THE CITY OF NEW YORK, BY ITS RAPID TRANSIT BOARD, WITH JOHN B. MCDONALD, CONTRACTOR, AND INTEPvBOROUGH RAPID TRANSIT COMPANY AGREEMENT MODIFYING CONTRACT FOR CONSTRUCTION AND OPERATION OF RAPID TRANSIT RAILROAD. ADDITIONAL TRACKS NEAR 96 STREET. DATED JUNE 27, 19O7. made this 27th day of June, in the year Nineteen hundred and seven, between THE CITY or NEW YORK (hereinafter called the "City"), acting by the Board of Rapid Transit Railroad Commissioners for the City of New York (herein- after called "the Board"), party of the first part, and JOHN B. MCDONALD, of the City of New York (hereinafter called "the Contractor"), party of the second part, and INTEEBOBOUGH RAPID TRAN- SIT COMPANY, a corporation organized and exist- ing under the laws of the State of New York (here- inafter called " Interborough Company"), party of the third part, WITNESSETH : WHEREAS, heretofore and on or about the 21st day of February, 1900, the City, acting by the Board, entered into a contract with the Contractor for the construction and operation of a Rapid Transit Railroad in the City of New York and otherwise, as therein mentioned, the said contract for construction and operation being hereinafter styled "the Contract," which contract has been JVI258291 T 2 from time to time modified by certain other agree- ments between the said parties ; and WHEREAS, the Contractor has deposited with the Comptroller of the City certain security for the performance of the Contract on his part, and has given certain bonds as further security for such performance and upon such bonds there are now sureties as follows: Rapid Transit Subway Construction Company, The United States Fidel- ity & Guaranty Company, The Empire State Surety Company, American Surety Company of New York, National Surety Company and Fidelity and Deposit Company of Maryland ; and WHEREAS, by written instruments bearing date the tenth day of July, 1902, the Contractor, with the written consent of the Board, concurred in by six members thereof, duly assigned the right and obligation to maintain and operate the said Rapid Transit Railroad for the term of years specified in the Contract and all rights included in the leasing provisions of the Contract, together with /f. 3 the obligation to provide equipment for the said railroad unto Interborough Company, which Com- pany also guaranteed the performance by the Contractor of the provisions of so much of the Contract as was not so assigned to it; and WHEREAS, it is provided in the Contract that the said Board of Rapid Transit Railroad Commis- sioners shall have the right to require additional work to be done or additional materials to be fur- nished or both, within the general purview of a rapid transit railroad as therein described, the reasonable value of which shall be additionally paid to the Contractor ; and WHEREAS, The Contractor and the Interborough Rapid Transit Company desire, and the Board approves, a modification of the Routes and Gene- ral Plan for the Rapid Transit Railroad referred to in the said Contract for Construction and Operation as set forth in certain resolutions adopted by the Board this day, a copy of which is hereto annexed, in order to provide for an addi- tion to the said Routes and General Plan, as in said resolutions and herein described, Now, THEREFORE, in consideration of the prem- ises, but subject to the consents hereinafter pro- vided, IT is AGREED that the said Contract for Con- struction and Operation and the Routes and Gen- eral Plan therein contained be, and the same are hereby modified by adding to the said Routes and General Plan the words following, to wit: And also an additional track extending along the easterly side of Broadway from a point near the center line of 96th Street to a point about seventy-five (75) feet north of the northerly line of 102nd Street. The said easterly additional track is more particularly described as follows : A track, the center line of which shall begin at or near a point where the center line of 96th Street intersects the center line of the easterly track as originally constructed upon this route; thence diverging from the said easterly track originally constructed, and running northeasterly and northerly and generally parallel with the east- erly line of Broadway, and distant therefrom not less than twenty-four (24) feet and nine (9) inches, and so continuing to a point near the south- erly line of 102nd Street; and thence curving northwesterly, and again uniting with the said easterly track of the railroad as originally con- structed upon this route, at a point about seventy- five (75) feet north of the northerly line of 102nd Street. Also two additional tracks extending along the westerly side of Broadway, from a point near the center line of 96th Street northerly to a point near the center line of 101st Street. The said two tracks are more particularly described as follows : FIKST. A track, the center line of which shall begin at or near the point where the center line of 96th Street intersects the center line of the west- erly track as originally constructed upon this route; thence diverging from the said westerly track originally constructed, and running north- westerly and northerly and generally parallel with the westerly line of Broadway, and distant there- from not less than twenty-four (24) feet and nine (9) inches, to a point about fifty (50) feet south of the southerly line of 100th Street ; and thence curv- ing northeasterly, and again uniting with the said westerly track as originally constructed upon this route, at a point near the intersection of the center line of the said westerly track with the center line of 101st Street. SECOND. A track, the center line of which shall diverge from the center line of the additional track last above described, at a point about twenty (20) feet south of the northerly line of 96th Street ; and thence running northerly and parallel, or nearly so, with the westerly line of Broadway, and dis- tant about forty (40) feet therefrom, to a point about fifty (50) feet north of the northerly line of 100th Street; and thence curving northeasterly and continuing to a point near the intersection of the center line of 101st Street with the center line of the lower westerly track originally constructed upon this route, and known as the south-bound Lenox Avenue track. And also spurs or connections to unite the said three additional tracks or any one or more of them with any of the other tracks constructed upon this route. The additional tracks, spurs and connections herein provided for, shall be built (except where the same curve to unite with or diverge from any of the four tracks first constructed upon this route) between the walls of the railroad or sub- way, and the easterly and westerly sides of Broad- way respectively. The additional track on the easterly side shall descend from a point at or near the center line of 97th Street at a grade of about one per cent, to a point about forty (40) feet north of the center line of 99th Street, and then level to a point which is about thirty-five (35) feet below the surface of Broadway and near the southerly line of 100th Street, at which point a spur or connection shall diverge to connect with other tracks. Said east- erly additional track as above described shall from said lowest point ascend to about the center line of 102nd Street, and shall continue thence on the same grade as the easterly line originally con- structed upon this route, which is known as the north-bound Broadway track. The first of the two additional westerly tracks shall be constructed upon the same grade as the westerly track first constructed upon this route, which is known as the soujth-bound Broadway track. The second of the said two additional westerly tracks shall continue on the same grades as the first of the said additional westerly tracks from the point of beginning as above described, to a point near the intersection of the center line of 98th Street; from thence it shall descend to a point about the northerly line of 100th Street, at which it will be on the same grade as the two center tracks first constructed upon this route, known as the Lenox Avenue tracks; and from thence it shall continue on the same grades as the said two Lenox Avenue tracks. AND IT is HEREBY FURTHER AGREED that the said contract be and the same shall hereafter be deemed to be so modified as that the portion of the rapid transit railroad added by the modification afore- said of the Routes and General Plan shall in all respects, except as herein otherwise expressly pro- vided, be deemed to be part of the rapid transit railroad originally described in the said contract hereby modified. AND IT IS HEREBY FURTHER AGREED that the TCa- sonable value of constructing that portion of the rapid transit railroad upon the said additional tracks, including all of the said connections, switches, and appurtenances of such addition to the said rapid transit railroad shall be deemed a part of the cost of constructing said rapid transit railroad, and shall be ascertained and determined and paid to the Contractor in the manner provided in the contract for the construction and operation 8 of said rapid transit railroad in addition to the amounts in said contract originally agreed to be paid unto said Contractor, and that such addi- tional amounts so paid shall be included in the total cost of the construction of the said railroad in determining the amount of rental to be paid under said contract in like manner as if said addi- tional route had been originally authorized therein ; AND IT IS HEREBY FURTHER UNDERSTOOD AND AGREED that in computing the rental payable under the Contract, the interest actually paid by The City on bonds heretofore issued or that may here- after be issued for construction, shall be the basis of the said computation notwithstanding the rate of interest so paid may exceed three and one-half (31/2) per cent., the rate which was limited by law at the time the Contract was made ; PROVIDED^ however, and it is expressly AGREED That this agreement shall take effect if and when and only when the following consents shall have been duly had, to wit : 1. The consent of the Board of Estimate and Apportionment of the City of New York. 2. The consents of Rapid Transit Subway Con- struction Company, The United States Fidelity & Guaranty Company, The Empire State Surety Company, American Surety Company of New York, National Surety Company and Fidelity and Deposit Company of Maryland ; and PROVIDED, further, however, and it is expressly agreed, that this agreement shall take effect if and when, and only when, the following consents shall have been duly given to the said resolutions adopted by the Board this day, a copy of which is hereto annexed, providing for the said addition to said Eoutes and General Plan; the consent of the Board of Estimate and Apportionment of the City of New York ; the consent of the Mayor of the City of New York ; and the consent of the owners of a majority in value of the property along such streets or such portions of streets as are included 10 in the portion of the route added as aforesaid, or if such last mentioned consent cannot be obtained, then in lieu thereof, the determination of three commissioners to be appointed by the Appellate Division of the Supreme Court duly confirmed by the said Appellate Division. The plan hereto annexed entitled " Board of Eapid Transit Railroad Commissioners of the City of New York; proposed Additional Tracks between West 96th and West 103rd Streets. Drawing No. 1715 B, June 24th, 1907," is intended to illustrate and show in general the addition to and modification of the said original Routes and General Plan as hereby proposed. Jtt ttrttttJeSS mfoeVJejOf, This contract has been executed for the City of New York, by its Board of Rapid Transit Railroad Commissioners, under and by a resolution duly adopted by said Board, concurred in by seven of its members, and the seal of the said Board has been hereto affixed and these presents signed by the President and Secretary of the said Board, and the said 11 John B. McDonald has hereto set his hand and seal and the said Interborough Rapid Transit Company has caused its corporate seal to be hereto affixed and attested by its secretary, and these presents to be signed by its president, all the day and year first above written. A. E. ORE, [SEAL OF THE BOARD.] President. BION L. BURROWS, Secretary. INTERBOROUGH EAPID TRANSIT COM- PANY, E. P. BRYAN, [CORPORATE SEAL.] President. Attest : H. M. FISHER, Secretary. JOHN B. MCDONALD. [L. s.] 12 fcy as the WEST FARMS SUBWAY CONNECTION) upon the follow- ing route or routes : Diverging from the existing Third Avenue Elevated; Railroad at about 143d Street; thence extending through private property and Willis and Bergen Ave- nues to a point near 149th Street ; thence northeasterly- crossing 149th Street over a public place, Gerard Street, the right of way of the existing Manhattan- Bronx Rapid Transit Railroad constructed under the- contract of February 21, 1900, and private property to a point near the intersection of Brook and West- Chester Avenues, where a connection can conveniently be made with the West Farms Division of the said Manhattan-Bronx Rapid Transit Railroad. 2. To construct, maintain, and operate within the streets, avenues and public places included within the aforesaid routes or within the adjacent lines of intersecting streets and avenues lying within seventy-five (75) feet of the ex- terior line or side of the longitudinal streets, avenues and public places of the route, all necessary and proper con- nections with terminal yards, stations, landing places, stair- ways, platforms, elevators, escalators, telegraph, telephone and signal devices and other appliances and facilities, all as may be either necessary or convenient for the construc- tion, operation and maintenance of the Railroads. 3. To acquire and use private property for the construc- tion, maintenance and operation of the Railroads including yards, stations, station extensions, terminal rooms, power plants, stairways, elevators, escalators, or other methods of access to and from the street, and for other purposes necessary or convenient to carry into execution the terms and authority of this grant. i. To transport upon the Railroads persons and property .-and to use therefor and in connection therewith all suitable .appliances, 5. To construct, maintain and operate upon, under or contiguous to the Railroads for the transmission or ex- change of power, heat and light for the use of the Railroads -and such other railroads as may be owned, operated or controlled by the Interborough Company (and for no other purposes), telegraph and telephone wires and wires, cables, contact rails, conduits and ways and other appurtenances ; provided, however, that, except for the purpose of making necessary connections, all such appurtenances, when not placed upon the structure, shall be placed underground, unless otherwise directed by the Commission. The authorizations or licenses hereby granted to con- struct, maintain and operate the Webster Avenue line, the Eighth Avenue and lG2d Street Connection, the Queensboro Bridge line and the West Farms Subway Connection shall be held by the Interborough Company for a period of eighty -five (85) years from the date on which the Inter- borough Company shall first begin operation of any part of any of the Railroads, unless sooner terminated as here- inafter provided. Said date shall be evidenced by a resolu- tion of the Commission entered in its minutes approving- such date as the date of beginning operation of the Rail- roads and as the date from which the terms of these authorizations or licenses run and from which compensa- tion payable hereunder accrues, and also the date from which the period of ten years begins to run, after which the City may terminate the authorizations or licenses here- by granted; provided, however, that if operation of any of the Railroads be first begun as to any part thereof at a later date, such date may be evidenced by a resolution of the Commission approving that date as the date of begin- ning operation of such railroad and as the date from which the period of ten years begins to run after which the City may separately terminate this authorization or license therefor. Provided, however, and it is expressly agreed that the authorizations or licenses hereby granted are subject to certain terms, conditions and requirements which appear to the Commission to be just and proper, and which as so subject, are prescribed in the following articles, to wit: This certificate will be executed by the Commission in five identical originals, so proved as to be entitled to be recorded in the office of the Register of the County of New York and the Clerk of the County of Queens, and to be filed in the office of the Secretary of State of the State of New York, all of which will be delivered by the Commission to the president, vice-president, secretary or treasurer of the Interborough Company. The authorizations or licenses hereby granted shall be inoperative and this certificate shall be void unless within thirty days after such delivery or such further period as shall be prescribed in writing by the Commission, the Interborough Company shall have pro- cured four of the said identical originals to be returned to the Commission, each of them having an acceptance of this certificate and all the terms, conditions and requirements thereof subscribed at the foot thereof by the Interborough Company, such acceptance being so proved as to entitle it to be recorded and filed as aforesaid. II The authorizations or licenses hereby granted, if the Commission shall so determine, shall become void unless within three calendar months from the time of the delivery to the Commission of the acceptance of this certificate by the Interborough Company, that Company shall, in due and lawful form, obtain or receive the approval hereof by the 8 Board of Estimate and the consent of that Board as the local authority having the control of the portions of the streets, avenues, highways, bridges, parkways and public places upon, under or over which it is proposed to construct and operate the Railroads, together with the approval of the Mayor of the City. The authorizations or licenses hereby granted, if the Commission shall so determine, after due hearing, shall become void unless within one year from the time of the acceptance of this certificate by the Interborough Company that Company shall further and in due and lawful form obtain and submit to inspection by the Commission the consents of the owners of one-half in value of the property bounded on each portion of the streets, avenues or high- ways upon, under or over which the Railroads or any part thereof are authorized, to the construction and operation of the Railroads or such part thereof, or in case the consent of such property owners cannot be obtained, then the de- termination pursuant to law of commissioners to be ap- pointed by the Appellate Division of the Supreme Court in the proper department that such portion of the Railroads ought to be constructed and operated, the said determina- tion of such commissioners when confirmed by the Court, to be taken in lieu of such consent of property owners. Pro- vided, however, and it is expressly stipulated, that the Com- mission shall have power, upon reasonable cause shown, to extend by written certificate either of the periods herein- before in this article prescribed. The Interborough Company covenants that it will be diligent in prosecuting applications for the consents afore- said, but it it shall not have secured the same within the period of one year after its acceptance as aforesaid of this certificate, then and in such case the Interborough Com- pany shall, after a written notice of three months to the Commission, be released from its obligations hereunder, unless within such three months, or within such further with the other proyisions hereof may be permitted by the Commission. The Eailroads, with necessary sidings, turnouts and switches, excepting the portion of the Eighth Avenue and 162nd Street Connection west of Jerome Avenue shall follow the general design of the elevated railroads known as the Van Cortlandt Park Extension heretofore con- structed under the contract dated February 21, 1900. for the construction, equipment and operation of the Manhat- tan-Bronx Rapid Transit Railroad, except that the Inter- borough Company shall construct the following portions of the Webster Avenue Line and the Eighth Avenue and 162nd Street Connection upon approved plans involving a more elaborate and ornamental structure with solid floor or such other construction as will in the opinion of the Com- mission most effectually prevent noise and tremor, to wit: (a) The portion of the Eighth Avenue and 162nd Street Connection, including the portal from the point where it emerges from the ground near 162nd Street, over private property and 162nd Street to a point about midway between Cromwell Avenue and River Avenue. (b) The station on the Webster Avenue Line, near the intersection of Gun Hill Road and White Plains Road together with about 200 feet of the approaches thereto. (c) The portion of the Webster Avenue Line cross- ing Mosholu Parkway, together with about 200 feet of the approaches thereto. (d) The portion of the Webster Avenue Line over Fordham Square, together with about 200 feet of the approaches thereto. And except further that the Queensboro Bridge Line shall be so constructed as to harmonize in all respects with the Queensboro Bridge structure and approaches. 12 In 'the subway portion ol the Eighth Avenue and 162ncl Street Connection the construction shall be of iron or steel or masonry or a combination of iron and steel or masonry. The tunnel shall have a clear height above the base of rail *of not less than 13 feet 2 inches. The width of tunnel shall not exceed 15 feet for each track, in addition to the thick- ness of supporting w^alls, except that at stations, curves and crossovers the width may be increased; and the width of .the open cut and embankment portion shall not exceed 15 .feet for each track, in addition to the thickness of the .necessary retaining walls, except that at stations, curves .and crossovers the width may be increased. The sidings constructed shall be such as the Commission shall approve as necessary for the convenient operation of the Railroads and shall not exceed in length, for any line of the Railroads, one quarter of a mite of single track for each mile of railway structure of such line. No crossing is to be made at grade between tracks of di- verging lines without the approval of the Commission. The columns supporting the superstructure of the ele- vated portions of the Railroads 'except as hereinafter other- wise provided, may be placed within the roadway, but not less than thirteen (13) feet from the curb lines upon either 'side; the interior transverse distance between the columns shall not be less than twenty-three (23) feet. The distance from the face of elevated column to the center of adjacent street railway track shall be not less than seven (7) feet unless permitted by the Commission. The center line of the said elevated struc- ture shall coincide as nearly as may be with the center line of the street. Where, however, the width of the street is not sufficient to provide for a roadway upon each side -of the columns or wherever by reason of special or local conditions, it may not in the judgment of the Commission be desirable to locate the columns as herein first provided, the columns may be located either in the roadway or within the curb lines, as may be expressly approved by the Com- mission. 13 with the other proyisions hereof may be permitted by the Commission. The Railroads, with necessary sidings, turnouts and switches, excepting the portion of the Eighth Avenue and 162nd Street Connection west of Jerome Avenue shall follow the general design of the elevated railroads known as the Van Cortlandt Park Extension heretofore con- structed under the contract dated February 21, 1900. for the construction, equipment and operation of the Manhat- tan-Bronx Rapid Transit Railroad, except that the Inter- borough Company shall construct the following portions of the Webster Avenue Line and the Eighth Avenue and 162nd Street Connection upon approved plans involving a more elaborate and ornamental structure with solid floor or such other construction as will in the opinion of the Com- mission most effectually prevent noise and tremor, to wit: (a) The portion of the Eighth Avenue and 162nd Street Connection, including the portal from the point where it emerges from the ground near 162nd Street, over private property and 162nd Street to a point about midway between Cromwell Avenue and River Avenue. (b) The station on the Webster Avenue Line, near the intersection of Gun Hill Road and White Plains Road together with about 200 feet of the approaches thereto. (c) The portion of the Webster Avenue Line cross- ing Mosholu Parkway, together with about 200 feet of the approaches thereto. (d) The portion of the Webster Avenue Line over Fordham Square, together with about 200 feet of the approaches thereto. And except further that the Queensboro Bridge Line shall be so constructed as to harmonize in all respects with the Queensboro Bridge structure and approaches. 