PADUCAH & ELIZABETHTOWN R. R. CO.
FIEST MOETEAGE.
made the first day of February,
eighteed hundred and seventy*seven, between The
Paduoah and Elizabethtown eailkoad Company, a
corporation duly created and organized under the laws
of the Commonwealth of Kentucky, party of the first
part, and August Rutten and Charles J. Canda of
the City of New York, Trustees as hereinafter men¬
tioned, parties of the second part :
Whereas, the railroad situate in the Commonwealth
of Kentucky, formerly known as the Elizabethtown and
Paducah Railroad, extending from the City of Paducah
to Elizabethtown in the said State of Kentucky, a dis¬
tance of one hundred and eighty-four miles and forty-
six hundredths of a mile or thereabouts, with the ap¬
purtenances and equipment thereof was on the twenty-
fourth day of August, eighteen hundred and seventy-
six, sold at public auction, under and by virtue of a
decree of the Circuit Court of the United States for the
District of Kentucky.
And whereas, the purchasers of said railroad with
its appurtenances and equipment at said sale have be¬
come incorporated in the name of The Paducah and
Elizabethtown Railroad Company, under and pursuant
to the provisions, of an Act of the Gfeneral Assembly of
the Commonwealth of Kentucky, entitled " An Act to
incorjiorate the purchasers of railroads,'' approved
March first, eighteen hundred and seventy-six, which
2
corporation thus formed is the party of the first part
hereto.
Akd whebeas, according to the terms of the said act
the articles of incorporation of any such Company may
jjrovide for the issue at one or at several times and dis¬
position of any amount of negotiable bonds with or with¬
out coupons bearing a rate of interest payable semi-an¬
nually, not exceeding eight per cent, per annum, and
paid up capital stock, said bonds and capital stock not
to exceed in the aggregate the original cost of the con¬
struction of the railroad and equipments purchased and
such sum as may be necessary to complete the same ;
and the corporation thus created may secure the pay¬
ment of any bonds issued by it under the authority
conferred by the said act by mortgage or deeds of trust
upon all or any parts of its property, rights and fran¬
chises acquired or to be acquired.
Akd whereas, the capital stock of the Company
formed as aforesaid, and the bonds herein mentioned
and hereby secured, and all the other bonds the issue
whereof is provided for by the articles of incorporation
of the said Company are of much less amount in the
aggregate than the original cost of the said railroad and
equipments purchased at said sale as aforesaid.
Ajsii) whereas, it is in the Articles of Incorporation
of the corporation formed as aforesaid provided that the
said Company upon the order or with the sanction of
its Board of Directors and without further authoriza¬
tion from its stockholders, may and shall execute and
issue its first mortgage bonds for the aggregate amount
of five hundred thousand dollars to be repayable at such
dates as the Board of Directors may approve, and bearing
interest at the rate of eight per cent, per annum pay¬
able semi annually, and secure the same by a first mort¬
gage to August Hutten and Charles J. Canda, as Trus¬
tees, upon the railroad and other property, rights and
franchises to be by the purchasers at the said sale under
the decree aforesaid conveyed to the said Company (be-
3
ing the same railroad and other property which is here¬
inafter conveyed in mortagage to the parties of the
second part hereto) and all property, rights and fran-
chanses, and all the rolling stock conveyed to the said
Company and other property whatsoever as well real as
personal, now owned by said Company, or which it
shall at any time subsequently acquire, and which can-
legally or equitably be mortgaged.
Anb whereas, the said Articles of Incorporation pro¬
vide for the appropriation and disposition of the said
First Mortgage Bonds for five hundred thousand dollars.
And whereas, under and pursuant to the provision
of the said Articles of Incorporation in that behalf, the
said The Paducah and Elizabethtown Railroad Com¬
pany upon the resolution and with the sanction of its
Board of Directors, has caused to be prepared and made
ready for execution, and is about to make and execute
and issue under its corporate seal with the attestation
or signatures of its president and its secretary, its cer-
taid five hundred First Mortgage Bonds for one thousand
dollars each, numbered consecutively from 1 (one) to 500
(five hundred), both inclusive, dated on the first day of
February, eighteen hundred and seventy-seven, and
payable on the first day of February, eighteen hundred
and ninety-seven, and bearing interest in the meantime
from February first, eighteen hundred and seventy-
seven, at the rate of eight per cent, per annum, payable
semi-annually on the first days of February and August
in each year, with coupons for such interest in custom¬
ary form, which coupons are to bear the engraved
signature of the said company's secretary, and which
coupons said company hereby agrees shall upon being
duly issued by said company bind it as if such signa¬
ture were written, which said five hundred First Mort¬
gage Bonds so to be executed and issued as aforesaid
with the coupons thereof and the certificate of the trus¬
tees to be endorsed thereon, for identification thereof as
being issued under or secured by this mortgage are to
be substantially in the following form, that is to say :
4
The Paducah and Elizabethtown Railroad
Company.
No. First Mortgage Sinking Fund Bond. $1,000
The Paduoah and Elizabethtown Railroad Com¬
pany, a corporation created under the laws of the State
of Kentucky, hereby acknowledges itself indebted to
H. W. Sinithers and Arnold Marcus or to the bearer
hereof in the sum of one thousand dollars, and hereby
promises to pay the same to said H. W. Smithers and
Arnold Marcus, or to the bearer hereof, on the first
day of February, eighteen hundred and ninety-seven;
and further promises to pay in the meantime in the
City of New York, at the office of said Company's agent
there, which it shall from time to time appoint for the
purpose, with due public notice of such appointment,
interest upon said sum of one thousand dollars from the
first day of February eighteen hundred and seventy-
seven, at the rate of eight per cent, per annum, semi-an¬
nually on each first day of August and February, to
the bearer of the coupons for such interest hereto an¬
nexed, upon the presentation and surrender of such
coupons.
