

 

  1. AGREEMENT TO SELL AND PURCHASE

The Vendors hereby agree to sell and the Purchaser hereby agrees to purchase the Shares free from all claims, charges, liens pledges or any other encumbrances and with all rights and advantages attaching thereto or accruing thereon as at and from the date hereof, without limitation, all bonuses, rights, dividends and other distributions declared, paid or made thereof.

 

2.   CONSIDERATION

2.1       The consideration payable for the Shares (hereinafter called “the Purchase Price”) shall be the sum of RINGGIT MALAYSIA … (RM…) only subject to the  adjustments  as provided for in  Clause 2.2

2.2       It is hereby irrevocably agreed by the parties hereto that the Purchase Price shall be calculated and adjusted in accordance with the area of the said Land to be alienated to the Company at the rate of RINGGIT MALAYSIA … (RM….) only per square feet and such adjustments of the Purchase Price shall be made in proportion to each payment as provided for in Clause 4 herein and the payments or deduction thereof shall be adjusted and paid on or before each of the respective payment dates as provided for in Clause 4 herein.

 

  1. DEFINITION AND INTERPRETATION
    3.1   In this Agreement and in the Schedules (unless the context otherwise requires);
  • expressions in the masculine shall include the feminine and neuter genders and vice versa;
  • references in the singular include the plural and vice versa;
  • words applicable to natural persons includes any body of persons  company corporation firm or partnership corporate or otherwise;
  • the words “herein”, “hereinafter”, “hereinbefore”, “hereof” and “hereinunder” and other words of similar import shall refer to this Agreement as a whole and not to any particular provision;
  • the word “including” and “in particular” are to be construed as being by way of illustration or emphasis only and not to be construed as, nor shall they take effect as limiting the generality of any foregoing words.
  • The words “other” and “otherwise” are not to be construed ejusdem generis with any foregoing words where a wider construction is possible;
  • where there are two (2) or more persons or parties included or comprised in the expression “the Purchaser” or “the Vendors” agreements covenants terms stipulations and undertakings expressed to be made by or binding upon such persons or parties shall be deemed to be made by or binding upon such persons or parties jointly and severally;
  • the terms “Ringgit” and the abbreviation “RM” shall be construed as Malaysian currency;
  • reference to provisions of any statutes or legislation includes such provisions as amended  modified or re-enacted thereof;
  • words denoting an obligation on a person or party to do any act matter or thing includes an obligation to procure that it be done and words placing a person or party under a restriction includes an obligation not to permit infringement of the restriction;
  • the words “encumbrances” denotes any mortgage charge (whether fixed or floating) pledge lien option right of pre-emption right of retention of title or any other form of security interest  or  any obligations ( including any conditional obligation) to create any of the same;
  • “the Purchaser’s Solicitors” means Messrs……… currently at ………
  • “the Vendors’ Solicitors” means ………………………………………
  • the word “Force Majeure” means circumstances reasonably beyond the control of the party concerned which render it difficult or impractical or unlawful for such party to perform its obligation under this Agreement;
  • the “Board of Directors” shall mean the parties named in Schedule 4 annexed hereto;3.2       The headings in this Agreement are inserted for convenience only and shall not be taken to be read and construed as essential parts of this Agreement nor shall they affect its construction and interpretation.
    3.3       The Schedules shall be taken read and construed as an essential part of this Agreement and shall form an integral part thereof.

 

  1. PAYMENT OF THE PURCHASE PRICE 

4.1       The Purchaser shall pay to Messrs. … currently at …  (hereinafter called “the Purchaser’s Solicitors”) as stakeholders the sum of RINGGIT MALAYSIA … (RM…)  only (hereinafter called “the Deposit”)   towards part-payment of the Purchase Price on or before  the execution of this Agreement.
4.2        The balance of the Purchase Price of RINGGIT MALAYSIA … (RM…)  only or  such amount to be calculated and adjusted in accordance with  Clause 2.2 hereinabove (hereinafter called “the Balance Purchase Price”)  shall be paid by the Purchaser to the Vendors as follows:-

