Japanese Share Transfer Agreement This Share Transfer Agreement (hereinafter referred to as “this Agreement”) is made and entered into by and between ●● Corporation (hereinafter referred to as the “Seller”) and ●● Corporation (hereinafter referred to as the “Buyer”) regarding transfer to the Buyer of all issued common shares of ●● Corporation (hereinafter referred to as the “Company”) held by the Seller, including all common shares of the Company which have been granted to the Seller upon the absorption-type company split from the business of ●● the Seller engages in (hereinafter referred to as the “Business”) into the Company, if any【regarding transfer from the Seller to the Buyer of all common shares of the stock company (hereinafter referred to as the “Company”) which established by the incorporation-type company split and succeeds to any rights and obligations that the Seller holds in connection with its ●● business (hereinafter referred to as the “Business”).
In consideration of the premises, the covenants, and terms and conditions herein contained, both parties hereby agree as follows:
Article 1. (Definitions)
As used herein, the following terms have the respective meanings set forth below:
(1) The term “Shares” means all of the Subject Company’s common shares (● shares) held by the Seller which are to be transferred from the Seller to the Buyer in accordance with this Agreement.
(2) The term “Share Certificate(s)” means the share certificate representing the Shares.
(3) The term “Purchase Price” means the purchase price of the Shares.
(4) The term “Closing” means the execution of transfer from the Seller to the Buyer of the Shares in accordance with the provisions in the following Article.
(5) The term “Closing Date” means the date of transfer of the Shares.
(6) The term “Company Split” means that the Seller, in accordance with Article ● of this Agreement, causes the Company to succeed the Business operated by the Seller through the procedures for the absorption-type split subject to the Absorption-Type Split Agreement (Summary Exhibit 3).
(7) The term “Absorption-Type Split Date” means the effective date of the Company Split.
(8) The term “Due Diligence” means the company survey of the Company which has been carried out by the Buyer from [Month] [Date] to [Date], 2017 with the cooperation of the Company.
Article 2. (Transfer of the Shares)
The Seller transfers to the Buyer ● shares of the Company’s common shares (the Shares) held by the Seller, and the Buyer acquires such Shares from the Seller.
Article 3. (Share Transfer and Method of Transfer)
The Closing Date shall be [Month] [Date], 2017 or the date agreed by the both parties, and the transfer of the Shares shall be carried out on the Closing Date by the Seller delivering to the Buyer the Share Certificates together with all documents set forth in each following item, in exchange for the payment of the full amount of the Transfer Price provided in the following Article.
(1) Certificate of All Historical Matters of the Seller (original)
(2) Certificate of Seal Impression of the Seller’s Representative Director (issued within one month of the execution of this Agreement) (original)
(3) Application Form for registration of this transfer of the Share in the Shareholder Registry with the signature and seal of the Seller (original)
(4) Minutes of the meeting of the Board of Directors of the t Company regarding the approval for transfer of the Share (copy with an original certificate)
(5) The Company’s Shareholder Registry immediately before the Closing (copy with an original certificate)
(6) Resignation Letters of the Company’s Representative Director, Director, and Auditor (hereinafter collectively referred to as the “Officers”) (copy)
(7) The Company’s Certificate of All Historical Matters describing the completion of the Company Split or Application Form for Registration of the Company Split with the receipt stamp of Legal Affairs Bureau affixed (copy with an original certificate)
(8) The Company’s Representative’s Seal, Seal Registration Card and original copy of Certificate of Seal Impression (issued within one month of the execution of this Agreement)
Article 4. (Transfer Price and Method of Payment)
“1. The Transfer Price of the Shares shall be as follows:
●●●●●●●● Yen (●●●● Yen per share)”
“2. Upon the Closing Date, the Buyer shall pay to the Seller the full amount of the Transfer Price set forth in the preceding paragraph in exchange for the delivery of the Share Certificates together with all documents of each item set forth in the preceding Article. The payment shall be done by money transfer into the Seller’s bank account set forth below (any bank fees incurred on such money transfer shall be borne by the Buyer): The Seller’s Bank Account
●●●● Bank ●● Branch 【Saving or Checking】Account ●●●● Account Holder ●●”
Article 5. (Conditions Precedent to Closing)
1. Subject to fulfillment of all of the following conditions as of the Closing Date, the Seller shall perform the obligation to the Buyer provided in Article 3 (the obligation to transfer the Shares). In case where all or a part of the following conditions fail to be fulfilled as of the Closing Date, the Seller may, with its own discretion, waive any right of such conditions and perform the Seller’s obligation provided in Article 3:
(1) All of the Buyer’s representations and warranties provided in Article 7 are true and accurate as of the Closing Date;
(2) There is no material breach by the Buyer of its obligations under this Agreement; and/or
(3) The legal waiting period (if the period is shortened, such shortened period, the same applied hereinafter) for notification to the Fair Trade Commission pursuant to Article 10-2 of the Antimonopoly Act (hereinafter referred to as the “Notification of Share Acquisition”) on this transfer of the Shares has elapsed, and no measures or procedures has taken by the Fair Trade Commission to prevent the execution of this transfer of the Shares (hereinafter collectively referred to as “the Cease and Desist Order, etc.”) , such as issuing of the Cease and Desist Order or pendency of procedure for such Order pursuant to the Antimonopoly Act (including delivery of any documents requiring the advance notification or submission of reports provided in Article 10-9 of the Antimonopoly Act).