And in case default be made in the payment of any
such interest and the same shall remain in arrear and
unpaid and the default continue without the consent
A
of the holder, of this bond for sixty days after such in¬
terest being due and payable shall be duly demanded,
the principal of this bond shall thereupon at the option
of the holder hereof become immediately due and pay¬
able, with like effect as if the time originally herein
specified for the payment of such principal had arrived.
This bond is one of a series of five hundred First
Mortgage Bonds of said Railroad Company, for one
thousand dollars each, numbered from 1 (one) to 500
(five hundred) inclusive, all of like tenor and date, and
all alike secured by a mortgage or deed of trust of even
date herewith made by said Railroad Company to An-
5
gust Ratten and Charles J. Canda, Trustees, upon said
Company's Railroad, extending from Paducah to Eliz-
abethtown, in the state of Kentuckj^, with the appurte¬
nances, equipment and franchises thereof, and other
things in said mortgage mentioned.
The said mortgage or deed (^f trust provides for the
payment by said Railroad Company to the Trustees
from its earnings, of an annual sum of five thousand
t
dollars, commencing on the first day of June, eighteen
hundred and seventy-eight, and annually thereafter, by
way of sinking fund for the redemption of the five
hundred thousand dollars of bonds of this issue, and
for the application by the Trustees from time to time
of the annual sums so paid together with the amount of
interest accruing upon bonds previously redeemed from
such sinking fund, to the redemption at par of so many
of such bonds of this issue, to be drawn for by the
Trustees by lot, as such funds shall be sufficient to re¬
deem ; the bonds thus drawn to be redeemed at par by
the Trustees on the semi-annual day for payment of in¬
terest on such bonds next following the drawing of
such lot, and the Trustees to give notice of such in¬
tended redemption and of the numbers of the bonds so
drawn, by advertisement published in two newspapers
in the city of New York, of good circulation at least
twice in each week for six successive weeks prior to
such day for redemption, and the holders of such bonds
so drawn and advertised, are obligated to present the
same for redemption, and interest thereon shall cease
from and after such day fixed for redemption. Pro¬
vided always that the money for the redemption thereof
shall be in the hands of the Trustees, and that such
bonds shall be redeemed and paid when presented for
the purpose on and after the said day fixed therefor.
This bond in order to be entitled to the benefit of the
mortgage security aforesaid, must be identified by the
signatures of the Trustees endorsed thereon as being
one of the bonds issued under or purporting to be se¬
cured by said mortgage.
In witness whereof, the said Railroad
' é
6
Company in pursuance of a resolution of
its Board of Directors, hath hereunto
affixed its corporate seal and caused the
same to be attested by its President and
Secretary, at its office in Elizabeth town,
in the State of Kentucky, ihe first day of
February, eighteen hundred and seventy-
seven.
Form of Coupoiv.
The Paducah and Elizabethtown Railroad Company
will pay to the bearer in the city of New York, at the
office thereof said Company's agent to be appointed
by it for the purpose with due public notice, on the
first day of August, 1877, forty dollars, being semi¬
annual interest on its First Mortgage Bond, No.
Secretary.
Form of Trustees' Certificate.
We certify that this is one of the five hundred first
mortgage bonds for one thousand dollars each, issued
under and purporting to be secured by the within men¬
tioned mortgage or Deed of Trust to us as Trustees.
Trustees.
And whereas, the form of said bond and coupons,
as likewise the form and all the provisions and stipula¬
tions of this Indenture of Mortgage and Deed of Trust
have been duly approved by the Board of Directors
of said Railroad Company by Resolutions duly
passed.
And whereas, the said party of the first part is
about to appropriate and make disposition of the said
first Mortgage Bonds for five hundred thousand dollars
7
so made ready for execution and issue as aforesaid un¬
der and in accordance with the provisions of the said
Articles of Incorporation in that behalf, and desires to
secure the due payment of the principal of the said
bonds and of the interest from time to time becoming
due or payable thereon according to the terms thereof,
by this Mortgage in accordance with the said Articles
of Incorporation.
How, THEREFORE, THIS INDENTURE WITNESSETH,
that the said The Paducah and Elizabethtown Railroad
Company, the party of the first part, in consideration
of the premises and for the purpose of securing the due
payment of the aforesaid five hundred First Mortgage
Bonds for one thousand dollars each with the interest
which shall from time to time become due or payable
thereon in accordance wdth the terms, provisions and
conditions thereof ; and in further consideration of ten
dollars to the said party of the first part in hand paid
at and before the ensealing and delivery of these pres¬
ents, the receipt whereof is hereby acknowledged, hath
granted, bargained, sold, assigned, released and con¬
veyed, and by these presents doth grant, bargain, sell,
assign, release and convey unto the said August Rutten
and Charles J. Canda, Trustees as aforesaid, parties of
the second part, and their successors or successor in
said Trust, all and singular the Railroad of the said
party of the first part, known as The Paducah and
Elizabethtown Railroad, extending from the point of
commencement thereof in the city of Paducah, in
McCracken County, in the State of Kentucky, to the
terminus thereof, in the town of Elizabethtown, in the
County of Hardin,in the same State, a distance of one hun¬
dred and eighty-four miles and forty-six one hundredths
of a mile or thereabouts, be the same more or less to¬
gether with the track or roadway thereof and all the
lands and leaseholds, easements and other rights or in¬
terests in or pertaining to lands, side tracks or sidings,
bridges, fences, depots, stations, fixtures, car houses, en¬
gine houses, machine shops, repair shops and all
8
other buildings, erections and structures whatsoever,now
or hereafter belonging or appertaining to or acquired,
used or intended for use, for the purposes of, or in connec¬
tion with the said Railroad, or the operation or mainten¬
ance thereof ; and also, the said Company's telegraph line
now or hereafter constructed and used or intended to
be used for the purposes of or in connection with said
Railroad, and all the rights and things now or hereafter
belonging or appertaining to such telegraph line ; and
also all and singular the locomotives, engines, cars and
other rolling stock and equipment and machinery, in¬
struments, tools, implements, materials, furniture and
other chattels, now belonging or appertaining to said
Railroad Company or which said Company shall at any
time hereafter acquire,possess or have, for or in connec¬
tion with, or used or designed to be used in or upon,
or in connection with the said Railroad, or the operation,
use, reparation, or maintenance thereof ; and all the
present and future appurtenances of the said Rail¬
road and likewise of the said telegraph line, and
all the rents, issues and profits, tolls and
other income of the said Railroad and telegraph
