several mtges, charges, liens, and incumbrances affecting the same or any Form 723. pt thereof. 2. As a pt of the conson for the sd sale the new co shall pay, satisfy, New company and discharge all the debts, liabilities, and obligations of the old co &c., of old to pay debts, whatsoever, and shall adopt, perform, and fulfil all contracts and company. engagemts now binding on it, and shall at all times keep the old co, its liqs, and contribs, indemnified against such debts, liabilities, obligations, contracts, and engagemts and against all actions, proceedings, costs, damages, claims, and demands in respect thereof. pay New company to pay costs 3. As a further pt of the conson of the sd sale, the new co shall and at all times hereafter keep the old co, its liqs, and contribs, indem- of winding up nified against all the costs and expenses of and incident to the winding old company. up of the old co, and of carrying the sd sale into effect. company to old company. 4. As the residue of the conson for the sd sale every member of the Shares in new old co shall, in respect of each share therein held by him, be entled to be allotted to require the new co to allot to him, or to his nominee or nominees, one members of 51. share in the new co with the sum of 51. credited as having been pd up thereon, and any member of the old co who shall take the benefits by this clause offered to him, shall accept the same in full satisfon and discharge of all claims and demands in respect of his interest in the assets of the old co. Suppose the shares in the old company to be 101., fully paid-up, and that it is desired to return 51. per share to the members. In such case, if the new company is to have power to call up the amount again, the clause will provide, that every member, &c., shall be entitled, &c., "to require the new company to pay to him the sum of 51. in cash, and to allot to him or to his nominee or nominees one 107. share in the new company, with the sum of 5l. credited as having been paid up thereon." If the new company is not to have power to call up the 51. again, the shares will be 51. each, and will be allotted as fully paid up. Of course, instead of cash, debentures or other securities may be issued. Sometimes where the shares in the selling company are not all paid up, the latter part of Clause 4 above runs thus: "With the same amount credited as paid up thereon as stands credited in the books of the old company as having been paid up on the share in respect whereof the same is allotted." And sometimes the clause is expressed thus: As the residue of the consideration for the said sale, the new company shall allot shares in the capital of the new company in such manner as the liquidators of the old company shall direct, to the intent that such shares shall be divided as nearly as may be among the members or contributories of the old company, according to their rights and interests in the assets of that company." Where the agreement provides for the allotment of the shares to the liquidators, and such shares are only to be in part credited as paid up, it may be well to insert a clause providing that "The liquidators of the old company shall not be bound to accept an allotment of any of the shares mentioned in clause hereof, which they shall not require for allotment to the members of the old company, in accordance with that clause," or to provide that the allotment shall be made " upon the request" of the liquidator. Unless this is done, it may be contended that the liquidator is bound personally to take the shares, and this might involve him in liabilities. Dyett's case, 43 L. T. 85. Griffith v. Paget, 5 C. D. 894, should be borne in mind. See supra, p. 556. 0 0 Form 723. Provision for payment of dissentients. Title accepted. Delivery. Lien in favour of dissentients. Power to rescind. Agreement not to operate as conveyance. 5. If the liqs of the old co shall, in order to carry the sd sale into effect, have occasion to pchase the interest of any member of the old co, then and in every or any such case the new co shall be relieved from the obligation imposed on it by Clause 4 hereof as regards such member, but shall pay to the liqs for the ppose of effecting such pchase such sum as, by arbitration between the old co and such member, or by agreemt made with the sanction of the new co between him and the liqs of the old co, shall be determined to be the price payable in respect of such pchase. 6. The new co shall accept, without investigation, such title as the old co has to all the real and personal ppty and premes agreed to be hby sold. 7. The old co and its liqs shall, as soon as conveniently may be (but without prejudice to Clause 8 hereof), execute and do, at the expense of the new co, all such assurances and things as shall be reasonably required by the new co for vesting in it the sd ppty agreed to be hby sold, or any pt thereof, and giving to it the full benefit of this agreemt; and in the meantime (subject as afsd), the old co shall stand possessed of the ppty agreed to be hby sold in trust for the new co, and it shall be lawful for that co in the name or names of the old co or its liqs, but keeping them indemnified against all costs and damages which might arise thereby, to bring, take, and defend actions and proceedings, and to do all other things which shall be necessary or expedient for obtaining the full benefit of the sd sale. 8. Provided always that the old co and its liqs shall have a lien upon the whole of the ppty agreed to be hby sold for all monies (if any) payable by the new co under Clause 5 hereof, and until the same shall have been pd the sd liqs shall be at libty to retain possession of all or any pt of the sd ppty, and thereout at their discretion to raise and pay such monies or any pt thereof. As to this clause, see supra, p. 558. 