distributed among the holders of preferred stock shall be insufficient to permit the payment to such holders of the full preferential amount aforesaid, then the entire assets of the Company to be distributed shall be distributed ratably among the holders of preferred stock in proportion to the full preferential amount to which they are respectively entitled as aforesaid.

A consolidation or merger of the Company with or into any other corporation or corporations shall not be deemed to be liquidation, dissolution, winding up, or distribution of assets within the meaning of this clause.

The holder of each share of Series A preferred stock shall be entitled to one vote per share.

Subsequent series of preferred shares may, subject to approval by the Public Utilities Commission of the District of Columbia, be issued by the directors from time to time, free from preemptive rights in the then existing stockholders, which series shall have the same rights, preferences, priorities and restrictions as the Series A preferred shares, except that the directors at the time of the original issue of such Series, shall have the right to fix the dividend rate, redemption price and participating privileges, if any, applicable to such Series, which shall not exceed, however, the dividend rate, redemption price and participating privileges, of the Series A preferred shares and no preferred shares, additional to Series A, shall be issued so long as any preferred shares of Series A are outstanding, unless the earnings for twelve out of fourteen preceding months shall show that the dividend on all outstanding preferred shares, including those proposed to be issued, shall have been earned at least one and one-half times, or unless such issue is approved by the holders of not less than three-fourths of the Series A preferred shares then outstanding.

The holder of each share of common stock shall be entitled to one vote per share, except that if dividends upon Series A preferred shares shall be in arrears to the extent of $7.00 per share (after crediting any payments in respect to such dividends made to the holders of preferred shares other than by the Company) then, and so long only as that situation shall continue, the common shares shall not be entitled to vote for directors of the Company. Dividends in arrears on the preferred stock shall be paid up as promptly as is reasonably practicable. Additional common shares may, subject to approval by the Public Utilities Commission of the District of Columbia, be issued by the directors from time to time for cash or in payment for bonds or property.

The Company may issue, sell and dispose of any of its shares of stock authorized by this agreement or by subsequent increase of capital stock or by or pursuant to any amendment of this agreement at such price, for such consideration, and on such terms and conditions as from time to time may be fixed and determined by the Board of Directors, subject to approval by the Public Utilities Commission of the District of Columbia.

Eighth Upon the organization of the New Company, the following transactions shall be carried out substantially simultaneously.

A. The Capital Company shall vest in the New Company all of its estates, lands, rights, powers, privileges, licenses, franchises, and properties, real and personal, tangible and intangible, of every kind (including without limiting the generality of the foregoing, 202 shares of the par value of $50.00 per share of the capital stock of the Washington and Maryland Railroad Company out of a total of 202 shares issued and outstanding, $66,000 principal amount of 6 per cent bonds of said Company, due January 15, 1947, and a demand note for the principal amount of $20,500 bearing interest at the rate of 6 per cent per annum made by said Company endorsed to the Capital Company), and shall transfer to the New Company all existing operating and other contracts, and/or rights (subject to all conditions of said contracts) and shall execute all deeds, assignments, and/or other conveyances requisite for such purpose.

In consideration therefor, the New Company shall:

(a) Assume and discharge as the same mature all of the liabilities of the Capital Company, such liabilities to be $5,800,000 principal amount of Capital Traction First Mortgage bonds bearing interest at the rate of 5 per cent per annum, due June 1, 1947, (in addition to $200,000 principal amount thereof now in the Treasury of the Capital Company which shall be cancelled on or before the date of closing hereunder) and current liabilities arising in normal conduct of the business; and,

(b) Issue to the Capital Company 120,000 shares of said Series A preferred stock.

The Washington Company agrees that the Capital Company may, on behalf of the Washington Company, extend to each of the stockholders of the Capital

Company, of record ten days prior to the date of closing as hereinafter defined, the right or option to elect, on or before such date of closing and take in exchange for and in lieu of each full share of said preferred stock of the New Company to which said stockholders may be or become entitled, one half share of said Series A preferred stock of the New Company, plus 9/10 of a share of common stock of the New Company.

The Capital Company, acting in behalf of such stockholders, agrees to notify the Washington Company, on or before the date of closing as hereinafter defined, of the number of shares of preferred stock of the New Company so to be exchanged, and the Washington Company agrees thereupon to make said exchange in accordance therewith.

