said demised real and personal estate, with all improvements, additions or substitutions thereto, in the like good order and condition as that in which they are at the inception of this lease.

IV.

The lessee will pay yearly and every year :

(a.) The operating expenses of the New Brunswick system, which shall include, amongst other things, the cost of maintaining each portion thereof in good order and condition, also ordinary repairs and renewals, all expenditures arising out of any business or contract obligation, negligence or misfeasance, or however otherwise in any way connected with the use and operation thereof, including damages to persons or property, all taxes of every description, federal, provincial or municipal, upon the said demised properties, or the business or franchises thereof, and also any other expenditure which is herein declared to be operating expenses;

(b.) To the lessor, on the tenth day of March next after the date of these presents and thereafter half yearly on the tenth day of the months of March and September in each and every year, including and ending with the month of September next after the period of the said term, an amount equal to so much of eighty-eight four hundred and twentieths of twentythree one hundredths of the aggregate gross earnings of the lessor during the half year ending on the thirtieth day of June or the thirty first day of December (as the case may be), next preceding such day of payment, over the system of railways described in the third clause of the said indenture of lease, dated the twenty-first day of May, A. D. 1883, as shall exceed, if it do exceed, two thousand seven hundred and fifty pounds sterling,-the amount of this excess (if any) to be paid to the lessor, at such place in London, England, as it may, from time to time, in writing direct; but it is to be paid only so long as the St. John and Maine Railway Company or its assigns shall continue to be entitled to receive the same by way of rent under the terms of the said lease, and if the obligation of the lessor to pay the same be, at any time hereafter, satisfied or acquired on behalf of the lessor by means of the issue by the lessor of consolidated debenture stock to such an amount as may be necessary for that purpose, then the lessee will thereafter pay directly to the respective holders of consolidated debenture stock the interest as it shall fall due half yearly on so much of such consolidated debenture stock as shall have been so issued for that purpose;

(c.) To the lessor, as and when and where they respectively fall due, all such sums as may be necessary from time to time to meet the interest at the rate of three and a half per centum per annum on eighty-two thousand pounds sterling of perpetual guaranteed debenture stock, issued by the New Brunswick and Canada Railway Company;

(d.) To the lessor annually the sum of three hundred and nineteen thousand three hundred and ninety dollars in halfyearly payments of one hundred and fifty-nine thousand six hundred and ninety-five dollars each on the first day of the months of January and July in every year, after deducting from each such half-yearly instalment whatever sum the lessee shall have paid or shall have become liable to pay on account of any part of the six months next preceding the day on which such half yearly instalment shall mature, in respect of consolidated debenture stock, to be issued by the lessor, as provided for in the next succeeding paragraph;

(e.) To every holder of any consolidated debenture stock which may be hereafter at any time issued by the lessor upon the written request of the lessee and under the provisions of the Act of the Parliament of Canada, 53 Victoria, chapter 71, or of any subsequent or amending Act or Acts, as and when and where they respectively fall due, all such sums as may be necessary from time to time to meet the interest thereon. according to the rate at and the terms on which it shall have been issued, and will execute on each certificate which shall be issued in respect of any such stock, or in such other manner as may be requisite, a valid and sufficient undertaking and guaranty to that effect;

(f.) If, at the request of the lessee, consolidated debenture stock shall be, at any time or times, issued by the lessor in respect of floating obligations under paragraph (1) of clause III of the said Act, exceeding in the aggregate four hundred thousand dollars, then the lessee will pay as rent, in addition to the amounts covered by the two next preceding paragraphs, taken together, a further sum equal to four per centum per annum on the excess, whatever it may be, from time to time, beyond the said sum of four hundred thousand dollars,-such additional rent to be paid to the several holders of debenture stock in the same manner as is heretofore provided for in respect of other portions of such consolidated debenture stock.

This lease is upon the condition that, if the lessee shall, at any time, fail to pay the said sums of money reserved by way of rent as aforesaid, or any sum mentioned and provided for by clause IV of this lease, and such default shall continue for the space of ninety days, then and in every such case the lessor may enter upon the demised premises or upon any part thereof as for the whole and expel the lessee therefrom, and determine the estate hereby granted, and shall thereupon become seized and possessed of the demised premises and of every part thereof in its original right and as if this lease had never been made: provided, however, that such entry by the lessor shall in no wise prejudice or impair any remedies to which it might otherwise be entitled for arrears of rent or preceding breaches of covenants or conditions.

The lessor for itself, its successors and assigns, covenants with the lessee, its successors and assigns, as follows, that is to say:

VI.

The lessor will not, at any time, issue any portion of the consolidated debenture stock, so authorized by the said Act as aforesaid, or which may be authorized by any subsequent or amending Act or Acts, except upon and after the written request of the lessee; but, upon every such request being made in respect of any portion or portions of such debenture stock, the lessor will, without unnecessary delay, cause to be issued the portion or portions covered by such request, and will cause the same or the proceeds thereof to be made available for the purposes for which it shall be issued, to the end that the lessee may get the benefit thereof within the true meaning of the understanding embodied in these presents.

VII.

There shall be expended on improvements of the properties hereby demised, without unnecessary delay, and under the supervision and direction of the lessee, so much of the net proceeds of all the consolidated debenture stock which shall be issued by the lessor under the provisions of the said Act of Parliament, or of any subsequent or amending Act or Acts, as shall not be actually and properly applied under such provisions in the satisfaction or acquisition of the said present outstanding obligations of the lessor, or some portion thereof; and at the option of the lessee the amount of the proceeds, so to be expended on improvements, shall, from time to time, on the request of the lessee, be handed over to the lessee for the purpose of being so expended.