2. Subject to fulfillment of all of the following conditions as of the Closing Date, the Buyer shall perform the obligation provided in Article 4, Paragraph 2 (the payment obligation of the Transfer Price). In case where all or a part of the following conditions fail to be fulfilled as of the Closing Date, the Buyer may, with its own discretion, waive any right of such conditions and perform the obligation provided in Article 4, Paragraph 2:
(1) All of the Seller’s representations and warranties provided in Article 6 are true and accurate as of the Closing Date;
(2) There is no material breach by the Seller of its obligations under this Agreement;
(3) All of the Share Certificates have been issued duly and validly by the Subject Company;【or the Company has completed the procedure of amendment of Articles of Incorporation with respect to transition to a company not issuing share certificates; 】
(4) The Company Split has taken effect by the Closing Date;
(5) The Resignation Letters of Mr. / Ms. ●●, the Representative Director and Mr. / Ms. ●●, the Auditor of the Company have been submitted to the Company;
(6) The legal waiting period for the Notification of Share Acquisition has elapsed, and no measures of Cease and Desist Order, etc. are taken by the Fair Trade Commission;
(7) This transfer of the Shares has been approved at the General Meeting of Shareholders of the Company;
(8) Obtaining permits from relevant authorities, giving notifications to relevant authorities, and any and all other procedures necessary to carry out this transfer of the Shares pursuant to laws and regulations, etc. have been duly and validly performed;
(9) None of the Subject Company’s main customers has raised an objection to continue the business with the Company after the transfer of the Shares;
(10) The Buyer, as of the Closing Date, has completed financing from any financial institutions, etc. for mainly the payment of the whole or a part of amount of the Transfer Price; and/or
(11) During the period between the execution date of this Agreement and the Closing Date, no lawsuit against or violation to laws by the Company, or no matter or event which may result in any material adverse effect on the business, assets, liabilities, financial status, operating results, cash flow or future profit planning of the Company has occurred.
Article 6. (Seller’s Representations and Warranties)
1. The Seller represents and warrants to the Buyer that each item set forth in Exhibit 1 is true and accurate as of the execution date of this Agreement and the Closing Date.
2. The Buyer’s perception or possibility of perception of the Seller’s representations and warranties in this Article shall not affect the effect of such representations and warranties, or exertion or the validity of indemnification or remedy in connection therewith.
3. The Buyer agrees without any objection that the Seller makes no representations and warranties regarding any matters, express or implied, other than matters provided expressly in this Agreement.
Article 7. (Buyer’s Representations and Warranties)
1. The Buyer represents and warrants to the Seller that each item set forth in Exhibit 2 is true and accurate as of the execution date of the Agreement and the Closing Date.
2. The Seller’s perception or possibility of perception of the Buyer’s representations and warranties in this Article shall not affect the validity of such representations and warranties, or exertion or the validity of indemnification or remedy in connection therewith.
3. The Seller agrees without any objection that the Buyer makes no representations and warranties regarding any matters, express or implied, other than matters provided expressly in the Agreement.