12 In the subway portion of the Eighth Avenue and 162nd Street Connection the construction shall be of iron or steel or masonry or a combination of iron and steel or masonry. The tunnel shall have a clear height above the base of rail of not less than 13 feet 2 inches. The width f tunnel shall .not exceed 15 feet for each track, in addition to the thick- ness of supporting walls, except that at stations, curves and crossovers the width may be increased; and the width of -the open cut and embankment portion shall not exceed 15 .feet for each track, in addition to the thickness of the necessary retaining walls, except that at stations, curves ,and crossovers the width may be increased. The sidings constructed shall be such as the Commission shall approve as necessary for the convenient operation of the Railroads and shall not exceed in length, for any line of the Eailroads, one quarter of a mile of single track for each mile of railway structure of such line. No crossing is to be made at grade between tracks of di- verging lines without the approval of the Commission. The columns supporting the superstructure of the ele- vated portions of the Railroads except as hereinafter other- wise provided, may be placed within the roadway, but not less than thirteen (13) feet from the curb lines upon either side; the interior transverse distance between the columns shall not be less than twenty-three (23) feet. The distance from the face of elevated column to the center of adjacent street railway track shall be not less than seven (7) feet unless permitted by the 'Commission. The center line of the said elevated struc- ture shall coincide as nearly as may be with the center line of the street. Where, however, the width of the street is not sufficient to provide for a roadway upon each side -of the columns or wherever by reason of special or local conditions, it may not in the judgment of the Commission be desirable to locate the columns as herein first provided, the columns may be located either in the roadway or within the curb lines, as may be expressly approved by the Com- mission, 13 The tracks of the elevated portions of the Railroads iiiav rest upon longitudinal and transverse girders supported by the said columns, but no portion of the said girders, except with the approval of the Commission, shall approach within 14 feet of the surf ace of the roadway. The structural details employed in constructing the ele- vated portions of the Railroads shall be substantially sim- ilar to the structural details employed in the construction of the said Van Cortlandt Park Extension, except as aforesaid.. The structural details employed in constructing the sub- way portion of the Railroads shall be substantially similar to the structural details employed in the construction of the subway portions of the Manhattan-Bronx Rapid Transit Railroad constructed under the said contract of February 21, 1900. All plans and drawings for the construction of the Rail- roads other than mere shop drawings shall be submitted to and approved by the Commission in advance of construc- tion, and the method of carrying on the work shall be sub- ject to the approval of the Commission. Shop drawings shall so far as practicable be filed with the Commission. The right reserved to the Commission to approve the plans and drawings in advance of construction shall include the right to approve or disapprove the precise location of all tracks, columns, platforms, stations, stairways, escalators or other means of access to the Railroads and all other structures appurtenant thereto encroaching upon the surface of the streets. The Interborough Company shall be authorized to open and occupy so much of the surface of the street or streets affected by this grant and to erect thereon such temporary supports as may be necessary for the purpose of building- the said railroad structures; but the Commission may, whenever it deems it advisable, prescribe the manner in which the said work shall be performed. All necessary permits for opening of streets, and other necessary de- partmental permits, shall be obtained from the President of the Borough, or other officer as provided by law. 14 The City, the Commission and all duly authorized repre- sentatives of the City and the Commission, shall have the right at all reasonable times to inspect the Railroads here- in authorized, and any part thereof, as well during construc- tion as afterwards, and to enter thereon when necessary, for the examination, supervision or care of any property of the City, or of abutting property owners, or for any proper purpose. Such inspection shall include the inspection and approval of all materials, and the erection thereof, used in the construction of the Railroads. Nothing in this certifi- cate shall be deemed to diminish or affect the sanitary or police jurisdiction which the public authorities shall law- fully have over property in the City. V The Interborough Company shall procure all necessary casements and rights, titles and interests in real estate for the construction of the Railroads. The Interborough Company shall make good to the City all physical but not consequential damage which shall foe done to the property of the City by the construction or operation of the Railroads, &nd shall make good to every owner of property abutting upon the Railroads, or which -shall be injured by the work of constructing or operating the same, all physical damage which shall be done to such .abutting or injured property, through any act or omission of the Interborough Company, its successors, assigns, or lessees, or any contractor, sub-contractor or other person employed upon the construction or operation of the Rail- roads, or any part thereof. The Interborough Company shall in the course of con- struction at its own expense maintain the care of all street surfaces and surface and sub-surface structures which may be interfered with, and any -necessary interference there- with shall be subject to reasonable regulation by the de- partment of the government of the City in control or charge thereof. 15 VT The Interborough Company shall be entitled to cnarge* 1 for a single fare for each passenger for one continuous trip* in the same general direction over the Railroads (including the parts of the municipal railroad over which the Inter- borough Company is provided with trackage rights as inj this certificate provided) ancf the 1 additional tracks (which shall mean the additional tracks authorized; by the Com- mission by certificate to the Manhattan Railway Company bearing even date herewitn) and the Manhattan Rail- road the sum of five (5) cents but not more. A trip from any point on the Queensboro Bridge Line (including the part of the municipal railroad over which trackage rights are provided) to any point on the Manhattan Railroad or on the Railroads, or a trip from any point on the Manhat- tan Railroad or on the Railroads to any point on the- Queensboro Bridge Line (including the part of the mu- nicipal railroad over which trackage rights are provided) shall be deemed a continuous trip in the same general di- rection. VII The Railroads shall be carefully and skilfully operated,, according to the highest standards of railroad operation,, and with the highest regard to the safety of the passengers and employees and of all other persons. The Interborough Company shall during the term of the grants keep the plant and property (as the words "plant and property ' f are nereinafter defined) of the Railroads and each and* every part thereof in thorough repair, and shall restore and replace every necessary part thereof which may wear out or cease to be useful, so that at all times and at the termination of the grants such plant and property of the Railroads shall be in thoroughly good and solid condition. The power to be used shall be electricity or compressed! 16 air so used as to involve no combustion or impurity of air in cars or any other power of like description approved by the Commission. The Interborough Company may transport over the Eailroads passengers and property, provided, however, that the use of the Eailroads for the transportation of property shall not to any extent or in any way interfere with the use of the Railroads to their fullest capacity for the carriage of passengers who shall desire to be carried upon them. If the Queensboro Bridge will not permit of the oper- ation to their full capacity of the Queensboro Bridge Line and other railroads that may be authorized to operate across it, the Interborough Company shall operate its trains over the bridge at such headway as the Commission shall direct. No part of the Eailroads, or stations or other appur- tenancec thereof hall be used for advertising purposes, ex- cept that the Interborough Company may use the structure for posting necessary information for the public relative to the running of trains and to the operation of the Eail- roads; nor shall any trade, traffic or occupation, other than required for the operation of the Eailroads, be per- mitted thereon or in the stations thereof, except such sale of newspapers and periodicals as may, from time to time, always with the right of revocation, be permitted by the Commission. In case the present provisions of the Eapid Transit Act in respect of advertising or the carrying on of any trade, traffic or occupation are amended, the Cyom- mission, under rules and regulations to be prescribed by it, may permit the Interborough Company to carry on such advertising or such trade, traffic or occupation in accordance with the Eapid Transit Act as it may be amended from time to time. VIII The City reserves the right to use or to permit lessees 17 or operators of any rapid transit railroad or railroads now or hereafter constructed operating between a point or points in the Borough of Queens and a point or points in the Borough of Manhattan to use the plant and structure (as the words "plant and structure" are hereinafter denned) of any portion of the Queensboro Bridge and approaches upon such reasonable terms and conditions as may be agreed upon between the Interborough Company and the City or such lessee or operator. In the event they fail to agree upon reasonable terms and conditions the same shall be settled by arbitration or by the Court in the manner prescribed in Article XVI; provided, however, that the annual compensation to be paid by the City, or the lessee or the operator of such railroad shall not be less than such portion of the amount necessary to pay interest, sinking fund, and other like funds, upon the actual cost of the plant and structure, as hereinafter defined of said line, or the actual cost of that portion of such plant and structure so used by the City or by such lessee or operator, and to main- tain and operate the same, including a reasonable allow- ance for depreciation, but excluding train operating costs, as the use of the said roads by the City or the participating company shall bear to the total use thereof; and, further provided, that no trackage rights shall be conferred hereunder that will prevent at least one-half the use of the line by the Interborough Company if at any time needed by the Interborough Company ; and provided further, that the admission of such railroad to track- age rights upon the said lines shall not of itself involve upon the part of the Interborough Company any obligation to extend free transfers to the passengers of the said par- ticipating roads. IX The City also agrees to provide the Interborough Com- pany with trackage rights over parts of the municipal rail- 18 roads to be constructed and to be equipped, maintained and operated under a contract bearing even date herewith be- tween the City and Interborough Rapid Transit Company and over any extensions of such parts, and the Interbor- ough Company as grantee under this certificate agrees to operate over such parts in conjunction with the Eailroads to the end that through service may be provided over such parts over the Railroads and over the Manhattan Railroad. The first of such parts of the said municipal railroads is described as follows : Beginning at a point on the Queensboro Bridge Plaza at the easterly building line of Ely Avenue where a connection can conveniently be made with the Queensboro Bridge Line, thence continuing easterly over the Queensboro Bridge Plaza to a point at or about the Queensboro Bridge Plaza and Jackson Ave- nue where the line divides, one line curving south- easterly over the Queensboro Bridge Plaza and cross- ing over Jackson Avenue to Queens Boulevard, thence continuing southeasterly and easterly over and along Queens Boulevard to a point at or near Gosman Avenue, thence curving northeasterly over Queens Boulevard to Greenpoint Avenue, thence continuing northeasterly over and along Greenpoint Avenue to Skillman Avenue and thence continuing over and along Skillman Avenue in a general easterly direction over Skillman Avenue and Woodside Avenue to Roosevelt Avenue as the same is laid down on the map or plan of The City of New York, and thence con- tinuing easterly over and along Roosevelt Ave- nue as laid down upon said map or plan to Syca- more Avenue; and the other of said lines curving northeasterly over the Queensboro Bridge Plaza to a point in Jackson Avenue at or near Skillman Place, thence continuing northeasterly over and along Jack- son Avenue to Second (formerly Debevoise) Avenue and thence continuing northerly over and along Sec- ond Avenue to Ditmars Avenue. 19 The second of such parts of the said municipal railroads is described as follows: Beginning at a point in the Borough of The Bronx in River Avenue near 162nd Street where a connection can conveniently be made with the Eighth Avenue and 162nd Street Connection and extending thence north- erly over and along River Avenue to Jerome Avenue and thence continuing northerly over and along Jerome Avenue and reservoir property to a point in Jerome Avenue at or near Woodlawn Road. The third of such parts of the said municipal railroads is described as follows : Beginning at a point in the Borough of the Bronx in White Plains Road near Gun Hill Road where a con- nection can conveniently be made with the Webster Avenue Line and thence continuing northerly over and along White Plains Road to its intersection with East Two Hundred and Forty-first Street or Becker Ave- nue. The terms and conditions for the use of such parts shall be reasonable and may be agreed upon between the Com- mission, the Interborough Company and the Interborough Rapid Transit Company as Lessee under the said contract. In the event of a failure to agree upon reasonable terms and conditions, the same shall be settled by arbitration or by the court. The precise terms and conditions for such trackage rights as so agreed upon or so settled shall be embodied in a written agreement, supplementary to the said contract, between the City, acting by the Commission, the Interborough Company, as grantee under this certifi- cate, and the Interborough Rapid Transit Company as Lessee under the said contract. X Inasmuch as the City's compensation for the authoriza- 20 tions or licenses hereby given and its exercise of its right to take over the plant and property of the Railroads as hereinafter provided will be affected by the amounts of the Interborough Company's expenditures on account of con- structing, equipping and maintaining the Eailroads, the In- terborough Company shall strictly comply with the pro- visions hereof for assuring to the Commission supervision by it of all operations of the Interborough Company in and about such enterprise. The Interborough Company shall, therefore, in addition to providing facilities for inspection as hereinbefore provided, provide the Commission with facilities for full and complete supervision of all operations of the Interborough Company in or about the enterprise of constructing, equipping, maintaining and operating the Eailroads. The Interborough Company and any construc- tion or supply company controlled by the Interborough Company or by any company directly or indirectly con- trolling the Interborough Company or affiliated with the Interborough Company, shall keep suitable and proper books, accounts, records and memoranda of all opera- tions with contractors, bankers or persons furnishing labor, material, money or supplies and of all contracts directly or indirectly affecting the cost of the construction and equipment of the Railroads, showing in detail the cost of constructing and equipping the Railroads to the Inter- borough Company or any such construction company, in- cluding any additions thereto from time to time, and shall afford access to and permit the examination, use and pro- duction of any such books, records, memoranda or contracts, to the extent that the same have to do therewith. The Interborough Company shall (except in such cases where permission to do otherwise is expressly granted from time to time by the Commission, by a resolution en- tered in its minutes) before entering into any contract, agreement, mortgage or undertaking having to do with the construction or equipment of the Railroads submit the same to the Commission for its approval and the Commis- 21 slon may as a condition of its approval require tlie inser- tion of such terms and conditions therein as it may deem necessary. The Commission may further require the In- terborough Company before entering into any agreement having to do with the construction or equipment of the Railroads to ask for proposals upon forms of contracts satisfactory to the Commission, in a specific manner and for a specified time. Any contract, agreement or undertaking having; to do with the maintenance and operation of the Railroads ex- tending beyond a period of one year or involving an expen- diture in excess of fifty thousand dollars ($50,000) (and any other contract, agreement or undertaking having to do- with maintenance or operation of the Railroads, which the Interborough Company shall desire to make subject to the approval of the Commission) shall be entered into by the Lessee subject to the approval of the Commission. Any payments made under any such contract so approved by the Commission shall not be subject to objection under other provisions of this Article unless the payments therefor shall not be in accordance with the terms of such contract. The provision of this paragraph shall also apply to all contracts, agreements or undertakings of the character specified above entered into after the date hereof which are to continue in force after the beginning of operation of the Railroads. No contract, agreement or undertaking affecting the maintenance or operation of the Railroads (except mort- gages, assignments, leases, trackage agreements, power and advertising contracts, agreements amending or supple- menting this certificate and contracts, agreements or under- takings amending, supplementing or extending any such instruments) shall extend over a period in excess of five (5) years. The Commission may, whenever it deems advisable, establish a system of accounts to be used by the Interbor- ough Company in connection with the construction, equip- 22 , maintenance and operation of the Railroads and may prescribe the manner in which such accounts shall be kept. .It may also in its discretion prescribe forms of accounts, records and memoranda to be kept by the Interborough Company in connection with such enterprise, including the .accounts, records and memoranda of the movements of traffic as well as the receipts and expenditures of moneys. Reasonable notice of alterations by the Commission in the required method or form of keeping a system of accounts .shall be given to the Interborough Company by the Com- mission. The Commission shall at all times have access to all such accounts, records and memoranda kept by the In- terborough Company and may designate any of its officers or employees who shall thereupon have authority under the order of the Commission to inspect and examine any and all accounts, records and memoranda kept by the Inter- borough Company. The Commission may, after hearing, prescribe by order the accounts in which particular outlays .and receipts shall be entered, charged or credited. The Commission may from time to time adopt regula- tions, which the Interborough Company shall strictly com- ply with, as to the form of all vouchers and payrolls having to do with the construction or equipment of the Railroads, to the end that the cost data relating to various divisions of the construction and equipment of the Railroads can, at all times, be promptly and accurately determined and the property identified. No payment, credit, compensation or concession of whatsoever character having in any way to do with the construction or equipment of the Railroads shall be in- cluded in the actual cost unless the Interborough Company upon making such payment, credit, compensation or con- cession forthwith file with the Commission a duplicate voucher, credit slip or other original evidence thereof. The Commission may from time to time (by resolution evidenced by entries in its minutes) relieve the Interbor- ough Company from the obligation to file such vouchers, 23 credit slips or other original evidences to such extent as it may deem advisable. The Commission may object to any expenditure as un- reasonable or improper, made or to be made by the Inter- borough Company in connection with maintaining and operating the Railroads, by notice thereof to the Inter- borough Company. If the objection by the Commission re- fers to an expenditure already made, the Interborough Company forthwith upon receipt of notice shall remove the amount from the account or accounts to which it had been charged and hold the same in a suspense account until the item in dispute is adjudicated. If the objection refers: to an expenditure to be made, the Interborough Company,, if it make such expenditure, shall charge to and hold the same in a suspense account until the item in dis- pute is adjudicated. In case the Commission and the Interborough Company are unable witliin five (5) days after the delivery of such notice to agree upon the reasonableness and propriety of such ex- penditure, the same shall be determined by arbitration or by the court. Such arbitration shall be conducted in accord- ance with the provisions of Article XVI except that tlic periods for the appointment of arbitrators as therein prescribed shall for the purposes of all arbitrations under this paragraph be reduced to five (5) days, Saturdays, Sundays and Holidays excepted. Such notice of objection shall be given by the Commission within thirty (30) days after the Commission has become cognizant of such expen- diture unless satisfactory reasons are given for any delay. Any such delay shall not excuse the Interborough Company from complying with the provisions hereof in respect of the money to be held in suspense, but such delay may be set up by the Interborough Company as a defense to the objec- tion, and the adequacy of the reasons given for such delay shall be determined by arbitration or by iho court, If if lie agreed by the Commission and the IiitorhoroiiLvh (Ymi- 24 pany or determined by arbitration or by the court that the expenditure objected to is reasonable and proper, the amount thereof shall be charged to operating expenses, and the interest, if any, shall be charged against the inter- est revenue. If, on the other hand, it be agreed or so determined that such expenditure is unreasonable or im- proper, the amount thereof with interest shall be borne by the Interborough Company. Similarly, if any expenditure shall be so agreed or so determined to be unreasonable or improper in part, the charges for such parts shall be adjusted in the same manner as charges for whole amounts as hereinbefore provided. The Commission contemplates, and the Interborough Company hereby approves, the most thorough and minute inspection by the Commission and its Chief Engineer, and by their representatives or subordinates, of all work and materials (and of the manufacture or prepara- tion of such materials) entering into the construc- tion or equipment of the Railroads. The Inter- borough Company shall, therefore, at all times give to the Commission and its members, to the Chief Engineer and his assistants and subordinates, and to any person designated by the Commission or its Chairman, all facil- ities, whether necessary or convenient, for inspecting the materials to be furnished and the work to be done in and about the same. The members of the Commission, the Chief Engineer and any assistant or other person bearing his authorization or the authorization of the Commission or its Chairman, shall be admitted at any time summarily and without delay to any part of the work or to the inspection of materials at any place or stage of their manufacture, preparation, shipment or delivery. It is the intention of the Commission and the Interbor- ough Company, and the foregoing Article shall be con- strued in accordance with such intention, that the City shall be afforded all proper and necessary means for safe- guarding its right to one-half (1/2) of the excess of net 25 profits and for safeguarding its exercise of the right to terminate the authorizations or licenses hereby given. At the- same time it is neither intended nor desired that the fair and ordinary discretion of the Interborough Company in the management of the Railroads shall be interferred with. XI The actual cost of the plant and property of the Rail- roads shall be determined as follows: The words "PLANT AND PROPERTY" as used herein mean as to any of the Railroads, the equipment and the plant and structure thereof. The word "EQUIPMENT" means as to any of the Rail- roads, all cars, rolling stock, motors, power sub-stations and the real estate upon which they are built and all wires, cables and conduits suitable to and necessarily provided and used for the purposes of the Railroads not affixed to the railroad structure in streets or on rights of way, provided, however, that the cars, rolling stock and motors shall be such only as are specially purchased or constructed for use upon the Railroads, which shall at the time of purchase or construction be identified by suitable marking as "exten- sion equipment." The words "PLANT AND STRUCTURE" mean as to any of the Railroads, the foundations, structures, tracks, stations, terminal rooms, stairways and means of access thereto, consents, easements and rights of way and interests in real estate connected with the railroad as distinguished from the equipment as hereinbefore defined, terminal and stor- age yards and shops, signal towers, signal devices, contact rails, telephone and telegraph wires, wires, cables and all other fixtures suitable to and necessarily used for the pur- 26 poses of the Railroads affixed to the railroad structure in streets or on rights of way. The word "ADDITION" as used in this article with ref- erence to equipment or plant and structure means a better- ment, improvement or addition, during the term of this grant, ordered or approved by the Commission in advance of its construction or provision, to or of either the equip- ment or plant and structure as originally completed and put in operation, excluding anything furnished in the nature of repairs, maintenance or replacement. The words "DEBT DISCOUNT AND EXPENSE" to mean the actual and necessary expense to the Interborough Company (including discounts) involved in the issuance or disposal of securities issued by the Interborough Company to pro- vide means for constructing and equipping the Railroads or for additions, deducting therefrom any premiums re- ceived by or on behalf of the Interborough Company upon or in connection with the disposal of such securities. The words "ACTUAL COST" mean as to any of the Rail- roads, in respect to the equipment thereof : (1) The actual and necessary net cost in money to the Interborough Company for acquisition, or for all labor and materials entering into the construction, of the equip- ment and additions thereto from time to time, other than repairs, maintenance or replacements. (2) The actual and necessary net cost in money to the Interborough Company of any real estate or interests therein including consents or easements (other than re- placements) necessarily acquired for the construction or operation of equipment or such additions thereto, together with the actual and necessary expenses in connection with such acquisition. 27 (3) The debt discount and expense in connection with the equipment and additions thereto from time to time, provided, however, that the debt discount and expense, except in the case of additions, shall not exceed an amount equal to three per centum (3%) of the actual cost of equipment including in such actual cost any expenditures under this paragraph. (4) Taxes, assessments and interest actually and neces- sarily paid or accrued upon the items of this definition pending the beginning of operation, including in the word ''taxes", assessments and other governmental charges (in- cluding mortgage recording tax) of every description against the Interborough Company in and about the con- struction or acquisition of equipment and additions thereto from time to time. During operation such assessments for benefits as are not properly chargeable against revenue shall be charged to such actual cost. (5) The sums actually and necessarily paid by the In- terborough Company for superintendence, insurance, dam- ages, engineering, legal expenses and administration; in- cluding in respect of equipment (other than additions) the expenses above referred to in this paragraph actually and necessarily incurred or payable by the Interborough Com- pany prior to the date of this certificate and in addition the actual and necessary expense incurred or payable by the Interborough Company in printing, engraving and cer- tifying securities for equipment (other than additions). Provided, however, that the actual and necessary net cost in money of all replacements, substitutions or renewals not due to wear and tear from operation and necessitated by the reconstruction of parts of the the existing structures of the Manhattan Railway Company for the purpose of physically connecting the same with the Railroads shall be deemed to be included in the foregoing definition of actual cost of equipment.. 28 The words u ACTUAL COST T ' mean as to any of the Kail- roads, in respect to the plant and structure thereof: (1) The actual and necessary net cost in money to the Interborough Company of all labor and materials entering into the construction of the plant and structure and per- manent additions thereto from time to time other than xepairs, maintenance r replacements. (2) The actual and necessary net cost in money to the Interborough Company of any real estate or interest there- in, including consents or easements (other than replace- ments) necessarily acquired for the construction or opera- tion of the plant and structure, or such permanent addi- tions thereto, together with the actual and necessary ex- penses in connection with such acquisition. (3) The debt discount and expense in connection with the construction of the plant and structure and additions thereto from time to time, provided, however, that the debt discount and expense, except in the case of additions, shall not exceed an amount equal to three per centum (3%) of the actual cost of the plant and structure including in such actual cost any expenditures under this paragraph. (4) Taxes, assessments and interest actually and neces- sarily paid or accrued upon the items of this definition pend- ing the beginning of operation of the said railroad line or portion thereof, including in the word " taxes", assess- ments and other governmental charges (including mortgage recording tax) of every description against the Interbor- ough Company in and about the construction of the plant and structure and additions thereto from time to time. During operation such assessments for benefits as are not properly chargeable against revenue shall be charged to such actual cost. 29 (5) The sums actually and necessarily paid by the Inv terborough Company for superintendence, insurance, dam-- ages, engineering, legal expenses and administration; in- cluding in respect of the plant and structures (other than additions) the expenses above referred to in this para- graph actually and necessarily incurred or payable by the- Interborough Company prior to the date of this certificate and in addition the actual and necessary expense incurred or payable by the Interborough Company in printing, en- graving and certifying securities for the construction of the plant and structure (exclusive of additions). Provided, however, that the actual and necessary net cost in money of all replacements, substitutions or renew- als not due to wear and tear from operation and neces- sitated by the reconstruction of parts of the existing: structures of the Manhattan Eailway Company for the purpose of physically connecting the same with the Bail- roads shall be deemed to be included in the foregoing defi- nition of actual cost of plant and structure. If any profit, salvage, rebate or benefit (other than re- sulting from operation) from any source derived shall ac- crue directly or indirectly to the Interborough Company or on its behalf in any manner out of or in connection with the construction or acquisition of such plant and structure or additions thereto, or equipment or additions thereto,, then the amount of such profit, salvage, rebate or benefit shall be deducted from the cost of the other items referred to. No expenditure made by the Interborough Company in or about the acquisition or construction of the plant and property of any of said Railroads shall be included in or made a part of the actual cost of plant and structure or of equipment thereof in ascertainment of the amount to be paid by the City upon termination of any authorization or license therefor unless as soon as any of the Railroads or any additions thereto or any equipment thereof or addi- tions thereto are completed or put in operation the Inter- 30 Borough Company shall .present to the Commission a state- ment in writing, in which shall be included said expenditure, .showing the actual cost of the plant and structure of each of the Railroads or of such equipment or additions thereto from time to time of the same and in the case of additions .the date of the making of the same. If any expenditures are incurred by the Interborough 'Company in connection with the acquisition or construction of the plant and property of any of the Eailroads, or any additions thereto, subsequent to the filing of any such statement, the Interoorough Company shall include such ^expenditures in a supplemental statement or statements to be presented to the Commission within six months after 'the making of such additional expenditures. If such state- ment or statements, or such supplemental statement or statements, are approved by the Commission, both parties shall be estopped from raising any question with respect to any such expenditures, or the date of making the same. If such statements or supplemental statements are not agreed upon within one year from the date of presentation, the same shall forthwith be reviewed by arbitration or by the Court, as provided in Article XVL XII As compensation, the Interborough Company shall pay 'to the Comptroller for the period beginning on the day when any part of any of the Railroads is put into operation and ending on the day when the Interborough Company shall cease to operate the Railroads in conjunction with the Manhattan Railroad, (in which event the compensation shall be readjusted as hereinafter provided at the time such joint operation is discontinued) a sum which shall be de- termined as follows: After the beginning of operation of any part of any of the Railroads, the net profits upon all elevated lines operated by the Interborough Company (the same includ- 31 ing the Railroads, the existing Manhattan Railroad, and the railroads or additional tracks authorized by a certifi- cate granted to the Manhattan Railway Company bearing even date herewith which taken together are hereinafter in this article referred ta as Company Lines) in excess of the average annual net profits of the existing Manhattan Railroad for the two years, one ending June 30, 1910, and the other June 30, 1911, shall be ascertained and one-half (1/2) of the amount remaining of the said excess of net profits after deducting therefrom the rental for additionail tracks (authorized by the Commission by certificate bear- ing even date herewith) shall be deemed to be the com- pensation payable to the City by the Interborough Com- pany (in addition to said rental) under this certificate; provided, however, that the total payment to the City under both certificates shall not be less than the amount of the aforesaid rental. The said excess of net profits upon the Company Lines shall be ascertained as follows: From any and all income, increase or profits from what- ever source derived, either directly or indirectly, by the Interborough Company or on its behalf in any manner out of or in connection with the operation of the Company Lines (hereinafter referred to as the " revenue") the In- terborough Company shall at the end of each quarter year ending December 31, March 31, June 30 and September 30, deduct: (1) Taxes, if any, upon property actually and neces- sarily used by the Interborough Company in the operation; of the Company Lines, together with all taxes and other governmental charges of every description (whether on physical property, stock, securities, corporate or other franchises or otherwise), assessed or which may hereafter be assessed against the Interborough Company in connec- tion with, or incident to, the operation of the Company Lines. Also such assessments for benefits as are not prop- 32 erly chargeable to the actual cost of plant and structure or actual cost of equipment. (-2) Such rental, actually and necessarily payable by the Interborough Company for the Manhattan Railroad or for the use of property in connection with the Railroads, under contracts or leases approved by the Commission, as are not chargeable to operating expenses in the uni- form system of accounts prescribed by the Commission, including rental for additional tracks under the said cer- tificate bearing even date herewith. (3) All expenses, exclusive of maintenance, actually and necessarily incurred by the Interborough Company in the operation of the Company Lines. (4) An amount equal to, twelve per centum (12%) of the revenue for the maintenance, exclusive of depreciation of the Company Lines. Said maintenance shall include the repair and replacement of tracks and also parts of contin- uous construction and parts of plant and structure and equipment units but shall not include the replacement of the principal parts of the plant and structure and equip- ment, as such principal parts are from time to time speci- fied and defined by the Commission. If , in any quarter year such maintenance shall cost less than twelve per centum (12%) of the revenue the unexpended balance shall be transferred to the depreciation fund provided for in par- agraph (5) of this article; and if, in any quarter year, such maintenance shall cost more than such twelve per centum (12%) of the revenue an amount equal to the ex- cess may be withdrawn from or charged to such deprecia- tion fund and applied to such maintenance. (5) For the first year of operation an amount equal to two per centum (2%) of the revenue for depreciation of such portions of the Company Lines or their equipment 33 as are not retired or replaced through the expenditures for maintenance provided for in paragraph 4 of this article. Within thirty (30) days after the 30th day of June following the beginning of operation and annually thereafter the Commission and the Interborough Company shall determine the amount of depreciation and excess maintenance not covered by the amount set aside under the preceding paragraph during the preceding fiscal year, and the deductions for such year shall thereupon be adjusted to conform with such determination. If within such period the Commission and the Interborough Com- pany are unable to agree upon the amount of deprecia- tion during the preceding fiscal year, the amount thereof shall thereupon be determined by arbitration or by the court. The amount so determined shall be paid into a de- preciation fund. Such fund shall be in the charge and under the control of the Depreciation Fund Board. The cost of all replacements of the principal parts (as such principal parts are from time to time specified and defined by the Commission) of the Company Lines and the equipment thereof due either to wear and tear or obsolescence, in- adequacy or age and also any excess in the cost of mainten- ance as provided in paragraph 4 of this article shall be paid from this fund. When any principal part of the Com- pany Lines or the equipment thereof is retired or with- drawn from service, an amount equal to its cost shall be withdrawn from this fund and expended on new equip- ment or new construction. Any salvage or proceeds on any part so retired or withdrawn shall be paid into this fund. Any amounts in such fund not currently needed for the purposes herein specified shall be securely invested and reinvested by the Dprciation Fund Board and all interest and profits accruing therein shall be returned to the revenue. The Depreciation Fund Board shall have the right to sell investments to meet current needs and for purposes of reinvestment. A permanent record of the depreciation of each class of construction and equip- 34 ment (as such classes are from time to time defined or specified by the Commission) shall be kept by the Inter- borough Company in the form prescribed from time to time by the Commission. At the expiration of the term or upon earlier termination as hereinafter provided, any amount in such fund accrued with respect to the plant and prop- erty of the Railroads shall be paid to the City or to a new grantee as may be directed by the Commission and the bal- ance shall be paid to the Interborough Company. (G) An amount to be retained by the Interborough Company equal to one-quarter (14) of One Million Five Hundred and Eighty-nine Thousand Three Hundred and Forty-eight Dollars ($1,589,348) as representing the aver- age net profits of the existing Manhattan Railroad for the two years, one ending June 30, 1910, and the other June 30, 1911, provided, however, that if it should hereafter be de- cided that either the Manhattan Railway Company, or the Interborough Company is liable for the payment of the Federal corporation tax upon the sum distributable to the stockholders of the Manhattan Railway Company as a dividend, the aforesaid amount shall be reduced to the sum of One Million Five Hundred and Forty-seven Thou- sand Three Hundred and Fifty-one Dollars ($1.547,351). (7) An amount equal to one-quarter (i/4) of the annual interest payable by the Interborough Company upon the bonds issued to pay for the plant and property of the Rail- roads and of the plant and property of the railroads or additional tracks authorized by a certificate bearing even date herewith granted to the Manhattan Railway Company, together with a sum equal to one-quarter of one per centum (i/i of 1%) upon such bonds, which latter amount shall be set aside and with interest and accretions promptly and securely invested and reinvested for the amortization of the actual cost of the said plants and properties. Such latter amount shall as promptly as possible be invested 35 ill bonds issued by the Inter-borough Company in connection with its obligations under this certificate and linger the certificate bearing even date herewith for addi- tional tracks. Such bonds shall be acquired at the lowest possible purchase price. Upon the completion of the amor- tization of such bonds the payments provided for in this paragraph shall cease and any balance in the Sinking Fund shall be paid into the revenue. The Interborough Company shall also be entitled to de- duct an amount equal to one-quarter (*4) of the interest actually and necessarily payable by the Interborough Com- pany upon bonds issued by the Interborough Company with the approval of the Public Service Commission for the First District of the State of New York, for improve- ments to power house, substations, transmission lines and electrical apparatus required in connection therewith, now forming part of and supplying the Company Lines, which shall be necessary to provide additional power for the operation of the Railroads (including trackage rights) and the additional tracks authorized by certificate bearing even date herewith. (8) When the Interborough Company shall provide ad- ditions (as the word additions is defined herein and in the certificate for the additional tracks bearing even date herewith) then an amount to be retained by the Inter- borough Company equal to one-quarter (1/4) of the annual interest payable by the Interborough Company (or, in the event that the Interborough Company should not borrow money for such purpose, then an amount equal to one quarter (1/4) of the interest at the average rate pay- able by the Interborough Company upon long term securi- ties issued by it to carry out the purposes of this certificate) upon the actual cost of each additional item together with a sum equal to one-quarter of one per centum (14 of 1%) of the actual cost of each additional item, which latter amount shall be set aside and with interest and ac- 36 iTet'ions shall be promptly and securely invested and reinvested for the amortization of the cost of such additional item. Upon the completion of the amortiza- tion of the actual cost of any additional item the payments provided for in this paragraph in respect of such addi- tional item shall cease and any balance in the sinking fund .shall be paid into the revenue. (9) After making all such payments the amount of revenue remaining shall be the excess of net profits. If in any quarter year the revenue shall be insufficient to meet the various obligations and deductions referred to above, the deficits shall be accumulated and payment of .such deficits shall be thereafter made before deducting the amounts required in the paragraph succeeding the para- graph for the payment of the obligation or deductions as to which there has been such deficit. Interest shall be pay- able upon such deficits at the actual rate payable by the Interborough Company, or in the event that the Interbor- ough Company should not borrow money for the purpose of paying such deficits then at the prevailing rate of in- terest payable by the Interborough Company for short term loans. Interest payable upon such deficits, if not paid semi-annually, shall be added to, and form a part of, the cumulative deficits. The fund provided for in paragraph (5) above shall he in the charge of and under the control and direc- tion of a board to be known as the Depreciation Fund Board and to be organized and constituted as fol- lows: Before the beginning of operation of any part of the Eailroads or additional tracks authorized under the said certificate, the Commission and Interborough Company shall each name an individual to be a member of such board. Within thirty (30) days thereafter the Interborough Com- pany and the Commission shall agree upon the t!:!r/l mem- ber of such "board, or in the event of their failure to so agree 37 within such time, the third member, upon the jipplicatfois either of the Commission or of the Interborough ( inpany r shall be nominated in the same manner as is hereinafter provided in the case of arbitration in Article XVI. In the- event of a vacancy in the office of any of the members of the Board, the successor shall be chosen in the same man- ner as above provided in case of the original nomination. Such Depreciation Fund Board shall administer the fund provided for in paragraph (5) above and the members^ thereof shall serve for such period and receive as compen- sation for their services such amount as may from time to time be agreed upon by the Commission and the Inter- borough Company, and such amount shall be included as- part of the operating expenses referred to in paragraph 3 above. The Interborough Company shall also pay and in- clude as part of the operating expenses referred to in para- graph 3 above, the actual and necessary expenses of such Depreciation Fund Board, including clerical and office ex- penses. In case the Interborough Company shall cease to operate the Eailroads in conjunction with the Manhattan Railroad the amounts to be paid by the Interborough Company as- compensation under this certificate shall forthwith be re- adjusted as herein provided. The amounts to be paid by the Interborough Company as aforesaid shall be payable to the City by the Interborough Company on the 30th day of July, after the beginning of the operation of any part of any of the railroads for the year or portion of the year ending on the 30th of June imme- diately preceding and upon the 30th day of July of each- year thereafter for the preceding fiscal year. At the time of each payment the Interborough Company shall deliver to the Commission and to the Comp- troller a statement, in the form and with details to be prescribed by the Commission, showing the receipts and expenditures for the preceding year or portion thereof. Such statement shall be verified under oath by the officer o'f the Interboroiigh Company having charge of its books and accounts, or in case of his absence or disability, then by its president or other chief officer or manager. The 'Commission and the Comptroller shall have the right to verify any of the said statements by an examination of the Interborough Company's books, records and memoranda and an examination under oath of any of its officers or em- ployees; and the Interborough Company hereby covenants to submit to such examination and produce such books, records and memoranda whenever and wherever they may be required by the Commission or the Comptroller, The amounts to be paid by the Interborough Company as aforesaid shall be readjusted if and when the Inter- borough Company shall cease to operate the Railroads in -conjunction with the Manhattan Railroad, and shall there- after be readjusted at intervals of twenty years. The an- nual amounts to be paid by the Interborough Company for each and every period of twenty years after such first period shall be determined as follows, to wit: Each such determination shall be had upon the application of either the Interborough Company or the Commission. Such ap- plication shall be made at any time not earlier than two years and not later than one year before the expiration of each successive period. If the Interborough Company and the Commission shall agree upon the compensation to be paid for the ensuing period, their determination shall be expressed in writing, and, when approved by the Board of Estimate, shall be binding upon both parties. If the Interborough Company and the Commission shall not reach an agreement, or if the Board of Estimate shall not approve such agreement, on or before a date one year prior to the expiration of each period as to the compensation to be paid for the ensuing period, then the annual rate of com- pensation for such succeeding twenty years' period shall be reasonable; and the Commission and the Interborough Company shall be bound, upon the request of either, to submit the determination of such rate of compensation 39 to arbitration or to the Court, as herein provided in Ar- ticle XVI. If in any case the annual rate for a succeed- ing period shall not be fixed prior to the commencement of the said period, the Interborough Company, shall pay the annual rate for the preceding period until such time- as the new rate shall be determined ; and upon the deter- mination of the new rate the difference between the old and the new rate shall be adjusted and paid between the parties.. Any and all payments to be made according to the terms of this certificate by the Interborough Company shall not be considered in any manner in the nature of a tax, but such payments shall be made in addition to any and all taxes, now or hereafter lawfully imposed by the State of New York. The City shall have a lien upon the authorizations or licenses hereby granted and upon the real property of the' Interborough Company forming part of the Eailroads, to- secure the payment of such compensation. In case of any failure to make such payment as herein prescribed, the Hen aforesaid may be enforced by the Com- mission by foreclosure or other proper proceeding and by sale of such authorizations or licenses and real property. The Commission may, in its own name or in the name- and behalf of the City, bring action for specific performance- or by mandamus or injunction or otherwise compel the per- formance by the Interborough Company of the duties and! obligations imposed upon it under the terms of this certifi- cate. And the Commission may, in behalf or in the name of the City, bring any action or proceedings to recover pos- session of any part of the property of the City to be used by the Interborough Company as aforesaid, or to enforce the said lien of the City, or to enforce any provision of this certificate in the manner provided by Section 9 of the Rapid Transit Act or any other proper action or pro- ceeding. XIII The authorizations or licenses hereby given for the Web- 40 :st-er Avenue Line, the Eighth Avenue and 162nd Street Con- nection, the Queensboro Bridge Line and the West Farms .Subway Connection are separate grants, and the City, acting by the Commission or by such other board or boards as may be thereunto empowered, may termi- nate any such authorization or license and may pur- chase and take the plant and property as hereinbefore defined of such line or lines for which the authorization or license is so terminated at any time after the expiration of ten years from the date when operation of any part of the line for which the authorization or license is so termi- nated shall actually begin. In case it is determined to so terminate any or all of the authorizations or licenses hereby granted as hereinbefore provided, at least one year's notice thereof in writing shall be given to the Interborough Company. Such right of termination shall, however, be upon con- dition that the City shall pay an amount for said plant and property as property excluding any value for the authori- zation or license hereby granted, to be determined as follows : Upon termination as hereinbefore provided of the au- thorization or license of any of the Railroads the City shall pay as to the same, as follows : (1) For the plant and property thereof (other than -additions as hereinbefore defined) the percentage of the actual cost of the plant and property (other than additions) indicated in the following schedule: Schedule Percentage to If terminated at be paid by City 10 years 115 11 " 74/75ths of 115 12 " 73/75ths of 115 13 " 72/75ths of 115 14 " 71/75ths of 115 15 " 70/75ths of 115 16 " 69/75ths of 115 17 " 68/75ths of 115 18 " 67/75ths of 115 19 " 66/75ths of 115 20 " 65/75ths of 115 21 " 64/75ths of 115 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 .63/75ths of 115 .62/75ths of 115 ,61/75ths of 115 ,60/75ths of 115 .59/75ths of 115 .58/75ths of 115 .57/75ths of 115 .56/75ths of 115 . 