Form 5. company shall duly pay the said sum of 30,0007. and allot the said shares pursuant to clauses 4 & 5 hereof. Meantime vendors to carry on the business. Business to belong to company from a day certain. As to assurances and things for carrying sale into effect. Vendor to procure licence to assign leaseholds. Title to leaseholds. Vendors to be indemnified against contracts, &c. Outgoings. Books of account. 9. In the meantime the business shall be carried on by the vendors in the ordinary and usual manner, so as to maintain the business as a going concern without unduly pressing sales, and no sales being made except in the ordinary way of business and at the ordinary profit. 10. As from the day of next until the time fixed for completion the vendors shall be considered to be carrying on the said business on account and for the benefit of the company. day of 11. On or at any time after the next, the vendors shall at the expense of the company execute and do all such assurances and things as may reasonably be required by the company for vesting in it the property agreed to be hereby sold, and giving to it the full benefit of the said sale. 12. The vendors shall procure from the respective landlords of the said leasehold premises any licences which may be necessary for the assignment thereof pursuant to this agreement. 13. The title to the said leasehold premises shall commence with the respective leases under which the vendors hold the same, and the company shall not call for the production of or investigate or make any objection or requisition in respect of the title of the respective lessors, or the right to grant the respective leases, and the production of a receipt for the last payment of rent accrued previously to the day of— next, shall be conclusive evidence that all the covenants and conditions in the lease under which such rent is payable have been performed and observed up to the said day of 14. The company shall indemnify the vendors against all actions and proceedings, claims and demands, in respect of the said contracts and engagements in relation to the said business, the benefit whereof is agreed to be hereby sold. 15. The company shall be entitled to the benefit of the current fire insurance of the said leasehold premises and stock in trade. 16. The vendors shall discharge all outgoings in respect of the said leasehold premises up to the day of next, and as from that day the company shall discharge the same, and such outgoings shall if necessary be apportioned for the purpose of this clause. 17. All books of account of the said firm, and all books of reference to customers, and all other books and documents of the said firm (except such as relate exclusively to the private affairs of the said firm or the individual members thereof), shall be delivered by the vendors to the company on possession being given of the premises, pursuant to the provision in that behalf hereinbefore contained, and the company shall thenceforth, subject to the following proviso, be entitled to the custody thereof, and to the use thereof for the purposes of carrying on its business, but the vendors shall have free access, at all reasonable times, to such of the said books and documents as show or relate to the outstanding book-debts and credits of the vendors, or may otherwise be requisite for enabling the vendors to collect and get in the assets of the Form 5. said firm not hereby agreed to be sold, and to liquidate the affairs thereof; Provided always that when and so soon as any of the said books of reference and other books shall cease to be necessary for the carrying on of the said business, the same shall be delivered over to the vendors, who shall thereupon become absolutely entitled thereto. 18. The vendors shall be entitled to such accommodation as they may Accommodareasonably require in the counting-house of the company, in the said tion in office to be given leasehold premises, for the purpose of collecting the book and other debts to vendors. due to the said firm in respect of the said business and liquidating the affairs thereof; and the vendors shall make all such book and other debts payable at the said premises, and at no other place, the object being to secure the continued resort of the customers of the said firm to the said premises, and so to give to the company the full benefit of the good-will of the said business. 19. Each of the vendors shall upon the request and at the costs of the company enter into a covenant with the company that he will not during the period of twenty years from the date hereof either solely [see supra, p. 11, clause 9, mutatis mutandis]. for certain 20. Each of the vendors shall, if he shall so long live, retain and hold Vendors to in his own name the whole of the shares to be allotted to him pursuant hold shares to clause 5 hereof for a period of six calendar months from the allotment period. thereof, and shall retain and hold in his own name at least 75 per cent. of the said shares for a period of five years from the time of such allotment (b). (b) Such a clause as the above is occasionally inserted. 21. Upon the adoption [supra, p. 11]. 22. If this agreement [supra, p. 12]. AS WITNESS, &c. THE SCHEDULES ABOVE REFERRED TO. SCHEDULE I. Description of leasehold premises. [See supra, clause 1.] SCHEDULE II. [Specification of chattels and effects referring to an inventory.] Sometimes upon the sale of a going concern the vendor agrees to give a limited preference to the shares taken up by the public, thus As between the holders of the 12,000 shares to be allotted to the Form 5a. vendors pursuant to clause hereof (which shares are hereinafter referred to as the vendors' shares), and the holders of the other shares in the capital of the company which have been already, or shall hereafter be Form 5a. issued not exceeding 20,000 in number (hereinafter referred to as the ordinary shares), the profits of the company, from the first day of January, 1880, to the 31st day of December, 1885, shall be applied, first in paying to the holders of the ordinary shares a cumulative preferential dividend at the rate of 6 per cent. per annum upon the amount for the time being paid up, or credited as paid up on the ordinary shares held by them respectively [not exceeding 10l. per share]. Secondly, in paying a dividend at the same rate to the holders of the vendors' shares upon the amount credited as paid up on the vendors' shares held by them respectively [and to the holders of the ordinary shares upon the amount paid up, or credited as paid up on the ordinary shares held by them respectively beyond 107. per share.] Thirdly, the surplus shall be applied in paying dividends on the ordinary shares and the vendors' shares pari passu in proportion to the amount paid up or credited as paid up thereon respectively. PROVIDED ALWAYS that where money has been paid up in advance of calls under clause of the articles of association of the company, upon the footing that the same shall carry interest, the same shall not, while carrying interest, confer a right to participate in profits under this clause. Upon each of the certificates of title issued in respect of the vendors' shares