Document:

Ex 4.1 Capital Plan Amendment 12.10.2014

Exhibit 4.1

CAPITAL PLAN 

OF THE

FEDERAL HOME LOAN BANK OF SEATTLE

Adopted March 5, 2002, as amended on November 22, 2002, December 8, 2004, March 9, 2005, June 8, 2005, October 11, 2006, February 20, 2008, March 6, 2009, September 5, 2011; November 5, 2012; and December 10, 2014. 

TABLE OF CONTENTS 

		
	Section I. Definitions
	1

		
	Section II. Stock Investment
	3

		
	A.
	General.    3

		
	B.
	Required Amount.    3

		
	C.
	Periodic Review.    5

		
	D.
	Amendments to the Capital Plan.    6

		
	E.
	Member Compliance.    6

		
	Section III. Transition
	7

		
	Manner of Conversion/Exchange.
	7

		
	Section IV. Classes of Stock
	8

		
	A.
	General.    8

		
	B.
	Rights, Terms and Preferences.    8

		
	C.
	Exchange of Ownership.    13

		
	Section V. Retained Earnings
	14

		
	A.
	Implementation.    14

		
	B.
	Definitions Applicable to Section V of this Capital Plan.    14

		
	C.
	Establishment of Restricted Retained Earnings.    17

		
	D.
	Limitations on Dividends, Stock Repurchases and Stock Redemptions.    18

		
	E.
	Termination of Retained Earnings Capital Plan Amendment Obligations.    19

SECTION I. DEFINITIONS
As used herein, the following terms shall have the following meanings (terms defined in the singular to have the same meaning when used in the plural and vice versa):
		
	1.
	“Activity-Based Member Stock Purchase Requirement” means Stock that a Member must acquire, hold or utilize as a condition of transacting business with the Bank, the aggregate amount of which is a function of the volume of the particular products or services provided to that Member by the Bank.

		
	2.
	“Advance” has the same meaning as set forth in 12 C.F.R. 900.2.

		
	3.
	“Bank” means the Federal Home Loan Bank of Seattle.

		
	4.
	“Bank Act” means the Federal Home Loan Bank Act (12 U.S.C 1421, et seq.), as amended from time to time.

		
	5.
	“Board of Directors” means the Board of Directors of the Bank.

		
	6.
	“Business Day” means any day on which the Bank is open to conduct business.

		
	7.
	“Capital Plan” means this capital plan, as amended, supplemented, or modified from time to time.

		
	8.
	“Class A Stock” means Stock issued by the Bank that has a par value of one hundred dollars ($100) per share and is redeemable at par for cash on six (6) months written notice to the Bank, consistent with the Regulations.

		
	9.
	“Class B Stock” means Stock issued by the Bank that has a par value of one hundred dollars ($100) per share and is redeemable at par for cash on five (5) years written notice to the Bank, consistent with the Regulations. 

		
	10.
	“Conversion Date” means the date upon which Current Stock is converted into the new Class B Stock.

		
	11.
	“Current Stock” means all stock outstanding on the close of business on the last Business Day prior to the Conversion Date.

		
	12.
	“Excess Stock” means the Stock held by a Holder that is in excess of that Holder’s current Total Stock Purchase Requirement. 

		
	13.
	“Excess Stock Pool” means the aggregate amount of Excess Stock held by all Holders.  

		
	14.
	 “Finance Agency” means the Federal Housing Finance Agency or, where appropriate in the context, its predecessor agency, the Federal Housing Finance Board.

		
	15.
	“GAAP” means Generally Accepted Accounting Principles in the United States.

		
	16.
	“Holder” means a Member or a successor to a former Member that owns Stock.

		
	17.
	“Home Mortgage Loan” means:

		
	a.
	A loan, whether or not fully amortizing, or an interest in such a loan, which is secured by a mortgage, a deed of trust, or other security agreement that creates a lien on one of the following interests in property:

		
	i.
	One-to-four family property or multi-family property, in fee simple;

	
			
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	ii.
	A leasehold on one-to-four family property or multi-family property under a lease of not less than 99 years that is renewable, or under a lease having a period of not less than 50 years to run from the date the mortgage was executed; or

		
	b.
	A mortgage pass-through security that represents an undivided ownership interest in:

		
	i.
	Long-term loans provided that, at the time of issuance of the security, all of the loans satisfy the requirements set forth in Section I(17)(a) hereof; or

		
	ii.
	A security that represents an undivided ownership interest in long-term loans, provided that, at the time of issuance of the security, all of the loans satisfy the requirements set forth in Section I(17)(a) hereof.

		
	18.
	“Member” means an institution that has been approved for Membership, that has purchased Stock in the Bank and continues to be entitled to Membership. 

		
	19.
	“Member Advance Stock Purchase Requirement” means a specific Activity-Based Member Stock Purchase Requirement where the activity is the outstanding principal balance of one or more Advances made by the Bank to the Member.

		
	20.
	“Member MPP Stock Purchase Requirement” means a specific Activity-Based Member Stock Purchase Requirement where the activity is the outstanding principal balance of one or more loans sold to the Bank by the Member pursuant to the Bank’s Mortgage Purchase Program.

		
	21.
	“Membership” means all of the rights, privileges and obligations associated with being a Member of the Bank.

		
	22.
	“Membership Stock Purchase Requirement” means Stock that must be purchased and held as a condition of Membership in the Bank, as set forth in Section II (B)(1)(b) hereof.

		
	23.
	“Mortgage Purchase Program” or “MPP” means the program established by the Bank pursuant to 12 C.F.R. 955 for the purchase of loans from its Members.

		
	24.
	“Redemption Cancellation Fee” means the fee imposed by the Bank upon a Holder that has given the Bank notice of its intent to redeem Stock and that subsequently revokes or cancels such redemption request.

		
	25.
	“Regulations” means the regulations of the Finance Agency found at 12 C.F.R. Chapters IX and XII, as amended from time to time.

		
	26.
	“Stock” means Class A Stock and/or Class B Stock as defined in the Bank Act, and as further defined by the Regulations.

		
	27.
	“Total Stock Purchase Requirement” means the amount of Stock that a Holder is required to hold or utilize pursuant to Section II (B)(1)(a) hereof.

	
			
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SECTION II. STOCK INVESTMENT
		
	A.
	GENERAL. 

Adequate capitalization is required in order to: (a) provide for the safe and sound operation of the Bank; (b) permit prudent leveraging into products and services of benefit to Members; (c) provide appropriate risk-adjusted Member dividend returns; (d) protect the Bank’s creditors against potential loss; (e) generate earnings sufficient to meet the Bank’s various community support and public purpose obligations; and (f) comply with statutory and regulatory capital requirements as established by federal law and the Finance Agency. The need for capital is a function of the volumes of and risks inherent in the products and services provided by the Bank to its Members. Therefore, the capital stock of the Bank should be contributed by its Members in general proportion to the distribution of such products and services to its Members. Accordingly, this Capital Plan requires Members to establish and maintain certain capital stock investments in the Bank.
		
	B.
	REQUIRED AMOUNT.

		
	1.
	Stock Purchase Requirements.

		
	a.
	Total Stock Purchase Requirement. The amount of Stock that each Member or successor to a former Member is required to hold or utilize shall at all times equal the greater of:

		
	i.
	The Membership Stock Purchase Requirement; or

		
	ii.
	The sum of the Member MPP Stock Purchase Requirement and the Member Advance Stock Purchase Requirement.

		
	b.
	Membership Stock Purchase Requirement. A Member’s Membership Stock Purchase Requirement shall be equal to the greater of five hundred dollars ($500), or one-half of one percent (0.5%) of the Member’s Home Mortgage Loans, as of the most recent calendar year-end; provided that a Member’s Membership Stock Purchase Requirement shall in no event exceed a dollar amount established from time to time by the Board of Directors within a range of not less than ten million dollars ($10 million) and not greater than fifty million dollars ($50 million). Only Class B Stock may be utilized to meet the Membership Stock Purchase Requirement. The Bank will calculate the Membership Stock Purchase Requirement annually by April 30 of each year based on Member’s Home Mortgage Loans as of the most recent calendar year-end. The Bank may, for a bona fide business purpose, recalculate a Member’s Membership Stock Purchase Requirement between annual calculations, based on the Member’s most current Home Mortgage Loans. The Board of Directors may change the above percentage within a range of not less than one-half of one percent (0.5%) or not greater than one percent (1.0%). Any such increase or decrease in the Membership Stock Purchase Requirement will be applied at the implementation date of the change to all Home Mortgage Loan balances of each Member. The Membership Stock Purchase Requirement of a non-member successor to a former Member shall be equal to that of the former Member on the day before the liquidation, merger, or consolidation of the Member until the next calculation of the Membership Stock Purchase Requirement. Notwithstanding any other provision of this Capital Plan, on that date, the Membership Stock Purchase Requirement 

	
			
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of the non-member successor to the former Member shall be reduced to $0. In the event that (1) a Member becomes insolvent or otherwise subject to the appointment of a conservator, receiver, or other legal custodian under federal or state law, and (2) the Board of Directors terminates the Membership of the Member, the Membership Stock Purchase Requirement of the Member shall be reduced to $0 on the date that the Member’s Membership is terminated. In the event that a Member provides the Bank with written notice of its intent to withdraw from Membership, the Membership Stock Purchase Requirement for said Member shall not be increased during the pendency of said notice. 
		
	c.
	Member MPP Stock Purchase Requirement. The Member MPP Stock Purchase Requirement shall be equal to five percent (5.0%) of the outstanding principal balance of loans sold by the Member to the Bank pursuant to the Bank’s Mortgage Purchase Program. The Board of Directors may change the above percentage within a range of not less than zero percent (0.0%) or not greater than six percent (6.0%). Only Class B Stock may be utilized to meet the Member MPP Stock Purchase Requirement. Any such change in the Member MPP Stock Purchase Requirement will be applied from the implementation date of the change to all new loans purchased by the Bank under its Mortgage Purchase Program. The requirements of this Section II(B)(1)(c) shall apply to a successor to a former Member that acquires the duties and obligations of the former Member with respect to any Mortgage Purchase Program loans sold by the former Member to the Bank.

