Document:

exhibit10_1.htm

     

     

    
      

      

    

     

     

    
      FIRST
AMENDMENT TO MASTER REPURCHASE AGREEMENT

      

      

      This First Amendment to Master
Repurchase Agreement (the “Amendment”) is made and entered into effective as of
September 25, 2008 between Natixis Real Estate Capital Inc.
(“Natixis”) and RCC Real
Estate SPE 3, LLC (“RCC”) in connection with the
Master Repurchase Agreement dated as of April 12, 2007 between Natixis and RCC
(the “Agreement”).

      

      Unless otherwise defined, capitalized
terms used in this Amendment shall have the meanings assigned in the Agreement
and, unless otherwise specified, all section references herein refer to sections
of the Agreement.

      

      In consideration of the mutual promises
contained herein, and other valuable consideration, and intending to be legally
bound, the parties hereby amend the Agreement as follows:

      

      
        	
                1.  

              	
                Section
      2 of the Agreement, in the definition of “Facility Amount”, is amended by
      substituting “$100,000,000” for “$150,000,000.” The cover page of the
      Agreement is also amended by substituting “$100,000,000” for
      “$150,000,000.”

              

      

      

      
        	
                2.  

              	
                Section
      3(f)(ii) of the Agreement is amended by, in clause (ii) thereof,
      substituting “$56,250,000” for
“$75,000,000.”

              

      

      

      
        	
                3.  

              	
                Upon
      execution of this Amendment, RCC shall pay Natixis a modification fee of
      0.25% of the Facility Amount (as such amount has been amended by this
      Amendment) by wire transfer.

              

      

      

      Except as
otherwise set forth herein, the Agreement shall remain unchanged and in full
force and effect. From and after the date hereof, any reference to the Agreement
shall be a reference to the Agreement as amended hereby.

      

      This Amendment shall be governed by,
and construed in accordance with the substantive laws of the State of New
York.

      

      IN WITNESS WHEREOF, the undersigned
have caused this First Amendment to Master Repurchase Agreement to be duly
executed and delivered as of the day and year first written above.

      

      

      [SIGNATURE
PAGE ON FOLLOWING PAGE]

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      [SIGNATURE
PAGE TO FIRST AMENDMENT TO MASTER REPURCHASE AGREEMENT]

      

       

      
        
          	NATIXIS
      REAL ESTATE CAPITAL INC.	 	 	RCC
      REAL ESTATE SPE 3, LLC	 
	 	 	 	 	 
	 	 	 	By: 
      RCC Real Estate, Inc., is sole member	 
	 	 	 	 	 
	
                  By: 
      /s/  Jonathan Love

                	 	 	
                  By: 
      /s/ David E. Bloom

                	 
	
                      Name: 
      Jonathan Love

                	 	 	
                      Name: 
      David E. Bloom

                	 
	
                      Title:  
      Managing Director

                	 	 	
                      Title:   
      Chief Investment Officerexhibit10_2.htm

     

     

    
      

      

    

    SECOND
AMENDMENT

    
      TO
GUARANTY

      

      

      This Second Amendment to Guaranty is
made and entered into effective as of September 25, 2008 between Natixis Real Estate Capital
Inc. and Resource
Capital Corp. in connection with the Guaranty dated as of April 12, 2007
(the “Guaranty”) from Resource Capital Corp. to Natixis Real Estate Capital Inc,
as amended by an Amendment to Guaranty dated September 30, 2007 (the “First
Amendment to Guaranty”).

      

      Unless otherwise defined, capitalized
terms used in this Amendment shall have the meanings assigned in the Guaranty
and, unless otherwise specified, all section references herein refer to sections
of the Guaranty.

      

      In consideration of the mutual promises
contained herein, and other valuable consideration, the parties hereby amend
clause (A) of Section 6(b)(i) of the Guaranty to be as follows: “(A) a Net Worth
in excess of $200,000,000,”.

      

      Except as
otherwise set forth herein, the Guaranty and First Amendment to Guaranty shall
remain unchanged and in full force and effect. From and after the date hereof,
any reference to the Guaranty shall be a reference to the Guaranty as amended by
the First Amendment to Guaranty and this Second Amendment to
Guaranty.