55/75 ths of 115 .54/75ths of 115 .53/75ths of 115 .52/75ths of 115 .51/75ths of 115 .50/75ths of 115 .49/75ths of 115 .48/75ths of 115 .47/75ths of 115 .46/75ths of 115 .45/75ths of 115 .44/75ths of 115 .43/75ths of 115 .42/75ths of 115 .41/75ths of 115 .40/75ths of 115 .39/75ths of 115 .38/75ths of 115 .37/75ths of 115 .36/75 ths of 115 35/75ths of 115 .34/75ths of 115 .33/75ths of 115 .32/75ths of 115 .31/75ths of 115 .30/75ths of 115 .29/75ths of 115 .28/75ths of 115 .27/75ths of 115 .26/75ths of 115 .25/75ths of 115 42 Percentage to If terminated at be paid by City 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 .. 24/75 ths of 115 23/75ths of 115 22/75ths of 115 21/75ths of 115 20/75ths of 115 19/75ths of 115 18/75ths of 115 ..17/75ths of 115 16/75ths of 115 15/75ths of 115 14/75ths of 115 13/75ths of 115 12/75ths of 115 ll/75ths of 115 10/75ths of 115 9/75ths of 115 8/75ths of 115 7/75ths of 115 6/75ths of 115 5/75ths of 115 4/75ths of 115 3/75ths of 115 2/75ths of 115 l/75th of 115 (2) For additions, as the word additions is hereinbefore denned, to the Eailroads, or to any of the Railroads as to which the authorization or license is terminated, the per- centage of the actual cost of such of said additions as may have been completed or put in operation within less than forty (40) years indicated in the schedule following ac- cording to the age of each item as there indicated. 43 Schedule Upon termination Percentage to be paid by City on provision 110. 1 year after provision 108.98863636 2 years " 107.93077925 3 " " " 106.82429135 4 " 105.66616697 5 " " 104.45637778 6 ' " 103.19016790 7 ' 101.86574900- 8 ' 100.48044509 9 ' " " 99.03145727 10 ' 97.51585797 11 ' 95.93058490 12 ' * 94.27243516 13 ' " 92.53805848 14 ' 90.72395065 15 " '* 88.82644632 16 " 86.84171162 17 " 84.76573667 18 " " 82.59432686 19 " 80.32309500 20 " 77.94745218 21 " 75.46259448 22 " 72.86351337 23 " " 70.14494556 24 '* 67.30140229 25 " 64.32713824 26 " 61.21614410 27 * " 57.96213419 28 ' 54.55853393 29 4 " 50.99846652 30 ' " " 47.27473898 31 ' " " 43.37982775 32 ' 39.30586320 33 ' " " 35.04461414 34 ' 30.58747088 35 ' " 25.92542798 36 " " 21.04906594 37 " " 15.94853233 38 " " 10.61352169 39 " 5.03325496 40 " .00000000 The above schedule is computed upon the basis of the investment of the deduction from the revenue for amortiza- tion provided for in paragraph (8) of Article XII in five per cent, bonds of the Interborough Company at one hun- dred and ten per centum (110%) and ten per cent. 44 has been added to each outstanding amount to cover premiums that may be payable by the Interborough Com- pany as a condition for calling in outstanding bonds. If the amortization fund is invested at a more favorable rate than that above assumed or if the premiums payable upon outstanding bonds are less than ten per centum (10%) then the amount to be paid by the City shall be correspond- ingly reduced. At the option of the City either at the expiration of a full term of the grant or at the earlier termination thereof, pursuant to notice as aforesaid, the Interborough Com- pany may be required to transfer the title, if any, to and possession of the plant and property directly to a new grantee upon his paying the amount to the Interborough Company which the City would have been required to pay as aforesaid. In case the City itself shall take over the plant and prop- erty such payment shall be made by a City warrant drawn by the Comptroller, or otherwise, as may then be provided by law. In case the plant and property shall be taken over directly by a new grantee such payment shall be made by a certified check, drawn by such new grantee, to the order ot the Interborough Company or by lawful money of the United States of America. If the amounts to be paid to the Interborough Company at the expiration of a full term of a grant or upon any such termination shall not have been finally determined or paid prior to or at the time when a full term is according to this certificate to end or the termination is under the said notice given to take effect, the title, if any, to and right of possession of the plant and property of the lines of the Railroads shall nevertheless pass to the City or to a new grantee, free and clear of all liens or other incumbrances, and the City or such new grantee shall pay to the Inter- borough Company the amount so determined with interest from the date of taking possession, provided, however, that the possession of such plant and property shall not pass 45 to the City or to such new grantee in advance of payment as aforesaid unless the City or such new grantee shall give the Interborough Company a satisfactory bond or bonds in an amount at least equal to the difference between the actual cost of the plant and property and the amount thereof that should be amortized as indicated in the sched- ules contained herein and in addition an amount sufficient adequately to protect the Interborough Company, which latter amount, if not agreed upon by the Commission and the Interborough Company, shall be determined by arbi- tration or by the court. Upon the expiration of a full term of the grant, or a termination by notice as aforesaid, the Interborough Com- pany shall execute and deliver such instruments as may be either necessary or convenient to assure and perfect the title and the possession of the City or such new grantee in and to the plant and property free and clear of all liens and incumbrances as aforesaid. The privilege of termination herein reserved by the City may be exercised on its behalf by the Commission, with the approval of the Board of Estimate, or by such other authority representing the City as is now or may hereafter be vested with the necessary power. Upon the exercise of such privilege, the plant and property shall forthwith vest in the City or the new grantee free from all leases, mort- gages or other encumbrances whatsoever; and all right, title and interest of the Interborough Company therein, shall at once cease and determine. In case the City shall terminate an authorization or license or a portion thereof under the privileges herein re- served all payments by way of compensation or otherwise, applicable thereto, except for damages for failure to per- form any covenants herein required to be performed by the Interborough Company, shall cease upon the date of such termination, and upon payment in full of all such com- pensation up to the date of such termination the Interbor- ough Company shall be relieved from any further payment of such compensation in respect to such authorization or license except as aforesaid. 46 It is the intention of the parties that the amount to Tse paid for plant and property to be ascertained as herein- before provided shall be the measure of any payment the City may be called upon to make therefor, but in pursu- ance of the provisions of Subdivision 1 of Section 34 of the Rapid Transit Act, as it now exists, it is further pro- vided that if at any time in ascertaining the amount to be paid by the City as a condition of a termination of any .authorization or license or portion thereof as herein pro- vided or at the expiration of a full term, it shall be neces- sary that a valuation of any plant, property, equipment, ^construction or any investment in any part thereof shall be determined, such valuation shall in default of agreement ; be determined by arbitration or by the court Upon the expiration of a full term of any authorization or license fixed herein, the authorization or license shall end -and upon such termination thereof all the rights of prop- erty of the Interborough Company in the streets, avenues, parkways, highways and public places shall cease and ter- minate without compensation, and further, upon such ex- piration, the plant and property, together with the appurte- nances thereto of the Interborough Company constructed pursuant to this certificate, except additions as hereinbefore defined, shall be and become the property of the City with- out further or other compensation to the Interborough Com- pany, and additions as hereinbefore defined shall be and become the property of the City on its paying to the Inter- borough Company for such of said additions as may have been completed or put in operation within less than forty (40) years the percentage of the actual cost of said addi- tions indicated in the schedule following according to the age of each item as there indicated, Such schedule is as follows: Schedule Upon expiration Percentage to be paid by City I f on provision 100. 1 year after provision 99.08057851 2 years " " 98.11889023 3 " " 97.11299214 4 " " 96.06085179 5 " " 94.96034344 6 " ' 93.80924355 7 " ' 92.60522636 8 " ' 91.34585917 9 " ' 90.02859752 10 " ' 88.65077997 11 " ' 87.20962264 12 " ' 85.70221378 13 " ' 84.12550771 14 " ' 82.47631877 15 " ' 80.75131484 16 " ' 78.94701062 17 " ' 77.05976061 18 " ' 75.08575169 19 " ' 73.02099545 20 " ' 70.86132016 21 " ' 68.60236225 22 " ' 66.23955761 23 " ' 63.76813233 24 ' ' 61.18309299 25 ' ' 58.47921658 26 ' ' 55.65104009 27 ' ' 52.69284926 28 ' ' 49.59866721 29 ' ' 46.36224229 30 ' ' 42.97703544 31 ' ' 39.43620703 32 ' ' 35.73260291 33 " ' 31.85874013 34 " ' 27.80679171 35 " ' 23.56857089 36 ' ' 19.13551449 37 ' ' 14.49866575 38 ' ' 9.64865608 39 ' " 4.57568624 40 ' " .00000000 The above schedule is computed upon the basis of the investment of the deductions from the revenue for amorti- zation provided for in paragraph (8) of Article XII in five per cent, bonds of the Interborough Company at one hundred and ten per centum (110%). If the amortization fund is invested at a more favorable rate than that above assumed then the amount to be paid by the City shall be correspondingly reduced. If the Interborough Company shall provide in connec- tion with the Webster Avenue Line and the Eighth Avenue and 162nd Street Connection and in connection with the municipal railroad on White Plains Road (with which the Webster Avenue Line will connect) and in connection with the municipal railroad on Jerome Avenue (with which the Eighth Avenue and 162nd Street Connection will connect) terminals, storage yards or shops located upon White Plains Road and Jerome Avenue which shall be used in connection with those lines and such municipal lines and the Manhattan Railroad or other lines of rapid transit railroad operated or to be operated by the Interborough Company, upon the expiration or earlier termination of the authorization and licenses hereby granted, the Interborough Company shall provide the City, or any firm, individual or corporation with whom or with which the City may enter into an agreement with respect to the operation of the Webster Avenue Line or the Eighth Avenue and 162nd Street Connection, or the municipal rail- roads on White Plains Road and Jerome Avenue, the use of so much of the said terminals as may be necessary to serve the equipment (as the word equipment is herein defined) exclusively provided for the Webster Avenue Line or the Eighth Avenue and 162nd Street Connection and such mu- nicipal railroads. The terms shall be reasonable, and if not agreed upon by the parties, shall be settled by arbitra- tion or by the court in the manner provided in Article XVI. If the Irfterborough Company shall so provide such ter- minals, storage yards or shops the City shall upon terminat- ing the authorization or license for the Webster Ave- nue Line and the Eighth Avenue and 162nd Street 49 Connection permit the Interborough Company or its assignee or lessor for a period equal to the then un- expired term of the authorization or license (if it had not been so terminated) to use the plant and structure of the Webster Avenue Line and the Eighth Avenue and 162nd Street Connection in connection with rights reserved over the municipal railroads on White Plains Road and Jerome Avenue under the terms of the contract between The City of New York and the Interbor- ough Company for the operation of such municipal rail- roads to reach such terminals, storage yards or shops. Such use of the plant and structure of the Webster Avenue and the Eighth Avenue and 162nd Street Connection shall be solely for the purpose of reaching such terminals or storage yards and the Interborough Company shall not transport passengers or freight for hire over such lines. In no event shall the use of such plants and structures of such lines for such purposes interfere with their necessary use for passenger transportation. The Interborough Company shall pay to the City or any new lessee a reasonable com- pensation for such use of the plants and structures of such lines for such purpose, which if not agreed upon by the Commission, with the approval of the Board of Estimate, and the Lessee, shall be determined by arbitration or by the Court in the manner provided in Article XVI. XVI In case it shall be necessary to submit to arbitration any question arising under any provision of this certificate in respect of which it is therein provided an arbitration may be had, such arbitration shall be conducted as fol- lows: Either the City, acting by the Commission, or the Interborough Company may give written notice to the other that it requires the matter arising thereun- der to be submitted to arbitration, and shall at the same time name an arbitrator, and accompany the notice by a 50 written acceptance by the arbitrator of the nomination. Within thirty (30) days after the receipt of such notice, the party receiving the same shall name an arbitrator and give written notice of such nomination to the other party, the notice to be accompanied by a written acceptance by the arbitrator of the nomination. If the party to whom notice of arbitration is given shall not so nominate an arbitrator, who shall so accept, then the arbitrator named by the party giving the first notice shall be the sole arbitrator. Upon the appointment of the second arbitrator the Com- mission and the Interborough Company shall there- upon select a third arbitrator ; but if they fail to agree upon such third arbitrator within thirty (30) days after the date of the nomination of the second arbitrator nominated, the third arbitrator shall be nominated by the Chief Judge of the Court of. Appeals of the State of New York; or if within fifteen (15) days after being requested by the Commission or the Interborough Com- pany to make such nomination, the said Chief Judge shall decline or fail to make a nomination, then an arbi- trator shall be named upon the request of the Commission or the Interborough Company within a period of fifteen (15) days by any Associate Judge of said Court of Appeals in the order of seniority ; or, if within said period said judges shall decline or fail to make a nomination, then the third arbitrator shall be nominated by the President or Acting President for the time being of the Chamber of Commerce of the State of New York. The arbitrators shall hear the parties and their counsel or any statements or evidence which the parties or either of them desire i<> submit. Either party may upon two (2) days' notice to the other bring on the subject in dispute for hearing be- fore the arbitrators. Within thirty days after such hear- ing commences, unless such time shall be extended for good cause by written order of the arbitrators or a majority of them, the arbitrators shall make their determination in writing in duplicate, one to be delivered to the Com- 51 mission and the other to the Interborough Com- pany. In case any vacancy shall at any time occur by reason of the death, resignation or inability to serve of any arbitrator, his successor shall be nominated in the same manner and within the same times (during which times the other periods of time prescribed for in the course of the arbitration shall be suspended) as above pro- vided for in the case of the original nomination of such ar- bitrator, and in case the successor arbitrator shall not be nominated within such times the remaining arbitrator or arbitrators shall be the sole arbitrator or arbitrators. Any determination by a majority of the arbitrators shall be final and conclusive. Every such arbitra- tor shall be deemed to be employed both by the City and the Interborough Company. The fees and ex- penses of the arbitrators (including necessary expenses for stenographic and clerical services) and the expenses of the parties shall be assessed as the arbitrators consider equitable and as they direct in their award, but no assess- ments so made shall be charged to the actual cost of equip- ment, the actual cost of plant and structure or to operat- ing expenses. Every such arbitrator shall, before proceeding to consider the matter, be sworn as near as may be in the same manner as referees in actions at law are required to be sworn. Provided, however, that if in any case, or for any reason an arbitration cannot validly be had as aforesaid, then the City or the Interborough Com- pany, if in no way responsible for the failure of the arbitra- tion, may bring such action, suit or proceeding as either of them may be adivsed for the purpose of determining any of the matters for which an arbitration is herein provided. XVII The authorizations or licenses hereby granted may be enjoyed, as well by the Interborough Company itself, as by 52 any lessee, grantee, assignee, transferee or successor there- of ; and the Interborough Company shall have the right to .grant, convey, assign, transfer or mortgage the authoriza- tions or licenses hereby granted, provided, however, that every grantee, assignee, or transferee thereof, not includ- ing, however, a mortgagee or mere lienor, but including any purchaser upon foreclosure of, or under or by virtue of any provision of any mortgage or lien, shall be a corporation subject to the laws of the State of New York, and shall upon .accepting the grant, transfer lease or assignment and be- fore such grant, transfer lease or assignment shall be valid, assume and agree to perform all of the obligations which by the provisions hereof are assumed by the Interborough Company, and no such grant, conveyance, transfer lease or assignment and no mortgage hereafter made covering the authorizations or licenses hereby granted shall relieve the Interborough Company of its obligations hereunder or be valid unless the same shall have been approved by the 'Commission. And provided further that, in case the Interborough Company or any successor or future owner of any of the authorizations or licenses shall be consolidated with or merged into any other x?orporation the obligations of the Interborough Company or such successor or future owner liereunder shall remain unaffected and the authorizations or licenses shall pass to such new corporation only if the agreement or act of consolidation or merger (which shall not be valid or of any force or effect unless the same shall have been approved by the Commission) shall effectually provide that the new consolidated or merging corporation shall assume all such obligations, or if such act or agree- ment shall not so provide, then if and when such new con- solidated or merging corporation shall in writing expressly assume such obligations it being the express intention of this instrument that no change in the incorporation of the Interborough Company or of any such successor or future owner or in the ownership or control of the authorizations 53 or licenses hereby granted, or of any of them shall diminish or affect the obligations of the holder of the same. XVIII The Commission in view of this certificate and in con- junction therewith, has awarded or may award, subject to- the approval of the Board of Estimate, (1) to the Manhattan Railway Company, being the- lessor of the Interborough Company, a certificate of even date herewith authorizing additional tracks onr Second Avenue, Third Avenue and Ninth Avenue, mainly in the Borough of Manhattan, City of New York, and (2) to the Interborough Company a contract under or in pursuance of which a rapid transit railroad may be in part constructed, and may be maintained and operated upon lines known respectively as Seventh Avenue-Lexington Avenue Line, Eastern Parkway Line, Steinway Tunnel Line and White Plains Road Line as in said contract described, and certain consents are or may be necessary to be pro- cured under the terms of such certificate in order that the said Manhattan Railway Company may have the right to construct, maintain and operate railroads therein described : It is now agreed, therefore, that if said certificate or contract shall not take effect or if the said Manhattan Railway Company shall be released from such certificate through failure to procure any such consents then this certificate hereby granted shall become null and void and all rights given hereby to the Interborough Company and all of its obligations hereunder shall cease and determine. 54 IN WITNESS WHEREOF, this certificate has "been prepared by the Public Service Commission for the First District, And is now attested by its seal and by the signature of its chairman, who is its presiding officer, and by the signature of its secretary this day of February, 1913. PUBLIC SERVICE COMMISSION FOR THE FIRST DISTRICT By Chairman Attest: STATE OF NEW YORK.) ss *~ County of New York,J On this day of February, 1913, in the City of New York, in said county, before me personally appeared William E. Willcox and Travis H. Whitney, each to me known and known to me to-be the said William E. Willcox r the Chairman, and the said Travis H. Whitney, the Secre- tary of the Public Service Commission for the First Dis- trict, and the said William E. Willcox and Travis H. Whit- ney, being by me duly sworn did depose and say, each for himself and not one for the other, the said William E. Willcox, that he resides in the Borough of Manhattan, in- the said City ; that he is th# Chairman of the said Commis- sion, and that he subscribed his name to the foregoing cer- tificate by virtue of the authority thereof; and the said Travis H. Whitney, that he resides in the Borough of Brooklyn, in the said City ; that he is the Secretary of the said Commission, and that he subscribed his name thereto- by like authority; and both the said William E. Willcox and Travis H. Whitney that they know the seal of the said Commission and that the same was affixed to the foregoing certificate by the authority of the said Commission and of a resolution duly adopted by the same. The Interborough Eapid Transit Company hereby accepts the foregoing certificate and all the terms, condi- tions and requirements thereof. Dated, New York, February , 1913. INTEBBOBOUGH EAPID TRANSIT COMPANY President Attest: Secretary 57 STATE OF NEW YORK.) o o County of New YorkJ On the day of February, 1913, in the City of York, before me personally came and to me known and known to note respectively to be the said , the President, and the said , the Secretary, of Interborough Eapid Transit Company, and being by me duly sworn, they did depose and say, each for himself and not one for the other, the said that he resided at , in the State of New York, and was the President of the Interborough Eapid Transit Company, the corporation named in and which executed the foregoing acceptance, and that he sub- scribed his name to the foregoing acceptance by the author- ity of the Board of Directors thereof ; and the said , that he resided in the , in the State of New York; that he was Secretary of the said Interborough Rapid Transit Company and subscribed his name to the foregoing acceptance by like authority; and both the said and the said , that they knew the seal of the said Interborough Eapid Transit Company ; that the seal affixed to such acceptance was such seal, and that the same was affixed to the foregoing acceptance by authority of the Board of Directors of the said Inter- borough Eapid Transit Company and pursuant to a resolu- tion adopted by the said Board. 