or any of them before the 31st day of December, 1885, there shall be indorsed a memorandum in the terms set forth in the schedule hereto. The memorandum will refer to the agreement, and set out the clause, and state that the shares included in the certificate form part of the vendors' shares. Sometimes the vendors of a going concern agree to give the company their services, as directors or otherwise, for a certain period. Form 6. Parties. Recitals. Agreement for sale. AGREEMENT FOR SALE to COMPANY of FOREIGN MINES. Premises to be inspected on behalf of Company. Consideration: Cash, Shares, and Debentures. Vendor to guarantee 10 per cent. on Capital for three Years. Vendor to pay Preliminary Expenses. day of AN AGREEMENT made the between A., of (hereinafter called the vendor), of the first part, and the Company, Limited (hereinafter called the company), of the other part. WHEREAS the nominal capital of the company is 200,0007., divided into 20,000 shares of 107. each; AND WHEREAS the company has been formed, among other things for the purpose of acquiring the property hereinafter described: Now IT IS HEREBY AGREED AS FOLLOWS: 1. The vendor shall sell and the company shall purchase: All and singular the lands, mills, orehouses, mines, and mining rights, hereditaments and privileges specified in the first schedule hereto: And also all the plant, machinery, stock, implements, and effects in or belonging to Form 6. the said mines, mills, and premises: behalf of the 2. The said premises shall be forthwith inspected by some competent Inspection to person to be appointed by the company, and unless such inspection shall be made on have been made and the result thereof be declared satisfactory by the company. directors of the company before the day of next, this agreement shall as from that day become void, and in such case no claim for costs, damages or otherwise shall, save as hereinafter provided, accrue either to the vendor or to the company in respect thereof (a). (a) This is a clause which, with more or less modification, is very commonly adopted. Compare with the clause in agreement of The Western of Canada Oil, Sc., Co., Carling's case, 1 C. Div. 116. Sometimes the company is given an option of having property revalued, the difference to be deducted or added to the purchase-money. Bagnall v. Carlton, 6 C. Div. 375. 3. The vendor shall make out to the satisfaction of the company or Title of its agent a good title, free from incumbrances, according to the laws in vendor. force in the state of in the United States of America, to the said premises; And, before the day of next, shall transfer the same premises or procure the same to be transferred to the company or its nominee or nominees. Transfer. 4. The consideration for the said sale shall be the sum of 100,0007., Consideration: whereof 50,000l. shall be paid and satisfied by the allotment to the and debenshares, cash, vendor or his nominees (b) on the day of next, of 6,250 tures. shares in the company of 107. each, upon each of which the sum of 81. shall be credited on the books of the company as having been paid-up. The said 5,000 shares shall be numbered in the books of the company with the numbers (b) See supra, p. 13. to inclusive (c). (c) As to giving the number, see supra, p. 13. issue of de 5. 20,000l., further part of the said sum of 100,000l., shall be paid to As to payment the vendor on the day of next, in cash; and the residue of of cash and the said sum of 100,000l., namely, 30,0007., shall be satisfied on that bentures. day by the issue to the vendor of 600 debentures (d) for 50l. apiece, such debentures to be in the form set forth in the schedule hereto. (d) A vendor is generally desirous that the debentures should be "to bearer;" they are more saleable. For forms of debentures, &c., see infra, Form 158, et seq. The form selected may be with or without provisions for drawings on redemption. 6. Possession of the said premises shall be given to company on the Possession, day of next, and the vendor shall, in the meantime, keep the profits, and outgoings. same in good repair and condition, and shall work the said mines, mills, and premises in as full and effectual a manner as the same has been hitherto worked. As from the 1st day of last the said premises, and the produce of the said mines and mills, shall be deemed to have Form 6. belonged to the company, and as from that day all the expenses of and incident to the working thereof shall be borne and paid by the company. The vendor shall pay all expenses and outgoings in respect of the said premises and the working thereof up to the said 1st day of last, and if necessary such expenses and outgoings shall be apportioned between the vendor and the company. Guarantee of profits by vendor. Vendor to pay preliminary expenses. 7. Upon payment of the cash portion of the purchase-money the vendor (e) shall enter into a covenant with the company for the benefit of the members thereof guaranteeing that the net profits of the company in respect of the said business during each of the three years next following the day of next shall amount to not less than [10] per cent. per annum on the capital of the company for the time being employed therein, and that if there shall be a deficiency in any of the said three years the vendor, his heirs, executors, or administrators, shall immediately after the same shall have been ascertained and notice thereof given to him or them, pay to the company in trust for the members thereof the amount of such deficiency. The certificate in writing of the auditor or auditors for the time being of the company of the existence and amount of any such deficiency shall, as against the vendor, be conclusive evidence thereof for the purposes of this clause. (e) See note at foot of this precedent. 8. The vendor shall pay all the costs of and incidental to the preparation and execution of this agreement, and of the memorandum and articles of association of the company, and of the registration thereof, and of all stamps, fees, and legal expenses incident to the formation of the company, and generally of all preliminary expenses whatever incurred in relation to the company up to the incorporation thereof; and, if the result of the inspection to be made pursuant to Clause 2 hereof, shall be unsatisfactory to the company, or if the vendor shall fail to show a good title to the said premises, the vendor shall also pay the costs, charges, and expenses incurred by the company in relation to such inspection, but so that such last-mentioned costs, charges, and expenses shall not exceed —l. IN WITNESS, &c. THE SCHEDULE ABOVE REFERRED TO. [Form of Debenture.] Guarantee of Profits. It is by no means uncommon, where a going business is sold to a company, for the vendor to guarantee that the profits shall, during a limited period, amount to a particular sum. The guarantee is usually given for the benefit of the shareholders, and is stated in the prospectus as an attraction. Where the transaction is bonâ fide (i.c., is not a mere scheme for enabling the company to pay dividends out of capital) the members thereby acquire an independent right, which they will be able to rely |