H^ícavaoua (J^anal (Construction
(Company.
IReovôanisation HGreement.
Dated December 8th, iSgj.
JOHN R. BARTIyBTT, Chairman,
United Bank Buildingf 2 Wall St.
SMITH M. WBED,
^ Plattsbnrgh, N. 1". and 21 Courtland St.
HENRY E. HOWEAND,
of Anderson & Howland, 3^ Wall St.
RICHARD E. EDWARDS,
Prest. Bank of State of iVeiv York.
JOHN J. EMERY,
of Ornery Bros,, Cincinnati and Xew York.
WIEHEEMUS MYNDERSE,
of Butler, Stillman & Hubbard, 54 Wall St.
E. K. SIBEEY,
of Marquand A: Parmly, 160 Broadway.
Committee.
CENTRAE TRUST COMPANY OF NEW YORK,
Ç* Depositary.
Ütf^ARY
BUREAU OF RAILWAY ECO O ÍIICS,
WASHINGTON, O. c.
TC^
J^01iJßJ61tXßtlt made this eighth day of December, in the-
year one thousand eight hundred and ninety-three, between
such of the stockholders of the Nicaragua Canal Construe-
tion Company as shall become parties to this agreement and
comply with the terms thereof, parties of the first part, and
John R. Bartlett, Smith M. Weed, Henry E. How-
land, Richard h. Edwards, John J. Emery, Wilhelmus
Mynderse and E. K. Sibley, a Committee, and such other
person or persons as may hereafter from time to time be
constituted members of said Committee, hereinafter called the
Reorganization Committee, or the Committee, parties of the
second part :
Whereas, the entire capital stock of the Nicaragua Canal
Construction Company, to the amount of twelve million dollars,
represented by one hundred and twenty thousand shares of
the par value of one hundred dollars each, has been issued ;
and
Whereas, under an order of the Circuit Court of the United
States for the Southern District of New York, dated August 30,
1893, in an action brought by a creditor of the Company, the
property and assets of the said Nicaragua Canal Construction
Company, of every description, were placed in the hands of a
Receiver ; and
Whereas, the property of said Nicaragua Canal Con¬
struction Company, so placed in the hands of a Receiver, is
composed in part of the stock and in part of obligations for
bonds of the Maritime Canal Company ; and
Whereas, at the time of the appointment of such Receiver,
there was existing, and still exists, a contract between the
Nicaragua Canal Construction Company and the Maritime
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Canal Company for the construction of a canal from the
Atlantic Ocean to the Pacific Ocean through Nicaragua ; and
Whereas, the property of the Company is of a kind
not readily negotiable, and is in danger of being sacrificed
if sold under order of the Court for the satisfaction of
creditors ; and
Whereas, it is desirable that a reorganization should be
eflfected, by which the property, assets, rights and franchises of
the Nicaragua Canal Construction Company may be preserved,
and the securities in its treasury increased in value and amount
for the benefit of such of its stockholders as may join in such
reorganization ; and
Whereas, the following plan of reorganization has been
proposed :
Plan of Reorg^anization.
The property, assets, rights and franchises of the Nicaragua
Canal Construction Company are to be acquired by purchase
by the Reorganization Committee for the benefit of those stock¬
holders uniting for this reorganization.
All the said assets when so acquired shall be conveyed by
the Committee to a new or reorganized company, and the
Committee shall receive in payment therefor the entire capital
stock of such new or reorganized company, which capital stock
shall consist of 120,0U0 shares of the par value of $100 per
share, to be issued to the said Committee or to its order.
The stockholders of the Nicaragua Canal Construction Com¬
pany desiring to participate in the reorganization shall deposit
with the Central Trust Company of New York their stock cer¬
tificates duly endorsed, in exchange for such Trust Company's
certificates of deposit.
Stockholders assenting to the plan of reorganization shall
receive, for each ten shares of stock deposited, one share of
the capital stock of the new or reorganized company, of the par
value of $100.
Or if at the time of depositing stock with the Central Trust
Company, any stockholder shall pay in cash to the said Trust
Company for account of the Reorganization Committee $3.50
upon each share so deposited by him, such stockholder shall
3
receive, for each two shares of stock so deposited, one share of
the capital stock of the new or reorganized company, of the
par value of $100.
The certiticates of capital stock of the new or reorganized
Company sball be deliverable by the Committee only upon the
completion of the reorganization, and shall be represented in
the meantime by the certificates of deposit issued on behalf of
the Committee by the Central Trust Company.
