Forms. Power to sanction provisional agreement. Agreement to be submitted to company. When to be 8. The following clauses of these presents shall, mutatis mutandis, apply to any such meeting, as if the same were here repeated, namely [here specify them, e.g., "Clauses 68 to 73 inclusive, and Clauses 76 to 84 inclusive." See these clauses, supra, p. 167, et seq.] 9. A separate meeting of the holders of founder's shares, at which members holding not less than founder's shares shall be present in person or by proxy, may sanction any provisional agreement made on behalf of the holders of founder's shares, with the directors on behalf of the company, for the surrender of the founder's shares, or the renunciation, modification, or alteration of any of the rights and privileges of the holders thereof, for such consideration and upon such terms and conditions as shall be specified in such agreement. 10. Within one month after any such agreement shall have been sanctioned, as aforesaid, the directors shall submit the same to the company, and shall for that purpose call an extraordinary meeting. 11. If at such meeting a resolution shall be passed concome binding. firming the agreement, the same shall thereupon become absolutely binding, and the directors shall carry the same into effect accordingly: otherwise the said agreement shall become null and void. Special option to take new shares. How option to be exercised or waived. 12. The holders of founder's shares shall, in proportion to the number of such shares held by them respectively, at any time within fourteen days after any resolution shall have been passed to increase the capital, have the option of taking one tenth part of the new shares, at par if such new shares be issued above par, and at the issue price of such shares if they shall be issued at or below par. This may be a very valuable privilege and at the same time a very inconvenient thing to the company. 13. As soon as may be, after any such resolution to increase the capital as aforesaid, the directors shall give notice to each holder of founder's shares specifying the number of the new shares, which he is entitled to the option of taking, and the issue price thereof, and limiting a time within which the option, if not exercised, will be deemed to be waived, and, after the expiration of such time, or on the receipt of an intimation from the member to whom such notice is given, that he waives his option, the directors may dispose of the Forms. shares, the subject of such option, as they think fit. 14. The accounts of the company, as passed at any general Accounts binding. meeting thereof, shall be absolutely binding and conclusive on the holders of founder's shares, both as to the amount of profit and in all other respects. FORM XI. BONUS WARRANTS. Bonus warrants, or some other security of a similar character, are sometimes agreed to be issued to the promoters of a company. Sometimes they are issued to the members, as in the clauses below. They are generally framed so as to be assignable free from equities. Such instruments are in the nature of debentures, as to which see further, infra, "Debentures." 1. There shall be issued to every person to whom shares in Issue of warthe original capital of the company shall be allotted one bonus rants. warrant in respect of each of the said shares allotted to him. 2. Every such bonus warrant shall be in the following form, Form. and shall be under the seal of the company :: The 107. Company, Limited. Bonus Warrant, No. The Company, Limited, will pay to the bearer of this warrant the sum of 107. at any time after this warrant shall have been selected for redemption, pursuant to the provisions in that behalf contained in the articles of association of the company, and will duly observe such provisions. The bearer of this warrant will be entitled to the payment of the money, intended to be hereby secured, without being affected by any equity of the company against the original or any intermediate holder hereof. The receipt of the bearer of this warrant shall be an effectual discharge for such money, and the company or persons paying the same shall not be bound to inquire into the title of the bearer. IN WITNESS whereof the common seal of The Company, Sinking fund. Investment. Application of sinking fund in redemption. How warrants to be selected for redemption. 3. The redemption of the said bonus warrants shall be effected by the operation of a sinking fund, which shall be created and formed by means of the appropriation to that purpose of the proportion of the net profits of the company specified in Clause hereof. For example of such a clause, see supra, p. 256. 4. The directors shall invest the monies, from time to time carried to the credit of the sinking fund, in or upon such investments as they think proper, with full power, from time to time, to vary such investments, and to realise the same as occasion may require. 5. Whenever the said sinking fund shall amount to £or more, the directors shall apply the same in the redemption of so many of the said bonus warrants as it shall be competent to redeem. 6. The particular warrants to be redeemed on each occasion shall be selected by lot in the presence of a notary public. 7. The selection shall be made on such day, and at such Time, place, place, as the directors shall appoint, notice thereof being given in some London daily newspaper at least one week previously; and any holder of a warrant may attend thereat. and notice of selection. Notice after selection. Records to be kept. Statutory declaration. 8. Forthwith, after such selection, notice shall be given by advertisement in a London daily newspaper of the numbers of the bonus warrants drawn for redemption. 9. The result of each selection shall be recorded in a book to be kept by the directors for that purpose, which shall be open for the inspection of the holders of bonus warrants. 10. If the holder of a bonus warrant shall so require the notary public present at any such selection shall make a statutory declaration of the result thereof. FORM XII. POWER TO ACQUIRE BUSINESS. Forms. 1. The directors may purchase or acquire upon such terms Power to acquire and under such stipulations as to guarantee or otherwise, as business. may be agreed upon, the business and goodwill of the said Messrs. as the same now stands. The above was the authority given to the directors of Overend, Gurney & Co., Limited. "There is the largest possible power given to these gentlemen to buy this, which was, in itself, a speculative business, and they are to do it entirely in such manner as they may think expedient." Per Lord Hatherley, Overend, &c. v. Gurney, 4 Ch. 715. It was held that the above power authorised the directors to purchase the business and to undertake the liabilities thereof. "I have no doubt whatever," said Lord Chelmsford," that the words 'as the same now stands' must mean that the business is to be taken over with its credits and liabilities, that is, as the business appeared in the books of the company." S. C., 5 H. L. 505. However it is usual in empowering directors to acquire a business, expressly to refer to the liabilities. FORM XIII. POWER TO ACQUIRE BUSINESS. power to The directors may purchase, or otherwise acquire, and Another undertake, upon such terms and conditions as they think fit, acquire now carried on by Messrs. the business of a & Co., business. at, and all, or any part of the property, and liabilities of the said firm in connection with the said business. FORM XIV. POWER TO ACQUIRE BUSINESS. Works, at The directors may, upon such terms and conditions as they Another think fit, acquire all or any part of the land and buildings power to acquire known as the and of the plant, business. machinery, fixtures, stock-in-trade, chattels, and effects, rights and privileges, in or about the said works or otherwise belonging to, in connection with the business carried on there by him, and undertake all or any of the contracts and liabilities of the said in relation to the said business. Forms. Special regu lations as to transfer. Member to have right of pre-emption. Mode of exercising right. FORM XV. TRANSFER OF SHARES. The following Clauses are occasionally used. 1. A share shall not be transferred except in accordance with the regulations following: that is to say, (a) Any holder of a share who proposes to transfer the same, shall serve notice of such proposal on the company. (b) The notice shall be in writing, and shall specify the share or shares to be transferred, and the name and address of the proposed transferree. (c) The directors shall, within fourteen days after the service. of such notice, notify to the person making the proposal their approval or disapproval of the transfer. (d) If the directors shall notify their disapproval in manner (e) But if the directors shall not, within the period aforesaid, FORM XVI. CLAUSES AS TO TRANSFER OF SHARES GIVING MEMBERS 1. No share shall be transferred to a stranger so long as any member is willing to purchase the same at the fair value. 2. In order to ascertain whether any member is willing to purchase a share offered for sale, the seller, whether entitled in his own right or otherwise, shall give notice to the secretary that he desires to sell the share, and such notice shall constitute the secretary his agent to contract with any member for the sale of the share at the fair value to be determined as mentioned below. If the secretary fails, for the space of ten |