EXPLANATORY NOTES FOR THE AGREEMENT FOR THE SALE OF SHARES AND CLAIMS ON LOAN ACCOUNT (ALL COMPANIES) WHERE THE PURCHASER IS NOT A SHAREHOLDER AND WHERE THE UNDERLYING ASSET IS A BUSINESS ONLY. THIS AGREEMENT HAS A RESTRAINT OF TRADE BUILT INTO IT.
This is a “Sale of Shares Agreement (underlying asset is a business)” with a restraint of trade built into it. The restraint of trade is to protect the purchaser’s proprietary interests in respect of the underlying business.
This is a very detailed agreement that may be used where a shareholder in a private or unlisted public company is selling his/her/its shares in such company to a party that is not an existing shareholder. Certain individuals may be subject to a restraint of trade and are also parties to the agreement.
The agreement is drafted to cater for a situation where there are remaining current shareholders in the company and also where there are no remaining current shareholders. Detailed drafting notes assist with making the necessary changes.
This agreement is for use where the company – whose shares are being sold- owns an underlying business.
NOTE: this is an agreement for the sale of shares only and NOT for the sale of a business. HOWEVER, as this agreement caters for a situation where the company (in which shares are being sold) owns a business, this agreement requires that the seller provide the purchaser with certain undertakings in respect of the business as well as the shares and the claims on loan account.
This agreement is subject to suspensive conditions; please consider whether competition commission and TRP approval is required. Also please pay attention to our extensive drafting notes in the agreement regarding suspensive conditions.
PLEASE NOTE this agreement must be used in conjunction either with the unilaterally-applicable confidentiality undertaking that the seller may require of the purchaser, or the bi-laterally applicable confidentiality agreement that both parties may require of each other; both of the latter legal documents are available for sale on this site and their conclusion is a suspensive condition of the sale of shares agreement. Please ensure that the necessary confidentiality document is purchased and executed PRIOR to the conclusion of the sale of shares agreement. Please also ensure that the necessary individual confidentiality undertaking is purchased.
IT IS NECESSARY to ensure that the relevant confidentiality arrangements are in place, especially if the transaction does not go through. All necessary confidentiality undertakings (both corporate and individual) as well as confidentiality agreements are available for sale on this site at nominal prices.
AGAIN WE REITERATE that you may see clauses and appendices in this agreement that typically reside in a sale of business agreement; the reason for such is that we require that the seller provide certain undertakings concerning the business owned by the company, the shares of which are being sold; further there are suspensive conditions in the agreement relating to the business and due diligences in respect thereof; drafting the agreement as we have ensure that the purchaser is protected and performs the necessary checks.
This SALE OF SHARES AND CLAIMS AGREEMENT (underlying asset is a business):
is legally substantive (20 pages in total; 1.5 spacing); please feel free to look at the explanatory notes below and compare the substance of this agreement to others for sale elsewhere);
has pages numbered;
is fully justified;
is typed up using Bookman Old Style font, size 11;
has been meticulously spell-checked;
is extremely professional in its appearance;
has several drafting notes therein to guide a legal practitioner;
may be printed onto 20 A4 pages. (In the interests of the environment, it is suggested that the agreement be printed back to back on 10 pages.). Single line pacing is used herein and you may wish to increase such.
This SALE OF SHARES AND CLAIMS AGREEMENT (underlying asset is a business) contains the following clauses:
2. DEFINITIONS AND INTERPRETATION
4. SUSPENSIVE CONDITIONS
5. GOOD FAITH
6. SALE OF SHARES AND CLAIMS
7. PURCHASE CONSIDERATION AND PAYMENT
9. CESSION, ASSIGNMENT AND DELEGATION OF THE CLAIMS
10. WARRANTIES CONCERNING THE SUBJECT SHARES, THE CLAIMS AND THE BUSINESS
12. RESTRAINT OF TRADE
14. AGENT OR TRUSTEE
15. RESOLUTION AND AUTHORISATIES
18. DOMICILIUM AND NOTICES
APPENDIX 1: MARKS, BRANDS AND DESIGNS
APPENDIX 2: LEASED ASSETS
APPENDIX 3: FIXED ASSETS
Please read carefully through the agreement and fill in all missing details; in preparing a signature document, please have regard to all the notes we have placed therein to assist you with the conclusion of a professional, legally binding agreement.