  • the sum of RINGGIT MALAYSIA … (RM…) only (hereinafter called “the First Part Payment) to be settled by the Purchaser by way of contra payment of three (3) units of high costs apartments developed by the … (hereinafter called “the Developer”) of …  at the Developer’s selling price of  a value   equivalent to  the First Part Payment within one (1) month of the date of execution of this Agreement; and
  • the balance sum of RINGGIT MALAYSIA … (RM…) only or such amount to be calculated and adjusted in accordance with Clause 2.2 hereinabove (hereinafter called “the Final Payment) to be paid as follows:-
  1. the sum of RINGGIT MALAYSIA … (RM….) only at the expiry of one (1) month from the date of the Layout Plan approval by the relevant authority or within nine (9) months of the date of this Agreement, whichever is the earlier; and
  1. the balance sum of RINGGIT MALAYSIA … (RM…) only or such amount to be calculated and adjusted in accordance with  Clause 2.2 hereinabove at the expiry of two (2) months from the date of the Layout Plan approval by the relevant authority or within ten (10) months of the date of this Agreement, whichever is the earlier (hereinafter called “the Completion Date).

 

  1. DEPOSIT OF DOCUMENTS AND MATTERS INCIDENTAL THERETO
    5.1       Simultaneously upon the execution of this Agreement the Vendors shall deliver to the Purchaser’s Solicitors the following:-
  • the share certificates representing the Shares;
  • valid and registrable Memorandum of Transfer in respect of the Shares in favour of the Purchaser or its nominees duly executed by the Vendors.
  • A copy, certified as a true copy by the Chairman and the Secretary of the Company, of a resolution of the Board of Directors of the Company, which is in full force and effect, approving the transfers of the Shares to the Purchaser or  its nominee/nominees ;
  • A resolution in accordance with the Memorandum of Articles of Association of the Company approving the appointment of two (2) persons nominated by the Purchaser to the Board of Directors of the Company;
  • The undated resignation letters of all the present directors of the Company;
  • The Common Seal, the books and all the other effects of the Company as required under the Companies Act, 1985.
    5.2     The parties hereto expressly and irrevocably authorise the Purchaser’s Solicitors to release the Deposit or such amount to be adjusted in accordance with Clause 2.2 hereinabove to the Vendors after the Vendors’ due compliance of Clause 5.1 hereinabove and the Selangor State Executive Councilors’ confirmation and approval in respect of the area of the said Land and the alienation thereof.
    5.3     The Purchaser shall be entitled to forthwith effect registration of transfer of the Shares in favour of the Purchaser or its nominees.
    5.4     The Purchaser’s Solicitors are hereby expressly authorised by the Vendors to tender the said resignation letters as referred to in Clause 5.1(e) above to the Purchaser for registration and filing thereof.

 

  1. PENDING COMPLETION

With effect from the date of the execution of this Agreement hereof and pending completion of the sale and purchase of Shares the Vendors hereby agree and undertake with the Purchaser that the Vendors:

  • shall not on behalf of the company enter into any guarantee or in any way cause the current or capital assets of the Company to be depreciated or the financial position of the company to be derogated without the prior written consent of the Purchaser;
  • shall not on behalf of the Company cause the Company to enter into any contracts or obligations whatsoever or incur any capital expenditure without the prior written consent of the Purchaser;
  • shall ensure that all proceeds profits and income of the Company shall remain with the Company;
  • shall ensure that the company will not declare any dividend or issue any new shares in the Company or cause any changes in the capital structure of the company;
  • shall ensure that the directors and/or the principal employees of the Company shall not enter into any guarantee or contracts or obligations whatsoever on behalf of the Company without the prior written approval of the Purchaser;
  • shall cause the Company to permit and allow the Purchaser’s representatives to be present at the Company’s office at all reasonable times to observe  and keep records of the carrying out of  its principal business  and the Vendors shall ensure that all information particulars and other details shall be supplied whenever required or requested  for  by the Purchaser’s representatives;
  • shall ensure that subject to the provisions of this Agreement there shall be no change in the control of the Board of Directors and the Management of Company.

 

  1. BASIS OF SALE/CONDITION PRECEDENT

Notwithstanding any provision to the contrary contained herein, this sale and purchase of the Shares shall be on the basis that on the date of this Agreement and the Completion Date, the Approval Letter is still valid subsisting and unamended or altered and the area of the said Land shall be approximately Four point Five Nine (4.59) acres and the Purchase Price shall be adjusted in accordance with Clause 2.2 hereinabove.

