Founded in 1939, the Pfandbriefstelle der österreichischen Landes-Hypothekenbanken (hereinafter:Pfandbriefstelle) is a public law credit institution whose task is to issue common mortgage bonds, public-sector mortgage bonds, and other debentures and to procure funds for the business operations of its members by raising or brokering loans or by issuing debentures on the basis of appropriate cover funds (e.g. mortgages serving as cover).

1. Pursuant to Section 1 of the Federal Act on the Pfandbriefstelle der österreichischen Landes-Hypothekenbanken, Federal Law Gazette I No. 45/2004 (Pfandbriefstelle Act), the Pfandbriefstelle is a body corporate under public law having registered offices in Vienna.
   
   Its company name is:
   Pfandbriefstelle der österreichischen Landes-Hypothekenbanken.
   The Pfandbriefstelle is set up for an indefinite period of time.
   
   
2. Members as defined in Section 5 Pfandbriefstelle Act are:
   1. EB und HYPO - Bank Burgenland AG, Eisenstadt;
   2. HYPO ALPE-ADRIA-BANK AG, Klagenfurt;
   3. HYPO ALPE-ADRIA-BANK INTERNATIONAL AG, Klagenfurt;
   4. Niederösterreichische Landesbank-Hypothekenbank AG, St. Pölten;
   5. Oberösterreichische Landesbank AG, Linz;
   6. Salzburger Landes-Hypothekenbank AG, Salzburg;
   7. Landes-Hypothekenbank Steiermark AG, Graz;
   8. HYPO TIROL BANK AG, Innsbruck;
   9. Vorarlberger Landes- und Hypothekenbank AG, Bregenz.
   
   
3. The Pfandbriefstelle, as a public law credit institution, is governed by the Mortgage Bond ActdRGBl. 1927 I S 492, and the Banking Act – BWG,
   Federal Law Gazette No. 532/1993 Art. I.
   
   
4. The Pfandbriefstelle may carry a seal or stamp designated “Pfandbriefstelle der österreichischen Landes-Hypothekenbanken”.

§ 2 Liability

1. The members are jointly and severally liable for the liabilities of the Pfandbriefstelle.
   The members may reach other liability agreements in a particular case to cover those liabilities which are no longer covered by the liability of a guarantor as set forth in paragraph 3. These are, however, effective only if published in the terms and conditions of issue.
   
   
2. Different liability agreements must be approved by the Administrative Council. Liabilities arising from issues of the Pfandbriefstelle which are no longer covered by the liability of a guarantor pursuant to paragraph 3 will be accepted by those members only which specifically accepted liability in the Administrative Council's resolution adopting the issue.
   
   Articles of Association of Pfandbriefstelle der österreichischen Landes-Hypothekenbanken
   September 22, 2004
   
   
3. The members’ guarantors are jointly and severally liable for all liabilities of the Pfandbriefstelle which have arisen until 2 April 2003. The guarantors are jointly and severally liable for all liabilities that have arisen after 2 April 2003 up to 1 April 2007 only if the agreed terms do not mature after 30 September 2017. The guarantors are no longer liable for liabilities arising after 1 April 2007.
   
   
4. The Pfandbriefstelle shall establish and include in a separate liability report the scope of liabilities covered by the guarantors’ liability annually as of the balance sheet date. The Pfandbriefstelle’s Board of Directors shall submit the liability report to the guarantors and the Financial Market Authority no later than within six months after the end of the financial year.

§ 3 Objects of Business

1. The Pfandbriefstelle's responsibility is to issue mortgage bonds (mortgage debentures, public sector mortgage bonds) on the basis of cover loans granted by its members and to procure funds for loans to be granted by its members by raising or brokering loans.
   
2. To achieve these objects, the Pfandbriefstelle engages in the following business:
   
   Section 1 1 (1) Banking Act: The acceptance of moneys of others for administration or as deposit (deposit business);
   
   Section 1 (1) (3) Banking Act:
   The entering into money loan contracts and extension of money loans (credit business);
   
   Section 1 (1) (7) Banking Act:
   The dealing for own or other than own account in
   a) foreign means of payment (foreign exchange and foreign currency business);
   b) money market instruments;
   c) financial futures contracts, including equivalent cash-settled instruments and options to acquire or dispose of any instruments falling within paras a and d through f, including equivalent cash-settled instruments (futures and options business);
   d) forward interest rate agreements and interest rate adjustment agreements (FRAs), interest rate and currency swaps as well as equity swaps;
   e) transferrable securities (securities business);
   f) instruments derived from paras b through e;
   Section 1 (1) (9) Banking Act:
   The issuing of mortgage bonds, municipal bonds and the investment of their proceeds in accordance with the applicable legal provisions (issuing of securities business – except for the issue of funded bank bonds);
   