      

      This Second Amendment to Guaranty shall
be governed by, and construed in accordance with the substantive laws of the
State of New York.

      

      IN WITNESS WHEREOF, the undersigned
have caused this Second Amendment to Guaranty to be duly executed and delivered
as of the day and year first written above.

       

       

       

      
        
          	NATIXIS
      REAL ESTATE CAPITAL INC.    	 	 	RESOURCE
      CAPITAL CORP.	 
	 	 	 	 	 
	
                  By: 
      /s/  Jonathan Love

                	 	 	
                  By: 
      /s/  David E. Bloom

                	 
	
                      Name: 
      Jonathan Love

                	 	 	
                      Name: 
      David E. Bloom 

                	 
	
                      Title:  
       Managing Director

                	 	 	
                      Title:   
      Senior Vice PresidentFiled by Bowne Pure Compliance

Exhibit 4(a)

(TRANSLATION)

JAPAN FINANCE CORPORATION FOR

MUNICIPAL ENTERPRISES LAW

(Law No. 83 of April 27, 1957)

AMENDMENTS

	 	 	 	 	 	 	 
	April 1, 1958
	 	Law No. 49	 	June 28, 1989	 	Law No. 48
	 
	 	 	 	 	 	 
	March 17, 1959
	 	Law No. 19	 	June 14, 1993	 	Law No. 63
	 
	 	 	 	 	 	 
	March 31,1960
	 	Law No. 45	 	June 12, 1998	 	Law No. 101
	 
	 	 	 	 	 	 
	June 30, 1960
	 	Law No. 113	 	July 16, 1999	 	Law No. 87
	 
	 	 	 	 	 	 
	March 30, 1961
	 	Law No. 17	 	December 22, 1999	 	Law No. 160
	 
	 	 	 	 	 	 
	March 28, 1962
	 	Law No. 34	 	May 31, 2000	 	Law No. 99
	 
	 	 	 	 	 	 
	May 16, 1962
	 	Law No. 140	 	March 30, 2001	 	Law No. 9
	 
	 	 	 	 	 	 
	March 28, 1964
	 	Law No. 16	 	May 31, 2002	 	Law No. 56
	 
	 	 	 	 	 	 
	March 31, 1965
	 	Law No. 20	 	June 2, 2004	 	Law No. 76
	 
	 	 	 	 	 	 
	June 30, 1967
	 	Law No. 45	 	December 1, 2004	 	Law No. 147
	 
	 	 	 	 	 	 
	April 30, 1970
	 	Law No. 34	 	July 26, 2005	 	Law No. 87
	 
	 	 	 	 	 	 
	June 15, 1972
	 	Law No. 65	 	November 7, 2005	 	Law No. 112
	 
	 	 	 	 	 	 
	June 15, 1972
	 	Law No. 66	 	June 2, 2006	 	Law No. 50
	 
	 	 	 	 	 	 
	July 20, 1973
	 	Law No. 59	 	June 14, 2006	 	Law No. 66
	 
	 	 	 	 	 	 
	May 15, 1976
	 	Law No. 20	 	June 21, 2006	 	Law No. 80
	 
	 	 	 	 	 	 
	May 1, 1978
	 	Law No. 38	 	March 31, 2007	 	Law No. 23
	 
	 	 	 	 	 	 
	May 31, 1985
	 	Law No. 44	 	May 30, 2007	 	Law No. 64

 

 

 

CONTENTS

	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	CHAPTER I
	 	GENERAL PROVISIONS (Articles 1-8)	 	 	 	 
	 
	 	 	 	 	 	 
	CHAPTER II
	 	OFFICERS AND EMPLOYEES (Articles 9-18)	 	 	 	 
	 
	 	 	 	 	 	 
	CHAPTER III
	 	BUSINESS (Articles 19-22)	 	 	 	 
	 
	 	 	 	 	 	 
	CHAPTER IV
	 	JAPAN FINANCE CORPORATION FOR (Articles 23-27)	 	 	 	 
	 
	 	 	 	 	 	 
	CHAPTER V
	 	ACCOUNTS (Articles 28-34)	 	 	 	 
	 
	 	 	 	 	 	 
	CHAPTER VI
	 	SUPERVISION (Articles 35-37-2)	 	 	 	 
	 