It is understood and agreed that to carry out the intent hereof the Capital Company shall and will, as soon as may be possible after the date of closing as hereinafter defined, make distribution to its stockholders, liquidate and dissolve, and that to this end approval of this agreement by Joint Resolution or Act of the Congress of the United States shall constitute and confer all necessary authority to The Capital Company to liquidate its assets by distributing amongst its stockholders, in proportion to their several holdings of stock in said company, the shares of preferred stock of the New Company which it shall have received as the consideration for the sale, transfer and conveyance of its property to the said New Company as provided herein, that is to say, one share of such preferred stock to the holder of record of each share of the capital stock of the Capital Company; and thereupon to liquidate its affairs and dissolves its corporate existence; provided, that the existing liabilities of the said Capital Company and the rights of its creditors shall not be affected thereby and that such creditors shall have, as to the New Company upon the transfer of property to it as aforesaid, all rights and remedies which they may then have as to the Capital Company; and provided further, that no action or proceedings to which the Capital Company is a party shall abate in consequence thereof but the same may be continued in the name of the party by or against which the same was begun, unless the Court in which said action or proceedings are pending shall order the New Company to be substituted in its place and stead; and provided further, that the fact of such dissolution in accordance with this provision shall be published once a week for two successive weeks thereafter in at least two daily newspapers of general circulation published in the City of Washington, District of Columbia.

The date of closing is hereby defined as the date of the transfer of the properties mentioned herein to the New Company and the delivery of New Company preferred and common shares to the Capital and Washington Companies in accordance herewith.

B. The Washington Company will vest, or cause to be vested in the New Company all of its physical property, real and personal, Glen Echo Amusement Park (except devices not owned by the Washington Company or Glen Echo Park Company) tracks, lands, buildings, shops, structures, machinery, rolling stock, busses. easements, franchises, rights, operating and other contracts for the use of tracks, power, exchange of facilities, or otherwise, directly connected with, or relating to, and used in the ordinary operation and business of an electric railway, motor bus, public transportation company and common carrier, situate in the District of Columbia and State of Maryland (subject to all conditions of said contracts), including without limiting the generality of the foregoing, the physical property, rights and franchises of The Washington & Rockville Railway Company of Montgomery County, used in the operation of said transit business, with the understanding, however, that nothing herein shall be understood to include the transfer of the right of the Washington Company and The Washington & Rockville Railway Company of Montgomery County to exist as corporations or separate corporate entities, nor to include the stock of the Potomac Electric Power Company, the Braddock Light and Power Company, Incorporated, Great Falls Power Company, Potomac Electric Appliance Company or other investments in stock, bonds or personal property not connected with or used in the ordinary conduct of the business of said electric railways, nor any cash, bills receivable, credits or choses in action, except as otherwise herein provided; and that approval of this Agreement by Joint Resolution or Act of the Congress of the United States shall constitute and confer the necessary authority to the Washington Company to retain and hold the aforesaid stocks of the said Companies. A general description of the property to be transferred hereunder, shall be prepared and delivered to the Capital

Company before the final execution of deeds, and the Washington Company shall execute all deeds, assignments and/or other conveyances requisite for such purpose. It being understood, however, that the Washington Company will transfer to the New Company net current assets equal to the net current assets transferred to the New Company by the Capital Company, as hereinbefore provided, and no more.

The said property of the Washington Company shall be vested in the New Company, subject, in so far but only in so far, as the same may by the terms of such mortgages respectively attach to any part or parts of said property to the following mortgages or deeds of trust:

(1) First Mortgage of the City and Suburban Railway of Washington, dated September 1, 1898, made to The Baltimore Trust and Guarantee Company, as trustee, securing $1,703,000 principal amount of 5% bonds due August 1, 1948; (2) First Mortgage of the Anacostia and Potomac River Railroad Company, dated April 1, 1899, made to The Baltimore Trust and Guarantee Company, as trustee, securing $2,964,000 principal amount of 5% bonds due April 1, 1949;

(3) Consolidated Mortgage of the Washington Railway and Electric Company, dated March 1, 1902, made to United States Mortgage and Trust Company, as trustee, securing $11,643,000 principal amount of 4% bonds, due December 1, 1951; and

(4) General and Refunding Mortgage of Washington Railway and Electric Company, dated November 1, 1923, made to American Security and Trust Company, as trustee, securing $2,646,000 principal amount of bonds, due November 1, 1933;

Provided, however, that the New Company shall assume only such of the above described bonds as hereinafter specified.

The Washington Company shall at the time of closing hereunder, execute its own bond to the New Company and to the Capital Company whereby it shall agree to pay when due the principal and interest of:

$4.002,000 principal amount of consolidated bonds of Washington Railway and Electric Company described above, and

$2,646,000 principal amount of General and Refunding Bonds of Washington Railway and Electric Company, described above.

