Forms. That the said liquidators be, and they are hereby authorised and directed, pursuant to Section 161 of the Companies Act, 1862, to adopt, on behalf of this company, the said agreement, and to carry the same into effect. See supra, p. 482. For the further procedure, see supra, p. 480. SCHEME III. In this case it is supposed that the capital of the existing company is divided into first and second preference, and ordinary shares, and that it is desired to convert the whole capital into shares of uniform description, and to issue preference shares to rank in priority to the existing ones. Assuming that the same course is adopted as in Scheme II., supra, p. 493, the capital of the new company will be divided into A and B shares, the former having a preference over the latter. The agreement will be to the same effect, mutatis mutandis, as above, p. 493, except that Clause 5 will be as follows: As the residue of the consideration for the said sale the new company shall allot to, or to the nominee or nominees of every member of the old company, who shall require the new company so to do, one of the said B shares in respect of each 107. ordinary share in the old company held by him, and fifteen of the said B shares in respect of each 57. first preference share in the old company held by him, and two of the said B shares in respect of every 17. second preference share in the old company held by him. The shares so allotted shall be deemed for all purposes to be fully paid up, and every member of the old company accepting shares in the new company in pursuance of this clause shall be deemed thereby to release the old company from all claims and demands in respect of his interest as a member of that company. The resolutions of the old company will be similar to these, supra, p. 495. See, however, Griffith v. Argentine Tramways Co. mentioned in the Addenda, supra, as to the validity of such a scheme. SCHEME IV. The following form of agreement is based on one which was recently used in the reconstruction of an important company having only a small number of members. The members were all creditors of the company in respect of monies lent to it on debentures and otherwise. There were also outside creditors to a considerable amount. The object of the reconstruction was to raise funds to pay outside creditors and to carry on the business, to capitalize arrears of interest, and to effect other arrangements. All the members were parties to the agreement. AN AGREEMENT made the Forms. day of - between the several persons whose names are set forth in the first schedule Parties. hereto of the first part, the several persons whose names are set forth in the second schedule hereto of the second part, the several persons whose names are set forth in the third schedule hereto of the third part, the several persons whose names are set forth in the fourth schedule hereto of the fourth part, and the C. Company, Limited, hereinafter called the new company, of the fifth part : WHEREAS in the year a company (hereinafter referred to Recitals. as the old company) was incorporated under the Companies Act, 1862, by the name of the Company, Limited, with the objects of purchasing and carrying into operation a concession granted by H. M. the King of --, for &c., and for other purposes set forth in the memorandum of association thereof: AND WHEREAS the old company purchased the said concession, and has duly complied with the conditions thereof, and the same is now in full force: AND WHEREAS the capital of the old company is 60,0007. divided into 6,000 shares of 107. each: AND WHEREAS all the said shares have been taken : AND WHEREAS, in pursuance of a provision made by Clause of the articles of association of the old company, the sum of 15,000l. required for the purposes of the undertaking, was contributed by some of the members as a loan to the old company, and the said sum with interest thereon up to the day of last, amounting to 12,0607. 10s. 3d., is now owing by the old company: AND WHEREAS, in pursuance of a resolution passed at a general meeting of the old company held on the day of 1867, a sum of 25,000l. was raised on debentures of the company for 1007. a-piece, bearing interest at the rate of 10 per cent. per annum (hereinafter referred to as debentures of the first issue), and the said sum with interest thereon up to the amounting to 14,7877. 168. 10d., or thereabouts, is now owing by the old company: AND WHEREAS, in pursuance of a resolution passed at a general meeting of the old company, held on the day of 1870, a sum of 15,000l. was authorised to be raised on debentures of the old company, to be issued bearing interest at the rate of 10 per cent. per annum (hereinafter referred to as preferential debentures), and by an agreement, dated the day of 1870, the holders of the debentures of the first issue agreed that the principal and interest to be secured day of K K Forms. Resolutions of old company by the debentures of the second issue should have priority of 1. The members of the old company shall forthwith pass the to be passed. necessary resolutions for winding-up the old company, appointing a liquidator or liquidators (hereinafter referred to as the liquidator), and directing him or them to adopt and carry into effect this agreement. Agreement for sale. 2. The liquidator and the old company shall sell, and the new company shall purchase, all the [supra, p. 495]. shares. 