I beg to apply for debentures of the above issue in the terms of the prospectus issued by you, dated, &c., on which I have pd the required deposit of 107. per debenture; and I undertake to accept the same or any less number you may allot to me, and to make the remaining paymts in respect thereof* at the dates specified in the sd prospectus. Your obedient servant,

Names
Address
Occupation
Date

* If you desire to pay in full on allotment, the words "the dates specified in the said prospectus" should be struck out, and the words " on allotment under discount substituted.

The following is a provisional certificate in the ordinary form. It is probably a negotiable instrument by the law merchant. Rumball v. Metropolitan Bank, 2 Q. B. Div. 194.

Form 222.

THIS IS TO CERTIFY that the above-named co have received the sum of 207. upon each of the sd debentures, and that on paymt of the remaining instalmts as below mentd, the bearer will be entled to receive debentures of the sd issue, each for 501.

The remaining instalmts on each debenture are to be pd at the bankers of the co as follows:

On the th June next 107. debenture.

per

On the th July next 107. per debenture.

On the th July next 107. per debenture.

Failure to pay any instalmt when due will render the previous paymts liable to forfeiture.

Form 223.

of

The remaining instalmts may be pd in full under discount at the rate p. c. p. a. on any day on which an instalmt falls due.

London,

For the co,

Secretary.

--, Street, E.C., 1st, 1877.

Annexed to the above certificate, will be receipts for future instalments, as follows:

Form 224.

Prospectus of debenture

stock tenders.

The

Co, Limtd, Four P. C. Mtge Debenture Stock.

The directors invite tenders for the unissued balance, about
the co's debenture stock. This stock bears interest at the rate of
c. p. a., payable half yearly on the -

of—, and

of

each year. The pchase money for the stock will be payable on the

1. of

--

p.

in

The stock will be allotted in amounts of not less than 1007. to the highest bidders (but no less price than 967. for each 1007. stock will be accepted), and the stock will be registered in the names of the applicants or their nominees free of expense.

Tenders sealed up and marked "Tender for Debenture Stock," must be sent to the undersigned at this office not later than 10 a.m. on the of, and may be made in the following form, or if desired, printed forms of tender may be obtained on applicon.

I hby tender for -7. 4 p. c. debenture stock of the co, at the price of 1. for each 1007. stock, and I undertake to accept the sd stock or any less amount that may be allotted to me, and to pay the pchase money to the co's bankers on or before the

(Name, address, and description in full.)

Note.-Letters of allotmt of stock will be sent by post on or before

redemption of the sd stock and the paymt of the interest thereon is secured by an indre dated, &c., and made, &c.

The stock is issued subject to the conditions specified in the sd indre given, &c.

Within the last few years a good many companies, registered under the Act of 1862, have taken to raising money by the issue of debenture stock. The stock is sometimes issued on the terms that it is to be redeemed at a fixed date, but is more commonly [supra, p. 258] made and called “ perpetual." It is usually secured by a trust deed, whereby the company covenants to redeem the stock in due course, and to pay the interest, and generally to observe the conditions on which the stock is issued. And in most cases the deed makes the company's property, or some part of it, a security for the payment of the stock.

Prior to the Bills of Sale Act, 1882, the deed could be so framed as to make the stock a charge by way of floating security on the whole assets of the company, present and future, including personal chattels, without any necessity for registration as a bill of sale; but since that Act came into operation, this can no longer be done, when the company is possessed of personal chattels, subject to the above Act. [See supra, p. 261.]

Nor can the difficulty be met, as in the case of debentures, by inserting a charge in the certificate; for the certificate is not a debenture within the meaning of s. 17 [supra, p. 261] of the Act.

Accordingly, where it is desired to raise money on the security of a floating charge on the assets, and those assets consist, and are likely to consist to any great extent of personal chattels subject to the Act, debentures (perpetual or terminable), seem preferable to debenture stock.

If, however, in any such case it should be considered that a security, called "debenture stock," would be more attractive than debentures, there would not seem to be any objection to creating a so-called debenture stock, to be represented by debentures instead of certificates; for in the case of a company registered under the Act of 1862 debenture stock" has no technical meaning; and, accordingly, if a company likes to create what it chooses to call a debenture stock, and to declare that it shall be represented by debentures, there can be no objection to such a course.

Where this course is adopted, the debentures will be headed

Forming pt of an issue of 100,000l. First Mtge Debenture Stock."

or otherwise as the circumstances may require, and the resolutions authorising the issue of the debentures, will purport to create a debenture stock, of the nominal amount of [100,000l.], to be represented by debentures in the form which has already been proposed, and is identified; and the adoption of this course removes the difficulty as to the Bills of Sale Act, 1882, for a charge can be insisted on the debentures by way of floating security. Supra, p. 262. For resolutions as to the creation of debenture stock, see supra, p. 202. Where debenture stock, represented by certificates (not debentures), is to be issued, the following conditions can be adopted, with such modifications as the circumstances require :

Form 225.

Debenture stock certifi

cate.

Form 226.

Redemption.

Interest.

Ordinary certificates.

Fees.

Registered holder to be deemed absolute owner.

Survivorship.

Transfer.

CONDITIONS AS TO THE ISSUE OF DEBENTURE STOCK.

,

The following are the conditions upon which the mtge debenture stock of the nominal amount of 100,000l., created by special resolution of The Co, Limtd, passed and confirmed at general meetings thereof held respively on the day of and the day of will be issued ::1. The stock will be redeemed at par on the day of 1890, upon which day the co will, subject to these conditions, pay to the several holders of the stock, the full nominal amount of their respive shares therein. Such paymts will be made at the registered office of the co.