		
	d.
	Member Advance Stock Purchase Requirement. 

		
	i.
	The Member Advance Stock Purchase Requirement shall be equal to four percent (4.0%) of the outstanding principal balance of Advances extended from the Bank to a Member. The Board of Directors may change the above percentage within a range of not less than two and one-half percent (2.5%) or not greater than six percent (6.0 %). Any such change in the Member Advance Stock Purchase Requirement will be applied from the implementation date of the change in the requirement to all new and renewed Advances. At its option, the Bank may issue either Class A Stock or Class B Stock in satisfaction of this requirement, as determined by the Board of Directors. Said determination shall be made periodically and applied consistently to all Members. The Bank may issue Class A Stock only to satisfy the Member Advance Stock Purchase Requirement for a new Advance, or for the renewal of an existing Advance initially capitalized by the Excess Stock Pool, and only to a Member that has no excess Class B Stock available to capitalize the new or renewing Advance. The requirements of this Section II(B)(1)(d) shall apply to a successor to a former Member that is allowed by the Bank to retain Advances acquired from a former Member.

		
	ii.
	Notwithstanding any other provision in this Capital Plan, a Member may utilize Stock from the Excess Stock Pool to satisfy its Member Advance Stock Purchase Requirement if all of the following conditions are met:

		
	 (a)
	The Member owns no other Stock that can be used to capitalize a new Advance or the renewal of an existing Advance to satisfy the Member Advance Stock Purchase Requirement.

	
			
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	 (b)
	The Member is requesting a new Advance or the renewal of an existing Advance, and the maturity does not exceed one year. 

		
	 (c)
	The Member would utilize no more than twenty five percent (25%) of the total amount of the Excess Stock Pool, measured on the date the Advance is received by the Member.

		
	 (d)
	The aggregate amount of all Stock from the Excess Stock Pool being utilized to capitalize Advances would not exceed fifty percent (50%) of the Excess Stock Pool, measured on the date the Advance is received by the Member. 

		
	iii.
	Authority to use Stock from the Excess Stock Pool shall expire on December 31, 2016. However, Advances utilizing Stock from the Excess Stock Pool received by the Member prior to the expiration of the Excess Stock Pool may continue to be capitalized utilizing Stock from the Excess Stock Pool until the maturity date of said Advances. An Advance acquired by a successor to a former Member which was capitalized with Stock from the Excess Stock Pool can continue to be capitalized by Stock in the Excess Stock Pool until the maturity of the Advance.

		
	iv.
	The Bank reserves the right to suspend, at any time, the use of the Excess Stock Pool. 

		
	e.
	Recalculation of Stock Purchase Requirements. The Member Advance Stock Purchase Requirement and the Member MPP Stock Purchase Requirement will be recalculated whenever any activity occurs that results in a change in the outstanding principal balances of either Advances or MPP loans. 

		
	f.
	Notice of Change in Stock Purchase Requirements. In the event the Board of Directors changes the Member Advance Stock Purchase Requirement, the Member MPP Stock Purchase Requirement, or the Membership Stock Purchase Requirement, in accordance with the provisions set forth above, the Bank shall provide its Members with prior written notice of any such change.

		
	2.
	Excess Stock. Subject to the right of the Bank to repurchase Stock pursuant to Sections IV(B)(6) and IV(B)(7) hereof, a Member or a successor to a former Member may hold Stock in excess of its Total Stock Purchase Requirement.

		
	C.
	PERIODIC REVIEW. 

To maintain prudent capitalization and ongoing compliance with the Regulations, the Board of Directors shall review the Bank’s Capital Plan at least annually to determine whether adjustments are required with respect to one or more of the following:
		
	1.
	The specific Stock purchase requirement percentages, and/or the types of loans and activities, to which such requirements shall apply.

		
	2.
	The exercise by the Bank of its discretion to repurchase Excess Stock.

		
	3.
	Any increases or decreases to the Redemption Cancellation Fees.

		
	4.
	The introduction of any new class or subclass of capital stock.

	
			
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	D.
	AMENDMENTS TO THE CAPITAL PLAN. 

Any modifications to this Capital Plan shall require an amendment to the Capital Plan by the Board of Directors and approval from the Finance Agency.
		
	E.
	MEMBER COMPLIANCE. 

Each Member is required to comply with any changes in, or adjustments or amendments to this Capital Plan, including without limitation any change, adjustment or amendment that may increase a Member’s Total Stock Purchase Requirement, within 10 Business Days after notice of such adjustment, change or amendment has been mailed by the Bank to such Member. In order to effectuate the purchase of additional Stock by a Member that may be required due to any such change, adjustment or amendment, the Bank may at any time following 10 Business Days after the mailing of the notice of the purchase requirement by the Bank to such Member, issue Stock in the name of such Member and withdraw appropriate payment from the Member’s demand deposit account held with the Bank. In addition, in the event any Member fails to comply with any requirement of this Capital Plan, the Member’s access to products and services of the Bank shall be suspended until such requirement is met, and such failure to comply may lead to involuntary termination of the Member’s Membership.

	
			
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SECTION III. TRANSITION
Manner of Conversion/Exchange.  
The following steps, which constitute the Bank’s Plan of Recapitalization for purposes of Section 368(a)(1)(E) of the Internal Revenue Code of 1986, as amended, shall be taken in order to implement the amendment of this Capital Plan effective on the Conversion Date:
		
	1.
	Establish Dates. Following Finance Agency approval of the amendment to this Capital Plan, the Bank will establish the Conversion Date, and notify all Holders of the Conversion Date. Holders shall be notified by the Bank of the Conversion Date no later than 5 days prior to the Conversion Date.

		
	2.
	Conversion of Current Stock to Class B Stock. On the Conversion Date, all of the outstanding Current Stock of the Bank shall be converted automatically to Class B Stock of equal par value without any action on the part of the Holders. The Bank will reflect the conversion by appropriate book entries. 

		
	3.
	Members in the Process of Withdrawing from Membership. Any Member that has filed its written notice to withdraw from Membership with the Bank prior to the Conversion Date shall have its Current Stock converted to Class B Stock in accordance with this Capital Plan, and the effective date of withdrawal established pursuant to 12 C.F.R. 925.26 shall remain unchanged.

	
			
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SECTION IV. CLASSES OF STOCK
		
	A.
	GENERAL.  

Except when issued as dividends to Holders in accordance with Section IV(B)(4), Stock shall be issued only to Members and may be held only by Members and their transferees in accordance with Section IV(B)(9), and is tradable only between the Bank and its Members. Stock shall be issued by the Bank in accordance with 12 C.F.R. 931.2 of the Regulations. 
		
	B.
	RIGHTS, TERMS AND PREFERENCES.  

Terms and Preferences. The terms and preferential rights of stockholders are as follows:
		
	1.
	Ownership. The retained earnings, surplus, undivided profits, and equity reserves, if any, of the Bank are owned by the Holders of Class B Stock proportionate to the total par value of any outstanding shares of Class B Stock; provided, however, that Holders have no right to receive any portion of these items except through the declaration of a dividend by the Board of Directors or through liquidation of the Bank.

		
	2.
	Dividends. At the discretion of the Board of Directors and subject to the terms and conditions set forth herein and in the Bank Act or the Regulations, dividends may from time to time (quarterly or otherwise) be declared and paid on Class A Stock and Class B Stock. Stock dividends are non-cumulative with respect to payment obligation. Any dividend on Class A Stock shall be paid equally on all Class A Stock and any dividend on Class B Stock shall be paid equally on all Class B Stock. Dividends may be paid in the form of cash or stock.  Dividends shall be paid to a Holder based on the average number of shares of Stock actually owned by the Holder during the period for which the dividend has been declared. In no event will the Board of Directors declare or pay any dividend on its Class A Stock or Class B Stock if after doing so it would fail to meet any of its minimum capital requirements or if the Board of Directors determines in its discretion that to do so would create a safety and soundness issue for the Bank. No dividend shall be declared or paid except out of previously retained earnings or current net earnings, as determined in accordance with GAAP, and in accordance with the requirements set forth in the Bank Act or the Regulations. For purposes of this Section IV(B)(2), net earnings shall equal net income under GAAP, plus or minus any adjustments as authorized or required by the Finance Agency.

		
	3.
	Dividend Rate. The dividend rate shall be determined by the Board of Directors in its discretion at such time as a dividend is declared. The dividend rate that is declared on Class A Stock may differ from the dividend rate declared on Class B Stock. 

		
	4.
	Form of Payment. Holders of Class A Stock shall receive dividend payments with respect to such Class A Stock in the form of cash or Class A Stock. Holders of Class B Stock shall receive dividend payments with respect to such Class B Stock in the form of cash or Class B Stock. The Board of Directors shall determine the form of payment of dividends on Stock. All dividend payments, with respect to such class of Stock, shall be pro rata as to both amount and character.

	
			
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	5.
	Rights of Holders in the Event of Liquidation, Merger or Consolidation of the Bank. 

a.     Liquidation.  Subject to applicable law and Regulations, which could modify, restrict or eliminate any rights set forth in this Section, in the event of a liquidation of the Bank, the Holders of Class A Stock and Class B Stock shall be entitled to receive the par value of their Class A Stock and Class B Stock plus any declared but unpaid dividends on a pari passu basis, provided that payment obligations to the Bank’s creditors have been fully satisfied. The Holders of Class B Stock shall thereafter be entitled to receive the retained earnings, surplus, undivided profits and equity reserves, if any, provided that payment obligations to the Bank’s creditors have been fully satisfied. 
		
	b. 
	Merger or Consolidation.

		
	i.
	Bank Acquired.  In the event that the Bank is merged or consolidated into another FHLBank, the Holders of the outstanding Stock of the Bank will be entitled to the rights and benefits set forth in any applicable definitive merger agreement and/or terms established or approved by the Finance Agency.

		
	ii.
	Bank Acquires Other FHLBank.  In the event that another FHLBank is merged or consolidated into the Bank, the holders of the outstanding stock of the other FHLBank will be entitled to the rights and benefits set forth in any applicable definitive merger agreement and/or terms established or approved by the Finance Agency.   