58 THE CITY OF NEW YORK, BY THE PUBLIC SERVICE COMMISSION FOR THE FIRST DISTRICT, WITH Interboroiigh Rapid Transit Company LESSEE AND GRANTEE SUPPLEMENTARY AGREEMENT TRACKAGE RIGHTS SEVENTH AVENUE-LEXINGTON AVENUE LINE, WHITE PLAINS ROAD LINE AND STEINWAY TUNNEL LINE Dated March 19th, 1913 The City ol New York, b y the Public service Commission for the First District WITH Interborongh Rapid Transit Company LESSEE AND GRANTEE SUPPLEMENTARY AGREEMENT TRACKAGE RIGHTS SEVENTH-LEXINGTON AVENUE LINE WHITE PLAINS ROAD LINE STEINWAY TUNNEL LINE March 19, 1913 [NoiE. Marginal notes, running headlines, table of contents and index do not form part of contract.] TABLE OF CONTENTS PAGE Recitals ! I. Grant of Trackage Rights over Portions of Routes Described : Subdivision II of Lexington Avenue Branch 3 White Plains Road Line 4 Steinway Tunnel Line 4 Period of Grant 5 II. Operation by Grantee before Lessee is Ready 6 III. Joint Operation by Grantee with New York Municipal Railway Corporation 8 IV. Joint Operation by Grantee and Lessee 8 V. Expenses Borne by Each Operator 10 VI. Joint Operation by Grantee, Lessee and New York Municipal Railway Corporation 10 VII. Rental Charged Grantee by Lessee during Joint Operation 11 VIII. Rental during Joint Operation with New York Municipal Rail- way Corporation 12 IX. Intent of Agreement 13 X. Modification 14 XI. Arbitration 14 XII. Binding Effect as to Successors and Assigns 14 Testimonium 15 Approval of Corporation Counsel 16 Acknowledgments 17, 18 ' RECITALS AGREEMENT made this 19th day of March Parties 1913, between THE CITY OF NEW YORK, here- inafter called the "City", acting by the PUBLIC SERVICE COMMISSION FOR THE FIRST DIS- TRICT, hereinafter called the "Commission", party of the first part, and INTERBOROUGH RAPID TRANSIT COMPANY, a corporation existing under the laws of the State of New York, hereinafter called the " Interborough Company", as Grantee under the Certificate hereinafter mentioned and as Lessee under the Subway Contract hereinafter men- tioned, party of the second part. WHEREAS the City, acting by the Commission, Subway and the Interborough Company have entered or Contract are about to enter into a certain contract for the construction by the City and for the equipment, maintenance and operation by the Interborough Company of certain additional or proposed rapid transit railroads described in said contract and known and hereinafter referred to as the Seventh Avenue-Lexington Avenue Line, Eastern Park- way Line, Steinway Tunnel Line and White Plains Road Line, in conjunction with the exist- ing Manhattan-Bronx and Brooklyn-Manhattan Rapid Transit Railroads now operated by the Interborough Company, which said contract is hereinafter called the "Subway Contract" and to which reference is hereby made as if the same were herein fully set forth, the Interborough Company as Lessee under the Subway Contract being hereinafter called the "Lessee"; and WHEREAS the Interborough Company is the Existing operator and lessee of all the railroads, property, Ri s ht & rights and franchises of the Manhattan Railway perate Company, a corporation existing under the laws of the State of New York, which said railroads are hereinafter called the "Manhattan Rail- RECITALS Elevated Extensions Reserva- tions in Subway Contract Reserva- tions in Extension Certificate road", and the Commission lias issued or is about to issue to the Interbo rough. Company a certificate for the construction, maintenance and operation of certain railroads described in said certificate and known and hereinafter referred to as the Webster Avenue Line, Eighth Avenue and 162nd Street Connection, Queens- boro Bridge Line and West Farms Subway Con- nection, which said certificate is hereinafter called the "Certificate" and to which reference is hereby made as if the same were herein fully set forth, the Interborough Company as grantee under the Certificate being hereinafter called the "Grantee"; and WHEREAS the Subway Contract provides that the City reserves the right for the Lessee, as the operator and lessee of the Manhattan Eailroad, and for the successors and assigns of the Lessee, to use the tracks, structures and line equip- ment of Subdivision II of the Lexington Ave- nue Branch of the Seventh Avenue-Lexington Avenue Line, of the White Plains Eoad Line, of the Queensboro Bridge Plaza portion of Subdivision II of the Steinway Tunnel Line and of Subdivisions III, IV and V of the Steinway Tunnel Line or of any of them, or of any Extensions thereof, and the Certificate also provides, in Article IX thereof, that the City agrees to provide the Grantee with trackage rig] its over such parts of such municipal rail- roads, and over any extensions of such parts, and that the Grantee agrees to operate over such parts in conjunction with the Railroads author- ized by the Certificate to the end that through service may be provided over such parts, over such Railroads and over the Manhattan Railroad, the terms and conditions for such use to be rea- sonable and as may be agreed upon between the TRACKAGE EIGHTS Commission, the Lessee and Grantee, and to be Provision embodied in a written agreement, supplementary to the Subway Contract, between the City, acting Agreement by the Commission, the Lessee and Grantee ; and WHEREAS the Commission, the Lessee and Grantee have agreed upon such terms and condi- tions as are hereinafter embodied in this agree- ment, NOW, THEREFORE, THIS AGREEMENT WITNESSETH Agreement that the City, acting by the Commission, the Lessee and Grantee hereby mutually agree as follows : ARTICLE FIRST: The City and the Lessee agree that the Grantee, its successors and assigns, shall have, and hereby grant to the Grantee and to its successors and assigns, the right to use the tracks, Grant of structures and line equipment of a portion of Subdivision II of the Lexington Avenue Branch of the Seventh Avenue-Lexington Avenue Line, of a portion of the White Plains Road Line, of the Queensboro Bridge Plaza portion of Sub division II of the Steinway Tunnel Line and of Subdivisions III, IV and V of the Steinway Tun- nel Line or of any of them, for the purpose of operating its or their trains and cars thereon in conjunction with the Railroads authorized by the Certificate, to the end that through service may Through be provided over such portions, over such Rail- service roads and, so long as the Grantee, its successors or assigns, shall operate the Manhattan Railroad, over such Manhattan Railroad. The portion of Subdivision II of the Lexington Lexington Avenue Branch of the Seventh Avenue-Lexing- ton Avenue Line upon which such trackage rights are granted is described as follows: ROUTES DESCRIBED Lexington Avenue Branch White Plains Road Line Steinway Tunnel Line Beginning at a point in the Borough of The Bronx in River Avenue near 162nd Street and extending thence northerly over and along River Avenue to Jerome Avenue and thence continuing northerly over and along Jerome Avenue and reservoir property to a point in Jerome Avenue at or near Woodlawn Road. The portion of the White Plains Road Line upon which such trackage rights are granted is described as follows : Beginning at a point in the Borough of The Bronx in White Plains Road near Gun Hill Road and thence continuing northerly over and along White Plains Road to its intersec- tion with East Two Hundred and Forty-first Street or Becker Avenue. The Queensboro Bridge Plaza portion of Sub- division II of the Steinway Tunnel Line and Sub- divisions III, IV and V of the Steinway Tunnel Line upon which such trackage rights are granted are described as follows: Beginning at a point in the Queensboro Bridge Plaza in the Borough of Queens at or near the easterly building line of Ely Avenue, thence continuing easterly over the Queens- boro Bridge Plaza to a point at or about the Queensboro Bridge Plaza and Jackson Ave- nue where the line divides, one line curving southeasterly over the Queensboro Bridge Plaza and crossing over Jackson Avenue to the Queens Boulevard, thence continu- ing southeasterly and easterly over and along the Queens Boulevard to a point at or near Grosman Avenue, thence curving northeasterly over the Queens Boulevard to PERIOD OF GRANT Greenpoint Avenue, thence continuing north- easterly over and along Greenpoint Avenue to Skillman Avenue and thence continuing in Steinway a general easterly direction over Skillman LUW Avenue and Woodside Avenue to Eoosevelt Avenue, and thence continuing easterly over and along Eoosevelt Avenue to Sycamore Avenue; and the other of said lines curving northeasterly over the Queensboro Bridge Plaza to a point in Jackson Avenue at or near Skillman Place, thence continuing north- easterly over and along Jackson Avenue to Second (formerly Debevoise) Avenue and thence continuing northerly over and along Second Avenue to a point at or near Ditmars Avenue. The trackage rights for that portion of Sub- Period for division II of the Lexington Avenue Branch of Bright?" the Seventh Avenue-Lexington Avenue Line are granted above described shall continue from the date when such portion or any part thereof shall be ready for operation until the expiration or earlier termination of the Subway Con- tract as to the Seventh Avenue-Lexington Avenue Line unless the grant given by the Certificate for the Eighth Avenue and 162d Street Connection shall be terminated prior to the expiration or termination of the Subway Contract as to the Seventh Avenue-Lexington Avenue Line, and in that event until the termina- tion of such grant. The trackage rights for that portion of the Period of White Plans Eoad Line above described shall grant continue from the date when such portion or any part thereof shall be ready for operation until the expiration or earlier termination of the Subway Contract as to the White Plains Eoad Line unless the grant given by the Certificate for the Webster OPERATION BY GRANTEE Period of grant Operation by Grantee Before Lessee is Ready Compensa- tion For use of Seventh- Lexington Avenue Line Avenue Line shall be terminated prior to the expiration or termination of the Subway Contract as to the White Plains Eoad Line, and in that event until the termination of such grant. The trackage rights for the Queensboro Bridge Plaza portion of Subdivision II of the Steinway Tunnel Line and Subdivisions III, IV and V of the Steinway Tunnel Line shall continue from the date when such lines or any portion thereof shall be ready for operation until the expiration or earlier termination of the Subway Contract as to the Steinway Tunnel Line unless the grant given by the Certificate for the Queensboro Bridge Line shall be terminated prior to the expiration or termination of the Subway Contract as to the Steinway Tunnel Line, and in that event until the termination of such grant. ARTICLE SECOND: In the event that any of such portions of the municipal railroads de- scribed in Article First hereof shall be ready for operation and the Grantee shall be ready to operate the same in conjunction with the Railroads authorized by the Certificate prior to the time when the Lessee shall be ready to operate such portion or portions, then the Grantee shall, until the Lessee shall begin to oper- ate such portion or portions, maintain and operate such portion or portions in conjunction with such Railroads and shall collect all fares and other revenue therefrom, and shall pay all ex- penses of operation enumerated in Articles Fourth and Fifth hereof, and shall credit to the Lessee at monthly intervals as compensation for the use of such portion or portions the following sums : (a) As compensation for the use of such portion or portions of the Seventh Avenue-Lex- ington Avenue Line and of the White Plains OPERATION BY GBANTEE Eoad Line a sum equal to one-twelfth of six per For use of centum (1/12 of 6%) of four-tenths (4/10) of p^ the cost of construction and cost of equipment Road Line (exclusive of rolling stock and that portion of Equipment required for the generation, trans- mission, conversion and distribution of power up to the contact rails and the local lighting and power circuits) of such portion or portions. (b) As compensation for the use of such F r . use of portion or portions of the Steinway Tunnel Tunnel Line a sum equal to one-twelfth of six per Line centum (1/12 of 6%) of one-quarter of the cost of construction and cost of equipment (exclusive of rolling stock and that portion of Equipment required for the generation, transmission, con- version and distribution of power up to the con- tact rails and the local lighting and power cir- cuits) of such portion or portions, except that one-half of such sum to be credited as compensa- tion on account of one-quarter of the cost of construction shall be credited only for such months as the revenue of the Grantee as defined in Article XII of the Certificate shall exceed the amount of the deductions specified in Paragraphs 1 to 8, inclusive, of said Article XII, and then only up to the amount of such excess; but any deficits in the payment of such one-half shall be Deficits cumulative and shall bear simple interest and shall be credited to the Lessee whenever the ex- cess of such revenue over such deductions shall permit before any payment is made to the City under said Article XII. Such cost of construction and cost of equip- Cost of ment shall be determined in the manner provided c . onstru c- ^ o -u n tlon and in the Subway Contract. equipment The Grantee shall, solely at its own cost and D Uty O f expense, during the period when it shall so main- Grantee as tain and operate such portion or portions of such in municipal railroads, keep such portion or portions JOINT OPERATION Mainte- nance Joint Operation with New York Mu- nicipal Railway Corpora- tion Division of Revenue be- tween Lessee and Grantee Ton mileage and the Equipment therefor and each and every part thereof in thorough repair and shall restore and replace every part thereof which may wear out so that at the end of said period such portion or portions shall be in as thoroughly good and solid condition as at the beginning of such period, reasonable wear and tear excepted. ARTICLE THIRD: If the Grantee in the event specified in Article Second hereof shall operate such portion or portions of the Steinway Tunnel Line jointly with the New York Municipal Rail- way Corporation pursuant to a certain supple- mentary agreement entered or about to be en- tered into between the City, acting by the Com- mission, Interborongh Company and the said New York Municipal Railway Corporation, prior to operation thereon by the Lessee, the Grantee shall receive all the revenue and payments (ex- cept the rentals specified in Articles Eighth, Ninth and Tenth of said supplementary agree- ment) and make all the payments which the In- terborough Company is to receive or make under said supplementary agreement, crediting com- pensation for the use of such portion or portions to the Lessee as provided in Article Second hereof. ARTICLE FOURTH : After the beginning and dur- ing the continuance of joint operation by the Lessee and Grantee on any of such portions of the municipal railroads described in Arti- cle First, the Lessee shall collect all fares and other train revenue (except advertising) and all station revenue of such portion or portions operated jointly and shall credit to the Grantee at monthly intervals such proportion of the same as the ton mileage of the Grantee's train service on such portion or portions during the preceding month shall bear to the combined ton mileage of BEVENUES AND EXPENSES the train service of both the Lessee and the Gran- Expenses tee on such portion or portions during such pre- ^Grante ceding month, and shall charge to the Grantee at monthly intervals the same proportion of the fol- lowing expenses : (a) All rentals actually and necessarily Ren tais payable by the Lessee for the use of property in connection with the tracks, structures and line equipment (as line equipment is denned in paragraph (c) of this Article) of such portion or portions under contracts or leases approved by the Commission and not charge- able to operating expenses. (b) Taxes, if any, on property actually Taxes and necessarily used in the operation of such portion or portions, together with taxes and other governmental charges of every descrip- tion assessed or which may hereafter be as- sessed against the Lessee in connection with or incident to the operation of such portion or portions exclusive of taxes on rolling stock and on that portion of Equipment required for generation, transmission, conversion and distribution of power up to the contact rails and the local lighting and power circuits. (c) Maintenance (including depreciation) Mainte- of tracks, structures and line equipment, such line equipment being defined as all tion Equipment belonging to such portion or por- tions exclusive of rolling stock and that por- tion of Equipment required for generation, transmission, conversion and distribution of power up to the contact rails and the local lighting and power circuits. (d) Cost of powder supplied by the Lessee, Cost of which shall be charged at the actual cost pS without profit, but including taxes, interest, Lessee 9 REVENUES AXD EXPENSES r sup- plied by Lessee Expense of ["are Col- lection, etc. Damages for acci- dents General expenses \\ a.ues of train crews, etc. During joint opera- tion with New York Municipal Railway Corpora- tion amortization and depreciation on that por- tion of the Equipment and Existing Equip- ment (as denned in the Subway Contract) required for the generation, transmission, conversion and distribution of power up to the contact rails and the local lighting and power circuits. (e) All expenses in connection with the col- lection of fares and other train revenue at stations. (f) Damages for accidents to persons or property (including personal injury claims) occurring on such portion or portions. (g) General expenses, which for the pur- poses of this Article shall be taken as ten per centum (10%) of each of the preceding items (a), (b), (c), (d), (e) and (f). ARTICLE FIFTH : The Lessee and Grantee, after the beginning and during the continuance of such joint operation by the Lessee and Grantee on any of such portions of such municipal rail- roads, shall each bear the following expenses in connection with its own operation over such por- tion or portions operated jointly: Wages of train crews and other em- ployees engaged exclusively in conducting its train service and the cost of labor and mate- rials required in the care and maintenance of its cars. ARTICLE SIXTH : After the beginning and dur- ing the continuance of joint operation by the Lessee and Grantee and the New York Municipal Railway Corporation pursuant to said sup- plementary agreement entered or about to be en- tered into between the City, the Interborough Company and the New York Municipal Railway 10 RENTAL Corporation, of any portion or portions of the Steinway Tunnel Line, the procedure as to di- vision of the revenue and expenses mentioned in Division of revenue Articles Fourth and Fifth hereof between the and Lessee and Grantee in respect to such portion or expenses portions of the Steinway Tunnel Line operated jointly by the Lessee, Grantee and said New York Municipal Eailway Corporation shall be the same as prescribed in Articles Fourth and Fifth hereof, except that such revenue and expenses shall be deemed to be that portion of the revenue and expenses not belonging to or chargeable against the New York Municipal Railway Cor- poration under the terms of said supplementary agreement. ARTICLE SEVENTH : At the end of each quarter Rental year ending March 31st, June 30th, September Q h r a a r n g t ^ t 30th and December 31st, after the beginning and Lessee during the continuance of such joint operation by the Lessee and Grantee on any of such por- tions of the Seventh Avenue-Lexington Avenue Line and of the White Plains Eoad Line, the Lessee shall charge the Grantee with an amount as rental equal to one-quarter of six per centum (i/4 of 6%) on such proportion of the cost of construction and cost of equipment (ex- clusive of rolling stock and that portion of Equipment required for the generation, trans- mission, conversion and distribution of power up to the contact rails and the local lighting and power circuits) of such portion or portions of such municipal railroads operated jointly as the ton mileage operated by the Grantee on such por- Relative tion or portions during such quarter year bears ton mileage to the total ton mileage operated by both the quarter-year Lessee and Grantee on such portion or portions during such quarter-year. At the end of each quarter-year ending March 31st, June 30th, September 30th and December 11 EEXTAL Rental on Steimvay Tunnel Line Deficits Cumulative Cost of construction and equip- ment 31st, after the beginning and during the continu- ance of such joint operation by the Lessee and Grantee on any portion or portions of the Steinway Tunnel Line, except as provided in Article Eighth, the Lessee shall charge the Grantee with an amount as rental equal to one- quarter of six per centum (14 of 6%) on such pro- portion of the cost of construction and cost of equipment (exclusive of rolling stock and that portion of Equipment required for the genera- tion, transmission, conversion and distribution of power up to the contact rails and the local light- ing and power circuits) of such portion or por- tions of the Steinway Tunnel Line operated jointly as the ton mileage operated by the Grantee on such portion or portions during such quarter-year bears to the total ton mileage oper- ated by both the Lessee and Grantee on such portion or portions during such quarter year, ex- cept that one-half of such amount chargeable to the Grantee as rental on account of the cost of construction of such portion or portions shall be charged only for such quarter years as the reve- nue of the Grantee as defined in Article XII of the Certificate shall exceed the amount of the deductions specified in paragraphs 1 to 8, in- clusive, of said Article XII, and then only up to the amount of such excess ; but any deficits in the payment of such one-half shall be cumulative and shall bear simple interest and shall be charged to the Grantee whenever the excess of such revenue over such deductions shall permit before any payment is made to the City under said Arti- cle XII. Such costs of construction and costs of equip- ment shall be determined in the manner provided in the Subwaj 7 Contract. ARTICLE EIGHTH: At the end of each quarter year ending March 31st, June 30th, September 12 KENTAL 30th and December 31st, after the beginning and during the continuance of joint operation by the Ren . tal Lessee and Grantee and the New York Municipal jy the INTERBOROUGH COMPANY under Contract No. 1 or forming a part of or connected with the Man- hattan Railroad. The right and privilege hereby granted shall also extend to the stations of that part of the Existing Railroads operated under Con- tract No. 2 and to the stations of the New Rail- roads and the Elevated Extensions if, and to the extent that, the Public Service Commission for the First District, or other public authority, as successor to* the Board of Rapid Transit Railroad Commissioners for the City of New York, shall, pursuant to the provisions of said Contract No. 2 and, or of said Contract No. 3 and said Inter! tr- ough Certificate, give its written permission there- for. It is further understood and agreed that no sign or advertisement shall be placed on the outside of the stations on the sides away from the tracks 11 and facing towards the cross streets, nor on the ends of the stations. But this provision shall not prevent the use of the stairways of the Manhattan Railroad as now used, or the risers of the stairs leading from the streets to the elevated stations of the Existing Railroads as now used. The words "approaches to stations" as employed in this agree- ment embrace only stairways 1 or passageways or platforms which belong to or are leased to or un- der the control of the INTERBOROUGH COMPANY. In general, subject to the limitations in this con- tract, contained, the spaces and places upon which signs or advertisements shall be placed in the sta- tions are those which have heretofore been used for that purpose and those similar thereto. It is, however, understood and agreed that if the use of any of said spares or places, as aforesaid, shall interfere with the safety, comfort or convenience of the passengers or employes of the INTERBOROUGH COMPANY, or with the maintenance -of said struc- tures, or thf* operation of the railways, the Presi- dent may change said spaces and places and desig- nate in their stead other spaces and places, if the same exist, which shall not cause such interfer- ence. The INTERBOROUGH COMPANY reserves all such spaces as have heretofore been occupied, or may hereafter be reasonably required for the offi- cial announcements of its business to the public and to its employes. No sign or advertisement shall be so placed as to incommode passengers, employes or others in their access to or egress from the cars, stations, platforms, stairways or other structures or premises of the INTERBOROUGH COM- PANY, nor so as to interfere in any way with the lighting, ventilating or heating of said stations, or with the light in any adjoining or neighboring building; no sign or advertisement shall be or contain anything unlawful, immoral or offensive 1.2 to good taste, and in that respect they are to 'be subject to the approval of the said President. None of the kiosks or stairways leading to un- derground stations of the Existing Railroads, nor any approach to any station owned by any third party, is included in the spaces or premises in which any of the foregoing privileges are granted. (e) The sole and exclusive right and privilege to place and maintain advertisements and notices in the interior of the passenger cars which are, or may hereafter be, owned or leased by the INTER- BOROUGH COMPANY and operated by it on the Exist- ing Railroads, the New Railroads, the Manhattan Railroad (including the Additional Tracks)', the Elevated Extensions, or upon any extensions to any such railroad, which may hereafter be con- structed and operated by the INTERBOROUGH COM- PANY under the provisions of Contract No. 3 or the Interborough Certificate during the term of this agreement. The spaces in said cars to be used for said pur- pose shall be all the spaces on the side of the cars between the. top of the windows and the roof, not exceeding, however, twelve inches in height, includ- ing the frames; and also the solid or paneled spaces, if any, at the ends of the cars over and at the sides of the doors, but sufficient space snail be left at the bottom of the panel over the doors to ena'ble the INTERBOROUGH COMPANY to place, paint or af- fix the number of the car in the usual size and style. It is, however, understood and agreed that if the use of any of said spaces or places, as afore- said, in the cars shall interfere with the safety, comfort or convenience of the passengers or em- ployes of the INTERBOROUGH COMPANY,, or with the maintenance or operation of said cars, the said President may change said spaces or places, and 13 designate in their stead other spaces or places, if the same exist, which shall not cause such interfer- ence. The INTERBOROUGH COMPANY reserves all such spaces in the cars as have been heretofore occupied, or which may hereafter be reasonably re- quired by it for the official announcement of its business to the public and to its employes. No sign or advertisement shall be so placed in the cars as to incommode passengers, employes or others in their access to or egress from the cars, nor so as to interfere in any way with the lighting, ven- tilating or heating of the cars. No sign or ad- vertisement shall be or contain anything unlawful, immoral or offensive to good taste, and in that respect they are to be subject to the approval of the said President. (f) The privilege of transporting newspapers free of charge on the passenger trains operated by the INTERBOROUGH COMPANY to the several stations of the Existing Railroads, the New Railroads, the Manhattan Railroad and the Elevated Extensions, where the right and privilege of maintaining news stands is granted hereunder, for the purpose of selling the same on the news