VIII.

The lessor will, on or immediately after the commencement of the said term and at its own costs and charges in all respects, procure the following obligations of the lessor to be satisfied or acquired by the application of the proceeds of consolidated debenture stock, to be issued (under the provisions of the said Act) to an amount not exceeding the par value of such outstanding obligations, as below stated, that is to say:

Floating obligations, referred to in paragraph (d) of Section 3
of the said Act, four hundred thousand dollars.
New Brunswick Railway second mortgage bonds, two hundred
thousand pounds sterling.

$400,000

£200,000

New Brunswick Railway Car Trust on rolling stock, two
hundred and fifteen thousand dollars.

$215,000

so that the future annual charge in respect of these obligations shall be forthwith reduced to sixty-three thousand five hundred and thirty-four dollars, or its equivalent in sterling money.

IX.

All leases and contracts of the lessor for the operation of other railroads, terminating during the term of this lease, if any,

shall, at the request of the lessee, be renewed by the lessor upon the most favourable terms practicable, and, being so renewed, the property affected thereby, as well as the said leases and contracts, shall be subject to all the provisions of this lease as effectually as if now existing and herein included, and at the request of the lessee shall be validly assigned to the lessee; and in case the lessor make and conclude with the consent of the lessee any new and satisfactory arrangement with the Fredericton Railroad Company to work and operate the line of railway from the city of Fredericton to the Fredericton Junction, then and in such case such arrangement shall enure to the benefit of the lessee, and such railroad shall be included in the demise herein contained and shall become subject to the terms and conditions of this lease in the same manner and to the same extent as if it had been originally included and named herein, the lessee, its successors and assigns assuming the obligations so entered into with the said Fredericton Company by the lessor with the consent of the lessee as aforesaid; and thereafter the proportion of earnings, to be paid under paragraph (b) of Clause IV of these presents, shall be modified according to an agreement made between the St. John and Maine Railway Company of the one part and the lessor of the other part, and dated the 27th day of December, 1883.

X.

In case it is found necessary and in the interest of the lessee, that the lessor shall construct, lease or purchase lines of or interests in railroads not demised by this present lease, or any railroad bridges, either in the provinces of New Brunswick or Quebec, or the said State of Maine, such construction, leasing or purchase will be authorized by the lessor at the request of the lessee, and shall be made, entered into and completed at the expense of the lessee; but no money or other compensation by way of rental shall be payable by the lessee to the lessor in respect of such lines of railroad or bridges, so to be constructed, leased or acquired as aforesaid.

XI.

The lessor will, from time to time and at all times hereafter, on the written request of the lessee and without price, transfer and set over by a valid conveyance to the lessee, its successors and assigns, or its or their nominees, the shares in the capital stock or the bonds or other securities (if any) of, or the contracts entered into with, any of the companies from which the lessor has directly or indirectly acquired any of the properties demised by these presents, which it may, either in its own name or by or through any trustee or trustees, or otherwise howsoever, then hold or be entitled to, to the end that the lessee may, from time to time and at all times hereafter, have an interest in and a control over each of the said properties and of the transactions of the Company owning it as full and complete as the lessor now has or is entitled to have.

XII.

To prevent uncertainty as to the personal property herein demised and so to be accounted for as aforesaid at the termination of this lease, there shall be made by the lessor a full, complete and particular inventory, description and appraisal of all such property as at the commencement of the said term.such inventory to be made in duplicate, and an original furnished and signed by an official of each of the parties thereto.

XIII.

The lessor will maintain its existence and organization as a corporation during the said term, and to that end will comply with all the requisites and forms of law.-will do all acts and things and execute all legal instruments necessary and proper to put and secure the lessee in the full enjoyment of all the properties, rights, franchises and interests herein demised, and so as to carry into effect the true intent and meaning of this lease, and will permit the lessee to use the name of the lessor (and it hereby grants the use of such name irrevocably,) in all legal proceedings and in all cases needful for obtaining, holding and enjoying the premises hereby demised and every part thereof, and for all purposes consistent with the true scope and intent of this lease; and, on the demand of the lessee, the proper officials of the lessor will affix to any document presented for that purpose the corporate seal of the lessor and the signature of such of its officials as may be proper and necessary, and the said officials are hereby irrevocably empowered so to do, upon the condition, however, that the lessee shall, in every case, hold harmless and keep indemnified the lessor from the consequences thereof.

XIV.

The lessor will cause to be assigned and transferred, when thereto requested and as directed, to the lessee or its nominees, the several mortgages and deeds of trust held by the said trustees for the lessor on the St. Stephen branch and the Woodstock branch of the New Brunswick and Canada Railroad Company, or any of them, and also all or any of the leases of land held by it, situate in the city of St. John or in the towns of St. Stephen, Woodstock and St. Andrew's, or any of them.

XV.

During the continuance of this lease the lessor will well and truly pay or cause to be paid all rentals, interest and sums of money, due and payable by virtue of the said several herein mentioned indentures of lease, according to the respective terms and conditions thereof, except the sums to be paid by the lessee under paragraph (a) of clause IV of this lease, and also will perform and keep all the covenants and conditions in the said indentures contained and on the part and behalf of