		
	6.
	Repurchase at Discretion of Bank.

		
	a.
	Subject to the provisions of 12 C.F.R. 931.8(a), the Bank may elect to repurchase at any time and at par, Excess Stock; provided, however, that the Bank must give five (5) Business Days prior written notice of any such repurchase by the Bank. Said notice shall specify the class of Stock and the number of shares to be repurchased. In no event will the Bank make any such repurchase if such repurchase would cause the Bank to fail any minimum capital requirement set forth in applicable law or Regulations or cause the seller to fail to satisfy its Total Stock Purchase Requirement. The Bank will not repurchase any Excess Stock which is Class B Stock unless the Holder has no Class A Stock outstanding that could be repurchased as Excess Stock.

		
	b.
	A Holder who receives written notice from the Bank of the Bank’s intention to repurchase the Holder’s shares of Excess Stock shall be permitted to specify by written notice to the Bank, delivered at least one (1) Business Day prior to the date on which the repurchase is to be finalized, the particular shares that are the subject of the repurchase. Such notice shall identify the particular shares that are subject to repurchase by reference to the number and class of Stock, and specifying the date and manner in which such shares were acquired (i.e. whether by purchase at par value or as a stock distribution or dividend from the Bank). If a Holder fails to timely deliver written notice to the Bank identifying the shares to be repurchased, the shares of the Holder’s Stock subject to repurchase within a particular class shall be determined using a first-acquired, first-repurchased method of identification. 

	
			
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	7.
	Redemption at Member Request.

		
	a.
	Subject to the restrictions set forth below and in 12 CFR 931.8(a), Class A Stock shares are redeemable for cash at par value at the request of the Holder following six (6) months prior written notice to the Bank of such redemption request and Class B Stock shares are redeemable for cash at par value at the request of the Holder following five (5) years prior written notice to the Bank of such redemption request; provided, however, that a Holder shall not have more than one notice of redemption outstanding at one time with respect to the same shares of Stock. The applicable notice period shall begin on the date that written notice of the redemption request is received by the Bank. In accordance with Section IV(B)(6) and prior to the expiration of the applicable redemption period, the Bank has the right in its sole discretion, but not the obligation, upon five (5) Business Days prior written notice to the Holder, to repurchase at par, any or all of the shares of Excess Stock for which a Holder has provided a redemption notification unless a shorter notice period is agreed to in writing by the affected Holder. The Bank may suspend redemption of Stock by a Holder if the Bank reasonably believes that the continued redemption of Stock would cause the Bank to fail to meet its minimum capital requirements as set forth in applicable law or Regulations, would prevent the Bank from maintaining adequate capital against a potential risk that may not be adequately reflected in its minimum capital requirements, or would otherwise prevent the Bank from operating in a safe and sound manner. In the event the Bank suspends a redemption of Stock, the following provisions shall apply:

		
	i.
	The Bank will notify the Finance Agency in writing within two (2) Business Days of the date of the decision to suspend the redemption of Stock, informing the Finance Agency of the reasons for the suspension and of the strategies and time frames for addressing the conditions that led to the suspension.

		
	ii.
	The Finance Agency may require the Bank to re-institute the redemption of a Holder’s Stock.

		
	iii.
	The Bank will not repurchase any Stock without the written permission of the Finance Agency during any period in which the Bank has suspended redemption of Stock under this Section.

		
	iv.
	The Bank will not charge a Redemption Cancellation Fee if Stock is not redeemed due to the suspension of Stock redemptions under this Section.

		
	b.
	A Holder who provides written notice to the Bank of its intention to redeem Stock pursuant to this Section shall identify in that written notice the particular shares that are the subject of that redemption request by reference to the class of Stock, the number of shares in that class, the date acquired, and the manner in which the shares subject to notice were acquired (i.e. whether by purchase at par value or as a stock distribution or dividend by the Bank). Failure to identify the class of Stock and number of shares in that class to be redeemed shall render the notice invalid. If a Holder fails to identify the specific shares to be redeemed by reference to the date and manner in which the shares were acquired, the shares of the Holder’s Stock subject to redemption within a particular class shall be determined using a first-acquired, first-redeemed method of identification. 

	
			
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	c.
	The Stock of a Holder will not be redeemed if such redemption would cause the Holder to fail to satisfy its Total Stock Purchase Requirement. In the event that a redemption would cause a Holder to fail to satisfy its Total Stock Purchase Requirement on the redemption date, such portion of the request that causes the Holder to fail its Total Stock Purchase Requirement will be cancelled by the Bank five (5) Business Days following the expiration of such redemption period, and the Redemption Cancellation Fee will apply to the cancelled portion of the request.

		
	d.
	A Holder that previously had notified the Bank in writing of its intent to redeem some or all of its Stock, and that subsequently decides to cancel its redemption request before the completion of the applicable notification period, shall do so by providing written notice to the Bank of its intent to cancel its redemption. Said notice shall include a copy of the redemption request and shall specify the particular shares that are subject to the notice to cancel the redemption request by reference to the class of Stock, the number of shares in that class, and if applicable, the date acquired, and the manner in which the shares subject to the notice were acquired. Failure to identify accurately the shares of Stock that are subject to the notice to cancel the redemption request shall render such notice invalid. If a Holder cancels a redemption request, the Bank shall impose a Redemption Cancellation Fee equal to the applicable amount shown in the following table; provided, however, that the Board of Directors may waive the imposition of such fee if it has a bona fide business purpose for doing so and the waiver is consistent with Section 7(j) of the Bank Act. If a Redemption Cancellation Fee is imposed by the Bank, the Bank shall notify the Holder of the amount of the fee that is imposed.

	
		
	Cancellation of Redemption Request Occurs During:
	Maximum Cancellation Fee

	Year 1
	20% of dividends received during the time the request was outstanding

	Year 2
	Year 1 fee plus 40% of the dividends received during the second year the request was outstanding

	Year 3
	Year 2 fee plus 60% of the dividends received during the third year the request was outstanding

	Year 4
	Year 3 fee plus 80% of the dividends received during the fourth year the request was outstanding

	Year 5
	Year 4 fee plus 100% of the dividends received during the fifth year the request was outstanding

		
	e.
	In the event the Bank does impose such a Redemption Cancellation Fee, the Holder, within ten (10) business days from the date of mailing by the Bank to the Holder of written notice that sets forth the amount of the fee, may provide written notice of its intent to revoke the cancellation and to proceed with the redemption of the Stock subject to the redemption request in accordance with the original redemption timetable, in which event no Redemption Cancellation Fee shall be imposed.

	
			
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	f.
	The Bank may retain the proceeds of redemption by a Holder of Stock as additional collateral if the Bank reasonably determines that there is an existing or anticipated collateral deficiency related to any obligations owed by the Holder to the Bank and the Holder has failed to deliver additional collateral to resolve the existing or anticipated collateral deficiency to the Bank’s satisfaction, until all such obligations have been satisfied or the anticipated deficiency is resolved to the Bank’s satisfaction.

		
	8.
	Voting Rights. Holders will have the right to vote their Stock in elections of the Bank’s Board of Directors pursuant to applicable law and Regulations.

		
	9.
	Transferability.  

		
	a.
	Except as set forth herein, a Holder may not transfer Stock to any other person or entity.

		
	b.
	A Holder may transfer at par value the Excess Stock held by that Holder to a Member. 

		
	c.
	In the event of a merger or consolidation of two or more Members, the Stock of the disappearing Member or Members may be transferred at par value to the surviving or consolidated Member.

		
	d.
	Notwithstanding any other provision of this Capital Plan, (i) in the event of a proposed merger of a Member into a non-Member in which the non-Member will be the successor institution, a Member, prior to such proposed merger and with the prior approval of the Bank, may transfer its Activity-Based Member Stock Purchase Requirement, together with the rights and obligations associated with the related Advances and/or Mortgage Purchase Program activities, to a Member that is Affiliated with either the merging Member or the merging non-Member, and (ii) in the event of a merger of a Member into a non-Member in which the non-Member will be the successor institution, the successor non-Member, following such proposed merger and with the prior approval of the Bank, may transfer the Activity-Based Member Stock Purchase Requirement that it has assumed by virtue of the merger with the Member, together with the rights and obligations associated with the related Advances and/or Mortgage Purchase Program activities, to a Member that is Affiliated with the successor non-Member. In addition, any such successor non-Member that holds Stock shall, if requested to do so by the Bank in its discretion, transfer the Activity-Based Member Stock Purchase Requirement that it has assumed by virtue of the merger with the Member, together with the rights and obligations associated with the related Advances and/or Mortgage Purchase Program activities, to a Member that is Affiliated with the successor non-Member, and said transfer must take place no later than 60 days following the request from the Bank. Upon the transfer of Stock pursuant to the preceding d(ii) hereof, the stock redemption period that became applicable to any such Stock by virtue of the merger of the Member into the successor non-Member shall be deemed to be cancelled and inapplicable, as of the date of the transfer of Stock to the successor non-Member pursuant to d(ii) hereof, and the Bank, in its discretion, may impose a cancellation fee in accordance with the amounts set forth in Section IV(B)(7)(d). The Activity-Based Member Stock Purchase Requirement of any Member or non-Member that has been transferred pursuant to this Section shall terminate with respect to the transferor as of the effective date of the transfer. 

		
	e.
	For purposes of this Section IV(B)(9), the term “Affiliated” means to control, to be controlled by, or to be under common control with.

