AGREEMENT FOR SALE OF THE ENTIRE SHARE-CAPITAL OF A COMPANY TO ANOTHER COMPANY 

 

Date: - ___________________

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And

 

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WHEREAS :

(1)   A B Limited (hereinafter called the company) was incorporated under the Companies Act, 1956 on the ________ day of _________ and has an authorised share capital of Rs. ___________ divided into 100 ordinary shares of Rs. 10 each all of which are fully paid (and are hereinafter collectively referred to as the existing shares).

(2)   The vendors have (in their capacity as directors of the company) revalued the freehold property belonging to the company which stands in the books of the company at Rs. __________ at the sum of Rs. ________ the surplus Rs. _________ arising thereout being transferred to capital reserve.

(3)   The company is proposing to convene an extraordinary general meeting for the following purposes: To increase the company.s authorised share capital to Rs. ________ by the creation of __________ additional ordinary shares of Rs. 10 each ranking pari passu in all respects with the existing ordinary shares.

(4)   To capitalise the sum of Rs. __________ being part of the amount standing to the credit of the company.s said capital reserve and to appropriate the sum as capital to and amongst the holders of the existing ordinary shares on condition that the sum to be paid in cash be applied in paying up in full _________ unissued ordinary shares of Rs. 10 each in the capital of the company (hereinafter called the new ordinary shares) to be allotted (by means of renounceable letters of allotment) to the holders of the existing ordinary shares in proportion to the number of existing ordinary shares held by them respectively namely nineteen new ordinary shares for every one share now held by them.

(5)   The purchasers have agreed (subject to the carrying into effect of the proposals specified in recital (3) hereof) to purchase all the existing shares and all the new ordinary shares in the company.

 

NOW IT IS HEREBY AGREED AND DECLARED as follows:

1.      The vendors shall sell or procure the sale of and the purchasers shall purchase as at the ________ day of __________ free from all charges liens and encumbrances all the existing shares (ex-the right to the new shares) and all the new ordinary shares for a consideration of Rs. __________ per share making a total of Rs. _________ and particulars of the holding by the registered shareholders of the existing shares and their entitlement to the new ordinary shares together with particulars of the monies to be paid to each of the registered shareholders on completion are as set forth in the schedule hereto.

2.      The sale and purchase of the shares hereby agreed to be made shall be completed on the ________ day of _________ at [place] by the payment to the vendors by the purchasers of the said sum of Rs. _________

 

a.       On completion the vendors shall procure the appointment to the board of the company of additional directors to be nominated by the purchasers and thereupon the existing directors of the company will resign free from any liability of the company in respect of compensation otherwise than fees salaries and expenses as previously agreed up to the date of such resignation. On completion, the vendors shall if required to procure the resignation of the secretary of the company.

b.      On completion, the vendors shall deliver to the purchasers.

                    i.      duly executed transfers in favour of the purchasers or their nominees of the existing shares together with the relevant share certificates and shall procure the said transfers to be registered;

                        ii.      letters of allotment of the new ordinary shares duly renounced by the allottees in favour of the purchasers or their nominees; and

                     iii.      the certificate of incorporation the common seal minute book combined share register and share certificate book with any unissued share certificates and all other records of the company.

3.      The vendors will maintain the goodwill of and carry on the business of the company pending completion. The purchasers hereby undertake to procure the release of the vendors from their personal guarantee in respect of the amount due on overdraft from the company at __________ Bank Limited within one week of the date of completion.

4.      Notwithstanding completion of the sale and purchase hereby agreed in accordance with the provisions hereof this agreement shall continue in full force and effect so far as it remains to be performed and the warranties contained in this agreement shall remain in full force and effect and shall bind the estates and personal representatives of the parties hereto.

 

SCHEDULE

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[Particulars of Shareholdings]

 

AS WITNESS etc.

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[Signatures of all parties]