Capital Plan



 Exhibit 4.1 
 

 
 CAPITAL PLAN OF THE 
 FEDERAL HOME LOAN BANK OF ATLANTA 
 As Last Amended by the Board of Directors on

 December 8, 2005 
 Approved by the Finance Board on 
 January 25, 2006 








					
	 I.
	  	DEFINITIONS	  	1
			
	II.	  	CAPITAL STOCK	  	5
			
		  	A. CHARACTERISTICS OF CAPITAL STOCK	  	5
			
		  	B. INTEREST IN RETAINED EARNINGS	  	5
			
	 III.
	  	ISSUANCE OF CAPITAL STOCK	  	5
			
		  	A. SUBJECT TO PLAN	  	5
			
		  	B. NEW MEMBERS	  	5
			
		  	C. FORMER MEMBERS AND NONMEMBER STOCKHOLDERS	  	5
			
	 IV.
	  	MINIMUM STOCK REQUIREMENT	  	6
			
		  	A. CALCULATION OF MINIMUM STOCK REQUIREMENT	  	6
			
		  	B. AUTHORIZED RANGES	  	7
			
		  	 1. Authorized Ranges for Membership Stock Requirement
	  	7
			
		  	 2. Authorized Ranges for Activity-Based Stock Requirement
	  	7
			
		  	 3. No Adjustment Outside Authorized Ranges Without Plan Amendment
	  	7
			
		  	C. ADJUSTMENTS TO MINIMUM STOCK REQUIREMENTS	  	7
			
		  	 1. Notice of Change in Minimum Stock Investment Requirement
	  	7
			
		  	 2. Adjustment to Membership Stock Requirement
	  	8
			
		  	 3. Adjustment to Activity-Based Stock Requirement
	  	9
			
		  	 4. Application of Change Within Authorized Ranges
	  	10
			
	 V.
	  	OWNERSHIP AND TRANSFER OF CAPITAL STOCK	  	10
			
	 VI.
	  	VOTING RIGHTS	  	11
			
	 VII.
	  	DIVIDENDS	  	11
			
		  	A. DECLARATION OF DIVIDENDS	  	11
			
		  	B. NO PREFERENCE	  	11
			
		  	C. STOCK HELD BY WITHDRAWING OR FORMER MEMBER	  	11
			
	 VIII.
	  	LIQUIDATION, MERGER OR CONSOLIDATION	  	11
			
		  	A. LIQUIDATION	  	11
			
		  	B. MERGER OR CONSOLIDATION	  	12
			
		  	C. NO LIMITATION ON FINANCE BOARD’S AUTHORITY	  	12
			
	 IX.
	  	REDEMPTION AND REPURCHASE OF CAPITAL STOCK (CONTINUING MEMBERSHIP)	  	12
			
		  	A. REDEMPTION UPON APPLICATION BY THE MEMBER	  	12
			
		  	 1. Conditions Applicable to Redemption
	  	12
			
		  	 2. Cancellation of Redemption Notice
	  	12
			
		  	 3. Redemption
	  	13
			
		  	B. REPURCHASE UPON INITIATION BY THE BANK	  	13
			
		  	C. CONTINUED BENEFITS OF OWNERSHIP PRIOR TO REDEMPTION OR
REPURCHASE	  	13

  


					
	As of December 8, 2005	  	i	  	










					
	 X.
	  	REDEMPTION AND REPURCHASE OF CAPITAL STOCK (WITHDRAWAL OR TERMINATION OF MEMBERSHIP)	  	13
			
		  	A. VOLUNTARY WITHDRAWAL	  	13
			
		  	 1. Notice of Intention to Withdraw from Membership
	  	13
			
		  	 2. Termination of Membership
	  	13
			
		  	 3. Continued Benefits of Membership Prior to Termination
	  	14
			
		  	 4. Cancellation of Notice of Withdrawal
	  	14
			
		  	 5. Circumstances Requiring Finance Board Certification for Withdrawal
	  	14
			
		  	B. TERMINATION OF MEMBERSHIP AS A RESULT OF A,
CONSOLIDATION OR RELOCATION	  	14
			
		  	 1. Consolidation of Members
	  	14
			
		  	 2. Consolidation into Nonmember
	  	15
			
		  	 3. Relocation of Member
	  	15
			
		  	C. OTHER INVOLUNTARY TERMINATION OF MEMBERSHIP	  	16
			
		  	D. REDEMPTION	  	17
			
	 XI.
	  	LIMITATIONS ON REDEMPTION AND REPURCHASE OF CAPITAL STOCK	  	17
			
		  	 A. LIMITATIONS DUE TO CHARGES AGAINST CAPITAL
STOCK
	  	17
			
		  	 B. LIMITATIONS DUE TO FAILURE TO SATISFY
MINIMUM REQUIREMENTS
	  	17
			
		  	 C. OTHER RESTRICTIONS ON REDEMPTION
	  	17
			
		  	 D. OTHER RESTRICTIONS ON REPURCHASE
	  	17
			
		  	 E. NOTICE OF SUSPENSION OF REPURCHASES OR
REDEMPTIONS
	  	18
			
		  	 F. NO PRIORITY FOR NOTICES OF REDEMPTION
IN THE EVENT OF LIQUIDATION
	  	18
			
	 XII.
	  	DISPOSITION OF CLAIMS	  	18
			
		  	 A. IN GENERAL
	  	18
			
		  	 B. LIEN ON CAPITAL STOCK
	  	18
			
		  	 C. PREPAYMENT FEES
	  	18
			
	 XIII.
	  	AMENDMENT TO THE CAPITAL PLAN	  	19

  


					
	As of December 8, 2005	  	ii	  	









 CAPITAL PLAN OF THE 
 FEDERAL HOME LOAN BANK OF ATLANTA 
  

	I.	Definitions 

 For the purposes of this Plan,
all capitalized terms used but not defined elsewhere have the following meanings: 
 Acquired Member Assets (“AMA”) means
assets acquired by the Bank from a Member pursuant to Part 955 of the Regulations. 
 Acquired Member Asset Stock Requirement means the
amount of Subclass B2 Capital Stock (rounded up to the nearest whole share) that a Member must own for as long as the Bank owns any Acquired Member Asset sold by the Member to the Bank. 
 Acquired Member Asset Stock Retention Requirement means the amount of Subclass B2 Capital Stock (rounded up to the nearest whole share) that a
Former Member or Nonmember Stockholder must own for as long as the Bank owns any Acquired Member Asset sold by the Former Member to the Bank. The Acquired Member Asset Stock Retention Requirement for a Former Member or Nonmember Stockholder shall be
calculated according to the same formula used to calculate the Acquired Member Asset Stock Requirement for a Member. 
 Act means the
Federal Home Loan Bank Act, as amended from time to time. 
 Activity-Based Stock Requirement means the amount of Subclass B2 Capital
Stock (rounded up to the nearest whole share) that a Member must own for as long as a particular transaction between the Bank and the Member remains outstanding. 
 Activity-Based Stock Retention Requirement means the amount of Subclass B2 Capital Stock (rounded up to the nearest whole share) that a Former Member or Nonmember Stockholder must own for as long as a
particular transaction between the Bank and the Former Member remains outstanding. The Activity-Based Stock Retention Requirement for a Former Member or Nonmember Stockholder shall be calculated according to the same formula used to calculate the
Activity-Based Stock Requirement for a Member. 
 Advance or Advances means the principal balance of all loans from the Bank to a
Member or Former Member that are outstanding from time to time and that are (1) provided pursuant to a written agreement, (2) supported by a note or other written evidence of the borrower’s obligation, and (3) fully secured by
collateral in accordance with the Act and the Regulations, including, without limitation, all such loans that are outstanding on the Conversion Date. 
 Advances Stock Requirement means the amount of Subclass B2 Capital Stock (rounded up to the nearest whole share) that a Member must own for as long as Advances made by the Bank to the Member remain outstanding.