	
			
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	f.
	Each transferor shall give the Bank at least 30 days prior notice of any transfer it intends to make pursuant to this Section, unless this prior notice requirement is waived by the Bank.

		
	g.
	All transfers permitted by this Section shall: (1) be subject to applicable law and Regulations, and the prior approval of the Bank, (2) be subject to the terms, limits and conditions set forth in this Capital Plan, including without limitation the applicable provisions of Section IV(C), and (3) be transferred at par value.

		
	C.
	EXCHANGE OF OWNERSHIP.

		
	1.
	Consolidation of Members. Upon a merger or consolidation of two or more Members, the Total Stock Purchase Requirement will be calculated for the surviving or consolidated institution using data as of the effective date of the merger or consolidation. Excess Stock, if any, of the surviving or consolidated institution will be subject to the other terms and conditions set forth in this Capital Plan.   

		
	2.
	Withdrawals and Terminations of Membership.

		
	a.
	Law and Regulations. All withdrawals and terminations of Membership shall be subject to applicable law and Regulations.

		
	b.
	Disposition of capital of a terminated Member. In the event that a Member withdraws from Membership or has had its Membership terminated and on the effective date of such withdrawal or termination remains indebted to the Bank or has outstanding business transactions with the Bank, the Bank shall not redeem or repurchase any Stock that is required by any Activity-Based Member Stock Purchase Requirement of such Member, in accordance with the provisions hereof, until such indebtedness and business transactions have been extinguished or settled, including any fees relating to the prepayment of Advances.

		
	c.
	Stock redemption notices of a terminated Member.

		
	i.
	Voluntary withdrawal of Membership. The receipt by the Bank of a Member’s notice of withdrawal of Membership shall commence the redemption period of all Stock held by that Member that is not already subject to a pending request for redemption. In the case of an institution the Membership of which has been terminated as a result of a merger or consolidation into a nonmember or into a member of another Federal Home Loan Bank, the applicable stock redemption period for any Stock that is not subject to a pending notice of redemption shall be deemed to commence on the date on which the charter of the Member is cancelled.

		
	ii.
	Involuntary termination of Membership. In the event of an involuntary termination of a Member’s Membership, the redemption period for all Stock owned by the Member and not already subject to a pending request for redemption, shall commence on the date that the Bank terminates the institution’s Membership.

	
			
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SECTION V. RETAINED EARNINGS
		
	A.
	IMPLEMENTATION.  

The provisions of this Section V shall become effective upon, and only upon, the occurrence of the Interim Capital Plan Amendment Implementation Date. Until the Restriction Termination Date, in the event of any conflict between this Section V and the remainder of this Capital Plan, the applicable terms of this Section V shall govern and shall be interpreted in a manner such that the restrictions set forth herein are supplementary to, and not in lieu of, the requirements of the remainder of this Capital Plan.
		
	B.
	DEFINITIONS APPLICABLE TO SECTION V OF THIS CAPITAL PLAN.

As used in this Section V, the following terms shall have the meanings set forth below (terms defined in the singular shall have the same meaning when used in the plural and vice versa). Capitalized terms used in this Section V and not defined below shall have the meanings ascribed to them elsewhere in this Capital Plan.
		
	1.
	”Act” means the Federal Home Loan Bank Act, as amended as of the Effective Date.

		
	2.
	”Adjustment to Prior Net Income” means either an increase, or a decrease, to a prior calendar quarter’s Quarterly Net Income subsequent to the date on which any allocation to Restricted Retained Earnings for such calendar quarter was made. 

		
	3.
	“Agreement” means the Joint Capital Enhancement Agreement adopted by the FHLBanks on the Effective Date and amended on the date on which the FHFA has approved the Retained Earnings Capital Plan Amendments for all of the FHLBanks that have issued capital stock pursuant to a capital plan as of the Effective Date. 

		
	4.
	“Allocation Termination Date” means the date the Bank’s obligation to make allocations to the Restricted Retained Earnings account is terminated permanently. That date is determined pursuant to Section V(E) of this Capital Plan.

		
	5.
	“Automatic Termination Event” means (i) a change in the Act, or another applicable statute, occurring subsequent to the Effective Date, that will have the effect of creating a new, or higher, assessment or taxation on net income or capital of the FHLBanks, or (ii) a change in the Act, another applicable statute, or the Regulations, occurring subsequent to the Effective Date, that will result in a higher mandatory allocation of an FHLBank’s Quarterly Net Income to any Retained Earnings account than the annual amount, or total amount, specified in an FHLBank’s capital plan as in effect immediately prior to the Automatic Termination Event.  

		
	6.
	“Automatic Termination Event Declaration Date” means the date specified in Section V(E)(1)(a) or V(E)(1)(b) of this Capital Plan.

		
	7.
	“Bank’s Total Consolidated Obligations” means the daily average carrying value for the calendar quarter, excluding the impact of fair value adjustments (i.e., fair value option and hedging adjustments), of the Bank’s portion of outstanding System Consolidated Obligations for which it is the primary obligor.

		
	8.
	“Declaration of Automatic Termination” means a signed statement, executed by officers authorized to sign on behalf of each FHLBank that is a signatory to the Agreement, in which 

	
			
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at least 2/3 of the then existing FHLBanks declare their concurrence that a specific statutory or regulatory change meets the definition of an Automatic Termination Event.
		
	9.
	“Dividend” means a distribution of cash, other property, or stock to a Stockholder with respect to its holdings of Stock.

		
	10.
	“Dividend Restriction Period” means any calendar quarter: (i) that includes the REFCORP Termination Date, or occurs subsequent to the REFCORP Termination Date; (ii) that occurs prior to an Allocation Termination Date; and (iii) during which the amount of the Bank’s Restricted Retained Earnings is less than the amount of the Bank’s RREM. If the amount of the Bank’s Restricted Retained Earnings is at least equal to the amount of the Bank’s RREM, and subsequently the Bank’s Restricted Retained Earnings becomes less than its RREM, the Bank shall be deemed to be in a Dividend Restriction Period (unless an Allocation Termination Date has occurred).

		
	11.
	“Effective Date” means February 28, 2011.  

		
	12.
	“FHFA” means the Federal Housing Finance Agency, or any successor thereto.

		
	13.
	“FHLBank” means a Federal Home Loan Bank chartered under the Act.

		
	14.
	“Interim Capital Plan Amendment Implementation Date” means 31 days after the date by which the FHFA has approved a capital plan amendment substantially the same as the Retained Earnings Capital Plan Amendments for all of the FHLBanks that have issued Stock pursuant to a capital plan as of the Effective Date. 

		
	15.
	“Net Loss” means that the Quarterly Net Income of the Bank is negative, or that the annual net income of the Bank calculated on the same basis is negative.

		
	16.
	“Quarterly Net Income” means the amount of net income of an FHLBank for a calendar quarter calculated in accordance with GAAP, after deducting the FHLBank’s required contributions for that quarter to the Affordable Housing Program under section 10(j) of the Act, as reported in the Bank’s quarterly and annual financial statements filed with the Securities and Exchange Commission. 

		
	17.
	“REFCORP Termination Date” means the last day of the calendar quarter in which the FHLBanks’ final regular payments are made on obligations to REFCORP in accordance with Section 997.5 of the Regulations and Section 21B(f) of the Act.

		
	18.
	“Regular Contribution Amount” means the result of (i) 20 percent of Quarterly Net Income; plus (ii) 20 percent of a positive Adjustment to Prior Net Income for any prior calendar quarter that includes the REFCORP Termination Date, or occurred subsequent to the REFCORP Termination Date, to the extent such adjustment has not yet been made in the current calendar quarter; minus (iii) 20 percent of the absolute value of a negative Adjustment to Prior Net Income for any prior calendar quarter that includes the REFCORP Termination Date, or occurred subsequent to the REFCORP Termination Date, to the extent such adjustment has not yet been made in the current calendar quarter. 

		
	19.
	“Regulations” mean: (i) the rules and regulations of the Federal Housing Finance Board (except to the extent that they may be modified, terminated, set aside or superseded by the Director of the FHFA) in effect on the Effective Date; and (ii) the rules and regulations of the FHFA, as amended from time to time.

	
			
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	20.
	“Restricted Retained Earnings” means the cumulative amount of Quarterly Net Income and Adjustments to Prior Net Income allocated to the Bank’s Retained Earnings account restricted pursuant to the Retained Earnings Capital Plan Amendment, and does not include amounts retained in: (i) any accounts in existence at the Bank on the Effective Date; or (ii) any other Retained Earnings accounts subject to restrictions that are not part of the terms of the Retained Earnings Capital Plan Amendment.

		
	21.
	“Restricted Retained Earnings Minimum” (“RREM”) means a level of Restricted Retained Earnings calculated as of the last day of each calendar quarter equal to one percent of the Bank’s Total Consolidated Obligations.

		
	22.
	“Restriction Termination Date” means the date the restriction on the Bank paying Dividends out of the Restricted Retained Earnings account, or otherwise reallocating funds from the Restricted Retained Earnings account, is terminated permanently. That date is determined pursuant to Section V(E) of this Capital Plan.  

		
	23.
	“Retained Earnings” means the retained earnings of an FHLBank calculated pursuant to GAAP.

		
	24.
	“Retained Earnings Capital Plan Amendment” means the amendment to this Capital Plan, made a part thereof, adopted effective on the Interim Capital Plan Amendment Implementation Date, adding Section V to this Capital Plan and similar amendments to the capital plans of the other FHLBanks that have issued capital stock pursuant to a capital plan as of the Effective Date.