lines resjiectively, and all the rights, privileges,
immunities and franchises whatsoever, including the
franchise of being a corporation, which the said Rail¬
road Company now possesses, owns, oris entitled unto,
and all rights, privileges, immunities and franchises,
properties real and personal, and rights and things
which said Railroad Company may or shall hereafter
acquire, possess or become entitled to, for the purposes
of or in connection with the said Railroad and the said
telegraph lines, respectively, or the operation, use, or
maintenance thereof ; and also, in case the said Trus-
ees or their successors shall at any time hereafter law¬
fully enter into possession of the Railroad with its ap¬
purtenances hereby mortgaged, or have a Receiver ap¬
pointed for the same as hereinafter authorized, any and
all fuel and supplies intended for use in and about the
operation, repair or maintenance of said Railroad which
9
said Railroad Company shall have on hand at thé time
of the said Trustees so entering into possession, or at
the time of such Receivership being granted or applied
for, subject to any valid paramount liens which at such
time may exist on such fuel or supplies, and likewise
in case of the said Trustees so entering into possession
of said Railroad hereby mortgaged, or of a Receiver
being so appointed of the same, all the said Railroad
Company's books, papers, vouchers and documents, and
all debts, dues and demands, w^hich may at such time
be due or owing, or belonging to or lawfully claimable
by said Railroad Company, with the evidences thereof,
and all the other property and effects which the said
Company at such time of the Trustees so entering into
possession or of the granting of or application for such
Receivership may own, possess, or be entitled unto.
To have axd to hold all and singular the premises,
properties, franchises, rights, and things above granted,
transferred, assigned or conveyed, or purporting so to
be, unto the said parties of the second part and their
successors or successor in the said trust, but in trust for
and for the use, benefit, and security of all and singular
the persons and corporations who or which shall from
time to time be lawful owners or holders of any of the
said five hundred first mortgage bonds for one thousand
dollars each, ^lih. pro rata equality without preference
or priority of any of such bondholders over any of the
others, and to the heirs and assigns of such Trustees or
of their successors or successor forever.
Provided always, nevertheless, and these pres¬
ents are upon the express condition, that if the said
Railroad Company, party of the first part hereto, do
and shall well and truly pay, when and as the same
shall become due and payable, the said five hun¬
dred First Mortgage Bonds for one thousand dollars
each, and do and shall also well and truly pay
all the interest which from time to time shall
become due or payable upon said five hun¬
dred bonds respectively, in accordance with the terms,
10
provisions and conditions thereof, then these presents
and the estates, rights and interests thereby
granted or conveyed shall cease and determine and be¬
come null and void; and provided further, and it is
likewise an express condition of this indenture, that
nntil the party of the first part shall have made some de¬
fault in the payment of the principal or interest secured
by or payable upon the said bonds hereby intended to
be secured, or upon some of such bonds or some part of
such principal or interest or in the performance of some
other of the covenants, stipulations and provisions on
the part of the party of the first part in this indenture
contained, the said party of the first part shall be en¬
titled to continue in the possession, use and enjoyment
of the said Railroad and other mortgaged premises,
properties, rights, interests and franchises, and in
receipt of the income, rents and profits thereof, and that
while the said party of the first part shall so remain iu
possession, and there shall be no such subsisting default
in the payment of interest or principal, or in the per¬
formance of the stipulations, conditions and provisions
on the part of the said party of the first part in this in¬
denture contained, the said parties of the second part,
or their successors in the said trust, shall have full
power and authority, to be exercised in their own dis¬
cretion, and not otherwise, to release from the lien and
operation of these presents, in such manner as they
may deem proper, any portion of the premises hereby
mortgaged which may be appurtenant to the said Rail¬
road, or which may have been acquired or held for the
uses or purposes thereof, but which, in the judgment of
the said Trustees, shall be no longer requisite for use in
connection therewith, or which shall have been acquired
or held for stations, depots, shops or other buildings, or
for supplying fuel, gravel or other material, and which,
in the Trustees' judgment, shall be no longer requisite
tobe kept for such purpose, and likewise any lauds not
occupied by the track, which may become disused by
reason of a change in the location of any station house,
11
depot, shop or other building connected with the said
Railroad, and likewise any land occupied by the tracks
and adjacent to such station house, depot, shop or other
building which the said party of the ñrst part, its suc¬
cessors or assigns, may deem it expedient to disuse or
abandon by reason of such change, and likewise any
part of the original line of track or roadwaj^, and of the
depot grounds, buildings or accommodations connected
therewith, which may have been thrown out of and
ceased to form part of the Railroad at the time of such
release, by reason of straightening or alteration of the
line of the road; pi'ovided always, that the power of
release given by this article is designed to be exer¬
cised, and shall be exercised only in case of
the said Railroad Company's selling or contracting
to sell the property so to be released, because
of its being no longer required for the uses or purposes
of said railway, and requiring the same to be so released
in order to give a perfect title to the purchaser
or purchasers ; and provided further, ¡that when
such released premises shall have been thrown out of
use, or ceased to be required, by reason of change of the
line of the road, or change of depot grounds, buildings
or other accommodations, the substitutes therefor shall
be conveyed by appropriate deeds to the Trustees, upon
the trusts and for the uses and purposes of this indent¬
ure. before the giving of such release under the power
contained in this article.
And the said Trustees shall likewise have full power
to allow the said party of the first i^art, its successors or
assigns, from time to time to sell and dispose, according
to its discretion, of such portions of the equipments,
machinery and implements which shall be at any time
held or acquired for the use of said Railroad as may
have become unfit for such use, replacing the same by
new ; and all such other equipment, machinery and im¬
plements which may be acquired in substitution as afore¬
said shall, by virtue and force hereof, become, and be
immediately upon the acquisition of the same, subject to
12
the lien and operation of these présents, withont any
new conveyance or transfer or other act or ceremony
whatever, but such new conveyance and transfer shall
be given to the Trustees if they shall require or request
the same.