stands as herein pro- vided. The privilege hereby granted shall be exer- cised always subject to such reasonable rules and regulations as the said President may from time to time adopt. ARTICLE III. The CONTRACTOR hereby covenants and agrees to pay to the INTERBOROUGH COMPANY for the rights and privileges granted hereunder, as follows: (1) For the said privileges of maintaining news stands and automatic vending and weighing ma- chines and of checking parcels on the stations of the Existing Railroads and the Manhattan Rail- 14 road as now constructed and operated ; for the said privilege of maintaining news stands on the sta- tions of the New Railroads and the Elevated Ex- tensions or on so many of them as permission may be obtained, as in Article II, subdivision (c) pro- vided; for the said privilege of maintaining ad- vertisements on the stations, platforms and ap- proaches to stations of that part of the Existing Railroads operated under Contract No. 1 and of the Manhattan Railroad; and for the said privi- lege of placing and maintaining advertisements and notices in the passenger cars operated by the IN- TERBOROUGH COMPANY upon the Existing Railroads, the New Railroads, the Manhattan Railroad and the Elevated Extensions, the following: (a) For the first year of the term, from January 1, 1914, to December 31, 1914, the sum of Six HUNDRED THOUSAND DOLLARS (f 600,000). (b) For the second, third, fourth and fifth years of the term, that is to say, from January 1, 1915, to December 31, 1918, the sum of SEVEN HUNDRED THOUSAND DOLLARS (#700,000) per annum. (c) for the slrth year of the term, beginning January 1, 1919, and for each and every year there- after, the sum of EIGHT HUNDRED THOUSAND DOL- LARS ($800,000) per annum, plus an additional sum equal to ten per cent. (10%) of the gross receipts from whatever source derived, directly or indirectly, 'by the CONTRACTOR, or on his behalf, in any manner from, out of or in connection with the exercise of the rights and privileges granted here- under for each of said years. The amount of such gross receipts shall be de- termined in the first instance by a statement pre- pared and submitted by the CONTRACTOR to the IN- TERROROUGH COMPANY not later than the fifth day 15 of the month succeeding the month for which such statement is prepared. Such statement shall be in the form and with the details to be prescribed by the President of the INTERBOROUGH COMPANY and shall be verified under oath by the CONTRACTOR, or, in case of his absence or inability, by his agent or employe having charge of his books, records and memoranda. The INTERBOROUGH COMPANY and its officers and duly designated representatives shall have the right to verify any of the said statements by an examination of the CONTRACTOR'S books, rec- ords and memoranda and by the examination un- der oath of the CONTRACTOR or his* agent or em- ploye having charge of such books, records and memoranda ; and the CONTRACTOR hereby covenants that he will submit and will require his agents and employes to submit to such examination and pro- duce such books, records and memoranda when- ever required by the IXTERBOROUGH COMPANY for such purpose. The CONTRACTOR further covenants that the INTERBOROUGH COMPANY shall also have the right to examine his books, records and memo- randa and to examine under oath any of his ser- vants or employes having charge thereof in case any controversy shall arise between the CONTRAC- TOR and the INTERBOROUGH COMPANY in connection with any of the matters referred to in Article VIII hereof. In case any controversy shall arise be- tween the CONTRACTOR and the INTERBOROUGH COM- PANY as to the amount of such gross receipts in any of said years which cannot be adjusted between the parties, the dispute shall be determined by arbi- tration, as hereinafter provided. It is expressly understood and agreed that the foregoing payments are to be deemed to be the con- sideration and are to be made for the privileges hereinbefore in this subdivision enumerated, but the amounts to be paid by the CONTRACTOR here- 10 under shall not be diminished by reason of his fail- ure .to obtain the privilege of maintaining news stands on any of the stations of the New Railroads or the Elevated Extensions, unless said privileges on any of said stations shall, under the require- ments of the Public Service Commission for the First District, be extended to and be exercised by a person or persons other than the Contractor, in which event the amounts to be paid as aforesaid shall be diminished by the amount received by the INTERBOEOUGH COMPANY from such other person or persons, nor shall the amounts payable by the Con- tractor as aforesaid be diminished by reason of the termination (except upon the contingency referred to in Article XI hereof) of the privileges for news stands or vending machines on the stations of the Existing Railroads, the Manhattan Railroad, the New Railroads or the Elevated Extensions, in ac- cordance with the provisions hereof, at the expira- tion of five years from the date of the beginning of the term of the lease of Contract No. 3, pursu- ant to the terms thereof, or at the expiration of five years from the date when any part of the Elevat- ed Extensions is put into operation pursuant to the provisions of the Interborough Certificate, as the case may be. (2) In case the Contractor shall obtain the right to display advertising signs with the written per- mission of the Public Service Commission for the First District, as in Article II, subdivision (d) provided, on any of the stations of that part of the Existing Railroads operated under Contract No. 2, or on any of the stations of the New Railroads, or of the Elevated Extensions, which at the date of the initial operation thereof under Contract No. 3 or under the Interborough Certificate constitute a part of the New Railroads or the Elevated Exten- 17 sioris, the Contractor shall also pay the additional sum of TWELVE HUNDRED AND FIFTY DOLLARS ($1250) per annum for each and every such station, up and down, or TWENTY-FIVE HUNDRED DOLLARS ($2500) for the entire station, including both up and down, at which such right may be obtained, as aforesaid. (3) In case any extensions are added to the Existing Railroads or the Manhattan Railroad, and new stations are constructed and maintained thereon, or in case new stations (in addition to those constituting a part of the New Railroads and the Elevated Extensions! when they shall be wholly operated as now planned) are constructed and maintained on the New Railroads or the Elevated Extensions, or on any extensions thereof, additional payments shall be made by the CONTRACTOR as fol- lows : (a) The further sum of TWELVE HUNDRED AND FIFTY DOLLARS ($1250) per annum for each and every such station, up and down, or TWENTY-FIVE HUNDRED DOLLARS ($2500) for the entire station, including both up and down, at which the CON- TRACTOR shall obtain the right to place advertising signs. (b) The further sum of Six HUNDRED AND TWENTY-FIVE DOLLARS ($625) for each and every station, up and down, where the CONTRACTOR shall not obtain such privilege, the said additional pay- ment being deemed to be additional compensation for any additional cars that may be put in oper- ation in connection with such station. Provided, however, that in case the CONTRAC- TOR shall obtain the right to exercise at any such new stations any privileges not in this sub- division (3) enumerated, or shall obtain both the right to place advertising signs and the right to maintain news stands on any of such stations, the additional amounts, if any, to be paid by the CON- TRACTOR in such events shall be agreed upon be- tween the parties at the time such rights are ob- tained, or, in case of their failure to agree, by arbi- tration, as hereinafter provided; and Provided Further, that the CONTRACTOR shall not be re- quired to pay any additional compensation under this subdivision (3) as to any new station added to the portions of the Existing Railroads or to the Manhattan Railroad, as the said railroads existed or were under construction on January 1, 1906. Such annual payments (except as hereinafter provided) shall be made in monthly instalments, in advance, on the first day of each calendar month, and shall be subject to apportionment and read- justment in case the amount payable shall be changed during the month by reason of the open- ing for business of any new station the operation of which shall require the CONTRACTOR to increase the payments to be made by him hereunder, or of any extension of any of the railroads. The additional amount equal to ten per cent. (10%) of the gross receipts required to be paid under the provisions of Article III, subdivision (1), paragraph (c), shall be paid in monthly in- stalments by not later than the tenth day of the month succeeding the month in which such gross receipts shall have been received by the CON- TRACTOR. The CONTRACTOR also covenants and agrees that he will make the payments hereinbefore provided without deduction for taxes or assessments of any kind which he may be required to pay thereon, or 19 retain therefrom, by virtue of any present or future law, and that, in addition to making the payments hereinbefore provided, he will pay and discharge as part of the consideration for the privileges granted hereunder, as and when the same have or may become due, any and all taxes, assessments, license fees or other governmental charges of every description assessed, or which, under any present or future law, may be hereafter assessed against or be payable by the INTERBOROUGH COMPANY upon or in connection with or incident to any of the priv- ileges granted hereunder or directly assessed against the income therefrom; provided, however, that the CONTRACTOR shall not be required to pay or assume the income tax payable by INTERBOR- OTJGH COMPANY under the Federal Income Tax Law in respect of the payments required to be made hereunder. And Provided Further, that in case the amount of such taxes, assessments, license fees or other gov- ernmental charges imposed under any future law and required to be paid or assumed by the CON- TRACTOR, as aforesaid, shall be so great as to amount to confiscation or to prevent the CONTRAC- TOR from realizing a reasonable profit from the ex- ercise of the rights and privileges granted hereun- der, the CONTRACTOR shall have the right or option to terminate this contract. In case any dispute shall arise between the CONTRACTOR and the INTER- BOROUGH COMPANY as to what is a reasonable profit or as to whether the CONTRACTOR'S inability to vealiae the same is due to additional tax burdens imposed under any future law, the same shall be determined by arbitration, as hereinafter provided, and the determination of the arbitrators shall be binding as to the CONTRACTOR'S right to terminate this agreement. 20 ARTICLE IV. The CONTRACTOR hereby covenants and agrees to indemnify the INTERBOROUGH COM- PANY against any and all claim or claims for dam- ages and from all liability, loss and expense aris- ing from injury to person or property which shall have been occasioned in whole or in part by the acts or omissions of said CONTRACTOR, his servants, employes, agents, lessees or assigns, and to protect and save harmless the INTERBOROUGH COMPANY from any and all claim or claims for damages, and from all liability, loss and expense arising from death or from injuries to person or property re- sulting to the CONTRACTOR or to any person or per- sons employed by him while in, upon or about the cars, stations, platforms, structures or premises of the INTERBOROUGH COMPANY and engaged in and about said business; and also against any and all claim or claims for damages, and from all liabil- ity, loss and expense arising from death or from injuries to person or property resulting from the acts or omissions of the CONTRACTOR, or of any per- son or persons in his employ, or from the presence in or upon any car, station platform, stairway or other structures or premises of INTERBOROUGH COMPANY, of any article or articles brought, car- ried or placed a,t, in, upon or about the same by the CONTRACTOR, or by his servants, agents, les- sees or assigns, when engaged in or about said business; it being the intent of this provision that the CONTRACTOR shall indemnify and save harmless the INTERBOROUGH COMPANY against all such claims or liabilities arising out of or in any man- ner connected with the exercise of the rights and privileges granted hereunder, whether or not the same be due to the negligence of the CONTRACTOR or the INTERBOROUGH COMPANY, or their respective servants, agents or employes, or otherwise. 21 The CONTRACTOR hereby further covenants and agrees to indemnify and save harmless the INTER- BOROUGH COMPANY against any and all claim or claims for damages, and from all liability, loss and expense arising from, or because of, any alleged libelous advertisement or notice which may have been displayed by the CONTRACTOR in any of the cars operated by the INTERBOROUGH COMPANY, or on the stations, appurtenances or other structures of any of the railways described herein, or because of the sale or display of any newspaper, magazine or periodical at any of the news stands at any of the stations, approaches to the stations, and plat- forms of the stations of the railways, containing, or alleged to contain, any libelous matter or state- ment. ARTICLE V. In consideration of the execution of this contract 'by the INTERBOROUGH COMPANY,, and conditioned upon its approval by the Public Service Commission for the First District, the CONTRACTOR hereby agrees to waive any and all rights which he now has, or claims to have, to a renewal or extension of the rights and privileges granted under a certain agreement, dated January 1, 1906, made and entered into by the INTERBOR- OUGH COMPANY with Artemas Ward and William Gow, composing the firm of Ward & Gow; and fur- ther agrees to fully and wholly, and well and truly, indemnify and save harmless the INTERBOROUGH COMPANY, its successors and assigns, from and against any and all suits, actions, costs, counsel fees, expenses, losses, damages, judgments or de- crees to which the INTERBOROUGH COMPANY may be put, or which it may suffer or incur, arising or growing out of or because of any breach, or alleged breach, of said agreement of January 1, 1906, or of any breach or alleged breach of any of the terms, provisions, options or privileges of said agreement, which may be asserted or alleged by the said Ar- temas Ward and William Gow, or either or both of them, individually, or as co-partners, or by their or 'by either or both of their heirs, executors, ad- ministrators or assigns., or by any person, firm or corporation having or claiming to have any rights or privileges in or under the said agreement of January 1, 1906, affected or interfered with by the execution of this contract. It is hereby expressly understood and agreed that the covenants, indemnities, stipulations and agreements of this article, and the right of the INTERBOROUGH COMPANY to insist upon and enforce the same, are not intended to be, and shall not lie construed to be, dependent in any way upon the duration of the rights and privileges granted under this contract, or of any of them, the execution by the INTERBOROUGH COMPANY of this contract and the approval thereof by the said Public Service Commission being deemed to be full and adequate consideration for said provisions. ARTICLE VI. The CONTRACTOR further covenants and agrees that, within fifteen days after the ex- piration of this agreement, or within fifteen days after the expiration of any of the privileges granted herennder, he will remove from the premises of the INTERBOROUGH COMPANY, upon or in connection with which such privileges are granted, all prop- erty of every description placed thereon by the CONTRACTOR under the provisions of this agree- ment. The INTERBOROUGH COMPANY, on its part, agrees. in every proper manner consistent Avith its duty to its passengers, to facilitate the CONTRACTOR in carrying out the intent of this agreement and in making the business hereby authorized successful; 23 and, to that end, the INTEEBOROUGH COMPANY agrees, subject to the terms, conditions and limita- tions of Contract No. 3 and the Interborough Cer- tificate, that it will 1 neither authorize nor permit any other person or persons to sell any articles whatsoever, nor check parcels, nor to maintain any automatic platform weighing machines, automatic vending machines for the sale of chewing gum, chocolate, candy or any other articles on the sta- tions, stairways, approaches to stations or plat- forms upon or in connection with which similar privileges are granted hereunder to the CONTRAC- TOR, or to place any signs, advertisements or no- tices in the cars operated by the INTERBOROUGH COMPANY on any of the railroads herein described or on the stations, stairways or approaches to sta- tions or platforms upon which similar privileges are granted hereunder to the CONTRACTOR, pro- vidcd, however, that in the performance of this covenant the INTERBOROUGH COMPANY shall not be required to act in conflict with the provisions of Contract No. 3 or of the Interborough Certificate, and anything done by the INTERBOROUGH COMPANY in the performance of its obligations under Con- tract No. 3 and the Interborough Certificate shall not be deemed to be a violation of this covenant. The INTERBOROUGH COMPANY further agrees that the persons employed by the CONTRACTOR in and about the 'business contemplated hereunder and when engaged therein, subject to such reasonable rules as the INTERBOROUGH COMPANY may establish from time to time in its discretion, shall have free access to and from and free passage over and upon the stations, cars, platforms and approaches of the INTERBOROUGH COMPANY for the purpose of per- forming their duties in said business and shall be allowed to take with them the articles necessary in carrying out this agreement, provided that they 24 do not inconvenience, injure or annoy the passen- gers or employes of the INTERBOROUGH COMPANY. The CONTRACTOR hereby covenants and agrees that all persons employed by him shall conduct themselvesi in an orderly and proper manner and so as not to annoy or be offensive to the passengers of the INTERBOROUGH COMPANY by solicitations or otherwise, and further agrees that he will, at the request of the President of the INTERBOROUGH COM- PANY, discharge any employe who shall offend in this respect, and that he will not, without the con- sent of said President, employ or retain any per- son who has been discharged for cause from the employment of the INTERBOROUGH COMPANY. The CONTRACTOR further agrees that the persons so employed by him shall be designated by a sim- ple badge or uniform, or by both, of a style satis- factory to the said President, and that he will con- duct the business herein provided for in a manner in all respects reasonably acceptable to the INTER- BOROUGH COMPANY. The Contractor further covenants and agrees that all persons employed by him in the business herein provided for shall make no unnecessary dirt or litter in or about the said stations, platforms, approaches or cars>, and that he will promptly re- move any and all dirt caused by any of his em- ployes. ARTICLE VII. The CONTRACTOR hereby agrees to deposit with the INTERBOROUGH COMPANY upon the execution and delivery of this contract, as se- curity for the payment of all of the amounts herein provided for and for the faithful performance of all the terms, conditions, stipulations and covenants of this contract, cash to the amount of One hun- dred and fifty thousand dollars ($150,000), or, in lieu thereof, securities of a market value equal to 25 said amount, the character and amount of which shall have been previously approved in writing by the President of the INTERBOROUGH COMPANY. In case securities are so deposited and the same shall depreciate in value so as to be of a market value of less than One hundred and fifty thousand dol- lars (|150,000), the CONTRACTOR agrees to deposit other approved securities in lieu thereof or to de- posit additional approved securities so as to bring the total market value of such securities up to said amount. The CONTRACTOR shall have the right, from time to time, with the consent in writing of the President of the INTERBOROUGH COMPANY, to substitute cash for securities, or securities of the character aforesaid for cash, or new securities for securities theretofore deposited, but always so that the total amount and value of the deposit, whether in cash or securities, shall not be reduced. Any securities deposited as security hereunder shall be first endorsed or assigned in blank. So long as there is no default on the part of the CONTRACTOR in the performance of any of the terms, conditions or stipulations of this contract, the actual interest earned by any such cash deposited hereunder or the dividends or interest paid on any securities de- posited hereunder shall be paid over to the CON- TRACTOR from time to time as the same shall be re- ceived by the INTERBOROTTGH COMPANY. The said deposit, whether in cash or securities, in the form and as the same shall at, any time be, shall be security for the faithful performance by the CONTRACTOR of all the terms, conditions, stipu- lations and covenants of this contract. In case of any default on the part of the CONTRACTOR in such performance, then the INTERBOROUGH COMPANY may forthwith apply to its use the said deposit in cash or securities, or so much thereof as may be necessary to reimburse it for any damages incurred by reason of any such default. 2G In case said deposit shall l>e diminished by reason of any such application, the CONTRACTOR agrees within ten (10) days after written notice from the President of the INTERBOROUGH COMPANY, by fur- ther deposit of money or approved securities, to re- store the said deposit to the full amount originally required. If the Contractor shall fail to meet the payments in this contract provided for, his lia- bility therefor shall be limited to the payments due for the actual time of occupation, and the cash or securities deposited with the INTERBOROUGH COM- PANY, as aforesaid, shall stand as the entire liqui- dated damages beyond such earned payments. ARTICLE VIII. The present rates for advertising adopted by the CONTRACTOR under his prior con- tract \vith the TNTERBOROUGII COMPANY and the present method of disposing of the advertising space, and privileges accorded to him thereby hav- ing proved sufficient to establish the stability of the business conducted by the CONTRACTOR there- under and to insure his ability to meet the rentals required by the terms of said contract, for the pur- pose of avoiding the effect of any unwise or im- provident reduction of said rates, to the extent that 8ii ch an arrangement may be lawful, the CONTRAC- TOR agrees that he will neither make any substan- tial reduction in his said rates, nor unreasonably grant the gratuitous use of unsold spaces without (except as hereinafter otherwise provided) the consent in writing of the President of the INTER- BOROUGH COMPANY. If, and as often as, the CON- TRACTOR shall desire to make any such reduction in said rates, or to change his present method of util- izing unsold space, he shall notify in writing the President of the TNTEKBOROUGH COMPANY of the proposed reduction or reductions, change or 27 changes. Unless the President shall, within five days from the giving of any such notice, signify in writing his disapproval thereof, he shall be deemed to have approved the proposed reduction or reduc- tions, change or changes. If, however, within said five days, the President shall have signified in writ- ing his disapproval thereof, or of any thereof, then the question of the propriety of permitting such reduction, reductions, change or changes, shall be submitted to arbitration in the manner herein pro- vided and the decision of the arbitrators shall be final. If the finding shall be against the CONTRAC- TOR, no forfeiture of the CONTRACTOR'S rights here- under shall be worked thereby, but the INTERBOR- OL T GH COMPANY may, at its option, prohibit the put- ting into effect or the continuance of the rates or advertisements in controversy and the CONTRACTOR agrees to observe such prohibition and the CON- TRACTOR'S failure to observe such prohibition shall, at the option of the INTERBOROUGH COMPANY, work a forfeiture of his rights under this contract. Re- newals of long standing and existing contracts and donations or discounts to charitable or philan- thropic societies or institutions shall not be con- sidered a violation of the provisions of this Arti- cle, The present rates, as herein mentioned, are set forth in a schedule or memorandum appended hereto. If the provisions of this Article, or any of them, shall be declared to be illegal by any court of competent jurisdiction, that circumstance shall not operate to affect the validity of any other part of this contract. ARTICLE IX. In case a portion of the rights and privileges granted hereunder shall, as provided in Article I hereof, be declared to be or be made un- lawful or terminated, and in case in such event the 28 CONTRACTOR shall elect to retain the rights and privileges not so declared to be or made unlawful, or not so terminated, the payments to be made by the CONTRACTOR for such diminished rights and privileges (unless otherwise provided under Arti- cle III hereof) shall be readjusted upon a fair and equitable basis. In order to facilitate such readjustment and to ascertain the gross returns or net profits of that portion of the business which may have been so declared to be, or made unlaw- ful, or so terminated, or of that portion of the busi- ness remaining, the CONTRACTOR covenants and agrees to submit to the INTEIRBOROTJGH COMPANY for the inspection of its officers or of its duly au- thorized agents or representatives, all of his books of account showing the details of his operation under this contract. In case the CONTRACTOR and the INTEIRBOROTJGH COMPANY cannot agree upon such readjustment, the same shall be determined by arbitration as hereinafter provided. Pending the readjustment of such payments, or the determination of such arbitration, the CON- TRACTOR shall continue to pay the full amounts pro- vided hereunder, and the INTERBOROTJGH COMPANY shall repay, when the final decision is reached, the amount of diminution agreed upon, or finally al- lowed because of the diminished privileges for the said period. ARTICLE X. If the INTERBOROUGH COMPANY or the CONTRACTOR shall desire to submit to arbitra- tion any matter