And whereas, said party of the first part has determined to issue such bonds at the rate of not exceeding fifteen thousand dollars per mile of railway actually constructed, not including side tracks or turn-outs.

And whereas, the proceeds of such bonds, and the other means of said company will be sufficient only for the construction and completion of said road-bed and superstructure, and will leave said first party without the means to procure equipment necessary for the maintenance and operation of said railway, and in order that the same may when completed, be equipped, maintained and operated in such manner as the public convenience may require, and also that the means may be provided for the payment of the semi-annual accruing interest on said bonds, and the principal thereof at maturity, it has resolved to enter into the agreement herein contained, and reference to the subject-matter of which the respective parties hereto are fully authorized by the laws of the State of Iowa to contract as herein provided.

Now therefore, this indenture witnesseth: That the first party, in consideration of the covenants and agreements herein contained, to be kept and performed by the said second party, it, the said first party, hath granted, demised and leased, and by these presents doth grant, demise and lease unto the said party of the second part, its successors and assigns, all the following described property of said Chicago, Decorah & Minnesota Railway Company, that is to say:

All its railway extending from said town of Decorah, in a southerly direction, to a point of junction with the Milwaukee Division line of road of the party of the second part, at or near Postville aforesaid; and also all of said first party's line of railway extending northwardly from said town of Decorah to such point or points in the States of Iowa and Minnesota, as may be hereafter determined, constructed and to be constructed, together with all branches and further extensions of railway, hereafter to be made, including right of way, lands occupied thereby, superstructure and tracks thereon, and to be placed thereon, and other material used therein, and procured or to be procured therefor; bridges, viaducts, fences, depot grounds and buildings thereon and to be placed thereon, and all other property, real or personal, appertaining to said railway, and the use thereof now or hereafter acquired by said first party, together with the rents, revenues and income to be had, levied or derived therefrom, and all the rights, privileges and franchises of said first party, in, to, or concerning said railroad, constructed and to be constructed, and every part thereof.

To have and to hold the above described railroad premises and property, with the appurtenances, rights, privileges and franchises appertaining thereto, unto the said party of the second part, its successors and assigns, from the fifteenth day of March‣ A. D. eighteen hundred and eighty-four, for and during the chartered existence of said first party, and during the extension or extensons, renewal or renewals, of the chartered rights and existence of said first party, if said renewals or extensions shall be had as hereinafter provided, absolute and exclusive possession to be delivered to said second party, its successors and assigns.

Said first party further agrees, that during the continuance of this lease and the life of its present charter, it will keep up its corporate organization by the annual election of its officers, and the performance of such other acts as may be required by law for that purpose.

And further, that at the expiration of its present charter it will, at the request of said second party, its successors and assigns, in case the mortgage herein mentioned shall not have, in the meantime, been foreclosed, cause its rights, powers and franchises to be renewed and extended for another term of fifty years, or for such other or further period as may be at the time authorized by law.

And will, in like manner on like request, at each successive expiration of its chartered rights, provided always that no foreclosure has taken place, renew and extend the same.

And will. during all such renewals and extensions, keep up and maintain its organization, so as, in fact, to make such organization a continuing one.

And will. at the termination of its present chartered existence and at the termination of each successive renewal and extension thereof, as hereinbefore provided, at the request of the second party, its successors and assigns, in case no foreclosure of mortgage shall have been had, renew and extend, or cause to be renewed and extended, this lease and stipulations herein provided, so as in effect to make the same perpetual.

The said second party, in consideration of the premises hereby covenants and agrees as follows, to-wit:

1. To take full possession of all and singular the railway premises and property hereby demised and now constructed or in process of construction, or hereafter to be constructed or acquired, and owned by the party of the first part.

2. To pay or cause to be paid, all taxes and assessments that may be lawfully levied, charged or assessed on said demised premises and property, or any part thereof, during the continuance of this lease and all renewals thereof.

3. To procure and place on said railway such, and such an amount of rolling stock as may be reasonably required in the transaction of the business of said demised railway. and to keep the same in good condition, and to maintain and operate said railway in such manner as may be required to reasonably accommodate the country through which said demised railway passes.

4. To pay annual rental thereof of thirty per cent of the gross earnings thereon; on all joint business the gross earnings to be computed on a pro rata basis, according to the distance carried respectively on the roads of the parties hereto, which said thirty per cent of gross earnings the said second party guarantees shall amount to a sum sufficient to pay the semi-annually accruing interest on the bonds herein mentionad and contemplated, and which shall be paid semi-annually on the first days of October and April in each year, at the office and agency of the first party, in the City of New York, and so much thereof as may be necessary to be used and applied by it to pay and take up the semi-annually maturing coupons attached to said bonds, until all are paid, and after the maturity of said bonds, to be applied by said second party to the payment of interest thereon at the rate of five per cent per annum, payable semi-annually, at the same time and place, until the expiration of the chartered rights of said first party, and any balance remaining in its hands and not required for payment of coupons and interest or principal of said bonds as herein provided, shall be paid to the first party, its successor and assigns.