	 	 	 	 	 	 
	CHAPTER VII
	 	AUXILIARY PROVISIONS (Articles 38, 39)	 	 	 	 
	 
	 	 	 	 	 	 
	CHAPTER VIII
	 	PENAL PROVISIONS (Articles 40, 41)	 	 	 	 
	 
	 	 	 	 	 	 

CHAPTER I GENERAL PROVISIONS

			
	Article 1	 	(Objects)

1. The object of Japan Finance Corporation for Municipal Enterprises shall be, for contributing to
the sound operation of Municipal Enterprises, to finance local governments requiring stable funds
of particularly low interest for Local Loans for their Municipal Enterprises, in order to thereby
develop Municipal Enterprises of local governments and to contribute to the improvement of the
welfare of local residents.

2. The object of Japan Finance Corporation for Municipal Enterprises shall be, in addition to the
provisions of the preceding paragraph, supplementing the financing provided by ordinary financial
institutions, to finance local toll-road public corporations requiring long-term funds, for the
purpose of promoting the construction of local principal roads implemented by local toll-road
public corporations.

3. The object of Japan Finance Corporation for Municipal Enterprises shall be, in addition to the
provisions of the preceding two paragraphs, supplementing the financing provided by ordinary
financial institutions, to finance local land-development public corporations requiring long-term
funds, for the purpose of promoting the acquisition of land implemented by local land-development
public corporations.

			
	Article 2	 	(Definition of Terms)

The following terms as used in this Law shall have the following meanings:

	 	(1)	 	“Municipal Enterprises” shall mean, among the activities of local governments,
those for which expenses are covered mainly by earnings derived from their operations
and which are provided for in the Cabinet Order.

	 	(2)	 	“Local Loans” shall mean local loans for Municipal Enterprises, which have been
consented to at the consultation provided for in Article 5-3, Paragraph 1 of the Local
Finance Law (Law No. 109 of 1948) or approved in accordance with the provisions of
Article 5-4, Paragraph 1 or 3 of the same Law and for which Government funds are not
provided.

			
	Article 3	 	(Legal Personality)

Japan Finance Corporation for Municipal Enterprises (hereinafter referred to as the
“Corporation”) shall be a juridical person.

 

-2-

 

			
	Article 4	 	(Business Office)

The Corporation shall have its office in Tokyo.

			
	Article 5	 	(Capital)

1. The capital of the Corporation shall be 2.4 billion (2,400,000,000) yen, all of which shall be
provided by the Government from the Investment Account of the Fiscal
Investment and Loan Program Special Account.

2. The Government may, when deemed necessary, make an additional capital contribution to the
Corporation within the limit of the amount appropriated in the budget.

3. When a capital contribution specified in the immediately preceding paragraph is made by the
Government, the Corporation shall increase its capital by the amount of this contribution.

			
	Article 6	 	(Registration)

1. The Corporation shall register as provided for in the Cabinet Order.

2. The particulars to be registered in accordance with the provisions of the immediately preceding
paragraph cannot be claimed against a third party before registration.

			
	Article 7	 	(Limitation on Use of Name)

No one other than the Corporation may use the name “Japan Finance Corporation for Municipal
Enterprises” or any other similar name.

			
	Article 8	 	(Application of the Civil Code)

The provisions of Articles 44 (Juridical Person’s Capacity for Torts, etc.) and 50 (Domicile
of Juridical Person) of the Civil Code (Law No. 89 of 1896) shall apply mutatis mutandis to the
Corporation.

CHAPTER II OFFICERS AND EMPLOYEES

			
	Article 9	 	(Officers)

The Corporation shall have as its officers a Governor, up to four (4) Executive Directors and
an Auditor.

			
	Article 10	 	(Functions and Powers of Officers)

1. The Governor shall represent the Corporation and preside over its business.

2. The Executive Directors shall represent the Corporation as provided for by the Governor, assist
the Governor in managing the business of the Corporation, act on behalf of the Governor in case the
Governor is prevented from discharging his/her functions and perform the functions of the Governor
in case his/her position is vacant.

3. The Auditor shall audit the business of the Corporation.

4. The Auditor may, when deemed necessary, submit his/her opinions, based on the result of audit,
to the Governor or the competent ministers.