9. Notwithstanding anything herein contd, if, in order to carry the sd sale into effect, it would be necessary for the liqs to pchase the interests of members holding more than shares in the old co, the new co shall be at libty by notice in writing, addressed to the liqs of the old co and left at the registered office of that co, to rescind this agreemt. This clause is not at all unusual. There might happen to be so many dissentient members of the old company that the new company could not find the means to pay them off, and in such case it is convenient to give a power of rescission. 10. These presents are intended to operate as an agreemt only, and not as a conveyance, transfer, or assignmt. This clause is frequently used in such agreements presumably in order to prevent any doubt whether the instrument is liable to ad valorem duty as a conveyance or transfer of any part of the property. See Tilsley, 188 et seq. But it seems clear that such an agreement could not be held a conveyance within the Stamp Act, 1870. See supra, p. 6. An arbitration clause is sometimes inserted, although some doubt has been Form 723. felt as to its validity. However, in Southall v. British Mutual Life Assurance Soc., 6 Ch. 614, James, L. J., was of opinion that an arbitration clause did not invalidate an agreement for a sale pursuant to s. 161 of the Act, and Mellish, L. J., concurred. 11. Until the dissolution of the old co, the new co shall, at its own expense, produce and show at such times, and to such persons, and in such places as the liq for the time being of the old co shall require, all the books, documts, and papers of the old co agreed to be hby sold. A clause as above is sometimes inserted and appears desirable. Silber Co., 12 C. D. 717. IN WITNESS whereof the sd cos have caused their respive common seals to be hereunto affixed, and the sd liqs have respively set their hands hto, the day and year first above written. The resolutions in the above case would be as follows: (1.) That the co be wound up voluntarily, and that A. B. and C. D. Form 724. be, and they are hby appointed liqs for the ppose of such winding up. Resolutions to reconstruction. (2.) That the sd liqs be and they are hby authorised to consent to the with a view registration of a new co, to be named The A. Co, Limtd, with a memorandum and articles of association which have already been prepared with the privity and approval of the directors of this co. (3.) That the draft agreemt submitted to this meeting and expressed to be made between this co and its liqs of the one pt, and The Co, Limtd, of the other pt, be, and the same is hby approved, and that the sd liqs be, and they are hby authorised to enter into an agreemt with such new co (when incorporated) in the terms of the sd draft, and to carry the same into effect. In some cases it is thought expedient to frame the first resolution thus: "That it is desirable to reconstruct the company, and that, with a view thereto, the company be wound up, &c." [as above]. Where the new company is not to bear the same name as the old company, resolution (2) can be varied. Sometimes it is resolved "that the liquidators be authorised to consent to any variation in the terms of the agreement which they may think fit," and occasionally "the liquidators are authorised to transfer or sell the whole or any part of this company's business and property to any other company, and to receive, in compensation or part compensation for such transfer or sale, shares in such company, or to enter into any other arrangement whereby the members of this company may, in lieu of receiving cash, shares, or other like interests, or, in addition thereto, participate in the profits of or receive any other benefit from such other company." Sometimes the authority is "to make or enter into any such sale or arrangement as is contemplated by s. 161 of the Companies Act, 1862, and in particular to enter into an agreement with The Company Limited, for the sale to that company of this company's business and assets upon the terms set forth in the draft agreement submitted to the meeting." The following is an example of the form of notice to be used where a member dissents pursuant to s. 161 of the Act. Agreement 5. If the liqs of the old co shall, in order to carry the sd sale into effect, have occasion to pchase the interest of any member of the old co, then and in every or any such case the new co shall be relieved from the obligation imposed on it by Clause 4 hereof as regards such member, but shall pay to the liqs for the ppose of effecting such pchase such sum as, by arbitration between the old co and such member, or by agreemt made with the sanction of the new co between him and the liqs of the old co shall be determined to be the price payable in respect of such pchase. 6. The new co shall accept, without investigation, such title as t old co has to all the real and personal ppty and premes agreed to be b sold. 7. The old co and its liqs shall, as soon as conveniently may be 8. Provided always that the old co and its liqs shall have As to this clause, see supra, p. 558. 10. These presents are intended to operate as a not to operate not as a conveyance, transfer, or assignmt. as conveyance. 565 726. FORMS. An arbitration clause is sometimes inverted, although wenner doubt, has been Form 729 felt as to its validity. However, in bruthall v. British Mutual Life Assurance Soc 6 Ch. 4. James L. J. vad g that an arbitravom A WA izrabdate a trement is a aut parant 161 A, M ng force of this Agreement to pchase: All and sell. able, ppty, effects, at nature or kind ether with the full moveable, held by ch sale expressly in> or of its liqs, or at all arrears of calls on 277. 108. per share, and i misfeasance or breach other persons, whether y suit now pending, but share capital, and to the greemt shall have become for the ultimate benefit of ny pt of the ppty, effects, |