 Advances Stock Retention Requirement means the amount of Subclass B2 Capital Stock (rounded up to the nearest whole share) that a
Former Member or Nonmember Stockholder must own for as long as Advances made by the Bank to the Former Member remain outstanding. The Advances Stock Retention Requirement for a Former Member or Nonmember Stockholder shall be calculated according to
the same formula used to calculate the Advances Stock Requirement for a Member. 
  


					
	As of December 8, 2005	  	1	  	









 Bank means the Federal Home Loan Bank of Atlanta. 
 Board of Directors means the board of directors of the Bank. 
 Business Day means any day on which the Bank is open to conduct business. 
 Capital Stock means
capital stock that has the characteristics of class B stock as described in the Act and the Regulations. 
 Consolidation means a
merger, a consolidation, a sale of all, or substantially all, of the assets and liabilities of an entity to another entity, or other similar transaction. 
 Conversion Date means December 17, 2004. 
 Daily Investment Account means a Member’s,
Former Member’s or Nonmember Stockholder’s demand deposit transaction account established at the Bank. 
 Excess Stock (or
“Excess Shares”) means the amount of each subclass of Capital Stock held by a Member, Former Member or Nonmember Stockholder that exceeds the amount of Capital Stock for that subclass that the Member, Former Member or Nonmember Stockholder
is required to own in accordance with the provisions of the Plan. 
 Excess Stock Threshold Amount means the amount, as determined by
the Bank from time to time, of Excess Shares of Subclass B2 Capital Stock that generally shall trigger the Repurchase by the Bank of some or all of such Excess Shares of Subclass B2 Capital Stock owned by the Member, Former Member or
Nonmember Stockholder. 
 Exchange means the exchange on the Bank’s books of each share of Bank stock outstanding prior to the
exchange on the Conversion Date for one share of Capital Stock, upon which each share of Bank stock shall be retired. 
 Finance Board
means the Federal Housing Finance Board or any successor agency. 
 Former Member means an institution, other than a Member or
Nonmember Stockholder, that owns Capital Stock, and includes without limitation (1) an institution that has withdrawn voluntarily from Membership, (2) an institution whose Membership has been terminated and ceased to exist as a result of
Consolidation and the Capital Stock of which is now owned by a Nonmember Stockholder, (3) an institution whose Membership has been terminated as a result of Relocation outside of the Bank’s district, and (4) an institution whose
Membership has been terminated involuntarily by the Board of Directors. 
 GAAP means generally accepted accounting principles in the
United States. 
 Indebtedness means all indebtedness of a Member, Former Member or Nonmember Stockholder to the Bank that is
outstanding from time to time, including, without limitation, all Advances and all other obligations and liabilities of the Member, Former Member or Nonmember Stockholder to the Bank. 
 Issue or Issuance means the issuance of Capital Stock to a Member, Former Member or Nonmember Stockholder by the Bank (1) in the Exchange or
(2) in a sale or (3) as a dividend. 
 Member means any institution, other than a Former Member, that has been approved for
Membership in the Bank and has purchased and owns the required amount of Capital Stock. 
  


					
	As of December 8, 2005	  	2	  	









 Membership means membership in the Bank. 
 Membership Stock Requirement means the amount of Subclass B1 Capital Stock (rounded up to the nearest whole share) that a Member must own in order
to become and remain a Member. 
 Membership Stock Retention Requirement means the amount of Subclass B1 Capital Stock (rounded up to
the nearest whole share) that a Former Member or Nonmember Stockholder must own until the expiration of the Redemption Period applicable to the Capital Stock. The Membership Stock Retention Requirement for a Former Member or Nonmember Stockholder
shall be the amount of Capital Stock that comprised the Former Member’s Membership Stock Requirement on the date on which its Membership was terminated, unless adjusted in accordance with the provisions of Section IV.C.2.c. of this Plan.

 Minimum Regulatory Capital Requirement means each and all of the following: (1) the Regulatory Leverage Capital Requirement,
(2) the Regulatory Risk-Based Capital Requirement, and (3) the Regulatory Total Capital Requirement. 
 Minimum Stock
Requirement for a Member means the sum of (1) the Member’s Membership Stock Requirement, and (2) the Member’s Activity-Based Stock Requirement. 
 Minimum Stock Retention Requirement for a Former Member or Nonmember Stockholder means the sum of (1) the Former Member’s or Nonmember Stockholder’s Membership Stock Retention Requirement, and
(2) the Former Member’s or Nonmember Stockholder’s Activity-Based Stock Retention Requirement. 
 Nonmember Stockholder
means an institution, other than a Member or a Former Member, that owns Capital Stock, and has acquired a Member or Former Member in connection with a Consolidation. 
 Notice to Members (or “Notice”) means any written notice from the Bank to Members, Former Members or Nonmember Stockholders regarding any element of the Plan, and also includes any electronic writing
related to the Plan, including electronic mail. 
 Opt-Out Date means November 17, 2004. 
 Permanent Capital means the sum of (1) the amount of the retained earnings of the Bank, determined in accordance with GAAP, and (2) the
amounts paid-in for Capital Stock. 
 Plan means this capital plan as adopted by the Board of Directors and approved by the Finance
Board. 
 Principal Place of Business means, for an institution, the state in which the institution maintains its home office
established as such in conformity with the laws under which the institution is organized, or, if such institution has designated another state as such institution’s principal place of business in accordance with Section 925.18(c) of the
Regulations, such other state. 
 Record Date means December 31 of the prior calendar year. 
 Redeem or Redemption means the acquisition and retirement by the Bank of Capital Stock and payment at par value to a Member, Former Member or
Nonmember Stockholder following the expiration of the Redemption Period. 
  