			
	Article 11	 	(Appointment of Officers)

1. The Governor and Auditor shall be appointed by the competent ministers.

2. The Executive Directors shall be appointed by the Governor with the approval of the competent
ministers.

 

-3-

 

			
	Article 12	 	(Term of Office of Officers)

1. The term of office of the officers shall be four (4) years.

2. The officers may be reappointed.

3. In case the position of an officer has become vacant, an officer shall be appointed without
delay to fill the vacancy. The term of office of the officer appointed to fill the vacancy shall be
the remainder of that of his/her predecessor.

			
	Article 13	 	(Ineligibility of Officers)

No one who is an employee (excluding a part-time employee) of the Government or a local
government may be an officer.

			
	Article 14	 	(Prohibition of Officers’ Holding Concurrent Offices)

No officer may be an officer of an association whose object it is to carry on an economic
enterprise or him/herself engage in an economic enterprise.

			
	Article 15	 	(Limitation on Power of Representation)

The Governor or Executive Directors shall have no power of representation in respect of
matters in which the interest of the Corporation and their own interest conflict with each other.
In such cases, the Auditor shall represent the Corporation.

			
	Article 16	 	(Appointment of Employees)

The employees of the Corporation shall be appointed by the Governor.

			
	Article 17	 	(Character of Officers and Employees as Public Service Personnel)

The officers and employees of the Corporation shall be, in respect of the application of the
provisions of the Penal Code (Law No. 45 of 1907) or any other penal provisions, regarded as
personnel engaged in public service in accordance with laws and orders.

			
	Article 18	 	(Standards for Retirement Allowances)

The Corporation shall obtain the approval of the competent ministers prior to preparing the
standards for retirement allowances for its officers and employees. The same shall apply to the
alteration thereof.

CHAPTER III BUSINESS

			
	Article 19	 	(Scope of Business)

1. In order to attain the object specified in Article 1, Paragraph 1 hereof, the Corporation shall
conduct the following business:

	 	(1)	 	To provide funds for Local Loans or to subscribe for bonds issued as Local
Loans;
	 
	 	(2)	 	To provide funds for short-term loans of Municipal Enterprises; or
	 
	 	(3)	 	Business incidental to the business specified in the preceding two items.

2. The Corporation may, in the case specified in Item (1) of the immediately preceding paragraph,
provide funds prior to the consent specified in Article 5-3, Paragraph 1 of the Local Finance Law
or the approval specified in Article 5-4, Paragraph 1 or 3 of the same Law only when there is a
special need and when the consent or approval is considered certain within the limit of the amount
of the Local Loans subject to the consent or approval.

 

-4-

 

3. In order to attain the object specified in Article 1, Paragraph 2 hereof, the Corporation shall
provide funds required for the construction of local principal roads implemented by local toll-road
public corporations, and conduct other business incidental thereto.

4. In order to attain the object specified in Article 1, Paragraph 3 hereof, the Corporation shall
provide funds required for the projects which, though implemented by local land-development public
corporations, are equal in substance to Municipal Enterprises and which are provided for in the
Cabinet Order, and conduct other business incidental thereto.

			
	Article 20	 	(Statement of Business Procedures)

1. The Corporation shall, upon the commencement of its business, prepare a Statement of Business
Procedures and obtain the approval for the Statement from the competent ministers. The same shall
apply to the alteration thereof.

2. The particulars to be stated in the Statement of Business Procedures specified in the
immediately preceding paragraph shall be provided for in the Cabinet Order.

			
	Article 21	 	(Entrustment of Business)

1. The Corporation may, in case of a special need, entrust local governments with a part of its
investigation business on loans.

2. The Corporation may, with the approval of the competent ministers, entrust financial
institutions with the business of making loans or collecting principal and interest payments or any
other business concerning loans and collection, except, however, the decision to make loans.

			
	Article 22	 	(Business Plan and Financial Program)

The Corporation shall prepare a business plan and a financial program on a quarterly basis and
set the maximum amount for the short-term borrowing as provided for in Article 30, Paragraph 1
hereof during the relevant quarter, and obtain the approval therefor from the competent ministers.
The same shall apply to the alteration thereof.

CHAPTER IV JAPAN FINANCE CORPORATION FOR

MUNICIPAL ENTERPRISES BONDS, ETC.

