Form 14. Parties. Sale. Consideration. Completion. AGREEMENT for SALE of SHIP to SINGLE SHIP COMPANY. Parties: A., B., and C., "the vendors" (1), and "the company" (2). 1. The vendors shall sell, and the company shall purchase the steamship specified in the schedule hereto, together with all the gear, stores and other effects, and the benefit of all contracts and engagemts therein mentioned. 2. The conson for the sd sale shall be 32,0007., which shall be satisfied as to 3,0007. by crediting as paid up the eight shares which, by the company's memorandum of association, the subscribers thereto (including the vendors) have agreed to take up; and as to the balance (29,0007) by the allotment to the vendors, in the proportions specified in the second schedule hereto, of the remaining fifty-six shares in the company's capital: such shares to be deemed for all purposes fully paid. Sometimes the vendors and their friends subscribe the memorandum for all the shares. 3. The purchase shall be completed on the day of - and thereupon the vendors shall transfer the sd steamship and premises to the company, free from incumbrances. The company [Form 9, cl. 10.] No duty is payable on the sale, transfer or other disposition of any ship or vessel, or interest or property therein. See Schedule to Stamp Act, 1870. 4. This agreemt shall forthwith be filed, supra, p. 15. IN WITNESS, &c. [Schedules (1) giving parlars of ship, &c.; (2) showing how shares to be apportioned.] See note to Form 104, infra. Sometimes the agreement for sale provides for the appointment of some of the vendors as managers at specified remuneration; but it seems better not to disclose this in an agreement which must be filed. Form 15. Parties. Option to pay in shares. AGREEMENT for SALE of CONCESSION to PROMOTER, who is to form Parties: A., 1; and B., 2. 1. The sd A. shall sell, and the sd B. shall purchase the concession specified in the schedule hereto, and the full benefit thereof at the price of 50,0007, whereof 7. shall forthwith be paid to the said A. by way of deposit. 2. If before the day of [the time for completion] the sd B. shall have resold the sd concession to a company duly formed under the Companies Acts, 1862 to 1883, for the purpose, inter alia, of acquiring and carrying out the sd concession, and with a nominal capital of 200,000l., divided into 20,000 shares of 107. each [and with a working capital of. at the least], the said B. shall have the option of satisfy- Form 15. ing any part of the balance of the purchase-money not exceeding 40,0007, by procuring the allotment or transfer to the sd A. of fully paid-up shares in such company to be treated as of par value. 3. The said A. shall show a good title to the sd concession in himself Title. or some other person willing and bound to convey by his direction, and shall prove that the concession is valid and in full force, and shall duly transfer the same to the sd B. or his nomince at or before the time for completion hereinafter fixed. 4. The purchase shall be completed on the day of next, at Completion. or at such other place in the city of London as the sd B. shall fix, and thereupon the purchase-money shall be paid or satisfied as hereinbefore provided. 5. The sd B. shall before the time hereinbefore fixed for completion Report ofagent. appoint some competent agent in to examine and report on the title to the sd concession and to certify the transfer thereof, and a telegram from such agent stating that the title is satisfactory and that the transfer is complete shall be sufficient evidence of the facts. 6. The said B. may at any time before the day of next, by Rescission. notice in writing to the sd A., annul the sale, and if the said purchasemoney shall not be paid or satisfied at the time and in manner aforesaid, then and in such case the sd A. may at any time afterwards by notice in writing to the sd B. annul the sale. deposit. 7. If the sale is annulled under this clause the deposit shall be for- Forfeiture of feited to the sd A., and neither party shall have any claim against the other for expenses, damages, or otherwise. IN WITNESS, &c. [The Schedule containing particulars of concession.] Not uncommonly an agreement as above is made without any provision for a deposit, so that practically it imposes no liability on the purchaser. The promoter, having secured the agreement, forms his company, and enters into an agreement with the company for the sale of the concession at an advance in price. There is no objection to such an arrangement, provided that due disclosure is made to the company. But great care must be taken in framing the prospectus. Ross v. Estates Investment Co., 3 Ch. 689. Remuneration of Promoters. In most cases the promoters of a company expect liberal remuneration for their services, and sometimes it is fairly deserved: nor is there any objection thereto, provided that due disclosure is made to the company. The mode of remuneration is usually settled by the promoters themselves, and the following are several of the modes commonly adopted : (1.) The promoters purchase, or agree to purchase, property and sell it at a profit to the company. (2.) The promoters undertake to form a company and procure it to purchase property, and the owner agrees to give them a commission payable either in cash or in paid-up shares. The contract with the company should recite the agreement. D Form 15. (3.) The promoters agree to pay the preliminary expenses, or to place a certain number of shares, in consideration whereof the company agrees to allow them a commission. (4.) The capital consists, in part, of a small number of shares-e. g., 100 of 11. (5.) The promoters agree to pay the preliminary expenses, &c., in con- (7.) The articles of association authorise or direct the directors to pay a In determining the mode of remuneration, it