					
	As of December 8, 2005	  	3	  	









 Redemption Period for Capital Stock means the five-year period following (1) the Bank’s
receipt of a Member’s written Redemption notice to the Bank provided in accordance with the provisions of Section IX. of the Plan, (2) the Bank’s receipt of a Member’s written notice to the Bank of the Member’s intention to
withdraw from Membership provided in accordance with the provisions of Section X. of the Plan, or the date of acquisition or receipt by the Member of any additional shares of Capital Stock after the Bank’s receipt of such notice, (3) a
Member’s termination from Membership as a result of a Consolidation into a nonmember, or the date of acquisition or receipt by the successor to the Member of any additional shares of Capital Stock after such Member’s termination from
Membership, (4) a Member’s termination from Membership as a result of Relocation, or the date of acquisition or receipt by such Member of any additional shares of Capital Stock after the termination of Membership, or (5) a
Member’s involuntary termination from its Membership, or the date of acquisition or receipt by such Member of any additional shares of Capital Stock after the termination of its Membership. 
 Regulations means the regulations of the Finance Board, as amended from time to time. 
 Regulatory Leverage Capital Requirement means the ratio of Total Capital to total assets that the Bank is required to maintain in accordance with
the Regulations. 
 Regulatory Risk-Based Capital Requirement means the amount of Permanent Capital that the Bank is required to
maintain in accordance with the Regulations. 
 Regulatory Total Capital Requirement means the amount of Total Capital that the Bank is
required to maintain in accordance with the Regulations. 
 Relocation means an institution’s Principal Place of Business is no
longer located or designated in a state within the Bank’s district. 
 Repurchase means the acquisition and retirement by the Bank
of Excess Stock and payment at par value to a Member, Former Member or Nonmember Stockholder without regard to the expiration of any Redemption Period. 
 Targeted Debt/Equity Investment means a debt or equity investment that meets the criteria set forth in Section 940.3(e) of the Regulations. 
 Targeted Debt/Equity Investment Stock Requirement means the amount of Subclass B2 Capital Stock (rounded up to the nearest whole share) that a
Member must own for as long as the Bank owns any Targeted Debt/Equity Investment sold by the Member to the Bank. 
 Targeted Debt/Equity
Investment Stock Retention Requirement means the amount of Subclass B2 Capital Stock (rounded up to the nearest whole share) that a Former Member or Nonmember Stockholder must own for as long as the Bank owns any Targeted Debt/Equity Investment
sold by the Former Member to the Bank. 
 Total Capital means the sum of (1) Permanent Capital; (2) the amount of any general
allowance for losses reserved on the books of the Bank; and (3) the value of other instruments identified in the Plan that the Finance Board has determined by regulation to be available to absorb losses incurred by the Bank. 
  


					
	As of December 8, 2005	  	4	  	










	II.	Capital Stock 

  

	 	A.	Characteristics of Capital Stock 

 The Board of
Directors hereby authorizes the Bank to Issue, Redeem, and Repurchase Capital Stock, and take other actions in accordance with the provisions of the Plan, at the Exchange and thereafter. Capital Stock shall have a par value of $100 per share and
shall be Issued, Redeemed, and Repurchased only at its stated par value. 
 The Bank may Issue Capital Stock only in book-entry form, only in
whole shares, and only in the following subclasses: (i) Subclass B1, which a Member must own in order to become and remain a Member and (ii) Subclass B2, which a Member must own for as long as certain transactions between the Bank and the
Member remain outstanding. A Member may not use shares of (i) Subclass B1 Capital Stock to meet any Activity-Based Stock Requirement or (ii) Subclass B2 Capital Stock to meet any Membership Stock Requirement. 
  

	 	B.	Interest in Retained Earnings 

 Each Issued and
outstanding share of Capital Stock shall represent an undivided ownership interest (proportionate to the number of shares of Capital Stock Issued and outstanding from time to time) in the retained earnings, paid-in surplus, undivided profits, and
equity reserves of the Bank. No Member, Former Member or Nonmember Stockholder shall have a right to receive a distribution of its undivided interest in the retained earnings, paid-in surplus, undivided profits, or equity reserves of the Bank at any
time, including but not limited to, upon withdrawal or termination from Membership, except through a dividend or capital distribution approved by the Board of Directors or as a result of the liquidation of the Bank. 
  

	III.	Issuance of Capital Stock 

  

	 	A.	Subject to Plan 

 The terms, rights, and preferences
applicable to any Capital Stock Issued by the Bank shall be identical to those set forth in this Plan. The Bank may not Issue Capital Stock other than in accordance with the Regulations and this Plan. 
  

	 	B.	New Members 

 Within 60 calendar days following
Membership approval by the Bank, an approved applicant must purchase and hold sufficient shares of Capital Stock to satisfy its Minimum Stock Requirement in effect on the date of the purchase. The Membership Stock Requirement for a new Member shall
be calculated using the applicant’s total assets as of the most recent quarter-end for which data is available. 
  

	 	C.	Former Members and Nonmember Stockholders 

 Any
Former Member or Nonmember Stockholder must purchase and hold sufficient shares of Capital Stock to satisfy its Minimum Stock Retention Requirement. 
  


					
	As of December 8, 2005	  	5	  	










	IV.	Minimum Stock Requirement 

  

	 	A.	Calculation of Minimum Stock Requirement 

 From time
to time, the Board of Directors shall set the Minimum Stock Requirement for Members so that the aggregate of (i) the Minimum Stock Requirements of all Members and (ii) the Minimum Stock Retention Requirements of all Former Members and
Nonmember Stockholders is sufficient for the Bank to meet its Minimum Regulatory Capital Requirement. The Board of Directors shall have a continuing obligation to review and adjust the Minimum Stock Requirement to ensure that the Bank remains in
compliance with its Minimum Regulatory Capital Requirement. Each Member shall comply promptly with any such requirement. As of the Conversion Date, and for as long as its Membership continues or a relevant transaction is outstanding, each Member
shall hold Capital Stock in an amount equal to the sum of: 
  

	 	1.	The Member’s Membership Stock Requirement, which shall be shares of Subclass B1 Capital Stock equal to the lesser of: 

  

	 	a.	The percentage (initially 0.20%) of the Member’s total assets as of the Record Date specified by the Board of Directors in accordance with Section IV.B. of this Plan; or


  

	 	b.	The dollar cap (initially $25 million) on the Subclass B1 Membership Stock Requirement applicable to all Members specified by the Board of Directors in accordance with Section IV.B.
of this Plan; plus 

  

	 	2.	The Member’s Activity-Based Stock Requirement, which shall be shares of Subclass B2 Capital Stock equal to the sum of: 

  

	 	a.	The Member’s Advances Stock Requirement, which shall be the percentage (initially 4.50%) of the Member’s outstanding Advances specified by the Board of Directors in
accordance with Section IV.B. of this Plan; plus 

  

	 	b.	The Member’s Acquired Member Asset Stock Requirement, which shall be the percentage (initially 0.00%) of any Acquired Member Asset sold by the Member to the Bank specified by
the Board of Directors in accordance with Section IV.B. of this Plan; plus 

  

	 	c.	The Member’s Targeted Debt/Equity Investment Stock Requirement, which shall be the percentage (initially 8.00%) of any Targeted Debt/Equity Investment sold by the Member and
owned by the Bank specified by the Board of Directors in accordance with Section IV.B. of this Plan. 