of difference arising under any pro- vision of this contract in respect of which it is therein provided an arbitration may be had, such matter of difference shall be submitted to arbitra- tion as follows. Either the INTERBOROUGH COM- PA.VY or the CONTRACTOR may give written notice to the other that it requires the matter of differ- 29 ence to be submitted to arbitration and shall at the same time name a disinterested person as an ar- bitrator and accompany the notice by a written ac- ceptance by the arbitrator of the nomination. With- in five (5) days after the receipt of such notice the party receiving the same shall nominate a disinter- ested person as an arbitrator and give written no- tice of such nomination to the other party, the no- tice to be accompanied by a written acceptance by the arbitrator of the nomination. If such two arbitrators cannot agree upon the matter in controversy within twenty (20) days after the nomination of the second arbitrator, or within such further time as the parties thereto may stipulate in writing, the two arbitrators shall select a third arbitrator, and the final decision of the three arbitrators shall be rendered within ten (10) days after the selection of the third arbitra- tor, or within such further time as the parties may stipulate. The decision of any two arbitrators in writing shall be final and binding upon both par- ties. ARTICLE XI. The CONTRACTOR shall have the right or option to a renewal for a further period of five years, and then to a further renewal for the unexpired term of this contract of the rights and privileges granted under Article II, subdivisions (a), (b) and (c) hereof, upon the expiration of the term of each of such grants upon the same terms and conditions as are herein contained in respect thereof, provided, and on the condition that, the consent and approval of the Public Service Com- mission for the First District under Contract No. 3 and the Interborough Certificate may be first had and obtained to s>uch renewal or renewals, and provided further that the CONTRACTOR shall obtain no rights under this Article or the option herein provided extending beyond the term of this con- 30 tract, as provided in Article I hereof. In case such consent and approval of the Public Service Com- mission for the First District cannot be obtained (but only in such event), the CONTRACTOR shall be entitled to a reasonable deduction from the pay- ments required to be made under Article III, Sub- division (1), paragraph (c) of this contract; the amount of such deduction shall be determined by agreement between the INTERBOROFGH COMPANY and the CONTRACTOR, or, in case of their failure to agree, by arbitration as herein provided. ARTICLE XII. All the rights and privileges granted under this contract to the CONTRACTOR shall forthwith terminate at the option of the IN- TERBOROUGH COMPANY, (a) if the CONTRACTOR shall make any assignment for the benefit of creditors; or (b) if a receiver shall be appointed by any court of the property of the CONTRACTOR; or (c) if the CONTRACTOR shall be adjudged a bankrupt; PRO- VIDED, HOWEVER, and it is distinctly understood and agreed, that no such termination of the rights and privileges granted hereunder shall in any way affect the rights or obligations of the CONTRACTOR or the INTERBOROUGH COMPANY under Articles IV, V and VII hereof, or the rights or lien of the IN- TERBOROUGH COMPANY in and upon the cash or se- curities deposited pursuant to the provisions of Article VII hereof. ARTICLE XIII. This Contract shall bind and in- ure to the benefit of the executors, administrators, successors and assigns of the parties hereto. But the CONTRACTOR covenants that he will not assign this Contract or transfer, sell or assign any of the rights or privileges granted hereunder, and no such assignments, transfer or sale shall be valid or be binding upon the INTERBOROUGH COMPANY without the written consent of the INTEIRBOROUGH COMPANY 31 first had and obtained. In case the CONTRACTOR shall organize a corporation under the laws of the State of New York for the purpose of taking over all of the rights of the CONTRACTOR under this Con- tract and for the purpose of carrying on the busi- ness contemplated hereunder, the INTERBOROUGH COMPANY agrees to consent to the assignment of this Contract in its entirety to such corporation, provided it shall be satisfied with the financial condition and ability of any such corporation to carry on such business and to make the payments required hereunder, and, provided further, that no such consent shall affect the rights or lien of IN- TERBOROUGH COMPANY to or upon the cash or secur- ities deposited hereunder for the faithful perform- ance of this Contract, and, provided further, that such consent may be given upon such further con- ditions as may be reasonably required for the ade- quate protection of the INTBRBOROUGH COMPANY. IN WITNESS WHEREOF, INTERBOROUGH TRANSIT COMPANY has caused this Contract to be signed in its name by its President and its corpo- rate seal to be hereto affixed, attested by its Sec- retary, and ARTEMAS WARD has hereunto signed his name and affixed his seal, the day and year first above written. INTERBOROUGH RAPID TRANSIT COMPANY, By T. P. SHONTS, President. Attest : H. M. FISHER, Secretary. [Corporate Seal.] ARTEMAS WARD ( L. s. ) 32 STATE OF NEW YORK, COUNTY OF NEW YORK, f ss ' On this 29th day of December, in the year One thousand nine hundred and thirteen (1913), be- fore me personally came T. P. SHONTS, to me known, who, being by me duly sworn, did depose and say that he resides in the City of New York, State of New York ; that he is the President of IN- TERBOROUGH RAPID TRANSIT COMPANY,, the corpora- tion described in and which executed the forego- ing instrument; that he knows the seal of said cor- poration; that the seal affixed to said instrument is such corporate seal ; that it was so affixed by order of the Board of Directors of said corporation, and that he signed his name thereto by like order. J. C. NORRIS, (Notarial Seal) Notary Public, N. Y. Co., No. 2777. Certificate Filed Register's Office, N. Y. County, No. 5029. 33 STATE OF NEW YORK,) COUNTY OP NEW YORK,) On this 29th day of December, in the year One thousand nine hundred and thirteen (1913), be- fore me personally came ARTEMAS WARD, to me known, and known to me to be the individual de- scribed in and who executed the foregoing instru- ment, and he duly acknowledged to me that he ex- ecuted the same. J. C. NORRIS, (Notarial Seal) Notary Public, New York County, No. 2777. Certificate Filed Register's Office, N. Y. County, No. 5029. 34 RATES FOR SPACE IN CARS. Size 11 x 21 Inches. For Twelve For Six For Three Months' Months' Months' Lease Lease Lease Per Month Per Month Per Month Elevated & Subway, all H of all cars cars. $1,450.00 850 00 $1,595.00 935 00 $1,670.00 980 00 J4 of all cars 475.00 525 00 550 00 Elevated alone, all cars. 850.00 935 00 980 00 l /2 of all cars 475 00 525 00 550 00 54 of all cars 275.00 305 00 325 00 A. W. T. P. S. RATES FOR SPACE ON ELEVATED OR SUBWAY STATIONS. For 1-Sheet Poster, Size 30 x 46 Inches. For Twelve For Six Foi Three Months' Months' Months' Lease Lease Lease Per Month Per Month Per Month All stations $600 00 $660 00 $690 00 l /2 of all stations 350 00 385 00 405 00 J4 f all stations 200.00 220.00 230.00 COMBINATION RATES FOR SPACE ON AND SUBWAY STATIONS. ELEVATED For 1-Sheet Poster, Size 30 x 46 Inches. For Twelve For Six For Three Months' Months' Months' Lease Lease Lease Per Month Per Month Per Month All stations l /z of all stations. J4 of all stations. .$1,000.00 $1,100.00 $1,150.00 . 600.00 660.00 690.00 350.00 385.00 405.00 A. W. T. P. S, i n\H\/ t: : INTERBOROUGH RAPID TRANSIT COMPANY and THE TERRY & TENCH CO., Inc., THE SNARE & TRIEST COMPANY, and THE T. A. GILLESPIE COMPANY. CONTRACT FOR THE CONSTRUCTION OF ADDI- TIONAL TRACKS, ETC., MANHATTAN ELEVATED LINES. Dated, February 13, 1914. The Hecla Press, 57 Warren St., N. Y. Tel. 6067 Barclay. 'ML 1. THIS CONTRACT is made between the INTER- BOROUGH KAPID TRANSIT COMPANY, hereinafter called "the Company," and THE TERRY & TENCH Co., Inc., a New York corporation, THE SNARE & TRIEST COMPANY, a New York corporation, and THE T. A. GILLESPIE COMPANY,, a New Jersey cor- poration, -who have associated themselves together for the purpose of doing the work herein described, and who are hereinafter called "the Contractor." 2. The Company is the lessee and operator of the elevated railroads of the Manhattan Bailway Company in The City of New York. On March 19, 1913, the Public Service Commission delivered to the Manhattan Railway Company, and that Com- pany accepted, a certificate for the construction and operation of additional tracks on Second Ave- nue, Third Avenue and Ninth Avenue. The orig- inal of that certificate is on file with the Commis- sion and is made a part of this Contract, so far as it may be applicable. 3. This Contract is intended to be a sub-con- tract for the performance by the Contractor of all of the obligations as to the construction of Plant and Structure as the words "Plant and Structure" are defined in said certificate (except additions), imposed upon the Company by the acceptance of said certificate, with the exception of certain things hereafter stated which the Company will do itself, or engage others to do. 4. The Contractor hereby undertakes the per- formance of all of such construction obligations and agrees to do all work and furnish all labor, tools, machinery, plant and materials necessary therefor, in strict accordance with the terms and conditions of the said certificate and under the supervision and to the satisfaction of the Chief Engineer of the Company and in accordance with the specifications hereto annexed and the drawings herein referred to, which are hereby made a part of this Contract, Said drawings bear the general title "Interborougli Rapid Transit 'Company," and are specified and identified in Schedule A annexed hereto. 5. The Company, in consideration of such per- formance, will pay to the Contractor the actual and necessary costs hereinafter specified incurred by the 'Contractor, and, except as hereinafter pro- vided, in addition thereto a sum equal to fifteen per centum ( 15% ) of such costs as compensation to the Contractor for its skill and services and for furnishing and maintaining in good order and re- pair the necessary plant, tools and machinery for the performance hereunder, and also for all obliga- tions and risks herein assumed by the Contractor, hereinafter called the Contractor's percentage. 6. The actual and necessary costs shall include : (a) The sums actually and necessarily paid by the Contractor for all labor and materials enter- ing into the construction herein provided for; (b) The sums actually and necessarily paid by the Contractor for superintendence; rents of field offices, licenses and permits, field office manage- ment and expenses ; engineering and legal expenses ; (c) The sums actually and necessarily paid by the Contractor for such insurance or indemnity bonds as the 'Company may prescribe or as the Contractor may otherwise deem proper (but not including any premium paid by the Contractor on the bond given hereunder as security for the faith- ful performance by the Contractor of this con- tract) ; no 'Contractor's percentage shall be allowed on such sums; (d) Expenditures necessarily incurred in defend- ing and discharging claims for damages to per- sons or property arising from negligence, or other- wise, by the Company, the Contractor, or whomso- ever done; or at the option of the 'Company, the Contractor will turn over to the Law Department of the Company all such claims and suits for ad- justment, litigation or payment by the Company; no 'Contractor's percentage shall be allowed on ex- penditures in payment of claims or judgments for injuries to persons or property. 7. On or about the first day of each month, the Chief Engineer shall make an estimate in writing, such as, in his opinion, shall be just and fair of the actual and necessary costs incurred for the work done and materials delivered to the end of the preceding calendar month, or since the last monthly estimate. The Chief Engineer shall also make an estimate in writing, such as, in his opin- ion, shall be just and fair, of the actual and neces- sary costs incurred by the Contractor for materials procured by it and in its possession in The City of New York, although not yet delivered to the Company, provided that such materials be set apart and marked and identified as the property of the Company. 8. On or about the fifteenth day of each month ninety per centum of the amount appearing due by such estimates, together with the Contractor's percentage thereof, shall be paid to the Contractor in cash at the office of the Company upon delivery of receipts satisfactory to the Company. 9. Whenever, in the opinion of the Chief En- gineer, the Contractor shall have completely per- formed a substantial and conveniently separable portion of this Contract, the Chief Engineer shall prepare an intermediate estimate as to such separ- able portion showing from actual measurement the whole amount of work done and materials fur- nished as to such portion and the actual and neces- sary costs thereof according to the terms of this 'Contract. At the expiration of thirty days after the delivery of such intermediate estimate as to any such substantial portion, the Company shall pay to the Contractor the amount of such costs, plus the Contractor's percentage then remaining unpaid as to such substantial portion, provided that as to all other portions remaining unper- formed, progress satisfactory to the Chief Engineer shall have been made by the Contractor. 10. Whenever, in the opinion of the Chief En- gineer, the Contractor shall have completely per- formed this 'Contract, the Chief Engineer shall prepare a final statement or estimate showing from actual measurements the whole amount of work done and materials furnished by the Contractor and the actual and necessary costs thereof, plus the Contractor's percentage to the Contractor. At the expiration of ninety days after the delivery of such final estimate, the 'Company shall pay to the Contractor in cash the amount remaining after de- ducting from the amount stated in such final esti- mate all such sums as shall theretofore have been paid to the Contractor under any of the provisions of this Contract, and also any sum or all sums of money as by the terms hereof the Company is or may be authorized to reserve or retain. All prior monthly or intermediate estimates or other certi- ficates upon which partial or other payments may have been made (being merely estimates) shall be subject to correction in the final estimates. 11. The acceptance by the 'Contractor of the last or final payment shall be and operate as a release to the Company from all claim and liability to the Contractor for anything done or furnished for, or relating to, the work, or for any act or neglect of the Company or the 'Chief Engineer, or of any person relating to or affecting the work. 12. It is understood that this Contract must be performed without seriously interfering with the normal and usual operations of the railroads and the power house, sub-stations, shops, terminals and other places and appliances of the Company, and therefore it is expressly agreed that, as to all mat- ters, the 'Contractor and its subordinates will co- operate and confer, and comply with the directions of the Chief Engineer. This provision shall apply to all work of construction and the time, manner and methods of the performance of each and every part thereof, including the furnishing of labor and material therefor. 12a. Before entering upon the performance of this contract the Contractor shall file with the Chief Engineer for his approval a statement or schedule of the rates of salaries and wages proposed to be paid by the Contractor for all classes of employees and laborers, including engineering and clerical as- .sistants, engaged in the performance of this con- tract. No allowance shall be made to the Con- tractor in excess of the rate approved by the Chief JBngineer, .Such .statement or .schedule may be 6 charged or supplemented from time to time as con- ditions may require provided the approval of the Chief Engineer shall be first obtained. 13. The Company may, whenever it deems it ad- visable, establish a system of accounts, vouchers and pay-rolls to be used by the Contractor in connec- tion with this Contract, and may from time to time, prescribe and alter the form and manner in which they shall be kept. The Company shall at all times have access to all such accounts and other records for inspection and examination, so that the actual costs can, at all times, be promptly and accurately determined and the property identified. 14. No payment, credit, compensation, or con- cession, of whatsoever character, having in any way to do with the actual and necessary costs of the Contractor under this Contract, shall be de- termined to be a part of such costs, unless the Con- tractor, before making such payment, credit, com- pensation or concession, shall forthwith file with the Company a duplicate voucher, credit slip or other original evidence thereof, for audit by the Auditor of the Company and approval for payment by the President of the Company, or by some per- son by the President thereunto duly authorized. 15. The 'Company may object to any expenditure either made or proposed, as unreasonable or im- proper, and thereupon such expenditures shall not be estimated by the Chief Engineer, as part of the actual and necessary costs; but the disputed items shall be held in suspense and submitted to ad- judication either by arbitration or in the courts. 16. The Contractor shall not assign this Con- tract without first having obtained the consent in writing of the Company, and without such con- sent no such assignment shall be recognized by, or be binding upon the Company. The Contractor shall (except in such cases where permission to do otherwise is expressly granted from time to time in writing by the Company through its President or a Vice-President) before entering into any con- tract, agreement or undertaking having to do with the construction or equipment of the railroads, submit the same to the President or a Vice-Presi- dent for his approval and he may, as a condition of approval, require the insertion of such terms and conditions therein as may be deemed necessary. The Company may further require the Contractor, before entering into any agreement having to do with the construction hereunder to ask for pro- posals upon forms of contracts satisfactory to the Company in a specific manner and for a specified time. 17. This 'Contract contemplates the most thor- ough and minute inspection by the Company and its Chief Engineer, and by their representatives or subordinates, of all work and materials (and of the manufacture or preparation of such materials) entering into the construction, and the Contractor shall at all times give to the Company and its officers, to the Chief Engineer and his duly author- ized assistants and subordinates, and to any per- son designated by the President or a Vice-President of the Company, all facilities, whether necessary or convenient, for inspecting the materials to be furnished and the work to be done in and about the construction under this Contract, and such representatives of the Company shall be admitted at any time summarily and without delay, to any part of the work or to the inspection of materials at any place or stage of their manufacture, prepa- ration, shipment or delivery. But it is expressly agreed however, that no omission on the part of the Company, or its Chief Engineer, or any other 8 representative thereof, to point out any errors, variations or defects, shall give the Contractor any right or claim against the Company, or in any way relieve the Contractor from its obligation to do the work and furnish the materials according to the terms of this Contract. 18. The Contractor also agrees strictly and fully and freely to comply with every provision of the certificate in respect to inspection and supervision by the Public Service 'Commission to the extent that such provisions have to do with 'the perform- ance of this Contract. 19. Simultaneously with the execution of this Contract, and before the same shall be or become binding upon the Company, the Contractor shall deliver to the Company a bond in the form attached hereto and made a part hereof, executed by the Con- tractor and a surety or sureties, approved by the Company in the sum of Five hundred thousand dollars ($500,000) as security for the faithful per- formance of this Contract by the 'Contractor. 20. In addition, and as further security, the Company may retain ten per centum (10%) of the amounts certified from time to time to be due on each preliminary estimate until said ten per centum (10%) shall have been paid in full upon an inter- mediate estimate, or a final estimate, as herein- before provided. 21. The Company reserves the right to change the location, and to alter in any way it may deem necesSary, the drawings aforesaid, in part or alto- gether, at any time during the progress of the work, without constituting grounds for any claim by the Contractor for payment or allowance for dam- ages or extra services, or loss of profit other than payments of the actual and necessary costs for work done and materials furnished, plus the Con- tractor's percentage. 22. Any directions or explanations given by the Chief Engineer to the 'Contractor, or its agents, em- ployees or sub-contractors, to complete or give proper effect to the plans and specifications, shall be deemed a part of said specifications and of this Contract; but all such directions shall be in writing and a copy thereof duly delivered to the Contractor at its office immediately thereafter. 23. All materials furnished and work done not in accordance with said plans and specifications shall, on demand of the 'Chief Engineer, be re- moved by the Contractor (unless erected or fur- nished by direction of the Company), at the ex- pense of the Contractor, and other materials shall be furnished and work done in place thereof which shall be in accordance with said plans and speci- fications, the Company reserving the right to con- tinue to use the rejected parts in service until new parts have been furnished, and such alterations shall be without cost to the Company. 24. To prevent disputes and litigations, the Chief Engineer shall, in all cases, determine the amount, quality, acceptability and fitness of the several kinds of work and materials which are to be paid for under this Contract, except as to ex- penditures objected to by the Company as in para- graph 15 provided ; shall determine all questions in relation to the work and the construction thereof, and shall, in all cases, determine every question which may arise relative to the fulfilment of this Contract on the part of the Contractor. Such de- termination and estimate shall be final and con- clusive upon the Contractor, and shall be a condi- tion precedent to the right of the Contractor to receive any money under this Contract. 10 25. During the progress of the work, it will be necessary for other contractors and persons or em- ployees of the 'Company to do work in or about the construction or equipment upon, or adjacent to, some portion of the railroad embraced within this Contract. The Contractor shall afford to such other contractors or persons or employees of the Com- pany, such facilities as the Chief Engineer mar require. Any difference or conflict which may arise between the Contractor and such other con- tractors, or persons, or employees, of the Com- pany in regard to their work shall be adjusted and determined by the Chief Engineer. 26. The Company may pay the amount of any liens upon or growing out of any of the work done or materials furnished hereunder, and may deduct the amounts so paid from the amount then or there- after falling due to the Contractor, and the Con- tractor hereby undertakes to indemnify and save harmless the Company from and against all loss, damage or expense arising from such liens. 27. Time is of the essence of this Contract. The Contractor shall begin the performance of the work in such portions or subdivisions, when and as directed by notice in writing by the Chief Engineer. At the time of such notice the 'Chief Engineer may issue additional or supplemental specifications to the specifications hereto annexed, which additional or supplemental specifications shall be deemed to be a part of this Contract The Chief Engineer shall specify in such notice or in such additional or sup- plemental specification, the date when the work therein specified to be done shall be completely done; the entire work, however, to be completed, and the Contractors' plant, tools and machinery to be removed from the Company's property within eighteen months from the date of (lie delivery of this contract. The Contractor will carry on the work with such force and number of shifts and in such manner and order as may be directed by the Chief Engineer. 28. In the computation of the time occupied by the Contractor in completing the performance of the work, or furnishing the materials specified in such notice or such additional or supplemental specifications, the length of time, during which the work or any part thereof has been delayed by any act or omission of the Company, or by interference by public authority, or by injunction for which the Contractor is in no way responsible, or other causes beyond the reasonable control of the Con- tractor, shall be allowed to the Contractor and the time for completion shall be extended by the Com- pany by the amount of the time of such delay; pro- vided, however, that no period of such delay shall he deemed to begin until -written notice thereof shall be given by the Contractor to the 'Company. 29. The Company shall be accorded the right, if it so desires, to intervene or become a party to any suit or proceeding in which an injunction shall be obtained, and to move to dissolve the same or other- wise, as the 'Company may deem proper. If re- quested, the attorney or counsel of the Company shall be authorized by the Contractor to appear, for that purpose, as attorney or counsel for the Con- tractor. 