The Committee propose to acquire, for the benefit of the
reorganization, any outstanding first mortgage bonds or bond
obligations of the Maritime Canal Company, or scrip therefor,
not now included in the assets of the Nicaragua Canal Con¬
struction Company, and any outstanding stock of the Maritime
Canal Company not now included in such assets ; and also ex¬
isting debts or claims against the Nicaragua Canal Construc¬
tion Company. The Committee propose to acquire such
bonds, bond obligations or scrip, and such stock and such
debts, or any portion thereof practicable, either by purchase or
by adrnittiug the respective owners thereof to tliis reorganiza¬
tion upon terms to be fixed by the Committee, or otherwise in
the discretion of the Committee.
The cash requirements of the Committee shall be met from
the funds paid in by such of the stockholders as elect to pay
the foregoing charge of $3.50 per share upon their stock de¬
posited, and from the sale of stock of the new or reorganized
company. The amount of stock to be so sold shall not, how¬
ever, exceed, together with that which is required for the re¬
demption of the Central Trust Company's certificates of de¬
posits and the acquisition of bonds, bond obligations or scrip
therefor, and of stock of the Maritime Canal Company, and of
existing debts of the Nicaragua Canal Construction Company,
one-half of tlie capital stock of the new or reorganized company.
Such stock shall be offered for sale by subscription to the
stockholders parties to this agreement, in such lots and at such
prices not less than $10 per share as the Committee mav de¬
termine. All subscriptions must be made on or before the date
the Committee may name by advertisement, and in the event
that the subscriptions exceed in amount the stock offered for
sale, allotment shall be made to subscribers, first, in pro¬
portion to their deymsits, and then, as to any stock remaining
unallotted, in proportion to the amounts of their subscriptions,
and the subscription price shall be payable upon notice of
allotment. Any such stock not allotted upon subscription may
be thereafter sold by the Committee and in such manner and at
such prices as they shall determine, but at not less than the
subscription price.
The names of all depositors shall be registered by the
Central Trust Company, and the right of subscription shall
belong to the registered depositors, or to their respective
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assigns, within the limit of time and subject to the terms and
conditions of payment fixed by the Committee.
tïxts ligve^mjcnt witnessjetlx^ that in
consideration of one dollar, the receipt of which is hereby
acknowledged, the subscribers hereto have agreed with each
other and with the said Committee as follows :
^XVSt. That the parties of the first part hereby make, con¬
stitute and appoint Jolin K. Bartlett, Smith M. Weed, Henry
E. Howland, Richard L. Edwards, John J. Emery, Wilhelmus
Mynderse and E. K. Sibley, parties of the second part, as their
attorneys in fact and as their Committee of Reorganization.
^iJCJCrtxxl. That the parties of the first part are the owners, or
the duly authorized representatives of the owners, of the shares
of stock set opposite their respective names, and deposited
hereunder, and that they will forthwith upon notice deposit the
same with the Central Trust Company of New York, and will
in all cases execute transfers of their said stock and deposit
the same wdth the said stock, so that the legal title of the said
stock shall become vested in and subject to the control of the
said Reorganization Committee ; and all property and rights
acquired by the Committee shall vest in the Committee as it
mav be constituted from time to time, without the need of
formal transfer.
^IXXt^Ä. That the parties of the first part agree to accept in
exchange for the stock so deposited by them, respectively, cer¬
tificates of deposit, signed by or on behalf of the Central Trust
Company, which certificates shall describe the stock deposited,
and shall contain the folloAving substantially :
Deposited under an agreement between certain of the
stockholders of the Nicaragua Canal Construction Company,
parties of the first part, and John R. Bartlett, Smith M.
Weed, Henry E. Howland, Richard L. Edw^ards, John J.
Emery, Wilhelmus Mynderse and E. K. Sibley, therein called
" the Reorganization Committee, parties of the second part,
bearing date the eighth day of December, 1893,
5
" The holder hereof assents to, and is bound by, the pro-
visions of said agreement by receiving this certificate,"
The election whether or not to pay $3.50 a share on each
share of stock deposited shall be made by the depositor at
the time of making his deposit of stock, and cannot be later
reconsidered.
The certificates of deposit issued to depositors paying $3,50
per share on stock deposited by them shall contain also
the following, substantially :
$3.50 per share having been paid at the time of deposit
upon the stock herein described, the owner and holder
" of this certificate is entitled, at the completion of the re-
organization, to the advantages and privileges provided
in the Plan of Reorganization for the benefit of those de-
positors making such payment."
The interest represented by said certificates shall be trans¬
ferable by assignment or delivery, subject to the terms and
conditions of this agreement.
The words subscriber, depositor, assenting stockholder or
creditor, or other words equivalent thereto, whenever used
herein, shall be held to include individuals, trustees, guardians,
committees, agents and other persons acting in a representa¬
tive or fiduciary capacity, with control over the shares, securi¬
ties or claims held by them, partnerships, partnership associa¬
tions, joint stock companies and corporations.