And the said party of the first part doth hereby
covenant, promise and agree to and with the said par¬
ties of the second part, and their successors in the trust
hereby created, that while the said party of the tirst
part shall remain in possession of the said Railroad it
shall and will from time to time pay and discharge all
taxes, assessments and governmental charges lawfully
imposed upon the said Railroad and other hereby mort¬
gaged premises, or upon any part thereof, the lien of
which might or could be held to be prior to the lien of
these presents, and likewise all other sums which shall
became due and payable, and which, if left unpaid, would
be and remain liens on said mortgaged premises and
property, or any part thereof, paramount or superior to
the lien of this mortgage, so that the security of this
mortgage may be dnly preserved ; and that the said
party of the first part shall not and will not do or suffer
any matter or thing whatsoever whereby the lien of this
indenture of mortgage might or could be impaired, until
the said bonds hereby secured, with all interest accrued
thereon, shall be fully paid and satisfied ; and that the
said party of the first part shall from time to time do
all acts and things which may be requisite in order to
keep complete and effectual the lien and security of this
mortgage, and that the said party of the first part, while
it remains in the possession of the said Railroad, shall
and will in each month pay all wages or compensation
which may be due or owing for the preceding month to
employees of said party of the first part or persons em¬
ployed in or about the opeiation, care or maintenance
of the said Railroad and other mortgaged premises, or
any part thereof; and likewise shall and will pay and
discharge, when and as the same shall accrue and
become established or acljnclicatecl and payable, all claims
13
against said Railroad Company for compensation for
damage or injury to persons or property incurred in the
course of operating said Railroad.
And the said party of the first part doth hereby
covenant and agree to and with the said parties of the
second part and their successors in the said trust that
the said party of the first part will well and truly pay
unto the lawful owners or holders thereof for the time
being the said five hundred First Mortgage Bonds for one
thousand dollars each, or such of the same as shall
remain or be outstanding when and as the same shall
become due and payable, and likewise that the party of
the first part will well and truly pay all the interest
which shall from time to time become due and payable
upon the First Mortgage Bonds for five hundred thousand
dollars, or upon such of the same as shall be outstand¬
ing when and as the same shall become due and pa^^^-
able.
And it is hereby further provided, declared, granted
and agreed, and is one of the conditions of this Inden¬
ture, that in case default shall be made by the party of
the first part in the payment of any sum or amount of
interest which, under and in accordance with the stipu¬
lations, provisions and conditions of such Bonds in that
behalf shall have become due and payable upon the
said five hundred First Mortgage Bonds hereby secured,
or upon any of such Bonds, when such interest being so
due and payable shall be lawfully demanded, and if
such sum or amount of interest so due and payable or
any part thereof shall remain in arrear and unpaid, and
the default in respect thereof shall continue for sixty
days after such demand duly made for the payment
thereof, or in case default shall be made by said Rail¬
road Company, and continue for ninety days after de¬
mand in the due observance and performance of its
covenants for further assurance, or in respect of the
sinking fund herein provided for hereinafter contained,
or in case default shall be made by said Railroad Com¬
pany in the due observance and performance of any of
14
its foregoing stipulations and covenants for the pay¬
ment of taxes, assessments and other governmental
charges, and for the payment of other sums which, if
left unpaid would be or remain liens prior or superior
to the lien of this mortgage, and for the payment of
wages or compensation of employees and for claims for
damages or injury to persons or property as aforesaid,
and if such default in respect of any of such stipula¬
tions or covenants above referred to shall continue for
the period of ninety days after notification to the said
Railroad Company of the existence of such default and
request to said Railroad Company to observe and fulfill
its said covenants and stipulations in that behalf shall
have been made or given by the Trustees under this
mortgage, or by the holders of bonds secured hereby to
the aggregate amount of not less than one hundred
thousand dollars, or in case default shall be made in the
payment of the principal of said Bonds hereby secured,
br any of such bonds, when such principal shall be due
and payable, then, and in any and every such case of
default made, in any of the particulars aforesaid, and
provided such default be continued as aforesaid, where
such continuance is above called for, the said parties of
the second part, or their successors in the said Trust,
shall be entitled to and may, or upon the requisition in
writing to that effect of holders of such First Mortgage
Bonds hereby secured to the aggregate amount of not
less than one hundred thousand dollars of principal,
and upon being duly and properly indemnified by such
bondholders against expense or loss in the premises,
shall, either personally or by agent or attorney, enter
into and upon the said Railroad and other mortgaged
premises, properties and rights, and have, hold and
possess the same, with the rights, privileges and fran¬
chises thereunto appertaining, or in lieu and. stead of
such entry by such Trustees, they in their discretion
may and shall be entitled to have a Receiver or Re¬
ceivers of the said Railroad and other mortgaged prem¬
ises, properties, rights, privileges and franchises ap-
15
pointed by the order or decree of a competent Court
either of the United States or of the State of Kentucky,
•t /
having jurisdiction in the premises, and such appoint¬
ment shall operate to entitle the said Trustees to the
benefit of the net earnings of the property in the hands
of the Receiver in all respects as if they had entered
into the personal possession thereof, aná thereupon the
said Trustees, or such Receivers or Receiver, in their
place and stead, may and shall operate the said Rail¬
road by such superintendents, managers, receivers,
assistants, servants and agents as the said Trustees or
Receivers shall deem proper, making from time to time
all such repairs and replacements and all such useful
alterations, additions and improvements to the said
Railroad and other mortgaged prQperty, as the said
Trustees or Receivers may deem expedient or judicious,
and as the income of the said mortgaged prem¬