Article 8. (Pre-Closing Covenants)
1. Between the execution date of this Agreement and the Closing, the Seller shall conduct its business affairs and control and manage its assets with the care of a good manager in the normal manner and practically same one as it has done before the execution date of this Agreement, and, unless otherwise provided in this Agreement or prior written consent of the Buyer, shall not conduct any significant business affairs including the following one, other than the normal business affairs:
(1) Establishment of, significant change to and abolishment of Articles of Incorporation or other internal rules;
(2) Issuance of shares or disposition of treasury shares, issuance of share options, etc. or disposition of own share options, and acquisition or cancellation of treasury shares or own share options;
(3) Increase or reduction of capital or reserve funds;
(4) Merger, share exchange, share transfer, company split, assignment and acceptance of business, or other reorganization;
(5) Split or consolidation of shares;
(6) Change of business;
(7) Dividend of surplus or other disposition;
(8) Change in accounting policies or accounting practice, or change of a business year;
(9) Issuance of corporate bonds, assumption, borrowing, guarantee of obligation, or any other act to assume debts similar to the said acts;
(10) Repayment of corporate bonds, debts or borrowing (except for the Seller’s obligations under the Pooling Agreement) to the parent company and affiliated companies, or fulfillment of guarantee of obligation, or any other performance of obligation similar to the said acts;
(11) Acquisition, sale, lease, setting of security or other deposition of material assets (including intellectual property rights);
(12) Execution, change, or termination of material agreements;
(13) Commencement of a material new transaction with the Seller or its subsidiaries or affiliated companies (limited to the cases where the terms and conditions are significantly different from those of the prior transaction), or termination of existing transactions;
(14) Investment, loan or other credit granting;
(15) Waiver of material rights or agreement upon waiver of material rights;
(16) Change of the payment term of account receivable and account payable or other terms and conditions, deriving from the normal business activities;
(17) Election or dismissal of a director or an auditor, or employment or discharge of an important employee;
(18) Change of employment conditions of employees;
(19) Transfer of an employee from and to the Seller or its subsidiaries or affiliated companies;
(20) Payment of retirement allowances to the retired Officers of the Company, or agreement of such payment;
(21) Filing for or initiation of a lawsuit, arbitration, mediation, conciliation, or other judicial, administrative or alternative dispute resolution, closure of such procedures by settlement or other reason than a judicial decision, or other determinations of an material policy regarding such procedures or procedures similar thereto;
(22) Transfer of shares or equity interest by means of acquisition, sale, transfer, gift or other
(23) Dissolution, liquidation or filing petition in bankruptcy proceedings, reorganization proceedings, civil rehabilitation proceedings, or any other insolvency proceedings;
(24) Breach to the Seller’s representations and warranties set forth in Article 6; and
(25) In addition to items provided above, any acts requiring a resolution by the Company’s Board of Directors or General Meeting of Shareholders.
2. In cases where the Seller recognizes, between the execution date of this Agreement and the Closing, a lawsuit against or violation to laws by the Company, or a possibility of occurring any matters or events which may result in any material adverse effect on the business, assets, liabilities, financial status, operating results, cash flow or future profit planning of the Company, the Seller shall immediately inform the Buyer thereof.
3. In cases where, between the execution date of this Agreement and the Closing, a lawsuit against or violation to laws by the Company, or any matters or events which may result in any material adverse effect on the business, assets, liabilities, financial status, operating results, cash flow or future profit planning of the Company has occurred, the Buyer may have discussions with the Seller about the contents of this Agreement.
Article 9. (Acquisition of Approval for Transfer)
The Seller shall cause the Company to hold a Board of Directors and adopt a resolution to approve this transfer of the Shares by the Closing Date.
Article 10. (Company Split)
The Absorption-Type Company Split Date shall be separately agreed by the both parties, and, on the said date of the company split, the Seller shall cause the Company to succeed the rights and obligations owned by the Seller in connection with the Business through the absorption-type split pursuant to the Absorption-Type Split Agreement (Summary Exhibit 3).
Article 11. (Acquisition of Customer’s and Supplier’s Consent)
If, with respect to the agreement between the Company and its customer or supplier, it is necessary to obtain a prior consent from such customer or supplier regarding the transfer of the Shares pursuant to this Agreement, the Seller shall cause the Company to obtain such customer’s or supplier’s consent by the Closing Date.
Article 12. (Acquisition of Resignation Letter)
The Seller shall cause Mr. / Ms. ●●, the Representative Director and Mr. / Ms. ●●, the Auditor of the Company (hereinafter collectively referred to as the “Resigning Officers”) to submit their Resignation Letters to the Company by the Closing Date.
Article 13. (Settlement of Monetary Loan Relationship)
The Seller shall settle the monetary loan relationship between the Seller and the Company (if any) on the Closing Date.
