the principal thereof. The purchase of notes as aforesaid may be made by the Trustee without notice, provided notes shall be offered to it or shall be purchasable in the market at a price in its judgment fair and reasonable within the above limit. The Trustee may also at any time call for offers of said notes within said limit as to price by advertisement in one or more daily newspapers published in the City of New York. The expense of such advertisement shall be paid by the Company. The Trustee shall be under no duty to advertise as aforesaid unless requested so to do by holders of 20% of the notes issued and outstanding hereunder, and unless indemnified to its satisfaction against the cost of such advertising. All of such notes purchased by the Trustee shall forthwith be canceled and the Trustee shall note on one of the originals hereof the fact of such cancellation and thereupon deliver the notes so canceled to the Company.

Whenever there shall have remained on deposit with the Trustee as much as five thousand dollars ($5,000) for sixty (60) successive days, notwithstanding efforts to purchase notes therewith, as hereinbefore provided, such fund shall be paid out by the Trustee from time to time upon the direction of the Company expressed by resolution of its Board of Directors or Executive Committee and upon delivery to the Trustee of (1) a copy of such resolution certified by the Secretary or Assistant Secretary of the Company under its corporate seal, and (2) a certificate signed and verified by the President or Vice-President and the Treasurer or Assistant Treasurer of the Company, stating in substance:

(a) That the Company has acquired stocks, bonds, notes or other securities of corporations, at least fifty-one per cent. of whose stock is owned by the Company, describing the same with reasonable detail and stating the actual cash cost of each item; and

(b) That the sum directed to be paid out does not exceed the fair value and does not exceed the actual cash cost to the Company of said stocks, bonds, notes or other securities. Prior to any payment by the Trustee, there shall be delivered to it any shares of stock or any mortgage bonds, notes or other securities of corporations made the basis of such payment.

The certified copy of resolution and the certificate above provided for shall be full protection to the Trustee in making any payment hereunder.

[Such stocks, bonds, notes, or other securities of corporations deposited with the Trustee hereunder shall be held by it as further security for the payment of the notes secured hereby and so long as there shall be no default, the Company shall be entitled (1) to receive

all interest paid or dividends declared on such securities and (2) to vote upon all shares of stock deposited with the Trustee hereunder. See J. & L. S. Co., Art. 3, Sec. 5, p. 214.]

[The purchase price of any stocks, bonds, etc., delivered by the Trustee to the Company by resolution of its Board of Directors or Executive Committee shall be paid in cash to the Trustee.]

[Trustee entitled to expenses and reasonable compensation. See J. & L. S. Co., Art. 10, Sec. 1, pp. 241-2]

ARTICLE IV

[All notes, but not less than all, redeemable at 102 and accrued interest. See J. & L. S. Co., Art. 4, Sec. 2, p. 221.]

ARTICLE V

SECTION 1. [Principal and accrued interest due on default. See J. & L. S. Co., Art. 5, Sec. 4, p. 227.]

SECTION 2. [In case of default in interest payment for 90 days the Trustee may demand that the principal then due and any accrued interest be paid with 6% interest; also expenses of collection and reasonable compensation.]

In case the Company shall fail forthwith to pay said amounts upon such demand, the Trustee may sell and dispose of for cash either all, or from time to time any part, of the stocks, bonds, notes or other securities of other corporations held in pledge hereunder, if any, which sale or sales, if deemed best by the Trustee, may be made privately, but otherwise shall be made in the City of New York, State of New York, either at the New York Stock Exchange, according to the rules and customs thereof, or at public auction at such other place or places, and at such time or times, and upon such terms as the Trustee may fix, and notice or notices of the time and place of sale shall be sufficient if given by publication thereof in at least two newspapers published in the City of New York, for five days in the week next preceding such sale or sales.

[If proceeds of sale are insufficient, then proceedings may be instituted at law or in equity to secure the deficiency. See J. & L. S. Co., Art. 5, Sec. 15, p. 232.]

[Rights of action enforceable by Trustee without the possession of any of the notes or coupons.]

[No noteholder or noteholders shall have right of action until written notice of default of Company has been given to Trustee. See J. & L. S. Co., Art. 5, Sec. 18, p. 233.]

SECTION 3.

[Application of proceeds of sale:

(1) To payment of expenses, etc.

(2) Payment of principal and interest.

(3) Surplus to Company. See J. & L. S. Co., Art. 5, Sec. 13, pp. 230-1.]

SECTION 4.

[Trustee and noteholder may bid. Purchaser permitted to apply notes and matured coupons. See J. & L. S. Co., Art. 5, Sec. 14, p. 231.]

ARTICLE VI

[Form and proof of execution of instruments by noteholders. Proof of ownership of notes and coupons. See J. & L. S. Co., Art. 7, pp. 235-6.]

