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 ($110,700) 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 equipment:

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

severally mature, together with interest at the rate of five per cent. per annum upon the principal of said notes, according to the tenor of the coupons thereto attached-all such payments both of principal and interest to be in gold coin of the United States of the present standard of weight and fineness, or its equivalent; and

(b) Any and all taxes which may be assessed or levied upon the trust equipment, or any part thereof, and any and all taxes which may be assessed or levied upon the equipment notes issued hereunder and the interest coupons thereon, and which the Railroad may be required to pay thereon or deduct therefrom.

II. The Railroad agrees to forthwith execute and deliver to the Trustee its notes (herein designated "equipment notes") aggregating in principal amount Three Million and Forty Thousand Dollars ($3,040,000). Such notes shall be designated as "Erie Railroad. Equipment Notes; Series N," shall be for the principal sum of One Thousand Dollars each; shall be dated and bear interest (to be evidenced by interest coupons attached) from October 1, 1907, at the rate of five per cent. per annum, payable semi-annually on the first days of April and October in each year; shall be numbered consecutively from one to three thousand and forty, both inclusive; shall have endorsed thereon a certificate of the Trustee as hereinafter specified; and shall mature at the rate of $152,000 face amount thereof on the first day of April and the first day of October in each year, beginning April 1, 1908, and ending October 1, 1917. .

Said notes shall be in substantially the following form:

19

For value received ERIE RAILROAD COMPANY promises to pay to bearer on the first day of without grace, the sum of One Thousand Dollars ($1,000), in gold coin of the United States of America, of the present standard of weight and fineness, or its equivalent, at the office of First National Bank of New York, in the Borough of Manhattan, City of New York, with interest thereon from October 1, 1907, until paid, at the rate of five per cent. per annum, payable semi-annually in like gold coin at the office of said First National Bank of New York on the first days of April and

October in each year on the presentation and surrender of the respective coupons for such interest (hereto attached) as they severally mature. All payments upon this note, both of principal and of interest, shall be made without deduction for any tax or taxes which the Railroad Company may be required to pay thereon or retain therefrom under any present or future law of the United States or of any State, County or Municipality thereof.

This note is one of a series of notes designated as "Erie Railroad Company Equipment Notes, Series N," numbered consecutively from N1 to N3,040 both inclusive, aggregating in par value the principal sum of Three Million and Forty Thousand Dollars ($3,040,000), all of like date, amount and tenor except as to the date of maturity, of which said notes

numbers N1 to N152 inclusive mature April 1, 1908,

Said notes represent the obligation of Erie Railroad Company to pay the purchase price of certain equipment and are issued under and all equally secured by, the provisions of the certain indenture of lease and conditional sale agreement dated First day of October, 1907, made between Erie Railroad Company, Columbia Trust Company, as Trustee, and American Car and Foundry Company, in which said. equipment is fully described and by the terms of which the title to all of said equipment is retained and held by Columbia Trust Company as Trustee for the equal benefit of the holders of said equipment notes and until full payment of all thereof, and of the interest thereon.

For the further terms and conditions of the said indenture of lease and conditional sale agreement, and the rights and obligations of the

said parties thereto and the rights of the several note holders, reference is hereby made to the said agreement.

This note shall not become or be valid or obligatory for any purpose until the certificate endorsed hereon has been duly signed by Columbia Trust Company, Trustee under said agreement.

In witness whereof, ERIE RAILROAD COMPANY has caused its corporate name to be hereunto subscribed by its Vice-President and its corporate seal to be hereunto affixed and attested by its Secretary, and coupons for interest, bearing the engraved or lithographed fac-simile of the signature of its Treasurer, to be hereto attached, as of the first day of October, 1907.

ERIE RAILROAD COMPANY

Attest:

By..

Vice-President.

Secretary

Each of the said coupons appertaining to said notes shall represent interest for a period of six months and shall be in substantially the following form:

No. N

$25.00

(Form of Coupon.)

On the first day of....

ERIE RAILROAD COMPANY

Will pay to bearer, at the office of First National Bank of New York, in Manhattan Borough, New York City, Twenty-five Dollars in gold coin of the United States, of the present standard of weight and fineness, or its equivalent-being interest then due on its equipment note, Series N, No.

subject to all the conditions stated in the said note and in the indenture of lease and conditional sale agreement dated October 1, 1907, therein referred to.

TREASURER.

The Certificate of the Trustee to be endorsed on each of said notes shall be in substantially the following form: