large appear, and which are known as the fifth mortgage bonds of the said Company; and whereas, a lien was created by the Buffalo Branch of the Erie Railway Company, and the Erie Railway Company by a mortgage of the railroad running from Hornellsville in Steuben County, to Attica in Wyoming County, in the State of New York, together with all the property, franchises, interests and appurtenances appertaining to the said railroad, and to the said corporation, known as the Buffalo Branch of the Erie Railway Company, to secure the payment of the bonds therein mentioned, which bonds are now outstanding to the amount of one hundred and eighty-six thousand dollars, as by reference to the said mortgage on record will more fully and at large appear.

AND WHEREAS, all the said liens to the extent that the same are still outstanding unpaid, are recognized as liens prior to the mortgage hereby created upon the property mentioned in the said mortgages respectively.

AND WHEREAS, the party of the first part did on the first pay of September, one thousand eight hundred and sixty-five, issue its convertible, unsecured bonds, amounting in the aggregate to one million pounds sterling, the principal whereof becomes due on the first day of September, one thousand eight hundred and seventy-five, and which bear interest at the rate of six per cent per annum, but which had no lien upon the property of the party of the first part.

AND WHEREAS, the said The Erie Railway Company created a further lien upon its property by a mortgage, known as a consolidated mortgage, dated the first day of September, one thousand eight hundred and seventy, made to the Farmers' Loan and Trust Company as trustee, to secure bonds in the aggregate amounting to thirty millions of dollars, of which last-mentioned bonds an aggregate amount of eighteen millions five hundred and fifty-four thousand dollars were reserved, and not to be issued or withdrawn except on the presentation and surrender of an equal amount of the aforesaid prior lien bonds; and the said Company did further, by an agreement dated the eighth day of December, one thousand eight hundred and seventy, made with Junius Spencer Morgan and others, further set apart and appropriate the further aggregate sum of five millions of dollars of the said consolidated bonds as collateral to and to provide for the aforesaid issue of so-called sterling bonds last above referred to, as by reference to the aforesaid consolidated mortgage, and to the aforesaid agreement made with Junius Spencer Morgan and others, will fully appear.

AND WHEREAS, under and by virtue of the provisions before recited, in respect thereto, a portion of the aforesaid.prior lien bonds, and of the said sterling bonds have been cancelled, and consolidated bonds have been issued for an equal amount, and all the remainder of the said consolidated bonds, pledged for that purpose, and equal to the amount of the remainder of the said prior lien bonds, and of the remainder of the said sterling bonds are still unissued, and still remain pledged for the purpose of securing and of meeting the same.

AND WHEREAS, the said party of the first part did on the first day of January, in the year one thousand eight hundred and seventy-three, issue its convertible unsecured bonds for the aggregate amount of ten millions of dollars, the principal whereof becomes due and payable on the first day of January, in the year one thousand nine hundred and three, and which bear interest at the rate of seven per centum per annum, but which last-mentioned bonds had no lien upon the property of the party of the first part, and were not secured by any pledge or mortgage of its property, but which last-mentioned bonds, it is the intention of the party of the first part to equally and legally secure by virtue hereof to the same extent, and in the same manner as the bonds now about to be issued, and hereinafter particularly described, shall be secured hereby, and so that the aforesaid ten millions of dollars of convertible bonds, and the proposed issue of thirty millions of dollars of so-called second consolidated bonds, shall in point of security stand on the same footing, and be on an equality, and so that no bond of either of said issues shall have any priority over any other bond of either of said issues.

AND WHEREAS, for the purpose of enabling the said party of the first part to carry into effect the premises above recited, and to complete, finish and operate its railroad, and also for the purpose of obtaining the money and materials necessary for perfecting its line of railway, and enlarging the capacity, and extending the facilities thereof, the said party of the first part has, by a vote of its Board of Directors, resolved to borrow money to an amount not exceeding in the aggregate the sum of thirty millions of dollars, and to issue bonds for the payment thereof, to the number of thirty thousand, each for the sum of one thousand dollars, or two hundred pounds sterling, and bearing date the second day of March, Anno Domini one thousand eight hundred and seventy-four, which said bonds are numbered from one to thirty thousand inclusive, and are upon an equality so far as regards security for the payment thereof, by this Indenture, notwithstanding the same may be in fact executed, issued and delivered at different times, and are authenticated by the certificate of the said trustees thereon endorsed, and each of which bonds may be in substantially the form following, to wit:

United States of America, State of New York.-One Thousand Dollars-Two Hundred Pounds. The Erie Railway Second Consolidated Mortgage Bond

Know all men by these presents, That the Erie Railway Company acknowledges itself indebted anto WILLIAM PITT SHEARMAN, or the bearer hereof, in the sum of two hundred pounds sterling money, or in the sum of one thousand dollars in gold coin of the United States of America of the present standard of value and fineness, which the said Company promises and agrees to pay in like coin or in sterling money, at the rate of four shillings to the dollar, to the said William Pitt Shearman, or to the bearer hereof, (at his option,) on the second day of March, 1894, at the agency of the said Company, in the City of London, with interest thereon in like coin or in sterling money, payable half yearly at the said agency of the Company in London, (or, at the holder's option, at the office of the Company in the City of New York, on giving six months' notice in writing to the Treasurer of the Company to that effect,) on the presentation and surrender of the annexed coupons as they severally become due.

And the said Company further agrees with the holder hereof that this bond may be transferred upon the books of the Company in New York, or at any other place where the Company may keep transfer books for that purpose; but after a registration of ownership certified hereon by the transfer agent of the Company, no transfer except upon the books of the Company shall be valid, unless the last transfer upon said books be to bearer, which shall restore the transferability by delivery. And this bond shall continue so subject to successive registrations and transfers to bearer as aforesaid, at the option of each holder. Upon the failure to pay any one of the coupons hereto attached upon due presentation on or after maturity and offer to surrender the same, provided said default continue for the space of six months thereafter, the principal of this bond shall immediately become due and payable.

This bond is one of a series or an issue amounting in the aggregate to thirty millions of dollars and consisting of thirty thousand bonds, each for the sum of one thousand dollars, or its equivalent, the sum of two hundred pounds sterling, and numbered from one to thirty thousand, inclusive, all which are equally secured by mortgage bearing date the fourth day of February, 1874, duly executed and recorded and delivered by the obligor to the Farmers' Loan and Trust Company of the City of New York in trust, and conveying to the said Trustee all the Railways owned by said Company, together with all and singular the equipments, appurtenances and franchises therein mentioned, as by reference thereto will more fully and at large appear, but subject, nevertheless, to the existing priority of lien of the bonds given by the New York and Erie Railroad Company, viz.: of the bonds generally known as the first mortgage bonds issued in pursuance of an act of the Legislature of the State of New York, amounting in the aggregate to three millions of dollars, and of the outstanding second mortgage bonds, amounting in the aggregate to four millions of dollars, and of the outstanding third mortgage bonds, amounting in the aggregate to six millions of dollars, and of the outstanding fourth mortgage bonds, amounting in the aggregate to four million four hundred and forty-one thousand dollars, and of the outstanding fifth mort

gage bonds, amounting in the aggregate to nine hundred and twenty-six thousand five hundred dollars, and also subject to the priority of the outstanding mortgage bonds given by the Buffalo Branch of the Erie Railway Company upon that part of the said railway which is between Hornellsville, in Steuben County, and Attica, in Wyoming County, New York, amounting in the aggregate to one hundred and eighty-six thousand dollars, and also subject to the priority of the mortgage known as the first consolidated mortgage, which was give to secure bonds amounting in the aggregate to the sum of thirty million of dollars, but out of which amount an aggregate amount sufficient for the security, satisfaction and cancellation of all of said recited prior lien bonds, and also to cover the existing sterling convertible bonds of this company for five millions of dollars, making a total of twenty-three millions five hundred and fifty-four thousand dollars were reserved; and to the extent that such prior lien bonds, and said sterling convertible bonds, remain uncancelled, the same are still reserved and remain placed in trusts for that purpose, and to be withdrawn from said trusts only upon presentation to, and concellation by the Trustee of an amount of such prior lien or sterling convertible bonds equal to the amount of the bonds then to be withdrawn from said trust, from time to time, until all are cancelled. Ard the mortgage given to secure the bonds of the present issue also secures equally a further sum of ten millions of dollars of bonds known as the convertible bonds of this Company, issued first January in the year 1873.

It is expressly provided that this Company may at any time after five years from the date hereof, on giving six months' notice, by publication in the Cities of New York and London, pay the principal of this bond according to its tenor, although the time above limited for such payment shall not then have expired, and after such notice and after the expiration of such period of six months and offer of payment, the interest on the same shall cease.