ises coming to the Trustees' or Receivers' hands
shall be adequate to pay for ; and it shall be
lavrful for the Trustees or Receivers after entry
and possession as above authorized, to collect and
receive all fares, freights, issues, profits and income of
the said Railroad and other mortgaged premises, and
to deduct and retain or pay therefrom all the lawful ex¬
penses or charges of, or incident to, making such entry
or obtaining possession of said premises, and the proper
expenses and charges of or incidental to the. holding,
operating and managing the said Railroad and premises,
and conducting the business thereof, including the ex¬
pense of all such repairs, replacements, alterations,
additions and improvements as above authorized, and all
payments which may be made or be due for taxes, as¬
sessments or other charges or liens prior to the lien of
these i)resents, upon the said Railroad and premises or
upon any part or parcel thereof, as well as just and
reasonable compensation for the Trustees' or Receivers'
services in the premises, and for the services of such
attorneys and counsel as may have been by them prop¬
erly employed in respect thereof, and after making all
16
such deductions and payments as aforesaid, the Trus¬
tees or Receivers shall apply the net residne of such
fares, freights, issues, profits and income remaining in
their hands, to the payment, in the first place, of all
overdue interest payable on the said First Mortgage
Bonds hereby secured or any oí them, with the interest
accrued on such amount of interest after default in its
payment, in the order in which such interest shall have
become due, ratably to the holders of such bonds, and
without discrimination or preference between them on
account of the time of the actual issue of said bonds,
and, in the next place, to the payment of all interest
accruing and becoming due and pa3^able during such
possession of the Trustees upon the said First Mortgage
Bonds hereby secured, in the order in which such in¬
terest shall so become due and payable, ratably and
without any preference of one bondholder over another,
save the said preference accorded to earliest maturing
coupons, and then to making any overdue payments to
the sinking fund herein provided for, and if, in any
twelve months of such possession by the Trustees or
Receivers after payment of all matured interest on the
said First Mortgage Bonds, and all overdue payments
to the sinking fund, a surplus of net income arising as
aforesaid shall remain in the hands of the Trustees or
Receivers, it shall be lawful for the Trustees or Re¬
ceivers to pay over such surplus to the said party of the
first part, its successors or assigns, or as any Court of
competent jurisdiction «hall lawfully direct, and there¬
upon to deliver possession of said Railroad and other
mortgaged premises to the party of the first part, to be
thenceforth possessed by it subject to (he lien of this
mortgage, and to the Trustees' right again to take pos¬
session in case of future default entitling possession to
be taken as hereinbefore specified.
And it is further provided, declared, granted and
agreed that in case the principal of the said First Mort¬
gage Bonds hereby secured, or such of the same as shall
remain outstanding, shall have fallen due and become
17
payable according to tlie original tenor and provision
thereof in respect of the time of payment of the princi¬
pal, and such bonds or any of them shall remain unpaid
and in default, or in case default shall have been made
and continued for sixty days after demand in the pay¬
ment of any semi-annual installment of interest upon
the First Mortgage Bonds hereby secured or any of
them, and if, according to the tenor of such bonds and
the election of the holders thereof to that effect, the
principal of so many as one hundred thousand dollars
in amount of said First Mortgage Bonds hereby secured
shall have fallen due, and become payable in conse-
qence of such continued default in the payment of in¬
terest thereon, then, and in either of such cases, it shall
be lawful for the said parties of the second part hereto
or their successors in the trust, either personally or by
attorney or agent duly constituted therefor by the said
Trustees, to sell and dispose of all and singular the
said Railroad and other premises, properties, rights,
immunities and franchises which shall then remain
subject to the lien and operation of this In¬
denture of Mortgage, at public auction to the high¬
est bidder, either in the City of New York or in
either or the Cities of Louisville or Paducah in the State
of Kentucky, as the said Trustees may in their discretion
designate, and at such time as they may appoint there¬
for, provided, however, and it is hereby declared and
agreed, that preparatory to such auction sale as afore¬
said the said Trustees shall give public notice of the
time and place, when and where the same is to be made
and of the property to be sold,'by advertisement in two
newspapers in the State of Kentucky, and in two news¬
papers of good circulation published in the city of New
York, and that such advertisement shall be published
in each of such newspapers, at least twice in each week,
for the twelve successive weeks next previous to the
day fixed for such sale, with the right, however, to the
Trustees, after such notice shall have been so published,
to adjourn the sale so advertised, from time to time in
18
the discretion of the Trustees, giving reasonable notice
or notices of such adjournment or adjournments, and
after so adjourning, to make the sale at the time to
which it may be finally adjourned ; and it shall be law¬
ful for the said Trustees, and they are expressly author¬
ized and empowered, upon making any such auction
sale of the said mortgaged premises and property, rights
and franchises as above authorized, to make and deliver
to the purchaser or purchasers thereof at such sale, upon
his or their paying the purchase money therefor, a good
and sufficient deed or deeds of conveyance in the laws,
of the same which auction sale and the deed or deeds
thereupon made as above authorized, it is hereby
granted, declared and agreed, shall be good and valid in
the law, and shall operate to vest in the grantee or
grantees in such conveyances the said Railroad and other
mortgaged premises, properties, rights, immunities and
franchises, in fee simple and absolutely, and Jsuch deed
or deeds shall operate to foreclose all equity of redemp¬
tion of the said party of the first part and its sucessors
or assigns, and shall be a perpetual bar both in law and
equity against the said party of the first part, its suc¬
cessors and assigns, and against any and all persons or
corporations claiming or to claim such premises, prop¬
erties, rights or franchises so sold and conveyed, or any
part thereof, by, from, through or under the said party
of the first part or its successors or assigns.