Article 14. (Treatment of Officers)
1. Mr. / Ms. X shall resign 【 the Director or the Representative Director 】 of the Company on the Closing Date.
2. Mr. / Ms. X shall assist in carrying on the business even after his/her resignation.
3. The parties shall cause the Company to enter into an advisory contract with Mr. / Ms. X, and the terms and conditions, etc. of such contract shall be determined upon separate discussions between the Buyer and Mr. / Ms. X.
4. Any Officers of the Company other than Mr. / Ms. X shall remain being Officers for the time being, after the Closing Date, on the same positions with the same compensations (including the remuneration level and the Officer’s retirement allowance level) as those before the Closing Date.
Article 15. (Buyer’s Covenants)
1. The Buyer shall submit the Notification of Share Acquisition promptly after the execution date of this Agreement, and shall make maximum efforts for the elapse of the legal waiting period without issuance of the Cease and Desist Order, etc. by the Fair Trade Commission in connection with the Notification of Share Acquisition.
2. The Buyer shall, immediately after the Closing (by the end of the Closing Date at the latest), elect the necessary number of Directors and Auditors of the Company to satisfy the number of Officers provided in laws and regulations, etc. and Articles of Incorporation, dismiss the Resigning Officers and appoint the new Directors and Auditors, and then shall register them without delay.
3. The Buyer, whether by exercising the shareholder’s right or other, shall not pursue, or cause the Company or other third party to pursue any of the Resigning Officer’s liabilities with respect to all the acts or omissions by the Resigning Officer as an Officer of the Company.
Article 16. (Treatment of Employee)
The Buyer shall make maximum efforts to maintain employment of all employees of the Company as of the Closing Date (including part-time employees, hereinafter collectively referred to as the “Company’s Employees”) for the time being. Further, without any reason provided in the Rules of Employment of the Company, the Buyer shall not adversely change the compensation (including the wage level and retirement allowance level) of the Company’s Employees for the time being.
Article 17. (Extraordinary General Meeting of Shareholders)
On the Closing Date, the Seller shall cause the Company to hold an Extraordinary General Meeting of Shareholders and to resolve the following matters:
(1) Election of new Directors and Auditors of the Company appointed by the Buyer;
(2) Grant to Mr./Ms. X of the Officer’s retirement allowance with the amount agreed upon by the Seller and the Buyer.
Article 18. (Release of Liability for Guarantee and Cancellation of Mortgage)
With respect to the liabilities which the Seller guarantees and the mortgages which the Seller has established to secure debts and agreements of the Company, the Buyer shall, at its own cost and responsibility, engage in any necessary procedures to release the Seller from such liabilities and to cancel such mortgages, and, in cases where the creditor takes an action to pursue such liabilities or exercise such mortgages against the Seller before completion of the said procedures, the Buyer shall indemnify the Seller.
Article 19. (Non-Competition)
1. The Seller, without prior consent of the Buyer, shall not engage in, or cause its subsidiaries or affiliated companies to engage in, directly or indirectly, in any manner whatsoever, any business which is the same as or similar to any business engaged in by the Company, for the period of ● years after the Closing Date.
2. The Seller shall not solicit, or cause its subsidiaries or affiliated companies to solicit officers or employees of the Company to become an Officer or an employee of the Seller, its subsidiaries or affiliated company.
Article 20. (Confidentiality)
1. The parties shall not disclose any information of the parties to this Agreement or the Company disclosed through process of this Agreement, process of the Due Diligence, or the execution of this Agreement to any third parties other than outside experts hired by them such as audit corporations, certified public accountants, certified tax accountants, lawyers, judicial scriveners, financial advisors, etc. for the period of three (3) years after the execution date of this Agreement; provided, however, that the above obligation shall not apply to the following information:
(1) which already has been known to the receiving party at the time of disclosure by the other party;
(2) which already has been accessible to the public at the time of disclosure by the other party;
(3) which is obtained lawfully without any confidentiality obligation from the third party duly authorized to possess such information;
(4) which is required to disclose by laws and regulations;
(5) which has been requested to disclose by administrative agencies, judicial organs or stock exchanges; and
(6) which has been approved by the other party in writing to disclose it to a third party in advance.
Article 21. (Public Announcement)
The parties may publicly announce the execution of this Agreement and its contents by prior agreement of the parties on the time and details of such announcement; provided, however, that this shall not apply to the case where such announcement is carried out within the reasonable extent as required by the Financial Instruments and Exchange Act, or rules of a stock exchange, etc. by giving a prior notice to the other party of the time, details and method thereof.