This bond shall not become obligatory until authenticated by a certificate endorsed hereon, signed by the said Trustee.

IN TESTIMONY WHEREOF, the said Erie Railway Company has caused its corporate seal to be hereto affixed, and the same attested by the signatures of its President and Secretary, and the coupons annexed by the name of said Secretary, on this second day of March, in the year of our Lord one thousand eight hundred and seventy-four.

Secretary.

President.

The Farmers' Loan and Trust Company hereby certifies that this bond is one of the thirty thousand bonds of one thousand dollars each (or two hundred pounds each when in sterling currency), secured by the mortgage referred to above, and that said mortgage is duly recorded as authorized by law.

FARMERS' LOAN AND TRUST COMPANY, Trustee.

All of said bonds bearing interest at seven per centum per annum, represented by coupons for the sum of seven pounds sterling each, payable semi-annually at the agency of the Company in London or in New York, after six months' notice to the Treasurer of the Company as above expressed.

NOW, THEREFORE, THIS INDENTURE WITNESSETH, that the said party of the first part, for the purpose of securing the payment of the sums of money mentioned in said thirty thousand bonds, bearing date the second day of March, in the year one thousand eight hundred and seventy-four, and each and every of them, with the interest thereon accruing, after the actual issue of each of such bonds, and also for the purpose of equally and legally securing the payment of the aforesaid sum of ten millions of dollars, represented by the bonds of this Company for the same aggregate amount issued in the year one thousand eight hundred and seventy-three, and known as " convertible bonds," and so that the bonds, bearing date the 2nd day of March, in the year one thousand eight hundred and seventy-four, and the said convertible bonds, shall in point of security hereby, be on an equality. And in consideration of the premises above

recited, of the loan of the said money, and of the sum of one dollar to the said party of the first part in hand paid by the said party of the second part, at and before the receipt, ensealing and delivery of these presents, the receipt whereof is hereby acknowledged, the party of the first part hath granted, bargained, sold, assigned, transferred and conveyed, and by these presents doth grant, bargain, sell, assign, transfer and convey unto the said party of the second part, as trustee, and to its successor or successors in the trust, all and singular the railway of the party of the first part, from and including Piermont, on the Hudson River, to and including the final terminus of the said railway on Lake Erie, and the railway known as the Newburgh Branch, from Newburgh to the main line, and also all that part of the railway, designated as the Buffalo Branch of the Erie Railway, extending from Hornellsville to Attica, in the State of New York, and also all other railways belonging to the party of the first part, in the States of New York, Pennsylvania and New Jersey, or any of them, together with all the lands, tracks, lines, rails, bridges, ways, buildings, piers, wharves, structures, erections, fences, walls, fixtures, franchises, privileges and rights of the said Company, and also all the locomotives, engines, tenders, cars, carriages, tools, machinery, manufactured or unmanufactured materials, coal, wood and supplies, of every kind, belonging or appertaining to the party of the first part, and all the tolls, income, issues and profits arising out of the said property, and all rights to receive or recover the same; also all the estate, right, title, and interest, terms and remainder of terms, franchises, privileges and rights of action, of whatsoever name or nature, in law or in equity, conveyed or assigned unto the New York and Erie Railroad Company, or unto the Erie Railway Company, by the Union Railroad Company, by the Buffalo, New York and Erie Railroad Company, by the Buffalo, Bradford and Pittsburgh Railroad Company, by the Rochester and Genesee Valley Railroad Company, and by the Long Dock Company.

TO HAVE AND TO HOLD the same, together with all and singular the emoluments, income, advantages, tenements, hereditaments and appurtenances thereunto belonging, and the reversion and reversions, remainder and remainders, rents, issues and profits thereof, unto the said party of the second part, and its successors for ever, on the trusts and for the uses and purposes in this Indenture declared, and not other

wise:

PROVIDED ALWAYS, and these presents are upon the express condition, that if the said party of the first part shall well and truly pay, or cause to be paid, to the holders of the said thirty thousand mortgage bonds, intended to be secured hereby, and to the holders of the said ten thousand bonds known as couvertible bonds, also intended to be secured hereby, and to every of them, the principal sums of money therein mentioned, according to the true intent and meaning thereof, as the same become due, with interest thereon, at the times and in the manner therein provided, then and from thenceforth this Indenture, and the estate herein granted, shall cease, determine, and be utterly void.