 Provided, however, that
(i) the Member’s Acquired Member Asset Stock Requirement shall not include any Acquired Member Asset sold by the Member and owned by the Bank pursuant to a master commitment executed prior to the Conversion Date; and (ii) the
Member’s Targeted Debt/Equity Investment Stock Requirement shall not include any Targeted Debt/Equity Investment sold by the Member and owned by the Bank prior to the Conversion Date. 
 The Bank provided at least 75 days’ advance notice of the initial factors used to calculate, and the dollar cap applicable to, the Minimum Stock
Requirement via a Notice to Members. Such Notice was also provided to any institution with a pending application for Membership on the 

  


					
	As of December 8, 2005	  	6	  	









 
date of the Notice and to any institution that requested or submitted an application for Membership subsequent to the date of the Notice, but prior to the
Conversion Date. 
  

	 	B.	Authorized Ranges 

  

	 	1.	Authorized Ranges for Membership Stock Requirement 

 From
time to time, the Board of Directors may adjust the factor used to calculate the Membership Stock Requirement to an amount of Subclass B1 Capital Stock equal to but not less than 0.05% nor greater than 0.40% of the Member’s total assets.

 From time to time, the Board of Directors may adjust the dollar cap applicable to the Membership Stock Requirement to an amount of
Subclass B1 Capital Stock equal to but not less than $15 million nor greater than $35 million. 
  

	 	2.	Authorized Ranges for Activity-Based Stock Requirement 

 From time to time, the Board of Directors may adjust the Activity-Based Stock Requirement to an amount equal to the sum of: 
  

	 	a.	The Advances Stock Requirement, which shall equal an amount of Subclass B2 Capital Stock not less than 3.50% nor greater than 6.00% of the Member’s outstanding Advances; plus


  

	 	b.	The Acquired Member Asset Stock Requirement, which shall equal an amount of Subclass B2 Capital Stock not less than 0.00% nor greater than 6.00% of any Acquired Member Asset sold by
the Member and owned by the Bank; plus 

  

	 	c.	The Targeted Debt/Equity Investment Stock Requirement, which shall equal an amount of Subclass B2 Capital Stock not less than 6.00% nor greater than 9.00% of any Targeted
Debt/Equity Investment sold by the Member and owned by the Bank. 

  

	 	3.	No Adjustment Outside Authorized Ranges Without Plan Amendment 

 The Bank may not adjust the factors or the dollar cap used to calculate the Membership Stock Requirement or the Activity-Based Stock Requirement outside the ranges authorized in this Section IV.B., except upon an amendment to the Plan
approved by the Board of Directors and the Finance Board. 
  

	 	C.	Adjustments to Minimum Stock Requirements 

  

	 	1.	Notice of Change in Minimum Stock Investment Requirement 

 The Bank shall provide a Notice to Members at least 10 business days prior to the effective date of any change in the Membership Stock Requirement or Activity-Based Stock Requirement approved by the Board of Directors within the ranges
authorized under Section IV.B. of this Plan. 
  


					
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	 	2.	Adjustment to Membership Stock Requirement 

  

	 	a.	Annual Recalculation 

 No later than March 31 of each
year, the Bank shall recalculate the Membership Stock Requirement of each Member holding Membership on the Record Date using financial data as of the Record Date. The Bank shall provide a Notice to Members at least 10 business days prior to the date
of the transaction to adjust the Member’s Subclass B1 Capital Stock balance to the new Membership Stock Requirement. In its discretion, the Bank may recalculate any Member’s Membership Stock Requirement more frequently, using financial
data from the fiscal year-end or the fiscal quarter-end immediately preceding the date of such recalculation, whichever period data is most-recently available. 
  

	 	b.	Recalculation Due to Adjustment Within Authorized Ranges 

 The Bank shall recalculate each Member’s Membership Stock Requirement on the effective date of any adjustment to the factors and/or dollar cap used to calculate the Membership Stock Requirement within the authorized ranges described in
Section IV.B of this Plan, using either the most recently available quarter-end financial data or financial data as of the prior calendar year-end, as determined by the Bank and specified in the Notice to Members. 
  

	 	c.	Recalculation Due to Termination of Membership as a Result of Consolidation, Relocation or Involuntary Action 

 The Bank may, in its sole discretion, recalculate the Membership Stock Retention Requirement for a Nonmember Stockholder or Former Member after the
termination of the Former Member’s Membership as a result of a Consolidation, Relocation or action by the Bank’s Board of Directors as specified in Section X.C. of this Plan. 
  

	 	d.	Adjustment Transaction 

 If any adjustment results in an
increase to the Member’s Membership Stock Requirement, on the transaction date specified in the Notice to Members the Bank shall (i) Issue sufficient additional shares of Subclass B1 Capital Stock so that the Member meets its Membership
Stock Requirement; and (ii) debit the Member’s Daily Investment Account in the amount of the par value of the additional shares of Subclass B1 Capital Stock Issued. In the event that the Member’s Daily Investment Account reflects
insufficient funds, the Bank may take any of the actions authorized pursuant to the account terms and conditions then in effect. 
 If any
adjustment results in a decrease to a Member’s Membership Stock Requirement or a Former Member’s or Nonmember Stockholder’s Membership Stock Retention Requirement, on the transaction date specified in the Notice to Members, the Bank,
in its discretion, may Repurchase any Excess Shares of Subclass B1 Capital Stock then held by the Member, Former Member or Nonmember Stockholder. The Notice to Members shall specify whether the Bank will Repurchase any Excess Shares of Subclass B1
Capital Stock. If the Bank will Repurchase only a portion of the Excess Shares, the Notice to Members shall specify either the amount of Excess Shares that the Bank will Repurchase or the methodology used to determine the amount of Excess Shares
that the Bank will Repurchase. 
  


					
	As of December 8, 2005	  	8	  	










	 	3.	Adjustment to Activity-Based Stock Requirement 

  

	 	a.	Recalculation of Activity-Based Requirement 

 The Bank
shall recalculate each Member’s Activity-Based Stock Requirement or each Former Member’s or Nonmember Stockholder’s Activity-Based Stock Retention Requirement at the time of any change in the amount of transactions outstanding between
the Bank and the Member, Former Member or Nonmember Stockholder and on the effective date of any adjustment to the factors used in calculating the Activity-Based Stock Requirement within the authorized ranges described in Section IV.B. Any
adjustment to the Activity-Based Stock Requirement for Members also shall apply to the Activity-Based Stock Retention Requirement for Former Members and Nonmember Stockholders. This Plan shall constitute Notice to Members of any change in the
Member’s, Former Member’s or Nonmember Stockholder’s Activity-Based Stock Requirement resulting from a change in the amount of transactions outstanding between the Bank and the Member, Former Member or Nonmember Stockholder.