And it is further provided, declared and agreed that
from the proceeds of such sale made as aforesaid the
said Trustees shall be entitled in the first place to de¬
duct and retain or pay for all proper charges or ex¬
penses of or incident to such advertisement, foreclosure
and sale and conveyance, including attorneys' and
counsels' fees, and any and all unreimbursed advances,
expenses, charges and liabilities which may have been
properly made or incurred by such Trustees or Receivers
in maintaining or operating the said railroad, or in
managing the business of the same while it shall have
remained in the Trustees' or Receivers' possession; or in
19
arranging for and completing the sale aforesaid, and
also all nnreimbiirsed payments which may have been
made by the Trustees or Receivers for taxes or assess¬
ments and for charges or liens prior to the lien of this
indenture, if any such there shall be, on the said Railroad
and premises so sold or any part thereof, as well as the
just and reasonable compensation for the services of such
Trustees in the premises, and the said Trustees shall
apply the residue of the proceeds of such sale, after
the deductions and payments above authorized to be first
made thereout, to the payment of the principal of the
said first mortgage bonds by this mortgage secured or
intended so to be or of such of said bonds as may at that
time remain outstanding and unpaid, and likewise to the
payment of the interest which shall have accrued up to
that time upon the principal of the said bonds hereby
secured and which shall remain unpaid and properly
payable with any interest accrued on such interests
after default, without discrimination or preference as
between principal and interest, but ratably according
to the aggregate amount of such unpaid principal and
accrued and unpaid interest, which payments shall be
made to the persons holding respectively the
bonds and coupons evidencing the right to
such principal and interest without any dis¬
crimination or preference between them on account
of the time of the actual issuing of the bonds
or of the time of maturing of the interest or principal,
and it being understood and hereby declared and
agreed that upon any sale of said railroad and other
mortgaged premises which may be made as aforesaid
or upon any sale thereof made under or by virtue of
the judgment or decree of any Court of competent
jurisdiction rendered in any suit or proceeding for
the enforcement or foreclosure of the lien created
by this Indenture of Mortgage the principal of
all the then outstanding bonds secured by these
presents shall become and be immediately due and
payable.
20
And it is farther declared and agreed that the re¬
ceipt *of the Trustees who shall make the sale here¬
inbefore authorized shall be a sufficient discharge to
the purchaser or purchasers at such sale for his or
their purchase money, and that such purchaser or
purchasers, his or their heirs or assigns or personal
representatives shall not after paying such purchase
money and receiving such Trustees' receipt therefor
be obliged to see to the application of such purchase
money upon or for the trusts or purposes of these
presents, or be in any wise answerable for any loss,
misapplication or non-application of such purchase
money by the Trustees.
And the said party of the first part doth hereby
further covenant that it will, if and when thereunto
requested, make, execute and deliver such deeds or
other instruments as shall be reasonably advised by coun¬
sel to confirm and assure such title and ownership as
aforesaid to such purchaser or purchasers at such sale
made as above authorized so as fully to effectuate said
sale.
And the said party of the first part for itself, its
successors and assigns hereby agrees to waive and doth
hereby absolutely and irrevocably waive and relin¬
quish the benefit or advantage of any and all valua¬
tion, stay, appraisement, extension or redemption law
or laws, now existing or which may hereafter be
passed by the State of Kentucky, which but for this
provision, agreement and waiver might be applicable
to the sale hereinbefore authorized to be made by the
Trustees of the said railroad and other mortgaged
premises, or to any judicial sale which may be made of
said mortgaged railroad and premises, or any part there¬
of, under and in virtue of the judgment or decree of
any competent Court in a suit instituted for the fore¬
closure of this mortgage, or for enforcement of the lien
by this Indenture created, and the said party of the
first part for itself, its successors and assigns, agrees
to waive and doth hereby irrevocably waive any and
21
all right of redemption which it might or could other¬
wise have or be entitled to, under any present or
future law of the State of Kentucky upon or after or
in respect of any sale of the said hereby mort¬
gaged premises, properties, rights and franchises,
or any part thereof, which may be madç
either by the Trustees under the power herein¬
before contained, or as a judicial sale under order or
decree of a Court in a suit for foreclosure of this mort¬
gage or enforcement of its lien as aforesaid, and the said
party of the first part hereby covenants that it will not
in any manner set up or seek to take the benefit or ad¬
vantage of any such present or future valuation, stay,
appraisement extension or redemption law, to prevent
or hinder or delay the absolute or irredeemable sale of
said mortgaged premises, properties, rights and fran¬
chises, as hereinbefore authorized to be made by the
Trustees, or as might, but for such law, be directed or
decreed by a Court of competent jurisdiction.
J
And it is hereby further provided, declared and
agreed that in case of such auction sale as hereinbefore
authorized being made by the parties of the second part,
or their successor or successors in the said trust, or in
case of any judicial sale being made of the said railroad
and other premises, properties, rights and franchises
hereby mortgaged or any part thereof, in enforcement
of the mortgage lien hereby created, the purchaser or
purchasers at such sale shall be entitled, in making set¬
tlement for and payment of the purchase money bidden
at such sale, to turn in and use towards the payment of
such purchase money, any of the bonds or coupons held
by such purchaser or purchasers, to or towards the pay¬
ment whereof the net proceeds of such sale shall be
legally applicable, reckoning such bonds or coupons for
such purpose at such sum as shall be payable out of the
net proceeds of such sale to such purchaser or purcha¬
sers as holder or holders of such bonds or coupons, for
his or their just share and proportion, in that charactei*,
of such net proceeds of sale upon due apportionment of
22-
and accounting concerning sncli net proceeds, due re¬
ceipts and acknowledgments being thereupon given by
the holders of such bonds or coupons for the amount thus
realized thereon by means of turning in and using the same
as aforesaid, and the said bonds or coupons being either
delivered up to the person or persons making the sale
and entitled to receive payment of the purchase money
or due endorsement being made thereon of the amount
so realized on account thereof.
