First Mortgage
P. & A. V. (III.).

Possession of mortgagor until default.

In case of default continued for six months, trustees may enter and take possession.

In Trust, nevertheless, for the purposes herein expressed, and with the powers and liabilities herein named, to wit:

Article First.- Until default shall be made in the payment of principal or interest of the said bonds, or some of them, or until default shall be made in respect to something by these presents required to be done, observed, performed, or kept by the party of the first part, the said party of the first part shall be suffered and permitted to possess, manage, operate, and enjoy the said herein before described railroad, and every part thereof, with its equipments and appurtenances, and to take and use the tolls, incomes, rents, issues, and profits thereof in the same manner and with the same effect as if this deed had not been made, except as hereinafter provided.

Article Second. In case default shall be made in the payment of any interest on any of the aforesaid bonds issued or to be issued, according to the tenor thereof, or of the coupons thereto annexed, or in any requirement to be done or kept by the party of the first part, and in case such default shall continue for the period of six months, it shall be lawful for the said Trustees, or their successors, personally, or by their attorney or agent, to enter into or upon all and singular the railroad and premises hereby conveyed, or intended so to be conveyed, and each and every part thereof, and to have, hold, and use the same, operating by their superintendents, managers, receivers, or servants, or other attorney or agent, the said railroad, and conducting the business thereof, and making, from time to time, all repairs and replacements, and such useful alterations, additions and improvements thereto, as may seem to them or him to be judicious; and collect and receive all tolls, freights, incomes, rents, issues, and profits of the same, and of every part thereof; and after deducting the expenses of operating the said railroad, and conducting its business, and of all the said repairs, replacements, alterations, additions, and improvements, and all payments which may be made for taxes, assessments, charges, or liens, prior to the lien of these presents upon the said railroad and premises,

P. & A V. (III.).

or any part thereof, to apply the moneys arising as afore- First Mortgage said to the payment of interest upon said bonds in the order in which such interest shall have become or shall become due, ratably to the persons holding the coupons evidencing the right to such interest; and, after paying all interest which shall have become due, to apply the same to the satisfaction of the principal of the said bonds which may be at that time unpaid, ratably, and without discrimination or preference.

default.

Article Third. In case default shall be made as afore- Power of sale on said, and shall continue as aforesaid, or in case default shall be made in the payment of the principal of any of the said bonds, or any part thereof, and such default shall continue for the period of six months aforesaid, it shall likewise be lawful for the said Trustees, or their successors, after entry as aforesaid, or other entry personally, or by their attorney or agent, to sell and dispose of all and singular the railroad and premises hereby conveyed, or intended so to be, at public auction, either in the city of Boston, or at such place within the Territory of Colorado as they or he may designate, and at such time as they or he may appoint, having first given notice of the time and place of such sale, by advertisement to be published not less than three times a week for six weeks, in one or more newspapers in the city of Boston, Mass., and Pueblo, Colorado, respectively, and to adjourn the said sale from time to time in their or his discretion; and, if so adjourning, to make the same at the time and place to which the same may be so adjourned; and upon such sale, to make and deliver to the purchaser or purchasers of the property so sold, good and sufficient deed or deeds in law for the same; which sale, made as aforesaid, shall be a perpetual bar, both in law and equity, against the party of the first part, and all other persons whomsoever, lawfully claiming or to claim the said railroad and premises, or any part thereof, by, from, through, or under it; and after deducting from the proceeds of such sale just allowances for all expenses of the said sale, including attorney's and counsel fees, and all other expenses, advances, or liabilities, which may have

First Mortgage
P. & A. V. (III.).

On default on interest continued for six months, trustees may declare principal due.

been made or incurred by the said Trustees in operating or maintaining the said railroad, or in managing its business while in possession, and all payments which may have been made by them for taxes or assessments on the said premises, or any part thereof, as well as compensation for their own services, to apply the said proceeds to the payment of the principal of such of the aforesaid bonds as may be at that time unpaid, whether or not the same shall have previously become due, and of the interest which shall at that time have accrued on the said principal, and be unpaid, without discrimination or preference, ratably to the aggregate amount of such unpaid principal and accrued and unpaid interest; and if, after satisfaction thereof, a surplus of the said proceeds shall remain, to pay over the same to the said party of the first part, or to whomsoever may be lawfully or equitably entitled to receive the same.