  

	 	b.	Adjustment Transaction 

 If the adjustment results in an
increase to a Member’s Activity-Based Stock Requirement, the Bank shall (i) Issue sufficient additional shares of Subclass B2 Capital Stock so that the Member meets its Activity-Based Stock Requirement; and (ii) debit the
Member’s Daily Investment Account in the amount of the par value of the additional shares of Subclass B2 Capital Stock Issued. In the event that the Member’s Daily Investment Account reflects insufficient funds, the Bank may take any of
the actions authorized pursuant to the account terms and conditions then in effect. 
 If the adjustment results in a decrease to a
Member’s Activity-Based Stock Requirement or to a Former Member’s or Nonmember Stockholder’s Activity-Based Stock Retention Requirement, and the decrease results in ownership by the Member, Former Member or Nonmember Stockholder of an
amount of Subclass B2 Capital Stock that exceeds the Excess Stock Threshold Amount, or in the case of a Former Member or Nonmember Stockholder with no outstanding Indebtedness, is less than the Excess Stock Threshold Amount, the Bank
generally shall promptly Repurchase some or all of the Excess Shares of Subclass B2 Capital Stock held by the Member, Former Member or Nonmember Stockholder. This Plan shall constitute Notice of the Bank’s general practice to promptly
Repurchase some or all of the Excess Shares of Subclass B2 Capital Stock held by the Member, Former Member or Nonmember Stockholder when the par value of Excess Shares of Subclass B2 Capital Stock held by such Member exceeds the Excess Stock
Threshold Amount, or in the case of a Former Member or Nonmember Stockholder with no outstanding Indebtedness, is less than the Excess Stock Threshold Amount. 
 In the event that the Bank suspends such Repurchases, the Bank shall provide a Notice to Members in accordance with Section XI.E. of this Plan. 
  

	 	c.	Notice Regarding Excess Stock Threshold Amount 

 The
Excess Stock Threshold Amount is $100,000. 
 The Bank shall provide a Notice to Members at least five business days prior to the effective
date of any change in the Excess Stock Threshold Amount. Such Notice to Members shall include the par value of Excess Shares of Subclass B2 Capital Stock, if 

  


					
	As of December 8, 2005	  	9	  	









 
any, that the Bank generally shall permit the Member, Former Member or Nonmember Stockholder to retain when the amount of Subclass B2 Capital Stock
held by the Member, Former Member or Nonmember Stockholder exceeds the Excess Stock Threshold Amount. 
  

	 	4.	Application of Change Within Authorized Ranges 

 The Bank
shall apply any adjustment caused by a change within the authorized ranges to the factors and/or dollar cap used in calculating the Membership Stock Requirement, the Activity-Based Stock Requirement, and the Activity-Based Stock Retention
Requirement either retroactively or prospectively, as outlined below: 
  

	 	a.	Any adjustment caused by a change to the factor and/or dollar cap used in calculating the Membership Stock Requirement shall be applied retroactively by applying the new factor
and/or dollar cap to the Member’s total assets as of the date specified in accordance with Section IV.C.2. of this Plan. 

  

	 	b.	Any adjustment caused by a change to the factor used in calculating the Advances Stock Requirement shall be applied retroactively by applying the new factor to the outstanding
balance of advances on the effective date of the change as specified in the Notice to Members. Any retroactive application of an adjustment to the Advances Stock Requirement also shall apply to the Advances Stock Retention Requirement.


  

	 	c.	If the adjustment results in an increase to the factor used to calculate the Acquired Member Asset Stock Requirement, the Bank shall apply the new requirement on a prospective basis
only to any Acquired Member Asset sold by the Member and owned by the Bank pursuant to a master commitment executed subsequent to the effective date of the adjustment. 

  

	 	d.	If the adjustment results in a decrease to the factor used to calculate the Acquired Member Asset Stock Requirement, the Bank, in its sole discretion, may apply the new requirement
(i) on a prospective basis only to any Acquired Member Asset sold by the Member and owned by the Bank pursuant to a master commitment executed subsequent to the effective date of the adjustment, or (ii) on a retroactive and a prospective
basis to any Acquired Member Asset sold by the Member or Former Member and owned by the Bank on the effective date of the change, as well as to Acquired Member Asset sold by the Member and owned by the Bank subsequent to the effective date of the
adjustment. Any retroactive application of an adjustment to the Acquired Member Asset Stock Requirement shall also apply to the Acquired Member Asset Stock Retention Requirement. 

  

	 	e.	If the adjustment results in an increase to the factor used to calculate the Targeted Debt/Equity Investment Stock Requirement, the Bank shall apply the new requirement on a
prospective basis only to any Targeted Debt/Equity Investment sold by the Member and owned by the Bank subsequent to the effective date of the adjustment. 

  

	V.	Ownership and Transfer of Capital Stock 

 Except for any Former Member or Nonmember Stockholder subject to a Minimum Stock Retention Requirement, Capital Stock may only be Issued to or held by Members. Capital Stock shall be tradable only between the Bank, on the one hand, and
Members, Former Members and Nonmember Stockholders, on the other, and any transfer of Capital Stock shall be made at par value. The Bank shall act as the transfer agent for any such transfer, and it shall record promptly the transaction on 

  


					
	As of December 8, 2005	  	10	  	









 
the books of the Bank. Transfers among any Member, Former Member and Nonmember Stockholder are prohibited, except as approved by the Bank in connection with
a Consolidation. 
  

	VI.	Voting Rights 

 The Members shall be entitled
to vote in connection with the election of directors in accordance with the provisions of the Act and the Regulations. A Member may cast in any such election a number of votes equal to the number of shares of Capital Stock that it was required to
hold pursuant to Section IV. of the Plan as of the Record Date; provided, however, that the number of votes that any Member may cast in any such election shall not exceed the average of the number of shares of Capital Stock that all Members located
in that Member’s state were required to hold pursuant to Section IV. of the Plan as of the Record Date. For purposes of this Section VI., “Member” includes any Member that was a Member as of the Record Date, any Former Member that was
a Member as of the Record Date and any Nonmember Stockholder whose predecessor-in-interest was a Member as of the Record Date. 
  

	VII.	Dividends 

  

	 	A.	Declaration of Dividends 

 From time to time, the
Board of Directors, in its sole discretion (subject to the regulatory oversight of the Finance Board), may declare and the Bank may pay dividends on Capital Stock. Any such dividend may be paid in the form of cash or Capital Stock, shall be paid to
the Members, Former Members and Nonmember Stockholders holding Capital Stock during the time period for which the dividend is declared, and shall be computed on the amount of time during the relevant time period that the Capital Stock was
outstanding. The amount of any dividend paid in the form of Capital Stock shall be rounded down to the nearest whole share, and the remainder, if any, shall be paid in the form of cash. 
 The Bank may not pay any dividend if it is not in compliance with its Minimum Regulatory Capital Requirement or if, after paying such dividend, it would
fail to comply with its Minimum Regulatory Capital Requirement. 
  

	 	B.	No Preference 

 All Capital Stock shall share in any
dividends without preference. Any dividends shall be payable only from the net earnings or retained earnings of the Bank, determined in accordance with generally accepted accounting principles. 
  