		
	25.
	“Special Contribution Amount” means the result of: (i) 50 percent of Quarterly Net Income; plus (ii) 50 percent of a positive Adjustment to Prior Net Income for any prior calendar quarter that includes the REFCORP Termination Date, or occurred subsequent to the REFCORP Termination Date, to the extent such adjustment has not yet been made in the current calendar quarter; minus (iii) 50 percent of the absolute value of a negative Adjustment to Prior Net Income for any prior calendar quarter that includes the REFCORP Termination Date, or occurred subsequent to the REFCORP Termination Date, to the extent such adjustment has not yet been made by the current calendar quarter. 

		
	26.
	“Stockholder” means: (i) an institution that has been approved for membership in the Bank, and has purchased Stock in accordance with the Regulations; (ii) a former member of the Bank that continues to own Stock; or (iii) a successor to an entity that was a member of the Bank that continues to own Stock.

		
	27.
	“System Consolidated Obligation” means any bond, debenture, or note authorized under the Regulations to be issued jointly by the FHLBanks pursuant to Section 11(a) of the Act, as amended, or any bond or note previously issued by the Federal Housing Finance Board on behalf of all FHLBanks pursuant to Section 11(c) of the Act, on which the FHLBanks are jointly and severally liable, or any other instrument issued through the Office of Finance, or any successor thereto, under the Act, that is a joint and several liability of all the FHLBanks. 

		
	28.
	“Total Capital” means Retained Earnings, the amount paid in for Stock, the amount of any general allowance for losses, and the amount of other instruments that the FHFA has determined to be available to absorb losses incurred by the Bank.

	
			
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	C.
	ESTABLISHMENT OF RESTRICTED RETAINED EARNINGS.

		
	1.
	Segregation of Account. No later than the REFCORP Termination Date, the Bank shall establish an account in its official books and records in which to allocate its Restricted Retained Earnings, with such account being segregated on its books and records from the Bank’s Retained Earnings that are not Restricted Retained Earnings for purposes of tracking the accumulation of Restricted Retained Earnings and enforcing the restrictions on the use of the Restricted Retained Earnings imposed in the Retained Earnings Capital Plan Amendment.

		
	2.
	Funding of Account.

		
	a.
	Date on which Allocation Begins. The Bank shall allocate to its Restricted Retained Earnings account an amount at least equal to the Regular Contribution Amount beginning on the REFCORP Termination Date. The Bank shall allocate amounts to the Restricted Retained Earnings account only through contributions from its Quarterly Net Income or Adjustments to Prior Net Income occurring on or after the REFCORP Termination Date, but nothing in the Retained Earnings Capital Plan Amendment shall prevent the Bank from allocating a greater percentage of its Quarterly Net Income or positive Adjustment to Prior Net Income to its Restricted Retained Earnings account than the percentages set forth in the Retained Earning Capital Plan Amendment.

		
	b.
	Ongoing Allocation. During any Dividend Restriction Period that occurs before the Allocation Termination Date, the Bank shall continue to allocate its Regular Contribution Amount (or when and if required under Section V(C)(2)(d) below, its Special Contribution Amount) to its Restricted Retained Earnings account.  

		
	c.
	Treatment of Quarterly Net Losses and Annual Net Losses. In the event the Bank sustains a Net Loss for a calendar quarter, the following shall apply: (i) to the extent that its cumulative calendar year-to-date net income is positive at the end of such quarter, the Bank may decrease the amount of its Restricted Retained Earnings such that the cumulative addition to the Restricted Retained Earnings account calendar year-to-date at the end of such quarter is equal to 20 percent of the amount of such cumulative calendar year-to-date net income; (ii) to the extent that its cumulative calendar year-to-date net income is negative at the end of such quarter (a) the Bank may decrease the amount of its Restricted Retained Earnings account such that the cumulative addition calendar year-to-date to the Restricted Retained Earnings at the end of such quarter is zero, and (b) the Bank shall apply any remaining portion of the Net Loss for the calendar quarter first to reduce Retained Earnings that are not Restricted Retained Earnings until such Retained Earnings are reduced to zero, and thereafter may apply any remaining portion of the Net Loss for the calendar quarter to reduce Restricted Retained Earnings; and (iii) for any subsequent calendar quarter in the same calendar year, the Bank may decrease the amount of its quarterly allocation to its Restricted Retained Earnings account in that subsequent calendar quarter such that the cumulative addition to the Restricted Retained Earnings account calendar year-to-date is equal to 20 percent of the amount of such cumulative calendar year-to-date net income.

In the event the Bank sustains a Net Loss for a calendar year, any such Net Loss first shall be applied to reduce Retained Earnings that are not Restricted Retained Earnings 

	
			
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until such Retained Earnings are reduced to zero, and thereafter any remaining portion of the Net Loss for the calendar year may be applied to reduce Restricted Retained Earnings.
		
	d.
	Funding at the Special Contribution Amount. If during a Dividend Restriction Period, the amount of the Bank’s Restricted Retained Earnings decreases in any calendar quarter, except as provided in Sections V(C)(2)(c)(i) and (ii)(a) above, the Bank shall allocate the Special Contribution Amount to its Restricted Retained Earnings account beginning at the following calendar quarter-end (except as provided in the last sentence of this subsection). Thereafter, the Bank shall continue to allocate the Special Contribution Amount to its Restricted Retained Earnings account until the cumulative difference between: (i) the allocations made using the Special Contribution Amount; and (ii) the allocations that would have been made if the Regular Contribution Amount applied, is equal to the amount of the prior decrease in the amount of its Restricted Retained Earnings account arising from the application of Section V(C)(2)(c)(ii)(b). If at any calendar quarter-end the allocation of the Special Contribution Amount would result in a cumulative allocation in excess of such prior decrease in the amount of Restricted Retained Earnings: (i) the Bank may allocate such percentage of Quarterly Net Income to the Restricted Retained Earnings account that shall exactly restore the amount of the prior decrease, plus the amount of the Regular Contribution Amount for that quarter; and (ii) the Bank in subsequent quarters shall revert to paying at least the Regular Contribution Amount.

		
	e.
	Release of Restricted Retained Earnings. If the Bank’s RREM decreases from time to time due to fluctuations in the Bank’s Total Consolidated Obligations, amounts in the Restricted Retained Earnings account in excess of 150 percent of the RREM may be released by the Bank from the restrictions otherwise imposed on such amounts pursuant to the provisions of the Retained Earnings Capital Plan Amendment, and reallocated to its Retained Earnings that are not Restricted Retained Earnings. Until the Restriction Termination Date, the Bank may not otherwise reallocate amounts in its Restricted Retained Earnings account (provided that a reduction in the Restricted Retained Earnings account following a Net Loss pursuant to Section V(C)(2)(c) is not a reallocation).  

		
	f.
	No Effect on Rights of Shareholders as Owners of Retained Earnings. In the event of the liquidation of the Bank, or a taking of the Bank’s Retained Earnings by any future federal action, nothing in the Retained Earnings Capital Plan Amendment shall change the rights of the holders of the Bank’s Class B Stock that confer ownership of Retained Earnings, including Restricted Retained Earnings, as granted under section 6(h) of the Act.

		
	D.
	LIMITATIONS ON DIVIDENDS, STOCK REPURCHASES AND STOCK REDEMPTIONS.

		
	1.
	General Rule on Dividends. From the REFCORP Termination Date through the Restriction Termination Date, the Bank may not pay Dividends, or otherwise reallocate funds, out of Restricted Retained Earnings. During a Dividend Restriction Period, the Bank may not pay Dividends out of the amount of Quarterly Net Income required to be allocated to Restricted Retained Earnings.

	
			
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	2.
	Limitations on Repurchase and Redemption. From the REFCORP Termination Date through the Restriction Termination Date, the Bank shall not engage in a repurchase or redemption transaction if following such transaction the Bank’s Total Capital as reported to the FHFA falls below the Bank’s aggregate paid-in amount of Stock.

		
	E.
	TERMINATION OF RETAINED EARNINGS CAPITAL PLAN AMENDMENT OBLIGATIONS.

		
	1.
	Notice of Automatic Termination Event.

		
	a.
	Action by FHLBanks. If the Bank desires to assert that an Automatic Termination Event has occurred (or will occur on the effective date of a change in a statute or the Regulations), the Bank shall provide prompt written notice to all of the other FHLBanks (and provide a copy to the FHFA) identifying the specific statutory or regulatory change that is the basis for the assertion. For the purposes of this section, ‘prompt written notice’ means notice delivered no later than 90 calendar days subsequent to: (1) the date the specific statutory change takes effect; or (2) the date an interim final rule or final rule effecting the specific regulatory change is published in the Federal Register.  

If within 60 calendar days of transmission of such a written notice to all of the other FHLBanks, at least 2/3 of the then existing FHLBanks (including the Bank) execute a Declaration of Automatic Termination concurring that the specific statutory or regulatory change identified in the written notice constitutes an Automatic Termination Event, then the Declaration of Automatic Termination shall be delivered by the Bank to the FHFA within 10 calendar days of the date that the Declaration of Automatic Termination is executed. After the expiration of a 60 calendar day period that begins when the Declaration of Automatic Termination is delivered to the FHFA, an Automatic Termination Event Declaration Date shall be deemed to occur (except as provided in Section V(E)(1)(c)). 
After the expiration of a 60 calendar day period that begins when the Declaration of Automatic Termination is delivered to the FHFA by another FHLBank pursuant to the terms of its capital plan, an Automatic Termination Event Declaration Date shall also be deemed to occur (except as provided in Section V(E)(1)(c)).
If a Declaration of Automatic Termination concurring that the specific statutory or regulatory change identified in the written notice constitutes an Automatic Termination Event has not been executed by at least the required 2/3 of the then existing FHLBanks within 60 calendar days of transmission of such notice to all of the other FHLBanks, the Bank may request a determination from the FHFA that the specific statutory or regulatory change constitutes an Automatic Termination Event. Such request must be filed with the FHFA within 10 calendar days after the expiration of the 60 calendar day period that begins upon transmission of the written notice of the basis of the assertion to all of the other FHLBanks.  
		
	b.
	Action by FHFA. The Bank (or a Notifying Bank) may request a determination from the FHFA that a specific statutory or regulatory change constitutes an Automatic Termination Event, and may claim that an Automatic Termination Event has occurred, or will occur, with respect to a specific statutory or regulatory change only if the Bank has complied with the time limitations and procedures of Section V(E)(1)(a).  

