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The Preference Share Agreement is a crucial document used when a company seeks to raise capital through the issuance of preference shares in Malaysia. This type of financing instrument is particularly relevant when companies need to attract investors while maintaining existing voting control structures, or when investors seek priority rights to dividends and capital returns. The agreement must comply with Malaysian corporate law, particularly the Companies Act 2016, and typically includes comprehensive details about share rights, dividend policies, redemption mechanisms, and investor protections. It's commonly used in various scenarios including growth capital raising, restructuring, or strategic investments, where investors require preferential rights over ordinary shareholders. The document serves as the primary reference point for the relationship between the company and its preference shareholders, defining their respective rights and obligations.

1. Parties: Identification of the Company issuing the preference shares and the Preference Shareholder(s)

2. Background: Context of the preference share issuance, including company's capital structure and purpose of the issuance

3. Definitions: Key terms used throughout the agreement, including specific definitions related to preference shares, dividend rights, and conversion terms

4. Subscription and Issue: Details of the preference shares being issued, including number, class, and subscription price

5. Preference Share Rights: Core rights attached to the preference shares, including dividend rights, capital rights, and voting rights

6. Dividend Provisions: Specific terms regarding dividend payments, including rate, frequency, and cumulative/non-cumulative nature

7. Redemption Rights: Terms and conditions for redemption of preference shares, including timing and price

8. Transfer Restrictions: Limitations and conditions on the transfer of preference shares

9. Meetings and Voting: Rights and procedures for shareholder meetings and voting arrangements

10. Events of Default: Circumstances constituting default and consequences thereof

11. Representations and Warranties: Standard declarations by both parties regarding their capacity and authority

12. Covenants: Ongoing obligations of the company and restrictions on its operations

13. Notices: Communication procedures between parties

14. Governing Law and Jurisdiction: Confirmation of Malaysian law as governing law and jurisdiction for disputes

15. General Provisions: Standard boilerplate clauses including amendments, waivers, and severability