ARTICLE VII

[Waiver of personal liability. See J. & L. S. Co., Art. 6, p. 235.]

ARTICLE VIII

[Trustee may assume default not to exist until notified, Trustee not required to incur expense without indemnity, Trustee not responsible for validity of indenture or security, Trustee not responsible for recitals, Trustee may employ agents or lawyers, Trustee entitled to compensation-same to constitute a lien, Trustee not responsible for recording, etc. See J. & L. S. Co., Art. 10, Sec. 1, pp. 240-3.]

[Testimonium. See J. & L. S. Co., Art. 12, p. 251.] [Acknowledgments. See J. & L. S. Co., Art. 12, pp. 252-4.]

CONDITIONAL SALE AGREEMENT

THIS AGREEMENT, made at the City of New York, in the State of New York, on the first day of October, 1907, by and between American Car and Foundry Company, a corporation organized under the laws of the State of New Jersey, hereinafter called the Car Company, party of the first part; Columbia Trust Company as Trustee, a corporation organized under the laws of the State of New York, hereinafter called the Trustee, party of the second part; and Erie Railroad Company, a corporation organized under the laws of the State of New York, and having its chief office and place of business in the City of New York, State of New York, hereinafter called the Railroad, party of the third part; Witnesseth:

[Whereas clause stating purpose of agreement and acceptance of trust.] 1

[Consideration clause.]

First. The Car Company agrees to manufacture for and to deliver to the Trustee during the months of October, November and December, 1907 (all deliveries to be completed not later than January 31, 1908), and in the lots hereinafter specified, three thousand forty-ton, steel-underframe box cars lettered "Erie" and numbered 109500 to 112499 inclusive (comprising the "trust equipment" in this instrument mentioned), which said cars are to be built in accordance with the Car Company's specifications No. 809 and subject to inspection and approval by the representatives of the Railroad. Two thousand of said cars shall be delivered on tracks at the Car Company's works at Berwick, Pa., and one thousand on tracks at its works at Detroit, Mich.

The Car Company agrees to accept as full payment for said cars the principal sum of Three million, four hundred and eighty thousand, seven hundred Dollars ($3,480,700), of which sum Four hundred and forty thousand, seven hundred Dollars ($440,700) shall be in cash or in materials for use in the construction of said trust equipment, and the remaining Three million and forty thousand Dollars ($3,040,000) of said principal sum shall be in the "equipment notes" (hereinafter described) of the Railroad to be issued and delivered as hereinafter provided for.

Second. The Trustee agrees to, and does hereby, lease unto the Railroad, and the Railroad does hereby hire and lease from the Trus

1 Note-Statements enclosed in brackets [] are digests of parts omitted. These parts, however, have been abbreviated because they are practically duplicated in the Corporate Mortgage of the Jones & Laughlin Steel Company to which reference is made as follows: J. & L. S. Co., Art.

Sec.

, P.

tee, all and singular the said trust equipment constructed as aforesaid, from the dates of the respective deliveries thereof and until October 1, 1917 (or the earlier termination of this lease as hereinafter provided for), at the rental and upon and subject to the terms and conditions hereinafter stated, which said cars shall be delivered to the Railroad as they shall from time to time be received by the Trustee from the Car Company.

Third. The Railroad agrees to receive and accept, upon and subject to all the terms and conditions of this agreement, said trust equipment, built as herein provided, as and when the same shall be ready for delivery at the places and within the times herein specified; and to pay as rental therefor the amount in the manner and at the times as hereinafter set forth.

And it is distinctly and specially stipulated, covenanted and agreed that the delivery to and the acceptance of the trust equipment, or of any part thereof, by the Railroad shall not vest any right or interest therein or title thereto in the Railroad other than as defined in this indenture; and that until payment by the Railroad of all the equipment notes by this agreement provided for and of the coupons belonging thereto, and until all the obligations of the Railroad hereunder shall have been fully complied with and performed, the title to the trust equipment or to any part thereof shall not pass to or vest in the Railroad, but shall remain in the Trustee on the Trust to perform and enforce this agreement for the equal benefit of the holders of the equipment notes herein mentioned. notwithstanding the delivery of the trust equipment to and its possession and use by the Railroad.

And it is further covenanted and agreed by and between the parties:

I. The Railroad agrees, as a consideration for the leasing to it of the trust equipment, to faithfully observe and comply with all and every the terms, provisions and conditions of this agreement by it to be observed and complied with; and agrees to pay the Trustee, to and for the account of the Car Company, as part payment for the trust equipment to be manufactured by the Car Company, the sum of Four Hundred and Forty Thousand, Seven Hundred Dollars ($440,700), in cash or in materials for use in the construction of said trust equipment. The Railroad agrees also to pay as rental for said trust equip

ment:

(a) The entire principal of the equipment notes issued in accordance with the provisions hereof, according to their tenor, as the same