 

  1. VENDORS’ WARRANTIES AND UNDERTAKING

The Vendors hereby jointly and severally warrant to and undertake with the Purchaser:-

  • that the provisions of this Agreement shall  have full force and effect notwithstanding the completion of the sale and purchase under this Agreement;
  • that the statements contained in the Recitals hereof are true and accurate in all respects;
  • that the position of the Company and the earnings and/or losses of the Company as at the date of this Agreement were all as respectively disclosed in and  do not differ from the disclosures made to the Purchaser;
  • no person has the right to call for the issue of any share or loan capital of the company under any option or other agreement (including conversion rights);
  • that the company is and will remain the beneficiary of the approval of alienation of the said Land;
  • that the Vendors hereby agree covenant and undertake to submit the Layout Plan for the said Land as proposed by the Purchaser immediately upon receipt thereof and to procure the relevant Authority’s written approval for the Layout Plan subject to such amendments and/or changes as may be imposed by the relevant Authority. For the purpose of interpretation of this Agreement, the endorsement on the Layout Plan by the relevant Authority shall be deemed to be approval for the Layout
  • that all proper and necessary books of account minute books registers and records which have been maintained by the Company are in its possession and contained information in accordance with generally accepted principles relating to all transactions to which the Company has been a party;
  • that the Company will not prior to  completion of the sale and purchase of the Shares hereof except with the previous written consent of the Purchaser which shall not be unreasonably withheld:
  • create, extend, grant or issue or agree to create, extend, grant or issue any mortgages, charges, debentures or other securities;
  • create or issue or agree to create or issue any share or loan capital or give or agree to give any option in respect of any share of loan capital;
  • enter into long term or abnormal contracts or capital commitments;
  • in any way depart from the ordinary course of its day to day business either as regards the nature scope or manner of conducting the same;
  • do or suffer anything whereby its financial position shall be rendered less favourable than as at the date of this Agreement;
  • pass any resolution by its members in general meeting or make any  alterations to the provisions of its Memorandum and/or Articles of Association;
  • pay or agree to pay its directors or officers or any of them any remunerations or other emoluments or benefits whatsoever other than those which have been disclosed  and  agreed to by the Purchaser;
  • knowingly permit any of its normal insurance to lapse or do anything to make any policy of insurance void or voidable;
  • that the Company is and will not be engaged in any litigation or arbitration proceedings as at the Completion Date and so far as the Vendors are aware no litigation or arbitration proceedings are pending or threatened by or against the Company except as disclosed in Schedule 2 of this Agreement;
  • that the Company has properly made all returns and provided all other information required for the purposes of every form of taxation for which the company is or could be liable and as at the date of this Agreement none of such returns is disputed by the Revenue Authorities or other authority concerned in Malaysia and the Company has made full provision for all sums due  or likely to be due to the Revenue Authorities or other authority concerned;
  • that the Company has properly accounted to the Revenue Authorities for tax chargeable on the salaries of its employees;
  • that the Company has not made any payment to or provided any benefit for any officer or employee of the Company which  is not allowable as a deduction in calculating the profits of the  Company for taxation purposes;
  • that the Vendors are not aware of any other fact or matter which renders any such information misleading or which might reasonably affect the willingness of a Purchaser to purchase the Shares on the terms (including price) of this Agreement;
  • the Vendors are the registered and beneficial owners of the  Shares  and  they are all ordinary fully paid-up shares ranking pari passu with each other.

(n)  the Shares are free from all charges liens or any other encumbrances;

(o)  that  the  Vendors have no claims demands  and/or   action    whatsoever   against  the Company whether past present future or otherwise; and

(p) on completion of this  Agreement the   Vendor    shall  have  no   more  shares   in  the Company and they have no claims or beneficial   rights   whatsoever to any   of the shares of the Company belonging to any of the shareholders of the Company.

(q) the Vendors further agree and undertake to assist the Purchaser in drawing up the latest accounts of the  Company prior to the date of this Agreement together with all the necessary  secretarial work in respect of the Company;

(r)  the Vendors hereby agree and undertake to sign execute and do all such documents deeds and things as shall be necessary for carrying the provisions of this Agreement and the take over  of the  Company into effect;

  • there are no undisclosed  latent and or other liabilities whatsoever other than that shown in the  accounts of the Company;

 

8.2 The Vendors hereby covenant with the Purchaser that the warranties representations undertakings and agreements contained herein shall remain in full force and effect and shall continue to subsist hereafter notwithstanding the completion aforesaid which will take place on the basis of the statement made herein.

8.3 Without prejudice to any other rights and remedies which the Purchaser may have in law, the Vendors hereby undertake and agree with the Purchaser that the Vendors will at all times hereinafter indemnify and keep the Purchaser indemnified fully and effectively against any loss damage and other liabilities which the Purchaser may directly or indirectly suffer or sustain as a result of or in connection with any misrepresentations or any breach of any of the representations warranties and agreements set out herein or collateral to this Agreement.