	 	C.	Stock Held by Withdrawing or Former Member 

 A
Member, Former Member or Nonmember Stockholder shall be entitled to receive any dividends attributable to its Capital Stock (subject to the Bank’s lien thereon) through the date of Redemption or Repurchase by the Bank. 
  

	VIII.  Liquidation,	Merger or Consolidation 

  

	 	A.	Liquidation 

 In the event of the liquidation of the
Bank, after making provision for the payment of the Bank’s liabilities, the Bank shall pay to each Member, Former Member and Nonmember Stockholder the par value of its Capital Stock; provided, however, that if sufficient funds are not available
to make payment in full to all Members, Former Members and Nonmember Stockholders, payment 

  


					
	As of December 8, 2005	  	11	  	









 
shall occur on a pro rata basis. In addition, any undistributed retained earnings, paid-in surplus, undivided profits, equity reserves, and other assets not
otherwise identified shall be allocated among the Members, Former Members and Nonmember Stockholders, in proportion to the number of shares of Capital Stock owned by each. 
  

	 	B.	Merger or Consolidation 

 In the event that the Bank
merges with or consolidates into another Federal Home Loan Bank, the Members, Former Members and Nonmember Stockholders shall be entitled to the rights and benefits set forth in the agreement of merger or consolidation approved by the Board of
Directors and the Finance Board. 
  

	 	C.	No Limitation on Finance Board’s Authority 

 Notwithstanding the provisions of Section VIII.A. and B., no provision of this Plan shall limit the authority of the Finance Board to prescribe rules, regulations or orders governing the liquidation or reorganization of the Bank.

  

	IX.	Redemption and Repurchase of Capital Stock (Continuing Membership) 

  

	 	A.	Redemption Upon Application by the Member 

  

	 	1.	Conditions Applicable to Redemption 

 Subject to the
limitations in Section XI. of this Plan, a Member may obtain Redemption of its Capital Stock by providing a written Redemption notice to the Bank, in a form acceptable to the Bank. The Redemption notice must identify the particular subclass and
number of shares to be Redeemed, and the identified shares may not be the subject of an outstanding Redemption notice. If the Redemption notice fails to identify either the particular subclass or the number of shares to be Redeemed, or if the shares
identified in the Redemption notice are subject to a pending Redemption notice, the Redemption notice shall be deemed invalid. 
  

	 	2.	Cancellation of Redemption Notice 

  

	 	a.	Cancellation by Member 

 A Member may cancel its
Redemption notice at any time prior to the expiration of the Redemption Period by providing a written cancellation notice to the Bank. Any Member that cancels its Redemption notice shall pay a fee to the Bank equal to the greater of (i) $500,
or (ii) two basis points (.02%) multiplied by the par value of the number of shares of Capital Stock subject to the Redemption notice. 
  

	 	b.	Automatic Cancellation of Redemption Notice 

 The Bank
shall not Redeem a Member’s Capital Stock if, following the Redemption, the Member would fail to meet its Minimum Stock Requirement. If, upon expiration of the Redemption Period, the Bank is prevented from Redeeming a Member’s Capital
Stock for such reason, the Bank shall attempt the Redemption on each of the five business days following the expiration of the Redemption Period. If at the end of such time the Bank is prevented from Redeeming the Member’s Capital Stock
because, following the Redemption, the Member would fail to meet its Minimum Stock Requirement, the Bank shall automatically cancel the Member’s Redemption notice. Such automatic cancellation shall have the same effect as a notice of
cancellation provided by the Member to the Bank. 
  


					
	As of December 8, 2005	  	12	  	










	 	c.	Waiver of Cancellation Fee 

 The Board of Directors may
waive a cancellation fee only for bona fide business purposes and only if consistent with the provisions of Section 7(j) of the Act. 
  

	 	3.	Redemption 

 Except as set forth in Sections IX.A.2 and
XI., and so long as the Member has complied with the conditions set forth in Section IX.A.1., the Bank shall Redeem the Member’s Capital Stock upon expiration of the Redemption Period. 
  

	 	B.	Repurchase Upon Initiation by the Bank 

 The Bank
may Repurchase Excess Shares of Subclass B1 Capital Stock and Subclass B2 Capital Stock in accordance with the provisions of Section IV.C. of this Plan. If the Bank intends to Repurchase Excess Stock from a Member, a Former Member or a Nonmember
Stockholder that has submitted a Redemption notice pursuant to Section IX.A.1., before Repurchasing any other Excess Stock of the Member, Former Member or Nonmember Stockholder, the Bank shall first Repurchase from that Member, Former Member or
Nonmember Stockholder the shares of Excess Stock that are subject to a Redemption notice. 
  

	 	C.	Continued Benefits of Ownership Prior to Redemption or Repurchase 

 A Member, Former Member or Nonmember Stockholder shall be entitled to receive any dividends attributable to its Capital Stock (subject to the Bank’s lien thereon) through the date of Redemption or Repurchase by
the Bank. A Member also shall be entitled to exercise the other benefits associated with ownership of such Capital Stock prior to the date of Redemption or Repurchase. 
  


	X.	Redemption and Repurchase of Capital Stock (Withdrawal or Termination of Membership) 

  

	 	A.	Voluntary Withdrawal 

  

	 	1.	Notice of Intention to Withdraw from Membership 

 A Member
may voluntarily withdraw and terminate its Membership by providing to the Bank written notice of its intention to withdraw from Membership. The Redemption Period for all Capital Stock then held by that Member that is not subject to a pending
Redemption notice shall begin on the date the notice is received by the Bank. 
 The Redemption Period for any Capital Stock acquired or
received by the Member subsequent to the Bank’s receipt of the Member’s notice of intention to withdraw shall begin on the date of acquisition or receipt of the Capital Stock by the Member; provided, however, that any Capital Stock that is
not required to meet the Member’s Minimum Stock Requirement shall be Excess Stock and shall be subject to Repurchase by the Bank. 
  

	 	2.	Termination of Membership 

 The Membership of a Member
that has submitted a notice of intention to withdraw shall terminate on the date on which the Redemption Period ends with respect to the Capital 

  


					
	As of December 8, 2005	  	13	  	









 
Stock that comprised the Member’s Membership Stock Requirement on the date on which the Bank received the Member’s notice of intention to withdraw,
unless the Bank has received written notice from the Member prior to the date on which its Membership terminates that the Member is canceling its notice of intention to withdraw. Until the date on which its Membership terminates, a Member shall
continue to maintain Capital Stock sufficient to meet its Minimum Stock Requirement in accordance with the provisions of the Plan. 
  

	 	3.	Continued Benefits of Membership Prior to Termination 

 A
Member that has submitted a notice of intention to withdraw shall be entitled to receive any dividends attributable to its Capital Stock (subject to the Bank’s lien thereon) through the date of Redemption or Repurchase by the Bank. The Member
also shall be entitled to exercise the other benefits associated with Membership until the date on which its Membership terminates, but the Bank in its sole discretion (subject to the regulatory oversight of the Finance Board) may limit a
Member’s ability to enter into transactions with the Bank, including but not limited to Advances, that would mature or otherwise terminate subsequent to the date on which its Membership terminates. 
  