			
	Article 23	 	(Issuance of Bonds)

1. The Corporation may issue Japan Finance Corporation for Municipal Enterprises Bonds
(hereinafter referred to in this chapter and Article 30 as the “JFM Bonds”) upon the approval of
the competent ministers.

2. Except for those provided for in the immediately preceding paragraph, the Corporation may issue
the JFM Bonds pursuant to the Cabinet Order if it is necessary in order to deliver to those who
have lost the JFM Bonds.

			
	Article 24	 	(General Mortgage)

1. A holder of the JFM Bonds (except those JFM Bonds, the claims of which are secured by the loan
credit entrusted pursuant to Article 26-2 hereof) shall have the right to receive repayment of
his/her claim with respect to the property of the Corporation in preference to other creditors.

2. The preferential right specified in the immediately preceding paragraph shall rank next to
after the general preferential rights under the Civil Code.

			
	Article 25	 	(Entrustment of Issuance Business)

1. The
Corporation may entrust Japanese or foreign banks, trust companies or persons who engage in financial instruments business (which means the Financial Instruments Business provided for in Article 2, Paragraph 8 of the Financial Instruments and Exchange Act (Law No. 25 of 1948); the same shall apply in the following paragraph)
with the whole or a part of the business concerning the issuance of the JFM Bonds.

 

-5-

 

2. The provisions of Article 705, Paragraphs 1 and 2 and Article 709 (Rights and Duties of Bond
Administrator) of the Companies Act (Law No. 86 of 2005) shall apply mutatis mutandis to the
banks, trust companies or persons who engage in financial instruments
business entrusted with the business concerning the issuance of
the JFM Bonds in accordance with the provision of the immediately preceding paragraph.

			
	Article 26	 	(Government Guarantee)

1. Notwithstanding the provisions of Article 3 of the Law Concerning Restriction on Government
Financial Aid to Juridical Persons (Law No. 24 of 1946), the Government may guarantee the
obligations under the JFM Bonds issued pursuant to the provision of Article 23, Paragraph 1 hereof
(except for the obligations on which the Government may enter into a guarantee agreement pursuant
to the provision of Article 2 of the Law Concerning Special Measures with respect to Acceptance of
Foreign Capital from International Bank for Reconstruction and Development, etc. (Law No. 51 of
1953; in the following paragraph referred to us “Law Concerning Acceptance of Foreign Capital”);
the same shall apply to Paragraph 3 hereof.) within the limit of the amount appropriated with the
budget.

2. Of the amount appropriated with the budget provided for in the immediately preceding paragraph,
the amount with respect to the obligations under the JFM Bonds denominated in Japanese currency and
issued in a foreign country may be appropriated as added up with the amount appropriated with the
budget provided for in Article 2, paragraph 2 of the Law Concerning Acceptance of Foreign Capital,
when it is difficult to separate those amounts from one another.

3. In addition to the provision of Paragraph 1 hereof the Government may guarantee the obligations
under the JFM Bonds issued by the Corporation pursuant to Article 23, Paragraph 2 hereof.

			
	Article 26-2	 	(Trust of Loan Credit to Secure the JFM Bonds)

For the purpose of securing the obligations under the JFM Bonds (except for those guaranteed
by the Government pursuant to the immediately preceding Article), the Corporation may, upon an
approval of the competent ministers, entrust a part of its loan credit to a trust company or any
other financial institution approved under Article 1, Paragraph 1 of the Law Concerning Finance
Institutions’ Concurrent Management of Trust Business, etc. (Law No. 43 of 1943) (in Paragraph 1,
Item 1 of the immediately following article referred to as the “Trust Companies, etc.”).

			
	Article 26-3	 	(Trust, etc. of the Loan Credit for Fund Procurement)

1. In order to apply to resources of the fund necessary for its businesses, the Corporation may,
with the approval of the competent ministers:

	 	(1)	 	entrust a part of its loan credit to its Trust Companies, etc. and assign all
or a part or all of the beneficiary interest therein;
	 
	 	(2)	 	assign a part of its loan credit to a special purpose company provided for in
Article 2, Paragraph 3 of the Law Concerning Securitization of Assets (Law No. 105 of
1998), and/or
	 
	 	(3)	 	conduct actions pertaining to the actions specified in the above two Items.

