HARRY HUGHES, Governor                              4557

Principal payments received on loans made by the
corporation shall be allocated among the members on the
basis of their participating interests and remitted not
later than three months following receipt of such payments,
in reduction of the indebtedness of, the corporation to
members under the time notes relating to such loan or loans.
Interest accrued on the time notes shall be calculated and
paid to members on the basis as set forth in such time notes
and shall be paid at least once every three months.

Whenever any loan made by the corporation in which
participating interests have been allocated to members
pursuant to calls is determined by vote of the executive
committee of the board of directors to be uncollectible,
payment of the uncollectible principal balance of such loan
shall be made from the capital, surplus and reserve funds of
the corporation and shall be allocated among the members on
the basis of each member's participating interest therein
and remitted on the next following payment date.

Notwithstanding the provisions of any other law,
general or special, the notes or other interest-bearing
obligations of such corporation, issued in accordance with
and by virtue of this subtitle and by the bylaws of such
corporation, shall be legal investments for the financial
institutions which become members of such corporation.

(b)  Evidences of indebtedness. -- All loans to the
corporation by members shall be evidenced by bonds,
debentures, notes or other evidences of indebtedness of the
corporation, which shall be freely transferable at all
times.

(c)  Limitation on indebtedness. -- [At no time, shall]
A MEMBER MAY BUT SHALL NOT BE REQUIRED TO LEND FUNDS TO THE
CORPORATION IF AFTER MAKING THE LOAN the aggregate
outstanding principal balance of the corporation's
indebtedness to its members[, exceed] EXCEEDS an amount
equal to ten times the sum of the corporation's paid-in
capital and surplus[, provided, however, that such
limitation shall not apply to the issuance to, or holding
by, members . of the corporation of any indebtedness of the
corporation arising out of the issuance of bonds,
debentures, notes, or other evidences of indebtedness under
the provisions of § 426 of this article].

[421.] 10. Capital stock.

The authorized capital stock of the corporation shall
consist of two million shares of common stock with a par
value of one dollar each, which shares shall be issued only
on receipt by the corporation of cash in such amount not
less than the par value thereof as may be determined by the
board of directors.