In amplification of the foregoing provisions, the Vendors hereby further agree covenant and undertake with the Purchaser to keep the Purchaser fully indemnified against any damage, deficiencies, losses, costs, liabilities and expenses (including legal fees and disbursements) which the Purchaser may suffer or sustain in consequence of or in relation to:-

(a) trade liabilities, tax liabilities and debts incurred by the Company which have not been disclosed in the books and accounts of the  Company  before and up to the date of this Agreement; and

(b) any inaccuracies, errors, misrepresentations, or breaches of warranties and/or undertakings on the part of the Vendors under the terms of this Agreement.

 

  1. DUE DILIGENCE AUDIT
  • Within Thirty (30) days from the date of this Agreement, the Purchaser shall be entitled to make a full and thorough audit of the Company’s accounts books assets and liabilities and the inspection of all books and documents of the Company (hereinafter referred to as “the Due Diligence Audit”) and the Vendors hereby undertake to supply such information necessary for the said Due Diligence Audit.
  • The Purchaser shall complete the Due Diligence Audit within twenty-one (21) days from its date of commencement. If upon completion of the Due Diligence Audit, the Company’s Accounts as compared with the results of the Due Diligence Audit shall be found to be materially inaccurate, incorrect or incomplete or fails to disclose the actual financial position of the Company as at the date of this Agreement, the Purchaser shall be entitled (but not obligated) by notice in writing to forthwith terminate this Agreement and upon such termination this Agreement shall be null and void and the Vendors shall forthwith refund the Deposit and all other monies paid by the  Purchaser  and upon such refund by the Vendors to the Purchaser  neither the Vendors nor the Purchaser hereto shall have any claims against the other save and except for any  antecedent breach.
  • For the purposes of this Agreement, a discrepancy of more than five per centum (5%) shall be deemed to be material inaccuracy.

 

  1. DEFAULT BY THE PURCHASER

In the event that the Purchaser shall fail to complete the sale and purchase of the Shares in accordance with Clause 3 hereto the Vendors shall be entitled to terminate this Agreement by giving thirty (30) days’ notice in writing to the Purchaser and this Agreement shall at the expiry of the said notice be determined and whatever monies paid herein by the Purchaser or a sum equivalent to 10% of the Purchase Price or adjusted Purchase Price, whichever shall be the lower, shall be forfeited to the Vendors as agreed  liquidated damages and other sums paid by the Purchaser to the Vendors (if any) shall be refunded  free of interest to  the Purchaser. Upon such refund by the Vendors to the Purchaser, the Purchaser shall cause the Directors nominated by the Purchaser to resign from the Board of Directors of the Company forthwith. Thereafter this Agreement shall be terminated and be null and void Provided Always that the Vendors shall not be entitled to terminate this Agreement if the Purchaser shall make good and remedy such breach within the period of the said notice.

 

  1. DEFAULT BY THE VENDORS

In the event that the Vendors shall commit any breach of this Agreement and/or that any of the representations warranties or covenants of the Vendors contained in this Agreement shall be false incorrect or misrepresented and/or that the Vendors shall fail to perform their obligations hereof on or before the Completion Date the Purchaser shall be entitled to terminate this Agreement and the Vendors shall refund the Deposit and all monies paid hereunder forthwith to the Purchaser and upon such refund by the Vendor to the Purchaser, the Purchaser shall cause the Directors nominated by it to resign from the Board of Directors of the Company forthwith without prejudice to the rights of the Purchaser to claim for any expenses incurred by the Purchaser and for the  damages and losses suffered by the Purchaser arising  out of the termination of this Agreement.

 

  1. FEES AND DISBURSEMENTS

Each party hereto shall pay their own solicitors’ costs (if any). The stamp duty and registration fees in connection with this Agreement and the transfer of the Shares shall be borne by the Purchaser.

 

  1. NO ASSIGNMENT

Neither the Vendors nor the Purchaser is entitled to assign transfer and/or deal with in any respect of its rights or benefits or obligations under this Agreement to any third party save and except with the prior written consent of the other.

 

  1. ENTIRE AGREEMENT

This Agreement constitutes the whole agreement between the parties hereto and that no variation hereof shall be effective unless made in writing and agreed by all the parties hereto.

 

  1. TIME TO BE OF THE ESSENCE

Time   whenever   mentioned in this Agreement shall be of   the essence of this Agreement.