And it is hereby further provided, declared, granted and
agreed, that upon the happening of such event or events
as is or are hereinbefore declared, agreed or provided to
entitle the said parties of the second part or their suc¬
cessors to make sale of the said Railroad and other mort¬
gaged premises or to take the requisite proceedings to
that end, the said parties of the second part or their suc¬
cessors, as Trustees hereunder, shall be entitled in their
discretion instead of taking proceedings for and making
sale of said Railroad and other mortgaged premises and
properties, rights, interests, immunities, and franchises
under and in virtue of the power of sale hereinbefore
contained, to proceed by Bill in Equity or other ap¬
propriate proceedings in any Court of competent juris¬
diction of either the United States or of the State of
Kentucky to foreclose this mortgage, or enforce the
rights, liens and securities of the Trustees and the bond¬
holders thereunder, and thereupon said Trustees or
their successors shall be entitled to have the said rail¬
road and other mortgaged premises and properties,
rights, interests, immunities and franchises sold by
judicial sale under the order or decree of such Court,
for or towards the satisfaction of the principal and in¬
terest due or owing uj)on the then oustanding first
mortgage bonds issued under or entitled to the benefit
of the security of this mortgage, and for the enforce¬
ment of the rights, liens and securities of the Trustees
and the bondholders, and in case of such judicial sale
the net proceeds thereof shall be applicable and dis¬
tributable in like manner as herein provided in respect
23
of the net proceeds of a sale of such mortgaged premises
and properties, rights and franchises under and in
virtue of the power of sale hereinbefore contained, and
all the stipula tions and provisions in this indenture con¬
tained with reference to or consequent upon a sale of
such mortgaged premises and properties, rights, im¬
munities and franchises, when or if sold under said
power of sale, shall be applicable, and applied as far
and as nearly as may be in case of such judicial sale
being made under the order or decree of a Court.
And it is hereby further provided, declared and
agreed that the Trustees under this indenture, or their
successors, may at any time be removed from the trust,
by instrument in writing, under the hands and seals of
the holders of a majority in interest of the then out¬
standing bonds, secured hereby, or their attorneys, in
fact thereunto authorized.
And it is further declared, provided and agreed that
in case a vacancy shall at any time exist in the Trustee¬
ship hereunder, by reason of removal, death or mental
incapacity of the Trustees for the time being, or either
of them, or of the resignation of any such Trustee ac¬
cepted in writing by a majority in interest of the bond¬
holders, or by a Court of competent jurisdiction, or of a
vacany in such Trusteeship otherwise lawfully occur¬
ring and existing, a majority in amount of the holders
of the then outstanding bonds, issued under and se¬
cured by this indenture of mortgage, shall have the
right and power by instrument in writing, under hand
and seal, to appoint a new Trustee or Trustees to fill
such vacancy ; and such vacancy may be so filled by
the bondholders by the appointment, as Trustee,
of a corporation, having lawful power to execute
such trust, in like manner as of an indi¬
vidual Trustee or Trustees ; and if there be
a total vacancy in the Trusteeship a corporation
may be appointed sole Trustee instead of two individual
Trustees ; and until the appointment of a Trustee or
Trustees to fill any vacancy shall have been made by
24
the majority in interest of ihe said bondholders under
the power in that behalf above contained, the Board of
Directors, for the time being, of the party of the first
part, may appoint a neAv Trustee or Trustees to fill such
vacacy for the time being ; and in case of any vacancy
being filled by such appointment by the Board of Di¬
rectors, it shall be competent for any Court of equitable
powers, having jurisdiction in the premises, upon the ap¬
plication of any of the bondholders holding not less than
one hundred thousand dollars in amount of such bonds,
to annul such appointment, and appoint a Trustee or
Trustees in the place of the Trustee or Trustees so ap¬
pointed by the Directors, to hold the trust for the like
term as he or they would have held the same under the
ajppointment of the said Directors, but no longer.
And in case of any vacancy occurring and not being
filled by a majority in interest of the bondholders, un¬
der the preceding provisions in that behalf, it shall be
the duty of the President of the said Railroad Company
to call a meeting on a notice of at least three weeks,
published once a week for three successive weeks, in
two newspapers of good circulation, published in the
city of New York, of the bondholders to be held in the
city of New York, to appoint a Trustee or Trustees to
fill the vacancies so existing, or which shall have ex¬
isted, but, nevertheless, such vacancy may be filled
without waiting for and irrespective of any such meet¬
ing, by instrument or conciiri-ent instruments, under
hand and seal, of a majority in interest of such bond¬
holders ; and any appointment of a Trustee or Trustees
to hll such vacancy existing or which shall have existed,
whether made at such meeting, called as aforesaid, or
otherwise, provided it be under the hands and seals of a
majority in interest of the holders of the then outstand¬
ing bonds hereby secured, or their attorneys in fact
thereunto authorized, but not otherwise, shall be valid
and effectual and shall supersede any previous appoint¬
ment of a Trustee, to fill such vacancy, which may have
been made by the Board of Directors of the said Com-
25
party, or by a Court under any of the preceding provis¬
ions hereof.
And it is hereby provided, declared and agreed that
the due appointment of a Trustee or Trustees in any of
k
the modes herein provided, shall be effectual to vest in
such Trustee or Trustees the appropriate estate, rights,
powers and duties as herein provided in that behalf,
without any new deed of conveyance ; but, nevertheless,
the said Railroad Company hereby covenants, in any
and every such case, to make and execute, upon re¬
quest, any such deeds, conveyances or assurances as
may be appropriate for more fully and certainly vesting
in and confirming to such new Trustee, such estate,
rights, powers and duties, and in every case of re¬
signation of a Trustee, the resigning Trustee shall, if re¬
quested, make and execute such deeds, conveyances or
assurances to his successor.
And it is hereby further provided, declared and
agreed that the Trustees hereunder shall be entitled to
receive reasonable compensation for all services per¬
formed by them in and about the execution of the trusts
hereby created, which compensation, if there shall have
been an entry by the Trustees themselves, or through a
Receiver or Receivers, upon the mortgaged premises, ora
sale made of such premises, in enforcement of this mort¬
gage, shall be payable out of such mortgaged premises,
and the proceeds and income thereof, and if there shall
have been no such entry or sale, such compensation shall
be payable by the said party of the first part.