And it is hereby declared that the receipt of the Trustees shall be a sufficient discharge to the purchaser or purchasers of the premises for his or their purchase money; and that such purchaser or purchasers, his or their heirs, executors, administrators, or assigns, shall not, after payment thereof, and having such receipt, be liable to see to its being applied upon or for the trusts and purposes of these presents, or in any manner whatsoever be answerable for any loss, misapplication, or non-application of such purchase-money, or any part thereof, or be obliged to inquire into the necessity, expediency, or authority of or for any such sale.

Article Fourth. In case default shall be made in the payment of any half-year's interest on any of the aforesaid bonds at the time and in the manner in the coupons issued therewith, provided the said coupon having been presented, and the payment of the interest therein specified, having been demanded, and in case such default shall continue for the period of six months after the said coupon shall have become due and payable, then and thereupon the principal of all the bonds secured hereby shall, at the election of the Trustees, become immediately due and payable, anything contained in the said bonds, or herein, to the

P. & A. V. (III.).

contrary notwithstanding; but a majority in interest of the First Mortgage holders of said bonds may, by an instrument in writing, signed by such majority before the interest in arrears shall be paid, instruct the Trustees to declare the said principal to be due, or to waive the right so to declare on such terms and conditions as such majority shall deem proper, or may annul or reverse the election of the Trustees, provided that no action of the Trustees or bondholders shall extend to, or be taken to affect, any subsequent default, or to impair the rights resulting therefrom.

assurance.

Article Fifth. The party of the first part shall from Covenant of further time to time, and at all times hereafter, and as often as thereunto requested by the Trustees, execute, deliver, and acknowledge all such further deeds, conveyances, and assurances in the law for the better assuring to the Trustees, upon the trusts herein expressed, the said railroad and the equipments and appurtenances hereinbefore mentioned or intended so to be conveyed, and all franchises now held or hereafter acquired, as by the Trustees, or by their counsel learned in the law, shall be reasonably advised, devised, or [required] acquired.

to release real estate.

Article Sixth.- The Trustees shall have full power, in Power of trustees their discretion, upon the written request of the party of the first part, to convey, by way of release or otherwise to the persons designated by the said Company, any lands acquired or held for the purposes of stations, depot-shops, or other buildings; and shall also have power to convey as aforesaid, on like request, any lands or property, which, in the judgment of the Trustees, shall not be necessary for use in connection with the said railroad, or which may have been held for a supply of fuel, gravel, or other materials; and also to convey as aforesaid on like request, any lands not occupied by the track, which may become disused by reason of a change of the location of any stationhouse, depot-shop, or other building connected with the said railroad, and such lands occupied by the track, and adjacent to such station-house, depot-shop, or other building, as the said Company may deem it expedient to disuse or abandon by reason of such change; and to consent to

First Mortgage
P. & A. V. (III.).

any such change, and to such other changes in the location of the track or depot or other buildings as in their judgment shall have become expedient; and to make and deliver the conveyances necessary to carry the same into effect; but any lands which may be acquired for permanent conveyed to trustees. use, in substitution for any so released, shall be conveyed to the Trustees upon the trusts of these presents.

Any lands acquired

in substitution to be

Defeasance clause.

Requisition of bondholders to enforce remedies.

In case of default as to interest or principal, holders of $500,000 of bonds may make requisition.

Article Seventh. If the party of the first part shall well and truly pay the principal of the said bonds and every of them, and all interest thereon, when the same shall become payable, according to the tenor of the said bonds and the coupons issued therewith, and shall well and truly observe, perform, and keep all and singular the several things herein required to be by it performed or kept, according to the true intent and meaning of these presents, then, and in that case, all the estate, right, title, and interest of the said party of the second part, and of their successors in the trust hereby created, shall cease, determine, and become void; otherwise the same shall be and remain in full force and virtue.

Article Eighth. It is hereby declared and agreed that it shall be the duty of the Trustees to execute the power of entry hereby granted, or the power of sale hereby granted, or both, or to take appropriate proceedings in equity or at law, to enforce the rights of the bondholders under these presents, upon requisition in writing as hereinafter specified; viz.,

1. If the default be as to interest or principal of any of the bonds aforesaid, such requisition upon the said Trustees shall be by holders of not less than five hundred thousand dollars in aggregate amount of the said bonds; and upon such requisition and a proper indemnification by the persons making the same to the Trustees against the costs and expenses to be by them incurred, it shall be the duty of the Trustees to enforce the rights of the bondholders under these presents by entry, sale, or legal proceedings, as they, being advised by the counsel learned in the law, shall deem most expedient for the interest of all the holders of the said bonds.