	 	4.	Cancellation of Notice of Withdrawal 

  

	 	a.	Conditions Applicable to Cancellation 

 A Member may
cancel its notice of intention to withdraw at any time prior to the date on which its Membership terminates by providing a written cancellation notice to the Bank. Any Member that cancels its notice of intention to withdraw shall pay a fee to the
Bank equal to the greater of (i) $500, or (ii) two basis points (.02%) multiplied by the par value of the number of shares of Capital Stock held by the Member on the date the Bank receives the notice of cancellation. 
  

	 	b.	Waiver of Cancellation Fee 

 The Board of Directors may
waive a cancellation fee only for bona fide business purposes and only if consistent with the provisions of Section 7(j) of the Act. 
  

	 	5.	Circumstances Requiring Finance Board Certification for Withdrawal 

 No Member may withdraw from Membership unless, on the date that the Membership is to terminate, there is in effect a certification from the Finance Board that the withdrawal will not cause the Federal Home Loan Bank
System to fail to satisfy its obligations under 12 U.S.C. 1441b(f)(2)(C) to contribute toward the interest payments owed on obligations issued by the Resolution Funding Corporation. 
  

	 	B.	Termination of Membership as a Result of a Consolidation or Relocation 

  

	 	1.	Consolidation of Members 

 Upon Consolidation of two or
more Members, the Membership of each disappearing Member shall terminate upon the cancellation of its charter. At such time, the Capital Stock of the disappearing Member shall be transferred on the Bank’s books to the account of the surviving
Member. The Redemption Period for the Capital Stock held by the disappearing Member on the date of its termination from Membership and that is not subject to a pending Redemption notice shall not be deemed to begin solely by virtue of the
termination 

  


					
	As of December 8, 2005	  	14	  	









 
from Membership, but shall begin only upon (i) the Bank’s receipt of the surviving Member’s written notice to the Bank requesting Redemption
of Capital Stock, (ii) the Bank’s receipt of the surviving Member’s written notice to the Bank of its intention to withdraw from Membership, (iii) the surviving Member’s termination from Membership as a result of a
Consolidation into a nonmember, (iv) the surviving Member’s termination from Membership as a result of a Relocation, or (v) the surviving Member’s involuntary termination from Membership. 
  

	 	2.	Consolidation into Nonmember 

 Upon Consolidation of a
Member into an institution that is not a Member pursuant to a transaction in which the surviving institution operates under the charter of the institution that is not a Member, the Membership of the Member shall terminate upon the cancellation of
the Member’s charter. The Redemption Period for the Capital Stock held by the disappearing Member on the date of its termination from Membership and that is not subject to a pending Redemption notice shall be deemed to begin, on the date of its
termination from Membership. At such time, the Capital Stock of the disappearing Member shall be transferred on the Bank’s books to the account of the surviving institution, a Nonmember Stockholder. 
 Capital Stock held by a Nonmember Stockholder shall not be deemed automatically to be Excess Stock solely by virtue of the disappearing Member’s
termination of Membership; provided, however, that any Capital Stock that is not required to meet the Minimum Stock Retention Requirement for the Nonmember Stockholder, as adjusted pursuant to Section IV.C.2.c. or Section IV.C.3. of this Plan, shall
be Excess Stock and shall be subject to Repurchase by the Bank. 
 The Redemption Period for any Capital Stock acquired or received by a
Nonmember Stockholder subsequent to the termination of the disappearing Member’s Membership shall begin on the date of acquisition or receipt of the Capital Stock by the Nonmember Stockholder; provided, however, that any Capital Stock that is
not required to meet the Minimum Stock Retention Requirement for the Nonmember Stockholder, as adjusted pursuant to Section IV.C.2.c or Section IV.C.3. of this Plan, shall be Excess Stock and shall be subject to Repurchase by the Bank. 

The Nonmember Stockholder shall be entitled to receive any dividends attributable to its Capital Stock (subject to the Bank’s lien thereon)
through the date of Redemption or Repurchase by the Bank, but the Nonmember Stockholder shall have no right to exercise any of the other benefits of Membership after the termination of the disappearing Member’s Membership. 
  

	 	3.	Relocation of Member 

 Upon Relocation by a Member, the
Member shall promptly notify the Bank in writing of such Relocation. Upon the later of the receipt of such notice or the effective date of the Relocation, the Membership of the Member shall terminate. The Redemption Period for the Capital Stock held
by the Member on the date of its termination from Membership and that is not subject to a pending Redemption notice shall be deemed to begin on the date of its termination from Membership. 
 Capital Stock held by the Member on the date of its termination from Membership shall not be deemed automatically to be Excess Stock solely by virtue of
the Member’s termination of Membership; provided, however, that any Capital Stock that is not required to meet the 

  


					
	As of December 8, 2005	  	15	  	









 
Minimum Stock Retention Requirement for the Former Member, as adjusted pursuant to Section IV.C.2.c. or Section IV.C.3. of this Plan, shall be Excess Stock
and shall be subject to Repurchase by the Bank. 
 The Redemption Period for any Capital Stock acquired or received by the Former Member
subsequent to its termination from Membership shall begin on the date of acquisition or receipt of the Capital Stock by the Former Member; provided, however, that any Capital Stock that is not required to meet the Minimum Stock Retention Requirement
of the Former Member, as adjusted pursuant to Section IV.C.2.c. or Section IV.C.3. of this Plan, shall be Excess Stock and shall be subject to Repurchase by the Bank. 
 The Former Member shall be entitled to receive any dividends attributable to its Capital Stock (subject to the Bank’s lien thereon) through the date of Redemption or Repurchase by the Bank, but the Former Member
shall have no right to exercise any of the other benefits of Membership after the termination of its Membership. 
  

	 	C.	Other Involuntary Termination of Membership 

 The
Board of Directors may immediately terminate the Membership of any Member that: 
  

	 	1.	Fails to comply with any requirement of the Act, the Regulations, or the Capital Plan; 

  


	 	2.	Becomes insolvent or otherwise subject to the appointment of a conservator, receiver, or other legal custodian under federal or state law; or 

  

	 	3.	Would jeopardize the safety or soundness of the Bank if it were to remain a Member. 

 Upon action of the Board of Directors to terminate the Membership of any Member as described above, the Membership of such Member shall terminate, and the Redemption Period for all Capital Stock then held by the
terminated Member that is not subject to a pending Redemption notice shall begin, on the effective date of the Board of Directors’ action. 
 Capital Stock held by a Former Member whose Membership has been terminated by the Board of Directors shall not be deemed automatically to be Excess Stock solely by virtue of the termination of Membership; provided, however, that any Capital
Stock that is not required to meet the Former Member’s Minimum Stock Retention Requirement, as adjusted pursuant to Section IV.C.2.c. or Section IV.C.3. of this Plan, shall be Excess Stock and shall be subject to Repurchase by the Bank.