Article 22. (Damages and Indemnification)
1. In case that either party commits any breach of obligations under this Agreement or Representations and Warranties, if a letter claiming for compensation or indemnification of damages, losses, liabilities, expenses (including a reasonable amount of attorney’s fee), disadvantages, etc. (hereinafter referred to as the “Damages, etc.”) is sent from the other party within ● years after the Closing Date, the violating party shall compensate or indemnify the other party for such damages, etc.
2. The amount of compensation and indemnification borne by the Seller in accordance with this Article shall not exceed the amount equivalent to ● % of the Purchase Price which the Seller has received, and the said compensation or indemnification shall be claimed only when the amount claimed for a sole fact exceeds ● yen.
Article 23. (Special Indemnification of Unpaid Wage)
In addition to the obligation under Paragraph 1 of the preceding Article, in case of a claim against the Company for the unpaid wages (including premium wages) and late payment charges which the Company is subject to pay in accordance with the status before the Closing, the Seller shall compensate the Buyer (or the Company if designated by the Buyer) for the amount equivalent to such unpaid wages (including premium wages) and late payment charges owed by the Company.
Article 24. (Termination)
1. The parties may terminate this Agreement only before the Closing Date by giving a written notice to the other party if a material breach by the other party in its representations and warranties is found and, as a result of such breach, it becomes difficult to maintain this Agreement, or a material breach by the other party in its obligations under this Agreement has failed to be remedied within two (2) weeks after giving the written warning to the violating party, or a petition in bankruptcy proceeding, civil rehabilitation proceeding, reorganization proceeding, special liquidation, or other similar legal insolvency proceedings is filed against the other party.
2. This Agreement may be terminated only in accordance with this Article, and the parties to this Agreement may not terminate this Agreement without pursuant to this Article for any legal grounds of responsibility for default, liability for defects, responsibility for unlawful conduct, legal liability or whatever.
3. Even after that this Agreement is terminated in accordance with this Article, this Article, the provisions in Article ● (Confidentiality), Article ● (Public Announcement), Article ● (Compensation and Indemnification), Article ● (Cost and Expense), Article ● (No Assignment), Article ● (Notice), Article ● (Entire Agreement), Article ● (Governing Law), Article ● (Jurisdiction), and Article ● (Good Faith Negotiation) shall survive.
Article 25. (Cost and Expense)
Unless otherwise provided in this Agreement or otherwise agreed, each the Seller and the Buyer shall bear its own expenses incurred in connection with this Agreement (including costs for attorneys, certified public accountants and other advisors).
Article 26. (No Assignment)
Unless otherwise provided in this Agreement, the parties shall not depose to any third party the whole or a part of the rights or status under this Agreement by assignment, transfer, mortgage or other measures without prior written consent of the other party.
Article 27. (Notice)
Any notice required or permitted to be given or made under this Agreement shall be effective only if such notice is given in writing or in facsimile to the following address (or any addresses notified in accordance with this Article):
“(1) If to the Seller
Address ●●●●
Company Name ●● Corporation
Contact ●●, Department of ●●
FAX ●●-●●●●-●●”
“(2) If to the Buyer
Address ●●●●
Company Name ●● Corporation
Contact ●●, Department of ●●
FAX ●●-●●●●-●●”
Article 28. (Entire Agreement)
This Agreement constitutes the entire agreement and understandings between the parties relating to the subject matters of this Agreement and supersedes all prior or contemporaneous agreements and understandings, written or oral, between the parties relating to the subject matter hereof.
Article 29. (Governing Law)
The Agreement shall be governed by and construed in accordance with the laws of Japan.
Article 30. (Jurisdiction)
The parties agree in advance that any dispute in connection with this Agreement shall be subject to the exclusive jurisdiction of the Tokyo District Court in the first instance.
Article 31. (Good Faith Negotiation)
Any matters not stipulated in this Agreement or doubts arising over the interpretation of each terms and conditions of this Agreement shall be solved through discussion and negotiation in good faith between the Seller and the Buyer in accordance with the laws and customs.
(Blank below here)
IN WITNESS WHEREOF, the Seller and the Buyer have executed this Agreement in duplicate by placing their signatures and seals thereon, and each party shall keep one (1) copy of the originals.
Dated: [ Month ] [ Day ], 2017
“Seller：Address
Company Name ●● Corporation
Representative Director ● ● ● ●”
“Buyer：Address
Company Name ●● Corporation
Representative Director ● ● ● ●” |
