Holders of the said bonds of the Toledo Electric Street Railway Company who do not desire to avail themselves of the above privileges will receive par for their bonds upon delivery of the same on or after February 1, 1912, to said Blair & Co. Copies of the Extension Agreement, stating the terms of the extension and other details, may be obtained at the Company's office or from Blair & Co. Dated Toledo, Ohio, December 15, 1911. THE TOLEDO RAILWAYS AND LIGHT COMPANY, Referring to the foregoing Notice, we are now prepared to receive deposits of the aforesaid bonds for exchange and extension. Holders of such bonds desiring to avail themselves of the privilege should deposit the same promptly at our office. Depositing Bondholders will receive receipts, exchangeable for extended bonds, as soon as the Extension Certificate and Coupons can be attached thereto. The privileges as to the bonds of the Toledo Consolidated Street Railway Company and the Toledo. Traction Company will terminate on December 28, 1911. The privileges as to the bonds of the Toledo Electric Street Railway Company will terminate on January 28, 1912. All bonds of the Toledo Consolidated Street Railway Company and all bonds of the Toledo Traction Company, the holders of which do not wish to avail themselves of the above-mentioned privileges, will be purchased by us at par, on or after January 1, 1912. All bonds of the Toledo Electric Street Railway Company, the holders of which do not wish to avail themselves of the above-mentioned privileges, will be purchased by us, at par, on or after February 1, 1912. BLAIR & CO., 24 Broad Street, New York CONVERSION OF BONDS INTO STOCK1 SECTION 1. Any of the bonds issued hereunder may be converted at the option of the bearer or registered holder thereof at any time after the first day of November, 1913, until, but not including, the date of maturity of such bond, or if such bond is called for redemption, until, but not including the date fixed for redemption, into shares of the par value of $100 each of the full-paid common capital stock of the Company as its authorized capital stock shall be constituted at the time of such conversion at the rate of $100 principal amount of bonds for one share of stock; and on presentation and surrender to it at its office or agency in the City of New York, of such bond with all unmatured coupons thereto appertaining for conversion, the Company will deliver in exchange therefor certificates for said shares of the common capital stock of the Company at the rate aforesaid. The Company shall not be required to convert any bonds into stock while its stock transfer books are closed for any meeting of stockholders, or for the payment of dividends, or for any other purpose, and the right of conversion shall be suspended during such periods, provided, however, that the right of conversion shall not at any one time be so suspended for a longer period than twenty days. All bonds surrendered for conversion as aforesaid, and all unmatured coupons appertaining to any of said bonds, shall at once become null and void and shall be cancelled and deposited with the Trustee. SEC. 2. The Company covenants and agrees that at all times there shall be reserved unissued, exclusively for the conversion of said bonds, Five Million Dollars ($5,000,000) par value of the common capital stock of the Company or such part thereof as may be necessary for the conversion of all said bonds as herein provided, which are then outstanding, or may thereafter be issued hereunder, and that said stock shall not be issued or used for any other purpose. SEC. 3. Nothing herein contained shall prevent the Company from increasing from time to time its present authorized or outstanding stock or from issuing preferred stock or different classes of stock. 1 From Mortgage of Atlantic Fruit and Steamship Company to Knickerbocker Trust Company, Trustee. Dated November 1, 1911. SEC. 4. In case any corporation duly becomes the sole successor of the Company, in accordance with the provisions of Article Fourteen of this indenture, all references contained in this Article to the common capital stock of the Company shall be deemed to refer to the common capital stock of such successor corporation, and every other reference contained in this Article to the Company shall be deemed to refer to such successor corporation. This provision shall not be construed to limit in any manner the application of Section 3 of Article Fourteen to all of the provisions of this indenture. Convertible bonds are usually secured by a direct lien, at a fixed rate of interest, upon the property of the issuing company, and in addition, holders of such bonds have the right to convert them into stock, in accordance with the terms of conversion, at such time as they may elect. When it is considered that the prices for stocks reflect to a greater extent than other security issues the increase and growth of the business of corporations, the strong probability of holders of