 The Redemption Period for any Capital Stock acquired or received by the Former Member subsequent to the termination of Membership shall
begin on the date of acquisition or receipt of the Capital Stock by the Former Member; provided, however, that any Capital Stock that is not required to meet the Former Member’s Minimum Stock Retention Requirement, as adjusted pursuant to
Section IV.C.2.c. or Section IV.C.3. of this Plan, shall be Excess Stock and shall be subject to Repurchase by the Bank. 
 The Former Member
shall be entitled to receive any dividends attributable to its Capital Stock (subject to the Bank’s lien thereon) through the date of Redemption or Repurchase by the Bank, but the Former Member shall have no right to exercise any of the other
benefits of Membership after the termination of Membership. 
  


					
	As of December 8, 2005	  	16	  	










	 	D.	Redemption 

 Except as set forth in Section XI., and
unless the Former Member or Nonmember Stockholder must continue to comply with an Activity-Based Stock Retention Requirement, the Bank shall Redeem the Former Member’s or Nonmember Stockholder’s Capital Stock upon expiration of the
Redemption Period. 
  

	XI.	Limitations on Redemption and Repurchase of Capital Stock 

  

	 	A.	Limitations Due to Charges Against Capital Stock 

 Notwithstanding any other provision of this Plan, if the Finance Board or the Board of Directors determines that the Bank has incurred or is likely to incur losses that result in, or are likely to result in, charges against Capital Stock
that create an other than temporary decline in the Bank’s Total Capital such that the value of Total Capital falls below the Bank’s aggregate amount of Capital Stock, the Bank shall not Redeem or Repurchase any Capital Stock without the
prior written approval of the Finance Board for however long the Bank continues to incur such charges or until the Finance Board determines that such charges are not expected to continue. 
  

	 	B.	Limitations Due to Failure to Satisfy Minimum Requirements 

 The Bank shall not Redeem or Repurchase any Capital Stock if, following the Redemption or Repurchase, the Bank would fail to satisfy its Minimum Regulatory Capital Requirement, the Member would fail to maintain its Minimum Stock
Requirement, or the Former Member or Nonmember Stockholder would fail to maintain its Minimum Stock Retention Requirement. Further, the Bank shall not Redeem or Repurchase any Capital Stock if prohibited from doing so by any Regulation or Finance
Board order. 
  

	 	C.	Other Restrictions on Redemption 

 In the event that
the Board of Directors, or a committee of the Board of Directors, determines that continued Redemption is not consistent with the Regulations because (i) following such Redemption, the Bank would fail to meet or would be likely to fail to meet
its Minimum Regulatory Capital Requirement, or (ii) Redemption would otherwise prevent the Bank from operating in a safe and sound manner, including, without limitation, a reasonable belief that the Redemption would prevent the Bank from
maintaining sufficient Permanent Capital or Total Capital against a potential risk that may not be reflected adequately in the Bank’s Minimum Regulatory Capital Requirement, then the Board of Directors, or a committee of the Board of Directors,
in its sole discretion (subject to the regulatory oversight of the Finance Board), may temporarily suspend Redemptions. The Bank shall not Repurchase any Capital Stock without prior written approval of the Finance Board during the period that
Redemptions are suspended under this provision. 
 The Bank shall notify the Finance Board in writing within two Business Days following the
determination by the Board of Directors, or a committee of the Board of Directors, to suspend Redemption of Capital Stock, informing the Finance Board of the reasons for the suspension and of the Bank’s strategies and time frames for addressing
the conditions that led to the suspension. 
  

	 	D.	Other Restrictions on Repurchase 

 On any Business
Day that the Repurchase of some or all Excess Shares of Subclass B2 Capital Stock would cause the Bank to fail to satisfy its Minimum Regulatory Capital Requirement, the 

  


					
	As of December 8, 2005	  	17	  	









 
Bank shall suspend Repurchases until the Bank can honor such Repurchases in full, or the Board of Directors establishes pro rata Repurchase procedures.

  

	 	E.	Notice of Suspension of Repurchases or Redemptions 

 The Bank shall provide a Notice to Members regarding the suspension of Redemptions or Repurchases on or before the effective date of the suspension. The Bank shall provide a Notice to Members at least one business day prior to resuming
Repurchases or Redemptions. 
  

	 	F.	No Priority for Notices of Redemption in the Event of Liquidation 

 In the event that the Finance Board determines to liquidate the Bank, from and after the date of any such determination, all of the Capital Stock held by the Members, Former Members and Nonmember Stockholders whether
or not subject to a notice of Redemption or Repurchase, shall thereafter be treated exactly the same, and no further Redemptions or Repurchases shall occur except in connection with the liquidation of the Bank in accordance with the provisions of
the Act, the Regulations and this Plan. 
  

	XII.	Disposition of Claims 

  

	 	A.	In General 

 If a Member withdraws from Membership
or its Membership is otherwise terminated, the Bank, in its sole discretion (subject to the regulatory oversight of the Finance Board), shall determine an orderly manner for liquidating all Indebtedness owed by the Former Member or Nonmember
Stockholder to the Bank and for settling all other claims against the Former Member or Nonmember Stockholder. After the obligations and claims have been extinguished or settled, the Bank shall return to the Former Member or Nonmember Stockholder the
collateral pledged by the Former Member or Nonmember Stockholder to the Bank to secure its obligations to the Bank. 
  

	 	B.	Lien on Capital Stock 

 The Bank shall have a lien
on all of the Capital Stock owned by a Member, Former Member or Nonmember Stockholder, and all dividends and other proceeds of such Capital Stock, to secure the performance by the Member, Former Member or Nonmember Stockholder of its obligations
pursuant to the Capital Plan and to secure its performance with respect to any Indebtedness to the Bank or any transaction with the Bank. The Bank shall not Redeem or Repurchase any Capital Stock that is required to meet the Member’s
Activity-Based Stock Requirement or the Former Member’s or Nonmember Stockholder’s Activity-Based Stock Retention Requirement until after the relevant Indebtedness or transactions have been extinguished or settled. The Bank shall have the
right to collect any dividends and other proceeds of Capital Stock otherwise payable to a Member, Former Member or Nonmember Stockholder in default to satisfy any monetary obligations of the Member, Former Member or Nonmember Stockholder to the Bank
or, in the sole discretion of the Bank (subject to the regulatory oversight of the Finance Board), to pay any dividends to the Member, Former Member or Nonmember Stockholder in Capital Stock. 
  

	 	C.	Prepayment Fees 

 Any liquidation of Indebtedness
that results in payment of the Indebtedness before its stated maturity shall be deemed a prepayment of the Indebtedness, and shall be subject to any fees applicable to the prepayment. 
  


					
	As of December 8, 2005	  	18	  	










	XIII.  Amendment	to the Capital Plan 

 Any amendment to the
Capital Plan must be approved by the Board of Directors and by the Finance Board. The Bank shall provide a Notice to Members at least five business days prior to the effective date of any amendment. 
  


					
	As of December 8, 2005	  	19