Agreement made this day of January, 1922, between ............of............hereinafter for convenience designated as the Debtor, and all creditors of the Debtor, who shall hereafter sign this agreement, hereinafter for convenience designated as the Creditors,
Witnesseth as follows:
Whereas, a careful audit of the affairs of the Debtor has been made by Messrs............., Certified Public Accountants, who were retained for that purpose by the.......,
Whereas, said audit discloses that the Debtor has assets of the estimated value of $............and is indebted to various creditors in various amounts aggregating about......., a considerable part of which is past due, and
Whereas, the Debtor, although solvent, is unable to pay such indebtedness at this time, or as it falls due, and desires an extension of time in which to pay such indebtedness in full and with legal interest.
1. As soon as creditors of the Debtor, aggregating not less than 05% of the aforesaid total indebtedness, have given their assent in writing to this agreement, the business of the Debtor shall be immediately incorporated under the laws of the State of............, and all the assets of the said Debtor, as disclosed by the aforesaid audit, shall be transferred and conveyed to the said corporation, which shall also assume all the debts and obligations of the said Debtor, as disclosed by the aforesaid audit.
.............% in cash to be paid within............days after the corporation has been organized; and the balance of............% in three equal installments of...........% each, payable............, .............and............
months after said cash payment has been made, said deferred payments to be evidenced by the promissory notes of the corporation, which notes are to bear interest at the rate of 6% per annum, and are to be indorsed by the Debtor and by......
3. Pending the formation of the corporation, and pursuant to a resolution passed at a meeting of the Creditors of the
Debtor which was held on..............., at the..........
....., in..............., a Creditors1 Committee composed of...................., ....................and........
............(hereafter referred to as the Committee) were appointed. This Committee is now in control of the assets of the Debtor and is supervising the running of his business. This Committee is hereby authorized and empowered to arrange all the details in connection with the incorporation of the Debtor's business with the end in view of fully protecting the interests of Creditors. It is expressly understood and agreed that the Debtor will cause said Committee to be elected on the Board of Directors of the corporation and that the Debtor will also cause himself to be so elected and that said four shall constitute the Board of Directors of the corporation. It is also expressly understood and agreed that until the final payment has been made to Creditors, as provided herein, the entire capital stock of the corporation shall be deposited with the Committee under a voting trust agreement and that said Committee shall also hold said stock as collateral security for the faithful performance of the terms of this agreement on the part of the Debtor.
4. The said Committee or their successors, are expressly given the right, in the event of default of any of the payments provided herein, in their absolute discretion, to declare all subsequent payments payable forthwith, irrespective of anything herein stated to the contrary; or the said Committee or their successors, in their absolute discretion, may waive such default or defaults, and defer (but not longer than one year), any or all of the payments due hereunder. The said Committee or their successors are also given the authority, in their absolute discretion, to anticipate any or all of the payments due hereunder in whole or in part. In the event of default, as provided herein, the Committee, or their successors, may, in their absolute discretion liquidate the affairs of the corporation in such manner as they may deem for the best interests of the creditors, either by court proceedings or otherwise, and they shall not be liable by reason thereof.
5. It is expressly agreed that the said Committee, or their successors, in whatever capacity they may be acting (whether as committeemen, officers, directors, voting trustees, escrow agents or otherwise) shall not be liable or responsible for any error of judgment or mistake or act of omission or commission either on their own part or parts, or on the part or parts of any agent or attorney, or for anything save only their willful misconduct.
6. It is expressly agreed and understood that before the corporation delivers to Creditors the cash payment provided herein and the new notes, that Creditors surrender all outstanding notes on which the Debtor is liable.
7. It is expressly agreed that all expenses in connection with this extension, including a reasonable attorney's fee to the Counsel to the Creditors' Committee (which counsel is to prepare all the corporate papers, agreements, etc., necessary to carry out the purposes of this extension agreement), the expense of the audit heretofore referred to, and such actual out of pocket disbursements as the Creditors' Committee may have incurred or will hereafter incur (but no compensation to said Creditors' Committee) will be paid by the Debtor.
8. It is further agreed that creditors whose claims are not in excess of $........, need not join in this extension, and authority is hereby given that said claims be paid in full at maturity.
9. Until all the payments have been made to creditors, as herein provided, no dividends are to be paid on any of the stock of the corporation. After all payments have been made, as provided herein, the Committee, or their successors, are to resign forthwith as officers, directors, voting trustees, escrow agents, etc., and the entire management and control of the corporation is to become vested in the Debtor, or his designees.
10. This agreement may be executed in any number of counterparts, each of which, when executed, shall be deemed to be an original, and all of which shall constitute but one and the same agreement.
Signed and Sealed the day and year first above written.