PROVISIONS FOR SECURITY , -
German Mortgage Bank Law of 1899, will mature not later 3
than the maturity of the bonds and will bear interest at the
rate of at least 7 per cent. Payment on account of the principal
thereof will be collectible by the Trustees. The deposit of the
mortgage documents under the Trust Indenture provides
security equivalent to a pledge under German law.
Each of the agricultural credit organizations from which the
deposited mortgage documents are acquired by the Bank will be
individually respectively liable with respect to such mortgages
to the full amount of the unamortized principal thereof.
The Bank covenants that it will not issue any other bonds or
contract any indebtedness in any manner sharing in the specific
security provided for the bonds of this issue.
The Bank also covenants at all times to maintain the value
of the security provided by the trust indenture for the outstand-
ing bonds at an amount at least equivalent to the aggregate
principal amount of such bonds in dollars.
(b) Saxon State Mortgage Institution (31, 66). The bonds
are endorsed by the Free State of Saxony, which uncondition-
ally guarantees the due and punctual payment of the principal
at maturity and of the interest. They are direct credit obliga-
tions of the Mortgage Institution secured by its entire resources.
They shall at all times be secured by the pledge of mortgages of
an unamortized principal equivalent to the aggregate principal
amount of the outstanding bonds, or, in lieu of such mortgages,
cash of an equivalent amount. These mortgages shall con-
stitute absolute first liens on industrial properties. They may
not exceed 30 per cent of the conservatively appraised value
of the real estate covered, together with improvements thereon,
shall bear interest at a rate not less than 7 per cent (No. 66: 614
per cent) and shall mature not later than December 1, 1945
(No. 66: December 1, 1946).
(¢) Municipal Bank of the State of Hessen (22). The bonds
are endorsed by the State of Hessen which is unconditionally
and unlimitedly liable for the due and punctual payment of the
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