In consideration of the foregoing, the New Company shall:

(a) Assume and discharge as the same mature, liabilities of the Washington Company incident to the transit business to be transferred as aforesaid, such liabilities to be $462,000 principal amount of the First Mortgage bonds of the Anacostia and Potomac River Railroad Company, described above, bearing interest at the rate of 5 per cent per annum due April 1, 1949, being the bonds of said issue guaranteed by the Washington Railway and Electric Company; $7,641,000 principal amount of the consolidated bonds of the Washington Railway and Electric Company, also described above, bearing interest at the rate of 4 per cent annum, due December 1, 1951, and current liabilities arising in the normal course of the transit business. The obligation of the New Company in respect to said Washington Railway and Electric Company Consolidated 4% Bonds shall be such that the Washington Company shall retain the right to redeem or pay such bonds in whole or in part prior to their normal maturity, and that if it should do so the New Company shall at that time have the option, either (1) to reimburse the Washington Company for the cost of redemption or payment of such Consolidated 4% Bonds in the proportion that the New Company is responsible therefor as above, or (2) to issue to the Washington Company its own 4% Bonds for the same amount and maturity and secured by a lien of like rank on that portion of the property of the New Company which shall be conveyed to it by the Washington Company hereunder, and securing the said Consolidated 4% Bonds so redeemed or paid, for which the New Company shall on such redemption or payment date be responsible, as above, or (3) the New Company may create a General and Refunding Mortgage secured on all its property, whereby provision shall be made for the retirement and cancellation of all prior mortgage liens against its property and issue thereunder to the Washington Company 4% bonds maturing December 1, 1951, for the same amount assumed of the Consolidated 4% Bonds redeemed or paid as aforesaid. (b) Issue to the Washington Company 193,420 shares of common stock plus the number of shares of common stock at par equaling the total net current assets including materials and supplies to be received by the New Company from the Capital Company and the Washington Company.

C. There shall be vested in the New Company by Harley P. Wilson, 21,237 shares of the Bus Company out of a total outstanding of 21,612 shares; pro

vided that the Bus Company shall be merged or consolidated with the New Company when and if the Public Utilities Commission shall so require.

In consideration of the foregoing, the New Company shall:

(a) Assume and discharge all of the liabilities of the Bus Company, such liabilities to be $550,000 of bills payable and current liabilities arising in the normal conduct of the business.

(b) Obligate itself to pay to Harley P. Wilson, his executors, administrators or assigns the further sum of $596,000 plus interest thereon from February 1, 1928.

D. As a result of the foregoing transactions, the initial funded debt, the principal and interest of which the New Company is to pay, shall be as follows: Capital Traction first mortgage bonds at 5%, due June 1, 1947------ $5, 800, 000 City and Suburban Railway of Washington first mortgage bonds, at 5%, due August 1, 1948.

Anacostia and Potomac River Railroad Company first mortgage bonds, at 5%, due April 1, 1949_.

Washington Railway and Electric Company consolidated mortgage bonds at 4%, due December 1, 1951-

Total funded debt-----

1, 703, 000

2, 964, 000

7,641, 000

18, 108, 000

Ninth The foregoing apportionment of the stock of the New Company is based on the present conditions and businesses of the participating companies and on the assumption that, in the interval before the consummation of the foregoing transactions, there will be no change in the transit businesses, other than as a result of normal operations, and that no distribution will be made to the stockholders of Capital Company or the Bus Company, except the regular dividend payments, at not exceeding the present rate, and that, subject to such exceptions, the assets and liabilities of the participating companies will be substantially as appears from their December 31, 1927, balance sheets, subject to variations in the normal course of business.

Tenth The Washington Company will cause the Potomac Electric Power Company, subject to the approval of the Public Utilities Commission, to enter into a power arrangement with the New Company (which may include a lease by the Power Company of the power properties which the New Company will have obtained as being appurtenant to the transit properties to be acquired by the New Company) on terms which will create a situation such that the net cost of power to the New Company (after crediting any rental payable to the New Company for its power properties) shall not exceed what the aggregate cost of power would be to the Capital Company and the Washington Company were the present arrangements continued; provided that the said power contract between the Potomac Electric Power Company and the New Company shall run for the life of whichever of the franchises of these two companies expires first, and the New Company shall take over all existing contracts of the Washington Company for the sale of power to other railway companies. This entire agreement is conditioned upon such approval of said Commission.