   Section 1 (1) (10) Banking Act:
   The issuing of other fixed-interest securities in order to invest the proceeds in other banking activities, limited to the issue of unfunded bonds forming part of the loan issue, the proceeds of which are passed on in the form of loans and credits to the Landes-Hypothekenbanken and companies of which more than half is owned by the Landes-Hypothekenbanken, such proceeds being passed on directly or on an escrow basis predominantly in the form of medium or long-term loans and credits for investment
   purposes (other issuing of securities business);
   
   Section 1 (1) (11) Banking Act:
   Participation in the underwriting of third party issues of any of the instruments listed in No. 7 paras b through f and the provision of services related thereto (third party issuing of securities business);
   
   Section 1 (1) (18) Banking Act:
   The brokerage of transactions set forth in
   a) No 1, unless conducted by contractual insurance companies;
   b) No 3, with the exception of the brokerage of mortgage loans and personnel loans by licensed real estate agents and licensed brokers of personnel loans, mortgage loans and investment consulting;
   c) No 7 para. a, insofar as it concerns the foreign exchange business;
   d) No 8;
   
   Section 1 (1) (19) Banking Act:
   The providing of the following services relating to financial instruments, to the extent these services do not encompass the holding of money, securities or other instruments so that the provider of these
   services at no time places himself in debit with his client (financial service business);
   a) investment advice concerning client funds;
   b) managing client portfolios in accordance with mandates given by investors; and
   c) brokerage of business opportunities for the acquisition or sale of one or more of the instruments referred to in No. 7 paras b through f.

§ 4 Relationship to Members

1. The funds procured in accordance with § 3 are made available to the members in the form of loans, less the money procurement costs.
   
   
2. The members may invest the funds only in such mortgages and public-sector loans which are compatible with the lending principles and conditions of loans issued in accordance with § 9 (3) and, pursuant to the legal provisions, are suitable for covering the mortgage bonds and municipal creditbacked bonds (public-sector debentures, public-sector bonds) the Pfandbriefstelle has issued or the loans it has raised pursuant to § 3.
   The members shall procure that sufficient cover in accordance with the legal provisions equal to the amount of the loans granted to them is available at all times for the bonds issued by the Pfandbriefstelle or the loans it has raised pursuant to § 3.
   
   
3. The members shall provide such information to and permit the Board of Directors to carry out such audits which it may deem necessary. They shall promptly submit to the Pfandbriefstelle the audit report on the financial statements on an annual basis.

§ 5 Working Capital

The members shall provide the Pfandbriefstelle with the necessary working capital. The Pfandbriefstelle may collect a levy from its members to cover expenses which are not covered by its own revenues. The amount of working capital to be provided and the amount of the levy will be determined by the Administrative Council

§ 6 Bodies

InstitutesBodies of the Pfandbriefstelle are the Board of Directors and the Administrative Council.

§ 7 Composition of the Administrative Council

1. The Pfandbriefstelle’s Administrative Council consists of the chairman, his deputy and a number of further members as described in paragraph 2.
   
   
2. Each member institute will delegate one member to the Administrative Council whose term of office shall not exceed five years. Members may be delegated several times. The delegated member may be represented by another member of that member institute's Board of Directors or by another member of the Administrative Council.
   
   
3. The Administrative Council will elect a chairman and a deputy from among its members by simple majority of the votes cast. These appointments and any termination of the chairman’s or his deputy’s mandate shall be promptly notified in writing to the Federal Minister of Finance and to the Financial Market Authority. The term of office may not exceed the term of office for which the elected member was delegated to the Administrative Council.
   
   
4. The Administrative Council may appoint one or more committees from among its members and ask experts for assistance.
   
   
5. Meetings of the Administrative Council are called by the chairman at least on a quarterly basis. Invitations, which shall state the agenda, shall be sent in writing or via e-mail at least fourteen days before the meeting.

§ 8 Resolutions of the Administrative Council

1. The Administrative Council will form a quorum if it was properly convened and if the chairman or his deputy and at least half of the other members or their deputies are present. A valid resolution requires a simple majority of the votes cast.
   
2. In case of a tie, the chairman, who may also otherwise participate in votes, shall have a casting vote. Resolutions referred to in § 9 (11) require a majority of two thirds of the votes validly cast. The Administrative Council shall adopt resolutions to amend § 2 (liability) unanimously. Abstentions shall not qualify as votes cast. Circular resolutions are valid only if all members of the Administrative Council (or their deputies) have agreed with a written vote in a particular case.

§ 9 Competence of the Administrative Council

The Administrative Council is particularly responsible for:

1. appointing and recalling members of the Board of Directors; a member shall be appointed without delay if the Board of Directors has less than two members; members shall be recalled without delay if the requirements laid down in Section 5 (1) (6) through (11) and (13) Banking Act are no longer satisfied or in case of good cause as defined in Section 75 (4) Stock Corporation Act 1965, Federal Law Gazette 98/1965.
   