 

  1. FURTHER DEEDS AND ACTS

The parties hereto shall execute and do and procure all other necessary persons or companies, if any, to execute and do or deliver such further deeds assurances acts and things as may    be   reasonably required for the purpose of implementing the terms and conditions of this Agreement. If for any reason the transaction hereby effected shall not be completed on the date as contemplated herein but shall by   Agreement between the parties hereto to be completed on a subsequent date   then the reference throughout this Agreement to such aforesaid contemplated date shall thereupon be substituted by reference to the actual date of completion.

 

  1. CONFIDENTIALITY

No announcement circular or other publicity relating to any matter referred to in this Agreement shall be made or issued without the prior written consent of the Purchaser and/or the Vendors.

 

  1. BINDING EFFECT OF THIS AGREEMENT

This Agreement shall be binding upon the heirs personal representatives successors-in title   and   permitted assigns as the case may be of the parties hereto.

 

  1. KNOWLEDGE OR ACQUIESCENCE

Knowledge or acquiescence by any of the parties hereto of or any breach of any of the terms   conditions and covenants herein contained shall not operate as or be deemed to be a waiver of such terms conditions or covenants or any of them and notwithstanding such knowledge or acquiescence each party hereto shall be entitled to exercise its respective rights under this Agreement and to require strict performance by the other of the terms conditions and covenants herein contained.

 

  1. SEVERABILITY

If at any time during the currency of this Agreement any terms condition stipulation provision covenant or undertaking in this Agreement is or becomes illegal void invalid prohibited or unenforceable in any respect the same shall be ineffective to the extent of such illegality voidness invalidity prohibition or inenforceability without invalidating in any manner whatsoever the remaining provisions hereof.

 

  1. NOTICES

Any notice required under this Agreement shall be treated to have been validly given if such notice is delivered by hand or sent by registered post to the party concerned at any of its addresses stated hereinabove or such other addresses notified to the other party from time to time and such notice given by registered post shall be treated to have been received in the ordinary course of post notwithstanding that such notice is returned through the post.

 

  1. TAX

The Vendors hereby undertake to bear and pay all taxes of whatsoever nature (if any) payable in respect of the sale of the Shares herein including the tax payable under the Real Property Gains Tax Act 1976 and the Vendors shall indemnify and keep the Purchaser indemnified in the event of any loss and/or damage that may be suffered by the Purchaser in respect of Real Property Gains Tax or any other tax payable by the Vendors.

 

  1. GOVERNING LAW AND JURISDICTION

This Agreement shall be governed by and construed in all respects in accordance with the laws of Malaysia and the parties irrevocably agree that the Courts of Malaysia shall have exclusive jurisdiction in respect of any dispute suit action arbitration or proceedings which may arise out of or in connection with this Agreement.

 

  1. NATURE OF AGREEMENT

24.1     This Agreement contains the whole agreement between the parties relating to the transactions provided for in this Agreement and supersedes all prior Agreements letters correspondence (if any) between the parties in respect of such matters dealt with in this Agreement whether written oral expressed or implied entered into prior to this Agreement and any such prior Agreements letters correspondence are cancelled as at the date of execution hereof but without prejudice to any rights which have already accrued to either of the parties.

24.2     Each of the parties to this Agreement acknowledges that in agreeing to enter into this Agreement it has not relied on any representations or warranties except for those contained in this Agreement.

24.3     This Agreement may be executed in any number of counterparts or duplicates each of which shall be an original   but   such   counterparts or duplicates shall together constitute but one and the same Agreement.

 

 

 

 

 

 

IN WITNESS WHEREOF the parties hereto have hereunto set their hands the day and year first above written.

 

 

SIGNED by the Vendors         )

in the presence of:                 )

)

…………………………………………

 

 

 

…………………………………………..

 

 

 

 

SIGNED by the Purchaser       )

in the presence of:                 )

)

 

……………………………………………

 

 

 

 

SCHEDULE 1

 

No.    The  Vendors      The  Shares
1  

(NRIC NO:  )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 **** ordinary shares

being ***% of the issued

and  paid-up capital of

the Company
2.  

(NRIC NO:  )

  **** ordinary shares

being ***% of the issued

and  paid-up capital of

the Company

 

 

 

 

**** ordinary shares being ****% of the issued and  paid-up capital of the Company

 

SCHEDULE 2

 

LIST OF LITIGATION CASES

 

NIL

 

SCHEDULE 3

 

BOARD OF DIRECTORS

 

(NRIC NO:  )

 

(NRIC NO:  )

 

SCHEDULE 4

 

Letter of Approval

 

SCHEDULE 5

 

Plan

 

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