و

18

pay to

2. In the meantime the co will, as from the day of the holders of the stock, interest on their respive shares therein, at the rate of 8 p. c. p. a. Such interest will be paid half-yearly, on the day of

and
day of

day of

3. Every holder of a share in the stock will be entled to a certificate under the seal of the co, stating the amount of the stock held by him.

4. There shall be pd to the co for every such certificate the sum of 1s.

5. The co will recognise the registered holder of any share of registered stock as the absolute owner thereof, and shall not be bound to take notice or see to the execution of any trust, whether express, implied, or constructive, to which such share of stock may be subject; and the receipt of such person for the interest from time to time accruing due in respect thereof, and for any monies payable upon the redemption of the same shall be a good discharge to the co, notwithstanding any notice it may have, whether express or otherwise, of the right, title, interest, or claim of any other person to or in such share of stock or monies.

6. In case of the death of any one of the joint holders of any registered stock the survivor will be the only person recognised by the co as having any title to or interest in such stock. The dissolution of a body corporate shall, for the ppose of this clause, be treated as its death.

7. Every holder of registered stock will be entled to transfer the same or any pt thereof by an instrumt in writing in the form following, and as near thereto as the circes will admit.

Execution of transfer.

Transfer to be left at office,

&c.

And will be retained.

Fees on transfer.

I, in conson of the sum of pd to me by , do hby transfer to the sd (hereinafter called the transferee) -l., of the mtge debenture stock of the above-named co standing [or, pt of the stock standing] in my name in books of the sd co, to hold the same unto the transferee, subject to the several conditions on which I held the same immediately before the exe cution hereof. And I, the transferee, do hby agree to take the sd stock, subject to the same conditions.

8. Every such instrumt must be executed, both by the transferor and transferee, and the transferor shall be deemed to remain owner of such stock until the name of the transferee is entered in the register (hereinafter mentd) in respect thereof.

9. Every instrumt of transfer must be left at the registered office of the co for registration, accompanied by the certificate of the stock to be transferred, and such other evidence as the directors may require to prove the title of the transferor or his right to transfer the stock.

10. All instrumts of transfer which shall be registered will be retained by the co.

11. A fee not exceeding 2s. 6d. will be charged for the registration of each

transfer, and must, if required by the directors, be pd before the registration Form 226. of the transfer.

in each year.

Closing register

12. No transfer will be registered during the fourteen days immediately pre- of transfers. ceding the sd day of and day of 13. The exs or ads of a deceased holder of registered stock (not being one of the several joint holders) shall be the only persons recognised by the co as having any title to such stock.

Transmissions.

14. Any committee of a lunatic holder of registered stock, or any person Rights of becoming entled to registered stock in consequence of the death of any holder parents, &c. of such stock, upon producing such evidence that he sustains the character in respect of which he proposes to act under this condition, or of his title, as the directors shall think sufficient, may, subject to the preceding conditions as to transfer, transfer such stock.

15. The directors shall be at liberty to retain the interest payable upon any When interest share of registered stock, in respect of which any person under condition 14 is may be withentled to transfer, until such person shall duly transfer the same. held.

16. Upon the applicon of the holder of a share of registered stock the co will Certificates issue to him a certificate to bearer specifying the share of such stock held by to bearers. him. Every holder of registered stock will be entled at his discretion to several such certificates, each for a pt of his registered stock.

17. A certificate to bearer will not be issued, except upon a request in Request to writing, signed by the person for the time being entered in the register, herein- issue. after mentd, as the holder of the stock in respect of which the certificate to bearer is to be issued.

18. The request made must be in such form, and authenticated in such man- Form of. ner as the directors shall from time to time require, and must be lodged at the office of the co; and the certificates then outstanding in respect of the stock intended to be included in the certificate to bearer must, at the same time, be delivered up to the sd directors to be cancelled. There shall be pd to the co, Fee. for every certificate to bearer, the sum of 1s.

19. If the bearer, for the time being, of a certificate to bearer, shall sur- New certifirender the same, together with the coupons for future interest belonging cates. thereto, to the directors to be cancelled, the directors will issue to him a new certificate to bearer for the stock specified in the certificate so delivered up, or any pt thereof.

20. If the bearer of a certificate to bearer shall surrender the same, together Re-entry on with the coupons for future interest belonging thereto, to the directors, to be register. cancelled; and shall therewith lodge at the office of the co a declon in writing signed by him, and in such form as the directors shall from time to time direct, requesting that his name may be entered in the register, hereinafter mentd, as the holder of the stock specified in the same certificate, or any pt thereof; and stating in such declon his name, and condition or occupation, and address, his name will be entered in the sd register in respect of the stock specified in the sd certificate.

owner.

21. The co will recognise the bearer of a certificate to bearer as the absolute Bearer of owner of the share of the stock therein specified, and shall not be bound to take certificate notice or see to the execution of any trust, whether express, implied, or con- absolute structive, to which such share of stock may be subject; and the receipt of such person for any monies payable upon the redemption of the same share of stock shall be a good discharge to the co, notwithstanding any notice it may have, whether express or otherwise, of the right, title, interest, or claim of any other person to or in such share of stock or monies.

22. With every certificate to bearer there will be issued coupons providing Coupons. for the interest thereafter to accrue due in respect of the share of the stock therein specified up to the time fixed for the redemption of the same.

23. The co will recognise the bearer of this coupon as the absolute owner of the interest monies therein specified, and shall not be bound to take notice or see to the execution of any trust, whether express, implied, or constructive, to