Eleventh: It is understood by the parties hereto that a rate base will be established by the Public Utilities Commission at Fifty Million Dollars ($50,000,000.00), for all of the properties within and without the District of Columbia to be acquired by the New Company, either directly or through stock ownership which are used and useful for the convenience of the public, and such rate base shall be increased by capital expenditures due to additions, betterments and changes in track arrangement, including capital expenditures made necessary by the unification of the properties, and decreased by retirements from use of such properties; provided, however, that retirements of properties brought about by the unification herein provided for, or by order of regulatory authority, shall remain in the rate base until amortized out of earnings. The said rate base shall remain in effect for a period of ten (10) years, and thereafter until a revaluation is made. Upon the rate base established as aforesaid, the New Company shall be entitled to earn a reasonable rate of return; provided, that the present rates of fare (except with respect to transfers) shall remain in force for a period of one (1) year after the date of closing as hereinbefore defined, but the existing companies shall not be precluded from requesting a change in fare if this agreement is not approved by the present session of Congress.

Twelfth Upon the enactment of the legislation as contemplated by the agreement, the New Company shall grant with each street railway fare, a free immediate transfer to any connecting portion of its street railway lines, within the

District of Columbia, subject to approval by the Public Utilities Commission, and reasonable rules and regulations to prevent abuse thereof. In addition transfers between street cars and busses shall be granted under terms and conditions prescribed by the Public Utilities Commission.

Thirteenth This agreement is conditioned upon the New Company being relieved from the expense of policemen at street railway crossings and intersections, the laying of new pavement, the making of permanent improvements, renewals or repairs to the pavement of streets and public bridges; and the permanent improvements, renewals or repairs to public bridges over which the street car lines operate; except that the New Company shall bear the entire cost of paving repairs or replacements incident to track repairs, replacements or changes made at a time when the street or bridge is not being paved, and shall bear one-fourth (4) the cost of other paving, re-paving or maintenance of paving between its tracks and for two (2) feet outside of the outer rails, and shall bear the excess cost of construction and maintenance of public bridges, due to the installation or existence of its tracks on such bridges, but nothing herein shall relieve the New Company from liability for street paving as owner of real estate apart from rights-of-way occupied by its tracks, as set out in the so-called Borland Law, approved September 1, 1916, as amended to date.

Fourteenth: In order to promote the efficiency of the service and increase the ability of the New Company to supply the transportation which is needed by the public, the legislation obtained to effectuate this agreement shall contain a provision for the reasonable protection of the New Company against competition. Fifteenth: The New Company may defray any legal and other expenses of unification which may be necessarily incurred in connection therewith; provided that these expenses shall be treated in the accounts of the New Company as ordered by the Public Utilities Commission.

Sixteenth This agreement is approved by the Directors of the Capital Company and of the Washington Company, and has been ratified by the holders of two-thirds of the stock of record of each of said Companies, and is subject to the approval of the Public Utilities Commission and of the Congress of the United States.

Seventeenth Approval of this agreement by the Public Utilities Commission or Congress shall not be taken as approval of the considerations mentioned herein for properties or stocks, or of the agreed rate base, as binding upon the Public Utilities Commission in any future determination of the fair value of the properties used and useful for the public convenience belonging to the Washington Company, the Capital Company or the Bus Company, or to be acquired by the New Company, that may be made in accordance with this agreement.

This agreement involves concessions by all parties made for the purpose of securing the benefits and advantages of transit unification which are recognized to be in the public interest as well as in the interest of the stockholders of said Companies. Unless the Plan as herein contemplated shall be approved by Congress on or before June 1, 1929, each party is restored to complete liberty of action and shall not be deemed prejudiced by any concession herein made.

In witness whereof, The Capital Traction Company, the Washington Railway and Electric Company have caused this instrument to be executed in their respective corporate names by their respective Presidents, and their respective corporate seals to be hereunto affixed and the same to be attested by their respective Secretaries, and Harley P. Wilson has set his hand and seal, the day and year first above written.

Attest: H. D. CRAMPTON, Secretary.

THE CAPITAL TRACTION COMPANY, By JOHN H. HANNA, President. WASHINGTON RAILWAY AND ELECTRIC COMPANY, By WILLIAM F. HAM, President.

Attest: H. M. KEYSER, Secretary.

Witness: BRICE CLAGETT.

HARLEY P. WILSON.

DISTRICT OF COLUMBIA, 88:

I, Chas. J. Bigham, a Notary Public in and for the District of Columbia, do hereby certify that William F. Ham, President of the Washington Railway and Electric Company, a party to the agreement hereto annexed, dated as of the 7th day of April, 1928, personally appeared before me in the District aforesaid the said William F. Ham being personally well known to me to be the President of

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