30. The Company reserves the right of tem- porarily suspending the execution of the whole or any part of the work herein contracted to be done at such times and for such periods as the Chief Engineer may deem necessary, and it shall be the duty of the Contractor during such period of sus- pension to maintain and preserve the plant and the work theretofore completed in proper and safe con- 12 dition and to provide and furnish all labor and materials necessary therefor. The actual and neces- sary costs, plus the Contractor's percentage as here- inhefore defined, of such maintenance and preser- vation shall be paid to the Contractor, but no ad- ditional percentage or other compensation shall be paid because of such suspension. 31. The permitting of the Contractor to con- tinue the performance of work, or the furnishing of material, or any part thereof, after the time speci- fied in such notice or additional or supplemental specifications for completion, or after the date to which the time of completion may have been ex- tended, or the making of partial payments to the Contractor after any such periods, shall in no wise operate as a waiver on the part of the Company of the right to terminate the employment of the Con- tractor or to invoke any other of the remedies here- in provided in case of abandonment or delay, nor shall any such permission or payment be deemed a wjiiver or forfeiture by the Company of any claim for damages or expenses arising from such non- completion within the time or times specified. 32. In case the Contractor shall fail to com- plete the performance of work specified in such notice or additional or supplemental specifications, in accordance with the specifications and to the satisfaction of the Chief Engineer within the time specified therefor, the Contractor shall and will pay to the Company the sum of 1/50 of one per cent, of the estimated cost of the particular portion as to which it shall be in default, for each and every day the time consumed in said performance and completion may exceed the time allowed for that purpose, which said sum, in view of the difficulty of ascertaining the exact damage which the Com- pany will suffer by reason of delay in such per- 13 formance or completion, is hereby agreed upon, fixed and determined by the parties hereto as the liquidated damages that the -Company will suffer by reason of said delay and default, and not as a penalty; and the Company shall and may deduct and retain the amount or amounts of such liqui- dated damages out of the moneys which may be due or become due to the Contractor under this Con- tract. 33. Should the 'Contractor at any time refuse or neglect to supply a sufficiency of properly skilled workmen or of materials of the proper quality, or fail in any respect to prosecute the work with such skill and diligence as will, in the opinion of the Chief Engineer, insure its completion within the time herein stipulated, or fail in the performance of any of the agreements herein contained, the Com- pany shall be at liberty, after ten days' written notice to the Contractor, to provide any such labor or materials, and to deduct the cost thereof from any money then due or thereafter to become due to the Contractor under this 'Contract; and if the Chief Engineer shall certify that such refusal, neg- lect or failure is sufficient ground for such action, the Company shall also be at liberty to terminate the employment of the Contractor for said work and to enter upon the premises and take possession for the purpose of completing the work compre- hended under this Contract, of all materials, plant, tools and appliances thereon, and to employ any other person or persons to perform said work, and to provide the materials therefor; and in case of such termination, the 'Contractor shall not be en- titled to receive any further payment under this Contract until said work shall be wholly completed, at which time, if the unpaid balance of the amount to be paid under this Contract shall exceed the ex- pense incurred by the Company in completing the 14 work, such excess shall be paid by the Company to the Contractor; but if such expenses shall exceed such unpaid balance, the Contractor shall pay the difference to the Company; and the certificate of the Chief Engineer of the cost of furnishing the materials and completing the work shall be con- clusive upon the parties. 34. In case of the bankruptcy, insolvent assign- ment or failure of the Contractor before this Con- tract is completed on its part, the Company may, in addition to all other rights and remedies herein or by law provided, elect to take possession of the unfinished work of this Contract, or any part there- of, and the materials required therefor, and to have the same completed and delivered at the expense of the Contractor or its assignees. 35. All risk of loss or damage not caused or contributed by the Company, to the work or to any part thereof, or to any of the materials, is assumed by the Contractor, and any such loss or damage shall be made good by it at its own cost, and the construction shall be carried forward by it in ac- cordance with this Contract without additional cost to the Company by reason of such loss or damage, unless the same shall be caused by the act of God, the public enemy, riots, or the malicious or criminal acts of others. 36. It is expressly agreed, however, that the Contractor shall not be discharged or relieved from any obligations and liabilities hereunder by the employment of a subcontractor. The provisions of this Contract shall apply to such subcontractor, its agents and employees, in all respects, and all acts and negligence of the subcontractor, its agents and employees, shall be deemed to be those of the Con- tractor. 15 37. The tools, machinery and plant to be used, installed and operated by the 'Contractor shall be of the best kind and sufficient and proper for the work to be done; but if at any time the Chief Engineer shall deein such tools, machinery and plant insuf- ficient or improper, or the methods of operation faulty, either for performing the work in the man- ner or time required by the Contract and specifica- tions, or for the security of persons or property, he may order them increased, changed or discontinued, and the Contractor shall comply immediately. 38. The Chief Engineer may order the discharge of any employee of the Contractor for inefficiency or for conduct which, in the opinion of the Chief Engineer, is prejudicial to the interests of the Com- pany, and the employee shall not again be employed on the work. Subcontractors and their employees shall be considered as employees of the Contractor. 39. The Contractor shall obtain all licenses and permits necessary for the prosecution of the work, and observe and comply with all laws of the United States, of the State of New York, and all local ordinances or regulations in any manner regulating or affecting the labor or materials involved in the performance of this Contract and shall protect the Company from any penalties incurred in conse- quence of violation or neglect thereof by the Con- tractor or by anyone in the employ of the Contrac- tor.- 40. In the event of any doubt as to the meaning of any portion or portions of the specifications or contract drawings, or the text of this Contract, the same shall be interpreted as calling for the best con- struction, both as to materials and workmanship, capable of being supplied or applied under existing local conditions, irrespective of any provisions here- in contained as to the inspection of the said! work and materials. 16 41. The specifications and other provisions of this Contract and the drawings are intended to be explanatory of each other. Should, however, any discrepancy appear or any misunderstanding arise as to the import of anything contained in either, the explanation of the 'Chief Engineer, if in writing, shall be final and conclusive. 42. If any inconsistency or conflict shall exist between any part of this Contract and said speci- fications, the provisions of this Contract shall pre- vail. 43. In the absence of the Contractor, the Chief Engineer shall have authority to give such instruc- tions as he may deem immediately necessary to the superintendent or foreman in charge at the point where such instructions are given, and the same shall be obeyed as though issued to and by the Contractor. 44. All written notices to the Contractor herein provided for shall be given by mailing or delivering the same, addressed to the Contractor at his prin- cipal office of The City of New York, State of New York. Proof of sending same by registered mail shall be sufficient for all purposes. The provisions of this paragraph shall also apply to all notices to be given to the Contractor or to the surety or sure- ties of the Contractor under or in connection with the surety bond given or required in accordance with this 'Contract. 45. The Company reserves the right at its option to execute with its own organization, or to engage others to execute, such portions of the work as it may deem advisable because of its or their greater familiarity therewith, or as a matter of convenience in connection with its ordinary other business. In general, such excepted work will be changes in 17 foundations and tracks and such other things as in the opinion of the Chief Engineer may "best be done in that manner. But the Contractor agrees to leave all such questions to the judgment of the Company, acting by its Chief Engineer. 46. This Contract, except for temporary occu- pation by the Contractor, does not include the pro- curement of real estate or easements, or rights, titles and interests in real estate for the construc- tion of the railroads or their operation; nor mat- ters pertaining to franchises or consents incidental thereto, but the Contractor shall make no claim for damages or loss of profit in case the Company shall be unable to obtain the necessary franchises or consents incidental thereto for the construction of any portion or portions of the work contem- plated by this contract. 47. The provisions of the Certificate as to arbi- trations shall be followed by the Company and the Contractor in the adjustment of disputes so far as those provisions may be workable under this Con- tract. 48. Upon the completion of any part of the work, the 'Contractor shall, on demand of the Chief Engineer, remove therefrom the Contractor's plant, tools, machinery, and appliances, and shall also re- move therefrom or turn over to the Company, as directed, the materials then remaining on hand which have been paid for by the 'Company as part of the Contractor's actual costs, or such portions thereof, as the Chief Engineer may deem necessary so as not to impede the execution of the remaining work by the Contractor or others. Upon the final completion of the entire work and its acceptance by 18 the Chief Engineer, the Contractor shall remove from the Company's property all of the Contrac- tor's plant, tools, machinery and appliances then remaining on hand and leave the premises free from rubbish and waste materials and in a clean and finished condition, and the Contractor shall turn over to the Company all materials, wherever located, then remaining on hand which have been paid for : by the Company as part of the Contractor's actual and necessary costs. If any such materials shall be sold or disposed of by the Contractor be- fore the final completion of the work, the pro- ceeds shall be credited by the Contractor upon its monthly estimates as equivalent to cash payments by the Company; but no such materials shall be sold or disposed of by the Contractor without first procuring the approval of the Company. 49. It is expressly understood and agreed that The Terry & Tench Co., Inc., The Snare & Triest Company and The T. A. Gillespie Company shall do and perform such character, kind and portion or portions of the work hereunder, as the Chief En- gineer, during the progress of the work, or in the notice, or additional or supplemental specifications, provided for in paragraph 27 hereof, shall desig- nate. 50. All the work hereunder to be done by the Contractor shall be done under the guidance, super- vision and administration of The T. A. Gillespie Company, which shall from time to time present the estimates and receive all payments due the Con- tractor hereunder. IN WITNESS WHEREOF, the parties hereto have caused their respective corporate seals to "be hereto affixed and attested by their respective secretaries 19 and these presents to be signed by their respective presidents the 13th day of February, 1914. INTERBOROUGH RAPID TRANSIT COMPANY, By T. P. SHONTS, ('Corporate Seal) President. Attest : H. M. FISHER, Secretary. THE TERRY & TENCH CO., INC., By E. F. TERRY, (Corporate Seal) President. Attest : FREDERICK TENCH, Treasurer. THE SNARE & TRIEST COMPANY, By W. G. TRIEST, (Corporate Seal) V. President. Attest : A. W. BUTTENIIEIM, Secretary. THE T. A. GILLESPIE COMPANY, By T. A. GILLESPIE, (Corporate Seal) President. Attest : R. A. JOHNSTON, Asst. Secretary. (Duly acknowledged by all parties February 13, 1914.) 20 GENERAL SPECIFICATIONS FOR ELEVATED KAILWAY IMPROVEMENTS. 1. The work to be done tinder these specifica- tions comprises the furnishing of all materials and labor required for constructing the Elevated Rail- way Improvements as herein described and illus- trated by the drawings specified, except as provided in paragraph thirteen (13) o>f the invitation. 2. The drawings herein referred to are ninety- six (96) in number, bear the general title "Inter- borough Rapid Transit 'Company," and are speci- fied and identified in Schedule A annexed hereto. These drawings are general alignment drawings. 3. The Company will furnish additional draw- ings and specifications illustrating in detail all work to be done hereunder, and such specifications and drawings shall 'be of equal force with these specifications and the drawings herein referred to. 4. All lines and levels necessary for the prosecu- tion of the work will be established by the Engineer. The Contractor shall provide all facilities necessary for establishing the lines and levels, and shall take due precaution to preserve all marks and stations established by the Engineer. 5. The work is divided into the following sec- tions, and it is the intention that each section shall be treated as an individual work. 21 MANHATTAN ELEVATED RAILWAY IMPROVEMENTS. SECTION No. 1. Section No. 1 comprises the reconstruction of the Elevated Kailway on Park Row from the present terminus at City Hall to Bent 189 at Chatham Square, a total distance of 1960 lineal feet, and on New Bowery from 'Column #117 near Franklin Square to Column #162 near Division Street, a total distance of 1840 lineal feet, The reconstruction in Park Row comprises prac- tically a replacement of the present two (2) track structure with a new four (4) track structure; a new station at City Hall and a new station in a new location at Chatham Square taking the place of the present Chatham Square, Third Avenue Station, which is to be demolished. The principal exceptions to this statement are that the present longitudinal track girders and center platform girders, floor beams and bracing of the old City Hall Station ; the present longitudinal track girders, bracing and cross girders from Bent 155 to Bent 170 will be retained and built into the new structure. The reconstruction on New Bowery comprises the addition of a two (2) track structure founded on new cross girders supported on the present columns and the reconstruction of the Second Avenue Chatham Square Station to provide a train platform for these two (2) upper grade tracks. Under this reconstructed station the present cross girders and columns will be replaced by new structural members. The present foundations under 52 columns are to be taken out and replaced by new foundations. The estimated weight of new structural material required for Section No. 1 jg 5,963 Tons. SECTION No. 2. Section No. 2 comprises the reconstruction of the Elevated Kailway, in the Bowery, from Column #162 north of Division Street to Column #285 north of Fifth Street, and is sub-divided into Sec- tion No. 2A from Column #162 north of Division Street to Column #219 north of Delancey Street, a total length of 2,531 feet, and Section No. 213 from Column #219 north of Delancey Street to Column 285 north of Fifth Street, a total length of 2,737 feet. The reconstruction on Section No. 2A comprises the replacement of the present structure with a five (5) track structure from 'Chatham Square to Canal Street, and a three (3) track structure from Canal Street to Delancey Street, and new stations at Canal and Grand Streets, to take the place of the present stations. The principal exception to this statement is that the longitudinal track girders on the east and west lower deck tracks from Bent #162 to #169 will be retained and built into the new structure. On Section No. 2 A 17 foundations will be re- built. The estimated weight of new stmctural material required for Section 2A is 4,562 Tons. SECTION No. 2B. Section No. 2B comprises the complete replace- ment of the present two (2) track structure sup- ported on the columns located inside the curb lines with a three (3) track structure supported on columns in the roadway, and the construction of a new express station at Houston Street to take the place of the present Houston Street Station. 23 The estimated weight of new structural material required for Section No. 2B is 3,820 Tons. SECTION No. 3. Section No. 3 comprises the completion of the third track on the Third Avenue Line from Column #285 near Fifth Street to Column #954 near 116th Street, with new over-grade express stations on 9th, 23rd, 42nd and 106th Streets. There is 5,104.31 lineal feet of center track struc- ture to be constructed to complete the center track on the Third Avenue Line and this comprises new longitudinal track girders, new cross girders tak- ing the place of the present arch braces and the re- inforcement of the present column tops. Under express stations at 9th, 23rd, 42nd and 106th Streets 35 cross bents consisting of two (2) columns and a cross girder will be replaced Tby new structural members. It is the intention to use the present foundations under columns at new express stations where the bents are replaced by new bents, but it may be necessary to rebuild these founda- tions if the} 7 are found to be in poor condition when the work is done. The estimated weight of new structural material required for Section No. 3 is 3,929 Tons. SECTION No. 4A. Section No. 4A comprises the completion of center track on the Second Avenue Line from near Chatham Square to the center line of 116th Street with new express station at 14th and 42nd Streets, and new local station at 92nd Street. The work on this section comprises the addition of 23,382 lineal feet of new center track structure 24 consisting of longitudinal track girders and brac- ing. No alteration of moment being necessary in the present cross girders or columns. The present island station at 92nd Street and Second Avenue will be replaced with a local station having outside platforms. The estimated weight of new structural material required for Section No. 4A is 5,544 Tons. SECTION No. 5. Section No. 5 is su'b-divided into four (4) divisions, as folows: (a) All work required to build one ad- ditional over-grade track on the Third Ave- nue Line from Column #954 near 116th Street to connect with the two upper tracks of the new bridge over the Harlem River at Second Avenue, and a new over-grade ex- press station at 125th Street. (b) All work required to reconstruct the Second Avenue Line north of the center line of 116th Street to provide a two (2) track connection with the upper tracks of the new bridge over the Harlem River at Second Avenue, and a new mezzanine station at 125th Street. (c) All work required for new double deck, four track, swing bridge and approach spans, and all operating machinery for draw span. (d) All work required for building two (2) additional tracks from north end of new bridge to 133rd Street. 25 SECTION No. 5A. The cross bents including columns and cross girders from Bent #1004 to #1030 with the ex- ception of the columns at Bent #1026, #1029 and #1030 will be replaced by new structural members. Section No. 5A 26 column foundations under present columns are to 'be replaced by new founda- tions. The estimated weight of new structural material required for Section No. 5A is 1,732 Tons. SECTION No. 5B. The columns from Bent #877 to Bent #896 will be replaced by new cotfimns on account of the neces- sity of raising the structure at this point. Four old columns at other points on this section will be re- placed by new columns. There will be a new station at 125th Street and Second Avenue and the present station at 127th Street, Second Avenue, will be demolished. The estimated weight of new structural material required for Section No. 5B is 1,440 Tons. SECTION No. 50. The work under Section No. 50 comprises the complete replacement of the present drawbridge and approach spans with a new four (4) track double deck bridge and approach spans. No work of any moment is required on the present piers. The estimated weight of new structural material not including operating machinery required for Section No. 5O is 1,100 Tons. 20 SECTION No. 5D. The work under Section No. 5D comprises the addition of two (2) upper grade tracks supported on a new structure, the columns of which, in some cases cut through the present cross girders, and this requires some cutting and refitting of present structure. The estimated weight of new structural material required for Section No. 5D is 1,113 Tons. SECTION No. 6A. Section No. 6A comprises all the work required for constructing two (2) additional tracks from 133rd Street to 143rd Street, Third Avenue Line, with new upper-grade stations at 133rd, 138th and 143rd Streets, and a center track from 143rd Street to Third Avenue near 147th Street, The work on this section comprises the shifting of the present southbound track 13 feet west for a length of 2,800 feet and the construction of a two (2) track elevated railroad at a higher level in the space thus made between the two (2) present tracks and practically new double deck stations at 133rd, 138th and 143rd Streets to take the place of the present stations at these points. The present southbound track is supported on masonry piers and when this track is shifted 13 feet west it will be necessary to construct new piers to take the place of the present ones. The present columns supporting the structure on 'Third Avenue to near 147th Street will be re- placed by new columns as the present columns are not sufficiently strong to carry the proposed three tracks. The estimated weight of new structural material required for Section 6A is 2,926 Tons. 27 SECTION No. 6C. The work under this heading comprises the com- pletion of the third track on the Third Avenue Line from near 147th Street to Fordham Koad, and in- volves the replacement of ten (10) island platform stations with new outside stations. The present columns supporting the structure from 147th to 177th Street will be replaced by new columns, as the present columns are not sufficiently strong to carry three (3) tracks. The estimated weight of new structural material required for Section No. 60 is 8,075 Tons. SECTION No. 7. The work under this heading comprises all the work required to widen the structure at 116th Street and 123th Street and Eighth Avenue to pro- vide a continuous center track past these two (2) stations and to remodel station buildings and plat- forms, and also the construction of express stations at 66th Street, Columbus Avenue and 145th Street, Eighth Avenue. The estimated weight of new structural material required for Section 7 is 1,487 Tons. SECTION No. 8A. Section No. 8A comprises all the work required to build a center track on the Ninth Avenue Line in Greenwich Street and Ninth Avenue from Cort- landt Street to 14th Street, and island platforms with over-grade bridges for express station stops at 'Cortlandt, Warren, Desbrosses and Christopher Streets. 28 The work on Section No. 8A comprises the con- struction of 10,540 lineal feet of new single track structure consisting of longitudinal track girders, new cross girders and reinforcement of column tops, and the reconstruction of stations at Cort- landt, Warren, Desbresses and Christopher Streets to provide island platforms for express trains at these points with overgrade bridges connecting these platforms with the present stations. In this Section 154 old 'columns will be replaced with new columns, 32 old cross girders will be re- placed by new cross girders, 29 old cross girders will be reinforced, and 61 spans or 4,328 lineal feet of old longiturinal girders will be replaced with new longitudinal girders in present southbound track. The estimated weight of new structural materials required for Section No. 8A is 5,041 Tons. SECTION No. 8B. The work under this heading comprises the con- struction of express stations at 14th Street and 34th Street, Ninth Avenue. The estimated weight of new structural material required for Section No. SB is 1302 Tons. SECTION No. 8C. The work under this heading comprises the eleva- tion of the Ninth Avenue express track over the junction with the Sixth Avenue tracks at 53rd Street and Ninth Avenue. The estimated weight of new structural material required for Section No. 80 is 547 Tons. 29 SECTION No. 10B. The work under this heading comprises the re- construction of the present station and terminal at 155th Street and Eighth Avenue to provide a two track connection with the 162nd Street and Eighth Avenue connection of the Elevated Railway Exten- sions, involving the construction of two (2) new island platforms, two (2) mezzanine stations, an over-grade crossing of the express track with the northbound local track and relocation of and ad- ditions to the present structure for the purpose of providing additional tracks as shown on Drawing No. 10,106. GEO. H. PEGEAM, Chief Engineer. 30 Schedule A. SECTION No. 1. 1056, 1057, 1058, 1059, 1258, 1259, 1260, 1261. SECTION No. 2. 2500, 2501, 2502, 2503, 2034, 2035, 2036, 2037, 2038. SECTION No. 3. 3012, 3013, 3014, 3015, 3016, 3017, 3018, 3019, 3020, 3076, 3077, 3088, 3089, 3090, 3091. SECTION No. 4. 4002, 4009, 4010, 4011, 4048. SECTION No. 5. 5002, 5003, 5004, 5005, 5038, 5039, 5062, 5216, 5217, 5218, 5600, 5607, 5800. SECTION No. 6. 6001, 6002, 6003, 6601, 6602, 6603, 6604, 6605, 6606, 6607, 6608, 6609, 6610, 6611, 6612, 6613, 6614, 6615, 6616. SECTION No. 7. 7002, 7023, 7024, 7025, 7026, 7027, 7028. SECTION No. 8. 8004, 8005, 8006, 8007, 8008, 8009, 8010, 8011, 8012, 8300, 8301, 8302, 8303, 8504, 8505, 8506, 8700, 8701, 8702, 8703. SECTION No. 10B. 10,106. Of 1954 YL 17177 M258291 THE UNIVERSITY OF CALIFORNIA LIBRARY