convertible bonds realizing substantial profits becomes readily apparent. The very heavy declines which have taken place in the security markets are largely responsible for the study being given properly selected convertible bonds by well-informed investors. In order to aid in selecting such investments, we describe herein practically all of the convertible bonds now upon the market, although, of course, we do not recommend the purchase of all of the issues as suitable for conservative buyers. One of the strongest features in connection with convertible bonds is aptly illustrated by existing conditions in the stock market; that is, when, as now, stocks have declined considerably below the conversion figures, convertible bonds, other things being equal, decline only to approximately the same level as other junior fixed liens of the issuing company. The reason for this is that convertible bonds, viewed from the standpoint of security, are usually just as valuable as any of the other junior liens of the issuing company. Therefore, at the present time, convertible bonds are being purchased upon the basis of their security value, the conversion privilege being ignored as of remote advantage. There may, therefore, be considered a certain level below. which convertible bonds will not decline. When, however, the market for stocks begins to advance, convertible bonds advance also. If the right to convert actually exists, it is obvious that the prices of convertible bonds will practically coincide with the quotation for the stock of the same issuing company. But, even if the date of conversion is not immediately at hand, when the stock advances to figures above the conversion prices, it is usually the case that convertible bonds also move with the stock, and sell at considerably higher prices than the junior liens or the prior liens of the same company, there being practically no limit to the figures to which they may advance. A study of the history of convertible bonds will show that investors have often made as large a profit at 50% or more Therefore, during such abnormal times as these, when prices are so low, it seems reasonable to believe that in some cases the extraordinary results may be repeated. In our judgment, where the management, general conditions and prospects of a corporation are good, its convertible bonds may be bought with safety, and also with the probability of greater profits being realized than from any other form of corporate obligations. Interest payable June and (1) THE ATCHISON, TOPEKA & SANTA FE RAILWAY COMPANY. Fifty Year Four Per Cent. Convertible Bonds. Dated February 9, 1905. Due June 1, 1955. December 1st. In coupon form, $1,000 each. $5,000, or any multiple thereof. The Morton Trust Company, New York, Trustee. Authorized issue, $50,000,000. Outstanding, $48,952,000. Convertible after June 1, 1906, but prior to June 1, 1918, into common stock at (par value, $100) and subject to redemption at 110 and interest, but if called for payment prior to June 1, 1918, may be converted into stock. The proceeds from sale of these bonds are to be used to complete lines under construction, build additional branches, second tracks, reduction of grades on main line, additional equipment, etc. The indenture stipulates that no new mortgage on lines owned January 1, 1905, shall be made without securing the convertible bonds thereunder. For the fiscal year ending June 30, 1906, the Company reports a total net income of $28,335,393, out of which there was paid for fixed charges, including interest on adjustment bonds, $10,622,184, leaving a surplus of $17,733,209. The $114,173,730 5% preferred stock receives regular dividends. The $102,759,000 common stock outstanding receives div. idends at the rate of 6% per annum. On January 30, 1907, the stockholders approved the proposition to increase the authorized common stock from $152,000,000 to $200,000,000; also to authorize an issue, in lieu of common stock, of bonds convertible into common stock at the option of the holder during a term of ten years. (2) THE ATCHISON, TOPEKA & SANTA FE RAILWAY COMPANY. Ten Year Five Per Cent. Convertible Gold Bonds. Dated May 9, 1907. Due June 1, 1917. Interest payable June and December 1st. In coupon form $1,000 each. In registered form $1,000, $5,000, or any multiple thereof. Coupon bonds may be exchanged for registered bonds and registered bonds for coupon bonds. Redeemable on any interest date at 110 and interest. Convertible into common stock prior to June 1, 1913, at the option of the holder, on the basis of ten shares of common stock (par value $100) for each $1,000 bond. If called for redemption prior to expiration of conversion period, holders may convert in lieu of taking cash. Authorized issue, $35,000,000. Present issue, about $26,000,000. (See earnings given above.) (3) THE BROOKLYN RAPID TRANSIT SYSTEM. First Refunding Mortgage Four Per Cent. Convertible Gold Bonds. Dated July 1, 1902. Due July 1, 2002. Interest payable January and |