SETTLEMENT AGREEMENT
This Agreement is made this day of 20…
Between
…… (Company No: ) a company incorporated in Malaysia and having its principal place of business …. (hereinafter referred to as “the Debtor”) of the first part
And
… (Company No: …) (formerly known as … ( a company incorporated in Malaysia and having its registered office at …. and principal place of business at …(hereinafter referred to as “the Creditor”) of the second part
And
… (Company No. ….) (formerly known as ….) a company incorporated in Malaysia and having its place of business at … (hereinafter referred to as “the Proprietor”) of the third part.
WHEREAS:
1. The Creditor had in the course of its ordinary business supplied goods to the Debtor and as at the Debtor is indebted to the Creditor together with interest in the sum of Ringgit Malaysia … (RM..) only (hereinafter referred to as “the Debt”) which made up as follows :-
Principal Sum RM………..
Interest Charged ………………………..
RM
2. The Proprietor is the registered owner of :-
(a) one (1) unit of a semi-detached factory which is erected and held under…… (hereinafter referred to as “the Property “A””).
(b) one (1) unit of a three storey shop-office which is erected on land held under ………. (hereinafter referred to as “the Property “B””).
(hereinafter collectively referred to as “the Properties”).
2. The Debtor with the consent of the Proprietor has proposed to settle the Debt due to the Creditor by transferring the Properties at a consideration of Ringgit Malaysia ………(RM…. only (hereinafter referred to as ‘the Consideration Sum”) subject to the terms and conditions herein contained.
The configuration of is as follow :-
(a) Property “A” – contra for RM………..
(b) Property “B” – contra for RM………..
3. The Property “A” and “B” are subject to restriction-in-interest that is to say the said Property cannot be transferred leased or charged (if any) without the written consent from the relevant State Authority and is free from encumbrances.
4. The Property “B” is presently charged ……… (hereinafter referred to as “the Chargee”) and Property “A” is free from all encumbrances.
5. The Proprietor shall be responsible to obtain the consent from the State Authority to transfer the Property “A” and “B” to the Creditor at the Debtor’s own costs and expenses.
6. The parties hereto have agreed to the proposal stated aforesaid subject to and upon the terms and conditions herein contained.
7. The Creditor is represented by …… of ……(hereinafter referred to as “the Creditor”s Solicitors”).
8. The Debtor is represented by …….. (hereinafter referred to as “the Debtor’s Solicitors”).
NOW THIS AGREEMENT WITNESSETH as follows :-
1. CONSIDERATION
In consideration of the Proprietor agreeing to transfer the Property “A” and “B” to the Creditor at the Consideration Sum and the redemption of the Property “B” from the Chargee not exceeding the sum of RM…….. the Creditor hereby agrees to withhold any legal action (if any) against the Debtor pending the transfer of the Property free from all encumbrances apart from the redemption in favour of the Creditor.
2. CONDITION PRECEDENT
(A) SALE AND PURCHASE AGREEMENT
The Debtor shall immediately upon signing of this Agreement cause the Proprietor to execute the Sale and Purchase Agreement and other related documents to transfer the Property “A” and “B” in favthe Creditor or their nominee or nominees.
(B) REDEMPTION OF PROPERTIES FROM THE CHARGEE (if any)
The Creditor shall redeem Property “B” from the Chargee within three (3) months from the date of receipt of the original Letter of Consent duly issued by the State Authority from the Debtor or the Proprietor. However in the event if the redemption sum due to the Chargee exceeds the sum of RM……. the Debtor shall within one (1) week from the date of request to pay up the difference of the redemption sum to the Chargee.
(C) APPLICATION FOR CONSENT TO TRANSFER FOR PROPERTY “A” and “B”
(a) The Proprietor shall immediately at the expense of the Debtor’s own costs and expenses apply to the relevant State Authority for the written consent to transfer in favour of the Creditor.
(b) The Debtor and the Proprietor shall within two (2) months from the date of this Agreement to obtain the Written Consent and deliver the same to the Creditor’s Solicitors failing which the Creditor shall grant to the Debtor and the Proprietor an extension of further one (1) month period and at the expiry of the aforesaid one (1) month period the Creditor shall be entitled, if the Creditor so decide, either to grant to the Debtor and the Proprietor an extension of such duration as the Creditor shall deem fit or alternatively terminate this Agreement by notice in writing to the Debtor and the Debtor will within fourteen (14) days from the date of such notice from the Creditor pay the Debt as stipulated in Clause 1 hereof and together with interest thereon at the rate of ten per centum (10%) per annum calculated from …… to the date of full and final settlement. The Creditor shall have the absolute right to continue or proceed with the legal proceedings against the Debtor all solicitors for the full recovery of the Debt due together with client’s costs for recovery of the Debt due pursuing the action shall be borne by the Debtor.