AND THIS INDENTURE FURTHER WITNESSETH, that the actual possession, use, management and control of all the premises herein granted shall remain with the party of the first part, so long as the said bonds shall remain without default; that in case default is made in payment of any interest on the said bonds, so that the same shall be in arrear for six months, after actual demand thereof, made upon the party of the first part, the principal of the bonds upon which the party of the first part is so in default shall then be due and payable, notwithstanding the term of credit and time of payment specified on the face of said bonds; and that the said party of the first part, its successors and assigns, will, whenever default shall be made in the payment of the principal or interest of any of the said bonds for six months continuously, assign to the party of the second part, upon demand, all the right, title and interest of the party of the first part in and to every lien of any of the property herein before described, and will in the same case and upon such demand deliver to the party of the second part or its agents, the actual possession of the premises hereby granted and conveyed, and that in such case the party of the second part shall and may, by its officers and agents, take, receive, and collect the income and profits of said railroad, and all the other property hereinbefore described, first applying the same to the payment and discharge of all cur

rent expenses, needful repairs, and of the expense of taking, holding and managing such property, and all taxes and other similar charges, payment of which may be necessary for the carrying on of the business of the said railway, and next to the payment of all sums becoming due and payable upon the bonds secured by mortgages or other liens hereinbefore described prior to the lien hereby created, and next to the payment of all sums due and payable upon the bonds hereby expressly secured; and that the said party of the second part having entered, as before provided, into the full possession of the property, estates, and interests hereby conveyed, may proceed to sell and dispose of the same, and of all the benefit and equity of redemption of the party of the first part therein, by public auction, subject, however, to any of the said prior liens which may then be outstanding, giving at least sixty days' public notice in three daily newspapers published in the City of New York, and at least one daily newspaper in each town on the line of said railroad in which a daily newspaper is printed, and setting forth in such notice the time, place, and terms of the said sale, and that the parties of the second part shall and may, as the attorneys of the parties of the first part, for that purpose, by these presents duly constituted and appointed, make and deliver to the purchaser or purchasers thereof, a good and sufficient deed or deeds of conveyance in law for the same in fee simple, and good and sufficient transfers or assignments of all the said personal property, and shall and may, out of the moneys arising from such sale or sales, retain the principal and interest which shall then be due on the bonds hereby secured for the benefit of the holders thereof, together with the cost and charges of the sale and advertisement, and all other sums which the party of the second part or its successors may have been obliged to pay by reason of their taking possession of and operating the same property, and also a reasonable allowance for their own services, rendering the overplus purchase money, if any there be, unto the party of the first part, its successors and assigns, which sale shall be a perpetual bar both in law and equity against the party of the first part, its successors and assigns, and all persons claiming or to claim in the premises, or any part thereof, by, through, or under them.

AND THIS INDENTURE FURTHER WITNESSETH, that the said party of the first part, its successors and assigns, will at their own proper charge do all things necessary to be done to keep intact the lien hereby created, and will at any time or times hereafter, upon the request of the party of the second part, or its successors, make, do, and execute, and cause to be made, done, and executed, all and every such further reasonable acts, conveyances, assignments, and assurances in the law, for the better and more effectual vesting and confirming of the premises hereby granted or intended so to be, in and to the said party of the second part, or its successors, for ever, as by the said party of the second part, or its successors, or their counsel learned in the law, shall be reasonably devised or requested, and that the party of the first part will pay to the holders of the bonds hereby secured, respectively, the said principal sums of money therein mentioned, together with interest thereon, as the same shall come due and payable, and as the coupons therefor shall be presented for payment.

AND THIS INDENTURE FURTHER WITNESSETH, that the said party of the second part hereby accept the trusts aforesaid, and agrees to execute them upon the following terms and conditions, which are mutually agreed upon by the parties interested herein, to wit: That the party of the second part shall be responsible only for gross negligence or willful default; that it shall not be required to act in execution of the trusts hereby created, except at its own option, unless requested to do so by some person having a direct interest under the trust, and furnishing reasonable indemnity to the party of the second part against the loss, trouble and expense which it may be at in so doing; that it shall have power to submit all controversies to arbitration; and that in case the party of the second part is required to take measures for the enforcement of this mortgage, the reasonable expense of such measures shall be paid out of the trust estate, in preference to all other charges.

In witness whereof, the party of the first part has caused these presents to be subscribed by its Vice-President, and the party of the second part has caused the same to be subscribed by its Presi