2. adopting the Board of Directors' rules of procedure and the assignment of responsibilities and the rules of procedure for the Administrative Council;
   
3. establishing the requirements for the use of a mortgage as mortgage bond cover, in particular the security requirements (lending principles)
   
4. deciding on the use of the capital sums to be procured by the Pfandbriefstelle
   
5. establishing the extent to which the member banks shall make working capital available to the Pfandbriefstelle;
   
6. approving the purchase and sale of real property and other measures for which the Board of Directors seeks the Administrative Council’s approval in view of their importance
   
7. supervising the entire management and carrying out the necessary examinations, whereas
   substantial drawbacks or difficulties, which cannot be removed shortly, shall promptly be notified to the Federal Minister of Finance.
   
8. determining the contributions which will be demanded from the member banks
   
9. commenting on the budget, approving the financial statements and the annual report and
   discharging the Board of Directors
   
10. compensating retiring member banks
    
11. adopting the articles of association or any amendment thereof, dissolving the Pfandbriefstelle and distributing the liquidation proceeds.

§ 10 Board of Directors

1. The Board of Directors shall conduct the Pfandbriefstelle’s operations with the diligence of a prudent and conscientious manager (Section 39 (1) Banking Act). (2) The Board of Directors particularly represents the Pfandbriefstelle in and out of court.
   
   
2. The Board of Directors has at least two members who shall be appointed by the Administrative Council for not more than five years. Members may be appointed several times. Every appointment of a member of the Board of Directors and every termination of a board mandate shall promptly be notified in writing to the Federal Minister of Finance.
   
   
3. The Board of Directors adopts its resolutions unanimously, provided it consists of two members, or else by simple majority of the votes cast.
   
   
4. The Board of Directors shall issue its own rules of procedure with the consent of the
   Administrative Council, which rules will lay down an allocation of business, regardless of the Company's representation towards third party.

§ 11 Representation and Signing Authority

Declarations issued on behalf of the Pfandbriefstelle will be signed "Pfandbriefstelle der österreichischen Landes-Hypothekenbanken". The Pfandbriefstelle is represented by two members of the Board of Directors jointly, or by one member of the Board of Directors together with a holder of power of collective commercial representation (Gesamtprokurist). The signing authority will be published in customary bank signatures books.

§ 12 Supervision of the Pfandbriefstelle

1. The legal supervision of the Federal Minister of Finance refers to the Pfandbriefstelle as a body corporate of public law and continues after its dissolution until the completion of its liquidation. All documents and information shall be provided to the Federal Minister of Finance at all times upon his request. In addition, the experts he may have appointed shall be granted access to the books, records and data carriers.
   
   
2. Resolutions of the Administrative Council on the dissolution of the Pfandbriefstelle, the
   distribution of the liquidation proceeds and amendments of the articles of association shall be approved by the Federal Minister of Finance.
   
   
3. These provisions do not affect the competence of the Financial Market Authority (FMA) as
   banking supervisory authority within the meaning of the Banking Act. In addition, the state
   commissioner and his deputy shall have the powers referred to in Section 76 Banking Act.

§ 13 Financial Year, Financial Statements and Appropriation of Profits

1. The financial year shall be the calendar year.
   
   
2. Within the first six months of the financial year, the Board of Directors shall prepare the financial statements, profit and loss account, the notes thereto and the directors' report for the preceding financial year, and it shall submit these documents after they have been audited by an auditor along with a proposal for the appropriation of profits to the Administrative Council.
   
   
3. Within the first eight months of the financial year, the Administrative Council decides each year on the discharge of the Board of Directors, the distribution of net profits generated in the preceding year, the election of the auditor and, in the cases provided for by law, on the adoption of the financial statements.
   
   
4. No later than six weeks before commencement of a financial year, the Board of Directors shall submit a budget to the Administrative Council.

§ 14 Amendments of the Articles of Association

Resolutions of the Administrative Council on amendments of the articles of association shall be adopted with two thirds of the votes validly cast. The Administrative Council shall adopt resolutions to amend § 2 (liability) unanimously. After its approval by the Administrative Council of the Pfandbriefstelle, any amendment of the articles of association shall be submitted to the Federal Minister of Finance for approval without delay.

§ 15 Publications

Publications of the Pfandbriefstelle shall be made in "Wiener Zeitung".

§ 16 Withdrawal of Member Banks

Member banks may terminate their membership with six months' notice at the end of a financial year, provided they have redeemed the loans received from the Pfandbriefstelle.

§ 17 Dissolution of the Pfandbriefstelle

After dissolution of the Pfandbriefstelle, the Board of Directors shall wind up business in accordance with the detailed instructions of the Administrative Council. Any remaining assets after the termination of the liquidation shall be due to the member banks.

§ 18 Transitional Provisions

The first terms of office of the Administrative Council, of the chairman and his deputy and of the Board of Directors shall commence with the date on which these articles are adopted by the Administrative Council.

§ 19 Termination of the Pfandbriefstelle

The board of directors has to settle the transactions after termination of the
Pfandbriefstelle according to the detailed orders of the administrative council.
The assets remaining after the liquidation accrue to the member institutes,
insofar as public corporate bodies, which participate with an initial contribution,
have not been granted a participation in the remaining assets.