(c) The parties hereby agree that in the event any of the Property “A” and/or “B” consent is not obtained for any reason whatsoever within the time period as mentioned above from the relevant authorities , the completion date of the Sale and Purchase Agreement for Property “A” and “B” respectively, the interest charged by the Creditor against the Debtor shall be only on the remaining balance outstanding less the sum contra and set off for the Property at the rate of ten per centum (10%) per annum
(d) Upon the original Letter of Consent for Property “A” and “B” are being obtained by the Creditor or Creditor’s Solicitors and if there is any differential amount on the purchase price and the debt due the Creditors shall remit the same within fourteen (14) working days from the date of presentation of the transfer for Property “A” and “B” respectively at the relevant land office/registry.
(e) In the event upon both consent of Property “A” and “B” being obtained and after payment of the redemption if there is any excess sum due and owing to the Debtor by the Creditor the Creditor shall supply goods which the Debtor shall accept to contra the excess due to the Debtor by the Creditor (if any).
3. MEMORANDUM OF TRANSFER
Upon the execution of this Agreement the Debtor shall forthwith cause the Proprietor to execute the Memorandum of Transfer of the Properties in favour of the Creditor or their nominee or nominees and deliver the same to the Creditor’s Solicitors and the parties hereto hereby authorise the Creditor’s Solicitors to submit the same thereafter for adjudication upon receiving the written consent to transfer from the relevant State Authority.
The Debtor and the Proprietor shall deposit or cause to deposit the current quit rent, assessement and other utilities receipts duly settled with the Creditor’s Solicitors upon signing of this Agreement.
3. SET OFF
Upon the expiry of fourteen (14) days after the presentation of the transfer and document of title and other relevant documents for registration at the Land Registry, the Debtor’s Debt due to the Creditor shall be deemed to have been fully settled up to the said Consideration Sum PROVIDED HOWEVER that in the event the documents are rejected by the registering authority for any reason whatsoever, the Debtor’s Debt shall remain due and owing to the Creditor.
4. COSTS
Each party shall bear its own solicitors costs and the Creditor shall bear the costs of stamping this Agreement and the stamp duty on transfer of Properties. The Debtor shall bear the costs of application for consent to transfer, Discharge of Charge and other related expenses.
5. TIME
Time whenever mentioned shall be of essence of this Agreement.
6. NOTICE
Any notice or demand required to be served by either of the parties hereto to the other under the provisions of this Agreement shall be in writing and shall be deemed to have been served after the expiration of five (5) business day from the date of the notice being sent by registered post to the address of the party herein stated contained.
7. SUCCESSORS BOUND
This Agreement shall be binding on the respective successors-in-title, personal representatives and assigns of the parties hereto.
8. EFFECT OF HEADING
The headings to the clauses hereto are inserted for convenience only and shall not form part of this Agreement.
9. WAIVER
Knowledge and acquiescence by either party hereto of or in any breach of any of the conditions and covenants herein contained shall not operate as or deemed to be a waiver of such conditions or covenants or any of them and notwithstanding such knowledge and acquiescence each party hereto shall be entitled to exercise their respective rights under this Agreement and to require strict performance by the other of the terms and conditions as herein contained.
10. POWER OF THE DEBTOR AND THE PROPRIETOR
The Debtor and the Proprietor has the full power to execute this Agreement and other related documents to transfer the Properties in favour of the Creditor.
11. INTERPRETATION
In this Agreement, unless there is something in the subject or context inconsistent with such construction and unless it is expressly provided :-
(i) words importing the masculine gender shall be deemed and taken to include the feminine and neuter genders;
(ii) words in the singular number only include the plural number and vice-versa.
IN WITNESS WHEREOF the parties hereto have hereunto set their hands and seals the day and the year abovewritten.
SIGNED by )
for and on behalf of the )
Creditor in the presence of :- )
SIGNED by )
for and on behalf of the )
Debtor in the presence of :- )
SIGNED by )
for and on behalf of the )
Proprietor in the presence of :- )