should be borne in mind that (a.) Disclosure is essential [see infra, p. 239]: (b.) It should be seen that the executive of the company is independent : (d.) The remuneration should not be excessive, otherwise it will invite hostile Form 16. AGREEMENT by PROMOTER to PAY preliminary EXPENSES in consideration of part of the VENDOR'S SHARES. Parties. What B. to do. Parties, A., 1; B., 2. WHEREAS, the said A. has entered into an agreement (hereinafter called the scheduled contract) with the Limited (hereinafter called the company), for the sale of certain patents and other property to the company in consideration of 20,0007., whereof 15,0007. is to be satisfied by the allotment to the sd A. of 1,500 fully paid-up 107. shares in the capital of the company: AND WHEREAS by the scheduled contract it is among other things provided that the sd A. shall pay all the preliminary expenses, that is to say, &c., down to the first allotment of shares: AND WHEREAS the prospectus, a copy of which is hereunto annexed, has been approved by the board of directors of the company, and the sd A. has obtained their authority to advertise the same at his own expense. NOW THEREFORE IT IS AGREED as follows: 1. The sd B. shall advertise and circulate the said prospectus in accordance with the scheme set forth in the schedule hereto, and shall use his best endeavours to induce persons to apply for shares in the Form 16. company. 2. The said B. shall pay all the preliminary expenses of the company Further. specified in the scheduled contract, and shall indemnify the sd A. against all proceedings, claims, and demands in respect thereof. 3. If the sd B. shall duly perform his obligations under clauses 1 and Consideration. 2 hereof he shall be entitled to of the said 1,500 fully paid-up shares, and the sd A. will procure the company to allot the same to him accordingly. 4. Unless before the day of next shares at the least Conditions. in the capital of the company shall have been taken up the sd B. shall forfeit all claim to the sd fully paid-up shares, and, save as hereinbefore expressly provided, the sd B. shall not be entitled to any remuneration for his services in respect of the premises. IN WITNESS, &c. [Schedule.] AGREEMENT with PROMOTER to pay PRELIMINARY EXPENSES in con- Form 17. sideration of COMMISSION. AN AGREEMENT, &c. Parties: Company, 1; A., 2: WHEREBY IT IS AGREED AS FOLLOWS: Parties. WHEREAS a prospectus of the company (whereof a copy is hereunto Recital. annexed) is about to be published and circulated in accordance with the scheme set forth in the schedule hereto : NOW THEREFORE IT IS AGREED AS FOLLOWS: expenses. 1. The sd A. shall pay all the preliminary expenses of the company, A. to pay the that is to say, all the costs, charges, and expenses of and incidental to preliminary the preparation of the sd prospectus and the publication and circulation thereof in accordance with the sd scheme, and of and incident to the preparation, execution, and registration of the company's memorandum and articles of association, and of these presents, and all other expenses of and incident to the establishment of the company down to the first allotment of shares therein, or if the directors of the company, shall within the period of weeks from the date hereof resolve not to proceed to allotment then down to the date of such resolution: [PROVIDED THAT the company shall be bound to proceed to allotment if more than shares are bonâ fide applied for within the sd period]. And the sd A. shall indemnify the company and the directors thereof from and against all proceedings, claims, and demands in respect of the sd preliminary expenses. 2. In consideration of the premises the company shall, within 14 days Consideration. after the first allotment of shares, pay to the said A. a commission at the rate of [1] per cent. on the nominal capital of the company, viz., Form 17.7., but in the event of such resolution as aforesaid being passed the sd A. shall not be entitled to any remuneration in respect of the premises. IN WITNESS, &c. [Schedule: showing the newspapers in which advertisements are to appear, the minimum number in each, and the number of prospectuses to be circulated, &c.] It is a common thing to enter into an agreement as above, but the commission ought to be moderate, otherwise questions of ultra vires may be raised. Guiness v. Land Corp., 22 C. Div. 383. Form 18. AGREEMENT by PROMOTER to guarantee the PLACING of TWO-THIRDS of the CAPITAL in consideration of FOUNDERS' SHARES. Parties. Guarantee. Further provision. Consideration. AN AGREEMENT. Parties: Company, 1; A., 2: WHEREAS the capital of the company is 7., divided into ordinary shares of -7. each and 200 founders' shares of 17. each: AND WHEREAS a prospectus, &c. [as in Form -]: NOW THEREFORE IT IS AGREED AS FOLLOWS: 1. The said A. hereby guarantees that two-thirds at the least of the said ordinary shares shall be bonâ fide applied for in accordance with the terms of the said prospectus before the day of day of 2. If two-thirds of the sd shares at the least shall not have been so applied for before the sd the sd A. will, within days afterwards, take or cause to be taken on the terms of the sd prospectus so many of the sd ordinary shares as with those then already applied for as aforesaid shall make up the sd two-thirds. sd day of 3. In consideration of the premises the company shall, provided that two-thirds of the sd ordinary shares are bona fide applied for upon the terms aforesaid before the day of, immediately after the allot to the sd A. or his nominees the sd 200 founders' shares, which shall be considered for all purposes fully paid up [or, and the sd A. will, on such allotment being made, pay or cause to be paid to the company the full sum of 17. per share in respect of each of the sd founders' shares]. IN WITNESS, &c. |