2. Unless the aggregate amount of the fund procured by the assignment of the beneficiary interest
provided for in Item 1 of the immediately preceding paragraph and the loan credit provided for in
Item 2 of the immediately preceding paragraph is within the limit of the amount appropriated by the
Diet every business year, the Corporation may not assign such beneficiary interest or such loan
credit pursuant to the provisions of Items 1 and 2 of the immediately preceding Paragraph.

			
	Article 26-4	 	(Delegation, etc. of Business from the Trustee for the Trust)

1. If the Corporation trusts or assigns its loan credit in accordance with the provisions of the
immediately preceding two articles, it shall be delegated all of the collection of the principal
and the interest of such loan credit and other business pertaining thereto from the trustee or the
assignee.

 

-6-

 

2. The Corporation may entrust a part of the business that the Corporation has been delegated
pursuant to the immediately preceding article to a financial institution approved by the competent
ministers as provided for in Article 21, Paragraph 2 hereof.

			
	Article 27	 	(Mandate to Cabinet Order)

In addition to the matters provided for in Article 23 thorough the immediately preceding
article, matters that are necessary for application of those articles shall be provided for in the
Cabinet Order.

CHAPTER V ACCOUNTS

			
	Article 28	 	(Budget and Settlement of Accounts)

The Law Concerning the Budget and Settlement of Accounts of Public Corporations (Law No. 99 of
1951) shall apply to the budget and settlement of accounts of the Corporation.

			
	Article 28-2	 	(Fund)

1. The Corporation shall have a Fund for the Improvement of Operations of Municipal Enterprises
(hereinafter referred to as the “Fund”) in order to contribute to the reduction of interest on
Local Loans (which shall mean interest on funds provided in accordance with the provisions of
Article 19, Paragraph 1, Item 1 hereof or Paragraph 2 of the same article; the same shall apply to
Article 28-4).

2. The Corporation shall, when it receives the Contributions specified in Article 32-2 of the
Local Finance Law, add them to the Fund.

			
	Article 28-3	 	(Separation of Accounts)

Accounts of the Fund shall be kept separate from the general accounts as provided for in the
Cabinet Order.

			
	Article 28-4	 	(Administration of the Fund)

1. The monies in the Fund shall be used for loans to local governments.

2. Earnings from the loans specified in the immediately preceding paragraph or any other
employment of the Fund shall be, as provided for in the Cabinet Order, used as compensation for the
costs caused by the reduction of interest on Local Loans. If there remains a surplus after the
reduction of the amount used as compensation for the costs caused by the reduction of interest on
Local Loans from the earnings, such surplus shall be added to the Fund.

3. The Fund shall not be disbursed. However, this shall not apply to the case where, if the
earning amount specified in the immediately preceding paragraph is short of the necessary amount
for compensation for the costs caused by the reduction of interest on Local Loans, the Fund is used
to cover such shortage within the limit of the total of the amount added in accordance with the
provisions of the immediately preceding paragraph and the amount of the Contributions provided for
in Article 28-2, Paragraph 2 hereof which were contributed in the same business year as the
shortage is incurred.

			
	Article 29	 	(Payment into National Treasury)

1. The Corporation shall pay any profits which remain after the settlement of profits and loss in
each business year to the National Treasury by May 31 of the following business year.

2. The payment into the National Treasury specified in the immediately preceding paragraph shall
be the revenue of the Government in the preceding fiscal year in which the date specified in the
immediately preceding paragraph falls.

 

-7-

 

3. The methods of computation of profits specified in Paragraph 1 hereof, the procedures of the
payment into the National Treasury specified in the same paragraph and the accounts to which the
payment belongs shall be provided for in the Cabinet Order.

			
	Article 30	 	(Short-term Borrowing)

1. The Corporation may make a short-term borrowing form financial institutions specified by the
Ordinances of competent ministries, within the limit of the amount equivalent to the limit amount
designated in the budget for issuance of the JFM Bonds, less the aggregate amount of the JFM Bonds
already issued (if such amount exceeds the maximum amount of the short-term borrowing provided for
in Article 22 hereof, such maximum amount), if such short-term borrowings are necessary for
management of fund-raising.

