This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
(i) To employ and compensate counsel, auditors and all necessary assistants for services rendered in and about the matters mentioned in this agreement, including the preparation hereof, and to incur any and all expenses deemed reasonable by the Committee in the premises, including a reasonable compensation to the members of the Committee, all of which the Company agrees to pay, and the same shall be a prior charge upon the assets of the Company.
(j) The Committee may adopt their own rules of procedure and may act either by vote at a meeting or by consent in writing, and may determine from time to time what number of votes or consents of its members shall be deemed to be the act of the Committee.
(k) The Committee may exercise from time to time or refrain from exercising any of the foregoing powers and any other powers conferred or intended to be conferred upon them by this agreement as they, in their own uncontrolled discretion, may deem for the best interests of the Creditors, and the enumeration of the foregoing powers shall not be construed to exclude or prevent the exercise of any other powers necessary or reasonably convenient for the protection and advantage of the Creditors, or the management of the corporation.
4. That the Company will, when requested so to do by the Committee, issue negotiable promissory notes to any or all of said Creditors for their respective claims of whatever nature, such notes to bear interest at a rate of not less than
--------- per cent. (-%) per annum and to run for such time and to be given in such form and upon such condition as the Committee may decide, except that such notes shall mature not later than ---------, 19-. All promissory notes so issued, and all other promissory notes and evidences of any claims of Creditors and held by any Creditor, which may be allowed by the Committee or otherwise proved to be valid claims against the Company, which the Committee may require, shall be deposited with the Committee, except when any Creditor may need the same to establish its claim in court or otherwise, as they may direct, and proper receipts shall be given for the same.
5. The Stockholders and the Company agree that the present officers and directors of the Company, any or all of them, will resign their respective positions whenever requested so to do by the Committee after this agreement becomes effective; and that the Committee may require the discharge or resignation of any employe or employes and may appoint others in their stead.
6. The Committee may at any time cause any debts against the Company to be compromised, adjusted or paid in part or in full, as in its judgment it may seem best. All other claims approved as aforesaid shall' be paid pro rata. Any moneys of the Company which the Committee shall from time to time deem proper to be withdrawn from the active operations of the business of the Company shall be applied in the following order:
(a) To the payment of the compensation and expenses of the Committee, including a reasonable compensation to the Depositary.
(b) To the repayment of any moneys borrowed by the Committee.
(c) To all the Creditors of the Company at the date of this agreement, whether signers of this agreement or not until their respective claims are paid in full with interest as aforesaid.
No payment shall be made upon any of the foregoing classes until all claims under the prior class or classes have been paid; provided, however, that payments may be made under class (c) whenever the holders of claims (b) shall assent thereto. The Committee may require the presentation to them, or to any bank or banks as agents for them, of any notes upon which payments are to be made in order that such payments may be endorsed thereon, and may require receipts in such form as they deem proper for payments upon any other claim.
7. Any plan formulated by the Committee for reorganization of the Company or for its operation otherwise than under the terms hereof which shall contemplate that the Creditors will accept anything for their respective claims other than cash payment shall be submitted to the Creditors for their acceptance or rejection, by mailing a copy of said plan and notice to the Creditors, directed to them at the address given when signing this agreement or furnished to the Chairman of the Committee, and they shall have thirty (30) days, after the mailing of such plan and notice, for the consideration thereof, but the plan as submitted shall be deemed to be conclusively adopted by such of the Creditors as do not notify the Committee in writing of their rejection of said plan within the aforesaid thirty (30) days. Those of the Creditors who reject said plan may withdraw from this agreement upon payment, or securing to the Committee the payment of their proper pro rata proportion of the expenses and of any other obligations theretofore incurred by the Committee or by the Company hereunder and then remaining unpaid.
8. The Committee shall always consist of five members, and the Committee may act by a majority of their members, or in such manner as they may have provided, in accordance with paragraph three (3), subdivision "j," of this agreement. Any member of the Committee as at any time constituted may resign by tendering his written resignation to the then Chairman of the Committee. Whenever a member of the Committee shall resign or die, another person shall be appointed in his stead by the remaining members of the Committee. Whenever the Committee is referred to in this agreement, it comprehends the Committee as it is then constituted, in accordance with the foregoing provisions, at the time of any action taken by them or by their authority.
9. No member of the Committee shall in any way be held personally responsible for any act, deed or omission of the Committee of which' he is a member, or of himself as a member of said Committee, or of any agent or representative of the Committee, or for any moneys or property coming into the hands of said Committee, or money paid out by said Committee, or through or by its order or that of its Chairman, or for any of the acts or omissions of any agent, officer or employe of said Company, except for wilful malfeasance on his part.