By the acceptance of the certificates of deposit hereinbefore
referred to, the several parties of the first part respectively
depositing their shares with the Central Trust Company
become parties to this agreement, with the same force and effect
as if they had severally affixed their signatures and seals at the
foot of this instrument.
gxrxtvtlx. After the assent of stockholders to the amount of
sixty thousand shares has been given, the Committee shall
then be the sole judge when and whether the assent of enough
6
stockholders has been obtained to this agreement to warrant
them in carrying ont the same. They shall then have power
to declare said agreement operative.
The failure of a shareholder to avail himself of the pro¬
visions of this agreement prior to the declaration by the Re¬
organization Committee that it has become operative, shall ex¬
clude him from participation in the reorganization, except
that the Committee may, upon such terms and in such manner
and within such limits of time as they shall think fit, admit
such stockholders to the reorganization.
The said Reorganization Committee is empowered :
1. To organize and act by the vote or decision of a ma¬
jority of their number present at any meeting, a majority of
the Committee constituting a quorum for the transaction of
business. An absent member may vote through a proxy given
to another member.
2. To add to the number of its members, and to fill any
vacancy in the Committee arising either from death, resigna¬
tion, incapacity or refusal to act. In such case the appoint¬
ment shall be made in writing by the remaining members of
the Committee, or by a majority of them, and shall be executed
and deposited with'the Central Trust Company of New York.
3. To invite, in such manner as said Committee may deem
best, the stockholders of the Company to become parties to
this agreement.
4. To appoint such sub-committees, counsel, attorneys^
agents or other employees as they shall see fit ; to pay them a
reasonable compensation for their services, and to incur such
expenses as shall, in their opinion, be necessary in carrying
this plan into effect.
5. To do whatever in their opinion may be necessary
7
or proper to secure a sale or conveyance to them of
the said property and franchises of the Nicaragua Canal
Construction Company, either by means of the existing
legal proceedings, or by the institution of new suit or
suits or proceedings, or by negotiation or agreement
or otherwise, as to them shall seem expedient, and upon
any sale or sales, in their discretion to purchase or acquire the
property, assets, rights and franchises of the said Nicaragua
Canal Construction Company, or any part or parts thereof, and
to hold the property so purchased, either in their own name or
in the name of persons chosen by them for the purposes of this
agreement, and generally to exercise all powers, authority and
discretion which the parties of the first part, or any of them,
might or could do, singly or collectively, as stockholders.
6. To organize a corporation of the capital stock of twelve
millions of dollars, under the laws of the United States of
America or of some State of the United States of America, and
to sell and convey the said property, assets, rights and fran¬
chises, and all other property which the Committee may ac¬
quire, to such corporation, in full payment of the issue of its
entire capital stock of twelve millions of dollars, and to pro¬
cure the issue of such capital stock to the Committee or to its
order.
7. To attend any and all stockholders' meetings of the Nica¬
ragua Canal Construction Company and of the new or reorgan¬
ized company, and to vote upon the shares of stock deposited
as aforesaid, or upon the shares of stock of the new or reorgan¬
ized company received as aforesaid, on any questions that may
come up at such meetings for action, and to examine the books
and accounts of the Nicaragua Canal Construction Company,
and to take any action which any of the depositing stockholders
could take, except that the Committee shall not voluntarily
incur for depositing stockholders any individual responsibility
for moneys borrowed.
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8. To do any and all acts and things that they may consider
judicious, necessary and proper to carry out any purpose indi¬
cated in the foregoing plan, and to bring about a reorganization
of the Company, and to obtain for it necessary capital. And
for these purposes the Committee are authorized to make con¬
tracts with syndicates, bankers or other persons to obtain cash
for the purchase of any property and assets of the Nicaragua
Canal Construction Company hereinbefore referred to, and to
obtain or provide cash for any of the requirements of the new
or reorganized Company, or any cash which may be required to
carry out any purpose of this agreement.
9. To abandon the attempt of reorganization at any time,,
if it shall be deemed by them impracticable to accomplish it.
That the Reorganization Committee shall use and
apply the money received by them, and the property and assets,
purchased by them, in the manner following :
1. So much of said money as shall be requisite shall be ap¬
plied to the payment of all proper expenses of every descrip¬
tion incurred in or about the execution of this agreement, in¬
cluding reasonable compensation to the Central Trust Com¬
pany, and to the members of this committee, and to their counsel,
and to payment of any other expenses properly incidental to
the performance of the agreement.
2. So much of said money as shall be requisite shall be used
for the acquisition of the property and assets of the Nicaragua
Canal Construction Company, including the assignment of the
contract between the Construction Company and the Maritime
Canal Company for the construction of the canal.