2. The short-term borrowings specified in the immediately preceding paragraph shall be repaid
within the business year in which such short-term borrowing is made.

3. The Corporation shall not borrow funds except in the case specified in Paragraph 1 above.

			
	Article 31	 	(Investment of Surplus Funds)

1. The Corporation shall not invest any surplus funds incurred from its business operations except
by way of:

	 	(1)	 	Purchase of government bonds, local government bonds, government-guaranteed
bonds (which shall mean the bonds of which the redemption of principal and interest
payment is guaranteed by the Government) or bonds issued by banks, the Norinchukin
Bank, the Shokochukin Bank or the Federation of Credit Associations which covers all
Japan;
	 
	 	(2)	 	Deposit with the Fiscal Loan Fund;
	 
	 	(3)	 	Deposit with Banks; or
	 
	 	(4)	 	Methods provided for in Ordinances of competent ministries as such shall
correspond to the preceding three items.

2. Investment of surplus funds by the methods provided for in the immediately preceding paragraph
shall be done safely and efficiently.

			
	Article 32	 	(Delivery of Funds)

The Corporation may, when deemed necessary for its business, deliver the necessary funds in
respect of loans to the financial institutions entrusted with business in accordance with the
provisions of Article 21, Paragraph 2 hereof (hereinafter referred to as the “Trustee”).

			
	Article 33	 	(Accounts Books)

The Corporation shall, as provided for by the competent ministers, keep the necessary books to
present properly the nature and content of the business and the condition of the business
operations and accounts.

			
	Article 34	 	Deleted.

CHAPTER VI SUPERVISION

			
	Article 35	 	(Supervision)

1. The competent ministers shall supervise the Corporation.

2. The competent ministers may, when deemed necessary for the enforcement of this Law, give the
Corporation such orders concerning its business as are necessary for supervision.

 

-8-

 

			
	Article 36	 	(Removal of Officers)

1. The competent ministers shall remove any officer of the Corporation who comes under one of the
items of Article 13 hereof.

2. The competent ministers may remove any officer of the Corporation who comes under any of the
following items:

	 	(1)	 	Any officer of the Corporation who has violated this Law or orders issued in
accordance with the provisions of this Law;
	 
	 	(2)	 	Any officer of the Corporation who has been convicted in a criminal case;
	 
	 	(3)	 	Any officer of the Corporation who has been adjudged to be subject to the
commencement of bankruptcy procedure; or
	 
	 	(4)	 	Any officer of the Corporation who is mentally or physically incompetent to
perform his/her duties.

			
	Article 37	 	(Report and Inspection)

1. The competent ministers may, when deemed necessary for the enforcement of this Law, have the
Corporation or the Trustee submit a report or have their officials enter the office of the
Corporation or that of the Trustee and inspect its condition of business or its registers,
documents or other necessary materials, limited, however, in case of the Trustee, to the scope of
its entrusted business.

2. The official who makes the on-the-spot inspection in accordance with the provisions of the
immediately preceding paragraph shall carry a certificate of identification and present the same to
the party concerned.

3. The on-the-spot inspection specified in Paragraph 1 above shall not be interpreted to be made
for the purpose of a criminal investigation.

			
	Article 37-2	 	(Delegation of Authority)

1. The competent ministers may, as may be provided for by the Cabinet Order, delegate a part of
the authority to make on-the-spot inspections provided for in Paragraph 1 of the immediately
preceding article to the Prime Minister.

2. When the Prime Minister has made an on-the-spot inspection in accordance with the provision of
Paragraph 1 of the immediately preceding article based on the delegation provided for in the
immediately preceding paragraph, the Prime Minister shall promptly report to the competent
ministers on the result thereof.

3. The Prime Minister shall delegate the authority delegated to him/her in accordance with the
provision of Paragraph 1 above and the authority under the provision of the immediately preceding
paragraph to the Commissioner of the Financial Services Agency.

4. The Commissioner of the Financial Services Agency may, as may be provided for by the Cabinet
Order, delegate all or a part of the authority delegated to him/her in accordance with the
provision of the immediately preceding paragraph to the Director General of a local finance bureau
or a local finance branch bureau.

CHAPTER VII AUXILIARY PROVISIONS

			
	Article 38	 	(Competent Ministers, etc.)