	
			
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If within 60 calendar days after the Bank delivers such request to the FHFA, or a similar request is delivered by another FHLBank pursuant to its capital plan, the FHFA provides the requesting FHLBank with a written determination that a specific statutory or regulatory change is an Automatic Termination Event, then an Automatic Termination Event Declaration Date shall be deemed to occur as of the expiration of such 60 calendar day period (except as provided in Section V(E)(1)(c)). The date of such Automatic Termination Event Declaration Date shall be as of the expiration of such 60 calendar day period (except as provided in Section V(E)(1)(c)) no matter on which day prior to the expiration of the 60 calendar day period the FHFA has provided its written determination.  
If the FHFA fails to make a determination within 60 calendar days after an FHLBank delivers such request to the FHFA, then an Automatic Termination Event Declaration Date shall be deemed to occur as of the date of the expiration of such 60 calendar day period (except as provided in Section V(E)(1)(c)); provided, however, that the FHFA may make a written request for information from that FHLBank, and toll such 60 calendar day period from the date that the FHFA transmits its request until that FHLBank delivers to the FHFA information responsive to its request.  
If within 60 calendar days after an FHLBank delivers to the FHFA a request for determination that a specific statutory or regulatory change constitutes an Automatic Termination Event (or such longer period if the 60 calendar day period is tolled pursuant to the preceding sentence), the FHFA provides that FHLBank with a written determination that a specific statutory or regulatory change is not an Automatic Termination Event, then an Automatic Termination Event shall not have occurred with respect to such change.
		
	c.
	Proviso as to Occurrence of Automatic Termination Event Declaration Date. In no case under this Section V(e)(1) may an Automatic Termination Event Declaration Date be deemed to occur prior to: (1) the date the specific statutory change takes effect; or (2) the date an interim final rule or final rule effecting the specific regulatory change is published in the Federal Register.

		
	2.
	Notice of Voluntary Termination. If the FHLBanks terminate the Agreement, then the FHLBanks shall provide written notice to the FHFA that the FHLBanks have voted to terminate the Agreement. 

		
	3.
	Consequences of an Automatic Termination Event or Vote to Terminate the Agreement.  

		
	a.
	Consequences of Voluntary Termination. In the event the FHLBanks deliver written notice to the FHFA that the FHLBanks have voted to terminate the Agreement, then without any further action by the Bank or the FHFA: (i) the date of delivery of such notice shall be an Allocation Termination Date; and (ii) one year from the date of delivery of such notice shall be a Restriction Termination Date.  

		
	b.
	Consequences of an Automatic Termination Event Declaration Date. If an Automatic Termination Event Declaration Date has occurred, then without further action by the Bank or the FHFA: (i) the date of the Automatic Termination Event Declaration Date shall be an Allocation Termination Date; and (ii) one year from the date of the Automatic Termination Event Declaration Date shall be a Restriction Termination Date.  

	
			
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	c.
	Deletion of Operative Provisions of Retained Earnings Capital Plan Amendment. Without any further action by the Bank or the FHFA, on the Restriction Termination Date, Section V of this Capital Plan shall be deleted.

	
			
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	Page 21 of 21EX-10.5

 Exhibit 10.5 

Enanta has requested that portions of this document be accorded confidential treatment 

pursuant to Rule 24b-2 promulgated under the Securities Exchange Act of 1934, as amended. 

THIRD AMENDMENT TO THE COLLABORATIVE 

DEVELOPMENT AND LICENSE AGREEMENT 

This THIRD AMENDMENT TO THE COLLABORATIVE DEVELOPMENT AND LICENSE AGREEMENT (this “Third Amendment”) is entered into as of
October 20, 2014, by and between Enanta Pharmaceuticals, Inc., with principal offices at 500 Arsenal Street, Watertown, Massachusetts 02472 (“Enanta”) and AbbVie Inc., having a place of business at 1 North Waukegan Road, North
Chicago, Illinois 60064 (“AbbVie”). AbbVie and Enanta are sometimes referred to herein individually as a “Party” and collectively as the “Parties.” 

WHEREAS, Enanta and AbbVie’s predecessor, Abbott Laboratories (“Abbott”), entered into the Collaborative Development and
License Agreement (the “Original Agreement”), dated November 27, 2006, for the purpose of identifying, developing and commercializing Enanta’s proprietary HCV NS3 or NS3/4A protease inhibitors and/or certain of Abbott’s
proprietary protease inhibitors as more fully described within the Original Agreement; 
 WHEREAS, Enanta and Abbott entered into a First
Amendment to the Original Agreement, dated January 27, 2009, and a Second Amendment to the Original Agreement dated December 9, 2009 (such amendments, together with the Original Agreement, being collectively the “Agreement”);

 WHEREAS, pursuant to the Agreement, the Parties intend to develop and commercialize Combination Products containing Products and one or
more other ingredients that are therapeutically or biologically active and are not themselves Products, as those terms are defined in the Agreement; and 

WHEREAS, the Parties wish to define further the terms for the co-development and commercialization of Combination Products created from a
Product and for appropriate adjustments to Net Sales to reflect a good faith determination of the relative value of each pharmaceutically active ingredient in a Combination Product. 

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, and for other good and valuable consideration, the
Parties hereto, intending to be legally bound, hereby agree as follows: 
 A. Any capitalized terms used and not otherwise defined herein
shall have the meanings set forth in the Agreement. 
 B. When used in the Agreement and this Third Amendment, “Abbott” or
“Abbott Laboratories” shall mean AbbVie. 
 C. The following new terms and definitions shall be added to Section 1
(Definitions) of the Agreement: 

  
 Confidential materials
omitted and filed separately with the Securities and Exchange Commission. 
 Asterisks denote such omission. 

 1.116 “DAA” means any protease inhibitor, NS5A inhibitor,
non-nuc polymerase inhibitor, nucleoside or nucleotide polymerase inhibitor, or any other direct acting antiviral agent, but for clarity does not include, without limitation, ritonavir, interferon, or ribavirin. 

1.117 “Non-DAA” means any active pharmaceutical ingredient other than a DAA. For purposes of clarity, a
non-DAA includes, without limitation, ritonavir, interferon, and ribavirin. 
 1.118 “First Generation
Product” means any Combination Product containing or comprising the compound known as ABT-450 (parataprevir), a Product that is an HCV NS3/4 protease inhibitor, and one or more other ingredients that are therapeutically or biologically
active and are not themselves Products. For purposes of clarity, the First Generation Product may consist of more than one combination, each containing ABT-450, including, without limitation, the 3D Regimen and the 2D Regimen, each as defined below.

 1.119 “3D Regimen” means the First Generation Product combination comprising the co-formulation of
the compounds ABT-450, ABT-267 (ombitasvir), and ritonavir (the “Co-Formulation”), plus the co-administered compound ABT-333 (dasabuvir) [*****]. 

1.120 “2D Regimen” means the First Generation Product combination comprising the Co-Formulation for use
in the treatment of HCV without co-administration of the compound ABT-333 (dasabuvir). 
 1.121 [*****]. 

1.122 “Second Generation Product” means any Combination Product containing or comprising the compound
known as ABT-493, a Product that is an HCV NS3/4A protease inhibitor, and one or more other ingredients that are therapeutically or biologically active and are not themselves Products. For purposes of clarity, a Second Generation Product may consist
of more than one combination, each containing ABT-493. 
 D. Section 1.44 (Enanta Co-Development Percentage) of the Agreement is hereby
deleted in its entirety, and the following Section 1.44 is inserted in lieu of the deleted Section: 
 1.44
“Enanta Co-Development Percentage” means forty percent (40%) for any Co-Developed Product. Notwithstanding the foregoing, for the Second Generation Product, the Parties agree that the Enanta Co-Development Percentage
means forty percent (40%) divided by 

  
 Confidential materials
omitted and filed separately with the Securities and Exchange Commission. 
 Asterisks denote such omission. 

 
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the total number of DAAs comprising the Second Generation Product. If one or more Non-DAAs is added to the Second Generation Product, then the Parties will negotiate in good faith further
adjustments to the Enanta Co-Development Percentage for the Second Generation Product based on the relative value of the Non-DAA(s) to the product, using the same formulas as set forth in Section 6.5.1(e)(iii) to the extent applicable. 

E. Section 1.78 (Materially Used) of the Agreement is hereby deleted in its entirety, and the following Section 1.78 is inserted in
lieu of the deleted Section: 
 1.78 “Materially Used” means, with respect to Shared Development
Costs, the inclusion in the core efficacy registration package in the NDA of any data, results, and/or information produced in the conduct of a clinical trial. 

F. Section 1.96 (Relevant Market Size) of the Agreement is hereby deleted in its entirety, and the following Section 1.96 is
inserted in lieu of the deleted Section: 
 1.96 “U.S. Relative Market Size” means the result
obtained by [*****]. 
 G. Section 1.103 (Shared Clinical Trial) of the Agreement is hereby deleted in its entirety, and the following
Section 1.103 is inserted in lieu of the deleted Section: 
 1.103 “Global Development Costs”
means any Development Costs incurred by a Party (or for its account by an Affiliate or a Third Party) that are intended to support approval both in the Co-Development Territory and outside of the Co-Development Territory, regardless of where those
costs are physically incurred. For purposes of clarity, Global Development Costs do not include (a) any filing fees required for, and other costs associated with, any Regulatory Filings for a particular country or (b) clinical studies
conducted solely to support approval in a specific country or countries (i.e., U.S. Development Costs or Ex-U.S. Development Costs as defined below). 

