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11. The Contractors shall effect insurances on the cable in the sum of £176 per mile, against fire, '. and river and sea risks, until laid, by policies similar in form to those on the British Indian Telegraph Cable, and shall deliver such policies to the Company, to the full amount of the payments from time to time made to the Contractors. 12. The Company shall pay to the Contractors, for the works and matters hereinbefore undertaken by the Contractors under this contract, and for the transfer of the ship hereinafter referred to, the total sum or contract price of £300,000, but subject to such reduction as hereinafter mentioned. The said contract price shall be paid at the times and in manner following, that is to say:— (a.) Thirty thousand pounds upon the execution of this contract. (b.) One hundred and eighty-five thousand pounds, by weekly payments, as mentioned in Article 13. (c.) Twenty-five thousand pounds upon the certificate of the Engineer of the shipment of the whole of the cable, and that the condition thereof is in accordance with this contract. (d.) Fifteen thousand pounds on the certificate of the successful laying and completion of the cable in accordance with this contract. (c.) Fifteen thousand pounds upon the transfer to the Company of the steamship " Edinburgh," in manner hereinafter provided. (f.) And thirty thousand pounds, the balance of the contract price (subject to reduction as mentioned in Article 16), upon the Engineer's certificate mentioned in Article 15. 13. The payments in respect of the sum of £185,000 mentioned in Article 12 (paragraph B), shall be subject to the following regulations, that is to say, the Contractors shall deliver, at the principal office of the Company, a certificate signed by the Engineer and the Contractors' engineer or electrician, stating the length of the cable made up to the day of the date of the certificate, and certifying that the same is in perfect working order, and in all respects up to the conditions required by these presents; and on every Monday morning after that day, until the manufacture of the cable shall be completed, the Contractors may deliver a like certificate, stating the length of the cable made during the week ending on the Saturday preceding, and also the total length manufactured up to the same date, and that the same total length of cable is in perfect working order, and in all respects up to the condition required by these presents; and on receipt of the above certificates respectively the Company shall, not later than the Saturday next following every Monday after the date on which the certificate is duly delivered as aforesaid, pay over to the Contractors or their agent authorized in writing to call for the same, at the office of the Company, in respect of the said sum of £185,000, the sum of £135 per mile for every nautical mile of cable manufactured during the period to which the certficate bears reference. The balance of the said sum of £185,000 shall be paid upon the certificate of the Engineer of the completion of the manufacture of the said cable. 14. The Engineer of the Company accompanying the expedition shall examine and test the line when laid, and, as soon as practicable thereafter, telegraph to Messrs. Clark, Forde, and Co., in London, and also write by the next post to them, the results of his examination and testing, and shall forthwith deliver a copy of the telegram and letter to the Contractors' agent; and, upon the receipt by the Engineer in England of such telegram or letter, he shall give his certificate that the cable has been successfully laid and completed in accordance with this contract, or shall state in writing his reasons for not giving such certificate, and shall forward a duplicate of such certificate or statement in writing, as the case may be, to the Company and the Contractors respectively. 15. The £30,000 mentioned in Article 12, paragraph F, shall (subject to the provisions of Article 16) be paid to the Contractors, upon the certificate of the Engineer in England that, for thirty consecutive days after the completion of the laying of the cable, the same has continued in good electrical condition ; and the provisions of Article 14 shall (mutatis mutandis) apply to the examination and testing and certifying of the condition of the cable during the said thirty days. 16. If the Contractors successfully complete the contract, and obtain the certificate referred to in Article 15, without disaster, delay, or accident occasioning damage to the Contractors to the amount of £10,000, the sum of £30,000, mentioned in Article 12, paragraph F, shall be reduced to £20,000; and if any such disaster, delay, or accident shall occur, but shall occasion damage to an amount less than £10,000, then the difference between the amount of the damage so occasioned and £10,000 shall be deducted, from the said sum of £300,000 and retained by the Company. 17. Any surplus cable remaining out of the lengths specified, after the completion of the contract, shall belong to the Company, and shall be delivered at Sydney or New Zealand as the Company or their Engineer shall, before the sailing of the vessels from England, direct. 18. The Company shall, subject to the directions of the Engineer, be at liberty to work the cable from the time when it is laid until finally certified under Article 15, and the receipts from working the same shall belong to the Company, who shall bear the expense of working; but the Contractors shall, until the final certificate is given, have full liberty to inspect and examine the line and its connections, and the working and testing thereof, and to test the same at reasonable times, under the supervision of the Engineer. 19. The Engineer for the purposes of this contract shall be Josiah Latimer Clark, Esquire, Henry Charles Forde, Esquire, Charles Hockin, Esquire, and Herbert Arnaud Taylor, Esquire, or any one or more of them acting in the name of their firm of Clark, Forde, and Co.; and several members of the firm may act as Engineer at the same time in different places. The Engineer in England shall, subject as hereinbefore provided, duly sign and give every certificate to which the Contractors are entitled under this contract when the provisions of the contract upon the performance of which the Contractors are entitled to the same respectively shall have been performed. 20. The Contractors shall, after the Engineer's certificate referred to in Article 15, transfer to the Company, for a nominal price, and as the Company's absolute property, the steamship " Edinburgh " (which is intended to be employed by the Contractors for the purposes of this contract), together with her tanks, machinery, fittings, and stores ; and shall deliver the said vessel at the place indicated, under Article 17, for the delivery of surplus cable, as soon as practicable after the expiration of the 4—F. 4

lII.—As to New Zealand Cable. ■