shall have the right to compromise, arbitrate, and adjust any and all such claims in such manner as the Trustees may deem for the best interests of Creditors, and the Trustees shall have the further right, provided in their opinion the best interests of Creditors will be served thereby, to purchase or anticipate the claims of Creditors of said Debtors; also to discharge any liens or claims to release merchandise belonging to the Debtors. 5. It is understood that the Debtors may continue in business and the Trustees shall have the right to consign or sell to said Debtors, from time to time, merchandise, manufactured, unmanufactured or in process, transferred to the Trustees under this agreement, upon such terms as to the Trustees may seem proper. 6. The Trustees shall not be liable for any loss resulting from the non-payment or non-collection of the purchase price of any merchandise sold by them, nor shall they be liable for any depreciation in any security taken by them upon the sale of merchandise, nor shall they be liable for the selection of any depositary in which a bank account may be opened, nor shall said trustees be liable for any error of judgment or mistake at law, or for anything but their own individual, willful fraud. 7. The Trustees shall not be required to give any bond for the performance of their duties. 8. The Trustees, as at any time constituted, notwithstanding any vacancy, shall have the power, rights, and interests of the Trustees as herein originally appointed. In the event that any of said Trustees shall die, resign or become otherwise disqualified from acting, the remaining Trustees may fill any vacancy, and such additional and succeeding Trustee shall have and shall exercise all the power and authority under this agreement and trust as was previously possessed by a Trustee, as originally appointed. The majority vote of the Trustees shall constitute the final determination of the Trustees upon any matter in which all of the Trustees shall not be unanimous. 9. The Trustees are authorized to employ, during the term of this agreement, the debtors for such time upon such conditions, and at such salary, as to them may seem proper. 10. The Trustees shall keep books of account showing the receipts and disbursements, which shall be open for reasonable inspection during business hours by any of the parties to this agreement, and upon the termination of the trust, the Trustees shall, upon demand, account in writing to any of the parties to this agreement for the trust estate. 11. Nothing herein contained, in so far as a specific delegation of power to the Trustees is concerned, shall in any wise limit their general power as Trustees. 12. Each of the Creditors hereto agrees that he will not, pending the execution of this trust, institute any proceeding at law or in equity, or in bankruptcy, against the Debtors, and that he will not become a party to any proceeding in bankruptcy against said Debtors, and in the event of any proceedings by or against said Debtors being had, which will require any proofs of claim or other written instruments to be executed by or sworn to by any of the creditors, each of the creditors, for himself undertakes to execute said agreement or proof of claim, and further power of attorney as may in the opinion of the Trustees, be requisite to further carry out the spirit of this agreement. 13. The Trustees do hereby accept the trust created by this agreement, and covenant faithfully to perform the terms hereof, and comply with its provisions, and agree to act without compensation. 14. It is understood and agreed that the trust herein created shall continue until the 1st day of February, 1920, at which time all property and assets remaining in the hands and possession of the Trustees shall be disposed of at public or private sale, in such manner as the Trustees and a majority of the committee may deem proper, unless a majority of the committee shall deem it advisable to extend the trust from time to time, timely notice of which extension shall be given by mail to the Creditors. 15. Any Creditor may become a party to this agreement by signing the same or a copy, and all copies hereof shall be deemed one and the same instrument. 16. The said Debtors do hereby agree upon demand to execute from time to time such other and further instrument as a majority of the Trustees may request, and which said majority of the Trustees may be advised to be necessary and proper to carry into effect the purposes and intent of this agreement. IN WITNESS WHEREOF, the parties have hereunto set their hands and seals, the day and year first above written. Agreement Between Creditors and Embarrassed Solvent Debtor Providing for Extension-Formation of Corporation Controlled by Creditors .of... AGREEMENT made this day of January, 1922, between ...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......., and 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. Now, THEREFORE, in consideration of the premises it is agreed between the parties hereto as follows: 1. As soon as creditors of the Debtor, aggregating not less than 95% 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. 2. The Creditors agree to sell to said corporation, when organized, all claims of every kind, name and nature against the Debtor for the sum of 100% thereof, said sum to be payable as follows: % in cash to be paid within.. ..and. .% days after the corporation has been organized; and the balance of.... % in three equal installments of.. each, payable.. 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. . . . . ..of. 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. of... in.... at the... a Creditors' Committee composed . . . . 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 any thing 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 |