Provided, however, that in case a foreclosure of said mortgage shall be had before or after maturity of said bonds, or before the expiration of the chartered rights of said company, then and thereafter this lease shall cease and determine.

This indenture of contract and lease, made this eighth day of June, A. D. one thousand eight hundred and eighty, by and between the Iowa City & Western Railway Company, a corporation of the State of Iowa, party of the first part, and the Burlington, Cedar Rapids & Northern Railway Company, a corporation of the State of Iowa, owning and operating the Burlington, Cedar Rapids & Northern Railway in Iowa, party of the second part.

Whereas, the said first party is authorized by the laws of the State of Iowa to locate, construct, maintain and operate a railway from Iowa City through the English River valley to Ottumwa, Montezuma, Oskaloosa, or such point or poiuts as may be determined upon, and such extensions or branches as said first party may desire to construct.

And, whereas, said first party by the assistance of the said second party, and under the contract of lease of date April 22d, A. D. one thousand eight hundred and seventynine, with said second party has constructed that portion of its line of railway between Iowa City in Johnson county and the town of What Cheer in Keokuk county.

And, whereas, said first party has resolved to borrow one million dollars ($1,000,000) to pay for the construction of said proposed line or lines of railway, and to issue therefor one thousand bonds of one thousand dollars ($1,000) each, to bear date the second day of June, A. D. one thousand eight hundred and seventy nine, to have thirty years to run to maturity, to bear interest at the rate of seven per cent (7 per ct.) per annum, payable semi-annaally, both principal and interest payable at the agency of the second party in the City of New York, and has secured the payment therefor by a trust mortgage, to which this lease is subject.

Now, therefore, this indenture witnesseth, that the first party in consideration of the covenants and agreements herein contained, to be kept and performed, by said second party, it. the said first party hath granted, demised and leased unto the said party of the second part, its successors and assigns, all the following described property of said Iowa City & Western Railway Company.

Said first party further agrees, that during the continuance of this lease and the life of its present charter, it will keep up its corporate organization by the annual election

of its officers and directors, and perform all such other acts as may be required by law for that purpose.

The said second party, in consideration of the premises, hereby agrees to continue in full possession of the rallway premises and property hereby demised, and to take full possession of all additions and extensions of said railway, upon completion of each section or division thereof, and to pay, or cause to be paid, all taxes and assessments that may be lawfully levied, charged, or assessed on said demised railroad premises and property, or any part thereof, during the continuance of this lease and all renewals thereof, and to procure and place thereon said railway such and such an amount of rolling stock as may be required in the transaction of the business on said demised railway, and keep the same in good condition and maintain and operate said railway now completed and hereafter to be constructed, in such manner as may be required to reasonably accommodate the country through which said demised railway passes; and in addition thereto. that is to say, on and after the 22d day of April, A. D. one thousand eight hundred and ninety-four (see section 2 of said contract and lease of date April 22, 1879), the said second party is to pay an annual rental therefor of thirty (30) per cent of the gross earnings thereon, on all joint business gross earnings to be computed upon a pro rata basis, according to the distance carried respectively on the roads of the parties hereto, which said thirty (30) per cent of the gross earnings the second party guarantees shall amount to a sum sufficient to pay the semi-annually accruing interest on the bonds herein mentioned and contemplated, and which shall be paid semi-annually on the first days of September and March in each year, at the agency of the first party, in the city of New York, and so much thereof as may be necessary to be applied and used in paying and taking up the semi annually maturing coupons attached to said bonds, until all are paid; and after the maturity of said bonds to be anplied to the payment of interest thereon at the rate of seven (7) per cent per annum, payable semi-annually at the same time and place, until the expiration of the chartered rights of said first party, and any balance remaining in the hands of said agency in the city of New York, of the first party at the end of each year, and not required for the payment of coupons and interest as herein provided, shall be paid to the first party, its successors and assigns, provided, however, that in no case a foreclosure of said mortgage shall be had before or after the maturity of said bonds, or defore the expiration of the chartered rights of said company, then and thereafter this lease shall cease and determine.

It is mntually and expressly agreed that the authorized capital stock of said first party, shall not exceed the sum of two millions of dollars ($2,000,000), and that of said stock no greater amount shall ever be issued by said first party, its successors and assigns, than six thousand shares, by amendment of its charter, or otherwise, without the written consent of the second party, its successors and assigns, which six thousand shares the second party now holds and owns, subject to the limitations and provisions provided for in said contract and lease of date April 22, 1879.

And further, that the covenants and agreements herein contained shall be binding upon the successors and assigns of the respective parties hereto.

1. Amount of stock issued for dividends on earnings

2. Amount of stock per mile of road...

3. Amount of stock representing road in Iowa (on mileage basis).

None.

None.

None.
None.

None.
None.

17,350 None for the year.
55.000 None for the year.

72,350

FUNDED DEBT.

MORTGAGE BONDS, MISCELLANEOUS OBLIGATIONS, AND INCOME BONDS.

Amount of funded debt representing road in Iowa on 855,56 miles of road.