receive new securities for the same aggregate amount of principal as is secured
by the existing securities, and, in addition thereto, shall be entitled to receive a
premium on such principal computed in accordance with the Fourth Schedule
hereto.

18. (1) Every premium to which any person is entitled under the last preceding clause shall be satisfied by payment of the amount thereof in cash.

(2) All payments of cash in accordance with the last preceding subclause
that are not made out of any sinking fund pursuant to the provisions of this
Order in that behalf shall be made by the local authority out of the local fund,
and charged to the appropriate account.

PLACE FOR PAYMENT OF PRINCIPAL AND INTEREST.

19. The principal and interest in respect of new securities shall be payable
    in New Zealand.

CONSOLIDATED SINKING FUND FOR NEW SECURITIES.

20. (1) In order to provide funds for the repayment of the new securities
    the local authority shall forthwith make provision for the creation, pursuant to a
    resolution of the local authority, of a consolidated sinking fund, of which the
    Public Trustee shall be the Commissioner.

(2) For such purpose the local authority shall permanently appropriate and
shall pay to the Commissioner of the consolidated sinking fund on each of the
maturity dates specified in the Third Schedule hereto, a contribution of seven
hundred and ten pounds, increased in respect of each contribution by a sum
equal to four and one-quarter per centum of the aggregate amount of new
securities redeemable up to and including the maturity date immediately preceding
that on which such contribution is payable, and reduced by the aggregate of the
sums which during the twelve months preceding the date of payment of such
contribution have, pursuant to the provisions of the next succeeding clause, been
paid to any sinking fund for unconverted securities

(3) The provisions of subsections four, five, and six of section ninety-five of
the Local Bodies' Loans Act, 1926, shall apply with respect to such sinking fund.

SINKING FUND FOR UNCONVERTED SECURITIES.

21. (1) If dissent is signified in accordance with the provisions of this Order
    from the conversion of any existing securities issued in respect of any loan in
    the First Schedule hereto for which a sinking fund was provided, the local
    authority, in order to provide funds for the repayment of the unconverted securities
    issued in respect of such loan, shall forthwith make provision for the creation,
    pursuant to a resolution of the local authority, of a sinking fund, of which the
    persons who at the date of conversion were Sinking Fund Commissioners in respect
    of such loan shall be the first Commissioners.

(2) For such purpose the local authority shall permanently appropriate a sum
which bears the same proportion to the annual contribution payable, before the
date of conversion, to the existing sinking fund of such loan as the aggregate
amount of principal secured by such unconverted securities bears to the aggregate
amount of principal secured by all the existing securities in respect of which such
existing sinking fund is held, and shall pay such sum to the Commissioners yearly
and every year until the maturity date of such unconverted securities, or until the
Commissioners are satisfied that the accumulations of sinking fund will suffice to
redeem such securities at maturity.

(3) The first of such yearly payments shall be made not later than one year
after the date on which the last annual contribution payable before the date of
conversion to the existing sinking fund of such loan was payable.

(4) Subject to the provisions of this Order, the provisions of sections forty
to forty-four of the Local Bodies' Loans Act, 1926, shall, so far as applicable
and with all necessary modifications, apply with respect to such sinking fund:
Provided that nothing in the said sections or in this Order shall authorize
the removal or suspension of the Public Trustee as Commissioner of any sinking
fund.

APPLICATION OF EXISTING SINKING FUNDS.

22. The existing sinking fund of every loan referred to in the First Schedule
    hereto shall be applied by the Commissioners thereof, so far as it will extend, in or
    towards making the following payments, in the following order of priority,
    namely:-

(a) First, in transferring to the Commissioners of the sinking fund herein-
before required to be created for the unconverted securities issued in
respect of such loan a sum which bears the same proportion to the
amount of such existing sinking fund at the date of conversion as the
aggregate amount of principal secured by such unconverted securities
bears to the aggregate amount of principal secured by all the securities
in respect of which such sinking fund is held;

(b) Secondly, in payment, in accordance with the directions of the local
authority, of any cash premiums to which any holder is entitled on
the conversion of any existing securities to which this Order applies
(whether issued in respect of such loan or of any other loan referred
to in the First Schedule hereto); and

(c) Thirdly, in transferring the balance to the Commissioner of the con-
solidated sinking fund hereinbefore required to be created for the new
securities, to be held as part of that sinking fund.

CONSOLIDATED SPECIAL RATE.

23. (1) As a security for the new securities and the unconverted securities
    the local authority shall forthwith, by resolution gazetted (in the form num-
    bered (4) in the Second Schedule hereto), make and levy a special rate over the
    whole of the district of the local authority to provide for the payment of interest,
    sinking fund, and other charges in respect of such securities.

(2) Subject to the provisions of this Order, the provisions of the Local
Bodies' Loans Act, 1926, and of any other Act shall, so far as applicable and
with all necessary modifications, apply with respect to such special rate, and with
respect to the interest and other charges in respect of such securities, as if such
special rate were made and levied in respect of a special loan raised under Part I
of the said Local Bodies' Loans Act, 1926.