3. All funds or securities remaining in the hands of said
Committee, however acquired, shall, after payment of the
charges and expenses aforesaid, and after making the distri-
butions and sales and purchases and adjustments contem¬
plated or authorized in the plan or in this agreement, be
delivered to a Trustee or Trustees, to be designated by the
Committee, for the sole use and benefit of the new or reor¬
ganized company; or the same may be delivered to the
treasury of the new or reorganized company ; or part may be
delivered to a Trustee or Trustees, and the remainder to the
treasury of the new or reorganized company, if it is thought
bv the Committee to be more advisable to do so. Whether
delivered to a Trustee or Trustees, or to the treasury of the new
or reorganized company, or to both, the transfer and delivery
of the stock of the Maritime Canal Company shall be subject
to the condition (to be embodied in the instrument of trans¬
fer by appropriate provisions) that an amount of such stock
equal in par value to the par value of the outstanding capital
stock of the new or reorganized Company shall at all times be
held in the treasury of the new or reorganized Company, or
for the benefit of such treasury, until the liquidation of the
new or reorganized Company, or until the Directors of the new
or reorganized Company shall by a vote of three-fourths of
their entire number annul the condition.
That an account shall be kept by the Committee
of all receipts and disbursements by them made, and they shall
file their accounts with the Board of Directors of the new re¬
organized corporation, and the same shall be final, binding and
conclusive upon all parties hereto.
That the amount to be paid at the sale of the
property and assets of the Nicaragua Canal Construction Com¬
pany shall be in the discretion of the Committee.
That it is expressly understood that the Committee
assume no responsibility for the execution of the above plan or
any part thereof ; the members, however, undertake in good
faith to endeavor to execute the same. They shall not be
10
personally liable in any case for the acts of each other, nor for
their own except in case of willful malfeasance or gross negli¬
gence, nor shall they be personally liable for the acts of their
agents or employees. Any member of the Committee may at
any time resign, by giving notice in writing to the Committee,
and the Committee may settle any transaction with such mem¬
ber, or with the personal representatives of any deceased mem¬
ber, and give a full release and discharge. It is agreed that
the present or future members of the Committee may be or
become pecuniarily interested in any of the pro]3erty or
matters which are the subject of this agreement; and that they
mav become members of any syndicate formed for the sale or
purchase of stock, or for the prosecution of work in the
construction of the canal, or for the financial assistance of the
enterprise.
SmtlX. That in case it shall be found practicable to effect
a reorganization of the Nicaragua Canal Construction Company
without a sale of its property, assets and franchises, the Com¬
mittee are authorized in their discretion to effect such reorgan¬
ization.
^IjCWJCiXth. That the Committee are vested with full power
and authority to do any and all acts and things necessary and
proper in their judgment to be done, in order to carry out the
said plan of reorganization, or to carry out any purpose indi¬
cated therein, including the power from time to time to make
such changes in the plan of reorganization as they may con¬
sider necessary or expedient. But no alteration or modification
shall be made by the Committee involving the acceptance by
depositing stockholders of any less amount of new stock than is
contemplated in the said plan, unless notice of such alteration
or modification shall be given by advertisement of not less
than twice a week for two successive weeks in two newspapers
published in the city of New York, and in one newspaper
published in the city of San Francisco : any depositing stock-
11
holder who shall not consent to such alteration or modification
shall file notice of dissent with the said Central Trust Com¬
pany within the said two weeks, and if more than one-quarter
of the registered shares object to the proposed alteration or
modification, it shall not go into effect ; otherwise, it shall be
effective and binding upon all.
That in the event of this agreement not be¬
coming operative, or of its being abandoned, or of its not being
consummated by the purchase of the property by the Re¬
organization Committee and the organization of a new
Company or through the rehabilitation of the now-existing
Company, then the Committee shall return to the several
depositors, upon surrender of their certificates of deposit, the
stock deposited and the moneys paid by them respectively,
upon payment, however, of a due proportion of all advances
made by the Committee, and all expenses and liabilities by
them incurred, including their own reasonable compensation.
That the original agreement shall be filed
with the Central Trust Company of New York. Copies shall be
printed and may be signed by the parties subscribing thereto,
either singly or by as many as may be convenient upon each
paper, and all of said papers so signed shall be taken and
deemed as constituting one original paper.
^jcrutitjectxtlx. Any notice required to be given by the Com¬
mittee to assenting or depositing stockholders may be given by
publication of the same twice a week for two weeks in two
daily newspapers in the City of New York, and in one newspaper
in the city of San Francisco, and such notice shall be sufficient.
That this agreement shall bind the said Re¬
organization Committee and their successors in office appointed
in accordance herewith, and shall bind the assenting stock¬
holders, their, and each of their heirs, executors, administra¬
tors, assigns and successors.
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%\t WitXlJ^SS the said parties have hereunto
signed their names, or put their corporate seals, and the parties
of the first part have written opposite to their respective names
or seals the amount of the stock deposited or to be deposited
by them respectively.
Signatures."^
Address.
No. of
Shares.
* N. B.—The option of paying $3.50 a share is to be exercised at the
time of depositing shares with the Central Trust Company.