Guarantee by Bank for the Benefit of Creditors of a Company which is reducing its Share Capital

Guarantee by Bank for the Benefit of Creditors of a Company which is reducing its Share Capital.

THIS AGREEMENT is made the ...... day of .........20....
BETWEEN:
(1 ) (name of bank ) the registered office of which is at (address ) (`the Bank )
and
(2 ) (name of company ) the registered office of which is at (address ) and the company registration number of which is (number ) (`the Company ).
WHEREAS
(1 ) The Company has presented a petition to the High Court of Justice Chancery Division Companies Court for the confirmation of a reduction of the Companys share capital set out in the resolution passed on (date ) and scheduled to this agreement.
(2 ) With a view to obtaining a direction of the Court pursuant to the Companies and Allied Matters Act 1990 that the Act shall not apply as regards the creditors of the Company at the date of this agreement, the Bank has agreed at the request of the Company to give the guarantee in respect of the companys liabilities set out below.
NOW IT IS AGREED as follows:
1 In consideration of the payment to the Bank by the Company of the sum of ......... (receipt of which the Bank acknowledges ) the Bank undertakes that if the Company fails to pay or satisfy any debt or claim outstanding at the date of this agreement that would, if that same date were the commencement of the winding up of the company, be admissible in proof against the Company, the Bank will pay or satisfy such debt or claim.
2 If pursuant to the provisions of clause 1 above the Bank pays or satisfies any debt or claim of the Company, the resulting debt or claim of the Bank against the Company shall be postponed to every other debt or claim against the Company of the nature mentioned in clause 1 above, and accordingly the Bank shall not be entitled to any right of proof on a winding up of the Company in respect of any debt or claim paid or satisfied by the Bank under this agreement until all other debts or claims as aforesaid have been fully paid or satisfied.
3 The provisions of clauses 1 and 2 above shall ensure for the benefit of every person who is a creditor of the Company in respect of any such debt or claim as is mentioned in clause 1 and shall be enforceable against the Bank by any such creditor as mentioned above.
4 The Bank as a creditor or contingent creditor of the Company now consents to the reduction of the Companys share capital referred to in the said Petition.
5 The liability of the Bank under this agreement shall be limited to the sum of ..........
AS WITNESS etc
SCHEDULE
Resolutions of the Company
(this schedule provides for a reduction in capital by repayment of cash, but may be adapted for use on a reduction of capital by substitution of loan capital for preference shares )
1 That the capital of the Company be reduced from [N      ] divided into [              ] ordinary shares of [ ] each (all of which have been issued and are fully paid up ), to [         ] divided into [      ] ordinary shares of [   ] each and that such reduction be effected by returning to the holders of the said shares paid up capital to the extent of [   ] per share and by reducing the nominal amount of each of the said shares from [ ] to [    ]
2 That immediately and contingently upon such reduction of capital taking effect:
2.1 the [       ] fully paid ordinary shares of [   ] each resulting from such resolution be consolidated in such manner that every [ ] of the said shares shall constitute one fully paid ordinary share of [ ]
2.2 the capital of the Company be increased to its former amount of [    ] by the creation of [   ] ordinary shares of [ ] each
2.3 the sum of [      ] being part of the amount standing to the credit of the general reserve of the Company be capitalised and accordingly that such sum be set free for distribution amongst the members of the Company who would have been entitled to it if distributed by way of dividend and in the same proportions on condition that the same be not paid in cash but be applied in paying up in full [      ] of the unissued ordinary shares of [ ] each in the capital of the company to be allotted and distributed credited as fully paid up to and amongst such members in the proportions aforesaid

.............................
[For and on behalf of............Bank PLC]
............................
[For and on behalf of...........Nigeria Ltd]

 

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