| (a) There must be a description of the indenture under which the securities are to be issued. This description should include information as to: (1) interest and interest payment dates; (2) default; (3) redemption and prepayment; (4) subordination; (5) sinking fund; (6) subsequent issues; (7) modification of the indenture; (8) paying agents and trustees including a brief statement concerning the duties of trustees; (9) insurance coverage on properties of issuer; and (10) any other material facts regarding the rights of bond holders. (b) If any organization (it does not matter whether the organization is affiliated with the issuer or not) makes a guarantee of payment for the issue, information describing the ability of that organization to guarantee payment must be
furnished, including financial statements. The word "guarantee" should not be used to describe the obligation of the issuer to pay, and it is appropriate only if there is a second obligation by another entity. The guarantee in and of itself may involve the offering of a second security which may require registration. (c) If the security for the bond issue is in part real estate, the cost (if reasonably ascertainable) and appraised value of said property must be stated; likewise, a statement must be made concerning whether the sale of additional bonds may be authorized for the same underlying security.
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