H. Section 1.104 (Shared Clinical Trial Costs) of the Agreement is hereby deleted in its entirety, and the following Section 1.104
is inserted in lieu of the deleted Section: 
 1.104 “U.S. Development Costs” means any Development
Costs (including, without limitation, any filing fees required for, and other costs associated with, any Regulatory Filings) incurred by a Party (or for its account by an Affiliate or a Third Party) that are solely intended to support approval of
the Co-Developed Product within the Co-Development Territory, regardless of where those costs are physically incurred. 

  
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 I. Section 1.105 (Shared Clinical Trial True-Up Percentage) of the Agreement is hereby
deleted in its entirety, and the following Section 1.105 is inserted in lieu of the deleted Section: 
 1.105
“Sharing Percentage” means [*****]. For purposes of clarity, the Sharing Percentage will be [*****] and solely for purposes of calculating what portion of Global Development Costs are Shared Development Costs. 

J. Section 1.106 (Shared Clinical Trial Data) of the Agreement is hereby deleted in its entirety, and the following Section 1.106 is
inserted in lieu of the deleted Section: 
 1.106 “Shared Development Costs” for a Co-Developed
Product means the sum of (a) the Global Development Costs times the Sharing Percentage [*****] and (b) the U.S. Development Costs, in each case only to the extent such costs applicable to the Co-Developed Product were incurred on or after
its Co-Development and Profit Share Option Exercise Date. For purposes of clarity, Shared Development Costs will not include any Development Costs incurred by a Party (or for its account by an Affiliate or a Third Party) that are solely intended to
support approval of the Co-Developed Product outside the Co-Development Territory, regardless of where those costs are physically incurred (“Ex-U.S. Development Costs”). 

K. Section 4.1.1 (Development Plans) of the Agreement is hereby deleted in its entirety, and the following Section 4.1.1 is inserted
in lieu of the deleted Section: 
 4.1.1 Development Plans. A Development Plan and budget for each Candidate
for the balance of the Calendar Year during which the Compound or Abbott Compound is designated by the JSC as a Candidate shall be prepared by Abbott and submitted to the JSC promptly after the designation of such Compound or Abbott Compound as
provided in Sections 2.1.4(h) and 3.6. Thereafter, for each Calendar Year during the Development Program, an updated Development Plan and budget for each Candidate shall be prepared by Abbott and submitted to the JSC as provided in
Section 2.1.4(a) or (b), as applicable. To the extent JSC approval is required, the Parties shall manage the preparation of each Development Plan and budget in a manner designed to obtain such JSC approval no later than [*****] days prior to
the end of the then-current Calendar Year. Each Development Plan and amendment thereto shall: (a) set forth (i) the Development objectives, activities, priorities, timelines, budget and resources for the Calendar Year covered by the
Development Plan with reasonable specificity, (ii) the Development objectives and activities to be performed for each Calendar Year period covered by the 

  
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Development Plan with reasonable specificity, broken down by Calendar Quarters, (iii) the Party that shall be responsible for performing such activities, (iv) a timeline for such
activities and (v) the expected Development Costs over such Calendar Year, including the U.S. Development Costs and the Global Development Costs; and (b) be consistent with the other terms of this Agreement. 

L. Section 5.2 (Effect of Exercise) of the Agreement is hereby deleted in its entirety, and the following Section 5.2 is inserted in
lieu of the deleted Section: 
 5.2 Effect of Exercise. If Enanta exercises the Co-Development and Profit Share
Option with respect to a Compound or Candidate, as the case may be, as described in Section 5.1 then: (a) that Compound or Candidate, as the case may be, will thereafter be deemed to be a Co-Developed Product for purposes of this
Agreement; (b) the Parties shall prepare and provide to the JSC for its review and approval a Marketing and Sales Plan for such Co-Developed Product within the Co-Development Territory which shall be updated and submitted by the Parties to the
JSC not less than annually; (c) Abbott shall provide Enanta, as promptly as possible thereafter, with Abbott’s revised non-binding, good faith estimate of Development Costs it expects to incur with respect to that Co-Developed Product
within the Co-Development Territory for each Calendar Quarter for the next five (5) Calendar Years; (d) except in accordance with Section 5.4, Enanta shall be responsible for the Enanta Co-Development Percentage of all Shared
Development Costs applicable to that Co-Developed Product incurred on and after the Co-Development and Profit Share Option Exercise Date; (e) Enanta shall have the right to employ a number of Enanta Representatives to Co-Promote such
Co-Developed Product, such number to equal the Enanta Co-Development Percentage of the total sales force the JDCC has reasonably determined is appropriate for the successful commercialization of the Co-Developed Product in the Co-Development
Territory; (f) the Parties shall negotiate a Co-Promotion Agreement for such Co-Developed Product in accordance with Section 5.7; and (g) Enanta shall receive the Enanta Co-Development Percentage of all Operating Income derived from
that Co-Developed Product in accordance with Section 6.5.2. The Parties hereby acknowledge and agree that either Party shall have the right to propose the addition of other therapeutically or biologically active ingredients for inclusion with a
Co-Developed Product to create a Combination Product. Enanta and Abbott will negotiate in good faith on the terms for the development and commercialization of a Combination Product created from a Co-Developed Product that have not been contemplated
in this Agreement. 

  
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 M. Section 5.3.1 (Reconciliation of Development Costs) of the Agreement is hereby deleted in
its entirety, and the following Section 5.3.1 is inserted in lieu of the deleted Section: 
 5.3.1 Reconciliation
of Development Costs. Within [*****] days following the end of each Calendar Quarter following the exercise of the Co-Development and Profit Share Option applicable to a given Co-Developed Product, Abbott shall submit to JSC a written report
setting forth in reasonable detail all Shared Development Costs incurred by Abbott over such Calendar Quarter. Within [*****] days following the JSC’s receipt of such written reports, the JSC shall prepare and submit to Enanta a written report
setting forth in reasonable detail the calculation of the net amount owed by Enanta to Abbott in order to ensure the appropriate sharing of the Shared Development Costs in accordance with the Enanta Co-Development Percentage. Enanta shall pay the
net amount to Abbott within [*****] days after the distribution by the JSC of such written report. 
 N. Section 5.4 (Allocation of
Shared Clinical Trial Costs) of the Agreement is hereby deleted in its entirety, and the following Section 5.4 is inserted in lieu of the deleted Section: 

5.4 Allocation of Shared Development Costs. 

5.4.1 Development Plan Corrections. On and after the date of exercise by Enanta of its Co-Development and Profit Share
Option for a Co-Developed Product and continuing for the Term of this Agreement [*****], whichever date is earlier, Abbott shall provide written notice to Enanta to the extent any Shared Development Cost (a) previously designated as a Global
Development Cost is now intended solely to support approval in the Co-Development Territory or solely to support approval outside of the Co-Development Territory; or (b) previously designated as a U.S. Development Cost or an Ex-U.S. Development
Cost is now intended to support approval both in the Co-Development Territory and outside of the Co-Development Territory and otherwise qualifies as a Shared Development Cost (the “Development Plan Correction Notice”). Further, [*****],
Abbott shall provide a Development Plan Correction Notice within [*****] days following the filing of the core efficacy registration package for a Co-Developed Product in the Co-Development Territory (1) if any clinical trials (a) intended
to support approval both in the Co-Development Territory and outside of the Co-Development Territory or (b) intended to support approval solely in the Co-Development Territory was not Materially Used in that core efficacy registration package,
or (2) if any clinical trial intended to support approval solely outside the Co-Development Territory was Materially 

  
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Used in that core efficacy registration package. Within [*****] days after the end of the quarter in which Abbott provides a Development Plan Correction Notice (or as soon as reasonably possible
thereafter), Abbott will include in its reconciliation of Shared Development Costs report pursuant to Section 5.3.1 (or in a separate report as soon as reasonably possible thereafter) a statement indicating any amounts owed by Abbott or Enanta
necessary to adjust Enanta’s contribution to Shared Development Costs to reflect the amount Enanta would have paid had the Development Costs subject to the Development Plan Correction Notice been correctly allocated from the date of exercise by
Enanta of its Co-Development and Profit Share Option. For example, for purposes of clarity, if the Development Plan Correction Notice identifies a Development Cost previously designated as a Global Development Cost that should now be designated as
an Ex-U.S. Development Cost, then Enanta would receive a credit in the next quarterly cost statement provided pursuant to Section 5.3.1 (or in a separate report as soon as reasonably possible thereafter) in the amount of its prior contribution
to those Shared Development Costs and would not share in those costs going forward. 
 5.4.2 Initial True-Up of Shared
Development Costs. Within [*****] days after the end of the Calendar Year following the filing of the core efficacy registration package in the NDA for a Co-Developed Product in the Co-Development Territory, a Third Party entity reasonably
acceptable to the Parties that performs such market analyses for the biotechnology or pharmaceutical industry will determine the U.S. Relative Market Size. Within [*****] days of that determination, Abbott shall submit to JSC a written report
setting forth in reasonable detail all Shared Development Costs incurred through the end of the Calendar Year in which the filing of the core efficacy registration package in the NDA for the Co-Development Territory occurred (the “Initial
Period”) and the amount Enanta has paid in Shared Development Costs for the Initial Period under Section 5.2. Within [*****] days following the JSC’s receipt of such written reports, the JSC shall prepare and submit to each Party a
written report setting forth in reasonable detail the calculation of the net amount owed by a Party to the other Party in order to ensure the appropriate sharing of Shared Development Costs [*****]. The net amount payable shall be due within [*****]
days after receipt of any such accounting. [*****]. 
 5.4.3 Annual True-Up of Shared Development Costs. Within
[*****] days of the end of each Calendar Year following the year in which the core efficacy registration package was filed in the Co-Development Territory (the “Subsequent Calendar Year”), to the extent Shared Development Costs are
incurred during the Subsequent Calendar 

  
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Year, a Third Party entity reasonably acceptable to the Parties that performs such market analyses for the biotechnology or pharmaceutical industry will determine whether any changes to the U.S.
Relative Market Size are warranted. If any changes are warranted, Abbott shall submit to JSC a written report setting forth in reasonable detail all Shared Development Costs incurred during that Subsequent Calendar Year and the amount Enanta has
paid in Shared Development Costs for that Subsequent Calendar Year under Section 5.2. Within [*****] days following the JSC’s receipt of such written report, the JSC shall prepare and submit to each Party a written report setting forth in
reasonable detail the calculation of the net amount owed by a Party to the other Party in order to ensure the appropriate sharing of Shared Development Costs as if the adjusted U.S. Relative Market Size had been the Sharing Percentage during the
entire Subsequent Calendar Year. The net amount payable shall be due within [*****] days after receipt of any such accounting. The U.S. Relative Market Size so determined for the Annual-True Up for any year would be the U.S. Relative Market Size for
the subsequent calendar year, subject to annual true-up as provided above, which process would repeat for as long as Shared Development Costs are incurred. 