3. As part of the consideration for the said sale, the new Forms. company shall issue to the liquidator 8,710 of its ordinary Part conshares, which shares shall be numbered in the books of the com- sideration to pany be ordinary to inclusive, and shall be deemed for all purposes to be fully paid up. The said shares shall immediately after the issue thereof, be converted by the new company into stock to be called "ordinary stock," and the liquidators shall thereupon distribute the same among the parties hereto of the first part in proportion to their respective shares in the capital of the old company and in the principal and interest owing in respect of the said loan of 15,000l. 4. As further part of the consideration for the said sale, the new company shall issue to the liquidator 398 of its preference shares. Such shares shall for all purposes be deemed to be fully paid up, and shall be forthwith converted into stock to be called preference stock. Further part ference shares. to be pre be surren dered. 5. Each of the parties hereto of the second part shall give Debentures of up to the liquidator his debenture of the first issue, and shall first issue to accept a transfer (which shall thereupon be made by the liquidator) of so much of the said preference stock as shall be equal in nominal value to the amount owing to him on the day of last for principal and interest on such debentures, in full satisfaction of all claims in respect thereof. So much of the said preference stock as shall not be required for transfer in manner aforesaid, shall be held by the liquidator in trust for the new company. members of 6. The new company shall, as further part of the considera- Issue of detion for the said sale, issue to each of the parties hereto of the bentures to third part mortgage debentures of the new company to the old company. effect and secured in manner hereinafter specified, for securing day of last on an amount of principal money equal to the amount owing to 7. As the residue of the consideration for the said sale, the New company to pay debts new company shall pay, satisfy and discharge all the debts, and costs of liabilities and engagements of the old company, not herein- winding up before specifically provided for, and shall pay the costs of old company. winding up the old company and of carrying the said sale into effect, and shall keep the company and its liquidators indemni How residue of mortgage debentures to fied against such debts, liabilities, engagements and costs, and against all actions, &c., in respect thereof. 8. The new company shall accept [supra, p. 491]. 9. The old company and the liquidators shall immediately after the adoption hereof by the liquidator execute and do all such assurances and things as may be necessary for carrying the said sale into full effect, and for giving to the new company the full benefit of the agreement. 10. The new company shall borrow the further sum of 16,0007., being the estimated sum required to pay off the debts of the old company (other than the principal and interest of the said loan of £15,000, and the said debenture debts), and to carry on the business of the new company, by issue of mortgage debentures, to the effect, and secured in manner hereinafter specified, to the nominal value of 20,0007. 11. The mortgage debentures to be taken in exchange by the parties of the third part, and those to be issued for raising the said sum of 16,000l. as aforesaid, shall bear interest at the rate of 10 per cent. per annum on the amount of principal money expressed to be thereby secured, and shall rank rateably with each other, and be in the form, and be payable and secured in the manner expressed by the draft mortgage debentures and draft deed of trust set forth in the fifth schedule hereto. name 12. Each of the said parties hereto of the first part, whose is included in the fourth schedule hereto, shall pay to the new company as his contribution to the said sum of 16,000l., to be raised as aforesaid, the sum set opposite his name in the same schedule in exchange for such mortgage debentures as last aforesaid to the nominal amount of 100l. for every 801. so paid by him. As to issuing debentures at a discount, see supra, pp. 184, 418. 13. The residue of the said mortgage debentures shall be offered, at 20 per cent. below the nominal value thereof, to the be disposed of. members of the old company in proportion to the number of ordinary shares in the old company held by them respectively. Such offer shall be made by notice in writing, specifying the number of such debentures to which the member is entitled, and limiting a time within which the offer, if not accepted, will be deemed to be declined, and after the expiration of such time, |