The competent ministers as used in this Law shall be the Minister for Internal Affairs and
Communications and the Minister of Finance, and the Ordinances of competent ministries shall be
those of the Ministry of Internal Affairs and Communications and those of Ministry of Finance.

 

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	Article 39	 	(Pension)

1. In the event that a public servant specified in Article 19 of the Pension Law (Law No. 48 of
1923) (hereinafter referred to in this article as a “public servant”) or a person who is regarded
as a public servant specified in the same article of the same Law (hereinafter referred to in this
article as a “person regarded as a public servant”) successively takes office as an employee of the
Corporation, the phrase “who is successively in office as a public servant or a person regarded as
a public servant” in Article 10, Paragraph 1 of the Supplementary Provisions of the Law for the
Partial Amendment of the Pension Law (Law No. 77 of 1947; hereinafter referred to as “Law No. 77”)
shall be, in applying the provisions of Article 10 of the Supplementary Provisions of Law No. 77,
read as “who is successively in office as a public servant or a person regarded as a public servant
or an employee of the Corporation”.

2. In the event that the provisions of Article 10 of the Supplementary Provisions of Law No. 77
are applied mutatis mutandis to the provisions of any other laws, the provisions of Paragraph 1 of
the said article read as provided for in the immediately preceding paragraph shall apply mutatis
mutandis .

3. In the event that a person who is actually in office as a public servant or a person regarded
as a public servant at the establishment of the Corporation, successively takes office as an
employee of the Corporation and further successively becomes a public servant or a person regarded
as a public servant (including the case where one who is actually in office as a public servant or
a person regarded as a public servant at the establishment of the Corporation is successively in
office as a public servant or a person regarded as a public servant and further successively takes
office as an employee of the Corporation and furthermore successively becomes a public servant or a
person regarded as a public servant), the term of his/her office as an employee of the Corporation
shall be, in computing the ordinary pension to be paid to such a public servant or a person
regarded as a public servant, added to the term of his/her office as a public servant or a person
regarded as a public servant.

4. The provisions of Paragraph 1 above (including the cases where the provisions of Article 10,
Paragraph 1 of the Supplementary Provisions of Law No. 77 read as provided for in Paragraph 1 above
apply mutatis mutandis in accordance with the provisions of other laws) and the immediately
preceding paragraph shall not apply to the person whose term of office as a public servant or a
person regarded as a public servant before his/her taking office as an employee of the Corporation
reaches the shortest necessary term for the ordinary pension.

5. In applying or applying mutatis mutandis of the provisions of Article 64-2 of the Pension Law
to a person to whom the provisions of Paragraph 3 above apply, his/her being employed as an
employee of the Corporation shall be regarded as his/her rehiring.

6. The Corporation shall, as provided for in the Cabinet Order, pay into the National Treasury or
local governments the amount to be paid as a pension to the person who was an employee of the
Corporation to whom the provisions of Paragraph 1 above (including the cases where the provisions
of Article 10, Paragraph 1 of the Supplementary Provisions of Law No. 77 read as provided for in
Paragraph 1 above apply mutatis mutandis in accordance with the provisions of other laws) and
Paragraph 3 above should apply, or his/her bereaved family.

 

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CHAPTER VIII PENAL PROVISIONS

			
	Article 40	 	(Penal Provisions)

An officer of the Corporation who comes under one of the following items shall be liable to a
non-penal fine not exceeding 30,000 yen:

	 	(1)	 	When he/she has failed to obtain the approval of the competent ministers as
required by this Law;
	 
	 	(2)	 	When he/she has neglected to register in violation of the Cabinet Order
specified in Article 6, Paragraph 1 hereof;
	 
	 	(3)	 	When he/she has conducted any business other than those specified in Article 19
hereof and Paragraph 9 of the Supplementary Provisions below;

	 	(4)	 	When he/she has employed surplus funds in violation of the provisions of
Article 31 hereof; or

	 	(5)	 	When he/she has disobeyed the orders of the competent ministers specified in
Article 35, Paragraph 2 hereof.

			
	Article 41	 	 

Anyone who uses the name “Japan Finance Corporation for Municipal Enterprises” or any other
similar name in violation of the provisions of Article 7 hereof shall be liable to a non-penal fine
not exceeding 10,000 yen.

 

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