O. Section 5.5 (Roll-Over Payments) of the Agreement is hereby deleted in its entirety, and the following Section 5.5 is inserted in
lieu of the deleted Section: 
 5.5 Roll-Over Payments. If, in any Calendar Quarter, the actual amount of
Shared Development Costs incurred and owed by Enanta with respect to a Co-Developed Product for that Calendar Quarter exceeds by greater than [*****] Abbott’s good faith estimate of Shared Development Costs for that Co-Developed Product for
that Calendar Quarter, Enanta may, upon written notice to Abbott, delay payment of its share of any such excess until the subsequent Calendar Year (the “Roll-Over Payment”). Enanta shall make the Roll-Over Payment in two (2) equal
amounts over the first two (2) consecutive Calendar Quarters of the subsequent Calendar Year. For purposes of clarity, this Section does not affect the timing of any true-up payments owed by Enanta pursuant to Section 5.4 above. 

P. Section 5.6 ([*****]) of the Agreement is hereby deleted in its entirety, and the following Section 5.6 is inserted in lieu of
the deleted Section: 
 5.6 [*****]. 

Q. The following provision shall be inserted at the end of Section 6.4.1 (Milestones) of the Agreement: 

  
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 (e) Next Generation Products. If Enanta elects to exercise the
Co-Development and Profit Share Option with respect to any Next Generation Product (such as the Second Generation Product) [*****]. 
 R.
Section 6.5.1(e) (Combination Products) of the Agreement is hereby deleted in its entirety, and the following Section 6.5.1(e) is inserted in lieu of the deleted Section: 

(e) Combination Products. 

(i) In calculating royalties owed on the First Generation Product in the form of the 2D Regimen and the 3D Regimen, Net Sales
throughout the world shall be adjusted as follows: (A) the total Net Sales of the 3D Regimen shall be multiplied by 0.3, and (B) the total Net Sales of the 2D Regimen shall be multiplied by 0.45. [*****]. If the Parties cannot agree on
such an adjustment, a Third Party entity that is reasonably acceptable to the Parties and that performs such market estimates of pharmaceutical usage for the biotechnology or pharmaceutical industry shall make such determination, which determination
shall be final and binding upon the Parties. 
 (ii) In calculating royalties owed on the Second Generation Product, Net
Sales shall be divided by the total number of DAAs comprising the Second Generation Product. In the event that the Second Generation Product comprises or contains one or more Non-DAAs, then the Parties will negotiate in good faith further
adjustments to the Net Sales for the Second Generation Product based on the relative value of the Non-DAA(s) to the product using the same formulas as set forth in Section 6.5.1(e)(iii) to the extent applicable. 

(iii) For any Royalty-Bearing Product that is a Combination Product other than a First Generation Product addressed in
Section 6.5.1(e)(i) above or a Second Generation Product addressed in Section 6.5.1(e)(ii) above, the Parties shall, on a country-by-country basis, agree to an appropriate adjustment to Net Sales to reflect a good faith determination of
the relative value of each pharmaceutically active ingredient, based on the estimated fair market value of each such therapeutically or biologically active ingredient, as follows: (a) In the case of a Combination Product for which the
Royalty-Bearing Product and each of the other therapeutically or biologically active ingredients contained in the Combination Product are sold separately in such country by Abbott, Net Sales shall be determined by [*****]; (b) In the case of a
Combination Product for which the Royalty-Bearing Product is sold separately in such country but the non-Royalty-Bearing Product therapeutically or biologically active ingredients contained in the 

  
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Combination Product are not sold separately by Abbott in such country, Net Sales shall be calculated by [*****]; and (c) If in a country neither the Royalty-Bearing Product nor all of the
therapeutically or biologically active ingredients contained in the combination product are sold separately in said country by Abbott, Net Sales of the Royalty-Bearing Product forming part of the Combination Product shall be reasonably determined by
[*****]. In the case where the Parties are unable to agree on [*****], the Parties shall agree upon an internationally recognized independent certified public accountant who shall make such determination and whose determination shall be final and
binding on the Parties. 
 S. Section 6.5.1(g) (Payment Dates and Reports) of the Agreement is hereby deleted in its entirety, and the
following Section 6.5.1(g) is inserted in lieu of the deleted Section: 
 (g) Payment Calculation, Dates and
Reports. Abbott shall make Royalty Payments within [*****] days after the end of each Calendar Quarter commencing with the Calendar Quarter in which the First Commercial Sale of each Royalty-Bearing Product occurs. The Royalty Payment for each
Calendar Quarter [*****] is to be calculated as the total royalties due Enanta for the Calendar Year through the end of that Calendar Quarter (“Calendar Year To Date”) less any Royalty Payments made by Abbott for any prior Calendar Quarter
of the same Calendar Year. For example, the Royalty Payment for the Third Quarter will be the total royalties owed for the Calendar Year To Date less Royalty Payments made for the First and Second Calendar Quarters. If the total Royalty Payments for
the prior Calendar Quarters of the same Calendar Year exceed the royalties due Enanta for the Calendar Year To Date, then Abbott will receive a credit in following Calendar Quarter, unless no further royalties are owed under the Agreement for any
Royalty-Bearing Product, in which case Enanta would pay any outstanding credits owed to Abbott within [*****] days of receipt of an invoice therefor. All payments shall be made by wire transfer to the credit of such bank account as shall be
designated in writing from time to time by Enanta. Abbott shall also provide, at the same time each such payment is made, a report showing: (i) the Net Sales of each Royalty-Bearing Product by country in the Territory; (ii) an explanation
of the methodology Abbott used to calculate Net Sales from gross amounts billed or invoiced (and for clarity not including transaction-level data); (iii) the applicable royalty rates for such Royalty-Bearing Product; (iv) the exchange
rates used in calculating any of the foregoing; and (v) a calculation of the amount of royalty due to Enanta. For the First Generation Product, this report shall include [*****]. 

  
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 T. Section 6.5.2 (Operating Income) of the Agreement is hereby deleted in its entirety, and
the following Section 6.5.2 is inserted in lieu of the deleted Section: 
 6.5.2 Operating Income
Payments. Enanta shall receive from Abbott, in lieu of receiving any Royalty Payments with respect to each Co-Developed Product in the Co-Development Territory, the Enanta Co-Development Percentage of all Annual Operating Income derived from
sales of that Co-Developed Product in the Co-Development Territory (such payments, the “Operating Income Payments”) for as long as there are sales by Abbott, its Affiliates and Sublicensees of such Co-Developed Product (the
“Co-Development Term”). For purposes of clarity, if Operating Income is negative for any Co-Developed Product in any Calendar Quarter, for example, due to commercialization expenses incurred before sales of the Co-Developed Product, Enanta
shall pay its applicable share of the negative Operating Income; [*****]. Within thirty (30) days following the end of each Calendar Quarter commencing on and after the date of First Commercial Sale of each Co-Developed Product, (a) Enanta
shall submit to the JSC a statement identifying all Commercialization Expenses and License Fees incurred by it with respect to such Co-Developed Product in the Co-Development Territory and (b) Abbott shall submit to the JSC a statement
identifying the Net Sales, Cost of Goods, freight, Third Party Payments, R&D and all Commercialization Expenses incurred by it with respect to such Co-Developed Product. Within forty-five (45) days following the end of the Calendar Quarter,
the JSC shall submit to the Parties a written report setting forth in reasonable detail (c) the calculation of Operating Income, determined in accordance with Schedule 6 attached hereto and (d) the calculation of the amount of Operating
Income payable to Enanta in accordance with the Enanta Co-Development Percentage for that Co-Developed Product taking into account Enanta’s expenditures for the period. Abbott shall make the Operating Income Payments to Enanta within thirty
(30) days following the issuance of such written report. 
 U. Enanta hereby waives its Co-Development and Profit Share Option with
respect to ABT-493. 
 V. Enanta and Abbott agree that this Third Amendment shall be annexed to and made part of the Original Agreement. Any
conflicts arising between this Third Amendment and the Agreement shall be resolved in favor of the provisions in this Third Amendment, including any terms and/or definitions modified and/or made obsolete by this Third Amendment. Except as herein
provided, all of the terms and conditions in the Agreement remain unchanged and are hereby reaffirmed. 

  
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 W. This Third Amendment may be executed in two or more counterparts, each of which shall be
deemed an original, but all of which together will constitute one and the same instrument. 
 IN WITNESS WHEREOF, AbbVie and Enanta have
each caused this Third Amendment to be executed by a duly authorized representative as of the day and year first above written. 
  

									
	ABBVIE INC.	 		 	ENANTA PHARMACEUTICALS, INC.
					
	By:	 	 /s/ William J. Chase
	 		 	By:	 	 /s/ Jay R. Luly

					
	Name:	 	 William J. Chase
	 		 	Name:	 	 Jay R. Luly

					
	Title:	 	 Executive Vice President, CFO
	 		 	Title:	 	 President and CEO

  
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