And it is hereby further provided, declared and
agreed that in case of the Trustees hereunder entering
ujjon and taking possession of the said railroad and
other mortgaged premises or property in consequence of
default made by said Railroad Company, under or in
pursuance of the power and authority in that behalf
hereinbefore conferred upon the Trustees, it shall be
lawful and competent for such Trustees to employ an
agent or agents for the j)erformanee of any such
duties, acts and things in and about taking and main-
26
taining such possession and using, operating and man¬
aging the said railroad, and collecting the income, earn¬
ings and profits thereof, and making repairs and im¬
provements as above authorized, as such Trustees may
deem fit, and for the performance of any other acts in
and about such possession and management, the per¬
formance whereof can be properly delegated to an agent
and that such Trustees, provided they shall have exer¬
cised reasonable prudence and care in the selection and
employment of such agent or agents for any of such pur¬
poses, shall not be responsible for losses or damages in
the premises caused by the act, neglect or default of
such agent or agents. But this provision is not intended
and shall not be construed so as to exempt the Trustees,
in case of sale being made of the said mortgaged premises,
from due responsibility to the bondholders hereby se¬
cured for the due application of the proceeds of such
sale received either by the Trustees or by any agent or
agents whom they may see fit to employ to receive
such proceeds of sale.
And the said party of the first part, for the considera¬
tions aforesaid, doth hereby covenant and agree to and
with the said parties of the second part and their suc¬
cessors, as Trustees, and likewise to and with the hold¬
ers, from time to time, of the several bonds issued under
and secured by this Indenture, that the said party of the
first part, its successors and assigns, shall and will, from
time to time, and at all times hereafter, upon reasonable
request, make, do, execute, acknowledge and deliver all
such further acts, deeds, conveyances and assurances in
the laws for the better and more effectually assuring,
conveying and confirming under the said Trustees and
their successors in the trust hereby created upon the
trusts and for the uses and purposes herein expressed or
intended, all and singular the railroad and equipment,
premises, properties, rights and franchises hereby mort¬
gaged or conveyed in trust or agreed or purporting or
intended so to be, whether now owned or possessed by
or vested in said part}'' of the first part, or subsequently
27
acquired by or. vested in it, as by sucli Trustees or bond¬
holders, under the advice of counsel, shall be reasonably
advised, devised or required.
And the said party of the first part, for itself and
its successors and assigns, doth hereby covenant and
agree to and with the said parties of the second part
and their successors in the said trust, and to and with
the respective holders for the time being, of the said
bonds issued under or purporting to be secured by this
Indenture of Mortgage and Deed of Trust, that in order
further to secure and to provide a sinking fund for the
redemption and payment of all and singular the said
bonds, the said party of the first part will set apart
from the net earnings of the said Railroad and other
t J
property hereby mortgaged after payment of the cur¬
rent interest upon the bonds by this Indenture secured,
and will pay over by way of such sinking fund to the
said parties of the second part, or their successors in
the said trust, an annual sum of five thousand dollars,
the first of which annual payments shall be so made on
the first day of June, eighteen hundred and seventy-
eight, and thereafter such payments to be made annu¬
ally on the first day of June in each and every year
until all said bonds shall have been redeemed.
And it is hereby agreed by and between the parties
hereto, and by the said Railroad Company with all the
holders from time to time of bonds secured by this In¬
denture, that such annual sums so paid over to or for
such sinking fund, as likewise all interest from time to
time accruing upon bonds redeemed with such sinking
fund shall be applied by the said Trustees to redeem¬
ing at par so many of the outstanding bonds issued
under and purporting to be secured by this Indenture,
as the said sinking fund, including the interest as afore¬
said, in the Trustees' hands from time to time, after
paying thereout the Trustees' charges and expenses in
respect of such sinking fund, shall be adequate to pay
for, the bonds to be so redeemed to be drawn for by
lot and the redemption thereof, and the notices call-
28
ing iñ the same for redemption, to be made and given
in accordance with the conditions of such bonds in that
behalf, and that all such bonds so redeemed with the
sinking fund, and each and every coupon attached to
all such bonds at the respective dates of redemption
shall be immediately stamped upon their face by the
Trustees so as to show the same to belong irrevocably
to the said sinking fund and not further transferable,
and the said Railroad Company shall continue to be
liable to pay and shall pay to such Trustees for the
benefit of said sinking fund, the interest from time to
time accruing upon such bonds belonging to the sink^
ing fund, until all the bonds secured hereby shall have
been redeemed or paid off and discharged, and when
that shall have been done, all the bonds belonging to
said sinking fund shall be cancelled, the said bonds
after being redeemed or taken up by the Trustees with
the sinking fund being kept alive and in force merely
for the purpose of collecting the interest thereon for
the purposes of such sinking fund.
And it is further provided that the Trustees shall
from time to time deposit in their names as Trustees,
in some Trust Company in the city of New York, of
good credit and standing, upon such interest as they
may be able to obtain therefor, the fractional amounts
belonging to such sinking fund in their hands, which
may remain in their hands as left over after the year's
redemption, because of their being insuificieut to pay
the amount of a bond.
And the said Trustees and their successors shall be
and are obligated to render to the said Railroad Com-
Xmny, yearly accounts showing the amounts received by
them for such sinking fund and the application thereof,
and to exhibit to said Railroad Company from time to
time, if required, the bonds redeemed by means of such
sinking fund, with such stamj) placed on the face
thereof as is above provided for.
And the said parties of the second part do hereby ac¬
cept the trusts hereby created.
Ix WITNESS WHEEEOE, the Said party of the
29
first part, in pursuance of a resolution of
its Board of Directors, liath hereto affixed
its corporate seal, and caused the same to
be attested by its President and Secretary,
at Elizabethtown, in the State of Ken¬
tucky ; and the said parties of the second
part respectively have hereunto set their
hands and seals the day and year first
above written.
The Paducah and Elizabethtown
Railboad Company.
[seal.] By H. W. Smithers,
President.
[seal.] R. W. Brown,
Secretary.
August Rutten. [seal.]
G. J. Canda. [seal.]
Sealed and delivered in
the presence of
William H. Bowers.
C. W. sohaap.
3 5556 042 154484